Helix Energy Solutions Group, Inc. (NYSE: HLX) reported net income of $57.8 million, or $0.55 per diluted share, for the second quarter of 2014 compared to net income of $27.2 million, or $0.26 per diluted share, for the same period in 2013 and net income of $53.7 million, or $0.51 per diluted share, in the first quarter of 2014. Net income for the six months ended June 30, 2014 was $111.5 million, or $1.05 per diluted share, compared with net income of $28.8 million, or $0.27 per diluted share, for the six months ended June 30, 2013.
The first quarter 2014 results included a $10.5 million gain on the sale of our former spoolbase facility located in Ingleside, Texas, and a $7.2 million insurance claim settlement related to our former oil and gas business. These items contributed $0.11 of after-tax earnings per diluted share in the first quarter of 2014.
Owen Kratz, President and Chief Executive Officer of Helix, stated, “We believe that the market environment remains positive for well intervention services, and our well intervention assets have continued to perform at a high level. Robotics delivered increased results in the second quarter reflecting both stronger demand for trenching services and normal seasonal activity uplift.”
Summary of Results
(in thousands, except per share amounts and percentages, unaudited)
|Quarter Ended||Six Months Ended|
| Net Income Applicable to
|Income (Loss) from continuing operations||$||57,782||$||27,240||$||53,719||$||111,501||$||27,797|
|Income (Loss) from discontinued operations||-||(29||)||-||-||1,029|
|Diluted Earnings Per Share|
|Income from continuing operations||$||0.55||$||0.26||$||0.51||$||1.05||$||0.26|
|Income from discontinued operations||$||-||$||-||$||-||$||-||$||0.01|
|Adjusted EBITDA from continuing operations||$||109,050||$||74,533||$||92,501||$||201,551||$||116,564|
Segment Information, Operational and Financial Highlights
(in thousands, unaudited)
|Income from Operations:|
|Gain (Loss) on Disposition of Assets||(1,078||)||(1,085||)||11,496|
|Corporate / Other||(17,467||)||(14,207||)||(13,875||)|
Business Segment Results
- Well Intervention revenues increased 13% in the second quarter of 2014 from revenues in the first quarter of 2014, due to having a full quarter of the Helix 534 at full utilization, as well as all three North Sea vessels being 100% utilized in the second quarter. The spare rental intervention riser system (IRS no. 2) continues to positively contribute to revenues; the unit was on-hire for 86 days during the second quarter of 2014 versus 42 days in the first quarter of 2014. Vessel utilization for the Q4000 in the Gulf of Mexico was slightly down – 90% utilization in the second quarter of 2014 versus 100% in the first quarter of 2014, due to a planned regulatory inspection and thruster repairs.
- For Robotics, chartered vessel fleet utilization increased to 89% for the quarter from 80% in the first quarter of 2014. Overall stronger asset utilization and an increase in vessel days worked were the primary drivers resulting in a 36% growth in revenues in the second quarter of 2014 over the first quarter of 2014. Spot vessels contributed 161 days of vessel utilization during the second quarter of 2014. ROV, trencher and ROVDrill utilization in the second quarter of 2014 increased by 7% over the first quarter of 2014.
- During the second quarter of 2014, the Marco Polo platform was shut in following a compressor fire on May 8, 2014. The platform remained shut in for the remainder of the quarter, thus marginally affecting Production Facilities earnings in the second quarter. Production resumed at the platform in early July 2014.
- Selling, general and administrative expenses were 9.6% of revenue in the second quarter of 2014, 8.0% of revenue in the first quarter of 2014 and 8.3% in the second quarter of 2013. Our second quarter 2014 expense includes $5.2 million of charges associated with the provision for uncertain collection of a portion of our existing trade receivables related to our Robotics segment.
- Net interest expense and other decreased to $4.5 million in the second quarter of 2014 from $5.3 million in the first quarter of 2014. Net interest expense remained flat at $4.5 million in both the second and first quarter of 2014. Other expense was minimal in the second quarter of 2014 compared to $0.8 million in the first quarter of 2014, which reflects foreign exchange fluctuations in our non-U.S. dollar functional currencies.
- Our total liquidity at June 30, 2014 was approximately $1.1 billion, consisting of $501 million in cash and cash equivalents and $583 million in unused capacity under our revolver. Consolidated net debt at June 30, 2014 was $57 million. Net debt to book capitalization at June 30, 2014 was 3%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation below.)
- We incurred capital expenditures (including capitalized interest) totaling $105 million in the second quarter of 2014, compared to $70 million in the first quarter of 2014 and $59 million in the second quarter of 2013.