HOUSTON, Nov. 09, 2020 (GLOBE NEWSWIRE) -- Deep Down, Inc. (OTCQB: DPDW), a specialist in deepwater oil and gas production and distribution equipment and services, today reported results for its third quarter ended September 30, 2020. Deep Down will hold a conference call tomorrow, Tuesday, November 10, 2020 at 10:00 am Eastern Time to review its results and outlook (call details below).

Deep Down at a Glance:

$0.40

$0.34 - $0.95

12.4M

$5.0M

Charles Njuguna, Deep Down’s CEO, commented, “Our business continues to be impacted by the travel restrictions imposed in response to the COVID-19 pandemic, as evidenced by our third quarter results. While there are some signs of moderate improvement, especially as we look towards 2021, our primary focus continues to be on free cash flow generation and the ongoing refinement of our cost structure.”Operating Results

Q3 2020 revenues decreased 29% to $3.1 million compared to the three months ended September 30, 2019 (“Q3 2019”), primarily due to fewer projects in process. This decrease in project activity has broadly been the result of the global economic disruption caused by the COVID-19 pandemic. Gross profit for Q3 2020 was $1.2 million, or 37 percent of revenues, compared to Q3 2019 gross profit of $1.8 million, or 42 percent of revenues. The decrease in gross profit percentage on a year-over-year basis was driven by a lower proportion of service revenues resulting from COVID-19 disruptions and delays during Q3 2020.

Selling, general and administrative (“SG&A”) expenses were $1.4 million, or 43 percent of revenues, in Q3 2020 compared to $2.1 million, or 49 percent of revenues, in Q3 2019, which included a $0.3 million one-time expense related to the resignation of the Company’s founder. Excluding the one-time charge, SG&A expenses for Q3 2019 were $1.8 million, or 41% of revenues. The $0.4 million decrease in regular SG&A expenses was due to lower payroll costs, lower legal costs, and continuous efforts to reduce operating expenses during Q3 2020 compared to Q3 2019.

Deep Down’s modified EBITDA declined to $0.03 million in Q3 2020 compared to modified EBITDA of $0.4 million in Q3 2019. The decline in modified EBITDA was primarily due to decreased revenues resulting from the decline in offshore activity triggered by the COVID-19 pandemic.

Due to the factors discussed above, Deep Down reported a Q3 2020 net loss of $0.3 million, or $0.02 loss per common share, compared with a Q3 2019 net loss of $0.4 million, or $0.03 loss per common share. Per share results are based on 12.4 million and 13.3 million weighted average shares outstanding in Q3 2020 and Q3 2019, respectively.

Financial Strength

At September 30, 2020, Deep Down had working capital of $4.5 million, which includes cash of $4.0 million and receivables of $3.9 million. Total shareholders’ equity was $7.8 million, or approximately $0.63 per common share. Given the Company’s current capital structure, Deep Down remains well-positioned to navigate through this challenging business environment.

About Deep Down, Inc. (www.deepdowninc.com)

Deep Down focuses on complex deepwater and ultra-deepwater oil and gas production distribution system technologies and support services, connecting the platform and the wellhead. Deep Down's proven services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, installation buoyancy, remotely operated vehicles and tooling, marine vessel automation, control, and ballast systems. Deep Down supports subsea engineering, installation, commissioning, and maintenance projects through specialized, highly experienced service teams and engineered technological solutions.