1998 FOURTH QUARTER REPORT February 12, 1999

 

To Our Shareholders:

Historically, the fourth quarter is a wild card as winter weather fronts roll through the Gulf beginning in November and combine with the holiday season to slow operations. Piled on top of these seasonal cross currents this year came the challenge of the most severe industry downturn in over a decade as the offshore mobile rig count declined throughout the quarter to the lowest levels of utilization seen since 1992. In the face of this adversity, Cal Dive delivered unprecedented performance that established all-time earnings records in each quarter of 1998. This continued success through good times and bad is a function of Cal Dive’s single focus: For more than three decades, CDI has combined new technology with outstanding performance to lower customer costs for offshore field development, construction and salvage operations. Our ability to deliver record results in the midst of so much chaos has generated tremendous interest in the CDI story. The number of research analysts following Cal Dive increased from four to seven in 1998 with another three expected to initiate coverage this year. These ten industry-respected analysts will give Cal Dive investors unusually broad research coverage.

Financial Highlights:

Net income of $5.4 million in Q4 took 1998 earnings to $24.1 million, a 67% increase in a year in which the oilfield service market crumbled beneath us.

Fourth Quarter

Twelve Months

1998

 

1997

Increase

1998

1997

Increase

Revenues

$37,291,000

$33,455,000

11%

$151,887,000

$109,386,000

39%

Net Income

5,351,000

4,009,000

33%

24,125,000

14,482,000

67%

Diluted Earnings Per Share

0.36

0.27

33%

1.61

1.09

48%

Operational Highlights

Respectfully Submitted,

Owen E. Kratz
Chairman
Chief Executive Officer

Martin R. Ferron
President
Chief Operating Officer

S. James Nelson, Jr.
Executive Vice President
Chief Financial Officer