UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) November 12, 1999
SUPERIOR ENERGY SERVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20310 75-2379388
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1105 Peters Road, Harvey, Louisiana 70058
(Address of principal executive offices) (Zip Code)
(504) 362-4321
(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
On November 10, 1999, Superior Energy Services, Inc. issued the press
release attached hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(b) Exhibits.
99 Press release issued by Superior Energy Services, Inc. on
November 10, 1999 announcing results for the third quarter
of 1999 and the consummation of the acquisition of
Production Management Companies, Inc.
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 hereunto duly authorized.
SUPERIOR ENERGY SERVICES, INC.
By: /S/ ROBERT S. TAYLOR
Robert S. Taylor
Chief Financial Officer
Dated: November 12, 1999
SUPERIOR ENERGY SERVICES 1105 Peters Road
Harvey, Louisiana 70058
(504) 362-4321
Fax (504) 362-1818
NASDAQ:SESI
FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT:
Terence Hall,CEO: Robert Taylor, CFO: 504-362-4321
SUPERIOR ENERGY ANNOUNCES THIRD QUARTER RESULTS AND CONSUMMATION OF
ACQUISITION
(Harvey, LA, November 10, 1999) Superior Energy Services, Inc. (NASDAQ:
SESI) today announced earnings for the third quarter and nine months ended
September 30, 1999.
Superior also announced the consummation of the previously announced
acquisition of Production Management Companies, Inc. Production Management
provides contract operating and supplemental labor services on offshore oil
and gas producing properties, offshore construction and maintenance
services, onshore and offshore sandblasting and platform coating services
as well as offshore and dockside environmental cleaning services.
Production Management is headquartered in Harvey, Louisiana.
On July 15, 1999, Cardinal Holding Corp. merged with and into a
wholly-owned Superior subsidiary. The merger was treated for accounting
purposes as an acquisition of Superior by Cardinal and, accordingly, all
historical numbers presented herein for periods prior to July 15, 1999
represent the results of Cardinal on a stand alone basis. The results of
the third quarter ended September 30, 1999 include three months of Cardinal
and two and a half months of Superior. The results for the quarter ended
September 30, 1998 are Cardinal alone. The results for the nine months
ended September 30, 1999 include nine months of Cardinal and two and a half
months of Superior. The results for the nine months ended September 30,
1998 are Cardinal alone. Analyzing prior period results to determine or
estimate the combined operating potential will be difficult at best and
perhaps meaningless given the fact that Cardinal, prior to the merger,
incurred substantial non-cash and extraordinary charges during the last few
years associated with a reorganization and recapitalization. Beginning in
the first quarter of 2000, the Company's financial results will include
Superior, Cardinal and Production Management for the entire quarter.
For the quarter ended September 30, 1999, revenues were $33.4 million
resulting in income before extraordinary charges of $978,000 or $0.02
diluted earnings per share. Simultaneously with the merger, the debt of
the combined Company was refinanced which resulted in an extraordinary
charge of $4.5 million, net of income taxes from the early extinguishment
of debt. The majority of the charges were non- cash in nature. This
resulted in a net loss after extraordinary charges of $3.5 million or $0.06
loss per share for the three months ended September 30, 1999.
For the nine months ended September 30, 1999, the Company generated
revenues of $69.0 million resulting in a loss before extraordinary charges
of $3.8 million or $0.10 diluted loss per share. Assuming the merger had
been in place for the nine month period ended September 30, 1999 the
revenues, net income and diluted earnings per share would have been $102.9
million, $1.3 million and $0.01, respectively.
Commenting on these results, Terence E. Hall, President and Chief Executive
Officer, said, "Industry conditions are primarily responsible for the third
quarter results which are well below the full earnings potential for the
combined Superior/Cardinal organization." Mr. Hall further stated, " The
completion of the merger with Cardinal and subsequent acquisition of
Production Management were important steps for Superior. The company is
now able to provide a more complete package of life of property
production-related services to our customers. Recognizing that industry
conditions are beyond our control, but confident that they will improve, in
recent months management has focused on the integration of three distinct
business cultures and the coordination of management practices and sales
efforts. Although this process will be ongoing, it will be substantially
completed during the current quarter and the new organization will be
properly positioned for the expected industry recovery in 2000 and beyond."
Superior Energy Services, Inc. provides a broad range of specialized
oilfield services and equipment primarily to major and independent oil and
gas companies engaged in the exploration, production and development of oil
and natural gas properties offshore in the Gulf of Mexico and throughout
the Gulf Coast region. These services and equipment include the rental of
liftboats, rental of specialized oilfield equipment, electric and
mechanical wireline services, well plug and abandonment services, coiled
tubing services, engineering services, the manufacture and sale of drilling
instrumentation and the manufacture and sale of oil spill containment
equipment.
This press release contains certain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 which
involve known and unknown risk, uncertainties and other factors. Among the
factors that could cause actual results to differ materially are:
volatility of the oil and gas industry, including the level of exploration,
production and development activity; risks associated with the Company's
rapid growth; and, changes in competitive factors and other material
factors that are described from time to time in the Company's filings with
the Securities and Exchange Commission. Actual events, circumstances,
effects and results may be materially different from the results,
performance or achievements expressed or implied by the forward-looking
statements. Consequently, the forward-looking statements contained herein
should not be regarded as representations by Superior or any other person
that the projected outcomes can or will be achieved.
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998
(in thousands, except earnings per share amounts)
Three Months Nine Months
1999 1998 1999 1998
--------- --------- --------- ---------
Revenue $ 33,729 $ 17,765 $ 68,974 $ 57,656
--------- --------- --------- ---------
Cost and expenses:
Cost of services 18,692 11,569 42,627 31,941
Depreciation and amortization 4,099 1,780 8,639 4,671
General and administrative 6,579 2,239 13,927 11,966
--------- --------- --------- ---------
Total costs and expenses 29,370 15,588 65,193 48,578
--------- --------- --------- ---------
Income from operations 4,359 2,177 3,781 9,078
Other income (expense):
Interest expense (3,061) (3,317) (9,562) (9,172)
Interest income 140 - 140 -
--------- --------- --------- ---------
Income(loss) before income taxes and
extraordinary losses 1,438 (1,140) (5,641) (94)
Income taxes 460 (379) (1,805) 67
--------- --------- --------- ---------
Income(loss) before extraordinary losses 978 (761) (3,836) (161)
Extraordinary losses, net of income tax
benefit (4,514) - (4,514) (10,885)
--------- --------- --------- ---------
Net loss $ (3,536) $ (761) $ (8,350) $ (11,046)
========= ========= ========= =========
Basic earnings(loss) per share:
Earnings(loss) before extraordinary losses $ 0.02 $ (0.03) $ (0.10) $ (0.01)
Extraordinary losses (0.08) - (0.12) (0.36)
--------- --------- --------- ---------
Loss per share $ (0.06) $ (0.03) $ (0.22) $ (0.37)
========= ========= ========= =========
Diluted earnings(loss) per share:
Earnings(loss) before extraordinary losses $ 0.02 $ (0.03) $ (0.10) $ (0.01)
Extraordinary losses (0.08) - (0.12) (0.36)
--------- --------- --------- ---------
Loss per share $ (0.06) $ (0.03) $ (0.22) $ (0.37)
========= ========= ========= =========
Weighted average common shares used
in computing earnings per share:
Basic 54,719 30,240 38,489 30,240
========= ========= ========= =========
Diluted 54,719 30,240 38,489 30,240
========= ========= ========= =========
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(in thousands)
9-30-99 12-31-98
--------- ---------
ASSETS
Current Assets $ 43,033 $ 26,027
Property, plant and equipment - net 132,329 60,328
Goodwill - net 70,531 17,163
Note receivable 8,898 -
Other assets - net 3,739 4,443
--------- ---------
Total assets $ 258,530 $ 107,961
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 19,818 $ 22,694
Long-term debt, less current portion 110,260 120,210
Deferred income taxes 12,276 4,997
Stockholder's equity 116,176 (39,940)
--------- ---------
Total liabilities and stockholders' equity $ 258,530 $ 107,961
========= =========
On July 15, 1999, Cardinal Holding Corp. merged with and into a
wholly-owned subsidiary of Superior Energy Services, Inc. For accounting
purposes, the merger was treated as a reverse acquisition of Superior by
Cardinal using the purchase method of accounting. Historical balances and
operations of Superior in this press release are those of Cardinal.
