Hornbeck Offshore Services announced results for the fourth quarter ended December 31, 2009. Following are highlights for this period and the Company's future outlook:
Fourth quarter 2009 revenues decreased 27.0% to $88.3 million compared to $121.0 million for the fourth quarter of 2008 and decreased 2.0% compared to $90.1 million for the third quarter of 2009. Operating income was $24.2 million, or 27.4% of revenues, for the fourth quarter of 2009 compared to $56.5 million, or 46.7% of revenues, for the prior-year quarter; and $27.1 million, or 30.1% of revenues, for the third quarter of 2009. Net income for the fourth quarter of 2009 was $9.3 million, or $0.34 per diluted share, compared to $34.6 million, or $1.29 per diluted share for the year-ago quarter; and $13.8 million, or $0.51 per diluted share for the third quarter of 2009. EBITDA for the fourth quarter of 2009 was $41.2 million compared to fourth quarter 2008 EBITDA of $70.5 million and third quarter 2009 EBITDA of $43.6 million. The year-over-year decrease in revenues, operating income and EBITDA was primarily due to a substantial decline in fleetwide average dayrates and utilization for both of the Company's segments. Included in fourth quarter 2009 results was a $0.8 million ($0.5 million after-tax, or $0.02 per diluted share) gain on the sale of six single-hulled tank barges for net cash proceeds of $3.5 million. For additional information regarding EBITDA as a non-GAAP financial measure, please see Note 10 to the accompanying data tables.
Upstream Segment. Revenues from the Upstream segment were $78.7 million for the fourth quarter of 2009, a decrease of $21.2 million, or 21.2%, from $99.9 million for the same period in 2008 and an increase of $5.0 million, or 6.8%, over $73.7 million for the third quarter of 2009. The vessels placed in service since the fourth quarter of 2008 under the Company's ongoing newbuild and conversion programs accounted for an $18.4 million year-over-year increase in Upstream revenues. These incremental revenues were offset by a $34.4 million year-over-year decrease in revenue from lower effective dayrates for the Company's new generation offshore supply vessels ("OSVs") that were in service since September 30, 2008. In addition, the Company experienced a $5.2 million decrease in revenue from the Company's non-core conventional OSVs that were in service during the quarter ended December 31, 2008, but which were either stacked or sold on various dates since then. Continued soft OSV market conditions in the U.S. Gulf of Mexico ("GoM") contributed to Upstream operating income decreasing 48.3% to $27.5 million, or 35.0% of revenues, for the fourth quarter of 2009 from $53.2 million, or 53.2% of revenues, for the fourth quarter of 2008. Excluding roughly $4.0 million of revenue recognized during the fourth quarter of 2009 related to the final settlement of the Superior Offshore litigation in December, the Company's Upstream revenue and operating margin was in-line with the third quarter of 2009. The weak demand for new generation OSVs led to the Company's decision to stack ten of these OSVs on various dates since May 2009. In December 2009, two of the previously stacked 200 class vessels were returned to active status and mobilized to Latin America for a long-term contract. Average new generation OSV dayrates for the fourth quarter of 2009 declined to $19,880 compared to $24,385 for the same period in 2008 and $20,915 for the third quarter of 2009. New generation OSV utilization was 73.1% for the fourth quarter of 2009 compared to 96.4% for the same period in 2008 and 71.9% in the third quarter of 2009. Effective new generation OSV utilization for the Company's active fleet, which excludes the impact of stacked vessels, was 89.2% for the fourth quarter of 2009 compared to 83.2% for the third quarter of 2009.
Downstream Segment. Revenues from the Downstream segment of $9.6 million for the fourth quarter of 2009 decreased by $11.5 million, or 54.5%, compared to $21.1 million for the same period in 2008. Downstream revenues were unfavorably impacted by continued lower demand for the Company's ocean-going tug and tank barge ("TTB") equipment, which was primarily driven by soft market conditions. These conditions resulted in the stacking of all of the Company's single-hulled tank barges on various dates since the second quarter of 2008. The Company's double-hulled tank barge average dayrates were $16,210 for the fourth quarter of 2009 compared to $20,157 for the same period in 2008. Utilization for the double-hulled tank barge fleet was 71.5% for the fourth quarter of 2009 compared to 75.6% for the same period in 2008. The decrease in the Company's double-hulled tank barge utilization was the result of the continued decline in market demand for double-hulled equipment, particularly black-oil barges, driven by the current economic slowdown. The supply-demand imbalance was further affected by the industry's delivery of approximately 1.1 million barrels of newbuild double-hulled tank barge capacity during 2009.
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