HERCULES OFFSHORE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
(All Currencies in US Dollars unless otherwise noted)
March 31, December 31,
2007 2006
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $74,137 $72,772
Marketable securities 34,000 --
Restricted cash 250 250
Accounts receivable 83,221 89,136
Insurance claims receivable 3,626 --
Prepaid expenses and other 12,828 18,065
Total current assets 208,062 180,223
PROPERTY AND EQUIPMENT, net 421,677 415,864
OTHER ASSETS, net 12,424 9,494
Total assets $642,163 $605,581
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $1,400 $1,400
Insurance note payable -- 6,058
Accounts payable 35,506 29,123
Accrued liabilities 13,394 16,262
Taxes payable 10,333 8,745
Interest payable 2,047 2,105
Other current liabilities 4,579 5,633
Total current liabilities 67,259 69,326
LONG-TERM DEBT, net of current portion 91,500 91,850
OTHER LIABILITIES 6,491 6,700
DEFERRED INCOME TAXES 46,029 42,854
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY 430,884 394,851
Total liabilities and
stockholders' equity $642,163 $605,581
HERCULES OFFSHORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended March 31,
2007 2006
REVENUES
Contract drilling services $63,707 $26,997
Marine services 46,757 29,136
110,464 56,133
COSTS AND EXPENSES
Operating expenses for contract
drilling services, excluding
depreciation and amortization 20,946 11,107
Operating expenses for marine
services, excluding depreciation
and amortization 20,581 10,829
Depreciation and amortization 11,730 5,934
General and administrative,
excluding depreciation
and amortization 9,163 6,586
62,420 34,456
OPERATING INCOME 48,044 21,677
OTHER INCOME (EXPENSE)
Interest expense (2,090) (2,086)
Gain on disposal of assets -- 29,580
Other, net 1,275 303
INCOME BEFORE INCOME TAXES 47,229 49,474
INCOME TAX PROVISION (13,838) (18,562)
NET INCOME $33,391 $30,912
EARNINGS PER SHARE:
Basic $1.04 $1.02
Diluted $1.03 $1.00
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic 31,975 30,173
Diluted 32,471 30,964
HERCULES OFFSHORE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March 31,
2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $33,391 $30,912
Adjustments to reconcile net
income to net cash provided by
operating activities
Depreciation and amortization 11,730 5,934
Stock-based compensation expense 1,151 703
Deferred income taxes 3,261 13,075
Amortization of deferred
financing fees 180 160
Excess tax benefit from stock-
based arrangements (715) --
Gain on disposal of assets (296) (29,580)
(Increase) decrease in operating assets
Accounts receivable 5,900 (1,438)
Insurance claims receivable (3,626) (7,673)
Prepaid expenses and other 3,243 (20)
Increase (decrease) in operating liabilities
Accounts payable 6,383 (2,988)
Insurance note payable (6,058) (1,797)
Other current liabilities (1,700) 9,721
Other liabilities (209) --
Net cash provided by operating
activities 52,635 17,009
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in marketable
securities (34,000) --
Purchase of property and
equipment (13,719) (42,690)
Deferred drydocking expenditures (5,486) (2,704)
Proceeds received from sale of
assets, net of commissions 610 --
Net cash used in investing
activities (52,595) (45,394)
CASH FLOWS FROM FINANCING ACTIVITIES
Payment of debt (350) (350)
Proceeds from exercise of stock options 960 --
Excess tax benefit from stock-
based arrangements 715 --
Payment of debt issuance costs -- (193)
Distributions to members -- (3,732)
Net cash provided by financing
activities 1,325 (4,275)
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,365 (32,660)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 72,772 47,575
CASH AND CASH EQUIVALENTS AT END OF PERIOD $74,137 $14,915
HERCULES OFFSHORE, INC. AND SUBSIDIARIES
SELECTED FINANCIAL AND OPERATING DATA
(Dollars in thousands, except per day amounts)
(Unaudited)
Three Months Ended March 31,
2007 2006
Domestic Contract Drilling Services Segment:
Number of rigs (as of end of period) 6 6
Operating days 474 382
Available days 540 450
Utilization (1) 87.8% 84.9%
Average revenue per rig per day (2) $90,363 $70,673
Average operating expense per rig
per day (3) $25,117 $24,682
Revenues $42,831 $26,997
Operating expenses, excluding
depreciation and amortization $13,563 $11,107
Depreciation and amortization $2,561 $1,652
General and administrative expenses,
excluding depreciation and amortization $1,942 $1,786
Operating income $24,765 $12,452
International Contract Drilling Services Segment:
Number of rigs (as of end of period) 3 3
Operating days 180 --
Available days 180 --
Utilization (1) 100.0% --
Average revenue per rig per day (2) $115,978 --
Average operating expense per rig
per day (3) $41,016 --
Revenues $20,876 --
Operating expenses, excluding
depreciation and amortization $7,383 --
Depreciation and amortization $1,368 --
General and administrative expenses,
excluding depreciation and amortization $530 35
Operating income $11,595 (35)
Domestic Marine Services Segment:
Number of liftboats (as of end of period) 47 42
Operating days 2,667 2,850
Available days 4,099 3,458
Utilization (1) 65.1% 82.4%
Average revenue per liftboat per day (2) $12,262 $8,981
Average operating expense per
liftboat per day (3) $3,328 $2,659
Revenues $32,703 $25,597
Operating expenses, excluding
depreciation and amortization $13,640 $9,193
Depreciation and amortization $6,070 $3,978
General and administrative expenses,
excluding depreciation and amortization $538 $745
Operating income $12,455 $11,681
International Marine Services Segment:
Number of liftboats (as of end of period) 17 4
Operating days 1,162 357
Available days 1,474 360
Utilization (1) 78.8% 99.0%
Average revenue per liftboat per day (2) $12,095 $9,913
Average operating expense per
liftboat per day (3) $4,709 $4,544
Revenues $14,054 $3,539
Operating expenses, excluding
depreciation and amortization $6,941 $1,636
Depreciation and amortization $1,704 $279
General and administrative expenses,
excluding depreciation and amortization $950 $761
Operating income $4,459 $863
Total Company:
Revenues $110,464 $56,133
Operating expenses, excluding
depreciation and amortization $41,527 $21,936
Depreciation and amortization $11,730 $5,934
General and administrative expenses,
excluding depreciation and amortization $9,163 $6,586
Operating income $48,044 $21,677
Interest expense $2,090 $2,086
Gain on disposal of asset $ -- $29,580
Other income $1,275 $303
Income before income taxes $47,229 $49,474
Income tax expense $13,838 $18,562
Net income $33,391 $30,912
(1)Utilization is defined as the total number of days our rigs or
liftboats, as applicable, were under contract, known as operating
days, in the period as a percentage of the total number of available
days in the period. Days during which our rigs and liftboats were
undergoing major refurbishments, upgrades or construction, which
included Rig 26 in the three months ended March 31, 2007, and Rig 16,
Rig 21, Rig 26 and Rig 31 in the three months ended March 31, 2006, or
cold-stacked units, which included one and three of our liftboats
during the three months ended March 31, 2007 and 2006, respectively,
are not counted as available days. Days during which our liftboats
are in the shipyard undergoing drydocking or inspection are considered
available days for the purposes of calculating utilization.
(2)Average revenue per rig or liftboat per day is defined as revenue
earned by our rigs or liftboats, as applicable, in the period divided
by the total number of operating days for our rigs or liftboats, as
applicable, in the period. Included in revenue is a total of
US$1,792,692 related to amortization of deferred mobilization revenue
and contract specific capital expenditures reimbursed by the customer
for the three months ended March 31, 2007. We had no such revenue for
the three months ended March 31, 2006.
(3)Average operating expense per rig or liftboat per day is defined as
operating expenses, excluding depreciation and amortization, incurred
by our rigs or liftboats, as applicable, in the period divided by the
total number of available days in the period. We use available days
to calculate average operating expense per rig or liftboat per day
rather than operating days, which are used to calculate average
revenue per rig or liftboat per day, because we incur operating
expenses on our rigs and liftboats even when they are not under
contract and earning a dayrate. In addition, the operating expenses
we incur on our rigs and liftboats per day when they are not under
contract are typically lower than the per-day expenses we incur when
they are under contract. Included in operating expense is a total of
US$1,170,955 related to amortization of deferred mobilization expenses
for the three months ended March 31, 2007. We had no such expenses
for the three months ended March 31, 2006.
Hercules Offshore, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
The Company is providing first quarter 2006 net income before the gain on the insurance settlement of Rig 25 because management believes that this measure better reflects the normal operations of the Company, as this measure excludes a significant, one-time item that materially affects period-to-period comparability. The adjusted net income and earnings per share amounts are non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles ("GAAP"). In order to fully assess the Company's financial operating results, management believes that the adjusted net income figure included in this release is an appropriate measure of the Company's continuing and normal operations. However, this measure should be considered in addition to, and not as a substitute, or superior to, net income, operating income, cash flows from operations, or other measures of financial performance prepared in accordance.
HOUSTON, April 30 /PRNewswire/ --
The non-GAAP measure included in this press release has been reconciled to the nearest GAAP measure in the following table:
Three Months Ended
March 31, 2006
Operating Income:
GAAP Operating Income $21,677
Adjustment (1) --
Non-GAAP Operating Income $21,677
Other Income (Expense):
GAAP Other Income (Expense) $27,797
Adjustment (1) (29,580)
Non-GAAP Other Income (Expense) $(1,783)
Provision for Income Taxes:
GAAP Provision for Income Taxes $(18,562)
Tax Impact of Adjustment (1) 10,945
Non-GAAP Provision for Income Taxes $(7,617)
Net Income (Loss):
GAAP Net Income (Loss) $30,912
Total Adjustment, Net of Tax (18,635)
Non-GAAP Net Income $12,277
Diluted Earnings per Share:
GAAP Diluted Earnings per Share $1.00
Charges per Share (0.60)
Non-GAAP Diluted Earnings per Share $0.40
(1) Represents a gain on an after-tax basis of US$18.6 million related to
an insurance claim settlement on the loss of Rig 25.
Web site: http://www.herculesoffshore.com
Stephen M. Butz, Vice President and Treasurer of Hercules Offshore, Inc., +1-713-979-9832; Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20050601/DAW092LOGO, AP Archive: http://photoarchive.ap.org, PRN Photo Desk, photodesk@prnewswire.com
