##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
 þ
    
    Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2007
 or
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number: 001-33412
 Superior Offshore International, Inc.
 (Exact Name of Registrant as Specified in its Charter)
 Delaware(State or other jurisdiction 
of incorporation or organization)
    
    72-1264943(I.R.S. Employer
Identification No.)717 Texas Avenue 
Suite 3150
Houston, Texas(Address of principal executive offices)
    
    77002(Zip Code)
 (713) 910-1875  (Registrants telephone number, including area code)
  þ o
  o o þ
  o þ




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##### 



TABLE OF CONTENTS
 PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements:
    
    
    1Condensed Consolidated Balance Sheets  June 30, 2007 (Unaudited) and December 31, 2006
    
    
    1Condensed Consolidated Statements of Operations (Unaudited)  Three months ended June
30, 2007 and 2006
    
    
    2Condensed Consolidated Statements of Operations (Unaudited)  Six months ended June
30, 2007 and 2006
    
    
    3Condensed Consolidated Statements of Cash Flows (Unaudited)  Six months ended June
30, 2007 and 2006
    
    
    4Notes to Condensed Consolidated Financial Statements (Unaudited)
    
    
    5Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32Item 4. Controls and Procedures
    
    
    33Item 4T. Controls and Procedures
    
    
    33PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    34Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 6. Exhibits
    
    
    34Signatures
    
    
    36Employment Agreement - David WeinhofferCredit AgreementGuarantee and Collateral AgreementFirst Amendment to Credit AgreementRule 13a-14(a)/15d-14(a) Certification of the Principal Executive Officer Pursuant to Section 302Rule 13a-14(a)/15d-14(a) Certification of the Principal Financial Officer Pursuant to Section 302Section 1350 Certification of the Principal Executive Officer Pursuant to Section 906Section 1350 Certification of the Principal Financial Officer Pursuant to Section 906
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##### Table of Contents



PART IFINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 SUPERIOR OFFSHORE INTERNATIONAL, INC.
 
 Condensed Consolidated Balance Sheets
 June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)AssetsCurrent assets:Cash and cash equivalents
    
    $
    1,547,755
    
    
    $
    2,556,068Accounts receivable, net of allowance for
doubtful accounts of $945,286 and $1,084,453,
respectively
    
    
    33,417,085
    
    
    
    38,452,431Unbilled receivables
    
    
    6,174,018
    
    
    
    17,258,245Inventory
    
    
    900,376
    
    
    
    693,432Prepaid
expenses
    
    
    5,323,028
    
    
    
    2,194,495Deferred tax assets
    
    
    5,798,212
    
    
    
    486,629Other current assets
    
    
    1,548,411
    
    
    
    702,999Total current assets
    
    
    54,708,885
    
    
    
    62,344,299Property and equipment, at cost:
    
    
    160,163,205
    
    
    
    75,631,856Less accumulated depreciation
    
    
    (8,551,320
    )
    
    
    (6,279,126
    )Net property and equipment
    
    
    151,611,885
    
    
    
    69,352,730Other assets:Restricted cash
    
    
    15,612,108
    
    
    
    4,813,662Other assets
    
    
    11,338,795
    
    
    
    6,301,527Total assets
    
    $
    233,271,673
    
    
    $
    142,812,218Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    22,433,194
    
    
    $
    31,250,286Accrued expenses
    
    
    7,832,400
    
    
    
    9,743,789Line of credit
    
    
    
    
    
    
    4,218,470Notes payable, current portion
    
    
    3,701,630
    
    
    
    3,608,132Other current liabilities
    
    
    1,211,250
    
    
    
    14,676,510Total current liabilities
    
    
    35,178,474
    
    
    
    63,497,187Notes payable, net of current portion
    
    
    25,431,676
    
    
    
    9,759,385Line of credit
    
    
    13,146,719
    
    
    
    Deferred income taxes
    
    
    7,857,159
    
    
    
    5,007,363Total liabilities
    
    
    81,614,028
    
    
    
    78,263,935Commitments and contingenciesStockholders equity:Common Stock, par value $0.01 per share,
200,000,000 shares authorized, 25,765,001 and
14,836,667 shares issued and outstanding at June 2007 and December
2006, respectively
    
    
    257,650
    
    
    
    148,367Preferred Stock, par value $0.01 per share,
50,000,000 shares authorized, no shares issued
and outstanding
    
    
    
    
    
    
    Additional paid in capital
    
    
    120,236,334
    
    
    
    Accumulated other comprehensive income
    
    
    690,811
    
    
    
    894,956Retained earnings
    
    
    30,472,850
    
    
    
    63,504,960Total stockholders equity
    
    
    151,657,645
    
    
    
    64,548,283Total liabilities and stockholders equity
    
    $
    233,271,673
    
    
    $
    142,812,218
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##### Table of Contents



SUPERIOR OFFSHORE INTERNATIONAL, INC.
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Three Months Ended June 30,2007
    
    
    2006RevenuesDiving services, net
    
    $
    40,753,055
    
    
    $
    56,263,620Fabrication
    
    
    1,153,768
    
    
    
    4,281,296Other
    
    
    
    
    
    
    78,66641,906,823
    
    
    
    60,623,582Costs of revenues (excluding depreciation and amortization)
    
    
    35,252,808
    
    
    
    33,120,247Selling, general and administrative
    
    
    18,319,552
    
    
    
    8,022,269Depreciation and amortization
    
    
    1,222,176
    
    
    
    724,037Income (loss) from operations
    
    
    (12,887,713
    )
    
    
    18,757,029Interest income, net
    
    
    (352,886
    )
    
    
    (3,492
    )Loss on extinguishment of debt
    
    
    3,850,654
    
    
    
    Income (loss) before income taxes
    
    
    (16,385,481
    )
    
    
    18,760,521Provision (benefit) for income taxes
    
    
    (5,598,043
    )
    
    
    6,632,070Net income (loss)
    
    $
    (10,787,438
    )
    
    $
    12,128,451Earnings (loss) per share:Basic
    
    $
    (0.50
    )
    
    $
    0.82Diluted
    
    $
    (0.50
    )
    
    $
    0.82Weighted average shares outstanding:Basic
    
    
    21,598,572
    
    
    
    14,836,667Diluted
    
    
    21,598,572
    
    
    
    14,836,667
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 
 Condensed Consolidated Statements of Operations
(Unaudited)
 Six Months Ended June 30,2007
    
    
    2006RevenuesDiving services, net
    
    $
    93,220,234
    
    
    $
    102,059,671Fabrication
    
    
    3,020,897
    
    
    
    7,782,245Other
    
    
    
    
    
    
    153,33696,241,131
    
    
    
    109,995,252Costs of revenues (excluding depreciation and amortization)
    
    
    68,347,307
    
    
    
    57,005,413Selling, general and administrative
    
    
    29,379,234
    
    
    
    14,108,480Depreciation and amortization
    
    
    2,392,286
    
    
    
    1,455,420Income (loss) from operations
    
    
    (3,877,696
    )
    
    
    37,425,939Interest expense (income), net
    
    
    (578,298
    )
    
    
    331,661Loss on extinguishment of debt
    
    
    3,850,654
    
    
    
    Income (loss) before income taxes
    
    
    (7,150,052
    )
    
    
    37,094,278Provision (benefit) for income taxes
    
    
    (2,547,942
    )
    
    
    13,048,885Net income (loss)
    
    $
    (4,602,110
    )
    
    $
    24,045,393Earnings (loss) per share:Basic
    
    $
    (0.25
    )
    
    $
    1.62Diluted
    
    $
    (0.25
    )
    
    $
    1.62Weighted average shares outstanding:Basic
    
    
    18,236,299
    
    
    
    14,836,667Diluted
    
    
    18,236,299
    
    
    
    14,836,667
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 
 Condensed Consolidated Statements of Cash Flows
(Unaudited)
 Six Months Ended June 30,2007
    
    
    2006Cash flows from operating activities:Net income (loss)
    
    $
    (4,602,110
    )
    
    $
    24,045,393Adjustments
to reconcile net income (loss) to net cash provided by (used in)
operating activities:Depreciation and amortization
    
    
    2,392,286
    
    
    
    1,455,420Stock compensation expense
    
    
    2,229,371
    
    
    
    Loss on extinguishment of debt
    
    
    3,850,654
    
    
    
    Deferred income taxes
    
    
    (2,329,667
    )
    
    
    851,472Other
    
    
    1,956,874
    
    
    
    595,450Changes in operating assets and liabilities, net of effects of acquisition:Accounts and unbilled receivables
    
    
    14,134,261
    
    
    
    (21,610,393
    )Inventory
    
    
    (206,944
    )
    
    
    (157,185
    )Prepaid
expenses
    
    
    (3,128,533
    )
    
    
    (1,321,370
    )Other assets
    
    
    (2,613,464
    )
    
    
    165,226Accounts payable and accrued expenses
    
    
    (10,728,481
    )
    
    
    2,158,111Other liabilities
    
    
    (13,250,000
    )
    
    
    6,090,457Net cash provided by (used in) operating activities
    
    
    (12,295,753
    )
    
    
    12,272,581Cash flows from investing activities:Purchase of property and equipment, net of acquisitions
    
    
    (88,223,211
    )
    
    
    (13,988,000
    )Proceeds from disposal of assets
    
    
    382,145
    
    
    
    Acquisition of businesses, net of cash acquired
    
    
    (969,688
    )
    
    
    Deposits in restricted cash
    
    
    (10,798,446
    )
    
    
    (3,035,612
    )Net cash used in investing activities
    
    
    (99,609,200
    )
    
    
    (17,023,612
    )Cash flows from financing activities:Payments on notes payable, net of assumed debt
    
    
    (120,291,156
    )
    
    
    (1,308,656
    )Proceeds from notes payable
    
    
    136,056,945
    
    
    
    6,588,162Draws on line of credit, net
    
    
    8,928,249
    
    
    
    1,986,962Debt issuance cost
    
    
    (3,657,712
    )
    
    
    Dividend paid
    
    
    (28,255,932
    )
    
    
    (844,032
    )Proceeds from initial public offering, net
    
    
    118,116,246
    
    
    
    Net cash provided by financing activities
    
    
    110,896,640
    
    
    
    6,422,436Increase (decrease) in cash and cash equivalents
    
    
    (1,008,313
    )
    
    
    1,671,405Cash and cash equivalents, beginning of period
    
    
    2,556,068
    
    
    
    3,382,032Cash and cash equivalents, end of period
    
    $
    1,547,755
    
    
    $
    5,053,437Supplemental cash flow disclosuresCash paid for income taxes
    
    $
    13,250,000
    
    
    $
    6,050,000Cash paid for interest
    
    
    2,391,966
    
    
    
    622,017
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 (1) Organization and Basis of Presentation
     (2) Initial Public Offering
  
    
    repaid in full the senior secured term loan using $68,385,109 of the proceeds from
the Offering and $43,496,441 of the proceeds previously received from the senior
secured term loan that were held in a segregated account;
    
    used $6,571,000 of the proceeds from the Offering to repay outstanding borrowings
under the senior secured credit facility; and
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 
    
    used $28,000,000 of the proceeds from the Offering to pay a special cash dividend to
the existing stockholders.
  (3) Earnings (Loss) Per Share
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    (10,787,438
    )
    
    $
    12,128,451
    
    
    $
    (4,602,110
    )
    
    $
    24,045,393Weighted average number of common shares outstanding
    
    
    21,598,572
    
    
    
    14,836,667
    
    
    
    18,236,299
    
    
    
    14,836,667Add: Net effect of dilutive stock options and unvested
restricted stock (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Adjusted weighted average number of common shares
outstanding
    
    
    21,598,572
    
    
    
    14,836,667
    
    
    
    18,236,299
    
    
    
    14,836,667Basic earnings (loss) per share
    
    $
    (0.50
    )
    
    $
    0.82
    
    
    $
    (0.25
    )
    
    $
    1.62Diluted earnings (loss) per share
    
    $
    (0.50
    )
    
    $
    0.82
    
    
    $
    (0.25
    )
    
    $
    1.62
 
 (1)
    
    In periods of a net loss, potentially dilutive securities would have been antidilutive and
are therefore excluded from the calculation of diluted EPS. (4) Property and Equipment
  June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)Land
    
    $
    
    
    
    $
    174,068Furniture and fixtures
    
    
    1,473,046
    
    
    
    1,100,041Machinery and equipment
    
    
    5,933,987
    
    
    
    5,988,619Diving vessels and equipment
    
    
    36,145,277
    
    
    
    22,195,063Automobiles, trucks, and trailers
    
    
    1,018,998
    
    
    
    976,041Leasehold improvements
    
    
    440,119
    
    
    
    432,236Buildings
    
    
    179,007
    
    
    
    179,007Construction in progress
    
    
    114,972,771
    
    
    
    44,586,781$
    160,163,205
    
    
    $
    75,631,856
 Superior
Achiever Gulf Diver IV Superior Endeavour
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 Superior Achiever  
 (5) Notes Payable and Lines of Credit
  June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)Lines of credit
    
    $
    13,146,719
    
    
    $
    4,218,470Senior secured term loan facility due in nineteen equal quarterly
installments of 3.75% of the amount outstanding on December 31, 2008
beginning March 2009, with the balance payable in December 2013, interest at
federal funds effective rate plus 0.50% per annum (8.65% at June 30, 2007)
    
    $
    25,000,000
    
    
    $
    Note payable to bank due in monthly installments of principal of $78,571
plus interest through April 2010, with a final balloon payment of $1,964,286
due on April 12, 2010, interest at JPMorgans prime rate plus 0.50% per
annum (9.04% at December 31, 2006)
    
    
    
    
    
    
    5,028,571Note payable to bank due in monthly installments of principal of $37,500
plus interest July 2006 through June 2011, interest at JPMorgans prime rate
plus 0.50% per annum (9.04% at December 31, 2006)
    
    
    
    
    
    
    2,025,000Note payable to bank due in monthly installments of principal of $30,000
plus interest July 2006 through June 2011, interest at JPMorgans prime rate
plus 0.50% per annum (9.04% at December 31, 2006)
    
    
    
    
    
    
    1,620,000Non-revolving line of credit with a maximum aggregate principal of $3,600,000
    
    
    
    
    
    
    2,908,518Insurance premium financing note due in monthly installments of $227,453
from May 12, 2006 through January 12, 2007 (7.9% per annum)
    
    
    
    
    
    
    225,940Insurance premium financing note due in monthly installments of $225,783
from August 1, 2006 through April 1, 2007 (7.9% per annum)
    
    
    
    
    
    
    888,538Insurance premium financing note due in monthly installments of $503,294
from March 1, 2007 through December 1, 2007 (6.47% per annum)
    
    
    3,447,841
    
    
    
    Other notes payable
    
    
    685,465
    
    
    
    670,95029,133,306
    
    
    
    13,367,517Less principal due within one year
    
    
    (3,701,630
    )
    
    
    (3,608,132
    )Total long-term notes payable
    
    $
    25,431,676
    
    
    $
    9,759,385
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
   Superior
Achiever
        Superior Achiever
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
   
    
    a base rate equal to the greater of
 
    
    the federal funds effective rate, plus 0.50%; and
    
    the prime lending rate;
 plus a spread equal to 1.00% per annum, or
 
    
    the London Interbank Offered Rate, plus a spread equal to 3.25% per annum.
  Superior Achiever
    Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income
    
    $
    (304,060
    )
    
    $
    (48,067
    )
    
    $
    (714,998
    )
    
    $
    (84,263
    )Interest expense, net of capitalized interest
    
    
    (48,826
    )
    
    
    44,575
    
    
    
    136,700
    
    
    
    415,924Interest expense (income), net
    
    $
    (352,886
    )
    
    $
    (3,492
    )
    
    $
    (578,298
    )
    
    $
    331,661
 (6) Commitments and Contingencies
 (a) Leases
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
      (b) Charters
 Adams
Surveyor Adams Surveyor
 Toisa Puma Toisa Puma
 Crossmar XIV Crossmar XIV
 Seamec III Seamec III
  (c) Purchase Commitments
 Superior Achiever  
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
  Superior Achiever
  Superior Achiever
 (d) Litigation
  (7) Major Customers
  Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,Customer
    
    2007
    
    2006
    
    2007
    
    2006Customer A
    
    
    10
    %
    
    
    8.5
    %
    
    
    36
    %
    
    
    5
    %Customer B
    
    
    20
    %
    
    
    
    
    
    
    13
    %
    
    
    Customer C
    
    
    1
    %
    
    
    15
    %
    
    
    7
    %
    
    
    20
    %Customer D
    
    
    1
    %
    
    
    10
    %
    
    
    1
    %
    
    
    6
    %Customer E
    
    
    
    
    
    
    7
    %
    
    
    
    
    
    
    19
    %
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 (8) Contributions to Employee Benefit Plan
  (9) Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxes Accounting for Income Taxes
  Fair Value Measurements
  The Fair Value Option
for Financial Assets and Financial Liabilities
 (10) Acquisition
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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 (11) Comprehensive Income
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net income (loss)
    
    $
    (10,787,438
    )
    
    $
    12,128,451
    
    
    $
    (4,602,110
    )
    
    $
    24,045,393Unrealized loss on foreign
currency hedges, net of tax
benefit of $(183,664) and
$(132,119) for 2007
    
    
    (341,091
    )
    
    
    
    
    
    
    (245,365
    )
    
    
    Foreign currency translation gain
    
    
    249,650
    
    
    
    
    
    
    
    41,220
    
    
    
    Total comprehensive income (loss)
    
    $
    (10,878,879
    )
    
    $
    12,128,451
    
    
    $
    (4,806,255
    )
    
    $
    24,045,393
  June 30,
    
    
    December 31,2007
    
    
    2006(Unaudited)Unrealized gain on foreign currency
hedges, net of tax of $406,085 and $538,204
    
    $
    754,157
    
    
    $
    999,522Cumulative foreign currency translation losses
    
    
    (63,346
    )
    
    
    (104,566
    )Accumulated other comprehensive income
    
    $
    690,811
    
    
    $
    894,956
 (12) Share-Based Compensation
   13




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SUPERIOR OFFSHORE INTERNATIONAL, INC.
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 Expected life (years)
    
    
    6.25Riskfree interest rate
    
    
    4.6
    %Volatility
    
    
    56.0
    %Dividend yield
    
    
    0.0
    %Weightedaverage fair value per share at grant date
    
    
    8.95
  14




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion and analysis of our financial condition and results of operations
should be read in conjunction with our unaudited condensed consolidated financial statements and notes
thereto appearing in Item 1 of Part I of this Quarterly Report on Form 10-Q as well as with our
audited consolidated financial statements and notes thereto appearing in our Prospectus, dated
April 19, 2007 and filed with the SEC on April 20, 2007, relating to our initial public offering
(the IPO Prospectus). This discussion and analysis contains forward-looking statements that
involve risks and uncertainties. Our actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including those set forth under
the caption Risk Factors in our IPO Prospectus. For additional information concerning
forward-looking statements, please read Forward-Looking Information below.
 Our Business
      Superior Endeavour Gulmar Condor
 15




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Gulmar Condor Superior Endeavour
 Toisa Proteus
 Our Outlook
 Superior Endeavour Toisa Proteus
 Gulmar Condor Adams Surveyor Toisa
Puma Superior Endeavour Gulmar Falcon
 Gulmar Falcon Gulmar Condor Seamec III Crossmar XIV Gulmar Falcon
   16




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##### Table of Contents



Our Fleet
  Year
    
    DatePurchased
    
    Placed in
    
    
    
    
    
    Clear Deck
    
    
    
    
    
    Moon Pool
    
    CraneOwn/
    
    or Chartered
    
    Service by
    
    Length
    
    Space
    
    
    
    
    
    Launch/
    
    CapacityFlag
    
    Charter
    
    by Superior
    
    Superior
    
    (feet) (1)
    
    (sq. feet)
    
    Accommodations
    
    SAT Diving
    
    (tons)DP Vessels:Superior Endeavour
    
    Vanuatu
    
    Own
    
    
    2004
    (2)
    
    
    10/2004
    
    
    
    265
    
    
    
    8,600
    
    
    
    61
    
    
    Yes(3)
    
    
    45
    (3)Gulmar Falcon
    
    Panama
    
    Charter(4)
    
    
    2006
    
    
    
    04/2006
    
    
    
    220
    
    
    
    9,235
    
    
    
    73
    
    
    Yes(5)
    
    
    30Gulmar Condor
    
    Panama
    
    Charter(6)
    
    
    2006
    
    
    
    07/2007
    
    
    
    341
    
    
    
    10,764
    
    
    
    128
    
    
    Yes(5)
    
    
    120/70Adams Surveyor
    
    Bahrain
    
    Charter(7)
    
    
    2007
    
    
    
    03/2007
    
    
    
    228
    
    
    
    5,084
    
    
    
    54
    
    
    No(8)
    
    
    45Toisa Puma
    
    Liberia
    
    Charter(9)
    
    
    2007
    
    
    
    
    
    
    
    253
    
    
    
    4,672
    
    
    
    60
    
    
    Yes(5)
    
    
    25Seamec III
    
    India
    
    Charter(10)
    
    
    2007
    
    
    
    07/2007
    
    
    
    304
    
    
    
    5,124
    
    
    
    90
    
    
    Yes(5)
    
    
    50/10Four-Point Vessels:Gulf Diver III
    
    
    U.S.
    
    
    Own
    
    
    2003
    
    
    
    09/2003
    
    
    
    165
    
    
    
    1,034
    
    
    
    36
    
    
    No
    
    
    10Gulf Diver IV (11)
    
    
    U.S.
    
    
    Own
    
    
    2005
    
    
    
    
    
    
    
    168
    
    
    
    2,880
    
    
    
    43
    
    
    No
    
    
    15Gulf Diver V
    
    
    U.S.
    
    
    Own
    
    
    2005
    
    
    
    03/2006
    
    
    
    180
    
    
    
    3,330
    
    
    
    23
    
    
    No
    
    
    15Gulf Diver VI
    
    
    U.S.
    
    
    Own
    
    
    2006
    
    
    
    09/2006
    
    
    
    166
    
    
    
    2,890
    
    
    
    38
    
    
    No
    
    
    15
 
 (1)
    
    We measure the length of each vessel from the tip of the bow to the farthest point on the
stern. Other companies or regulatory bodies may measure vessel length differently than we do.(2)
    
    We chartered this vessel beginning in October 2004 and purchased this vessel in April 2005.(3)
    
    We placed this vessel in the shipyard in February 2007 for scheduled upgrades and expect to
place this vessel back in service by the end of August 2007. Following
these upgrades, the Superior Endeavourwill be equipped with a 50-ton crane, a six-man
saturation diving system and a hyperbaric rescue chamber.(4)
    
    This charter expires in March 2008, subject to options to extend the charter for up to two
additional six-month periods. The vessel owner placed this vessel in shipyard in July 2007
for scheduled upgrades, and we expect to place this vessel back in service in September 2007.(5)
    
    This vessel is equipped with a hyperbaric rescue chamber.(6)
    
    This charter expires in March 2009, subject to options to extend the charter for up to two
additional six-month periods.(7)
    
    This charter expires in February 2008, subject to options to extend the charter for up to two
additional six-month periods.(8)
    
    This vessel does not currently have a saturation diving system, but has positioning and
reference systems that allow the operation of either a saturation diving system or ROVs.(9)
    
    This charter expires in July 2009, subject to options to extend the charter for up to two
additional six-month periods. We expect to place this vessel in
service by the end of August 2007.(10)
    
    This charter expires in January 2008, subject to options to extend the charter for up to
three additional six-month periods.(11)
    
    This vessel has been in the shipyard for upgrade and refurbishment since we acquired it in
December 2005. We are evaluating the engineering, refurbishment and future deployment of this
vessel. We do not expect to place this vessel in service in 2007.  Crossmar XIV Crossmar XIV
 17




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##### Table of Contents



Crossmar XIV
 Superior Achiever Superior Achiever
 Factors Affecting Our Operations
   Superior Endeavour Toisa Proteus
 18




---



##### Table of Contents



2006
    
    
    2007Q1
    
    
    Q2
    
    
    Q3
    
    
    Q4
    
    
    Q1
    
    
    Q2Number of vessels (as of end
of period) (1)
    
    
    6
    
    
    
    7
    
    
    
    7
    
    
    
    8
    
    
    
    9
    
    
    
    9Number of vessel revenue days (2):Owned and long-term charter
    
    
    236
    
    
    
    363
    
    
    
    330
    
    
    
    380
    
    
    
    196
    
    
    
    234Short-term charter
    
    
    521
    
    
    
    291
    
    
    
    247
    
    
    
    318
    
    
    
    408
    
    
    
    128Total vessel revenue days
    
    
    757
    
    
    
    654
    
    
    
    577
    
    
    
    698
    
    
    
    604
    
    
    
    362Vessel utilization (3)
    
    
    91
    %
    
    
    93
    %
    
    
    85
    %
    
    
    88
    %
    
    
    45
    %
    
    
    51
    %U.S. natural gas prices (4)
    
    $
    9.04
    
    
    $
    8.81
    
    
    $
    8.49
    
    
    $
    7.86
    
    
    $
    7.98
    
    
    $
    8.63NYMEX crude oil prices (5)
    
    $
    66.20
    
    
    $
    73.29
    
    
    $
    73.74
    
    
    $
    64.70
    
    
    $
    61.87
    
    
    $
    68.72
 
 (1)
    
    The number of vessels as of the end of each period represents our DP and four-point
vessels owned or under long-term charter. Vessels acquired are treated as added to our fleet
as of the date we purchased the vessel. Vessels under long-term charter are treated as part
of our fleet during the term of the charter. We define long-term charters as charters of six
months or longer. Our method of computation of number of vessels may or may not be comparable
to other similarly titled measures of other companies. The number of vessels for the first
and second quarters of 2006 includes our ownership of the Gulf Diver IVand the Gulf Diver VI,
which were owned but not in service during those periods. The number of vessels for the third
and fourth quarters of 2006 includes our ownership of the Gulf Diver IV, which was owned but
not in service during those periods, and our charter of the American Salvor, which was under
long-term charter but not in service during those periods. The number of vessels for the
fourth quarter of 2006 and the first and second quarters of 2007 also includes our charter of
the Gulmar Condor, which was under long-term charter but not in service during those periods.
The number of vessels for the second quarter of 2007 also includes our ownership of the
Superior Endeavour, which was owned but not in service during that period.(2)
    
    The number of vessel revenue days is the total number of days the vessels generated revenue.
Our method of computation of number of vessel revenue days may or may not be comparable to
other similarly titled measures of other companies.(3)
    
    Average vessel utilization is calculated by dividing the total number of days our owned or
long-term chartered vessels generated revenues by the total number of days the vessels were
available for service in each period and does not reflect days during the period between the
dates vessels were acquired and initially placed in service and days vessels were in drydock
for regulatory-related inspections and maintenance. Our method of computation of vessel
utilization may or may not be comparable to other similarly titled measures of other
companies.(4)
    
    Quarterly average of the Henry Hub natural gas 12-month strip futures price (dollars per
Mmbtu).(5)
    
    Quarterly average of NYMEX WTI crude oil 12-month strip futures price (dollars per barrel). Recent Events
  
    
    repaid in full our senior secured term loan using approximately $68.4 million
of the proceeds from our initial public offering and approximately $43.5 million of the
proceeds from the senior secured term loan that were held in a segregated account;
 19




---



##### Table of Contents




    
    used approximately $6.6 million of the proceeds from our initial public
offering to repay outstanding borrowings under our revolving credit facility; and
    
    used $28.0 million of the proceeds from our initial public offering to pay a
special cash dividend to our existing stockholders.
    Toisa Puma Toisa Puma
 Crossmar XIV Crossmar XIV
 Seamec III Seamec III
  Critical Accounting Estimates and Policies
   Major Customers and Concentration of Credit Risk
  20




---



##### Table of Contents



Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,Customer
    
    2007
    
    2006
    
    2007
    
    2006Customer A
    
    
    10
    %
    
    
    8.5
    %
    
    
    36
    %
    
    
    5
    %Customer B
    
    
    20
    %
    
    
    
    
    
    
    13
    %
    
    
    Customer C
    
    
    1
    %
    
    
    15
    %
    
    
    7
    %
    
    
    20
    %Customer D
    
    
    1
    %
    
    
    10
    %
    
    
    1
    %
    
    
    6
    %Customer E
    
    
    
    
    
    
    7
    %
    
    
    
    
    
    
    19
    %
   Seasonality
  Accounting for Share-Based Payments
  Share-Based Payment
 21




---



##### Table of Contents



Non-GAAP Financial Measures
     22




---



##### Table of Contents



Reconciliation of EBITDA
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in thousands)EBITDA
    
    $
    (11,665
    )
    
    $
    19,481
    
    
    $
    (1,485
    )
    
    $
    38,881Less: interest income (expense), net*
    
    
    353
    
    
    
    3
    
    
    
    578
    
    
    
    (332
    )Less: benefit (provision) for income taxes
    
    
    5,598
    
    
    
    (6,632
    )
    
    
    2,548
    
    
    
    (13,049
    )Plus: gain (loss) on disposal of assets
    
    
    (4
    )
    
    
    155
    
    
    
    (28
    )
    
    
    155Plus: allowance for doubtful accounts
    
    
    1,914
    
    
    
    273
    
    
    
    1,985
    
    
    
    440Plus: stock compensation expense
    
    
    2,229
    
    
    
    
    
    
    
    2,229
    
    
    
    Less: decrease (increase) in accounts receivable
    
    
    9,697
    
    
    
    (10,023
    )
    
    
    14,134
    
    
    
    (21,608
    )Less: increase in inventory
    
    
    (150
    )
    
    
    (138
    )
    
    
    (207
    )
    
    
    (157
    )Less: increase in other assets
    
    
    (2,983
    )
    
    
    (1,944
    )
    
    
    (5,742
    )
    
    
    (1,156
    )Plus: (decrease) increase in accounts payable and
accrued expenses
    
    
    (5,570
    )
    
    
    (915
    )
    
    
    (10,728
    )
    
    
    2,158Plus: (decrease) increase in income taxes payable
    
    
    (13,130
    )
    
    
    4,180
    
    
    
    (13,250
    )
    
    
    6,147Plus: increase in other liabilities
    
    
    
    
    
    
    (114
    )
    
    
    
    
    
    
    (57
    )Plus: (decrease) increase in deferred income taxes
    
    
    (3,506
    )
    
    
    851
    
    
    
    (2,330
    )
    
    
    851Net cash provided by (used in) operating activities
    
    $
    (17,217
    )
    
    $
    5,177
    
    
    $
    (12,296
    )
    
    $
    12,273
 
 *
    
    Interest expense (income) for the three and six months ended June 30, 2007 and 2006 consists
of the following elements: Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest income
    
    $
    (304,060
    )
    
    $
    (48,067
    )
    
    $
    (714,998
    )
    
    $
    (84,263
    )Interest expense, net of capitalized interest
    
    
    (48,826
    )
    
    
    44,575
    
    
    
    136,700
    
    
    
    415,924Interest expense (income), net
    
    $
    (352,886
    )
    
    $
    (3,492
    )
    
    $
    (578,298
    )
    
    $
    331,661
 23




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##### Table of Contents



Results of Operations
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(dollars in millions)Number of
vessel revenue days(1):Owned and long-term charter
    
    
    234
    
    
    
    363
    
    
    
    431
    
    
    
    599Short-term charter
    
    
    128
    
    
    
    291
    
    
    
    576
    
    
    
    812Total vessel revenue days
    
    
    362
    
    
    
    654
    
    
    
    1,007
    
    
    
    1,411Revenues
    
    $
    41.9
    
    
    $
    60.6
    
    
    $
    96.2
    
    
    $
    110.0Cost of revenues (excluding depreciation and amortization)
    
    
    35.3
    
    
    
    33.1
    
    
    
    68.3
    
    
    
    57.0Operating expenses
    
    
    19.5
    
    
    
    8.8
    
    
    
    31.8
    
    
    
    15.6Non operating expenses
    
    
    3.5
    
    
    
    
    
    
    
    3.3
    
    
    
    0.3Provision
(benefit) for income taxes
    
    
    (5.6
    )
    
    
    6.6
    
    
    
    (2.6
    )
    
    
    13.1Net income (loss)
    
    
    (10.8
    )
    
    
    12.1
    
    
    
    (4.6
    )
    
    
    24.0
 
 (1)
    
    The number of vessel revenue days is the total number of days the vessels generated revenue.
Our method of computation of number of vessel revenue days may or may not be comparable to
other similarly titled measures of other companies. Three Months Ended June 30, 2007 versus the Three Months Ended June 30, 2006
 Revenues. Superior
Endeavour Superior Endeavour Toisa Proteus Superior Endeavour
 Costs of Revenues (excluding depreciation and amortization).
 Operating Expenses.
 24




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##### Table of Contents



Non-Operating Expenses.
 Provision (Benefit) for Income Taxes.
 Six Months Ended June 30, 2007 versus the Six Months Ended June 30, 2006
 Revenues. Superior Endeavour Superior Endeavour Superior Endeavour
 Costs of Revenues (excluding depreciation and amortization).
 Operating Expenses.
 25




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##### Table of Contents



Non-Operating Expenses (Income).
 Provision
(Benefit) for Income Taxes.
 Liquidity and Capital Resources
 Cash Flows
  Superior Achiever Superior Achiever Superior Endeavour
  
    
    repaid in full our senior secured term loan using approximately $68.4 million of the
proceeds from our initial public offering and approximately $43.5 million of the
proceeds from the senior secured term loan that were held in a segregated account;
    
    used approximately $6.6 million of the proceeds from our initial public offering to
repay outstanding borrowings under our revolving credit facility; and
    
    used $28.0 million of the proceeds from our initial public offering to pay a special
cash dividend to our existing stockholders.
   Capital Expenditures
 Superior Achiever
 26




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##### Table of Contents



Superior Achiever Superior Achiever
   Liquidity Needs
 Superior Achiever 
 Superior Achiever
  Long-Term Debt
  Senior Secured Term Loan.
 27




---



##### Table of Contents



Superior Achiever
   
    
    a base rate equal to the greater of
    
    
    the London Interbank Offered Rate, plus a spread equal to 3.25% per annum.
  Superior Achiever
   
    
    the maintenance of a ratio of consolidated total debt (as defined in the Term Loan
Agreement) to consolidated EBITDA (as defined in the Term Loan Agreement) of no greater
than 2.0 to 1.0;
    
    the maintenance of a ratio of consolidated EBITDA to consolidated interest expense
(as defined in the Term Loan Agreement) of at least 5.0 to 1.0;
    
    the maintenance of a ratio of appraised fair market
value of vessels (as defined in the Term Loan Agreement) and related equipment pledged
as collateral to outstanding borrowings under the senior secured term loan facility of
at least 1.20 to 1.0 until December 31, 2008 and 2.0 to 1.0 thereafter;
    
    restrictions on incurring indebtedness, including certain capital lease, guarantee
and charter obligations;
    
    restrictions on incurring liens on certain of our property and the property of our subsidiaries;
    
    restrictions on selling assets or inventory outside the ordinary course of business;
 28




---



##### Table of Contents




    
    prohibitions on entering into sale and leaseback transactions; and
    
    restrictions on transactions with affiliates and materially changing our business.
  Senior Secured Credit Facility
    
    
    a base rate equal to the higher of:
    
    
    LIBOR (as adjusted for statutory reserve requirements for eurocurrency liabilities)
plus a spread ranging from 1.75% to 2.25%, subject to a performance based grid.
     
    
    the maintenance of a ratio of consolidated total debt (as defined in the Credit
Facility Agreement) to consolidated EBITDA (as defined in the Credit Facility
Agreement) of no greater than 2.0 to 1.0;
    
    the maintenance of a ratio of EBITDA minus the unfinanced portion of capital
expenditures to fixed charges (the Fixed Charge Coverage
Ratio) of at least 1.2 to 1.0;
 29




---



##### Table of Contents




    
    restrictions on incurring indebtedness, including certain capital lease, guarantee
and charter obligations;
    
    restrictions on incurring liens on certain of our property and the property of our subsidiaries;
    
    restrictions on selling assets or inventory outside the ordinary course of business;
    
    prohibitions on entering into sale and leaseback transactions; and
    
    restrictions on transactions with affiliates and materially changing our business.
  Contractual Obligations
  Payments Due by PeriodLess Than
    
    
    
    
    
    
    
    
    
    
    More ThanContractual Obligations (1)
    
    Total
    
    
    1 Year
    
    
    1-3 Years
    
    
    3-5 Years
    
    
    5 Years(dollars in thousands)Long-term debt obligations,
including current maturities
    
    $
    29,133
    
    
    $
    3,702
    
    
    $
    5,939
    
    
    $
    7,615
    
    
    $
    11,877Line of credit obligations
    
    
    13,147
    
    
    
    
    
    
    
    13,147
    
    
    
    
    
    
    
    Vessel construction obligations (2)
    
    
    49,867
    
    
    
    49,867
    
    
    
    
    
    
    
    
    
    
    
    Vessel charter obligations
    
    
    127,800
    
    
    
    80,810
    
    
    
    46,990
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    3,225
    
    
    
    1,122
    
    
    
    1,840
    
    
    
    263
    
    
    
    Purchase obligations
    
    
    683
    
    
    
    683
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    223,855
    
    
    $
    136,184
    
    
    $
    67,916
    
    
    $
    7,878
    
    
    $
    11,877
 
 (1)
    
    This table does not include an estimated $3.9 million that we will pay in the third quarter
of 2007 in connection with our acquisition of the businesses of Subtech Diving and Marine in
December 2006, based on the financial performance of our Subtech subsidiary through June 2007.(2)
    
    These amounts represent our obligations relating to the construction of the Superior Achiever
as of June 30, 2007. The total estimated construction cost of the Superior Achiever,
including equipment and change orders made to date, is expected to be approximately $129.6
million. On each of April 2, 2007 and May 4, 2007, we made a scheduled payment of $16.0
million related to the construction of the Superior Achiever. As of August 8, 2007, we have
paid the shipbuilder 47.4 million (or approximately $61.4 million) and equipment vendors
approximately $7.6 million in connection with the construction of the Superior Achiever. The
total estimated future capital expenditures for the construction of this vessel as of August
8, 2007 are expected to be approximately $60.6 million. We also may expend significant
additional capital, currently estimated at up to $10.0 million, to enable the vessel to
perform most full-field development services, including deepwater small-diameter pipelay and
umbilical installation. 30




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##### Table of Contents



Off-Balance Sheet Arrangements
  Forward-Looking Information
  
    
    our strategy, including the expansion and growth of our operations and our ability
to make future acquisitions on attractive terms;
    
    our plans, expectations and any effects of capitalizing on strong market conditions
in the U.S. Gulf of Mexico, expanding the breadth of services in our core market,
expanding our deepwater capabilities, pursuing international growth opportunities and
expanding our fabrication capabilities;
    
    our expected results from the Trinidad project and plans to expand our operations in
Trinidad;
    
    our plans to provide services in the Middle East and Africa;
    
    our ability to enter into new contracts for subsea construction and commercial
diving services and future utilization rates and contract rates for our vessels;
    
    the correlation between demand for our services and customers expectations of
energy prices;
    
    future capital expenditures, including estimated costs for the construction of the
Superior Achiever, the equipment necessary to enable the Superior Achieverto perform
deepwater small-diameter pipelay and umbilical installation, and the scheduled upgrades
for the Superior Endeavour;
    
    expected drydocking schedules and the dates vessels and equipment will be placed in service;
    
    expected delivery of the Superior Achiever;
    
    the planned specifications of the Superior Achiever;
    
    the capabilities of our vessels following scheduled upgrades and refurbishments;
    
    our expected results of operations for the second half of 2007;
    
    expected sources of revenues in the second half of 2007;
    
    sufficiency of funds for required capital expenditures, working capital and debt service;
    
    plans regarding additional financing arrangements;
    
    liabilities under laws and regulations protecting the environment;
    
    expected outcomes of litigation, claims and disputes and their expected effects on
our financial condition and results of operations;
    
    expectations regarding improvements in diving and offshore construction activity;
demand for our services, including the provision of diving resources and technical
expertise on vessels and platforms owned and operated by third parties; operating
revenues; operating and maintenance expense; insurance expense and deductibles;
interest expense; debt level; and other matters with regard to the outlook of our
business and industry; and
    
    expectations of future share-based payments and compensation expense.
 31




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##### Table of Contents




    
    crude oil and natural gas prices, and industry expectations about future prices;
    
    demand for subsea construction and commercial diving services;
    
    our ability to enter into and the terms of future contracts;
    
    the impact of governmental laws and regulations;
    
    the adequacy of sources of liquidity;
    
    uncertainties relating to the level of activity in offshore crude oil and natural
gas exploration, development and production;
    
    competition and market conditions in the subsea construction and commercial diving industry;
    
    the availability of skilled personnel;
    
    labor relations and work stoppages;
    
    operating hazards, war, terrorism and cancellation or unavailability of insurance coverage;
    
    the effect of litigation and contingencies; and
    
    our inability to achieve our plans or carry out our strategy.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk.
   32




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Superior Achiever Superior Achiever Superior Achiever
 
 Item 4. Controls and Procedures.
  
 Item 4T. Controls and Procedures.
 Evaluation of Disclosure Control and Procedures
  Changes in Internal Control over Financial Reporting
  33




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##### Table of Contents



PART IIOTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
   
 Item 6. Exhibits
 3.1
    
    Amended and Restated Certificate of Incorporation of Superior Offshore International, Inc.
(incorporated by reference to Exhibit 3.1 to the Companys Registration Statement on Form S-8
(Registration No. 333-142394) (the Form S-8)).3.2
    
    Bylaws of Superior Offshore International, Inc. (incorporated by reference to Exhibit 3.2 to the
Form S-8).4.1
    
    Registration Rights Agreement among the Company, Louis E. Schaefer, Jr. and Schaefer Holdings, LP
(incorporated by reference to Exhibit E to the Schedule 13D dated April 19, 2007 filed by Schaefer
Holdings, LP, Schaefer Holdings GP, LLC, Louis E. Schaefer, Jr. and R. Joshua Koch, Jr.).10.1
    
    Employment Agreement between the Company and Louis E. Schaefer, Jr. (incorporated by reference to
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).10.2
    
    Employment Agreement between the Company and James J. Mermis (incorporated by reference to Exhibit
10.2 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).10.3
    
    Employment Agreement between the Company and Roger D. Burks (incorporated by reference to Exhibit
10.3 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).
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10.4
    
    Employment Agreement between the Company and R. Joshua Koch, Jr. (incorporated by reference to
Exhibit 10.4 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).10.5
    
    Employment Agreement between the Company and John F. Guarisco (incorporated by reference to Exhibit
10.5 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).10.6
    
    Employment Agreement between the Company and Patrice Chemin (incorporated by reference to Exhibit
10.6 to the Companys Quarterly Report on Form 10-Q for the period ended March 31, 2007).10.7
    
    Employment Agreement between the Company and David Weinhoffer.10.8
    
    Superior Offshore International 2007 Stock Incentive Plan (incorporated by reference to Exhibit 10.1
to the Form S-8).10.9
    
    Form of Stock Option Agreement (incorporated by reference to Exhibit 10.7 to the Companys
Registration Statement on Form S-1 (Registration No. 333-136567 (the Form S-1)).10.10
    
    Form of Restricted Stock Award Agreement (incorporated by reference to Exhibit 10.8 to the Form S-1).10.11
    
    Credit Agreement dated as of June 19, 2007 among Superior Offshore International, Inc., as Borrower,
the Collateral Agent as named therein, the several lenders from time to time parties thereto, and
Fortis Capital Corp., as Administrative Agent.10.12
    
    Guarantee and Collateral Agreement dated as of June 19, 2007 made by Superior Offshore
International, Inc. in favor of Fortis Capital Corp., as Collateral Agent.10.13
    
    First Amendment to Credit Agreement dated as of June 20, 2007 among Superior Offshore International,
Inc., as Borrower, the lenders party thereto and JPMorgan Chase Bank, N.A., as Administrative Agent.31.1
    
    Rule 13a-14(a)/15d-14(a) certification of the Principal Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2
    
    Rule 13a-14(a)/15d-14(a) certification of the Principal Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1
    
    Section 1350 certification of the Principal Executive Officer pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2
    
    Section 1350 certification of the Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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SIGNATURES
  SUPERIOR OFFSHOREINTERNATIONAL, INC.Date:
August 17, 2007
    
    By:
    
    /s/ James J. MermisJames J. MermisPresident and Chief Executive Officer(Principal Executive Officer)Date:
August 17, 2007
    
    By:
    
    /s/ Roger D. BurksRoger D. BurksExecutive Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)




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EXHIBIT INDEX
 ExhibitNo.
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of Superior
Offshore International, Inc. (incorporated by reference to
Exhibit 3.1 to the Companys Registration Statement on Form
S-8 (Registration No. 333-142394) (the Form S-8)).3.2
    
    Bylaws of Superior Offshore International, Inc. (incorporated
by reference to Exhibit 3.2 to the Form S-8).4.1
    
    Registration Rights Agreement among the Company, Louis E.
Schaefer, Jr. and Schaefer Holdings, LP (incorporated by
reference to Exhibit E to the Schedule 13D dated April 19,
2007 filed by Schaefer Holdings, LP, Schaefer Holdings GP,
LLC, Louis E. Schaefer, Jr. and R. Joshua Koch, Jr.).10.1
    
    Employment Agreement between the Company and Louis E.
Schaefer, Jr. (incorporated by reference to Exhibit 10.1 to
the Companys Quarterly Report on Form 10-Q for the period
ended March 31, 2007).10.2
    
    Employment Agreement between the Company and James J. Mermis
(incorporated by reference to Exhibit 10.2 to the Companys
Quarterly Report on Form 10-Q for the period ended March 31,
2007).10.3
    
    Employment Agreement between the Company and Roger D. Burks
(incorporated by reference to Exhibit 10.3 to the Companys
Quarterly Report on Form 10-Q for the period ended March 31,
2007).10.4
    
    Employment Agreement between the Company and R. Joshua Koch,
Jr. (incorporated by reference to Exhibit 10.4 to the
Companys Quarterly Report on Form 10-Q for the period ended
March 31, 2007).10.5
    
    Employment Agreement between the Company and John F. Guarisco
(incorporated by reference to Exhibit 10.5 to the Companys
Quarterly Report on Form 10-Q for the period ended March 31,
2007).10.6
    
    Employment Agreement between the Company and Patrice Chemin
(incorporated by reference to Exhibit 10.6 to the Companys
Quarterly Report on Form 10-Q for the period ended March 31,
2007).10.7
    
    Employment Agreement between the Company and David Weinhoffer.10.8
    
    Superior Offshore International 2007 Stock Incentive Plan
(incorporated by reference to Exhibit 10.1 to the
Form S-8).10.9
    
    Form of Stock Option Agreement (incorporated by reference to
Exhibit 10.7 to the Companys Registration Statement on Form
S-1 (Registration No. 333-136567 (the Form S-1)).10.10
    
    Form of Restricted Stock Award Agreement (incorporated by
reference to Exhibit 10.8 to the Form S-1).10.11
    
    Credit Agreement dated as of June 19, 2007 among Superior
Offshore International, Inc., as Borrower, the Collateral
Agent as named therein, the several lenders from time to time
parties thereto, and Fortis Capital Corp., as Administrative
Agent.10.12
    
    Guarantee and Collateral Agreement dated as of June 19, 2007
made by Superior Offshore International, Inc. in favor of
Fortis Capital Corp., as Collateral Agent.10.13
    
    First Amendment to Credit Agreement dated as of June 20, 2007
among Superior Offshore International, Inc., as Borrower, the
lenders party thereto and JPMorgan Chase Bank, N.A., as
Administrative Agent.31.1
    
    Rule 13a-14(a)/15d-14(a) certification of the Principal
Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.31.2
    
    Rule 13a-14(a)/15d-14(a) certification of the Principal
Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.32.1
    
    Section 1350 certification of the Principal Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Section 1350 certification of the Principal Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.