Global Industries, Ltd. (GLBL)
Q1 2010 Earnings Call
May 6, 2010 10:00 AM
John Reed - CEO
Peter Atkinson - President
Andy Smith - CFO
Trudy McConnaughhay - VP & Corporate Controller
Jim Rollyson - Raymond James
Martin Malloy - Johnson Rice
Joe Gibney - Capital One
Graham Mattison - Lazard
Michael Marino - Stephens
Brad Handler - Credit Suisse
Previous Statements by GLBL
» Global Industries, Ltd. Q4 2009 Earnings Call Transcript
» Global Industries, Ltd. Q2 2009 Earnings Call Transcript
» Global Industries, Ltd. Q1 2009 Earnings Call Transcript
Welcome to Global Industries first quarter earnings conference call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. (Operator Instructions) Today’s conference is being recorded. If you have any objections, you may disconnect at this time.
On the call this morning are John Reed, Chief Executive Officer; Peter Atkinson, President; Andy Smith, Chief Financial Officer; and Trudy McConnaughhay, Vice President and Corporate Controller.
I’d now like to turn the call over to Mr. Andy Smith. Sir, please begin.
Thank you. Good morning. I’d like to welcome everyone to Global Industries first quarter 2010 earnings conference call. This call is being recorded and will be available on our website at www.globalind.com.
Before we begin, I’d like to remind everyone, certain of our comments and responses to questions reflect our current views and assumptions and are consider forward-looking statements as defined and securities laws and regulations and may include risk and uncertainties, which are more fully described in our filings with the Securities and Exchange Commission. Interested parties are directed to our website for access to our SEC filing.
Now, I’ll turn it over to our Chief Executive Officer, Mr. John Reed. John.
Good morning and welcome to our call. On our call this morning, we will cover operational and financial results. Before we do, I’d like to say a few words about the quarter and our plans going forward. First, we’re clearly disappointed with our first quarter results. The current market for our services is depressed and as a result pricing is suffered.
In this environment execution is crucial. We will continue to improve our execution in all aspects of our business to achieve satisfactory result regardless of market condition. Our favorable market conditions are clearly preferred most actively managed for robust and lien times to that end we’re pursuing a number of initiatives.
First, we’re focused on utilization of our assets and rationalization of our fleet. Over the past few months, we’ve taken a hard look at our fleet and made decisions about some assets and their contribution to our strategic plans. During the quarter we classified two Assets held for sale as they no longer made our needs, assets which are underutilized in effective or inefficient will continued to be evaluated.
Second, we must continue to better match expenses to the revenue for the current opportunities sets, so that we can maintain adequate profitability regardless of market condition. In addition to overall review of our cost structure, each of regional Senior Vice President has been asked to eliminate discretionary spending and to adjust their organizations overall cost structure.
Third, as most of you aware, we will be taking delivery of our newest vessel, the Global 1200 in the third quarter of this year. I’m happy to announce that the 1200 is on schedule and on budget. The 1200 and following it’s completion the 1201 will be the center split pieces of Global’s fleet and we’re currently forming and coordinating marketing operations and project management teams to support each vessel.
Finally, we must maintain our project execution, as many of our projects awarded as fixed price contract, best-in-class, risk management, and project management are imperatives. We recently added to the Global team, John Spratt as Vice President of Project Execution. John brings 30 years of experience in the offshore construction industry and comes from technique were he most recently served as Vice President of Operations.
We’re fortunate to have John on Board and look forward to supporting him and his efforts to further improve our execution. So before I turn it over to Andy for the financial results, I want to say that while the headwinds in the industry still exist, we look forward to an improving backlog throughout the remainder of the year. Andy
Thanks John. For the first quarter of 2010, consolidated revenues were $106.8 million compared with $269.5 million for the same quarter last year. Gross loss was $4.2 million in the first quarter, compared to gross profit of $45.4 million in the same quarter last year. Net loss attributable to common shareholders was $21.4 million or $0.19 per diluted share for the first quarter of 2010, compared to net income of $19 million or $0.17 per diluted share in the first quarter of 2009.
Before I discuss the overall results of operations, I’d like to address a few specific items negatively affecting the quarter. During the quarter, we recognized increased non-cash stock compensation expense of $1.8 million associated with a one-time special grant of equity award to managerial personnel. We also transferred two DSVs to Assets held for sale and took an impairment charge of $700,000 to write these assets down to net realizable value.
Also during the quarter, we resold approximately $11 million of auction rate securities back to the original issuer at a $500,000 discount, which we recognized as a loss on the sales of marketable equity securities during the quarter. Finally, the structure of our international operations resulted in a reverse tax effects idle assets, which continued to incur cost were accounted for a low tax rate into these which serve to reduce the tax benefit we will receive from our losses during the quarter.