Superior Energy Services, Inc. Reports Second Quarter 2009 Results
Core Earnings of
Excluding non-cash special charges, the Company had adjusted net income of
(Please see Non-GAAP reconciliation disclosure and table at the end of this press release.)
The second quarter 2009 results include the following special charges:
-- A non-cash, pre-tax charge of approximately $92.7 million , or $0.76
per share after tax, related to the reduction in value of a portion of
the Company's long-lived intangible assets associated with its well
intervention segment due to the downturn in the oilfield services
sector, especially in the U.S. land markets;
-- A non-cash, pre-tax charge of approximately $36.5 million , or $0.30
per share after tax, related to the reduction in value of the
Company's remaining equity-method investment in Beryl Oil & Gas; and,
-- Losses during the quarter of $15.7 million , or $0.13 per share after
tax related to the Company's loss in equity-method investment in Beryl
Oil & Gas for the three months ended June 30, 2009 .
The reduction in value of long-lived intangible assets and the writedown of the Company's remaining equity investment in Beryl Oil & Gas do not impact the Company's liquidity position, operational capabilities or its future cash flows.
The results also include non-cash, unrealized losses of approximately
For the six months ended
Operational factors impacting the second quarter include the following:
-- Total revenue decreased 21% as compared with the second quarter of
2008 ("year-over-year") and decreased 17% as compared with the first
quarter of 2009 ("sequential"). The sequential change was primarily
due to lower demand for production-related services and rental tools,
especially in the domestic land market areas. In addition, the
Company performed less work on its large platform removal project than
in the prior quarter. The project remains well ahead of schedule and
on budget.
-- Well Intervention Segment revenue of $231.1 million decreased 22% over
the second quarter of 2008 and decreased 20% as compared with the
first quarter of 2009. Rental Tools Segment revenue was $102.5
million , a 24% decrease year-over-year and a 19% decrease
sequentially. Marine Segment revenue of $27.5 million increased 6%
year-over-year and increased 19% sequentially.
-- Gulf of Mexico revenue was approximately $216.0 million , or 17% lower
sequentially; domestic land revenue was approximately $74.4 million , a
decline of 27% from the first quarter of 2009; and international
revenue was approximately $70.8 million , a sequential decrease of 3%.
"With respect to the platform recovery project, we continue to perform well ahead of schedule and expect the pace of work for the remainder of the year to be similar to what we just experienced in the second quarter. For the remainder of 2009, we expect domestic activity to stabilize and international activity to increase slightly, especially for rental tools in Latin America as we continue our expansion efforts into new markets. As a result, we anticipate that the Company's overall business will continue its relative industry performance."
Well Intervention Segment
Second quarter revenue for the Well Intervention Segment was
Rental Tools Segment
Quarterly revenue for the Rental Tools Segment was
Marine Segment
Marine Segment revenue was
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended June 30, 2009
($ actual)
Average
Class Liftboats Dayrate Utilization
----- --------- ------- -----------
145'-155' 10 $7,051 34.3%
160'-175' 8 8,803 41.3%
200' 5 11,058 63.7%
230'-245' 3 29,284 86.4%
250' 2 34,527 97.3%
265' 2 34,559 80.9%
Equity-Method Investments
The Company's losses in equity-method investment include the
aforementioned quarterly losses at Beryl Oil & Gas and non-cash, unrealized
losses from hedging contracts impacting the Company's earnings from its
equity-method investment in SPN Resources. Excluding these items, earnings
from equity-method investments were
Reduction in Value of Long-Lived Intangible Assets and Equity-Method Investment
In accordance with Statement of Financial Accounting Standards No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets," the Company
concluded that
The Company's remaining
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 uncertainty of macroeconomic
and business conditions worldwide, as well as the global credit markets; 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:
Terence Hall , CEO; Robert Taylor , CFO;
Greg Rosenstein , VP of Investor Relations, (504) 587-7374
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Six Months Ended June 30, 2009 and 2008
(in thousands, except earnings per share amounts)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2009 2008 2009 2008
-------- ------- -------- --------
As Adjusted As Adjusted
(Note 1) (Note 1)
Oilfield service and
rental revenues $361,161 $457,655 $798,270 $843,974
Oil and gas revenues - - - 55,072
-------- ------- -------- --------
Total revenues 361,161 457,655 798,270 899,046
------- ------- ------- -------
Cost of oilfield
services and
rentals 197,268 222,097 419,733 413,229
Cost of oil and gas
sales - - - 12,986
Total cost of services,
rentals and sales
(exclusive of items
shown separately
below) 197,268 222,097 419,733 426,215
-------- ------- -------- --------
Depreciation,
depletion,
amortization and
accretion 50,978 41,954 100,846 83,833
General and
administrative
expenses 60,283 66,426 125,269 136,032
Reduction in value of
intangible assets 92,683 - 92,683 -
Gain on sale of
businesses - 3,058 - 40,946
-------- ------- -------- --------
Income (loss) from
operations (40,051) 130,236 59,739 293,912
Other income
(expense):
Interest
expense, net (11,720) (11,023) (25,008) (23,206)
Losses from equity-
method
investments, net (19,426) (7,765) (17,170) (3,808)
Reduction in
value of equity-
method
investment (36,486) - (36,486) -
-------- ------- -------- --------
Income (loss) before
income taxes (107,683) 111,448 (18,925) 266,898
Income taxes (38,766) 40,081 (6,813) 96,002
-------- ------- -------- --------
Net income (loss) $(68,917) $71,367 $(12,112) $170,896
======== ======= ======== ========
Basic earnings (loss)
per share $(0.88) $0.88 $(0.16) $2.12
======== ======= ======== ========
Diluted earnings
(loss) per share $(0.88) $0.86 $(0.16) $2.08
======== ======= ======== ========
Weighted average
common shares
used in computing
earnings per share:
Basic 78,153 80,749 78,093 80,762
======== ======= ======== ========
Diluted 78,153 82,942 78,093 82,134
======== ======= ======== ========
Note 1
On January 1, 2009 , we adopted Financial Accounting Standards Board Staff
Position APB 14-1 which changed the accounting for the Company's 1.5%
senior exchangeable notes. The comparative Statement of Operations for
the three and six months ended June 30, 2008 has been adjusted to comply
with FSP APB 14-1 on a retrospective basis.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 30, 2009 AND DECEMBER 31, 2008
(in thousands)
6/30/2009 12/31/2008
--------- ----------
As Adjusted
(Note 1)
ASSETS
Current assets:
Cash and cash equivalents $36,590 $44,853
Accounts receivable, net 332,128 360,357
Income taxes receivable 7,277 -
Prepaid expenses 30,384 18,041
Other current assets 335,692 223,598
---------- ----------
Total current assets 742,071 646,849
---------- ----------
Property, plant and equipment, net 1,217,178 1,114,941
Goodwill, net 482,216 477,860
Equity-method investments 59,692 122,308
Intangible and other long-term assets, net 37,198 128,187
Total assets $2,538,355 $2,490,145
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $80,609 $87,207
Accrued expenses 162,466 152,536
Income taxes payable - 20,861
Deferred income taxes 67,742 36,830
Current maturities of long-term debt 810 810
---------- ----------
Total current liabilities 311,627 298,244
---------- ----------
Deferred income taxes 200,116 246,824
Long-term debt, net 718,005 654,199
Other long-term liabilities 40,915 36,605
Total stockholders' equity 1,267,692 1,254,273
---------- ----------
Total liabilities and stockholders'
equity $2,538,355 $2,490,145
========== ==========
Note 1
On January 1, 2009 , we adopted Financial Accounting Standards Board Staff
Position APB 14-1 which changed the accounting for the Company's 1.5%
senior exchangeable notes. The comparative Balance Sheet as of
December 31, 2008 has been adjusted to comply with FSP APB 14-1 on a
retrospective basis.
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended June 30, 2009 , March 31, 2009 and June 30, 2008
(Unaudited)
(in thousands)
Three months ended,
------------------------------------------------
Revenue June 30, 2009 March 31, 2009 June 30, 2008
------------- -------------- -------------
Well Intervention $231,121 $288,057 $296,891
Rental Tools 102,533 125,944 134,773
Marine 27,507 23,108 25,991
-------- -------- --------
Total Revenues $361,161 $437,109 $457,655
======== ======== ========
Three months ended,
------------------------------------------------
Gross Profit (1) June 30, 2009 March 31, 2009 June 30, 2008
------------- -------------- -------------
Well Intervention $83,607 $122,568 $135,410
Rental Tools 69,231 83,908 93,438
Marine 11,055 8,168 6,710
-------- -------- --------
Total Gross Profit $163,893 $214,644 $235,558
======== ======== ========
Three months ended,
------------------------------------------------
Income from Operations June 30, 2009 March 31, 2009 June 30, 2008
------------- -------------- -------------
Well Intervention (2) $(65,094) $61,700 $78,202
Rental Tools 20,123 35,309 47,531
Marine 4,920 2,781 1,445
Gain on Sale of Business - - 3,058
-------- -------- --------
Total Income (Loss) from
Operations $(40,051) $99,790 $130,236
======== ======== ========
(1) 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.
(2) Income from operations in the Well Intervention Segment for the three
months ended June 30, 2009 includes a reduction in value of long-lived
intangible assets of $92.7 million .
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 special charges
from impairments and unrealized earnings (losses) from mark-to-market
changes in hedging contracts 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.
Three Months Ended
June 30,
----------------
2009 2008
------- -------
Net income (loss) as reported $(68,917) $71,367
Pre-tax adjustments:
--------------------
Reduction in value of intangible assets 92,683 -
Reduction in value of equity-method investment in
Beryl Oil & Gas 36,486 -
(Earnings) losses from equity-method investment in
Beryl Oil & Gas 15,683 (989)
Unrealized losses from equity-method investment
hedging contracts at SPN Resources, LLC 5,972 19,934
Gain on sale of businesses - (3,058)
------- -------
Total pre-tax adjustments 150,824 15,887
Income tax effect of adjustments (54,297) (5,719)
------- -------
Non-GAAP adjusted net income $27,610 $81,535
======= =======
Non-GAAP adjusted diluted earnings per share $0.35 $0.98
======= =======
Weighted average common shares used in
computing diluted earnings per share 78,153 82,942
======= =======
SOURCE
CONTACT:
or
Web Site: http://www.superiorenergy.com
