COVINGTON, La., May 2, 2018 /PRNewswire/ -- Hornbeck
Offshore Services, Inc. (NYSE:HOS) announced today results for the
first quarter ended March 31, 2018.
Following is an executive summary for this period and the
Company's future outlook:
- 1Q2018 diluted EPS was $(1.04), a decrease of $3.52 from 4Q2017 diluted EPS of $2.48
- 1Q2018 net loss was $(38.7)
million, a decrease of $132.5
million from 4Q2017 net income of $93.8 million
- Excluding the reconciling items discussed below, adjusted
4Q2017 diluted EPS and net loss were $(0.44) and $(16.1)
million, respectively
- 1Q2018 EBITDA was $(7.2)
million, a decrease of $21.1
million, or 152%, from 4Q2017 EBITDA of $13.9 million
- 1Q2018 average new gen OSV dayrates were $17,985, a sequential decrease of $979, or 5%
- 1Q2018 effective new gen OSV dayrates were $3,723, a sequential decrease of $847, or 19%
- 1Q2018 utilization of the Company's new gen OSV fleet was
21%, down from 24% sequentially
- 1Q2018 effective utilization of the Company's active new gen
OSVs was 71%, down from 81% sequentially
- The Company currently has 40 OSVs stacked and expects to
have a total of 40 OSVs stacked at the end of 2Q2018
- Quarter-end cash was $171
million, down from $187
million sequentially, with $62
million of newbuild growth capex remaining to be
funded
- The Company expects delivery of final two MPSVs in 2019 with
$17 million and $45 million of growth capex in 2018 and 2019,
respectively
- 1Q2018 total liquidity (cash and credit availability) of
$308 million represents a decrease of
$16 million, or 5%, from
4Q2017
- The Company recently entered into a vessel purchase
agreement with Aries Marine to acquire four high-spec OSVs for
$36.6 million in cash
The Company recorded a net loss for the first quarter of 2018 of
$(38.7) million, or $(1.04) per diluted share, compared to a net loss
of $(27.9) million, or $(0.76) per diluted share, for the first quarter
of 2017; and net income of $93.8
million, or $2.48 per diluted
share, for the fourth quarter of 2017. Included in the
Company's year-ago quarter results was a $9.4 million redelivery fee related to the
completion of a long-term contract for one of the Company's OSVs
and $3.8 million of G&A expense
resulting from additional bad debt reserves due to an unfavorable
ruling in bankruptcy proceedings related to a receivable from a
former customer. Excluding the net impact of these two items,
net loss and diluted EPS for the first quarter of 2017 would have
been $(31.7) million, and
$(0.87) per share, respectively.
Included in the Company's sequential quarter results was a
$125.2 million tax benefit related to
U.S. tax reform legislation that was enacted in December 2017, partially offset by $14.2 million of tax expense due to valuation
allowances related to tax credits that may expire prior to being
utilized and a $1.7 million non-cash
write-off of goodwill. Excluding the net impact of these
reconciling items, net loss and diluted EPS for the fourth quarter
of 2017 would have been $(16.1)
million and $(0.44) per
diluted share, respectively. Diluted common shares for the
first quarter of 2018 were 37.3 million compared to 36.6 million
and 37.9 million for the first quarter of 2017 and the fourth
quarter of 2017, respectively. GAAP requires the use of basic
shares outstanding for diluted EPS when reporting a net loss.
EBITDA for the first quarter of 2018 was $(7.2) million compared to $1.6 million for the first quarter of 2017 and
$13.9 million for the fourth quarter
of 2017. For additional information regarding EBITDA as a
non-GAAP financial measure, please see Note 10 to the accompanying
data tables.
Revenues. Revenues were $41.6 million for the first quarter of 2018, a
decrease of $2.5 million, or 5.7%,
from $44.1 million for the first
quarter of 2017; and a decrease of $14.6
million, or 26.0%, from $56.2
million for the fourth quarter of 2017. The
year-over-year decrease in revenues primarily resulted from a
redelivery fee related to the completion of a long-term contract
for one of the Company's OSVs that was recognized during the first
quarter of 2017. The sequential decrease in revenues was
primarily attributable to lower effective dayrates for the MPSV
fleet. As of March 31, 2018,
the Company had 44 OSVs stacked. For the three months ended
March 31, 2018, the Company had an
average of 44.0 vessels stacked compared to 45.9 vessels stacked in
the prior-year quarter and 43.5 vessels stacked in the sequential
quarter. Operating loss was $(33.9)
million, or (81.4)% of revenues, for the first quarter of
2018 compared to an operating loss of $(26.5) million, or (60.1)% of revenues, for the
prior-year quarter; and an operating loss of $(14.3) million, or (25.4)% of revenues, for the
fourth quarter of 2017. Excluding the impact of the goodwill
write-off discussed above, fourth quarter 2017 operating loss would
have been $(12.6) million, or (22.4)%
of revenues. Average new generation OSV dayrates for the
first quarter of 2018 were $17,985
compared to $27,767 for the same
period in 2017 and $18,964 for the
fourth quarter of 2017. Excluding the aforementioned
redelivery fee, average new generation OSV dayrates would have been
$19,221 for the prior-year quarter.
New generation OSV utilization was 20.7% for the first
quarter of 2018 compared to 19.7% for the year-ago quarter and
24.1% for the sequential quarter. Excluding stacked vessel
days, the Company's new generation OSV effective utilization was
71.3%, 67.5% and 81.0% for the same periods, respectively.
Utilization-adjusted, or effective, new generation OSV dayrates for
the first quarter of 2018 were $3,723
compared to $5,470 for the same
period in 2017 and $4,570 for the
fourth quarter of 2017.
Operating Expenses. Operating
expenses were $36.0 million for the
first quarter of 2018, an increase of $8.1
million, or 29.0%, from $27.9
million for the first quarter of 2017; and an increase of
$4.8 million, or 15.4%, from
$31.2 million for the fourth quarter
of 2017. The year-over-year increase in operating expenses
was primarily due to higher contract-specific cost-of-sales
expenses associated with our MPSV fleet, a higher active vessel
count during the first quarter of 2018 and increased maintenance
and repair expense. The sequential increase in operating expenses
was primarily due to higher maintenance and repair expense,
contract-specific cost-of-sales and insurance expense.
General and Administrative ("G&A").
G&A expense was $12.9
million for the first quarter of 2018 compared to
$14.2 million for the first quarter
of 2017; and $11.0 million for the
fourth quarter of 2017. The year-over-year decrease in
G&A expense was primarily attributable to lower bad debt
reserves due to the unfavorable ruling in a bankruptcy proceeding
related to a receivable from a former customer during the three
months ended March 31, 2017,
partially offset by higher incentive compensation expense and
higher legal costs. The sequential increase in G&A expense was
primarily due to higher long-term incentive compensation
expense.
Depreciation and Amortization. Depreciation
and amortization expense was $26.6
million for the first quarter of 2018, or $1.8 million lower than each of the year-ago and
sequential quarters. Depreciation expense was in-line with
the prior-year and sequential quarters. Amortization expense
decreased by $1.7 million from the
year-ago quarter, driven by postponed recertifications for certain
of the Company's stacked OSVs. Amortization expense decreased
$1.7 million from the sequential
quarter, wholly attributable to the fourth quarter 2017 goodwill
charge previously mentioned. However, amortization expense is
expected to increase in fiscal 2019 as a result of currently active
vessels that were placed in service under the Company's fifth OSV
newbuild program commencing their initial intermediate drydock or
special survey. The Company also expects amortization expense
to increase whenever market conditions warrant reactivation of
currently stacked vessels, which will then require the Company to
drydock such vessels, and thereafter to revert back to historical
levels.
Interest Expense. Interest expense was
$13.9 million during the first
quarter of 2018, which was in-line with the same period in 2017.
The Company recorded $2.3
million of capitalized construction period interest, or
roughly 14% of its total interest costs, for the first quarter of
2018 compared to $2.4 million, or
roughly 15% of its total interest costs, for the year-ago
quarter.
Recent Development
On April 13, 2018, the Company
entered into a definitive vessel purchase agreement with Aries
Marine Corporation and certain of its affiliates to acquire four
high-spec OSVs and related equipment for $36.6 million in cash, plus the cost of fuel and
lube inventory. The acquired vessels are 100% U.S.-flagged
and are comprised of two 280 class OSVs and two 300 class OSVs, all
of which have a DP-2 designation. The two 280 class OSVs were
built in 2014 and 2015, respectively, and have capacities of
approximately 3,800 DWT and 13,000 barrels of liquid mud. The
two 300 class OSVs were built in 2010 and 2011, respectively, and
have capacities of approximately 5,500 DWT and 19,500 barrels of
liquid mud. The Company expects to close the transaction,
subject to customary conditions, during the second quarter of 2018.
The acquisition will be fully funded with cash on hand.
In accordance with the terms of the Company's First-Lien Credit
Facility, the vessels will be pledged as additional collateral
against that facility.
Future Outlook
Based on the key assumptions outlined below and in the attached
data tables, the following statements reflect management's current
expectations regarding future operating results and certain events
during the Company's guidance period as set forth on pages 11 and
12 of this press release. These statements are
forward-looking and actual results may differ materially,
particularly given the volatility inherent in, and the currently
depressed conditions of, the Company's industry. Other than
as expressly stated, these statements do not include the potential
impact of any significant further change in commodity prices for
oil and natural gas; any additional future repositioning voyages;
any additional stacking or reactivation of vessels; unexpected
vessel repairs or shipyard delays; or future capital transactions,
such as vessel acquisitions, modifications or divestitures,
business combinations, possible share or note repurchases or
financings that may be commenced after the date of this
disclosure. Additional cautionary information concerning
forward-looking statements can be found on page 8 of this news
release.
Forward Guidance
The Company's forward guidance for selected operating and
financial data, outlined below and in the attached data tables,
reflects the current state of commodity prices and planned
decreases in the capital spending budgets of its
customers.
Vessel Counts. As of
March 31, 2018, the Company's fleet
of owned vessels consisted of 62 new generation OSVs and eight
MPSVs. The forecasted vessel counts presented in this press
release reflect the four-vessel acquisition discussed above and the
two MPSV newbuilds expected to be delivered during fiscal 2019, as
discussed below. With an average of 41.2 new generation OSVs
projected to be stacked during fiscal 2018, the Company's active
fleet for 2018 is expected to be comprised of an average of 23.3
new generation OSVs and 8.0 MPSVs. With an assumed average of
40.0 new generation OSVs projected to be stacked during fiscal
2019, the Company's active fleet for 2019 is expected to be
comprised of an average of 26.0 new generation OSVs and 9.0
MPSVs.
Operating Expenses. Inclusive of
the four-vessel acquisition discussed above, aggregate cash
operating expenses are projected to be in the range of $35.0 million to $40.0
million for the second quarter of 2018, and $145.0 million to $160.0
million for the full-year 2018. Reflected in the cash
opex guidance ranges above are the anticipated continuing results
of several cost containment measures initiated by the Company since
the fourth quarter of 2014 due to prevailing market conditions,
including, among other actions, the stacking of vessels on various
dates from October 1, 2014 through
March 31, 2018, as well as
company-wide headcount reductions and across-the-board pay-cuts for
shoreside and vessel personnel. The Company may choose to
stack or reactivate additional vessels as market conditions
warrant. The cash operating expense estimate above is
exclusive of any additional repositioning expenses the Company may
incur in connection with the potential relocation of more of its
vessels into international markets or back to the GoM, and any
customer-required cost-of-sales related to future contract fixtures
that are typically recovered through higher dayrates.
G&A Expense. G&A expense
is expected to be in the approximate range of $11.0 million to $13.0
million for the second quarter of 2018, and $45.0 million to $50.0
million for the full fiscal year 2018.
Other Financial Data. Quarterly
depreciation, amortization, net interest expense, cash income
taxes, cash interest expense, weighted-average basic shares
outstanding and weighted-average diluted shares outstanding for the
second quarter of 2018 are projected to be $24.7 million, $2.3
million, $16.0 million,
$0.1 million, $14.1 million, 37.5 million and 37.8 million,
respectively. As a reminder, please note that GAAP requires
the use of basic shares outstanding for diluted EPS when reporting
a net loss. Guidance for depreciation, amortization, net
interest expense, cash income taxes and cash interest expense for
the full fiscal years 2018 and 2019 is provided on page 12 of this
press release. The Company's annual effective tax benefit
rate is expected to be between 18.0% and 20.0% for fiscal years
2018 and 2019.
Capital Expenditures Outlook
Update on OSV Newbuild Program #5. During the first
quarter of 2018, the Company notified the shipyard that it was
terminating the construction contracts for the final two vessels
under the Company's nearly completed 24-vessel domestic newbuild
program due to performance issues at the shipyard. The
Company is now working with the issuer of the shipyard's
performance bonds in order to complete the construction of the
vessels at a completion yard. These two remaining vessels,
both of which are 400 class MPSVs, are expected to be delivered in
the second and third quarters of 2019, respectively. The
remaining shipyard contract price to be paid by the Company as of
the date of termination for both vessels was approximately
$53.8 million, before application of
liquidated damages and other deductions allowed by the
contracts. The Company also expects to incur an additional
$8.1 million of budgeted project
costs post-delivery for final outfitting of the vessels and for
installation and commissioning of the cranes.
The Company owns 62 new generation OSVs and eight MPSVs as of
March 31, 2018. Based on the
projected MPSV in-service dates, the Company now expects to own
eight and ten MPSVs as of December 31,
2018 and December 31, 2019,
respectively. These vessel additions result in a projected
average MPSV fleet complement of 8.0, 9.0 and 10.0 vessels for the
fiscal years 2018, 2019 and 2020, respectively. The aggregate
cost of the Company's fifth OSV newbuild program, excluding
construction period interest, is expected to be approximately
$1,335.0 million, of which
$17.6 million and $44.7 million are expected to be incurred in the
full fiscal years 2018 and 2019, respectively. From the
inception of this program through March 31,
2018, the Company has incurred $1,273.1 million, or 95.4%, of total expected
project costs, including $0.4 million
that was spent during the first quarter of 2018. The Company
does not expect to incur any newbuild project costs during the
second quarter of 2018.
Update on Maintenance Capital Expenditures.
Please refer to the attached data table on page 11 of
this press release for a summary, by period and by vessel type, of
historical and projected data for drydock downtime (in days) and
maintenance capital expenditures for each of the quarterly and/or
annual periods presented for the fiscal years 2017, 2018 and 2019.
Maintenance capital expenditures, which are recurring in
nature, primarily include regulatory drydocking charges incurred
for the recertification of vessels and other vessel capital
improvements that extend or maintain a vessel's economic useful
life. The Company expects that its maintenance capital
expenditures for its fleet of vessels will be approximately
$22.4 million and $27.6 million for the full fiscal years 2018 and
2019, respectively. These cash outlays are expected to be
incurred over approximately 319 and 445 days of aggregate
commercial downtime in 2018 and 2019, respectively, during which
the applicable vessels will not earn revenue.
Update on Other Capital Expenditures. Please
refer to the attached data tables on page 11 of this press release
for a summary, by period, of historical and projected data for
other capital expenditures, for each of the quarterly and/or annual
periods presented for the fiscal years 2017, 2018 and 2019.
Other capital expenditures, which are generally
non-recurring, are comprised of the following: (i)
commercial-related capital expenditures, including vessel
improvements, such as the addition of cranes, ROVs, helidecks,
living quarters and other specialized vessel equipment, or the
modification of vessel capacities or capabilities, such as DP
upgrades and mid-body extensions, which costs are typically
included in and offset, in whole or in part, by higher dayrates
charged to customers; and commercial-related intangibles; and (ii)
non-vessel related capital expenditures, including costs related to
the Company's shore-based facilities, leasehold improvements and
other corporate expenditures, such as information technology or
office furniture and equipment. The Company expects
miscellaneous incremental commercial-related capital expenditures
and non-vessel capital expenditures to be approximately
$5.7 million and $0.5 million, respectively, for the full fiscal
years 2018 and 2019, respectively.
Liquidity Outlook
As of March 31, 2018, the
Company's total liquidity (cash and credit availability) was
$307.5 million, comprised of
$170.8 million of cash and
$136.7 million of availability under
its First-Lien Credit Facility, which represents a decrease of
$16.0 million, or 5%, from the end of
the fourth quarter. The Company projects that, even with the
currently depressed operating levels, cash generated from
operations together with cash on hand and remaining availability
under its First-Lien Credit Facility should be sufficient to fund
its operations and commitments, including the pending $36.6 million four-vessel acquisition, through at
least December 31, 2019.
However, absent the combination of a significant recovery of
market conditions such that cash flow from operations were to
increase materially from projected levels coupled with a
refinancing and/or further management of its funded debt
obligations, the Company does not currently expect to have
sufficient liquidity to repay the full amount of its 5.875% Senior
Notes and 5.000% Senior Notes as they mature in fiscal years 2020
and 2021, respectively. The Company remains fully cognizant
of the challenges currently facing the offshore oil and gas
industry and continues to review its capital structure and assess
its strategic options.
Conference Call
The Company will hold a conference call to discuss its first
quarter 2018 financial results and recent developments at
10:00 a.m. Eastern (9:00 a.m. Central) tomorrow, May 3, 2018. To participate in the call, dial
(412) 902-0030 and ask for the Hornbeck Offshore call at least 10
minutes prior to the start time. To access it live over the
Internet, please log onto the web at
http://www.hornbeckoffshore.com, on the "Investors" homepage of the
Company's website at least fifteen minutes early to register,
download and install any necessary audio software. Please
call the Company's investor relations firm, Dennard-Lascar, at
(713) 529-6600 to be added to its e-mail distribution list for
future Hornbeck Offshore news releases. An archived version of the
web cast will be available shortly after the call for a period of
60 days on the "Investors" homepage of the Company's website.
Additionally, a telephonic replay will be available through
May 17, 2018, and may be accessed by
calling (201) 612-7415 and using the pass code 13678457#.
Attached Data Tables
The Company has posted an electronic version of the following
four pages of data tables, which are downloadable in Microsoft
Excel™ format, on the "Investors" homepage of the Hornbeck Offshore
website for the convenience of analysts and investors.
In addition, the Company uses its website as a means of
disclosing material non-public information and for complying with
disclosure obligations under SEC Regulation FD. Such disclosures
will be included on the Company's website under the heading
"Investors." Accordingly, investors should monitor that portion of
the Company's website, in addition to following the Company's press
releases, SEC filings, public conference calls and webcasts.
Hornbeck Offshore Services, Inc. is a leading provider of
technologically advanced, new generation offshore service vessels
primarily in the Gulf of Mexico
and Latin America. Hornbeck
Offshore currently owns a fleet of 70 vessels primarily serving the
energy industry and expects to add four acquired high-spec OSVs and
two ultra high-spec MPSV newbuilds to its fleet in 2018 and
2019.
Forward-Looking Statements
This Press Release contains "forward-looking statements," as
contemplated by the Private Securities Litigation Reform Act of
1995, in which the Company discusses factors it believes may affect
its performance in the future. Forward-looking statements are all
statements other than historical facts, such as statements
regarding assumptions, expectations, beliefs and projections about
future events or conditions. You can generally identify
forward-looking statements by the appearance in such a statement of
words like "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "intend," "may," "might," "plan,"
"potential," "predict," "project," "remain," "should," "will," or
other comparable words or the negative of such words. The accuracy
of the Company's assumptions, expectations, beliefs and projections
depends on events or conditions that change over time and are thus
susceptible to change based on actual experience, new developments
and known and unknown risks. The Company gives no assurance that
the forward-looking statements will prove to be correct and does
not undertake any duty to update them. The Company's actual future
results might differ from the forward-looking statements made in
this Press Release for a variety of reasons, including impacts from
oil and natural gas prices in the U.S. and worldwide; continued
weakness in demand and/or pricing for the Company's services
through and beyond the maturity of any of the Company's long-term
debt; unplanned customer suspensions, cancellations, rate
reductions or non-renewals of vessel charters or vessel management
contracts or failures to finalize commitments to charter or manage
vessels; continued weak capital spending by customers on offshore
exploration and development; the inability to accurately predict
vessel utilization levels and dayrates; sustained weakness in the
number of deepwater and ultra-deepwater drilling units operating in
the GoM or other regions where the Company operates; the effect of
inconsistency by the United States
government in the pace of issuing drilling permits and plan
approvals in the GoM or other drilling regions; any negative impact
on the Company's ability to successfully complete the remainder of
its current vessel newbuild program on-time; the inability to
successfully integrate the pending acquisition of four high-spec
OSVs; the inability to successfully market the vessels that the
Company owns, is constructing or might acquire; the government's
cancellation or non-renewal of the management, operations and
maintenance contracts for vessels; an oil spill or other
significant event in the United
States or another offshore drilling region that could have a
broad impact on deepwater and other offshore energy exploration and
production activities, such as the suspension of activities or
significant regulatory responses; the imposition of laws or
regulations that result in reduced exploration and production
activities or that increase the Company's operating costs or
operating requirements; environmental litigation that impacts
customer plans or projects; disputes with customers; bureaucratic,
administrative or operating barriers that delay vessels in foreign
markets from going on-hire; administrative barriers to exploration
and production activities in Brazil; disruption in the timing and/or extent
of Mexican offshore activities; age or other restrictions imposed
on our vessels by customers; unanticipated difficulty in
effectively competing in or operating in international markets;
less than anticipated subsea infrastructure and field development
demand in the GoM and other markets affecting our MPSVs; sustained
vessel over-capacity for existing demand levels in the markets in
which the Company competes; economic and geopolitical risks;
weather-related risks; upon a return to improved operating
conditions, the shortage of or the inability to attract and retain
qualified personnel, when needed, including vessel personnel for
active vessels or vessels the Company may reactivate or acquire;
any success in unionizing the Company's U.S. fleet personnel;
regulatory risks; the repeal or administrative weakening of the
Jones Act or adverse changes in the interpretation of the Jones
Act; drydocking delays and cost overruns and related risks; vessel
accidents, pollution incidents, or other events resulting in lost
revenue, fines, penalties or other expenses that are unrecoverable
from insurance policies or other third parties; unexpected
litigation and insurance expenses; other industry risks;
fluctuations in foreign currency valuations compared to the U.S.
dollar and risks associated with expanded foreign operations, such
as non-compliance with or the unanticipated effect of tax laws,
customs laws, immigration laws, or other legislation that result in
higher than anticipated tax rates or other costs; the possible loss
or material limitation of the Company's tax net operating loss
carryforwards and other attributes due to a change in control, as
defined in Section 382 of the Internal Revenue Code; or the
inability of the Company to refinance or otherwise retire certain
funded debt obligations that come due in 2019, 2020 and 2021; or
the potential for any impairment charges that could arise in the
future and that would reduce the Company's consolidated net
tangible assets which, in turn, would further limit the Company's
ability to grant certain liens, make certain investments, and incur
certain debt under the Company's senior notes indentures and the
New Credit Facility. In addition, the Company's future results may
be impacted by adverse economic conditions, such as inflation,
deflation, or lack of liquidity in the capital markets, that may
negatively affect it or parties with whom it does business
resulting in their non-payment or inability to perform obligations
owed to the Company, such as the failure of customers to fulfill
their contractual obligations or the failure by individual lenders
to provide funding under the Company's New Credit Facility, if and
when required. Further, the Company can give no assurance
regarding when and to what extent it will effect common stock or
note repurchases. Should one or more of the foregoing risks
or uncertainties materialize in a way that negatively impacts the
Company, or should the Company's underlying assumptions prove
incorrect, the Company's actual results may vary materially from
those anticipated in its forward-looking statements, and its
business, financial condition and results of operations could be
materially and adversely affected and, if sufficiently severe,
could result in noncompliance with certain covenants of the
Company's existing indebtedness. Additional factors that you should
consider are set forth in detail in the "Risk Factors" section of
the Company's most recent Annual Report on Form 10-K as well as
other filings the Company has made and will make with the
Securities and Exchange Commission which, after their filing, can
be found on the Company's website www.hornbeckoffshore.com.
Regulation G Reconciliation
This Press Release also contains references to the non-GAAP
financial measures of earnings, or net income, before interest,
income taxes, depreciation and amortization, or EBITDA, and
Adjusted EBITDA. The Company views EBITDA and Adjusted EBITDA
primarily as liquidity measures and, therefore, believes that the
GAAP financial measure most directly comparable to such measure is
cash flows provided by operating activities. Reconciliations of
EBITDA and Adjusted EBITDA to cash flows provided by operating
activities are provided in the table below. Management's opinion
regarding the usefulness of EBITDA to investors and a description
of the ways in which management uses such measure can be found in
the Company's most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission, as well as in Note 10 to the
attached data tables.
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited
Consolidated Statements of Operations
|
(in thousands,
except Other Operating and Per Share Data)
|
|
|
|
|
|
|
|
|
Statement of
Operations (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
41,587
|
|
$
56,241
|
|
$
44,079
|
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Operating expenses
|
35,969
|
|
31,152
|
|
27,935
|
|
|
Depreciation and amortization
|
26,640
|
|
28,400
|
|
28,401
|
|
|
General and administrative expenses
|
12,875
|
|
11,024
|
|
14,242
|
|
|
|
75,484
|
|
70,576
|
|
70,578
|
|
|
Gain
on sale of assets
|
43
|
|
57
|
|
18
|
|
|
Operating loss
|
(33,854)
|
|
(14,278)
|
|
(26,481)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest income
|
644
|
|
891
|
|
401
|
|
|
Interest expense
|
(13,945)
|
|
(12,170)
|
|
(13,809)
|
|
|
Other income (expense), net 1
|
9
|
|
(233)
|
|
(323)
|
|
|
|
(13,292)
|
|
(11,512)
|
|
(13,731)
|
|
|
Loss before income
taxes
|
(47,146)
|
|
(25,790)
|
|
(40,212)
|
|
|
Income tax
benefit
|
(8,491)
|
|
(119,548)
|
|
(12,314)
|
|
|
Net income
(loss)
|
$
(38,655)
|
|
$
93,758
|
|
$ (27,898)
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share
|
$
(1.04)
|
|
$
2.53
|
|
$
(0.76)
|
|
|
Diluted earnings
(loss) per common share
|
$
(1.04)
|
|
$
2.48
|
|
$
(0.76)
|
|
|
Weighted average
basic shares outstanding
|
37,339
|
|
37,049
|
|
36,596
|
|
|
Weighted average
diluted shares outstanding 2
|
37,339
|
|
37,864
|
|
36,596
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
Offshore Supply
Vessels:
|
|
|
|
|
|
|
|
Average number of new
generation OSVs 3
|
62.0
|
|
62.0
|
|
62.0
|
|
|
Average number of active new
generation OSVs 4
|
18.0
|
|
18.5
|
|
18.1
|
|
|
Average new generation OSV
fleet capacity (deadweight) 3
|
220,072
|
|
220,072
|
|
220,030
|
|
|
Average new generation OSV
capacity (deadweight)
|
3,550
|
|
3,550
|
|
3,549
|
|
|
Average new generation
utilization rate 5
|
20.7%
|
|
24.1%
|
|
19.7%
|
|
|
Effective new generation
utilization rate 6
|
71.3%
|
|
81.0%
|
|
67.5%
|
|
|
Average new generation
dayrate 7
|
$
17,985
|
|
$
18,964
|
|
$
27,767
|
|
|
Effective dayrate
8
|
$
3,723
|
|
$
4,570
|
|
$
5,470
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
March 31,
|
|
As of
December 31,
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
170,836
|
|
$
186,849
|
|
|
|
|
Working
capital
|
170,153
|
|
199,579
|
|
|
|
|
Property, plant and
equipment, net
|
2,481,735
|
|
2,501,013
|
|
|
|
|
Total
assets
|
2,729,055
|
|
2,768,878
|
|
|
|
|
Total long-term
debt
|
1,082,017
|
|
1,080,826
|
|
|
|
|
Stockholders'
equity
|
1,399,047
|
|
1,437,924
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
March
31,
|
|
March
31,
|
|
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash used in
operating activities
|
$
(8,874)
|
|
$
(3,619)
|
|
|
|
|
Cash used in
investing activities
|
(6,560)
|
|
(3,547)
|
|
|
|
|
Cash used in
financing activities
|
(536)
|
|
(573)
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Financial Data
|
(in thousands,
except Financial Ratios)
|
|
|
|
|
|
|
|
Other Financial
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
Vessel
revenues
|
$
33,134
|
|
$
47,641
|
|
$
35,849
|
|
Non-vessel revenues
9
|
8,453
|
|
8,600
|
|
8,230
|
|
Total
revenues
|
$
41,587
|
|
$
56,241
|
|
$
44,079
|
|
Operating
loss
|
$
(33,854)
|
|
$
(14,278)
|
|
$
(26,481)
|
|
Operating
deficit
|
(81.4%)
|
|
(25.4%)
|
|
(60.1%)
|
|
Components
of EBITDA 10
|
|
|
|
|
|
|
Net income
(loss)
|
$
(38,655)
|
|
$
93,758
|
|
$
(27,898)
|
|
Interest
expense, net
|
13,301
|
|
11,279
|
|
13,408
|
|
Income tax
benefit
|
(8,491)
|
|
(119,548)
|
|
(12,314)
|
|
Depreciation
|
24,648
|
|
24,695
|
|
24,677
|
|
Amortization
|
1,992
|
|
3,705
|
|
3,724
|
|
EBITDA
10
|
$
(7,205)
|
|
$
13,889
|
|
$
1,597
|
|
Adjustments
to EBITDA
|
|
|
|
|
|
|
Stock-based
compensation expense
|
$
2,868
|
|
$
1,259
|
|
$
2,042
|
|
Interest
income
|
644
|
|
891
|
|
401
|
|
Adjusted
EBITDA 10
|
$
(3,693)
|
|
$
16,039
|
|
$
4,040
|
|
EBITDA
10 Reconciliation to GAAP:
|
|
|
|
|
|
|
EBITDA
10
|
$
(7,205)
|
|
$
13,889
|
|
$
1,597
|
|
Cash paid for
deferred drydocking charges
|
(1,970)
|
|
(1,113)
|
|
(3,129)
|
|
Cash paid for
interest
|
(15,131)
|
|
(12,166)
|
|
(13,756)
|
|
Cash (paid
for) refunds of income taxes
|
(449)
|
|
10,086
|
|
(349)
|
|
Changes in
working capital
|
12,833
|
|
2,645
|
|
6,246
|
|
Stock-based
compensation expense
|
2,868
|
|
1,259
|
|
2,042
|
|
Gain on sale
of assets
|
(43)
|
|
(57)
|
|
(18)
|
|
Changes in
other, net
|
223
|
|
2
|
|
3,748
|
|
Net cash
provided by (used in) operating activities
|
$
(8,874)
|
|
$
14,545
|
|
$
(3,619)
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures and Drydock Downtime Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
March
31,
|
|
|
|
|
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
2.0
|
|
4.0
|
|
2.0
|
|
|
|
|
|
|
|
Commercial
downtime (in days)
|
91
|
|
60
|
|
61
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
-
|
|
2.0
|
|
|
|
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
2.0
|
|
-
|
|
|
|
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
78
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
1,970
|
|
$
1,113
|
|
$
3,129
|
|
|
|
|
|
|
|
Other vessel
capital improvements
|
2,563
|
|
-
|
|
103
|
|
|
|
|
|
|
|
|
4,533
|
|
1,113
|
|
3,232
|
|
|
|
|
|
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related capital expenditures
|
1,343
|
|
388
|
|
58
|
|
|
|
|
|
|
|
Non-vessel
related capital expenditures
|
7
|
|
84
|
|
130
|
|
|
|
|
|
|
|
|
1,350
|
|
472
|
|
188
|
|
|
|
|
|
|
|
|
$
5,883
|
|
$
1,585
|
|
$
3,420
|
|
|
|
|
|
|
|
Growth Capital
Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
421
|
|
$
3,163
|
|
$
1,302
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted
Data12:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2018A
|
|
2Q
2018E
|
|
3Q
2018E
|
|
4Q
2018E
|
|
2018E
|
|
2019E
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
2.0
|
|
2.0
|
|
2.0
|
|
5.0
|
|
11.0
|
|
12.0
|
|
Commercial
downtime (in days)
|
91
|
|
60
|
|
11
|
|
110
|
|
272
|
|
275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
1.0
|
|
1.0
|
|
-
|
|
2.0
|
|
7.0
|
|
Commercial
downtime (in days)
|
-
|
|
10
|
|
12
|
|
25
|
|
47
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
2.0
|
|
$
4.6
|
|
$
4.3
|
|
$
3.6
|
|
$
14.5
|
|
$
24.1
|
|
Other vessel
capital improvements
|
2.6
|
|
3.1
|
|
0.8
|
|
1.4
|
|
7.9
|
|
3.5
|
|
|
4.6
|
|
7.7
|
|
5.1
|
|
5.0
|
|
22.4
|
|
27.6
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related capital expenditures
|
1.3
|
|
4.1
|
|
-
|
|
-
|
|
5.4
|
|
-
|
|
Non-vessel
related capital expenditures
|
-
|
|
0.2
|
|
0.1
|
|
-
|
|
0.3
|
|
0.5
|
|
|
1.3
|
|
4.3
|
|
0.1
|
|
-
|
|
5.7
|
|
0.5
|
|
|
$
5.9
|
|
$
12.0
|
|
$
5.2
|
|
$
5.0
|
|
$
28.1
|
|
$
28.1
|
|
Growth Capital
Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
0.4
|
|
$
-
|
|
$
9.8
|
|
$
7.4
|
|
$
17.6
|
|
$
44.7
|
|
Vessel
acquisitions
|
-
|
|
36.6
|
|
-
|
|
-
|
|
36.6
|
|
-
|
|
|
$
0.4
|
|
$
36.6
|
|
$
9.8
|
|
$
7.4
|
|
$
54.2
|
|
$
44.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Fleet and Financial Data
|
(in millions,
except Average Vessels and Tax Rate)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Guidance
of Selected Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q
2018E
|
|
Full-Year
2018E
|
|
Full-Year
2019E
|
|
|
|
|
|
|
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
|
|
|
|
|
|
Fleet Data (as of
2-May-2018):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New generation OSVs -
Active
|
22.9
|
|
23.3
|
|
26.0
|
|
|
|
|
|
|
|
New generation OSVs -
Stacked 13
|
40.9
|
|
41.2
|
|
40.0
|
|
|
|
|
|
|
|
New generation OSVs -
Total
|
63.8
|
|
64.5
|
|
66.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New generation MPSVs -
Active
|
8.0
|
|
8.0
|
|
9.0
|
|
|
|
|
|
|
|
New generation MPSVs -
Stacked
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
New generation MPSVs -
Total
|
8.0
|
|
8.0
|
|
9.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
71.8
|
|
72.5
|
|
75.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q 2018E
Range
|
|
Full-Year
2018E Range
|
|
|
|
|
|
Cost
Data:
|
Low14
|
|
High
14
|
|
Low14
|
|
High
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
35.0
|
|
$
40.0
|
|
$
145.0
|
|
$
160.0
|
|
|
|
|
|
General and administrative
expenses
|
$
11.0
|
|
$
13.0
|
|
$
45.0
|
|
$
50.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2018A
|
|
2Q
2018E
|
|
3Q
2018E
|
|
4Q
2018E
|
|
2018E
|
|
2019E
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
$
24.6
|
|
$
24.7
|
|
$
24.9
|
|
$
25.0
|
|
$
99.2
|
|
$ 103.4
|
|
Amortization
|
2.0
|
|
2.3
|
|
2.7
|
|
3.4
|
|
10.4
|
|
17.3
|
|
Interest
expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense 15
|
$
15.9
|
|
$
16.2
|
|
$
16.4
|
|
$
16.4
|
|
$
64.9
|
|
$
74.4
|
|
Incremental
non-cash OID interest expense 16
|
1.0
|
|
1.0
|
|
1.0
|
|
1.0
|
|
4.0
|
|
2.7
|
|
Amortization
of deferred gain 17
|
(0.7)
|
|
(0.8)
|
|
(0.8)
|
|
(0.8)
|
|
(3.1)
|
|
(3.2)
|
|
Capitalized
interest
|
(2.3)
|
|
-
|
|
(2.5)
|
|
(2.7)
|
|
(7.5)
|
|
(4.6)
|
|
Interest
income
|
(0.6)
|
|
(0.4)
|
|
(0.3)
|
|
(0.3)
|
|
(1.6)
|
|
(1.3)
|
|
Total interest
expense, net
|
$
13.3
|
|
$
16.0
|
|
$
13.8
|
|
$
13.6
|
|
$
56.7
|
|
$
68.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
rate
|
18.0%
|
|
20.0%
|
|
20.0%
|
|
20.0%
|
|
20.0%
|
|
19.0%
|
|
Cash paid for
(refunds of) income taxes
|
$
0.4
|
|
$
0.1
|
|
$
0.1
|
|
$
(0.6)
|
|
$
-
|
|
$
(2.5)
|
|
Cash paid for
interest 15
|
15.1
|
|
14.1
|
|
15.6
|
|
14.5
|
|
59.3
|
|
70.0
|
|
Weighted
average basic shares outstanding
|
37.3
|
|
37.5
|
|
37.6
|
|
37.6
|
|
37.5
|
|
37.9
|
|
Weighted
average diluted shares outstanding 18
|
37.9
|
|
37.8
|
|
37.9
|
|
37.9
|
|
37.9
|
|
38.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Represents other
income and expenses, including equity in income from investments
and foreign currency transaction gains or losses.
|
|
|
2
|
Due to net losses for
the three months ended March 31, 2018 and March 31, 2017, the
Company excluded the dilutive effect of equity awards representing
the rights to acquire 750 and 978 shares of common stock,
respectively, because the effect was anti-dilutive. For the three
months ended December 31, 2017, the company had 185 anti-dilutive
stock options. As of March 31, 2018, December 31, 2017
and March 31, 2017, the 1.500% convertible senior notes were not
dilutive, as the average price of the Company's stock was less than
the effective conversion price of $68.53 for such
notes.
|
|
|
3
|
The Company owned 62
new generation OSVs as of March 31, 2018. Excluded from this
data are eight MPSVs owned by the Company and four non-owned
vessels operated by the Company for the U.S. Navy. Also
excluded are the four vessels included in the pending acquisition
from Aries Marine expected to close in the second quarter of
2018.
|
|
|
4
|
In response to weak
market conditions, the Company elected to stack certain of its new
generation OSVs on various dates since October 1, 2014.
Active new generation OSVs represent vessels that are immediately
available for service during each respective period.
|
|
|
5
|
Average utilization
rates are based on a 365-day year for all active and stacked
vessels. Vessels are considered utilized when they are
generating revenues.
|
|
|
6
|
Effective utilization
rate is based on a denominator comprised only of vessel-days
available for service by the active fleet, which excludes the
impact of stacked vessel days.
|
|
|
7
|
Average new
generation OSV dayrates represent average revenue per day, which
includes charter hire, crewing services, and net brokerage
revenues, based on the number of days during the period that the
OSVs generated revenues.
|
|
|
8
|
Effective dayrate
represents the average dayrate multiplied by the average new
generation utilization rate for the respective period.
|
|
|
9
|
Represents revenues
from shore-based operations, vessel-management services related to
non-owned vessels, including from the O&M contract with the
U.S. Navy, and ancillary equipment rentals, including from
ROVs.
|
|
|
10
|
Non-GAAP Financial
Measure
|
|
|
|
The Company discloses
and discusses EBITDA as a non-GAAP financial measure in its public
releases, including quarterly earnings releases, investor
conference calls and other filings with the Securities and Exchange
Commission. The Company defines EBITDA as earnings (net
income) before interest, income taxes, depreciation and
amortization. The Company's measure of EBITDA may not be
comparable to similarly titled measures presented by other
companies. Other companies may calculate EBITDA differently
than the Company, which may limit its usefulness as a comparative
measure.
|
|
|
|
The Company views
EBITDA primarily as a liquidity measure and, as such, believes that
the GAAP financial measure most directly comparable to it is cash
flows provided by operating activities. Because EBITDA is not
a measure of financial performance calculated in accordance with
GAAP, it should not be considered in isolation or as a substitute
for operating income, net income or loss, cash flows provided by
operating, investing and financing activities, or other income or
cash flow statement data prepared in accordance with
GAAP.
|
|
|
|
EBITDA is widely used
by investors and other users of the Company's financial statements
as a supplemental financial measure that, when viewed with GAAP
results and the accompanying reconciliations, the Company believes
EBITDA provides additional information that is useful to gain an
understanding of the factors and trends affecting its ability to
service debt, pay deferred taxes and fund drydocking charges and
other maintenance capital expenditures. The Company also
believes the disclosure of EBITDA helps investors meaningfully
evaluate and compare its cash flow generating capacity from quarter
to quarter and year to year.
|
|
|
|
EBITDA is also a
financial metric used by management (i) as a supplemental internal
measure for planning and forecasting overall expectations and for
evaluating actual results against such expectations; (ii) as a
significant criteria for annual incentive cash bonuses paid to the
Company's executive officers and other shore-based employees; (iii)
to compare to the EBITDA of other companies when evaluating
potential acquisitions; and (iv) to assess the Company's ability to
service existing fixed charges and incur additional
indebtedness.
|
|
|
|
In addition, the
Company has also historically made certain adjustments, as
applicable, to EBITDA for losses on early extinguishment of debt,
stock-based compensation expense and interest income, or Adjusted
EBITDA, to internally evaluate its performance based on the
computation of ratios used in certain financial covenants of its
credit agreements with various lenders. The Company believes
that such ratios can, at times, be material components of financial
covenants and, when applicable, failure to comply with such
covenants could result in the acceleration of indebtedness or the
imposition of restrictions on the Company's financial
flexibility.
|
|
|
|
Set forth below are
the material limitations associated with using EBITDA as a non-GAAP
financial measure compared to cash flows provided by operating
activities.
|
|
|
|
- EBITDA does not reflect the future capital
expenditure requirements that may be necessary to replace the
Company's existing vessels as a result of normal wear and
tear,
- EBITDA does not reflect the interest, future
principal payments and other financing-related charges necessary to
service the debt that the Company has incurred in acquiring and
constructing its vessels,
- EBITDA does not reflect the deferred income
taxes that the Company will eventually have to pay once it is no
longer in an overall tax net operating loss position, as
applicable, and
- EBITDA does not reflect changes in the
Company's net working capital position.
|
|
|
|
Management
compensates for the above-described limitations in using EBITDA as
a non-GAAP financial measure by only using EBITDA to supplement the
Company's GAAP results.
|
|
|
11
|
Commercial-related
Downtime results from commercial-related vessel improvements, such
as the addition of cranes, ROVs, helidecks, living quarters and
other specialized vessel equipment; the modification of vessel
capacities or capabilities, such as DP upgrades and mid-body
extensions, which costs are typically included in and offset, in
whole or in part, by higher dayrates charged to customers; and the
speculative relocation of vessels from one geographic market to
another.
|
|
|
12
|
The capital
expenditure amounts included in this table are anticipated cash
outlays before the allocation of construction period interest, as
applicable.
|
|
|
13
|
As of May 2, 2018,
the Company's inactive fleet of 40 new generation OSVs that were
"stacked" was comprised of the following: twelve 200 class OSVs,
twenty-four 240 class OSVs, three 265 class OSVs and one 300 class
OSV.
|
|
|
14
|
The "low" and "high"
ends of the guidance ranges set forth in this table are not
intended to cover unexpected variations from currently anticipated
market conditions. These ranges provide only a reasonable
deviation from the conditions that are expected to
occur.
|
|
|
15
|
Interest on the
Company's First-Lien Credit Facility is variable based on changes
in LIBOR, or the London Interbank Offered Rate. The guidance
included in this press release related to such facility is based on
industry estimates of LIBOR in future periods as of May 2,
2018. Actual results may differ from this estimate.
Interest expense on all of the Company's other funded debt is fixed
at rates set forth in the indentures governing such
notes.
|
|
|
16
|
Represents
incremental imputed non-cash OID interest expense required by
accounting standards pertaining to the Company's 1.500% convertible
senior notes due 2019.
|
|
|
17
|
Represents the
non-cash recognition of the $20.7 million gain on the debt-for-debt
exchange associated with the Company's First-Lien Credit Facility,
which is being deferred and amortized prospectively as a yield
adjustment to interest expense as required by GAAP under debt
modification accounting.
|
|
|
18
|
Projected
weighted-average diluted shares do not reflect any potential
dilution resulting from the Company's 1.500% convertible senior
notes. Warrants related to the Company's 1.500% convertible
senior notes become dilutive when the average price of the
Company's stock exceeds the effective conversion price for such
notes of $68.53.
|
Contacts:
|
Todd Hornbeck,
CEO
|
|
Jim Harp,
CFO
|
|
Hornbeck Offshore
Services
|
|
985-727-6802
|
|
|
|
Ken Dennard, Managing
Partner
|
|
Dennard-Lascar /
713-529-6600
|
View original
content:http://www.prnewswire.com/news-releases/hornbeck-offshore-announces-first-quarter-2018-results-300641428.html
SOURCE Hornbeck Offshore Services, Inc.