Helix Reports First Quarter 2024 Results
- Helix reported a net loss of $26.3 million in the first quarter of 2024, compared to a net loss of $28.3 million in the fourth quarter of 2023.
- Adjusted EBITDA for the first quarter of 2024 was $47.0 million, lower than the $70.6 million reported in the fourth quarter of 2023.
- Revenues for the first quarter of 2024 were $296.2 million, showing an improvement from $250.1 million in the first quarter of 2023.
- The company retired its Convertible Senior Notes due 2026, resulting in pre-tax losses of approximately $20.9 million in the first quarter of 2024.
- Helix settled the Alliance earn-out in early April, meeting significant near-term cash obligations.
- The first quarter results showed higher revenue, EBITDA, and Free Cash Flow year over year, despite challenges in the Shallow Water Abandonment segment.
- The net loss in the first quarter of 2024 was higher compared to the same period in 2023.
- Adjusted EBITDA decreased from the previous quarter, indicating some financial challenges.
- Revenues declined from the fourth quarter of 2023, impacting the overall financial performance.
- The retirement of the Convertible Senior Notes led to pre-tax losses, affecting the company's financials.
- Lower activity levels in the Shallow Water Abandonment segment contributed to revenue declines.
Insights
Helix Energy Solutions Group, Inc.'s report of a net loss of
More indicative of Helix’s operational health is the Adjusted EBITDA, which stands at
Given these mixed results, stakeholders should weigh the strategic retirement of debt and its implications for future interest expense savings against the observed widening net loss. The company's shift away from convertible notes to a traditional capital structure could be seen as a move toward stability and a focus on executing its Energy Transition strategy.
The specific segments within Helix's operations provide a nuanced view into the company's market positioning. The Well Intervention segment, showing a 90% vessel utilization rate, reflects a robust demand for Helix's services, despite the transitory decrease in operating income. Particularly, the high utilization rates of vessels such as the Q7000 and the Seawell are indicative of strong market demand for well intervention services, a pivotal aspect of Helix's business.
On the other hand, the Robotics segment’s slight increase in year-over-year revenue is encouraging but offset by a seasonal downturn from the prior quarter. This exemplifies the cyclical nature of certain subsectors within the energy industry. For investors, Robotics represents both an opportunity and a risk, contingent upon market cycles and the company's ability to optimize utilization rates.
The Shallow Water Abandonment segment faced a stark revenue decrease, painting a less favorable picture due to lower market activity in the Gulf of Mexico. This volatility reflects the inherent challenges of this market segment, potentially indicating the need for Helix to diversify or stabilize its income streams in this area.
Helix reported adjusted EBITDA1 of
Summary of Results ($ in thousands, except per share amounts, unaudited) |
|||||||||||
| Three Months Ended | |||||||||||
| 3/31/2024 | 3/31/2023 | 12/31/2023 | |||||||||
| Revenues | $ |
296,211 |
|
$ |
250,084 |
|
$ |
335,157 |
|
||
| Gross Profit | $ |
19,554 |
|
$ |
15,184 |
|
$ |
49,278 |
|
||
|
7% |
|
6% |
|
15% |
||||||
| Net Loss | $ |
(26,287 |
) |
$ |
(5,165 |
) |
$ |
(28,333 |
) |
||
| Basic Loss Per Share | $ |
(0.17 |
) |
$ |
(0.03 |
) |
$ |
(0.19 |
) |
||
| Diluted Loss Per Share | $ |
(0.17 |
) |
$ |
(0.03 |
) |
$ |
(0.19 |
) |
||
| Adjusted EBITDA1 | $ |
46,990 |
|
$ |
35,094 |
|
$ |
70,632 |
|
||
| Cash and Cash Equivalents2 | $ |
323,849 |
|
$ |
166,674 |
|
$ |
332,191 |
|
||
| Net Debt1 | $ |
(5,685 |
) |
$ |
91,278 |
|
$ |
29,531 |
|
||
| Cash Flows from Operating Activities | $ |
64,484 |
|
$ |
(5,392 |
) |
$ |
94,737 |
|
||
| Free Cash Flow1 | $ |
61,242 |
|
$ |
(11,692 |
) |
$ |
91,878 |
|
||
1 Adjusted EBITDA, Net Debt and Free Cash Flow are non-GAAP measures; see reconciliations below |
2 Excludes restricted cash of |
Owen Kratz, President and Chief Executive Officer of Helix, stated, “We are pleased with our first quarter 2024 results, which reflect high utilization in Well Intervention, good seasonal performance in Robotics and the commencement of operations on the Q7000 offshore
Segment Information, Operational and Financial Highlights ($ in thousands, unaudited) |
|||||||||||
| Three Months Ended | |||||||||||
| 3/31/2024 | 3/31/2023 | 12/31/2023 | |||||||||
| Revenues: | |||||||||||
| Well Intervention | $ |
216,459 |
|
$ |
142,438 |
|
$ |
210,735 |
|
||
| Robotics |
|
50,309 |
|
|
49,222 |
|
|
62,957 |
|
||
| Shallow Water Abandonment |
|
26,853 |
|
|
49,381 |
|
|
61,995 |
|
||
| Production Facilities |
|
24,152 |
|
|
20,905 |
|
|
19,383 |
|
||
| Intercompany Eliminations |
|
(21,562 |
) |
|
(11,862 |
) |
|
(19,913 |
) |
||
| Total | $ |
296,211 |
|
$ |
250,084 |
|
$ |
335,157 |
|
||
| Income (Loss) from Operations: | |||||||||||
| Well Intervention | $ |
18,679 |
|
$ |
(8,143 |
) |
$ |
21,041 |
|
||
| Robotics |
|
5,450 |
|
|
5,094 |
|
|
9,224 |
|
||
| Shallow Water Abandonment |
|
(12,428 |
) |
|
6,822 |
|
|
12,032 |
|
||
| Production Facilities |
|
(1,543 |
) |
|
5,157 |
|
|
(985 |
) |
||
| Change in Fair Value of Contingent Consideration |
|
- |
|
|
(3,992 |
) |
|
(10,927 |
) |
||
| Corporate / Other / Eliminations |
|
(11,434 |
) |
|
(13,241 |
) |
|
(15,005 |
) |
||
| Total | $ |
(1,276 |
) |
$ |
(8,303 |
) |
$ |
15,380 |
|
||
Segment Results
Well Intervention
Well Intervention revenues increased
Well Intervention revenues increased
Robotics
Robotics revenues decreased
Robotics revenues increased
Shallow Water Abandonment
Shallow Water Abandonment revenues decreased
Shallow Water Abandonment revenues decreased
Production Facilities
Production Facilities revenues increased
Production Facilities revenues increased
Selling, General and Administrative and Other
Share Repurchases
Share repurchases totaled approximately 0.5 million shares for
Selling, General and Administrative
Selling, general and administrative expenses were
Losses Related to Convertible Senior Notes
The loss of
Other Income and Expenses
Other expense, net was
Cash Flows
Operating cash flows were
Capital expenditures, which are included in investing cash flows, totaled
Free Cash Flow was
During the first quarter 2024, Helix retired the remaining approximate
Financial Condition and Liquidity
Cash and cash equivalents were
Conference Call Information
Further details are provided in the presentation for Helix’s quarterly teleconference to review its first quarter 2024 results (see the "For the Investor" page of Helix's website, www.helixesg.com). The teleconference, scheduled for Thursday, April 25, 2024, at 9:00 a.m. Central Time, will be audio webcast live from the "For the Investor" page of Helix’s website. Investors and other interested parties wishing to participate in the teleconference may join by dialing 1-800-715-9871 for participants in
About Helix
Helix Energy Solutions Group, Inc., headquartered in
Non-GAAP Financial Measures
Management evaluates operating performance and financial condition using certain non-GAAP measures, primarily EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt. We define EBITDA as earnings before income taxes, net interest expense, net other income or expense, and depreciation and amortization expense. Non-cash impairment losses on goodwill and other long-lived assets are also added back if applicable. To arrive at our measure of Adjusted EBITDA, we exclude gains or losses on disposition of assets, acquisition and integration costs, gains or losses related to convertible senior notes, the change in fair value of contingent consideration, and the general provision (release) for current expected credit losses, if any. We define Free Cash Flow as cash flows from operating activities less capital expenditures, net of proceeds from asset sales and insurance recoveries (related to property and equipment), if any. Net Debt is calculated as long-term debt including current maturities of long-term debt less cash and cash equivalents and restricted cash.
We use EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt to monitor and facilitate internal evaluation of the performance of our business operations, to facilitate external comparison of our business results to those of others in our industry, to analyze and evaluate financial and strategic planning decisions regarding future investments and acquisitions, to plan and evaluate operating budgets, and in certain cases, to report our results to the holders of our debt as required by our debt covenants. We believe that our measures of EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt provide useful information to the public regarding our operating performance and ability to service debt and fund capital expenditures and may help our investors understand and compare our results to other companies that have different financing, capital and tax structures. Other companies may calculate their measures of EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt differently from the way we do, which may limit their usefulness as comparative measures. EBITDA, Adjusted EBITDA, Free Cash Flow and Net Debt should not be considered in isolation or as a substitute for, but instead are supplemental to, income from operations, net income, cash flows from operating activities, or other income or cash flow data prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions that are excluded from these measures. See reconciliation of the non-GAAP financial information presented in this press release to the most directly comparable financial information presented in accordance with GAAP. We have not provided reconciliations of forward-looking non-GAAP financial measures to comparable GAAP measures due to the challenges and impracticability with estimating some of the items without unreasonable effort, which amounts could be significant.
Forward-Looking Statements
This press release contains forward-looking statements that involve risks, uncertainties and assumptions that could cause our results to differ materially from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any statements regarding: our plans, strategies and objectives for future operations; any projections of financial items including projections as to guidance and other outlook information; future operations expenditures; our ability to enter into, renew and/or perform commercial contracts; the spot market; our current work continuing; visibility and future utilization; our protocols and plans; energy transition or energy security; our spending and cost management efforts and our ability to manage changes; oil price volatility and its effects and results; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions, including the integration of the Alliance acquisition and any subsequently identified legacy issues with respect thereto; developments; any financing transactions or arrangements or our ability to enter into such transactions or arrangements; our sustainability initiatives; future economic conditions or performance; our share repurchase program or execution; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. Forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that could cause results to differ materially from those in the forward-looking statements, including but not limited to market conditions and the demand for our services; volatility of oil and natural gas prices; results from acquired properties; our ability to secure and realize backlog; the performance of contracts by customers, suppliers and other counterparties; actions by governmental and regulatory authorities; operating hazards and delays, which include delays in delivery, chartering or customer acceptance of assets or terms of their acceptance; the effectiveness of our sustainability initiatives and disclosures; human capital management issues; complexities of global political and economic developments; geologic risks; and other risks described from time to time in our filings with the Securities and Exchange Commission ("SEC"), including our most recently filed Annual Report on Form 10-K, which are available free of charge on the SEC's website at www.sec.gov. We assume no obligation and do not intend to update these forward-looking statements, which speak only as of their respective dates, except as required by law.
| HELIX ENERGY SOLUTIONS GROUP, INC. | ||||||||
| Comparative Condensed Consolidated Statements of Operations | ||||||||
| Three Months Ended Mar. 31, | ||||||||
| (in thousands, except per share data) |
|
2024 |
|
|
2023 |
|
||
| (unaudited) | ||||||||
| Net revenues | $ |
296,211 |
|
$ |
250,084 |
|
||
| Cost of sales |
|
276,657 |
|
|
234,900 |
|
||
| Gross profit |
|
19,554 |
|
|
15,184 |
|
||
| Gain (loss) on disposition of assets, net |
|
(150 |
) |
|
367 |
|
||
| Acquisition and integration costs |
|
- |
|
|
(231 |
) |
||
| Change in fair value of contingent consideration |
|
- |
|
|
(3,992 |
) |
||
| Selling, general and administrative expenses |
|
(20,680 |
) |
|
(19,631 |
) |
||
| Loss from operations |
|
(1,276 |
) |
|
(8,303 |
) |
||
| Net interest expense |
|
(5,477 |
) |
|
(4,187 |
) |
||
| Losses related to convertible senior notes |
|
(20,922 |
) |
|
- |
|
||
| Other income (expense), net |
|
(2,216 |
) |
|
3,444 |
|
||
| Royalty income and other |
|
1,906 |
|
|
1,863 |
|
||
| Loss before income taxes |
|
(27,985 |
) |
|
(7,183 |
) |
||
| Income tax benefit |
|
(1,698 |
) |
|
(2,018 |
) |
||
| Net loss | $ |
(26,287 |
) |
$ |
(5,165 |
) |
||
| Loss per share of common stock: | ||||||||
| Basic | $ |
(0.17 |
) |
$ |
(0.03 |
) |
||
| Diluted | $ |
(0.17 |
) |
$ |
(0.03 |
) |
||
| Weighted average common shares outstanding: | ||||||||
| Basic |
|
152,369 |
|
|
151,764 |
|
||
| Diluted |
|
152,369 |
|
|
151,764 |
|
||
| Comparative Condensed Consolidated Balance Sheets | ||||||||
| Mar. 31, 2024 | Dec. 31, 2023 | |||||||
| (in thousands) | (unaudited) | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ |
323,849 |
|
$ |
332,191 |
|
||
| Restricted cash |
|
- |
|
|
- |
|
||
| Accounts receivable, net |
|
219,844 |
|
|
280,427 |
|
||
| Other current assets |
|
62,064 |
|
|
85,223 |
|
||
| Total Current Assets |
|
605,757 |
|
|
697,841 |
|
||
| Property and equipment, net |
|
1,529,635 |
|
|
1,572,849 |
|
||
| Operating lease right-of-use assets |
|
358,285 |
|
|
169,233 |
|
||
| Deferred recertification and dry dock costs, net |
|
73,091 |
|
|
71,290 |
|
||
| Other assets, net |
|
47,046 |
|
|
44,823 |
|
||
| Total Assets | $ |
2,613,814 |
|
$ |
2,556,036 |
|
||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ |
120,375 |
|
$ |
134,552 |
|
||
| Accrued liabilities |
|
163,797 |
|
|
203,112 |
|
||
| Current maturities of long-term debt |
|
8,965 |
|
|
48,292 |
|
||
| Current operating lease liabilities |
|
54,892 |
|
|
62,662 |
|
||
| Total Current Liabilities |
|
348,029 |
|
|
448,618 |
|
||
| Long-term debt |
|
309,199 |
|
|
313,430 |
|
||
| Operating lease liabilities |
|
314,351 |
|
|
116,185 |
|
||
| Deferred tax liabilities |
|
109,981 |
|
|
110,555 |
|
||
| Other non-current liabilities |
|
65,432 |
|
|
66,248 |
|
||
| Shareholders' equity |
|
1,466,822 |
|
|
1,501,000 |
|
||
| Total Liabilities and Equity | $ |
2,613,814 |
|
$ |
2,556,036 |
|
||
| Helix Energy Solutions Group, Inc. | |||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||
| Three Months Ended | |||||||||||||
| (in thousands, unaudited) | 3/31/2024 | 3/31/2023 | 12/31/2023 | ||||||||||
| Reconciliation from Net Loss to Adjusted EBITDA: | |||||||||||||
| Net loss | $ |
(26,287 |
) |
$ |
(5,165 |
) |
$ |
(28,333 |
) |
||||
| Adjustments: | |||||||||||||
| Income tax provision (benefit) |
|
(1,698 |
) |
|
(2,018 |
) |
|
8,721 |
|
||||
| Net interest expense |
|
5,477 |
|
|
4,187 |
|
|
4,771 |
|
||||
| Other (income) expense, net |
|
2,216 |
|
|
(3,444 |
) |
|
(6,963 |
) |
||||
| Depreciation and amortization |
|
46,353 |
|
|
37,537 |
|
|
44,103 |
|
||||
| EBITDA |
|
26,061 |
|
|
31,097 |
|
|
22,299 |
|
||||
| Adjustments: | |||||||||||||
| (Gain) loss on disposition of assets, net |
|
150 |
|
|
(367 |
) |
|
- |
|
||||
| Acquisition and integration costs |
|
- |
|
|
231 |
|
|
- |
|
||||
| Change in fair value of contingent consideration |
|
- |
|
|
3,992 |
|
|
10,927 |
|
||||
| General provision (release) for current expected credit losses |
|
(143 |
) |
|
141 |
|
|
129 |
|
||||
| Losses related to convertible senior notes |
|
20,922 |
|
|
- |
|
|
37,277 |
|
||||
| Adjusted EBITDA | $ |
46,990 |
|
$ |
35,094 |
|
$ |
70,632 |
|
||||
| Free Cash Flow: | |||||||||||||
| Cash flows from operating activities | $ |
64,484 |
|
$ |
(5,392 |
) |
$ |
94,737 |
|
||||
| Less: Capital expenditures, net of proceeds from asset sales and insurance recoveries |
|
(3,242 |
) |
|
(6,300 |
) |
|
(2,859 |
) |
||||
| Free Cash Flow | $ |
61,242 |
|
$ |
(11,692 |
) |
$ |
91,878 |
|
||||
| Net Debt: | |||||||||||||
| Long-term debt including current maturities | $ |
318,164 |
|
$ |
260,460 |
|
$ |
361,722 |
|
||||
| Less: Cash and cash equivalents and restricted cash |
|
(323,849 |
) |
|
(169,182 |
) |
|
(332,191 |
) |
||||
| Net Debt | $ |
(5,685 |
) |
$ |
91,278 |
|
$ |
29,531 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240424236377/en/
Erik Staffeldt, Executive Vice President and CFO
email: estaffeldt@helixesg.com
Ph: 281-618-0465
Source: Helix Energy Solutions Group, Inc.
FAQ
What was Helix's net loss in the first quarter of 2024?
What was Helix's adjusted EBITDA for the first quarter of 2024?
How did Helix's revenues in the first quarter of 2024 compare to the same period in 2023?
What significant financial obligations did Helix settle in early April?
What challenges did Helix face in the Shallow Water Abandonment segment in the first quarter of 2024?
