COVINGTON, La., Nov. 2, 2016 /PRNewswire/ -- Hornbeck
Offshore Services, Inc. (NYSE:HOS) announced today results for the
third quarter ended September 30,
2016. Following is an executive summary for this
period and the Company's future outlook:
- 3Q2016 diluted EPS was $(0.45), an improvement of $0.12 from 2Q2016 diluted EPS of $(0.57)
- 3Q2016 revenues were $51.9
million, a decrease of $1.8
million, or 3%, from 2Q2016 revenues of $53.7 million
- 3Q2016 net loss was $(16.5)
million, a $4.1 million
improvement from 2Q2016 net loss of $(20.6)
million
- 3Q2016 operating loss was (28)% of revenues, an improvement
from 2Q2016 operating loss of (40)%
- 3Q2016 EBITDA was $15.2
million, an increase of $8.3
million, or 120%, from 2Q2016 EBITDA of $6.9 million
- 3Q2016 average new gen OSV dayrates were $25,639, a decrease of $1,003, or 4%, from the sequential
quarter
- 3Q2016 utilization of the Company's new gen OSV fleet was
22%, down from 24% sequentially
- 3Q2016 effective utilization of the Company's active new gen
OSVs was 76%, up from 74% sequentially
- 3Q2016 effective new gen OSV dayrates were $5,641, a decrease of $726, or 11%, from the sequential
quarter
- By the end of December 2016,
the Company expects to have stacked a total of 48 new gen
OSVs
- Two 310 class MPSVs were placed in service under the
Company's fifth OSV newbuild program during 3Q 2016
- Total cash of $225 million
with only $72 million of growth capex
remaining to be funded under the 24-vessel newbuild
program
The Company recorded a net loss for the third quarter of 2016 of
$(16.5) million, or $(0.45) per diluted share, compared to net income
of $14.4 million, or $0.40 per diluted share, for the year-ago
quarter; and a net loss of $(20.6)
million, or $(0.57) per
diluted share, for the second quarter of 2016. Included in
the Company's third quarter 2015 net income was a gain of
$11.0 million ($6.7 million after-tax or $0.19 per diluted share) related to the
August 2015 sale of the fourth and
final 250EDF class OSV to the U.S. Navy. Excluding the impact
of such gain on sale of assets, net income and diluted EPS for the
third quarter of 2015 would have been $7.7
million, and $0.21 per share,
respectively. Diluted common shares for the third quarter of
2016 were 36.3 million compared to 36.4 million and 36.2 million
for the third quarter of 2015 and the second quarter of 2016,
respectively. GAAP requires the use of basic shares
outstanding for diluted EPS when reporting a net loss. EBITDA
for the third quarter of 2016 was $15.2
million compared to $60.3
million in the third quarter of 2015 and $6.9 million in the second quarter of 2016.
Excluding the impact of the third quarter 2015 gain on sale of
assets, EBITDA for such quarter would have been $49.3 million. For additional information
regarding EBITDA as a non-GAAP financial measure, please see Note
10 to the accompanying data tables.
Revenues. Revenues were $51.9 million for the third quarter of 2016, a
decrease of $64.4 million, or 55.3%,
from $116.3 million for the third
quarter of 2015; and a decrease of $1.8
million, or 3.4%, from $53.7
million for the second quarter of 2016. The
year-over-year decrease in revenues was primarily due to soft
market conditions worldwide, which led to the Company's decision to
stack 28 incremental OSVs on various dates since June 2015. As of September 30, 2016, the Company had 45 OSVs
stacked. For the three months ended September 30, 2016, the Company had an average of
44.1 vessels stacked compared to 18.1 vessels stacked in the
prior-year quarter and 41.9 vessels in the sequential quarter.
The year-over-year decrease in revenue was partially offset
by $3.0 million in revenue earned
from the full or partial-period contribution of five vessels that
were placed in service since June
2015 under the Company's fifth OSV newbuild program.
Operating loss was $(14.4) million,
or (27.8)% of revenues, for the third quarter of 2016, compared to
operating income of $32.8 million, or
28.2% of revenues, for the prior-year quarter; and operating loss
of $(21.5) million, or (40.1)% of
revenues, for the second quarter of 2016. Average new
generation OSV dayrates for the third quarter of 2016 were
$25,639 compared to $25,699 for the same period in 2015 and
$26,642 for the second quarter of
2016. New generation OSV utilization was 22.0% for the third
quarter of 2016 compared to 50.3% for the year-ago quarter and
23.9% for the sequential quarter. The year-over-year decrease
in utilization is primarily due to soft market conditions for
high-spec OSVs operating in the GoM and the incremental vessels
that were stacked. Excluding stacked vessel days, the
Company's new generation OSV effective utilization was 76.3%, 72.2%
and 73.8% for the same periods, respectively.
Utilization-adjusted, or effective, new generation OSV dayrates for
the third quarter of 2016 were $5,641
compared to $12,927 for the same
period in 2015 and $6,367 for the
second quarter of 2016.
Operating Expenses. Operating
expenses were $29.4 million for the
third quarter of 2016, a decrease of $25.6
million, or 46.5%, from $54.9
million for the third quarter of 2015; and a decrease of
$4.9 million, or 14.3%, from
$34.3 million for the second quarter
of 2016. The year-over-year decrease in operating expenses
was primarily due to vessels that the Company removed from its
active fleet count through its stacking strategy since June 2015, which resulted in a substantial
reduction in mariner headcount, mariner pay cuts and reductions in
other operating expenses. This decrease was partially offset
by $3.7 million of operating costs
related to the full or partial-period contribution from newbuilds
added to the Company's fleet since June 2015.
General and Administrative ("G&A").
G&A expenses were $9.0
million for the third quarter of 2016 compared to
$12.2 million for the third quarter
of 2015; and $12.4 million for the
second quarter of 2016. The year-over-year decrease in
G&A expenses was primarily attributable to lower shoreside
compensation expense and to a lesser extent a decrease in bad debt
reserves. Shoreside compensation expense was lower due to
workforce reductions that were implemented in late 2015 and during
the first nine months of 2016, as well as lower long-term and
short-term incentive compensation expense.
Depreciation and Amortization. Depreciation
and amortization expense was $28.0
million for the third quarter of 2016, or $0.7 million higher than the year-ago quarter and
$0.4 lower than the sequential
quarter. Depreciation increased by $2.5 million over the year-ago quarter primarily
due to the contribution of five vessels that were placed in service
under the Company's fifth OSV newbuild program since June 2015. The depreciation increase was
partially offset by a decrease in amortization expense of
$1.8 million, which was mainly driven
lower by postponed recertifications for certain of the Company's
stacked OSVs. Depreciation expense is expected to increase
from current levels as the vessels under the Company's current
newbuild program are placed in service. Amortization expense
is expected to decrease as the result of the deferral of regulatory
recertification activities for vessels that have been stacked.
Gain on Sale of Assets. Included in third
quarter 2016 net income was an $81,000 ($53,000
after-tax or $0.00 per diluted share)
gain on the sale of certain vessel-related equipment for cash
consideration of $0.1 million.
Included in third quarter 2015 net income was an $11.0 million ($6.7
million after-tax and $0.19
per diluted share) gain on the sale of one 250EDF class OSV to the
U.S. Navy, which closed on August 28,
2015 for cash proceeds to the Company of $38.0 million.
Interest Expense. Interest expense was
$12.8 million during the third
quarter of 2016, or $3.1 million
higher than the prior-year quarter. The increase was
primarily due to the Company capitalizing a lower percentage of
interest compared to the prior-year period driven by a lower
average construction work-in-progress balance under the Company's
nearly completed newbuild program. The Company recorded
$4.2 million of capitalized
construction period interest, or roughly 25% of its total interest
costs, for the third quarter of 2016 compared to $6.3 million, or roughly 39% of its total
interest costs, for the year-ago quarter.
Nine Month Results
Revenue for the first nine months of 2016 decreased 52.9% to
$182.4 million compared to
$387.4 million for the same period in
2015. Operating loss was $(36.7)
million, or (20.1)% of revenues, for the first nine months
of 2016 compared to operating income of $139.1 million, or 35.9% of revenues, for the
prior-year period. Net income for the first nine months of
2016 decreased $114.1 million to a
net loss of $(44.6) million, or
$(1.23) per diluted share, compared
to net income of $69.5 million, or
$1.92 per diluted share, for the
first nine months of 2015. EBITDA for the first nine months
of 2016 decreased 77.3% to $50.3
million compared to $221.4
million for the first nine months of 2015. The Company
recorded a $36,000 ($23,000 after-tax or $0.00 per diluted share) pre-tax gain on sale of
assets during the first nine months of 2016. This gain resulted
from the sale of the Company's last remaining non-core conventional
OSV, the Cape Breton, and
certain vessel-related equipment. The Company recorded a
$44.1 million ($27.6 million after-tax or $0.76 per diluted share) pre-tax gain on sale of
assets during the first nine months of 2015. This gain
resulted from the February 2015 and
August 2015 sales of four 250EDF
class OSVs previously chartered to the U.S. Navy. Excluding
the impact of such gain on sale of assets, operating income, net
income, diluted EPS and EBITDA for the first nine months of 2015
would have been $95.0 million,
$41.9 million, $1.16 per share and $177.3
million, respectively. The year-over-year decrease in
vessel revenues primarily resulted from soft market conditions in
the GoM, which led to the Company's decision to stack 40 OSVs on
various dates from December 2014
through September 30, 2016. For
the nine months ended September 30,
2016, the Company had an average of 39.9 vessels stacked
compared to 15.1 vessels stacked in the prior-year period. The
decrease in revenue was partially offset by $13.3 million in revenue earned from the full or
partial-period contribution of eight vessels that were placed
in-service under the Company's fifth OSV newbuild program since
December 2014.
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. These statements are forward-looking and actual results
may differ materially given the volatility inherent in the
Company's industry. Other than as expressly stated, these
statements do not include the potential impact of any significant
further decline in commodity prices for oil and natural gas; any
additional future repositioning voyages; unexpected vessel repairs
or shipyard delays; or future capital transactions, such as vessel
acquisitions, modifications or divestitures, business combinations,
possible additional share 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 depressed commodity prices and
planned decreases in the capital spending budgets of its
customers.
Vessel Counts. As of
September 30, 2016, the Company's
fleet consisted of 62 new generation OSVs and eight MPSVs.
The forecasted vessel counts presented in this press release
reflect the fiscal 2016 and 2018 MPSV newbuild deliveries discussed
below. With an average of 41.5 new generation OSVs projected
to be stacked during fiscal 2016, the Company's active fleet for
2016 is expected to be comprised of an average of 20.4 new
generation OSVs and 6.7 MPSVs. With an assumed average of
48.0 new generation OSVs projected to be stacked during fiscal
2017, the Company's active fleet for 2017 is expected to be
comprised of an average of 14.0 new generation OSVs and 8.0
MPSVs.
Operating Expenses. Aggregate
cash operating expenses are projected to be in the range of
$29.0 million to $34.0 million for
the fourth quarter of 2016, and $133.0
million to $138.0 million for the full-year 2016.
Reflected in the cash opex guidance range above are the
anticipated results of several cost containment measures initiated
by the Company due to prevailing market conditions, including,
among other actions, the stacking of 48 new generation OSVs,
including eight 300 class OSVs, on various dates from October 1, 2014 through December 31, 2016, as well as company-wide
headcount reductions and across-the-board pay-cuts for shoreside
and vessel personnel. Since the end of the quarter, the
Company has stacked one 240 class OSV and plans to stack two
additional OSVs, including one 300 class OSV, during the fourth
quarter of 2016 and may choose to stack 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 Expenses. G&A
expenses are expected to be in the approximate range of
$10.0 million to $11.0 million for
the fourth quarter of 2016, and $40.0
million to $41.0 million for the full-year 2016.
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
fourth quarter of 2016 are projected to be $24.7 million, $3.9
million, $13.6 million,
$1.2 million, $11.3 million, 36.4 million and 37.2 million,
respectively. Guidance for depreciation, amortization, net
interest expense, cash income taxes and cash interest expense for
the full fiscal years 2016 and 2017 is provided on page 12 of this
press release. The Company's annual effective tax rate is
expected to be between 40.0% and 45.0% for fiscal 2016 and 34.5%
for fiscal 2017.
Capital Expenditures Outlook
Update on OSV Newbuild Program
#5. The Company's fifth OSV
newbuild program consists of four 300 class OSVs, five 310 class
OSVs, ten 320 class OSVs, three 310 class MPSVs and two 400 class
MPSVs. As of November 2, 2016,
the Company has placed 22 vessels in service under this program.
The two remaining vessels under this 24-vessel domestic
newbuild program are currently expected to be delivered in the
first and third quarters of 2018, respectively.
The Company owns 62 new generation OSVs, including two newbuilds
delivered in the first quarter of 2016. These vessel
deliveries result in an average new generation OSV fleet complement
of 61.9 and 62.0 vessels for the fiscal years 2016 and 2017, of
which 41.5 and 48.0 vessels are projected to be stacked,
respectively. Based on the projected vessel in-service dates
and recent deliveries during the third quarter of 2016, the Company
expects to own and operate eight, eight and ten MPSVs as of
December 31, 2016, 2017 and 2018,
respectively. These vessel additions result in a projected
average MPSV fleet complement of 6.7, 8.0, 9.3 and 10.0 vessels for
the fiscal years 2016, 2017, 2018 and 2019, 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 $68.2 million, $21.8 million and $43.3
million are expected to be incurred in the full fiscal years
2016, 2017 and 2018, respectively. From the inception of this
program through September 30, 2016,
the Company has incurred $1,263.0
million, or 94.6%, of total expected project costs,
including $6.8 million that was spent
during the third quarter of 2016. The Company expects to
incur newbuild project costs of $6.9
million during the fourth quarter of 2016.
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 2015, 2016 and 2017.
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
$10.8 million and $7.7 million for the full fiscal years 2016 and
2017, respectively. These cash outlays are expected to be incurred
over approximately 204 and 121 days of aggregate commercial
downtime in 2016 and 2017, respectively, during which the 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 2015, 2016 and 2017.
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 the speculative
relocation of vessels from one geographic market to another; 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 $17.0 million and
$1.0 million, respectively, for the
full fiscal years 2016 and 2017, respectively. These cash
outlays are expected to be incurred over approximately 353 days of
aggregate commercial downtime in 2016, during which the vessels
will not earn revenue.
Liquidity Outlook
As of September 30, 2016, the
Company had a cash balance of $225.5
million. The Company projects that, even with the
current depressed operating levels, cash generated from operations
together with cash on hand should be sufficient to fund its
operations and commitments at least through the end of its current
guidance period. The Company has three tranches of funded
unsecured debt outstanding that mature in fiscal years 2019, 2020
and 2021, respectively, and existing covenants in its revolving
credit agreement constrain the Company's ability to access that
undrawn facility. The Company remains fully cognizant of the
challenges currently facing the offshore oil and gas industry and
is proactively taking steps to protect the business enterprise.
Accordingly, the Company has engaged the advisory firm of
PricewaterhouseCoopers Corporate Finance, LLC to begin the process
of independently reviewing its capital structure and assessing
strategic options.
Conference Call
The Company will hold a conference call to discuss its third
quarter 2016 financial results and recent developments at
10:00 a.m. Eastern (9:00 a.m. Central) tomorrow, November 3, 2016. 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
November 10, 2016, and may be
accessed by calling (201) 612-7415 and using the pass code
13646466#.
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 Upstream
vessels under construction for delivery in 2018.
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 sustained or
further declines in oil and natural gas prices; a sustained
weakening of demand for the Company's services; unplanned customer
suspensions, cancellations, rate reductions or non-renewals of
vessel charters, vessel management contracts or failures to
finalize commitments to charter or manage vessels; sustained or
further reductions in capital spending budgets by customers; the
inability to accurately predict vessel utilization levels and
dayrates; fewer than anticipated 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; the Company's inability to successfully complete
the remainder of its current vessel newbuild program on-time and
on-budget, which involves the construction and integration of
highly complex vessels and systems; 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 ("O&M") 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 or result in
contractual penalties or deductions imposed by foreign customers;
industry risks; the impact stemming from the reduction of
Petrobras' announced plans for or administrative barriers to
exploration and production activities in Brazil; recent disruption in 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 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 changes in the interpretation of the Jones Act related
to the U.S. citizenship qualification; 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;
or 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; the inability to
repatriate foreign-sourced earnings and profits; or the inability
of the Company to refinance or otherwise retire funded debt
obligations that come due in 2019, 2020 and 2021. 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 banks to provide funding under the Company's credit
agreement, if required. Further, the Company can give no
assurance regarding when and to what extent it will effect share
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 recently amended and currently undrawn revolving credit
facility. 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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Ken Dennard, Managing
Partner
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Dennard-Lascar /
713-529-6600
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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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Three Months
Ended
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Nine Months
Ended
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September
30,
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June
30,
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September
30,
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September
30,
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September
30,
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2016
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2016
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2015
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2016
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2015
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Revenues
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$
51,927
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$
53,673
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$
116,281
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$
182,420
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$
387,351
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Costs and
expenses:
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Operating expenses
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29,375
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34,330
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54,938
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104,134
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|
173,900
|
|
|
Depreciation and amortization
|
28,047
|
|
28,474
|
|
27,350
|
|
84,973
|
|
81,306
|
|
|
General and administrative expenses
|
9,031
|
|
12,379
|
|
12,188
|
|
30,084
|
|
37,143
|
|
|
|
66,453
|
|
75,183
|
|
94,476
|
|
219,191
|
|
292,349
|
|
|
Gain
on sale of assets
|
81
|
|
-
|
|
11,004
|
|
36
|
|
44,060
|
|
|
Operating income (loss)
|
(14,445)
|
|
(21,510)
|
|
32,809
|
|
(36,735)
|
|
139,062
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
401
|
|
386
|
|
381
|
|
1,164
|
|
988
|
|
|
Interest expense
|
(12,820)
|
|
(11,004)
|
|
(9,712)
|
|
(34,888)
|
|
(29,895)
|
|
|
Other income (expense), net 1
|
1,592
|
|
(48)
|
|
94
|
|
2,048
|
|
1,016
|
|
|
|
(10,827)
|
|
(10,666)
|
|
(9,237)
|
|
(31,676)
|
|
(27,891)
|
|
|
Income (loss) before
income taxes
|
(25,272)
|
|
(32,176)
|
|
23,572
|
|
(68,411)
|
|
111,171
|
|
|
Income tax expense
(benefit)
|
(8,769)
|
|
(11,590)
|
|
9,148
|
|
(23,808)
|
|
41,679
|
|
|
Net income
(loss)
|
$
(16,503)
|
|
$
(20,586)
|
|
$
14,424
|
|
$
(44,603)
|
|
$
69,492
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss)
per common share
|
$
(0.45)
|
|
$
(0.57)
|
|
$
0.40
|
|
$
(1.23)
|
|
$
1.95
|
|
|
Diluted earnings
(loss) per common share
|
$
(0.45)
|
|
$
(0.57)
|
|
$
0.40
|
|
$
(1.23)
|
|
$
1.92
|
|
|
Weighted average
basic shares outstanding
|
36,338
|
|
36,191
|
|
35,832
|
|
36,205
|
|
35,723
|
|
|
Weighted average
diluted shares outstanding 2
|
36,338
|
|
36,191
|
|
36,383
|
|
36,205
|
|
36,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Operating
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
Offshore Supply
Vessels:
|
|
|
|
|
|
|
|
|
|
|
|
Average number of new
generation OSVs 3
|
62.0
|
|
62.0
|
|
59.6
|
|
61.9
|
|
60.1
|
|
|
Average number of active new
generation OSVs 4
|
17.9
|
|
20.1
|
|
41.5
|
|
22.0
|
|
45.0
|
|
|
Average new generation OSV
fleet capacity (deadweight) 3
|
221,629
|
|
221,629
|
|
205,734
|
|
220,885
|
|
205,467
|
|
|
Average new generation OSV
capacity (deadweight)
|
3,575
|
|
3,575
|
|
3,451
|
|
3,570
|
|
3,419
|
|
|
Average new generation
utilization rate 5
|
22.0%
|
|
23.9%
|
|
50.3%
|
|
27.0%
|
|
57.1%
|
|
|
Effective new generation
utilization rate 6
|
76.3%
|
|
73.8%
|
|
72.2%
|
|
76.0%
|
|
76.2%
|
|
|
Average new generation
dayrate 7
|
$
25,639
|
|
$
26,642
|
|
$
25,699
|
|
$
25,488
|
|
$
26,885
|
|
|
Effective dayrate
8
|
$
5,641
|
|
$
6,367
|
|
$
12,927
|
|
$
6,882
|
|
$
15,351
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
September 30,
|
|
As of
December 31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
225,461
|
|
$
259,801
|
|
|
|
|
|
|
|
|
Working
capital
|
236,868
|
|
278,491
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
2,598,244
|
|
2,574,661
|
|
|
|
|
|
|
|
|
Total
assets
|
2,913,423
|
|
2,984,416
|
|
|
|
|
|
|
|
|
Total long-term
debt
|
1,080,284
|
|
1,070,281
|
|
|
|
|
|
|
|
|
Stockholders'
equity
|
1,425,200
|
|
1,446,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flow Data
(unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
|
|
|
|
|
|
September
30,
|
|
September
30,
|
|
|
|
|
|
|
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash provided by
operating activities
|
$
56,711
|
|
$
184,468
|
|
|
|
|
|
|
|
|
Cash used in
investing activities
|
(91,812)
|
|
(63,730)
|
|
|
|
|
|
|
|
|
Cash used in
financing activities
|
(370)
|
|
(123)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Financial Data
|
(in thousands,
except Financial Ratios)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel
revenues
|
$
43,670
|
|
$
45,284
|
|
$
108,308
|
|
$
157,170
|
|
$
366,608
|
|
|
Non-vessel revenues
9
|
8,257
|
|
8,389
|
|
7,973
|
|
25,250
|
|
20,743
|
|
|
Total
revenues
|
$
51,927
|
|
$
53,673
|
|
$
116,281
|
|
$
182,420
|
|
$
387,351
|
|
|
Operating income
(loss)
|
$
(14,445)
|
|
$
(21,510)
|
|
$
32,809
|
|
$
(36,735)
|
|
$
139,062
|
|
|
Operating margin
(deficit)
|
(27.8%)
|
|
(40.1%)
|
|
28.2%
|
|
(20.1%)
|
|
35.9%
|
|
|
Components
of EBITDA 10
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
(16,503)
|
|
$
(20,586)
|
|
$
14,424
|
|
$
(44,603)
|
|
$
69,492
|
|
|
Interest
expense, net
|
12,419
|
|
10,618
|
|
9,331
|
|
33,724
|
|
28,907
|
|
|
Income tax
expense (benefit)
|
(8,769)
|
|
(11,590)
|
|
9,148
|
|
(23,808)
|
|
41,679
|
|
|
Depreciation
|
23,467
|
|
22,658
|
|
20,958
|
|
68,298
|
|
61,114
|
|
|
Amortization
|
4,580
|
|
5,816
|
|
6,392
|
|
16,675
|
|
20,192
|
|
|
EBITDA
10
|
$
15,194
|
|
$
6,916
|
|
$
60,253
|
|
$
50,286
|
|
$
221,384
|
|
|
Adjustments
to EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
2,341
|
|
3,044
|
|
3,183
|
|
6,557
|
|
7,957
|
|
|
Interest
income
|
401
|
|
386
|
|
381
|
|
1,164
|
|
988
|
|
|
Adjusted
EBITDA 10
|
$
17,936
|
|
$
10,346
|
|
$
63,817
|
|
$
58,007
|
|
$
230,329
|
|
|
EBITDA
10 Reconciliation to GAAP:
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
10
|
$
15,194
|
|
$
6,916
|
|
$
60,253
|
|
$
50,286
|
|
$
221,384
|
|
|
Cash paid for
deferred drydocking charges
|
(897)
|
|
(1,110)
|
|
(5,725)
|
|
(3,214)
|
|
(12,034)
|
|
|
Cash paid for
interest
|
(13,784)
|
|
(11,300)
|
|
(13,879)
|
|
(38,871)
|
|
(39,151)
|
|
|
Cash paid for
taxes
|
(446)
|
|
(490)
|
|
(1,447)
|
|
(2,688)
|
|
(3,331)
|
|
|
Changes in
working capital
|
13,711
|
|
4,976
|
|
18,115
|
|
45,396
|
|
54,400
|
|
|
Stock-based
compensation expense
|
2,341
|
|
3,044
|
|
3,183
|
|
6,557
|
|
7,957
|
|
|
Gain on sale
of assets
|
(81)
|
|
-
|
|
(11,004)
|
|
(36)
|
|
(44,060)
|
|
|
Changes in
other, net
|
(1,573)
|
|
957
|
|
223
|
|
(719)
|
|
(697)
|
|
|
Net cash
provided by operating activities
|
$
14,465
|
|
$
2,993
|
|
$
49,719
|
|
$
56,711
|
|
$
184,468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Financial Data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures and Drydock Downtime Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
|
September
30,
|
|
June
30,
|
|
September
30,
|
|
September
30,
|
|
September
30,
|
|
|
|
|
2016
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
|
New-Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
1.0
|
|
-
|
|
3.0
|
|
6.0
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
84
|
|
72
|
|
147
|
|
234
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
|
New-Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
1.0
|
|
-
|
|
1.0
|
|
1.0
|
|
|
|
Commercial
downtime (in days)
|
43
|
|
27
|
|
-
|
|
70
|
|
266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
1.0
|
|
-
|
|
2.0
|
|
-
|
|
|
|
Commercial
downtime (in days)
|
-
|
|
52
|
|
-
|
|
201
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
897
|
|
$
1,110
|
|
$
5,725
|
|
$
3,214
|
|
$
12,034
|
|
|
|
Other vessel
capital improvements
|
(401)
|
|
2,154
|
|
3,064
|
|
5,272
|
|
7,134
|
|
|
|
|
496
|
|
3,264
|
|
8,789
|
|
8,486
|
|
19,168
|
|
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related vessel improvements
|
2,549
|
|
4,056
|
|
8,151
|
|
13,434
|
|
40,326
|
|
|
|
Non-vessel
related capital expenditures
|
139
|
|
9
|
|
1,250
|
|
414
|
|
15,855
|
|
|
|
|
2,688
|
|
4,065
|
|
9,401
|
|
13,848
|
|
56,181
|
|
|
|
|
$
3,184
|
|
$
7,329
|
|
$
18,190
|
|
$
22,334
|
|
$
75,349
|
|
|
|
Growth Capital
Expenditures (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
6,818
|
|
$
25,027
|
|
$
27,723
|
|
$
61,352
|
|
$
137,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forecasted
Data12:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2016A
|
|
2Q
2016A
|
|
3Q
2016A
|
|
4Q
2016E
|
|
2016E
|
|
2017E
|
|
Drydock
Downtime:
|
|
|
|
|
|
|
|
|
|
|
|
|
New-Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
2.0
|
|
1.0
|
|
-
|
|
1.0
|
|
4.0
|
|
5.0
|
|
Commercial
downtime (in days)
|
63
|
|
84
|
|
-
|
|
31
|
|
178
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing drydock activities
|
-
|
|
-
|
|
-
|
|
1.0
|
|
1.0
|
|
3.0
|
|
Commercial
downtime (in days)
|
-
|
|
-
|
|
-
|
|
26
|
|
26
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related
Downtime11:
|
|
|
|
|
|
|
|
|
|
|
|
|
New-Generation
OSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
-
|
|
1.0
|
|
-
|
|
1.0
|
|
2.0
|
|
-
|
|
Commercial
downtime (in days)
|
-
|
|
27
|
|
43
|
|
49
|
|
119
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MPSVs
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
vessels commencing commercial-related downtime
|
1.0
|
|
1.0
|
|
-
|
|
1.0
|
|
3.0
|
|
-
|
|
Commercial
downtime (in days)
|
149
|
|
52
|
|
-
|
|
33
|
|
234
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance and
Other Capital Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
Maintenance
Capital Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred
drydocking charges
|
$
1.2
|
|
$
1.1
|
|
$
0.9
|
|
$
1.1
|
|
$
4.3
|
|
$
6.9
|
|
Other vessel
capital improvements
|
3.5
|
|
2.2
|
|
(0.4)
|
|
1.2
|
|
6.5
|
|
0.8
|
|
|
4.7
|
|
3.3
|
|
0.5
|
|
2.3
|
|
10.8
|
|
7.7
|
|
Other Capital
Expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial-related vessel improvements
|
6.8
|
|
4.1
|
|
2.6
|
|
3.0
|
|
16.5
|
|
-
|
|
Non-vessel
related capital expenditures
|
0.3
|
|
-
|
|
0.1
|
|
0.1
|
|
0.5
|
|
1.0
|
|
|
7.1
|
|
4.1
|
|
2.7
|
|
3.1
|
|
17.0
|
|
1.0
|
|
|
$
11.8
|
|
$
7.4
|
|
$
3.2
|
|
$
5.4
|
|
$
27.8
|
|
$
8.7
|
|
Growth Capital
Expenditures (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
OSV newbuild
program #5
|
$
29.5
|
|
$
25.0
|
|
$
6.8
|
|
$
6.9
|
|
$
68.2
|
|
$
21.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hornbeck Offshore
Services, Inc. and Subsidiaries
|
Unaudited Other
Fleet and Financial Data
|
(in millions,
except Average Vessels, Contract Backlog and Tax
Rate)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Guidance
of Selected Data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4Q
2016E
|
|
Full-Year
2016E
|
|
Full-Year
2017E
|
|
|
|
|
|
|
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
Avg
Vessels
|
|
|
|
|
|
|
|
Fleet Data (as of
2-Nov-2016):
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
|
|
New generation OSVs -
Active
|
15.9
|
|
20.4
|
|
14.0
|
|
|
|
|
|
|
|
New generation OSVs -
Stacked 13
|
46.1
|
|
41.5
|
|
48.0
|
|
|
|
|
|
|
|
New generation OSVs -
Total
|
62.0
|
|
61.9
|
|
62.0
|
|
|
|
|
|
|
|
New generation
MPSVs
|
8.0
|
|
6.7
|
|
8.0
|
|
|
|
|
|
|
|
Total Upstream
|
70.0
|
|
68.6
|
|
70.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4Q 2016E
Range
|
|
Full-Year
2016E Range
|
|
|
|
|
|
Cost
Data:
|
Low14
|
|
High
14
|
|
Low14
|
|
High
14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
$
29.0
|
|
$
34.0
|
|
$
133.0
|
|
$
138.0
|
|
|
|
|
|
General and administrative
expenses
|
$
10.0
|
|
$
11.0
|
|
$
40.0
|
|
$
41.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q
2016A
|
|
2Q
2016A
|
|
3Q
2016A
|
|
4Q
2016E
|
|
2016E
|
|
2017E
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
$
22.2
|
|
$
22.7
|
|
$
23.5
|
|
$
24.7
|
|
$
93.1
|
|
$
98.4
|
|
Amortization
|
6.3
|
|
5.8
|
|
4.6
|
|
3.9
|
|
20.6
|
|
11.6
|
|
Interest
expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
$
13.5
|
|
$
13.5
|
|
$
13.5
|
|
$
13.5
|
|
$
54.0
|
|
$
54.0
|
|
Write-off of
unamortized debt issuance costs
|
-
|
|
-
|
|
0.9
|
|
-
|
|
0.9
|
|
-
|
|
Incremental
non-cash OID interest expense 15
|
2.6
|
|
2.6
|
|
2.6
|
|
2.7
|
|
10.5
|
|
11.1
|
|
Capitalized
interest
|
(5.0)
|
|
(5.1)
|
|
(4.2)
|
|
(2.3)
|
|
(16.6)
|
|
(9.6)
|
|
Interest
income
|
(0.4)
|
|
(0.4)
|
|
(0.4)
|
|
(0.3)
|
|
(1.5)
|
|
(0.8)
|
|
Total interest
expense, net
|
$
10.7
|
|
$
10.6
|
|
$
12.4
|
|
$
13.6
|
|
$
47.3
|
|
$
54.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
rate
|
31.5%
|
|
36.0%
|
|
34.7%
|
|
59.0%
|
|
42.5%
|
|
34.5%
|
|
Cash income
taxes
|
$
1.8
|
|
$
0.5
|
|
$
0.5
|
|
$
1.2
|
|
$
4.0
|
|
$
1.8
|
|
Cash interest
expense
|
13.8
|
|
11.3
|
|
13.8
|
|
11.3
|
|
50.2
|
|
50.2
|
|
Weighted
average basic shares outstanding
|
36.1
|
|
36.2
|
|
36.3
|
|
36.4
|
|
36.2
|
|
36.8
|
|
Weighted
average diluted shares outstanding 16
|
36.8
|
|
37.2
|
|
37.1
|
|
37.2
|
|
37.0
|
|
37.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
Represents other
income and expenses, including equity in income from investments
and foreign currency transaction gains or losses.
|
|
|
2
|
Due to net losses for
the three and nine months ended September 30, 2016 and the three
months ended June 30, 2016, the Company excluded the dilutive
effect of equity awards representing the rights to acquire 988, 974
and 992 shares of common stock, respectively, because the effect
was anti-dilutive. Stock options representing rights to
acquire 317 and 326 shares of common stock for the three and nine
months ended September 30, 2015 were excluded from the calculation
of diluted earnings per share, because the effect was antidilutive
after considering the exercise price of the options in comparison
to the average market price, proceeds from exercise, taxes and
related unamortized compensation. As of September 30, 2016,
June 30, 2016, and September 30, 2015, 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 September 30, 2016. Excluded from
this data are eight MPSVs owned and operated by the
Company.
|
|
|
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 average rates based on a 365-day year. 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 utilization rate
for the respective period.
|
|
|
9
|
Represents revenues
from shore-based operations, vessel-management services, 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
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 also makes 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 these ratios
can 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 November 2,
2016, the Company's inactive fleet of 46 new generation OSVs that
were "stacked" was comprised of the following: eleven 200 class
OSVs, twenty-five 240 class OSVs, three 265 class OSVs and seven
300 class OSVs. In addition, the Company plans to stack one
240 class OSV and one 300 class OSV during the fourth quarter of
2016.
|
|
|
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
|
Represents
incremental imputed non-cash OID interest expense required by
accounting standards pertaining to the Company's 1.500% convertible
senior notes due 2019.
|
|
|
16
|
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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/hornbeck-offshore-announces-third-quarter-2016-results-300356238.html
SOURCE Hornbeck Offshore Services, Inc.