Hornbeck Offshore Services, Inc. announced that revenues for the quarter ended March 31, 2003 increased 20.3 percent to $27.3 million compared to $22.7 million for the same quarter in 2002. Operating income was $10.4 million or 38.1 percent of revenues for the first quarter of 2003, compared to $9.3 million or 41.0 percent of revenues for the same quarter in 2002. First quarter 2003 net income was $4.3 million, including a $0.7 million gain on disposition of a vessel, compared to $3.5 million for the first quarter 2002.
The primary reason for the increase in revenue was the increase in the size of the Company’s fleet by an average of 3.8 offshore supply vessels during the first quarter 2003 compared to the first quarter 2002.
The Company took delivery of a total of five new deepwater OSVs
on February 20, June 13, August 11 and October 20, 2002 and March 17, 2003, respectively, all of which are 240E, 240ED or 265-ft. class OSVs. The $4.6 million net increase in first quarter 2003 revenue over the prior year quarter was comprised primarily of incremental revenue from these newly constructed vessels. Operating costs and depreciation expense increased by a combined $3.5 million, primarily related to the incremental quarter-over-quarter contribution of the five new, larger class OSVs. On January 28, 2003, Hornbeck sold a tank barge, the Energy 5502, to an unrelated third party for $1.65 million, which resulted in a gain of $0.7 million. There were no such dispositions of assets in the first quarter 2002. On February 28, 2003, the Company purchased an 80,000 barrel double-hulled tank barge for $7.4 million. The purchase of the vessel, which was renamed the Energy 8001, was funded with a $7.4 million draw on Hornbeck’s revolving credit facility. The amount outstanding under the revolver remained at $7.4 million as of March 31, 2003.
Todd Hornbeck, President and CEO, said, “Even though we continue to experience downward pressure on dayrates and utilization in our OSV segment, we had another quarter of strong financial results, primarily due to two reasons: continued fleet expansion
in our OSV segment and strong winter-related activity in our tug and tank barge segment. This is the sixth consecutive quarter that we have delivered a newly constructed deepwater OSV into our fleet, a trend we expect to continue in each of the next three quarters. We also experienced a full quarter of the favorable effects of normal winter conditions on the Northeast tank barge market, a trend that may not be sustainable post-winter until current U.S. economic conditions improve.”
On March 17, 2003, Hornbeck took delivery of the HOS Bluewater
, the Company’s first 240ED class offshore supply vessel, and the first vessel to be delivered under its current eight-vessel newbuild program
. The HOS Bluewater, which was delivered two weeks early by the shipyard, immediately commenced service under a spot time charter with a large independent oil and gas company to support its deepwater operations in the Gulf of Mexico.
On April 30, 2003, Hornbeck entered into a bareboat lease
of a newly constructed 165-ft. crewboat, the HOS Hotshot. The vessel immediately commenced service under a spot time charter within the “pool fleet” of a major oil company to support its deepwater operations in the Gulf of Mexico.