Helix Energy Solutions Group, Inc. (NYSE:HLX) Q3 2023 Earnings Call Transcript

Greg Lewis: Super helpful. Thanks for your time everyone.

Scotty Sparks: Thank you.

Operator: Our next question comes from Don Crist with Johnson Rice. Please proceed.

Don Crist: Good morning gentlemen. I wanted to ask one quick question about the convertible debt. I mean obviously, there are – all options are on the table. But would you expect any of the current note-holders to convert given where it’s trading today? It seems at least to us that – it doesn’t really seem like anybody is going to convert at this stage given where they are trading today.

Erik Staffeldt: Yes. Good morning Don. I think the advice that we have gotten from the experts in this area is to generally not expect any of the holders to convert because the notes trade at a premium to our stock price, and so that’s the advice that we have been given. And I think that you can see it from the trading value of the converts that they are trading at a slight premium to our stock price. And therefore, we would not expect there to be a conversion.

Don Crist: Okay. And I wanted to ask one question on the Alliance payout. It seems like it impacted your EPS, but not your EBITDA this quarter. Can you remind us when that actually goes out the door – when that cash is out or to the ex management team?

Erik Staffeldt: So yes, the measurement period, Don, goes through the fourth quarter of ‘23, so it includes the upcoming quarter as well. At which point, we will true it up as of the third quarter to net up to fair market estimate, value estimate of $74 million. The payment is expected to happen in the start of the second quarter of 2024.

Don Crist: Well, I think we are all in agreement that Alliance has significantly outperformed, so we don’t mind paying a little bit more to them. So, I appreciate the time today. Thanks.

Erik Staffeldt: Yes. And to your point there, once again, it is $74 million through the third quarter. We expect, obviously, we will adjust it upwards as they continue to outperform here in the fourth quarter.

Don Crist: Thank you.

Operator: Gentlemen, there are no further questions at this time.

Erik Staffeldt: Okay. Thanks for joining us today. We very much appreciate your interest and participation and look forward to having you on our fourth quarter call 2023 in February. Thank you.

Operator: That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day everyone.