Superior Energy Services Announces First Quarter 2018 Results
The Company recorded a pre-tax charge of
“The weather and supply chain challenges experienced in the U.S. muted the impact of increased customer demand during the quarter, limiting our financial results. We are increasingly confident that current levels of demand create an environment for utilization to improve well into 2019.
“Activity levels in the Gulf of
“International activity declined during what has historically been a seasonally weak quarter for our production services segment. Well control activity was also lower sequentially.
“After more than three years of declining industry activity, the challenges we face in the oilfield today are associated with growth and expansion. For the duration of the downturn, we have been gearing our organization for this moment. It is anticipated that improved commodity prices will drive further market improvement in the U.S. during 2018 and our service lines will continue to benefit from higher utilization levels. We are also prepared for Gulf of
First Quarter 2018 Geographic Breakdown
U.S. land revenue was
Drilling Products and Services Segment
The Drilling Products and Services segment revenue in the first quarter of 2018 was
U.S. land revenue increased 16% sequentially to
Onshore Completion and Workover Services Segment
The Onshore Completion and Workover Services segment revenue in the first quarter of 2018 was
Production Services Segment
The Production Services segment revenue in the first quarter of 2018 was
U.S. land revenue decreased 5% sequentially to
Technical Solutions Segment
The Technical Solutions segment revenue in the first quarter of 2018 was
U.S. land revenue decreased 17% 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 and fluid management 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 | ||||||||||||
(in thousands, except earnings per share amounts) | ||||||||||||
(unaudited) | ||||||||||||
Three Months Ended | ||||||||||||
March 31, | December 31, | |||||||||||
2018 | 2017 | 2017 | ||||||||||
Revenues | $ | 482,318 | $ | 400,936 | $ | 497,043 | ||||||
Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion) | 343,460 | 321,986 | 356,628 | |||||||||
Depreciation, depletion, amortization and accretion | 105,719 | 114,281 | 107,565 | |||||||||
General and administrative expenses | 75,820 | 75,493 | 68,934 | |||||||||
Reduction in value of assets | - | - | 4,202 | |||||||||
Loss from operations | (42,681 | ) | (110,824 | ) | (40,286 | ) | ||||||
Other income (expense): | ||||||||||||
Interest expense, net | (24,887 | ) | (24,250 | ) | (24,776 | ) | ||||||
Other income (expense) | (1,735 | ) | 649 | (822 | ) | |||||||
Loss from continuing operations before income taxes | (69,303 | ) | (134,425 | ) | (65,884 | ) | ||||||
Income taxes | (9,355 | ) | (44,764 | ) | (87,762 | ) | ||||||
Net income (loss) from continuing operations | (59,948 | ) | (89,661 | ) | 21,878 | |||||||
Income (loss) from discontinued operations, net of income tax | 224 | (1,998 | ) | (13,285 | ) | |||||||
Net income (loss) | $ | (59,724 | ) | $ | (91,659 | ) | $ | 8,593 | ||||
Basic earnings (losses) per share: | ||||||||||||
Net income (loss) from continuing operations | $ | (0.39 | ) | $ | (0.59 | ) | $ | 0.14 | ||||
Loss from discontinued operations | - | (0.01 | ) | (0.08 | ) | |||||||
Net income (loss) | $ | (0.39 | ) | $ | (0.60 | ) | $ | 0.06 | ||||
Diluted earnings (losses) per share: | ||||||||||||
Net income (loss) from continuing operations | $ | (0.39 | ) | $ | (0.59 | ) | $ | 0.14 | ||||
Loss from discontinued operations | - | (0.01 | ) | (0.08 | ) | |||||||
Net income (loss) | $ | (0.39 | ) | $ | (0.60 | ) | $ | 0.06 | ||||
Weighted average common shares: | ||||||||||||
Basic | 154,121 | 152,701 | 153,085 | |||||||||
Diluted | 154,121 | 152,701 | 154,277 | |||||||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||
CONSOLIDATED BALANCE SHEETS | ||||||
(in thousands) | ||||||
(unaudited) | ||||||
3/31/2018 | 12/31/2017 | |||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ | 90,438 | $ | 172,000 | ||
Accounts receivable, net | 443,253 | 398,056 | ||||
Income taxes receivable | - | 959 | ||||
Prepaid expenses | 45,330 | 42,128 | ||||
Inventory and other current assets | 149,484 | 134,032 | ||||
Assets held for sale | 3,860 | 13,644 | ||||
Total current assets | 732,365 | 760,819 | ||||
Property, plant and equipment, net | 1,300,897 | 1,316,944 | ||||
Goodwill | 809,342 | 807,860 | ||||
Notes receivable | 61,087 | 60,149 | ||||
Restricted cash | 20,585 | 20,483 | ||||
Intangible and other long-term assets, net | 140,487 | 143,970 | ||||
Total assets | $ | 3,064,763 | $ | 3,110,225 | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ | 148,499 | $ | 119,716 | ||
Accrued expenses | 215,801 | 221,757 | ||||
Income taxes payable | 934 | - | ||||
Current portion of decommissioning liabilities | 22,287 | 27,261 | ||||
Current maturities of long-term debt | 744 | - | ||||
Liabilities held for sale | 4,851 | 6,463 | ||||
Total current liabilities | 393,116 | 375,197 | ||||
Deferred income taxes | 48,773 | 61,058 | ||||
Decommissioning liabilities | 104,088 | 103,136 | ||||
Long-term debt, net | 1,280,569 | 1,279,771 | ||||
Other long-term liabilities | 160,048 | 158,634 | ||||
Total stockholders' equity | 1,078,169 | 1,132,429 | ||||
Total liabilities and stockholders' equity | $ | 3,064,763 | $ | 3,110,225 | ||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
THREE MONTHS ENDED MARCH 31, 2018 AND 2017 | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
2018 | 2017 | ||||||||
Cash flows from operating activities: | |||||||||
Net loss | $ | (59,724 | ) | $ | (91,659 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||
Depreciation, depletion, amortization and accretion | 105,719 | 114,281 | |||||||
Other noncash items | (5,075 | ) | (20,486 | ) | |||||
Changes in working capital and other | (65,878 | ) | (44,861 | ) | |||||
Net cash used in operating activities | (24,958 | ) | (42,725 | ) | |||||
Cash flows from investing activities: | |||||||||
Payments for capital expenditures | (65,734 | ) | (21,188 | ) | |||||
Other | 12,135 | 4,090 | |||||||
Net cash used in investing activities | (53,599 | ) | (17,098 | ) | |||||
Cash flows from financing activities: | |||||||||
Other | (4,715 | ) | (8,706 | ) | |||||
Net cash used in financing activities | (4,715 | ) | (8,706 | ) | |||||
Effect of exchange rate changes in cash | 1,812 | 2,194 | |||||||
Net decrease in cash, cash equivalents, and restricted cash | (81,460 | ) | (66,335 | ) | |||||
Cash, cash equivalents and restricted cash at beginning of period | 192,483 | 246,092 | |||||||
Cash, cash equivalents, and restricted cash at end of period | $ | 111,023 | $ | 179,757 | |||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||||||
REVENUE BY GEOGRAPHIC REGION BY SEGMENT | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Three months ended, | |||||||||
March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||
U.S. land | |||||||||
Drilling Products and Services | $ | 40,717 | $ | 35,146 | $ | 21,162 | |||
Onshore Completion and Workover Services | 231,489 | 232,720 | 204,979 | ||||||
Production Services | 52,457 | 55,010 | 23,435 | ||||||
Technical Solutions | 6,833 | 8,161 | 9,085 | ||||||
Total U.S. land | $ | 331,496 | $ | 331,037 | $ | 258,661 | |||
Gulf of Mexico | |||||||||
Drilling Products and Services | $ | 20,989 | $ | 22,521 | $ | 23,485 | |||
Onshore Completion and Workover Services | - | - | - | ||||||
Production Services | 17,500 | 19,864 | 17,746 | ||||||
Technical Solutions | 37,562 | 34,027 | 33,717 | ||||||
Total Gulf of Mexico | $ | 76,051 | $ | 76,412 | $ | 74,948 | |||
International | |||||||||
Drilling Products and Services | $ | 23,496 | $ | 21,559 | $ | 23,784 | |||
Onshore Completion and Workover Services | - | - | - | ||||||
Production Services | 30,760 | 43,363 | 27,424 | ||||||
Technical Solutions | 20,515 | 24,672 | 16,119 | ||||||
Total International | $ | 74,771 | $ | 89,594 | $ | 67,327 | |||
Total Revenues | $ | 482,318 | $ | 497,043 | $ | 400,936 | |||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES | ||||||||||||
SEGMENT HIGHLIGHTS | ||||||||||||
(in thousands) | ||||||||||||
(unaudited) | ||||||||||||
Three months ended, | ||||||||||||
Revenues | March 31, 2018 | December 31, 2017 | March 31, 2017 | |||||||||
Drilling Products and Services | $ | 85,202 | $ | 79,226 | $ | 68,431 | ||||||
Onshore Completion and Workover Services | 231,489 | 232,720 | 204,979 | |||||||||
Production Services | 100,717 | 118,237 | 68,605 | |||||||||
Technical Solutions | 64,910 | 66,860 | 58,921 | |||||||||
Total Revenues | $ | 482,318 | $ | 497,043 | $ | 400,936 | ||||||
Adjusted Income (Loss) from Operations (1) | ||||||||||||
Drilling Products and Services | $ | 7,979 | $ | 340 | $ | (8,322 | ) | |||||
Onshore Completion and Workover Services | (7,141 | ) | (9,888 | ) | (49,128 | ) | ||||||
Production Services | (11,180 | ) | (6,464 | ) | (24,045 | ) | ||||||
Technical Solutions | 1,817 | 3,176 | (1,482 | ) | ||||||||
Corporate and other | (26,064 | ) | (23,248 | ) | (27,847 | ) | ||||||
Total Adjusted Income (Loss) from Operations | $ | (34,589 | ) | $ | (36,084 | ) | $ | (110,824 | ) | |||
Adjusted EBITDA (1) | ||||||||||||
Drilling Products and Services | $ | 37,620 | $ | 31,547 | $ | 26,407 | ||||||
Onshore Completion and Workover Services | 40,514 | 41,311 | 19 | |||||||||
Production Services | 8,100 | 12,420 | (3,456 | ) | ||||||||
Technical Solutions | 9,547 | 8,022 | 6,894 | |||||||||
Corporate and other | (24,651 | ) | (21,819 | ) | (26,407 | ) | ||||||
Total Adjusted EBITDA | $ | 71,130 | $ | 71,481 | $ | 3,457 | ||||||
(1) Adjusted income (loss) from operations and adjusted EBITDA exclude the impact of restructuring costs for the three months ended March 31, 2018 and the impact of reduction in value of assets for the three months ended December 31, 2017. There were no adjustments for the three months ended March 31, 2017. For Non-GAAP reconciliations, refer to Table 2 below. |
Non-GAAP Financial Measures
The following table reconciles net loss from continuing operations on a consolidated basis, which is the directly comparable financial result determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted income/loss from continuing operations on a consolidated basis (non-GAAP financial measure). This financial measure is provided to enhance investors’ overall understanding of the Company’s current financial performance.
Consolidated Adjusted Net Loss From Continuing Operations Reconciliation | ||||||||||||||||
(in thousands) | ||||||||||||||||
(unaudited) | ||||||||||||||||
Table 1 | ||||||||||||||||
Three months ended, | ||||||||||||||||
March 31, 2018 | December 31, 2017 | |||||||||||||||
Consolidated | Per Share | Consolidated | Per Share | |||||||||||||
Reported net income (loss) from continuing operations | $ | (59,948 | ) | $ | (0.39 | ) | $ | 21,878 | $ | 0.14 | ||||||
Reduction in value of assets and other items | 8,092 | 0.05 | 4,202 | 0.02 | ||||||||||||
Income taxes | (1,092 | ) | - | (716 | ) | - | ||||||||||
US Tax Reform (1) | - | - | (76,529 | ) | (0.49 | ) | ||||||||||
Adjusted net loss from continuing operations | $ | (52,948 | ) | $ | (0.34 | ) | $ | (51,165 | ) | $ | (0.33 | ) | ||||
(1) Recorded in Income Taxes in the condensed consolidated statement of operations. | ||||||||||||||||
The following table reconciles net income/loss from continuing operations by segment, which is the directly comparable financial results determined in accordance with Generally Accepted Accounting Principles (GAAP), to adjusted income/loss from operations and adjusted EBITDA by segment (non-GAAP financial measures). These financial measures are provided to enhance investors’ overall understanding of the Company’s current financial performance.
Reconciliation of Adjusted Income (Loss) from Operations and Adjusted EBITDA by Segment | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Table 2 | |||||||||||||||||||||||||
Three months ended, March 31, 2018 | |||||||||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Corporate and Other |
Consolidated |
||||||||||||||||||||
Reported net income (loss) from continuing operations | $ | 7,967 | $ | (10,043 | ) | $ | (14,092 | ) | $ | 2,273 | $ | (46,053 | ) | $ | (59,948 | ) | |||||||||
Restructuring and other costs | 12 | 2,902 | 2,912 | 500 | 1,766 | 8,092 | |||||||||||||||||||
Interest expense, net | - | - | - | (956 | ) | 25,843 | 24,887 | ||||||||||||||||||
Other expense | - | - | - | - | 1,735 | 1,735 | |||||||||||||||||||
Income taxes | - | - | - | - | (9,355 | ) | (9,355 | ) | |||||||||||||||||
Adjusted income (loss) from operations | $ | 7,979 | $ | (7,141 | ) | $ | (11,180 | ) | $ | 1,817 | $ | (26,064 | ) | $ | (34,589 | ) | |||||||||
Depreciation, depletion, amortization and accretion |
29,641 | 47,655 | 19,280 | 7,730 | 1,413 | 105,719 | |||||||||||||||||||
Adjusted EBITDA | $ | 37,620 | $ | 40,514 | $ | 8,100 | $ | 9,547 | $ | (24,651 | ) | $ | 71,130 | ||||||||||||
Three months ended, December 31, 2017 | |||||||||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Corporate and Other |
Consolidated |
||||||||||||||||||||
Reported net income (loss) from continuing operations | $ | (1,016 | ) | $ | (12,734 | ) | $ | (6,464 | ) | $ | 4,116 | $ | 37,976 | $ | 21,878 | ||||||||||
Reduction in value of assets | 1,356 | 2,846 | - | - | - | 4,202 | |||||||||||||||||||
Interest expense, net | - | - | - | (940 | ) | 25,716 | 24,776 | ||||||||||||||||||
Other expense | - | - | - | - | 822 | 822 | |||||||||||||||||||
Income taxes | - | - | - | - | (87,762 | ) | (87,762 | ) | |||||||||||||||||
Adjusted income (loss) from operations | $ | 340 | $ | (9,888 | ) | $ | (6,464 | ) | $ | 3,176 | $ | (23,248 | ) | $ | (36,084 | ) | |||||||||
Depreciation, depletion, amortization and accretion |
31,207 | 51,199 | 18,884 | 4,846 | 1,429 | 107,565 | |||||||||||||||||||
Adjusted EBITDA | $ | 31,547 | $ | 41,311 | $ | 12,420 | $ | 8,022 | $ | (21,819 | ) | $ | 71,481 | ||||||||||||
Three months ended, March 31, 2017 | |||||||||||||||||||||||||
Drilling Products and Services |
Onshore Completion and Workover Services |
Production Services |
Technical Solutions |
Corporate and Other |
Consolidated |
||||||||||||||||||||
Reported net loss from continuing operations | $ | (8,322 | ) | $ | (49,128 | ) | $ | (24,045 | ) | $ | (692 | ) | $ | (7,474 | ) | $ | (89,661 | ) | |||||||
Interest expense, net | - | - | - | (790 | ) | 25,040 | 24,250 | ||||||||||||||||||
Other expense | - | - | - | - | (649 | ) | (649 | ) | |||||||||||||||||
Income taxes | - | - | - | - | (44,764 | ) | (44,764 | ) | |||||||||||||||||
Loss from operations | $ | (8,322 | ) | $ | (49,128 | ) | $ | (24,045 | ) | $ | (1,482 | ) | $ | (27,847 | ) | $ | (110,824 | ) | |||||||
Depreciation, depletion, amortization and accretion |
34,729 | 49,147 | 20,589 | 8,376 | 1,440 | 114,281 | |||||||||||||||||||
EBITDA | $ | 26,407 | $ | 19 | $ | (3,456 | ) | $ | 6,894 | $ | (26,407 | ) | $ | 3,457 | |||||||||||
FOR FURTHER INFORMATION CONTACT: