HOUSTON, April 29, 2015 /PRNewswire/ -- Hercules
Offshore, Inc. (Nasdaq: HERO) today reported a net loss of
$57.1 million, or $0.35 per diluted share, on revenue of
$122.6 million for the first quarter
2015, compared to net income of $19.9
million, or $0.12 per diluted
share, on revenue of $256.7 million
for the first quarter 2014. As outlined in the Reconciliation of
GAAP to Non-GAAP Financial Measures, first quarter 2014 results
included an after-tax charge of $15.2
million, or $0.10 per diluted
share, related to early debt retirement and issuance costs.
John T. Rynd, Chief Executive Officer and President of Hercules
Offshore stated, "2015 is shaping up to be a very challenging year
for our industry in general and our company in particular.
Demand for jackup rigs remains weak in every region of the world
and the market is still scheduled to deliver a significant number
of newbuild rigs over the next several years. Given this
backdrop, we are very pleased to have signed our five year contract
on the Hercules 260 which will keep the rig working into
2020 with potential dayrate upside. We expect continued
weakness in rig utilization through the remainder of 2015, or at
least until we see a meaningful improvement in commodity
prices. Additionally, our International Liftboat business
continues to suffer low utilization, especially in Nigeria, which we expect to continue through
this year. In response to these conditions, we have
implemented a number of cost saving measures, including cold
stacking several rigs, which have made a significant impact on our
first quarter results and should show additional benefits in future
quarters."
Domestic Offshore
Revenue generated from Domestic Offshore for the first quarter
2015 decreased 63% to $52.9 million
from $143.3 million in the first
quarter 2014, driven by lower utilization and dayrates on a reduced
marketed rig fleet. Operating days during the first quarter 2015
declined to 533 days with utilization of 60.1% as we exited the
quarter with 9 marketed rigs, compared to 1,344 days on 18 marketed
rigs at 83.0% utilization during the first quarter 2014. Average
revenue per rig per day decreased to $99,203 in the first quarter 2015 from
$106,596 in the comparable 2014
period. Operating expense decreased approximately 51% to
$36.0 million in the first quarter
2015 from $72.8 million in the first
quarter 2014, largely attributable to the reduced number of
marketed rigs in operation. Domestic Offshore generated operating
income of $3.8 million in the first
quarter 2015, compared to $51.5
million in the first quarter 2014.
International Offshore
International Offshore revenue declined to $51.6 million in the first quarter 2015, from
$80.9 million in the first quarter
2014, driven largely by reduced utilization and partially offset by
slightly higher dayrates. Utilization decreased to 47.9% in the
first quarter 2015 from 88.1% in the first quarter 2014, largely
due to scheduled downtime for equipment recertification on the
Hercules 262, as well as idle time on the Hercules
Triumph, Hercules Resilience and Hercules 260.
Average revenue per rig per day increased to $149,704 in the first quarter 2015 from
$136,030 in the first quarter of
2014, driven in part by a demobilization fee of $4.5 million received for the Hercules 208
following its contract conclusion, as well as higher dayrates on
the Hercules 261 and Hercules 262 as these rigs
rolled to new contracts. Operating expense in the first quarter
2015 was $50.2 million, up slightly
from $47.5 million in the respective
2014 period. Preparation costs for the Hercules 260 prior to
commencing its contract with ENI in Gabon, as well as mobilization costs of the
Hercules 208 to Malaysia,
contributed to the increase in segment operating
expenses. International Offshore recorded an operating loss of
$20.9 million in the first quarter
2015 compared to operating income of $14.6
million in the prior year period.
International Liftboats
International Liftboats revenue declined to $18.1 million in the first quarter 2015 from
$32.5 million in the prior year
period, due to lower utilization and dayrates. First quarter 2015
utilization of 38.1% reflects a continuation of lower activity in
Nigeria as well as shipyard work
on multiple boats in both West
Africa and the Middle East,
and compares to 57.9% utilization during the first quarter 2014
period. Average revenue per liftboat per day decreased to
$22,964 in the first quarter 2015
from $27,132 in the first quarter
2014, primarily due to a shift in revenue mix toward the smaller
class liftboats while larger boats were in the shipyard. Operating
expenses in the first quarter 2015 declined by 34% to $13.5 million, compared to $20.4 million in the first quarter 2014,
reflecting lower activity levels and the impact of our cost
reduction measures. International Liftboats recorded an operating
loss of $0.4 million in the first
quarter 2015 compared to operating income of $5.6 million in the first quarter 2014.
Non-GAAP
Certain non-GAAP performance measures and corresponding
reconciliations to GAAP financial measures for the Company have
been provided for meaningful comparisons between current results
and prior operating periods. Generally, a non-GAAP financial
measure is a numerical measure of a company's performance,
financial position, or cash flows that excludes or includes amounts
that are not normally excluded or included in the most directly
comparable measure calculated and presented in accordance with
generally accepted accounting principles. In order to fully assess
the financial operating results, management believes that the
adjusted net income figures included in this release are
appropriate measures of the continuing and normal operations of the
Company. However, these measures should be considered in addition
to, and not as a substitute for, or superior to, net income,
operating income, cash flows from operations, or other measures of
financial performance prepared in accordance with GAAP. The
non-GAAP measures included in this press release have been
reconciled to the nearest GAAP measure in the table that follows
the financial statements. Please see the attached Reconciliation of
GAAP to Non-GAAP Financial Measures for a complete description of
the adjustments made to Operating Income, Net Income and
Diluted Income per Share.
Conference Call Information
Hercules Offshore will conduct a conference call at 10:00 a.m. CDT (11:00 a.m.
EDT) on April 29, 2015, to
discuss its first quarter 2015 financial results. To participate in
the call, dial 855-641-5843 (Domestic) or 262-912-6154
(International) and reference access code 22987992 approximately 10
minutes prior to the start of the call. The conference call will
also be broadcast live via the Internet at
http://www.herculesoffshore.com.
A replay of the conference call will be available by telephone
on April 29, 2015, beginning at
1:00 p.m. CDT (2:00 p.m. EDT), through May 6, 2015. The phone number for the conference
call replay is 855-859-2056 (Domestic) or 404-537-3406
(International) with access code 22987992. Additionally, the
recorded conference call will be accessible through our website at
http://www.herculesoffshore.com for 7 days after the conference
call.
Additional Information
Headquartered in Houston,
Hercules Offshore, Inc. operates a fleet of 33 jackup rigs,
including one rig under construction, and 24 liftboats. The Company
offers a range of services to oil and gas producers to meet their
needs during drilling, well service, platform inspection,
maintenance, and decommissioning operations in several key shallow
water provinces around the world. For more information, please
visit our website at http://www.herculesoffshore.com.
The news release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934. Such statements are
subject to a number of risks, uncertainties and assumptions,
including the factors described in Hercules Offshore's most recent
periodic reports and other documents filed with the Securities and
Exchange Commission, which are available free of charge at the
SEC's website at http://www.sec.gov or the Company's website
at http://www.herculesoffshore.com. Hercules Offshore cautions you
that forward-looking statements are not guarantees of future
performance and that actual results or developments may differ
materially from those projected or implied in these statements.
HERCULES OFFSHORE,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
|
Current
Assets:
|
|
|
|
|
|
|
Cash and Cash
Equivalents
|
|
$
|
218,172
|
|
$
|
207,937
|
|
|
Accounts Receivable,
Net
|
|
108,053
|
|
166,359
|
|
|
Prepaids
|
|
8,571
|
|
19,585
|
|
|
Current Deferred Tax
Asset
|
|
4,461
|
|
4,461
|
|
|
Other
|
|
2,557
|
|
5,955
|
|
|
|
|
341,814
|
|
404,297
|
|
|
|
|
|
|
|
|
Property and
Equipment, Net
|
|
1,568,485
|
|
1,574,749
|
|
Other Assets,
Net
|
|
23,156
|
|
23,361
|
|
|
|
|
$
|
1,933,455
|
|
$
|
2,002,407
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
Accounts
Payable
|
|
$
|
46,424
|
|
$
|
52,952
|
|
|
Accrued
Liabilities
|
|
54,296
|
|
66,090
|
|
|
Interest
Payable
|
|
39,132
|
|
32,008
|
|
|
Other Current
Liabilities
|
|
12,177
|
|
13,406
|
|
|
|
|
152,029
|
|
164,456
|
|
|
|
|
|
|
|
|
Long-term
Debt
|
|
1,210,981
|
|
1,210,919
|
|
Deferred Income
Taxes
|
|
4,403
|
|
4,147
|
|
Other
Liabilities
|
|
7,479
|
|
7,854
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
558,563
|
|
615,031
|
|
|
|
|
$
|
1,933,455
|
|
$
|
2,002,407
|
HERCULES OFFSHORE,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
122,619
|
|
$
|
256,734
|
|
|
|
|
|
|
Costs and
Expenses:
|
|
|
|
|
|
Operating
Expenses
|
|
99,599
|
|
140,752
|
|
Depreciation and
Amortization
|
|
37,218
|
|
40,083
|
|
General and
Administrative
|
|
15,760
|
|
18,227
|
|
|
|
152,577
|
|
199,062
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
(29,958)
|
|
57,672
|
|
|
|
|
|
|
Other Income
(Expense):
|
|
|
|
|
|
Interest
Expense
|
|
(24,960)
|
|
(22,901)
|
|
Loss on
Extinguishment of Debt
|
|
-
|
|
(15,158)
|
|
Other, Net
|
|
420
|
|
150
|
|
|
|
|
|
|
Income (Loss) Before
Income Taxes
|
|
(54,498)
|
|
19,763
|
Income Tax Benefit
(Provision)
|
|
(2,617)
|
|
153
|
Net Income
(Loss)
|
|
$
|
(57,115)
|
|
$
|
19,916
|
|
|
|
|
|
|
Net Income (Loss) Per
Share:
|
|
|
|
|
|
Basic
|
|
$
|
(0.35)
|
|
$
|
0.12
|
|
Diluted
|
|
$
|
(0.35)
|
|
$
|
0.12
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding:
|
|
|
|
|
|
Basic
|
|
161,057
|
|
160,070
|
|
Diluted
|
|
161,057
|
|
161,883
|
HERCULES OFFSHORE,
INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
|
(57,115)
|
|
$
|
19,916
|
|
Adjustments to
Reconcile Net Income (Loss) to Net Cash Provided by
Operating Activities:
|
|
|
|
|
|
Depreciation and
Amortization
|
|
37,218
|
|
40,083
|
|
Stock-Based
Compensation Expense
|
|
820
|
|
2,400
|
|
Deferred Income
Taxes
|
|
(278)
|
|
(4,616)
|
|
Other
|
|
(243)
|
|
3,089
|
|
Net Change in
Operating Assets and Liabilities
|
|
56,171
|
|
(20,227)
|
|
Net Cash Provided by
Operating Activities
|
|
36,573
|
|
40,645
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Capital
Expenditures
|
|
(30,740)
|
|
(40,665)
|
|
Insurance Proceeds
Received
|
|
2,418
|
|
-
|
|
Proceeds from Sale of
Assets, Net
|
|
1,984
|
|
1,679
|
|
Net Cash Used in
Investing Activities
|
|
(26,338)
|
|
(38,986)
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
Long-term Debt
Borrowings
|
|
-
|
|
300,000
|
|
Redemption of 7.125%
Senior Secured Notes
|
|
-
|
|
(220,072)
|
|
Cash Designated for
Debt Retirement
|
|
-
|
|
(79,928)
|
|
Payment of Debt
Issuance Costs
|
|
-
|
|
(2,961)
|
|
Other
|
|
-
|
|
108
|
|
Net Cash Used In
Financing Activities
|
|
-
|
|
(2,853)
|
|
|
|
|
|
|
Net Increase
(Decrease) in Cash and Cash Equivalents
|
|
10,235
|
|
(1,194)
|
Cash and Cash
Equivalents at Beginning of Period
|
|
207,937
|
|
198,406
|
Cash and Cash
Equivalents at End of Period
|
|
$
|
218,172
|
|
$
|
197,212
|
HERCULES OFFSHORE,
INC. AND SUBSIDIARIES
|
SELECTED FINANCIAL
AND OPERATING DATA
|
(Dollars in
thousands, except per day amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Domestic
Offshore:
|
|
|
|
|
|
Number of rigs (as of
end of period)
|
|
24
|
|
28
|
|
Revenue
|
|
$
|
52,875
|
|
$
|
143,265
|
|
Operating
expenses
|
|
35,966
|
|
72,800
|
|
Depreciation and
amortization expense
|
|
11,693
|
|
17,371
|
|
General and
administrative expenses
|
|
1,386
|
|
1,548
|
|
Operating
income
|
|
$
|
3,830
|
|
$
|
51,546
|
|
|
|
|
|
|
International
Offshore:
|
|
|
|
|
|
Number of rigs (as of
end of period)
|
|
9
|
|
10
|
|
Revenue
|
|
$
|
51,648
|
|
$
|
80,938
|
|
Operating
expenses
|
|
50,167
|
|
47,538
|
|
Depreciation and
amortization expense
|
|
20,339
|
|
16,626
|
|
General and
administrative expenses
|
|
1,994
|
|
2,132
|
|
Operating income
(loss)
|
|
$
|
(20,852)
|
|
$
|
14,642
|
|
|
|
|
|
|
International
Liftboats:
|
|
|
|
|
|
Number of liftboats
(as of end of period)
|
|
24
|
|
24
|
|
Revenue
|
|
$
|
18,096
|
|
$
|
32,531
|
|
Operating
expenses
|
|
13,466
|
|
20,414
|
|
Depreciation and
amortization expense
|
|
4,432
|
|
5,126
|
|
General and
administrative expenses
|
|
549
|
|
1,427
|
|
Operating income
(loss)
|
|
$
|
(351)
|
|
$
|
5,564
|
|
|
|
|
|
|
Total
Company:
|
|
|
|
|
|
Revenue
|
|
$
|
122,619
|
|
$
|
256,734
|
|
Operating
expenses
|
|
99,599
|
|
140,752
|
|
Depreciation and
amortization expense
|
|
37,218
|
|
40,083
|
|
General and
administrative expenses
|
|
15,760
|
|
18,227
|
|
Operating income
(loss)
|
|
(29,958)
|
|
57,672
|
|
Interest
expense
|
|
(24,960)
|
|
(22,901)
|
|
Loss on extinguishment
of debt
|
|
-
|
|
(15,158)
|
|
Other, net
|
|
420
|
|
150
|
|
Income (loss) before
income taxes
|
|
(54,498)
|
|
19,763
|
|
Income tax benefit
(provision)
|
|
(2,617)
|
|
153
|
|
Net income
(loss)
|
|
$
|
(57,115)
|
|
$
|
19,916
|
HERCULES OFFSHORE,
INC. AND SUBSIDIARIES
|
SELECTED FINANCIAL
AND OPERATING DATA - (Continued)
|
(Dollars in
thousands, except per day amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2015
|
|
|
Operating
Days
|
|
Available
Days
|
|
Utilization
(1)
|
|
Average
Revenue per
Day (2)
|
|
Average
Operating
Expense per
Day (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Offshore
|
533
|
|
887
|
|
60.1%
|
|
$
|
99,203
|
|
$
|
40,548
|
|
International
Offshore
|
345
|
|
720
|
|
47.9%
|
|
149,704
|
|
69,676
|
|
International
Liftboats
|
788
|
|
2,070
|
|
38.1%
|
|
22,964
|
|
6,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
|
Operating
Days
|
|
Available
Days
|
|
Utilization
(1)
|
|
Average
Revenue per
Day (2)
|
|
Average
Operating
Expense per
Day (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Domestic
Offshore
|
1,344
|
|
1,620
|
|
83.0%
|
|
$
|
106,596
|
|
$
|
44,938
|
|
International
Offshore
|
595
|
|
675
|
|
88.1%
|
|
136,030
|
|
70,427
|
|
International
Liftboats
|
1,199
|
|
2,070
|
|
57.9%
|
|
27,132
|
|
9,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Utilization is
defined as the total number of days our rigs or liftboats, as
applicable, were under contract, known as operating days, in the
period as a percentage of the total number of available days in the
period. Days during which our rigs and liftboats were
undergoing major refurbishments, upgrades or construction, and days
during which our rigs and liftboats are cold stacked, are not
counted as available days. Days during which our liftboats are in
the shipyard undergoing drydocking or inspection are considered
available days for the purposes of calculating
utilization.
|
|
|
(2)
|
Average revenue per
rig or liftboat per day is defined as revenue earned by our rigs or
liftboats, as applicable, in the period divided by the total number
of operating days for our rigs or liftboats, as applicable, in the
period.
|
|
|
(3)
|
Average operating
expense per rig or liftboat per day is defined as operating
expenses, excluding depreciation and amortization, incurred by our
rigs or liftboats, as applicable, in the period divided by the
total number of available days in the period. We use
available days to calculate average operating expense per rig or
liftboat per day rather than operating days, which are used to
calculate average revenue per rig or liftboat per day, because we
incur operating expenses on our rigs and liftboats even when they
are not under contract and earning a dayrate.
|
Hercules Offshore,
Inc. and Subsidiaries
|
Reconciliation of GAAP to Non-GAAP Financial
Measures
|
(Unaudited)
|
(In thousands,
except per share data)
|
|
|
|
We report our
financial results in accordance with generally accepted accounting
principles (GAAP). However, management believes that certain
non-GAAP performance measures and ratios
may provide users of this financial information additional
meaningful comparisons between current results and results in prior operating periods.
Non-GAAP financial measures we may present from time to time are
operating income, income from continuing operations, net income or diluted earnings
per share excluding certain charges or amounts. These adjusted
income amounts are not a measure
of financial performance under GAAP. Accordingly, they should not
be considered as a substitute for operating income, income
from continuing operations,
net income, earnings per share or other income data prepared in
accordance with GAAP. See the table below for supplemental financial data and corresponding
reconciliations to GAAP financial measures for the three months
ended March 31, 2014. Non-GAAP
financial measures should be viewed in addition to, and not as an
alternative for, the Company's reported results prepared in
accordance with GAAP. The non-GAAP
measures included in this press release have been reconciled to the
nearest GAAP measure in the following table:
|
|
|
|
Three Months
Ended
March 31, 2014
|
|
|
|
|
|
|
Operating
Income:
|
|
|
|
GAAP Operating
Income
|
$
|
57,672
|
|
|
Adjustment
|
-
|
|
|
Non-GAAP Operating
Income
|
$
|
57,672
|
|
|
|
|
|
|
Other
Expense:
|
|
|
|
GAAP Other
Expense
|
$
|
(37,909)
|
|
|
Adjustment
|
15,158
|
(a)
|
|
Non-GAAP Other
Expense
|
$
|
(22,751)
|
|
|
|
|
|
|
Benefit for Income
Taxes:
|
|
|
|
GAAP Benefit for Income
Taxes
|
$
|
153
|
|
|
Tax
Adjustment
|
-
|
|
|
Non-GAAP Benefit for
Income Taxes
|
$
|
153
|
|
|
|
|
|
|
Net
Income:
|
|
|
|
GAAP Net
Income
|
$
|
19,916
|
|
|
Total
Adjustment
|
15,158
|
|
|
Non-GAAP Net
Income
|
$
|
35,074
|
|
|
|
|
|
|
Diluted Earnings per
Share:
|
|
|
|
GAAP Diluted Earnings
per Share
|
$
|
0.12
|
|
|
Adjustment per
Share
|
0.10
|
|
|
Non-GAAP Diluted
Earnings per Share
|
$
|
0.22
|
|
|
|
|
|
(a)
|
This amount
represents a charge of $15.2 million related to retirement of a
portion of our 7.125% senior secured notes and issuance of our
6.75% senior notes.
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hercules-offshore-announces-first-quarter-2015-results-300074126.html
SOURCE Hercules Offshore, Inc.