Deep Down Inc. today posted its financial results for the second quarter of 2010. The company reported a net loss of $452,000, or $0.00 loss per share, on revenues of $9.6 million, compared to a loss of $1.8 million, or $0.01 loss per share, on revenues of $6.2 million during the same quarter of 2009.
Deep Down’s second-quarter 2010 revenues increased 55 percent to $9.6 million, up from $6.2 million reported for the comparable quarter last year. The company attributes the increase to production of products for deepwater products and ROV and other related services.
The company’s gross profit increased 93 percent to $3.6 million for the second quarter 2010, reflecting an overall increase in the gross profit margin from 30 percent to 37 percent.
For the second quarter of 2010, Deep Down reported an operating loss of $339,000, down $2.1 million from the second quarter of 2009. The company attributes the reduced loss to improved gross margin and a 9.8 percent decrease in selling, general and administrative expenses.
Deep Down CEO Ronald E. Smith noted the importance of its international reach in the future, and said the company is on track to deliver services and products necessary to meet demand.
“There will undoubtedly be greater regulatory scrutiny and higher costs associated with finding and developing hydrocarbon reserves in deep water, particularly in the GOM. Additionally, we believe that the international markets will be more important to our operations going forward as we continue our focus on Brazil and West Africa deepwater projects. The deepwater market remains one of the best frontiers for adding large hydrocarbon reserves with high production flow rates. We are well positioned to supply services and products required to support safe offshore and deepwater projects of our customers. Therefore, we anticipate demand for our deepwater services and products will continue to grow and we will continue to focus on this sector of the industry worldwide,” Smith stated in the press release.
As of June 30, 2010, Deep Down’s working capital was $2.8 million, down $3.9 million from $1.1 million at December 31, 2009, mainly due to the company reclassifying $2.6 million of its long-term debt to current liabilities. The company also reported that $3.4 million of debt from one lender is due April 15, 2011; the company said it is in discussions with several lenders interested in refinancing the company’s debt.
Deep Down’s cash balance was $1.1 million at June 30, 2010, compared to $0.9 million at December 31, 2009.
For more information visit www.deepdowncorp.com