HOUSTON, March 31, 2015 /PRNewswire/ -- Deep Down,
Inc. (OTCQX: DPDW) ("Deep Down" or the "Company"), an oilfield
services company specializing in complex deepwater and
ultra-deepwater oil production distribution system support
services, today reported financial results for the year ended
December 31, 2014.
OPERATING RESULTS
For 2014, Deep Down reported a net loss of $5.8 million, or $0.38 loss per diluted share, compared to a net
loss of $0.6 million, or $0.05 loss per diluted share for 2013. This loss
included the full impairment of our goodwill, previously recorded
on our balance sheet at $4.9 million.
This impairment was due to the effect on our business from the
reduction in oil prices, and the impact it had on the energy
market.
Revenues for 2014 were $28.6
million, and were relatively flat when compared to revenues
of $29.6 million for 2013. The
$1.0 million decrease is primarily
the result of customer delays in certain projects caused by the
recent drop in oil prices.
Gross profit as a percentage of revenues for 2014 was a slightly
improved 30 percent, compared to 2013's 29 percent.
The Company's management evaluates its financial performance
based on a non-GAAP measure, Modified EBITDA, which consists of
earnings (net income or loss) available to common shareholders
before net interest expense, income taxes, depreciation and
amortization, and other non-cash and non-recurring charges.
Modified EBITDA in 2014 was equal to 2013 except for a one-time
adjustment in 2013 for the purchase of a carousel fabricated by the
Company for a customer that had been accounted for on a
percentage-of-completion basis. The carousel was in the final
stages of completion, and we were required to book the purchase at
our cost, effecting a $1.4 million
adjustment to net income.
At December 31, 2014, we had
working capital of $12.3 million,
including cash and cash equivalents of $5.3
million. Because of these factors, and because of cash we
expect to generate from operations, we believe that we will have
adequate liquidity to meet our future operating requirements.
Ronald E. Smith, Chief Executive
Officer, stated, "The significant drop in oil prices resulted in
delays of several of our customers' projects, many of which are now
beginning to pick up again as the industry readjusts to the new
environment. While we are disappointed in the financial results for
2014, we are optimistic about the new opportunities being presented
by lower oil prices. Our after-market business is receiving
increased attention from operators, several of whom have already
engaged us to assist them weather this turbulent period.
"The outlook for 2015 remains uncertain; however, production
projects for deepwater and ultra-deepwater continue to be very
active despite the lower oil prices. Our current backlog is
approximately $31 million and
continues to grow. However, in light of the uncertainties in our
market, we have commenced a cost containment and cost reduction
program, which will enable us to better align ourselves with the
changing market without limiting our ability to continue serving
our customers. We remain cautiously optimistic for the future,
especially in light of our diverse service offerings."
EARNINGS CONFERENCE CALL
In connection with this earnings release, Deep Down will
host its annual conference call on Wednesday, April 1, 2015 at 4:30 PM Eastern Time (3:30
PM Central Time). Interested investors are invited to dial
the toll free number at (877) 303-6187 and provide the Conference
ID: 18567668.
At the conclusion of the call, a replay will be available until
April 6, 2015. To access the
replay of the call dial (855) 859-2056 and provide the same
Conference ID.
The call can also be accessed via the web by going to the
Investor Relations section of the Company's website at
www.deepdowninc.com.
About Deep Down, Inc.
Deep Down, Inc. is an oilfield services company serving the
worldwide offshore exploration and production industry. Deep Down's
proven services and technological solutions include distribution
system installation support and engineering services, umbilical
terminations, loose-tube steel flying leads (LSFL), installation
buoyancy, ROVs and tooling, marine vessel automation, control, and
ballast systems. Deep Down supports subsea engineering,
installation, commissioning, and maintenance projects through
specialized, highly experienced service teams and engineered
technological solutions. The company's primary focus is on more
complex deepwater and ultra-deepwater oil production distribution
system support services and technologies, used between the platform
and the wellhead. More information about Deep Down is available at
www.deepdowncorp.com.
Forward-Looking Statements
Any forward-looking statements in the preceding paragraphs of
this release are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Investors are
cautioned that such forward-looking statements involve risks and
uncertainties in that actual results may differ materially from
those projected in the forward-looking statements. In the course of
operations, we are subject to certain risk factors, competition and
competitive pressures, sensitivity to general economic and
industrial conditions, international political and economic risks,
availability and price of raw materials and execution of business
strategy. For further information, please refer to the Company's
filings with the Securities and Exchange Commission, copies of
which are available from the Company without charge.
DEEP DOWN,
INC.
|
SUMMARY FINANCIAL
DATA
|
|
|
|
|
|
Year
Ended
|
|
December
31,
|
|
2014
|
|
2013
|
(in thousands,
except per share amounts)
|
|
|
|
Results of
operations data:
|
|
|
|
Revenues
|
$
28,630
|
|
$
29,593
|
Cost of
sales
|
20,033
|
|
20,879
|
Gross
profit
|
8,597
|
|
8,714
|
Total operating
expenses
|
14,532
|
|
8,927
|
Operating
loss
|
(5,935)
|
|
(213)
|
Total other income
(expense)
|
142
|
|
(400)
|
Loss before income
taxes
|
(5,793)
|
|
(613)
|
Income tax (expense)
benefit
|
(10)
|
|
18
|
Net
income
|
$
(5,803)
|
|
$
(595)
|
|
|
|
|
Net income per share,
basic and diluted
|
|
|
|
Basic
|
$
(0.38)
|
|
$
(0.05)
|
Diluted
|
$
(0.38)
|
|
$
(0.05)
|
|
|
|
|
Weighted-average
shares outstanding:
|
|
|
|
Basic
|
15,179
|
|
11,858
|
Diluted
|
15,179
|
|
11,860
|
|
|
|
|
(in
thousands)
|
|
|
|
Modified EBITDA
data:
|
|
|
|
Net
loss
|
$
(5,803)
|
|
$
(595)
|
Add back interest
expense, net
|
205
|
|
195
|
Add back income tax
expense (benefit)
|
10
|
|
(18)
|
Add back depreciation
and amortization
|
1,599
|
|
1,583
|
Add back goodwill
impairment
|
4,916
|
|
-
|
Add back share-based
compensation
|
693
|
|
610
|
Add back inventory
obsolescence
|
205
|
|
-
|
Add back Panama exit
costs
|
188
|
|
-
|
Adjustment for estimated revenue reduction due
to buy-back of fabricated asset
|
-
|
|
1,418
|
Add back technology
investment expense
|
-
|
|
225
|
Modified
EBITDA
|
$
2,013
|
|
$
3,418
|
|
|
|
|
(in
thousands)
|
|
|
|
Cash flow
data:
|
|
|
|
Cash provided by
(used in):
|
|
|
|
Operating
activities
|
$
(145)
|
|
$
(1,438)
|
Investing
activities
|
(314)
|
|
(556)
|
Financing
activities
|
(3,389)
|
|
5,731
|
|
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
(in
thousands)
|
|
|
|
Balance sheet
data:
|
|
|
|
Cash and cash
equivalents
|
$
5,312
|
|
$
5,260
|
Current
assets
|
22,015
|
|
16,614
|
Current
liabilities
|
9,754
|
|
4,705
|
Working
capital
|
12,261
|
|
11,909
|
Total
assets
|
34,720
|
|
38,302
|
Total debt
|
5,615
|
|
4,934
|
Total
liabilities
|
9,754
|
|
7,923
|
Stockholders'
equity
|
24,966
|
|
30,379
|
Logo -
http://photos.prnewswire.com/prnh/20121204/LA23242LOGO
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/deep-down-reports-2014-results-300058200.html
SOURCE Deep Down, Inc.