Superior Energy Services Announces Second Quarter 2020 Results

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Superior Energy Services Announces Second Quarter 2020 Results

HOUSTON, Aug. 10, 2020 /PRNewswire/ -- Superior Energy Services, Inc. (NYSE: SPN) (the "Company") today announced a net loss from continuing operations for the second quarter of 2020 of $58.9 million, or $3.97 per share, on revenue of $183.9 million.  This compares to a net loss from continuing operations of $32.3 million, or $2.18 per share, for the first quarter of 2020, on revenue of $321.5 million and a net loss from continuing operations of $18.4 million, or $1.18 per share, for the second quarter of 2019, on revenue of $367.4 million

The Company reported $9.1 million in severance and other related costs, and $8.6 million of merger-related transaction costs. The resulting adjusted net loss from continuing operations for the second quarter of 2020 was $45.3 million, or $3.06 per share.

David Dunlap, President and CEO, commented, "We expected a significant reduction in oil field activity resulting from the COVID-19 related economic slow-down during the second quarter, and our sequential revenue decline of 43% was in line with those expectations. 

"As we manage these troubling and uncertain times, we have prioritized our balance sheet and cost structure.  Measures taken during the quarter include lower levels of spending, structural cost reductions, and disciplined operations, resulting in a 10% sequential increase of our cash balance, which grew to $278 million.  Our cash balance at quarter-end does not reflect a tax refund of approximately $30 million, which was received in July. 

"Despite an uncertain forward outlook, we are observing signals that oil field activity, particularly completion related operations, will increase during the second half of the year as broader economic activity improves. We expect the impact of the COVID-19 pandemic to persist well into the future, and we will continue to be agile in our approach as the landscape evolves."

Second Quarter 2020 Geographic Breakdown

U.S. land revenue was $55.0 million in the second quarter of 2020, a decrease of 59% as compared with revenue of $134.7 million in the first quarter of 2020, and a 72% decrease compared to revenue of $194.1 million in the second quarter of 2019.  U.S. offshore revenue decreased 27% to $58.6 million as compared with revenue of $80.1 million in the first quarter of 2020, and decreased 29%  from revenue of $83.0 million in the second quarter of 2019.  International revenue of $70.3 million decreased by 34% as compared with revenue of $106.8 million in the first quarter of 2020 and decreased 22% as compared to revenue of $90.4 million in the second quarter of 2019.

Drilling Products and Services Segment                                                                                         

The Drilling Products and Services segment revenue in the second quarter of 2020 was $67.4 million, a 35% decrease from first quarter 2020 revenue of $104.0 million and a 33% decrease from second quarter 2019 revenue of $100.7 million.

U.S. land revenue decreased 47% from first quarter 2020 to $19.5 million, U.S. offshore revenue decreased 23% sequentially to $28.6 million and international revenue decreased by 36% to $19.2 million.

Onshore Completion and Workover Services Segment

The Onshore Completion and Workover Services segment revenue in the second quarter of 2020 was $21.2 million, a 65% decrease from first quarter 2020 revenue of $61.2 million, and a 78% decrease from second quarter 2019 revenue of $94.6 million.

Production Services Segment

The Production Services segment revenue decreased in the second quarter of 2020 by 46% to $54.5 million from $101.5 million in the first quarter of 2020 and decreased by 47% from second quarter 2019 revenue of $103.0 million.

U.S. land revenue was $11.1 million, a 64% decrease from first quarter 2020 revenue of $30.7 millionU.S. offshore revenue decreased 44% sequentially to $6.4 million and international revenue decreased by 38% from the first quarter 2020 to $37.0 million.

Technical Solutions Segment

The Technical Solutions segment revenue in the second quarter of 2020 was $40.8 million, a 25% decrease from first quarter 2020 revenue of $54.8 million and a 41% decrease from second quarter 2019 revenue of $69.1 million.

U.S. land revenue decreased 48% sequentially to $3.2 millionU.S. offshore revenue decreased 25% sequentially to $23.6 million and international revenue decreased 18% to $14.1 million.

About Superior Energy Services 

Superior Energy Services (NYSE: SPN) 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.

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" 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 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 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. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the conditions in the oil and gas industry; the effects of public health threats, pandemics and epidemics, and the adverse impact thereof on our business, financial condition, results of operations and liquidity, including, but not limited to, our growth, operating costs, supply chain, labor availability, logistical capabilities, customer demand and industry demand generally, margins, utilization, cash position, taxes, the price of our securities, and our ability to access capital markets, including the macroeconomic effects from the continuing COVID-19 pandemic; the ability of the members of the Organization of the Petroleum Exporting Countries and its broader partners ("OPEC+") to agree on and to maintain crude oil price and production controls; our outstanding debt obligations and the potential effect of limiting our ability to fund future growth; inability to generate enough cash flows to meet our debt obligations; necessary capital financing may not be available at economic rates or at all; volatility of our common stock; operating hazards, including the significant possibility of accidents resulting in personal injury or death, or property damage for which we may have limited or no insurance coverage or indemnification rights; possibly not being fully indemnified against losses incurred due to catastrophic events; claims, litigation or other proceedings that require cash payments or could impair the Company's financial condition; credit risk associated with the customer base; the effect of regulatory programs  and environmental matters on our operations or prospects; the impact of unfavorable or unusual weather conditions could have on our operations; the potential inability to retain key employees and skilled workers; political, legal, economic and other risks and uncertainties associated with the Company's international operations; laws, regulations or practices in foreign countries could materially restrict  operations or expose us to additional risks; potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting operating results; changes in competitive and technological factors affecting operations; risks associated with the uncertainty of macroeconomic and business conditions worldwide; potential impacts of cyber-attacks on operations; counterparty risks associated with reliance on key suppliers; challenges with estimating the Company's potential liabilities related to its oil and natural gas property; risks associated with potential changes of Bureau of Ocean Energy Management security and bonding requirements for the Company's offshore platforms; the amount of the costs, fees, expenses and charges incurred as a result of terminating the Combination; the potential impact on our business and financial results due to the failure to close the Combination. 

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, the Company's Form 10-Q for the quarter ended March 31, 2020, 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.

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except earnings per share amounts)

(unaudited)

 
   

Three Months Ended

 

Six Months Ended

   

June 30,

 

March 31,

 

June 30,

   

2020

 

2019

 

2020

 

2020

 

2019

                     

Revenues

 

$      183,853

 

$      367,438

 

$      321,497

 

$       505,350

 

$     732,712

                     

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

 

128,803

 

229,532

 

211,686

 

340,489

 

469,585

Depreciation, depletion, amortization and accretion

36,786

 

51,271

 

41,355

 

78,141

 

107,614

General and administrative expenses

 

59,707

 

71,038

 

65,157

 

124,864

 

142,150

Reduction in value of assets

 

-

 

7,556

 

16,522

 

16,522

 

7,556

                     

Income/(Loss) from operations

 

(41,443)

 

8,041

 

(13,223)

 

(54,666)

 

5,807

                     

Other income (expense):

                   

  Interest expense, net

 

(24,749)

 

(24,650)

 

(25,134)

 

(49,883)

 

(49,771)

  Other income (expense)

 

821

 

490

 

(4,232)

 

(3,411)

 

(1,122)

                     

Loss from continuing operations before income taxes

(65,371)

 

(16,119)

 

(42,589)

 

(107,960)

 

(45,086)

                     

Income taxes

 

(6,508)

 

2,322

 

(10,254)

 

(16,762)

 

5,999

                     

Net loss from continuing operations

 

(58,863)

 

(18,441)

 

(32,335)

 

(91,198)

 

(51,085)

                     

Loss from discontinued operations, net of income tax

(6,243)

 

(52,609)

 

(47,129)

 

(53,372)

 

(67,670)

                     

Net loss

 

$      (65,106)

 

$      (71,050)

 

$      (79,464)

 

$     (144,570)

 

$   (118,755)

                     

Basic and diluted loss per share

                   

Net loss from continuing operations

 

$          (3.97)

 

$          (1.18)

 

$          (2.18)

 

$           (6.18)

 

$         (3.29)

Income from discontinued operations

 

(0.42)

 

(3.37)

 

(3.18)

 

(3.61)

 

(4.35)

Basic and diluted loss per share

 

$          (4.39)

 

$          (4.55)

 

$          (5.36)

 

$           (9.79)

 

$         (7.64)

                     
                     

Weighted average shares outstanding

 

14,826

 

15,600

 

14,809

 

14,767

 

15,538

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)

         
   

6/30/2020

 

12/31/2019

ASSETS

       
         

Current assets:

       

  Cash and cash equivalents

 

$       278,409

 

$       272,624

  Accounts receivable, net

 

219,410

 

332,047

  Income taxes receivable

 

32,648

 

740

  Prepaid expenses

 

42,893

 

49,132

  Inventory and other current assets

 

118,309

 

117,629

 Assets held for sale

 

116,163

 

216,197

         

        Total current assets

 

807,832

 

988,369

         

Property, plant and equipment, net 

 

599,114

 

664,949

Operating lease right-of-use assets

 

71,376

 

80,906

Goodwill

 

136,006

 

137,695

Notes receivable

 

70,350

 

68,092

Restricted cash

 

2,774

 

2,764

Intangible and other long-term assets, net

46,988

 

50,455

         

        Total assets

 

$    1,734,440

 

$    1,993,230

         

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

         

Current liabilities:

       

  Accounts payable

 

$         64,604

 

$         92,966

  Accrued expenses

 

147,304

 

182,934

  Current portion of decommissioning liabilities

3,706

 

3,649

  Liabilities held for sale

 

7,252

 

44,938

         

        Total current liabilities

 

222,866

 

324,487

         

Long-term debt, net

 

1,288,663

 

1,286,629

Decommissioning liabilities

 

135,677

 

132,632

Operating lease liabilities

 

54,087

 

62,354

Deferred income taxes 

 

2,531

 

3,247

Other long-term liabilities

 

125,743

 

134,308

         

Total stockholders' equity (deficit)

 

(95,127)

 

49,573

         

        Total liabilities and stockholders' equity (deficit)

$    1,734,440

 

$    1,993,230

         

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(in thousands)

(unaudited)

   

2020

 

2019

         

Cash flows from operating activities:

       

Net loss

 

$       (144,570)

 

$         (118,755)

Adjustments to reconcile net loss to net cash provided by operating activities:

       

Depreciation, depletion, amortization and accretion

 

78,141

 

157,657

Reduction in value of assets

 

16,522

 

31,381

Reduction in value of assets held for sale

 

49,361

 

-

Other noncash items

 

14,614

 

17,788

Changes in working capital and other

 

(14,641)

 

(19,241)

Net cash provided by (used in) operating activities 

 

(573)

 

68,830

         

Cash flows from investing activities:

       

Payments for capital expenditures

 

(30,518)

 

(79,136)

Proceeds from sales of assets

 

39,445

 

84,557

Net cash provided by investing activities 

 

8,927

 

5,421

         

Cash flows from financing activities:

       

Other

 

(208)

 

(1,026)

Net cash used in financing activities

 

(208)

 

(1,026)

         

Effect of exchange rate changes in cash

 

(2,351)

 

(102)

         

Net change in cash, cash equivalents, and restricted cash

5,795

 

73,123

         

Cash, cash equivalents and restricted cash at beginning of period

 

275,388

 

163,748

         

Cash, cash equivalents, and restricted cash at end of period

 

$         281,183

 

$          236,871

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

REVENUE BY GEOGRAPHIC REGION BY SEGMENT

(in thousands)

(unaudited)

 
   

Three months ended, 

   
   

June 30, 2020

 

March 31, 2020

 

June 30, 2019

   

U.S. land

               

     Drilling Products and Services

$                    19,538

 

$                    36,656

 

$                    47,267

   

     Onshore Completion and Workover Services

21,180

 

61,218

 

94,618

   

     Production Services

 

11,097

 

30,667

 

38,808

   

     Technical Solutions

 

3,166

 

6,137

 

13,385

   

Total U.S. land

 

$                    54,981

 

$                  134,678

 

$                  194,078

   
                 

U.S. offshore

               

     Drilling Products and Services

$                    28,587

 

$                    37,224

 

$                    28,085

   

     Onshore Completion and Workover Services

-

 

-

 

-

   

     Production Services

 

6,363

 

11,299

 

21,410

   

     Technical Solutions

 

23,611

 

31,533

 

33,492

   

Total U.S. offshore

 

$                    58,561

 

$                    80,056

 

$                    82,987

   
                 

International

               

     Drilling Products and Services

$                    19,225

 

$                    30,113

 

$                    25,330

   

     Onshore Completion and Workover Services

-

 

-

 

-

   

     Production Services

 

37,033

 

59,538

 

42,784

   

     Technical Solutions

 

14,053

 

17,112

 

22,259

   

Total International

 

$                    70,311

 

$                  106,763

 

$                    90,373

   
                 

Total Revenues

 

$                  183,853

 

$                  321,497

 

$                  367,438

   
                 

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

(in thousands)

(unaudited)

 
   

Three months ended, 

 

Revenues

 

June 30, 2020

(1)

March 31, 2020

(1)

June 30, 2019

(1)

Drilling Products and Services

$                   67,350

 

$                 103,993

 

$                 100,682

 

Onshore Completion and Workover Services

21,180

 

61,218

 

94,618

 

Production Services

 

54,493

 

101,504

 

103,002

 

Technical Solutions

 

40,830

 

54,782

 

69,136

 

Total Revenues

 

$                 183,853

 

$                  321,497

 

$                  367,438

 
               

Income (Loss) from Operations

           

Drilling Products and Services

$                    18,804

 

$                    36,867

 

$                    26,087

 

Onshore Completion and Workover Services

(10,321)

 

(1,870)

 

3,031

 

Production Services

 

(7,350)

 

756

 

3,442

 

Technical Solutions

 

(4,709)

 

(2,292)

 

8,473

 

Corporate and other

 

(20,206)

 

(19,803)

 

(24,174)

 

Total Income from Operations

 

$                  (23,782)

 

$                    13,658

 

$                    16,859

 
               

EBITDA

             

Drilling Products and Services

$                    34,632

 

$                    54,657

 

$                    47,577

 

Onshore Completion and Workover Services

(4,807)

 

4,443

 

12,471

 

Production Services

 

2,832

 

11,594

 

16,614

 

Technical Solutions

 

(374)

 

3,053

 

14,452

 

Corporate and other

 

(19,279)

 

(18,734)

 

(22,984)

 

Total EBITDA

 

$                    13,004

 

$                    55,013

 

$                    68,130

 
               

(1) Income (loss) from operations and EBITDA exclude the impact of special items for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019.  For Non-GAAP reconciliations, refer to Table 2 below.

 
 
 

 

 

 

Reconciliation of Consolidated Adjusted Net Loss From Continuing Operations

       

(in thousands)

       

(unaudited)

       

Table 1

       
                         
   

Three months ended,

   

June 30, 2020

 

March 31, 2020

 

June 30, 2019

   

Consolidated

 

Per Share

 

Consolidated

 

Per Share

 

Consolidated

 

Per Share

                         

Reported net loss from continuing operations

 

$           (58,863)

 

$      (3.97)

 

$           (32,335)

 

$      (2.18)

 

$           (18,441)

 

$          (1.18)

                         

Reduction in value of assets

 

-

 

-

 

16,522

 

1.12

 

7,556

 

0.48

Severance and other related costs

 

9,104

 

0.61

 

6,020

 

0.41

 

1,262

 

0.08

Merger-related transaction costs

 

8,557

 

0.58

 

4,339

 

0.29

 

-

 

-

Income taxes

 

(4,097)

 

(0.28)

 

(6,236)

 

(0.42)

 

(2,046)

 

(0.13)

                         

Adjusted net loss from continuing operations

 

$            (45,299)

 

$       (3.06)

 

$           (11,690)

 

$       (0.78)

 

$            (11,669)

 

$         (0.75)

 

 

 

Reconciliation of Adjusted Income (Loss) from Operations and Adjusted EBITDA by Segment

(in thousands)

(unaudited)

Table 2

                         
   

Three months ended June 30, 2020

   

Drilling Products and Services

 

Onshore
Completion
and Workover
Services

 

Production
Services

 


Technical
Solutions

 

Corporate and Other

 

Consolidated

                         

Reported net income (loss) from continuing operations

 

$            18,108

 

$          (12,578)

 

$        (11,162)

 

$          (5,788)

 

$         (47,443)

 

$          (58,863)

Severance and other related costs

696

 

2,257

 

3,812

 

2,183

 

156

 

9,104

Merger-related costs

 

-

 

-

 

-

 

-

 

8,557

 

8,557

Interest expense, net

 

-

 

-

 

-

 

(1,104)

 

25,853

 

24,749

Other expense

 

-

 

-

 

-

 

-

 

(821)

 

(821)

Income taxes

 

-

 

-

 

-

 

-

 

(6,508)

 

(6,508)

Income (loss) from operations

 

$             18,804

 

$           (10,321)

 

$           (7,350)

 

$           (4,709)

 

$          (20,206)

 

$           (23,782)

Depreciation, depletion, amortization
  and accretion

 

15,828

 

5,514

 

10,182

 

4,335

 

927

 

36,786

Adjusted EBITDA 

 

$             34,632

 

$              (4,807)

 

$            2,832

 

$              (374)

 

$          (19,279)

 

$             13,004

                         
                         
   

Three months ended March 31, 2020

   

Drilling Products and Services

 

Onshore
Completion
and Workover
Services

 

Production
Services

 


Technical
Solutions

 

Corporate and Other

 

Consolidated

                         

Reported net income (loss) from continuing operations

 

$            36,727

 

$             (2,998)

 

$           (3,897)

 

$         (17,329)

 

$          (44,838)

 

$           (32,335)

Severance and other related costs

140

 

1,128

 

557

 

3,784

 

411

 

6,020

Merger-related costs

 

-

 

-

 

-

 

-

 

4,339

 

4,339

Reduction in value of assets

 

-

 

-

 

4,096

 

12,426

 

-

 

16,522

Interest expense, net

 

-

 

-

 

-

 

(1,173)

 

26,307

 

25,134

Other expense

 

-

 

-

 

-

 

-

 

4,232

 

4,232

Income taxes

 

-

 

-

 

-

 

-

 

(10,254)

 

(10,254)

 Adjusted income (loss) from operations

$            36,867

 

$              (1,870)

 

$               756

 

$           (2,292)

 

$          (19,803)

 

$            13,658

Depreciation, depletion, amortization
  and accretion

 

17,790

 

6,313

 

10,838

 

5,345

 

1,069

 

41,355

Adjusted EBITDA 

 

$            54,657

 

$               4,443

 

$          11,594

 

$            3,053

 

$          (18,734)

 

$            55,013

                         
                         
   

Three months ended June 30, 2019

   

Drilling Products and Services

 

Onshore
Completion
and Workover
Services

 

Production
Services

 


Technical
Solutions

 

Corporate and Other

 

Consolidated

                         

Reported net income (loss) from continuing  operations

 

$            26,087

 

$              (4,525)

 

$            3,442

 

$            9,508

 

$          (52,953)

 

$           (18,441)

Severance and other related costs

-

 

-

 

-

 

-

 

1,262

 

1,262

Reduction in value of assets

 

-

 

7,556

 

-

 

-

 

-

 

7,556

Interest expense, net

 

-

 

-

 

-

 

(1,035)

 

25,685

 

24,650

Other expense

 

-

 

-

 

-

 

-

 

(490)

 

(490)

Income taxes

 

-

 

-

 

-

 

-

 

2,322

 

2,322

 Adjusted income (loss) from operations

$            26,087

 

$               3,031

 

$            3,442

 

$            8,473

 

$          (24,174)

 

$             16,859

Depreciation, depletion, amortization
  and accretion

 

21,490

 

9,440

 

13,172

 

5,979

 

1,190

 

51,271

Adjusted EBITDA 

 

$            47,577

 

$             12,471

 

$          16,614

 

$          14,452

 

$          (22,984)

 

$             68,130

                         

 

 

 

Cision View original content:http://www.prnewswire.com/news-releases/superior-energy-services-announces-second-quarter-2020-results-301108654.html

SOURCE Superior Energy Services, Inc.

FOR FURTHER INFORMATION CONTACT: Paul Vincent, VP of Treasury and Investor Relations, (713) 654-2200, 1001 Louisiana St., Suite 2900, Houston, TX 77002, NYSE: SPN