Cal Dive Reports Fourth Quarter and Year End 2012 Results

  Cal Dive Reports Fourth Quarter and Year End 2012 Results

Business Wire

HOUSTON -- February 27, 2013

Cal Dive International, Inc. (NYSE: DVR) generated a fourth quarter 2012 loss
of $4.4 million, or $0.05 per diluted share, excluding a $4.0 million
after-tax non-cash charge related to the marked-to-market adjustment of the
derivative liability for the Company’s convertible debt, a $4.1 million
after-tax non-cash fixed asset impairment charge, as well as two non-cash
income tax adjustments totaling $6.6 million. For the fourth quarter 2012, the
Company reported EBITDA of $13.5 million compared to $12.8 million for the
fourth quarter 2011. Including the charges above, the Company reported a
fourth quarter 2012 loss of $19.1 million, or $0.21 per diluted share,
compared to a loss of $8.8 million, or $0.10 per diluted share, for the fourth
quarter 2011.

Excluding the charges discussed above, the improvement in results is primarily
attributable to the Company’s West Africa operations and higher activity in
Mexico. Additionally, higher activity for the Company’s multi-service vessel,
Uncle John, which worked the entire fourth quarter 2012, benefited the
quarterly results. The Uncle John was in drydock for two months during the
fourth quarter 2011. These improvements were offset by lower activity and
margins in Australia during the fourth quarter 2012 compared to 2011 as the
prior year included diving activity from the highly profitable Gorgon project
which has been completed.

The Company reported a full year 2012 loss of $65.0 million, or $0.70 per
diluted share compared to a full year 2011 loss of $66.9 million, or $0.73 per
diluted share. Included in these losses are non-cash after-tax impairment
charges of $19.7 million during 2012 and $30.4 million during 2011. Excluding
these non-cash impairment charges, a full year 2012 after-tax non-cash gain of
$1.4 million related to the marked-to-market adjustment of the Company’s
convertible debt and the tax related adjustments discussed above, the Company
generated a loss of $40.2 million, or $0.43 per diluted share, for 2012
compared to a loss of $36.5 million, or $0.40 per diluted share, in 2011.
Neither of the tax adjustments recorded during the fourth quarter of 2012 will
impact cash taxes for 2013. The Company reported full year 2012 EBITDA of
$23.3 million compared to $40.6 million for full year 2011.

Quinn Hébert, Chairman, President and Chief Executive Officer of Cal Dive,
stated, “We were pleased to wrap up a challenging 2012 with our best quarterly
operating results of the year. Our international activity remained strong and
our domestic working season held up reasonably well during the quarter. The
market in 2012 presented many challenges but we feel confident heading into
2013 that we will see the financial benefits of our cost restructuring
efforts, an improving domestic market and continued strong international
activity. Regarding the first quarter 2013, the winter season will limit
opportunities in the Gulf of Mexico but we anticipate significant financial
improvement from last year since the Uncle John and Kestrel will not be in
drydock as they were in the first quarter 2012. The Kestrel is booked for the
entire quarter on its charter in Mexico and the Uncle John is expected to have
good utilization during the quarter. In addition, we expect to realize a full
quarter of cost savings from our initiatives in the latter part of 2012.”

Financial Highlights

     Backlog: Contracted backlog was $172 million as of December 31, 2012.
     This compares to backlog of $178 million at December 31, 2011 and $224
     million at September 30, 2012. Of this backlog, $137 million relates to
--  international work with the remainder relating to work in the U.S. Gulf
     of Mexico and 80% is expected to be earned in 2013. Approximately $65
     million of the backlog relates to work scheduled to be completed in the
     first quarter 2013 compared to $36 million that was in the December 31,
     2011 backlog to be completed in the first quarter 2012.
     
     Revenues: Fourth quarter 2012 revenues increased by $19.0 million to
     $146.4 million as compared to fourth quarter 2011. The increase is
--   primarily attributable to higher activity in Mexico, the Company’s joint
     venture work in West Africa that began in the second half of 2012 and
     increased utilization of the Uncle John. These revenue increases were
     partially offset by a decrease in diving activity in Australia.
     
     Gross Profit: Fourth quarter 2012 gross profit increased by $2.3 million
     to $10.1 million as compared to fourth quarter 2011. The improvement in
     gross profit for the fourth quarter 2012 is primarily attributable to
--   higher activity in Mexico, the results from the Company’s West Africa
     operations and improvement in the U.S. Gulf of Mexico, specifically full
     utilization of the Uncle John during the quarter. These improvements were
     offset by lower activity and margins in Australia.
     
     SG&A: Fourth quarter 2012 SG&A increased by $0.1 million to $13.0 million
     as compared to fourth quarter 2011. The increase is primarily due to
     higher domestic employee medical claims and legal costs associated with
     international operations offset by lower stock based compensation expense
--   and headcount reductions relating to cost savings initiatives. As a
     percentage of revenues, SG&A was 8.9% for the fourth quarter 2012
     compared to 10.1% for the fourth quarter 2011. The Company expects its
     quarterly SG&A to decrease during 2013 compared to 2012 due to its cost
     savings initiatives.
     
     Interest Expense: Fourth quarter 2012 net interest expense increased by
     $1.8 million to $4.6 million as compared to fourth quarter 2011,
--   primarily due to the non-cash interest expense relating to the accretion
     of the debt discount of the Company’s convertible debt and higher average
     outstanding debt during the period.
     
     Additionally, during the fourth quarter 2012, the Company recorded
     interest expense of $6.2 million for the marked-to-market adjustment in
    the fair value of the derivative liability related to the embedded
     conversion feature of the Company’s convertible debt due to the increase
     in the Company’s stock price.
     
     Income Tax: The effective tax benefit rate for the fourth quarter 2012
     was 4.1% compared to a tax benefit rate of 9.5% for the fourth quarter
     2011. The low benefit rate for fourth quarter 2012 is due to a $5.2
     million non-cash income tax valuation allowance on foreign tax credits
--   and foreign losses and a $1.4 million discrete period tax adjustment. The
     benefit from these foreign tax credits could be realized in future
     periods as the Company generates profits. The low effective tax benefit
     rate for the fourth quarter 2011 was primarily due to a tax reserve for a
     foreign uncertain tax position.
     
     Balance Sheet: As of December 31, 2012, total debt consisted of $86.25
     million in convertible notes, $42.1 million under a term loan and $31.8
     million outstanding under a revolving credit facility. Cash and cash
     equivalents were $8.3 million, for a net debt position of $151.8 million
     at December 31, 2012, compared to net debt positions of $134.4 million at
     December 31, 2011 and $161.7 million at September 30, 2012. The secured
--   debt amount that is subject to financial covenants was $73.9 million at
     December 31, 2012 and $150.0 million at December 31, 2011. Total debt
     presented on the consolidated balance sheet is net of a debt discount of
     $22.8 million on the Company’s convertible debt. The increase in amounts
     outstanding under the revolving credit facility at the end of 2012
     compared to 2011 is due to increased international activity and the
     funding of associated working capital requirements.
     

Further details will be provided during Cal Dive’s conference call, scheduled
for 9:00 a.m. Central Time tomorrow, February 28, 2013. The teleconference
dial-in numbers are: (800) 329-9097 (domestic), (617) 614-4929
(international), passcode 87551212. Investors will be able to obtain the slide
presentation and listen to the live conference call broadcast from the
Investor Relations page at www.caldive.com. A replay of the call will also be
available from the Investor Relations-Audio Archives page.

Cal Dive International, Inc., headquartered in Houston, Texas, is a marine
contractor that provides an integrated offshore construction solution to its
customers, including manned diving, pipelay and pipe burial, platform
installation and salvage, and light well intervention services to the offshore
oil and natural gas industry on the Gulf of Mexico OCS, Northeastern U.S.,
Latin America, Southeast Asia, China, Australia, West Africa, the Middle East,
and Europe, with a diversified fleet of surface and saturation dive support
vessels and construction barges.

                             CAUTIONARY STATEMENT

This press release may include “forward-looking” statements that are generally
identifiable through the use of words such as “believe,” “expect,”
“anticipate,” “intend,” “plan,” “estimate,” “project” and similar expressions
and include any statements that are made regarding earnings expectations. The
forward-looking statements speak only as of the date of this release, and the
Company undertakes no obligation to update or revise such statements to
reflect new information or events as they occur. These statements are based on
a number of assumptions, risks and uncertainties, many of which are beyond the
control of the Company. Investors are cautioned that any such statements are
not guarantees of future performance and that actual future results may differ
materially due to a variety of factors, including intense competition in the
Company’s industry, the operational risks inherent in the Company’s business,
risks associated with the Company’s increasing presence internationally, and
other risks detailed in the Company’s most recently filed Annual Report on
Form 10-K.

                                                          
CAL DIVE INTERNATIONAL, INC. and SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
                                                                   
                                                                   
                                                                   
                   Three Months Ended              Twelve Months Ended
                   December 31,                    December 31,
                   2012            2011            2012            2011
                   (unaudited)                     (unaudited)
                                                                   
Revenues           $ 146,396       $ 127,434       $ 464,847       $ 479,811
Cost of sales       136,318       119,646       467,135       465,545 
Gross profit         10,078          7,788           (2,288  )       14,266
(loss)
Selling and
administrative       13,026          12,907          52,934          59,181
expenses
Asset                6,224           1,561           28,756          38,199
impairment
(Gain) loss on       (18     )       68              (3,363  )       (3,670  )
sale of assets
(Recovery of)
doubtful            -            -             -             (2,240  )
accounts
Operating loss       (9,154  )       (6,748  )       (80,615 )       (77,204 )
Interest             4,643           2,815           14,786          9,227
expense, net
Interest
expense -
adjustment to
conversion           6,218           -               (2,139  )       -
feature of
convertible
debt
Other (income)      285           127           (178    )      337     
expense, net
Loss before          (20,300 )       (9,690  )       (93,084 )       (86,768 )
income taxes
Income tax          (834    )      (919    )      (24,739 )      (19,871 )
benefit
Net loss             (19,466 )       (8,771  )       (68,345 )       (66,897 )
Loss
attributable
to                  (374    )      -             (3,316  )      -       
noncontrolling
interest
Loss
attributable       $ (19,092 )     $ (8,771  )     $ (65,029 )     $ (66,897 )
to Cal Dive
                                                                   
Loss per share
attributable
to Cal Dive:
Basic and          $ (0.21   )     $ (0.10   )     $ (0.70   )     $ (0.73   )
diluted
                                                                   
Weighted
average shares
outstanding:
Basic and           92,757        91,785        92,751        91,742  
diluted
                                                                   
Other
financial
data:
Depreciation
and                $ 15,037        $ 15,524        $ 61,581        $ 66,692
amortization
Non-cash stock
compensation         1,277           2,400           7,762           9,563
expense
EBITDA               13,533         12,779          23,267          40,602

                                                             
CAL DIVE INTERNATIONAL, INC. and SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
                                                                  
                                                                  
                                                 December 31,     December 31,
                                                 2012             2011
ASSETS                                           (unaudited)
                                                                  
Current assets:
Cash and cash equivalents                        $   8,343        $   15,598
Accounts receivable, net                             135,205          132,852
Other current assets                                36,361          32,482
Total current assets                                179,909         180,932
                                                                  
Net property and equipment                           423,536          496,771
                                                                  
Other assets, net                                   27,228          27,237
Total assets                                     $   630,673      $   704,940
                                                                  
                                                                  
LIABILITIES AND EQUITY
                                                                  
Current liabilities:
Accounts payable                                 $   73,480       $   78,277
Other current liabilities                            37,995           36,775
Current maturities of long-term debt                4,219           6,000
Total current liabilities                           115,694         121,052
                                                                  
Long-term debt                                       133,116          144,000
Derivative liability for conversion feature          22,456           -
of convertible debt
Other long-term liabilities                         91,132          110,247
Total liabilities                                   362,398         375,299
                                                                  
Total equity                                         268,275          329,641
                                                                 
Total liabilities and equity                     $   630,673      $   704,940

                                                             
Reconciliation of Non-GAAP Financial Measures
For the Periods Ended December 31, 2012 and 2011
(in thousands)
                                                                   
In addition to net income, one primary measure that the Company uses to
evaluate financial performance is earnings before net interest expense, taxes,
depreciation and amortization, or EBITDA. The Company uses EBITDA to measure
operational strengths and the performance of its business and not to measure
liquidity.EBITDA does not reflect the periodic costs of certain capitalized
tangible and intangible assets used in generating revenues, and should be
considered in addition to, and not as a substitute for, net income and other
measures of financial performance reported in accordance with GAAP.
Furthermore, EBITDA presentations may vary among companies; thus, the
Company's EBITDA may not be comparable to similarly titled measures of other
companies.
                                                                   
The Company believes EBITDA is useful as a measurement tool because it helps
investors evaluate and compare operating performance from period to period by
removing the impact of capital structure (primarily interest charges from
outstanding debt) and asset base (primarily depreciation and amortization of
vessels) from operating results. The Company's management uses EBITDA in
communications with lenders, rating agencies and others, concerning financial
performance.
                                                                   
The following table presents a reconciliation of EBITDA to income (loss)
attributable to Cal Dive, which is the most directly comparable GAAP financial
measure of the Company's operating results:
                                                                   
                                                                   
                                                                   
(all amounts        Three Months Ended               Twelve Months Ended
in thousands)
                    December 31,                     December 31,
                    2012              2011           2012          2011
EBITDA              $  13,533         $  12,779      $ 23,267      $ 40,602
(unaudited)
                                                                   
Less:
Depreciation           15,037            15,524        61,581        66,692
&
amortization
Less: Income           (834     )        (919    )     (24,739 )     (19,871 )
tax benefit
Less: Net
interest               4,643             2,815         14,786        9,227
expense
Less:
Interest
expense -              6,218             -             (2,139  )     -
conversion
feature
adjustment
Less:
Non-cash
stock                  1,277             2,400         7,762         9,563
compensation
expense
Less:
Severance              60                169           2,289         3,689
charges
Less:
Non-cash              6,224           1,561       28,756      38,199  
impairment
charges
Loss
Attributable        $  (19,092  )     $  (8,771  )   $ (65,029 )   $ (66,897 )
to Cal Dive
                                                                   
                                                                   
                                                                   
                                                                   
                                                                   
                    As of 12/31/12
Total debt          $  160,103
^(1)
Less: cash            (8,343   )
Net debt            $  151,760  
                                                                   
                                                                   
^(1) Total debt consists of outstanding balances on the revolver and term loan
and the principal amount of convertible debt.

Contact:

Cal Dive International, Inc.
Brent Smith, 713-361-2634
Executive Vice President, Chief Financial Officer and Treasurer
 
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