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Business Services Industry

Cal Dive Reports First Quarter 2008 Results; Awarded Major Project for Integrated Services

Business Wire, April 30, 2008

HOUSTON -- Cal Dive International, Inc. (NYSE:DVR) reported first quarter 2008 net income of $0.6 million, or $.01 per diluted share compared to $30.1 million and $.36 per diluted share for the same period of 2007. The decrease is primarily due to lower vessel utilization related to winter weather seasonality during the first quarter and is in line with the Company's expectations for 2008. The Company took advantage of the slower period by scheduling close to half of its annual regulatory required drydock and capital improvement out of service days in the first quarter. During the first quarter of 2007, the Company continued to experience a high level of hurricane repair activity and earned stand-by revenue for many of its vessels despite winter weather work interruptions.

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Despite the slow first quarter, the Company's backlog has increased to approximately $450 million as of April 30, 2008 from $175 million as of December 31, 2007. It is expected that approximately 90% of this backlog will be performed during the remainder of 2008. Based on the strength of this backlog and the outlook for new construction and inspection, repair and maintenance demand levels during the good weather months, the Company is re-affirming its annual earnings guidance range for the year.

The Company also announced that it has been awarded a major project to install, trench, backfill, tie-in, and pre-commission a natural gas pipeline off the US East Coast. The project is expected to generate approximately $125 million in revenue and will employ four of the Company's key assets, including the Lone Star, a pipelay barge; the Atlantic, a derrick barge; the Kestrel, a dynamically positioned saturation dive support vessel; and one of the Company's four-point saturation diving vessels. The work is expected to commence in June of 2008 and will be performed in two seasons, with the remaining work scheduled in the summer of 2009.

Quinn Hebert, President and Chief Executive Officer of Cal Dive, stated "We are very excited about the way the market is shaping up. Our customers' confidence and capital spending forecasts are translating into a high level of tendering activity. The East Coast project is a big win for us and it demonstrates the strategic rationale for the recent acquisition of Horizon through the integrated diving, derrick barge and pipelay services we are providing under this project. This contributed to the growth in our backlog to approximately $450 million.

We just weathered a slow first quarter in the Gulf of Mexico but our work outside the Gulf and in international markets remained strong as we earned 50% of our revenues there. That more than doubles the revenues earned outside the Gulf in the first quarter of 2007."

Financial Highlights

* Revenues: First quarter 2008 revenues decreased by $4.6 million to $144.6 million as compared to the first quarter of 2007, primarily due to lower vessel utilization resulting from the weather seasonality during the first quarter of 2008. The seasonality impact during the first quarter of 2008 was significant due to unusually harsh weather in the Gulf of Mexico. This decrease in revenues was partially offset by revenue contributions from certain Horizon assets acquired.

* Gross Profit: First quarter 2008 gross profit decreased by $33.3 million to $24.7 million as compared to the first quarter 2007, primarily due to the decreased vessel utilization as described above as well as increased depreciation and deferred drydock amortization expense. The utilization impact from the harsh weather in the Gulf of Mexico was compounded by the Company's increased exposure in terms of fleet size following the Horizon acquisition. Additionally, the Company expects to realize lower gross margins subsequent to the acquisition of Horizon with its entrance into the pipelay and derrick barge contracting business, which typically has lower gross margins compared to the Company's historical diving services.

* SG&A: First quarter 2008 SG&A increased by $7.5 million over the first quarter 2007, primarily due to the acquisition of Horizon in late 2007 (including approximately $1.9 million of non-cash amortization of related intangible assets and one-time integration costs), increased employee benefit costs and increased information technology costs.

* Net Interest Expense: First quarter 2008 net interest expense increased by $4.2 million over the first quarter of 2007, due to the term loan borrowings incurred in late 2007 in connection with the acquisition of Horizon.

* Income Tax Expense: The effective tax rate for the first quarter 2008 was 31.5% compared to 35.6% for the same period in 2007. The rate decrease is primarily due to an increased percentage of income being earned in foreign jurisdictions with lower income tax rates.

* Balance Sheet: Total debt was $335.0 million and cash and cash equivalents were $52.8 for a net debt position of $282.2 million as of March 31, 2008 compared to a net debt position of $313.7 million at December 31, 2007.

Business Services Industry

Cal Dive Reports First Quarter 2008 Results; Awarded Major Project for Integrated Services

Business Wire, April 30, 2008

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