Investors News Release Details

HOUSTON, Nov. 03, 2023 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ending September 30, 2023. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on November 6, 2023.

For the third quarter of 2023, the Company reported net income from continuing operations of $32.6 million, or $1.62 per diluted share, and revenue of $210.4 million. This compares to net income from continuing operations of $67.4 million or $3.35 per diluted share, and revenue of $244.5 million, for the second quarter of 2023. Net income from continuing operations for the second quarter of 2023 was favorably impacted by approximately $14.9 million in income tax benefits arising from reversals of uncertain tax positions related to foreign jurisdictions and adjustments to valuation allowances on foreign operations.

The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 4) was $71.8 million for the third quarter of 2023 compared to $92.5 million in the second quarter of 2023. Refer to pages 11 and 12 for a Reconciliation of Adjusted EBITDA to GAAP results.

Brian Moore, Chief Executive Officer, commented, “I’m pleased to report Superior’s financial performance for the third quarter of 2023 was in line with expectations. Illustrative of our responsive people and their leaders, highly engineered and desirable assets, delivered by established recognized brands with strong positions in the Gulf of Mexico and international offshore markets where activity is strengthening with continued confidence in the longer-term outlook for global oil prices.”

Third Quarter 2023 Geographic Breakdown

U.S. land revenue was $45.7 million in the third quarter of 2023, a 10% decrease compared to revenue of $50.5 million in the second quarter of 2023 and was driven primarily by declines in our rental businesses as results tracked with a lower U.S. land rig count.

U.S. offshore revenue was $59.1 million in the third quarter of 2023, a decrease of 3% compared to revenue of $60.9 million in the second quarter of 2023. This change was primarily driven by declines in our completion services business unit within our Well Services segment, offset by increases from our premium drill pipe and accommodation businesses within our Rentals segment.

International revenue was $105.5 million in the third quarter of 2023, a decrease of 21% compared to revenue of $133.0 million in the second quarter of 2023, primarily due to a decline in activity from well control activities within our Well Services segment.

Third Quarter 2023 Segment Reporting

The Rentals segment revenue in the third quarter of 2023 was $113.2 million, which was roughly equal to the second quarter of 2023 as increases in U.S. offshore premium drill pipe and accommodations rentals were offset by declines in U.S. land, which was impacted by a decline in the U.S land rig counts. Adjusted EBITDA was $68.8 million, a 3% decrease from the second quarter of 2023. Adjusted EBITDA Margin (a non-GAAP measure defined on page 4) was 61%, a 2% decrease from the second quarter of 2023.

The Well Services segment revenue in the third quarter of 2023 was $97.2 million, a 26% decrease compared to revenue of $132.1 million in the second quarter of 2023, primarily from well control activities and completion services within our International markets. Adjusted EBITDA for the third quarter of 2023 was $15.1 million with an Adjusted EBITDA Margin of 16%, as compared to Adjusted EBITDA of $34.6 million with an Adjusted EBITDA Margin of 26% in the second quarter of 2023. The decrease in both Adjusted EBITDA and Adjusted EBITDA Margin for the third quarter of 2023 was largely driven by a comparatively stronger prior quarter performance in our well control and completion services business units.

Liquidity

As of September 30, 2023, the Company had cash, cash equivalents, and restricted cash of approximately $438.7 million and the availability remaining under our ABL Credit Facility was approximately $85.3 million, assuming continued compliance with the covenants under our ABL Credit Facility. We had no balances outstanding under the Credit Facility on September 30, 2023.

Total cash proceeds received during the third quarter of 2023 from the sale of non-core businesses and assets were $9.6 million compared to total cash proceeds received during the second quarter of 2023 of $3.6 million.

During the third quarter of 2023 we utilized an indirect foreign exchange mechanism known as a Blue Chip Swap (“BCS”) to remit $9.7 million U.S. dollars from Argentina through the purchase and sale of BCS securities. The transactions were completed at implied exchange rates that were approximately 123% higher than the official exchange rate resulting in a loss of $12.1 million during the third quarter of 2023.

The Company remains focused on cash conversion. Free Cash Flow (a non-GAAP measure defined on page 4) for the third quarter of 2023 totaled $30.8 million compared to $2.1 million for the second quarter of 2023. Additionally, we incurred approximately $3.4 million in decommissioning costs associated with our oil and gas platform in the Gulf of Mexico. Free Cash Flow during the second quarter of 2023 was negatively impacted by our payment of the $27.1 million use tax assessment levied against us by the Washington State Department of Revenue related to a discontinued business unit. Refer to page 8 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities.

Third quarter capital expenditures were $21.6 million. The Company expects total capital expenditures for 2023 to be approximately $80 to $85 million. Approximately 80% of total 2023 capital expenditures are targeted for the replacement of existing assets. Of the total capital expenditures, approximately 75% is expected to be invested in the Rentals segment.

2023 Guidance

Our guidance for full year 2023 remains consistent from our previous guidance provided in the second quarter of 2023, as we expect revenue to come in at a range of $880 million to $920 million with Adjusted EBITDA in a range of $310 million to $330 million. As we noted in the second quarter of 2023, our back half of 2023 results are more heavily weighted to the fourth quarter due to significant expected deliveries from our Completion Services business in the Well Services segment.

Conference Call Information

The Company’s management team will host a conference call on Monday, November 6, 2023, 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 November 6, 2024 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” 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, depreciation expense, 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 and the availability of strategic partners, 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, 2022 and Form 10-Q’s for the quarters ended March 31, June 30, and September 30, 2023 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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
Revenues
Rentals		$	113,201			$	112,411			$	104,557			$	334,433			$	297,042
Well Services			97,184				132,062				117,730				340,562				347,815
Total revenues			210,385				244,473				222,287				674,995				644,857
Cost of revenues
Rentals			37,769				35,021				33,638				109,258				101,250
Well Services			72,076				85,733				82,443				239,062				248,179
Total cost of revenues			109,845				120,754				116,081				348,320				349,429
Depreciation, depletion, amortization and accretion			20,490				20,621				20,508				61,250				77,939
General and administrative expenses			30,089				31,177				31,841				92,256				94,090
Restructuring expenses			-				-				1,223				1,983				4,441
Other (gains) and losses, net			(4,073	)			47				(13,397	)			(5,424	)			(30,263	)
Income from operations			54,034				71,874				66,031				176,610				149,221
Other income (expense):
Interest income, net			6,629				6,513				3,373				18,581				6,011
Loss on Blue Chip Swap securities			(12,120	)			-				-				(12,120	)			-
Other expense, net			(4,520	)			(1,836	)			(6,838	)			(8,508	)			(6,362	)
Income from continuing operations before income taxes			44,023				76,551				62,566				174,563				148,870
Income tax expense			(11,403	)			(9,147	)			(14,058	)			(44,615	)			(32,813	)
Net income from continuing operations			32,620				67,404				48,508				129,948				116,057
Income (loss) from discontinued operations, net of income tax			128				(9	)			17				408				(188	)
Net income		$	32,748			$	67,395			$	48,525			$	130,356			$	115,869
Income (loss) per share - basic:
Net income from continuing operations		$	1.62			$	3.35			$	2.42			$	6.46			$	5.80
Income (loss) from discontinued operations, net of income tax			0.01				-				-				0.02				(0.01	)
Net income		$	1.63			$	3.35			$	2.42			$	6.48			$	5.79
Income (loss) per share - diluted:
Net income from continuing operations		$	1.62			$	3.35			$	2.41			$	6.45			$	5.78
Income (loss) from discontinued operations, net of income tax			-				-				0.01				0.02				(0.01	)
Net income		$	1.62			$	3.35			$	2.42			$	6.47			$	5.77
Weighted-average shares outstanding
Basic			20,136				20,126				20,024				20,123				20,016
Diluted			20,159				20,143				20,090				20,144				20,074

 

SUPERIOR ENERGY SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
		September 30,				December 31,
		2023				2022
ASSETS
Current assets
Cash and cash equivalents		$	357,769			$	258,999
Accounts receivable, net			251,395				249,808
Income taxes receivable			6,046				6,665
Prepaid expenses			17,167				17,299
Inventory			87,010				65,587
Other current assets			7,185				6,276
Assets held for sale			753				11,978
Total current assets			727,325				616,612
Property, plant and equipment, net			291,144				282,376
Note receivable			72,611				69,679
Restricted cash			80,940				80,108
Deferred tax assets			68,187				97,492
Other assets, net			42,826				44,745
Total assets		$	1,283,033			$	1,191,012
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	41,760			$	31,570
Accrued expenses			103,279				116,575
Income taxes payable			15,680				11,682
Decommissioning liability			25,334				9,770
Liabilities held for sale			292				3,349
Total current liabilities			186,345				172,946
Decommissioning liability			136,233				150,901
Other liabilities			45,231				84,281
Total liabilities			367,809				408,128
Total stockholders' equity			915,224				782,884
Total liabilities and stockholders' equity		$	1,283,033			$	1,191,012

 

SUPERIOR ENERGY SERVICES, INC.
STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
Cash flows from operating activities
Net income		$	32,748			$	67,395			$	48,525			$	130,356			$	115,869
Adjustments to reconcile net income to net cash from operating activities
Depreciation, depletion, amortization and accretion			20,490				20,621				20,508				61,250				77,939
Other non-cash items			566				8,392				(5,807	)			23,357				(28,165	)
Loss on Blue Chip Swap securities			12,120				-				-				12,120				-
Washington State Tax Payment			-				(27,068	)			-				(27,068	)			-
Decommissioning Costs			(3,401	)			(2,878	)			-				(6,279	)			-
Changes in operating assets and liabilities			(10,112	)			(36,780	)			(9,445	)			(38,390	)			(43,618	)
Net cash from operating activities			52,411				29,682				53,781				155,346				122,025
Cash flows from investing activities
Payments for capital expenditures			(21,592	)			(27,540	)			(22,387	)			(67,218	)			(42,901	)
Proceeds from sales of assets			9,563				3,578				31,231				24,710				46,414
Proceeds from sales of equity securities			-				-				-				-				13,366
Proceeds from sales of Blue Chip Swap securities			9,656				-				-				9,656				-
Purchases of Blue Chip Swap securities			(21,776	)			-				-				(21,776	)			-
Net cash from investing activities			(24,149	)			(23,962	)			8,844				(54,628	)			16,879
Cash flows from financing activities
Other			-				-				-				(1,116	)			-
Net cash from financing activities			-				-				-				(1,116	)			-
Net change in cash, cash equivalents and restricted cash			28,262				5,720				62,625				99,602				138,904
Cash, cash equivalents and restricted cash at beginning of period			410,447				404,727				470,814				339,107				394,535
Cash, cash equivalents and restricted cash at end of period		$	438,709			$	410,447			$	533,439			$	438,709			$	533,439
Reconciliation of Free Cash Flow
Net cash from operating activities		$	52,411			$	29,682			$	53,781			$	155,346			$	122,025
Payments for capital expenditures			(21,592	)			(27,540	)			(22,387	)			(67,218	)			(42,901	)
Free Cash Flow		$	30,819			$	2,142			$	31,394			$	88,128			$	79,124
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												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
U.S. land
Rentals		$	37,478			$	44,730			$	39,673			$	127,341			$	117,426
Well Services			8,223				5,806				9,808				20,384				18,507
Total U.S. land			45,701				50,536				49,481				147,725				135,933
U.S. offshore
Rentals			44,681				37,516				37,829				117,867				106,913
Well Services			14,459				23,405				23,609				54,185				84,499
Total U.S. offshore			59,140				60,921				61,438				172,052				191,412
International
Rentals			31,042			$	30,165				27,055				89,225				72,703
Well Services			74,502				102,851				84,313				265,993				244,809
Total International			105,544				133,016				111,368				355,218				317,512
Total Revenues		$	210,385			$	244,473			$	222,287			$	674,995			$	644,857

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
SEGMENT HIGHLIGHTS
(in thousands, unaudited)
		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
Revenues
Rentals		$	113,201			$	112,411			$	104,557			$	334,433			$	297,042
Well Services			97,184				132,062				117,730				340,562				347,815
Total Revenues		$	210,385			$	244,473			$	222,287			$	674,995			$	644,857
Income from Operations
Rentals		$	56,253			$	58,106			$	56,291			$	167,373			$	133,635
Well Services			10,581				27,425				26,249				50,860				63,531
Corporate and other			(12,800	)			(13,657	)			(16,509	)			(41,623	)			(47,945	)
Total Income from Operations		$	54,034			$	71,874			$	66,031			$	176,610			$	149,221
Adjusted EBITDA
Rentals		$	68,791			$	70,659			$	64,141			$	204,632			$	175,030
Well Services			15,137				34,629				25,179				69,697				67,081
Corporate and other			(12,125	)			(12,793	)			(14,232	)			(37,207	)			(39,954	)
Total Adjusted EBITDA		$	71,803			$	92,495			$	75,088			$	237,122			$	202,157
Adjusted EBITDA Margin
Rentals			61	%			63	%			61	%			61	%			59	%
Well Services			16	%			26	%			21	%			20	%			19	%
Corporate and other		n/a				n/a				n/a				n/a				n/a
Total Adjusted EBITDA Margin			34	%			38	%			34	%			35	%			31	%
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 (Non-GAAP)
(in thousands, unaudited)
		Three Months Ended												Nine Months ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
Net income from continuing operations		$	32,620			$	67,404			$	48,508			$	129,948			$	116,057
Depreciation, depletion, amortization and accretion			20,490				20,621				20,508				61,250				77,939
Interest income, net			(6,629	)			(6,513	)			(3,373	)			(18,581	)			(6,011	)
Income tax expense			11,403				9,147				14,058				44,615				32,813
Restructuring expenses			-				-				1,223				1,983				4,441
Other expense, net			4,520				1,836				6,838				8,508				6,362
Loss on Blue Chip Swap Securities			12,120				-				-				12,120				-
Other adjustments (1)			(2,721	)			-				(12,674	)			(2,721	)			(29,444	)
Adjusted EBITDA		$	71,803			$	92,495			$	75,088			$	237,122			$	202,157
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 and the residual gain from revisions to our estimated decommissioning liability

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT
(in thousands, unaudited)
		Three Months Ended												Nine Months Ended
		September 30,				June 30,				September 30,				September 30,
		2023				2023				2022				2023				2022
Rentals
Income from operations		$	56,253			$	58,106			$	56,291			$	167,373			$	133,635
Depreciation, depletion, amortization and accretion			12,538				12,553				12,554				37,259				46,099
Other adjustments (1)			-				-				(4,704	)			-				(4,704	)
Adjusted EBITDA		$	68,791			$	70,659			$	64,141			$	204,632			$	175,030
Wells Services
Income from operations		$	10,581			$	27,425			$	26,249			$	50,860			$	63,531
Depreciation, depletion, amortization and accretion			7,277				7,204				6,900				21,558				28,290
Other adjustments (2)			(2,721	)			-				(7,970	)			(2,721	)			(24,740	)
Adjusted EBITDA		$	15,137			$	34,629			$	25,179			$	69,697			$	67,081
Corporate
Loss from operations		$	(12,800	)		$	(13,657	)			(16,509	)		$	(41,623	)		$	(47,945	)
Depreciation, depletion, amortization and accretion			675				864				1,054				2,433				3,550
Restructuring expenses			-				-				1,223				1,983				4,441
Adjusted EBITDA		$	(12,125	)		$	(12,793	)		$	(14,232	)		$	(37,207	)		$	(39,954	)
Total
Income from operations		$	54,034			$	71,874			$	66,031			$	176,610			$	149,221
Depreciation, depletion, amortization and accretion			20,490				20,621				20,508				61,250				77,939
Restructuring expenses			-				-				1,223				1,983				4,441
Other adjustments			(2,721	)			-				(12,674	)			(2,721	)			(29,444	)
Adjusted EBITDA		$	71,803			$	92,495			$	75,088			$	237,122			$	202,157
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA.
(1) Adjustments for disposal activities related to non-core businesses (2) Adjustments for exit and disposal activities related to non-core businesses and the residual gain from revisions to our estimated decommissioning liability