Delaware | 0-51582 | 56-2542838 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
9 Greenway Plaza, Suite 2200 Houston, Texas | 77046 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
99.1 | Press release issued by Hercules dated July 23, 2014. |
HERCULES OFFSHORE, INC. | |||
Date: July 23, 2014 | By: | /s/ Stephen M. Butz | |
Stephen M. Butz | |||
Executive Vice President and Chief Financial Officer |
No. | Description | ||
99.1 | Press release issued by Hercules dated July 23, 2014. |
June 30, 2014 | December 31, 2013 | |||||||
(Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash and Cash Equivalents | $ | 191,905 | $ | 198,406 | ||||
Accounts Receivable, Net | 198,275 | 220,139 | ||||||
Prepaids | 41,771 | 20,395 | ||||||
Current Deferred Tax Asset | 10,876 | 10,876 | ||||||
Other | 14,153 | 17,363 | ||||||
456,980 | 467,179 | |||||||
Property and Equipment, Net | 1,819,400 | 1,808,526 | ||||||
Other Assets, Net | 26,512 | 25,743 | ||||||
$ | 2,302,892 | $ | 2,301,448 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts Payable | $ | 87,584 | $ | 80,018 | ||||
Accrued Liabilities | 65,833 | 81,500 | ||||||
Interest Payable | 32,281 | 33,067 | ||||||
Insurance Notes Payable | — | 9,568 | ||||||
Other Current Liabilities | 30,431 | 35,735 | ||||||
216,129 | 239,888 | |||||||
Long-term Debt | 1,210,796 | 1,210,676 | ||||||
Deferred Income Taxes | 15,394 | 14,452 | ||||||
Other Liabilities | 7,012 | 12,732 | ||||||
Commitments and Contingencies | ||||||||
Stockholders' Equity | 853,561 | 823,700 | ||||||
$ | 2,302,892 | $ | 2,301,448 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Revenue | $ | 242,963 | $ | 211,456 | $ | 499,697 | $ | 397,651 | ||||||||
Costs and Expenses: | ||||||||||||||||
Operating Expenses | 126,725 | 118,857 | 267,477 | 232,811 | ||||||||||||
Depreciation and Amortization | 43,670 | 37,928 | 83,753 | 72,866 | ||||||||||||
General and Administrative | 22,519 | 21,421 | 40,746 | 40,537 | ||||||||||||
192,914 | 178,206 | 391,976 | 346,214 | |||||||||||||
Operating Income | 50,049 | 33,250 | 107,721 | 51,437 | ||||||||||||
Other Income (Expense): | ||||||||||||||||
Interest Expense | (26,069 | ) | (18,040 | ) | (48,970 | ) | (35,135 | ) | ||||||||
Loss on Extinguishment of Debt | (4,767 | ) | — | (19,925 | ) | — | ||||||||||
Gain on Equity Investment | — | 14,876 | — | 14,876 | ||||||||||||
Other, Net | 214 | (1,511 | ) | 364 | (1,315 | ) | ||||||||||
Income Before Income Taxes | 19,427 | 28,575 | 39,190 | 29,863 | ||||||||||||
Income Tax Benefit (Provision) | (12,781 | ) | (12,001 | ) | (12,628 | ) | 27,009 | |||||||||
Income from Continuing Operations | 6,646 | 16,574 | 26,562 | 56,872 | ||||||||||||
Loss from Discontinued Operations, Net of Taxes | — | (43,953 | ) | — | (49,089 | ) | ||||||||||
Net Income (Loss) | 6,646 | (27,379 | ) | 26,562 | 7,783 | |||||||||||
Loss attributable to Noncontrolling Interest | — | 18 | — | 18 | ||||||||||||
Net Income (Loss) attributable to Hercules Offshore, Inc. | $ | 6,646 | $ | (27,361 | ) | $ | 26,562 | $ | 7,801 | |||||||
Net Income (Loss) attributable to Hercules Offshore, Inc. Per share: | ||||||||||||||||
Basic: | ||||||||||||||||
Income from Continuing Operations | $ | 0.04 | $ | 0.10 | $ | 0.17 | $ | 0.36 | ||||||||
Loss from Discontinued Operations | — | (0.27 | ) | — | (0.31 | ) | ||||||||||
Net Income (Loss) | $ | 0.04 | $ | (0.17 | ) | $ | 0.17 | $ | 0.05 | |||||||
Diluted: | ||||||||||||||||
Income from Continuing Operations | $ | 0.04 | $ | 0.10 | $ | 0.16 | $ | 0.35 | ||||||||
Loss from Discontinued Operations | — | (0.27 | ) | — | (0.30 | ) | ||||||||||
Net Income (Loss) | $ | 0.04 | $ | (0.17 | ) | $ | 0.16 | $ | 0.05 | |||||||
Weighted Average Shares Outstanding: | ||||||||||||||||
Basic | 160,713 | 159,574 | 160,392 | 159,252 | ||||||||||||
Diluted | 161,795 | 161,442 | 161,839 | 161,283 |
Six Months Ended June 30, | ||||||||
2014 | 2013 | |||||||
Cash Flows from Operating Activities: | ||||||||
Net Income | $ | 26,562 | $ | 7,801 | ||||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | ||||||||
Depreciation and Amortization | 83,753 | 83,764 | ||||||
Stock-Based Compensation Expense | 4,771 | 5,169 | ||||||
Deferred Income Taxes | (5,213 | ) | (20,812 | ) | ||||
Gain on Equity Investment | — | (14,876 | ) | |||||
Provision for Doubtful Accounts Receivable | 5,088 | 356 | ||||||
(Gain) Loss on Disposal of Assets, Net | (17,003 | ) | 1,743 | |||||
Asset Impairment | — | 44,370 | ||||||
Other | 4,220 | 3,585 | ||||||
Net Change in Operating Assets and Liabilities | (37,208 | ) | (19,493 | ) | ||||
Net Cash Provided by Operating Activities | 64,970 | 91,607 | ||||||
Cash Flows from Investing Activities: | ||||||||
Acquisition of Assets, Net of Cash Acquired | — | (178,136 | ) | |||||
Capital Expenditures | (100,448 | ) | (80,699 | ) | ||||
Insurance Proceeds Received | 9,067 | — | ||||||
Proceeds from Sale of Assets, Net | 23,717 | 8,797 | ||||||
Net Cash Used in Investing Activities | (67,664 | ) | (250,038 | ) | ||||
Cash Flows from Financing Activities: | ||||||||
Long-term Debt Borrowings | 300,000 | — | ||||||
Redemption of 7.125% Senior Secured Notes | (300,000 | ) | — | |||||
Redemption of 3.375% Convertible Senior Notes | — | (61,274 | ) | |||||
Payment of Debt Issuance Costs | (3,914 | ) | — | |||||
Other | 107 | 1,170 | ||||||
Net Cash Used In Financing Activities | (3,807 | ) | (60,104 | ) | ||||
Net Decrease in Cash and Cash Equivalents | (6,501 | ) | (218,535 | ) | ||||
Cash and Cash Equivalents at Beginning of Period | 198,406 | 259,193 | ||||||
Cash and Cash Equivalents at End of Period | $ | 191,905 | $ | 40,658 |
HERCULES OFFSHORE, INC. AND SUBSIDIARIES SELECTED FINANCIAL AND OPERATING DATA (Dollars in thousands, except per day amounts) (Unaudited) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Domestic Offshore: | ||||||||||||||||
Number of rigs (as of end of period) | 26 | 29 | 26 | 29 | ||||||||||||
Revenue | $ | 140,383 | $ | 126,998 | $ | 283,648 | $ | 248,113 | ||||||||
Operating expenses | 63,538 | 65,559 | 136,338 | 125,310 | ||||||||||||
Depreciation and amortization expense | 17,978 | 19,636 | 35,349 | 39,480 | ||||||||||||
General and administrative expenses | 1,584 | 1,902 | 3,132 | 3,467 | ||||||||||||
Operating income | $ | 57,283 | $ | 39,901 | $ | 108,829 | $ | 79,856 | ||||||||
International Offshore: | ||||||||||||||||
Number of rigs (as of end of period) | 10 | 11 | 10 | 11 | ||||||||||||
Revenue | $ | 71,725 | $ | 48,753 | $ | 152,663 | $ | 80,527 | ||||||||
Operating expenses | 44,061 | 33,667 | 91,599 | 65,578 | ||||||||||||
Depreciation and amortization expense | 19,075 | 12,767 | 35,701 | 22,787 | ||||||||||||
General and administrative expenses | 1,864 | 5,652 | 3,996 | 7,664 | ||||||||||||
Operating income (loss) | $ | 6,725 | $ | (3,333 | ) | $ | 21,367 | $ | (15,502 | ) | ||||||
International Liftboats: | ||||||||||||||||
Number of liftboats (as of end of period) | 24 | 24 | 24 | 24 | ||||||||||||
Revenue | $ | 30,855 | $ | 35,705 | $ | 63,386 | $ | 69,011 | ||||||||
Operating expenses | 19,126 | 19,631 | 39,540 | 41,923 | ||||||||||||
Depreciation and amortization expense | 5,616 | 4,799 | 10,742 | 9,151 | ||||||||||||
General and administrative expenses | 6,826 | 1,338 | 8,253 | 2,848 | ||||||||||||
Operating income (loss) | $ | (713 | ) | $ | 9,937 | $ | 4,851 | $ | 15,089 | |||||||
Total Company: | ||||||||||||||||
Revenue | $ | 242,963 | $ | 211,456 | $ | 499,697 | $ | 397,651 | ||||||||
Operating expenses | 126,725 | 118,857 | 267,477 | 232,811 | ||||||||||||
Depreciation and amortization expense | 43,670 | 37,928 | 83,753 | 72,866 | ||||||||||||
General and administrative expenses | 22,519 | 21,421 | 40,746 | 40,537 | ||||||||||||
Operating income | 50,049 | 33,250 | 107,721 | 51,437 | ||||||||||||
Interest expense | (26,069 | ) | (18,040 | ) | (48,970 | ) | (35,135 | ) | ||||||||
Loss on extinguishment of debt | (4,767 | ) | — | (19,925 | ) | — | ||||||||||
Gain on equity investment | — | 14,876 | — | 14,876 | ||||||||||||
Other, net | 214 | (1,511 | ) | 364 | (1,315 | ) | ||||||||||
Income before income taxes | 19,427 | 28,575 | 39,190 | 29,863 | ||||||||||||
Income tax benefit (provision) | (12,781 | ) | (12,001 | ) | (12,628 | ) | 27,009 | |||||||||
Income from continuing operations | 6,646 | 16,574 | 26,562 | 56,872 | ||||||||||||
Loss from discontinued operations, net of taxes | — | (43,953 | ) | — | (49,089 | ) | ||||||||||
Net income (loss) | 6,646 | (27,379 | ) | 26,562 | 7,783 | |||||||||||
Loss attributable to noncontrolling interest | — | 18 | — | 18 | ||||||||||||
Net income (loss) attributable to Hercules Offshore, Inc. | $ | 6,646 | $ | (27,361 | ) | $ | 26,562 | $ | 7,801 |
HERCULES OFFSHORE, INC. AND SUBSIDIARIES SELECTED FINANCIAL AND OPERATING DATA - (Continued) (Dollars in thousands, except per day amounts) (Unaudited) | |||||||||||||||||
Three Months Ended June 30, 2014 | |||||||||||||||||
Operating Days | Available Days | Utilization (1) | Average Revenue per Day (2) | Average Operating Expense per Day (3) | |||||||||||||
Domestic Offshore | 1,297 | 1,638 | 79.2 | % | $ | 108,237 | $ | 38,790 | |||||||||
International Offshore | 455 | 728 | 62.5 | % | 157,637 | 60,523 | |||||||||||
International Liftboats | 1,277 | 2,093 | 61.0 | % | 24,162 | 9,138 | |||||||||||
Three Months Ended June 30, 2013 | |||||||||||||||||
Operating Days | Available Days | Utilization (1) | Average Revenue per Day (2) | Average Operating Expense per Day (3) | |||||||||||||
Domestic Offshore | 1,506 | 1,695 | 88.8 | % | $ | 84,328 | $ | 38,678 | |||||||||
International Offshore | 420 | 538 | 78.1 | % | 116,079 | 62,578 | |||||||||||
International Liftboats | 1,475 | 2,093 | 70.5 | % | 24,207 | 9,379 | |||||||||||
Six Months Ended June 30, 2014 | |||||||||||||||||
Operating Days | Available Days | Utilization (1) | Average Revenue per Day (2) | Average Operating Expense per Day (3) | |||||||||||||
Domestic Offshore | 2,641 | 3,258 | 81.1 | % | $ | 107,402 | $ | 41,847 | |||||||||
International Offshore | 1,050 | 1,403 | 74.8 | % | 145,393 | 65,288 | |||||||||||
International Liftboats | 2,476 | 4,163 | 59.5 | % | 25,600 | 9,498 | |||||||||||
Six Months Ended June 30, 2013 | |||||||||||||||||
Operating Days | Available Days | Utilization (1) | Average Revenue per Day (2) | Average Operating Expense per Day (3) | |||||||||||||
Domestic Offshore | 3,054 | 3,315 | 92.1 | % | $ | 81,242 | $ | 37,801 | |||||||||
International Offshore | 689 | 988 | 69.7 | % | 116,875 | 66,374 | |||||||||||
International Liftboats | 2,925 | 4,104 | 71.3 | % | 23,594 | 10,215 |
(1) | Utilization is defined as the total number of days our rigs or liftboats, as applicable, were under contract, known as operating days, in the period as a percentage of the total number of available days in the period. Days during which our rigs and liftboats were undergoing major refurbishments, upgrades or construction, and days during which our rigs and liftboats are cold stacked, are not counted as available days. Days during which our liftboats are in the shipyard undergoing drydocking or inspection are considered available days for the purposes of calculating utilization. |
(2) | Average revenue per rig or liftboat per day is defined as revenue earned by our rigs or liftboats, as applicable, in the period divided by the total number of operating days for our rigs or liftboats, as applicable, in the period. |
(3) | Average operating expense per rig or liftboat per day is defined as operating expenses, excluding depreciation and amortization, incurred by our rigs or liftboats, as applicable, in the period divided by the total number of available days in the period. We use available days to calculate average operating expense per rig or liftboat per day rather than operating days, which are used to calculate average revenue per rig or liftboat per day, because we incur operating expenses on our rigs and liftboats even when they are not under contract and earning a dayrate. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||||
Operating Income: | |||||||||||||||||||||||
GAAP Operating Income | $ | 50,049 | $ | 33,268 | $ | 107,721 | $ | 51,455 | |||||||||||||||
Adjustment | (17,879 | ) | (a) | — | (17,879 | ) | (a) | — | |||||||||||||||
Non-GAAP Operating Income | $ | 32,170 | $ | 33,268 | $ | 89,842 | $ | 51,455 | |||||||||||||||
Other Expense: | |||||||||||||||||||||||
GAAP Other Expense | $ | (30,622 | ) | $ | (4,675 | ) | $ | (68,531 | ) | $ | (21,574 | ) | |||||||||||
Adjustment | 4,767 | (b) | (14,876 | ) | (c) | 19,925 | (d) | (14,876 | ) | (c) | |||||||||||||
Non-GAAP Other Expense | $ | (25,855 | ) | $ | (19,551 | ) | $ | (48,606 | ) | $ | (36,450 | ) | |||||||||||
Benefit (Provision) for Income Taxes: | |||||||||||||||||||||||
GAAP Benefit (Provision) for Income Taxes | $ | (12,781 | ) | $ | (12,001 | ) | $ | (12,628 | ) | $ | 27,009 | ||||||||||||
Tax Adjustment | — | — | — | (37,729 | ) | (e) | |||||||||||||||||
Non-GAAP Provision for Income Taxes | $ | (12,781 | ) | $ | (12,001 | ) | $ | (12,628 | ) | $ | (10,720 | ) | |||||||||||
Income (Loss) from Continuing Operations attributable to Hercules Offshore, Inc.: | |||||||||||||||||||||||
GAAP Income from Continuing Operations | $ | 6,646 | $ | 16,592 | $ | 26,562 | $ | 56,890 | |||||||||||||||
Total Adjustment | (13,112 | ) | (14,876 | ) | 2,046 | (52,605 | ) | ||||||||||||||||
Non-GAAP Income (Loss) from Continuing Operations | $ | (6,466 | ) | $ | 1,716 | $ | 28,608 | $ | 4,285 | ||||||||||||||
Diluted Earnings (Loss) per Share: | |||||||||||||||||||||||
GAAP Diluted Earnings per Share | $ | 0.04 | $ | 0.10 | $ | 0.16 | $ | 0.35 | |||||||||||||||
Adjustment per Share | (0.08 | ) | (0.09 | ) | 0.02 | (0.32 | ) | ||||||||||||||||
Non-GAAP Diluted Earnings (Loss) per Share | $ | (0.04 | ) | $ | 0.01 | $ | 0.18 | $ | 0.03 |
(a) | This amount represents a $17.9 million gain on the sale of three cold-stacked drilling rigs. |
(b) | This amount represents a charge of $4.8 million related to retirement of the remaining portion of our 7.125% senior secured notes in April 2014. |
(c) | This amount represents a non-cash gain of $14.9 million related to the adjustment of our investment in Discovery Offshore to fair market value at the date our controlling interest was obtained. |
(d) | This amount represents a charge of $19.9 million related to retirement of our 7.125% senior secured notes and issuance of our 6.75% senior notes. |
(e) | This amount represents a tax benefit recognized of $37.7 million related to the change in characterization of the Seahawk acquisition for tax purposes from a purchase of assets to a reorganization. |