PARKER DRILLING COMPANY HOUSTON, Feb. 17, 2016 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today reported results for the quarter ended December 31, 2015, including a net loss of $35.6 million, or $(0.29) per share, on revenues of $148.7 million.
The net loss included the following pre-tax charges:
* $6.1 million of asset and inventory write-offs, which include $4.8 million to reduce the carrying value of two rigs and $1.3 million in inventory writedowns, related to the Company's decision to no longer provide its drilling services in Colombia;
* $4.3 million of non-cash charges to increase the provision for the reduction in carrying value of certain drilling-related assets; and,
* $4.8 million loss associated with the sale of the Company's investment in a joint venture.
Excluding these pre-tax charges, the adjusted net loss was $23.3 million, or $(0.19) per share.
Fourth quarter Adjusted EBITDA was $28.6 million, compared with $35.4 million for the preceding quarter.
Gary Rich, the Company's Chairman, President and CEO said, "Cost reductions, particularly those implemented in the second half of the year, resulted in fourth quarter Adjusted EBITDA that was slightly higher than we anticipated despite a 14 percent sequential decline in revenues. We experienced activity declines across all three segments as low commodity prices continued to curtail customer activity across multiple geographic markets.
2015 Summary
"In 2015, we successfully accomplished several initiatives aimed at navigating this difficult operating environment. We lowered our cost base through headcount reductions and minimized rig-related costs, maintained our working capital diligence, reduced capital expenditures and, where possible, sustained utilization and market share.
"We further strengthened our financial position by reducing our total debt by $30 million during the year and enhanced our liquidity and financial flexibility by increasing our revolver capacity. By efficiently managing our cash receipts and spending, we ended the year with a cash balance of $134 million and an undrawn revolver. Our total liquidity as of December 31, 2015 was approximately $322 million as compared with approximately $178 million at December 31, 2014.
"From an operational perspective, our U.S. rental tools business outperformed the U.S. rig count as we maintained share and grew our Gulf of Mexico footprint. While the U.S. rig count declined 47 percent in 2015, our U.S. rental tools revenue was 37 percent lower. In addition, we increased gross margin as a percentage of revenue in our international rental tools business despite lower revenue as we inserted new management, consolidated and closed locations, reduced headcount, and improved the management of our supply chain.
"Going forward, we believe rig utilization and pricing will continue to come under pressure, especially as the deteriorating market fundamentals impact our international drilling customers. We also think the lower U.S. rig count will further impact utilization and pricing for our rental tools. In response, we will maintain our focus on managing our cash flows. As part of that strategy, our 2016 capital expenditures are expected to be approximately $50 million as compared with $88 million in 2015."
Fourth Quarter Review
Parker Drilling's revenues for the 2015 fourth quarter, compared with the 2015 third quarter, decreased 14.2 percent to $148.7 million from $173.4 million, operating gross margin excluding depreciation and amortization expense (gross margin) decreased 22.7 percent to $34.3 million from $44.4 million and gross margin as a percentage of revenues was 23.1 percent, compared with 25.6 percent for the prior period.
Drilling Services
For the Company's Drilling Services business, which is comprised of the U.S. (Lower 48) Drilling and International & Alaska Drilling segments, revenues declined 15.1 percent to $99.0 million from $116.6 million, gross margin decreased 24.6 percent to $20.5 million from $27.2 million, and gross margin as a percentage of revenues was 20.7 percent, compared with 23.3 percent for the prior period.
U.S. (Lower 48) Drilling
U.S. (Lower 48) Drilling segment revenues were $3.5 million, a 41.7 percent decrease from 2015 third quarter revenues of $6.0 million. Gross margin was a $2.2 million loss as compared with a 2015 third quarter gross margin loss of $1.9 million. The declines in revenues and margin were primarily the result of lower utilization, partially offset by lower costs.
International & Alaska Drilling
International & Alaska Drilling segment revenues were $95.5 million, a 13.7 percent decrease from 2015 third quarter revenues of $110.7 million. Gross margin was $22.6 million, a 22.3 percent decrease from 2015 third quarter gross margin of $29.1 million. Gross margin as a percentage of revenues was 23.7 percent as compared with 26.3 percent in the 2015 third quarter. The decrease in revenues is primarily attributable to lower Latin America rig utilization and project services activities, partially offset by lower operating costs.
Rental Tools Services
Rental Tools segment revenues were $49.8 million, a 12.3 percent decrease from 2015 third quarter revenues of $56.8 million. Gross margin was $13.8 million, a 19.8 percent decrease from 2015 third quarter gross margin of $17.2 million. Gross margin as a percentage of revenues was 27.7 percent as compared with 30.3 percent in the 2015 third quarter. Reduced revenues and gross margin were primarily due to the continued decline in U.S. land drilling activity, as well as lower activity in certain international markets.
General and Administrative expense decreased to $6.9 million for the 2015 fourth quarter, from $8.9 million for the 2015 third quarter.
The Company's effective tax rate in the fourth quarter was 7%, primarily due to discrete items as well as receiving no tax benefit from certain charges incurred during the quarter.
Capital expenditures in the fourth quarter were $15.7 million, and were $88.2 million for the year.
Conference Call
Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, February 18, 2016, to review reported results. The call will be available by telephone at (888) 510-1785, access code 2054769. The call can also be accessed through the Investor Relations section of the Company's website. A replay of the call can be accessed on the Company's website for 12 months and will be available by telephone from February 18, 2016 through February 25, 2016 at (888) 203-1112, access code 2054769#.
Cautionary Statement
This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. All statements in this press release other than statements of historical facts that address activities, events or developments that the Company expects, projects, believes, or anticipates will or may occur in the future are forward-looking statements. These statements include, but are not limited to, statements about anticipated future financial or operational results; the outlook for rental tools utilization and rig utilization and dayrates; the results of past capital expenditures; scheduled start-ups of rigs; general industry conditions such as the demand for drilling and the factors affecting demand; competitive advantages such as technological innovation; future operating results of the Company's rigs, rental tools operations and projects under management; future capital expenditures; expansion and growth opportunities; acquisitions or joint ventures; asset sales; successful negotiation and execution of contracts; scheduled delivery of drilling rigs or rental equipment for operation; the strengthening of the Company's financial position; increases in utilization or market share; outcomes of legal proceedings; compliance with credit facility and indenture covenants; and similar matters. These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Although the Company believes that its expectations stated in this press release are reasonable, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, that could cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include risks relating to changes in worldwide economic and business conditions, fluctuations in oil and natural gas prices, compliance with existing laws and changes in laws or government regulations, the failure to realize the benefits of, and other risks relating to, acquisitions, the risk of cost overruns, our ability to refinance our debt and other important factors, many of which could adversely affect market conditions, demand for our services, and costs, and all or any one of which could cause actual results to differ materially from those projected. For more information, see "Risk Factors" in the Company's Annual Report filed on Form 10-K with the Securities and Exchange Commission and other public filings and press releases. Each forward-looking statement speaks only as of the date of this press release and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Company Description
Parker Drilling provides drilling services and rental tools to the energy industry. The Company's Drilling Services business serves operators in the inland waters of the U.S. Gulf of Mexico utilizing Parker Drilling's barge rig fleet and in select international markets and harsh-environment regions utilizing Parker-owned and customer-owned equipment. The Company's Rental Tools Services business supplies premium equipment and well services to operators on land and offshore in the U.S. and international markets. More information about Parker Drilling can be found on the Company's website at www.parkerdrilling.com.
PARKER DRILLING COMPANY
Consolidated Condensed Balance Sheets
(Dollars in Thousands)
December 31, 2015 December 31, 2014
----------------- -----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $134,294 $108,456
Accounts and Notes Receivable,
Net 175,105 270,952
Rig Materials and Supplies 34,937 47,943
Deferred Costs 1,367 5,673
Other Current Assets 21,038 29,279
TOTAL CURRENT ASSETS 366,741 462,303
------- -------
PROPERTY, PLANT AND EQUIPMENT,
NET 805,841 895,940
OTHER ASSETS
Deferred Income Taxes 139,282 130,165
Other Assets 65,040 32,251
TOTAL OTHER ASSETS 204,322 162,416
------- -------
TOTAL ASSETS $1,376,904 $1,520,659
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term
Debt $ - $10,000
Accounts Payable and Accrued
Liabilities 136,121 168,665
TOTAL CURRENT LIABILITIES 136,121 178,665
------- -------
LONG-TERM DEBT 585,000 605,000
LONG-TERM DEFERRED TAX LIABILITY 68,654 52,115
OTHER LONG-TERM LIABILITIES 18,617 18,665
TOTAL CONTROLLING INTEREST IN
STOCKHOLDERS' EQUITY 568,512 662,431
Noncontrolling interest - 3,783
---
TOTAL EQUITY 568,512 666,214
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,376,904 $1,520,659
========== ==========
Current Ratio 2.69 2.59
Total Debt as a Percent of
Capitalization 51% 48%
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months
Ended
September 30,
-------------
Three Months Ended December 31,
-------------------------------
2015 2014 2015
---- ---- ----
REVENUES $148,748 $243,213 $173,418
EXPENSES:
Operating Expenses 114,488 167,990 128,963
Depreciation and
Amortization 37,720 38,455 39,584
152,208 206,445 168,547
------- ------- -------
TOTAL OPERATING GROSS
MARGIN (3,460) 36,768 4,871
------ ------ -----
General and
Administrative Expense (6,947) (9,675) (8,895)
Provision for Reduction
in Carrying Value of
Certain Assets (9,268) - (906)
Gain (Loss) on
Disposition of Assets,
Net (1,043) 621 383
------
TOTAL OPERATING INCOME
(LOSS) (20,718) 27,714 (4,547)
------- ------ ------
OTHER INCOME AND (EXPENSE):
Interest Expense (11,388) (10,779) (11,293)
Interest Income 60 39 7
Other (6,119) 1,148 (719)
TOTAL OTHER EXPENSE (17,447) (9,592) (12,005)
------- ------ -------
INCOME (LOSS) BEFORE
INCOME TAXES (38,165) 18,122 (16,552)
INCOME TAX EXPENSE
(BENEFIT) (2,519) 9,983 31,930
------ ----- ------
NET INCOME (LOSS) (35,646) 8,139 (48,482)
Less: net income
attributable to
noncontrolling interest - 386 138
--- --- ---
NET INCOME (LOSS)
ATTRIBUTABLE TO
CONTROLLING INTEREST $(35,646) $7,753 $(48,620)
======== ====== ========
EARNINGS (LOSS) PER SHARE
-BASIC $(0.29) $0.06 $(0.40)
EARNINGS (LOSS) PER SHARE
-DILUTED $(0.29) $0.06 $(0.40)
NUMBER OF COMMON SHARES USED IN COMPUTING
EARNINGS PER SHARE:
Basic 122,951,598 121,755,421 122,933,518
Diluted 122,951,598 123,295,412 122,933,518
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Year Ended December 31,
-----------------------
2015 2014 2013
---- ---- ----
REVENUES $712,183 $968,684 $874,172
EXPENSES:
Operating Expenses 526,290 669,381 571,672
Depreciation and
Amortization 156,194 145,121 134,053
682,484 814,502 705,725
------- ------- -------
TOTAL OPERATING GROSS
MARGIN 29,699 154,182 168,447
------ ------- -------
General and
Administrative Expense (36,190) (35,016) (68,025)
Provision for Reduction
in Carrying Value of
Certain Assets (12,490) - (2,544)
Gain on Disposition of
Assets, Net 1,643 1,054 3,994
TOTAL OPERATING INCOME
(LOSS) (17,338) 120,220 101,872
------- ------- -------
OTHER INCOME AND (EXPENSE):
Interest Expense (45,155) (44,265) (47,820)
Interest Income 269 195 2,450
Loss on extinguishment
of debt - (30,152) (5,218)
Other (9,747) 2,539 1,503
TOTAL OTHER EXPENSE (54,633) (71,683) (49,085)
INCOME (LOSS) BEFORE
INCOME TAXES (71,971) 48,537 52,787
------- ------ ------
INCOME TAX EXPENSE 22,313 24,076 25,608
------ ------ ------
NET INCOME (LOSS) (94,284) 24,461 27,179
Less: net income
attributable to
noncontrolling
interest 789 1,010 164
--- ----- ---
NET INCOME (LOSS)
ATTRIBUTABLE TO
CONTROLLING INTEREST $(95,073) $23,451 $27,015
======== ======= =======
EARNINGS (LOSS) PER
SHARE -BASIC $(0.78) $0.19 $0.23
EARNINGS (LOSS) PER
SHARE -DILUTED $(0.78) $0.19 $0.22
NUMBER OF COMMON SHARES USED IN COMPUTING
EARNINGS PER SHARE:
Basic 122,562,187 121,186,464 119,284,468
Diluted 122,562,187 123,076,648 121,224,550
PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)
Three Months Ended Year Ended December 31,
------------------ -----------------------
December 31, September 30, 2015 2014 2013
------------ ---- ---- ----
2015 2014 2015
---- ---- ----
REVENUES:
Drilling Services:
U.S. (Lower 48) Drilling $3,451 $32,124 $5,961 $30,358 $158,405 $153,624
International & Alaska Drilling 95,546 118,711 110,661 435,096 462,513 410,507
Total Drilling Services: 98,997 150,835 116,622 465,454 620,918 564,131
Rental Tools 49,751 92,378 56,796 246,729 347,766 310,041
Total Revenues $148,748 $243,213 $173,418 $712,183 $968,684 $874,172
OPERATING EXPENSES:
Drilling Services:
U.S. (Lower 48) Drilling $5,616 $21,369 $7,820 $36,247 $90,314 $84,209
International & Alaska Drilling 72,902 93,564 81,586 325,346 368,424 324,439
Total Drilling Services: 78,518 114,933 89,406 361,593 458,738 408,648
Rental Tools 35,970 53,057 39,557 164,697 210,643 163,024
Total Operating Expenses $114,488 $167,990 $128,963 $526,290 $669,381 $571,672
OPERATING GROSS MARGIN:
Drilling Services:
U.S. (Lower 48) Drilling $(2,165) $10,755 $(1,859) $(5,889) $68,091 $69,415
International & Alaska Drilling 22,644 25,147 29,075 109,750 94,089 86,068
Total Drilling Services: 20,479 35,902 27,216 103,861 162,180 155,483
Rental Tools 13,781 39,321 17,239 82,032 137,123 147,017
Depreciation and Amortization (37,720) (38,455) (39,584) (156,194) (145,121) (134,053)
Total Operating Gross Margin $(3,460) $36,768 $4,871 $29,699 $154,182 $168,447
PARKER DRILLING COMPANY
Adjusted EBITDA
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
December 31, September 30, June 30, March 31, December 31,
2015 2015 2015 2015 2014
---- ---- ---- ---- ----
Net Income (Loss)
Attributable to Controlling
Interest $(35,646) $(48,620) $(14,029) $3,222 $7,753
Interest Expense 11,388 11,293 11,396 11,078 10,779
Income Tax (Benefit) Expense (2,519) 31,930 (6,916) (182) 9,983
Depreciation and Amortization 37,720 39,584 38,351 40,539 38,455
------ ------ ------ ------ ------
EBITDA 10,943 34,187 28,802 54,657 66,970
====== ====== ====== ====== ======
Adjustments:
Other Income and Expense 6,059 712 1,510 1,197 (1,187)
(Gain) Loss on Disposition of
Assets, Net 1,043 (383) 138 (2,441) (621)
Provision for Reduction in
Carrying Value of Certain
Assets 9,268 906 2,316 - -
Special items (2) 1,265 - - - -
----- --- --- --- ---
Adjusted EBITDA (1) $28,578 $35,422 $32,766 $53,413 $65,162
======= ======= ======= ======= =======
(1) We believe Adjusted EBITDA is an
important measure of operating
performance because it allows
management, investors and others to
evaluate and compare our core
operating results from period to
period by removing the impact of our
capital structure (interest expense
from our outstanding debt), asset
base (depreciation and
amortization), remeasurement of
foreign currency transactions, tax
consequences, impairment, and other
special items. Special items include
items impacting operating expenses
that management believes detract
from an understanding of normal
operating performance. Management
uses Adjusted EBITDA as a
supplemental measure to review
current period operating performance
and period to period comparisons.
Our Adjusted EBITDA may not be
comparable to a similarly titled
measure of another company because
other entities may not calculate
EBITDA in the same manner. EBITDA
and Adjusted EBITDA are not measures
of financial performance under U.S.
Generally Accepted Accounting
Principles (GAAP), and should not be
considered in isolation or as an
alternative to operating income or
loss, net income or loss, cash flows
provided by or used in operating,
investing and financing activities,
or other income or cash flow
statement data prepared in
accordance with GAAP.
(2) For the three months ended December
31, 2015, special items include a
$1.3 million write-off of inventory
associated with our decision to no
longer provide drilling services in
Colombia.
PARKER DRILLING COMPANY
Reconciliation of Adjusted Earnings Per Share
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
------------------
December 31, September 30,
------------
2015 2014 2015
---- ---- ----
Net income attributable to
controlling interest $(35,646) $7,753 $(48,620)
Earnings per diluted share $(0.29) $0.06 $(0.40)
Adjustments:
Sale of investment in joint
venture $4,799 - -
Provision for reduction in
carrying value of certain
assets 9,268 - -
Write-off inventory 1,265 - -
Valuation allowance - - 36,632
Total adjustments 15,332 - 36,632
Tax effect of adjustments (3,010) - -
Net adjustments 12,322 - 36,632
Adjusted net income attributable
to controlling interest(1) $(23,324) $7,753 $(11,988)
======== ====== ========
Adjusted earnings per diluted
share(1) $(0.19) $0.06 $(0.10)
====== ===== ======
(1) We believe Adjusted net income
(loss) attributable to
controlling interest and
Adjusted earnings per diluted
share are useful financial
measures for investors to assess
and understand operating
performance for period to period
comparisons. Management views
the adjustments to net income
attributable to controlling
interest and earnings per
diluted share to be items
outside of the Company's normal
operating results. Adjusted net
income (loss) attributable to
controlling interest and
Adjusted earnings per diluted
share are not measures of
financial performance under
GAAP, and should not be
considered in isolation or as an
alternative to net income (loss)
or earnings per diluted share.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2015-fourth-quarter-results-300221968.html
SOURCE Parker Drilling Company
