Helix Reports Third Quarter 2020 Results
Helix Energy Solutions Group (NYSE: HLX) reported a net income of $24.5 million, or $0.16 per diluted share, for Q3 2020, down from $31.7 million year-over-year. Adjusted EBITDA decreased to $52.7 million, compared to $66.3 million in Q3 2019. Year-to-date net income reached $18.0 million, down from $49.9 million last year. Revenues fell to $193.5 million, driven by reduced operational demand and lower vessel utilization, particularly in Well Intervention, which saw a 17% decline in revenues. Despite challenges from COVID-19, the company maintained cash flow and strengthened its balance sheet.
- Cash flow from operating activities increased to $52.6 million in Q3 2020, up from $23.3 million in Q2 2020.
- Free cash flow improved to $51.4 million in Q3 2020 compared to $18.6 million in Q2 2020.
- Strengthened balance sheet by reducing costs and repaying maturing debt.
- Net income decreased 23% year-over-year from $31.7 million (Q3 2019) to $24.5 million (Q3 2020).
- Adjusted EBITDA fell to $52.7 million, down from $66.3 million in the same quarter last year.
- Well Intervention revenues declined by 17% compared to Q3 2019.
HOUSTON--(BUSINESS WIRE)--Helix Energy Solutions Group, Inc. ("Helix") (NYSE: HLX) reported net income1 of
For the nine months ended September 30, 2020, Helix reported net income of
Summary of Results |
||||||||||||||||||||
($ in thousands, except per share amounts, unaudited) |
||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| 9/30/2020 | 9/30/2019 | 6/30/2020 | 9/30/2020 | 9/30/2019 | ||||||||||||||||
| Revenues | $ |
193,490 |
|
$ |
212,609 |
|
$ |
199,147 |
|
$ |
573,658 |
|
$ |
581,160 |
|
|||||
| Gross Profit | $ |
34,628 |
|
$ |
55,074 |
|
$ |
29,576 |
|
$ |
66,214 |
|
$ |
111,262 |
|
|||||
|
18 |
% |
|
26 |
% |
|
15 |
% |
|
12 |
% |
|
19 |
% |
||||||
| Net Income1 | $ |
24,499 |
|
$ |
31,695 |
|
$ |
5,450 |
|
$ |
18,011 |
|
$ |
49,867 |
|
|||||
| Diluted Earnings Per Share | $ |
0.16 |
|
$ |
0.21 |
|
$ |
0.04 |
|
$ |
0.10 |
|
$ |
0.33 |
|
|||||
| Adjusted EBITDA2 | $ |
52,719 |
|
$ |
66,273 |
|
$ |
47,915 |
|
$ |
119,977 |
|
$ |
146,811 |
|
|||||
| Cash and Cash Equivalents3 | $ |
259,334 |
|
$ |
286,340 |
|
$ |
178,367 |
|
$ |
259,334 |
|
$ |
286,340 |
|
|||||
| Cash Flows from Operating Activities | $ |
52,586 |
|
$ |
57,316 |
|
$ |
23,264 |
|
$ |
58,628 |
|
$ |
89,877 |
|
|||||
1 Net income attributable to common shareholders
2 Adjusted EBITDA is a non-GAAP financial measure. See reconciliation below
3 Excludes restricted cash of
Owen Kratz, President and Chief Executive Officer of Helix, stated, “Our third quarter operating results improved sequentially despite lower revenue, as we maintain strict cost control measures during this difficult time. COVID-19 continues to affect us, both in our operations and customer demand for our services, and we expect this to persist until the pandemic is resolved. Despite these challenges, our team continues to perform at high levels, safely operating our vessels and delivering services with outstanding uptime efficiency and minimal disruptions from the pandemic. During the third quarter we enhanced our financial position by reducing our costs and strengthening our balance sheet. We continue to repay maturing debt, and we proactively extended maturities on a portion of our long-term debt, creating a longer liquidity runway and establishing a debt reduction schedule more manageable in the current environment. We believe these actions will allow us to continue navigating through this difficult environment and position us for more favorable markets ahead.”
Segment Information, Operational and Financial Highlights |
||||||||||||||||||||
($ in thousands, unaudited) |
||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| 9/30/2020 | 9/30/2019 | 6/30/2020 | 9/30/2020 | 9/30/2019 | ||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Well Intervention | $ |
140,803 |
|
$ |
170,206 |
|
$ |
145,841 |
|
$ |
427,296 |
|
$ |
451,511 |
|
|||||
| Robotics |
|
49,802 |
|
|
51,909 |
|
|
50,836 |
|
|
135,896 |
|
|
136,396 |
|
|||||
| Production Facilities |
|
14,167 |
|
|
13,777 |
|
|
13,593 |
|
|
43,301 |
|
|
44,651 |
|
|||||
| Intercompany Eliminations |
|
(11,282 |
) |
|
(23,283 |
) |
|
(11,123 |
) |
|
(32,835 |
) |
|
(51,398 |
) |
|||||
| Total | $ |
193,490 |
|
$ |
212,609 |
|
$ |
199,147 |
|
$ |
573,658 |
|
$ |
581,160 |
|
|||||
| Income (Loss) from Operations: | ||||||||||||||||||||
| Well Intervention | $ |
18,844 |
|
$ |
37,689 |
|
$ |
11,758 |
|
$ |
24,910 |
|
$ |
74,002 |
|
|||||
| Robotics |
|
6,982 |
|
|
8,876 |
|
|
7,781 |
|
|
11,940 |
|
|
7,921 |
|
|||||
| Production Facilities |
|
4,134 |
|
|
3,050 |
|
|
3,365 |
|
|
11,142 |
|
|
11,907 |
|
|||||
| Goodwill Impairment |
|
- |
|
|
- |
|
|
- |
|
|
(6,689 |
) |
|
- |
|
|||||
| Corporate / Other / Eliminations |
|
(10,945 |
) |
|
(10,617 |
) |
|
(8,710 |
) |
|
(29,121 |
) |
|
(31,491 |
) |
|||||
| Total | $ |
19,015 |
|
$ |
38,998 |
|
$ |
14,194 |
|
$ |
12,182 |
|
$ |
62,339 |
|
|||||
Segment Results
Well Intervention
Well Intervention revenues decreased
Well Intervention revenues decreased
Robotics
Robotics revenues decreased
Robotics revenues decreased
Production Facilities
Production Facilities revenues increased
Selling, General and Administrative and Other
Selling, General and Administrative
Selling, general and administrative expenses were
Other Income and Expenses
Other income, net was
Cash Flows
Operating cash flow was
Capital expenditures totaled
Free cash flow was
Financial Condition and Liquidity
In August 2020 we issued
Cash and cash equivalents were
Conference Call Information
Further details are provided in the presentation for Helix’s quarterly webcast and teleconference to review its third quarter 2020 results (see the "Investor Relations" page of Helix’s website, www.HelixESG.com). The teleconference, scheduled for Thursday, October 22, 2020 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 1-800-771-7943 for participants in the United States and 1-212-231-2907 for international participants. The passcode is "Staffeldt." A replay of the webcast will be available on our website under "For the Investor" by selecting the "Audio Archives" link beginning approximately two hours after the completion of the event.
About Helix
Helix Energy Solutions Group, Inc., headquartered in Houston, Texas, is an international offshore energy services company that provides specialty services to the offshore energy industry, with a focus on well intervention and robotics operations. For more information about Helix, please visit our website at www.HelixESG.com.
Non-GAAP Financial Measures
Management evaluates performance and financial condition using certain non-GAAP measures, primarily EBITDA, Adjusted EBITDA, net debt, net debt to book capitalization and free cash flow. We define EBITDA as earnings before income taxes, net interest expense, gain or loss on extinguishment of long-term debt, net other income or expense, and depreciation and amortization expense. Non-cash impairment losses on goodwill and other long-lived assets and gains and losses on equity investments are also added back if applicable. To arrive at our measure of Adjusted EBITDA, we exclude the gain or loss on disposition of assets and the general provision for current expected credit losses, if any. In addition, we include realized losses from foreign currency exchange contracts not designated as hedging instruments and other than temporary loss on note receivable, which are excluded from EBITDA as a component of net other income or expense. Net debt is calculated as total long-term debt less cash and cash equivalents and restricted cash. Net debt to book capitalization is calculated by dividing net debt by the sum of net debt and shareholders’ equity. We define free cash flow as cash flows from operating activities less capital expenditures, net of proceeds from sale of assets.
We use EBITDA and free cash flow 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 and free cash flow 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 and free cash flow differently from the way we do, which may limit their usefulness as comparative measures. EBITDA, Adjusted EBITDA and free cash flow 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.
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 the ongoing COVID-19 pandemic and recent oil price volatility and their respective effects and results, our protocols and plans, our current work continuing, the spot market, our spending and cost reduction plans and our ability to manage changes; our strategy; any statements regarding visibility and future utilization; any projections of financial items; any statements regarding future operations expenditures; any statements regarding the plans, strategies and objectives of management for future operations; any statements regarding our ability to enter into, renew and/or perform commercial contracts; any statements concerning developments; any statements regarding future economic conditions or performance; 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 the results and effects of the COVID-19 pandemic and actions by governments, customers, suppliers and partners with respect thereto; market conditions; results from acquired properties; demand for our services; the performance of contracts by suppliers, customers and partners; 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; our ultimate ability to realize current backlog; employee management issues; complexities of global political and economic developments; geologic risks; volatility of oil and gas prices and other risks described from time to time in our reports filed with the Securities and Exchange Commission (“SEC”), including our most recently filed Annual Report on Form 10-K and in our other filings with the SEC, 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 the securities laws.
Social Media
From time to time we provide information about Helix on Twitter (@Helix_ESG), LinkedIn (www.linkedin.com/company/helix-energy-solutions-group), Facebook (www.facebook.com/HelixEnergySolutionsGroup) and Instagram (www.instagram.com/helixenergysolutions).
| HELIX ENERGY SOLUTIONS GROUP, INC. | |||||||||||||||||
| Comparative Condensed Consolidated Statements of Operations | |||||||||||||||||
Three Months Ended Sep. 30, |
Nine Months Ended Sep. 30, |
||||||||||||||||
| (in thousands, except per share data) | 2020 |
2019 |
2020 |
2019 |
|||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||
| Net revenues | $ |
193,490 |
|
$ |
212,609 |
|
$ |
573,658 |
|
$ |
581,160 |
|
|||||
| Cost of sales |
|
158,862 |
|
|
157,535 |
|
|
507,444 |
|
|
469,898 |
|
|||||
| Gross profit |
|
34,628 |
|
|
55,074 |
|
|
66,214 |
|
|
111,262 |
|
|||||
| Goodwill impairment |
|
- |
|
|
- |
|
|
(6,689 |
) |
|
- |
|
|||||
| Gain on disposition of assets, net |
|
440 |
|
|
- |
|
|
913 |
|
|
- |
|
|||||
| Selling, general and administrative expenses |
|
(16,053 |
) |
|
(16,076 |
) |
|
(48,256 |
) |
|
(48,923 |
) |
|||||
| Income from operations |
|
19,015 |
|
|
38,998 |
|
|
12,182 |
|
|
62,339 |
|
|||||
| Equity in losses of investment |
|
(11 |
) |
|
(13 |
) |
|
(33 |
) |
|
(82 |
) |
|||||
| Net interest expense |
|
(7,598 |
) |
|
(1,901 |
) |
|
(20,407 |
) |
|
(6,204 |
) |
|||||
| Gain (loss) on extinguishment of long-term debt |
|
9,239 |
|
|
- |
|
|
9,239 |
|
|
(18 |
) |
|||||
| Other income (expense), net |
|
8,824 |
|
|
(2,285 |
) |
|
(3,672 |
) |
|
(2,430 |
) |
|||||
| Royalty income and other |
|
208 |
|
|
362 |
|
|
2,526 |
|
|
2,897 |
|
|||||
| Income (loss) before income taxes |
|
29,677 |
|
|
35,161 |
|
|
(165 |
) |
|
56,502 |
|
|||||
| Income tax provision (benefit) |
|
5,232 |
|
|
3,539 |
|
|
(16,132 |
) |
|
6,739 |
|
|||||
| Net income |
|
24,445 |
|
|
31,622 |
|
|
15,967 |
|
|
49,763 |
|
|||||
| Net loss attributable to redeemable noncontrolling interests |
|
(54 |
) |
|
(73 |
) |
|
(2,044 |
) |
|
(104 |
) |
|||||
| Net income attributable to common shareholders | $ |
24,499 |
|
$ |
31,695 |
|
$ |
18,011 |
|
$ |
49,867 |
|
|||||
| Earnings per share of common stock: | |||||||||||||||||
| Basic | $ |
0.16 |
|
$ |
0.21 |
|
$ |
0.10 |
|
$ |
0.33 |
|
|||||
| Diluted | $ |
0.16 |
|
$ |
0.21 |
|
$ |
0.10 |
|
$ |
0.33 |
|
|||||
| Weighted average common shares outstanding: | |||||||||||||||||
| Basic |
|
149,032 |
|
|
147,575 |
|
|
148,956 |
|
|
147,506 |
|
|||||
| Diluted |
|
149,951 |
|
|
148,354 |
|
|
149,824 |
|
|
148,086 |
|
|||||
| Comparative Condensed Consolidated Balance Sheets | |||||||||||||||||
| Sep. 30, 2020 | Dec. 31, 2019 | ||||||||||||||||
| (in thousands) | (unaudited) | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current Assets: | |||||||||||||||||
| Cash and cash equivalents (1) | $ |
259,334 |
|
$ |
208,431 |
|
|||||||||||
| Restricted cash (1) |
|
- |
|
|
54,130 |
|
|||||||||||
| Accounts receivable, net |
|
157,834 |
|
|
125,457 |
|
|||||||||||
| Other current assets |
|
104,117 |
|
|
50,450 |
|
|||||||||||
| Total Current Assets |
|
521,285 |
|
|
438,468 |
|
|||||||||||
| Property and equipment, net |
|
1,776,010 |
|
|
1,872,637 |
|
|||||||||||
| Operating lease right-of-use assets |
|
162,052 |
|
|
201,118 |
|
|||||||||||
| Other assets, net |
|
46,127 |
|
|
84,508 |
|
|||||||||||
| Total Assets | $ |
2,505,474 |
|
$ |
2,596,731 |
|
|||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
| Current Liabilities: | |||||||||||||||||
| Accounts payable | $ |
66,320 |
|
$ |
69,055 |
|
|||||||||||
| Accrued liabilities |
|
84,657 |
|
|
62,389 |
|
|||||||||||
| Current maturities of long-term debt (1) |
|
73,401 |
|
|
99,731 |
|
|||||||||||
| Current operating lease liabilities |
|
52,160 |
|
|
53,785 |
|
|||||||||||
| Total Current Liabilities |
|
276,538 |
|
|
284,960 |
|
|||||||||||
| Long-term debt (1) |
|
283,545 |
|
|
306,122 |
|
|||||||||||
| Operating lease liabilities |
|
112,957 |
|
|
151,827 |
|
|||||||||||
| Deferred tax liabilities |
|
118,411 |
|
|
112,132 |
|
|||||||||||
| Other non-current liabilities |
|
4,958 |
|
|
38,644 |
|
|||||||||||
| Redeemable noncontrolling interests |
|
3,579 |
|
|
3,455 |
|
|||||||||||
| Shareholders' equity (1) |
|
1,705,486 |
|
|
1,699,591 |
|
|||||||||||
| Total Liabilities and Equity | $ |
2,505,474 |
|
$ |
2,596,731 |
|
|||||||||||
(1) |
Net debt to book capitalization - |
| Helix Energy Solutions Group, Inc. | ||||||||||||||||||||||
| Reconciliation of Non-GAAP Measures | ||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||
| (in thousands, unaudited) | 9/30/2020 | 9/30/2019 | 6/30/2020 | 9/30/2020 | 9/30/2019 | |||||||||||||||||
| Reconciliation from Net Income to Adjusted EBITDA: | ||||||||||||||||||||||
| Net income | $ |
24,445 |
|
$ |
31,622 |
|
$ |
5,450 |
|
$ |
15,967 |
|
$ |
49,763 |
|
|||||||
| Adjustments: | ||||||||||||||||||||||
| Income tax provision (benefit) |
|
5,232 |
|
|
3,539 |
|
|
(271 |
) |
|
(16,132 |
) |
|
6,739 |
|
|||||||
| Net interest expense |
|
7,598 |
|
|
1,901 |
|
|
7,063 |
|
|
20,407 |
|
|
6,204 |
|
|||||||
| (Gain) loss on extinguishment of long-term debt |
|
(9,239 |
) |
|
- |
|
|
- |
|
|
(9,239 |
) |
|
18 |
|
|||||||
| Other (income) expense, net |
|
(8,824 |
) |
|
2,285 |
|
|
2,069 |
|
|
3,672 |
|
|
2,430 |
|
|||||||
| Depreciation and amortization |
|
33,985 |
|
|
27,908 |
|
|
33,969 |
|
|
99,552 |
|
|
84,420 |
|
|||||||
| Goodwill impairment |
|
- |
|
|
- |
|
|
- |
|
|
6,689 |
|
|
- |
|
|||||||
| EBITDA |
|
53,197 |
|
|
67,255 |
|
|
48,280 |
|
|
120,916 |
|
|
149,574 |
|
|||||||
| Adjustments: | ||||||||||||||||||||||
| Gain on disposition of assets, net |
|
(440 |
) |
|
- |
|
|
(473 |
) |
|
(913 |
) |
|
- |
|
|||||||
| General provision (release) for current expected credit losses |
|
(38 |
) |
|
- |
|
|
108 |
|
|
656 |
|
|
- |
|
|||||||
| Realized losses from foreign exchange contracts not designated as hedging instruments |
|
- |
|
|
(982 |
) |
|
- |
|
|
(682 |
) |
|
(2,763 |
) |
|||||||
| Adjusted EBITDA | $ |
52,719 |
|
$ |
66,273 |
|
$ |
47,915 |
|
$ |
119,977 |
|
$ |
146,811 |
|
|||||||
| Free Cash Flow: | ||||||||||||||||||||||
| Cash flows from operating activities | $ |
52,586 |
|
$ |
57,316 |
|
$ |
23,264 |
|
$ |
58,628 |
|
$ |
89,877 |
|
|||||||
| Less: Capital expenditures, net of proceeds from sale of assets |
|
(1,174 |
) |
|
(18,153 |
) |
|
(4,692 |
) |
|
(18,255 |
) |
|
(43,086 |
) |
|||||||
| Free cash flow | $ |
51,412 |
|
$ |
39,163 |
|
$ |
18,572 |
|
$ |
40,373 |
|
$ |
46,791 |
|
|||||||
