This excerpt taken from the HOS 8-K filed Feb 24, 2005.
Q4 profit was $0.22 per share excluding bond refinancing charges
February 24, 2005 New Orleans, Louisiana Hornbeck Offshore Services, Inc. (NYSE:HOS) announced today its results for the fourth quarter and year ended December 31, 2004. Fourth quarter revenues increased 29.5% to $37.8 million compared to $29.2 million for the fourth quarter of 2003. The $8.6 million increase was primarily driven by improved OSV market conditions in the U.S Gulf of Mexico and continued tightening in the supply of single-hulled equipment in the northeast U.S. as a result of fourth quarter retirements mandated by the Oil Pollution Act of 1990 (OPA 90).
Operating income was $10.2 million, or 27.0% of revenues, for the fourth quarter of 2004 compared to $8.4 million, or 28.8% of revenues, for the same quarter in 2003. Higher dayrates and utilization in both segments contributed to an increase in EBITDA to $16.7 million, or 22.8% over the fourth quarter of 2003, and near the high-end of the Companys upwardly revised guidance range of $15.5 to $17.0 million for the fourth quarter of 2004. For additional information regarding EBITDA, please see more discussion on this subject later in this release.
The Company recorded a $10.1 million loss, or $0.48 loss per share, in the fourth quarter 2004 which included a $22.4 million ($14.7 million after-tax) charge for the early extinguishment of debt. This charge was incurred in connection with the refinancing of the Companys 10.625% senior notes due 2008 with new 6.125% senior notes due 2014. Excluding this $0.70 per share charge, net income for the fourth quarter of 2004 was $4.7 million, or $0.22 earnings per diluted share. This compares to net income of $2.1 million, or $0.14 per diluted share, for the fourth quarter of 2003. The average number of basic shares outstanding increased 43.4% to 20.8 million in the fourth quarter of 2004 from 14.5 million in the fourth quarter of 2003, primarily as a result of the Companys March 2004 initial public stock offering. For additional information regarding a reconciliation of net income and EPS before and after bond refinancing charges, please see the table at the end of this release.
Todd Hornbeck, the Companys President and CEO, stated, We are very pleased that we were able to continue the trend of exceeding our own expectations in all key performance measures in our first year as a publicly traded company. A major contributor to this success was our ability to move our utilization-adjusted, or effective, OSV dayrate up nearly 50% since the market trough in April 2004.
Since May 2004, oil companies have increased their emphasis on replacing reserves through the drill bit and are devoting significant capital to deepwater, ultra-deepwater and deep-shelf oilfield projects. In the fourth quarter, our OSV segment continued to capitalize on this market recovery as we maintained near full utilization while further increasing fleet average dayrates by roughly $800 over the third quarter. We were also pleased with the performance of our tug and tank barge segment, which finished the year stronger than expected due to improving supply-demand fundamentals related to OPA 90.
OSV Segment. Revenues from the OSV segment were $22.2 million for the fourth quarter of 2004, an increase of 28.3% from $17.3 million for the same period in 2003. The net increase in segment revenues is due to the quarter-over-quarter increase in average dayrates and utilization rates. Hornbecks utilization rate was 94.3% for the three months ended December 31, 2004, which was higher than the 85.5% achieved for the same period of 2003. The average OSV dayrate in the fourth quarter of 2004 was $10,926 compared to $9,769 for the same period of 2003. On a sequential basis, fourth quarter 2004 average fleet utilization increased slightly from 93.2%, while average dayrates improved 8.2%, or $830 per day, over the third quarter of 2004. Slightly offsetting the improved market conditions was an increase in segment costs stemming primarily from discretionary vessel maintenance, higher insurance costs and higher than expected general and administrative (G&A) expenses. The net result was a modest improvement in sequential quarterly operating income to $7.8 million from $7.7 million.
Tug and Tank Barge Segment. Tug and tank barge (TTB) segment revenues for the fourth quarter of 2004 were up 30.0% over the same period in 2003 to $15.6 million, and operating income increased by $0.5 million to $2.4 million. Utilization in the tug and tank barge segment increased to 82.1% from 76.1% in last years fourth quarter and average dayrates grew to $12,642 from $10,537 during the same period. While the fourth quarter 2004 operating margin of 15.5% was down slightly from 16.2% for the same period last year, it was up sequentially from 12.1% in the third quarter of 2004.
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