Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $53.7 million, or $0.51 per diluted share, for the first quarter of 2014 compared to net income of $1.6 million, or $0.02 per diluted share, for the same period in 2013 and net income of $36.5 million, or $0.35 per diluted share, in the fourth quarter of 2013.
First quarter 2014 results include a $10.5 million gain on the sale of our former spoolbase facilities located in Ingleside, Texas, and a $7.2 million insurance reimbursement settlement related to our former oil and gas business. These items contributed $0.11 of after-tax earnings per diluted share in the first quarter of 2014.
Owen Kratz, President and Chief Executive Officer of Helix, stated, “We successfully introduced the Helix 534 to our well intervention fleet in the first quarter and the vessel is off to a good start. We also realized better than expected Robotics activity in the first quarter of 2014; our Robotics unit is projected to have a much stronger 2014 versus 2013.”
Summary of Results
|(in thousands, except per share amounts and percentages, unaudited)|
| Net Income Applicable to
|Income from continuing operations||$||53,719||$||557||$||36,503|
|Income from discontinued operations||-||1,058||-|
|Diluted Earnings Per Share|
|Income from continuing operations||$||0.51||$||0.01||$||0.35|
|Income from discontinued operations||$||-||$||0.01||$||-|
|Adjusted EBITDA from continuing operations||$||92,501||$||42,031||$||81,549|
Segment Information, Operational and Financial Highlights
|(in thousands, unaudited)|
|Income from Operations:|
|Gain on Sale of Assets||11,496||-||-|
Discontinued Operations (Oil and Gas):
|Income from Operations||$||-||$||4,360||$||-|
Business Segment Results
- Well Intervention revenues increased 20% in the first quarter of 2014 from revenues in the fourth quarter of 2013, due to both the addition of the Helix 534 into the fleet in mid-February and the recognition of deferred mobilization revenue related to the Skandi Constructor’s West Africa project. The spare rental intervention riser system (IRS no. 2) also positively contributed to revenues, while being on-hire for 42 days during the first quarter of 2014. Vessel utilization in the North Sea was slightly down – 86% utilization in the first quarter of 2014 versus 92% in the fourth quarter of 2013, primarily reflecting the regulatory dry dock for the Well Enhancer that commenced in mid-December 2013 but was completed late January 2014. The Q4000 achieved 100% utilization for the third consecutive quarter.
- For Robotics, chartered vessel fleet utilization decreased to 80% for the quarter from 88% in the fourth quarter of 2013. Revenues were marginally impacted by the decrease in utilization – 3% decrease in first quarter 2014 – yet partially offset by strong ROV utilization. ROV utilization in the first quarter of 2014 increased by 4% over the fourth quarter of 2013. Revenues were also bolstered from the 62 days of utilization garnered from four additional spot vessels during the first quarter of 2014.
- During the first quarter of 2014 we acquired the minority interest in Kommandor LLC, and as a result the company now owns 100% of the Helix Producer I.
- Selling, general and administrative expenses were 8.0% of revenue in the first quarter of 2014, 7.6% of revenue in the fourth quarter of 2013 and 11.8% in the first quarter of 2013.
- Net interest expense and other increased to $5.3 million in the first quarter of 2014 from $2.8 million in the fourth quarter of 2013. Net interest expense decreased to $4.5 million in the first quarter of 2014 from $4.6 million in the fourth quarter of 2013. Other expense was $0.8 million in the first quarter of 2014 compared to $1.9 million of other income in the fourth quarter of 2013, primarily due to foreign exchange fluctuations in our non-U.S. dollar functional currencies.
- Our total liquidity at March 31, 2014 was approximately $1.1 billion, consisting of cash and cash equivalents of $470 million and $582 million in unused capacity under our revolver. Consolidated net debt at March 31, 2014 was $91 million. Net debt to book capitalization at March 31, 2014 was 6%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation below.)
- We incurred capital expenditures (including capitalized interest) totaling $70 million in the first quarter of 2014, compared to $56 million in the fourth quarter of 2013 and $80 million in the first quarter of 2013.