Press Releases
HOUSTON--(BUSINESS WIRE)--April 30, 2008--Helix Energy Solutions (NYSE:HLX) reported first quarter net income of $74.3 million, or $0.79 per diluted share, compared to $55.8 million, or $0.60 per diluted share reported for the first quarter of 2007.
Summary of Results --------------------------------------------------------------------- (in thousands, except per share amounts and percentages) First Quarter Fourth Quarter --------------------------- -------------- 2008 2007 2007 ------------- ------------- -------------- Revenues $450,737 $396,055 $500,243 Gross Profit 120,879 135,615 70,058 27% 34% 14% Net Income 74,335 55,820 120,412(a) 17% 14% 24% Diluted Earnings Per Share $0.79 $0.60 $1.25(a) EBITDAX $238,764 $166,461 $228,351 (a) Includes gain on Cal Dive's acquisition of Horizon.
Owen Kratz, President and Chief Executive Officer of Helix, stated, "A few months ago we laid our budget assumptions for 2008. I am pleased to report first quarter was a strong operating quarter for us. Services performed better than our budget assumptions and production rates as well as commodity prices exceeded our budget assumptions. We also executed the first of the budgeted production sales in this quarter with others progressing as planned. "
Financial Highlights
- Revenues: The $54.7 million increase in year-over-year first quarter revenues was driven by increases in revenue from both Oil and Gas production and Contracting Services due primarily to continued market demand in the deepwater and an increase in year-over-year commodity prices.
- Margins: Margins of 27% for the first quarter 2008 were 7 points lower than 34% in the first quarter of 2007 as Cal Dive experienced a seasonal margin decline, the Q4000 was out of service for upgrades, and we experienced a $14 million impairment at our Devil's Island field.
- Sale of Oil and Gas Interests: The Company sold 30% working interests in its Danny Noonan discoveries in two separate transactions for total cash consideration of approximately $165 million, an obligation of the purchaser to pay their 30% share of all related future capital expenditures and an obligation to pay up to an additional $20 million based on reaching production milestones. The first transaction for 20% closed March 31, 2008 and resulted in a gain of $61.1 million in the first quarter. The second transaction for 10% closed on April 23, 2008.
- SG&A: $47.8 million increased $17.2 million over the same period a year ago due primarily to increased overhead to support our growth (particularly Cal Dive) and severance relating to the resignation of our former CEO. Excluding the severance, this level of SG&A was 9% of first quarter revenues, compared to 8% in the year ago quarter.
- Equity in Earnings: $10.9 million is comprised of our share of earnings for the quarter relating to the Marco Polo facility and the Independence Hub facility.
- Income Tax Provision: The Company's effective tax rate for the quarter was 36.6%, compared to the 34% effective rate for last year's first quarter due primarily to provision of deferred taxes relating to Cal Dive's earnings.
- Balance Sheet: Total consolidated net debt as of March 31, 2008 was $1.7 billion. This includes $335 million outstanding under Cal Dive's term loan that was used to fund the cash portion of its acquisition of Horizon Offshore, which loan is non-recourse to Helix. Total consolidated net debt as of March 31, 2008 represents 46% net debt to book capitalization.
Further details are provided in the presentation for Helix's quarterly conference call (see the Investor Relations page of www.HelixESG.com). The call, scheduled for 8:00 a.m. Central Daylight Time on Thursday, May 1, 2008, will be webcast live. If you wish to dial in to the call the telephone number is 888 791 6044 (Domestic) or 1-210-234-0006 (International). The pass code is Pursell. A replay will be available from the Audio Archives page on our website.
Helix Energy Solutions, headquartered in Houston, Texas, is an international offshore energy company that provides development solutions and other key life of field services to the open energy market as well as to our own oil and gas business unit.
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 statements that could be deemed "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, any projections of revenue, gross margin, expenses, earnings or losses from operations, or other financial items; future production volumes, results of exploration, exploitation, development, acquisition and operations expenditures, and prospective reserve levels of property or wells; any statements of the plans, strategies and objectives of management for future operations; any statement concerning developments, performance or industry rankings; any statements regarding future economic conditions or performance; any statements of expectation or belief; and any statements of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include the performance of contracts by suppliers, customers and partners; employee management issues; complexities of global political and economic developments; geologic risks and other risks described from time to time in our reports filed with the Securities and Exchange Commission ("SEC"), including the company's Annual Report on Form 10-K for the year ending December 31, 2007. We assume no obligation and do not intend to update these forward-looking statements.
HELIX ENERGY SOLUTIONS GROUP, INC. ---------------------------------------------------------------------- Comparative Condensed Consolidated Statements of Operations ---------------------------------------------------------------------- Three Months Ended Mar. 31, (in thousands, except per share data) 2008 2007 ----------------------------------------- ------------- ------------- (Unaudited) Net revenues: Contracting services $ 279,686 $ 265,088 Oil and gas 171,051 130,967 ------------- ------------- 450,737 396,055 Cost of sales: Contracting services 220,186 178,055 Oil and gas 109,672 82,385 ------------- ------------- 329,858 260,440 Gross profit 120,879 135,615 Gain on sale of assets, net 61,113 - Selling and administrative expense 47,784 30,600 ------------- ------------- Income from operations 134,208 105,015 Equity in earnings of investments 10,923 6,104 Net interest expense and other 26,046 13,012 ------------- ------------- Income before income taxes 119,085 98,107 Provision for income taxes 43,632 33,123 Minority interest 237 8,219 ------------- ------------- Net income 75,216 56,765 Preferred stock dividends 881 945 ------------- ------------- Net income applicable to common shareholders $ 74,335 $ 55,820 ============= ============= Weighted Avg. Common Shares Outstanding: Basic 90,413 89,994 ============= ============= Diluted 95,186 94,312 ============= ============= Earnings Per Common Share: Basic $ 0.82 $ 0.62 ============= ============= Diluted $ 0.79 $ 0.60 ============= =============
Comparative Condensed Consolidated Balance Sheets --------------------------------------------------------------------- ASSETS (in thousands) Mar. 31, 2008 Dec. 31, 2007 --------------------------------------------------------------------- (unaudited) Current Assets: Cash and equivalents $ 176,119 $ 89,555 Accounts receivable 404,008 512,132 Other current assets 122,720 125,582 --------------------------------------------------------------------- Total Current Assets 702,847 727,269 Net Property & Equipment: Contracting Services 1,618,051 1,507,463 Oil and Gas 1,776,719 1,737,225 Equity investments 207,579 213,429 Goodwill 1,087,904 1,089,758 Other assets, net 194,870 177,209 --------------------------------------------------------------------- Total Assets $ 5,587,970 $ 5,452,353 ===================================================================== LIABILITIES & SHAREHOLDERS' EQUITY (in thousands) Mar. 31, 2008 Dec. 31, 2007 -------------------------------------------------------------------- (unaudited) Current Liabilities: Accounts payable $ 321,595 $ 382,767 Accrued liabilities 215,092 221,366 Income taxes payable 26,849 - Current mat of L-T debt (1) 54,301 74,846 -------------------------------------------------------------------- Total Current Liabilities 617,837 678,979 Long-term debt (1) 1,835,878 1,725,541 Deferred income taxes 626,946 625,508 Decommissioning liabilities 192,727 193,650 Other long-term liabilities 66,026 63,183 Minority interest 267,978 263,926 Convertible preferred stock (1) 55,000 55,000 Shareholders' equity (1) 1,925,578 1,846,566 -------------------------------------------------------------------- Total Liabilities & Equity $ 5,587,970 $ 5,452,353 ==================================================================== (1) Net debt to book capitalization - 46% at March 31, 2008. Calculated as total debt less cash and equivalents ($1,714,060) divided by sum of total net debt, convertible preferred stock and shareholders' equity ($3,694,638).
Helix Energy Solutions Group, Inc. Reconciliation of Non GAAP Measures Three Months Ended March 31, 2008 Earnings Release: -------------------------------------- Reconciliation From Net Income to Adjusted EBITDAX: --------------------------------------------------------------------- 1Q08 1Q07 4Q07 -------- -------- --------- (in thousands) Net income applicable to common shareholders $ 74,335 $ 55,820 $120,412 Cal Dive gains - - (98,602) Non-cash impairment and other unusual items - - 57,814 Preferred stock dividends 881 945 881 Income tax provision 43,523 28,617 37,552 Net interest expense and other 23,236 12,331 14,396 Depreciation and amortization 94,901 67,558 84,695 Exploration expense 1,888 1,190 11,203 ----------------------------- Adjusted EBITDAX $238,764 $166,461 $228,351 ============================= We calculate adjusted EBITDAX as earnings before net interest expense, taxes, depreciation and amortization, and exploration expense. Further, we reduce adjusted EBITDAX for the minority interest in Cal Dive that we do not own. Adjusted EBITDAX margin is defined as adjusted EBITDAX divided by net revenues. These non-GAAP measures are useful to investors and other internal and external users of our financial statements in evaluating our operating performance because they are widely used by investors in our industry to measure a company's operating performance without regard to items which can vary substantially from company to company and help investors meaningfully compare our results from period to period. Adjusted EBITDAX should not be considered in isolation or as a substitute for, but instead is supplemental to, income from operations, net income or other income data prepared in accordance with GAAP. Non-GAAP financial measures should be viewed in addition to, and not as an alternative to our reported results prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions which are excluded.
CONTACT: Helix Energy Solutions, Houston
Chief Financial Officer
Wade Pursell, 281-618-0400
SOURCE: Helix Energy Solutions