Helix Reports Fourth Quarter and Full Year 2013 Results

  Helix Reports Fourth Quarter and Full Year 2013 Results

Business Wire

HOUSTON -- February 19, 2014

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.”

                                                                       
Summary of Results

(in thousands, except per share amounts and percentages, unaudited)
                                                                                  
                 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          -             (157,951 )      -             -             (177,135 )
Impairments
^(1)
Total            $ 71,164        $ (108,925 )     $ 69,457        $ 260,685       $ 49,915
                                                                                  
Net Income
(Loss)
Applicable
to

Common
Shareholders
Income
(Loss) from      $ 36,503        $ (99,679  )     $ 44,549        $ 108,849       $ (70,018  )
continuing
operations
Income
(Loss) from       -             (71,888  )      44            1,073         23,684   
discontinued
operations
Total            $ 36,503       $ (171,567 )     $ 44,593       $ 109,922      $ (46,334  )
                                                                                  
Diluted
Earnings
(Loss) Per
Share
Income
(Loss) from      $ 0.35          $ (0.95    )     $ 0.42          $ 1.03          $ (0.67    )
continuing
operations
Income
(Loss) from      $ -            $ (0.69    )     $ -            $ 0.01         $ 0.23     
discontinued
operations
Total            $ 0.35         $ (1.64    )     $ 0.42         $ 1.04         $ (0.44    )
                                                                                  
Adjusted
EBITDA from      $ 81,549        $ 47,699         $ 70,198        $ 268,311       $ 233,612
continuing
operations
Adjusted
EBITDAX from      -             65,528         -             31,754        367,216  
discontinued
operations
Adjusted         $ 81,549       $ 113,227       $ 70,198       $ 300,065      $ 600,828  
EBITDAX ^(2)
                                                                                  
                                                                                  
Note: Footnotes appear at end of press release.

                                                            
Segment Information, Operational and Financial Highlights

(in thousands, unaudited)
                                                                   
                                  Quarter Ended
                                  12/31/2013      12/31/2012       9/30/2013
Continuing Operations:
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                -               (157,951 )       -
Impairments ^(1)
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      $ 815          $ 887           $ 857     
Investments
                                                                   
Discontinued Operations (Oil
and Gas):
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”:
            2012 impairment charges include $157.8 million for the Caesar and
   (1)  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.

Footnotes to “Segment Information, Operational and Financial Highlights”:
            Fourth quarter 2012 impairment charges of $157.8 million were for
      (1)   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         2013            2012             2013            2012
share data)
                   (unaudited)                      (unaudited)
                                                                    
                                                                    
Revenues           $ 226,837       $ 201,696        $ 876,561       $ 846,109
Cost of sales        155,673         152,670          615,876         619,059
Asset
impairment          -             157,951        -             177,135  
charges
Gross profit         71,164          (108,925 )       260,685         49,915
(loss)
Loss on
commodity            -               (10,507  )       (14,113 )       (10,507  )
derivative
contracts
Gain (loss) on       -               (543     )       14,727          (13,476  )
sale of assets
Selling,
general and         (17,224 )      (25,661  )      (82,265 )      (94,415  )
administrative
expenses
Income (loss)
from                 53,940          (145,636 )       179,034         (68,483  )
operations
Equity in
earnings of          815             887              2,965           8,434
investments
Other income -       800             -                6,581           -
oil and gas
Net interest
expense and         (2,756  )      (11,883  )      (44,992 )      (65,949  )
other
Income (loss)
before income        52,799          (156,632 )       143,588         (125,998 )
taxes
Income tax
provision           15,534        (57,753  )      31,612        (59,158  )
(benefit)
Net income
(loss) from          37,265          (98,879  )       111,976         (66,840  )
continuing
operations
Income (loss)
from
discontinued        -             (71,888  )      1,073         23,684   
operations,
net of tax
Net income
(loss),
including            37,265          (170,767 )       113,049         (43,156  )
noncontrolling
interests
Less net
income
applicable to       (762    )      (800     )      (3,127  )      (3,178   )
noncontrolling
interests
Net income
(loss)             $ 36,503       $ (171,567 )     $ 109,922      $ (46,334  )
applicable to
Helix
                                                                    
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         $ 0.35          $ (0.95    )     $ 1.03          $ (0.67    )
operations
Discontinued        -             (0.69    )      0.01          0.23     
operations
Net income
(loss) per         $ 0.35         $ (1.64    )     $ 1.04         $ (0.44    )
share of
common stock
                                                                    
Diluted
earnings
(loss) per
share of
common stock:
Continuing         $ 0.35          $ (0.95    )     $ 1.03          $ (0.67    )
operations
Discontinued        -             (0.69    )      0.01          0.23     
operations
Net income
(loss) per         $ 0.35         $ (1.64    )     $ 1.04         $ (0.44    )
share of
common stock

                                                                  
Comparative Condensed Consolidated Balance Sheets
                                                                      
ASSETS                                       LIABILITIES & SHAREHOLDERS' EQUITY
(in          Dec. 31,      Dec. 31,      (in             Dec. 31,      Dec. 31,
thousands)   2013            2012            thousands)        2013            2012
             (unaudited)                                       (unaudited)
Current                                      Current
Assets:                                      Liabilities:
Cash and                                     Accounts
equivalents  $ 478,200       $ 437,100       payable           $ 72,602        $ 92,398
(1)
Accounts       184,165         186,073       Accrued             96,482          161,514
receivable                                   liabilities
Current                                      Income tax
deferred tax   51,573          43,942        payable             760             -
assets
Other                                        Current mat
current        29,709          52,992        of L-T debt         20,376          16,607
assets                                       (1)
C-A of                                       C-L of
discontinued  -            84,000      discontinued     -            182,527
operations                                   operations
Total                                        Total Current
Current        743,647         804,107       Liabilities         190,220         453,046
Assets
                                                                               
                                                                               
                                                                               
Property &     1,528,294       1,485,875     Long-term           545,776         1,002,621
Equipment                                    debt (1)
Equity         157,919         167,599       Deferred tax        265,879         359,237
investments                                  liabilities
                                             Other
Goodwill       63,230          62,935        non-current         18,295          5,025
                                             liabilities
                                             N-C
Other                                        liabilities
assets, net    51,190          49,837        of                  -               147,237
                                             discontinued
                                             operations
N-C assets
of            -            816,227     Shareholders'    1,524,110    1,419,414
discontinued                                 equity (1)
operations
                                             Total
Total Assets $ 2,544,280   $ 3,386,580   Liabilities &   $ 2,544,280   $ 3,386,580
                                             Equity
                                                                               
(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).


                                                              
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Three and Twelve Months Ended December 31, 2013
                                                           
                                                                     
Earnings
Release:
                                                                     
Reconciliation From Net Income from Continuing Operations to Adjusted EBITDAX:
                                                                     
                                                                     
                   4Q13       4Q12         3Q13         2013         2012
                   (in thousands)
                                                                     
Net income
(loss) from        $          $            $ 45,348     $ 111,976    $
continuing         37,265     (98,879)                               (66,840)
operations
Adjustments:
Income tax
provision          15,534     (57,753)     7,058        31,612       (59,158)
(benefit)
Net interest
expense and        2,756      11,883       12,791       44,992       65,949
other
Depreciation
and                26,993     25,016       21,850       98,535       97,201
amortization
Asset
impairment         -         157,951     -           -           177,135
charges
EBITDA             82,548    38,218      87,047      287,115     214,287
Adjustments:
Noncontrolling     (999)      (1,039)      (1,037)      (4,077)      (4,128)
interest
Unrealized loss
on commodity       -          9,977        -            -            9,977
derivative
contracts
(Gain) loss on     -         543         (15,812)    (14,727)    13,476
sale of assets
Adjusted EBITDA
from continuing    81,549    47,699      70,198      268,311     233,612
operations
                                                                     
Adjusted
EBITDAX from
discontinued       -         65,528      -           31,754      367,216
operations ^(1)
(2)
Adjusted           $         $ 113,227   $ 70,198    $ 300,065   $ 600,828
EBITDAX            81,549
                                                                     
                                                                     
(1) Amounts relate to ERT which was sold in February 2013.
(2) Reconciliation of Adjusted EBITDAX from discontinued operations:

                   4Q13       4Q12         3Q13         2013         2012
                   (in thousands)
                                                                     
Net income
(loss) from                   $
discontinued       $ -        (71,888)     $ 44         $ 1,073      $ 23,684
operations, net
of tax
Adjustments:
Income tax
provision          -          (38,705)     24           579          13,420
(benefit)
Net interest
expense and        -          6,982        -            2,732        28,191
other
Depreciation
and                -          32,015       -            1,226        158,284
amortization
Asset
impairment         -          138,628      -            -            138,628
charges
Exploration        -         826         -           3,514       3,295
expenses
EBITDAX            -         67,858      68          9,124       365,502
Adjustments:
Unrealized loss
on commodity       -          (2,330)      -            -            -
derivative
contracts
(Gain) loss on     -         -           (68)        22,630      1,714
sale of assets
Adjusted
EBITDAX from       $ -       $ 65,528    $ -         $ 31,754    $ 367,216
discontinued
operations
                                                                     
                                                                     
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.

                                         
Helix Energy Solutions Group, Inc.
Reconciliation of Non GAAP Measures
Twelve Months Ended December 31, 2013
                                         
                                            
Earnings Release:
                                            
Reconciliation of significant items:
                                            
                                            
                                            3Q13
                                            (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           
Nonrecurring items in continuing            $         (4,559          )
operations, net:
                                            
Diluted shares                                       105,136         
Net after income tax effect per share       $         (0.04           )

Contact:

Helix Energy Solutions Group, Inc.
Terrence Jamerson, 281-618-0400
Director, Finance & Investor Relations
 
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