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
February 24, 1998
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 & County 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 February 24, 1998, the Registrant announced
its fourth quarter and 12-month earnings for the year
ended December 31, 1997 and related matters. Such
matters are described in the press release attached
hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
(a) No financial statements are filed with this
report.
(b) Exhibits.
99.1 Press release issued by the Registrant
on February 24, 1998 announcing its
fourth quarter and 12-month earnings
for the year ended December 31, 1997
and related matters.
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
Dated: February 26, 1998
<PAGE>
EXHIBIT INDEX
99.1 Press release issued by the
Registrant on February 24, 1998
announcing its fourth quarter and
12-month earnings for the year
ended December 31, 1997 and related
matters.
EXHIBIT 99.1
NEWS RELEASE
For further information contact:
Kevin C. Peterson Cathy M. Green
Chief Operating Officer Chief Financial Officer
(713) 430-1100 (713) 430-1100
FOR IMMEDIATE RELEASE
TUESDAY, FEBRUARY 24, 1998
CEANIC ANNOUNCES FOURTH QUARTER, 1997 YEAR-END RESULTS
Houston, Texas -- American Oilfield Divers, Inc. doing
business as Ceanic (NASDAQ: DIVE) today reported revenue of
$38.8 million and net income of $985,000 ($0.09 per share) for
the fourth quarter ended December 31, 1997, and revenue and net
income of $132.7 million and $2.2 million ($0.22 per share),
respectively, for the year ended December 31, 1997.
Both fourth quarter revenue and net income increased compared
with revenue of $26.3 million and net income of $331,000 for the
same period a year ago. Revenues increased 25% to $132.7 million
in fiscal 1997 compared to $105.8 million for fiscal 1996, but
net income decreased to $2.2 million in fiscal 1997 compared to
$5.0 million in fiscal 1996. However, Ceanic would have
recorded net income of approximately $4.5 million ($0.44 per
share) in fiscal 1997 had Ceanic not recorded non-recurring
charges totaling $2.3 million, after tax, as previously reported
in the fiscal 1997 third quarter.
"Although we recorded a healthy 25% annual revenue growth rate
and our core markets remain strong, we elected to focus on the
achievement of our long-term strategy towards the deep-water and
international markets which, in turn, affected our short-term
profitability," said Rod Stanley, Ceanic's President and CEO.
"We have added significant capital assets and experienced
management expertise in 1997 with the resultant increased levels
of SG&A and depreciation expense. Although they did not reach
their full potential in fiscal 1997, these added resources
should pay dividends for years to come." Kevin Peterson,
Ceanic's COO, added, " We view 1997 as our transition year to
focus internally and position ourselves as a deepwater, high
technology provider of innovative solutions both in our
traditional subsea markets and in our various emerging markets
such as field development and government services. We expect our
profitability in fiscal 1998 to begin to reflect the
implementation of our long-term strategy."
The 25% increase in revenue was primarily attributable to
significantly higher activity levels in Ceanic's Americas and
Europe Africa Regions, and to revenue attributable to Ceanic's
relatively new business units such as its Asia Pacific Region,
and Concrete Products and HardSuits Divisions.
Ceanic's gross profit margins remained relatively flat for
fiscal 1997 at 32.8% compared to 33.8% for fiscal 1996 primarily
due to lower activity levels in the General Contracting Division
and lower margins in the Subsea Products Division.
Ceanic's SG&A increased 41% to $27.4 million in fiscal 1997
compared to $19.5 million for fiscal 1996 primarily due to costs
associated with the newly acquired Hard Suits and Contract
Diving Services, Pty. Ltd., the addition of international and
deepwater management infrastructure, the addition of the new
Houston headquarters and the added costs of supporting increased
activities in the Americas Region. Ceanic has attracted seasoned
executives from much larger companies desiring to work in an
aggressive, growth company; since March 1997, Ceanic has added
approximately four hundred years of subsea and topside oilfield
service management experience.
Ceanic's depreciation and amortization expense increased 72%
to $11.7 million for fiscal 1997 compared to $6.8 million in
fiscal 1996. This increase is primarily attributable to the
addition of significant capital assets to the company's product
and service offerings as well as to the $1.5 million write-down
of goodwill associated with the Company's Hard Suits subsidiary
taken in the third quarter of 1997.
Regional Review/Outlook
Americas Region
Ceanic's core Gulf of Mexico diving and vessel business
experienced strong utilization with gradually increasing
dayrates in fiscal 1997, while accounting for approximately 51%
of Ceanic's overall revenue and 54% of Ceanic's overall gross
profits in fiscal 1997. As a result of the strong demand for
its services in this region, Ceanic recorded record dive crew
days and vessel days in this region for fiscal 1997.
Based on traditional industry indicators, Ceanic expects the
Gulf of Mexico to continue a relatively strong demand trend for
its services during fiscal 1998. To address these needs, Ceanic
expects to incur significant capital expenditures during 1998
for the acquisition of at least seven deepwater ROVs and one
240-foot DSV.
Asia Pacific Region
Ceanic established its Asia Pacific Region in July 1997 with
the acquisition of Contract Diving Services. Since that time,
Ceanic has bolstered its management team and pursued large
turnkey and other opportunities in the area. Ceanic recorded a
small loss in this region for fiscal 1997. This region was
instrumental in assisting Ceanic's Field Development Division
secure its first ever Tarpon Guyed Monotower installation in
Indonesia that is expected to be completed in the first quarter
of 1998.
Europe Africa Region
Ceanic reorganized this region in fiscal 1997 with the
establishment of Aberdeen, Scotland as the regional headquarters
and with West Africa reporting directly to Aberdeen rather than
the United States. West Africa experienced a 51% increase in
revenue compared to fiscal 1996.
Products
Ceanic's Field Development Division experienced significant
growth in fiscal 1997, with the Ceanic Concrete Products group
generating significant revenue and gross profits for a full 12
months and the installation of a Tarpon Guyed Monotower in the
Gulf of Mexico. Although Ceanic's Big Inch Products group
experienced relatively flat revenues year-over-year, it did
experience significant activity levels in the fourth quarter of
fiscal 1997 and the early part of the fiscal 1998 first quarter.
Hard Suits continues to be an area of focus. For fiscal 1997,
exclusive of its sales of suits to other Ceanic subsidiaries and
the $1.5 million write-down of goodwill in the third quarter of
1997, Hard Suits recorded an operating loss of $2.1 million, net
of tax, (or $0.21 per share). Ceanic has hired an experienced
subsea systems manufacturing executive and is aggressively
pursuing a number of government contracts on the heels of the
successful builder's trials of the U.S. Navy's 2,000 foot suit.
General Contracting Division
Ceanic recently combined the Company's traditional Inland and
West Coast groups and formed the General Contracting Division.
Although the division's revenue remained relatively flat year-
over-year, the diversity of the fiscal 1997 revenue accurately
reflects this group's growth potential and long-term value to
the Company.
Statements in this press release regarding profitability of
Hard Suits, and of the Company generally, utilization and
dayrates in the Gulf of Mexico, opportunities in the Asia-
Pacific market, and the Company's Inland/West Coast sector and
other statements included herein that are not statements of
historical fact are forward-looking statements involving factors
that could cause actual results to vary materially from those
predicted. The Company's ability to return Hard Suits to
profitability depends on among other things, securing government
defense contracts for its product lines, development of new
products and the timing of such revenues. Other forward-looking
statements, including statements as to the Company's
profitability, depend upon, among other things, prices of crude
oil and natural gas, weather conditions in offshore markets,
capital expenditures by customers and the Company's ability to
procure large turnkey projects.
Ceanic is a leading provider of diving services,
intervention technologies, subsea products and marine
construction services to offshore industries in the U.S. Gulf of
Mexico and internationally.
Tables follow . . .
<PAGE>
AMERICAN OILFIELD DIVERS, INC.
Consolidated Results of Operations and Financial Position
($ in thousands except for per share amounts)
Three Months Ended Year Ended
December 31, December 31,
--------------- ------------
Income Statement 1997 1996 1997 1996
---- ----- ---- ----
Revenues $38,821 $26,306 $132,728 $105,772
------ ------ ------- -------
Gross profit 12,542 7,897 43,524 35,706
Selling, general and
administrative expenses 8,153 4,727 27,424 19,486
Depreciation and amortization 2,714 2,078 11,663 6,815
----- ----- ------ ------
Operating income 1,675 1,092 4,437 9,405
Other income (expense), net 60 (281) 569 (434)
----- ----- ------ ------
Income before income taxes 1,735 811 5,006 8,971
Income tax provision 750 480 2,775 3,950
----- ----- ----- ------
Net income $ 985 $ 331 $ 2,231 $ 5,021
===== ===== ====== ======
Net income per share (basic) $ .09 $ .05 $ .22 $ .74
===== ===== ====== ======
Net income per share (diluted) $ .09 $ .05 $ .22 $ .73
===== ===== ====== ======
Weighted average shares
outstanding 10,639 6,840 10,166 6,787
====== ===== ====== =====
Operational Data
Dive crew days 13,785 9,497 51,419 40,131
Dive crews per day 150 103 141 110
Diving support vessel
utilization 54% 49% 53% 51%
Earnings before interest, taxes,
depreciation and
amortization (EBITDA) $4,389 $3,170 $16,100 $16,220
EBITDA as % of revenue 11.3% 12.1% 12.1% 15.3%
SG&A as % of revenue 21.0% 18.0% 20.7% 18.4%
Gross profit % 32.3% 30.0% 32.8% 33.8%
December 31, December 31,
Balance Sheet 1997 1996
---- ----
Assets:
Current assets $55,286 $35,734
Other long-term assets 79,014 57,173
---------- ----------
Total assets $134,300 $92,907
========== ==========
Liabilities & Stockholders' Equity:
Current liabilities $29,698 $23,512
Long-term debt 8,060 8,459
Other liabilities 6,291 15,091
Stockholders' equity 90,251 45,845
_________ _________
Total liabilities & stockholders equity $134,300 $92,907
========= =========
More...
<PAGE>
<TABLE>
<CAPTION>
Three Months Ended December 30, 1997
============================================================================================
Asia Europe General
Americas Pacific Africa Contracting Subsea
Region<F1> Region Region Division<F2> Products<F3> Total
---------- -------- -------- ------------ ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues $17,556 $1,223 $2,226 $11,654 $6,162 $38,821
Expenses $11,085 $ 849 $1,678 $ 8,134 $4,533 $26,279
Gross Profit $ 6,471 $ 374 $ 548 $ 3,520 $1,629 $12,542
Gross Profit
Percentage 36.9% 30.6% 24.6% 30.2% 26.4% 32.3%
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended December 30, 1996
===========================================================================================
Asia Europe General
Americas Pacific Africa Contracting Subsea
Region<F1> Region Region Division<F2> Products<F3> Total
---------- -------- -------- ------------ ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues $12,485 $ -- $1,635 $7,970 $4,216 $26,306
Expenses $ 9,163 $ -- $1,204 $4,907 $3,135 $18,409
Gross Profit $ 3,322 $ -- $ 431 $3,063 $1,081 $ 7,897
Gross Profit
Percentage 26.7% --% 26.4% 38.4% 25.6% 30.0%
<FN>
<F1> Includes operations in the Company's Americas Region, which
encompasses diving, vessel and related services, and
environmental remediation services, all of which were
performed in the Gulf of Mexico. The Company's environmental
remediation business was sold effective October 31, 1997.
<F2> Includes diving and related services in U.S. inland markets,
off the U.S. West Coast and in Latin America.
<F3> Includes manufacturing and marketing of Big Inch pipeline
connectors, Tarpon marginal well production systems, Tarpon
Concrete Storage Systems and Hard Suits Inc. products.
</FN>
</TABLE>
more . . .
<PAGE>
<TABLE>
<CAPTION>
Year Ended December 31, 1997
=============================================================================================
Asia Europe General
Americas Pacific Africa Contracting Subsea
Region<F1> Region Region Division<F2> Products<F3> Total
---------- -------- -------- ------------ ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues $68,339 $2,798 $11,798 $30,583 $19,210 $132,728
Expenses $44,690 $1,766 $ 7,845 $21,955 $12,948 $ 89,204
Gross Profit $23,649 $1,032 $ 3,953 $ 8,628 $ 6,262 $ 43,524
Gross Profit
Percentage 34.6% 36.9% 33.5% 28.2% 32.6% 32.8%
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1996
=============================================================================================
Asia Europe General
Americas Pacific Africa Contracting Subsea
Region<F1> Region Region Division<F2> Products<F3> Total
---------- -------- -------- ------------ ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Revenues $53,220 $ --- $7,837 $34,097 $10,618 $105,772
Expenses $36,037 $ --- $5,490 $22,025 $ 6,514 $ 70,066
Gross Profit $17,183 $ --- $2,347 $12,072 $ 4,104 $ 35,706
Gross Profit
Percentage 32.3% ---% 29.9% 35.4% 38.7% 33.8%
<FN>
<F1> Includes operations in the Company's Americas Region, which
encompasses diving, vessel and related services, and
environmental remediation services, all of which were
performed in the Gulf of Mexico. The Company's environmental
remediation business was sold effective October 31, 1997.
<F2> Includes diving and related services in U.S. inland markets,
off the U.S. West Coast and in Latin America.
<F3> Includes manufacturing and marketing of Big Inch pipeline
connectors, Tarpon marginal well production systems, Tarpon
Concrete Storage Systems and Hard Suits Inc. products.
</FN>
</TABLE>
