Superior Energy Services Announces First Quarter 2017 Results
“Entering the quarter, a number of costs related to increasing activity levels continued to impede margin growth. These factors included significant increases in sand pricing, costs associated with reactivation of equipment and increased hiring and training costs. As the quarter progressed, we gained momentum in our conversations with customers which focused on balancing these higher costs with increased demand and activity levels.
“We exited the first quarter in a much more favorable position as it relates to these factors than when the quarter began. As rig count growth slows and equipment reactivation costs are fully absorbed, transitional inefficiency should be significantly diminished. These factors, in addition to reasonable service price increases, should put us on a path to acceptable margins.
“Outside of U.S. land markets, we are encouraged by the non-rig related project work we have in the Gulf of
“Crude oil prices are higher than they were a year ago at this time, our customers have committed to higher levels of spending and we have been proactive in preparing for market recovery. Despite the near-term noise associated with market transition, everything we are observing from a fundamental perspective is moving in the direction necessary to create a path to increased growth and profitability.”
First Quarter 2017 Geographic Breakdown
U.S. land revenue was
Drilling Products and Services Segment
The Drilling Products and Services segment revenue in the first quarter of 2017 was
U.S. land revenue increased 20% sequentially to
Onshore Completion and Workover Services Segment
The Onshore Completion and Workover Services segment revenue in the first quarter of 2017 was
During the quarter, the Company spent approximately
Production Services Segment
The Production Services segment revenue in the first quarter of 2017 was
U.S. land revenue increased 17% sequentially to
Technical Solutions Segment
The Technical Solutions segment revenue in the first quarter of 2017 was
U.S. land revenue decreased 25% sequentially to
Conference Call Information
The Company will host a conference call at
About
The press release contains, and future oral or written statements or press releases by us and our management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company’s financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from such statements. Such uncertainties include, but are not limited to: the cyclicality and volatility of the oil and gas industry, including changes in prevailing levels of capital expenditures, exploration, production and development activity; changes in prevailing oil and gas prices or expectations about future prices; operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage for which we may have limited or no insurance coverage or indemnification rights; the effect of regulatory programs (including worker health and safety laws) and environmental matters on our operations or prospects, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for our pressure pumping services, or that future changes in climate change legislation could result in increased operating costs or reduced commodity demand globally; counter-party risks associated with reliance on key suppliers; risks associated with the uncertainty of macroeconomic and business conditions worldwide; changes in competitive and technological factors affecting our operations; credit risk associated with our customer base; the potential inability to retain key employees and skilled workers; challenges with estimating our oil and natural gas reserves and potential liabilities related to our oil and natural gas property; risk associated with potential changes of
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||
Consolidated Statements of Operations | ||||||||||||
Three Months Ended March 31, 2017, 2016 and December 31, 2016 | ||||||||||||
(in thousands, except earnings per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
Three months ended, | ||||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||
Revenues | $ | 400,936 | $ | 354,418 | $ | 413,133 | ||||||
Cost of services and rentals (exclusive of items shown separately below) | 321,986 | 321,132 | 285,339 | |||||||||
Depreciation, depletion, amortization and accretion | 114,281 | 117,954 | 136,672 | |||||||||
General and administrative expenses | 75,493 | 78,122 | 103,155 | |||||||||
Reduction in value of assets | - | 35,961 | - | |||||||||
Loss from operations | (110,824 | ) | (198,751 | ) | (112,033 | ) | ||||||
Other income (expense): | ||||||||||||
Interest expense, net | (24,250 | ) | (24,429 | ) | (23,806 | ) | ||||||
Other income | 649 | 519 | 7,755 | |||||||||
Loss from continuing operations before income taxes | (134,425 | ) | (222,661 | ) | (128,084 | ) | ||||||
Income taxes | (44,764 | ) | (56,402 | ) | (43,548 | ) | ||||||
Net loss from continuing operations | (89,661 | ) | (166,259 | ) | (84,536 | ) | ||||||
Loss from discontinued operations, net of income tax | (1,998 | ) | (44,982 | ) | (2,267 | ) | ||||||
Net loss | $ | (91,659 | ) | $ | (211,241 | ) | $ | (86,803 | ) | |||
Loss per share information: | ||||||||||||
Basic and Diluted | ||||||||||||
Net loss from continuing operations | $ | (0.59 | ) | $ | (1.10 | ) | $ | (0.56 | ) | |||
Loss from discontinued operations | (0.01 | ) | (0.30 | ) | (0.01 | ) | ||||||
Net loss | $ | (0.60 | ) | $ | (1.40 | ) | $ | (0.57 | ) | |||
Weighted average common shares used | ||||||||||||
in computing earnings per share: | ||||||||||||
Basic and diluted | 152,701 | 151,741 | 151,324 | |||||||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||
CONSOLIDATED BALANCE SHEETS | |||||||
March 31, 2017 and December 31, 2016 | |||||||
(in thousands) | |||||||
(unaudited) | |||||||
3/31/2017 | 12/31/2016 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 151,766 | $ | 187,591 | |||
Accounts receivable, net | 329,770 | 297,164 | |||||
Income taxes receivable | 121,309 | 101,578 | |||||
Prepaid expenses | 42,976 | 37,288 | |||||
Inventory and other current assets | 139,631 | 130,772 | |||||
Assets held for sale | 27,411 | 27,158 | |||||
Total current assets | 812,863 | 781,551 | |||||
Property, plant and equipment, net | 1,513,282 | 1,605,365 | |||||
Goodwill | 804,436 | 803,917 | |||||
Notes receivable | 57,423 | 56,650 | |||||
Intangible and other long-term assets, net | 190,707 | 222,772 | |||||
Total assets | $ | 3,378,711 | $ | 3,470,255 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 102,221 | $ | 94,831 | |||
Accrued expenses | 236,978 | 218,192 | |||||
Income taxes payable | - | 694 | |||||
Current portion of decommissioning liabilities | 22,188 | 22,164 | |||||
Liabilities held for sale | 7,401 | 8,653 | |||||
Total current liabilities | 368,788 | 344,534 | |||||
Deferred income taxes | 213,855 | 243,611 | |||||
Decommissioning liabilities | 103,186 | 101,513 | |||||
Long-term debt, net | 1,286,210 | 1,284,600 | |||||
Other long-term liabilities | 193,974 | 192,077 | |||||
Total stockholders' equity | 1,212,698 | 1,303,920 | |||||
Total liabilities and stockholders' equity | $ | 3,378,711 | $ | 3,470,255 | |||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||||||
REVENUE BY GEOGRAPHIC REGION BY SEGMENT | ||||||||||
THREE MONTHS ENDED MARCH 31, 2017, DECEMBER 31, 2016 AND MARCH 31, 2016 | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
Three months ended, | ||||||||||
March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||
U.S. land | ||||||||||
Drilling Products and Services | $ | 21,162 | $ | 17,703 | $ | 19,745 | ||||
Onshore Completion and Workover Services | 204,979 | 150,578 | 132,472 | |||||||
Production Services | 23,435 | 19,984 | 27,721 | |||||||
Technical Solutions | 9,085 | 12,060 | 10,223 | |||||||
Total U.S. land | $ | 258,661 | $ | 200,325 | $ | 190,161 | ||||
Gulf of Mexico | ||||||||||
Drilling Products and Services | 23,485 | 25,772 | 37,532 | |||||||
Onshore Completion and Workover Services | - | - | - | |||||||
Production Services | 17,746 | 22,256 | 24,417 | |||||||
Technical Solutions | 33,717 | 23,614 | 51,466 | |||||||
Total Gulf of Mexico | $ | 74,948 | $ | 71,642 | $ | 113,415 | ||||
International | ||||||||||
Drilling Products and Services | $ | 23,784 | $ | 25,855 | $ | 31,145 | ||||
Onshore Completion and Workover Services | - | - | - | |||||||
Production Services | 27,424 | 38,734 | 52,756 | |||||||
Technical Solutions | 16,119 | 17,862 | 25,656 | |||||||
Total International | $ | 67,327 | $ | 82,451 | $ | 109,557 | ||||
Total Revenues | $ | 400,936 | $ | 354,418 | $ | 413,133 | ||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||||||||
SEGMENT HIGHLIGHTS | |||||||||||||
THREE MONTHS ENDED MARCH 31, 2017, DECEMBER 31, 2016 AND MARCH 31, 2016 | |||||||||||||
(in thousands) | |||||||||||||
(unaudited) | |||||||||||||
Three months ended, | |||||||||||||
Revenues | March 31, 2017 | December 31, 2016 | March 31, 2016 | ||||||||||
Drilling Products and Services | $ | 68,431 | $ | 69,330 | $ | 88,422 | |||||||
Onshore Completion and Workover Services | 204,979 | 150,578 | 132,472 | ||||||||||
Production Services | 68,605 | 80,974 | 104,894 | ||||||||||
Technical Solutions | 58,921 | 53,536 | 87,345 | ||||||||||
Total Revenues | $ | 400,936 | $ | 354,418 | $ | 413,133 | |||||||
Loss from Operations | |||||||||||||
Drilling Products and Services | $ | (13,167 | ) | $ | (29,864 | ) | $ | (17,722 | ) | ||||
Onshore Completion and Workover Services | (63,241 | ) | (77,681 | ) | (70,535 | ) | |||||||
Production Services | (29,212 | ) | (31,492 | ) | (23,717 | ) | |||||||
Technical Solutions | (5,204 | ) | (59,714 | ) | (59 | ) | |||||||
Total Loss from Operations | $ | (110,824 | ) | $ | (198,751 | ) | $ | (112,033 | ) | ||||
Adjusted Income (Loss) from Operations (1) | |||||||||||||
Drilling Products and Services | $ | (13,167 | ) | $ | (15,935 | ) | $ | (16,244 | ) | ||||
Onshore Completion and Workover Services | (63,241 | ) | (74,867 | ) | (65,691 | ) | |||||||
Production Services | (29,212 | ) | (20,412 | ) | (16,606 | ) | |||||||
Technical Solutions | (5,204 | ) | (14,387 | ) | 1,808 | ||||||||
Total Adjusted Income (Loss) from Operations | $ | (110,824 | ) | $ | (125,601 | ) | $ | (96,733 | ) | ||||
(1) Adjusted income (loss) from operations excludes the impact of reduction in value of assets, inventory write-down and restructuring costs for the three months December 31, 2016 and March 31, 2016. There were no adjustments for the three months ended March 31, 2017. | |||||||||||||
Non-GAAP Financial Measures
The following tables reconcile consolidated net loss from continuing operations and income (loss) from operations by segment, which are the directly comparable financial results determined in accordance with Generally Accepted Accounting Principles (GAAP), to consolidated adjusted loss from continuing operations and adjusted income (loss) from operations by segment (non-GAAP financial measures). Consolidated adjusted loss from continuing operations and income (loss) from operations by segment exclude the impact of reduction in value of assets and restructuring costs. These financial measures are provided to enhance investors’ overall understanding of the Company’s current financial performance.
Reconciliation of As Reported Income (Loss) from Operations to Adjusted Income (Loss) From Operations | ||||||||||||||||||||
Three months ended December 31, 2016 and March 31, 2016 | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
(unaudited) | ||||||||||||||||||||
Three months ended, December 31, 2016 | ||||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Consolidated | ||||||||||||||||
Reported loss from operations | $ | (29,864 | ) | $ | (77,681 | ) | $ | (31,492 | ) | $ | (59,714 | ) | $ | (198,751 | ) | |||||
Reduction in value of assets | 1,244 | 2,094 | 7,023 | 25,600 | 35,961 | |||||||||||||||
Inventory write-down | - | - | 1,664 | 19,122 | 20,786 | |||||||||||||||
Restructuring costs | 12,685 | 720 | 2,393 | 605 | 16,403 | |||||||||||||||
Adjusted loss from operations | $ | (15,935 | ) | $ | (74,867 | ) | $ | (20,412 | ) | $ | (14,387 | ) | $ | (125,601 | ) | |||||
Three months ended, March 31, 2016 | ||||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Consolidated | ||||||||||||||||
Reported loss from operations | $ | (17,722 | ) | $ | (70,535 | ) | $ | (23,717 | ) | $ | (59 | ) | $ | (112,033 | ) | |||||
Restructuring costs | 1,478 | 4,844 | 7,111 | 1,867 | 15,300 | |||||||||||||||
Adjusted income (loss) from operations | $ | (16,244 | ) | $ | (65,691 | ) | $ | (16,606 | ) | $ | 1,808 | $ | (96,733 | ) | ||||||
FOR FURTHER INFORMATION CONTACT:Paul Vincent , VP of Investor Relations, (713) 654-2200