COVINGTON, La., Feb. 7, 2018 /PRNewswire/ -- Hornbeck Offshore
Services, Inc. (NYSE:HOS) announced today results for the fourth
quarter ended December 31, 2017.
Following is an executive summary for this period and the
Company's future outlook:
- 4Q2017 diluted EPS was $2.48,
an improvement of $2.99 from 3Q2017
diluted EPS of $(0.51)
- 4Q2017 net income was $93.8
million, an improvement of $112.8
million from 3Q2017 net loss of $(19.0) million
- 4Q2017 income taxes include a benefit of $125.2 million related to the repricing of
deferred tax liabilities due to the tax reform enacted in
2017
- Offsetting this tax benefit was $14.2
million of tax expense due to valuation allowances for tax
credits that may expire prior to being utilized
- Excluding the reconciling items discussed below, adjusted
4Q2017 diluted EPS and net loss were $(0.44) and $(16.1)
million, respectively
- 4Q2017 EBITDA was $13.9
million, an increase of $3.3
million, or 31%, from 3Q2017 EBITDA of $10.6 million
- 4Q2017 average new gen OSV dayrates were $18,964, a sequential increase of $481, or 3%
- 4Q2017 effective new gen OSV dayrates were $4,570, a sequential decrease of $291, or 6%
- 4Q2017 utilization of the Company's new gen OSV fleet was
24%, down from 26% sequentially
- 4Q2017 effective utilization of the Company's active new gen
OSVs was 81%, down from 86% sequentially
- The Company currently has 44 OSVs stacked and expects to
have a total of 45 OSVs stacked by the end of 1Q2018
- The Company drew an additional $67
million of available capacity under its First-Lien Credit
Facility at year-end 2017
- Quarter-end cash was $187
million, up from $113 million
sequentially, with $62 million of
newbuild growth capex remaining to be funded
- The Company now expects delivery of final two MPSVs in 2019
with $18 million and $44 million of growth capex in 2018 and 2019,
respectively
- 4Q2017 total liquidity (cash and credit availability) of
$324 million represents an increase
of $7 million, or 2%, from
3Q2017
The Company recorded net income for the fourth quarter of 2017
of $93.8 million, or $2.48 per diluted share, compared to a net loss
of $(19.2) million, or $(0.53) per diluted share, for the year-ago
quarter; and a net loss of $(19.0)
million, or $(0.51) per
diluted share, for the third quarter of 2017. Included in the
Company's fourth quarter 2017 results is a $125.2 million tax benefit related to U.S. tax
reform legislation that was enacted in December 2017, partially offset by $14.2 million of tax expense due to valuation
allowances related to tax credits that may expire prior to being
utilized and a $1.7 million non-cash
write-off of goodwill. Excluding the net impact of these
reconciling items, net loss and diluted EPS for the fourth quarter
of 2017 would have been $(16.1)
million and $(0.44) per
diluted share, respectively. Diluted common shares for the
fourth quarter of 2017 were 37.9 million compared to 36.4 million
and 37.0 million for the fourth quarter of 2016 and the third
quarter of 2017, respectively. GAAP requires the use of basic
shares outstanding for diluted EPS when reporting a net loss.
EBITDA for the fourth quarter of 2017 was $13.9 million compared to $1.1 million for the fourth quarter of 2016 and
$10.6 million for the third quarter
of 2017. For additional information regarding EBITDA as a
non-GAAP financial measure, please see Note 10 to the accompanying
data tables.
Revenues. Revenues were $56.2 million for the fourth quarter of 2017, an
increase of $14.3 million, or 34.1%,
from $41.9 million for the fourth
quarter of 2016; and an increase of $2.5
million, or 4.7%, from $53.7
million for the third quarter of 2017. The
year-over-year increase in revenues was primarily due to improved
market conditions for the Company's MPSVs, partially offset by weak
OSV market conditions worldwide. The sequential increase in
revenues was primarily attributable to higher effective dayrates
for the MPSV fleet. As of December 31,
2017, the Company had 42 OSVs stacked. For the three
months ended December 31, 2017, the
Company had an average of 43.5 vessels stacked compared to 46.5
vessels stacked in the prior-year quarter and 43.0 vessels stacked
in the sequential quarter. Operating loss was $(14.3) million, or (25.4)% of revenues, for the
fourth quarter of 2017 compared to an operating loss of
$(27.5) million, or (65.6)% of
revenues, for the prior-year quarter; and an operating loss of
$(16.7) million, or (31.1)% of
revenues, for the third quarter of 2017. Excluding the impact
of the goodwill write-off discussed above, fourth quarter 2017
operating loss would have been $(12.6)
million, or (22.4)% of revenues. Average new
generation OSV dayrates for the fourth quarter of 2017 were
$18,964 compared to $24,212 for the same period in 2016 and
$18,483 for the third quarter of
2017. New generation OSV utilization was 24.1% for the fourth
quarter of 2017 compared to 20.0% for the year-ago quarter and
26.3% for the sequential quarter. Excluding stacked vessel
days, the Company's new generation OSV effective utilization was
81.0%, 74.5% and 85.8% for the same periods, respectively.
Utilization-adjusted, or effective, new generation OSV dayrates for
the fourth quarter of 2017 were $4,570 compared to $4,842 for the same period in 2016 and
$4,861 for the third quarter of
2017.
Operating Expenses. Operating
expenses were $31.2 million for the
fourth quarter of 2017, an increase of $3.7
million, or 13.5%, from $27.5
million for the fourth quarter of 2016; and an increase of
$1.1 million, or 3.7%, from
$30.1 million for the third quarter
of 2017. The year-over-year increase in operating expenses
was primarily due to a higher average number of active vessels in
the Company's fleet. The sequential increase in operating
expenses was primarily due to higher personnel expenses.
General and Administrative ("G&A").
G&A expense was $11.0
million for the fourth quarter of 2017 compared to
$13.3 million for the fourth quarter
of 2016; and $12.9 million for the
third quarter of 2017. The year-over-year decrease in G&A
expense was primarily attributable to lower long-term incentive
compensation and lower short-term incentive compensation, partially
offset by higher professional fees related to the Company's
on-going liability management activities. The sequential decrease
in G&A expense was primarily due to lower long-term incentive
compensation expense. Long-term incentive compensation was lower
than the prior-year period and sequential quarter due to a "mark to
market" adjustment on cash-settled share-based awards to reflect
the decrease in the Company's stock price during the three months
ended December 31, 2017.
Depreciation and Amortization. Depreciation
and amortization expense was $28.4
million for the fourth quarter of 2017, or $0.2 million lower than the year-ago quarter and
$1.2 million higher than the
sequential quarter. Depreciation expense decreased by
$0.1 million over the year-ago
quarter. Amortization expense also decreased by $0.1 million over the year-ago quarter, driven by
postponed recertifications for certain of the Company's stacked
OSVs, partially offset by the $1.7
million goodwill charge. Depreciation expense was
in-line with the sequential quarter; however, amortization expense
was $1.2 million higher, wholly
attributable to the goodwill charge previously mentioned.
Amortization expense is expected to decrease further in fiscal 2018
as a result of the deferral of regulatory recertification
activities for vessels that have been stacked. However,
amortization expense is expected to increase in fiscal 2019 as a
result of currently active vessels that were placed in service
under the Company's fifth OSV newbuild program commencing their
initial intermediate drydock or special survey. The Company
also expects amortization expense to increase whenever market
conditions warrant reactivation of currently stacked vessels, which
will then require the Company to drydock such vessels, and
thereafter to revert back to historical levels.
Interest Expense. Interest expense was
$12.2 million during the fourth
quarter of 2017, or $1.6 million
lower than the prior-year quarter. The decrease was primarily
due to lower interest expense associated with the debt exchange and
debt repurchases, as well as the termination of the then-existing
credit facility, all of which were completed during the second
quarter of 2017. The Company recorded $2.6 million of capitalized construction period
interest, or roughly 18% of its total interest costs, for the
fourth quarter of 2017 compared to $2.4
million, or roughly 15% of its total interest costs, for the
year-ago quarter.
Twelve Month Results
Revenue for fiscal 2017 decreased 14.7% to $191.4 million compared to $224.3 million for fiscal 2016. Operating
loss was $(88.7) million, or (46.4)%
of revenues, for fiscal 2017 compared to an operating loss of
$(64.2) million, or (28.6)% of
revenues, for the prior-year. Net income for fiscal 2017
increased $91.2 million to
$27.4 million, or $0.73 per diluted share, compared to a net loss
of $(63.8) million, or $(1.76) per diluted share, for fiscal 2016.
EBITDA for fiscal 2017 decreased 25.7% to $38.2 million compared to $51.4 million for fiscal 2016. Included in
the Company's results for the twelve months ended December 31, 2017 are a net $111.0 million tax benefit in the fourth quarter
of 2017 primarily related to the impact of the U.S. tax reform
legislation enacted in December 2017,
a $15.5 million net gain on early
extinguishment of debt in the second quarter of 2017 and a
$1.7 million charge for the write-off
of goodwill. Excluding the impact of these reconciling items,
net loss, diluted EPS and EBITDA for fiscal 2017 would have been
$(91.9) million, $(2.49) per diluted share and $22.8 million, respectively. The
year-over-year decrease in vessel revenues primarily resulted from
weak market conditions worldwide and the repricing or stacking of
six vessels, which concluded long-term contracts at dayrates above
current market levels. For fiscal 2017, the Company had an
average of 43.6 vessels stacked compared to 41.6 vessels stacked in
fiscal 2016.
Future Outlook
Based on the key assumptions outlined below and in the attached
data tables, the following statements reflect management's current
expectations regarding future operating results and certain events
during the Company's guidance period as set forth on pages 11 and
12 of this press release. These statements are forward-looking and
actual results may differ materially, particularly given the
volatility inherent in, and the currently depressed conditions of,
the Company's industry. Other than as expressly stated, these
statements do not include the potential impact of any significant
further change in commodity prices for oil and natural gas; any
additional future repositioning voyages; any additional stacking or
reactivation of vessels; unexpected vessel repairs or shipyard
delays; or future capital transactions, such as vessel
acquisitions, modifications or divestitures, business combinations,
possible share or note repurchases or financings that may be
commenced after the date of this disclosure. Additional
cautionary information concerning forward-looking statements can be
found on page 8 of this news release.
Forward Guidance
The Company's forward guidance for selected operating and
financial data, outlined below and in the attached data tables,
reflects the current state of commodity prices and planned
decreases in the capital spending budgets of its
customers.
Vessel Counts. As of
December 31, 2017, the Company's
fleet of owned vessels consisted of 62 new generation OSVs and
eight MPSVs. The forecasted vessel counts presented in this
press release reflect the two MPSV newbuilds now expected to be
delivered during fiscal 2019, as discussed below. With an
average of 42.9 new generation OSVs projected to be stacked during
fiscal 2018, the Company's active fleet for 2018 is expected to be
comprised of an average of 19.1 new generation OSVs and 8.0 MPSVs.
With an assumed average of 43.0 new generation OSVs projected
to be stacked during fiscal 2019, the Company's active fleet for
2019 is expected to be comprised of an average of 19.0 new
generation OSVs and 9.0 MPSVs.
Operating Expenses. Aggregate
cash operating expenses are projected to be in the range of
$32.0 million to $37.0 million for the first quarter of 2018, and
$130.0 million to $145.0 million for the full-year 2018.
Reflected in the cash opex guidance ranges above are the
anticipated continuing results of several cost containment measures
initiated by the Company since the fourth quarter of 2014 due to
prevailing market conditions, including, among other actions, the
stacking of vessels on various dates from October 1, 2014 through December 31, 2017, as well as company-wide
headcount reductions and across-the-board pay-cuts for shoreside
and vessel personnel. The Company plans to stack one 240
class OSV during the remainder of the first quarter of 2018.
The Company may choose to stack or reactivate additional
vessels as market conditions warrant. The cash operating
expense estimate above is exclusive of any additional repositioning
expenses the Company may incur in connection with the potential
relocation of more of its vessels into international markets or
back to the GoM, and any customer-required cost-of-sales related to
future contract fixtures that are typically recovered through
higher dayrates.
G&A Expense. G&A expense
is expected to be in the approximate range of $11.0 million to $13.0
million for the first quarter of 2018, and $45.0 million to $50.0
million for the full-year 2018.
Other Financial Data. Quarterly
depreciation, amortization, net interest expense, cash income
taxes, cash interest expense, weighted-average basic shares
outstanding and weighted-average diluted shares outstanding for the
first quarter of 2018 are projected to be $24.6 million, $2.1
million, $13.2 million,
$0.2 million, $15.1 million, 37.3 million and 37.9 million,
respectively. As a reminder, please note that GAAP requires
the use of basic shares outstanding for diluted EPS when reporting
a net loss. Guidance for depreciation, amortization, net
interest expense, cash income taxes and cash interest expense for
the full fiscal years 2018 and 2019 is provided on page 12 of this
press release. The Company's annual effective tax benefit
rate is expected to be between 20.0% and 22.0% for fiscal years
2018 and 2019.
Capital Expenditures Outlook
Update on OSV Newbuild Program
#5. The two remaining vessels
under the Company's nearly completed 24-vessel domestic newbuild
program, both of which are 400 class MPSVs, are now expected to be
delivered in the second and third quarters of 2019,
respectively.
The Company owns 62 new generation OSVs and eight MPSVs as of
December 31, 2017. Based on the
projected MPSV in-service dates, the Company now expects to own
eight and ten MPSVs as of December 31,
2018 and December 31, 2019,
respectively. These vessel additions result in a projected
average MPSV fleet complement of 8.0, 9.0 and 10.0 vessels for the
fiscal years 2018, 2019 and 2020, respectively. The aggregate
cost of the Company's fifth OSV newbuild program, excluding
construction period interest, is expected to be approximately
$1,335.0 million, of which
$18.4 million and $43.9 million are expected to be incurred in the
full fiscal years 2018 and 2019, respectively. From the
inception of this program through December
31, 2017, the Company has incurred $1,272.7 million, or 95.3%, of total expected
project costs, including $3.2 million
that was spent during the fourth quarter of 2017. The Company
expects to incur newbuild project costs of $0.4 million during the first quarter of
2018.
Update on Maintenance Capital Expenditures.
Please refer to the attached data table on page 11 of
this press release for a summary, by period and by vessel type, of
historical and projected data for drydock downtime (in days) and
maintenance capital expenditures for each of the quarterly and/or
annual periods presented for the fiscal years 2016, 2017, 2018 and
2019. Maintenance capital expenditures, which are recurring
in nature, primarily include regulatory drydocking charges incurred
for the recertification of vessels and other vessel capital
improvements that extend or maintain a vessel's economic useful
life. The Company expects that its maintenance capital
expenditures for its fleet of vessels will be approximately
$19.4 million and $24.2 million for the full fiscal years 2018 and
2019, respectively. These cash outlays are expected to be
incurred over approximately 329 and 435 days of aggregate
commercial downtime in 2018 and 2019, respectively, during which
the applicable vessels will not earn revenue.
Update on Other Capital Expenditures. Please
refer to the attached data tables on page 11 of this press release
for a summary, by period, of historical and projected data for
other capital expenditures, for each of the quarterly and/or annual
periods presented for the fiscal years 2016, 2017, 2018 and 2019.
Other capital expenditures, which are generally
non-recurring, are comprised of the following: (i)
commercial-related vessel improvements, such as the addition of
cranes, ROVs, helidecks, living quarters and other specialized
vessel equipment, or the modification of vessel capacities or
capabilities, such as DP upgrades and mid-body extensions, which
costs are typically included in and offset, in whole or in part, by
higher dayrates charged to customers; and (ii) non-vessel related
capital expenditures, including costs related to the Company's
shore-based facilities, leasehold improvements and other corporate
expenditures, such as information technology or office furniture
and equipment. The Company expects miscellaneous incremental
commercial-related vessel improvements and non-vessel capital
expenditures to be approximately $1.5
million and $0.5 million,
respectively, for the full fiscal years 2018 and 2019,
respectively.
Liquidity Outlook
As of December 31, 2017, the
Company's total liquidity (cash and credit availability) was
$323.5 million, comprised of
$186.8 million of cash and
$136.7 million of availability under
the First-Lien Credit Facility, which represents an increase of
$7.0 million, or 2%, from the end of
the third quarter. Included in the Company's year-end cash
balance was the minimum required draw of an additional $67.0 million of the delayed-draw
"use-it-or-lose-it" commitments under the First-Lien Credit
Facility. The next such minimum draw of $68.0 million isn't required until December 31, 2018. The Company projects
that, even with the currently depressed operating levels, cash
generated from operations together with cash on hand and remaining
availability under the First-Lien Credit Facility should be
sufficient to fund its operations and commitments through at least
December 31, 2019. However,
absent the combination of a significant recovery of market
conditions such that cash flow from operations were to increase
materially from projected levels coupled with a refinancing and/or
further management of its funded debt obligations, the Company does
not currently expect to have sufficient liquidity to repay the full
amount of its 5.875% Senior Notes and 5.000% Senior Notes as they
mature in fiscal years 2020 and 2021, respectively. The
Company remains fully cognizant of the challenges currently facing
the offshore oil and gas industry and continues to review its
capital structure and assess its strategic options.
Conference Call
The Company will hold a conference call to discuss its fourth
quarter 2017 financial results and recent developments at
10:00 a.m. Eastern (9:00 a.m. Central) tomorrow, February 8, 2018. To participate in the call,
dial (412) 902-0030 and ask for the Hornbeck Offshore call at least
10 minutes prior to the start time. To access it live over the
Internet, please log onto the web at
http://www.hornbeckoffshore.com, on the "Investors" homepage of the
Company's website at least fifteen minutes early to register,
download and install any necessary audio software. Please
call the Company's investor relations firm, Dennard-Lascar, at
(713) 529-6600 to be added to its e-mail distribution list for
future Hornbeck Offshore news releases. An archived version of the
web cast will be available shortly after the call for a period of
60 days on the "Investors" homepage of the Company's website.
Additionally, a telephonic replay will be available through
February 22, 2018, and may be
accessed by calling (201) 612-7415 and using the pass code
13675092#.
Attached Data Tables
The Company has posted an electronic version of the following
four pages of data tables, which are downloadable in Microsoft
Excel™ format, on the "Investors" homepage of the Hornbeck Offshore
website for the convenience of analysts and investors.
In addition, the Company uses its website as a means of
disclosing material non-public information and for complying with
disclosure obligations under SEC Regulation FD. Such disclosures
will be included on the Company's website under the heading
"Investors." Accordingly, investors should monitor that portion of
the Company's website, in addition to following the Company's press
releases, SEC filings, public conference calls and webcasts.
Hornbeck Offshore Services, Inc. is a leading provider of
technologically advanced, new generation offshore service vessels
primarily in the Gulf of Mexico
and Latin America. Hornbeck
Offshore currently owns a fleet of 70 vessels primarily serving the
energy industry and has two additional ultra high-spec MPSVs under
construction for delivery in 2019.
Forward-Looking Statements
This Press Release contains "forward-looking statements," as
contemplated by the Private Securities Litigation Reform Act of
1995, in which the Company discusses factors it believes may affect
its performance in the future. Forward-looking statements are all
statements other than historical facts, such as statements
regarding assumptions, expectations, beliefs and projections about
future events or conditions. You can generally identify
forward-looking statements by the appearance in such a statement of
words like "anticipate," "believe," "continue," "could,"
"estimate," "expect," "forecast," "intend," "may," "might," "plan,"
"potential," "predict," "project," "remain," "should," "will," or
other comparable words or the negative of such words. The accuracy
of the Company's assumptions, expectations, beliefs and projections
depends on events or conditions that change over time and are thus
susceptible to change based on actual experience, new developments
and known and unknown risks. The Company gives no assurance that
the forward-looking statements will prove to be correct and does
not undertake any duty to update them. The Company's actual future
results might differ from the forward-looking statements made in
this Press Release for a variety of reasons, including impacts from
oil and natural gas prices in the U.S. and worldwide; continued
weakness in demand and/or pricing for the Company's services
through and beyond the maturity of any of the Company's long-term
debt; unplanned customer suspensions, cancellations, rate
reductions or non-renewals of vessel charters or vessel management
contracts or failures to finalize commitments to charter or manage
vessels; continued weak capital spending by customers on offshore
exploration and development; the inability to accurately predict
vessel utilization levels and dayrates; sustained weakness in the
number of deepwater and ultra-deepwater drilling units operating in
the GoM or other regions where the Company operates; the effect of
inconsistency by the United States
government in the pace of issuing drilling permits and plan
approvals in the GoM or other drilling regions; any negative impact
on the Company's ability to successfully complete the remainder of
its current vessel newbuild program on-time; the inability to
successfully market the vessels that the Company owns, is
constructing or might acquire; the government's cancellation or
non-renewal of the management, operations and maintenance contracts
for vessels; an oil spill or other significant event in
the United States or another
offshore drilling region that could have a broad impact on
deepwater and other offshore energy exploration and production
activities, such as the suspension of activities or significant
regulatory responses; the imposition of laws or regulations that
result in reduced exploration and production activities or that
increase the Company's operating costs or operating requirements;
environmental litigation that impacts customer plans or projects;
disputes with customers; bureaucratic, administrative or operating
barriers that delay vessels in foreign markets from going on-hire;
administrative barriers to exploration and production activities in
Brazil; disruption in the timing
and/or extent of Mexican offshore activities; age or other
restrictions imposed on our vessels by customers; unanticipated
difficulty in effectively competing in or operating in
international markets; less than anticipated subsea infrastructure
and field development demand in the GoM and other markets affecting
our MPSVs; sustained vessel over-capacity for existing demand
levels in the markets in which the Company competes; economic and
geopolitical risks; weather-related risks; upon a return to
improved operating conditions, the shortage of or the inability to
attract and retain qualified personnel, when needed, including
vessel personnel for active vessels or vessels the Company may
reactivate or acquire; any success in unionizing the Company's U.S.
fleet personnel; regulatory risks; the repeal or administrative
weakening of the Jones Act or adverse changes in the interpretation
of the Jones Act; drydocking delays and cost overruns and related
risks; vessel accidents, pollution incidents, or other events
resulting in lost revenue, fines, penalties or other expenses that
are unrecoverable from insurance policies or other third parties;
unexpected litigation and insurance expenses; other industry risks;
fluctuations in foreign currency valuations compared to the U.S.
dollar and risks associated with expanded foreign operations, such
as non-compliance with or the unanticipated effect of tax laws,
customs laws, immigration laws, or other legislation that result in
higher than anticipated tax rates or other costs; or the inability
of the Company to refinance or otherwise retire certain funded debt
obligations that come due in 2019, 2020 and 2021; or the potential
for any impairment charges that could arise in the future and that
would reduce the Company's consolidated net tangible assets which,
in turn, would further limit the Company's ability to grant certain
liens, make certain investments, and incur certain debt under the
Company's senior notes indentures and the New Credit Facility. In
addition, the Company's future results may be impacted by adverse
economic conditions, such as inflation, deflation, or lack of
liquidity in the capital markets, that may negatively affect it or
parties with whom it does business resulting in their non-payment
or inability to perform obligations owed to the Company, such as
the failure of customers to fulfill their contractual obligations
or the failure by individual lenders to provide funding under the
Company's New Credit Facility, if and when required. Further,
the Company can give no assurance regarding when and to what extent
it will effect common stock or note repurchases. Should one
or more of the foregoing risks or uncertainties materialize in a
way that negatively impacts the Company, or should the Company's
underlying assumptions prove incorrect, the Company's actual
results may vary materially from those anticipated in its
forward-looking statements, and its business, financial condition
and results of operations could be materially and adversely
affected and, if sufficiently severe, could result in noncompliance
with certain covenants of the Company's existing indebtedness.
Additional factors that you should consider are set forth in detail
in the "Risk Factors" section of the Company's most recent Annual
Report on Form 10-K as well as other filings the Company has made
and will make with the Securities and Exchange Commission which,
after their filing, can be found on the Company's website
www.hornbeckoffshore.com.
Regulation G Reconciliation
This Press Release also contains references to the non-GAAP
financial measures of earnings, or net income, before interest,
income taxes, depreciation and amortization, or EBITDA, and
Adjusted EBITDA. The Company views EBITDA and Adjusted EBITDA
primarily as liquidity measures and, therefore, believes that the
GAAP financial measure most directly comparable to such measure is
cash flows provided by operating activities. Reconciliations of
EBITDA and Adjusted EBITDA to cash flows provided by operating
activities are provided in the table below. Management's opinion
regarding the usefulness of EBITDA to investors and a description
of the ways in which management uses such measure can be found in
the Company's most recent Annual Report on Form 10-K filed with the
Securities and Exchange Commission, as well as in Note 10 to the
attached data tables.
Contacts:
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Todd Hornbeck,
CEO
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Jim Harp,
CFO
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Hornbeck Offshore
Services
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985-727-6802
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|
|
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Ken Dennard, Managing
Partner
|
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Dennard-Lascar /
713-529-6600
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
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Unaudited
Consolidated Statements of Operations
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(in thousands,
except Other Operating and Per Share Data)
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Statement of
Operations (unaudited):
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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Three Months
Ended
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Twelve Months
Ended
|
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|
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December
31,
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September
30,
|
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December
31,
|
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December
31,
|
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December
31,
|
|
|
|
2017
|
|
2017
|
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2016
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2017
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2016
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Revenues
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$
56,241
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$
53,666
|
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$
41,879
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$
191,412
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$
224,299
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|
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Costs and
expenses:
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|
|
|
|
|
|
|
|
|
|
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Operating
expenses
|
31,152
|
|
30,082
|
|
27,524
|
|
120,537
|
|
131,658
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|
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Depreciation and
amortization
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28,400
|
|
27,155
|
|
28,583
|
|
111,901
|
|
113,556
|
|
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General and
administrative expenses
|
11,024
|
|
12,899
|
|
13,274
|
|
47,597
|
|
43,358
|
|
|
|
70,576
|
|
70,136
|
|
69,381
|
|
280,035
|
|
288,572
|
|
|
Gain (loss) on sale of
assets
|
57
|
|
(197)
|
|
18
|
|
(121)
|
|
54
|
|
|
Operating
loss
|
(14,278)
|
|
(16,667)
|
|
(27,484)
|
|
(88,744)
|
|
(64,219)
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Gain on early
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
15,478
|
|
-
|
|
|
Interest
income
|
891
|
|
447
|
|
326
|
|
2,203
|
|
1,490
|
|
|
Interest
expense
|
(12,170)
|
|
(11,956)
|
|
(13,787)
|
|
(51,364)
|
|
(48,675)
|
|
|
Other income
(expense), net 1
|
(233)
|
|
106
|
|
4
|
|
(396)
|
|
2,052
|
|
|
|
(11,512)
|
|
(11,403)
|
|
(13,457)
|
|
(34,079)
|
|
(45,133)
|
|
|
Loss before income
taxes
|
(25,790)
|
|
(28,070)
|
|
(40,941)
|
|
(122,823)
|
|
(109,352)
|
|
|
Income tax
benefit
|
(119,548)
|
|
(9,120)
|
|
(21,698)
|
|
(150,244)
|
|
(45,506)
|
|
|
Net income
(loss)
|
$
93,758
|
|
$
(18,950)
|
|
$
(19,243)
|
|
$
27,421
|
|
$
(63,846)
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share
|
$
2.53
|
|
$
(0.51)
|
|
$
(0.53)
|
|
$
0.74
|
|
$
(1.76)
|
|
|
Diluted earnings
(loss) per common share
|
$
2.48
|
|
$
(0.51)
|
|
$
(0.53)
|
|
$
0.73
|
|
$
(1.76)
|
|
|
Weighted average
basic shares outstanding
|
37,049
|
|
37,013
|
|
36,375
|
|
36,858
|
|
36,248
|
|
|
Weighted average
diluted shares outstanding 2
|
37,864
|
|
37,013
|
|
36,375
|
|
37,664
|
|
36,248
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Offshore Supply
Vessels:
|
|
|
|
|
|
|
|
|
|
|
|
Average number of new
generation OSVs 3
|
62.0
|
|
62.0
|
|
62.0
|
|
62.0
|
|
61.9
|
|
|
Average number of
active new generation OSVs 4
|
18.5
|
|
19.0
|
|
16.7
|
|
19.2
|
|
20.6
|
|
|
Average new generation
OSV fleet capacity (deadweight) 3
|
220,072
|
|
220,172
|
|
219,389
|
|
220,072
|
|
218,854
|
|
|
Average new generation
OSV capacity (deadweight)
|
3,550
|
|
3,551
|
|
3,539
|
|
3,550
|
|
3,535
|
|
|
Average new generation
utilization rate 5
|
24.1%
|
|
26.3%
|
|
20.0%
|
|
23.1%
|
|
25.2%
|
|
|
Effective new
generation utilization rate 6
|
81.0%
|
|
85.8%
|
|
74.5%
|
|
75.2%
|
|
75.7%
|
|
|
Average new generation
dayrate 7
|
$
18,964
|
|
$
18,483
|
|
$
24,212
|
|
$
20,250
|
|
$
25,233
|
|
|
Effective dayrate
8
|
$
4,570
|
|
$
4,861
|
|
$
4,842
|
|
$
4,678
|
|
$
6,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31,
|
|
As of
December 31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
186,849
|
|
$
217,027
|
|
|
Working
capital
|
199,579
|
|
225,412
|
|
|
Property, plant and
equipment, net
|
2,501,013
|
|
2,578,388
|
|
|
Total
assets
|
2,768,878
|
|
2,878,275
|
|
|
Total long-term
debt
|
1,080,826
|
|
1,083,710
|
|
|
Stockholders'
equity
|
1,437,924
|
|
1,402,996
|
|
|
|
|
|
|
|
|
Cash Flow Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Cash provided by
(used in) operating activities
|
$
(14,658)
|
|
$
53,500
|
|
|
Cash used in
investing activities
|
(21,300)
|
|
(97,011)
|
|
|
Cash provided by
(used in) financing activities
|
6,226
|
|
(252)
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
|
Unaudited Other
Financial Data
|
|
(in thousands,
except Financial Ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel
revenues
|
$
47,641
|
|
$
45,637
|
|
$
33,266
|
|
$
158,466
|
|
$
190,436
|
|
|
Non-vessel revenues
9
|
8,600
|
|
8,029
|
|
8,613
|
|
32,946
|
|
33,863
|
|
|
Total
revenues
|
$
56,241
|
|
$
53,666
|
|
$
41,879
|
|
$
191,412
|
|
$
224,299
|
|
|
Operating
loss
|
$
(14,278)
|
|
$
(16,667)
|
|
$
(27,484)
|
|
$
(88,744)
|
|
$
(64,219)
|
|
|
Operating
deficit
|
(25.4%)
|
|
(31.1%)
|
|
(65.6%)
|
|
(46.4%)
|
|
(28.6%)
|
|
|
Components
of EBITDA 10
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
93,758
|
|
$
(18,950)
|
|
$
(19,243)
|
|
$
27,421
|
|
$
(63,846)
|
|
|
Interest
expense, net
|
11,279
|
|
11,509
|
|
13,461
|
|
49,161
|
|
47,185
|
|
|
Income tax
benefit
|
(119,548)
|
|
(9,120)
|
|
(21,698)
|
|
(150,244)
|
|
(45,506)
|
|
|
Depreciation
|
24,695
|
|
24,682
|
|
24,773
|
|
98,733
|
|
93,071
|
|
|
Amortization
|
3,705
|
|
2,473
|
|
3,810
|
|
13,168
|
|
20,485
|
|
|
EBITDA
10
|
$
13,889
|
|
$
10,594
|
|
$
1,103
|
|
$
38,239
|
|
$
51,389
|
|
|
Adjustments
to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
$
1,259
|
|
$
2,726
|
|
$
3,426
|
|
$
6,999
|
|
$
9,983
|
|
|
Interest
income
|
891
|
|
447
|
|
326
|
|
2,203
|
|
1,490
|
|
|
Adjusted
EBITDA 10
|
$
16,039
|
|
$
13,767
|
|
$
4,855
|
|
$
47,441
|
|
$
62,862
|
|
|
EBITDA
10 Reconciliation to GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
10
|
$
13,889
|
|
$
10,594
|
|
$
1,103
|
|
$
38,239
|
|
$
51,389
|
|
|
Cash paid for
deferred drydocking charges
|
(1,113)
|
|
(995)
|
|
(764)
|
|
(8,063)
|
|
(3,978)
|
|
|
Cash paid for
interest
|
(12,166)
|
|
(13,829)
|
|
(11,281)
|
|
(52,194)
|
|
(50,152)
|
|
|
Cash (paid
for) refunds of income taxes
|
10,086
|
|
(334)
|
|
(1,044)
|
|
9,042
|
|
(3,732)
|
|
|
Changes in
working capital
|
2,645
|
|
(3,336)
|
|
4,955
|
|
2,742
|
|
50,801
|
|
|
Stock-based
compensation expense
|
1,259
|
|
2,726
|
|
3,426
|
|
6,999
|
|
9,983
|
|
|
Gain on early
extinguishment of debt
|
-
|
|
-
|
|
-
|
|
(15,478)
|
|
-
|
|
|
(Gain) loss on
sale of assets
|
(57)
|
|
197
|
|
(18)
|
|
121
|
|
(54)
|
|
|
Changes in
other, net
|
2
|
|
(100)
|
|
(38)
|
|
3,934
|
|
(757)
|
|
|
Net cash
provided by (used in) operating activities
|
$
14,545
|
|
$
(5,077)
|
|
$
(3,661)
|
|
$
(14,658)
|
|
$
53,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures and Drydock Downtime Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
|
December
31,
|
|
September
30,
|
|
December
31,
|
|
December
31,
|
|
December
31,
|
|
|
|
2017
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
4.0
|
|
2.0
|
|
1.0
|
|
13.0
|
|
4.0
|
|
|
Commercial
downtime (in days)
|
60
|
|
2
|
|
22
|
|
191
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
-
|
|
1.0
|
|
4.0
|
|
1.0
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
26
|
|
48
|
|
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
2.0
|
|
-
|
|
1.0
|
|
2.0
|
|
2.0
|
|
|
Commercial
downtime (in days)
|
78
|
|
-
|
|
36
|
|
78
|
|
106
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
1.0
|
|
-
|
|
3.0
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
40
|
|
-
|
|
241
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
1,113
|
|
$
995
|
|
$
764
|
|
$
8,063
|
|
$
3,978
|
|
|
Other vessel
capital improvements
|
-
|
|
654
|
|
67
|
|
940
|
|
5,339
|
|
|
|
1,113
|
|
1,649
|
|
831
|
|
9,003
|
|
9,317
|
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related vessel improvements
|
388
|
|
160
|
|
1,916
|
|
747
|
|
15,350
|
|
|
Non-vessel
related capital expenditures
|
84
|
|
920
|
|
155
|
|
1,552
|
|
569
|
|
|
|
472
|
|
1,080
|
|
2,071
|
|
2,299
|
|
15,919
|
|
|
|
$
1,585
|
|
$
2,729
|
|
$
2,902
|
|
$
11,302
|
|
$
25,236
|
|
|
Growth Capital
Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
3,163
|
|
$
2,585
|
|
$
1,091
|
|
$
8,668
|
|
$
62,443
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted
Data12:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2018E
|
|
2Q
2018E
|
|
3Q
2018E
|
|
4Q
2018E
|
|
2018E
|
|
2019E
|
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
5.0
|
|
-
|
|
2.0
|
|
4.0
|
|
11.0
|
|
11.0
|
|
|
Commercial
downtime (in days)
|
141
|
|
12
|
|
7
|
|
117
|
|
277
|
|
259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
1.0
|
|
1.0
|
|
-
|
|
2.0
|
|
7.0
|
|
|
Commercial
downtime (in days)
|
-
|
|
10
|
|
12
|
|
30
|
|
52
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
2.6
|
|
$
3.5
|
|
$
4.6
|
|
$
3.5
|
|
$
14.2
|
|
$
23.1
|
|
|
Other vessel
capital improvements
|
1.7
|
|
1.5
|
|
0.5
|
|
1.5
|
|
5.2
|
|
1.1
|
|
|
|
4.3
|
|
5.0
|
|
5.1
|
|
5.0
|
|
19.4
|
|
24.2
|
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related vessel improvements
|
1.2
|
|
-
|
|
-
|
|
-
|
|
1.2
|
|
-
|
|
|
Non-vessel
related capital expenditures
|
0.1
|
|
0.1
|
|
0.1
|
|
-
|
|
0.3
|
|
0.5
|
|
|
|
1.3
|
|
0.1
|
|
0.1
|
|
-
|
|
1.5
|
|
0.5
|
|
|
|
$
5.6
|
|
$
5.1
|
|
$
5.2
|
|
$
5.0
|
|
$
20.9
|
|
$
24.7
|
|
|
Growth Capital
Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
0.4
|
|
$
5.6
|
|
$
7.8
|
|
$
4.6
|
|
$
18.4
|
|
$
43.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Fleet and Financial Data
|
(in millions,
except Average Vessels and Tax Rate)
|
|
|
|
|
|
|
|
Forward Guidance
of Selected Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2018E
|
|
Full-Year
2018E
|
|
Full-Year
2019E
|
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
Fleet Data (as of
7-Feb-2018):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New generation OSVs -
Active
|
19.5
|
|
19.1
|
|
19.0
|
|
New generation OSVs -
Stacked 13
|
42.5
|
|
42.9
|
|
43.0
|
|
New generation OSVs -
Total
|
62.0
|
|
62.0
|
|
62.0
|
|
|
|
|
|
|
|
|
New generation MPSVs -
Active
|
8.0
|
|
8.0
|
|
9.0
|
|
New generation MPSVs -
Stacked
|
-
|
|
-
|
|
-
|
|
New generation MPSVs -
Total
|
8.0
|
|
8.0
|
|
9.0
|
|
|
|
|
|
|
|
|
Total
|
70.0
|
|
70.0
|
|
71.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q 2018E
Range
|
|
Full-Year
2018E Range
|
|
Cost
Data:
|
Low14
|
|
High
14
|
|
Low14
|
|
High
14
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
32.0
|
|
$
37.0
|
|
$
130.0
|
|
$
145.0
|
|
General and
administrative expenses
|
$
11.0
|
|
$
13.0
|
|
$
45.0
|
|
$
50.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2018E
|
|
2Q
2018E
|
|
3Q
2018E
|
|
4Q
2018E
|
|
2018E
|
|
2019E
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
$
24.6
|
|
$
24.6
|
|
$
24.6
|
|
$
24.6
|
|
$
98.4
|
|
$101.3
|
|
Amortization
|
2.1
|
|
2.2
|
|
2.1
|
|
2.8
|
|
9.2
|
|
15.1
|
|
Interest expense,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
15
|
$
15.9
|
|
$
16.0
|
|
$
16.2
|
|
$
16.3
|
|
$
64.4
|
|
$
72.7
|
|
Incremental non-cash
OID interest expense 16
|
1.0
|
|
1.0
|
|
1.0
|
|
1.0
|
|
4.0
|
|
2.7
|
|
Amortization of
deferred gain 17
|
(0.8)
|
|
(0.8)
|
|
(0.8)
|
|
(0.8)
|
|
(3.2)
|
|
(3.2)
|
|
Capitalized
interest
|
(2.4)
|
|
(2.4)
|
|
(2.6)
|
|
(2.6)
|
|
(10.0)
|
|
(5.6)
|
|
Interest
income
|
(0.5)
|
|
(0.4)
|
|
(0.4)
|
|
(0.5)
|
|
(1.8)
|
|
(1.6)
|
|
Total interest
expense, net
|
$
13.2
|
|
$
13.4
|
|
$
13.4
|
|
$
13.4
|
|
$
53.4
|
|
$
65.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
rate
|
21.0%
|
|
21.0%
|
|
21.0%
|
|
21.0%
|
|
21.0%
|
|
21.0%
|
|
Cash paid for
(refunds of) income taxes
|
$
0.2
|
|
$
0.2
|
|
$
0.3
|
|
$
(0.4)
|
|
$
0.3
|
|
$
(3.0)
|
|
Cash paid for
interest 15
|
15.1
|
|
14.0
|
|
15.5
|
|
14.3
|
|
58.9
|
|
68.2
|
|
Weighted average
basic shares outstanding
|
37.3
|
|
37.5
|
|
37.6
|
|
37.7
|
|
37.5
|
|
38.0
|
|
Weighted average
diluted shares outstanding 18
|
37.9
|
|
37.8
|
|
38.0
|
|
38.0
|
|
37.9
|
|
38.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Represents other
income and expenses, including equity in income from investments
and foreign currency transaction gains or losses.
|
|
|
2
|
For the three and
twelve months ended December 31, 2017, the company had 185
anti-dilutive stock options. Due to net losses for the three and
twelve months ended December 31, 2016 and the three months ended
September 30, 2017, the Company excluded the dilutive effect of
equity awards representing the rights to acquire 981, 975 and 990
shares of common stock, respectively, because the effect was
anti-dilutive. As of December 31, 2017, September 30, 2017
and December 31, 2016, the 1.500% convertible senior notes were not
dilutive, as the average price of the Company's stock was less than
the effective conversion price of $68.53 for such
notes.
|
|
|
3
|
The Company owned 62
new generation OSVs as of December 31, 2017. Excluded from
this data are eight MPSVs owned by the Company and four non-owned
vessels operated by the Company for the U.S. Navy.
|
|
|
4
|
In response to weak
market conditions, the Company elected to stack certain of its new
generation OSVs on various dates since October 1, 2014.
Active new generation OSVs represent vessels that are immediately
available for service during each respective period.
|
|
|
5
|
Average utilization
rates are based on a 365-day year for all active and stacked
vessels. Vessels are considered utilized when they are
generating revenues.
|
|
|
6
|
Effective utilization
rate is based on a denominator comprised only of vessel-days
available for service by the active fleet, which excludes the
impact of stacked vessel days.
|
|
|
7
|
Average new
generation OSV dayrates represent average revenue per day, which
includes charter hire, crewing services, and net brokerage
revenues, based on the number of days during the period that the
OSVs generated revenues.
|
|
|
8
|
Effective dayrate
represents the average dayrate multiplied by the average new
generation utilization rate for the respective period.
|
|
|
9
|
Represents revenues
from shore-based operations, vessel-management services related to
non-owned vessels, including from the O&M contract with the
U.S. Navy, and ancillary equipment rentals, including from
ROVs.
|
|
|
10
|
Non-GAAP Financial
Measure
|
|
|
|
The Company
discloses and discusses EBITDA as a non-GAAP financial measure in
its public releases, including quarterly earnings releases,
investor conference calls and other filings with the Securities and
Exchange Commission. The Company defines EBITDA as earnings
(net income) before interest, income taxes, depreciation and
amortization. The Company's measure of EBITDA may not be
comparable to similarly titled measures presented by other
companies. Other companies may calculate EBITDA differently
than the Company, which may limit its usefulness as a comparative
measure.
|
|
|
|
The Company views
EBITDA primarily as a liquidity measure and, as such, believes that
the GAAP financial measure most directly comparable to it is cash
flows provided by operating activities. Because EBITDA is not
a measure of financial performance calculated in accordance with
GAAP, it should not be considered in isolation or as a substitute
for operating income, net income or loss, cash flows provided by
operating, investing and financing activities, or other income or
cash flow statement data prepared in accordance with
GAAP.
|
|
|
|
EBITDA is widely used
by investors and other users of the Company's financial statements
as a supplemental financial measure that, when viewed with GAAP
results and the accompanying reconciliations, the Company believes
EBITDA provides additional information that is useful to gain an
understanding of the factors and trends affecting its ability to
service debt, pay deferred taxes and fund drydocking charges and
other maintenance capital expenditures. The Company also
believes the disclosure of EBITDA helps investors meaningfully
evaluate and compare its cash flow generating capacity from quarter
to quarter and year to year.
|
|
|
|
EBITDA is also a
financial metric used by management (i) as a supplemental internal
measure for planning and forecasting overall expectations and for
evaluating actual results against such expectations; (ii) as a
significant criteria for annual incentive cash bonuses paid to the
Company's executive officers and other shore-based employees; (iii)
to compare to the EBITDA of other companies when evaluating
potential acquisitions; and (iv) to assess the Company's ability to
service existing fixed charges and incur additional
indebtedness.
|
|
|
|
In addition, the
Company has also historically made certain adjustments, as
applicable, to EBITDA for losses on early extinguishment of debt,
stock-based compensation expense and interest income, or Adjusted
EBITDA, to internally evaluate its performance based on the
computation of ratios used in certain financial covenants of its
credit agreements with various lenders. The Company believes
that such ratios can, at times, be material components of financial
covenants and, when applicable, failure to comply with such
covenants could result in the acceleration of indebtedness or the
imposition of restrictions on the Company's financial
flexibility.
|
|
|
|
Set forth below are
the material limitations associated with using EBITDA as a non-GAAP
financial measure compared to cash flows provided by operating
activities.
|
|
|
|
•
|
EBITDA does not
reflect the future capital expenditure requirements that may be
necessary to replace the Company's existing vessels as a result of
normal wear and tear,
|
|
|
|
|
•
|
EBITDA does not
reflect the interest, future principal payments and other
financing-related charges necessary to service the debt that the
Company has incurred in acquiring and constructing its
vessels,
|
|
|
|
|
•
|
EBITDA does not
reflect the deferred income taxes that the Company will eventually
have to pay once it is no longer in an overall tax net operating
loss position, as applicable, and
|
|
|
|
|
•
|
EBITDA does not
reflect changes in the Company's net working capital
position.
|
|
|
|
Management
compensates for the above-described limitations in using EBITDA as
a non-GAAP financial measure by only using EBITDA to supplement the
Company's GAAP results.
|
|
|
11
|
Commercial-related
Downtime results from commercial-related vessel improvements, such
as the addition of cranes, ROVs, helidecks, living quarters and
other specialized vessel equipment; the modification of vessel
capacities or capabilities, such as DP upgrades and mid-body
extensions, which costs are typically included in and offset, in
whole or in part, by higher dayrates charged to customers; and the
speculative relocation of vessels from one geographic market to
another.
|
|
|
12
|
The capital
expenditure amounts included in this table are anticipated cash
outlays before the allocation of construction period interest, as
applicable.
|
|
|
13
|
As of February 7,
2018, the Company's inactive fleet of 44 new generation OSVs that
were "stacked" was comprised of the following: twelve 200 class
OSVs, twenty-five 240 class OSVs, four 265 class OSVs and three 300
class OSVs. In addition, the Company plans to stack one 240
class OSV during the first quarter of 2018.
|
|
|
14
|
The "low" and "high"
ends of the guidance ranges set forth in this table are not
intended to cover unexpected variations from currently anticipated
market conditions. These ranges provide only a reasonable
deviation from the conditions that are expected to
occur.
|
|
|
15
|
Interest on the
Company's First-Lien Credit Facility is variable based on changes
in LIBOR, or the London Interbank Offered Rate. The guidance
included in this press release is based on industry estimates of
LIBOR in future periods as of February 7, 2018. Actual
results may differ from this estimate.
|
|
|
16
|
Represents
incremental imputed non-cash OID interest expense required by
accounting standards pertaining to the Company's 1.500% convertible
senior notes due 2019.
|
|
|
17
|
Represents the
non-cash recognition of the $20.7 million gain on the debt-for-debt
exchange associated with the Company's First-Lien Credit Facility,
which is being deferred and amortized prospectively as a yield
adjustment to interest expense as required by GAAP under debt
modification accounting.
|
|
|
18
|
Projected
weighted-average diluted shares do not reflect any potential
dilution resulting from the Company's 1.500% convertible senior
notes. Warrants related to the Company's 1.500% convertible
senior notes become dilutive when the average price of the
Company's stock exceeds the effective conversion price for such
notes of $68.53.
|
View original
content:http://www.prnewswire.com/news-releases/hornbeck-offshore-announces-fourth-quarter-2017-results-300595377.html
SOURCE Hornbeck Offshore Services, Inc.