April 22, 2005
Hornbeck ups first quarter earnings guidance
Hornbeck Offshore Services, Inc. (NYSE: HOS) today announced that, based on a preliminary financial review, it has raised its first quarter 2005 estimates. It now expects EBITDA for the first quarter of 2005 to range between $18.0 million and $19.0 million
President and CEO Todd Hornbeck stated, "After completing our preliminary financial review, we are pleased to announce that both of our business segments experienced first quarter results substantially better than we anticipated at the time of our last call. These more favorable results were due to a combination of higher revenues and lower expenses in each segment. Accordingly, we are raising our estimates for the first quarter of 2005.
"First quarter results for our OSV segment," said Hornbeck, reflected slightly higher effective dayrates than anticipated due to continuing improvements in deepwater and deep shelf activity in the U.S. Gulf of Mexico. Our expected tug and tank barge results for the first quarter were positively impacted by the early March 2005 delivery of the first double- hulled tank barge of our current newbuild program, the Energy 13501. Not only did we have an earlier delivery from the shipyard than expected, we were very fortunate to secure a substantial 'positioning charter' from the Gulf of Mexico, where the vessel was constructed, to the northeastern U.S. market. We had not anticipated placing the vessel into service with its first cargo load until it reached the Northeast, after mobilizing from the shipyard. In addition to higher revenue in each segment, we were also able to manage company-wide operating costs and overhead to lower than anticipated levels, due to a variety of factors which we will discuss on our next call."
Recent Vessel Acquisition
In late March 2005, the HOS acquired a second new generation 240 class, 8,000 bhp, anchor-handling towing supply (AHTS) vessel from a private owner. This vessel, which will be renamed the HOS Navegante, is the second foreign-flagged AHTS acquired this year by Hornbeck. As previously reported, in January 2005, the Company acquired its "sister vessel," the HOS Saylor, which is currently serving under a long-term time charter in Trinidad. The HOS Navegante was mobilized from West Africa and is currently at a Gulf of Mexico shipyard undergoing its regulatory drydocking, as well as discretionary modifications and improvements. The vessel is expected to be placed into service during the early third quarter of 2005. The HOS Navegante is currently being bid on various international charter opportunities. The aggregate purchase price and the estimated conversion costs for the two AHTS vessels are expected to be in the range of $28 million to $30 million. These vessel purchases were, and the cost of the conversions will be, funded out of available sources of liquidity, including cash on hand, projected cashflow and revolver capacity.
ornbeck added, "Our acquisition of these two strategic vessels complements our growing international market presence. While both of these vessels have anchor-handling capabilities, we plan to use them primarily as supply vessels and for towing jack-up rigs. We believe that our cost basis in these vessels is very attractive given the current shortage of 8,000 horsepower AHTS vessels, which should allow us to be very competitive in the international market. We expect these vessels to generate dayrates, margins and returns commensurate with our domestic 240 class new generation OSVs."