Superior Energy Services, Inc. Announces Fourth Quarter 2012 Results and Provides 2013 Earnings and Capital Expenditures Guidance
These results compare with the fourth quarter of 2011 net income from continuing operations of
For the year ended
"While our pressure pumping business experienced a sequential increase in profitability, our overall operating income as a percentage of revenue declined sequentially by just under 3% primarily due to lower pricing and utilization for coiled tubing and remedial pumping services, and changes in job mix for hydraulic workover and snubbing as well as pressure control services."
For the fourth quarter of 2012, U.S. land revenue was approximately
As previously announced, the Company realigned its segment reporting beginning with the fourth quarter of 2012, from two to four segments. The new reportable segments are as follows: Drilling Products and Services, Onshore Completion and Workover Services, Production Services and Subsea and Technical Solutions. The Drilling Products and Services business segment is unchanged from prior periods.
Drilling Products and Services Segment
Drilling Products and Services segment revenue was
The primary factor driving the lower sequential revenue in this segment was an 11% decrease in U.S. land market revenue to
Onshore Completions and Workover Services Segment
Onshore Completions and Workover Services segment revenue in the fourth quarter was
On a sequential basis, an increase in pressure pumping revenue was offset by declines in revenue from fluid management and well service rigs. The increase in pressure pumping revenue was due to higher utilization of contracted fleets. The decline in fluid management revenue was associated with lower utilization for storage assets (transportation and frac tanks) due to a decline in completion activity. Lower revenue for well service rigs was primarily related to job mix as more rigs were performing production-related workover activity rather than completion-related work.
Production Services Segment
Production Services segment revenue was
U.S. land market revenue declined 16% sequentially to
Subsea and Technical Solutions Segment
Subsea and Technical Solutions segment revenue was
International market revenue increased 16% to
2013 Earnings Guidance and Capital Expenditures Plan
The Company has established a 2013 earnings per share guidance range of
Dunlap commented, "We anticipate revenue from international and Gulf of
Growth capital expenditures are anticipated to be approximately
By segment, approximately 40% of the growth capital expenditures will be allocated to the Drilling Products and Services Segment, 15% to the Onshore Completion and Workover Segment, 25% to the Production Services Segment, and 20% to the Subsea and Technical Solutions Segment.
Dunlap added, "Our 2013 capital expenditures plan is directed to those geographic markets that we believe will generate the highest growth for us this year. We will maintain flexibility in both the timing and amount of our expenditures with the goal of generating free cash flow in 2013."
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 |
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Consolidated Statements of Operations |
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Three and Twelve Months Ended December 31, 2012 and 2011 |
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(in thousands, except earnings per share amounts) |
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(unaudited) |
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Three Months Ended |
Twelve Months Ended |
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December 31, |
December 31, |
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2012 |
2011 |
2012 |
2011 |
|||||
Revenues |
$ 1,178,247 |
$ 562,400 |
$ 4,568,068 |
$ 1,964,332 |
||||
Cost of services (exclusive of items shown separately below) |
722,814 |
293,596 |
2,689,473 |
1,046,409 |
||||
Depreciation, depletion, amortization and accretion |
143,009 |
67,264 |
509,281 |
244,915 |
||||
General and administrative expenses |
165,794 |
104,376 |
662,792 |
376,619 |
||||
Income from continuing operations |
146,630 |
97,164 |
706,522 |
296,389 |
||||
Other income (expense): |
||||||||
Interest expense, net |
(25,558) |
(20,281) |
(113,659) |
(67,590) |
||||
Loss on early extinguishment of debt |
- |
- |
(2,294) |
- |
||||
Earnings (losses) from equity-method investments, net |
- |
2,670 |
(287) |
16,394 |
||||
Gain on sale of equity-method investment |
- |
- |
17,880 |
- |
||||
Income from continuing operations before income taxes |
121,072 |
79,553 |
608,162 |
245,193 |
||||
Income taxes |
44,797 |
26,215 |
225,020 |
85,804 |
||||
Net income from continuing operations |
76,275 |
53,338 |
383,142 |
159,389 |
||||
Loss from discontinued operations, net of income tax |
- |
(33,976) |
(17,207) |
(16,835) |
||||
Net income |
$ 76,275 |
$ 19,362 |
$ 365,935 |
$ 142,554 |
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Basic earnings per share: |
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Net income from continuing operations |
$ 0.49 |
$ 0.67 |
$ 2.57 |
$ 2.00 |
||||
Income (loss) from discontinued operations |
- |
(0.43) |
(0.12) |
(0.21) |
||||
Net income |
$ 0.49 |
$ 0.24 |
$ 2.45 |
$ 1.79 |
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Diluted earnings per share: |
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Net income from continuing operations |
$ 0.48 |
$ 0.67 |
$ 2.54 |
$ 1.97 |
||||
Income (loss) from discontinued operations |
- |
(0.43) |
(0.12) |
(0.21) |
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Net income |
$ 0.48 |
$ 0.24 |
$ 2.42 |
$ 1.76 |
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Weighted average common shares used |
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in computing earnings per share: |
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Basic |
157,266 |
80,004 |
149,288 |
79,654 |
||||
Diluted |
158,709 |
81,149 |
151,106 |
81,095 |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED BALANCE SHEETS |
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DECEMBER 31, 2012 and 2011 |
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(in thousands) |
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12/31/2012 |
12/31/2011 |
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(Unaudited) |
(Audited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
$ 91,199 |
$ 80,274 |
||
Accounts receivable, net |
1,027,218 |
540,602 |
||
Deferred income taxes |
34,120 |
- |
||
Prepaid expenses |
93,190 |
34,037 |
||
Inventory and other current assets |
214,630 |
228,309 |
||
Total current assets |
1,460,357 |
883,222 |
||
Property, plant and equipment, net |
3,255,220 |
1,507,368 |
||
Goodwill |
2,532,065 |
581,379 |
||
Notes receivable |
44,838 |
73,568 |
||
Equity-method investments |
- |
72,472 |
||
Intangible and other long-term assets, net |
510,406 |
930,136 |
||
Total assets |
$ 7,802,886 |
$ 4,048,145 |
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LIABILITIES AND STOCKHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
$ 252,363 |
$ 178,645 |
||
Accrued expenses |
346,490 |
197,574 |
||
Income taxes payable |
153,212 |
717 |
||
Deferred income taxes |
- |
831 |
||
Current portion of decommissioning liabilities |
- |
14,956 |
||
Current maturities of long-term debt |
20,000 |
810 |
||
Total current liabilities |
772,065 |
393,533 |
||
Deferred income taxes |
745,144 |
297,458 |
||
Decommissioning liabilities |
93,053 |
108,220 |
||
Long-term debt, net |
1,814,500 |
1,685,087 |
||
Other long-term liabilities |
147,045 |
110,248 |
||
Total stockholders' equity |
4,231,079 |
1,453,599 |
||
Total liabilities and stockholders' equity |
$ 7,802,886 |
$ 4,048,145 |
||
Superior Energy Services, Inc. and Subsidiaries |
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Three months ended, |
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Revenue |
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
|||
Drilling Products and Services |
$ 192,677 |
$ 194,882 |
$ 170,208 |
|||
Onshore Completion and Workover Services |
417,738 |
421,194 |
- |
|||
Production Services |
369,341 |
373,868 |
232,241 |
|||
Subsea and Technical Solutions |
198,491 |
189,721 |
159,951 |
|||
Total Revenues |
$ 1,178,247 |
$ 1,179,665 |
$ 562,400 |
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Gross Profit (2) |
December 31, 2012 |
September 30, 2012 |
December 31, 2011 |
|||
Drilling Products and Services |
$ 127,834 |
$ 132,923 |
$ 111,422 |
|||
Onshore Completion and Workover Services |
144,626 |
143,414 |
- |
|||
Production Services |
120,228 |
136,362 |
103,926 |
|||
Subsea and Technical Solutions |
62,745 |
58,358 |
53,456 |
|||
Total Gross Profit |
$ 455,433 |
$ 471,057 |
$ 268,804 |
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Income from Continuing Operations |
December 31, 2012 (3) |
September 30, 2012 |
December 31, 2011 (4) |
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Drilling Products and Services |
$ 57,424 |
$ 62,759 |
$ 43,843 |
|||
Onshore Completion and Workover Services |
46,904 |
52,197 |
(2,866) |
|||
Production Services |
32,015 |
49,023 |
44,022 |
|||
Subsea and Technical Solutions |
10,287 |
15,460 |
12,165 |
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Total Income from Continuing Operations |
$ 146,630 |
$ 179,439 |
$ 97,164 |
(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 $2.1 million of additional consideration for an acquisition based on the acquired company exceeding performance goals. |
(4) |
Includes $4.1 million of transaction expenses related to acquisitions recorded in general and administrative expenses of the Onshore Completion and Workover Services Segment ($2.9 million) and Production Services Segment ($1.2 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 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 |
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to Non-GAAP Adjusted Net Income from Continuing Operations and Earnings per Share |
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For the three months ended December 31, 2012 and 2011 |
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(in thousands, except earnings per share amounts) |
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Three months ended |
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December 31, |
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2012 |
2011 |
|||
Net income from continuing operations as reported |
$ 76,275 |
$ 53,338 |
||
Pre-tax adjustments: |
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Earnout from acquisition activity |
2,088 |
- |
||
Cost related to the acquisition of Complete Production Services |
- |
4,093 |
||
Additional interest expense related to $800 million senior notes |
- |
4,056 |
||
Equity-method investments' hedging activities |
- |
1,507 |
||
Total pre-tax adjustments |
2,088 |
9,656 |
||
Income tax effect of adjustments |
(773) |
(3,380) |
||
Cumulative effect of tax rate change from 36% to 35% in 2011 |
- |
(1,624) |
||
Non-GAAP adjusted net income from continuing operations |
$ 77,590 |
$ 57,990 |
||
Non-GAAP adjusted diluted earnings per share from continuing operations |
$ 0.49 |
$ 0.71 |
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Weighted average common shares used in computing |
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diluted earnings per share |
158,709 |
81,149 |
SOURCE