For the first nine months of 2002, revenues decreased 2.1 percent to $43.5 million generating a gross profit of $8.8 million or 20.2 percent of revenues, compared to the year-ago nine-month period revenues of $44.4 million that produced a gross profit of $12.1 million or 27.3 percent of revenues. Net loss attributable to stockholders for the first nine months of 2002 totaled $0.1 million or $0.01 per diluted share. Earnings before nonrecurring charges totaled $2.3 million or $0.23 per diluted share for the nine-month 2001 period. Including the nonrecurring charges, the net loss attributable to common stockholders for the nine-month 2001 period was $0.8 million or $0.08 per diluted share.
Lyle G. Stockstill, Torch Offshore Chairman and Chief Executive Officer, commented, "We were disappointed in our third quarter 2002 results of operations. Several occurrences, mostly outside of our immediate control, contributed to this lackluster quarter including an overall depressed Gulf of Mexico market, a timing delay on our significant non-Gulf of Mexico project, and the impact of two major storms in the Gulf of Mexico."
The shipyard selection process for the conversion of the Midnight Express has been delayed, but remains a major priority of the Company. Negotiations with a few select shipyards are in their final stages and discussions with financial institutions for the financing of the vessel have commenced. We expect to announce a final decision concerning the selection of the shipyard once all of the negotiations have been completed. The announcement of the financing arrangement should follow shortly thereafter. Upon conversion, the Midnight Express will be a 520-foot multipurpose DP-2 vessel capable of subsea development and working in various water depths, including the deepwater arena. The vessel should be ready for work in the fourth quarter of 2003 or early part of 2004.
"We have been extremely careful in the shipyard selection process for the Midnight Express to ensure that the Company is selecting the right shipyard for this conversion job. We have spent countless hours discussing various aspects of the contracts internally, and with shipyard officials, government officials and lenders as there are various aspects of the conversion and financing plans that must be considered. This delay in the shipyard selection process should only delay us to the fourth quarter of 2003 or early part of 2004 for delivery of the vessel. We are excited about the conversion process and the outlook of the deepwater market for the Midnight Express at that time," said Lyle G. Stockstill.
The Company took delivery of the Midnight Hunter, a 340-foot DP-2 class vessel, during August 2002, at which time the vessel was equipped with a 60-ton crane. The vessel has completed its first job, which was providing assistance to ROV's in the placement of several jumpers on the floor of the Gulf of Mexico. The vessel successfully placed nine jumpers in water depths ranging from 6,000 to 7,200 feet.
The Company has signed a contract with Stolt Offshore Inc. to provide pipeline installation support in the Boston, Massachusetts Harbor for a unit of Duke Energy. The contract will commence in the fourth quarter of 2002 and should last for a period of five to six months. The contract calls for the Midnight Rider to work outside of Gulf of Mexico waters for the duration of the contract. Included in the contract are payments for the mobilization and demobilization of the vessel in addition to the pipelay and burial work to be completed by the Midnight Rider.
"The Boston hub project is an outstanding opportunity for Torch to show its capabilities outside of our traditional Gulf of Mexico market. The contract provides favorable margins for the Midnight Rider for a period of several months and should be a great contract for the Company," said Lyle G. Stockstill.
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