HOUSTON, Aug. 1 /PRNewswire-FirstCall/ -- Helix Energy Solutions (NYSE:
HLX) reported record second quarter net income of $69.1 million, or $0.83
per diluted share. This represents an improvement of 166% over last year's
second quarter net income.
Summary of Results
(in thousands, except per share amounts and percentages)
Second Quarter First Quarter Six Months
2006 2005 2006 2006 2005
Revenues $305,013 $166,531 $291,648 $596,661 $326,106
Gross Profit 131,692 52,419 102,266 233,958 104,292
43% 31% 35% 39% 32%
Net Income 69,139 26,027 55,389 124,528 51,437
23% 16% 19% 21% 16%
Diluted Earnings
Per Share 0.83 0.32 0.67 1.51 0.64
Owen Kratz, Chairman and Chief Executive Officer of Helix, stated, "We
are delighted to have once again posted a record quarter on the back of
continuing improvement in the market place for our contracting services. It
is very notable that those services contributed 61% of our EBITDA in the
quarter compared with 44% last year.
"During Q3 we are looking forward to further improvement and the first
contribution from the recently closed Remington acquisition. As announced
in early July we now expect full year 2006 earnings to fall in the higher
range of $3.20 - $3.70 per diluted share.
"We also take this opportunity to announce that our Shelf construction
subsidiary, Cal Dive, has completed the acquisition of Singapore based
Fraser Diving to expand its operating presence in the Middle Eastern and
Asia Pacific regions. Further details of this relatively small but
strategic acquisition are included in the quarterly earnings presentation."
Financial Highlights
* Revenues: The $138.5 million increase in year-over-year second
quarter revenues was driven primarily by significant improvements in
contracting services revenues due to the introduction of newly
acquired assets and much better market conditions.
* Margins: 43% is twelve points better than the year ago quarter driven
by the improved market conditions for contracting services. Margins
in second quarter 2005 were impacted by asset impairments totaling
$3.5 million pre-tax. Without this charge, margins would have been
34% in the prior year.
* SG&A: $27.4 million increased $14.6 million from the same period a
year ago due primarily to increased overhead to support the Company's
growth. This level of SG&A was 9% of second quarter revenues,
compared to 8% in the year ago quarter.
* Equity in Earnings: $4.5 million reflects primarily our share of
Deepwater Gateway, L.L.C.'s earnings for the quarter relating to the
Marco Polo facility.
* Income Tax Provision: The Company's effective tax rate for the
quarter was 34% which is less than the 36% rate in last year's second
quarter due primarily to the Company's ability to realize foreign tax
credits due to improved profitability both domestically and in foreign
jurisdictions.
* Balance Sheet: Total debt as of June 30, 2006 was $444 million. This
represents 35% debt to book capitalization and with $502 million of
EBITDA during the last twelve months, this represents 0.9 times
trailing twelve month EBITDA.
Further details are provided in the presentation for Helix's quarterly
conference call (see the Investor Relations page of http://www.HelixESG.com
). In addition, reconciliations of non-GAAP measures are included on the
Investor Relations page of our website. The call, scheduled for 9:00 a.m.
Central Daylight Time on Wednesday, August 2, 2006, will be webcast live. A
replay will be available from the Audio Archives page.
Helix Energy Solutions, headquartered in Houston, Texas, is an energy
services company that provides innovative solutions to the oil and gas
industry worldwide for marginal field development, alternative development
plans, field life extension and abandonment, with service lines including
diving services, shelf and deepwater construction, robotics, well
operations, well engineering and subsurface consulting services, platform
ownership and oil and gas production.
FORWARD-LOOKING STATEMENTS
This press release and attached presentation contain forward-looking
statements that involve risks, uncertainties and assumptions that could
cause our results to differ materially from those expressed or implied by
such forward-looking statements. All statements, other than statements of
historical fact, are statements that could be deemed "forward-looking
statements" within the meaning of the Private Securities Litigation Reform
Act of 1995, including, without limitation, any projections of revenue,
gross margin, expenses, earnings or losses from operations, or other
financial items; future production volumes, results of exploration,
exploitation, development, acquisition and operations expenditures, and
prospective reserve levels of property or wells; any statements of the
plans, strategies and objectives of management for future operations; any
statement concerning developments, performance or industry rankings
relating to services; any statements regarding future economic conditions
or performance; any statements of expectation or belief; any statements
regarding the anticipated results (financial or otherwise) of the merger of
Remington Oil and Gas Corporation into a wholly-owned subsidiary of Helix;
and any statements of assumptions underlying any of the foregoing. The
risks, uncertainties and assumptions referred to above include the
performance of contracts by suppliers, customers and partners; employee
management issues; complexities of global political and economic
developments, geologic risks and other risks described from time to time in
our reports filed with the Securities and Exchange Commission ("SEC"),
including the Company's Annual Report on Form 10-K for the year ending
December 31, 2005; and, with respect to the Remington merger, actual
results could differ materially from Helix's expectations depending on
factors such as the combined company's cost of capital, the ability of the
combined company to identify and implement cost savings, synergies and
efficiencies in the time frame needed to achieve these expectations, prior
contractual commitments of the combined companies and their ability to
terminate these commitments or amend, renegotiate or settle the same, the
combined company's actual capital needs, the absence of any material
incident of property damage or other hazard that could affect the need to
effect capital expenditures, any unforeseen merger or acquisition
opportunities that could affect capital needs, the costs incurred in
implementing synergies and the factors that generally affect both Helix's
and Remington's respective businesses. Actual actions that the combined
company may take may differ from time to time as the combined company may
deem necessary or advisable in the best interest of the combined company
and its shareholders to attempt to achieve the successful integration of
the companies, the synergies needed to make the transaction a financial
success and to react to the economy and the combined company's market for
its exploration and production. We assume no obligation and do not intend
to update these forward-looking statements.
As previously announced, Cal Dive has filed with the Securities and
Exchange Commission a Form S-1 for its planned initial public offering
(IPO) of a minority interest in Cal Dive's common stock.
The offering will be made only by means of a prospectus. Once
available, preliminary prospectuses may be obtained from Cal Dive
International, Inc., 400 North Sam Houston Parkway E., Houston, Texas 77060
or by calling (281) 618-0400.
A registration statement relating to the IPO of Cal Dive stock has been
filed with the Securities and Exchange Commission but has not yet become
effective. These securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any sale
of Cal Dive common stock in any state in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of any such state. There can be no assurance of if or when
this offering will be completed.
HELIX ENERGY SOLUTIONS GROUP, INC.
Comparative Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
Jun. 30, Jun. 30,
(in thousands, except per share
data) 2006 2005 2006 2005
(Unaudited)
Net revenues $305,013 $166,531 $596,661 $326,106
Cost of sales 173,321 114,112 362,703 221,814
Gross profit 131,692 52,419 233,958 104,292
Gain on sale of assets, net 16 --- 283 925
Selling and administrative 27,414 12,858 48,442 25,696
Income from operations 104,294 39,561 185,799 79,521
Equity in earnings of
investments 4,520 2,708 10,756 4,437
Net interest expense and
other 2,983 913 5,440 2,102
Income before income taxes 105,831 41,356 191,115 81,856
Income tax provision 35,887 14,779 64,978 29,319
Net income 69,944 26,577 126,137 52,537
Preferred stock dividends 805 550 1,609 1,100
Net income applicable to common
shareholders $69,139 $26,027 $124,528 $51,437
Other Financial Data:
Net income applicable to
common shareholders $69,139 $26,027 $124,528 $51,437
Preferred stock dividends 805 550 1,609 1,100
Income tax provision 35,887 14,779 64,978 29,319
Net Interest expense and
other 2,983 913 5,440 2,102
Non-cash stock compensation
expense 2,251 204 3,816 397
Depreciation and amortization 34,346 29,247 88,318 55,969
Share of equity investments:
Depreciation 1,242 997 2,482 2,007
Interest expense, net 75 --- 174 1,419
EBITDA (A) $146,728 $72,717 $291,345 $143,750
Weighted Avg. Shares
Outstanding:
Basic 78,462 77,444 78,216 77,294
Diluted 83,965 81,963 83,659 81,850
Earnings Per Share:
Basic $0.88 $0.34 $1.59 $0.67
Diluted $0.83 $0.32 $1.51 $0.64
(A) The Company calculates EBITDA as earnings before net interest
expense, taxes, depreciation and amortization (which includes non-
cash asset impairments), non-cash stock compensation expense and the
Company's share of depreciation, net interest expense and taxes from
its equity investments. EBITDA and EBITDA margin (defined as EBITDA
divided by net revenues) are supplemental non-GAAP financial
measurements used by the Company and investors in the energy industry
in the evaluation of its business due to the measurements being
similar to income from operations.
Comparative Condensed Consolidated Balance Sheets
ASSETS
(000's omitted) Jun. 30, 2006 Dec. 31, 2005
(unaudited)
Current Assets:
Cash and equivalents $38,278 $91,080
Accounts receivable 284,278 228,058
Other current assets 58,105 52,915
Total Current Assets 380,661 372,053
Net Property & Equipment:
Marine Contracting 640,697 524,890
Oil and Gas Production 453,606 391,472
Equity Investments 203,198 179,844
Goodwill 105,012 101,731
Other assets, net 97,413 90,874
Total Assets $1,880,587 $1,660,864
LIABILITIES & SHAREHOLDERS' EQUITY
Jun. 30, 2006 Dec. 31, 2005
(unaudited)
Current Liabilities:
Accounts payable $138,006 $99,445
Accrued liabilities 135,633 145,752
Current mat of L-T debt (B) 6,316 6,468
Total Current Liabilities 279,955 251,665
Long-term debt (B) 437,970 440,703
Deferred income taxes 203,419 167,295
Decommissioning liabilities 110,757 106,317
Other long-term liabilities 8,984 10,584
Convertible preferred stock (B) 55,000 55,000
Shareholders' equity (B) 784,502 629,300
Total Liabilities & Equity $1,880,587 $1,660,864
(B) Debt to book capitalization - 35% at June 30, 2006. Calculated as
total debt ($444,286) divided by sum of total debt, convertible
preferred stock and shareholders' equity ($1,283,788).
SOURCE Helix Energy Solutions Group, Inc.
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Related links:
http://www.HelixESG.com
CONTACT:
Wade Pursell, Chief Financial Officer of
Helix Energy Solutions Group, Inc., +1-281-618-0400, or fax,
+1-281-618-0505
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