Cal Dive International, Inc. reported a first quarter 2014 loss of $13.1 million, or $0.14 per diluted share, on revenues of $119.1 million.
This compares to a loss of $17.7 million, or $0.19 per diluted share, on revenues of $80.9 million for the first quarter 2013. For the first quarter 2014, the Company reported EBITDA of positive $2.0 million compared to negative $6.5 million for the first quarter 2013.
Commenting on the results, Cal Dive’s Chairman, President and Chief Executive Officer, Quinn Hébert, stated, “The improvement in our first quarter results reflects our increased activity levels in Mexico. While we did experience harsher weather conditions during the month of March than anticipated, we were able to make significant progress towards the completion of our current projects. We expect to complete two of the four projects in the second quarter and work on the remaining two projects, which were delayed by Pemex, will continue through the third and fourth quarters. We expect significant collections to come over the next five months as we complete these projects. We are also entering the busy season for submitting bids for new projects to Pemex and remain confident in continued high activity levels in the region.”
Hébert continued, “Domestically, the first quarter was generally in line with our expectations although we did experience harsher weather than anticipated. Some assets exceeded expectations while others were below expectations due to either weather or customers not yet starting their annual spend cycle. However, we are seeing signs of continued improvement in the U.S. Gulf of Mexico, specifically as it relates to new pipelay activity. We expect our results during the upcoming good weather months to be improved over the same period in 2013. Elsewhere, the DLB Sea Horizon experienced strong utilization in Southeast Asia and our Australia results were solid during the first quarter. We also substantially completed a project for the installation of three platforms off the coast of Ecuador.”
— Backlog: Contracted backlog was $282 million as of March 31, 2014. This compares to backlog of $249 million at December 31, 2013 and $221 million at March 31, 2013. Of this backlog, $179 million relates to international work with the remainder relating to work in the U.S. Gulf of Mexico and 89% is expected to be performed in 2014.
— Revenues: First quarter 2014 revenues increased by $38.2 million to $119.1 million compared to the first quarter 2013. The 47% increase in revenues is primarily attributable to increased activity in Latin America partially offset by lower revenues in other regions in part due to the re-deployment of assets.
— Gross Loss: First quarter 2014 gross loss was $6.2 million, an improvement of $5.3 million, or 46%, compared to the first quarter 2013. The improvement from last year is primarily attributable to increased activity in Latin America and increased utilization for the DLB Sea Horizon in Southeast Asia partially offset by lower utilization domestically.
— G&A: First quarter 2014 G&A decreased by $1.9 million to $10.0 million as compared to first quarter 2013. The decrease is primarily due to the reimbursement of attorney’s fees awarded in connection with the collection of an overdue receivable from a customer in China, as well as lower stock based compensation and payroll expense due to headcount reductions. Included in first quarter 2014 G&A is approximately $0.3 million relating to severance costs associated with headcount reductions. Also, the Company incurred an additional $0.8 million of severance costs that has been recorded in cost of sales. As a percentage of revenues, G&A was 8.4% for the first quarter 2014 compared to 14.7% for the first quarter 2013.
— Interest Expense: First quarter 2014 net interest expense increased by $1.0 million to $5.6 million as compared to first quarter 2013, primarily due to higher outstanding borrowings due to working capital needs in Mexico, offset by interest received in connection with the collection of an overdue receivable from a customer in China.
— Income Tax: The effective tax benefit rate for the first quarter 2014 was 34.4% compared to a tax benefit rate of 32.9% for the first quarter 2013.
— Balance Sheet: As of March 31, 2014, total debt consisted of $86.25 million in convertible notes, $29.7 million under a senior secured term loan, $105.3 million outstanding under a revolving credit facility and $20.0 million under an unsecured term loan. Cash and cash equivalents were $3.3 million, for a net debt position of $237.9 million at March 31, 2014, compared to a net debt position of $200.0 million at December 31, 2013. The increase in net debt is primarily due to the continued working capital needs for the Company’s four projects in Mexico. The net secured debt amount that is subject to financial covenants was $131.7 million at March 31, 2014, compared to $93.8 million at December 31, 2013. Total debt presented on the consolidated balance sheet at March 31, 2014 is net of a debt discount of $17.7 million on the Company’s convertible debt.