Helix Reports Fourth Quarter and Full Year 2023 Results
- Adjusted EBITDA for Q4 2023 was $70.6 million, a decrease from $96.4 million in Q3 2023.
- Full-year 2023 net loss was $10.8 million, compared to a net loss of $87.8 million in 2022.
- Revenues for Q4 2023 were $335.2 million, with a gross profit of $49.3 million.
- Helix initiated capital structure transformations, returning to a simpler structure and pushing major long-term debt maturities to 2029.
- Net loss in Q4 2023 was $28.3 million, a significant decrease from net income in Q3 2023.
- Adjusted EBITDA decreased from Q3 2023 to Q4 2023.
- Revenues decreased from $395.7 million in Q3 2023 to $335.2 million in Q4 2023.
Insights
The reported net loss of $28.3 million for Helix Energy Solutions Group in Q4 2023, following a net income in the previous quarter, signifies a noteworthy financial reversal that could raise concerns among investors and stakeholders. The loss includes substantial costs associated with the repurchase of Convertible Senior Notes, indicating a strategic shift in the company's capital structure. The reduction in net loss for the full year 2023 compared to 2022, paired with a significant increase in adjusted EBITDA, suggests improved operational efficiency and a stronger underlying business performance despite the quarterly setback.
From a liquidity perspective, the increase in cash and cash equivalents is a positive sign, enhancing the company's financial flexibility. However, the volatility in operational segments, such as the decrease in Well Intervention revenues and the seasonal slowdown in Robotics and Shallow Water Abandonment, reflects the cyclical nature of the energy sector and its impact on Helix's business segments.
Helix's strategic actions to simplify its capital structure and eliminate potential dilution overhang by addressing its 2026 Convertible Senior Notes are significant for the market. This move, along with pushing major long-term debt maturities to 2029, could be perceived positively by the market as it may improve investor confidence in the company's long-term financial health.
The company's segment performance, particularly the highest fourth quarter EBITDA since 2013 driven by Well Intervention, indicates a robust demand for its services. However, the seasonal variability and the impact of external factors such as weather conditions on Robotics segment performance underscore the need for a diversified service offering to mitigate risks associated with individual market segments.
Helix's operational results, such as the high utilization rates in Well Intervention and the strategic full-field decommissioning contract, demonstrate the company's operational capabilities and strategic positioning within the offshore energy services market. The company's focus on Well Intervention and Robotics services aligns with industry trends towards increased offshore activities, particularly in decommissioning and renewable energy sectors.
The reported changes in fair value of contingent consideration and the impact of foreign currency fluctuations on financial results highlight the complexity of financial management in a global business environment. The appreciation of the British pound against the U.S. dollar and the losses on Nigerian naira conversion may have nuanced implications for the company's international operations and should be monitored closely by stakeholders.
For the full year 2023, Helix reported a net loss of
Summary of Results ($ in thousands, except per share amounts, unaudited) |
|||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||
12/31/2023 |
12/31/2022 |
9/30/2023 |
12/31/2023 |
12/31/2022 |
|||||||||||||||
| Revenues | $ |
335,157 |
|
$ |
287,816 |
|
$ |
395,670 |
|
$ |
1,289,728 |
|
$ |
873,100 |
|
||||
| Gross Profit | $ |
49,278 |
|
$ |
31,364 |
|
$ |
80,545 |
|
$ |
200,356 |
|
$ |
50,616 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
| Net Income (Loss) | $ |
(28,333 |
) |
$ |
2,709 |
|
$ |
15,560 |
|
$ |
(10,838 |
) |
$ |
(87,784 |
) |
||||
| Basic Earnings (Loss) Per Share | $ |
(0.19 |
) |
$ |
0.02 |
|
$ |
0.10 |
|
$ |
(0.07 |
) |
$ |
(0.58 |
) |
||||
| Diluted Earnings (Loss) Per Share | $ |
(0.19 |
) |
$ |
0.02 |
|
$ |
0.10 |
|
$ |
(0.07 |
) |
$ |
(0.58 |
) |
||||
| Adjusted EBITDA1 | $ |
70,632 |
|
$ |
49,169 |
|
$ |
96,385 |
|
$ |
273,403 |
|
$ |
121,022 |
|
||||
| Cash and Cash Equivalents2 | $ |
332,191 |
|
$ |
186,604 |
|
$ |
168,370 |
|
$ |
332,191 |
|
$ |
186,604 |
|
||||
| Net Debt1,3 | $ |
29,531 |
|
$ |
74,964 |
|
$ |
58,887 |
|
$ |
29,531 |
|
$ |
74,964 |
|
||||
| Cash Flows from Operating Activities | $ |
94,737 |
|
$ |
49,712 |
|
$ |
31,611 |
|
$ |
152,457 |
|
$ |
51,108 |
|
||||
| Free Cash Flow1 | $ |
91,878 |
|
$ |
21,198 |
|
$ |
23,366 |
|
$ |
133,798 |
|
$ |
17,604 |
|
||||
| 1 | Adjusted EBITDA, Net Debt and Free Cash Flow are non-GAAP measures; see reconciliations below |
| 2 |
Excludes restricted cash of |
| 3 |
Net Debt is calculated using |
Owen Kratz, President and Chief Executive Officer of Helix, stated, “We finished the year strong, and our fourth quarter 2023 reflects our highest fourth quarter EBITDA since 2013 as our Well Intervention business operated with high utilization, offsetting much of the seasonal slowdown in our Robotics and Shallow Water Abandonment segments. Our 2023 full-year results mark our second consecutive year of meaningful revenue and EBITDA growth, and we achieved our highest annual EBITDA since 2014, with significant improvements in Well Intervention and ongoing strong contributions from Robotics and Shallow Water Abandonment. During 2023, we initiated important transformations to our capital structure, issuing
Segment Information, Operational and Financial Highlights ($ in thousands, unaudited) |
|||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||
| 12/31/2023 | 12/31/2022 | 9/30/2023 | 12/31/2023 | 12/31/2022 | |||||||||||||||
| Revenues: | |||||||||||||||||||
| Well Intervention | $ |
210,735 |
|
$ |
167,658 |
|
$ |
225,367 |
|
$ |
732,761 |
|
$ |
524,241 |
|
||||
| Robotics |
|
62,957 |
|
|
48,538 |
|
|
75,646 |
|
|
257,875 |
|
|
191,921 |
|
||||
| Shallow Water Abandonment1 |
|
61,995 |
|
|
57,409 |
|
|
87,272 |
|
|
274,954 |
|
|
124,810 |
|
||||
| Production Facilities |
|
19,383 |
|
|
27,895 |
|
|
24,469 |
|
|
87,885 |
|
|
82,315 |
|
||||
| Intercompany Eliminations |
|
(19,913 |
) |
|
(13,684 |
) |
|
(17,084 |
) |
|
(63,747 |
) |
|
(50,187 |
) |
||||
| Total | $ |
335,157 |
|
$ |
287,816 |
|
$ |
395,670 |
|
$ |
1,289,728 |
|
$ |
873,100 |
|
||||
| Income (Loss) from Operations: | |||||||||||||||||||
| Well Intervention | $ |
21,041 |
|
$ |
2,554 |
|
$ |
16,120 |
|
$ |
32,398 |
|
$ |
(53,056 |
) |
||||
| Robotics |
|
9,224 |
|
|
7,127 |
|
|
20,665 |
|
|
52,450 |
|
|
29,981 |
|
||||
| Shallow Water Abandonment1 |
|
12,032 |
|
|
5,864 |
|
|
27,624 |
|
|
66,240 |
|
|
22,184 |
|
||||
| Production Facilities |
|
(985 |
) |
|
9,237 |
|
|
8,886 |
|
|
20,832 |
|
|
27,201 |
|
||||
| Change in Fair Value of Contingent Consideration |
|
(10,927 |
) |
|
(13,390 |
) |
|
(16,499 |
) |
|
(42,246 |
) |
|
(16,054 |
) |
||||
| Corporate / Other / Eliminations |
|
(15,005 |
) |
|
(16,520 |
) |
|
(20,568 |
) |
|
(66,164 |
) |
|
(55,111 |
) |
||||
| Total | $ |
15,380 |
|
$ |
(5,128 |
) |
$ |
36,228 |
|
$ |
63,510 |
|
$ |
(44,855 |
) |
||||
| 1 Shallow Water Abandonment includes the results of Helix Alliance beginning July 1, 2022, the date of acquisition. |
Fourth Quarter Results
Segment Results
Well Intervention
Well Intervention revenues decreased
Well Intervention revenues increased
Robotics
Robotics revenues decreased
Robotics revenues increased
Shallow Water Abandonment
Shallow Water Abandonment revenues decreased
Shallow Water Abandonment revenues increased
Production Facilities
Production Facilities revenues decreased
Production Facilities revenues decreased
Selling, General and Administrative and Other
Selling, General and Administrative
Selling, general and administrative expenses were
Change in Fair Value of Contingent Consideration
Change in fair value of contingent consideration related to our acquisition of Alliance was
Debt Extinguishment Loss
The debt extinguishment loss of
Other Income and Expenses
Other income, net was
Cash Flows
Operating cash flows were
Capital expenditures, which are included in investing cash flows, totaled
Free Cash Flow was
Full Year Results
Segment Results
Well Intervention
Well Intervention revenues increased
Robotics
Robotics revenues increased
Shallow Water Abandonment
Shallow Water Abandonment generated revenues of
Production Facilities
Production Facilities revenues increased
Selling, General and Administrative and Other
Selling, General and Administrative
Selling, general and administrative expenses were
Net Interest Expense
Net interest expense decreased to
Change in Fair Value of Contingent Consideration
Change in fair value of contingent consideration related to our acquisition of Alliance was
Debt Extinguishment Loss
The debt extinguishment loss of
Other Income and Expenses
Other expense, net was
Cash Flows
Helix generated operating cash flows of
Capital expenditures decreased to
Free Cash Flow was
Share Repurchases
2023 share repurchases totaled approximately 1.6 million shares for approximately
Financial Condition and Liquidity
During the fourth quarter 2023, Helix issued the 2029 Notes receiving proceeds, net of discounts and issuance costs, of
Cash and cash equivalents were
Conference Call Information
Further details are provided in the presentation for Helix’s quarterly teleconference to review its fourth quarter and full year 2023 results (see the "For the Investor" page of Helix's website, www.helixesg.com). The teleconference, scheduled for Tuesday, February 27, 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 1-800-952-1718 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, gains and losses on equity investments, 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 on extinguishment of long-term debt, 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 the earn-out payable in connection therewith 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 Dec. 31, |
|
Year Ended Dec. 31, |
|||||||||||||||
| (in thousands, except per share data) | 2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Net revenues | $ |
335,157 |
|
$ |
287,816 |
|
$ |
1,289,728 |
|
$ |
873,100 |
|
|||||
| Cost of sales |
|
285,879 |
|
|
256,452 |
|
|
1,089,372 |
|
|
822,484 |
|
|||||
| Gross profit |
|
49,278 |
|
|
31,364 |
|
|
200,356 |
|
|
50,616 |
|
|||||
| Gain on disposition of assets, net |
|
- |
|
|
- |
|
|
367 |
|
|
- |
|
|||||
| Acquisition and integration costs |
|
- |
|
|
(315 |
) |
|
(540 |
) |
|
(2,664 |
) |
|||||
| Change in fair value of contingent consideration |
|
(10,927 |
) |
|
(13,390 |
) |
|
(42,246 |
) |
|
(16,054 |
) |
|||||
| Selling, general and administrative expenses |
|
(22,971 |
) |
|
(22,787 |
) |
|
(94,427 |
) |
|
(76,753 |
) |
|||||
| Income (loss) from operations |
|
15,380 |
|
|
(5,128 |
) |
|
63,510 |
|
|
(44,855 |
) |
|||||
| Equity in earnings of investment |
|
- |
|
|
- |
|
|
- |
|
|
8,262 |
|
|||||
| Net interest expense |
|
(4,771 |
) |
|
(4,333 |
) |
|
(17,338 |
) |
|
(18,950 |
) |
|||||
| Loss on extinguishment of long-term debt |
|
(37,277 |
) |
|
- |
|
|
(37,277 |
) |
|
- |
|
|||||
| Other income (expense), net |
|
6,963 |
|
|
14,293 |
|
|
(3,590 |
) |
|
(23,330 |
) |
|||||
| Royalty income and other |
|
93 |
|
|
406 |
|
|
2,209 |
|
|
3,692 |
|
|||||
| Income (loss) before income taxes |
|
(19,612 |
) |
|
5,238 |
|
|
7,514 |
|
|
(75,181 |
) |
|||||
| Income tax provision |
|
8,721 |
|
|
2,529 |
|
|
18,352 |
|
|
12,603 |
|
|||||
| Net income (loss) | $ |
(28,333 |
) |
$ |
2,709 |
|
$ |
(10,838 |
) |
$ |
(87,784 |
) |
|||||
| Earnings (loss) per share of common stock: | |||||||||||||||||
| Basic | $ |
(0.19 |
) |
$ |
0.02 |
|
$ |
(0.07 |
) |
$ |
(0.58 |
) |
|||||
| Diluted | $ |
(0.19 |
) |
$ |
0.02 |
|
$ |
(0.07 |
) |
$ |
(0.58 |
) |
|||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic |
|
150,580 |
|
|
151,425 |
|
|
150,917 |
|
|
151,276 |
|
|||||
| Diluted |
|
150,580 |
|
|
151,425 |
|
|
150,917 |
|
|
151,276 |
|
|||||
| Comparative Condensed Consolidated Balance Sheets | ||||||
| Dec. 31, 2023 | Dec. 31, 2022 | |||||
| (in thousands) | (unaudited) | |||||
| ASSETS | ||||||
| Current Assets: | ||||||
| Cash and cash equivalents | $ |
332,191 |
$ |
186,604 |
||
| Restricted cash |
|
- |
|
2,507 |
||
| Accounts receivable, net |
|
280,427 |
|
212,779 |
||
| Other current assets |
|
85,223 |
|
58,699 |
||
| Total Current Assets |
|
697,841 |
|
460,589 |
||
| Property and equipment, net |
|
1,572,849 |
|
1,641,615 |
||
| Operating lease right-of-use assets |
|
169,233 |
|
197,849 |
||
| Deferred recertification and dry dock costs, net |
|
71,290 |
|
38,778 |
||
| Other assets, net |
|
44,823 |
|
50,507 |
||
| Total Assets | $ |
2,556,036 |
$ |
2,389,338 |
||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current Liabilities: | ||||||
| Accounts payable | $ |
134,552 |
$ |
135,267 |
||
| Accrued liabilities |
|
203,112 |
|
73,574 |
||
| Current maturities of long-term debt |
|
48,292 |
|
38,200 |
||
| Current operating lease liabilities |
|
62,662 |
|
50,914 |
||
| Total Current Liabilities |
|
448,618 |
|
297,955 |
||
| Long-term debt |
|
313,430 |
|
225,875 |
||
| Operating lease liabilities |
|
116,185 |
|
154,686 |
||
| Deferred tax liabilities |
|
110,555 |
|
98,883 |
||
| Other non-current liabilities |
|
66,248 |
|
95,230 |
||
| Shareholders' equity |
|
1,501,000 |
|
1,516,709 |
||
| Total Liabilities and Equity | $ |
2,556,036 |
$ |
2,389,338 |
||
| Helix Energy Solutions Group, Inc. | |||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | |||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||
| (in thousands, unaudited) | 12/31/2023 | 12/31/2022 | 9/30/2023 | 12/31/2023 | 12/31/2022 | ||||||||||||||||
| Reconciliation from Net Income (Loss) to Adjusted EBITDA: | |||||||||||||||||||||
| Net income (loss) | $ |
(28,333 |
) |
$ |
2,709 |
|
$ |
15,560 |
|
$ |
(10,838 |
) |
$ |
(87,784 |
) |
||||||
| Adjustments: | |||||||||||||||||||||
| Income tax provision |
|
8,721 |
|
|
2,529 |
|
|
8,337 |
|
|
18,352 |
|
|
12,603 |
|
||||||
| Net interest expense |
|
4,771 |
|
|
4,333 |
|
|
4,152 |
|
|
17,338 |
|
|
18,950 |
|
||||||
| Other (income) expense, net |
|
(6,963 |
) |
|
(14,293 |
) |
|
8,257 |
|
|
3,590 |
|
|
23,330 |
|
||||||
| Depreciation and amortization |
|
44,103 |
|
|
40,096 |
|
|
43,249 |
|
|
164,116 |
|
|
142,686 |
|
||||||
| Gain on equity investment |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(8,262 |
) |
||||||
| EBITDA |
|
22,299 |
|
|
35,374 |
|
|
79,555 |
|
|
192,558 |
|
|
101,523 |
|
||||||
| Adjustments: | |||||||||||||||||||||
| Gain on disposition of assets, net |
|
- |
|
|
- |
|
|
- |
|
|
(367 |
) |
|
- |
|
||||||
| Acquisition and integration costs |
|
- |
|
|
315 |
|
|
- |
|
|
540 |
|
|
2,664 |
|
||||||
| Change in fair value of contingent consideration |
|
10,927 |
|
|
13,390 |
|
|
16,499 |
|
|
42,246 |
|
|
16,054 |
|
||||||
| General provision for current expected credit losses |
|
129 |
|
|
90 |
|
|
331 |
|
|
1,149 |
|
|
781 |
|
||||||
| Loss on extinguishment of long-term debt |
|
37,277 |
|
|
- |
|
|
- |
|
|
37,277 |
|
|
- |
|
||||||
| Adjusted EBITDA | $ |
70,632 |
|
$ |
49,169 |
|
$ |
96,385 |
|
$ |
273,403 |
|
$ |
121,022 |
|
||||||
| Free Cash Flow: | |||||||||||||||||||||
| Cash flows from operating activities | $ |
94,737 |
|
$ |
49,712 |
|
$ |
31,611 |
|
$ |
152,457 |
|
$ |
51,108 |
|
||||||
| Less: Capital expenditures, net of proceeds from asset sales and insurance recoveries |
|
(2,859 |
) |
|
(28,514 |
) |
|
(8,245 |
) |
|
(18,659 |
) |
|
(33,504 |
) |
||||||
| Free Cash Flow | $ |
91,878 |
|
$ |
21,198 |
|
$ |
23,366 |
|
$ |
133,798 |
|
$ |
17,604 |
|
||||||
| Net Debt: | |||||||||||||||||||||
| Long-term debt including current maturities | $ |
361,722 |
|
$ |
264,075 |
|
$ |
227,257 |
|
$ |
361,722 |
|
$ |
264,075 |
|
||||||
| Less: Cash and cash equivalents and restricted cash |
|
(332,191 |
) |
|
(189,111 |
) |
|
(168,370 |
) |
|
(332,191 |
) |
|
(189,111 |
) |
||||||
| Net Debt | $ |
29,531 |
|
$ |
74,964 |
|
$ |
58,887 |
|
$ |
29,531 |
|
$ |
74,964 |
|
||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240226148615/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 for Q4 2023?
What was Helix's adjusted EBITDA for Q4 2023?
What were Helix's full-year 2023 revenues?
What capital structure transformations did Helix initiate?
