Superior Energy Services, Inc. Reports First Quarter 2012 Results
The Company completed its acquisition of
Discontinued operations reflect the operating results and the losses associated with the sale of the 18 liftboats and related assets comprising the marine segment and the sale of a derrick barge during the first quarter of 2012.
These results are compared with net income from continuing operations of
"The resurgence in drilling activity led to a 15% sequential increase in Gulf of
"The industry's continued emphasis on horizontal drilling - which oftentimes requires premium drill pipe and extensive use of other downhole tools - led to a 15% sequential increase in U.S. land revenue for our Drilling Products and Services Segment. Companywide, revenue from legacy Superior products and services operating in the U.S. land market areas increased 7% sequentially as compared with a 1% decline in the U.S. land drilling rig count, which supports our belief that operational execution and efficient deployment of capital are more important drivers for us than small changes in the drilling rig count.
"Income from continuing operations as a percentage of revenue (operating margin) - excluding transaction-related expenses - was essentially unchanged from the fourth quarter of 2011. The operating margin in the Drilling Products and Services Segment increased, which offset a lower operating margin in the Subsea and Well Enhancement Segment. This segment's margin was lower primarily due to a small decline in margin for legacy Superior products and services."
Geographic Breakdown
For the first quarter of 2012, U.S. land revenue was approximately
Subsea and Well Enhancement Segment
First quarter revenues in the Subsea and Well Enhancement Segment were
The products and services that comprise Superior's legacy Subsea and Well Enhancement Segment contributed revenue of
Drilling Products and Services Segment
First quarter revenue for the Drilling Products and Services Segment was
U.S. land revenue increased 15% sequentially primarily due to increased rentals of premium drill pipe. Demand for accommodations and ancillary equipment also increased. Gulf of
2012 Earnings Guidance Update
The Company has raised the lower end of its 2012 non-GAAP adjusted earnings from continuing operations guidance. The new range is
Mr. Dunlap commented, "The change in earnings guidance reflects the stronger-than-anticipated first quarter results. We are essentially leaving unchanged our expectations for the remaining nine months of 2012.
"Exposure in multiple geographic market areas, product and service diversification and business mix balance provide us a degree of confidence in our guidance range. We have solid committed contracting coverage in pressure pumping through the remainder of the year and we anticipate demand for fluid management, well servicing, intervention services and downhole drilling products will remain strong driven by high service intensity in certain U.S. land basins. We expect to benefit from the ongoing recovery in deep water Gulf of
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:
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Operations | ||||
Three Months Ended March 31, 2012 and 2011 | ||||
(in thousands, except earnings per share amounts) | ||||
(unaudited) | ||||
Three Months Ended | ||||
March 31, | ||||
2012 | 2011 * | |||
Revenues | $ 966,837 | $ 384,997 | ||
Cost of services (exclusive of items shown separately below) | 546,767 | 217,022 | ||
Depreciation, depletion, amortization and accretion | 102,596 | 55,824 | ||
General and administrative expenses | 176,021 | 84,615 | ||
Income from continuing operations | 141,453 | 27,536 | ||
Other income (expense): | ||||
Interest expense, net | (29,806) | (12,152) | ||
Earnings (losses) from equity-method investments, net | (287) | 27 | ||
Income from continuing operations before income taxes | 111,360 | 15,411 | ||
Income taxes | 41,203 | 5,534 | ||
Net income from continuing operations | 70,157 | 9,877 | ||
Income (loss) from discontinued operations, net of income tax | (16,237) | 5,626 | ||
Net income | $ 53,920 | $ 15,503 | ||
Basic earnings per share: | ||||
Net income from continuing operations | $ 0.56 | $ 0.13 | ||
Income (loss) from discontinued operations | (0.13) | 0.07 | ||
Net income | $ 0.43 | $ 0.20 | ||
Diluted earnings per share: | ||||
Net income from continuing operations | $ 0.55 | $ 0.12 | ||
Income (loss) from discontinued operations | (0.13) | 0.07 | ||
Net income | $ 0.42 | $ 0.19 | ||
Weighted average common shares used | ||||
in computing earnings per share: | ||||
Basic | 125,542 | 79,021 | ||
Diluted | 127,344 | 80,759 | ||
* As adjusted for discontinued operations |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||
CONSOLIDATED BALANCE SHEETS | ||||
MARCH 31, 2012 AND DECEMBER 31, 2011 | ||||
(in thousands) | ||||
3/31/2012 | 12/31/2011 | |||
(Unaudited) | (Audited) | |||
ASSETS | ||||
Current assets: | ||||
Cash and cash equivalents | $ 135,758 | $ 80,274 | ||
Accounts receivable, net | 1,035,985 | 540,602 | ||
Prepaid expenses | 72,792 | 34,037 | ||
Inventory and other current assets | 278,229 | 228,309 | ||
Total current assets | 1,522,764 | 883,222 | ||
Property, plant and equipment, net | 2,766,310 | 1,507,368 | ||
Goodwill | 2,504,670 | 581,379 | ||
Notes receivable | 74,750 | 73,568 | ||
Equity-method investments | 69,552 | 72,472 | ||
Intangible and other long-term assets, net | 530,312 | 930,136 | ||
Total assets | $ 7,468,358 | $ 4,048,145 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
Current liabilities: | ||||
Accounts payable | $ 312,985 | $ 178,645 | ||
Accrued expenses | 284,761 | 197,574 | ||
Income taxes payable | 26,834 | 717 | ||
Deferred income taxes | 16,721 | 831 | ||
Current portion of decommissioning liabilities | 15,678 | 14,956 | ||
Current maturities of long-term debt | 20,000 | 810 | ||
Total current liabilities | 676,979 | 393,533 | ||
Deferred income taxes | 684,894 | 297,458 | ||
Decommissioning liabilities | 110,151 | 108,220 | ||
Long-term debt, net | 1,978,508 | 1,685,087 | ||
Other long-term liabilities | 104,943 | 110,248 | ||
Total stockholders' equity | 3,912,883 | 1,453,599 | ||
Total liabilities and stockholders' equity | $ 7,468,358 | $ 4,048,145 |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIESSEGMENT HIGHLIGHTSTHREE MONTHS ENDED MARCH 31, 2012, DECEMBER 31, 2011(1) AND MARCH 31, 2011(1)(Unaudited)(in thousands) | ||||||
Three months ended, | ||||||
Revenue | March 31, 2012 | December 31, 2011 | March 31, 2011 | |||
Subsea and Well Enhancement | $ 777,480 | $ 392,192 | $ 256,727 | |||
Drilling Products and Services | 189,357 | 170,208 | 128,270 | |||
Total Revenues | $ 966,837 | $ 562,400 | $ 384,997 | |||
Gross Profit (2) | March 31, 2012 | December 31, 2011 | March 31, 2011 | |||
Subsea and Well Enhancement | $ 293,279 | $ 157,381 | $ 86,402 | |||
Drilling Products and Services | 126,791 | 111,423 | 81,573 | |||
Total Gross Profit | $ 420,070 | $ 268,804 | $ 167,975 | |||
Income from Continuing Operations | March 31, 2012 (3) | December 31, 2011(4) | March 31, 2011 | |||
Subsea and Well Enhancement | $ 84,224 | $ 53,321 | $ 6,158 | |||
Drilling Products and Services | 57,229 | 43,843 | 21,378 | |||
- | - | |||||
Total Income from Continuing Operations | $ 141,453 | $ 97,164 | $ 27,536 |
(1) | Adjusted for discontinued operations. |
(2) | 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. |
(3) | Includes $29.0 million of transaction-related expenses recorded in general and administrative expenses of the Subsea and Well Enhancement Segment. |
(4) | Includes $4.1 million of transaction-related expenses recorded in general and administrative expenses of the Subsea and Well Enhancement 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 certain items are customarily excluded by analysts in published estimates and management believes, for purposes of comparability to financial performance in other periods and to evaluate the Company's trends, that it is appropriate for these items to be excluded. 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. 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 and non-GAAP adjusted earnings per share, is below. In making any comparisons to other companies, investors need to be aware that the 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. Investors should pay close attention to the specific definition being used and to the reconciliation between such measures and the corresponding GAAP measures provided by each company under applicable
Reconciliation of Net Income from Continuing Operations | ||
to Non-GAAP Adjusted Net Income from Continuing Operations and Earnings per Share | ||
For the three months ended March 31, 2012 | ||
(in thousands) | ||
Three months | ||
ended | ||
March 31, 2012 | ||
Net income from continuing operations as reported | $ 70,157 | |
Pre-tax adjustments: | ||
Costs related to acquisitions, primarily Complete Production Services | 29,047 | |
Equity-method investments' hedging adjustments | 3,139 | |
Total pre-tax adjustments | 32,186 | |
Income tax effect of adjustments | (11,909) | |
Non-GAAP adjusted net income from continuing operations | $ 90,434 | |
Non-GAAP adjusted diluted earnings per share | $ 0.71 | |
Weighted average common shares used in computing | ||
diluted earnings per share | 127,344 |
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