<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the quarterly period ended June 30, 2000
( ) Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from _____________to ______________
-------------------------------
Commission File Number: 0-22739
-------------------------------
Cal Dive International, Inc.
(Exact Name of Registrant as Specified in its Charter)
Minnesota 95-3409686
(State or Other Jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
400 N. Sam Houston Parkway E.
Suite 400
Houston, Texas 77060
(Address of Principal Executive Offices)
(281) 618-0400
(Registrant's telephone number,
Including area code)
-------------------------------
Indicate by check whether the registrant (1) has filed all reports required
to be filed by Section 13(b) or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
At August 14, 2000 there were 15,734,353 shares of common stock, no par
value outstanding.
<PAGE> 2
CAL DIVE INTERNATIONAL, INC.
INDEX
Part I. Financial Information Page
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 2000 and December 31, 1999......................... 1
Consolidated Statements of Operations -
Three Months Ended June 30, 2000 and
June 30, 1999............................................ 2
Six Months Ended June 30, 2000 and
June 30, 1999............................................ 3
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2000 and
June 30, 1999............................................ 4
Notes to Consolidated Financial Statements...................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 7
Part II: Other Information
Item 6. Exhibits and Reports on Form 8-K........................ 12
Signatures...................................................... 13
<PAGE> 3
PART I. FINANCIAL STATEMENTS
Item 1. Financial Statements
CAL DIVE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, Dec. 31,
2000 1999
--------- ---------
ASSETS (unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 0 $ 11,310
Restricted cash 498 8,686
Accounts receivable --
Trade, net of revenue allowance
on gross amounts billed of
$2,655 and $1,789 28,990 48,191
Unbilled 4,931 3,430
Other current assets 18,088 16,327
--------- ---------
Total current assets 52,507 87,944
--------- ---------
PROPERTY AND EQUIPMENT 225,253 180,519
Less - Accumulated depreciation (56,334) (45,862)
--------- ---------
168,919 134,657
--------- ---------
OTHER ASSETS:
Goodwill 13,495 13,792
Other assets, net 13,115 7,329
--------- ---------
$ 248,036 $ 243,722
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 25,459 $ 31,834
Accrued liabilities 17,570 17,223
Income taxes payable 1,330 0
--------- ---------
Total current liabilities 44,359 49,057
LONG-TERM DEBT 1,090 0
DEFERRED INCOME TAXES 17,042 16,837
DECOMMISSIONING LIABILITIES 30,363 26,956
SHAREHOLDERS' EQUITY:
Common stock, no par, 60,000 shares
authorized, 22,549 and 22,395 shares issued 76,221 73,311
Retained earnings 82,712 81,312
Treasury stock, 6,820 shares, at cost (3,751) (3,751)
--------- ---------
Total shareholders' equity 155,182 150,872
--------- ---------
$ 248,036 $ 243,722
========= =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
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CAL DIVE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months
Ended June 30,
----------------------
2000 1999
-------- --------
(unaudited)
<S> <C> <C>
NET REVENUES:
Subsea and salvage $ 23,970 $ 29,563
Natural gas and oil production 15,931 4,541
-------- --------
39,901 34,104
COST OF SALES:
Subsea and salvage 21,583 24,511
Natural gas and oil production 7,900 3,869
-------- --------
Gross profit 10,418 5,724
SELLING AND ADMINISTRATIVE EXPENSES 4,953 2,455
-------- --------
INCOME FROM OPERATIONS 5,465 3,269
NET INTEREST (INCOME) AND OTHER 27 (772)
-------- --------
INCOME BEFORE INCOME TAXES 5,438 4,041
Provision for income taxes 1,904 1,400
Minority interest (126) 0
-------- --------
NET INCOME $ 3,660 $ 2,641
======== ========
EARNINGS PER COMMON SHARE:
Basic $ 0.23 $ 0.18
Diluted $ 0.23 $ 0.18
======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 15,711 14,685
Diluted 16,155 15,075
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
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<PAGE> 5
CAL DIVE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
----------------------
2000 1999
-------- --------
(unaudited)
<S> <C> <C>
NET REVENUES:
Subsea and salvage $ 54,308 $ 52,817
Natural gas and oil production 25,702 7,293
-------- --------
80,010 60,110
COST OF SALES:
Subsea and salvage 46,760 43,159
Natural gas and oil production 14,435 5,970
-------- --------
Gross profit 18,815 10,981
SELLING AND ADMINISTRATIVE EXPENSES 9,249 5,028
-------- --------
INCOME FROM OPERATIONS 9,566 5,953
NET INTEREST (INCOME) AND OTHER (173) (1,320)
-------- --------
INCOME BEFORE INCOME TAXES 9,739 7,273
Provision for income taxes 3,409 2,545
Minority interest (544) 0
-------- --------
NET INCOME $ 6,874 $ 4,728
======== ========
EARNINGS PER COMMON SHARE:
Basic $ 0.44 $ 0.32
Diluted $ 0.43 $ 0.32
======== ========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic 15,660 14,651
Diluted 16,104 14,994
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
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CAL DIVE INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
--------------------
2000 1999
-------- --------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 6,874 $ 4,728
Adjustments to reconcile net income to net cash
provided by operating activities --
Depreciation and amortization 13,231 6,641
Deferred income taxes 205 1,870
Equity in earnings of Aquatica, Inc. 0 (450)
Gain on sale of gas and oil properties (155) 0
Changes in operating assets and liabilities:
Accounts receivable, net 17,700 (4,962)
Other current assets (1,740) (3,368)
Accounts payable and accrued liabilities (6,045) 5,492
Income taxes payable/receivable 2,845 (219)
Other non-current, net (9,419) (3,862)
-------- --------
Net cash provided by operating activities 23,496 5,870
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (47,900) (32,015)
Restricted cash 8,188 0
Prepayment of decommissioning liabilities 0 7,750
(Purchase) release of deposits restricted for
salvage operations 1,713 (93)
Proceeds from sales of property 510 157
-------- --------
Net cash used in investing activities (37,489) (24,201)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings under term loan facility 1,090 0
Exercise of stock options 1,593 1,427
-------- --------
Net cash provided by financing activities 2,683 1,427
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (11,310) (16,904)
CASH AND CASH EQUIVALENTS:
Balance, beginning of period 11,310 32,843
-------- --------
Balance, end of period $ 0 $ 15,939
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
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<PAGE> 7
CAL DIVE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 - Basis of Presentation and Significant Accounting Policies
The accompanying financial statements include the accounts of Cal Dive
International, Inc. (Cal Dive or the Company) and its wholly owned subsidiaries,
Energy Resource Technology, Inc. (ERT) and Aquatica, Inc. All significant
intercompany accounts and transactions have been eliminated. These financial
statements are unaudited, have been prepared pursuant to instructions for the
Quarterly Report on Form 10-Q required to be filed with the Securities and
Exchange Commission and do not include all information and footnotes normally
included in financial statements prepared in accordance with generally accepted
accounting principles.
Management has reflected all adjustments (which were normal recurring
adjustments) which it believes are necessary for a fair presentation of the
consolidated balance sheets, results of operations, and cash flows, as
applicable. Operating results for the periods ended June 30, 2000, are not
necessarily indicative of the results that may be expected for the year ending
December 31, 2000. These financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for its fiscal year ended December 31,
1999.
Note 2 - Offshore Property Transactions
In February 2000, ERT acquired interests in six offshore blocks from EEX
Corporation and agreed to operate the remaining EEX properties on the Outer
Continental Shelf (OCS). The acquired offshore blocks include working interests
from 40% to 75% in five platforms, one caisson and 13 wells. ERT agreed to a
purchase price of $4.9 million and assumed EEX's prorated share of the
abandonment obligation for the acquired interests, and entered into a two-year
contract to manage the remaining EEX operated properties. EEX personnel who
operated these properties became ERT employees.
In April, 2000, ERT acquired a 20% working interest in Gunnison, a Deepwater
prospect in the Gulf of Mexico of Kerr-McGee Oil & Gas Corporation. Kerr-McGee,
the operator, has drilled an initial well and sidetrack in 3,200 feet of water
at Garden Banks 668, one of three lease blocks that comprise the Gunnison
prospect, and encountered significant potential reserves. Consistent with CDI's
philosophy of avoiding exploratory risk, financing for the exploratory costs is
being provided by an investment partnership, the investors of which are CDI
senior management in exchange for a 25% override of CDI's working interest. Once
the decision has been made to begin development, CDI has the right to
participate in field development planning and funding and will collaborate with
the working interest owners in the execution of subsea construction work.
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<PAGE> 8
Note 3 - Business Segment Information (in thousands)
June 30, 2000 December 31, 1999
------------- -----------------
(unaudited)
Identifiable Assets --
Subsea and Salvage $181,390 $197,570
Natural Gas and Oil Production 66,646 46,152
-------- --------
Total $248,036 $243,722
-------- --------
Note 4 - Loss of Vessel
In late June, 2000 the DP DSV Balmoral Sea caught fire while dockside in New
Orleans, LA. The fire broke out as the vessel was being prepared to enter
drydock for an extended period. The vessel crew was evacuated and no injuries
were reported. During the fire fighting operation conducted by the City of New
Orleans, the vessel listed and sank in approximately 30 feet of water. The
Balmoral Sea has been deemed a total loss by insurance underwriters; her book
value (approximately $7 million) is fully insured as are all salvage and
removal costs.
Note 5 - Subsequent Event - Shelf Registration Statement
In July, 2000 the Company filed a shelf registration statement with the
Securities and Exchange Commission covering the sale of up to 4.3 million
shares, which may be sold from time to time by CDI and/or certain of its
shareholders, including CDI's largest shareholder, Coflexip, which has demand
registration rights with respect to the CDI shares it owns.
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<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
FORWARD LOOKING STATEMENTS AND ASSUMPTIONS
This Quarterly Report on Form 10-Q includes or incorporates by reference
certain statements that may be deemed "forward looking statements" under
applicable law. Forward looking statements and assumptions in this Form 10-Q
that are not statements of historical fact involve risks and assumptions that
could cause actual results to vary materially from those predicted, including
among other things, unexpected delays and operational issues associated with
turnkey projects, the price of crude oil and natural gas, offshore weather
conditions, change in site conditions, and capital expenditures by customers.
The Company strongly encourages readers to note that some or all of the
assumptions, upon which such forward looking statements are based, are beyond
the Company's ability to control or estimate precisely, and may in some cases be
subject to rapid and material change.
RESULTS OF OPERATIONS
Comparison of Three Months Ended June 30, 2000 and 1999
Revenues. During the three months ended June 30, 2000, the Company's
revenues increased 17% to $39.9 million compared to $34.1 million for the three
months ended June 30, 1999. The increase was generated by the Natural Gas and
Oil Production segment (which represents ERT's operating results) which recorded
a 251% increase in revenues, offsetting a $5.6 million decline in Subsea and
Salvage sales. The decline in Subsea and Salvage was due to continued weak
industry demand and our decision to take five vessels out of service for
regulatory inspections/upgrades for a combined 206 days during the quarter,
compared to one vessel out of service 30 days during the same period of 1999.
The decline in Subsea and Salvage revenues was partially offset by contributions
from new assets, which include the acquisition of the newbuild DP vessel Cal
Dive Aker Dove, (which was placed in service in the third quarter of 1999), and
Aquatica, Inc. (which has been consolidated since the third quarter of 1999 when
we acquired the 55% of this company not previously owned).
Natural Gas and Oil Production revenue for the three months ended June 30,
2000 increased $11.4 million to $15.9 million from $4.5 million during the
comparable prior year period. Recent property acquisitions and the success of
last year's rig recompletion program combined to generate production of 4.2 Bcfe
in the second quarter of 2000 versus 1.8 Bcfe in the comparable period of 1999.
Natural gas prices averaged $3.40 per mcf during the latest quarter in contrast
to $2.10 a year ago, while oil and condensate averaged $26.50/bbl. Oil
production was not significant in the second quarter last year.
Gross Profit. Gross profit of $10.4 million for the second quarter of 2000
represents an 82% increase compared to the $5.7 million recorded in the
comparable prior year period due to the aforementioned revenue increase coupled
with a 9 point increase in margins (from 17% to 26%). The margin increase is due
mainly to an improvement of 35 points in Natural Gas and Oil Production margins
to 50% for the three months ended June 30, 2000 from 15% during the comparable
period of 1999 when commodity prices were at depressed levels. Lower Subsea
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<PAGE> 10
and Salvage margins are due to drydock downtime and soft market conditions which
resulted in only 60% utilization of those CDI vessels available for service. In
addition, the Cal Dive Aker Dove reported an operating loss due to only 40%
utilization and the lease payments for this vessel being included in charter
expense (the Dove was the subject of a sale and leaseback financing in the
fourth quarter of 1999).
Natural Gas and Oil Production gross profit increased $7.3 million from
$672,000 in the second quarter of 1999 to $8.0 million for the three months
ended June 30, 2000, due to the aforementioned improvement in both natural gas
prices and production which increased 62% and 133% respectively.
Selling & Administrative Expenses. Selling and administrative expenses
were $5.0 million in the second quarter of 2000, or 100% more than the $2.5
million incurred in the same period of 1999 due mainly to accruals for the ERT
employee incentive program, which is tied to that subsidiary's pre-tax income.
Accordingly, significantly improved second quarter results for the Natural Gas
and Oil Production segment accounts for $1.5 million of the increase and
consolidation of Aquatica added another $700,000.
Net Interest (Income) Expense and Other. The Company reported net interest
expense and other of $27,000 for the three months ended June 30, 2000 in
contrast to $772,000 of net interest income and other for the three months ended
June 30, 1999. This line item also included $350,000 of equity in Aquatica
earnings during the second quarter of 1999. Aquatica became a wholly owned
subsidiary in August 1999. Net interest expense for the three months ended June
30, 2000 reflects a reduction in cash balances as a result of our spending
program, principally for construction of the Q4000 vessel ,and the recording of
goodwill amortization expense related to the acquisition of the balance of
Aquatica, Inc. stock.
Income Taxes. Income taxes increased to $1.9 million for the three months
ended June 30, 2000, compared to $1.4 million in the comparable prior year
period due to increased profitability.
Net Income. Net income of $3.7 million for the three months ended June 30,
2000 was $1.0 million, or 39%, more than the comparable period in 1999 as a
result of factors described above. Diluted earnings per share increased only 29%
reflecting the additional shares issued to acquire Aquatica, Inc. in the third
quarter of 1999.
Comparison of Six Months Ended June 30, 2000 and 1999
Revenues. During the six months ended June 30, 2000, the Company's
revenues increased 33% to $80.0 million compared to $60.1 million for the six
months ended June 30, 1999 with the Natural Gas and Oil Production segment
contributing $18.4 million of the increase and the Subsea and Salvage segment
contributing the remaining $1.5 million. The Subsea and Salvage segment revenues
include almost $12.0 million of revenues from the addition of the DP vessel Cal
Dive Aker Dove and the acquisition of the 55% of Aquatica, Inc. not previously
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<PAGE> 11
owned. Exclusive of these new assets Subsea and Salvage contributed $10.4
million less in the first half of 2000 than it did in the first half of 1999 due
primarily to more difficult market conditions and to eight vessels being out of
service during the first half of 2000 for a combined 416 days for U.S. Coast
Guard and ABS inspections compared to three vessels for a combined 113 days
during the first half of 1999.
Natural Gas and Oil Production revenue for the six months ended June 30,
2000 increased 252% to $25.7 million from $7.3 million during the comparable
prior year period due to a 127% increase in production as a result of the
acquisition of interests in six offshore blocks from EEX during the first
quarter as well as additional production derived from 1999 property acquisitions
(involving a total of 20 offshore blocks) and last year's well exploitation
program. In addition we realized an average gas price of $3.03 per mcfe in the
first half of 2000, an increase of $1.12, or 59%, over the first half of 1999.
Gross Profit. Gross profit of $18.8 million for the first half of 2000 was
71% better than the $11.0 million gross profit recorded in the comparable prior
year period due mainly to the revenue improvement as well as a six point
improvement in margins (24% the first half of 2000 versus 18% in the comparable
prior year period). Subsea and Salvage margins declined from 18% for the first
half of 1999 to 14% for the first half of 2000 due to the additional vessels out
of service for regulatory inspections and upgrades and to the operating loss of
the Cal Dive Aker Dove.
Natural Gas and Oil Production gross profit increased $9.9 million from
$1.3 million in the first half of 1999 to $11.3 million for the six months ended
June 30, 2000 (and margins improved from 18% to 44%) due to the aforementioned
production and commodity pricing improvements.
Selling & Administrative Expenses. Selling and administrative expenses
were $9.2 million in the first half of 2000, an 84% increase over the $5.0
million incurred in the first half of 1999 due mainly to improved operating
results for ERT, whose incentive plan tracks its operating results ($2.2 million
increase) and to the consolidation of Aquatica, Inc. ($1.3 million increase).
The remainder of the increase is due to the addition of personnel to the
Deepwater sales group to meet the anticipated demand for the Company's services
in the Deepwater market.
Net Interest (Income) Expense and Other. The Company reported net interest
income and other of $173,000 for the six months ended June 30, 2000 in contrast
to $1.3 million for the six months ended June 30, 1999 as cash balances averaged
$9.4 million during the first half of 2000 as compared to $35.9 million the
first half of 1999. The net amount for the six months ended June 30, 2000
includes goodwill amortization expense related to the August, 1999 purchase of
the 55% of Aquatica, Inc. we did not already own. In addition, the equity in
Aquatica earnings was $450,000 in the same period of 1999.
Income Taxes. Income taxes increased to $3.4 million for the six months
ended June 30, 2000, compared to $2.5 million in the comparable prior year
period due to increased profitability.
Net Income. Net income of $6.9 million for the six months ended June 30,
2000 was $2.1 million, or 45%, more than the comparable period in 1999 as a
result of factors described above. Diluted earnings per share increased only 35%
reflecting the additional shares issued to acquire Aquatica, Inc. in the third
quarter of 1999.
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<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically funded operating activities principally from
internally generated cash flow, even during periods of weak industry demand such
as 1998 and 1999. The Company completed an initial public offering of common
stock on July 7, 1997, with the sale of 2,875,000 shares generating net proceeds
to the Company of approximately $39.5 million, which resulted in $15.0 million
of cash on hand after paying off all debt outstanding. Since our initial public
offering three years ago, internally generated cash flow, along with proceeds
received from the sale and leaseback of the Cal Dive Aker Dove of $20.0 million,
has funded approximately $164.0 million of capital expenditures while enabling
the Company to remain essentially debt free. As of June 30, 2000, the Company
had $8.1 million of working capital and $1.1 million debt outstanding under a
$40.0 million Revolving Credit Agreement.
Operating Activities. Net cash provided by operating activities was $23.5
million in the six months ended June 30, 2000, as compared to $5.9 million in
the first half of 1999. This increase was due mainly to $17.7 million of funding
from the collection of accounts receivable during the first half of 2000 as we
collected all amounts due on the EEX Cooper abandonment project (the largest
contract in CDI's history) during the first quarter. In addition, depreciation
and amortization increased $6.6 million to $13.2 million for the first half of
2000 due mainly to ERT depletion associated with increased production levels.
These increases were partially offset by a $6.0 million reduction in accounts
payable and accrued liabilities as we paid third party costs related to the EEX
Cooper project. During the first quarter we also paid for the new engines for
the Uncle John (which were previously commited and accrued for), which were
installed during June and July 2000.
Investing Activities. The Company incurred $47.9 million of capital
expenditures during the first half of 2000 compared to $32.0 million during the
comparable prior year period. Included in the $47.9 million of capital
expenditures in the first half of 2000 was $33 million for the construction of
the Q4000. Through the end of June 2000 we have funded approximately $63 million
of the estimated $150 million cost of the vessel. Also during the first half of
2000, ERT acquired interests in six offshore blocks from EEX Corporation and
agreed to operate the remaining EEX properties on the Outer Continental Shelf
(OCS). ERT agreed to a purchase price of $4.9 million and assumed EEX's prorated
share of the abandonment obligation for the acquired interests, and entered into
a two-year contract to manage the remaining EEX operated properties. In
connection with this transaction, $8.2 million of previously restricted cash
funds were utilized as the acquisition was structured as a "Like-Kind Exchange"
for tax purposes.
Included in the $32.0 million of capital expenditures in the first half of
1999 is $15.6 million for the acquisition of Hvide Marine's 56% interest in the
Cal Dive Aker Dove, a newbuild DP anchor handling and subsea construction
vessel. In addition, ERT property acquisitions and well recompletion work
required funding of $10.1 million. In connection with the aforementioned ERT
property acquisitions the seller prepaid $7.8 million of the decommissioning
liability.
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<PAGE> 13
Financing Activities. On June 30, 2000 the Company drew $1.1 million on
its Revolving Credit Facility to prepay certain vendors. The only other
financing activity during the first half of both 2000 and 1999 represents
exercise of employee stock options.
Capital Commitments. The Board of Directors has approved a capital budget
of $120 million for the year 2000, with approximately $85 million of that
associated with the Q4000. CDI has received a commitment from the U.S. Maritime
Administration (MARAD) of approximately $138.0 million regarding the application
for Title XI financing for the Q4000. This financing has been formally approved
and we expect initial construction funding (approximately $40 million) to be
drawn in the third quarter with additional draws occurring at the end of 2000
and upon delivery of the vessel. As a result of the June 2000 loss of the
Balmoral Sea, CDI will likely accelerate the timing of the conversion of the Sea
Sorceress to full dynamic positioning which, if approved by the Board of
Directors, will add $20 million to $25 million to the Company's 2000 capital
budget. In connection with its business strategy, management evaluates
opportunities to acquire additional vessels as well as interests in offshore
natural gas and oil properties. No such acquisitions are currently pending.
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<PAGE> 14
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various routine legal proceedings primarily
involving claims for personal injury under the General Maritime Laws of the
United States and Jones Act as a result of alleged negligence. In addition, the
Company from time to time incurs other claims, such as contract disputes, in the
normal course of business. The Company believes that the outcome of all such
proceedings would not have a material adverse effect on its consolidated
financial position, results of operations or net cash flows.
In 1998, CDI entered into a subcontract with Seacore Marine Contractors
Limited (Seacore) to provide a vessel (the Sea Sorceress) for the excavation of
glory holes on the Terra Nova Project in the North Atlantic ocean. Seacore was
in turn contracted by Coflexip Stena Offshore (Coflexip). Due to unforeseen
difficulties with respect to the sea states and soil conditions, Coflexip chose
to suspend glory hole dredging for the 1998 season. Subsequently, Coflexip
formally terminated the contract with Seacore and issued a call against a bond
provided by Seacore. CDI has provided Seacore a performance bond of $5 million
with respect to the subcontract of the Sea Sorceress although no call has been
made on this bond. Seacore and CDI believe the contract was wrongfully
terminated and are vigorously defending this claim and seeking damages in
arbitration.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of shareholders was held on May 10, 2000.
(b) The only matter submitted to a vote of security holders was for
the election of two "Class III" Directors.
Election of Directors Votes For Votes Against Votes Withheld
--------------------- --------- ------------- --------------
S. James Nelson, Jr. 13,747,706 0 177,890
Kevin P. Wood 13,747,705 1 177,890
The other continuing directors of the Company are:
Owen Kratz
Aline Montel
Bernard J. Duroc-Danner
Martin R. Ferron
Gordon F. Ahalt
Claire Giraut
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
Exhibit 27 - Financial Data Schedule. (Exhibit 27 is being
submitted as an exhibit only in the electronic format of this
Quarterly Report on Form 10-Q being submitted to the Securities
and Exchange Commission.)
(b) Reports on Form 8-K - None.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CAL DIVE INTERNATIONAL, INC.
Date: August 14, 2000 By: _____________________________________
S. James Nelson, Executive Vice
President and Chief Financial Officer
Date: August 14, 2000
By: _____________________________________
A. Wade Pursell, Vice President-Finance
and Chief Accounting Officer
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
------- -----------
Ex 27 -- Financial Data Schedule
