Cal Dive Reports 1Q05 Earnings
Cal Dive International (Nasdaq: CDIS) reported first quarter net income of $25.4 million or $0.64 per diluted share. Included in the earnings was a pre-tax $4.5 million, or $.06 per diluted share, for the write off of seismic costs acquired as part of the Company's recently announced oil and gas production acquisitions. Net income before the charge doubled the level achieved during last year's first quarter.
Summary of Results (in thousands, except per share amounts and percentages) First Quarter Fourth Quarter 2005 2004 2004 Revenues $159,575 $120,714 $162,990 Gross Profit 51,873 31,741 53,030 33% 26% 33% Net Income 25,411 13,645 25,269 16% 11% 16% Diluted Earnings Per Share 0.64 0.36 0.65
Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, stated,
"Absent the unusual charge, this was our fourth consecutive quarter of record
earnings, driven by excellent offshore performance and gradually improving
market conditions for Marine Contracting together with continued strong
performance by the oil and gas production division (ERT). Following this
strong start to the year, we now anticipate 2005 earnings to be in the
increased range of $2.30 - $2.90 per share.
"We have also been particularly busy setting the groundwork for further growth of Cal Dive in 2006 and beyond. We started by placing a long term debt facility and then announced strategic acquisitions in the Shelf sector of the Marine Contracting market. Finally, we closed several very exciting production contracting deals, which involved both significant reserve additions for ERT and good opportunities for deepwater Marine Contracting work."
* Revenues: The $38.9 million increase in year-over-year first quarter revenues reflects not only increases in commodity prices, but also a significant improvement in Marine Contracting revenues driven primarily by improved market conditions.
* Margins: 33% was seven points better than the year-ago quarter due to improved utilization and rates across virtually all business groups within Marine Contracting and the increase in commodity prices.
* SG&A: $12.8 million increased $1.7 million from the same period a year ago due primarily to improved financial results and the related increase from our incentive compensation programs. With this increase, SG&A was 8% of first quarter revenues, compared to 9% a year ago.
* Equity in Earnings: $1.7 million reflects our share of Deepwater Gateway, L.L.C.'s earnings for the quarter. This reflects a 51% decrease from the fourth quarter due to the expected fall-off in production from the Marco Polo reservoir and to the early retirement of Deepwater Gateway's term loan, which resulted in a $1.2 million charge for the write-off of deferred financing charges.
* Debt: On March 30, 2005, Cal Dive issued $300 million of Convertible Senior Notes. We utilized $72 million of the proceeds to fund Cal Dive's portion of the early retirement of Deepwater Gateway's term loan. Total debt to book capitalization was 44% at March 31, 2005, offset by $362 million of unrestricted cash. Subsequent to March 31, 2005, the Company announced acquisitions of certain assets of Stolt Offshore, subject to regulatory approval, and Torch Offshore, subject to bankruptcy court approvals, for approximately $205 million combined, if completed. In addition, the Company announced three production contracting transactions.
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