A little wind isn't the only bad news from the Bayoo


#1

crude continues to drop…over 5% just today

and the largest publicly traded OSV operator in the GoM is hemorrhaging severely

HOS reports red ink first quarter

MAY 4, 2017 — Covington, LA, headquartered Hornbeck Offshore Services, Inc. (NYSE:HOS) yesterday reports results for the first quarter ended March 31, 2017.

The company recorded a net loss for the first quarter of 2017 of $27.9 million, or $0.76 per diluted share, compared to a net loss of $7.5 million, year-ago quarter; and a net loss of $19.2 million,for the fourth quarter of 2016.

Included in the first quarter 2017 results is a $9.4 million redelivery fee related to the completion of a long-term contract for one of the company’s OSVs and a $3.8 million increase in G&A expense resulting from additional bad debt reserves due to an unfavorable ruling in recent bankruptcy proceedings related to a receivable from a former customer. Excluding the net impact of these two items, net loss and diluted EPS for the first quarter of 2017 would have been $31.7 million.

Revenues were $44.1 million for the first quarter of 2017, a decrease of $32.7 million, or 42.6%, from $76.8 million for the first quarter of 2016; and an increase of $2.2 million, or 5.3%, from $41.9 million for the fourth quarter of 2016. The year-over-year decrease in revenues was primarily due to weak market conditions worldwide, which led to the company’s decision to stack 18 incremental vessels on various dates since December 31, 2015.

As of March 31, 2017, the company had 44 OSVs and two MPSVs stacked. For the three months ended March 31, 2017, the Company had an average of 45.9 vessels stacked compared to 33.7 vessels stacked in the prior-year quarter and 46.5 vessels stacked in the sequential quarter.

Operating loss was $26.5 million, or 60.1% of revenues, for the first quarter of 2017 compared to operating loss of $0.8 millionfor the prior-year quarter; and operating loss of 27.5 millionor the fourth quarter of 2016. Excluding the net impact of the two items discussed above, first quarter 2017 operating loss would have been (32.0) million, or (92.3)% of adjusted revenues.


#2

Some of these companies will die a slow horrible death waiting on the upturn that’s years away.

I wonder how Harvey is staying afloat ?


#3

Because his private equity investors are keeping him afloat.

ECO is the one that will make it out alive and strong. I’ve heard through numerous channels that The Family is comfortable and confident in where they sit.


#4

you can better believe the person at the Jordan Company who brought Mister Shane through their door is now today rotting in some evil dungeon in an iron coffin with spikes on the inside

can’t imagine Shane Guidry is too popular himself when he shows up with his tin cup in hand begging for yet more cash

I don’t believe for one minute that the Chouest family is not feeling some pain these days but you know they will do everything human to make the world believe they are just great and never ever once made any mistake by building too many vessels. The biggest teller is how many of their fleet is idle…especially vessels less than 10years old? Gotta think that the shipyards are pretty quiet these days. Must have sent all the Poles and Romanian serfs back home.

if you ask me, I think the biggest winner in the end will be Charles Fabrikant at Seacor. When the first big OSV company goes under, he’ll be able to buy up nearly new boats from the bankruptcy court for a dime on the dollar.

lastly what happened with Turdwater? I thought they had given up on asking for more time?


#5

Massa Guidry isn’t even popular with the people who hire his boats or the ones who he wants to hire his boats.

As far as ECO… Everyone in the industry made mistakes. But if you drive along the stacked vessel yards, the majority of them are older vessels and many assume (and I agree) paid for in whole.

There was a contract recently where an O&G company want stupid stipulations put on the contract and The Family said, “No thanks, we’ll look elsewhere.”

In a market where people are shooting for even breakeven rates, that’s pretty ballsy.

And I agree that they’re in much better position than most.

Also agree with your comment about Seacor. Gulfmark, HOS and others will be like blood in the water. Turdwaters bankruptcy is highly expected and has been for some time.


#6

HOS just hired a bunch of people so despite losses they seem to think they’re in OK shape.


#7

A lot of those new hires come from Chouest and Harvey.


#8

what I want to know if a company loses so much for so long how it keeps operating? deficits have got to be made up from somewhere. selling off assets is not going to bring much in these times and borrowing cannot be easy or cheap when lenders are wondering if they would ever get their money back? do shareholders get an invoice to pony up some green to cover the overages? they represent losses on a per share basis so do shareholders get dunned? What if you are holding millions of shares?

I operate my business on a virtually all cash basis. I borrow next to nothing to operate it and my debt to asset ratio is something like 12:1 in favor of assets. How can any company justify taking on so much debt that if there is a downturn and drop in revenues they will have trouble to make the debt service? Such unbridled GREED is going to be the death of these companies!


#9

I thought HOS went into the downturn with a large cash surplus. That’s how the losses aren’t hurting to badly.


#10

but we are going on 2 1/2 years since the great plunge and no end in sight…those cash reserves have got to be getting pretty thin


#11

It’s possible because of extremely low interest rates and the use of Default Swaps, not to mention they are companies involved in the production of a commodity that is necessary for anyone and everyone everywhere. Sooner or later if there is no improvement the companies go under. You could watch the movie “The Big Short” or better yet read Ken Lewis book by the same name if your curious how it ends or just look to Puerto Rico’s current bankruptcy (or Detroits or Stocktons).

The article below explains how swaps work. As a business owner I’m sure you’ve incorporated, if you haven’t you should think seriously about doing so.


#12

If that large, publicly traded company would remove it’s head from it’s rear, they wouldn’t be bleeding out so badly. Breaking even or coming out with a 10% profit margin isn’t an option for them. They would rather just lose money by tying boats up (that need to work so they can pay for them) and letting people go. Well, they don’t need to let people go any more, people are still flying out of there. Guess them running around saying people can’t leave because nobody is hiring has backfired.


#13

Wow, I’m making more money than the mudboat “chiefs” now. Isn’t that something. the oil industry is just evil all around. It needs to go away and never come back.


#14

:slowclap: :slowclap: :facepalm:


#15

Batteries are batteries.


#16

I just bought a boat and I wish it was battery powered :fearful:


#17

Yeah, then you wouldn’t need those “dirty mud boats” to help the O&G industry drill for the fuel for your boat.


#18

I didn’t realize it got 2/mpg when I bought it.

I will sell it and buy a sailboat :slight_smile:


#19

I think we would all like to see oil go back up. The oil field operators would like to stay in the Gulf making higher day rates, while the smaller companies (Crosby, Stevens Towing, Foss, Dann) would like to work their equipment for the rate that they intended .