Superior Energy Services, Inc. Announces Third Quarter 2003 Results
Superior Energy Services, Inc. (NYSE: SPN) today announced results for the third quarter ended September 30, 2003. For the quarter, revenues were $128.3 million resulting in net income of $8.8 million or $0.12 diluted earnings per share, as compared to revenues of $107.2 million and net income of $1.9 million or $0.03 diluted earnings per share for the third quarter of 2002.
For the nine months ended September 30, 2003, revenues were $380.4 million and net income was $24.7 million or $0.33 diluted earnings per share, as compared to revenues of $324.8 million and net income of $16.3 million or $0.22 diluted earnings per share for the nine months ended September 30, 2002.
President and CEO Terry Hall Comments
President and CEO Terry Hall commented, "Demand for production-related services increased, resulting in higher revenue and gross profits in our Well Intervention segment as compared to the second quarter of this year. However, this was offset by decreases in drilling-related activity, which impacted our drilling-related rental tools and environmental services businesses. In our Marine segment, increases in production-related work were more than offset by higher-than-anticipated downtime due to weather and the loss of the 200-foot class Superior Challenge. The opportunity cost associated with losing the Challenge is high as it operated in our most highly utilized liftboat class."We do not expect much change in Gulf of Mexico activity in the near term. Longer term, we believe our focus on production enhancement will continue to benefit operators in both the shallow water and deepwater Gulf, as well as international operators as we continue to expand our geographic reach."
Well Intervention Group Segment
Third quarter revenues for the Well Intervention Group were $50.3 million, an 39 percent increase from the third quarter of 2002 and an 8 percent increase from the second quarter of 2003. Most well intervention activity increased due to rising demand for production-related services in the shallow water Gulf of Mexico. On a sequential basis, activity increased in coiled tubing, hydraulic workover, mechanical wireline and well control services, which were offset by decreases in plug and abandonment and electric line services.
Rental Tools Segment
Revenues for the Rental Tools segment were $35.4 million, 20 percent higher than the third quarter of 2002 and 3 percent lower than the second quarter of 2003. Rental activity was lower sequentially as a result of lower drilling and completion activity and changes in timing on certain deepwater Gulf of Mexico projects, which resulted in fewer rentals of drill pipe, stabilizers and related equipment.
Marine Segment
Superior's marine revenues were $17.3 million, a 20 percent increase as compared to the third quarter of 2002 and a 7 percent decrease as compared to the second quarter of 2003. Average fleet utilization was 66 percent as compared to 63 percent for the third quarter of 2002 and 66 percent for the second quarter of 2003.
Although production-related activity increased - a primary driver of liftboat activity - the segment was adversely impacted by the loss of the 200-foot class Superior Challenge and the unusually high number of weather downtime days due to multiple tropical storm systems in the Gulf of Mexico. The 200-foot class Superior Challenge liftboat sunk on June 30 due to a tropical storm. The Company recorded a gain from insurance proceeds of $2.8 million in other income.
Liftboat Average Dayrates and Utilization by Class Size
Three Months Ended September 30, 2003
($ actual)
Class Liftboats Average Dayrate Utilization
--------- --------- -------------- -----------
105' 8 $ 2,866 55.6%
120-135' 9 3,399 66.6%
145-155' 11 5,080 61.7%
160'-175' 6 7,047 74.1%
200' 2 10,439 95.7%
230'-245' 3 11,820 69.6%
250' 2 17,609 72.8% *T
Other Oilfield Services Segment
Revenues in this segment were $25.4 million, a 7 percent decrease as compared to the third quarter of 2002 and an 8 percent decrease as compared to the second quarter of 2003. Lower revenue is attributable to the sale of the Company's construction division and lower activity for drilling-related environmental services such as non-hazardous oilfield waste treatment.
During the quarter, the Company sold its construction-related assets for $1.25 million. There was no gain or loss recorded on the sale.
The Company will host a conference call at 10:30 a.m. Central Time today. The call can be accessed from Superior's website at www.superiorenergy.com, or by telephone at 800-763-5557. The replay telephone number is 800-642-1687 and the replay passcode is 3306581. The replay is available beginning two hours after the call and ending November 11, 2003.
Superior Energy Services, Inc. provides a broad range of specialized oilfield services and equipment primarily to major and independent oil and gas companies engaged in the exploration, production and development of oil and natural gas properties offshore in the Gulf of Mexico and throughout the Gulf Coast region. These services and equipment include the rental of liftboats, rental of specialized oilfield equipment, electric and mechanical wireline services, well plug and abandonment services, well control, coiled tubing services and engineering services. Additional services provided include contract operating and supplemental labor, offshore construction and maintenance services, offshore and dockside environmental cleaning services, the manufacture and sale of drilling instrumentation and the manufacture and sale of oil spill containment equipment.
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 Securities and Exchange Commission. Actual events, circumstances, effects and results may be materially different from the results, performance or achievements expressed or implied by the forward-looking statements. Consequently, the forward-looking statements contained herein should not be regarded as representations by Superior or any other person that the projected outcomes can or will be achieved.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2003 and 2002
(in thousands, except earnings per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------- -------------------
2003 2002 2003 2002
-------- -------- -------- --------
Revenues $128,316 $107,213 $380,368 $324,769
-------- -------- -------- --------
Costs and expenses:
Cost of services 75,449 67,136 219,897 188,514
Depreciation and
amortization 12,174 10,295 36,001 30,273
General and administrative 24,195 21,279 71,573 63,918
-------- -------- -------- --------
Total costs and expenses 111,818 98,710 327,471 282,705
-------- -------- -------- --------
Income from operations 16,498 8,503 52,897 42,064
Other income (expense):
Interest expense, net (5,611) (5,452) (16,693) (15,857)
Other income 2,762 - 2,762 -
Equity in income of
affiliates 60 113 492 258
-------- -------- -------- --------
Income before income taxes 13,709 3,164 39,458 26,465
Income taxes 4,883 1,218 14,797 10,189
-------- -------- -------- --------
Net income $ 8,826 $ 1,946 $ 24,661 $ 16,276
======== ======== ======== ========
Basic earnings per share $ 0.12 $ 0.03 $ 0.33 $ 0.22
======== ======== ======== ========
Diluted earnings per share $ 0.12 $ 0.03 $ 0.33 $ 0.22
======== ======== ======== ========
Weighted average common shares
used in computing earnings per
share:
Basic 74,035 73,765 73,933 72,615
======== ======== ======== ========
Diluted 75,169 74,543 74,952 73,634
======== ======== ======== ========
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2003 AND DECEMBER 31, 2002
(in thousands)
9/30/2003 12/31/2002
(Unaudited) (Audited)
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 20,732 $ 3,480
Accounts receivable - net 117,204 108,352
Income taxes receivable - 6,087
Prepaid insurance and other 15,807 11,663
---------- -----------
Total current assets 153,743 129,582
Property, plant and equipment - net 425,070 418,047
Goodwill - net 202,305 160,366
Investments in affiliates 12,772 12,343
Other assets - net 7,429 7,282
---------- -----------
Total assets $ 801,319 $ 727,620
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 20,306 $ 21,010
Accrued expenses 61,273 33,871
Income taxes payable 1,401 -
Current maturities of long-term debt 14,210 13,730
---------- -----------
Total current liabilities 97,190 68,611
---------- -----------
Deferred income taxes 82,755 67,333
Long-term debt 259,271 256,334
Total stockholders' equity 362,103 335,342
---------- -----------
Total liabilities and stockholders'
equity $ 801,319 $ 727,620
========== ===========
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended September 30, 2003 and 2002
(Unaudited)
(in thousands)
Revenue September 2003 September 2002
-------------- --------------
Well Intervention Group $ 50,264 $ 36,115
Marine 17,260 14,326
Rental Tools 35,351 29,401
Other Oilfield Services 25,441 27,371
-------- --------
Total $128,316 $107,213
Gross Profit (1)
Well Intervention Group $ 20,453 $ 11,701
Marine 4,817 2,870
Rental Tools 23,842 20,028
Other Oilfield Services 3,755 5,478
-------- --------
Total $ 52,867 $ 40,077
(1) Gross profit is calculated by subtracting cost of services from
revenue for each of the Company's four segments.
SOURCE: Superior Energy Services, Inc.
Superior Energy Services Inc., Harvey Terence Hall/Robert Taylor/Greg Rosenstein, 504-362-4321
