UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 7, 2024, Superior Energy Services, Inc., a Delaware corporation, announced, among other things, its financial results for the fiscal quarter and full year ended December 31, 2023 and a conference call with its shareholders. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated by reference. The information contained in this Item 2.02 (including the exhibit hereto) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01 Regulation FD Disclosure.
The information from Item 2.02 of this Current Report on Form 8-K is hereby incorporated into this Item 7.01 by reference.
The information contained in this Item 7.01 (including the exhibit hereto) shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. |
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Exhibit Description |
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104 |
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Cover Page Interactive Data File (Embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Superior Energy Services, Inc. |
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Date: |
March 7, 2024 |
By: |
/s/ James W. Spexarth |
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James W. Spexarth |
Exhibit 99.1
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 ANNOUNCES
FOURTH QUARTER 2023 RESULTS AND CONFERENCE CALL
Houston, March 7, 2024 – Superior Energy Services, Inc. (the “Company”) reported its results for the fiscal quarter and full year ended December 31, 2023. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on March 11, 2024.
For the fourth quarter of 2023, the Company reported net income from continuing operations of $44.6 million, or $2.21 per diluted share, and revenue of $244.4 million. This compares to net income from continuing operations of $32.6 million or $1.62 per diluted share, and revenue of $210.4 million, for the third quarter of 2023. During the third and fourth quarters of 2023, we utilized an indirect foreign mechanism known as a Blue Chip Swap (“BCS”) to remit a total of $13.9 million U.S. dollars from Argentina through the purchase and sale of BCS securities. These transactions resulted in a net loss of $12.1 million and $7.8 million in the third and fourth quarter of 2023, respectively.
For the year ended December 31, 2023, net income from continuing operations was $174.6 million, or $8.66 per diluted share, with revenue of $919.4 million. Net income from continuing operations for 2023 was impacted by the purchase and sale of BCS securities, which resulted in a net loss of $19.9 million in 2023. For the year ended December 31, 2022, net income from continuing operations was $291.0 million, or $14.49 per diluted share, and revenue of $884.0 million. Net income from continuing operations for 2022 was impacted by recognition of a worthless stock deduction and valuation allowance releases with estimated net tax benefits of $104.0 million and $18.5 million, respectively. Additionally, an immaterial misstatement was identified and recorded during 2023 related to the worthless stock deduction, resulting in additional income tax expense of $7.6 million.
The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 5) was $85.3 million for the fourth quarter of 2023 compared to $71.8 million in the third quarter of 2023. For the full year, Adjusted EBITDA was $322.4 million compared to $282.1 million in 2022. Refer to pages 13 and 14 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 fourth quarter of 2023 was in line with expectations. Our results are illustrative of our responsive people and their leaders, our highly engineered and desirable assets, and established recognized brands with strong positions in their respective markets. We appreciate our people, customers and suppliers for their continued contributions, not only with our strong year-end, but throughout a very good 2023 at Superior Energy.”
1
Fourth Quarter 2023 Geographic Breakdown
U.S. land revenue was $44.8 million in the fourth quarter of 2023, a 2% decrease compared to revenue of $45.7 million in the third quarter of 2023 and was driven primarily by declines in our hydraulic workover and snubbing activities and well control services components within Well Services alongside a lower U.S. land rig count.
U.S. offshore revenue was $96.3 million in the fourth quarter of 2023, an increase of 63% compared to revenue of $59.1 million in the third quarter of 2023. The increase was driven by a large deepwater project in our completion services business unit.
International revenue was $103.4 million in the fourth quarter of 2023, a decrease of 2% compared to revenue of $105.5 million in the third quarter of 2023, primarily due to a decline in activity from well control services within our Well Services segment. This was partially offset by increases in international premium drill pipe activities within our Rental Services segment.
Fourth Quarter 2023 Segment Reporting
The Rentals segment revenue in the fourth quarter of 2023 was $117.8 million, an increase of 4% compared to revenue of $113.2 million in the third quarter of 2023 due to increases in premium drill pipe activity across all geographic locations. Adjusted EBITDA for the fourth quarter of 2023 was $69.8 million, a 1% increase from the third quarter of 2023. Adjusted EBITDA Margin (a non-GAAP measure defined on page 5) was 59%, a 2% decrease from the third quarter of 2023.
The Well Services segment revenue in the fourth quarter of 2023 was $126.6 million, a 30% increase compared to revenue of $97.2 million in the third quarter of 2023, primarily from completion services within our U.S. offshore markets. Adjusted EBITDA for the fourth quarter of 2023 was $31.2 million with an Adjusted EBITDA Margin of 25%, as compared to Adjusted EBITDA of $15.1 million with an Adjusted EBITDA Margin of 16% in the third quarter of 2023. The increase in both Adjusted EBITDA and Adjusted EBITDA Margin for the fourth quarter of 2023 was largely driven by improved results from our completion services business unit.
Calendar Year 2023 Segment Reporting
The Rentals segment revenue in 2023 was $452.2 million, a 12% increase compared to revenue of $402.9 million in 2022. This increase is primarily attributable to increased revenue across all rental product service lines, which include our premium drill pipe, accommodations and bottom hole assemblies. Adjusted EBITDA of $274.4 million contributed 73% of the Company’s total Adjusted EBITDA before including corporate costs. Full year 2023 Adjusted EBITDA Margin within Rentals was 61%, a 2% increase from the 2022 margin of 59%. The increase in margins was primarily driven by higher offshore and international rig counts that provided for greater utilization of these rentals.
The Well Services segment revenue in 2023 was $467.2 million, a 3% decrease compared to revenue of $481.0 million in 2022. Revenues in 2023 were impacted by the disposition of certain non-core businesses in second half of 2022 and 2023 which negatively affected revenues by $36.0 million in 2023. Excluding the impact of these dispositions, revenues in 2023 increased $22.2 million from improvements in our completion services and well control service lines. Adjusted EBITDA for 2023 was $100.9 million for an Adjusted EBITDA Margin of 22%, a 2% increase from the 2022 margin of 20%. This increase was driven by continued increases in service revenues with higher margins, such as our U.S. offshore and international completions and international well control
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services. Additionally, increased offshore and international rig counts allowed for higher activity in our U.S. offshore and international operations.
Liquidity
As of December 31, 2023, the Company had cash, cash equivalents, and restricted cash of approximately $477.1 million and the availability remaining under our ABL Credit Facility was approximately $108.5 million, assuming continued compliance with the covenants under our ABL Credit Facility. We had no balances outstanding under the Credit Facility on December 31, 2023.
Total cash proceeds received during the fourth quarter of 2023 from the sale of non-core businesses and assets were $6.4 million compared to $9.6 million received during the third quarter of 2023.
During the third and fourth quarters of 2023, we received cash proceeds from the utilization of an indirect foreign exchange mechanism known as a Blue Chip Swap (“BCS”). We received cash proceeds related to the sale of BCS securities of approximately $4.3 million during the fourth quarter of 2023 and $9.7 million during the third quarter of 2023. Additionally, during 2023, we paid $27.1 million to the Washington State Department of Revenue related to a use tax assessment from several years ago that we have appealed and is currently under review. During the third and fourth quarters of 2023, we incurred approximately $3.4 million and $4.5 million in decommissioning costs associated with our oil and gas platform in the Gulf of Mexico.
The Company remains focused on cash conversion. Free Cash Flow (a non-GAAP measure defined on page 5) for the fourth quarter of 2023 totaled $39.8 million compared to $30.8 million for the third quarter of 2023. Fourth quarter capital expenditures were $7.3 million, and capital expenditures for the year ended December 31, 2023 totaled $74.5 million. Refer to page 10 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities.
In the fourth quarter of 2023, our Board declared a special cash dividend of $12.38 per share on our outstanding Class A Common Stock. The special dividend is expected to be paid on March 12, 2024 to shareholders of record as of February 27, 2024.
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2024 Guidance
Regarding 2024 guidance, there are four key drivers that we expect to impact projected 2024 results with a decline in both revenue and Adjusted EBITDA as compared to 2023.
Based on the previously noted factors, we expect first quarter 2024 revenue to come in between $210 million to $240 million and first quarter 2024 Adjusted EBITDA is expected to be between $65 million to $80 million.
For full year 2024 guidance, we expect revenue to come in at a range of $800 million to $875 million with Adjusted EBITDA in a range of $250 million to $310 million. Full year capital spending is expected to be in a range of $90 million to $110 million.
The Company’s 2024 outlook reflects its expectation for continued execution consistent with its 2023 results notwithstanding the shift in U.S. Gulf of Mexico rig operations from more completion oriented operations in 2023 to more drilling oriented operations in 2024. This is not necessarily driven by commodity prices or long-term development strategies, but by normal sequencing of operations as determined by our customers. This shift will likely negatively impact revenue mix and margins, but we believe rig operations are likely to cycle back toward completion oriented operations in 2025 with our consolidated revenue mix and margins expected to be similar to what we delivered in 2023.
Strategic Outlook
The Company’s positive performance in 2023 validates the strategy developed in 2021 with a sequential focus on product lines, geographic footprint and support cost rationalization. Over the last three years, we have met and overcome challenges and delivered on safety, service quality and financial performance. We have consistently demonstrated discipline and stewardship as evidenced by our return of cash to shareholders, with an approximately $250 million dividend in December 2022 and an additional approximately $250 million dividend expected in March 2024, all while retaining a strong capital structure.
In 2024, the Company will continue to explore alternatives to enhance shareholder value, including potential merger or acquisition opportunities. As part of this process, we remain in, and continue to pursue, preliminary or exploratory dialogue with various potential counterparties. In parallel, the Company will continue to seek opportunities to optimize its capital structure, including actions to facilitate additional return of capital to shareholders.
Our Board has not set a timetable or made any decisions related to further actions or potential strategic alternatives, including a future dividend, at this time. The declaration of dividends is at the discretion of the
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Company’s board of directors and will depend on the Company’s financial results, cash requirements, future prospects, contractual restrictions and other factors deemed relevant by the Company’s board of directors. Additionally, any potential transaction would depend upon entry into definitive agreements with a potential counterparty on terms acceptable to us. There can be no assurance that we will enter any such transaction or consummate or pursue any transaction or other strategic alternative.
Conference Call Information
The Company’s management team will host a conference call on Monday, March 11th, 2024 at 1:00 PM CST. 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 March 11th, 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 https://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 13 and 14 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
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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.
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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, the special dividend payable in 2024, 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, 2023, Form 10-Q for any subsequent interim period, and those set forth from time to time in the Company’s other current or 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.
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SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
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CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, unaudited) |
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Three Months Ended |
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Year Ended |
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December 31, |
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September 30, |
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December 31, |
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December 31, |
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2023 |
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2023 |
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2022 |
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2023 |
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2022 |
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Revenues |
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Rentals |
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$ |
117,816 |
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$ |
113,201 |
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$ |
105,900 |
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$ |
452,249 |
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$ |
402,942 |
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Well Services |
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126,609 |
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97,184 |
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133,203 |
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467,171 |
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481,018 |
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Total revenues |
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244,425 |
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210,385 |
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239,103 |
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919,420 |
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883,960 |
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Cost of revenues |
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Rentals |
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40,577 |
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37,769 |
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36,380 |
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149,835 |
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137,626 |
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Well Services |
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85,230 |
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72,076 |
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91,142 |
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324,292 |
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339,325 |
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Total cost of revenues |
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125,807 |
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109,845 |
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127,522 |
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474,127 |
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476,951 |
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Depreciation, depletion, amortization and accretion |
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19,818 |
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20,490 |
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20,121 |
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81,068 |
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98,060 |
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General and administrative expenses |
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33,403 |
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30,089 |
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34,204 |
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125,659 |
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128,294 |
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Restructuring and transaction expenses |
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1,311 |
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- |
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1,934 |
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3,294 |
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6,375 |
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Other (gains) and losses, net |
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(1,125 |
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(4,073 |
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1,129 |
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(6,549 |
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(29,134 |
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Income from operations |
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65,211 |
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54,034 |
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54,193 |
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241,821 |
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203,414 |
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Other income (expense): |
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Interest income, net |
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7,180 |
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6,629 |
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5,702 |
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25,761 |
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11,713 |
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Loss on Blue Chip Swap securities |
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(7,736 |
) |
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(12,120 |
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- |
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(19,856 |
) |
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- |
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Other income (expense), net |
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(4,883 |
) |
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(4,520 |
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4,558 |
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(13,391 |
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(1,804 |
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Income from continuing operations before income taxes |
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59,772 |
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44,023 |
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64,453 |
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234,335 |
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213,323 |
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Income tax benefit (expense) |
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(15,126 |
) |
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(11,403 |
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110,532 |
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(59,741 |
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77,719 |
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Net income from continuing operations |
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44,646 |
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32,620 |
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174,985 |
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174,594 |
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291,042 |
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Income (loss) from discontinued operations, net of income tax |
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18 |
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128 |
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(4,389 |
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426 |
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(4,577 |
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Net income |
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$ |
44,664 |
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$ |
32,748 |
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$ |
170,596 |
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$ |
175,020 |
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$ |
286,465 |
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Income (loss) per share - basic: |
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Net income from continuing operations |
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$ |
2.22 |
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$ |
1.62 |
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$ |
8.73 |
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$ |
8.68 |
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$ |
14.53 |
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Income (loss) from discontinued operations, net of income tax |
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- |
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0.01 |
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(0.22 |
) |
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0.02 |
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(0.22 |
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Net income |
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$ |
2.22 |
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$ |
1.63 |
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$ |
8.51 |
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$ |
8.70 |
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$ |
14.31 |
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Income (loss) per share - diluted: |
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Net income from continuing operations |
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$ |
2.21 |
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$ |
1.62 |
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$ |
8.69 |
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$ |
8.66 |
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$ |
14.49 |
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Income (loss) from discontinued operations, net of income tax |
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- |
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- |
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(0.21 |
) |
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0.02 |
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(0.23 |
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Net income |
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$ |
2.21 |
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$ |
1.62 |
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$ |
8.48 |
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$ |
8.68 |
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$ |
14.26 |
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Weighted-average shares outstanding |
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Basic |
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20,136 |
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|
|
20,136 |
|
|
|
20,049 |
|
|
|
20,126 |
|
|
|
20,024 |
|
Diluted |
|
|
20,177 |
|
|
|
20,159 |
|
|
|
20,125 |
|
|
|
20,152 |
|
|
|
20,087 |
|
8
SUPERIOR ENERGY SERVICES, INC. |
|
|||||||
CONSOLIDATED BALANCE SHEETS |
|
|||||||
(in thousands, unaudited) |
|
|||||||
|
|
|
|
|
|
|
||
|
|
December 31, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
391,684 |
|
|
$ |
258,999 |
|
Accounts receivable, net |
|
|
276,868 |
|
|
|
249,808 |
|
Income taxes receivable |
|
|
10,542 |
|
|
|
6,665 |
|
Prepaid expenses |
|
|
18,614 |
|
|
|
17,299 |
|
Inventory |
|
|
74,995 |
|
|
|
65,587 |
|
Other current assets |
|
|
7,922 |
|
|
|
6,276 |
|
Assets held for sale |
|
|
- |
|
|
|
11,978 |
|
Total current assets |
|
|
780,625 |
|
|
|
616,612 |
|
Property, plant and equipment, net |
|
|
294,960 |
|
|
|
282,376 |
|
Note receivable |
|
|
69,005 |
|
|
|
69,679 |
|
Restricted cash |
|
|
85,444 |
|
|
|
80,108 |
|
Deferred tax assets |
|
|
67,241 |
|
|
|
97,492 |
|
Other assets, net |
|
|
43,718 |
|
|
|
44,745 |
|
Total assets |
|
$ |
1,340,993 |
|
|
$ |
1,191,012 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
38,214 |
|
|
$ |
31,570 |
|
Accrued expenses |
|
|
103,782 |
|
|
|
116,575 |
|
Income taxes payable |
|
|
20,220 |
|
|
|
11,682 |
|
Decommissioning liability |
|
|
21,631 |
|
|
|
9,770 |
|
Liabilities held for sale |
|
|
- |
|
|
|
3,349 |
|
Total current liabilities |
|
|
183,847 |
|
|
|
172,946 |
|
Decommissioning liability |
|
|
148,652 |
|
|
|
150,901 |
|
Other liabilities |
|
|
47,583 |
|
|
|
84,281 |
|
Total liabilities |
|
|
380,082 |
|
|
|
408,128 |
|
Total stockholders' equity |
|
|
960,911 |
|
|
|
782,884 |
|
Total liabilities and stockholders' equity |
|
$ |
1,340,993 |
|
|
$ |
1,191,012 |
|
9
SUPERIOR ENERGY SERVICES, INC. |
||||||||||||||
STATEMENTS OF CASH FLOWS |
||||||||||||||
(in thousands, unaudited) |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
Year Ended |
||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
|
December 31, |
|||||
|
|
2023 |
|
|
2023 |
|
|
|
2023 |
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
|
|
|
|||
Net income |
|
$ |
44,664 |
|
|
$ |
32,748 |
|
|
|
$ |
175,020 |
|
|
Adjustments to reconcile net income to net cash from operating activities |
|
|
- |
|
|
|
|
|
|
|
|
|
||
Depreciation, depletion, amortization and accretion |
|
|
19,818 |
|
|
|
20,490 |
|
|
|
|
81,068 |
|
|
Other non-cash items |
|
|
517 |
|
|
|
566 |
|
|
|
|
23,874 |
|
|
Loss on Blue Chip Swap securities |
|
|
7,736 |
|
|
|
12,120 |
|
|
|
|
19,856 |
|
|
Washington State Tax Payment |
|
|
- |
|
|
|
- |
|
|
|
|
(27,068 |
) |
|
Decommissioning Costs |
|
|
(4,497 |
) |
|
|
(3,401 |
) |
|
|
|
(10,776 |
) |
|
Changes in operating assets and liabilities |
|
|
(21,194 |
) |
|
|
(10,112 |
) |
|
|
|
(59,584 |
) |
|
Net cash from operating activities |
|
|
47,044 |
|
|
|
52,411 |
|
|
|
|
202,390 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
|
|
|
|||
Payments for capital expenditures |
|
|
(7,278 |
) |
|
|
(21,592 |
) |
|
|
|
(74,496 |
) |
|
Proceeds from sales of assets |
|
|
6,389 |
|
|
|
9,563 |
|
|
|
|
31,099 |
|
|
Proceeds from sales of Blue Chip Swap securities |
|
|
4,256 |
|
|
|
9,656 |
|
|
|
|
13,912 |
|
|
Purchases of Blue Chip Swap securities |
|
|
(11,992 |
) |
|
|
(21,776 |
) |
|
|
|
(33,768 |
) |
|
Net cash from investing activities |
|
|
(8,625 |
) |
|
|
(24,149 |
) |
|
|
|
(63,253 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
|
|
|
|||
Other |
|
|
- |
|
|
|
- |
|
|
|
|
(1,116 |
) |
|
Net cash from financing activities |
|
|
- |
|
|
|
- |
|
|
|
|
(1,116 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Net change in cash, cash equivalents and restricted cash |
|
|
38,419 |
|
|
|
28,262 |
|
|
|
|
138,021 |
|
|
Cash, cash equivalents and restricted cash at beginning of period |
|
|
- |
|
|
|
410,447 |
|
|
|
|
339,107 |
|
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
38,419 |
|
|
$ |
438,709 |
|
|
|
$ |
477,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Reconciliation of Free Cash Flow |
|
|
|
|
|
|
|
|
|
|
|
|||
Net cash from operating activities |
|
$ |
47,044 |
|
|
$ |
52,411 |
|
|
|
$ |
202,390 |
|
|
Payments for capital expenditures |
|
|
(7,278 |
) |
|
|
(21,592 |
) |
|
|
|
(74,496 |
) |
|
Free Cash Flow |
|
$ |
39,766 |
|
|
$ |
30,819 |
|
|
|
$ |
127,894 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
Free Cash Flow is a Non-GAAP measure. See Non-GAAP Measures for our definition of Free Cash Flow. |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||
10
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
|
|||||||||||||||||||
REVENUE BY GEOGRAPHIC REGION BY SEGMENT |
|
|||||||||||||||||||
(in thousands, unaudited) |
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
December 31, |
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
U.S. land |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
$ |
39,597 |
|
|
$ |
37,478 |
|
|
$ |
43,316 |
|
|
$ |
166,938 |
|
|
$ |
160,742 |
|
Well Services |
|
|
5,188 |
|
|
|
8,223 |
|
|
|
6,051 |
|
|
|
25,572 |
|
|
|
24,558 |
|
Total U.S. land |
|
|
44,785 |
|
|
|
45,701 |
|
|
|
49,367 |
|
|
|
192,510 |
|
|
|
185,300 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
U.S. offshore |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
|
43,904 |
|
|
|
44,681 |
|
|
|
33,968 |
|
|
|
161,771 |
|
|
|
140,881 |
|
Well Services |
|
|
52,380 |
|
|
|
14,459 |
|
|
|
38,349 |
|
|
|
106,565 |
|
|
|
122,848 |
|
Total U.S. offshore |
|
|
96,284 |
|
|
|
59,140 |
|
|
|
72,317 |
|
|
|
268,336 |
|
|
|
263,729 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
International |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
|
34,315 |
|
|
$ |
31,042 |
|
|
|
28,616 |
|
|
|
123,540 |
|
|
|
101,319 |
|
Well Services |
|
|
69,041 |
|
|
|
74,502 |
|
|
|
88,803 |
|
|
|
335,034 |
|
|
|
333,612 |
|
Total International |
|
|
103,356 |
|
|
|
105,544 |
|
|
|
117,419 |
|
|
|
458,574 |
|
|
|
434,931 |
|
Total Revenues |
|
$ |
244,425 |
|
|
$ |
210,385 |
|
|
$ |
239,103 |
|
|
$ |
919,420 |
|
|
$ |
883,960 |
|
11
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
|
|||||||||||||||||||
SEGMENT HIGHLIGHTS |
|
|||||||||||||||||||
(in thousands, unaudited) |
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
Year Ended |
|
||||||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
December 31, |
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
$ |
117,816 |
|
|
$ |
113,201 |
|
|
$ |
105,900 |
|
|
$ |
452,249 |
|
|
$ |
402,942 |
|
Well Services |
|
|
126,609 |
|
|
|
97,184 |
|
|
|
133,203 |
|
|
|
467,171 |
|
|
|
481,018 |
|
Total Revenues |
|
$ |
244,425 |
|
|
$ |
210,385 |
|
|
$ |
239,103 |
|
|
$ |
919,420 |
|
|
$ |
883,960 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
$ |
57,647 |
|
|
$ |
56,253 |
|
|
$ |
50,001 |
|
|
$ |
225,020 |
|
|
$ |
183,636 |
|
Well Services |
|
|
23,956 |
|
|
|
10,581 |
|
|
|
20,998 |
|
|
|
74,816 |
|
|
|
84,529 |
|
Corporate and other |
|
|
(16,392 |
) |
|
|
(12,800 |
) |
|
|
(16,806 |
) |
|
|
(58,015 |
) |
|
|
(64,751 |
) |
Total Income from Operations |
|
$ |
65,211 |
|
|
$ |
54,034 |
|
|
$ |
54,193 |
|
|
$ |
241,821 |
|
|
$ |
203,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
$ |
69,802 |
|
|
$ |
68,791 |
|
|
$ |
62,633 |
|
|
$ |
274,434 |
|
|
$ |
237,663 |
|
Well Services |
|
|
31,194 |
|
|
|
15,137 |
|
|
|
28,738 |
|
|
|
100,891 |
|
|
|
95,819 |
|
Corporate and other |
|
|
(15,712 |
) |
|
|
(12,125 |
) |
|
|
(11,467 |
) |
|
|
(52,919 |
) |
|
|
(51,421 |
) |
Total Adjusted EBITDA |
|
$ |
85,284 |
|
|
$ |
71,803 |
|
|
$ |
79,904 |
|
|
$ |
322,406 |
|
|
$ |
282,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA Margin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Rentals |
|
|
59 |
% |
|
|
61 |
% |
|
|
59 |
% |
|
|
61 |
% |
|
|
59 |
% |
Well Services |
|
|
25 |
% |
|
|
16 |
% |
|
|
22 |
% |
|
|
22 |
% |
|
|
20 |
% |
Corporate and other |
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|
n/a |
|
|||||
Total Adjusted EBITDA Margin |
|
|
35 |
% |
|
|
34 |
% |
|
|
33 |
% |
|
|
35 |
% |
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA. |
|
|||||||||||||||||||
12
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
|
|
|||||||||||||||||||
RECONCILIATION OF ADJUSTED EBITDA (Non-GAAP) |
|
|
|||||||||||||||||||
(in thousands, unaudited) |
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
|
Year Ended |
|
|
||||||||||||||
|
|
December 31, |
|
|
September 30, |
|
|
December 31, |
|
|
December 31, |
|
|
||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|||||
Net income from continuing operations |
|
$ |
44,646 |
|
|
$ |
32,620 |
|
|
$ |
174,985 |
|
|
$ |
174,594 |
|
|
$ |
291,042 |
|
|
Depreciation, depletion, amortization and accretion |
|
|
19,818 |
|
|
|
20,490 |
|
|
|
20,121 |
|
|
|
81,068 |
|
|
|
98,060 |
|
|
Interest income, net |
|
|
(7,180 |
) |
|
|
(6,629 |
) |
|
|
(5,702 |
) |
|
|
(25,761 |
) |
|
|
(11,713 |
) |
|
Income tax (benefit) expense |
|
|
15,126 |
|
|
|
11,403 |
|
|
|
(110,532 |
) |
|
|
59,741 |
|
|
|
(77,719 |
) |
|
Restructuring and transaction expenses |
|
|
1,311 |
|
|
|
- |
|
|
|
1,934 |
|
|
|
3,294 |
|
|
|
6,375 |
|
|
Other (gains) losses, net |
|
|
(1,056 |
) |
|
|
(2,721 |
) |
|
|
3,656 |
|
|
|
(3,777 |
) |
|
|
(25,788 |
) |
|
Other (income) expense, net |
|
|
4,883 |
|
|
|
4,520 |
|
|
|
(4,558 |
) |
|
|
13,391 |
|
|
|
1,804 |
|
|
Loss on Blue Chip Swap Securities |
|
|
7,736 |
|
|
|
12,120 |
|
|
|
- |
|
|
|
19,856 |
|
|
|
- |
|
|
Adjusted EBITDA |
|
$ |
85,284 |
|
|
$ |
71,803 |
|
|
$ |
79,904 |
|
|
$ |
322,406 |
|
|
$ |
282,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA. |
|
|
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13
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES |
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RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT |
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|||||||||||||||||||
(in thousands, unaudited) |
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Three Months Ended |
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Year Ended |
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|
|
December 31, |
|
|
September 30, |
|
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December 31, |
|
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December 31, |
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||||||||
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|||||
Rentals |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations |
|
$ |
57,647 |
|
|
$ |
56,253 |
|
|
$ |
50,001 |
|
|
$ |
225,020 |
|
|
$ |
183,636 |
|
Depreciation, depletion, amortization and accretion |
|
|
12,155 |
|
|
|
12,538 |
|
|
|
12,632 |
|
|
|
49,414 |
|
|
|
58,731 |
|
Other adjustments (1) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(4,704 |
) |
Adjusted EBITDA |
|
$ |
69,802 |
|
|
$ |
68,791 |
|
|
$ |
62,633 |
|
|
$ |
274,434 |
|
|
$ |
237,663 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Wells Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Income from operations |
|
$ |
23,956 |
|
|
$ |
10,581 |
|
|
$ |
20,998 |
|
|
$ |
74,816 |
|
|
$ |
84,529 |
|
Depreciation, depletion, amortization and accretion |
|
|
7,238 |
|
|
|
7,277 |
|
|
|
6,551 |
|
|
|
28,796 |
|
|
|
34,841 |
|
Other adjustments (2) |
|
|
- |
|
|
|
(2,721 |
) |
|
|
1,189 |
|
|
|
(2,721 |
) |
|
|
(23,551 |
) |
Adjusted EBITDA |
|
$ |
31,194 |
|
|
$ |
15,137 |
|
|
$ |
28,738 |
|
|
$ |
100,891 |
|
|
$ |
95,819 |
|
|
|
|
|
|
|
|
|
|
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|
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Corporate |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Loss from operations |
|
$ |
(16,392 |
) |
|
$ |
(12,800 |
) |
|
|
(16,806 |
) |
|
$ |
(58,015 |
) |
|
$ |
(64,751 |
) |
Depreciation, depletion, amortization and accretion |
|
|
425 |
|
|
|
675 |
|
|
|
938 |
|
|
|
2,858 |
|
|
|
4,488 |
|
Restructuring expenses |
|
|
1,311 |
|
|
|
- |
|
|
|
1,934 |
|
|
|
3,294 |
|
|
|
6,375 |
|
Other adjustments (2) |
|
|
(1,056 |
) |
|
|
- |
|
|
|
2,467 |
|
|
|
(1,056 |
) |
|
|
2,467 |
|
Adjusted EBITDA |
|
$ |
(15,712 |
) |
|
$ |
(12,125 |
) |
|
$ |
(11,467 |
) |
|
$ |
(52,919 |
) |
|
$ |
(51,421 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Income from operations |
|
$ |
65,211 |
|
|
$ |
54,034 |
|
|
$ |
54,193 |
|
|
$ |
241,821 |
|
|
$ |
203,414 |
|
Depreciation, depletion, amortization and accretion |
|
|
19,818 |
|
|
|
20,490 |
|
|
|
20,121 |
|
|
|
81,068 |
|
|
|
98,060 |
|
Restructuring expenses |
|
|
1,311 |
|
|
|
- |
|
|
|
1,934 |
|
|
|
3,294 |
|
|
|
6,375 |
|
Other adjustments |
|
|
(1,056 |
) |
|
|
(2,721 |
) |
|
|
3,656 |
|
|
|
(3,777 |
) |
|
|
(25,788 |
) |
Adjusted EBITDA |
|
$ |
85,284 |
|
|
$ |
71,803 |
|
|
$ |
79,904 |
|
|
$ |
322,406 |
|
|
$ |
282,061 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|||||
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA. |
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|
|||||
(1) Adjustments for disposal activities related to non-core businesses |
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14