Cal Dive International Inc. Reports Operating Results (10-Q)
CAL DIVE has provided manned diving services on the Gulf of Mexico Outer Continental Shelf.They areone of the largest marine diving contracting companys in the world.They also offers general diving services working off customer vessels or platforms. As the market leader for marine construction and diving services. The Company\'s focus is marine construction diving and offshore services. Cal Dive International Inc. has a market cap of $827.4 million; its shares were traded at around $8.93 with a P/E ratio of 7.7 and P/S ratio of 1. Highlight of Business Operations: As of June 30, 2009, our backlog supported by written agreements or contract awards totaled approximately $284 million, compared to approximately $350 million as of December 31, 2008 and $484 million at June 30, 2008. The majority of our backlog is expected to be performed during 2009, except for $71 million which we expect to perform in 2010 and 2011. These backlog contracts are cancellable without penalty in most cases. Backlog is not a reliable indicator of total annual revenues because of the significant percentage of our revenues derived from the spot market, which are not reflected in our backlog.
Gross profit. Gross profit for the six months ended June 30, 2009 increased $37.6 million, or 52%, to $109.6 million, compared to $71.9 million for the six months ended June 30, 2008. This increase was primarily attributable to increased utilization due to increased domestic and international new construction activities and hurricane-related repair and salvage activity following hurricanes Gustav and Ike. In addition, we recorded a $5.9 million reduction to cost of sales during the six months ended June 30, 2009 related to insurance recoveries, net of expenses recorded, for damages incurred to our property and equipment during hurricanes Gustav and Ike and a claim from a prior year incurred during the normal course of business.
We have a senior secured credit facility, which consists of a term loan and a $300 million revolving credit facility, with certain financial institutions. At June 30, 2009, we had outstanding debt of $275 million under the term loan and $100 million under the revolving credit facility, $87.0 million of cash on hand and $190.0 million available under our revolving credit facility. The revolving and term loans under this facility mature on December 11, 2012, with quarterly principal payments of $20 million payable on the term loan. We may pay down or borrow from the revolving credit facility as business needs merit. At June 30, 2009, we had issued and outstanding letters of credit to secure performance bonds of $10.0 million under our revolving credit facility and $12.5 million on an unsecured basis with another financial institution. See Credit Facility below.
During the six months ended June 30, 2009 and 2008, we generated positive operating cash flow of approximately $111.9 million and $26.8 million, respectively. We utilized our operating cash flow to fund capital expenditures and recertification costs and to reduce our debt. In January 2009, we borrowed $100 million under our revolving credit facility to repurchase and retire $86 million of our common stock from Helix. The remaining $14 million of cash borrowed was used to repurchase and retire additional shares of our common stock from Helix in June 2009. For the six months ended June 30, 2009 and 2008, our cash flows are summarized as follows (in thousands):
We incur capital expenditures for recertification costs relating to regulatory drydocks on our vessels as well as costs for major replacements and improvements, which extend the vessels economic useful life. Inclusive of accrued costs, total capital expenditures incurred for these activities during the three and six months ended June 30, 2009 include $3.9 million and $9.4, respectively, for recertification costs, and $17.5 million and $37.3 million, respectively, relating to steel and equipment replacement, equipment purchases and operating lease improvements. For 2009, we anticipate capital expenditures, excluding acquisitions, of $78 million for recertification costs for regulatory drydocks and for replacements and vessel improvements. We may also incur capital expenditures for strategic investments and acquisitions.
On January 26, 2009, we borrowed $100 million under our revolving credit facility, which we used to fund the repurchase from Helix and retirement of approximately 13.6 million shares of our common stock in January 2009 for $6.34 per share, and approximately 1.65 million shares of our common stock in June 2009 for $8.50 per share. At June 30, 2009, we had $275 million outstanding under the term loan, $100 million outstanding under the revolving credit facility and had issued letters of credit totaling $10 million to secure performance bonds. At June 30, 2009 we had $190 million available under the revolving credit facility. We expect to use the remaining availability under the revolving credit facility for working capital, strategic investments and acquisitions, and other general corporate purposes as needed.
Read the The complete Report