Press Release
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Hornbeck Offshore Announces First Quarter 2009 Results
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COVINGTON, La.,
First quarter 2009 revenues increased 12.4% to Upstream Segment. Revenues from the Upstream segment were Downstream Segment. Revenues from the Downstream segment of General and Administrative ("G&A"). G&A expenses of Depreciation and Amortization. Depreciation and amortization expense was
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 earnings and certain events. These statements are forward-looking and actual results may differ materially. Other than as expressly stated, these statements do not include the potential impact of any future capital transactions, such as vessel acquisitions, divestitures, unexpected vessel repairs and shipyard delays, business combinations, financings and unannounced newbuild programs that may be commenced after the date of this disclosure. For additional information concerning forward-looking statements, please see the note at the end of this news release. Recent Development New Accounting Rule for Convertible Senior Notes. Pursuant to the
required change in method of accounting for convertible debt instruments
required by FASB Staff Position (FSP) No. APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon Conversion
(Including Partial Cash Settlement)," effective Earnings Outlook Annual 2009 Guidance. The Company expects total EBITDA for fiscal 2009 to
range between Key Assumptions. The Company's forward earnings guidance, outlined above
and in the attached data tables, assumes that current Upstream and Downstream
market conditions remain constant. Fleetwide average new generation OSV
dayrates are anticipated to be in the The Company's full-year 2009 Upstream guidance includes a partial-year contribution from additional vessels to be delivered under its MPSV program and its fourth OSV newbuild program with the estimated newbuild delivery expectations discussed below. In recognition of substantially reduced demand on the shallow-shelf for conventional vessels in early 2009, the annual 2009 guidance reflects the recent stacking of five conventional OSVs, which the Company considers non-core assets. The 2009 Downstream guidance primarily reflects a full-year contribution from the Company's fleet of nine double-hulled barges and, to a lesser extent, a full- or partial-year contribution from the Company's active single-hulled barges, as applicable. The Company expects that cash operating expenses per vessel-day in fiscal
2009 will not materially increase over fiscal 2008 levels, excluding
contract-related costs recoverable through higher dayrates or other revenue.
Annual G&A expenses are expected to be in the range of 9% to 10% of revenues
for fiscal 2009. The projected annual FAS 123R stock-based compensation
expense, depreciation, amortization and net interest expense that underpin the
Company's diluted EPS guidance for the full-year 2009 are included in the
attached data tables. Projected quarterly FAS 123R stock-based compensation
expense, depreciation, amortization and net interest expense for the quarter
ending Capital Expenditures Outlook Update on Maintenance Capital Expenditures. Please refer to the attached
data table for a summary, by period, of historical and projected data for each
of the following three major categories of maintenance capital expenditures:
(i) deferred drydocking charges; (ii) other vessel capital improvements and
(iii) non-vessel related capital expenditures. The Company expects total
maintenance capital expenditures for the full-year 2009 to be approximately
Update on MPSV Program. The Company's MPSV program consists of the
conversion of two U.S.-flagged coastwise sulfur tankers at domestic shipyards
into 370 class DP-2 new generation MPSVs and the construction of two T-22
class DP-3 new generation MPSV newbuilds in foreign shipyards. The first
converted DP-2 MPSV, the HOS Centerline, was placed in service in late Update on OSV Newbuild Program #4. The Company's fourth OSV newbuild
program consists of vessel construction contracts with three domestic
shipyards to build six 240 ED class OSVs, nine 250 EDF class OSVs and one 290
class OSV, respectively. Eleven of these 16 new generation DP-2 OSVs have
been awarded customer contracts prior to their shipyard delivery. Four of the
240 ED class OSVs under this program, the HOS Polestar, the HOS Shooting Star,
the HOS North Star and the HOS Lode Star, were placed in service in
2Q2009E 3Q2009E 4Q2009E 1Q2010E 2Q2010E 3Q2010E 4Q2010E
Estimated
In-Service
Dates:
240 ED class
OSVs - - 1 1 - - -
250 EDF class
OSVs - 2 1 2 1 1 -
- 2 2 3 1 1 -
Based on the above schedule of projected vessel in-service dates, the
Company expects to own and operate 46 and 51 new generation OSVs as of
Please refer to the attached data tables for a summary, by period, of historical and projected data for each of the contracted growth initiatives outlined above. All of the above capital costs and delivery date estimates for contracted growth initiatives are based on the latest available information and are subject to change. All of the figures set forth above represent expected cash outlays and do not include the allocation of construction period interest. Update on Liquidity. The Company believes that its current working
capital, available capacity under its existing revolving credit facility and
projected cash flows from operations for the fiscal years 2009 and 2010 will
be sufficient to meet its anticipated operating needs, as well as the total
remaining cash requirements under its MPSV and OSV newbuild programs of
approximately Conference Call The Company will hold a conference call to discuss its first quarter 2009
financial results and recent developments at Attached Data Tables The Company has posted an electronic version of the following three pages of data tables, which are downloadable in Microsoft Excel format, on the "IR Home" page of the "Investors" section of the Hornbeck Offshore website for the convenience of analysts and investors. Forward-Looking Statements and Regulation G Reconciliation 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," "should" or "will" or other comparable words or the negative of
such words. The accuracy of the Company's assumptions, expectations, beliefs
and projections depend 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, which include: the Company's inability to successfully or timely
complete its various vessel construction and conversion programs, especially
its MPSV program, which involves the construction and integration of highly
complex vessels and systems; changes in its vessel construction and conversion
budgets; less than anticipated success in marketing and operating its MPSVs,
which are a class of vessels that the Company does not have a long history of
owning or operating; the inability of our MPSVs to perform the services for
which they were designed; further weakening of demand for the Company's
services; inability to effectively curtail operating expenses from stacked
vessels; the potential for valuation impairment charges; the inability to sell
or otherwise dispose of non-core assets on acceptable terms; unplanned
customer suspensions, cancellations, rate reductions or non-renewals of vessel
charters or failures to finalize commitments to charter vessels; the inability
or unwillingness by customers to place on hire contractually committed vessels
that are part of the Company's newbuild programs, when such vessels are
available for service; industry risks; further reductions in capital spending
budgets by customers; further decline in oil and natural gas prices; increases
in operating costs; the inability to accurately predict vessel utilization
levels and dayrates; less than anticipated subsea infrastructure demand
activity in the U.S. Gulf of
Hornbeck Offshore Services, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations
(in thousands, except Other Operating and Per Share Data)
Statement of Operations (unaudited):
Three Months Ended
------------------
March 31, December 31, March 31,
2009 2008 2008
---- ---- ----
Revenues $109,647 $121,029 $97,521
Costs and
expenses:
Operating
expenses 40,571 40,168 39,795
Depreciation
and
amortization 15,148 13,963 12,189
General and
administrative
expenses 8,762 10,437 8,577
----- ------ -----
64,481 64,568 60,561
------ ------ ------
Gain on
sale
of
assets 245 - -
--- --- ---
Operating
income 45,411 56,461 36,960
Other income
(expense):
Interest
income 139 155 992
Interest
expense (2,731) (2,865) (2,546)
Other
income,
net(1) (240) 49 13
---- --- ---
(2,832) (2,661) (1,541)
------ ------ ------
Income before
income taxes 42,579 53,800 35,419
Income tax
expense 15,478 19,157 12,790
------ ------ ------
Net income $27,101 $34,643 $22,629
======= ======= =======
Basic
earnings
per share
of common
stock $1.04 $1.34 $0.88
===== ===== =====
Diluted
earnings
per share
of common
stock $1.01 $1.29 $0.84
===== ===== =====
Weighted
average
basic
shares
outstanding 25,942 25,882 25,783
====== ====== ======
Weighted average
diluted shares
outstanding(2) 26,803 26,803 26,938
====== ====== ======
Other Operating Data (unaudited):
Three Months Ended
------------------
March 31, December 31, March 31,
2009 2008 2008
---- ---- ----
Offshore Supply Vessels:
Average number of new
generation OSVs(3) 40.6 38.3 35.0
Average new generation fleet
capacity (deadweight)(3) 96,869 90,096 80,903
Average new generation vessel
capacity (deadweight) 2,389 2,352 2,312
Average new generation
utilization rate(4) 93.0% 96.4% 92.1%
Average new generation
dayrate(5) $23,085 $24,385 $21,020
Effective dayrate(6) $21,469 $23,507 $19,359
Tugs and Tank Barges:
TTB Consolidated:
Average number of tank
barges(7) 20.0 21.0 20.3
Average fleet capacity
(barrels)(7) 1,633,412 1,745,256 1,696,158
Average barge size
(barrels) 81,671 83,107 83,436
Average utilization rate(4) 56.7% 59.4% 85.6%
Effective utilization
rate(8) 81.0% 83.6% 85.6%
Average dayrate(9) $18,695 $18,507 $19,059
Effective dayrate(6) $10,600 $10,993 $16,315
Double-hulled tank barges:
Average utilization
rate(4) 80.0% 75.6% 91.1%
Average dayrate(9) $20,406 $20,157 $21,781
Effective dayrate(6) $16,325 $15,239 $19,842
Single-hulled tank barges:
Average utilization
rate(4) 37.6% 47.2% 81.8%
Effective utilization
rate(8) 82.7% 95.9% 81.8%
Average dayrate(9) $15,710 $16,484 $16,937
Effective dayrate(6) $5,907 $7,780 $13,854
Balance Sheet Data (unaudited):
As of As of
March 31, December 31,
2009 2008
---- ----
Cash and cash equivalents $20,909 $20,216
Working capital 57,282 66,069
Property, plant and equipment,
net 1,486,521 1,405,340
Total assets 1,659,751 1,595,743
Total long-term debt 645,966 618,519
Stockholders' equity 765,293 736,900
Cash Flow Data (unaudited):
Three Months Ended
------------------
March 31, March 31,
2009 2008
---- ----
Cash provided by operating
activities $59,618 $60,161
Cash used in investing
activities (83,964) (183,078)
Cash provided by financing
activities 25,077 571
Hornbeck Offshore Services, Inc. and Subsidiaries
Unaudited Other Financial Data
(in thousands, except Financial Ratios)
Other Financial Data (unaudited):
Three Months Ended
------------------
March 31, December 31, March 31,
2009 2008 2008
---- ---- ----
---------
Upstream:
---------
Revenues $90,576 $99,918 $67,452
Operating income $44,152 $53,159 $29,030
Operating margin 48.7% 53.2% 43.0%
Components of EBITDA(10)
Net income $26,660 $32,990 $17,908
Interest expense
(income), net 2,026 1,931 1,012
Income tax expense 15,226 18,286 10,122
Depreciation 7,314 6,368 4,732
Amortization 3,186 3,045 2,507
----- ----- -----
EBITDA(10) $54,412 $62,620 $36,281
======= ======= =======
Adjustments to EBITDA
Stock-based
compensation expense $2,038 $1,746 $1,625
Interest income 125 128 652
--- --- ---
Adjusted EBITDA(10) $56,575 $64,494 $38,558
======= ======= =======
EBITDA(10)
Reconciliation to GAAP:
EBITDA(10) $54,412 $62,620 $36,281
Cash paid for deferred
drydocking charges (4,379) (2,759) (2,974)
Cash paid for interest (476) (9,142) (33)
Cash paid for taxes (7,600) (2,023) (1,575)
Changes in working capital 14,016 (1,118) 15,290
Stock-based
compensation expense 2,038 1,746 1,625
Changes in other, net (119) 1,394 240
---- ----- ---
Net cash provided by
operating activities $57,892 $50,718 $48,854
======= ======= =======
-----------
Downstream:
-----------
Revenues $19,071 $21,111 $30,069
Operating income $1,259 $3,302 $7,930
Operating margin 6.6% 15.6% 26.4%
Components of EBITDA(10)
Net income $441 $1,653 $4,721
Interest expense
(income), net 566 779 542
Income tax expense 252 871 2,668
Depreciation 2,831 2,915 2,730
Amortization 1,817 1,635 2,220
----- ----- -----
EBITDA(10) $5,907 $7,853 $12,881
====== ====== =======
Adjustments to EBITDA
Stock-based
compensation expense $619 $637 $1,344
Interest income 14 27 340
--- --- ---
Adjusted EBITDA(10) $6,540 $8,517 $14,565
====== ====== =======
EBITDA(10)
Reconciliation to GAAP:
EBITDA(10) $5,907 $7,853 $12,881
Cash paid for deferred
drydocking charges (574) (2,193) (1,094)
Cash paid for interest (114) (3,415) (17)
Cash paid for taxes (4,765) - (1,710)
Changes in working capital 644 1,346 (1,502)
Stock-based
compensation expense 619 637 1,344
Changes in other, net 9 (477) (174)
--- ---- ----
Net cash provided by
operating activities $1,726 $3,751 $9,728
====== ====== ======
-------------
Consolidated:
-------------
Revenues $109,647 $121,029 $97,521
Operating income $45,411 $56,461 $36,960
Operating margin 41.4% 46.7% 37.9%
Components of EBITDA(10)
Net income $27,101 $34,643 $22,629
Interest expense
(income), net 2,592 2,710 1,554
Income tax expense 15,478 19,157 12,790
Depreciation 10,145 9,283 7,462
Amortization 5,003 4,680 4,727
----- ----- -----
EBITDA(10) $60,319 $70,473 $49,162
======= ======= =======
Adjustments to EBITDA
Stock-based
compensation expense $2,657 $2,383 $2,969
Interest income 139 155 992
--- --- ---
Adjusted EBITDA(10) $63,115 $73,011 $53,123
======= ======= =======
EBITDA(10)
Reconciliation to GAAP:
EBITDA(10) $60,319 $70,473 $49,162
Cash paid for deferred
drydocking charges (4,953) (4,952) (4,068)
Cash paid for interest (590) (12,557) (50)
Cash paid for taxes (12,365) (2,023) (3,285)
Changes in working capital 14,660 228 13,788
Stock-based
compensation expense 2,657 2,383 2,969
Changes in other, net (110) 917 66
---- --- --
Net cash provided by
operating activities $59,618 $54,469 $58,582
======= ======= =======
Hornbeck Offshore Services, Inc. and Subsidiaries
Unaudited Other Financial Data
(in millions, except Per Share and Historical Data)
Forward Earnings Guidance and Projected EBITDA Reconciliation: (Unaudited)
Pro Forma Run-
2009 Guidance Full-Year 2009 Rate
Estimate Estimate(11)
-------- -----------
Low High Low High
--- ---- --- ----
Components of Projected
EBITDA(10)
Adjusted EBITDA(10) $240.2 $260.2 $337.5 $411.2
Interest income 0.2 0.2 0.2 0.2
Stock-based
compensation expense 10.0 10.0 10.0 10.0
---- ---- ---- ----
EBITDA(10) $230.0 $250.0 $327.3 $401.0
Depreciation 45.0 45.0 59.2 59.2
Amortization 22.5 22.5 33.3 33.3
Interest expense, net:
Interest expense 27.7 27.3 24.7 24.7
Incremental APB 14-1
non-cash interest
expense(12) 10.1 10.1 10.1 10.1
Capitalized interest (19.7) (19.7) - -
Interest income (0.2) (0.2) (0.2) (0.2)
---- ---- ---- ----
Total interest
expense, net 17.9 17.5 34.6 34.6
Income tax expense 52.5 59.9 72.7 99.4
Income tax rate 36.3% 36.3% 36.3% 36.3%
Net income $92.1 $105.1 $127.5 $174.5
Weighted average
diluted shares
outstanding(13) 27.2 27.2 27.2 27.2
Diluted earnings per share,
as reported $3.39 $3.86 $4.69 $6.42
Incremental APB 14-1 non-
cash interest expense per
share(12) 0.11 0.11 0.24 0.24
---- ---- ---- ----
Diluted earnings per
share, as
adjusted(14) $3.50 $3.97 $4.93 $6.66
Projected EBITDA(10)
Reconciliation to GAAP:
EBITDA(10) $230.0 $250.0 $327.3 $401.0
Cash paid for deferred
drydocking charges (21.7) (21.7) (29.1) (29.1)
Cash paid for interest (25.8) (25.5) (22.9) (22.9)
Cash paid for taxes (14.5) (14.5) (14.5) (14.5)
Changes in working
capital(15) 12.9 7.9 (29.0) (31.3)
Stock-based
compensation expense 10.0 10.0 10.0 10.0
Changes in other, net(15) 1.9 1.9 1.9 1.9
--- --- --- ---
Cash flows provided by
operating activities $192.8 $208.1 $243.7 $315.1
====== ====== ====== ======
Capital Expenditures Data (unaudited)(16):
Historical Data
(in thousands):
Three Months Ended
------------------
March 31, December 31, March 31,
2009 2008 2008
---- ---- ----
Maintenance
Capital
Expenditures:
Deferred
drydocking
charges $4,953 $4,952 $4,069
Other vessel
capital
improvements 1,784 2,865 8,015
Non-vessel related
capital expenditures 2,774 272 22,158
----- --- ------
$9,511 $8,089 $34,242
====== ====== =======
Growth Capital
Expenditures:
MPSV program $33,355 $11,777 $107,913
TTB newbuild
program #2 - - 3,835
OSV newbuild
program #4 40,534 51,013 35,243
------ ------ ------
$73,889 $62,790 $146,991
======= ======= ========
Forecasted Data:
1Q2009A 2Q2009E 3Q2009E 4Q2009E 2009E
------- ------- ------- ------- -----
Maintenance
Capital
Expenditures:
Deferred
drydocking
charges $5.0 $6.8 $5.2 $5.0 $22.0
Other vessel
capital
improvements 1.8 0.7 0.4 0.7 3.6
Non-vessel related
capital expenditures 2.8 1.4 1.3 1.5 7.0
--- --- --- --- ---
$9.6 $8.9 $6.9 $7.2 $32.6
==== ==== ==== ==== =====
Growth Capital
Expenditures:
MPSV program $33.4 $17.2 $27.0 $11.8 $89.4
OSV newbuild
program #4 40.5 48.6 32.5 21.3 142.9
---- ---- ---- ---- -----
$73.9 $65.8 $59.5 $33.1 $232.3
===== ===== ===== ===== ======
Full
Construction
Cycle Data:
Pre-2009A 2009E 2010E Total
--------- ----- ----- -----
Growth Capital
Expenditures:
MPSV program $385.6 $89.4 $- $475.0
OSV newbuild
program #4 271.4 142.9 35.7 450.0
----- ----- ---- -----
$657.0 $232.3 $35.7 $925.0
====== ====== ===== ======
1 Represents other income and expenses, including gains or losses related
To foreign currency exchange and minority interests in income or loss
From unconsolidated entities.
2 Stock options representing rights to acquire 429, 430 and 67 shares of
common stock for the three months ended
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