Superior Energy Services, Inc. Announces Fourth Quarter and Full Year 2008 Results
For the year ended
Factors impacting the fourth quarter include the following:
- Well Intervention Segment revenue of
$304.4 million increased 60% over the fourth quarter of 2007 ("year-over-year") and decreased 5% as compared with the third quarter of 2008 ("sequential"). The sequential decrease was due to less activity for traditional well intervention services in the Gulf ofMexico resulting from seasonal
factors and customers' focus on hurricane-related recovery projects, including platform and facilities inspection and repairs as well as production restoration.
- Rental Tools Segment revenue was
$149.2 million , a 9% increase year-over-year and sequentially, primarily due to increased rentals of stabilization equipment, drill pipe, landing strings, specialty tubulars and other handling equipment. - Marine Segment revenue of
$38.1 million increased 25% year-over-year and 13% sequentially. The sequential increase is due to higher dayrates across most liftboat classes. - Gulf of
Mexico revenue was approximately$270 million , revenue from domestic land market areas was approximately$141 million and international revenue was approximately$81 million . - In October, the Company repurchased approximately 1.95 million shares
of its common stock for
$39.6 million as part of its authorized$350 million share repurchase program that will expire onDecember 31, 2009 . - During the fourth quarter, the Company established a Supplemental
Executive Retirement Plan, resulting in a charge of
$11.3 million to general and administrative expenses. - Earnings from equity-method investments include unrealized earnings of
$23.7 million from hedging contracts; non-cash charges of$12.2 million , net to the Company, for the reduction in value of oil and gas reserves due to the decrease in oil and gas prices; and hurricane-related reductions in oil and gas production, resulting in a reduction of earnings from equity-method investments of approximately$5.3 million , net to the Company. - The Company's effective annual income tax rate decreased to 35.25% from 36.00% in 2007.
Excluding the items impacting general and administrative expenses and
earnings from equity-method investments, and applying the new effective income
tax rate of 35.25%, fourth quarter adjusted net income was
"Clearly, there is a lot of uncertainty in our industry. Declining
commodity prices and falling domestic rig counts fueled by the global credit
crisis and subsequent economic downturn will impact demand for our products
and services as this year progresses, especially in
"While we have a healthy respect for near-term market conditions, cyclical weakness has historically provided us with long-term growth opportunities. We have a history of judiciously deploying capital in uncertain market environments either through additional asset purchases or acquisitions that have enhanced the Company's profile and competitive position. With our strong balance sheet, backlog and diverse sources of cash flow, we plan to opportunistically take advantage of market weakness and emerge as an even stronger company when conditions improve."
Well Intervention Segment
Fourth quarter revenue for the Well Intervention segment was
Rental Tools Segment
Quarterly revenue for the Rental Tools Segment wasMarine Segment
Marine segment revenue was
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended December 31, 2008
($ actual)
Average
Class Liftboats Dayrate Utilization
----- --------- ------- -----------
145'-155' 10 $9,632 62.1%
160'-175' 8 12,972 81.5%
200' 5 15,872 79.6%
230'-245' 3 28,674 87.7%
250' 2 38,927 96.7%
Equity-Method Investments
The
Conference Call Information
The Company will host a conference call at
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
FOR FURTHER INFORMATION CONTACT:
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Twelve Months Ended December 31, 2008 and 2007
(in thousands, except earnings per share amounts)
(unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
------------ ------------
2008 2007 2008 2007
---- ---- ---- ----
Oilfield service and
rental revenues $491,796 $358,055 $1,826,052 $1,379,767
Oil and gas revenues - 55,811 55,072 192,700
--- ------ ------ -------
Total revenues 491,796 413,866 1,881,124 1,572,467
------- ------- --------- ---------
Cost of oilfield
services and rentals 235,469 166,460 885,308 631,545
Cost of oil and gas sales - 10,735 12,986 66,580
--- ------ ------ ------
Total cost of services,
rentals and sales 235,469 177,195 898,294 698,125
------- ------- ------- -------
Depreciation, depletion,
amortization and accretion 46,825 53,874 175,500 187,841
General and
administrative
expenses 78,173 66,313 282,584 228,146
Gain on sale of businesses - - 40,946 7,483
--- --- ------ -----
Income from operations 131,329 116,484 565,692 465,838
Other income (expense):
Interest expense, net (7,203) (8,319) (30,419) (33,257)
Interest income 274 712 2,975 2,662
Other income (expense) (1,827) (164) (3,977) 189
Earnings (losses) from
equity-method investments,
net 5,014 (493) 24,373 (2,940)
----- ---- ------ ------
Income before income taxes 127,587 108,220 558,644 432,492
Income taxes 41,741 36,256 196,922 151,372
------ ------ ------- -------
Net income $85,846 $71,964 $361,722 $281,120
======= ======= ======== ========
Basic earnings per share $1.10 $0.89 $4.52 $3.47
===== ===== ===== =====
Diluted earnings per share$1.09 $0.88 $4.45 $3.41
===== ===== ===== =====
Weighted average common shares
used in computing earnings per
share:
Basic 77,901 80,735 79,990 80,973
====== ====== ====== ======
Diluted 78,406 81,998 81,213 82,389
====== ====== ====== ======
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2008 AND DECEMBER 31, 2007
(in thousands)
12/31/2008 12/31/2007
(unaudited) (audited)
----------- ---------
ASSETS
Current assets:
Cash and cash equivalents $44,853 $51,649
Accounts receivable, net 360,357 343,334
Current portion of notes receivable - 15,584
Prepaid expenses 18,041 19,641
Other current assets 223,598 40,797
------- ------
Total current assets 646,849 471,005
------- -------
Property, plant and equipment, net 1,114,941 1,086,408
Goodwill, net 477,860 484,594
Notes receivable - 16,732
Equity-method investments 122,308 56,961
Intangible and other long-term assets, net 129,675 141,549
Total assets $2,491,633 $2,257,249
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $87,207 $69,510
Accrued expenses 152,536 177,779
Income taxes payable 20,861 7,520
Current portion of decommissioning liabilities - 36,812
Deferred income taxes 36,830 -
Current maturities of long-term debt 810 810
--- ---
Total current liabilities 298,244 292,431
------- -------
Deferred income taxes 226,421 163,338
Decommissioning liabilities - 88,158
Long-term debt 710,830 711,151
Other long-term liabilities 36,605 21,492
Total stockholders' equity 1,219,533 980,679
--------- -------
Total liabilities and stockholders'
equity $2,491,633 $2,257,249
========== ==========
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended December 31, 2008 , September 30, 2008 and
December 31, 2007
(Unaudited)
(in thousands)
Three months ended,
-------------------
Revenue December 31, 2008 September 30, 2008 December 31, 2007
----------------- ------------------ -----------------
Well Intervention $304,417 $319,798 $190,735
Rental Tools 149,239 136,600 137,456
Marine 38,140 33,884 30,547
Oil and Gas - - 55,811
Less: Oil and Gas
Eliminations (2) - - (683)
--- --- ----
Total Revenues $491,796 $490,282 $413,866
======== ======== ========
Three months ended,
-------------------
Gross Profit (1)December 31, 2008 September 30, 2008 December 31, 2007
----------------- ------------------ -----------------
Well Intervention $134,073 $150,895 $87,647
Rental Tools 102,533 90,178 90,401
Marine 19,721 12,599 13,547
Oil and Gas - - 45,076
--- --- ------
Total Gross Profit $256,327 $253,672 $236,671
======== ======== ========
Three months ended,
Income from -------------------
Operations December 31, 2008 September 30, 2008 December 31, 2007
----------------- ------------------ -----------------
Well Intervention $67,474 $90,349 $36,964
Rental Tools 50,709 43,628 46,396
Marine 13,146 6,474 8,192
Oil and Gas - - 24,932
--- --- ------
Total Income from
Operations $131,329 $140,451 $116,484
======== ======== ========
- Gross profit is calculated by subtracting cost of services (exclusive of depreciation, depletion, amortization and accretion) from revenue for each of the Company's segments.
- Oil and gas eliminations represent products and services from the Company's segments provided to the Oil and Gas Segment.
NON-GAAP RECONCILIATION
We report our financial results in conformity with U.S. generally accepted accounting principles (GAAP). However, the Company provides non-GAAP adjusted net income and non-GAAP adjusted earnings per share because management believes that in order to properly understand the Company's operational trends and performance, investors may wish to consider the impact of adjustments for non-operating items (such as unrealized earnings from mark-to-market changes in hedging contracts, reduction in value of oil and gas reserves, financial impact of reduced oil and gas production and other non-recurring and/or non-cash charges) resulting from facts and circumstances, including acquisitions, divestitures, changes in commodity prices, and other non-recurring items. Management uses adjusted net income and adjusted diluted earnings per share to evaluate the Company's operational trends and historical performance on a consistent basis. Also, management believes adjusted net income and adjusted diluted earnings per share are more comparable to earnings estimates provided by research analysts. The adjusted amounts are not measures of financial performance under GAAP.
A reconciliation of net income, the GAAP measure most directly comparable to non-GAAP adjusted earnings per share, is below. Non-GAAP financial measures used by the Company may be calculated differently from, and therefore may not be directly comparable to, similarly titled measures used by other companies. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, or superior to, the Company's reported results prepared in accordance with GAAP.
For the Three Months Ended
December 31,
2008
----
Net income as reported $85,846
Adjustments for non-cash and/
or non-recurring items
Unrealized earnings from mark-to-
market changes in hedging contracts (23,684)
Reduction in value of oil and gas reserves 12,200
Hurricane-related reduction in oil and gas production 5,265
Charge to general and administrative expenses
for Supplemental Executive Retirement Plan 11,278
Tax effect of non-cash and/or non-recurring items (1,783)
Cumulative effect of tax rate change from 36.00% to
35.25% for the nine months ended September 30, 2008 (3,233)
------
Net income as adjusted $85,889
=======
Diluted earnings per share as adjusted $1.10
Weighted average common shares used in computing
diluted earnings per share as adjusted 78,406
======
SOURCE:
CONTACT:
Terence Hall, CEO,
all of
Web Site: http://www.superiorenergy.com
