Cal Dive International, Inc. (DVR)
Q2 2010 Earnings Call
July 29, 2010 11:00 a.m. ET
Quinn Hébert – Chairman, President and CEO
Bruce Koch – EVP, CFO and Treasurer
Scotty Naughton – EVP and COO
Lisa Buchanan – EVP, General Counsel and Secretary
Jim Rollyson - Raymond James
Marty Malloy - Johnson Rice & Company
Roger Read - Natexis Bleichroeder
Joe Gibney - Capital One Southcoast
Terese Fabian - Sidoti & Co.
Previous Statements by DVR
» Cal Dive International, Inc. Q1 2010 Earnings Call Transcript
» Cal Dive International, Inc. Q4 2008 Earnings Call Transcript
» Cal Dive International, Inc. Q3 2008 Earnings Call Transcript
Good day ladies and gentlemen and welcome to the Second Quarter 2010 Cal Dive International, Earnings Conference Call. My name is Erica and I'll be your coordinator for today. At this time all participants are in listen-only mode. We would be facilitating a question-and-answer session towards the end of this conference. (Operator Instructions).
I would now like to turn the presentation over to your host for today's call, Mr. Quinn Hébert, Chief Executive Officer and President of Cal Dive. Please proceed sir.
Okay, good morning everyone. Welcome to Cal Dive's second quarter 2010 earnings call. With me today is Bruce Koch, our Chief Financial Officer; Scotty Naughton, our Chief Operating Officer; Lisa Buchanan, our General Counsel; and Brent Smith, our Vice President of Finance.
To follow along this mornings presentation, that can be found at our website at www.caldive.com under the Investor Relations hot button. Turning to slide two, we have a forward-looking statement from Lisa Buchanan, our General Counsel.
Thank you, Quinn. This conference call includes forward-looking statements, particularly with respect to any statements that we make regarding our earnings and expectations. The forward-looking statements made during this call are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Our actual future results may differ materially due to a variety of factors. For information concerning the factors that could cause our actual results to differ, we refer you to the risk factors described in our Form 10-K on file with the Securities and Exchange Commission. This call also includes certain non-GAAP financial measures. For a reconciliation of the non-GAAP financial measures to their most directly comparable GAAP financial measures, we refer you to our earnings press release and the presentation slides for this call.
Okay. We'll go to slide three, agenda today will our normal agenda while make some remarks, talk about our backlog. And Bruce will then deliver more detail on our financial reserves discussion and then we'll open up the phone lines for Q&A.
On slide four, although we're disappointed about reporting a loss to this quarter. We do see improvement in the market from the first quarter as the weather in the Gulf of Mexico improved, our customers starts spending money there and a lot of -- most of our major assets to return to work offshore in the middle of May.
We attribute the lack of activities especially in the Gulf to a reduction in hurricane repair work as compared to higher levels in last years second quarter. The large effect have decreased offshore drilling in '09 and the general and sale need in the economic outlook and commodity prices. And the recent Macondo well blowout only increased certainly this time.
Before I go any further I just want to make a comment about the Macondo well blow, we talked a lot about it and in our industry it was a tragedy especially for 11 families that lost loved ones. So, when we talked about the blow we really talk about it with a heavy heart for those folks.
Additionally, in the second quarter in '09 there were three large construction projects that were working offshore. One in LNG project off of Boston, one China and Mexico that did not reoccur in 2010, so that impacted our 2010 results of course. As a result of all these factors, vessel utilization day rates was significantly reduced in 2010 second quarter especially when you comparing to 2009 levels, and those reduction in activity and rates hit us in our most profitable active class in the saturation diving and construction boarder.
Internationally, the fleet arrived which is our large combination deck LIBOR continue to be in scheduled dive activity in the second quarter. That boarder work almost continuously for three years non-stop. It required an extensive drive out and refitting. We're continuing to purse work for the Sea Horizon in the second half of this year.
The two VP SAT boats that we have positioned in the Eastern hemisphere went to work late in the second quarter and are working offshore right in the South China fleet and the Black Sea. As a total utilization of the assets for the second quarter this year were 50 days and that compared to the second quarter of last year they worked for over 200 days.
Obviously, the talk of our industry in the country is really impact from the oil still in the Gulf of Mexico, I wish I would say the exact long term impact for our company. There's just no way to know at this time and frankly even my information is not better than anybody else's. There are many factors that play here and the situation is obviously very dynamic.
But I can tell you is that we are performing some work related to the Macondo spill containment operations that surely is particularly offset some of the negative impact. Most of our assets are currently working offshore and expecting this upcoming third quarter to be our most profitable quarter of the year.