Helix Energy Solutions Group, Inc. ("Helix") (NYSE: HLX)
reported a net loss1 of $18.8 million, or $(0.12) per diluted
share, for the third quarter 2022 compared to net losses of $29.7
million, or $(0.20) per diluted share, for the second quarter 2022
and $19.0 million, or $(0.13) per diluted share, for the third
quarter 2021. Helix reported adjusted EBITDA2 of $52.6 million for
the third quarter 2022 compared to $16.8 million for the second
quarter 2022 and $26.5 million for the third quarter 2021.
For the nine months ended September 30, 2022, Helix reported a
net loss of $90.5 million, or $(0.60) per diluted share, compared
to a net loss of $35.6 million, or $(0.24) per diluted share, for
the nine months ended September 30, 2021. Adjusted EBITDA for the
nine months ended September 30, 2022 was $71.9 million compared to
$87.5 million for the nine months ended September 30, 2021. The
table below summarizes our results of operations:
Summary
of Results ($ in thousands, except per share amounts,
unaudited)
Three Months Ended
Nine Months Ended
9/30/2022
9/30/2021
6/30/2022
9/30/2022
9/30/2021
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 $2.5 million
as of 9/30/22 and 6/30/22 and $71.3 million as of 9/30/21
4
Net debt is calculated as long-term debt
(including current maturities of long-term debt) less cash and cash
equivalents and restricted cash
Owen Kratz, President and Chief Executive Officer of Helix,
stated, “We have been forecasting a stronger second half of 2022
and as evidenced by our strong results, we are off to a very good
start. Our third quarter 2022 results improved significantly over
the prior quarter, a combination of a stronger oil and gas market,
seasonally high offshore activity, and the inclusion of Helix
Alliance in our operating results for the quarter. Our bottom line
was negatively impacted by the strengthening of the U.S. dollar
affecting our foreign operating results and generating unrealized
non-cash foreign currency losses during the quarter. We expect to
continue the positive momentum in our operating results into the
fourth quarter with continued strong performance in the Gulf of
Mexico and North Sea. Additionally, with our recent contract
extension for the Siem Helix 2 and the planned commencement of the
Siem Helix 1 on a two-year P&A campaign, further improvements
are expected in Brazil towards the end of the fourth quarter and
beyond. As we maximize production for our customers and our late
life properties, with our focused growth in the renewables market
and the expansion of our decommissioning capabilities, we continue
to execute our strategy to position Helix as a preeminent offshore
Energy Transition company.”
Segment
Information, Operational and Financial Highlights ($ in
thousands, unaudited)
Three Months Ended
Nine Months Ended
9/30/2022
9/30/2021
6/30/2022
9/30/2022
9/30/2021
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 Helix
Alliance beginning July 1, 2022, the date of acquisition
Segment Results
Well Intervention
Well Intervention revenues increased $37.6 million, or 35%, in
the third quarter 2022 compared to the prior quarter. Our third
quarter 2022 revenues increased due primarily to higher vessel
utilization and an improvement in rates, offset in part by lower
15K IRS utilization and the impact of weaker foreign currency
exchange rates compared to the prior quarter. Utilization in West
Africa increased during the third quarter as the Q7000 recommenced
operations following scheduled maintenance in Namibia during the
prior quarter. Utilization in the North Sea continued to improve
during the third quarter following a late commencement of seasonal
activity during the second quarter. North Sea operating rate
improvements were offset in part by a weaker British pound during
the third quarter. Gulf of Mexico vessel utilization and rates
improved during the quarter following scheduled regulatory
inspections during the prior quarter, although utilization on our
15K IRS system decreased compared to the prior quarter. Overall
Well Intervention vessel utilization increased to 87% during the
third quarter 2022 compared to 67% during the prior quarter. Well
Intervention net loss from operations improved $21.2 million
compared to the prior quarter primarily due to higher revenues,
offset in part by higher operating costs on increased activity
during the third quarter.
Well Intervention revenues increased $12.6 million, or 10%, in
the third quarter 2022 compared to the third quarter 2021. The
increase was primarily due to higher utilization and rates in the
Gulf of Mexico and the North Sea, offset in part by lower
utilization in West Africa, lower rates in Brazil and the impact of
weaker foreign currency exchange rates during the third quarter
2022 compared to the third quarter 2021. Utilization in the Gulf of
Mexico improved year over year with fewer idle days in the third
quarter 2022, and the North Sea maintained strong utilization
during the quarter compared to the prior year, which saw an early
seasonal slowdown during the third quarter 2021. West Africa
utilization was lower during the third quarter 2022 as the Q7000
recommenced operations mid-quarter following scheduled maintenance
whereas the vessel was fully utilized during the third quarter
2021. Revenues in Brazil declined year over year primarily due to
the Siem Helix 2 under its existing contract at lower rates during
the third quarter 2022, whereas the vessel was operating at higher
rates during the third quarter 2021. Overall Well Intervention
vessel utilization increased from 72% during the third quarter 2021
to 87% during the third quarter 2022. Well Intervention net loss
from operations improved by $12.0 million in the third quarter 2022
compared to the third quarter 2021 primarily due to higher
revenues.
Robotics
Robotics revenues increased $6.3 million, or 13%, in the third
quarter 2022 compared to the prior quarter. The increase in
revenues was due to higher vessel, ROV and trenching activities.
Chartered vessel days increased to 376 days compared to 370 days,
and vessel utilization increased to 98% compared to 94%, during the
third quarter 2022 compared the prior quarter. Vessel days included
100 spot vessel days during the third quarter 2022 compared to 116
spot vessel days during the prior quarter. ROV and trencher
utilization increased from 53% during the prior quarter to 66% in
the third quarter 2022, which included utilization of our boulder
grab for seabed clearance operations on the U.S. east coast
following its deployment during the quarter. Trenching days
increased to 176 days during the third quarter 2022 on the Grand
Canyon III and the Horizon Enabler on both renewable energy and oil
and gas trenching projects, compared to 81 days during the prior
quarter. Robotics operating income increased $2.0 million during
the third quarter 2022 compared to the prior quarter due to higher
revenues, offset in part by higher costs on increased activity
during the quarter.
Robotics revenues increased $13.6 million, or 32%, during the
third quarter 2022 compared to the third quarter 2021. The increase
in revenues was due to higher vessel, ROV and trenching activities
year over year. Chartered vessel days increased to 376 days during
the third quarter 2022 compared to 358 days during the third
quarter 2021, and third quarter 2022 vessel utilization remained
relatively flat, at 98% compared to 99% during the third quarter
2021. Vessel days during the third quarter 2022 included 100 spot
vessel days compared to 176 spot vessel days during the third
quarter 2021. ROV and trencher utilization increased to 66% in the
third quarter 2022 from 43% in the third quarter 2021, and
trenching days increased to 176 days during the third quarter 2022
compared to 90 days during the third quarter 2021. Robotics
operating income increased $6.8 million during the third quarter
2022 compared to the third quarter 2021 due to higher revenues,
offset in part by higher costs on increased activity year over
year.
Shallow Water Abandonment
In the third quarter 2022, Shallow Water Abandonment generated
revenues of $67.4 million and income from operations of $16.3
million, which reflected the operating results of Helix Alliance
since its acquisition on July 1, 2022. Overall segment vessel
utilization was 80% across 21 vessels and 1,077 days, or 59% of
utilization across marketable plug and abandonment (P&A) and
coiled tubing systems during the quarter.
Production Facilities
Production Facilities revenues increased $0.8 million, or 4%, in
the third quarter 2022 compared to the prior quarter due primarily
to oil and gas production from our interest in the Thunder Hawk
Field following its acquisition on August 25, 2022. Production
Facilities revenues decreased $0.1 million, or 1%, compared to the
third quarter 2021 primarily due to lower oil and gas production.
The Helix Producer I completed its scheduled five-year regulatory
dry docking during the third quarter 2022.
Selling, General and Administrative and
Other
Selling, General and Administrative
Selling, general and administrative expenses were $23.6 million,
or 8.6% of revenue, in the third quarter 2022 compared to $16.0
million, or 9.9% of revenue, in the prior quarter. The increase
during the third quarter was primarily due to higher employee
incentive compensation costs and general and administrative costs
in our Shallow Water Abandonment segment following the closing of
our Alliance acquisition on July 1, 2022.
Acquisition and Integration Costs
Acquisition and integration costs are related to our acquisition
of Alliance, which closed on July 1, 2022 and included primarily
legal and professional fees as well as costs incurred to integrate
Alliance’s operations and systems and to align its financial
processes and procedures with those of Helix.
Other Income and Expenses
Other expense, net was $20.3 million in the third quarter 2022
compared to $13.5 million in the prior quarter and is comprised
almost entirely of unrealized non-cash foreign currency losses of
$19.7 million related to the approximate 8% weakening of the
British pound during the third quarter 2022 on U.S. dollar
denominated intercompany debt in our U.K. entities.
Cash Flows
Operating cash flows were $24.7 million during the third quarter
2022 compared to $(5.8) million during the prior quarter and $28.7
million during the third quarter 2021. The improvement in operating
cash flows quarter over quarter was primarily due to improvements
in operating income during the third quarter 2022 compared to the
prior quarter. The reduction in operating cash flows year over year
was primarily due to higher regulatory recertification costs for
our vessels and systems and negative changes in working capital
during the third quarter 2022 and tax refunds of $12.4 million
related to the CARES Act received during the third quarter 2021,
offset in part by higher operating income during the third quarter
2022. Regulatory recertification costs for our vessels and systems,
which are included in operating cash flows, were $10.7 million and
included the dry docking for the Helix Producer I during the third
quarter 2022 compared to $9.3 million during the prior quarter and
$0.9 million during the third quarter 2021.
Capital expenditures, which are included in investing cash
flows, totaled $2.8 million during the third quarter 2022 compared
to $1.6 million during the prior quarter and $0.6 million during
the third quarter 2021. Our net cash flow from investing activities
included a cash outflow of $112.6 million (net of acquired cash)
for our acquisition of Alliance on July 1, 2022.
Free Cash Flow was $21.8 million in the third quarter 2022
compared to $(7.4) million during the prior quarter and $28.1
million during the third quarter 2021. The increase in Free Cash
Flow quarter over quarter was due primarily to higher operating
cash flow, and the decrease in Free Cash Flow year over year was
due primarily to lower operating cash flow during the third quarter
2022. (Free Cash Flow is a non-GAAP measure. See reconciliation
below.)
Financial Condition and Liquidity
Cash and cash equivalents were $162.3 million at September 30,
2022, excluding $2.5 million of restricted cash. On July 1, 2022,
we amended our ABL facility to, among other things, increase the
size of the facility from $80 million to $100 million. Available
capacity under our ABL facility at September 30, 2022 was $81.8
million, resulting in total liquidity of $244.1 million. At
September 30, 2022 we had $263.6 million of long-term debt and net
debt of $98.8 million.
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 Tuesday,
October 25, 2022, 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 1-877-243-4912 for participants
in the United States and 1-303-223-0113 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. Our services
are centered toward and well positioned to facilitate global energy
transition by maximizing production of remaining oil and gas
reserves, decommissioning end-of-life oil and gas fields, and
supporting renewable energy developments. 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, 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 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 law.
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)
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
Sep. 30, 2022
Dec. 31, 2021
(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 $98,807 as of September 30, 2022. Net debt
calculated as long-term debt including current maturities of
long-term debt less cash and cash equivalents and restricted cash.
Helix Energy Solutions Group,
Inc.
Reconciliation of Non-GAAP
Measures
Three Months Ended
Nine Months Ended
(in thousands, unaudited)
9/30/2022
9/30/2021
6/30/2022
9/30/2022
9/30/2021
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/
Erik Staffeldt, Executive Vice President and CFO email:
estaffeldt@helixesg.com Ph: 281-618-0465
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Helix Energy Solutions (NYSE:HLX)
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Von Apr 2023 bis Apr 2024