The Company reported a net loss of $(43.2) million, or $(1.11) per share-diluted for the six months ended June 30, 2005 compared to a net loss of $(26.9) million, or $(1.00) per share-diluted for the six months ended June 30, 2004. Gross profit was $11.7 million (10.9% of contract revenues) on revenues of $107.9 million for the six months ended June 30, 2005, compared to a $(1.2) million loss on revenues of $87.4 million for the first six months of 2004. The calculated EBITDA was $6.0 million and $(4.3) million for the six months ended June 30, 2005 and 2004, respectively.
The $(27.7) million net loss for the second quarter of 2005 is primarily attributable to a $(21.9) million loss on debt extinguishment recognized on the debt for equity exchange transaction completed on June 10, 2005 with all of the holders of the Company's Subordinated Notes and the continued high levels of interest expense incurred related to the Company's substantial amount of debt. The Company's outstanding claims continue to impact its operating results and liquidity. During the second quarter of 2005, the Company incurred significant legal fees related to its claims and additionally recorded a $1.7 million reserve for claims and receivables negatively impacting its operating results. The Company will vigorously pursue its claims against Pemex and against the underwriters for the marine hull insurance policy on the Gulf Horizon.
The Company's revenues and margins for its domestic geographic operations have continued to show improvement during 2005. Oil and gas companies operating on the U.S. continental shelf in the Gulf of Mexico have increased their capital expenditures in response to the recent high energy prices, and offshore construction activity and the demand for the Company's services in the U.S. Gulf of Mexico have increased. Management expects the current level of offshore construction activity in the U.S. Gulf of Mexico to continue for the remainder of 2005 and into 2006. The current market conditions in the U.S. Gulf of Mexico have improved pricing levels and the Company's vessel utilization, allowing the Company to improve its profit margins during the first six months of 2005. In West Africa, the Company performed work and billed for the milestones completed under the contract for the installation of the West Africa Gas Pipeline.
"With the completion of the financing transaction in March 2005 and the equity recapitalization in June 2005, our company is positioned to capitalize on opportunities presented by the improved market conditions in the U.S. Gulf of Mexico and the other market areas we serve," said David W. Sharp, President and Chief Executive Officer. "The cornerstone of our 2005 and 2006 operations will be the successful execution of our current backlog of $215 million."
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