Item 5. Market for Registrant’s Common Equity
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Our common stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HLX.” On February 19, 2021, the closing sale price of our common stock on the NYSE was $4.95 per share. As of February 19, 2021, there were 287 registered shareholders and approximately 93,300 beneficial shareholders of our common stock.
We have not declared or paid cash dividends on our common stock in the past nor do we intend to pay cash dividends in the foreseeable future. We currently intend to retain earnings, if any, for the future operation and growth of our business. In addition, our current financing arrangements prohibit the payment of cash dividends on our common stock. See Management’s Discussion and Analysis of Financial Condition and Results of Operations “— Liquidity and Capital Resources.”
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Shareholder Return Performance Graph
The following graph compares the cumulative total shareholder return on our common stock for the period since December 31, 2015 to the cumulative total shareholder return for (i) the stocks of 500 large-cap corporations maintained by Standard & Poor’s (“S&P 500”), assuming the reinvestment of dividends; (ii) the Philadelphia Oil Service Sector index (the “OSX”), a price-weighted index of leading oil service companies, assuming the reinvestment of dividends; and (iii) a peer group selected by us as of January 2020 (the “Peer Group”) consisting of the following companies: ChampionX Corporation (formerly known as Apergy Corporation), Archrock, Inc., Baker Hughes Company, Core Laboratories N.V., DMC Global Inc., Dril-Quip, Inc., Bristow Group Inc. (formerly known as Era Group Inc.), Exterran Corporation, Geospace Technologies Corporation, Halliburton Company, KLX Energy Services Holdings, Inc., Matrix Service Company, McDermott International, Inc., NOV Inc. (formerly known as National Oilwell Varco, Inc.), Newpark Resources, Inc., Oceaneering International, Inc., Oil States International, Inc., ProPetro Holding Corp., RPC, Inc., Schlumberger Limited, SEACOR Holdings Inc., TechnipFMC plc, TETRA Technologies, Inc., and U.S. Silica Holdings, Inc. The returns of each member of the Peer Group have been weighted according to each individual company’s equity market capitalization as of December 31, 2020 and have been adjusted for the reinvestment of any dividends. We believe that the members of the Peer Group provide services and products more comparable to us than those companies included in the OSX. The graph assumes $100 was invested on December 31, 2015 in our common stock at the closing price on that date price and on December 31, 2015 in the three indices presented. We paid no cash dividends during the period presented. The cumulative total percentage returns for the period presented are as follows: our stock — (20.2)%; the Peer Group — (50.3)%; the OSX — (68.9)%; and S&P 500 — 105.8%. These results are not necessarily indicative of future performance.
Comparison of Five Year Cumulative Total Return among Helix, S&P 500,
OSX and Peer Group
As of December 31,
2015 2016 2017 2018 2019 2020
Helix $ 100.0 $ 167.7 $ 143.3 $ 102.9 $ 183.1 $ 79.8
Peer Group Index $ 100.0 $ 132.5 $ 111.4 $ 66.8 $ 75.1 $ 49.7
Oil Service Index $ 100.0 $ 101.0 $ 98.5 $ 54.0 $ 53.7 $ 31.1
S&P 500 $ 100.0 $ 113.5 $ 138.3 $ 132.2 $ 173.9 $ 205.8
Source: Bloomberg
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Issuer Purchases of Equity Securities
Period (a)
Total number
of shares
purchased (1)
(b)
Average
price paid
per share (c)
Total number of shares
purchased as part of publicly
announced program (d)
Maximum number of shares
that may yet be purchased
under the program (2) (3)
October 1 to October 31, 2020 — $ — — 6,709,159
November 1 to November 30, 2020 — — — 6,709,159
December 1 to December 31, 2020 24,316 4.19 — 6,913,705
24,316 $ 4.19 —
(1) Includes shares forfeited in satisfaction of tax obligations upon vesting of restricted shares.
(2) Under the terms of our stock repurchase program, we may repurchase shares of our common stock in an amount equal to any equity granted to our employees, officers and directors under our share-based compensation plans, including share-based awards under our existing long-term incentive plans and shares issued to our employees under our Employee Stock Purchase Plan (Note 14), and such shares increase the number of shares available for repurchase. For additional information regarding our stock repurchase program, see Note 11.
(3) In December 2020, we issued 204,546 shares of restricted stock to independent members of our Board. In January 2021, we issued 14,249 shares of restricted stock to certain independent members of our Board who have elected to take their quarterly fees in stock in lieu of cash. These issuances increase the number of shares available for repurchase under our stock repurchase program by a corresponding amount.
Item 6. Selected Financial Data
The financial data presented below for each of the five years ended December 31, 2020 should be read in conjunction with Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations and Item 8. Financial Statements and Supplementary Data included elsewhere in this Annual Report.
Year Ended December 31,
2020 2019 2018 2017 2016
(in thousands, except per share amounts)
Statement of Operations Data:
Net revenues $ 733,555 $ 751,909 $ 739,818 $ 581,383 $ 487,582
Gross profit 79,909 137,838 121,684 62,166 46,516
Income (loss) from operations (1)
13,025 67,997 51,543 (1,130) (63,235)
Net income (loss) (2)
20,084 57,697 28,598 30,052 (81,445)
Net loss attributable to redeemable noncontrolling interests (2,090) (222) — — —
Net income (loss) attributable to common shareholders 22,174 57,919 28,598 30,052 (81,445)
Adjusted EBITDA (3)
155,260 180,088 161,709 107,216 89,544
Earnings (loss) per share of common stock:
Basic $ 0.13 $ 0.39 $ 0.19 $ 0.20 $ (0.73)
Diluted $ 0.13 $ 0.38 $ 0.19 $ 0.20 $ (0.73)
Weighted average common shares outstanding:
Basic 148,993 147,536 146,702 145,295 111,612
Diluted 149,897 149,577 146,830 145,300 111,612
(1) Amount in 2020 included a $6.7 million goodwill impairment charge related to our U.K. well intervention reporting unit (Note 7). Amount in 2016 included a $45.1 million goodwill impairment charge related to our robotics reporting unit.
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(2) Amount in 2020 included a $9.2 million gain on extinguishment of long-term debt (Note 8), a $7.6 million net tax benefit as a result of the U.S. Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and net deferred tax benefits of $8.3 million due to the reduction in the overall tax rate associated with two of our foreign subsidiaries (Note 9). Amount in 2017 included a $51.6 million income tax benefit as a result of the U.S. Tax Cuts and Jobs Act (the “2017 Tax Act”).
(3) This is a non-GAAP financial measure. See “Non-GAAP Financial Measures” below for an explanation of the definition and use of such measure as well as a reconciliation of these amounts to each year’s respective reported net income or loss.
December 31,
2020 2019 2018 2017 2016
(in thousands)
Balance Sheet Data:
Cash and cash equivalents and restricted cash $ 291,320 $ 262,561 $ 279,459 $ 266,592 $ 356,647
Net working capital (1)
246,338 153,508 259,440 186,004 336,387
Total assets 2,498,278 2,596,731 2,347,730 2,362,837 2,246,941
Long-term debt (1)
258,912 306,122 393,063 385,766 558,396
Total shareholders’ equity 1,740,496 1,699,591 1,617,779 1,567,393 1,281,814
(1) Current maturities of our long-term debt are included in net working capital and excluded from long-term debt. Long-term debt is also net of unamortized debt discounts and debt issuance costs (Note 8).
Non-GAAP Financial Measures
A non-GAAP financial measure is generally defined by the SEC as a numerical measure of a company’s historical or future performance, financial position or cash flows that includes or excludes amounts from the most directly comparable measure under U.S. generally accepted accounting principles (“GAAP”). Non-GAAP financial measures should be viewed in addition to, and not as an alternative to, our reported results prepared in accordance with GAAP. Users of this financial information should consider the types of events and transactions that are excluded from these measures.
We measure our operating performance based on EBITDA and free cash flow. EBITDA and free cash flow are non-GAAP financial measures that are commonly used but are not recognized accounting terms under GAAP. We use EBITDA and free cash flow to monitor and facilitate internal evaluation of the performance of our business operations, to facilitate external comparison of our business results to those of others in our industry, to analyze and evaluate financial and strategic planning decisions regarding future investments and acquisitions, to plan and evaluate operating budgets, and in certain cases, to report our results to the holders of our debt as required by our debt covenants. We believe that our measures of EBITDA and free cash flow provide useful information to the public regarding our operating performance and ability to service debt and fund capital expenditures and may help our investors understand and compare our results to other companies that have different financing, capital and tax structures. Other companies may calculate their measures of EBITDA, Adjusted EBITDA and free cash flow differently from the way we do, which may limit their usefulness as comparative measures. EBITDA, Adjusted EBITDA and free cash flow should not be considered in isolation or as a substitute for, but instead are supplemental to, income from operations, net income, cash flows from operating activities, or other income or cash flow data prepared in accordance with GAAP.
We define EBITDA as earnings before income taxes, net interest expense, gain or loss on extinguishment of long-term debt, net other income or expense, and depreciation and amortization expense. Non-cash impairment losses on goodwill and other long-lived assets and non-cash gains and losses on equity investments are also added back if applicable. To arrive at our measure of Adjusted EBITDA, we exclude the gain or loss on disposition of assets and the general provision for current expected credit losses, if any. In addition, we include realized losses from foreign currency exchange contracts not designated as hedging instruments and other than temporary loss on note receivable, which are excluded from EBITDA as a component of net other income or expense. We define free cash flow as cash flows from operating activities less capital expenditures, net of proceeds from sale of assets. In the following reconciliations, we provide amounts as reflected in the consolidated financial statements unless otherwise noted.
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The reconciliation of our net income (loss) to EBITDA and Adjusted EBITDA is as follows (in thousands):
Year Ended December 31,
2020 2019 2018 2017 2016
Net income (loss) $ 20,084 $ 57,697 $ 28,598 $ 30,052 $ (81,445)
Adjustments:
Income tax provision (benefit) (18,701) 7,859 2,400 (50,424) (12,470)
Net interest expense 28,531 8,333 13,751 18,778 31,239
(Gain) loss on extinguishment of long-term debt (9,239) 18 1,183 397 3,540
Other (income) expense, net (4,724) (1,165) 6,324 1,434 (3,510)
Depreciation and amortization 133,709 112,720 110,522 108,745 114,187
Goodwill impairments 6,689 — — — 45,107
Gain (loss) on equity investment (264) (1,613) 3,430 1,800 1,674
EBITDA 156,085 183,849 166,208 110,782 98,322
Adjustments:
(Gain) loss on disposition of assets, net (889) — (146) 39 (1,290)
General provision for current expected credit losses 746 — — — —
Realized losses from foreign exchange contracts not designated as hedging instruments (682) (3,761) (3,224) (3,605) (7,488)
Other than temporary loss on note receivable — — (1,129) — —
Adjusted EBITDA $ 155,260 $ 180,088 $ 161,709 $ 107,216 $ 89,544
The reconciliation of our cash flows from operating activities to free cash flow is as follows (in thousands):
Year Ended December 31,
2020 2019 2018 2017 2016
Cash flows from operating activities $ 98,800 $ 169,669 $ 196,744 $ 51,638 $ 38,714
Less: Capital expenditures, net of proceeds from sale of assets (19,281) (138,304) (137,058) (221,127) (173,310)
Free cash flow $ 79,519 $ 31,365 $ 59,686 $ (169,489) $ (134,596)
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