HOUSTON--(BUSINESS WIRE)--Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $36.5 million, or $0.35 per diluted share, for the fourth quarter of 2013 compared to a net loss of $171.6 million, or $(1.64) per diluted share, for the same period in 2012, and net income of $44.6 million, or $0.42 per diluted share, in the third quarter of 2013. Net income from continuing operations totaled $108.8 million, or $1.03 per diluted share, for the year ended December 31, 2013, as compared with a net loss of $70.0 million, or $(0.67) per diluted share, for the year ended December 31, 2012. Including our discontinued operations, net income for the year ended December 31, 2013 was $109.9 million, or $1.04 per diluted share, compared with a net loss of $46.3 million, or $(0.44) per diluted share, for the year ended December 31, 2012.
Owen Kratz, President and Chief Executive Officer of Helix, stated, “Fourth quarter operating cash flow, as measured by EBITDA, saw a 16% sequential increase over the third quarter ($81.5 million versus $70.2 million). Although earnings per share declined quarter-to-quarter, this was due in part to the third quarter gain on the sale of the Express and in part due to a higher effective income tax rate in the fourth quarter. Our Robotics business improved dramatically in the second half of 2013 while the Well Intervention business continues to be stout, posting a record quarterly revenues number.”
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Summary of Results (in thousands, except per share amounts and percentages, unaudited) |
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| Quarter Ended | Year Ended | ||||||||||||||||||||||||
| 12/31/2013 | 12/31/2012 | 9/30/2013 | 12/31/2013 | 12/31/2012 | |||||||||||||||||||||
| Revenues | $ | 226,837 | $ | 201,696 | $ | 220,117 | $ | 876,561 | $ | 846,109 | |||||||||||||||
| Gross Profit (Loss) | |||||||||||||||||||||||||
| Operating | $ | 71,164 | $ | 49,026 | $ | 69,457 | $ | 260,685 | $ | 227,050 | |||||||||||||||
| 31 | % | 24 | % | 32 | % | 30 | % | 27 | % | ||||||||||||||||
| Contracting Services Impairments (1) | - | (157,951 | ) | - | - | (177,135 | ) | ||||||||||||||||||
| Total | $ | 71,164 | $ | (108,925 | ) | $ | 69,457 | $ | 260,685 | $ | 49,915 | ||||||||||||||
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Net Income (Loss) Applicable to
Common Shareholders |
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| Income (Loss) from continuing operations | $ | 36,503 | $ | (99,679 | ) | $ | 44,549 | $ | 108,849 | $ | (70,018 | ) | |||||||||||||
| Income (Loss) from discontinued operations | - | (71,888 | ) | 44 | 1,073 | 23,684 | |||||||||||||||||||
| Total | $ | 36,503 | $ | (171,567 | ) | $ | 44,593 | $ | 109,922 | $ | (46,334 | ) | |||||||||||||
| Diluted Earnings (Loss) Per Share | |||||||||||||||||||||||||
| Income (Loss) from continuing operations | $ | 0.35 | $ | (0.95 | ) | $ | 0.42 | $ | 1.03 | $ | (0.67 | ) | |||||||||||||
| Income (Loss) from discontinued operations | $ | - | $ | (0.69 | ) | $ | - | $ | 0.01 | $ | 0.23 | ||||||||||||||
| Total | $ | 0.35 | $ | (1.64 | ) | $ | 0.42 | $ | 1.04 | $ | (0.44 | ) | |||||||||||||
| Adjusted EBITDA from continuing operations | $ | 81,549 | $ | 47,699 | $ | 70,198 | $ | 268,311 | $ | 233,612 | |||||||||||||||
| Adjusted EBITDAX from discontinued operations | - | 65,528 | - | 31,754 | 367,216 | ||||||||||||||||||||
| Adjusted EBITDAX (2) | $ | 81,549 | $ | 113,227 | $ | 70,198 | $ | 300,065 | $ | 600,828 | |||||||||||||||
| Note: Footnotes appear at end of press release. | |||||||||||||||||||||||||
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Segment Information, Operational and Financial Highlights (in thousands, unaudited) |
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| Quarter Ended | |||||||||||||||
| 12/31/2013 | 12/31/2012 | 9/30/2013 | |||||||||||||
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Continuing Operations: |
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| Revenues: | |||||||||||||||
| Contracting Services | $ | 224,881 | $ | 224,201 | $ | 208,728 | |||||||||
| Production Facilities | 19,216 | 20,082 | 24,366 | ||||||||||||
| Intercompany Eliminations | (17,260 | ) | (42,587 | ) | (12,977 | ) | |||||||||
| Total | $ | 226,837 | $ | 201,696 | $ | 220,117 | |||||||||
| Income (Loss) from Operations: | |||||||||||||||
| Contracting Services | $ | 57,729 | $ | 39,433 | $ | 49,212 | |||||||||
| Production Facilities | 9,814 | 9,971 | 14,136 | ||||||||||||
| Gain (Loss) on Sale of Assets | - | (543 | ) | 15,812 | |||||||||||
| Contracting Services Impairments (1) | - | (157,951 | ) | - | |||||||||||
| Corporate/Other | (12,781 | ) | (31,551 | ) | (16,522 | ) | |||||||||
| Intercompany Eliminations | (822 | ) | (4,995 | ) | 21 | ||||||||||
| Total | $ | 53,940 | $ | (145,636 | ) | $ | 62,659 | ||||||||
| Equity in Earnings of Equity Investments | $ | 815 | $ | 887 | $ | 857 | |||||||||
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Discontinued Operations (Oil and Gas): |
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| Revenues | $ | - | $ | 110,089 | $ | - | |||||||||
| Income (Loss) from Operations | $ | - | $ | (103,611 | ) | $ | (68 | ) | |||||||
| Note: Footnotes appear at end of press release. | |||||||||||||||
Contracting Services
- Well Intervention revenues increased 16% in the fourth quarter of 2013 from revenues in the third quarter of 2013, primarily due to the strong utilization of the Skandi Constructor. Fourth quarter utilization of the Skandi Constructor was 100%, compared to 38% utilization in the third quarter when the vessel was docked in order to complete final modifications and install the well intervention equipment. Also during the fourth quarter of 2013, the Well Enhancer entered dry dock. On a combined basis, our three North Sea vessels – Seawell, Well Enhancer, Skandi Constructor – achieved 92% utilization in the fourth quarter compared to 78% utilization in the third quarter of 2013. In the Gulf of Mexico, the Q4000 utilization remained unchanged at 100% for the fourth quarter of 2013.
- For Robotics, chartered vessel fleet utilization decreased to 88% for the quarter compared to 98% in the third quarter of 2013. However, both revenues and gross profit remained flat compared to the third quarter of 2013 due to a 53% increase in utilized trencher days in the fourth quarter of 2013.
Other Expenses
- Selling, general and administrative expenses were 7.6% of revenue in the fourth quarter of 2013, 10.3% of revenue in the third quarter of 2013 and 12.7% in the fourth quarter of 2012. The decrease in selling, general and administrative expenses in the fourth quarter of 2013 compared to the third quarter of 2013 is primarily attributable to a $2.1 million allowance for doubtful accounts charge that was recorded in the third quarter of 2013.
- Net interest expense and other decreased to $2.8 million in the fourth quarter of 2013 from $12.8 million in the third quarter of 2013. Net interest expense decreased to $4.6 million in the fourth quarter of 2013 compared to $6.6 million in the third quarter of 2013. The decrease in interest expense reflects the substantial reduction in our average interest rate following the redemption of the remaining $275 million of 9.5% Senior Unsecured Notes outstanding in the third quarter of 2013. Other income was $1.9 million in the fourth quarter compared to $6.2 million of other expense in the third quarter of 2013, which included the $8.6 million loss on early extinguishment of the Senior Unsecured Notes.
Financial Condition and Liquidity
- Our total liquidity at December 31, 2013 was approximately $1.1 billion, consisting of cash and cash equivalents of $478 million and $584 million in unused capacity under our revolver. Consolidated net debt at December 31, 2013 was $88 million. Net debt to book capitalization at December 31, 2013 was 5%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation below.)
- We incurred capital expenditures (including capitalized interest) totaling $56 million in the fourth quarter of 2013, compared to $176 million in the third quarter of 2013 and $157 million in the fourth quarter of 2012. For the years ended December 31, 2013 and 2012, capital expenditures totaled $370 million and $497 million, respectively.
| Footnotes to “Summary of Results”: | |||||
| (1) | 2012 impairment charges include $157.8 million for the Caesar and related mobile pipelay equipment (Q4), $14.6 million for the Intrepid and $4.6 million for well intervention assets at our former operations in Australia. | ||||
| (2) | Non-GAAP measure. See reconciliation below. | ||||
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Footnotes to “Segment Information, Operational and Financial Highlights”: |
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| (1) | Fourth quarter 2012 impairment charges of $157.8 million were for the pending sale of the Caesar and related mobile pipelay equipment. | ||||
Conference Call Information
Further details are provided in the presentation for Helix’s quarterly conference call to review its fourth quarter 2013 results (see the “Investor Relations” page of Helix’s website, www.HelixESG.com). The call, scheduled for 9:00 a.m. Central Standard Time on Thursday, February 20, 2014, 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 800-896-0105 for persons in the United States and +1-212-271-4657 for international participants. The passcode is "Tripodo". A replay of the conference 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, headquartered in Houston, Texas, is an international offshore energy company that provides key life of field services to the energy market. 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 Adjusted EBITDA from continuing operations, Adjusted EBITDAX, net debt and net debt to book capitalization. We calculate Adjusted EBITDA from continuing operations as earnings before net interest expense and other, taxes, depreciation and amortization. Adjusted EBITDAX is Adjusted EBITDA from continuing operations plus the earnings of our former oil and gas business before net interest expense and other, taxes, depreciation and amortization, and exploration expenses. Net debt is calculated as the sum of financial debt less cash and cash equivalents on hand. Net debt to book capitalization is calculated by dividing net debt by the sum of net debt, convertible preferred stock and shareholders’ equity. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company’s operating performance without regard to items which can vary substantially from company to company, and help investors meaningfully compare our results from period to period. Adjusted EBITDA and Adjusted EBITDAX should not be considered in isolation or as a substitute for, but instead is 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 which are excluded.
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 future utilization; any projections of financial items; future operations expenditures; any statements of the plans, strategies and objectives of management for future operations; any statement 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 the Company 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 Dec. 31, | Twelve Months Ended Dec. 31, | |||||||||||||||||||
| (in thousands, except per share data) | 2013 | 2012 | 2013 | 2012 | ||||||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||||||
| Revenues | $ | 226,837 | $ | 201,696 | $ | 876,561 | $ | 846,109 | ||||||||||||
| Cost of sales | 155,673 | 152,670 | 615,876 | 619,059 | ||||||||||||||||
| Asset impairment charges | - | 157,951 | - | 177,135 | ||||||||||||||||
| Gross profit (loss) | 71,164 | (108,925 | ) | 260,685 | 49,915 | |||||||||||||||
| Loss on commodity derivative contracts | - | (10,507 | ) | (14,113 | ) | (10,507 | ) | |||||||||||||
| Gain (loss) on sale of assets | - | (543 | ) | 14,727 | (13,476 | ) | ||||||||||||||
| Selling, general and administrative expenses | (17,224 | ) | (25,661 | ) | (82,265 | ) | (94,415 | ) | ||||||||||||
| Income (loss) from operations | 53,940 | (145,636 | ) | 179,034 | (68,483 | ) | ||||||||||||||
| Equity in earnings of investments | 815 | 887 | 2,965 | 8,434 | ||||||||||||||||
| Other income - oil and gas | 800 | - | 6,581 | - | ||||||||||||||||
| Net interest expense and other | (2,756 | ) | (11,883 | ) | (44,992 | ) | (65,949 | ) | ||||||||||||
| Income (loss) before income taxes | 52,799 | (156,632 | ) | 143,588 | (125,998 | ) | ||||||||||||||
| Income tax provision (benefit) | 15,534 | (57,753 | ) | 31,612 | (59,158 | ) | ||||||||||||||
| Net income (loss) from continuing operations | 37,265 | (98,879 | ) | 111,976 | (66,840 | ) | ||||||||||||||
| Income (loss) from discontinued operations, net of tax | - | (71,888 | ) | 1,073 | 23,684 | |||||||||||||||
| Net income (loss), including noncontrolling interests | 37,265 | (170,767 | ) | 113,049 | (43,156 | ) | ||||||||||||||
| Less net income applicable to noncontrolling interests | (762 | ) | (800 | ) | (3,127 | ) | (3,178 | ) | ||||||||||||
| Net income (loss) applicable to Helix | $ | 36,503 | $ | (171,567 | ) | $ | 109,922 | $ | (46,334 | ) | ||||||||||
| Weighted Avg. Common Shares Outstanding: | ||||||||||||||||||||
| Basic | 105,018 | 104,412 | 105,032 | 104,449 | ||||||||||||||||
| Diluted | 105,159 | 104,412 | 105,184 | 104,449 | ||||||||||||||||
| Basic earnings (loss) per share of common stock: | ||||||||||||||||||||
| Continuing operations | $ | 0.35 | $ | (0.95 | ) | $ | 1.03 | $ | (0.67 | ) | ||||||||||
| Discontinued operations | - | (0.69 | ) | 0.01 | 0.23 | |||||||||||||||
| Net income (loss) per share of common stock | $ | 0.35 | $ | (1.64 | ) | $ | 1.04 | $ | (0.44 | ) | ||||||||||
| Diluted earnings (loss) per share of common stock: | ||||||||||||||||||||
| Continuing operations | $ | 0.35 | $ | (0.95 | ) | $ | 1.03 | $ | (0.67 | ) | ||||||||||
| Discontinued operations | - | (0.69 | ) | 0.01 | 0.23 | |||||||||||||||
| Net income (loss) per share of common stock | $ | 0.35 | $ | (1.64 | ) | $ | 1.04 | $ | (0.44 | ) | ||||||||||
| Comparative Condensed Consolidated Balance Sheets | |||||||||||||||||
| ASSETS | LIABILITIES & SHAREHOLDERS' EQUITY | ||||||||||||||||
| (in thousands) | Dec. 31, 2013 | Dec. 31, 2012 | (in thousands) | Dec. 31, 2013 | Dec. 31, 2012 | ||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Current Assets: | Current Liabilities: | ||||||||||||||||
| Cash and equivalents (1) | $ | 478,200 | $ | 437,100 | Accounts payable | $ | 72,602 | $ | 92,398 | ||||||||
| Accounts receivable | 184,165 | 186,073 | Accrued liabilities | 96,482 | 161,514 | ||||||||||||
| Current deferred tax assets | 51,573 | 43,942 | Income tax payable | 760 | - | ||||||||||||
| Other current assets | 29,709 | 52,992 | Current mat of L-T debt (1) | 20,376 | 16,607 | ||||||||||||
| C-A of discontinued operations | - | 84,000 | C-L of discontinued operations | - | 182,527 | ||||||||||||
| Total Current Assets | 743,647 | 804,107 | Total Current Liabilities | 190,220 | 453,046 | ||||||||||||
| Property & Equipment | 1,528,294 | 1,485,875 | Long-term debt (1) | 545,776 | 1,002,621 | ||||||||||||
| Equity investments | 157,919 | 167,599 | Deferred tax liabilities | 265,879 | 359,237 | ||||||||||||
| Goodwill | 63,230 | 62,935 | Other non-current liabilities | 18,295 | 5,025 | ||||||||||||
| Other assets, net | 51,190 | 49,837 | N-C liabilities of discontinued operations | - | 147,237 | ||||||||||||
| N-C assets of discontinued operations | - | 816,227 | Shareholders' equity (1) | 1,524,110 | 1,419,414 | ||||||||||||
| Total Assets | $ | 2,544,280 | $ | 3,386,580 | Total Liabilities & Equity | $ | 2,544,280 | $ | 3,386,580 | ||||||||
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(1) Net debt to book capitalization - 5% at December 31, 2013. Calculated as total debt less cash and equivalents ($87,952) divided by sum of total net debt and shareholders' equity ($1,612,062). |
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Helix Energy Solutions Group, Inc. Reconciliation of Non GAAP Measures Three and Twelve Months Ended December 31, 2013 |
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Earnings Release: |
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Reconciliation From Net Income from Continuing Operations to Adjusted EBITDAX: |
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4Q13 |
4Q12 |
3Q13 |
2013 |
2012 |
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| (in thousands) | ||||||||||
| Net income (loss) from continuing operations | $ 37,265 | $ (98,879) | $ 45,348 | $ 111,976 | $ (66,840) | |||||
| Adjustments: | ||||||||||
| Income tax provision (benefit) | 15,534 | (57,753) | 7,058 | 31,612 | (59,158) | |||||
| Net interest expense and other | 2,756 | 11,883 | 12,791 | 44,992 | 65,949 | |||||
| Depreciation and amortization | 26,993 | 25,016 | 21,850 | 98,535 | 97,201 | |||||
| Asset impairment charges | - | 157,951 | - | - | 177,135 | |||||
| EBITDA | 82,548 | 38,218 | 87,047 | 287,115 | 214,287 | |||||
| Adjustments: | ||||||||||
| Noncontrolling interest | (999) | (1,039) | (1,037) | (4,077) | (4,128) | |||||
| Unrealized loss on commodity derivative contracts | - | 9,977 | - | - | 9,977 | |||||
| (Gain) loss on sale of assets | - | 543 | (15,812) | (14,727) | 13,476 | |||||
| Adjusted EBITDA from continuing operations | 81,549 | 47,699 | 70,198 | 268,311 | 233,612 | |||||
| Adjusted EBITDAX from discontinued operations (1) (2) | - | 65,528 | - | 31,754 | 367,216 | |||||
| Adjusted EBITDAX | $ 81,549 | $ 113,227 | $ 70,198 | $ 300,065 | $ 600,828 | |||||
| (1) Amounts relate to ERT which was sold in February 2013. | ||||||||||
| (2) Reconciliation of Adjusted EBITDAX from discontinued operations: | ||||||||||
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4Q13 |
4Q12 |
3Q13 |
2013 |
2012 |
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| (in thousands) | ||||||||||
| Net income (loss) from discontinued operations, net of tax | $ - | $ (71,888) | $ 44 | $ 1,073 | $ 23,684 | |||||
| Adjustments: | ||||||||||
| Income tax provision (benefit) | - | (38,705) | 24 | 579 | 13,420 | |||||
| Net interest expense and other | - | 6,982 | - | 2,732 | 28,191 | |||||
| Depreciation and amortization | - | 32,015 | - | 1,226 | 158,284 | |||||
| Asset impairment charges | - | 138,628 | - | - | 138,628 | |||||
| Exploration expenses | - | 826 | - | 3,514 | 3,295 | |||||
| EBITDAX | - | 67,858 | 68 | 9,124 | 365,502 | |||||
| Adjustments: | ||||||||||
| Unrealized loss on commodity derivative contracts | - | (2,330) | - | - | - | |||||
| (Gain) loss on sale of assets | - | - | (68) | 22,630 | 1,714 | |||||
| Adjusted EBITDAX from discontinued operations | $ - | $ 65,528 | $ - | $ 31,754 | $ 367,216 | |||||
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We calculate adjusted EBITDA from continuing operations as earnings before net interest expense and other, taxes and depreciation and amortization. Adjusted EBITDAX is adjusted EBITDA plus the earnings of our former oil and gas business before net interest expense and other, taxes, depreciation and amortization and exploration expenses. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company's operating performance without regard to items which can vary substantially from company to company and help investors meaningfully compare our results from period to period. Adjusted EBITDA and EBITDAX should not be considered in isolation or as a substitute for, but instead is 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 which are excluded. |
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Helix Energy Solutions Group, Inc. Reconciliation of Non GAAP Measures Twelve Months Ended December 31, 2013 |
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Earnings Release: |
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Reconciliation of significant items: |
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3Q13 |
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| (in thousands, except earnings per share data) | |||||
| Nonrecurring items in continuing operations: | |||||
| Gain on sale of the Express | $ | (15,586 | ) | ||
| Loss on extinguishment of debt | 8,572 | ||||
| Tax provision of the above | 2,455 | ||||
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Nonrecurring items in continuing operations, net: |
$ | (4,559 | ) | ||
| Diluted shares | 105,136 | ||||
| Net after income tax effect per share | $ | (0.04 | ) | ||
