PARKER DRILLING COMPANY HOUSTON, Nov. 3, 2015 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced a net loss of $48.6 million, or a $0.40 loss per share on revenues of $173.4 million for the third quarter ended September 30, 2015. The net loss includes a $36.6 million non-cash valuation allowance taken primarily against U.S. foreign tax credits and certain foreign net operating losses that accounted for $0.30 of the reported loss per share. While the carry-forwards have been reserved on the Company's financial statements, they have not expired and remain available to offset future cash taxes. Excluding this valuation allowance, the adjusted loss per share was $0.10.
Third quarter adjusted EBITDA was $35.4 million, compared with $32.8 million for the preceding quarter.
Gary Rich, Chairman, President and CEO, said, "Both our adjusted EBITDA and our adjusted EBITDA as a percentage of revenue increased sequentially primarily due to strong results from our International & Alaska Drilling segment. In addition, we continued to benefit from company-wide cost efficiencies undertaken during the course of the year.
"From an outlook perspective, we anticipate that continued uncertainty over commodity prices will lead to further declines in customer spending and pricing during the remainder of the year. As a result, we anticipate lower activity for our drilling services and rental tools services businesses, which will drive lower operating results in the fourth quarter.
"We continue to manage our business as if this downturn will persist through 2016. Throughout this year, we have taken proactive steps to achieve our goal of generating free cash flow, including head count and operating expense reductions, maintaining our working capital diligence and reducing capital expenditures while striving to sustain utilization and market share. In addition, previously-announced amendments to our credit facility preserve our financial flexibility and enhance our position in this uncertain market. I believe our balanced profile of product and service mix, geographic diversity and backlog are enabling us to perform better than most of our peers. With our solid balance sheet and prudent management during this downturn, we believe we are positioned to grow once the market environment stabilizes and the outlook improves," Mr. Rich concluded.
Third Quarter Review
Parker Drilling's revenues for the 2015 third quarter, compared with the 2015 second quarter, decreased 6.7 percent to $173.4 million from $185.9 million, operating gross margin excluding depreciation and amortization expense (gross margin) increased 5.0 percent to $44.4 million from $42.3 million and gross margin as a percentage of revenues was 25.6 percent, compared with 22.8 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 4.3 percent to $116.6 million from $121.8 million, gross margin increased 31.4 percent to $27.2 million from $20.7 million, and gross margin as a percentage of revenues was 23.3 percent, compared with 17.0 percent for the prior period.
U.S. (Lower 48) Drilling
U.S. (Lower 48) Drilling segment revenues were $6.0 million, an 11.8 percent decrease from 2015 second quarter revenues of $6.8 million. Gross margin was a $1.9 million loss as compared with a 2015 second quarter gross margin loss of $2.0 million. The declines in revenues were primarily the result of lower activity in the Company's California O&M business, while gross margin improved as a result of slightly higher utilization and lower costs in the Gulf of Mexico drilling barge business.
International & Alaska Drilling
International & Alaska Drilling segment revenues were $110.7 million, a 3.7 percent decrease from 2015 second quarter revenues of $115.0 million. Gross margin was $29.1 million, a 28.8 percent increase from 2015 second quarter gross margin of $22.6 million. Gross margin as a percentage of revenues was 26.3 percent as compared with 19.7 percent in the 2015 second quarter. The decrease in revenues is attributable to a $7.1 million decrease in reimbursable expenses and lower Eastern Hemisphere rig utilization, partially offset by an increase in Latin America utilization and project services activities. The increase in gross margin is due to the increase in Latin America utilization and project services activities along with lower operating expenses.
Rental Tools Services
Rental Tools segment revenues were $56.8 million, an 11.4 percent decrease from 2015 second quarter revenues of $64.1 million. Gross margin was $17.2 million, a 20.7 percent decrease from 2015 second quarter gross margin of $21.7 million. Gross margin as a percentage of revenues was 30.3 percent as compared with 33.9 percent in the 2015 second quarter. Reduced revenues and gross margin were primarily due to the continued decline in U.S. land drilling activity, as well as lower pricing and business mix in certain international rental tools markets.
General and Administrative expense decreased to $8.9 million for the 2015 third quarter, from $9.5 million for the 2015 second quarter.
Capital expenditures in third quarter were $17.9 million, and year-to-date through September 30, 2015 were $72.5 million.
Conference Call
Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Wednesday, November 4, 2015, to review reported results. The call will be available by telephone at (888) 287-5563, access code 235454. 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 or by telephone for 1 week from November 4, 2015 at (888) 203-1112, using the access code 235454#.
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 addressing activities, events or developments 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 purchases and sales; successful negotiation and execution of contracts; scheduled delivery of drilling rigs or rental equipment for operation; the Company's financial position; changes 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 its expectations stated in this press release are based on reasonable assumptions, 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 U.S. and international markets and harsh-environment regions utilizing Parker Drilling-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, Except Per Share Data)
September 30, 2015 December 31, 2014
------------------ -----------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash Equivalents $104,651 $108,456
Accounts and Notes Receivable,
Net 224,996 270,952
Rig Materials and Supplies 38,516 47,943
Deferred Costs 2,961 5,673
Deferred Income Taxes 5,448 7,476
Other Current Assets 25,033 29,279
TOTAL CURRENT ASSETS 401,605 469,779
------- -------
PROPERTY, PLANT AND EQUIPMENT,
NET 841,923 895,940
OTHER ASSETS
Deferred Income Taxes 133,058 122,689
Other Assets 65,597 32,251
TOTAL OTHER ASSETS 198,655 154,940
------- -------
TOTAL ASSETS $1,442,183 $1,520,659
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term
Debt $ - $10,000
Accounts Payable and Accrued
Liabilities 150,170 168,665
TOTAL CURRENT LIABILITIES 150,170 178,665
------- -------
LONG-TERM DEBT 585,000 605,000
LONG-TERM DEFERRED TAX LIABILITY 75,197 52,115
OTHER LONG-TERM LIABILITIES 20,141 18,665
TOTAL CONTROLLING INTEREST IN
STOCKHOLDERS' EQUITY 606,498 662,431
Noncontrolling interest 5,177 3,783
-----
TOTAL EQUITY 611,675 666,214
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,442,183 $1,520,659
========== ==========
Current Ratio 2.67 2.63
Total Debt as a Percent of
Capitalization 49% 48%
Book Value Per Common Share $4.92 $5.43
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months
Ended June
30,
Three Months Ended September 30,
--------------------------------
2015 2014 2015
---- ---- ----
REVENUES $173,418 $242,012 $185,941
EXPENSES:
Operating Expenses 128,963 160,797 143,569
Depreciation and
Amortization 39,584 36,149 38,351
168,547 196,946 181,920
------- ------- -------
TOTAL OPERATING GROSS
MARGIN 4,871 45,066 4,021
----- ------ -----
General and
Administrative Expense (8,895) (9,370) (9,511)
Provision for Reduction
in Carrying Value of
Certain Assets (906) - (2,316)
Gain (Loss) on
Disposition of Assets,
Net 383 (457) (138)
--- ----
TOTAL OPERATING INCOME (4,547) 35,239 (7,944)
------ ------ ------
OTHER INCOME AND (EXPENSE):
Interest Expense (11,293) (10,848) (11,396)
Interest Income 7 36 19
Other (719) (536) (1,529)
TOTAL OTHER EXPENSE (12,005) (11,348) (12,906)
------- ------- -------
INCOME (LOSS) BEFORE
INCOME TAXES (16,552) 23,891 (20,850)
INCOME TAX EXPENSE
(BENEFIT) 31,930 11,014 (6,916)
------ ------ ------
NET INCOME (LOSS) (48,482) 12,877 (13,934)
------- ------ -------
Less: net income
attributable to
noncontrolling interest 138 311 95
NET INCOME (LOSS)
ATTRIBUTABLE TO
CONTROLLING INTEREST $(48,620) $12,566 $(14,029)
======== ======= ========
EARNINGS PER SHARE - BASIC
Net Income (loss) $(0.40) $0.10 $(0.11)
EARNINGS PER SHARE - DILUTED
Net Income (loss) $(0.40) $0.10 $(0.11)
NUMBER OF COMMON SHARES USED IN COMPUTING
EARNINGS PER SHARE
Basic 122,933,518 121,523,674 122,481,425
Diluted 122,933,518 123,177,753 122,481,425
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Nine Months Ended September 30,
-------------------------------
2015 2014
---- ----
REVENUES $563,435 $725,471
EXPENSES:
Operating Expenses 411,802 501,391
Depreciation and Amortization 118,474 106,666
530,276 608,057
------- -------
TOTAL OPERATING GROSS MARGIN 33,159 117,414
------ -------
General and Administrative
Expense (29,243) (25,341)
Provision for Reduction in
Carrying Value of Certain
Assets (3,222) -
Gain on Disposition of Assets,
Net 2,686 433
TOTAL OPERATING INCOME 3,380 92,506
----- ------
OTHER INCOME AND (EXPENSE):
Interest Expense (33,767) (33,486)
Interest Income 209 156
Loss on extinguishment of debt - (30,152)
Other (3,628) 1,391
TOTAL OTHER EXPENSE (37,186) (62,091)
------- -------
INCOME (LOSS) BEFORE INCOME
TAXES (33,806) 30,415
INCOME TAX EXPENSE (BENEFIT) 24,832 14,093
------ ------
NET INCOME (LOSS) (58,638) 16,322
------- ------
Less: net income attributable
to noncontrolling interest 789 624
NET INCOME (LOSS) ATTRIBUTABLE
TO CONTROLLING INTEREST $(59,427) $15,698
======== =======
EARNINGS PER SHARE - BASIC
Net Income (loss) $(0.49) $0.13
EARNINGS PER SHARE - DILUTED
Net Income (loss) $(0.49) $0.13
NUMBER OF COMMON SHARES USED IN COMPUTING
EARNINGS PER SHARE
Basic 122,430,957 120,994,728
Diluted 122,430,957 122,972,014
PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
September 30, June 30,
-------------
2015 2014 2015
---- ---- ----
REVENUES:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $5,961 $44,409 $6,848
International & Alaska
Drilling 110,661 109,892 114,969
------- -------
Total Drilling Services 116,622 154,301 121,817
Rental Tools 56,796 87,711 64,124
Total Revenues $173,418 $242,012 $185,941
OPERATING EXPENSES:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $7,820 $22,687 $8,829
International & Alaska
Drilling 81,586 86,123 92,329
------
Total Drilling Services 89,406 108,810 101,158
Rental Tools 39,557 51,987 42,411
------ ------ ------
Total Operating Expenses $128,963 $160,797 $143,569
OPERATING GROSS MARGIN:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $(1,859) $21,722 $(1,981)
International & Alaska
Drilling 29,075 23,769 22,640
------ ------
Total Drilling Services 27,216 45,491 20,659
Rental Tools 17,239 35,724 21,713
Depreciation and
Amortization (39,584) (36,149) (38,351)
------- ------- -------
Total Operating Gross
Margin $4,871 $45,066 $4,021
PARKER DRILLING COMPANY
Adjusted EBITDA
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
September 30, 2015 June 30, 2015 March 31, 2015 December 31, 2014 September 30,
2014
------------------ ------------- -------------- ----------------- -------------
Net Income (Loss) Attributable
to Controlling Interest $(48,620) $(14,029) $3,222 $7,753 $12,566
Adjustments:
Income Tax (Benefit) Expense 31,930 (6,916) (182) 9,983 11,014
Interest Expense 11,293 11,396 11,078 10,779 10,848
Other Income and Expense 712 1,510 1,197 (1,187) 500
(Gain) Loss on Disposition of
Assets, Net (383) 138 (2,441) (621) 457
Depreciation and Amortization 39,584 38,351 40,539 38,455 36,149
Provision for Reduction in
Carrying Value of Certain
Assets 906 2,316 - - -
--- ----- --- ---
Adjusted EBITDA* 35,422 32,766 53,413 65,162 71,534
====== ====== ====== ====== ======
Adjustments:
Non-routine Items - - - - (1,250)
--- --- --- ------
Adjusted EBITDA after Non-
routine Items $35,422 $32,766 $53,413 $65,162 $70,284
======= ======= ======= ======= =======
*Adjusted EBITDA, a non-GAAP
financial measure, excludes items
that management believes are of a
non-routine nature and which
detract from an understanding of
normal operating performance and
comparisons with other periods.
Management also believes that
results excluding these items are
more comparable to estimates
provided by securities analysts
and used by them in evaluating the
Company's performance.
PARKER DRILLING COMPANY
Reconciliation of Adjusted Earnings Per Share
(Dollars in Thousands, except Per Share)
(Unaudited)
Three Months Ended
------------------
September 30, June 30,
-------------
2015 2014 2015
---- ---- ----
Net income attributable to
controlling interest $(48,620) $12,566 $(14,029)
Earnings per diluted share $(0.40) $0.10 $(0.11)
Adjustments:
Escrow clawback $ - $(1,250) $ -
Provision for reduction in
carrying value of certain
assets** - 2,316
-
Valuation allowance 36,632 - -
Total adjustments 36,632 (1,250) 2,316
Tax effect of adjustments 500 (443)
-
---
Net adjustments 36,632 (750) 1,873
Adjusted net income
attributable to controlling
interest* $(11,988) $11,816 $(12,156)
======== ======= ========
Adjusted earnings per diluted
share $(0.10) $0.10 $(0.10)
====== ===== ======
*Adjusted net income, a non-GAAP
financial measure, excludes items
that management believes are of a
non-routine nature and which
detract from an understanding of
normal operating performance and
comparisons with other periods.
Management also believes that
results excluding these items are
more comparable to estimates
provided by securities analysts
and used by them in evaluating the
Company's performance.
**The three months ended September
30, 2015 excludes provision for
reduction in carrying value of
certain assets of $0.9 million
($0.5 million, net of tax) deemed
not meaningful to adjusted
earnings per diluted share for the
period.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2015-third-quarter-results-300171756.html
SOURCE Parker Drilling Company
