Helix Reports First Quarter 2014 Results

  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
 
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