![]() | PRESSRELEASE www.HelixESG.com |
Helix Energy Solutions Group, Inc. | • | 3505 W. Sam Houston Parkway N., Suite 400 | • | Houston, TX 77043 | • | 281-618-0400 | • | fax: 281-618-0505 | |||||||||||||||||||||
For Immediate Release | 21-002 | ||||||||||||||||||||||||||||
Date: February 22, 2021 | Contact: | Erik Staffeldt | |||||||||||||||||||||||||||
Executive Vice President & CFO | |||||||||||||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
12/31/2020 | 12/31/2019 | 9/30/2020 | 12/31/2020 | 12/31/2019 | |||||||||||||||||||||||||
Revenues | $ | 159,897 | $ | 170,749 | $ | 193,490 | $ | 733,555 | $ | 751,909 | |||||||||||||||||||
Gross Profit | $ | 13,695 | $ | 26,576 | $ | 34,628 | $ | 79,909 | $ | 137,838 | |||||||||||||||||||
9 | % | 16 | % | 18 | % | 11 | % | 18 | % | ||||||||||||||||||||
Net Income1 | $ | 4,163 | $ | 8,052 | $ | 24,499 | $ | 22,174 | $ | 57,919 | |||||||||||||||||||
Diluted Earnings Per Share | $ | 0.03 | $ | 0.05 | $ | 0.16 | $ | 0.13 | $ | 0.38 | |||||||||||||||||||
Adjusted EBITDA2 | $ | 35,283 | $ | 33,277 | $ | 52,719 | $ | 155,260 | $ | 180,088 | |||||||||||||||||||
Cash and Cash Equivalents3 | $ | 291,320 | $ | 208,431 | $ | 259,334 | $ | 291,320 | $ | 208,431 | |||||||||||||||||||
Cash Flows from Operating Activities | $ | 40,172 | $ | 79,792 | $ | 52,586 | $ | 98,800 | $ | 169,669 |
Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
12/31/2020 | 12/31/2019 | 9/30/2020 | 12/31/2020 | 12/31/2019 | |||||||||||||||||||||||||
Revenues: | |||||||||||||||||||||||||||||
Well Intervention | $ | 111,953 | $ | 141,789 | $ | 140,803 | $ | 539,249 | $ | 593,300 | |||||||||||||||||||
Robotics | 42,122 | 35,276 | 49,802 | 178,018 | 171,672 | ||||||||||||||||||||||||
Production Facilities | 15,002 | 16,559 | 14,167 | 58,303 | 61,210 | ||||||||||||||||||||||||
Intercompany Eliminations | (9,180) | (22,875) | (11,282) | (42,015) | (74,273) | ||||||||||||||||||||||||
Total | $ | 159,897 | $ | 170,749 | $ | 193,490 | $ | 733,555 | $ | 751,909 | |||||||||||||||||||
Income (Loss) from Operations: | |||||||||||||||||||||||||||||
Well Intervention | $ | 1,945 | $ | 15,562 | $ | 18,844 | $ | 26,855 | $ | 89,564 | |||||||||||||||||||
Robotics | 1,815 | (660) | 6,982 | 13,755 | 7,261 | ||||||||||||||||||||||||
Production Facilities | 4,833 | 5,253 | 4,134 | 15,975 | 17,160 | ||||||||||||||||||||||||
Goodwill Impairment | — | — | — | (6,689) | — | ||||||||||||||||||||||||
Corporate / Other / Eliminations | (7,750) | (14,497) | (10,945) | (36,871) | (45,988) | ||||||||||||||||||||||||
Total | $ | 843 | $ | 5,658 | $ | 19,015 | $ | 13,025 | $ | 67,997 |
Well Intervention Well Intervention revenues decreased $28.9 million, or 20%, from the prior quarter. The decrease was primarily due to lower vessel utilization in the North Sea and the Gulf of Mexico. North Sea vessel utilization on the Well Enhancer declined with the seasonal slowdown, and the Seawell remained idle during the fourth quarter. The Q7000 entered the fourth quarter idle but subsequently commenced its mobilization back to Nigeria. Overall Well Intervention vessel utilization declined to 56% compared to 68% during the prior quarter. Well Intervention income from operations decreased $16.9 million, or 90%, compared to the prior quarter primarily due to lower revenues, offset in part by lower costs during the fourth quarter. Well Intervention revenues decreased $29.8 million, or 21%, in the fourth quarter 2020 compared to the fourth quarter 2019 due to lower utilization in the North Sea and the Gulf of Mexico and weaker foreign currency rates in Brazil, offset in part by higher rates in the Gulf of Mexico on the Q5000. Well Intervention vessel utilization decreased to 56% in the fourth quarter 2020 from 92% in the fourth quarter 2019. Income from operations decreased $13.6 million, or 88%, in the fourth quarter 2020 compared to the fourth quarter 2019 primarily due to lower revenues, offset in part by lower costs during the fourth quarter 2020. |
Robotics Robotics revenues decreased $7.7 million, or 15%, from the previous quarter primarily due to a decrease in vessel days associated with the completion of the site clearance project in the North Sea and a decrease in trenching activity and ROV utilization during the fourth quarter. Chartered vessel utilization was 100% during the fourth quarter compared to 95% during the previous quarter. However, total vessel days decreased to 336 days during the fourth quarter compared to 450 days during the previous quarter. ROV, trencher and ROVDrill utilization decreased to 32% during the fourth quarter compared to 37% during the previous quarter, and the fourth quarter included 92 days of trencher utilization compared to 154 days in the previous quarter, including 92 days on third-party vessels. Robotics income from operations decreased $5.2 million, or 74%, from the prior quarter primarily due to lower revenues. Robotics revenues increased $6.8 million, or 19%, compared to the fourth quarter 2019 primarily due to an increase in vessel days, which included chartered vessels on the renewables site clearance project in the North Sea, offset in part by a decrease in trenching and ROV activity during the fourth quarter 2020. Chartered vessel utilization was 100% in the fourth quarter 2020 compared to 73% in the fourth quarter 2019. There were 336 vessel days during the fourth quarter 2020, which included 74 days from the North Sea renewables site clearance project, compared to 210 vessel days during the fourth quarter 2019. ROV, trencher and ROVDrill utilization decreased to 32% in the fourth quarter 2020, which included 92 days of trencher utilization, compared to 41% in the same quarter 2019, which included 123 days of trencher utilization including 59 days on third-party vessels. Income from operations in the fourth quarter 2020 increased $2.5 million compared to the fourth quarter 2019 primarily due to higher revenues. |
Production Facilities Production Facilities revenues increased $0.8 million in the fourth quarter 2020 compared to the previous quarter due to higher oil and gas production revenues during the fourth quarter, and decreased $1.6 million compared to the fourth quarter 2019 due to lower revenues from the Helix Fast Response System, offset in part by higher production revenues during the fourth quarter 2020. The fourth quarter 2019 benefitted from approximately $2.0 million of residual revenue from our previous contract on the Helix Fast Response System that was linked to 2019 utilization of our Gulf of Mexico Well Intervention vessels by HWCG members. |
Selling, General and Administrative Selling, general and administrative expenses were $12.8 million, or 8.0% of revenue, in the fourth quarter 2020 compared to $16.1 million, or 8.3% of revenue, in the third quarter 2020. The decrease was primarily due to lower costs related to employee incentive compensation and other employee benefits compared to the third quarter. |
Gain on Extinguishment of Long-term Debt Helix recognized a $9.2 million gain on extinguishment of long-term debt associated with our repurchase of a portion of our convertible senior notes due 2022 and 2023 during the third quarter 2020. We had no extinguishments during the fourth quarter 2020. |
Other Income, net Other income, net decreased $0.4 million in the fourth quarter 2020 compared to the prior quarter. The change was primarily due to lower foreign currency gains in the fourth quarter. |
Cash Flows Operating cash flows were $40.2 million in the fourth quarter 2020 compared to $52.6 million in the third quarter 2020 and $79.8 million in the fourth quarter 2019. The decrease in operating cash flows quarter over quarter was primarily due to lower operating income offset by improvements in working capital compared to the prior quarter. The decrease year over year was primarily due to lower operating income and smaller improvements in working capital in the fourth quarter 2020 compared to the same quarter 2019. Capital expenditures totaled $1.1 million in the fourth quarter 2020 compared to $1.6 million in the previous quarter and $95.2 million in the fourth quarter 2019. Capital expenditures during the fourth quarter 2019 were primarily related to completion of the Q7000, which commenced operations during the first quarter 2020. Free cash flow was $39.1 million in the fourth quarter 2020 compared to $51.4 million in the third quarter 2020 and $(15.4) million in the fourth quarter 2019. The decrease quarter over quarter was primarily due to lower operating cash flows in the fourth quarter 2020 compared to the previous quarter. The increase year over year was primarily due to lower capital expenditures, offset in part by lower operating cash flows, during the fourth quarter 2020 compared to the fourth quarter 2019. (Free cash flow is a non-GAAP measure. See reconciliation below.) |
Well Intervention Well Intervention revenues decreased by $54.1 million, or 9%, in 2020 compared to 2019. The decrease was primarily driven by lower vessel utilization in the North Sea and Gulf of Mexico, lower IRS rental utilization and lower foreign currency rates in Brazil. The decrease in revenues was offset in part by revenues on the Q7000, which commenced operations offshore West Africa in January 2020. Vessel utilization in the North Sea and Gulf of Mexico were negatively impacted by the downturn in the offshore oil and gas market due to the COVID-19 pandemic, which resulted in our warm-stacking the Seawell and the Q7000, as well as scheduled regulatory certification inspections in the Gulf of Mexico during the first quarter 2020. Overall Well Intervention vessel utilization decreased to 67% in 2020 from 89% in 2019, and 2020 had 257 fewer utilized vessel days compared to 2019. Our 2019 Well Intervention revenues also included approximately $3.9 million of contractual adjustments related to increases in withholding taxes in Brazil. Well Intervention operating income decreased $62.7 million, or 70%, in 2020 compared to 2019 primarily due to lower revenues and higher operating expenses associated with the Q7000. |
Robotics Robotics revenues increased by $6.3 million, or 4%, in 2020 compared to 2019. The increase was due to improvements in chartered vessel utilization, offset in part by lower ROV, trencher and ROVDrill utilization. Chartered vessel utilization increased to 94%, which included 1,690 vessel days, in 2020 compared to 87%, which included 1,086 vessel days, in 2019. Vessel days associated with our renewables site clearance project in the North Sea Site totaled 647 days in 2020 compared to 29 days in 2019. ROV, trencher and ROVDrill utilization decreased to 34% in 2020 compared to 41% in 2019. We generated 407 days of trenching, including 161 days on third-party vessels, in 2020 compared to 729 days of trenching, including 245 days on third-party vessels, in 2019. Robotics operating income increased $6.5 million, or 89%, in 2020 compared to 2019. The improvement in operating income was due to higher revenues as well as a full year of cost reductions relating to certain vessels, including the termination of the Grand Canyon charter in November 2019 and the expirations of the hedge of the Grand Canyon II charter payments in July 2019 and the hedge of the Grand Canyon III charter payments in February 2020. |
Production Facilities Production Facilities revenues decreased $2.9 million, or 5%, in 2020 compared to 2019. The decrease was due to reduced revenues related to the Helix Fast Response System and a reduction in oil and gas production revenues in 2020. Production Facilities operating income decreased $1.2 million from the prior year primarily due to decreases in revenues in 2020. |
Selling, General and Administrative Selling, general and administrative expenses were $61.1 million, or 8.3% of revenue, in 2020 compared to $69.8 million, or 9.3% of revenue, in 2019. The decrease was primarily related to a decrease in employee compensation costs and other cost saving measures, offset in part by credit provisions of $2.7 million in 2020. |
Net Interest Expense Net interest expense increased to $28.5 million in 2020 from $8.3 million in 2019. The increase was primarily associated with lower capitalized interest in 2020 with the completion of the Q7000 in January 2020 and higher yields associated with the convertible senior notes due 2026 issued in August 2020. |
Gain on Extinguishment of Long-term Debt The $9.2 million gain on extinguishment of long-term debt in 2020 was associated with our repurchase of the convertible notes due 2022 and 2023. |
Other Income, net Other income, net increased $3.6 million in 2020 compared to 2019. The change was primarily due higher foreign currency gains in 2020 compared to 2019. |
Income Tax Provision (Benefit) Income tax benefit was $18.7 million in 2020 compared to income tax expense of $7.9 million in 2019. In addition to lower income before income taxes in 2020, Helix also recognized a $7.6 million net tax benefit in 2020 related to the Coronavirus Aid, Relief, and Economic Security Act and an $8.3 million benefit related to the restructuring of certain foreign subsidiaries during 2020. |
Cash Flows Helix generated operating cash flows of $98.8 million in 2020 compared to $169.7 million in 2019. The decrease in operating cash flows in 2020 was due to lower earnings and larger increases in working capital in 2020 compared to 2019. Capital expenditures declined to $20.2 million in 2020 compared to $140.9 million in 2019 primarily as a result of the completion of the Q7000 in early 2020. Free cash flow was $79.5 million in 2020 compared to $31.4 million in 2019 due to lower capital expenditures, offset in part by lower operating cash flows. (Free cash flow is a non-GAAP measure. See reconciliation below.) |
Cash and cash equivalents were $291.3 million and available capacity under our revolving credit facility was $160.2 million at December 31, 2020. Consolidated long-term debt decreased to $349.6 million at December 31, 2020 from $356.9 million at September 30, 2020. Consolidated net debt at December 31, 2020 was $58.2 million compared to $97.6 million at September 30, 2020. Net debt to book capitalization at December 31, 2020 was 3% compared to 5% at September 30, 2020. (Net debt and net debt to book capitalization are non-GAAP measures. See reconciliation below.) |
Comparative Condensed Consolidated Statements of Operations |
Three Months Ended Dec. 31, | Year Ended Dec. 31, | |||||||||||||||||||||||||
(in thousands, except per share data) | 2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||
(unaudited) | (unaudited) | |||||||||||||||||||||||||
Net revenues | $ | 159,897 | $ | 170,749 | $ | 733,555 | $ | 751,909 | ||||||||||||||||||
Cost of sales | 146,202 | 144,173 | 653,646 | 614,071 | ||||||||||||||||||||||
Gross profit | 13,695 | 26,576 | 79,909 | 137,838 | ||||||||||||||||||||||
Goodwill impairment | — | — | (6,689) | — | ||||||||||||||||||||||
Gain (loss) on disposition of assets, net | (24) | — | 889 | — | ||||||||||||||||||||||
Selling, general and administrative expenses | (12,828) | (20,918) | (61,084) | (69,841) | ||||||||||||||||||||||
Income from operations | 843 | 5,658 | 13,025 | 67,997 | ||||||||||||||||||||||
Equity in earnings of investment | 249 | 1,521 | 216 | 1,439 | ||||||||||||||||||||||
Net interest expense | (8,124) | (2,129) | (28,531) | (8,333) | ||||||||||||||||||||||
Gain (loss) on extinguishment of long-term debt | — | — | 9,239 | (18) | ||||||||||||||||||||||
Other income, net | 8,396 | 3,595 | 4,724 | 1,165 | ||||||||||||||||||||||
Royalty income and other | 184 | 409 | 2,710 | 3,306 | ||||||||||||||||||||||
Income before income taxes | 1,548 | 9,054 | 1,383 | 65,556 | ||||||||||||||||||||||
Income tax provision (benefit) | (2,569) | 1,120 | (18,701) | 7,859 | ||||||||||||||||||||||
Net income | 4,117 | 7,934 | 20,084 | 57,697 | ||||||||||||||||||||||
Net loss attributable to redeemable noncontrolling interests | (46) | (118) | (2,090) | (222) | ||||||||||||||||||||||
Net income attributable to common shareholders | $ | 4,163 | $ | 8,052 | $ | 22,174 | $ | 57,919 | ||||||||||||||||||
Earnings per share of common stock: | ||||||||||||||||||||||||||
Basic | $ | 0.03 | $ | 0.05 | $ | 0.13 | $ | 0.39 | ||||||||||||||||||
Diluted | $ | 0.03 | $ | 0.05 | $ | 0.13 | $ | 0.38 | ||||||||||||||||||
Weighted average common shares outstanding: | ||||||||||||||||||||||||||
Basic | 149,106 | 147,625 | 148,993 | 147,536 | ||||||||||||||||||||||
Diluted | 150,156 | 150,182 | 149,897 | 149,577 |
Comparative Condensed Consolidated Balance Sheets |
Dec. 31, 2020 | Dec. 31, 2019 | ||||||||||||||||
(in thousands) | (unaudited) | ||||||||||||||||
ASSETS | |||||||||||||||||
Current Assets: | |||||||||||||||||
Cash and equivalents (1) | $ | 291,320 | $ | 208,431 | |||||||||||||
Restricted cash (1) | — | 54,130 | |||||||||||||||
Accounts receivable, net | 132,233 | 125,457 | |||||||||||||||
Other current assets | 102,092 | 50,450 | |||||||||||||||
Total Current Assets | 525,645 | 438,468 | |||||||||||||||
Property and equipment, net | 1,782,964 | 1,872,637 | |||||||||||||||
Operating lease right-of-use assets | 149,656 | 201,118 | |||||||||||||||
Other assets, net | 40,013 | 84,508 | |||||||||||||||
Total Assets | $ | 2,498,278 | $ | 2,596,731 | |||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
Current Liabilities: | |||||||||||||||||
Accounts payable | $ | 50,022 | $ | 69,055 | |||||||||||||
Accrued liabilities | 87,035 | 62,389 | |||||||||||||||
Current maturities of long-term debt (1) | 90,651 | 99,731 | |||||||||||||||
Current operating lease liabilities | 51,599 | 53,785 | |||||||||||||||
Total Current Liabilities | 279,307 | 284,960 | |||||||||||||||
Long-term debt (1) | 258,912 | 306,122 | |||||||||||||||
Operating lease liabilities | 101,009 | 151,827 | |||||||||||||||
Deferred tax liabilities | 110,821 | 112,132 | |||||||||||||||
Other non-current liabilities | 3,878 | 38,644 | |||||||||||||||
Redeemable noncontrolling interests | 3,855 | 3,455 | |||||||||||||||
Shareholders' equity (1) | 1,740,496 | 1,699,591 | |||||||||||||||
Total Liabilities and Equity | $ | 2,498,278 | $ | 2,596,731 |
Three Months Ended | Year Ended | |||||||||||||||||||||||||||||||||||||||||||
(in thousands, unaudited) | 12/31/2020 | 12/31/2019 | 9/30/2020 | 12/31/2020 | 12/31/2019 | |||||||||||||||||||||||||||||||||||||||
Reconciliation from Net Income to Adjusted EBITDA: | ||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 4,117 | $ | 7,934 | $ | 24,445 | $ | 20,084 | $ | 57,697 | ||||||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
Income tax provision (benefit) | (2,569) | 1,120 | 5,232 | (18,701) | 7,859 | |||||||||||||||||||||||||||||||||||||||
Net interest expense | 8,124 | 2,129 | 7,598 | 28,531 | 8,333 | |||||||||||||||||||||||||||||||||||||||
(Gain) loss on extinguishment of long-term debt | — | — | (9,239) | (9,239) | 18 | |||||||||||||||||||||||||||||||||||||||
Other income, net | (8,396) | (3,595) | (8,824) | (4,724) | (1,165) | |||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 34,157 | 28,300 | 33,985 | 133,709 | 112,720 | |||||||||||||||||||||||||||||||||||||||
Goodwill impairment | — | — | — | 6,689 | — | |||||||||||||||||||||||||||||||||||||||
Non-cash gain on equity investment | (264) | (1,613) | — | (264) | (1,613) | |||||||||||||||||||||||||||||||||||||||
EBITDA | 35,169 | 34,275 | 53,197 | 156,085 | 183,849 | |||||||||||||||||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||||||||||||||
(Gain) loss on disposition of assets, net | 24 | — | (440) | (889) | — | |||||||||||||||||||||||||||||||||||||||
General provision (release) for current expected credit losses | 90 | — | (38) | 746 | — | |||||||||||||||||||||||||||||||||||||||
Realized losses from foreign exchange contracts not designated as hedging instruments | — | (998) | — | (682) | (3,761) | |||||||||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 35,283 | $ | 33,277 | $ | 52,719 | $ | 155,260 | $ | 180,088 | ||||||||||||||||||||||||||||||||||
Free Cash Flow: | ||||||||||||||||||||||||||||||||||||||||||||
Cash flows from operating activities | $ | 40,172 | $ | 79,792 | $ | 52,586 | $ | 98,800 | $ | 169,669 | ||||||||||||||||||||||||||||||||||
Less: Capital expenditures, net of proceeds from sale of assets | (1,026) | (95,218) | (1,174) | (19,281) | (138,304) | |||||||||||||||||||||||||||||||||||||||
Free cash flow | $ | 39,146 | $ | (15,426) | $ | 51,412 | $ | 79,519 | $ | 31,365 |