Helix Reports Third Quarter 2022 Results
Helix Energy Solutions Group (NYSE: HLX) reported a net loss of $18.8 million, or $(0.12) per diluted share, for Q3 2022, a slight improvement from losses of $29.7 million in Q2 2022 and $19.0 million in Q3 2021. Adjusted EBITDA rose to $52.6 million in Q3 2022 from $16.8 million in Q2 2022. Despite a net loss of $90.5 million for the first nine months of 2022, revenue increased to $272.5 million. Key drivers included improved vessel utilization in Well Intervention and Robotics segments. However, unrealized foreign currency losses impacted results. Helix expects continued operational momentum into Q4 2022.
- Improved adjusted EBITDA to $52.6 million in Q3 2022, up from $16.8 million in Q2 2022.
- Revenue increased to $272.5 million in Q3 2022, up from $162.6 million in Q2 2022.
- Significant improvement in Well Intervention revenues, which increased by 35% quarter-over-quarter.
- Net loss of $18.8 million in Q3 2022, although improved from previous quarter and year.
- Unrealized foreign currency losses of $19.7 million due to U.S. dollar strengthening.
For the nine months ended
Summary of Results
|
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
| Revenues | $ |
272,547 |
|
$ |
180,716 |
|
$ |
162,612 |
|
$ |
585,284 |
|
$ |
506,072 |
|
||||
| Gross Profit (Loss) | $ |
39,215 |
|
$ |
3,000 |
|
$ |
(1,354 |
) |
$ |
19,252 |
|
$ |
20,754 |
|
||||
|
14 |
% |
|
2 |
% |
|
(1 |
)% |
|
3 |
% |
|
4 |
% |
|||||
| Net Loss1 | $ |
(18,763 |
) |
$ |
(19,043 |
) |
$ |
(29,699 |
) |
$ |
(90,493 |
) |
$ |
(35,630 |
) |
||||
| Diluted Loss Per Share | $ |
(0.12 |
) |
$ |
(0.13 |
) |
$ |
(0.20 |
) |
$ |
(0.60 |
) |
$ |
(0.24 |
) |
||||
| Adjusted EBITDA2 | $ |
52,568 |
|
$ |
26,532 |
|
$ |
16,759 |
|
$ |
71,853 |
|
$ |
87,512 |
|
||||
| Cash and Cash Equivalents3 | $ |
162,268 |
|
$ |
237,549 |
|
$ |
260,595 |
|
$ |
162,268 |
|
$ |
237,549 |
|
||||
| Net Debt4 | $ |
98,807 |
|
$ |
(4,338 |
) |
$ |
4,010 |
|
$ |
98,807 |
|
$ |
(4,338 |
) |
||||
| Cash Flows from Operating Activities | $ |
24,650 |
|
$ |
28,712 |
|
$ |
(5,841 |
) |
$ |
1,396 |
|
$ |
121,252 |
|
||||
| Free Cash Flow2 | $ |
21,847 |
|
$ |
28,138 |
|
$ |
(7,405 |
) |
$ |
(3,594 |
) |
$ |
113,917 |
|
||||
1 |
Net loss attributable to common shareholders |
2 |
Adjusted EBITDA and Free Cash Flow are non-GAAP measures; see reconciliations below |
3 |
Excludes restricted cash of |
4 |
Net debt is calculated as long-term debt (including current maturities of long-term debt) less cash and cash equivalents and restricted cash |
Segment Information, Operational and Financial Highlights
|
|||||||||||||||||||
|
|||||||||||||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
| Revenues: | |||||||||||||||||||
| Well Intervention | $ |
143,925 |
|
$ |
131,314 |
|
$ |
106,291 |
|
$ |
356,583 |
|
$ |
397,387 |
|
||||
| Robotics |
|
56,182 |
|
|
42,623 |
|
|
49,850 |
|
|
143,383 |
|
|
96,430 |
|
||||
| Shallow Water Abandonment1 |
|
67,401 |
|
|
- |
|
|
- |
|
|
67,401 |
|
|
- |
|
||||
| Production Facilities |
|
18,448 |
|
|
18,552 |
|
|
17,678 |
|
|
54,420 |
|
|
49,217 |
|
||||
| Intercompany Eliminations |
|
(13,409 |
) |
|
(11,773 |
) |
|
(11,207 |
) |
|
(36,503 |
) |
|
(36,962 |
) |
||||
| Total | $ |
272,547 |
|
$ |
180,716 |
|
$ |
162,612 |
|
$ |
585,284 |
|
$ |
506,072 |
|
||||
| Income (Loss) from Operations: | |||||||||||||||||||
| Well Intervention | $ |
(1,304 |
) |
$ |
(13,343 |
) |
$ |
(22,548 |
) |
$ |
(55,610 |
) |
$ |
(14,819 |
) |
||||
| Robotics |
|
11,708 |
|
|
4,936 |
|
|
9,666 |
|
|
22,854 |
|
|
2,257 |
|
||||
| Shallow Water Abandonment1 |
|
16,320 |
|
|
- |
|
|
- |
|
|
16,320 |
|
|
- |
|
||||
| Production Facilities |
|
6,068 |
|
|
5,089 |
|
|
6,045 |
|
|
17,964 |
|
|
16,285 |
|
||||
| Corporate / Other / Eliminations |
|
(20,566 |
) |
|
(7,013 |
) |
|
(12,139 |
) |
|
(41,255 |
) |
|
(25,550 |
) |
||||
| Total | $ |
12,226 |
|
$ |
(10,331 |
) |
$ |
(18,976 |
) |
$ |
(39,727 |
) |
$ |
(21,827 |
) |
||||
| 1 Shallow Water Abandonment includes the results of |
|||||||||||||||||||
Segment Results
Well Intervention
Well Intervention revenues increased
Well Intervention revenues increased
Robotics
Robotics revenues increased
Robotics revenues increased
Shallow Water Abandonment
In the third quarter 2022, 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
Acquisition and Integration Costs
Acquisition and integration costs are related to our acquisition of Alliance, which closed on
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
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 third quarter 2022 results (see the "For the Investor" page of Helix's website, www.helixesg.com). The teleconference, scheduled for
About Helix
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, gains or losses on extinguishment of long-term debt, 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 the gain or loss on disposition of assets, acquisition and integration costs, the change in fair value of the contingent consideration and the general provision (release) for current expected credit losses, 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. 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, Adjusted 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, Adjusted 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 COVID-19 pandemic and oil price volatility and their respective effects and results, our protocols and plans, our current work continuing, the spot market, our ability to identify, effect and integrate acquisitions, joint ventures or other transactions, including the integration of the Alliance acquisition; 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 including projections as to guidance and other outlook information; any statements regarding future operations expenditures; any statements regarding our plans, strategies and objectives for future operations; any statements regarding our ability to enter into, renew and/or perform commercial contracts; any statements concerning developments; any statements regarding our environmental, social and governance (“ESG”) initiatives; 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 ability to secure and realize backlog; the effectiveness of our ESG initiatives and disclosures; human capital 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
|
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|
|
|
|
|
|
|
|
|
||||||||
Comparative Condensed Consolidated Statements of Operations |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
| (in thousands, except per share data) |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
| (unaudited) | (unaudited) | |||||||||||||||
| Net revenues | $ |
272,547 |
|
$ |
180,716 |
|
$ |
585,284 |
|
$ |
506,072 |
|
||||
| Cost of sales |
|
233,332 |
|
|
177,716 |
|
|
566,032 |
|
|
485,318 |
|
||||
| Gross profit |
|
39,215 |
|
|
3,000 |
|
|
19,252 |
|
|
20,754 |
|
||||
| Gain (loss) on disposition of assets, net |
|
- |
|
|
15 |
|
|
- |
|
|
(631 |
) |
||||
| Acquisition and integration costs |
|
(762 |
) |
|
- |
|
|
(2,349 |
) |
|
- |
|
||||
| Change in fair value of contingent consideration |
|
(2,664 |
) |
|
- |
|
|
(2,664 |
) |
|
- |
|
||||
| Selling, general and administrative expenses |
|
(23,563 |
) |
|
(13,346 |
) |
|
(53,966 |
) |
|
(41,950 |
) |
||||
| Income (loss) from operations |
|
12,226 |
|
|
(10,331 |
) |
|
(39,727 |
) |
|
(21,827 |
) |
||||
| Equity in earnings of investment |
|
78 |
|
|
- |
|
|
8,262 |
|
|
- |
|
||||
| Net interest expense |
|
(4,644 |
) |
|
(5,928 |
) |
|
(14,617 |
) |
|
(17,900 |
) |
||||
| Loss on extinguishment of long-term debt |
|
- |
|
|
(124 |
) |
|
- |
|
|
(124 |
) |
||||
| Other expense, net |
|
(20,271 |
) |
|
(4,015 |
) |
|
(37,623 |
) |
|
(1,438 |
) |
||||
| Royalty income and other |
|
348 |
|
|
297 |
|
|
3,286 |
|
|
2,603 |
|
||||
| Loss before income taxes |
|
(12,263 |
) |
|
(20,101 |
) |
|
(80,419 |
) |
|
(38,686 |
) |
||||
| Income tax provision (benefit) |
|
6,500 |
|
|
(1,058 |
) |
|
10,074 |
|
|
(2,910 |
) |
||||
| Net loss |
|
(18,763 |
) |
|
(19,043 |
) |
|
(90,493 |
) |
|
(35,776 |
) |
||||
| Net loss attributable to redeemable noncontrolling interests |
|
- |
|
|
- |
|
|
- |
|
|
(146 |
) |
||||
| Net loss attributable to common shareholders | $ |
(18,763 |
) |
$ |
(19,043 |
) |
$ |
(90,493 |
) |
$ |
(35,630 |
) |
||||
| Loss per share of common stock: | ||||||||||||||||
| Basic | $ |
(0.12 |
) |
$ |
(0.13 |
) |
$ |
(0.60 |
) |
$ |
(0.24 |
) |
||||
| Diluted | $ |
(0.12 |
) |
$ |
(0.13 |
) |
$ |
(0.60 |
) |
$ |
(0.24 |
) |
||||
| Weighted average common shares outstanding: | ||||||||||||||||
| Basic |
|
151,331 |
|
|
150,088 |
|
|
151,226 |
|
|
150,018 |
|
||||
| Diluted |
|
151,331 |
|
|
150,088 |
|
|
151,226 |
|
|
150,018 |
|
||||
Comparative Condensed Consolidated Balance Sheets |
||||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
| (in thousands) |
|
|
|
|
|
(unaudited) |
|
|
||||||||
| ASSETS | ||||||||||||||||
| Current Assets: | ||||||||||||||||
| Cash and cash equivalents (1) | $ |
162,268 |
|
$ |
253,515 |
|
||||||||||
| Restricted cash (1) |
|
2,506 |
|
|
73,612 |
|
||||||||||
| Accounts receivable, net |
|
228,043 |
|
|
144,137 |
|
||||||||||
| Other current assets |
|
83,301 |
|
|
58,274 |
|
||||||||||
| Total Current Assets |
|
476,118 |
|
|
529,538 |
|
||||||||||
| Property and equipment, net |
|
1,607,840 |
|
|
1,657,645 |
|
||||||||||
| Operating lease right-of-use assets |
|
209,351 |
|
|
104,190 |
|
||||||||||
| Other assets, net |
|
62,188 |
|
|
34,655 |
|
||||||||||
| Total Assets | $ |
2,355,497 |
|
$ |
2,326,028 |
|
||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||
| Current Liabilities: | ||||||||||||||||
| Accounts payable | $ |
131,898 |
|
$ |
87,959 |
|
||||||||||
| Accrued liabilities |
|
112,321 |
|
|
91,712 |
|
||||||||||
| Current maturities of long-term debt (1) |
|
38,154 |
|
|
42,873 |
|
||||||||||
| Current operating lease liabilities |
|
48,102 |
|
|
55,739 |
|
||||||||||
| Total Current Liabilities |
|
330,475 |
|
|
278,283 |
|
||||||||||
| Long-term debt (1) |
|
225,427 |
|
|
262,137 |
|
||||||||||
| Operating lease liabilities |
|
166,916 |
|
|
50,198 |
|
||||||||||
| Deferred tax liabilities |
|
97,373 |
|
|
86,966 |
|
||||||||||
| Other non-current liabilities |
|
53,452 |
|
|
975 |
|
||||||||||
| Shareholders' equity |
|
1,481,854 |
|
|
1,647,469 |
|
||||||||||
| Total Liabilities and Equity | $ |
2,355,497 |
|
$ |
2,326,028 |
|
||||||||||
| (1) Net debt of |
||||||||||||||||
|
|||||||||||||||||||||
Reconciliation of Non-GAAP Measures |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
|
||||||||||||||||
| (in thousands, unaudited) |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
| Reconciliation from Net Loss to Adjusted EBITDA: | |||||||||||||||||||||
| Net loss | $ |
(18,763 |
) |
$ |
(19,043 |
) |
$ |
(29,699 |
) |
$ |
(90,493 |
) |
$ |
(35,776 |
) |
||||||
| Adjustments: | |||||||||||||||||||||
| Income tax provision (benefit) |
|
6,500 |
|
|
(1,058 |
) |
|
1,434 |
|
|
10,074 |
|
|
(2,910 |
) |
||||||
| Net interest expense |
|
4,644 |
|
|
5,928 |
|
|
4,799 |
|
|
14,617 |
|
|
17,900 |
|
||||||
| Loss on extinguishment of long-term debt |
|
- |
|
|
124 |
|
|
- |
|
|
- |
|
|
124 |
|
||||||
| Other expense, net |
|
20,271 |
|
|
4,015 |
|
|
13,471 |
|
|
37,623 |
|
|
1,438 |
|
||||||
| Depreciation and amortization |
|
35,944 |
|
|
36,719 |
|
|
33,158 |
|
|
102,590 |
|
|
106,226 |
|
||||||
| Gain on equity investment |
|
(78 |
) |
|
- |
|
|
(8,184 |
) |
|
(8,262 |
) |
|
- |
|
||||||
| EBITDA |
|
48,518 |
|
|
26,685 |
|
|
14,979 |
|
|
66,149 |
|
|
87,002 |
|
||||||
| Adjustments: | |||||||||||||||||||||
| (Gain) loss on disposition of assets, net |
|
- |
|
|
(15 |
) |
|
- |
|
|
- |
|
|
631 |
|
||||||
| Acquisition and integration costs |
|
762 |
|
|
- |
|
|
1,587 |
|
|
2,349 |
|
|
- |
|
||||||
| Change in fair value of contingent consideration |
|
2,664 |
|
|
- |
|
|
- |
|
|
2,664 |
|
|
- |
|
||||||
| General provision (release) for current expected credit losses |
|
624 |
|
|
(138 |
) |
|
193 |
|
|
691 |
|
|
(121 |
) |
||||||
| Adjusted EBITDA | $ |
52,568 |
|
$ |
26,532 |
|
$ |
16,759 |
|
$ |
71,853 |
|
$ |
87,512 |
|
||||||
| Free Cash Flow: | |||||||||||||||||||||
| Cash flows from operating activities | $ |
24,650 |
|
$ |
28,712 |
|
$ |
(5,841 |
) |
$ |
1,396 |
|
$ |
121,252 |
|
||||||
| Less: Capital expenditures, net of proceeds from sale of assets |
|
(2,803 |
) |
|
(574 |
) |
|
(1,564 |
) |
|
(4,990 |
) |
|
(7,335 |
) |
||||||
| Free Cash Flow | $ |
21,847 |
|
$ |
28,138 |
|
$ |
(7,405 |
) |
$ |
(3,594 |
) |
$ |
113,917 |
|
||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20221024006011/en/
email: estaffeldt@helixesg.com
Ph: 281-618-0465
Source:
FAQ
What were the main financial results for Helix Energy Solutions in Q3 2022?
How did Helix's revenue change in Q3 2022 compared to previous quarters?
What were the key drivers for Helix's financial performance in Q3 2022?
How has Helix's net loss in 2022 compared to the previous year?
What impact did foreign currency losses have on Helix's Q3 2022 results?
