UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: March 14, 2013
(Date of earliest event reported)
Hornbeck Offshore Services, Inc.
(Exact Name of Registrant as Specified in Its Charter)
| Delaware | 001-32108 | 72-1375844 | ||
| (State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) | ||
| 103 Northpark Boulevard, Suite 300 Covington, LA |
70433 | |||
| (Address of Principal Executive Offices) | (Zip Code) | |||
(985) 727-2000
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 8.01 – Other Events.
On March 14, 2013, Hornbeck Offshore Services, Inc., or the Company, announced that it has commenced a cash tender offer to purchase any and all of its $250.0 million in outstanding aggregate principal amount of 8.000% senior notes due 2017, or the 8.000% Notes. In connection with the tender offer, the Company is soliciting consents to proposed amendments that would eliminate most of the restrictive covenants and certain default provisions contained in the indenture governing the 8.000% Notes. The tender offer is subject to certain conditions, including receipt of consents to the proposed amendments to the indenture governing the 8.000% Notes from holders of a majority in principal amount of the outstanding 8.000% Notes; execution of a supplemental indenture effecting the amendments; consummation of the offering described below and certain other customary conditions. A copy of this press release is attached as Exhibit 99.1.
On March 14, 2013, the Company also announced that it intended to raise $450.0 million through a private placement of senior notes due 2021. A copy of this press release is attached as Exhibit 99.2. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which the offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state.
Item 9.01 – Financial Statements and Exhibits
| (d) | Exhibits. |
| 12.1 | Calculation of Ratio of Earnings to Fixed Charges. |
| 99.1 | Press Release dated March 14, 2013 announcing tender offer. |
| 99.2 | Press Release dated March 14, 2013 announcing senior note offering. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Hornbeck Offshore Services, Inc. | ||||||
| Date: March 14, 2013 | By: | /s/ James O. Harp, Jr. | ||||
| James O. Harp, Jr. | ||||||
| Executive Vice President and Chief Financial Officer | ||||||
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Exhibit 12.1
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges is computed by dividing fixed charges into earnings. For purposes of determining the ratios of earnings to fixed charges, earnings are defined as income from continuing operations plus fixed charges, excluding capitalized interest. Fixed charges consist of interest (whether expensed or capitalized) and amortization of debt expenses. The table below sets forth the calculation of the ratio of earnings to fixed charges for the periods indicated.
| Year ended December 31, | ||||||||||||||||||||
| (In thousands, except for ratio data) | 2008 | 2009 | 2010 | 2011 | 2012 | |||||||||||||||
| Total interest cost: |
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| Interest expense |
$ | 8,331 | $ | 21,204 | $ | 55,183 | $ | 59,649 | $ | 57,869 | ||||||||||
| Capitalized interest |
28,332 | 23,842 | 3,695 | 401 | 11,044 | |||||||||||||||
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| Total interest cost (fixed charges) |
$ | 36,663 | $ | 44,866 | $ | 58,878 | $ | 60,050 | $ | 68,913 | ||||||||||
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| Pre-tax income (loss) |
$ | 180,181 | $ | 80,555 | $ | 57,918 | $ | (3,363 | ) | $ | 59,743 | |||||||||
| Interest expense |
8,331 | 21,024 | 55,183 | 59,649 | 57,869 | |||||||||||||||
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| Earnings |
$ | 188,512 | $ | 101,579 | $ | 113,101 | $ | 56,286 | $ | 117,612 | ||||||||||
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| Ratio of earnings to fixed charges (1)(2) |
5.1 | x | 2.3 | x | 1.9 | x | (3) | 1.7 | x | |||||||||||
| (1) | We retrospectively applied a new accounting rule set forth by the Financial Accounting Standards Board adopted effective January 1, 2009 regarding our 1.625% convertible senior notes due 2026. This new requirement states that the liability and equity components of a convertible debt instrument that may be settled in cash upon conversion be accounted for separately so that an entity’s accounting will reflect additional non-cash interest expense to match the non-convertible debt borrowing rate when interest cost is recognized in subsequent periods. |
| (2) | During the year ended December 31, 2009, we recorded a non-cash asset impairment charge of $25.8 million related to ten single-hulled tank barges and six ocean-going tugs and a $0.9 million non-cash charge for the write-off of remaining goodwill associated with our Downstream segment. Excluding these non-cash charges, our ratio of earnings to fixed charges would have been 2.9x for the year ended December 31, 2009. |
| (3) | Our ratio of earnings to fixed charges was less than 1.0 for the year ended December 31, 2011. To achieve a ratio of earnings to fixed charges of 1.0, we would have had to generate additional earnings of approximately $3.8 million for the year ended December 31, 2011. |
Exhibit 99.1
| NEWS RELEASE | Contacts: | Todd Hornbeck, CEO | ||
| 13-003 | Jim Harp, CFO Hornbeck Offshore Services 985-727-6802 | |||
| For Immediate Release | Ken Dennard, Managing Partner Dennard-Lascar / 713-529-6600 | |||
HORNBECK OFFSHORE ANNOUNCES TENDER OFFER AND CONSENT SOLICITATION FOR ITS 8.000% SENIOR NOTES DUE 2017
March 14, 2013 — Covington, Louisiana — Hornbeck Offshore Services, Inc. (NYSE: HOS) (the “Company”) announced today that it has commenced a cash tender offer (the “Offer”) to purchase any and all of its $250,000,000 in outstanding aggregate principal amount of 8.000% Senior Notes due 2017 (CUSIP 440543 AH 9) (the “8.000% Notes”). In connection with the Offer, the Company is soliciting consents (the “Consent Solicitation”) to proposed amendments that would eliminate most of the restrictive covenants and certain default provisions contained in the indenture governing the 8.000% Notes (the “Indenture”).
The Offer is scheduled to expire at 11:59 p.m., New York City time, on April 10, 2013, unless extended or earlier terminated (the “Expiration Time”). Holders who validly tender their 8.000% Notes and provide their consents to the amendments to the Indenture before 5:00 p.m., New York City time, on March 27, 2013, unless extended (the “Consent Expiration”), will be eligible to receive the Total Consideration (as defined below). The Offer contemplates an early settlement option, so that holders whose 8.000% Notes are validly tendered prior to the Consent Expiration and accepted for purchase could receive payment on an initial settlement date (“Initial Settlement Date”), which is expected to be as early as March 28, 2013. Tenders of 8.000% Notes may be validly withdrawn and consents may be validly revoked until the Withdrawal Time (defined below). Holders who validly tender their 8.000% Notes after the Consent Expiration and prior to the Expiration Time will be eligible to receive payment on the final settlement date, which is expected to be April 11, 2013.
The “Total Consideration” for each $1,000 principal amount of 8.000% Notes validly tendered and not validly withdrawn prior to the Consent Expiration is $1,071.20, which includes a consent payment of $30.00 per $1,000 principal amount of 8.000% Notes. Holders tendering after the Consent Expiration will be eligible to receive only the “Tender Offer Consideration,” which is $1,041.20 for each
| 103 Northpark Boulevard, Suite 300 | Phone: (985) 727-2000 | |
| Covington, Louisiana 70433 | Fax: (985) 727-2006 |
$1,000 principal amount of 8.000% Notes, and does not include a consent payment. Holders whose 8.000% Notes are purchased in the Offer will also receive accrued and unpaid interest from the most recent interest payment date for the 8.000% Notes up to, but not including, the applicable payment date.
In connection with the Offer, the Company is soliciting consents to certain proposed amendments to the Indenture. Holders may not tender their 8.000% Notes without delivering consents or deliver consents without tendering their 8.000% Notes. No consent payments will be made in respect of 8.000% Notes tendered after the Consent Expiration. Following receipt of the consent of holders of a majority in aggregate principal amount of the 8.000% Notes, the Company will execute a supplemental indenture to amend the Indenture to eliminate substantially all of the restrictive covenants and certain events of default in the Indenture.
Tendered 8.000% Notes may be withdrawn and consents may be revoked before 5:00 p.m., New York City time, on March 27, 2013, unless extended (the “Withdrawal Time”), but generally not afterwards, unless required by law. Any extension or termination of the Offer will be followed as promptly as practicable by a public announcement thereof.
The Offer is subject to the satisfaction of certain conditions including: (1) receipt of consents to the amendments to the Indenture from holders of a majority in principal amount of the outstanding 8.000% Notes governed by the Indenture, (2) execution of a supplemental indenture effecting the amendments, (3) consummation of the capital markets debt financing announced today raising proceeds on terms satisfactory to the Company in an amount sufficient to fund the Offer and (4) certain other customary conditions.
The complete terms and conditions of the Offer are described in the Offer to Purchase and Consent Solicitation Statement dated March 14, 2013, copies of which may be obtained from Global Bondholder Services, the depositary and information agent for the Offer, by calling (866) 294-2200 (US toll-free) or (212) 430-3774 (collect).
The Company has also retained Barclays Capital Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC and DNB Markets, Inc. as dealer managers for the Offer and solicitation agents for the Consent Solicitation. Questions regarding the terms of the Offer may be directed to Barclays Capital Inc., Liability Management Group, at (212) 528-7581 (collect) and (800) 438-3242 (US toll-free), J.P. Morgan Securities LLC at (212) 834-4802 (collect) and (866) 834-4666 (US toll-free), Wells Fargo Securities, LLC, Liability Management Group, at (704) 410-4760 (collect) and (866) 309-6316 (US toll-free) and DNB Markets, Inc. at (212) 681-3911 (collect).
This announcement is not an offer to purchase, a solicitation of an offer to sell or a solicitation of consents with respect to any securities. The Offer is being made solely by the Offer to Purchase and Consent Solicitation Statement dated March 14, 2013. The Offer is not being made to holders of 8.000% Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
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The Company is a leading provider of technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges, primarily in the northeastern U.S. and the U.S. Gulf of Mexico. The Company currently owns a fleet of 79 vessels primarily serving the energy industry and has 24 additional high-spec Upstream vessels contracted, approved or under construction for delivery on various dates through 2015.
Forward-Looking Statements
This news release contains forward-looking statements, including, in particular, statements about the Company’s plans and intentions with respect to the purchase of the 8.000% Notes, the proposed amendment to the Indenture and the construction of certain vessels. These have been based on the Company’s current assumptions, expectations and projections about future events. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that the expectations will prove to be correct.
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Exhibit 99.2
| NEWS RELEASE | Contacts: | Todd Hornbeck, CEO | ||
| 13-004 | Jim Harp, CFO Hornbeck Offshore Services 985-727-6802 | |||
| For Immediate Release | Ken Dennard, Managing Partner Dennard-Lascar / 713-529-6600 | |||
HORNBECK OFFSHORE ANNOUNCES OFFERING OF $450,000,000 OF SENIOR NOTES
March 14, 2013 — Covington, Louisiana — Hornbeck Offshore Services, Inc. (NYSE: HOS) (the “Company”) announced today that it intends to offer, subject to market and other conditions, approximately $450,000,000 in aggregate principal amount of senior notes due 2021 (the “Senior Notes”) pursuant to exemptions from registration under the Securities Act of 1933, as amended (the “Securities Act”).
The Company intends to use the net proceeds from the Senior Notes offering to fund all of its obligations under its pending cash tender offer (the “Tender Offer”) for any and all of its outstanding 8.000% senior notes due 2017 (the “8.000% Notes”) and related consent solicitation. To the extent less than all of the outstanding 8.000% Notes are tendered or the Tender Offer is not consummated, the Company intends to use net proceeds from this offering to redeem any of the 8.000% Notes that remain outstanding. The remaining net proceeds will be used for general corporate purposes, which may include retirement of other debt or funding for the acquisition, construction or retrofit of vessels.
The Senior Notes have not been registered under the Securities Act or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and state securities laws. The Senior Notes may be resold by the initial purchasers pursuant to Rule 144A and Regulation S under the Securities Act.
This press release is being issued pursuant to Rule 135C under the Securities Act, and is neither an offer to sell nor a solicitation of an offer to buy any of these securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
The Company is a leading provider of technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges, primarily in the northeastern U.S. and the U.S. Gulf of Mexico. The Company currently owns a fleet of 79 vessels primarily serving the energy industry and has 24 additional high-spec Upstream vessels contracted, approved or under construction for delivery on various dates through 2015.
| 103 Northpark Boulevard, Suite 300 | Phone: (985) 727-2000 | |
| Covington, Louisiana 70433 | Fax: (985) 727-2006 |
Forward-Looking Statements
This news release contains forward-looking statements, including, in particular, statements about the Company’s plans and intentions with respect to the proposed issuance of Senior Notes and the use of proceeds thereof and the construction of certain vessels. These have been based on the Company’s current assumptions, expectations and projections about future events. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, the Company can give no assurance that the expectations will prove to be correct.
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