Deep Down Swings to Loss

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Deep Down reported a net loss of $0.6 million, or $0.04 loss per diluted share for the third quarter of 2015, compared to net income of $1.2 million, or $0.08 income per diluted share for the third quarter of 2014.

Revenues for the quarter ended September 30, 2015 were $6.1 million compared to revenues of $8.5 million for the quarter ended September 30, 2014. The $2.4 million (28 percent) decrease is primarily the result of a delay in the receipt of certain customer orders, mainly due to lower oil prices, the company said.

Gross profit for the quarter ended September 30, 2015 was $1.9 million, or 31 percent of revenues, compared to gross profit of $3.5 million, or 41 percent of revenues, for the quarter ended September 30, 2014.  The ten percentage-point decrease in gross profit is primarily attributable to additional costs incurred on some of our fixed price projects as well as additional costs incurred in preparation for certain customer orders that were delayed, Deep Down added.

Ronald E. Smith, Chief Executive Officer, stated, “The industry continues to be going through difficult times and is not expected to recover anytime soon. Offshore drilling is down substantially and continues to fall. Many projects have been pushed into 2017 and 2018. During the third quarter, we completed fabrication of a very large carousel that was having a significant negative impact on our operations. We also announced receiving a purchase order for approximately $13 million, which makes our backlog exceed $35 million. I believe these two things will result in improving our financial results over the next several quarters. We will however, continues to focus our efforts on better margin business and control our costs. We appreciate the support our customers have given us in these difficult times.”

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