Cal Dive International, Inc. (NYSE:DVR) reported a first quarter 2011 net loss of $18.7 million, or $.20 per diluted share compared to a net loss of $19.1 million, or $.20 per diluted share for the first quarter 2010. Despite typical winter seasonality, the first quarter 2011 loss before income taxes improved by $8.5 million to $22.5 million from a loss before income taxes of $31.0 million in the first quarter 2010 due to a general increase in vessel utilization and diving related activity in Australia.
Effective utilization for the Company’s saturation diving vessels increased from 39% to 48%, surface diving vessels increased from 22% to 34% and construction barges increased from 6% to 15%, from the first quarter of 2010 to the first quarter of 2011, respectively. The increase in utilization includes a project for the removal of a large jetty and installation of a new platform and related pipelines in the Bahamas.
The positive impact from increased activity levels during the first quarter of 2011 was partially offset by a reduced tax benefit compared to the first quarter of 2010. The decrease in tax benefit is due to a non-cash valuation allowance recorded in the first quarter of 2011 relating to certain losses in foreign jurisdictions and a higher percentage of the pre-tax losses generated in tax jurisdictions with lower tax rates. The Company did not record a valuation allowance in the first quarter of 2010.
As previously announced, the Company has renewed its existing credit facility for five years through April 2016. The $450 million credit facility consists of a $300 million revolving facility and a $150 million term loan. Under the renewed credit facility, quarterly principal payments on the term loan were significantly reduced such that no payments are required until June 30, 2012 when quarterly payments in the amount of $2 million commence. The quarterly principal payments will remain at $2 million until June 30, 2013 when they increase to $4 million for the duration of the facility. A final payment of approximately $94 million will be due at maturity in April 2016. Prior to the renewal, quarterly principal payments were $14.8 million with a final payment of $61.5 million scheduled at maturity in December 2012.
Quinn Hébert, Chairman, President and Chief Executive Officer of Cal Dive , stated, “ While the first quarter experienced typical winter seasonality effects coupled with continued challenging market conditions, we were able to improve our pre-tax loss and EBITDA results over the first quarter of 2010. Permitting activity is slowly recovering in the Gulf of Mexico and we continue to believe that 2011 will be a transition year as our customers learn how to navigate through the new rules and regulations. Internationally, our large construction project in the Bahamas is going well and we will commence pipelay operations on our Mexico project during the second quarter. In addition, we remain busy with diving related work on the Gorgon project in Australia. Markets in the Eastern Hemisphere continue to be highly competitive although we were able to increase utilization for the Sea Horizon compared to the first quarter of 2010. Moving forward, we are pleased to have completed the renewal of our credit facility with reduced debt payments which will provide us with additional financial flexibility as we continue to focus on growth opportunities .”
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Source: phx.corporate , May 4, 2011