CDIS Cal Dive International (MM)

HOUSTON, Nov. 1 /PRNewswire-FirstCall/ -- Cal Dive International, Inc. (NASDAQ:CDIS) reported third quarter net income of $42.7 million, or $1.05 per diluted share. This represents a 78% improvement over last year's third quarter results. The Company sustained damage to certain of its oil and gas production facilities in Hurricanes Katrina and Rita. The Company estimates total repair and inspection costs resulting from the hurricanes will range from $5 million to $8 million, net of insurance reimbursement. These costs, and any related insurance reimbursements, will be recorded as incurred over the next year. Summary of Results (in thousands, except per share amounts and percentages) Third Qtr Second Qtr Nine Months 2005 2004 2005 2005 2004 Revenues $209,338 $131,987 $166,531 $535,444 $380,403 Gross Profit 82,928 45,726 52,419 187,220 118,883 40% 35% 32% 35% 31% Net Income 42,671 22,794 26,027 94,108 54,647 20% 17% 16% 18% 14% Diluted Earnings Per Share 1.05 0.59 0.65 2.34 1.41 Owen Kratz, Chairman and Chief Executive Officer of Cal Dive, stated, "The two hurricanes that occurred during the quarter severely tested the resilience of our people and I am very pleased to report that they passed with flying colors. "Due to the strength of our business model, we produced another record quarter for both earnings and cash flow despite deferring around 12 cents per share of income related to delayed production revenues. It was particularly satisfying to see the Marine Contracting division have such a strong quarter even though the incremental benefit from hurricane related work did not start until late in the period. "The outlook for Q4 is for the Marine Contracting division to perform well again, especially with the introduction of several of the recently acquired assets, offsetting income deferrals resulting from hurricane related shut-ins for both the Oil and Gas division and the Production Facilities division. Based on this outlook we expect 2005 earnings to fall in the range of $3.15 - $3.35 per share." Financial Highlights * Revenues: The $77.4 million increase in year-over-year third quarter revenues was driven primarily by significant improvements in Marine Contracting revenues due to much better market conditions, particularly in both deepwater and shelf subsea construction. * Margins: 40% was five points better than the year-ago quarter due to a significant increase in Marine Contracting margins driven by improved market conditions. * SG&A: $15.9 million increased $5.0 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 third quarter revenues, consistent with the year ago level. * Equity in Earnings: $3.7 million reflects primarily our share of Deepwater Gateway, L.L.C.'s earnings for the quarter. This reflects only a $600,000 increase from the second quarter as the anticipated ramp up with K2 coming online at the Marco Polo facility was offset by downtime caused by the hurricanes. * Balance Sheet: During the third quarter, the Company acquired seven vessels from Torch Offshore, including the Midnight Express for $85.4 million. Total debt as of September 30, 2005 was $443 million. This represents 42% debt to book capitalization and with $316 million of EBITDA for the twelve months ended September 30, 2005, this represents 1.4 times trailing twelve month EBITDA. In addition, the Company had $150 million of unrestricted cash as of September 30, 2005. Most of these funds will be utilized for the previously announced acquisition of certain assets of Stolt Offshore, which the DOJ cleared last month. 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, November 2, 2005, 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. 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; 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; 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, 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. We assume no obligation and do not intend to update these forward-looking statements. CAL DIVE INTERNATIONAL, INC. Comparative Condensed Consolidated Statements of Operations Three Months Ended Nine Months Ended Sept. 30, Sept. 30, (000's omitted, except per share data) 2005 2004 2005 2004 (unaudited) Net Revenues $209,338 $131,987 $535,444 $380,403 Cost of Sales 126,410 86,261 348,224 261,520 Gross Profit 82,928 45,726 187,220 118,883 Gain on Sale of Assets, net 329 --- 1,254 --- Selling and Administrative 15,892 10,926 41,588 34,746 Income from Operations 67,365 34,800 146,886 84,137 Equity in Earnings of Investments 3,721 3,062 8,158 4,372 Interest Expense, net & Other 2,766 838 4,868 3,635 Income Before Income Taxes 68,320 37,024 150,176 84,874 Income Tax Provision 25,099 13,237 54,418 28,486 Net Income 43,221 23,787 95,758 56,388 Preferred Stock Dividends and Accretion 550 993 1,650 1,741 Net Income Applicable to Common Shareholders $42,671 $22,794 $94,108 $54,647 Other Financial Data: Income from Operations $67,365 $34,800 $146,886 $84,137 Equity in Earnings of Investments 3,721 3,062 8,158 4,372 Share of Equity Investments: Depreciation 1,200 1,004 3,207 1,985 Interest Expense, net 143 707 1,562 1,974 Depreciation and Amortization: Marine Contracting 10,033 9,049 29,637 26,862 Oil and Gas Production 18,713 17,316 55,078 52,083 EBITDA (A) $101,175 $65,938 $244,528 $171,413 Weighted Avg. Shares Outstanding: Basic 38,763 38,294 38,686 38,141 Diluted 41,080 39,418 40,981 39,413 Earnings Per Share: Basic $1.10 $0.60 $2.43 $1.43 Diluted $1.05 $0.59 $2.34 $1.41 (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) Sept. 30, 2005 Dec. 31, 2004 (unaudited) Current Assets: Cash and equivalents $150,497 $91,142 Accounts receivable 148,961 114,709 Other current assets 69,232 48,110 Total Current Assets 368,690 253,961 Net Property & Equipment: Marine Contracting 490,082 411,596 Oil and Gas Production 378,124 172,821 Equity Investments 168,198 67,192 Goodwill 82,476 84,193 Other assets, net 72,329 48,995 Total Assets $1,559,899 $1,038,758 LIABILITIES & SHAREHOLDERS' EQUITY Sept. 30, 2005 Dec. 31, 2004 (unaudited) Current Liabilities: Accounts payable $81,612 $56,047 Accrued liabilities 109,818 75,502 Current mat of L-T debt (B) 6,566 9,613 Total Current Liabilities 197,996 141,162 Long-term debt (B) 435,949 138,947 Deferred income taxes 177,453 133,777 Decommissioning liabilities 118,344 79,490 Other long term liabilities 11,623 5,090 Convertible preferred stock (B) 55,000 55,000 Shareholders' equity (B) 563,534 485,292 Total Liabilities & Equity $1,559,899 $1,038,758 (B) Debt to book capitalization - 42%. Calculated as total debt ($442,515) divided by sum of total debt, convertible preferred stock and shareholders' equity ($1,061,049). DATASOURCE: Cal Dive International, Inc. CONTACT: Wade Pursell, Chief Financial Officer of Cal Dive International, Inc., +1-281-618-0400, or fax, +1-281-618-0505 Web site: http://www.caldive.com/

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