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DVR Message Board

  • fredmahnke fredmahnke May 9, 2014 9:06 PM Flag

    Strange Day

    Given, the disappointing results, the delay in the conference call and the halting trading in mid-day, I was surprised to see the strong backlog, and optimistic tone regarding the discussion of the possible projects. Still not sure what to think about the debt refinancing, but I wonder if the backlog alone could trigger a short squeeze.
    I also wonder how this management team continues to lead this Company.

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    • Good News .. debt Refinancing is excellent news. no bank in today's world makes loans if there is a question about being repaid..Numbers for DVR are turning around.. slowly but the direction is the key..Large seller maybe out of the way and call confirms better days..Rome was not build in a day..higher stock prices are coming..bought more today after the halt and some more during the next few trading days.

      • 1 Reply to sprucestreet21
      • Strange indeed. First, they report their earnings late Thursday night. When id did not come out by 5pm, I thought that the earnings #s were going to be very bad. Then, they delay the CC until after the close on Friday. However, when I read through the earnings, I did not think they were too bad:
        * missed by 4 cents to consensus (-14), but
        * had positive EBITA for the first time in a long while
        * backlog continued to grow and is at its highest since 2008

        The 1st qtr is typically a seasonal low for their northern hemisphere business (which is most of their business). That and bad weather this 1st qtr contributed to the miss. They had one of their main vessels under utilized this 1st qtr (~51%). But this vessel is booked from now until late this year - so will be fully utilized. Bid activity for PEMEX will be at about the same level as last year (which was a high level). So, if they win a comparable share, the backlog & work will continue to grow nicely. Also, they were cautiously optimistic on GOM activity picking up - which could start turning around their spot work/utilization.

        On the downside is the higher debt & lack of liquidity that these post macando down years has put them in. The debt refinance should help, but the terms (%) is quite high and they will have increased interest expenses as a result. However, the bulk of the PEMEX payments for work performed recently will be delivered over the next 2 to 3 quarters - which should help the balance sheet.

        I do think things are turning around, will just take some time. I believe they have a good chance of turning a profit again in 2H14. I've begun accumulating some shares the last few weeks. May look to add some more early next week. JMHO