Cal Dive International, Inc. 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.
Bad weather in Mexico
Cal Dive has said that the second quarter was significantly impacted by unseasonably adverse weather that delayed the Company’s completion of two of its four Mexico projects. Cal Dive 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 Cal Dive 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, Cal Dive also completed a project in Ecuador, and continued to be busy in Australia and Southeast Asia. Cal Dive 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, Cal Dive’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.
Commenting on Cal Dive second quarter results, Chairman, President and Chief Executive Officer, Quinn Hébert, stated, “Much of the latter half of the second quarter was impacted by unseasonably adverse weather conditions, especially during the latter half of May and during June when we expected activity levels to ramp up for the summer work season. This weather delayed the timing of the start of projects in the U.S. Gulf of Mexico and also caused delays in our progress on two of our four current projects in Mexico for Pemex. We completed one of the Pemex projects during June and expect to complete the second project in the third quarter. Based on Pemex’s current project schedule, we are on track to complete the remaining two projects during the fourth quarter.”
Hébert continued, “Since the second quarter, the weather has improved, and our domestic fleet has experienced high levels of utilization, both for booked work that was included in our backlog at the end of the second quarter, as well as for new projects we have won during the third quarter. The level of domestic project awards we are seeing point to a continued market improvement in the U.S. Gulf of Mexico.”