HOUSTON, Feb. 28 /PRNewswire-FirstCall/ -- Cal Dive International, Inc. reported fourth quarter net income of $56 million, or $0.69 per diluted share. This represents a 116% improvement over last year's fourth quarter results.
The Company sustained damage to certain of its oil and gas production facilities in Hurricanes Katrina and Rita during the third quarter. Included in the fourth quarter earnings was approximately $7 million pre-tax of repair and inspection costs resulting from these hurricanes.
The Company's effective tax rate fell to 27% in the fourth quarter, resulting in a 33% effective rate for 2005 due primarily to improved profitability both domestically and in foreign jurisdictions.
Summary of Results
(in thousands, except per share amounts and percentages)
Fourth Quarter Third Quarter Full Year
2005 2004 2005 2005 2004
Revenues $264,028 $162,990 $209,338 $799,472 $543,392
Gross Profit 95,852 53,030 82,928 283,072 171,912
36% 33% 40% 35% 32%
Net Income 56,006 25,269 42,671 150,125 79,916
21% 16% 20% 19% 15%
Diluted Earnings
Per Share 0.69 0.32 0.53 1.86 1.03
Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, stated, "I am very pleased that we were able to deliver our best ever quarter despite the negative impact of hurricanes Katrina and Rita on our Oil and Gas division. As predicted, improved Marine Contracting results more than offset the deferral of around 2.5 bcfe of production and the significant repair costs mentioned above.
"Our people faced many challenges during the year and once again they excelled in this quarter by launching ten acquired assets in our Marine Contracting fleet and by bringing back our oil and gas production to near pre- storm levels.
"We are very proud of our performance in 2005 and look forward to continued growth and success during 2006. Our earnings guidance for the year remains in the range of $2.30 - $3.30 per diluted share (excluding the recently announced acquisition of Remington Oil and Gas) and we will provide our first update to that range at the end of the first quarter."
Financial Highlights
* Revenues: The $101.0 million increase in year-over-year fourth
quarter revenues was driven primarily by significant improvements in
Marine Contracting revenues due to the introduction of newly acquired
assets and much better market conditions.
* Margins: 36% was three points better than the year-ago quarter due to
a significant increase in Marine Contracting margins driven by
improved market conditions.
* SG&A: $21.2 million increased $7.1 million from the same period a
year ago due primarily to additional incentive compensation accruals
as a result of improved profitability. This level of SG&A was 8% of
fourth quarter revenues, compared to 9% in the year ago quarter.
* Equity in Earnings: $5.3 million reflects our share of Deepwater
Gateway, L.L.C.'s earnings for the quarter relating to the Marco Polo
facility as well as our share of Offshore Technology Services
Limited's earnings which is the Trinidadian company to which we
contributed the Witch Queen.
* Income Tax Provision: The Company's effective tax rate fell to 27% in
the fourth quarter, resulting in a 33% effective rate for the full
year 2005. This was primarily due to the Company's ability to realize
foreign tax credits and oil and gas percentage depletion due to
improved profitability both domestically and in foreign jurisdictions
and implementation of the Internal Revenue Code 199 manufacturing
deduction as it relates to oil and gas production. This resulted in a
benefit for the fourth quarter for previously unrecognized deferred
tax assets. We estimate our effective rate for 2006 will be between
34% and 35%.
* Balance Sheet: During the fourth quarter, the Company acquired the
Gulf of Mexico assets from Stolt Offshore. Total debt as of
December 31, 2005 was $447 million. This represents 40% debt to book
capitalization and with $353 million of EBITDA during 2005, this
represents 1.3 times trailing twelve month EBITDA. In addition, the
Company had $91 million of unrestricted cash as of December 31, 2005.
Most of these funds will be utilized for the final phases of the
acquisition of certain assets of Stolt Offshore.
Further details are provided in the presentation for Cal Dive's quarterly conference call (see the Investor Relations page of http://www.caldive.com/ ). The call, scheduled for 9:00 a.m. Central Standard Time on Wednesday, March 1, 2006, will be webcast live. A replay will be available from the Audio Archives page.
Cal Dive International, Inc., headquartered in Houston, Texas, is an energy service company which provides alternate solutions to the oil and gas industry worldwide for marginal field development, alternative development plans, field life extension and abandonment, with service lines including marine diving services, robotics, well operations, facilities ownership and oil and gas production.
FORWARD-LOOKING STATEMENTS
This press release and attached presentation contain forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin, expenses, earnings or losses from operations, or other financial items; future production volumes, results of exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of property or wells; any statements of the plans, strategies and objectives of management for future operations; any statement concerning developments, performance or industry rankings relating to services; any statements regarding future economic conditions or performance; any statements of expectation or belief; any statements regarding the proposed merger of Remington Oil and Gas Corporation into a wholly owned subsidiary of Cal Dive or the anticipated results (financial or otherwise) thereof; and any statements of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee management issues; complexities of global political and economic developments, geologic risks and other risks described from time to time in our reports filed with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ending December 31, 2004; and, with respect to the proposed Remington merger, actual results could differ materially from Cal Dive's expectations depending on factors such as the combined company's cost of capital, the ability of the combined company to identify and implement cost savings, synergies and efficiencies in the time frame needed to achieve these expectations, prior contractual commitments of the combined companies and their ability to terminate these commitments or amend, renegotiate or settle the same, the combined company's actual capital needs, the absence of any material incident of property damage or other hazard that could affect the need to effect capital expenditures, any unforeseen merger or acquisition opportunities that could affect capital needs, the costs incurred in implementing synergies and the factors that generally affect both Cal Dive's and Remington's respective businesses as further outlined in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in each of the companies' respective Annual Reports on Form 10-K for the year ended December 31, 2004. Actual actions that the combined company may take may differ from time to time as the combined company may deem necessary or advisable in the best interest of the combined company and its shareholders to attempt to achieve the successful integration of the companies, the synergies needed to make the transaction a financial success and to react to the economy and the combined company's market for its exploration and production. We assume no obligation and do not intend to update these forward-looking statements.
Additional Information
Cal Dive and Remington will file a proxy statement/prospectus and other relevant documents concerning the proposed merger transaction with the Securities and Exchange Commission ("SEC"). Investors are urged to read the proxy statement/prospectus when it becomes available and any other relevant documents filed with the SEC because they will contain important information. You will be able to obtain the documents free of charge at the website maintained by the SEC at http://www.sec.gov/ . In addition, you may obtain documents filed with the SEC by Cal Dive free of charge by requesting them in writing from Cal Dive or by telephone at (281) 618-0400. You may obtain documents filed with the SEC by Remington free of charge by requesting them in writing from Remington or by telephone at (214) 210-2650. Cal Dive and Remington, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies from the stockholders of Remington in connection with the merger. Information about the directors and executive officers of Cal Dive and their ownership of Cal Dive stock is set forth in the proxy statement for Cal Dive's 2005 Annual Meeting of Shareholders. Information about the directors and executive officers of Remington and their ownership of Remington stock is set forth in the proxy statement for Remington's 2005 Annual Meeting of Stockholders. Investors may obtain additional information regarding the interests of such participants by reading the proxy statement/prospectus when it becomes available.
CAL DIVE INTERNATIONAL, INC.
Comparative Condensed Consolidated Statements of Operations
Three Months Ended Twelve Months Ended
(000's omitted, except Dec. 31, Dec. 31,
per share data) 2005 2004 2005 2004
(unaudited)
Net Revenues $264,028 $162,990 $799,472 $543,392
Cost of Sales 168,176 109,960 516,400 371,480
Gross Profit 95,852 53,030 283,072 171,912
Gain on Sale of Assets, net 151 --- 1,405 ---
Selling and Administrative 21,202 14,135 62,790 48,881
Income from Operations 74,801 38,895 221,687 123,031
Equity in Earnings of
Investments 5,301 3,555 13,459 7,927
Interest Expense, net & Other 2,691 1,631 7,559 5,265
Income Before Income Taxes 77,411 40,819 227,587 125,693
Income Tax Provision 20,601 14,548 75,019 43,034
Net Income 56,810 26,271 152,568 82,659
Preferred Stock Dividends and
Accretion 804 1,002 2,454 2,743
Net Income Applicable to Common
Shareholders $56,006 $25,269 $150,114 $79,916
Other Financial Data:
Income from Operations $74,801 $38,895 $221,687 $123,031
Equity in Earnings of
Investments 5,301 3,555 13,459 7,927
Share of Equity Investments:
Depreciation 1,220 1,025 4,427 3,009
Interest Expense, net 46 205 1,608 2,179
Depreciation and Amortization:
Marine Contracting 11,199 12,397 40,836 39,259
Oil and Gas Production 15,559 16,963 70,637 69,046
EBITDA (A) $108,126 $73,040 $352,654 $244,451
Weighted Avg. Shares Outstanding:
Basic 77,659 76,789 77,444 76,409
Diluted 82,876 79,230 82,205 79,062
Earnings Per Share:
Basic $0.72 $0.33 $1.94 $1.05
Diluted $0.69 $0.32 $1.86 $1.03
(A) The Company calculates EBITDA as earnings before net interest
expense, taxes, depreciation and amortization (which includes non-
cash asset impairments) and the Company's share of depreciation and
net interest expense from its Equity Investments. EBITDA and EBITDA
margin (defined as EBITDA divided by net revenue) are supplemental
non-GAAP financial measurements used by CDI and investors in the
marine construction industry in the evaluation of its business due
to the measurements being similar to income from operations.
Comparative Condensed Consolidated Balance Sheets
ASSETS
(000's omitted) Dec. 31, 2005 Dec. 31, 2004
(unaudited)
Current Assets:
Cash and equivalents $91,080 $91,142
Accounts receivable 228,058 114,709
Other current assets 52,915 48,110
Total Current Assets 372,053 253,961
Net Property & Equipment:
Marine Contracting 524,890 411,596
Oil and Gas Production 391,472 172,821
Equity Investments 179,556 67,192
Goodwill 101,731 84,193
Other assets, net 91,162 48,995
Total Assets $1,660,864 $1,038,758
LIABILITIES & SHAREHOLDERS' EQUITY
Dec. 31, 2005 Dec. 31, 2004
(unaudited)
Current Liabilities:
Accounts payable $99,445 $56,047
Accrued liabilities 148,789 75,502
Current mat of L-T debt (B) 6,468 9,613
Total Current Liabilities 254,702 141,162
Long-term debt (B) 440,703 138,947
Deferred income taxes 164,258 133,777
Decommissioning liabilities 106,317 79,490
Other long term liabilities 10,584 5,090
Convertible preferred stock (B) 55,000 55,000
Shareholders' equity (B) 629,300 485,292
Total Liabilities & Equity $1,660,864 $1,038,758
(B) Debt to book capitalization - 40%. Calculated as total debt
($447,171) divided by sum of total debt, convertible preferred stock
and shareholders' equity ($1,131,471).
