Helix Energy Solutions(HLX) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements Helix Energy Solutions reported a $3.1 million net income in Q1 2025, a significant turnaround from a $26.3 million net loss in Q1 2024 Condensed Consolidated Balance Sheets As of March 31, 2025, total assets were $2.635 billion, a slight increase from $2.597 billion at year-end 2024, with shareholders' equity growing to $1.545 billion Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $369,987 | $368,030 | | Total current assets | $736,207 | $709,682 | | Property and equipment, net | $1,434,365 | $1,437,853 | | Total assets | $2,635,023 | $2,597,080 | | Liabilities & Equity | | | | Total current liabilities | $323,395 | $304,416 | | Long-term debt | $301,697 | $305,971 | | Total liabilities | $1,089,758 | $1,077,315 | | Total shareholders' equity | $1,545,265 | $1,519,765 | Condensed Consolidated Statements of Operations For Q1 2025, net revenues decreased 6% to $278.1 million, yet gross profit increased 41% to $27.5 million, resulting in a net income of $3.1 million compared to a $26.3 million net loss in Q1 2024 Q1 2025 vs Q1 2024 Statement of Operations (in thousands, except per share amounts) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net revenues | $278,064 | $296,211 | | Gross profit | $27,538 | $19,554 | | Income (loss) from operations | $8,172 | $(1,276) | | Losses related to convertible senior notes | $0 | $(20,922) | | Net income (loss) | $3,072 | $(26,287) | | Diluted EPS | $0.02 | $(0.17) | Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive income for Q1 2025 was $30.3 million, driven by $3.1 million net income and a $27.2 million foreign currency translation gain, contrasting with a $33.0 million comprehensive loss in Q1 2024 Comprehensive Income (Loss) (in thousands) | Component | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $3,072 | $(26,287) | | Foreign currency translation gain (loss) | $27,185 | $(6,683) | | Comprehensive income (loss) | $30,257 | $(32,970) | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities significantly decreased to $16.4 million in Q1 2025 from $64.5 million in Q1 2024, primarily due to higher recertification costs and working capital changes Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $16,442 | $64,484 | | Net cash used in investing activities | $(4,488) | $(3,242) | | Net cash used in financing activities | $(11,075) | $(69,304) | | Net increase (decrease) in cash | $1,957 | $(8,342) | Notes to Condensed Consolidated Financial Statements (Unaudited) The notes detail accounting policies, business segments, debt structure, and revenue recognition, highlighting $311.1 million in total debt and a $1.4 billion contract backlog as of March 31, 2025 - The company operates through four reportable business segments: Well Intervention, Robotics, Shallow Water Abandonment, and Production Facilities, providing services to oil and gas and renewable energy markets[22] - As of March 31, 2025, total long-term debt, including current maturities, was $311.1 million, primarily consisting of MARAD Debt and 9.75% Senior Notes due 2029[33] - As of March 31, 2025, the company had $1.4 billion in unsatisfied performance obligations (backlog), with $592.1 million expected to be recognized as revenue in the remainder of 2025[60] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 performance, highlighting a 6% revenue decline, 41% gross profit increase, and return to profitability Executive Summary The company provides specialty services in a volatile market influenced by commodity prices and tariffs, supported by a strong $1.4 billion backlog as of March 31, 2025 - The current market environment is characterized by volatile commodity prices, influenced by OPEC+ production increases and U.S. tariffs, which is expected to create a more challenging spot market in 2025[101][102][104] - Consolidated backlog totaled approximately $1.4 billion as of March 31, 2025, with $592 million expected to be performed in the remainder of 2025[105] - The international wind market remains robust, but U.S. windfarm activity is expected to decline following the 2025 Wind Energy Ban memorandum[103] Results of Operations Consolidated net revenues for Q1 2025 decreased 6% to $278.1 million, while gross profit increased 41% to $27.5 million, with varied segment performance and Adjusted EBITDA reaching $52.0 million Segment Revenue and Gross Profit (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Q1 2025 Gross Profit | Q1 2024 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Well Intervention | $198,374 | $211,300 | $24,322 | $23,144 | | Robotics | $51,042 | $50,309 | $8,016 | $8,183 | | Shallow Water Abandonment | $16,818 | $26,853 | $(11,582) | $(9,763) | | Production Facilities | $19,837 | $24,152 | $7,460 | $(1,306) | Vessel/Asset Utilization | Asset Category | Q1 2025 Utilization | Q1 2024 Utilization | | :--- | :--- | :--- | | Well Intervention vessels | 67% | 90% | | Robotics assets | 51% | 58% | | Chartered Robotics vessels | 67% | 74% | | Shallow Water Abandonment vessels | 30% | 41% | Non-GAAP Reconciliation: Adjusted EBITDA (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $3,072 | $(26,287) | | EBITDA | $52,070 | $26,061 | | Adjusted EBITDA | $51,985 | $46,990 | Liquidity and Capital Resources As of March 31, 2025, the company's liquidity was $404.7 million, a decrease from year-end 2024, with operating cash flow down to $16.4 million Financial Condition (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net working capital | $412,812 | $405,266 | | Long-term debt (excluding current) | $301,697 | $305,971 | | Liquidity | $404,673 | $429,586 | - The decrease in operating cash flow in Q1 2025 compared to Q1 2024 was primarily due to higher regulatory recertification spending ($17.9 million vs. $9.6 million) and lower working capital inflows[134] - Total material cash requirements, including debt, interest, and operating leases, amount to $1.288 billion, with $212.2 million due in the short-term (less than one year)[139] Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from foreign currency exchange rates, interest rates, and volatile commodity prices, recording a $27.2 million foreign currency translation gain in Q1 2025 - The company is exposed to foreign currency exchange rate risk. For Q1 2025, it recorded a foreign currency translation gain of $27.2 million in other comprehensive income and a net foreign currency loss of $0.4 million in the statement of operations[147][148] - Interest rate risk is managed by primarily borrowing at fixed rates. The company currently has no outstanding amounts under its variable-rate Amended ABL Facility[149] - The company faces commodity price risk related to oil and natural gas production in its Production Facilities business, with prices being volatile and unpredictable[150] Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during Q1 2025 - Based on an evaluation as of March 31, 2025, the principal executive officer and principal financial officer concluded that the company's disclosure controls and procedures were effective[151] - No changes occurred during Q1 2025 that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[152] PART II. OTHER INFORMATION Legal Proceedings The company is involved in various legal proceedings but does not currently expect them to have a material adverse impact on its financial statements - The company is involved in various legal proceedings but does not currently expect them to have a material adverse impact on its financial statements[82][154] Risk Factors There have been no material changes to the company's risk factors as disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There were no material changes in the company's risk factors during the period ended March 31, 2025[155] Unregistered Sales of Equity Securities and Use of Proceeds During Q1 2025, the company acquired 779,519 shares at an average price of $9.32 per share for tax obligations, with $158.4 million remaining authorized for repurchase Issuer Purchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Average Price Paid | Value Remaining in Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 394,215 | $9.32 | $158,392,000 | | Feb 2025 | 385,304 | $9.32 | $158,392,000 | | Mar 2025 | 0 | - | $158,392,000 | | Total | 779,519 | $9.32 | | - The shares purchased were forfeited to satisfy tax obligations from share-based awards and were not part of the publicly announced repurchase plan[157] Other Information During the first quarter of 2025, no director or officer of Helix adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during Q1 2025[161] Exhibits This section lists the exhibits filed with the Form 10-Q, including amended articles of incorporation, bylaws, an amendment to a strategic alliance agreement, and certifications by the CEO and CFO