Cal Dive International, Inc. has reported a second quarter 2014 loss of $29.1 million, or $0.31 per diluted share, on revenues of $121.7 million.
Included in the loss for the second quarter 2014 is a $6.2 million after-tax charge for the provision of doubtful accounts related to a receivable owed by a contractor in Mexico that became subject to bankruptcy proceedings in July, and a $3.0 million after-tax loss related to the early extinguishment of debt from the Company’s previously announced refinancing during the second quarter.
This compares to a loss of $1.7 million, or $0.02 per diluted share, on revenues of $121.0 million for the second quarter 2013. Included in the loss for the second quarter 2013 is a $4.0 million after-tax gain related to a mark-to-market adjustment on the Company’s convertible debt.
The company’s contracted backlog was $234 million as of June 30, 2014. This compares to backlog of $249 million at December 31, 2013 and $400 million at June 30, 2013. Of this backlog, $161 million relates to international projects with $73 million relating to projects in the U.S. Gulf of Mexico and 64% is expected to be performed during the remainder of 2014.
Revenues for the second quarter 2014 revenues increased by $0.7 million to $121.7 million compared to the second quarter 2013. Although revenue was relatively unchanged, international revenues increased 17% while domestic revenues decreased 29%, mostly due to unseasonably adverse weather and customer delays in project schedules, as well as lower utilization of the Company’s dive support vessels, including the impact of the sale of its surface diving fleet effective May 31, 2014.
Second quarter 2014 gross loss was $17.4 million, a deterioration of $20.0 million compared to gross profit of $2.6 million for the second quarter 2013. The loss is primarily attributable to cost overruns from delays related to unseasonably adverse weather conditions on two of the Company’s projects in Mexico, as well as lower utilization in the U.S. Gulf of Mexico due to unseasonably adverse weather and customer delays in project schedules.
The second quarter was significantly impacted by unseasonably adverse weather that delayed the Company’s completion of two of its four Mexico projects.
The Company is now 100% complete on one of the projects, and expects to complete the second project by mid-August. The remaining two Mexico projects have been temporarily suspended by Pemex as it waits for platforms to be installed by other contractors. Once the two platforms are installed, the Company will complete its remaining scopes of work.
Based on Pemex’s current project schedule, the Company expects to resume work on these projects late in the third quarter, and to complete both projects in the fourth quarter. During the second quarter, the Company also completed a project in Ecuador, and continued to be busy in Australia and Southeast Asia. The Company also commenced an air diving project in the North Sea in the second quarter that was completed during the third quarter, and commenced a second project in that region in the third quarter.
In the U.S. Gulf of Mexico, the second quarter was adversely affected by unseasonable weather and customer delays that delayed the start of the summer work season. However, the Company’s vessels are now experiencing high utilization levels, and domestic backlog at the end of the second quarter is the highest it has been in several years.
On Thursday, August 7, 2014, the Board of Directors of Cal Dive appointed Donald D. Patteson, Jr. to the Company’s Board as an independent director. Patteson’s appointment expands the Board to five directors, four of whom are independent. Mr. Patteson will serve on each of the Board’s three standing committees (Audit, Compensation and Corporate Governance and Nominating).
Press Release, August 11, 2014