Cal Dive's restructuring plan nets $2 million in headcount reduction, includes non-core asset sale

By Lisa Kerner

Charlotte, N.C., Nov. 8 - Cal Dive International, Inc. implemented a U.S. domestic restructuring plan in the third quarter that is expected to result in annual cost savings of about $15 million, including $10 million of cash cost savings, and will positively affect EBITDA, said president and chief executive officer Quinn Hebert during the company's earnings call on Thursday.

The plan includes consolidating departments and facilities, reducing headcount and selling non-core assets.

Cal Dive has realized severance costs of $2.2 million associated with the reduction of onshore staff, said Hebert.

The company expects to realize up to $9 million in net proceeds from the sale of two non-core assets, which will be used to repay term debt by year-end.

Debt update

Chief financial office Brent Smith said Cal Dive ended the quarter at Sept. 30 with net debt of $162 million. The total included $43 million of term-loan debt, a $33 million revolver and $86 million of convertible debt.

Cash and cash equivalents were $800,000.

During the quarter, the company repaid $4.8 million of its term loan.

Net debt for the prior-year prior period was about $178 million.

Cal Dive remains in compliance with its debt covenants and expects to remain in compliance in the fourth quarter. As such, there is no limit under its $125 million revolver, providing "more than adequate" liquidity going forward," said Smith.

The company's net book-to-capitalization ratio was 36% at quarter-end.

Financial highlights

Cal Dive reported a third-quarter 2012 loss of $15.9 million, or $0.17 per diluted share, compared to a loss of $34.4 million, or $0.37 per diluted share, for third-quarter 2011.

Third-quarter revenues were up by $5.2 million to $138.1 million from the prior-year period, due mainly to increased international activity offset by a decrease in revenues in the U.S. Gulf of Mexico.

Gross profit declined in the period by $8.2 million to $3.9 million, due in part to lower revenues.

Cal Dive is a Houston-based offshore oil and gas company.

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