Minnesota (State or other jurisdiction of incorporation) | 001-32936 (Commission File Number) | 95-3409686 (IRS Employer Identification No.) |
3505 West Sam Houston Parkway North, Suite 400 Houston, Texas (Address of principal executive offices) | 77043 (Zip Code) | |
281-618-0400 (Registrant's telephone number, including area code) |
99.1 | Press Release of Helix Energy Solutions Group, Inc. dated April 19, 2016 reporting financial results for the first quarter of 2016. |
99.2 | First Quarter 2016 Conference Call Presentation. |
HELIX ENERGY SOLUTIONS GROUP, INC. | ||||
By: | /s/ Anthony Tripodo | |||
Anthony Tripodo | ||||
Executive Vice President and Chief Financial Officer |
99.1 | Press Release of Helix Energy Solutions Group, Inc. dated April 19, 2016 reporting financial results for the first quarter of 2016. |
99.2 | First Quarter 2016 Conference Call Presentation. |
![]() | PRESSRELEASE www.HelixESG.com |
For Immediate Release | 16-008 | ||
Date: April 19, 2016 | Contact: | Erik Staffeldt | |
Vice President - Finance & Accounting |
• | Impairment charges of $256.2 million associated with our Production Facilities assets |
• | Impairment charge of $205.2 million associated with the Helix 534 |
• | Impairment charge of $6.3 million associated with other Well Intervention assets |
• | Goodwill impairment charge of $16.4 million associated with Well Intervention business in the U.K. |
• | Unrealized losses of $19.0 million associated with ineffectiveness of our foreign currency derivative contracts |
Three Months Ended | |||||||||||
3/31/2016 | 3/31/2015 | 12/31/2015 | |||||||||
Revenues | $ | 91,039 | $ | 189,641 | $ | 157,683 | |||||
Gross Profit (Loss): | |||||||||||
Operating | $ | (16,930 | ) | $ | 34,947 | $ | 20,112 | ||||
-19 | % | 18 | % | 13 | % | ||||||
Asset Impairments | — | — | (345,010 | ) | |||||||
Total | $ | (16,930 | ) | $ | 34,947 | $ | (324,898 | ) | |||
Goodwill Impairment | $ | — | $ | — | $ | (16,399 | ) | ||||
Non-cash Losses on Equity Investments | $ | — | $ | — | $ | (122,765 | ) | ||||
Net Income (Loss) | $ | (27,823 | ) | $ | 19,642 | $ | (403,867 | ) | |||
Diluted Earnings (Loss) Per Share | $ | (0.26 | ) | $ | 0.19 | $ | (3.83 | ) | |||
Adjusted EBITDA 1 | $ | 1,022 | $ | 51,364 | $ | 34,186 |
Three Months Ended | |||||||||||
3/31/2016 | 3/31/2015 | 12/31/2015 | |||||||||
Revenues: | |||||||||||
Well Intervention | $ | 46,056 | $ | 104,051 | $ | 88,680 | |||||
Robotics | 31,994 | 80,171 | 62,444 | ||||||||
Production Facilities | 18,482 | 18,385 | 18,137 | ||||||||
Intercompany Eliminations | (5,493 | ) | (12,966 | ) | (11,578 | ) | |||||
Total | $ | 91,039 | $ | 189,641 | $ | 157,683 | |||||
Income (Loss) from Operations: | |||||||||||
Well Intervention | $ | (16,688 | ) | $ | 14,794 | $ | 8,433 | ||||
Robotics | (12,750 | ) | 9,457 | (257 | ) | ||||||
Production Facilities | 7,183 | 4,578 | 6,626 | ||||||||
Non-cash Impairment Charges | — | — | (361,409 | ) | |||||||
Corporate / Other | (8,669 | ) | (6,607 | ) | (9,285 | ) | |||||
Intercompany Eliminations | 168 | 106 | 158 | ||||||||
Total | $ | (30,756 | ) | $ | 22,328 | $ | (355,734 | ) |
| Well Intervention revenues decreased 48% in the first quarter of 2016 as compared to revenues in the fourth quarter of 2015. Overall Well Intervention vessel utilization in the first quarter of 2016 decreased to 23% from 47% in the fourth quarter of 2015. The Q4000 utilization was 100% in the first quarter of 2016 compared to 98% in the fourth quarter of 2015. The Q5000 was idle in the first quarter of 2016 compared to utilization of 78% in the fourth quarter of 2015 after entering service in late October. In the North Sea, the Well Enhancer utilization decreased to 13% in the first quarter from 67% in the fourth quarter. The Skandi Constructor and Seawell were idle the entire quarter and both vessels remain warm stacked. The two intervention riser systems currently in the rental market completed their contracts during the first quarter of 2016. Utilization of these systems for the quarter decreased to 60% compared to 100% in the fourth quarter of 2015. |
| Robotics revenues decreased 49% in the first quarter of 2016 compared to the fourth quarter of 2015. Chartered vessel utilization decreased to 52% in the first quarter of 2016 from 58% in the fourth quarter of 2015 and ROV asset utilization decreased to 39% in the first quarter of 2016 from 48% in the fourth quarter of 2015. The decrease in revenue and gross profit was due to lower asset utilization, driven by the seasonal slow-down in the North Sea and the generally weak industry conditions. |
| Selling, general and administrative expenses were $13.8 million, 15.2% of revenue, in the first quarter of 2016 compared to $14.5 million, 9.2% of revenue, in the fourth quarter of 2015. |
| Net interest expense increased to $10.7 million in the first quarter of 2016 from $8.9 million in the fourth quarter of 2015. We recorded a $2.5 million charge to interest expense to accelerate a pro-rata portion of the deferred financing costs associated with the reduction of revolver capacity. |
| Other income was a benefit of $1.9 million in the first quarter of 2016 compared to an expense of $18.1 million in the fourth quarter of 2015. The income in the quarter was driven by the settlement and revaluations associated with our foreign currency derivative contracts. The expense in the fourth quarter of 2015 primarily reflects unrealized losses associated with ineffectiveness of our foreign currency derivative contracts. |
| Our total liquidity at March 31, 2016 was approximately $635 million, consisting of $488 million in cash and cash equivalents and $147 million in available capacity under our revolver. Consolidated net debt at March 31, 2016 was $244 million. Consolidated gross funded debt decreased to $757 million in the first quarter of 2016 compared to $776 million in the fourth quarter of 2015. Net debt to book capitalization at March 31, 2016 was 16%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation below.) |
| We incurred capital expenditures (including capitalized interest) totaling $21 million in the first quarter of 2016 compared to $42 million in the fourth quarter of 2015 and $58 million in the first quarter of 2015. |
Comparative Condensed Consolidated Statements of Operations |
Three Months Ended Mar. 31, | ||||||||
(in thousands, except per share data) | 2016 | 2015 | ||||||
(unaudited) | ||||||||
Net revenues | $ | 91,039 | $ | 189,641 | ||||
Cost of sales | 107,969 | 154,694 | ||||||
Gross profit (loss) | (16,930 | ) | 34,947 | |||||
Selling, general and administrative expenses | (13,826 | ) | (12,619 | ) | ||||
Income (loss) from operations | (30,756 | ) | 22,328 | |||||
Equity in earnings (losses) of investments | (123 | ) | 21 | |||||
Net interest expense | (10,684 | ) | (4,070 | ) | ||||
Other income (expense), net | 1,880 | (1,156 | ) | |||||
Other income - oil and gas | 2,572 | 2,926 | ||||||
Income (loss) before income taxes | (37,111 | ) | 20,049 | |||||
Income tax provision (benefit) | (9,288 | ) | 407 | |||||
Net income (loss) | $ | (27,823 | ) | $ | 19,642 | |||
Earnings (loss) per share of common stock: | ||||||||
Basic | $ | (0.26 | ) | $ | 0.19 | |||
Diluted | $ | (0.26 | ) | $ | 0.19 | |||
Weighted average common shares outstanding: | ||||||||
Basic | 105,908 | 105,290 | ||||||
Diluted | 105,908 | 105,290 |
Comparative Condensed Consolidated Balance Sheets |
ASSETS | LIABILITIES & SHAREHOLDERS' EQUITY | |||||||||||||||||
(in thousands) | Mar. 31, 2016 | Dec. 31, 2015 | (in thousands) | Mar. 31, 2016 | Dec. 31, 2015 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||
Current Assets: | Current Liabilities: | |||||||||||||||||
Cash and cash equivalents (1) | $ | 488,184 | $ | 494,192 | Accounts payable | $ | 41,369 | $ | 65,370 | |||||||||
Accounts receivable, net | 64,441 | 96,752 | Accrued liabilities | 67,265 | 71,641 | |||||||||||||
Current deferred tax assets | 53,027 | 53,573 | Income tax payable | 369 | 2,261 | |||||||||||||
Other current assets | 41,594 | 39,518 | Current maturities of long-term debt (1) | 71,786 | 71,640 | |||||||||||||
Total Current Assets | 647,246 | 684,035 | Total Current Liabilities | 180,789 | 210,912 | |||||||||||||
Property & equipment, net | 1,586,871 | 1,603,009 | Long-term debt (1) | 659,948 | 677,695 | |||||||||||||
Equity investments | — | 26,200 | Deferred tax liabilities | 174,064 | 180,974 | |||||||||||||
Goodwill | 45,107 | 45,107 | Other non-current liabilities | 49,845 | 51,415 | |||||||||||||
Other assets, net | 35,163 | 41,608 | Shareholders' equity (1) | 1,249,741 | 1,278,963 | |||||||||||||
Total Assets | $ | 2,314,387 | $ | 2,399,959 | Total Liabilities & Equity | $ | 2,314,387 | $ | 2,399,959 |
(1) | Net debt to book capitalization - 16% at March 31, 2016. Calculated as net debt (total long-term debt less cash and cash equivalents - $243,550) divided by the sum of net debt and shareholders' equity ($1,493,291). |
Earnings Release: | ||||||||||||||
Reconciliation from Net Income (Loss) to Adjusted EBITDA: | ||||||||||||||
Three Months Ended | ||||||||||||||
3/31/2016 | 3/31/2015 | 12/31/2015 | ||||||||||||
(in thousands) | ||||||||||||||
Net income (loss) | $ | (27,823 | ) | $ | 19,642 | $ | (403,867 | ) | ||||||
Adjustments: | ||||||||||||||
Income tax provision (benefit) | (9,288 | ) | 407 | (102,305 | ) | |||||||||
Net interest expense | 10,684 | 4,070 | 8,896 | |||||||||||
Other (income) expense, net | (1,880 | ) | 1,156 | 18,113 | ||||||||||
Depreciation and amortization | 31,565 | 26,089 | 34,068 | |||||||||||
Asset impairments | — | — | 345,010 | |||||||||||
Goodwill impairment | — | — | 16,399 | |||||||||||
Non-cash losses on equity investments | — | — | 122,765 | |||||||||||
EBITDA | 3,258 | 51,364 | 39,079 | |||||||||||
Adjustments: | ||||||||||||||
Gain on disposition of assets, net | — | — | (92 | ) | ||||||||||
Realized losses from cash settlements of ineffective foreign currency exchange contracts | (2,236 | ) | — | (4,801 | ) | |||||||||
Adjusted EBITDA | $ | 1,022 | $ | 51,364 | $ | 34,186 |
Earnings Release: | ||||||
Reconciliation of Significant Charges: | ||||||
Three Months Ended | ||||||
12/31/2015 | ||||||
(in thousands, except per share data) | ||||||
Impairments and other non-cash charges: | ||||||
Production Facilities asset impairments | $ | 256,198 | ||||
Helix 534 impairment | 205,238 | |||||
Other Well Intervention asset impairments | 6,339 | |||||
Goodwill impairment | 16,399 | |||||
Unrealized losses associated with ineffectiveness of our foreign currency derivative contracts | 18,957 | |||||
Tax benefit associated with the above | (104,624 | ) | ||||
Impairments and other charges, net | $ | 398,507 | ||||
Diluted shares | 105,574 | |||||
Net after income tax effect per share | $ | 3.77 |
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