Investors News Release Details

HOUSTON, May 01, 2024 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ended March 31, 2024. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on May 6, 2024.

For the first quarter of 2024, the Company reported net income from continuing operations of $37.9 million, or $1.88 per diluted share, with revenue of $208.6 million. This compares to net income from continuing operations of $44.6 million or $2.22 per diluted share, with revenue of $244.4 million, for the fourth quarter of 2023. During the fourth quarter of 2023, the Company utilized an indirect foreign mechanism known as a Blue Chip Swap (“BCS”) to remit approximately $4.3 million U.S. dollars from Argentina through the purchase and sale of BCS securities. This transaction resulted in a net loss of $7.7 million in the fourth quarter of 2023.

The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 4) was $68.1 million and net cash provided by operating activities was $88.9 million for the first quarter of 2024, which helped drive Free Cash Flow (a non-GAAP measure defined on page 4) to $68.2 million, the highest level achieved for a fiscal quarter since the Company’s emergence from bankruptcy in 2021. This compares to Adjusted EBITDA of $85.3 million, net cash provided from operations of $47.0 million, and Free Cash Flow of $39.8 million for the fourth quarter of 2023. Refer to pages 8, 11 and 12 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities and a Reconciliation of Adjusted EBITDA to GAAP results.

Brian Moore, Chief Executive Officer, commented, “Our first quarter results came in at the low end of expectations due in large part to the delay of key projects in our Well Services segment, most notably in our well control and completions services business units. Our expectation is that this activity will be realized over the remainder of 2024. Our leadership remains committed to creating value through free cash flow generation and shareholder return, both of which we realized in the first quarter with record post-emergence free cash flow for a fiscal quarter and the completion of an approximate $250 million special dividend to shareholders in March.”

First Quarter 2024 Geographic Breakdown

U.S. land revenue was $46.5 million for the first quarter of 2024, an increase of 4% compared to revenue of $44.8 million for the fourth quarter of 2023. This increase was driven primarily by increases in our hydraulic workover business within our Well Services segment.

U.S. offshore revenue was $66.1 million in the first quarter of 2024, a decrease of 31% compared to revenue of $96.3 million in the fourth quarter of 2023. While the first quarter of 2024 saw declines across all service lines in both our Rental and Well Services segments, this change was primarily driven by our Well Services segment, due to a large deepwater project in our completion services business unit in the fourth quarter of 2023.

International revenue was $96.0 million in the first quarter of 2024, a decrease of 7% compared to revenue of $103.4 million in the fourth quarter of 2023, primarily due to a decline in Latin America land activity within our Well Services segment and premium drill pipe activity within our Rental segment.

First Quarter 2024 Segment Reporting

The Rentals segment revenue in the first quarter of 2024 was $108.1 million, an 8% decrease compared to revenue of $117.8 million in the fourth quarter of 2023. This decrease is attributable to decreased revenue across all rental product service lines, which include our premium drill pipe, accommodations and bottom hole assemblies. Lower rental revenues were mainly attributable to a decline in our U.S. offshore market operations. Adjusted EBITDA was $63.0 million, a 10% decrease from the fourth quarter of 2023. Adjusted EBITDA Margin (a non-GAAP measure defined on page 4) was 58%, a 1% decrease from the fourth quarter of 2023.

The Well Services segment revenue in the first quarter of 2024 was $100.5 million, a 21% decrease compared to revenue of $126.6 million in the fourth quarter of 2023. This decrease was primarily driven by declines in our completion services business unit in the U.S. offshore market. Adjusted EBITDA for the first quarter of 2024 was $21.5 million with an Adjusted EBITDA Margin of 21%, as compared to Adjusted EBITDA of $31.2 million with an Adjusted EBITDA Margin of 25% in the fourth quarter of 2023.

Liquidity

As of March 31, 2024, the Company had cash, cash equivalents, and restricted cash of approximately $295.6 million. As of March 31, 2024, our borrowing base, as defined in our credit agreement, was approximately $120.9 million, and we had $36.7 million in letters of credit outstanding which reduced the borrowing availability to $84.2 million. At March 31, 2024, we had no outstanding borrowings under our credit facility.

Total cash proceeds received during the first quarter of 2024 from the sale of non-core businesses and assets were $2.6 million compared to total cash proceeds received during the fourth quarter of 2023 of $6.4 million. Additionally, during the first quarter of 2024, we paid a special cash dividend totaling $250.4 million to our shareholders.

First quarter 2024 capital expenditures were $20.7 million. The Company expects total capital expenditures for 2024 to be approximately $90 to $100 million. Approximately 90% of total 2024 capital expenditures are targeted for the replacement of existing assets. Of the total estimated 2024 capital expenditures, approximately 65% is expected to be invested in the Rentals segment.

2024 Guidance

We expect the second quarter of 2024 revenue to come in at a range of $185 million to $205 million with Adjusted EBITDA in a range of $50 million to $60 million.

In regard to full year 2024 guidance, we expect revenue to come in at a range of $780 million to $860 million with Adjusted EBITDA in a range of $240 million to $290 million.

We are lowering both the upper end, and lower end of our full year guidance due to updated projections related to our rental activity in our U.S. land market, as a result of lower natural gas activity. We remain well positioned in this market should activity levels improve.

Conference Call Information

The Company’s management team will host a conference call on Monday, May 6, 2024, at 10:00 a.m. Eastern Time. The call will be available via live webcast in the “Events” section at ir.superiorenergy.com. To access via phone, participants can register for the call here, where they will be provided a phone number and access code. The call will be available for replay until May 6, 2025 on Superior’s website at ir.superiorenergy.com. If you are a shareholder and would like to submit a question, please email your question beforehand to Jamie Spexarth at ir@superiorenergy.com.

About Superior Energy Services

Superior Energy Services serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialized oilfield services and equipment that are used throughout the economic life cycle of oil and gas wells. For more information, visit: www.superiorenergy.com.

Non-GAAP Financial Measures

To supplement Superior’s consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin. Management uses Adjusted EBITDA and Adjusted EBITDA Margin internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company also believes these non-GAAP measures provide investors useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings and may not be comparable to similar measures presented by other public companies. Adjusted EBITDA and Adjusted EBITDA Margin should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with GAAP. We define Adjusted EBITDA as net income (loss) before net interest expense, income tax expense (benefit) and depreciation, amortization, accretion and depletion, adjusted for other gains and losses, which management does not consider representative of our ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA by segment as a percentage of segment revenues. For a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, please see the tables under “―Superior Energy Services, Inc. and Subsidiaries Reconciliation of Adjusted EBITDA” included on pages 11 and 12 of this press release.

Free Cash Flow is defined as net cash from operating activities less payments for capital expenditures. Free Cash Flow is considered a non-GAAP financial measure under the SEC’s rules. Management believes, however, that Free Cash Flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures our ability to generate additional cash from our business operations. Free Cash Flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of Free Cash Flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Therefore, we believe it is important to view Free Cash Flow as supplemental to our entire Statement of Cash Flows.

The Company is unable to provide a reconciliation of the forward-looking non-GAAP financial measure, Adjusted EBITDA, contained in this press release to its most directly comparable GAAP financial measure, net income, as the information necessary for a quantitative reconciliation of the forward-looking non-GAAP financial measure to its respective most directly comparable GAAP financial measure is not (and was not, when prepared) available to the Company without unreasonable efforts due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP with a reasonable degree of accuracy. Net income includes the impact of depreciation, income taxes and certain other items that impact comparability between periods, which may be significant and are difficult to project with a reasonable degree of accuracy. In addition, we believe such reconciliation could imply a degree of precision that might be confusing or misleading to investors. The probable significance of providing this forward-looking non-GAAP financial measure without the directly comparable GAAP financial measure is that such GAAP financial measure may be materially different from the corresponding non-GAAP financial measure.

Forward-Looking Statements

This press release contains, and future oral or written statements or press releases by the Company and its 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”, “will” 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 and results, financial performance, liquidity, strategic alternatives (including dispositions, acquisitions, and the timing thereof), 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 the Company’s 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, including but not limited to conditions in the oil and gas industry, U.S. and global market and economic conditions generally and macroeconomic conditions worldwide, (including inflation, interest rates, supply chain disruptions and capital and credit markets conditions) that could cause the Company’s actual results to differ materially from such statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements.

While the Company believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company’s Form 10-K for the year ended December 31, 2023 and Form 10-Q’s for the quarter ended March 31, 2024 and those set forth from time to time in the Company’s other periodic filings with the Securities and Exchange Commission, which are available at www.superiorenergy.com. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

FOR FURTHER INFORMATION CONTACT:
Jamie Spexarth, Chief Financial Officer
1001 Louisiana St., Suite 2900
Houston, TX 77002
Investor Relations, ir@superiorenergy.com, (713) 654-2200

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2024				2023				2023
Rentals		$	108,091			$	117,816			$	108,821
Well Services			100,543				126,609				111,316
Total revenues			208,634				244,425				220,137
Rentals			37,766				40,577				36,468
Well Services			68,873				85,230				81,253
Total cost of revenues			106,639				125,807				117,721
Depreciation, depletion, amortization and accretion			20,447				19,818				20,139
General and administrative expenses			34,975				33,403				30,990
Restructuring and transaction expenses			-				1,311				1,983
Other gains, net			(1,082	)			(1,125	)			(1,398	)
Income from operations			47,655				65,211				50,702
Other income (expense):
Interest income, net			6,840				7,180				5,439
Loss on Blue Chip Swap Securities			-				(7,736	)			-
Other expense, net			(1,813	)			(4,883	)			(2,152	)
Income from continuing operations before income taxes			52,682				59,772				53,989
Income tax expense			(14,787	)			(15,126	)			(24,065	)
Net income from continuing operations			37,895				44,646				29,924
Income from discontinued operations, net of tax			-				18				289
Net income		$	37,895			$	44,664			$	30,213
Income per share - basic and diluted
Net income from continuing operations		$	1.88			$	2.22			$	1.49
Income from discontinued operations, net of tax			-				-				0.01
Net income		$	1.88			$	2.22			$	1.50
Weighted-average shares outstanding
Basic			20,162				20,136				20,107
Diluted			20,180				20,177				20,131

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
		March 31,				December 31,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents		$	237,845			$	391,684
Accounts receivable, net			243,416				276,868
Inventory			69,095				74,995
Income taxes receivable			10,424				10,542
Prepaid expenses			20,562				18,614
Other current assets			7,194				7,922
Total current assets			588,536				780,625
Property, plant and equipment, net			308,280				294,960
Notes receivable			70,214				69,005
Restricted cash			57,711				85,444
Deferred tax assets			61,130				67,241
Other assets, net			42,304				43,718
Total assets		$	1,128,175			$	1,340,993
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	42,949			$	38,214
Accrued expenses			95,431				103,782
Income taxes payable			24,596				20,220
Decommissioning liability			21,631				21,631
Total current liabilities			184,607				183,847
Decommissioning liability			150,733				148,652
Other liabilities			45,308				47,583
Total liabilities			380,648				380,082
Total equity			747,527				960,911
Total liabilities and equity		$	1,128,175			$	1,340,993

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
		Three Months Ended
		March 31,				-		December 31,				-		March 31,
		2024				-		2023				-		2023
Cash flows from operating activities
Net income		$	37,895					$	44,664					$	30,213
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation, depletion, amortization and accretion			20,447						19,818						20,139
Other noncash items			3,235						517						14,399
Loss on Blue Chip Swap Securities			-						7,736						-
Decommissioning cost payments			(430	)					(4,497	)					-
Changes in operating assets and liabilities:			27,747						(21,194	)					8,502
Net cash from operating activities			88,894						47,044						73,253
Cash flows from investing activities
Payments for capital expenditures			(20,698	)					(7,278	)					(18,086	)
Proceeds from sales of assets			2,616						6,389						11,569
Purchases of Blue Chip Swap Securities, net			-						(7,736	)					-
Net cash from investing activities			(18,082	)					(8,625	)					(6,517	)
Cash flows from financing activities
Distributions to shareholders			(250,417	)					-						-
Repurchase of shares			(962	)					-						-
Other			(1,005	)					-						(1,116	)
Net cash from financing activities			(252,384	)					-						(1,116	)
Net change in cash, cash equivalents, and restricted cash			(181,572	)					38,419						65,620
Cash, cash equivalents and restricted cash at beginning of period			477,128						438,709						339,107
Cash, cash equivalents, and restricted cash at end of period		$	295,556					$	477,128					$	404,727
Reconciliation of Free Cash Flow
Net cash from operating activities		$	88,894					$	47,044					$	73,253
Payments for capital expenditures			(20,698	)					(7,278	)					(18,086	)
Free Cash Flow		$	68,196					$	39,766					$	55,167
Free Cash Flow is a Non-GAAP measure. See Non-GAAP Measures for our definition of Free Cash Flow.

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
REVENUE BY GEOGRAPHIC REGION BY SEGMENT
(in thousands, unaudited)
		Three Months Ended
		March 31,			December 31,			March 31,
		2024			2023			2023
U.S. land
Rentals		$	39,006		$	39,597		$	45,133
Well Services			7,466			5,188			6,355
Total U.S. land			46,472			44,785			51,488
U.S. offshore
Rentals			37,251			43,904			35,670
Well Services			28,872			52,380			16,321
Total U.S. offshore			66,123			96,284			51,991
International
Rentals			31,834			34,315			28,018
Well Services			64,205			69,041			88,640
Total International			96,039			103,356			116,658
Total Revenues		$	208,634		$	244,425		$	220,137

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
SEGMENT HIGHLIGHTS
(in thousands, unaudited)
		Three Months Ended
		March 31,				-		December 31,				-		March 31,
		2024				-		2023				-		2023
Revenues
Rentals		$	108,091					$	117,816					$	108,821
Well Services			100,543						126,609						111,316
Total Revenues		$	208,634					$	244,425					$	220,137
Loss from Operations
Rentals		$	51,211					$	57,647					$	53,014
Well Services			13,392						23,956						12,854
Corporate and other			(16,948	)					(16,392	)					(15,166	)
Total loss from Operations		$	47,655					$	65,211					$	50,702
Adjusted EBITDA
Rentals		$	63,021					$	69,802					$	65,182
Well Services			21,523						31,194						19,931
Corporate and other			(16,442	)					(15,712	)					(12,289	)
Total Adjusted EBITDA		$	68,102					$	85,284					$	72,824
Adjusted EBITDA Margin
Rentals			58	%					59	%					60	%
Well Services			21	%					25	%					18	%
Corporate and other		n/a						n/a						n/a
Total Adjusted EBITDA Margin			33	%					35	%					33	%
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA.

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(in thousands, unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2024				2023				2023
Net income (loss) from continuing operations		$	37,895			$	44,646			$	29,924
Depreciation, depletion, amortization and accretion			20,447				19,818				20,139
Interest income, net			(6,840	)			(7,180	)			(5,439	)
Income taxes			14,787				15,126				24,065
Restructuring and transaction expenses			-				1,311				1,983
Other gains, net			-				(1,056	)			-
Other expense, net			1,813				4,883				2,152
Loss on Blue Chip Swap Securities			-				7,736				-
Adjusted EBITDA		$	68,102			$	85,284			$	72,824
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA.

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT
(in thousands, unaudited)
		Three Months Ended
		March 31,				December 31,				March 31,
		2024				2023				2023
Rentals
Income (loss) from operations		$	51,211			$	57,647			$	53,014
Depreciation, depletion, amortization and accretion			11,810				12,155				12,168
Adjusted EBITDA		$	63,021			$	69,802			$	65,182
Well Services
Income (loss) from operations		$	13,392			$	23,956			$	12,854
Depreciation, depletion, amortization and accretion			8,131				7,238				7,077
Adjusted EBITDA		$	21,523			$	31,194			$	19,931
Corporate
Income (loss) from operations		$	(16,948	)		$	(16,392	)		$	(15,166	)
Depreciation, depletion, amortization and accretion			506				425				894
Restructuring and transaction expenses			-				1,311				1,983
Other adjustments (1)			-				(1,056	)			-
Adjusted EBITDA		$	(16,442	)		$	(15,712	)		$	(12,289	)
Total
Income (loss) from operations		$	47,655			$	65,211			$	50,702
Depreciation, depletion, amortization and accretion			20,447				19,818				20,139
Restructuring and transaction expenses			-				1,311				1,983
Other adjustments			-				(1,056	)			-
Adjusted EBITDA		$	68,102			$	85,284			$	72,824
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA.
(1) Adjustments for exit and disposal activities related to non-core businesses.