|Superior Energy Services Announces First Quarter 2008 Results|
HARVEY, La., May 1 /PRNewswire-FirstCall/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $102.1 million and diluted earnings per share of $1.24 on revenues of $441.4 million, as compared to net income of $64.0 million, or $0.78 diluted earnings per share on revenues of $362.9 million for the first quarter of 2007.
The results include non-recurring gains and expenses primarily associated with the sale of 75% of the Company's interest in SPN Resources, which closed on March 14, 2008. These include a $37.9 million pre-tax gain on sale of businesses, $4.5 million in additional general and administrative expenses and a $9.8 million decrease in depreciation and depletion due to assets being held for sale. Excluding these non-recurring items, adjusted net income was $74.5 million, or $0.91 diluted earnings per share.
Operating factors impacting the quarter as compared to the most recent quarter (fourth quarter 2007) include the following:
Terence Hall, Chairman and CEO of Superior, stated, "Overall, our first quarter operating performance was stronger than the most recent quarter and better than our previous guidance. Several of our business units performed better than anticipated and more than offset seasonal weakness elsewhere. As we discussed on our most recent quarterly conference call, we anticipated seasonal weakness in the shallow water Gulf of Mexico for liftboats. Clearly, we are pleased that we continued our track record of consistently growing earnings from operations. Our ability to do this in a choppy market environment is a major benefit of our business mix."
Well Intervention Group Segment
First quarter revenue for the Well Intervention Group was $234.1 million, a 23% increase from the fourth quarter of 2007 and a 32% increase from the first quarter of 2007. Income from operations was $50.8 million, or 22% of segment revenue as compared to $37.0 million, or 19% of segment revenue, in the fourth quarter of 2007. Coiled tubing activity increased in domestic land market areas and hydraulic workover and snubbing activity increased in Latin America and the Middle East. Project management services increased as the Company commenced field operations associated with the previously announced wreck removal project. The gross profit margin decreased slightly due to lower high pressure well work and fewer well control projects. However, the segment operating margin increased as operating expenses were essentially unchanged.
Rental Tools Segment
Revenue for the Rental Tools Segment was $130.3 million, 5% lower than the fourth quarter of 2007 and 12% higher than the first quarter of 2007. Income from operations was $45.8 million, or 35% of segment revenue, down from $46.4 million, or 34% of segment revenue in the fourth quarter of 2007. Most of the sequential revenue decrease is due to the substantial completion in the last quarter of the sale of accommodations for a large-scale project. Demand increased for rentals of stabilizers worldwide, drill pipe in the Gulf of Mexico, and accommodations in the Asia-Pacific region. These were offset by a decrease in drill pipe rentals in the North Sea and a decrease in production-related rental tools in the shallow water Gulf of Mexico. Operating margins increased sequentially as a higher percentage of revenue was generated from drilling-related rental tools such as stabilizers, drill pipe and specialty tubulars.
Superior's Marine revenue was $23.1 million, a 24% decrease from the fourth quarter of 2007 and a 36% decrease from the first quarter of 2007. Income from operations was $2.6 million, or 11% of segment revenue, down from $8.2 million, or 27% of segment revenue in the fourth quarter of 2007. Average daily revenue in the first quarter was approximately $254,000, inclusive of subsistence revenue, as compared to $332,000 per day in the fourth quarter of 2007. The lower daily revenue was due to lower utilization primarily as a result of seasonal factors in the Gulf of Mexico, including a higher than normal amount of idle days due to poor weather conditions. The biggest utilization changes occurred in the smaller liftboat classes (145-ft. to 175-ft. class liftboats).
The Company took delivery of a 175-ft. class liftboat during the first quarter. Liftboat Average Dayrates and Utilization by Class Size Three Months Ended March 31, 2008 ($ actual) Average Class Liftboats Dayrate Utilization 145'-155' 11 $8,266 36.5% 160'-175' 7 12,051 50.7% 200' 5 15,629 56.5% 230'-245' 3 25,302 48.7% 250' 2 32,901 94.0%
Oil and Gas Segment
Oil and gas revenue was $55.1 million, a 1% decrease from fourth quarter 2007 levels and a 49% increase over the first quarter of 2007. Income from operations, excluding non-recurring gains and expenses related to the sale of 75% of SPN Resources, was $25.2 million, or 46% of segment revenue, up from $24.9 million, or 45% of segment revenue, in the fourth quarter of 2007. The financial performance of this segment for the first quarter of 2008 reflects 2 1/2 months of SPN Resources' results as 75% of interest in the business was sold on March 14, 2008.
Conference Call Information
The Company will host a conference call at 10 a.m. Central Time on Friday, May 2, 2008. The call can be accessed from Superior's website at http://www.superiorenergy.com, or by telephone at 303-262-2190. For those who cannot listen to the live call, a telephonic replay will be available through Friday, May 9, 2008 and may be accessed by calling 303-590-3000 and using the pass code 11112708#. An archive of the webcast will be available after the call for a period of 60 days on http://www.superiorenergy.com.
Superior Energy Services, Inc. serves the drilling and production needs of oil and gas companies worldwide through its brand name rental tools and its integrated well intervention services and tools, supported by an engineering staff who plan and design solutions for customers. Offshore projects are delivered by the Company's fleet of modern marine assets.
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 which involve known and unknown risks, uncertainties and other factors. Among the factors that could cause actual results to differ materially are: volatility of the oil and gas industry, including the level of exploration, production and development activity; risks associated with the Company's rapid growth; changes in competitive factors and other material factors that are described from time to time in the Company's filings with the Securities and Exchange Commission. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by Superior or any other person that the projected outcomes can or will be achieved.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Operations Three Months Ended March 31, 2008 and 2007 (in thousands, except earnings per share amounts) (unaudited) Three Months Ended March 31, 2008 2007 Oilfield service and rental revenues $386,319 $325,895 Oil and gas revenues 55,072 37,029 Total revenues 441,391 362,924 Cost of oilfield services and rentals 191,132 142,429 Cost of oil and gas sales 12,986 18,058 Total cost of services, rentals and sales 204,118 160,487 Depreciation, depletion, amortization and accretion 41,879 38,844 General and administrative expenses 69,606 50,859 Gain on sale of business 37,888 - Income from operations 163,676 112,734 Other income (expense): Interest expense, net (8,116) (7,699) Earnings (losses) from equity-method investments, net 3,957 (5,006) Income before income taxes 159,517 100,029 Income taxes 57,426 36,010 Net income $102,091 $64,019 Basic earnings per share $1.26 $0.79 Diluted earnings per share $1.24 $0.78 Weighted average common shares used in computing earnings per share: Basic 80,776 80,632 Diluted 82,086 82,156 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2008 AND DECEMBER 31, 2007 (in thousands) 3/31/2008 12/31/2007 (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $231,841 $51,649 Accounts receivable, net 326,224 343,334 Current portion of notes receivable - 15,584 Prepaid expenses 22,967 19,641 Other current assets 33,143 40,797 Total current assets 614,175 471,005 Property, plant and equipment, net 924,218 1,086,408 Goodwill, net 485,010 484,594 Notes receivable - 16,732 Equity-method investments 99,185 56,961 Intangible and other long-term assets, net 141,192 141,549 Total assets $2,263,780 $2,257,249 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $67,282 $69,510 Accrued expenses 171,695 177,779 Income taxes payable 60,194 7,520 Current portion of decommissioning liabilities - 36,812 Current maturities of long-term debt 810 810 Total current liabilities 299,981 292,431 Deferred income taxes 151,983 163,338 Decommissioning liabilities - 88,158 Long-term debt 711,271 711,151 Other long-term liabilities 24,422 21,492 Total stockholders' equity 1,076,123 980,679 Total liabilities and stockholders' equity $2,263,780 $2,257,249 Superior Energy Services, Inc. and Subsidiaries Segment Highlights Three months ended March 31, 2008, December 31, 2007 and March 31, 2007 (Unaudited) (in thousands) Three months ended, March 31, December 31, March 31, Revenue 2008 2007 2007 Well Intervention $234,115 $190,735 $176,931 Rental Tools 130,327 137,456 116,180 Marine 23,089 30,547 35,866 Oil and Gas 55,072 55,811 37,029 Less: Oil and Gas Eliminations (2) (1,212) (683) (3,082) Total Revenues $441,391 $413,866 $362,924 Three months ended, March 31, December 31, March 31, Gross Profit (1) 2008 2007 2007 Well Intervention $101,716 $87,647 $81,425 Rental Tools 86,227 90,401 80,664 Marine 7,244 13,547 21,377 Oil and Gas 42,086 45,076 18,971 Total Gross Profit $237,273 $236,671 $202,437 Three months ended, March 31, December 31, March 31, Income from Operations 2008 2007 2007 Well Intervention $50,778 $36,964 $46,066 Rental Tools (3) 45,757 46,396 45,076 Marine 2,578 8,192 16,461 Oil and Gas (4) 64,563 24,932 5,131 Total Income from Operations $163,676 $116,484 $112,734 (1) Gross profit is calculated by subtracting cost of services from revenue for each of the Company's four segments. (2) Oil and gas eliminations represent products and services from the Company's segments provided to the Oil and Gas Segment. (3) Income from operations in the Rental Tools Segment for the three months ended March 31, 2008 includes a gain on sale of business of $3.3 million. (4) Income from operations in the Oil and Gas Segment for the three months ended March 31, 2008 includes a gain on sale of business of $34.1 million, non-recurring incremental general and administrative expenses of $4.5 million, and a reduction of depreciation, depletion, and amortization of $9.7 million related to assets held for sale. FOR FURTHER INFORMATION CONTACT: Terence Hall, CEO; Robert Taylor, CFO; Greg Rosenstein, VP of Investor Relations, 504-362-4321
SOURCE Superior Energy Services, Inc.