Cal Dive Reports Record Second Quarter Earnings of 47 Cents

Cal Dive International, Inc. (Nasdaq: CDIS) reported second quarter net income of $18.2 million, or $0.47 per diluted share, essentially doubling the year ago net income of $8.9 million or $0.24 per diluted share. Second quarter revenues of $127.7 million increased 25% over the year ago quarter due primarily to improved levels of oil and gas production and higher commodity prices.

                              Summary of Results
           (in thousands, except per share amounts and percentages)
                     Second Quarter      First Quarter        Six Months
                    2004         2003         2004         2004        2003
    Revenues      $127,701     $101,839     $120,714     $248,416    $190,739

    Gross Profit    41,415       24,197       31,741       73,157      43,393
                        32%          24%          26%          29%         23%

    Net Income      18,208        8,912       13,645       31,854      14,950
                        14%           9%          11%          13%          8%

    Diluted Earnings
     per share        0.47         0.24         0.36         0.83        0.39

Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, stated, "It was very satisfying to establish record quarterly earnings, even though we are in the very early stages of a Marine Contracting recovery, still in the ramp up phase for Gunnison production and just beginning to see a contribution from our Production Facilities business segment.

"Quarterly results from the Marine Contracting and Oil & Gas Production (ERT) segments both exceeded our expectations. In Marine Contracting, we made the best of continuing poor market conditions by focusing on cost-effective and incident-free performance, while in the Oil & Gas Production segment we not only benefited from high commodity prices, but also excelled at maximizing production from our core properties.

"At the start of the year we predicted earnings for 2004 in the range of $1.30 to $1.70 per share, and stated that performance would be back loaded. After a good start, we now expect full year earnings near the top of the range."

Financial Highlights

  • Revenues: The $25.9 million increase in year-over-year second quarter revenues reflects significantly higher oil and gas production and increases in commodity prices.
  • Margins: 32% was eight points better than the year ago quarter due primarily to the increased commodity prices and improved utilization and rates in the North Sea for the Seawell.
  • SG&A: $12.7 million increased $4.0 million from the same period a year ago due to the new Marine Contracting compensation system and the ERT incentive compensation program. With this increase, SG&A was 10% of second quarter revenues, compared to 8.5% a year ago.
  • Equity in Earnings: $1.3 million reflects our share of Deepwater Gateway, L.L.C.'s earnings for the quarter. This represents the kick off of earnings in our new Production Facilities segment as mechanical completion of the Marco Polo TLP occurred at the end of March 2004 triggering the beginning of monthly demand fees. Tariff income will begin in Q3 following the beginning of production at the TLP in mid-July.
  • Debt: EBITDA of $56.2 million for the second quarter, along with $30 million of proceeds from the completion of the convertible preferred issuance entered into in January 2003, enabled us to reduce total debt to $183 million (from $204 million at March 31, 2004) and build $67.3 million of unrestricted cash. This represents a debt to book capitalization ratio of 28% and a net debt to book capitalization ratio of 20%.

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