Hornbeck Offshore Services, Inc 10-Q for FY2023 Q1

Hornbeck Offshore Services, Inc. (HOS)

10-Q 2023-04-26 For: 2023-03-31

Added on April 09, 2026

About this 10-Q

Hornbeck Offshore Services, Inc filed this 10-Q on April 26, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $250.08M; up 66.6% from $150.13M a year earlier
Net loss: $5.17M; compared with a net loss of $42.03M a year earlier
Diluted EPS: -$0.03; compared with -$0.28 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 – March 31, 2023 (Unaudited) and December 31, 2022	3

	Condensed Consolidated Statements of Operations (Unaudited) – Three months ended March 31, 2023 and 2022	4

	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) – Three months ended March 31, 2023 and 2022	5

	Condensed Consolidated Statements of Shareholders’ Equity (Unaudited) – Three months ended March 31, 2023 and 2022	6

	Condensed Consolidated Statements of Cash Flows (Unaudited) – Three months ended March 31, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	8

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

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 4.	Controls and Procedures	37

PART II.	OTHER INFORMATION	38

Item 1.	Legal Proceedings	38

Item 1A.	Risk Factors	38

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38

Item 3.	Defaults Upon Senior Securities	38

Item 4.	Mine Safety Disclosures	38

Item 5.	Other Information	38

Item 6.	Exhibits	39

	Signatures	40


	March 31,		December 31,
	2023		2022
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	166,674	$	186,604
Restricted cash		2,508		2,507
Accounts receivable, net of allowance for credit losses of $2,418 and $2,277, respectively		216,946		212,779
Other current assets		63,228		58,699
Total current assets		449,356		460,589
Property and equipment		3,036,579		3,016,312
Less accumulated depreciation		(1,410,428)		(1,374,697)
Property and equipment, net		1,626,151		1,641,615
Operating lease right-of-use assets		191,051		197,849
Deferred recertification and dry dock costs, net		53,697		38,778
Other assets, net		49,079		50,507
Total assets	$	2,369,334	$	2,389,338

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	134,363	$	135,267
Accrued liabilities		60,811		73,574
Current maturities of long-term debt		38,452		38,200
Current operating lease liabilities		54,407		50,914
Total current liabilities		288,033		297,955
Long-term debt		222,008		225,875
Operating lease liabilities		145,186		154,686
Deferred tax liabilities		97,577		98,883
Other non-current liabilities		100,810		95,230
Total liabilities		853,614		872,629
Commitments and contingencies
Shareholders’ equity:
Common stock, no par, 240,000 shares authorized, 151,494 and 151,935 shares issued, respectively		1,294,484		1,298,740
Retained earnings		318,123		323,288
Accumulated other comprehensive loss		(96,887)		(105,319)
Total shareholders’ equity		1,515,720		1,516,709
Total liabilities and shareholders’ equity	$	2,369,334	$	2,389,338


	Three Months Ended
	March 31,
	2023		2022
Net revenues	$	250,084	$	150,125
Cost of sales		234,900		168,734
Gross profit (loss)		15,184		(18,609)
Gain on disposition of assets, net		367		—
Acquisition and integration costs		(231)		—
Change in fair value of contingent consideration		(3,992)		—
Selling, general and administrative expenses		(19,631)		(14,368)
Loss from operations		(8,303)		(32,977)
Net interest expense		(4,187)		(5,174)
Other income (expense), net		3,444		(3,881)
Royalty income and other		1,863		2,141
Loss before income taxes		(7,183)		(39,891)
Income tax provision (benefit)		(2,018)		2,140
Net loss	$	(5,165)	$	(42,031)

Loss per share of common stock:
Basic	$	(0.03)	$	(0.28)
Diluted	$	(0.03)	$	(0.28)

Weighted average common shares outstanding:
Basic		151,764		151,142
Diluted		151,764		151,142


						Accumulated
						Other		Total
	Common Stock			Retained		Comprehensive		Shareholders’
	Shares	Amount		Earnings		Loss		Equity
Balance, December 31, 2022	151,935	$	1,298,740	$	323,288	$	(105,319)	$	1,516,709
Net loss	—		—		(5,165)		—		(5,165)
Foreign currency translation adjustments	—		—		—		8,432		8,432
Repurchases of common stock	(660)		(5,006)		—		—		(5,006)
Activity in company stock plans, net and other	219		(742)		—		—		(742)
Share-based compensation	—		1,492		—		—		1,492
Balance, March 31, 2023	151,494	$	1,294,484	$	318,123	$	(96,887)	$	1,515,720


	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	$	60,932	$	6,688	$	67,620
One to two years		60,058		5,517		65,575
Two to three years		36,690		1,974		38,664
Three to four years		39,169		979		40,148
Four to five years		15,845		979		16,824
Over five years		791		2,597		3,388
Total lease payments	$	213,485	$	18,734	$	232,219
Less: imputed interest		(30,177)		(2,449)		(32,626)
Total operating lease liabilities	$	183,308	$	16,285	$	199,593

Current operating lease liabilities	$	48,466	$	5,941	$	54,407
Non-current operating lease liabilities		134,842		10,344		145,186
Total operating lease liabilities	$	183,308	$	16,285	$	199,593


	2023		2026		MARAD
	Notes		Notes		Debt		Total
Less than one year	$	30,000	$	—	$	8,539	$	38,539
One to two years		—		—		8,965		8,965
Two to three years		—		200,000		9,412		209,412
Three to four years		—		—		9,881		9,881
Gross debt		30,000		200,000		36,797		266,797
Unamortized debt issuance costs ⁽¹⁾		(87)		(4,299)		(1,951)		(6,337)
Total debt		29,913		195,701		34,846		260,460
Less current maturities		(29,913)		—		(8,539)		(38,452)
Long-term debt	$	—	$	195,701	$	26,307	$	222,008


	Well				Shallow Water		Production		Intercompany		Total
	Intervention		Robotics		Abandonment		Facilities		Eliminations		Revenue
Three months ended March 31, 2023
Short-term	$	77,767	$	35,205	$	49,381	$	—	$	—	$	162,353
Long-term		64,671		14,017		—		20,905		(11,862)		87,731
Total	$	142,438	$	49,222	$	49,381	$	20,905	$	(11,862)	$	250,084

Three months ended March 31, 2022
Short-term	$	91,346	$	21,137	$	—	$	—	$	(635)	$	111,848
Long-term		15,021		16,214		—		18,294		(11,252)		38,277
Total	$	106,367	$	37,351	$	—	$	18,294	$	(11,887)	$	150,125


	Three Months Ended			Three Months Ended
	March 31, 2023			March 31, 2022
	Income		Shares	Income		Shares
Basic and Diluted:
Net loss attributable to common shareholders	$	(5,165)		$	(42,031)
Net loss available to common shareholders	$	(5,165)	151,764	$	(42,031)	151,142


			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


	2023		2022
AROs at January 1,	$	51,956	$	29,658
Accretion expense		1,168		741
AROs at March 31,	$	53,124	$	30,399


	2023		2022
Balance at January 1,	$	2,277	$	1,477
Additions (reductions) ⁽¹⁾		141		(126)
Balance at March 31,	$	2,418	$	1,351


	Three Months Ended
	March 31,
	2023		2022
Operating lease cost	$	17,006	$	14,462
Variable lease cost		4,910		4,922
Short-term lease cost		6,977		5,438
Sublease income		(331)		(249)
Net lease cost	$	28,562	$	24,573


	Three Months Ended
	March 31,
	2023		2022
Well Intervention	$	4,469	$	3,850
Robotics		7,393		8,037
Total	$	11,862	$	11,887


	2023
Balance at January 1,	$	42,754
Change in fair value		3,992
Balance at March 31,	$	46,746


	March 31, 2023				December 31, 2022
	Principal		Fair		Principal		Fair
	Amount ⁽¹⁾		Value ⁽²⁾		Amount ⁽¹⁾		Value ⁽²⁾
MARAD Debt (matures February 2027)	$	36,797	$	36,888	$	40,913	$	40,940
2023 Notes (mature September 2023)		30,000		30,590		30,000		31,149
2026 Notes (mature February 2026)		200,000		274,287		200,000		277,014
Total debt	$	266,797	$	341,765	$	270,913	$	349,103


	Three Months Ended						Increase/
	March 31,						(Decrease)
	2023			2022			Amount		Percent
Net revenues —
Well Intervention	$	142,438		$	106,367		$	36,071	34	%
Robotics		49,222			37,351			11,871	32	%
Shallow Water Abandonment		49,381			—			49,381	100	%
Production Facilities		20,905			18,294			2,611	14	%
Intercompany eliminations		(11,862)			(11,887)			25
	$	250,084		$	150,125		$	99,959	67	%

Gross profit (loss) —
Well Intervention	$	(4,362)		$	(28,446)		$	24,084	85	%
Robotics		7,007			3,520			3,487	99	%
Shallow Water Abandonment		7,498			—			7,498	100	%
Production Facilities		5,783			6,609			(826)	(12)	%
Corporate, eliminations and other		(742)			(292)			(450)
	$	15,184		$	(18,609)		$	33,793	182	%

Gross margin —
Well Intervention		(3)	%		(27)	%
Robotics		14	%		9	%
Shallow Water Abandonment		15	%		—	%
Production Facilities		28	%		36	%
Total company		6	%		(12)	%

Number of vessels, Robotics assets or Shallow Water Abandonment systems ⁽¹⁾ / Utilization ⁽²⁾
Well Intervention vessels		7 / 80	%		7 / 67	%
Robotics assets ⁽³⁾		46 / 56	%		45 / 35	%
Chartered Robotics vessels		5 / 91	%		5 / 90	%
Shallow Water Abandonment vessels ⁽⁴⁾		20 / 58	%		— / —	%
Shallow Water Abandonment systems ⁽⁵⁾		21 / 68	%		— / —	%


	Total		Short-Term		Long-Term
MARAD debt	$	36,797	$	8,539	$	28,258
2023 Notes		30,000		30,000		—
2026 Notes		200,000		—		200,000
Interest related to debt		45,058		16,207		28,851
Property and equipment		13,631		13,631		—
Operating leases ⁽¹⁾		395,212		126,475		268,737
Earn-out consideration ⁽²⁾		46,746		—		46,746
Total cash obligations	$	767,444	$	194,852	$	572,592


				(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)
January 1 to January 31, 2023	187,733	$	7.38	—	$	200,000
February 1 to February 28, 2023	—		—	—		200,000
March 1 to March 31, 2023	660,000		7.55	660,000		195,017
	847,733	$	7.51	660,000


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	Letter Agreement, dated as of January 25, 2023, 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 4.32 to the Annual Report on Form 10-K filed on February 24, 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: April 26, 2023	By:	/s/ Owen Kratz
		Owen Kratz
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: April 26, 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