Horizon Offshore, Inc. reported net income for the quarter ended September 30, 2002, of $1.8 million, which compares to a net income of $2.8 million for the third quarter of 2001. For the third quarter of 2002, the company reported gross profit of $11.6 million, or 17.9 percent, on contract revenues of $65.0 million, compared with gross profit of $7.7 million, or 12.6 percent, on contract revenues of $61.0 million in the third quarter of 2001.
Horizon also reported net income for the nine months ended September 30, 2002, of $4.8 million, or $0.19 per share-diluted. This compares with net income
of $10.8 million, or $0.47 per share-diluted before an extraordinary charge of $0.6 million net of tax for the nine months ended September 30, 2001. Gross profit was $26.2 million or 13.4 percent on contract revenues of $195.4 million for the first nine months of 2002, and gross profit was $30.2 million or 15.2 percent on contract revenues of $198.4 million for the first nine months of 2001.
Revenues recognized in the third quarter of 2002 and 2001 included $13.0 million and $6.6 million, respectively, from the salvage and installation projects in the Gulf of Mexico. Of the $13.0 million in revenues recognized during the third quarter of 2002, approximately $3.0 million represents values assigned to structures received as partial consideration for salvage services performed. No significant non-cash consideration was received in the third quarter of 2001.
In Mexico, we completed the EPC64 project, utilizing the Atlantic Horizon and the Lone Star Horizon. The second project completed was the rehabilitation of several pipelines in the Cantarell field, also utilizing the Atlantic Horizon, the Lone Star Horizon, as well as the Pearl Horizon. Horizon also began the KIX project for the construction of a 24-km, 8-inch pipeline and the associated platform piping, which is expected to be completed in December 2002.
On September 20, 2002, the pipelay barge, Lone Star Horizon, was damaged due to a fire while at anchor off Ciudad Del Carmen, Mexico. Horizon recorded the $2 million deductible related to the insurance claim for the fire as other expense. With the exception of the $2 million deductible, Horizon believes that the insurance coverage will mitigate the economic impact of the fire and does not anticipate any interruption in its current work program. The Lone Star Horizon is undergoing repairs at Bollinger shipyard
and is expected to return to service in late November 2002.
The Brazos Horizon arrived in Nigerian waters on October 1, 2002, and will begin construction on a major portion of Chevron Nigeria Ltd.'s Escravos Offshore Pipeline and Structural Installation two-year program. With our presence in West Africa realized and the Brazos Horizon on location, we are optimistic about opportunities and future business development in West Africa.