Hornbeck Offshore Services, Inc 10-Q for FY2022 Q2

Hornbeck Offshore Services, Inc. (HOS)

10-Q 2022-07-27 For: 2022-06-30

Added on April 09, 2026

About this 10-Q

Hornbeck Offshore Services, Inc filed this 10-Q on July 27, 2022, covering the quarter ended June 30, 2022 (FY2022 Q2).

Headline figures

Quarter ended June 30, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $162.61M; up 0.4% from $161.94M a year earlier
Net loss: $29.7M; compared with a net loss of $13.71M a year earlier
Diluted EPS: -$0.20; compared with -$0.09 a year earlier

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Minnesota		95-3409686
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
3505 West Sam Houston Parkway North
Suite 400
Houston Texas		77043
(Address of principal executive offices)		(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	HLX	New York Stock Exchange


Large accelerated filer ☑	Accelerated filer ☐	Non-accelerated filer ☐	Smaller reporting company ☐	Emerging growth company ☐


PART I.	FINANCIAL INFORMATION	PAGE

Item 1.	Financial Statements:	3
	Condensed Consolidated Balance Sheets – June 30, 2022 (Unaudited) and December 31, 2021	3

	Condensed Consolidated Statements of Operations (Unaudited) – Three and six months ended June 30, 2022 and 2021	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and six months ended June 30, 2022 and 2021	5

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Three months ended June 30, 2022 and 2021	6

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Six months ended June 30, 2022 and 2021	7

	Condensed Consolidated Statements of Cash Flows (Unaudited) – Six months ended June 30, 2022 and 2021	8

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37

Item 4.	Controls and Procedures	37

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 3.	Defaults Upon Senior Securities	39

Item 4.	Mine Safety Disclosures	39

Item 5.	Other Information	39

Item 6.	Exhibits	40

	Signatures	41


	June 30,		December 31,
	2022		2021
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	260,595	$	253,515
Restricted cash		2,505		73,612
Accounts receivable, net of allowance for credit losses of $1,563 and $1,477, respectively		153,314		144,137
Other current assets		68,990		58,274
Total current assets		485,404		529,538
Property and equipment		2,860,872		2,938,154
Less accumulated depreciation		(1,321,699)		(1,280,509)
Property and equipment, net		1,539,173		1,657,645
Operating lease right-of-use assets		139,262		104,190
Other assets, net		49,814		34,655
Total assets	$	2,213,653	$	2,326,028

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	99,716	$	87,959
Accrued liabilities		85,180		91,712
Current maturities of long-term debt		8,133		42,873
Current operating lease liabilities		39,697		55,739
Total current liabilities		232,726		278,283
Long-term debt		258,977		262,137
Operating lease liabilities		103,548		50,198
Deferred tax liabilities		86,416		86,966
Other non-current liabilities		196		975
Total liabilities		681,863		678,559
Commitments and contingencies
Shareholders’ equity:
Common stock, no par, 240,000 shares authorized, 151,714 and 151,124 shares issued, respectively		1,295,016		1,292,479
Retained earnings		339,342		411,072
Accumulated other comprehensive loss		(102,568)		(56,082)
Total shareholders’ equity		1,531,790		1,647,469
Total liabilities and shareholders’ equity	$	2,213,653	$	2,326,028


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Net revenues	$	162,612	$	161,941	$	312,737	$	325,356
Cost of sales		163,966		158,811		332,700		307,602
Gross profit (loss)		(1,354)		3,130		(19,963)		17,754
Loss on disposition of assets, net		—		(646)		—		(646)
Selling, general and administrative expenses		(17,622)		(13,425)		(31,990)		(28,604)
Loss from operations		(18,976)		(10,941)		(51,953)		(11,496)
Equity in earnings of investment		8,184		—		8,184		—
Net interest expense		(4,799)		(5,919)		(9,973)		(11,972)
Other income (expense), net		(13,471)		960		(17,352)		2,577
Royalty income and other		797		249		2,938		2,306
Loss before income taxes		(28,265)		(15,651)		(68,156)		(18,585)
Income tax provision (benefit)		1,434		(1,968)		3,574		(1,852)
Net loss		(29,699)		(13,683)		(71,730)		(16,733)
Net income (loss) attributable to redeemable noncontrolling interests		—		26		—		(146)
Net loss attributable to common shareholders	$	(29,699)	$	(13,709)	$	(71,730)	$	(16,587)

Loss per share of common stock:
Basic	$	(0.20)	$	(0.09)	$	(0.47)	$	(0.11)
Diluted	$	(0.20)	$	(0.09)	$	(0.47)	$	(0.11)

Weighted average common shares outstanding:
Basic		151,205		150,028		151,174		149,982
Diluted		151,205		150,028		151,174		149,982


						Accumulated
						Other		Total		Redeemable
	Common Stock			Retained		Comprehensive		Shareholders’		Noncontrolling
	Shares	Amount		Earnings		Loss		Equity		Interests
Balance, March 31, 2022	151,637	$	1,292,935	$	369,041	$	(69,230)	$	1,592,746	$	—
Net loss	—		—		(29,699)		—		(29,699)		—
Foreign currency translation adjustments	—		—		—		(33,338)		(33,338)		—
Activity in company stock plans, net and other	77		231		—		—		231		—
Share-based compensation	—		1,850		—		—		1,850		—
Balance, June 30, 2022	151,714	$	1,295,016	$	339,342	$	(102,568)	$	1,531,790	$	—


			Facilities and
	Vessels		Equipment		Total
Less than one year	$	42,744	$	5,135	$	47,879
One to two years		34,404		4,672		39,076
Two to three years		34,002		4,058		38,060
Three to four years		17,155		916		18,071
Four to five years		16,847		966		17,813
Over five years		—		3,289		3,289
Total lease payments	$	145,152	$	19,036	$	164,188
Less: imputed interest		(18,030)		(2,913)		(20,943)
Total operating lease liabilities	$	127,122	$	16,123	$	143,245

Current operating lease liabilities	$	35,306	$	4,391	$	39,697
Non-current operating lease liabilities		91,816		11,732		103,548
Total operating lease liabilities	$	127,122	$	16,123	$	143,245


	2023		2026		MARAD
	Notes		Notes		Debt		Total
Less than one year	$	—	$	—	$	8,133	$	8,133
One to two years		30,000		—		8,538		38,538
Two to three years		—		—		8,965		8,965
Three to four years		—		200,000		9,412		209,412
Four to five years		—		—		9,882		9,882
Gross debt		30,000		200,000		44,930		274,930
Unamortized debt issuance costs ⁽¹⁾		(225)		(5,278)		(2,317)		(7,820)
Total debt		29,775		194,722		42,613		267,110
Less current maturities		—		—		(8,133)		(8,133)
Long-term debt	$	29,775	$	194,722	$	34,480	$	258,977


	Well				Production		Intercompany		Total
	Intervention		Robotics		Facilities		Eliminations		Revenue
Three months ended June 30, 2022
Short-term	$	86,048	$	25,852	$	—	$	—	$	111,900
Long-term		20,243		23,998		17,678		(11,207)		50,712
Total	$	106,291	$	49,850	$	17,678	$	(11,207)	$	162,612

Three months ended June 30, 2021
Short-term	$	76,669	$	21,012	$	—	$	—	$	97,681
Long-term		55,636		10,639		14,218		(16,233)		64,260
Total	$	132,305	$	31,651	$	14,218	$	(16,233)	$	161,941

Six months ended June 30, 2022
Short-term	$	177,394	$	46,989	$	—	$	(635)	$	223,748
Long-term		35,264		40,212		35,972		(22,459)		88,989
Total	$	212,658	$	87,201	$	35,972	$	(23,094)	$	312,737

Six months ended June 30, 2021
Short-term	$	125,886	$	30,419	$	—	$	—	$	156,305
Long-term		140,187		23,388		30,665		(25,189)		169,051
Total	$	266,073	$	53,807	$	30,665	$	(25,189)	$	325,356


	Three Months Ended			Three Months Ended
	June 30, 2022			June 30, 2021
	Income		Shares	Income		Shares
Basic and Diluted:
Net loss attributable to common shareholders	$	(29,699)		$	(13,709)
Net loss available to common shareholders	$	(29,699)	151,205	$	(13,709)	150,028


			Grant Date
			Fair Value
Date of Grant	Award Type	Shares/Units	Per Share/Unit		Vesting Period
January 1, 2022 ⁽¹⁾	RSU	1,065,705	$	3.12	33% per year over three years
January 4, 2022 ⁽¹⁾	PSU	1,065,705	$	4.25	100% on January 4, 2025
January 4, 2022 ⁽²⁾	Restricted stock	15,775	$	3.12	100% on January 1, 2024
April 1, 2022 ⁽²⁾	Restricted stock	14,710	$	4.78	100% on January 1, 2024


	2022		2021
AROs at January 1,	$	29,658	$	30,913
Revisions in estimates		—		(2,631)
Accretion expense		1,303		48
AROs at June 30,	$	30,961	$	28,330


	2022		2021
Balance at January 1,	$	1,477	$	3,469
Additions (reductions) ⁽¹⁾		86		(76)
Write-offs ⁽²⁾		—		(1,845)
Balance at June 30,	$	1,563	$	1,548


	June 30, 2022				December 31, 2021
	Principal		Fair		Principal		Fair
	Amount ⁽¹⁾		Value ⁽²⁾		Amount ⁽¹⁾		Value ⁽²⁾
MARAD Debt (matures February 2027)	$	44,930	$	45,851	$	48,850	$	52,481
2022 Notes (matured May 2022)		—		—		35,000		34,794
2023 Notes (mature September 2023)		30,000		29,615		30,000		29,054
2026 Notes (mature February 2026)		200,000		191,902		200,000		200,562
Total debt	$	274,930	$	267,368	$	313,850	$	316,891


	Six Months Ended
	June 30,
	2022		2021
Cash flows from operating activities:
Net loss	$	(71,730)	$	(16,733)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		66,646		69,507
Amortization of debt issuance costs		1,161		1,587
Share-based compensation		3,572		3,901
Deferred income taxes		(550)		(3,649)
Equity in earnings of investment		(8,184)		—
Loss on disposition of assets, net		—		646
Unrealized foreign currency (gain) loss		12,578		(1,366)
Changes in operating assets and liabilities:
Accounts receivable, net		(15,165)		6,620
Other current assets		(10,449)		16,017
Income tax payable, net of income tax receivable		846		5,136
Accounts payable and accrued liabilities		18,754		18,828
Other, net		(20,733)		(7,954)
Net cash provided by (used in) operating activities		(23,254)		92,540

Cash flows from investing activities:
Capital expenditures		(2,187)		(6,772)
Distribution from equity investment, net		7,840		—
Proceeds from sale of assets		—		11
Net cash provided by (used in) investing activities		5,653		(6,761)

Cash flows from financing activities:
Repayment of convertible senior notes		(35,000)		—
Repayment of Term Loan		—		(1,750)
Repayment of Nordea Q5000 Loan		—		(53,572)
Repayment of MARAD Debt		(3,920)		(3,734)
Debt issuance costs		(227)		(43)
Acquisition of redeemable noncontrolling interests		—		(2,268)
Payments related to tax withholding for share-based compensation		(1,525)		(1,878)
Proceeds from issuance of ESPP shares		353		443
Net cash used in financing activities		(40,319)		(62,802)

Effect of exchange rate changes on cash and cash equivalents and restricted cash		(6,107)		896


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2022		2021		2022		2021
Operating lease cost	$	13,798	$	14,839	$	28,260	$	31,055
Variable lease cost		4,625		3,635		9,547		7,119
Short-term lease cost		7,571		5,243		13,009		6,975
Sublease income		(381)		(329)		(630)		(678)
Net lease cost	$	25,613	$	23,388	$	50,186	$	44,471


	Three Months Ended						Increase/
	June 30,						(Decrease)
	2022			2021			Amount		Percent
Net revenues —
Well Intervention	$	106,291		$	132,305		$	(26,014)	(20)	%
Robotics		49,850			31,651			18,199	57	%
Production Facilities		17,678			14,218			3,460	24	%
Intercompany eliminations		(11,207)			(16,233)			5,026
	$	162,612		$	161,941		$	671	0	%

Gross profit (loss) —
Well Intervention	$	(19,336)		$	(2,542)		$	(16,794)	(661)	%
Robotics		11,597			2,286			9,311	407	%
Production Facilities		6,687			5,103			1,584	31	%
Corporate, eliminations and other		(302)			(1,717)			1,415
	$	(1,354)		$	3,130		$	(4,484)	(143)	%

Gross margin —
Well Intervention		(18)	%		(2)	%
Robotics		23	%		7	%
Production Facilities		38	%		36	%
Total company		(1)	%		2	%

Number of vessels or robotics assets ⁽¹⁾ / Utilization ⁽²⁾
Well Intervention vessels		7 / 67	%		7 / 72	%
Robotics assets ⁽³⁾		45 / 53	%		47 / 36	%
Chartered robotics vessels		5 / 94	%		3 / 93	%


	Total		Short-Term		Long-Term
MARAD debt	$	44,930	$	8,133	$	36,797
2023 Notes		30,000		—		30,000
2026 Notes		200,000		—		200,000
Interest related to debt		57,643		17,167		40,476
Property and equipment		9,818		9,818		—
Operating leases ⁽¹⁾		281,530		92,262		189,268
Total cash obligations	$	623,921	$	127,380	$	496,541


				(c)	(d)
				Total number	Maximum
				of shares	number of shares
	(a)	(b)		purchased as	that may yet
	Total number	Average		part of publicly	be purchased
	of shares	price paid		announced plans	under the plans
Period	purchased ⁽¹⁾	per share		or programs	or programs ⁽²⁾
April 1 to April 30, 2022	—	$	—	—	9,197,893
May 1 to May 31, 2022	—		—	—	9,260,720
June 1 to June 30, 2022	—		—	—	9,260,720
	—	$	—	—


Exhibit Number	Description	Filed or Furnished Herewith or Incorporated by Reference from the Following Documents (Registration or File Number)
3.1	2005 Amended and Restated Articles of Incorporation, as amended, of Helix Energy Solutions Group, Inc.	Exhibit 3.1 to the Current Report on Form 8-K filed on March 1, 2006 (000-22739)
3.2	Second Amended and Restated By-Laws of Helix Energy Solutions Group, Inc., as amended.	Exhibit 3.1 to the Current Report on Form 8-K filed on September 28, 2006 (001-32936)
4.1	Amendment No. 1, dated as of July 1, 2022, to Loan, Security and Guaranty Agreement, among Helix Energy Solutions Group, Inc., Helix Well Ops Inc., Helix Robotics Solutions, Inc., Deepwater Abandonment Alternatives, Inc., Helix Well Ops (U.K.) Limited and Helix Robotics Solutions Limited as borrowers, the guarantors party thereto, the lenders party thereto, and Bank of America, N.A., as agent and security trustee for the lenders.	Exhibit 4.1 to the Current Report on Form 8-K filed on July 1, 2022 (001-32936)
10.1	Equity Purchase Agreement, dated as of May 16, 2022, by and among Helix Alliance Decom, LLC, Stephen J. Williams and Helix Energy Solutions Group, Inc. (solely for purposes of Sections 1.05(d) and 6.14).	Exhibit 2.1 to the Current Report on Form 8-K filed on July 1, 2022 (000-22739)
31.1	Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Owen Kratz, Chief Executive Officer.	Filed herewith
31.2	Certification Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 by Erik Staffeldt, Chief Financial Officer.	Filed herewith
32.1	Certification of Helix’s Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes–Oxley Act of 2002.	Furnished herewith
101.INS	XBRL Instance Document.	The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	Inline XBRL Taxonomy Extension Schema Document.	Filed herewith
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	Filed herewith
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	Filed herewith
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	Filed herewith
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	Filed herewith
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).	Filed herewith


		HELIX ENERGY SOLUTIONS GROUP, INC.
		(Registrant)

Date: July 27, 2022	By:	/s/ Owen Kratz
		Owen Kratz
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: July 27, 2022	By:	/s/ Erik Staffeldt
		Erik Staffeldt
		Executive Vice President and
		Chief Financial Officer
		(Principal Financial Officer)

	/s/ Owen Kratz
	Owen Kratz
	President and Chief Executive Officer

	/s/ Erik Staffeldt
	Erik Staffeldt
	Executive Vice President and Chief Financial Officer