Hornbeck Offshore Announces First Quarter 2014 Results

            Hornbeck Offshore Announces First Quarter 2014 Results

PR Newswire

COVINGTON, La., April 30, 2014

COVINGTON, La., April30, 2014 /PRNewswire/ --Hornbeck Offshore Services,
Inc. (NYSE:HOS) announced today results for the first quarter ended March 31,
2014. Following are highlights for this period and the Company's future
outlook:

  o1Q2014 Upstream revenue, EBITDA and diluted EPS were $136.6 million, $54.3
    million and $0.31 per share, respectively
  o1Q2014 utilization of the 54-vessel new gen OSV fleet was 75% compared to
    87% a year-ago and 79% sequentially
  o1Q2014 high-spec OSV effective utilization was 76% compared to 99% a
    year-ago and 81% sequentially
  o1Q2014 MPSV effective utilization was 85% compared to 95% a year-ago and
    100% sequentially
  oFirst seven HOSMAX OSVs have been placed in-service with two more newbuild
    deliveries expected by the end of 2Q2014
  oOSV Newbuild Program #5 remains 98% on-time and on-budget
  oContract backlog for new gen OSV vessel-days is currently at 60% and 24%
    for the remainder of 2014 and for fiscal 2015
  oContract backlog for MPSV vessel-days is currently at 62% and 6% for the
    remainder of 2014 and for fiscal 2015
  oOne 240 class OSV began 2-year charter (with options) in late-March to
    support IRM and survey work in the GoM
  oOne additional new gen OSV added to the previously announced five-vessel
    specialty charter in Mexico beginning 2Q2014
  oTwo new gen OSVs awarded spot contracts to support U.S. military
    operations outside of the GoM commencing in 2Q2014
  oCompany now has a total of ten incremental vessels commencing new charters
    in markets outside of the GoM in 2Q2014
  oCompany remains optimistic about a gradual GoM market improvement over the
    remainder of 2014, particularly in 2H2014

The Company recorded consolidated net income for the first quarter of 2014 of
$11.8 million, or $0.32 per diluted share, compared to net income of $6.2
million, or $0.17 per diluted share, for the year-ago quarter; and net income
of $22.2 million, or $0.61 per diluted share, for the fourth quarter of 2013.
Excluding the impact of a first quarter 2013 loss on early extinguishment of
debt,consolidated net income for the year-ago periodwould have been $21.4
million, or $0.59 per diluted share. Diluted common shares for the first
quarter of 2014 were 36.7 million compared to 36.3 million for the first
quarter of 2013 and 36.7 million for the fourth quarter of 2013. EBITDA from
consolidated operations for the first quarter of 2014 was $55.0 million
compared to $45.8 million in the first quarter of 2013 and $66.8 million in
the fourth quarter of 2013. Excluding the impact of a first quarter 2013 loss
on early extinguishment of debt, EBITDA from consolidated operations for the
year-ago periodwould have been $70.1 million. For additional information
regarding EBITDA as a non-GAAP financial measure, please see Note 7 to the
accompanying data tables. The historical results for the Downstream segment,
which was sold in August 2013, have been presented as discontinued operations
for all periods in this press release and the accompanying data tables.

Continuing Operations

The Company's income from continuing operations for the first quarter of 2014
was $11.4 million, or $0.31 per diluted share, compared to $3.9 million, or
$0.11 per diluted share, for the year-ago quarter; and $22.1 million, or $0.61
per diluted share, for the fourth quarter of 2013. First quarter 2014 EBITDA
from continuing operations increased 39.9% to $54.3 million compared to $38.8
million for the first quarter of 2013 and decreased 18.8% compared to $66.9
million for the fourth quarter of 2013. Excluding the impact of a first
quarter 2013 loss on early extinguishment of debt, income and EBITDA from
continuing operations for the year-ago periodwould have been $19.1 million
and $63.1 million, respectively. 

Revenues. Revenues were $136.6 million for the first quarter of 2014, an
increase of $4.1 million, or 3.1%, from $132.5 million for the first quarter
of 2013; and a decrease of $8.3 million, or 5.7%, from $144.9 million for the
fourth quarter of 2013. The year-over-year increase in Upstream revenues was
primarily due to the full or partial-period contribution of twelve vessels
that were placed in-service under the Company's fifth OSV newbuild program and
recently completed OSV retrofit program since March 2013 and, to a lesser
extent, an increase in revenues for the Company's MPSV fleet. The newly
constructed and recently retrofitted vessels accounted for a $25.5 million
year-over-year increase in revenues. These increases were partially offset by
a decrease in revenue due to transitory soft market conditions for the
Company's vessels that were in-service during each of the quarters ended March
31, 2014 and 2013. Operating income was $25.0 million, or 18.3% of revenues,
for the first quarter of 2014 compared to $43.8 million, or 33.1% of revenues,
for the prior-year quarter; and $43.7 million, or 30.2% of revenues, for the
fourth quarter of 2013. Excluding incremental amortization recorded for the
accelerated regulatory drydocking of vessels that are expected to relocate to
foreign markets from the GoM, operating margin for the first quarter of 2014
would have been 21.4%. Average new generation OSV dayrates for the first
quarter of 2014 were $26,237 compared to $25,142 for the same period in 2013
and $27,781 for the fourth quarter of 2013. New generation OSV utilization was
75.3% for the first quarter of 2014 compared to 86.7% for the year-ago quarter
and 79.4% for the sequential quarter. The year-over-year decrease in
utilization is primarily due to 223 incremental vessel-days out-of-service for
regulatory recertification during the first quarter of 2014 compared to the
prior-year period, along with transitory softness for high-spec OSVs operating
in the GoM spot market. The Company's high-spec OSVs achieved an average
utilization of 73.1% for the first quarter of 2014. After adjusting for 127
days of first quarter 2014 downtime for regulatory drydockings, the Company's
commercially available high-spec OSV fleet achieved an effective utilization
of 76.2%.

Operating Expenses.  Operating expenses were $68.6 million for the first
quarter of 2014, an increase of $12.3 million, or 21.8%, from $56.3 million
for the first quarter of 2013; and an increase of $3.5 million, or 5.4%, from
$65.1 million for the fourth quarter of 2013. The year-over-year increase in
operating expenses is primarily due to higher operating expenses related to an
increase in the number of active vessels in the Company's fleet during 2014
compared to 2013. Newly constructed vessels and upgraded vessels placed
in-service under the Company's 200 class OSV retrofit program since March 2013
accounted for approximately $11.2 million, or 91%,of the higher
year-over-year operating cost.

General and Administrative ("G&A"). G&A expenses of $13.7 million for the
first quarter of 2014 were 10.0% of revenues compared to $13.0 million, or
9.8% of revenues, for the first quarter of 2013. The increase in G&A expenses
was primarily attributable to the growth of the shoreside support team related
to the Company's on-going newbuild program and expanding international
operations.

Depreciation and Amortization. Depreciation and amortization expense was $29.4
million for the first quarter of 2014, or $9.9 million higher than the
prior-year quarter. This increase is partially due to $4.3 million of
incremental amortization recorded for the accelerated regulatory drydocking of
vessels that are expected to relocate to foreign markets from the GoM.
Depreciation was $2.4 million higher due to the contribution of six newbuild
OSVs that were placed in-service on various dates since June 2013, as well as
the higher cost basis of six upgraded vessels redelivered to the Company under
its 200 class OSV retrofit program. Depreciation and amortization expense is
expected to continue to increase from current levels as the vessels under the
Company's current newbuild program are placed in-service and when any newly
constructed vessels undergo their initial 30-month and 60-month
recertifications.

Interest Expense. Interest expense decreased $6.5 million, or 47.4%, during
the first quarter of 2014 compared to the same period in 2013, primarily due
to lower interest expense resulting from the November 2013 retirement of the
Company's 1.625% convertible senior notes due 2026. The Company recorded $8.7
million of capitalized construction period interest, or roughly 55% of its
total interest costs, for the first quarter of 2014 compared to having
capitalized $6.0 million, or roughly 30% of its total interest costs, for the
year-ago quarter.

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 from continuing operations and certain events. These
statements are forward-looking and actual results may differ materially given
the volatility inherent in the Company's industry. Other than as expressly
stated, these statements do not include the potential impact of any additional
future long-term contract repositioning voyages; unexpected vessel repairs or
shipyard delays; or future capital transactions, such as vessel acquisitions
or divestitures, business combinations, financings or the unannounced
expansion of existing newbuild programs that may be commenced after the date
of this disclosure. Additional cautionary information concerning
forward-looking statements can be found on page 9 of this news release.

Forward Guidance for Continuing Operations

Vessel Counts. As of March 31, 2014, excluding two inactive non-core vessels
and one OSV newbuild delivery that occurred in April 2014, the Company's
operating fleet consisted of 55 new generation OSVs and four MPSVs. The
forecasted Upstream vessel counts presented in this press release reflect the
anticipated fiscal 2014 OSV newbuild deliveries discussed below. The Company's
active Upstream fleet for fiscal years 2014 and 2015 is expected to be
comprised of an average of 58.6 and 67.7 new generation OSVs, respectively.
For fiscal 2014, the active new generation OSVs are comprised of an average of
28.7 "term" vessels that are currently chartered on long-term contracts and an
average of 29.9 "spot" vessels that are currently operating or being offered
for service under short-term charters. The Company expects to operate an
average of 4.4 MPSVs in fiscal 2014 and 5.3 in fiscal 2015.

Contract Coverage.  The Company's forward contract coverage for its current
and projected fleet of active new generation OSVs for the remainder of fiscal
year 2014 and for fiscal 2015 is currently 60% and 24%, respectively. The
Company's forward contract coverage for its current and projected fleet of
MPSVs for the remainder of fiscal year 2014 and for fiscal 2015 is currently
62% and 6%, respectively. These contract backlog percentages are based on
available vessel-days for the guidance periods, not estimated revenue.

Effective Dayrates. Effective, or utilization-adjusted, new generation OSV
dayrates for the Company's projected average of 28.7 active "term" OSVs are
now expected to be in the $23,000 to $24,000 range for the full-year 2014.
This range does not reflect the incremental impact of any revenue expected to
be derived in fiscal 2014 from the Company's "spot" OSVs. The Company does not
provide annual guidance regarding the effective dayrates anticipated for its
"spot" new generation OSVs or for any of its MPSVs due to the wide range of
potential outcomes of its current domestic and international bidding activity
for such vessels.

Operating Expenses.  Aggregate cash operating expenses are projected to be in
the range of $68.0 million to $73.0 million for the second quarter of 2014,
and $295.0 million to $310.0 million for the full-year 2014. This annual
guidance range includes roughly $5.2 million of total out-of-pocket costs
related to the conversion and repositioning of multiple vessels for
international or specialty charter commitments. During the first quarter, the
Company incurred $3.4 million of these operating costs and expects to incur
$1.5 million in the second quarter, with the remainder projected for the third
quarter. Not included in these costs is the lost revenue related to such
vessels during approximately 223 days of aggregate commercial-related
downtime. Please refer to the attached data table on page 12 of this press
release for a summary, by period and by vessel type, of historical and
projected data for commercial-related downtime (in days) for each of the
quarterly and/or annual periods presented for the fiscal years 2013, 2014, and
2015. The cash operating expense estimate above is exclusive of any additional
repositioning expenses the Company may incur that are not recoverable through
charter hire in connection with the potential relocation of more of its
current spot 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 Expenses.  General and administrative expenses are expected to be in the
approximate range of $13.5 million to $14.5 million for the second quarter of
2014, and $58.0 million to $61.0 million for the full-year 2014, commensurate
with the Company's pending fleet growth and expanding international
operations. The Company expects to remain within the historical range of
G&A-to-revenue margins of its public OSV peer group.

Other Financial Data.  Projected quarterly depreciation, amortization, net
interest expense, cash income taxes, cash interest expense and
weighted-average diluted shares outstanding for the second quarter of 2014 are
$17.1 million, $9.7 million, $7.9 million, $1.3 million, $11.4 million and
37.0 million, respectively. Guidance for depreciation, amortization, net
interest expense, cash income taxes and cash interest expense for each of the
remaining quarters of fiscal 2014 and for the full-year 2015 is provided on
page 13 of this press release. The expected increase in amortization expense
for the full-year 2014 is primarily due to the acceleration of drydock
activities for six new generation OSVs recently awarded long-term contracts
for specialty service in Mexico. The Company's annual effective tax rate is
expected to be in the range of 36.0% to 38.0% for fiscal years 2014 and 2015.

Capital Expenditures Outlook

Update on OSV Newbuild Program #5.  The Company's fifth OSV newbuild program
consists of four 300 class OSVs, five 310 class OSVs, ten 320 class OSVs and
five 310 class MPSVs. As of April 30, 2014, the Company has placed seven
vessels in-service under this program – four in 2013, two in February 2014 and
one in April 2014. The 17 remaining vessels under this 24-vessel domestic
newbuild program are currently expected to be delivered in accordance with the
table below:

                  2014              2015                    2016                    Total
                  2Q  3Q  4Q  1Q  2Q  3Q  4Q  1Q  2Q  3Q  4Q
Estimated

In-ServiceDates:
300 class OSVs    —     —     —     —     —     —     —     —     —     —     —     —
310 class OSVs    —     2     2     1     —     —     —     —     —     —     —     5
320 class OSVs    2     2     2     1     —     —     —     —     —     —     —     7
Total OSVs        2     4     4     2     —     —     —     —     —     —     —     12
310classMPSVs   —     1     —     —     —     1     1     —     1     1     —     5
Total Newbuilds   2     5     4     2     —     1     1     —     1     1     —     17

The Company continues to monitor production deficiencies experienced at one of
the shipyards and to employ all tools contractually available to improve
progress and to ensure all possible efforts are made to meet the requirements
of the contract. These deficiencies have led the Company to shift its
delivery assumption for the next vessel by 30 incremental days, however, the
full-year 2014 average vessel-delivery projections have not changed
materially. Based on the updated schedule above of projected vessel
in-service dates, the Company expects to own and operate 66 and 68 new
generation OSVs as of December 31, 2014 and 2015, respectively. These vessel
additions result in a projected average new generation OSV fleet complement of
58.6, 67.7 and 68.0 vessels for the fiscal years 2014, 2015 and 2016,
respectively. Based on the updated schedule above of projected vessel
in-service dates, the Company now expects to own and operate five, seven, and
nine MPSVs as of December 31, 2014, 2015, and 2016, respectively. These vessel
additions result in a projected average MPSV fleet complement of 4.4, 5.3, 7.8
and 9.0 vessels for the fiscal years 2014, 2015, 2016 and 2017, respectively.
The aggregate cost of the Company's fifth OSV newbuild program, excluding
construction period interest, is expected to be approximately $1.25 billion,
of which $390.7 million, $117.1 million and $25.7 million is expected to be
incurred in fiscal 2014, 2015 and 2016, respectively. From the inception of
this program through March 31, 2014, the Company has incurred $823.2 million,
or 65.9%, of total expected project costs, including $106.7 million that was
spent during the first quarter of 2014.

Update on Maintenance Capital Expenditures. Please refer to the attached data
table on page 12 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 2013, 2014, and 2015. 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 a vessel's economic useful life.
The Company expects that its maintenance capital expenditures for its Upstream
fleet of vessels will be approximately $54.5 million and $40.5 million,
respectively, for the full-years 2014 and 2015, respectively.

Update on Other Capital Expenditures. Please refer to the attached data
tables on page 12 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 2013, 2014 and
2015. Other capital expenditures, which are generally non-recurring, are
comprised of the following: (i) commercial-related 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 (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 vessel improvements and non-vessel capital
expenditures to be approximately $45.0 million and $4.0 million, respectively,
for the full-years 2014 and 2015, respectively.

Liquidity Outlook

As of March 31, 2014, the Company had a cash balance of $349.3 million and an
undrawn $300 million revolving credit facility. Together with cash on-hand and
cash proceeds from the sale of non-core assets, the Company expects to
generate sufficient cash flow from operations to cover all of its growth
capital expenditures for the remaining 17 HOSMAX vessels under construction,
commercial-related capital expenditures, and all of its annually recurring
cash debt service, maintenance capital expenditures and cash income taxes
through the completion of the newbuild and conversion programs without ever
having to use its currently undrawn revolving credit facility. The Company
has no funded debt outstanding that matures any sooner than fiscal 2019.

Conference Call

The Company will hold a conference call to discuss its first quarter 2014
financial results and recent developments at 10:00 a.m. Eastern (9:00 a.m.
Central) tomorrow, May 1, 2014. To participate in the call, dial (480)
629-9819 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 8, 2014, and may be accessed
by calling (303) 590-3030 and using the pass code 4678496#.

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 U.S. Gulf
of Mexico and Latin America. Hornbeck Offshore currently owns a fleet of 62
vessels primarily serving the energy industry and has 17 additional high-spec
Upstream vessels under construction for delivery through 2016.

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 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; the Company's inability to
successfully complete its fifth OSV newbuild program on-time and on-budget,
which involves the construction, conversion and integration of highly complex
vessels and systems; the inability to successfully market the vessels that the
Company owns, is constructing or might acquire; 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; fewer than expected additions to the
GoM active deepwater drilling rig fleet; disputes with customers;
bureaucratic, administrative or operating barriers that delay vessels
chartered in foreign markets from going on-hire or result in contractual
penalties or deductions imposed by foreign customers; a sustained weakening of
demand for the Company's services; unplanned customer suspensions,
cancellations, rate reductions or non-renewals of vessel charters or failures
to finalize commitments to charter vessels; the impact of planned sequester of
federal spending pursuant to the Budget Control Act of 2011; industry risks;
reductions in capital spending budgets by customers; a material reduction of
Petrobras' announced plans for or administrative barriers to exploration and
production activities in Brazil; sustained declines in oil and natural gas
prices; further increases in operating costs, such as mariner wage increases;
the inability to accurately predict vessel utilization levels and dayrates;
unanticipated difficulty in effectively competing in or operating in
international markets; less than anticipated subsea infrastructure demand in
the GoM and other markets; fewer than anticipated deepwater and
ultra-deepwater drilling units operating in the GoM or other regions that the
Company operates in; the level of fleet additions by the Company and its
competitors that could result in over capacity in the markets in which the
Company competes; economic and political risks; weather-related risks; the
shortage of or the inability to attract and retain qualified personnel,
including vessel personnel for active and newly constructed vessels;
regulatory risks; the repeal or administrative weakening of the Jones Act or
changes in the interpretation of the Jones Act related to the U.S. citizenship
qualification; 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;
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 or the inability to repatriate foreign-sourced earnings and profits. 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 banks to provide funding under the
Company's credit agreement, if required. 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. 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 7 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,
                                2014         2013              2013
Revenues                        $ 136,585    $    144,893   $132,526
Costs and expenses:
 Operating expenses     68,581       65,064            56,294
 Depreciation and       29,360       23,199            19,419
amortization
 General and            13,685       12,995            12,996
administrative expenses
                                111,626      101,258           88,709
 Gain on sale of assets 69           15                -
 Operating income       25,028       43,650            43,817
Other income (expense):
 Loss on early          -            -                 (24,319)
extinguishment of debt
 Interest income        364          589               577
 Interest expense       (7,232)      (8,680)           (13,722)
 Other income           (77)         61                (109)
(expense), net^1
                                (6,945)      (8,030)           (37,573)
Income before income taxes      18,083       35,620            6,244
Income tax expense              6,729        13,533            2,316
Income from continuing          11,354       22,087            3,928
operations
Income from discontinued        412          153               2,231
operations, net of tax
Net income                      $  11,766   $     22,240  $  6,159
Earnings per share
Basic earnings per common                   $     
share from continuing           $   0.32  0.62             $   0.11
operations
Basic earnings per common
share from discontinued         0.01         -                 0.06
operations
Basic earnings per common      $   0.33  $            $   0.17
share                                        0.62
Diluted earnings per common                 $     
share from continuing           $   0.31  0.61             $   0.11
operations
Diluted earnings per common
share from discontinued         0.01         -                 0.06
operations
Diluted earnings per common    $   0.32  $            $   0.17
share                                        0.61
Weighted average basic shares   36,169       36,054            35,618
outstanding
Weighted average diluted shares 36,717       36,670            36,346
outstanding^2
Other Operating Data (unaudited):
                                Three Months Ended
                                March 31,    December 31,      March 31,
                                2014         2013              2013
Offshore Supply Vessels:
 Average number of new      54.2         51.7              51.0
generation OSVs^3
 Average new generation OSV 157,296      142,506           128,190
fleet capacity (deadweight)^3
 Average new generation OSV 2,901        2,752             2,514
capacity (deadweight)
 Average new generation     75.3%        79.4%             86.7%
utilization rate^4
 Average new generation     $  26,237   $     27,781  $ 25,142
dayrate^5
 Effective dayrate^6        $  19,756   $     22,058  $ 21,798
Balance Sheet Data (unaudited):
                                As of        As of

                                March 31,    December 31,
                                2014         2013
Cash and cash equivalents       $ 349,340    $    439,291
Working capital                 426,932      518,959
Property, plant and equipment,  2,235,850    2,125,374
net
Total assets                    2,861,785    2,834,280
Total long-term debt            1,066,382    1,064,092
Stockholders' equity            1,306,501    1,295,428
Cash Flow Data (unaudited):
                                Three Months Ended
                                March 31,    March 31,
                                2014         2013
Cash provided by operating      $  36,704   $     31,705
activities
Cash used in investing          (129,203)    (94,014)
activities
Cash provided by financing      338          193,247
activities



^

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,
                             2014           2013              2013
CONTINUING OPERATIONS:
Vessel revenues              $134,029       $    141,354   $ 131,437
Non-vessel revenues          2,556          3,539             1,089
Total revenues               $136,585       $    144,893   $ 132,526
Operating income             $ 25,028      $     43,650  $  43,817
Operating margin             18.3%          30.1%             33.1%
 Components of EBITDA^7
 Income from continuing     $ 11,354      $     22,087  $   3,928
operations
 Interest expense, net      6,868          8,091             13,145
 Income tax expense         6,729          13,533            2,316
 Depreciation               16,185         14,834            13,196
 Amortization               13,175         8,365             6,223
 EBITDA^7                   $ 54,311      $     66,910  $  38,808
 Adjustments to EBITDA
 Loss on early              $      -  $          $  24,319
extinguishment of debt                       -
 Stock-based compensation   2,631          2,285             3,307
expense
 Interest income            364            589               577
 Adjusted EBITDA^7          $ 57,306      $     69,784  $  67,011
EBITDA^7 Reconciliation to
GAAP:
 EBITDA^7                   $ 54,311      $     66,910  $  38,808
 Cash paid for deferred     (9,915)        (10,431)          (5,681)
drydocking charges
 Cash paid for interest     (13,882)       (13,420)          (14,265)
 Cash paid for taxes        (937)          (1,218)           (553)
 Changes in working capital 4,633          (5,242)           (14,089)
 Stock-based compensation   2,631          2,285             3,307
expense
 Loss on early              -              -                 24,319
extinguishment of debt
 Changes in other, net      (137)          247               (141)
 Net cash provided by       $ 36,704      $     39,131  $  31,705
operating activities
DISCONTINUED OPERATIONS:
Revenues                     $    12    $           $  14,990
                                            433
Operating income             643            (207)             3,589
Operating margin             nmf           (47.8%)           23.9%
 Components of EBITDA^7
 Income from discontinued   $   412     $           $   2,231
operations                                  153
 Interest expense, net      -              -                 -
 Income tax expense         231            (360)             1,360
(benefit)
 Depreciation               29             58                2,114
 Amortization               -              -                 1,333
 EBITDA^7                   $   672     $            $   7,038
                                            (149)
 Adjustments to EBITDA
 Loss on early              $      -  $          $      -
extinguishment of debt                       -
 Stock-based compensation   -              -                 15
expense
 Interest income            -              -                 -
 Adjusted EBITDA^7          $   672     $            $   7,053
                                            (149)
EBITDA^7 Reconciliation to
GAAP:
 EBITDA^7                   $   672     $            $   7,038
                                            (149)
 Cash paid for deferred     -              -                 (1,753)
drydocking charges
 Cash paid for interest     -              -                 -
 Cash paid for taxes        -              -                 -
 Changes in working capital 809            (479)             1,534
 Stock-based compensation   -              -                 15
expense
 Loss on early              -              -                 -
extinguishment of debt
 Changes in other, net      (655)          -                 -
 Net cash provided by (used $   826     $            $   6,834
in) operating activities                    (628)



^

Hornbeck Offshore Services, Inc. and Subsidiaries
Unaudited Other Financial Data
Capital Expenditures and Drydock Downtime Data from
Continuing Operations (unaudited):
Historical Data:
                          Three Months Ended
                          March 31,  December   March
                                     31,        31,
                          2014       2013       2013
Drydock Downtime:
New-Generation OSVs
 Number of vessels
commencing drydock        12.0       3.0        2.0
activities
 Commercial downtime (in 281        84         58
days)
MPSVs
 Number of vessels
commencing drydock        1.0        1.0        -
activities
 Commercial downtime (in 9          44         -
days)
Commercial-related
Downtime^8:
200 class OSV retrofit
program
 Number of vessels
commencing retrofit       -          -          -
activities
 Commercial downtime (in -          114        180
days)
New-Generation OSVs
 Number of vessels
commencing                1.0        -          -
commercial-related
downtime
 Commercial downtime (in 83         92         -
days)
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                   9,915     10,431     5,681
 Other vessel capital    7,149      4,611      2,327
improvements
                          17,064     15,042     8,008
Other Capital
Expenditures:
 200 class OSV retrofit  122        10,416     4,234
program
 Commercial-related      7,385      12,194     65
vessel improvements
 Non-vessel related      556        434        479
capital expenditures
                          8,063      23,044     4,778
                          $ 25,127  $      $
                                     38,086     12,786
Growth Capital
Expenditures (in
thousands):
OSV newbuild program #5  $ 106,680  $       $
                                     113,075    82,575
Forecasted Data^9:
                          1Q 2014A   2Q 2014E   3Q 2014E  4Q     2014E  2015E
                                                          2014E
Drydock Downtime:
New-Generation OSVs
 Number of vessels
commencing drydock        12.0       4.0        3.0       2.0    21.0   16.0
activities
 Commercial downtime (in 281        203        76        50     610    435
days)
MPSVs
 Number of vessels
commencing drydock        1.0        -          1.0       -      2.0    2.0
activities
 Commercial downtime (in 9          -          8         -      17     63
days)
Commercial-related
Downtime^8:
New-Generation OSVs
 Number of vessels
commencing                1.0        -          1.0       -      2.0    -
commercial-related
downtime
 Commercial downtime (in 83         -          92        48     223    -
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                   9.9         22.1   6.1       5.0   43.1  37.4
 Other vessel capital    7.1        2.5        1.1       0.7    11.4   3.1
improvements
                          17.0       24.6       7.2       5.7    54.5   40.5
Other Capital
Expenditures:
 200 class OSV retrofit  0.1        -          -         -      0.1    -
program
 Commercial-related      7.4        9.0        5.8       16.1   38.3   -
vessel improvements
 Non-vessel related      0.6        1.2        1.7       3.1    6.6    4.0
capital expenditures
                          8.1        10.2       7.5       19.2   45.0   4.0
                          $        $      $       $     $      $
                          25.1        34.8   14.7     24.9  99.5  44.5
Growth Capital
Expenditures (in
millions):
 OSV newbuild program #5 $         $      $       $     $      $
                          106.7      131.2    75.0     77.8  390.7  117.1



^

Hornbeck Offshore Services, Inc. and Subsidiaries
Unaudited Other Fleet and Financial Data
(in millions, except Average Vessels, Contract Backlog and Tax Rate)
Forward Guidance of Selected Data from Continuing Operations (unaudited):
               2Q       2Q 2014E  Full-Year  2Q2014-4Q2014  Full-Year  Full-Year
               2014E              2014E                     2015E      2015E
               Avg      Contract  Avg        Contract       Avg        Contract
               Vessels  Backlog   Vessels    Backlog        Vessels    Backlog
Fleet Data (as
of
30-Apr-2014):
Upstream
 New
generation     29.0     100%      28.7       100%           17.0       97%
OSVs - Term^10
 New
generation     27.3     51%       29.9       20%            50.7       0%
OSVs - Spot^11
 New
generation     56.3     76%       58.6       60%            67.7       24%
OSVs - Total
 New
generation     4.0      100%      4.4        62%            5.3        6%
MPSVs
 Total     60.3               63.0                      73.0
Upstream
               2Q 2014E Range   Full-Year 2014E Range
Cost Data:     Low^12   High^12   Low^12     High^12
Operating   $     $      $      $      
expenses        68.0           295.0   310.0
                         73.0
 General and  $     $      $      $      
administrative  13.5                   61.0
expenses                 14.5    58.0
               1Q       2Q 2014E  3Q 2014E   4Q 2014E       2014E      2015E
               2014A
Other
Financial
Data:
               $     $      $      $        $      $    
 Depreciation  16.2                   20.1                  
                         17.1    18.7                      72.1       86.2
 Amortization 13.2     9.7       10.1       9.8            42.8       36.6
 Interest
expense, net:
 Interest     $     $      $      $        $      $    
expense         13.7                   13.7                  
                         13.7    13.7                      54.8       54.4
 Incremental
non-cash OID   2.3      2.3       2.4        2.4            9.4        9.9
interest
expense^13
 Capitalized  (8.7)    (7.9)     (6.3)      (5.2)          (28.1)     (13.4)
interest
 Interest     (0.4)    (0.2)     (0.1)      (0.1)          (0.8)      (1.0)
income
 Total        $     $      $      $        $      $    
interest         6.9                  10.8                  
expense, net              7.9   9.7                      35.3       49.9
 Income tax   37.2%    37.5%     37.5%      37.5%          37.5%      37.0%
rate
 Cash income  $     $      $      $        $      $    
taxes            0.9                   1.2                 
                          1.3   1.6                      5.0       12.9
 Cash
interest       13.9     11.4      13.9       11.4           50.6       50.6
expense
 Weighted
average        36.7     37.0      37.0       37.0           37.0       37.3
diluted shares
outstanding^14

^1  Represents other income and expenses, including equity in income from
    investments and foreign currency transaction gains or losses.
    For the three months ended March 31, 2014 and 2013 and the three months
    ended December 31, 2013, the Company had no anti-dilutive stock options.
    As of March 31, 2013, the 1.625% convertible senior notes retired in
    November 2013 were not dilutive, as the average price of the Company's
^2  stock was less than the effective conversion price of $62.59 for such
    notes. As of March 31, 2014, December 31, 2013, and March 31, 2013, 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.
    The Company owned 55 new generation OSVs as of March 31, 2014, and took
    delivery of one HOSMAX newbuild OSV in April 2014. Excluded from this
^3  data is one stacked conventional OSV that the Company considers to be a
    non-core asset. Also excluded from this data are four MPSVs owned and
    operated by the Company.
^4  Average utilization rates are average rates based on a 365-day year.
    Vessels are considered utilized when they are generating revenues.
    Average new generation OSV dayrates represent average revenue per day,
^5  which includes charter hire, crewing services, and net brokerage revenues,
    based on the number of days during the period that the OSVs generated
    revenues.
^6  Effective dayrate represents the average dayrate multiplied by the
    utilization rate for the respective period.
^7  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 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 also makes certain adjustments, as applicable, to
    EBITDA for losses on early extinguishment of debt, FAS 123R stock-based
    compensation expense and interest income, or Adjusted EBITDA, to compute
    ratios used in certain financial covenants of its credit agreements with
    various lenders and bond investors. The Company believes that these ratios
    are material components of such financial covenants and 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.
    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
^8  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.
^9  The capital expenditure amounts included in this table are cash outlays
    before the allocation of construction period interest, as applicable.
    As of April 30, 2014, the Company's active fleet of 31 new generation OSVs
^10 that were committed to "term" contracts (time charters of one year or
    longer in duration at inception) was comprised of the following fleet mix:
    eight 200 class OSVs, nineteen 240 class OSVs and four 300 class OSVs.
    As of April 30, 2014, the Company's active fleet of 25 new generation OSVs
    that were available for "spot" contracts (time charters of less than one
^11 year in duration at inception) or additional "term" contracts was
    comprised of the following fleet mix: five 200 class OSVs, twelve 240
    class OSVs, four 265 class OSVs and four 300 class OSVs.
    The "low" and "high" ends of the guidance ranges set forth in this table
^12 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.
    Represents incremental imputed non-cash OID interest expense required by
^13 accounting standards pertaining to the Company's 1.500% convertible senior
    notes due 2019. 
    Projected weighted-average diluted shares do not reflect any potential
    dilution resulting from the Company's 1.500% convertible senior notes.
^14 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

SOURCE Hornbeck Offshore Services, Inc.

Website: http://www.hornbeckoffshore.com
 
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