Helix Energy Solutions(HLX) - 2024 Q3 - Quarterly Report

Backlog and Demand - As of September 30, 2024, the company's consolidated backlog totaled approximately $1.6 billion, with$261 million expected to be performed over the remainder of 2024[107]. - Approximately 86% of the total backlog is represented by contracts with Shell, ExxonMobil, Trident Energy, Petrobras, and Talos[107]. - The company expects continued strong performance driven by increasing demand for decommissioning services internationally and growth in the offshore renewables trenching market[108]. - The demand for shallow water decommissioning services in the Gulf of Mexico is expected to remain soft in the near term but should grow over the mid- to long-term[108]. - The demand for P&A services is expected to grow over the mid- to long-term due to regulatory pressures and a shift towards renewable energy[105]. Financial Performance - Net income for the three months ended September 30, 2024, was $29,514 thousand, compared to$15,560 thousand for the same period in 2023, representing an increase of 90%[113]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $231,506 thousand, up from$202,771 thousand in the same period of 2023, reflecting a growth of 14.2%[113]. - Free Cash Flow for the nine months ended September 30, 2024, was $97,734 thousand, significantly higher than$41,920 thousand for the same period in 2023, indicating an increase of 132.8%[114]. - Consolidated net revenues for the nine-month period ended September 30, 2024, increased by 5% to $1,003.4 million from$954.6 million in the same period in 2023[130]. - Gross profit for the nine-month period ended September 30, 2024, increased by $9.6 million to$160.7 million compared to $151.1 million in the same period in 2023[136]. Revenue Breakdown - Net revenues for the three months ended September 30, 2024, decreased by 13$342,419 thousand from $395,670 thousand in the same period in 2023[117]. - Well Intervention revenues decreased by 19$182,667 thousand for the three months ended September 30, 2024, compared to $225,367 thousand in the same period in 2023[116]. - Robotics revenues increased by 12$84,526 thousand for the three months ended September 30, 2024, up from $75,646 thousand in the same period in 2023[119]. - Shallow Water Abandonment revenues decreased by 18$71,595 thousand for the three months ended September 30, 2024, compared to $87,272 thousand in the same period in 2023[120]. - Production Facilities revenues decreased by 15$20,695 thousand for the three months ended September 30, 2024, down from $24,469 thousand in the same period in 2023[121]. Expenses and Cash Flow - Selling, general and administrative expenses decreased to$21.1 million for Q3 2024 from $27.8 million in Q3 2023, primarily due to lower employee compensation costs[126]. - Net interest expense increased to$5.7 million for Q3 2024 compared to $4.2 million in Q3 2023, reflecting higher debt levels and rates[126]. - Operating cash flows for the nine-month period ended September 30, 2024, were$108.1 million, significantly up from $57.7 million in the same period of 2023, driven by higher operating income and lower working capital outflows[149]. - Cash flows used in investing activities decreased to$(10.3) million for the nine-month period ended September 30, 2024, compared to $(15.8) million in the same period of 2023, indicating reduced capital expenditures[148]. - Net cash outflows from financing activities for the nine-month period ended September 30, 2024, were$(105.6) million, primarily due to the retirement of the 2026 Notes and earn-out payments[150]. Debt and Liquidity - Long-term debt, excluding current maturities, was $305.5 million as of September 30, 2024, down from$313.4 million on December 31, 2023[141]. - Liquidity at September 30, 2024, was $398.8 million, down from$431.5 million at December 31, 2023, primarily due to higher letter of credit usage related to the Nigeria project[144]. - The company expects sufficient cash on hand and internally generated cash flows to fund operations and capital spending for at least the next 12 months[145]. Tax and Other Financial Metrics - Income tax provision increased to $22.5 million for the nine-month period ended September 30, 2024, compared to$9.6 million in the same period in 2023, with effective tax rates of 38.8% and 35.5% respectively[139]. - Net other expense decreased to $2.6 million for the nine-month period ended September 30, 2024, down from$10.6 million in the same period in 2023[138]. - The company recorded foreign currency translation gains of $35.3 million for the nine-month period ended September 30, 2024, impacting accumulated other comprehensive loss[160]. Operational Capacity - The company operates a well intervention fleet that includes seven purpose-built vessels and 12 subsea intervention systems, along with 39 work-class ROVs and six trenchers[100]. - The change in fair value of contingent consideration reflects an improvement in Helix Alliance's results during the third quarter 2023, with the final earn-out paid on April 3, 2024[125]. - The company anticipates lower availability under the Amended ABL Facility due to fewer eligible receivables while the Q4000 performs work in Nigeria[145].