Hornbeck Offshore Services, Inc 10-Q for FY2023 Q2

Hornbeck Offshore Services, Inc. (HOS)

10-Q 2023-07-27 For: 2023-06-30

Added on April 09, 2026

About this 10-Q

Hornbeck Offshore Services, Inc filed this 10-Q on July 27, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).

Headline figures

Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $308.82M; up 89.9% from $162.61M a year earlier
Net income: $7.1M; compared with a net loss of $29.7M a year earlier
Diluted EPS: $0.05; compared with -$0.20 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, no par value	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, 2023 (Unaudited) and December 31, 2022	3

	Condensed Consolidated Statements of Operations (Unaudited) – Three and six months ended June 30, 2023 and 2022	4

	Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) – Three and six months ended June 30, 2023 and 2022	4

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Three and six months ended June 30, 2023 and 2022	5

	Condensed Consolidated Statements of Cash Flows (Unaudited) – Six months ended June 30, 2023 and 2022	6

	Notes to Condensed Consolidated Financial Statements (Unaudited)	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38

Item 4.	Controls and Procedures	39

PART II.	OTHER INFORMATION	40

Item 1.	Legal Proceedings	40

Item 1A.	Risk Factors	40

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	40

Item 3.	Defaults Upon Senior Securities	40

Item 4.	Mine Safety Disclosures	40

Item 5.	Other Information	40

Item 6.	Exhibits	41

	Signatures	42


	June 30,		December 31,
	2023		2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	182,651	$	186,604
Restricted cash		—		2,507
Accounts receivable, net of allowance for credit losses of $2,966 and $2,277, respectively		253,147		212,779
Other current assets		76,212		58,699
Total current assets		512,010		460,589
Property and equipment		3,059,103		3,016,312
Less accumulated depreciation		(1,450,115)		(1,374,697)
Property and equipment, net		1,608,988		1,641,615
Operating lease right-of-use assets		177,942		197,849
Deferred recertification and dry dock costs, net		77,243		38,778
Other assets, net		47,662		50,507
Total assets	$	2,423,845	$	2,389,338

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	145,937	$	135,267
Accrued liabilities		142,609		73,574
Current maturities of long-term debt		38,499		38,200
Current operating lease liabilities		55,667		50,914
Total current liabilities		382,712		297,955
Long-term debt		222,469		225,875
Operating lease liabilities		131,175		154,686
Deferred tax liabilities		99,864		98,883
Other non-current liabilities		55,697		95,230
Total liabilities		891,917		872,629
Commitments and contingencies
Shareholders’ equity:
Common stock, no par, 240,000 shares authorized, 150,810 and 151,935 shares issued, respectively		1,291,307		1,298,740
Retained earnings		325,223		323,288
Accumulated other comprehensive loss		(84,602)		(105,319)
Total shareholders’ equity		1,531,928		1,516,709
Total liabilities and shareholders’ equity	$	2,423,845	$	2,389,338


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Net revenues	$	308,817	$	162,612	$	558,901	$	312,737
Cost of sales		253,468		163,966		488,368		332,700
Gross profit (loss)		55,349		(1,354)		70,533		(19,963)
Gain on disposition of assets, net		—		—		367		—
Acquisition and integration costs		(309)		(1,587)		(540)		(1,587)
Change in fair value of contingent consideration		(10,828)		—		(14,820)		—
Selling, general and administrative expenses		(24,007)		(16,035)		(43,638)		(30,403)
Income (loss) from operations		20,205		(18,976)		11,902		(51,953)
Equity in earnings of investment		—		8,184		—		8,184
Net interest expense		(4,228)		(4,799)		(8,415)		(9,973)
Other expense, net		(5,740)		(13,471)		(2,296)		(17,352)
Royalty income and other		175		797		2,038		2,938
Income (loss) before income taxes		10,412		(28,265)		3,229		(68,156)
Income tax provision		3,312		1,434		1,294		3,574
Net income (loss)	$	7,100	$	(29,699)	$	1,935	$	(71,730)

Earnings (loss) per share of common stock:
Basic	$	0.05	$	(0.20)	$	0.01	$	(0.47)
Diluted	$	0.05	$	(0.20)	$	0.01	$	(0.47)

Weighted average common shares outstanding:
Basic		150,791		151,205		151,275		151,174
Diluted		153,404		151,205		153,873		151,174


						Accumulated
						Other		Total
	Common Stock			Retained		Comprehensive		Shareholders’
	Shares	Amount		Earnings		Loss		Equity
Balance, March 31, 2023	151,494	$	1,294,484	$	318,123	$	(96,887)	$	1,515,720
Net income	—		—		7,100		—		7,100
Foreign currency translation adjustments	—		—		—		12,285		12,285
Repurchases of common stock	(750)		(5,123)		—		—		(5,123)
Activity in company stock plans, net and other	66		446		—		—		446
Share-based compensation	—		1,500		—		—		1,500
Balance, June 30, 2023	150,810	$	1,291,307	$	325,223	$	(84,602)	$	1,531,928


	July 1, 2022
Cash consideration	$	118,961
Contingent consideration		26,700
Total fair value of consideration transferred	$	145,661

Assets acquired:
Cash and cash equivalents	$	6,336
Accounts receivable		43,378
Other current assets		6,077
Property and equipment		117,321
Operating lease right-of-use assets		1,205
Intangible assets		1,500
Other assets		2,133
Total assets acquired		177,950
Liabilities assumed:
Accounts payable		20,480
Accrued liabilities		3,073
Operating lease liabilities		1,205
Deferred tax liabilities		7,531
Total liabilities assumed		32,289
Net assets acquired	$	145,661


			Facilities and
	Vessels		Equipment		Total
Less than one year	$	61,103	$	6,722	$	67,825
One to two years		54,287		5,135		59,422
Two to three years		35,941		1,107		37,048
Three to four years		34,893		1,008		35,901
Four to five years		12,138		1,008		13,146
Over five years		—		2,422		2,422
Total lease payments	$	198,362	$	17,402	$	215,764
Less: imputed interest		(26,707)		(2,215)		(28,922)
Total operating lease liabilities	$	171,655	$	15,187	$	186,842

Current operating lease liabilities	$	49,597	$	6,070	$	55,667
Non-current operating lease liabilities		122,058		9,117		131,175
Total operating lease liabilities	$	171,655	$	15,187	$	186,842


	2023		2026		MARAD
	Notes		Notes		Debt		Total
Less than one year	$	30,000	$	—	$	8,538	$	38,538
One to two years		—		—		8,965		8,965
Two to three years		—		200,000		9,412		209,412
Three to four years		—		—		9,882		9,882
Gross debt		30,000		200,000		36,797		266,797
Unamortized debt issuance costs ⁽¹⁾		(39)		(3,961)		(1,829)		(5,829)
Total debt		29,961		196,039		34,968		260,968
Less current maturities		(29,961)		—		(8,538)		(38,499)
Long-term debt	$	—	$	196,039	$	26,430	$	222,469


	Well				Shallow Water		Production		Intercompany		Total
	Intervention		Robotics		Abandonment		Facilities		Eliminations		Revenue
Three months ended June 30, 2023
Short-term	$	75,621	$	38,069	$	74,116	$	—	$	(26)	$	187,780
Long-term		78,600		31,981		2,190		23,128		(14,862)		121,037
Total	$	154,221	$	70,050	$	76,306	$	23,128	$	(14,888)	$	308,817

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

Six months ended June 30, 2023
Short-term	$	153,388	$	73,274	$	123,497	$	—	$	(26)	$	350,133
Long-term		143,271		45,998		2,190		44,033		(26,724)		208,768
Total	$	296,659	$	119,272	$	125,687	$	44,033	$	(26,750)	$	558,901

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


	Three Months Ended			Three Months Ended
	June 30, 2023			June 30, 2022
	Income		Shares	Income		Shares
Basic:
Net income (loss)	$	7,100		$	(29,699)
Less: Undistributed earnings allocated to participating securities		(12)			—
Net income (loss) available to common shareholders, basic	$	7,088	150,791	$	(29,699)	151,205

Diluted:
Net income (loss) available to common shareholders, basic	$	7,088	150,791	$	(29,699)	151,205
Effect of dilutive securities:
Share-based awards other than participating securities		—	2,613		—	—
Net income (loss) available to common shareholders, diluted	$	7,088	153,404	$	(29,699)	151,205


			Grant Date
			Fair Value
Date of Grant	Award Type	Shares/Units	Per Share/Unit		Vesting Period
January 1, 2023 ⁽¹⁾	RSU	506,436	$	7.38	33% per year over three years
January 3, 2023 ⁽¹⁾	PSU	489,498	$	9.26	100% on December 31, 2025
January 1, 2023 ⁽²⁾	Restricted stock	9,210	$	7.38	100% on January 1, 2025
April 1, 2023 ⁽²⁾	Restricted stock	7,267	$	7.74	100% on January 1, 2025


	2023		2022
AROs at January 1,	$	51,956	$	29,658
Accretion expense		2,364		1,303
AROs at June 30,	$	54,320	$	30,961


	2023		2022
Balance at January 1,	$	2,277	$	1,477
Additions ⁽¹⁾		689		86
Balance at June 30,	$	2,966	$	1,563


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Operating lease cost	$	17,347	$	13,798	$	34,353	$	28,260
Variable lease cost		5,255		4,625		10,165		9,547
Short-term lease cost		17,916		7,571		24,893		13,009
Sublease income		(206)		(381)		(537)		(630)
Net lease cost	$	40,312	$	25,613	$	68,874	$	50,186


	2023
Balance at January 1,	$	42,754
Change in fair value		14,820
Balance at June 30,	$	57,574


	June 30, 2023				December 31, 2022
	Principal		Fair		Principal		Fair
	Amount ⁽¹⁾		Value ⁽²⁾		Amount ⁽¹⁾		Value ⁽²⁾
2023 Notes (mature September 2023)	$	30,000	$	30,097	$	30,000	$	31,149
2026 Notes (mature February 2026)		200,000		265,598		200,000		277,014
MARAD Debt (matures February 2027)		36,797		36,912		40,913		40,940
Total debt	$	266,797	$	332,607	$	270,913	$	349,103


	Three Months Ended						Increase/
	June 30,						(Decrease)
	2023			2022			Amount		Percent
Net revenues —
Well Intervention	$	154,221		$	106,291		$	47,930	45	%
Robotics		70,050			49,850			20,200	41	%
Shallow Water Abandonment		76,306			—			76,306	100	%
Production Facilities		23,128			17,678			5,450	31	%
Intercompany eliminations		(14,888)			(11,207)			(3,681)
	$	308,817		$	162,612		$	146,205	90	%

Gross profit (loss) —
Well Intervention	$	6,974		$	(19,336)		$	26,310	136	%
Robotics		19,524			11,597			7,927	68	%
Shallow Water Abandonment		20,992			—			20,992	100	%
Production Facilities		8,654			6,687			1,967	29	%
Corporate, eliminations and other		(795)			(302)			(493)
	$	55,349		$	(1,354)		$	56,703	4,188	%

Gross margin —
Well Intervention		5	%		(18)	%
Robotics		28	%		23	%
Shallow Water Abandonment		28	%		—	%
Production Facilities		37	%		38	%
Total company		18	%		(1)	%

Number of vessels, Robotics assets or Shallow Water Abandonment systems ⁽¹⁾ / Utilization ⁽²⁾
Well Intervention vessels		7 / 84	%		7 / 67	%
Robotics assets ⁽³⁾		46 / 58	%		45 / 53	%
Chartered Robotics vessels		6 / 96	%		5 / 94	%
Shallow Water Abandonment vessels ⁽⁴⁾		20 / 78	%		— / —	%
Shallow Water Abandonment systems ⁽⁵⁾		21 / 81	%		— / —	%


	Total		Short-Term		Long-Term
MARAD debt	$	36,797	$	8,538	$	28,259
2023 Notes		30,000		30,000		—
2026 Notes		200,000		—		200,000
Interest related to debt		41,173		15,953		25,220
Property and equipment		14,532		14,532		—
Operating leases ⁽¹⁾		362,289		116,165		246,124
Earn-out consideration ⁽²⁾		57,574		57,574		—
Total cash obligations	$	742,365	$	242,762	$	499,603


				(c)	(d)
				Total number	Approximate dollar
				of shares	value of shares
	(a)	(b)		purchased as	that may yet be
	Total number	Average		part of publicly	purchased under the
	of shares	price paid		announced plans	plans or programs ⁽³⁾
Period	purchased ⁽¹⁾	per share		or programs ⁽²⁾	(in thousands)
April 1 to April 30, 2023	—	$	—	—	$	195,017
May 1 to May 31, 2023	750,000		6.77	750,000		189,941
June 1 to June 30, 2023	—		—	—		189,941
	750,000	$	6.77	750,000


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. 2, dated as of June 23, 2023, to Loan, Security and Guaranty Agreement dated as of September 30, 2021, among Helix Energy Solutions Group, Inc., Helix Well Ops Inc., Helix Robotics Solutions, Inc., Deepwater Abandonment Alternatives, Inc., Alliance Offshore, L.L.C., Triton Diving Services, LLC, Alliance Energy Services, LLC, 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, as previously amended.	Exhibit 4.1 to the Current Report on Form 8-K filed on June 23, 2023 (001-32936)
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, 2023	By:	/s/ Owen Kratz
		Owen Kratz
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: July 27, 2023	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