Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net
income of $11.5 million, or $0.10 per diluted share, for the third
quarter of 2016 compared to net income of $9.9 million, or $0.09
per diluted share, for the same period in 2015 and a net loss of
$10.7 million, or $(0.10) per diluted share, for the second quarter
of 2016. The net loss for the nine months ended September 30, 2016
was $27.0 million, or $(0.25) per diluted share, compared to net
income of $26.9 million, or $0.25 per diluted share, for the nine
months ended September 30, 2015.
Helix reported adjusted EBITDA1 of $46.7 million for the third
quarter of 2016 compared to $51.5 million for the third quarter of
2015 and $14.9 million for the second quarter of 2016. Adjusted
EBITDA for the nine months ended September 30, 2016 was $62.7
million compared to $138.6 million for the nine months ended
September 30, 2015.
Owen Kratz, President and Chief Executive Officer of Helix,
stated, “We realized a significant improvement in financial results
across our business units primarily resulting from a combination of
higher vessel utilization and seasonal factors. However, industry
conditions remain challenging.”
1Adjusted EBITDA is a non-GAAP measure. See reconciliation
below.
Summary of
Results
($ in thousands, except per share
amounts, unaudited
Three Months Ended
Nine Months Ended 9/30/2016
9/30/2015
6/30/2016 9/30/2016
9/30/2015 Revenues $ 161,245 $ 182,462 $ 107,267 $ 359,551 $
538,119 Gross Profit $ 40,184 $ 31,969 $ 5,658 $ 28,912 $
91,124 25 % 18 % 5 % 8 % 17 % Net Income (Loss) $ 11,462 $
9,880 $ (10,671 ) $ (27,032 ) $ 26,887 Diluted Earnings
(Loss) Per Share $ 0.10 $ 0.09 $ (0.10 ) $ (0.25 ) $ 0.25
Adjusted EBITDA1 $ 46,701 $ 51,497 $ 14,932 $ 62,655 $ 138,550
1Adjusted EBITDA is a non-GAAP measure. See reconciliation
below.
Segment
Information, Operational and Financial Highlights
($ in thousands, unaudited)
Three Months Ended 9/30/2016
9/30/2015 6/30/2016
Revenues: Well Intervention $ 108,287 $ 94,895 $ 59,919
Robotics 48,897 83,310 38,914 Production Facilities 17,128 19,133
18,957 Intercompany Eliminations
(13,067
) (14,876 )
(10,523 ) Total
$
161,245 $ 182,462
$ 107,267 Income
(Loss) from Operations: Well Intervention $ 24,413 $ 6,233 $
(538 ) Robotics (94 ) 14,329 (8,823 ) Production Facilities 8,312
6,938 9,730 Corporate / Other (10,288 ) (8,965 ) (9,827 )
Intercompany Eliminations
(873 )
(163 ) 163
Total
$ 21,470
$ 18,372 $
(9,295 )
Business Segment Results
- Well Intervention revenues increased
81% in the third quarter of 2016 from revenues in the second
quarter of 2016. Overall Well Intervention vessel utilization in
the third quarter of 2016 increased to 76% from 54% in the second
quarter of 2016. The Q4000 utilization was 93% in the third quarter
of 2016 compared to 99% in the second quarter of 2016. The Q5000
utilization was 84% in the third quarter of 2016 compared to 100%
in the second quarter of 2016 after going on contracted rates
mid-May. In addition, third quarter revenues included a payment
received due to a work scope cancellation on a 42 day “take or pay”
contract originally scheduled for the fourth quarter. In the North
Sea, the Well Enhancer utilization was 91% in the third quarter of
2016 compared to 75% in the second quarter of 2016. The Seawell
utilization increased to 98% in the third quarter of 2016 compared
to 23% in the second quarter of 2016 after its reactivation in
early June 2016. The Skandi Constructor utilization was 15% in the
third quarter of 2016 compared to being idle the entire second
quarter of 2016. The two rental intervention riser systems remained
idle in the third quarter of 2016.
- Robotics revenues increased 26% in the
third quarter of 2016 compared to the second quarter of 2016.
Chartered vessel utilization increased to 81% in the third quarter
of 2016 from 61% in the second quarter of 2016, and ROV asset
utilization increased to 57% in the third quarter of 2016 from 48%
in the second quarter of 2016. The increase in revenue was
primarily driven by increased seasonal activity in the North
Sea.
Other Expenses
- Selling, general and administrative
expenses were $18.7 million, 11.6% of revenue, in the third quarter
of 2016 compared to $15.0 million, 13.9% of revenue, in the second
quarter of 2016. Our third quarter 2016 expenses includes a $2.7
million charge associated with the provision for the uncertain
collection of a portion of an existing trade receivable. The
remaining increase of $1.0 million is primarily driven by increased
costs associated with our variable stock compensation plans and
increased start-up costs associated with the Petrobras
contract.
- Net interest expense decreased slightly
to $6.8 million in the third quarter of 2016 from $7.5 million in
the second quarter of 2016. The decrease in net interest expense is
primarily associated with higher capitalized interest on our
capital projects.
- We recorded a $0.2 million gain
associated with the repurchase in July 2016 of $7.6 million in
aggregate principal amount of our Convertible Senior Notes due
2032.
- Other income decreased to $0.8 million
in the third quarter of 2016 from $1.3 million in the second
quarter of 2016. The decrease was primarily driven by foreign
currency losses associated with our non-U.S. dollar functional
currencies, offset in part by unrealized gains on our foreign
currency derivative contracts that are not designated as
hedges.
Financial Condition and
Liquidity
- In August 2016, we completed our first
$50 million at-the-market (“ATM”) program with the sale of the
remaining $9.5 million of common stock.
- In August 2016, we launched a second
ATM program for the sale of an additional $50 million of common
stock. We completed this program on September 28, 2016 and sold a
total of 6,709,377 shares of our common stock under this ATM
program at an average of $7.45 per share. The proceeds from this
ATM program totaled $48.8 million, net of transaction costs.
- Our total liquidity at September 30,
2016 was approximately $499 million, consisting of $482 million in
cash and cash equivalents and $17 million in available capacity
under our revolver. Consolidated long-term debt decreased to $678
million in the third quarter of 2016 from $711 million in the
second quarter of 2016. Consolidated net debt at September 30, 2016
was $196 million. Net debt to book capitalization at September 30,
2016 was 13%. (Net debt and net debt to book capitalization are
non-GAAP measures. See reconciliation below.)
- We incurred capital expenditures
(including capitalized interest) totaling $99 million in the third
quarter of 2016 compared to $32 million in the second quarter of
2016 and $55 million in the third quarter of 2015. In addition, we
incurred $13 million in mobilization costs of the Siem Helix 1. Our
third quarter capital expenditures include a shipyard invoice for
the Q7000 of approximately $69 million that was paid in October
2016.
* * * * *
Conference Call Information
Further details are provided in the presentation for Helix’s
quarterly conference call to review its third quarter 2016 results
(see the “Investor Relations” page of Helix’s website,
www.HelixESG.com). The call, scheduled for 9:00 a.m. Central
Daylight Time Thursday, October 20, 2016, will be audio webcast
live from the “Investor Relations” page of Helix’s website.
Investors and other interested parties wishing to listen to the
conference via telephone may join the call by dialing 800-618-4645
for persons in the United States and 1-303-223-4398 for
international participants. The passcode is "Tripodo". A replay of
the conference call will be available under "Investor Relations" by
selecting the "Audio Archives" link from the same page beginning
approximately two hours after the completion of the conference
call.
About Helix
Helix Energy Solutions Group, Inc., headquartered in Houston,
Texas, is an international offshore energy services company that
provides specialty services to the offshore energy industry, with a
focus on well intervention and robotics operations. For more
information about Helix, please visit our website at
www.HelixESG.com.
Reconciliation of Non-GAAP Financial Measures
Management evaluates Company performance and financial condition
using certain non-GAAP metrics, primarily EBITDA, Adjusted EBITDA,
net debt and net debt to book capitalization. We define EBITDA as
earnings before income taxes, net interest expense, gain on
repurchase of long-term debt, net other income or expense, and
depreciation and amortization expense. To arrive at our measure of
Adjusted EBITDA, we include realized losses from the cash
settlements of our ineffective foreign currency derivative
contracts, which are excluded from EBITDA as a component of net
other income or expense. Net debt is calculated as total long-term
debt less cash and cash equivalents. Net debt to book
capitalization is calculated by dividing net debt by the sum of net
debt and shareholders’ equity. We use EBITDA to monitor and
facilitate external comparison of our business results to those of
others in our industry, to analyze and evaluate financial strategic
planning decisions regarding future investments and acquisitions,
to plan and evaluate operating budgets, and in certain cases, to
report our results to the holders of our debt as required by our
debt covenants. We believe that our measure of EBITDA provides
useful information to the public regarding our ability to service
debt and fund capital expenditures and may help our investors
understand our operating performance and compare our results to
other companies that have different financing, capital and tax
structures. Other companies may calculate their measures of EBITDA
and Adjusted EBITDA differently from the way we do, which may limit
their usefulness as comparative measures. EBITDA and Adjusted
EBITDA should not be considered in isolation or as a substitute
for, but instead are supplemental to, income from operations, net
income or other income data prepared in accordance with GAAP.
Non-GAAP financial measures should be viewed in addition to, and
not as an alternative to, our reported results prepared in
accordance with GAAP. Users of this financial information should
consider the types of events and transactions that are excluded
from these measures.
Forward-Looking Statements
This press release contains forward-looking statements that
involve risks, uncertainties and assumptions that could cause our
results to differ materially from those expressed or implied by
such forward-looking statements. All statements, other than
statements of historical fact, are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995, including, without limitation, any statements regarding
our strategy; any statements regarding visibility and future
utilization; any projections of financial items; future operations
expenditures; any statements regarding the plans, strategies and
objectives of management for future operations; any statements
concerning developments; any statements regarding future economic
conditions or performance; any statements of expectation or belief;
and any statements of assumptions underlying any of the foregoing.
The forward-looking statements are subject to a number of known and
unknown risks, uncertainties and other factors including but not
limited to the performance of contracts by suppliers, customers and
partners; actions by governmental and regulatory authorities;
operating hazards and delays; our ultimate ability to realize
current backlog; employee management issues; complexities of global
political and economic developments; geologic risks; volatility of
oil and gas prices and other risks described from time to time in
our reports filed with the Securities and Exchange Commission
("SEC"), including the Company's most recently filed Annual Report
on Form 10-K and in the Company’s other filings with the SEC, which
are available free of charge on the SEC’s website at www.sec.gov.
We assume no obligation and do not intend to update these
forward-looking statements except as required by the securities
laws.
Social Media
From time to time we provide information about Helix on Twitter
(@Helix_ESG) and LinkedIn (www.linkedin.com/company/helix-energy-solutions-group).
HELIX ENERGY SOLUTIONS GROUP, INC.
Comparative Condensed Consolidated Statements of Operations
Three Months Ended
Sep. 30, Nine Months Ended Sep. 30, (in
thousands, except per share data)
2016
2015 2016 2015
(unaudited) (unaudited) Net revenues $ 161,245 $ 182,462 $
359,551 $ 538,119 Cost of sales 121,061
150,493 330,639 446,995 Gross
profit 40,184 31,969 28,912 91,124 Selling, general and
administrative expenses (18,714 ) (13,597 )
(47,493 ) (42,750 ) Income (loss) from operations 21,470
18,372 (18,581 ) 48,374 Equity in losses of investments (122 ) (251
) (366 ) (553 ) Net interest expense (6,843 ) (8,713 ) (25,007 )
(18,018 ) Gain on repurchase of long-term debt 244 - 546 - Other
income (expense), net 830 (5 ) 4,018 (6,197 ) Other income
(expense) - oil and gas (468 ) 571
2,500 4,396 Income (loss) before income taxes
15,111 9,974 (36,890 ) 28,002 Income tax provision (benefit)
3,649 94 (9,858 ) 1,115
Net income (loss) $ 11,462 $ 9,880 $ (27,032 ) $
26,887 Earnings (loss) per share of common stock:
Basic
$ 0.10 $ 0.09 $ (0.25 ) $ 0.25
Diluted
$ 0.10 $ 0.09 $ (0.25 ) $ 0.25 Weighted
average common shares outstanding: Basic 113,680
105,438 109,135 105,362
Diluted 113,680 105,438 109,135
105,362
Comparative Condensed
Consolidated Balance Sheets ASSETS
LIABILITIES & SHAREHOLDERS' EQUITY (in thousands)
Sep. 30, 2016 Dec. 31,
2015 (in thousands)
Sep.
30, 2016 Dec. 31, 2015 (unaudited)
(unaudited) Current Assets: Current Liabilities: Cash and cash
equivalents (1) $ 482,106 $ 494,192 Accounts payable $ 127,733 $
65,370 Accounts receivable, net 117,565 96,752 Accrued liabilities
69,904 71,641 Current deferred tax assets 15,706 53,573 Income tax
payable - 2,261 Income tax receivable 9,569 - Current maturities of
long-term debt (1) 70,905 71,640 Other current assets
54,064 39,518 Total Current Liabilities 268,542
210,912 Total Current Assets 679,010 684,035 Property
& equipment, net 1,649,484 1,603,009 Long-term debt (1) 607,502
677,695 Equity investments - 26,200 Deferred tax liabilities
173,901 180,974 Goodwill 45,107 45,107 Other non-current
liabilities 44,425 51,415 Other assets, net 57,945
41,608 Shareholders' equity (1) 1,337,176 1,278,963
Total Assets $ 2,431,546 $ 2,399,959 Total Liabilities & Equity
$ 2,431,546 $ 2,399,959 (1) Net debt to book capitalization
- 13% at September 30, 2016. Calculated as net debt (total
long-term debt less cash and cash equivalents - $196,301) divided
by the sum of net debt and shareholders' equity ($1,533,477).
Helix Energy Solutions Group, Inc.
Reconciliation of Non-GAAP Measures
Earnings
Release:
Reconciliation
from Net Income (Loss) to Adjusted EBITDA:
Three Months Ended Nine
Months Ended 9/30/2016
9/30/2015 6/30/2016
9/30/2016 9/30/2015 (in
thousands) Net income (loss) $ 11,462 $ 9,880 $ (10,671 ) $
(27,032 ) $ 26,887 Adjustments: Income tax provision (benefit)
3,649 94 (4,219 ) (9,858 ) 1,115 Net interest expense 6,843 8,713
7,480 25,007 18,018 Gain on repurchase of long-term debt (244 ) -
(302 ) (546 ) - Other (income) expense, net (830 ) 5 (1,308 )
(4,018 ) 6,197 Depreciation and amortization 27,607
32,805 25,674 84,846
86,333 EBITDA 48,487 51,497 16,654
68,399 138,550 Adjustments:
Realized losses from cash settlements of
ineffective
foreign currency derivative contracts
(1,786 ) - (1,722 ) (5,744 ) -
Adjusted EBITDA $ 46,701 $ 51,497 $ 14,932 $ 62,655
$ 138,550 We define EBTIDA as earnings before income
taxes, net interest expense, gain on repurchase of long-term debt,
net other income or expense, and depreciation and amortization
expense. To arrive at our measure of Adjusted EBITDA, we include
realized losses from the cash settlements of our ineffective
foreign currency derivative contracts, which are excluded from
EBITDA as a component of net other income or expense. We use EBITDA
to monitor and facilitate external comparison of our business
results to those of others in our industry, to analyze and evaluate
financial strategic planning decisions regarding future investments
and acquisitions, to plan and evaluate operating budgets, and in
certain cases, to report our results to the holders of our debt as
required by our debt covenants. We believe that our measure of
EBITDA provides useful information to the public regarding our
ability to service debt and fund capital expenditures and may help
our investors understand our operating performance and compare our
results to other companies that have different financing, capital
and tax structures. Other companies may calculate their measures of
EBITDA and Adjusted EBITDA differently from the way we do, which
may limit their usefulness as comparative measures. EBITDA and
Adjusted EBITDA should not be considered in isolation or as a
substitute for, but instead are supplemental to, income from
operations, net income or other income data prepared in accordance
with GAAP. Non-GAAP financial measures should be viewed in addition
to, and not as an alternative to, our reported results prepared in
accordance with GAAP. Users of this financial information should
consider the types of events and transactions that are excluded
from these measures.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161019006501/en/
Helix Energy Solutions Group, Inc.Erik Staffeldt,
281-618-0400Vice President - Finance & Accounting
Helix Energy Solutions (NYSE:HLX)
Historical Stock Chart
From Feb 2024 to Mar 2024
Helix Energy Solutions (NYSE:HLX)
Historical Stock Chart
From Mar 2023 to Mar 2024