Helix Reports First Quarter 2014 Results Business Wire HOUSTON -- April 21, 2014 Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $53.7 million, or $0.51 per diluted share, for the first quarter of 2014 compared to net income of $1.6 million, or $0.02 per diluted share, for the same period in 2013 and net income of $36.5 million, or $0.35 per diluted share, in the fourth quarter of 2013. First quarter 2014 results include a $10.5 million gain on the sale of our former spoolbase facilities located in Ingleside, Texas, and a $7.2 million insurance reimbursement settlement related to our former oil and gas business. These items contributed $0.11 of after-tax earnings per diluted share in the first quarter of 2014. Owen Kratz, President and Chief Executive Officer of Helix, stated, “We successfully introduced the Helix 534 to our well intervention fleet in the first quarter and the vessel is off to a good start. We also realized better than expected Robotics activity in the first quarter of 2014; our Robotics unit is projected to have a much stronger 2014 versus 2013.” Summary of Results (in thousands, except per share amounts and percentages, unaudited) Quarter Ended 3/31/2014 3/31/2013 12/31/2013 Revenues $ 253,572 $ 197,429 $ 226,837 Gross Profit $ 75,846 $ 52,567 $ 71,164 30 % 27 % 31 % Net Income Applicable to Common Shareholders Income from continuing $ 53,719 $ 557 $ 36,503 operations Income from discontinued - 1,058 - operations Total $ 53,719 $ 1,615 $ 36,503 Diluted Earnings Per Share Income from continuing $ 0.51 $ 0.01 $ 0.35 operations Income from discontinued $ - $ 0.01 $ - operations Total $ 0.51 $ 0.02 $ 0.35 Adjusted EBITDA from $ 92,501 $ 42,031 $ 81,549 continuing operations Segment Information, Operational and Financial Highlights (in thousands, unaudited) Quarter Ended 3/31/2014 3/31/2013 12/31/2013 Continuing Operations: Revenues: Well Intervention $ 159,700 $ 106,332 $ 132,559 Robotics 87,890 64,196 90,306 Subsea Construction 358 27,526 2,016 Production Facilities 23,140 20,393 19,216 Intercompany Eliminations (17,516 ) (21,018 ) (17,260 ) Total $ 253,572 $ 197,429 $ 226,837 Income from Operations: Well Intervention $ 48,733 $ 36,450 $ 37,934 Robotics 10,180 (697 ) 15,141 Subsea Construction 228 3,551 4,654 Production Facilities 11,384 11,185 9,814 Gain on Sale of Assets 11,496 - - Corporate/Other (13,875 ) (33,531 ) (12,781 ) Intercompany Eliminations (1,198 ) (1,720 ) (822 ) Total $ 66,948 $ 15,238 $ 53,940 Discontinued Operations (Oil and Gas): Revenues $ - $ 48,847 $ - Income from Operations $ - $ 4,360 $ - Business Segment Results *Well Intervention revenues increased 20% in the first quarter of 2014 from revenues in the fourth quarter of 2013, due to both the addition of the Helix 534 into the fleet in mid-February and the recognition of deferred mobilization revenue related to the Skandi Constructor’s West Africa project. The spare rental intervention riser system (IRS no. 2) also positively contributed to revenues, while being on-hire for 42 days during the first quarter of 2014. Vessel utilization in the North Sea was slightly down – 86% utilization in the first quarter of 2014 versus 92% in the fourth quarter of 2013, primarily reflecting the regulatory dry dock for the Well Enhancer that commenced in mid-December 2013 but was completed late January 2014. The Q4000 achieved 100% utilization for the third consecutive quarter. *For Robotics, chartered vessel fleet utilization decreased to 80% for the quarter from 88% in the fourth quarter of 2013. Revenues were marginally impacted by the decrease in utilization – 3% decrease in first quarter 2014 – yet partially offset by strong ROV utilization. ROV utilization in the first quarter of 2014 increased by 4% over the fourth quarter of 2013. Revenues were also bolstered from the 62 days of utilization garnered from four additional spot vessels during the first quarter of 2014. *During the first quarter of 2014 we acquired the minority interest in Kommandor LLC, and as a result the company now owns 100% of the Helix Producer I. Other Expenses *Selling, general and administrative expenses were 8.0% of revenue in the first quarter of 2014, 7.6% of revenue in the fourth quarter of 2013 and 11.8% in the first quarter of 2013. *Net interest expense and other increased to $5.3 million in the first quarter of 2014 from $2.8 million in the fourth quarter of 2013. Net interest expense decreased to $4.5 million in the first quarter of 2014 from $4.6 million in the fourth quarter of 2013. Other expense was $0.8 million in the first quarter of 2014 compared to $1.9 million of other income in the fourth quarter of 2013, primarily due to foreign exchange fluctuations in our non-U.S. dollar functional currencies. Financial Condition and Liquidity *Our total liquidity at March 31, 2014 was approximately $1.1 billion, consisting of cash and cash equivalents of $470 million and $582 million in unused capacity under our revolver. Consolidated net debt at March 31, 2014 was $91 million. Net debt to book capitalization at March 31, 2014 was 6%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation below.) *We incurred capital expenditures (including capitalized interest) totaling $70 million in the first quarter of 2014, compared to $56 million in the fourth quarter of 2013 and $80 million in the first quarter of 2013. Conference Call Information Further details are provided in the presentation for Helix’s quarterly conference call to review its first quarter 2014 results (see the “Investor Relations” page of Helix’s website, www.HelixESG.com). The call, scheduled for 10:00 a.m. Central Daylight Time on Tuesday, April 22, 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 888-550-1479 for persons in the United States and +1-954-357-2908 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, Inc., headquartered in Houston, Texas, is an international offshore energy company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations. For more information about Helix, please visit our website at www.HelixESG.com. Reconciliation of Non-GAAP Financial Measures Management evaluates Company performance and financial condition using certain non-GAAP metrics, primarily Adjusted EBITDA from continuing operations, 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. 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 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 regarding 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 Helix on Twitter (@Helix_ESG) and LinkedIn (www.linkedin.com). HELIX ENERGY SOLUTIONS GROUP, INC. Comparative Condensed Consolidated Statements of Operations Three Months Ended Mar. 31, (in thousands, except 2014 2013 per share data) (unaudited) Net $ 253,572 $ 197,429 revenues Cost of 177,726 144,862 sales Gross 75,846 52,567 profit Loss on commodity - (14,113 ) derivative contracts Gain on sale of 11,496 - assets Selling, general and administrative (20,394 ) (23,216 ) expenses Income from operations 66,948 15,238 Equity in earnings of 708 610 investments Other income - oil 12,276 2,818 and gas Net interest expense (5,293 ) (16,889 ) and other Income before income 74,639 1,777 taxes Income tax 20,417 443 provision Net income from 54,222 1,334 continuing operations Income from discontinued - 1,058 operations, net of tax Net income, including noncontrolling 54,222 2,392 interests Less net income applicable to (503 ) (777 ) noncontrolling interests Net income applicable $ 53,719 $ 1,615 to Helix Weighted Avg. Common Shares Outstanding: Basic 105,126 105,032 Diluted 105,375 105,165 Basic earnings per share of common stock: Continuing operations $ 0.51 $ 0.01 Discontinued - 0.01 operations Net income per share $ 0.51 $ 0.02 of common stock Diluted earnings per share of common stock: Continuing operations $ 0.51 $ 0.01 Discontinued - 0.01 operations Net income per share $ 0.51 $ 0.02 of common stock Comparative Condensed Consolidated Balance Sheets ASSETS LIABILITIES & SHAREHOLDERS' EQUITY (in thousands) Mar. 31, Dec. 31, (in thousands) Mar. 31, Dec. 31, 2014 2013 2014 2013 (unaudited) (unaudited) Current Assets: Current Liabilities: Cash and equivalents $ 470,079 $ 478,200 Accounts payable $ 96,370 $ 72,602 (1) Accounts 189,726 184,165 Accrued liabilities 59,814 96,482 receivable Income tax receivable, 25,956 - Income tax payable - 760 net Current Current maturities of L-T deferred 19,865 51,573 debt (1) 20,508 20,376 tax assets Other current 46,759 29,709 assets Total Current 752,385 743,647 Total Current Liabilities 176,692 190,220 Assets Property & 1,521,619 1,532,217 Long-term debt (1) 540,636 545,776 equipment, net Equity investments 155,730 157,919 Deferred tax liabilities 270,918 265,879 Goodwill 63,336 63,230 Other non-current 13,748 18,295 liabilities Other assets, net 66,925 47,267 Shareholders' equity (1) 1,558,001 1,524,110 Total Assets $ 2,559,995 $ 2,544,280 Total Liabilities & $ 2,559,995 $ 2,544,280 Equity Net debt to book capitalization - 6% at March 31, 2014. Calculated as total debt less cash (1 ) and equivalents ($91,065) divided by sum of total net debt and shareholders' equity ($1,649,066). Helix Energy Solutions Group, Inc. Reconciliation of Non GAAP Measures Three Months Ended March 31, 2014 Earnings Release: Reconciliation From Net Income from Continuing Operations to Adjusted EBITDA: 1Q14 1Q13 4Q13 (in thousands) Net income from continuing $ 54,222 $ 1,334 $ 37,265 operations Adjustments: Income tax provision 20,417 443 15,534 Net interest expense and 5,293 16,889 2,756 other Depreciation and 24,726 24,380 26,993 amortization EBITDA from continuing 104,658 43,046 82,548 operations Adjustments: Noncontrolling interests (661 ) (1,015 ) (999 ) Gain on sale of assets (11,496 ) - - Adjusted EBITDA from $ 92,501 $ 42,031 $ 81,549 continuing operations We calculate adjusted EBITDA from continuing operations as earnings before net interest expense and other, taxes and depreciation and amortization. This non-GAAP measure is useful to investors and other internal and external users of our financial statements in evaluating our operating performance because it is 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 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 Three Months Ended March 31, 2014 Earnings Release: Reconciliation of significant items: 1Q14 (in thousands, except earnings per share data) Nonrecurring items: Gain on sale of Ingleside spoolbase $ 10,457 Insurance reimbursement settlement 7,217 Tax provision of the above (6,186 ) Nonrecurring items, net: $ 11,488 Diluted shares 105,375 Net after income tax effect per share $ 0.11 Contact: Helix Energy Solutions Group, Inc. Terrence Jamerson, 281-618-0400 Director, Finance & Investor Relations
Helix Reports First Quarter 2014 Results
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