Investors News Release Details

HOUSTON, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ended June 30, 2024. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on August 16, 2024.

For the second quarter of 2024, the Company reported net income from continuing operations of $29.5 million, or $1.46 per diluted share, with revenue of $201.1 million. This compares to net income from continuing operations of $37.9 million or $1.88 per diluted share, with revenue of $208.6 million, for the first quarter of 2024.

The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 4) was $60.0 million compared to $68.1 million for the first quarter of 2024. Refer to pages 11 and 12 for a reconciliation of Adjusted EBITDA to GAAP results.

Brian Moore, Chief Executive Officer, commented, “Superior Energy’s second quarter results were consistent with the expectations indicated in our Q1 2024 Earnings Release. Recognizing changing market conditions, particularly in US Land and Latin America, our leaders and their teams’ nimble actions enabled us to deliver expected results. In the second quarter we generated $39 million Free Cash Flow while continuing to support our businesses with nearly $35 million in capital expenditures.”

Second Quarter 2024 Geographic Breakdown

U.S. land revenue was $39.0 million for the second quarter of 2024, a decrease of 16% compared to revenue of $46.5 million for the first quarter of 2024. The decline in U.S. land revenue was primarily driven by decreased activity from our premium drill pipe product line within our Rentals segment, consistent with a reduced U.S. land rig count.

U.S. offshore revenue was $53.8 million in the second quarter of 2024, a decrease of 19% compared to revenue of $66.1 million in the first quarter of 2024. U.S. offshore revenue decreased across both our Rentals and Well Services segments, with the most significant decline coming from our project based completion services product line, which had a strong first quarter of 2024.

International revenue was $108.4 million in the second quarter of 2024, an increase of 13% compared to revenue of $96.0 million in the first quarter of 2024. International revenue was up across both our Rentals and Well Services segments, with the increase being driven by our premium drill pipe business unit in the Rentals segment, and our Kuwait based production services business in the Well Services segment.

Second Quarter 2024 Segment Reporting

The Rentals segment revenue in the second quarter of 2024 was $99.9 million, an 8% decrease compared to revenue of $108.1 million in the first quarter of 2024, primarily due to decreases in U.S. land and U.S. offshore market activity for our premium drill pipe product line. In the second quarter of 2024, Rentals segment income from operations was $44.1 million as compared to $51.2 million in the first quarter of 2024. Adjusted EBITDA was $56.0 million, an 11% decrease from the first quarter of 2024. Adjusted EBITDA Margin (a non-GAAP measure defined on page 4) was 56%, a 2% decrease from the first quarter of 2024.

The Well Services segment revenue in the second quarter of 2024 was $101.2 million, a 1% increase compared to revenue of $100.5 million in the first quarter of 2024. This increase was primarily driven by improvements in our international production services businesses, which were partially offset by a decline in U.S. offshore completion service revenues. In the second quarter of 2024, Well Services segment income from operations was $10.7 million as compared to $13.4 million in the first quarter of 2024. Adjusted EBITDA for the second quarter of 2024 was $19.1 million with an Adjusted EBITDA Margin of 19%, as compared to Adjusted EBITDA of $21.5 million with an Adjusted EBITDA Margin of 21% in the first quarter of 2024.

Liquidity

As of June 30, 2024, the Company had cash, cash equivalents, and restricted cash of approximately $335.3 million. As of June 30, 2024, our borrowing base, as defined in our credit agreement, was approximately $89.4 million, and we had $36.7 million in letters of credit outstanding which reduced the borrowing availability to $52.7 million. At June 30, 2024, we had no outstanding borrowings under our credit facility.

Total cash proceeds received during the second quarter of 2024 from the sale of non-core businesses and assets were $0.7 million compared to total cash proceeds received during the first quarter of 2024 of $2.6 million. Additionally, during the first quarter of 2024, we paid a special cash dividend totaling $250.4 million to our shareholders.

During the second quarter of 2024, net cash from operating activities was $73.8 million. Free Cash Flow (a non-GAAP measure defined on page 4) for the second quarter of 2024 totaled $39.0 million as compared to $68.2 million for the first quarter of 2024. Refer to page 8 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities.

Second quarter 2024 capital expenditures were $34.7 million. The Company expects total capital expenditures for 2024 to be approximately $100 to $110 million. Approximately 89% of total 2024 capital expenditures are targeted for the replacement of existing assets. Of the total estimated 2024 capital expenditures, approximately 68% is expected to be invested in the Rentals segment.

2024 Guidance

We expect the third quarter of 2024 revenue to come in at a range of $190 million to $215 million with Adjusted EBITDA in a range of $55 million to $70 million.

In regard to full year 2024 guidance, we expect revenue to come in at a range of $780 million to $840 million with Adjusted EBITDA in a range of $235 million to $265 million.

Conference Call Information

The Company’s management team will host a conference call on Friday, August 16, 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 August 16, 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) from continuing activities before net interest expense, income tax expense (benefit) and depreciation, amortization, accretion and depletion, restructuring and transaction expenses, adjusted for other gains and losses and other expenses, net, 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,” “could,” “may” 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 subsequent reports on Form 10-Qs 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, unaudited)
		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Rentals		$	99,851			$	108,091			$	112,411			$	207,942			$	221,232
Well Services			101,230				100,543				132,062				201,773				243,378
Total revenues			201,081				208,634				244,473				409,715				464,610
Rentals			36,596				37,766				35,021				74,362				71,489
Well Services			71,672				68,873				85,733				140,545				166,986
Total cost of revenues			108,268				106,639				120,754				214,907				238,475
Depreciation, depletion, amortization and accretion			20,868				20,447				20,621				41,315				40,760
General and administrative expenses			33,404				34,975				31,177				68,379				62,167
Restructuring and transaction expenses			-				-				-				-				1,983
Other (gains) and losses, net			(614	)			(1,082	)			47				(1,696	)			(1,351	)
Income from operations			39,155				47,655				71,874				86,810				122,576
Other income (expense):
Interest income, net			5,760				6,840				6,513				12,600				11,952
Other expense			(2,082	)			(1,813	)			(1,836	)			(3,895	)			(3,988	)
Income from continuing operations before income taxes			42,833				52,682				76,551				95,515				130,540
Income tax expense			(13,370	)			(14,787	)			(9,147	)			(28,157	)			(33,212	)
Net income from continuing operations			29,463				37,895				67,404				67,358				97,328
Income (loss) from discontinued operations, net of income tax			1,896				-				(9	)			1,896				280
Net income		$	31,359			$	37,895			$	67,395			$	69,254			$	97,608
Income per share - basic:
Net income from continuing operations		$	1.46			$	1.88			$	3.35			$	3.34			$	4.84
Income (loss) from discontinued operations, net of income tax			0.09				-				-				0.09				0.01
Net income		$	1.55			$	1.88			$	3.35			$	3.43			$	4.85
Income per share - diluted
Net income from continuing operations		$	1.46			$	1.88			$	3.35			$	3.34			$	4.83
Income (loss) from discontinued operations, net of income tax			0.09				-				-				0.09				0.02
Net income		$	1.55			$	1.88			$	3.35			$	3.43			$	4.85
Weighted-average shares outstanding
Basic			20,172				20,162				20,126				20,167				20,116
Diluted			20,183				20,180				20,143				20,181				20,136

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
		June 30,				December 31,
		2024				2023
ASSETS
Current assets:
Cash and cash equivalents		$	281,254			$	391,684
Accounts receivable, net			219,488				276,868
Inventory			66,267				74,995
Income taxes receivable			12,776				10,542
Prepaid expenses			25,716				18,614
Other current assets			7,148				7,922
Total current assets			612,649				780,625
Property, plant and equipment, net			309,994				294,960
Notes receivable			71,443				69,005
Restricted cash			54,003				85,444
Deferred tax assets			55,790				67,241
Other assets, net			42,114				43,718
Total assets		$	1,145,993			$	1,340,993
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable		$	38,515			$	38,214
Accrued expenses			93,786				103,782
Income taxes payable			19,841				20,220
Decommissioning liability			27,485				21,631
Total current liabilities			179,627				183,847
Decommissioning liability			147,284				148,652
Other liabilities			39,790				47,583
Total liabilities			366,701				380,082
Total equity			779,292				960,911
Total liabilities and equity		$	1,145,993			$	1,340,993

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Cash flows from operating activities
Net income		$	31,359			$	37,895			$	67,395			$	69,254			$	97,608
Adjustments to reconcile net loss to net cash from operating activities:											-
Depreciation, depletion, amortization and accretion			20,868				20,447				20,621				41,315				40,760
Other non-cash items			4,205				3,235				8,392				7,440				22,791
Washington State Tax Settlement			-				-				(27,068	)			-				(27,068	)
Decommissioning costs			(143	)			(430	)			(2,878	)			(573	)			(2,878	)
Changes in operating assets and liabilities:			17,487				27,747				(36,780	)			45,234				(28,278	)
Net cash from operating activities			73,776				88,894				29,682				162,670				102,935
Cash flows from investing activities
Payments for capital expenditures			(34,744	)			(20,698	)			(27,540	)			(55,442	)			(45,626	)
Proceeds from sales of assets			669				2,616				3,578				3,285				15,147
Net cash from investing activities			(34,075	)			(18,082	)			(23,962	)			(52,157	)			(30,479	)
Cash flows from financing activities
Distributions to shareholders			-				(250,417	)			-				(250,417	)			-
Repurchase of shares			-				(962	)			-				(962	)			-
Other			-				(1,005	)			-				(1,005	)			(1,116	)
Net cash from financing activities			-				(252,384	)			-				(252,384	)			(1,116	)
Net change in cash, cash equivalents, and restricted cash			39,701				(181,572	)			5,720				(141,871	)			71,340
Cash, cash equivalents and restricted cash at beginning of period			295,556				477,128				404,727				477,128				339,107
Cash, cash equivalents, and restricted cash at end of period		$	335,257			$	295,556			$	410,447			$	335,257			$	410,447
Reconciliation of Free Cash Flow
Net cash from operating activities		$	73,776			$	88,894			$	29,682			$	162,670			$	102,935
Payments for capital expenditures			(34,744	)			(20,698	)			(27,540	)			(55,442	)			(45,626	)
Free Cash Flow		$	39,032			$	68,196			$	2,142			$	107,228			$	57,309
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												Six Months Ended
		June 30,				Mar 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
U.S. land
Rentals		$	32,713			$	39,006			$	44,730			$	71,719			$	89,863
Well Services			6,242				7,466				5,806				13,708				12,161
Total U.S. land			38,955				46,472				50,536				85,427				102,024
U.S. offshore
Rentals			30,644				37,251				37,516				67,895				73,186
Well Services			23,125				28,872				23,405				51,997				39,726
Total U.S. offshore			53,769				66,123				60,921				119,892				112,912
International
Rentals			36,494				31,834				30,165				68,328				58,183
Well Services			71,863				64,205				102,851				136,068				191,491
Total International			108,357				96,039				133,016				204,396				249,674
Total Revenues		$	201,081			$	208,634			$	244,473			$	409,715			$	464,610

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
SEGMENT HIGHLIGHTS
(in thousands, unaudited)
		Three Months Ended												Six Months Ended
		June 30,				Mar 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Revenues
Rentals		$	99,851			$	108,091			$	112,411			$	207,942			$	221,232
Well Services			101,230				100,543				132,062				201,773				243,378
Total Revenues		$	201,081			$	208,634			$	244,473			$	409,715			$	464,610
Income (loss) from Operations
Rentals		$	44,061			$	51,211			$	58,106			$	95,272			$	111,120
Well Services			10,686				13,392				27,425				24,078				40,279
Corporate and other			(15,592	)			(16,948	)			(13,657	)			(32,540	)			(28,823	)
Income from operations		$	39,155			$	47,655			$	71,874			$	86,810			$	122,576
Adjusted EBITDA
Rentals		$	56,023			$	63,021			$	70,659			$	119,044			$	135,841
Well Services			19,078				21,523				34,629				40,601				54,560
Corporate and other			(15,078	)			(16,442	)			(12,793	)			(31,520	)			(25,082	)
Total Adjusted EBITDA		$	60,023			$	68,102			$	92,495			$	128,125			$	165,319
Adjusted EBITDA Margin
Rentals			56	%			58	%			63	%			57	%			61	%
Well Services			19	%			21	%			26	%			20	%			22	%
Corporate and other		n/a				n/a				n/a				n/a				n/a
Total Adjusted EBITDA Margin			30	%			33	%			38	%			31	%			36	%
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA and page 12 for a reconciliation to income (loss) from operations

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA
(in thousands, unaudited)
		Three Months Ended												Six Months Ended
		June 30,				Mar 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Net income from continuing operations		$	29,463			$	37,895			$	67,404			$	67,358			$	97,328
Depreciation, depletion, amortization and accretion			20,868				20,447				20,621				41,315				40,760
Interest income, net			(5,760	)			(6,840	)			(6,513	)			(12,600	)			(11,952	)
Income tax expense			13,370				14,787				9,147				28,157				33,212
Restructuring and transaction expenses			-				-				-				-				1,983
Other losses, net			-				-				-				-
Other expense, net			2,082				1,813				1,836				3,895				3,988
Adjusted EBITDA		$	60,023			$	68,102			$	92,495			$	128,125			$	165,319
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												Six Months Ended
		June 30,				Mar 31,				June 30,				June 30,				June 30,
		2024				2024				2023				2024				2023
Rentals
Income from operations		$	44,061			$	51,211			$	58,106			$	95,272			$	111,120
Depreciation, depletion, amortization and accretion			11,962				11,810				12,553				23,772				24,721
Adjusted EBITDA		$	56,023			$	63,021			$	70,659			$	119,044			$	135,841
Well Services
Income from operations		$	10,686			$	13,392			$	27,425			$	24,078			$	40,279
Depreciation, depletion, amortization and accretion			8,392				8,131				7,204				16,523				14,281
Adjusted EBITDA		$	19,078			$	21,523			$	34,629			$	40,601			$	54,560
Corporate
Loss from operations		$	(15,592	)		$	(16,948	)		$	(13,657	)		$	(32,540	)		$	(28,823	)
Depreciation, depletion, amortization and accretion			514				506				864				1,020				1,758
Restructuring and transaction expenses			-				-				-				-				1,983
Other adjustments			-				-				-				-				-
Adjusted EBITDA		$	(15,078	)		$	(16,442	)		$	(12,793	)		$	(31,520	)		$	(25,082	)
Total
Income from operations		$	39,155			$	47,655			$	71,874			$	86,810			$	122,576
Depreciation, depletion, amortization and accretion			20,868				20,447				20,621				41,315				40,760
Restructuring and transaction expenses			-				-				-				-				1,983
Other adjustments			-				-				-				-				-
Adjusted EBITDA		$	60,023			$	68,102			$	92,495			$	128,125			$	165,319
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA.

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