Superior Energy Services Announces Third Quarter 2015 Results
The prolonged decline in market activity resulted in the Company reporting a pre-tax charge of
"We continue to operate in an extremely challenging market environment as our customers reduce spending in response to this prolonged period of low commodity prices," said
"North American customer activity trended lower and continued pricing pressure was evident across all product lines throughout the quarter. We expect these trends to continue in the fourth quarter of 2015 and in to the next year as our customers face increased financial pressure resulting from low crude oil and natural gas prices as well as significantly lower levels of liquidity than they have enjoyed in recent years.
"We have taken a measured approach to managing this downturn, progressively taking steps to lower costs across all categories. Throughout the year we have re-aligned our headcount, wages and benefits to better reflect the environment we are in. Where appropriate, we have stacked and isolated idled equipment. Most recently, we have reorganized several of our businesses with operational and commercial similarities, significantly reducing their overhead costs. This reorganization also allows us to better package these services, offering our customers an opportunity to improve efficiencies, accomplish more with less and remain competitive in this challenging environment.
"We know that cyclical downturns eventually end and when they do, the most prepared organizations benefit greatly. We are intently focused on emerging from this downturn as a stronger organization that is better positioned to provide the service reliability and operational execution our customers have come to expect from us."
Third Quarter 2015 Geographic Breakdown
U.S. land revenue was
Drilling Products and Services Segment
The Drilling Products and Services segment revenue in the third quarter of 2015 was
U.S. land revenue decreased 13% sequentially to
Onshore Completion and Workover Services Segment
The Onshore Completion and Workover Services segment revenue in the third quarter of 2015 was
Production Services Segment
The Production Services segment revenue in the third quarter of 2015 was
U.S. land revenue decreased 14% sequentially to
Technical Solutions Segment
The Technical Solutions segment revenue in the third quarter of 2015 was
U.S. land revenue increased 13% sequentially to
Conference Call Information
The Company will host a conference call at
About
The press release contains 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 the Company's 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. Such uncertainties include, but are not limited to: the cyclicality and volatility of the oil and gas industry, including changes in prevailing levels of 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 the Company may have limited or no insurance coverage or indemnification rights; the effect of regulatory programs and environmental matters on the Company's operations or prospects, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for the Company's pressure pumping services; risks associated with the uncertainty of macroeconomic and business conditions worldwide; changes in competitive and technological factors affecting the Company's operations; the potential shortage of skilled workers; risks inherent in acquiring businesses; risks associated with business growth outpacing the capabilities of the Company's infrastructure and workforce; political, economic and other risks and uncertainties associated with the Company's international operations; the Company's continued access to credit markets on favorable terms; the impact that unfavorable or unusual weather conditions could have on the Company's operations; the risks inherent in long-term fixed-price contracts; and other risks disclosed in our periodic reports filed with the
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
||||||||
Consolidated Statements of Operations |
||||||||
Three and Nine Months Ended September 30, 2015 and 2014 |
||||||||
(in thousands, except earnings per share amounts) |
||||||||
(unaudited) |
||||||||
Three Months Ended |
Nine Months Ended |
|||||||
September 30, |
September 30, |
|||||||
2015 |
2014 |
2015 |
2014 |
|||||
Revenues |
$ 601,396 |
$ 1,209,026 |
$ 2,229,415 |
$ 3,377,996 |
||||
Cost of services and rentals (exclusive of items shown separately below) |
420,485 |
721,692 |
1,468,264 |
2,023,590 |
||||
Depreciation, depletion, amortization and accretion |
146,757 |
170,154 |
467,329 |
493,437 |
||||
General and administrative expenses |
123,189 |
154,859 |
403,812 |
457,631 |
||||
Reduction in value of assets |
755,632 |
- |
1,563,269 |
- |
||||
Income (loss) from operations |
(844,667) |
162,321 |
(1,673,259) |
403,338 |
||||
Other expense: |
||||||||
Interest expense, net |
(22,622) |
(24,169) |
(71,213) |
(72,610) |
||||
Other expense |
(3,123) |
(2,051) |
(10,620) |
(1,480) |
||||
Income (loss) from continuing operations before income taxes |
(870,412) |
136,101 |
(1,755,092) |
329,248 |
||||
Income taxes |
(53,825) |
50,358 |
(161,876) |
121,822 |
||||
Net income (loss) from continuing operations |
(816,587) |
85,743 |
(1,593,216) |
207,426 |
||||
Loss from discontinued operations, net of income tax |
(4,610) |
(5,886) |
(24,107) |
(15,735) |
||||
Net income (loss) |
$ (821,197) |
$ 79,857 |
$ (1,617,323) |
$ 191,691 |
||||
Basic earnings (losses) per share: |
||||||||
Net income (loss) from continuing operations |
$ (5.42) |
$ 0.55 |
$ (10.60) |
$ 1.33 |
||||
Loss from discontinued operations |
(0.03) |
(0.03) |
(0.16) |
(0.10) |
||||
Net income (loss) |
$ (5.45) |
$ 0.52 |
$ (10.76) |
$ 1.23 |
||||
Diluted earnings (losses) per share: |
||||||||
Net income (loss) from continuing operations |
$ (5.42) |
$ 0.55 |
$ (10.60) |
$ 1.31 |
||||
Loss from discontinued operations |
(0.03) |
(0.04) |
(0.16) |
(0.10) |
||||
Net income (loss) |
$ (5.45) |
$ 0.51 |
$ (10.76) |
$ 1.21 |
||||
Weighted average common shares used in computing earnings per share: |
||||||||
Basic |
150,742 |
154,530 |
150,372 |
156,424 |
||||
Diluted |
150,742 |
156,336 |
150,372 |
158,068 |
||||
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
||||
CONSOLIDATED BALANCE SHEETS |
||||
September 30, 2015 and December 31, 2014 |
||||
(in thousands) |
||||
(unaudited) |
||||
9/30/2015 |
12/31/2014 |
|||
ASSETS |
||||
Current assets: |
||||
Cash and cash equivalents |
$ 533,674 |
$ 393,046 |
||
Accounts receivable, net |
488,848 |
926,768 |
||
Deferred income taxes |
25,288 |
32,138 |
||
Prepaid expenses |
47,714 |
74,750 |
||
Inventory and other current assets |
187,283 |
185,429 |
||
Assets held for sale |
120,520 |
116,680 |
||
Total current assets |
1,403,327 |
1,728,811 |
||
Property, plant and equipment, net |
2,372,735 |
2,733,839 |
||
Goodwill |
1,151,346 |
2,468,409 |
||
Notes receivable |
27,241 |
25,970 |
||
Intangible and other long-term assets, net |
329,739 |
420,360 |
||
Total assets |
$ 5,284,388 |
$ 7,377,389 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||
Current liabilities: |
||||
Accounts payable |
$ 99,141 |
$ 225,306 |
||
Accrued expenses |
301,903 |
363,747 |
||
Income taxes payable |
10,068 |
40,213 |
||
Current portion of decommissioning liabilities |
10,400 |
- |
||
Current maturities of long-term debt |
29,485 |
20,941 |
||
Liabilities held for sale |
8,400 |
61,840 |
||
Total current liabilities |
459,397 |
712,047 |
||
Deferred income taxes |
502,658 |
702,996 |
||
Decommissioning liabilities |
82,901 |
88,000 |
||
Long-term debt, net |
1,613,171 |
1,627,842 |
||
Other long-term liabilities |
173,843 |
166,766 |
||
Total stockholders' equity |
2,452,418 |
4,079,738 |
||
Total liabilities and stockholders' equity |
$ 5,284,388 |
$ 7,377,389 |
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
||||||
SEGMENT HIGHLIGHTS |
||||||
THREE MONTHS ENDED SEPTEMBER 30, 2015, JUNE 30, 2015 AND SEPTEMBER 30, 2014 |
||||||
(in thousands) |
||||||
(unaudited) |
||||||
Three months ended, |
||||||
Revenue |
September 30, 2015 |
June 30, 2015 |
September 30, 2014 |
|||
Drilling Products and Services |
$ 130,476 |
$ 148,670 |
$ 239,204 |
|||
Onshore Completion and Workover Services |
202,845 |
226,363 |
470,849 |
|||
Production Services |
164,001 |
208,744 |
348,793 |
|||
Technical Solutions |
104,074 |
127,007 |
150,180 |
|||
Total Revenues |
$ 601,396 |
$ 710,784 |
$ 1,209,026 |
|||
Income (Loss) from Operations |
September 30, 2015 |
June 30, 2015 |
September 30, 2014 |
|||
Drilling Products and Services |
$ 6,594 |
$ 3,231 |
$ 78,110 |
|||
Onshore Completion and Workover Services |
(795,692) |
(84,553) |
54,782 |
|||
Production Services |
(47,161) |
(772,554) |
13,374 |
|||
Technical Solutions |
(8,408) |
3,477 |
16,055 |
|||
Total Income (Loss) from Operations |
$ (844,667) |
$ (850,399) |
$ 162,321 |
|||
Adjusted Income (Loss) from Operations (1) |
September 30, 2015 |
June 30, 2015 |
September 30, 2014 |
|||
Drilling Products and Services |
$ 7,552 |
$ 19,028 |
$ 78,110 |
|||
Onshore Completion and Workover Services |
(53,501) |
(44,290) |
54,782 |
|||
Production Services |
(24,914) |
(20,977) |
13,374 |
|||
Technical Solutions |
(7,671) |
3,477 |
16,055 |
|||
Total Adjusted Income (Loss) from Operations |
$ (78,534) |
$ (42,762) |
$ 162,321 |
(1) Adjusted income (loss) from operations excludes the impact of reduction in value of assets and restructuring costs for the three months ended September 30 and June 30, 2015. |
Non-GAAP Financial Measures
The following tables reconcile consolidated net loss from continuing operations and income (loss) from operations by segment, which are the directly comparable financial results determined in accordance with Generally Accepted Accounting Principles (GAAP), to consolidated adjusted loss from continuing operations and adjusted income (loss) from operations by segment (non-GAAP financial measures). Consolidated adjusted loss from continuing operations and income (loss) from operations by segment exclude the impact of reduction in value of assets and restructuring costs. These financial measures are provided to enhance investors' overall understanding of the Company's current financial performance.
Reconciliation of As Reported Net Loss from Continuing Operations to Adjusted Net Loss From Continuing Operations |
||||||||
For the three months ended September 30 and June 30, 2015 |
||||||||
(in thousands) |
||||||||
(unaudited) |
||||||||
Three months ended, |
||||||||
September 30, 2015 |
June 30, 2015 |
|||||||
Consolidated |
Per Share |
Consolidated |
Per Share |
|||||
Reported net loss from continuing operations |
$ (816,587) |
$ (5.42) |
$ (775,132) |
$ (5.15) |
||||
Reduction in value of assets and other items, net of tax |
747,763 |
4.96 |
727,755 |
4.84 |
||||
Adjusted net loss from continuing operations |
$ (68,824) |
$ (0.46) |
$ (47,377) |
$ (0.31) |
||||
Reconciliation of As Reported Income (Loss) from Operations to Adjusted Income (Loss) From Operations |
||||||||||
For the three months ended September 30 and June 30, 2015 |
||||||||||
(in thousands) |
||||||||||
(unaudited)
|
||||||||||
Three months ended, September 30, 2015 |
||||||||||
Drilling Products and Services |
Onshore |
Production |
|
Consolidated |
||||||
Reported income (loss) from operations |
$ 6,594 |
$ (795,692) |
$ (47,161) |
$ (8,408) |
$ (844,667) |
|||||
Reduction in value of assets |
- |
740,000 |
15,632 |
- |
755,632 |
|||||
Restructuring costs |
958 |
2,191 |
6,615 |
737 |
10,501 |
|||||
Adjusted income (loss) from operations |
$ 7,552 |
$ (53,501) |
$ (24,914) |
$ (7,671) |
$ (78,534) |
|||||
Three months ended, June 30, 2015 |
||||||||||
Drilling Products and Services |
Onshore |
Production |
|
Consolidated |
||||||
Reported income (loss) from operations |
$ 3,231 |
$ (84,553) |
$ (772,554) |
$ 3,477 |
$ (850,399) |
|||||
Reduction in value of assets |
15,797 |
40,263 |
751,577 |
- |
807,637 |
|||||
Adjusted income (loss) from operations |
$ 19,028 |
$ (44,290) |
$ (20,977) |
$ 3,477 |
$ (42,762) |
|||||
FOR FURTHER INFORMATION CONTACT:
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