Helix Energy Solutions Group, Inc. ("Helix") (NYSE: HLX)
reported a net loss of $2.9 million, or $(0.02) per diluted share,
for the first quarter 2021 compared to a net loss of $11.9 million,
or $(0.09) per diluted share, for the same period in 2020 and net
income of $4.2 million, or $0.03 per diluted share, for the fourth
quarter 2020.
Helix reported Adjusted EBITDA of $36.2 million in the first
quarter 2021 compared to $19.3 million in the first quarter 2020
and $35.3 million in the fourth quarter 2020. The table below
summarizes our results of operations:
Summary
of Results
($ in thousands, except per
share amounts, unaudited)
Three Months Ended
3/31/2021
3/31/2020
12/31/2020
Revenues
$
163,415
$
181,021
$
159,897
Gross Profit
$
14,624
$
2,010
$
13,695
9%
1%
9%
Net Income (Loss)1
$
(2,878
)
$
(11,938
)
$
4,163
Diluted Earnings (Loss) Per Share
$
(0.02
)
$
(0.09
)
$
0.03
Adjusted EBITDA2
$
36,168
$
19,343
$
35,283
Cash and Cash Equivalents3
$
204,802
$
159,351
$
291,320
Cash Flows from Operating Activities4
$
39,869
$
(17,222
)
$
40,172
Owen Kratz, President and Chief Executive Officer of Helix,
stated, "Our first quarter 2021 results reflect consistent
financial performance as we benefitted from the recommencement of
operations of the Q7000 in Nigeria, an early start-up of the Well
Enhancer from its winter warm stack and improved cost structure in
our Robotics segment. During the first quarter, we continued to
de-lever our balance sheet with the repayment at maturity of our
Q5000 Loan while maintaining significant liquidity with free cash
flow generation. Although we expect 2021 to be another challenging
year as our Well Intervention group shifts more to the spot market,
we should remain poised to benefit when the market returns."
1
Net income (loss) attributable to
common shareholders
2
Adjusted EBITDA is a non-GAAP
measure. See reconciliations below
3
Excludes restricted cash of $65.6
million as of 3/31/21 and $52.4 million as of 3/31/20
4
Cash flows from operating
activities during the three months ended 3/31/20 includes $17.8
million of regulatory certification costs for our vessels and
systems
Segment
Information, Operational and Financial Highlights
($ in thousands,
unaudited)
Three Months Ended
3/31/2021
3/31/2020
12/31/2020
Revenues: Well Intervention
$
133,768
$
140,652
$
111,953
Robotics
22,156
35,258
42,122
Production Facilities
16,447
15,541
15,002
Intercompany Eliminations
(8,956
)
(10,430
)
(9,180
)
Total
$
163,415
$
181,021
$
159,897
Income (Loss) from Operations: Well Intervention
$
5,243
$
(5,692
)
$
1,945
Robotics
(2,934
)
(2,824
)
1,815
Production Facilities
6,514
3,643
4,833
Goodwill Impairment
-
(6,689
)
-
Corporate / Other / Eliminations
(9,378
)
(9,465
)
(7,750
)
Total
$
(555
)
$
(21,027
)
$
843
Segment Results
Well Intervention
Well Intervention revenues increased $21.8 million, or 19%, in
the first quarter 2021 compared to the previous quarter. The
increase was primarily due to higher utilization on the Q7000,
which resumed operations in Nigeria January 2021, and higher
utilization on the Well Enhancer in the North Sea as the vessel
emerged from its seasonal warm stacking mid-February. Overall Well
Intervention vessel utilization increased to 70% in the first
quarter 2021 from 56% in the fourth quarter 2020. Well Intervention
income from operations increased $3.3 million in the first quarter
2021 compared to the previous quarter due to increased revenues,
offset in part by increased operating costs associated with higher
overall utilization quarter over quarter.
Well Intervention revenues decreased $6.9 million, or 5%, in the
first quarter 2021 compared to the first quarter 2020. The decrease
in revenues was primarily due to lower vessel utilization in the
North Sea and West Africa during the first quarter 2021, offset in
part by higher utilization in the Gulf of Mexico, compared to the
first quarter 2020. Utilization in the Gulf of Mexico during the
first quarter 2020 was lower due to our scheduled regulatory
certification inspections for the Q4000 and the Q5000. Well
Intervention vessel utilization decreased to 70% in the first
quarter 2021 from 72% in the first quarter 2020. Well Intervention
generated income from operations of $5.2 million in the first
quarter 2021 compared to operating losses of $5.7 million in the
first quarter 2020, with improvements primarily related to higher
revenues on the Q5000 and cost reduction efforts associated with
lower utilization in the North Sea and West Africa during idle
periods.
Robotics
Robotics revenues decreased $20.0 million, or 47%, in the first
quarter 2021 compared to the previous quarter. The decrease in
revenues was due to a reduction in vessel days as well as a
reduction in ROV and trenching activity compared to the previous
quarter. Chartered vessel utilization decreased to 90% in the first
quarter 2021, which included 165 total vessel days, compared to
100% in the fourth quarter 2020, which included 336 total vessel
days. Vessel days during the fourth quarter 2020 included 152 spot
vessel days primarily attributable to the seabed clearance and
decommissioning projects in the North Sea and utilization on the
Ross Candies in the Gulf of Mexico compared to three spot vessel
days during the first quarter 2021. ROV, trencher and ROVDrill
utilization decreased to 24% in the first quarter 2021 from 32% in
the previous quarter, and vessel trenching days in the first
quarter 2021 decreased to 72 days compared to 92 days in the
previous quarter. Robotics generated operating losses of $2.9
million during the first quarter 2021 compared to income from
operations of $1.8 million during the fourth quarter 2020 due to
lower revenues, offset in part by lower operating costs, quarter
over quarter.
Robotics revenues decreased $13.1 million, or 37%, in the first
quarter 2021 compared to the first quarter 2020. The decrease in
revenues year over year was due to a reduction in vessel days as
well as a reduction in ROV utilization compared to the first
quarter 2020. This decrease was offset in part by increased
trenching activity year over year. Chartered vessel utilization
increased slightly to 90% during the first quarter 2021 compared to
89% during the first quarter 2020; however, total vessel days
during the first quarter 2021 decreased to 165 compared to 405
during the first quarter 2020. Vessel days during the first quarter
2020 included 272 spot vessel days primarily attributable to the
seabed clearance project in the North Sea and utilization on the
Ross Candies in the Gulf of Mexico compared to three spot vessel
days during the first quarter 2021. ROV, trencher and ROVDrill
utilization was 24% in the first quarter 2021 compared to 34% in
the first quarter 2020, and vessel trenching days in the first
quarter 2021 increased to 72 days compared to 42 days in the first
quarter 2020. Robotics results from operations declined $0.1
million in the first quarter 2021 compared to the first quarter
2020 due to lower revenues, offset in part by lower operating
costs, year over year.
Production Facilities
During the first quarter 2021, Production Facilities revenues
increased $1.4 million, or 10%, compared to the previous quarter
and $0.9 million, or 6%, compared to the first quarter 2020
primarily due to higher oil and gas production revenues in the
first quarter 2021.
Selling, General and Administrative and
Other
Selling, General and Administrative
Selling, general and administrative expenses were $15.2 million,
or 9.3% of revenue, in the first quarter 2021 compared to $12.8
million, or 8.0% of revenue, in the fourth quarter 2020. The higher
expenses during the first quarter were primarily due to the timing
of employee benefit related costs as well as certain credits
related to employee benefits recognized during the prior
quarter.
Other Income and Expenses
Other income, net was $1.6 million in the first quarter 2021
compared to $8.4 million in the fourth quarter 2020. Other income,
net includes unrealized foreign currency translation gains related
to the British pound, which strengthened 1% during the first
quarter 2021 compared to 6% during the fourth quarter 2020.
Cash Flows
Operating cash flows were $39.9 million in the first quarter
2021 compared to $40.2 million in the fourth quarter 2020 and
$(17.2) million in the first quarter 2020. The increase in
operating cash flows year over year was due to higher earnings,
lower regulatory certification costs for our vessels and systems
and improvements in working capital during the first quarter
2021.
Capital expenditures totaled $1.3 million in the first quarter
2021 compared to $1.1 million in the fourth quarter 2020 and $12.4
million in the first quarter 2020. Capital expenditures in the
first quarter 2020 included capital spending related to the
completion of the Q7000, which was placed into service during the
first quarter 2020. Regulatory certification costs for our vessels
and systems, which are included in operating cash flows, were $1.8
million in the first quarter 2021 compared to $0.8 million in the
fourth quarter 2020 and $17.8 million in the first quarter 2020.
Regulatory certification costs during the first quarter 2020
included dry dock costs on the Q4000, the Q5000 and the Seawell as
well as certification costs for several intervention systems.
Free cash flow was $38.5 million in the first quarter 2021
compared to $39.1 million in the fourth quarter 2020 and $(29.6)
million in the first quarter 2020. The increase in free cash flow
year over year was due to higher operating cash flows and lower
capital expenditures. (Free cash flow is a non-GAAP measure. See
reconciliation below.)
Financial Condition and Liquidity
Cash and cash equivalents were $204.8 million at March 31, 2021
and excluded $65.6 million of restricted cash pledged as collateral
on a short-term project-related letter of credit. Available
capacity under our revolving credit facility was $172.2 million at
March 31, 2021. Consolidated long-term debt decreased to $336.0
million at March 31, 2021 from $349.6 million at December 31, 2020.
The decrease in long-term debt was primarily due to scheduled
maturities of $58.2 million of existing debt, including the
repayment of the Q5000 Loan, offset in part by the impact of the
adoption of ASC 2020-06, which required us to reverse unamortized
discounts on our outstanding convertible senior notes totaling
$44.1 million. Consolidated net debt at March 31, 2021 was $65.7
million. Net debt to book capitalization at March 31, 2021 was 4%.
(Net debt and net debt to book capitalization are non-GAAP
measures. See reconciliations below.)
Conference Call Information
Further details are provided in the presentation for Helix’s
quarterly teleconference to review its first quarter 2021 results
(see the "For the Investor" page of Helix’s website,
www.HelixESG.com). The teleconference, scheduled for Tuesday, April
27, 2021 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 1-800-771-6871 for participants in the United
States and 1-303-223-0117 for international participants. The
passcode is "Staffeldt." A replay of the webcast will be available
on the "For the Investor" page of Helix’s website 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, 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 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 including recent
regulatory initiatives by the new U.S. administration; 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 Mar.
31
(in thousands, except per share data)
2021
2020
(unaudited)
Net revenues
$
163,415
$
181,021
Cost of sales
148,791
179,011
Gross profit
14,624
2,010
Goodwill impairment
-
(6,689
)
Selling, general and administrative expenses
(15,179
)
(16,348
)
Loss from operations
(555
)
(21,027
)
Net interest expense
(6,053
)
(5,746
)
Other income (expense), net
1,617
(10,427
)
Royalty income and other
2,057
2,179
Loss before income taxes
(2,934
)
(35,021
)
Income tax provision (benefit)
116
(21,093
)
Net loss
(3,050
)
(13,928
)
Net loss attributable to redeemable noncontrolling interests
(172
)
(1,990
)
Net loss attributable to common shareholders
$
(2,878
)
$
(11,938
)
Loss per share of common stock: Basic
$
(0.02
)
$
(0.09
)
Diluted
$
(0.02
)
$
(0.09
)
Weighted average common shares outstanding: Basic
149,935
148,863
Diluted
149,935
148,863
Comparative Condensed
Consolidated Balance Sheets
Mar. 31, 2021
Dec. 31, 2020
(in thousands)
(unaudited)
ASSETS Current Assets: Cash and cash
equivalents (1)
$
204,802
$
291,320
Restricted cash (1)
65,579
-
Accounts receivable, net
132,314
132,233
Other current assets
86,242
102,092
Total Current Assets
488,937
525,645
Property and equipment, net
1,759,092
1,782,964
Operating lease right-of-use assets
136,210
149,656
Other assets, net
37,510
40,013
Total Assets
$
2,421,749
$
2,498,278
LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities: Accounts payable
$
55,148
$
50,022
Accrued liabilities
76,486
87,035
Current maturities of long-term debt (1)
36,478
90,651
Current operating lease liabilities
50,321
51,599
Total Current Liabilities
218,433
279,307
Long-term debt (1)
299,560
258,912
Operating lease liabilities
88,576
101,009
Deferred tax liabilities
100,655
110,821
Other non-current liabilities
3,105
3,878
Redeemable noncontrolling interests
3,960
3,855
Shareholders' equity (1)
1,707,460
1,740,496
Total Liabilities and Equity
$
2,421,749
$
2,498,278
(1)
Net debt to book capitalization
4% at March 31, 2021. Calculated as net debt (total long-term debt
less cash and cash equivalents and restricted cash - $65,657)
divided by the sum of net debt and shareholders' equity
($1,773,117).
Helix Energy Solutions Group, Inc.
Reconciliation of Non-GAAP
Measures
Three Months Ended
(in thousands, unaudited)
3/31/2021
3/31/2020
12/31/2020
Reconciliation from Net Income
(Loss) to Adjusted EBITDA: Net income (loss)
$
(3,050
)
$
(13,928
)
$
4,117
Adjustments: Income tax provision (benefit)
116
(21,093
)
(2,569
)
Net interest expense
6,053
5,746
8,124
Other (income) expense, net
(1,617
)
10,427
(8,396
)
Depreciation and amortization
34,566
31,598
34,157
Goodwill impairment
-
6,689
-
Non-cash gain on equity investment
-
-
(264
)
EBITDA
36,068
19,439
35,169
Adjustments: Loss on disposition of assets, net
-
-
24
General provision for current expected credit losses
100
586
90
Realized losses from foreign exchange contracts not designated as
hedging instruments
-
(682
)
-
Adjusted EBITDA
$
36,168
$
19,343
$
35,283
Free Cash
Flow: Cash flows from operating activities
$
39,869
$
(17,222
)
$
40,172
Less: Capital expenditures, net of proceeds from sale of assets
(1,329
)
(12,389
)
(1,026
)
Free cash flow
$
38,540
$
(29,611
)
$
39,146
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210426005912/en/
Erik Staffeldt Ph 281-618-0465 email -
estaffeldt@helixesg.com
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