SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
November 5, 1997
Date of Report (Date of earliest event reported)
AMERICAN OILFIELD DIVERS, INC.
(Exact name of Registrant as specified in its charter)
LOUISIANA 0-22032 72-0918249
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification
of incorporation) Number)
900 Town & Country Lane, Suite 400
Houston, Texas 77024
(Address of principal executive offices) (Zip Code)
(713) 430-1100
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
<PAGE>
Item 5. Other Events.
On November 6, 1997, Registrant announced its
fiscal 1997 third quarter earnings and other matters.
Such matters are described in the press release
attached hereto as Exhibit 99.1.
On November 13, 1997, Registrant announced awards
of approximately $10 million in projects.
Item 7. Financial Statements and Exhibits.
(a) No financial statements are filed with this report.
(b) Exhibits.
99.1 Press release issued by American
Oilfield Divers, Inc. on November 6, 1997
concerning fiscal 1997 third quarter
earnings and other matters.
99.2 Press release issued by American Oilfield
Divers, Inc. on November 13, 1997 concerning
awards of approximately $10 million in projects.
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 hereunto duly authorized.
By: /s/ Cathy M. Green
__________________________
Cathy M. Green
Vice President- Finance and
Chief Financial Officer
(Principal Financial
and Accounting Officer)
Dated: November 13, 1997
<PAGE>
EXHIBIT INDEX
99.1 Press release issued by American Oilfield Divers, Inc. on
November 6, 1997 concerning fiscal 1997 third quarter earnings
and other matters.
99.2 Press release issued by American Oilfield Divers, Inc. on
November 13, 1997 concerning the awards of $10 million in
projects.
Exhibit 99.1
NEWS RELEASE
For further information contact:
Greg Rosenstein Kevin C. Peterson
Churchill Group Inc. Chief Operating Officer
(713) 430-1100 (713) 430-1100
FOR IMMEDIATE RELEASE
THURSDAY, NOVEMBER 6, 1997
AMERICAN OILFIELD DIVERS ANNOUNCES THIRD QUARTER RESULTS
Houston, TX -- American Oilfield Divers, Inc. (NASDAQ: DIVE)
today announced net income of $1.7 million ($0.16 per share) on
revenue of $37.2 million for the fiscal third quarter ended
September 30, 1997. However, due to non-recurring charges of
$2.3 million, after tax, the Company reported a net loss of
$622,000 ($.06 per share).
As previously disclosed on September 8, 1997, AOD booked an
after-tax charge of $1.5 million related to the writedown of
goodwill associated with the Company's Hard Suits Inc.
subsidiary, and an after-tax charge of $292,000 related to the
closure of American Inland Divers' Kansas office. Additionally,
the Company established reserves of approximately $522,000
after-tax related to American Marine Construction, Inc.'s
platform abandonment contract.
"The delayed commencement of key vessel operations during the
quarter and excessive operational costs incurred on the first
contract for one of these vessels due to unanticipated
mechanical failures have negatively impacted our third quarter
results," said Rod W. Stanley, President and Chief Executive
Officer of American Oilfield Divers. "We continue our long-term
focus on expansion into deepwater Gulf of Mexico and
international markets which in turn is increasing both SG&A and
depreciation as we add deepwater assets and key management
infrastructure, negatively impacting short term results while
positioning the Company for long-term growth."
The Company's revenues increased by 11% over the third quarter
of 1996, which includes a 10% increase in AOD's core Gulf of
Mexico business plus revenues from Hard Suits Inc., Contract
Diving Services, Inc., and Tarpon Concrete Storage Systems, all
of which were acquired after third quarter 1996. Revenue in the
third quarter of 1996 included $6.9 million attributed to the
Chevron platform abandonment project successfully performed by
AOD's west coast subsidiary.
AOD's gross profit margins, exclusive of the pretax charge of
$727,000 in the Gulf Services group, decreased from 36% to 32%,
primarily due to the lower activity levels/margins in the
Inland/West Coast Services sector and lower margins in the
Subsea Products sector.
The Company's SG&A, exclusive of the pretax charge of
$254,000, increased 31% over the same quarter a year ago,
primarily due to costs associated with the newly acquired Hard
Suits Inc. and Commercial Diving Services Inc. subsidiaries, the
addition of international and deepwater management
infrastructure and the addition of the new Houston headquarters.
The Company's net profit margin decreased from 9% in the third
quarter of 1996 to 5%, for the third quarter of 1997, prior to
non-recurring items.
The Company's present backlog is estimated at $30 million, the
largest in Company history.
more . . .
<PAGE>
Regional Review/Outlook
- -Americas
As part of its ongoing efforts to streamline its business, the
Company closed its Harvey, Louisiana office, consolidated key
personnel to its New Orleans office and Port of Iberia,
Louisiana operating base, and effective October 31, 1997, sold
its American Pollution Control, Inc. subsidiary for an
undisclosed sum.
The core Gulf of Mexico diving and vessel business continues
to experience strong utilization with gradually increasing
dayrates.
In addition, the Company has mobilized its first-ever project in
Brazil utilizing one of its Hard Suit atmospheric diving systems
consisting of two suits.
The American Constitution saturation diving vessel is now
fully on-line. The dynamically positioned vessel American
Defender is now expected on-line by December 1997, complete with
the deepwater work-class ROV Triton(R) XL.
- -Asia Pacific
To date, Contract Diving Services has yet to realize its full
potential and add profitability, however, the entry into the
Asia Pacific market is producing significant long-term
opportunities, including field development for Tarpon Systems,
subsea pipeline connector sales and projects involving the use
of remotely operated vehicles (ROVs), Hard Suits and other
remote intervention technologies.
- -Europe/Africa
The Company experienced a major turnaround in its West Africa
operations during the third quarter of 1997 with revenue
increases of 400%, and gross profit margins in line with AOD's
core business.
- -Inland
Excluding $6.9 million in revenue attributed to last year's
Chevron platform abandonment project, the Inland/West Coast core
business has increased 50% over last year. The backlog and
bidding opportunities of the Inland/West Coast service sector
continues to grow as the Company's general contracting
capabilities are further developed.
- -Products
The Company's Subsea Products sector underperformed during the
third quarter as a result of timing of subsea product delivery
at its Big Inch Marine subsidiary and losses at Hard Suits of
approximately $.05 per share, after tax, during the third
quarter. However, Big Inch has a strong backlog and strong
year-to-date results, and Tarpon Systems added profitability
through both of its steel and concrete products divisions.
Statements in this press release regarding profitability of
Hard Suits, utilization and dayrates in the Gulf of Mexico,
opportunities in the Asia-Pacific market, and the Company's
Inland/West Coast sector and other statements included herein
that are not statements of historical fact are forward-looking
statements involving factors that could cause actual results to
vary materially from those predicted. The Company's ability to
return Hard Suits to profitability depends on among other
things, securing government defense contracts for its product
lines, development of new products and the timing of such
revenues. Other forward-looking statements depend upon, among
other things, prices of crude oil and natural gas, weather
conditions in offshore markets, capital expenditures by
customers and the Company's ability to procure large turnkey
projects.
American Oilfield Divers, Inc., is a leading provider of
diving and intervention services, subsea products and marine
construction services to the offshore oil and gas industry,
primarily in the U.S. Gulf of Mexico, U.S. West Coast,
internationally and to certain U.S. inland customers.
Tables follow . . .
<PAGE>
AMERICAN OILFIELD DIVERS, INC.
Consolidated Results of Operations and Financial Position
($ in thousands except for per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------ -------------
Income Statement 1997 1996 1997 1996
---- ---- ---- ----
Revenues $37,154 $33,409 $93,907 $79,466
------ ------ ------ ------
Gross profit 11,348 12,025 30,982 27,809
Selling, general and
administrative expenses 7,154 5,258 19,271 14,759
Depreciation and amortization 4,373 1,471 8,949 4,737
------ ------- ------ ------
Operating income (179) 5,296 2,762 8,313
Other income (expense), net 177 (295) 509 (153)
------ ------- ------ ------
Income before income taxes (2) 5,001 3,271 8,160
Income tax provision 620 2,150 2,025 3,470
------ ------- ------ ------
Net income (622) $ 2,851 $ 1,246 $ 4,690
======= ======= ====== ======
Net income per share $ (.06) $ .42 $ .13 $ .69
======= ======= ====== ======
Weighted average
shares outstanding 10,588 6,806 10,002 6,769
======= ======= ====== ======
Operational Data
Dive crew days 13,825 12,752 37,634 29,630
Dive crews per day 150 139 138 108
Diving support vessel
utilization 59% 59% 54% 52%
Earnings before interest,
taxes, depreciation and
amortization (EBITDA) $4,178 $6,767 $11,711 $13,050
EBITDA as % of revenue 11.2% 20.3% 12.5% 16.4%
SG&A as % of revenue 19.4% 15.7% 20.5% 18.6%
Gross profit % 30.6% 36.0% 33.0% 35.0%
More...
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 1997
=============================================================================================
Inland and
Gulf International West Coast Subsea
Services<F1> Services<F2> Services<F3> Products<F4> Total
--------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues $20,299 $ 5,269 $ 7,317 $ 4,269 $37,154
Expenses $13,851 $ 3,463 $ 5,248 $ 3,244 $25,806
Gross Profit $ 6,448 $ 1,806 $ 2,069 $ 1,025 $11,348
Gross Profit Percentage 31.8% 34.3% 28.3% 24.0% 30.5%
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended September 30, 1996
=============================================================================================
Inland and
Gulf International West Coast Subsea
Services<F1> Services<F2> Services<F3> Products<F4> Total
--------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues $18,478 $ 770 $ 11,351 $2,810 $33,409
Expenses $11,414 $1,264 $ 7,247 $1,459 $21,384
Gross Profit $ 7,064 $ (494) $ 4,104 $1,351 $12,025
Gross Profit Percentage 38.2% (64.2)% 36.2% 48.1% 36.0%
<F1> Includes operations in the Company's Americas Region, which
encompasses diving, vessel and related services, and
environmental remediation and oil spill response services
provided by American Pollution Control, Inc., all of which
were performed in the Gulf of Mexico.
<F2> Includes diving and related services performed by the
Company's Asia Pacific and Europe/Africa Regions.
<F3> Includes diving and related services off the U.S. West Coast
and in Latin America by American Pacific Marine, Inc., and
diving and related services provided by American Inland Divers, Inc.
<F4> Includes manufacturing and marketing of Big Inch pipeline
connectors and Tarpon marginal well production systems. The
three months ended September 30, 1997 also includes
manufacturing and marketing of Tarpon Concrete Storage Systems
and Hard Suits Inc. products.
more . . .
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1997
=============================================================================================
Inland and
Gulf International West Coast Subsea
Services<F1> Services<F2> Services<F3> Products<F4> Total
--------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues $50,785 $11,146 $18,929 $13,047 $93,907
Expenses $33,855 $ 7,083 $13,822 $ 8,165 $62,925
Gross Profit $16,930 $ 4,063 $ 5,107 $ 4,882 $30,982
Gross Profit Percentage 33.3% 36.5% 27.0% 37.4% 33.0%
</TABLE>
<TABLE>
<CAPTION>
Nine Months Ended September 30, 1996
=============================================================================================
Inland and
Gulf International West Coast Subsea
Services<F1> Services<F2> Services<F3> Products<F4> Total
--------- --------- --------- ---------- -------
<S> <C> <C> <C> <C> <C>
Revenues $40,735 $6,202 $26,127 $6,402 $79,466
Expenses $26,874 $4,286 $17,118 $3,379 $51,657
Gross Profit $13,861 $1,916 $ 9,009 $3,023 $27,809
Gross Profit Percentage 34.0% 30.9% 34.5% 47.2% 35.0%
<F1> Includes operations in the Company's Americas Region, which
encompasses diving, vessel and related services; derrick barge
services provided by American Marine Construction, Inc.; and
environmental remediation and oil spill response services
provided by American Pollution Control, Inc., all of which
were performed in the Gulf of Mexico.
<F2> Includes diving and related services performed by the
Company's Asia Pacific and Europe/Africa Regions.
<F3> Includes diving and related services off the U.S. West Coast
and in Latin America by American Pacific Marine, Inc., and
diving and related services provided by American Inland Divers, Inc.
<F4> Includes manufacturing and marketing of Big Inch pipeline
connectors and Tarpon marginal well production systems. The
three months ended September 30, 1997 also includes
manufacturing and marketing of Tarpon Concrete Storage Systems
and Hard Suits Inc. products.
# # # #
</TABLE>
EXHIBIT 99.2
NEWS RELEASE
For further information contact:
Greg Rosenstein Kevin C. Peterson
Churchill Group Inc. Chief Operating Officer
(713) 781-0020 (713) 430-1100
FOR IMMEDIATE RELEASE
THURSDAY, NOVEMBER 13, 1997
AMERICAN OILFIELD DIVERS ANNOUNCES $10 MILLION MIX OF PROJECTS
Houston, TX -- American Oilfield Divers, Inc. (NASDAQ: DIVE) today
announced it has received letters of award for three projects worth
approximately $10 million, bringing its total backlog to approximately $40
million - largest in Company history.
The three projects include a Tarpon offshore guyed caisson structure
expected to be installed in Southeast Asia in the first quarter of fiscal
1998 worth approximately $2 million and a sale by Hard Suits Inc. to the
Italian government worth approximately $1.2 million. The third project
involves the plugging and abandonment of approximately 37 underwater wells
for private industry in the Midwest. The project is scheduled to be
performed by the Company's inland group over the next three years for
approximately $6.6 million. Although it is possible for the project to be
completed sooner, the project is expected to contribute approximately $2.2
million in revenues over each of the next three years. The three projects
remain subject to the finalization of an acceptable definitive contract and
the satisfaction of other conditions precedent customary to projects of this
type.
"The size and diversity of the three projects are an example of the
successful implementation of our strategy to identify and exploit certain
international market niches and undertake larger turnkey projects and
provides momentum for us in 1998," said Rod Stanley, the Company's President
and CEO.
Statements in this press release regarding opportunities for Tarpon and
Hard Suits, and in the Asia-Pacific market, and the Company's Inland/West
Coast sector and other statements included herein that are not statements of
historical fact are forward-looking statements involving factors that could
cause actual results to vary materially from those predicted. Such forward-
looking statements depend upon, among other things, further market
penetration of the Tarpon and Hard Suits product line, prices of crude oil
and natural gas, weather conditions in offshore markets, capital
expenditures by customers and the Company's ability to procure large turnkey
projects.
American Oilfield Divers, Inc., is a leading provider of diving and
intervention services, subsea products and marine construction services to
the offshore oil and gas industry, primarily in the U.S. Gulf of Mexico,
U.S. West Coast, internationally and to certain U.S. inland customers.
# # # #
