Cal Dive International, Inc. (Nasdaq: CDIS) reported fourth quarter net income of $25.3 million or $0.65 per diluted share, after pre-tax charges of $3.9 million, or $0.06 per diluted share, associated with marine asset value impairments. Net income, before charges, increased by 22% sequentially and by 213% compared with the prior year quarter.
Summary of Results
(in thousands, except per share amounts and percentages)
Fourth Quarter Third Quarter Year Ending
2004 2003 2004 2004 2003
Revenues $162,990 $101,675 $131,987 $543,392 $396,269
Gross Profit 53,030 24,685 45,726 171,912 92,083
33% 24% 35% 32% 23%
Net Income 25,269 8,884 22,794 79,916 32,771
16% 9% 17% 15% 8%
Per Share 0.65 0.23 0.59 2.06 0.87
Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, stated, "This was our third consecutive quarter of record earnings, which capped a memorable year of performance and profitability. Our people worked tirelessly and diligently to achieve optimum results. Return on capital (tax effected earnings before net interest expense divided by average debt and equity) of 14% and EBITDA margins of 44% are just two measures of our success throughout the year.
"At the start of 2005 we are witnessing clearly improving market conditions for our Marine Contracting services and strong contribution from our Oil and Gas Production division. Additionally, we expect a ramp up in contribution from our Production Facilities business in the second half of 2005."
Revenues: The $61.3 million increase in year-over-year fourth quarter
revenues reflects not only higher oil and gas production and increases
in commodity prices but also a significant improvement in Marine
Contracting revenues driven by Hurricane Ivan work and improved market
Margins: 33% was nine points better than the year-ago quarter due
primarily to the increased commodity prices. Marine Contracting
margins were higher as a result of improved utilization and rates, but
were offset by marine asset value impairment charges. During Q4, we
decided to sell the Merlin and accordingly wrote down her book value
to expected sales price. In addition, book values for two shelf
assets were deemed impaired and written down to realizable value.
Total pre-tax charges were $3.9 million.
SG&A: $14.1 million increased $4.4 million from the same period a
year ago due primarily to our incentive compensation programs and
related improved financial results. With this increase, SG&A was 9%
of fourth quarter revenues, compared to 10% a year ago.
Equity in Earnings: $3.6 million reflects our share of Deepwater
Gateway, L.L.C.'s earnings for the quarter. This reflects a 16%
increase over the third quarter as production at the Marco Polo
facility began to ramp up.
Debt: EBITDA of $71.8 million for the quarter enabled us to reduce
total debt to $149 million and increase unrestricted cash to
$91 million as of year-end. This represents a debt to book
capitalization ratio of 22% and a net debt (total debt less
unrestricted cash) to book capitalization ratio of 10%.