PARKER DRILLING COMPANY HOUSTON, May 3, 2016 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced results for the first quarter ended March 31, 2016, including a reported net loss of $95.8 million, or a $0.78 loss per share, on revenues of $130.5 million.
The net loss includes a $73.1 million non-cash valuation allowance taken primarily against U.S. domestic deferred tax assets largely consisting of U.S. federal net operating losses. The valuation allowance accounted for $0.60 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 net loss was $22.7 million, or an $0.18 loss per share.
First quarter adjusted EBITDA was $12.6 million, compared with $28.6 million for the preceding quarter.
"Operating results for the first quarter were generally in-line with our expectations," said Gary Rich, the Company's Chairman, President and CEO. "Weak market conditions have continued to prevail as low commodity prices curtailed customer activity across multiple geographic markets. We continue to maintain solid operational execution while prudently managing expenses to minimize the margin compression the downturn has caused across all of our business segments.
"During the quarter we extended the contracts for three of our drilling rigs in Kazakhstan that were scheduled to end mid-2016. One of the contracts was extended to the end of 2016 and two were extended to the end of 2017. Our balance sheet remains strong with a cash position of $108.4 million and an undrawn revolver. Looking forward, our 2016 second quarter results are expected to be weaker than the first quarter as utilization and pricing continue to remain under pressure. However, our cash management efforts and strong customer relationships should continue to position the Company for recovery and growth in the future," concluded Rich.
First Quarter Review
Parker Drilling's revenues for the 2016 first quarter, compared with the 2015 fourth quarter, decreased 12.2 percent to $130.5 million from $148.7 million, operating gross margin excluding depreciation and amortization expense (gross margin) decreased 34.7 percent to $22.4 million from $34.3 million and gross margin as a percentage of revenues was 17.2 percent, compared with 23.1 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 8.4 percent to $90.7 million from $99.0 million, gross margin decreased 23.9 percent to $15.6 million from $20.5 million, and gross margin as a percentage of revenues was 17.2 percent, compared with 20.7 percent for the prior period.
U.S. (Lower 48) Drilling
U.S. (Lower 48) Drilling segment revenues were $2.1 million compared to $3.5 million in the 2015 fourth quarter. Gross margin was a $3.3 million loss as compared with a 2015 fourth quarter loss of $2.2 million. The declines in revenues and gross margin were primarily the result of lower utilization.
International & Alaska Drilling
International & Alaska Drilling segment revenues were $88.6 million, a 7.2 percent decrease from 2015 fourth quarter revenues of $95.5 million. Gross margin was $18.9 million, a 16.4 percent decrease from 2015 fourth quarter gross margin of $22.6 million. Gross margin as a percentage of revenues was 21.3 percent as compared with 23.7 percent in the 2015 fourth quarter. The decrease in revenues and gross margin were attributable to lower rig utilization and lower realized dayrates partially offset by higher project services activities.
Rental Tools Services
Rental Tools segment revenues were $39.8 million, a 20.1 percent decrease from 2015 fourth quarter revenues of $49.8 million. Gross margin was $6.8 million, a 50.7 percent decrease from 2015 fourth quarter gross margin of $13.8 million. Gross margin as a percentage of revenues was 17.1 percent as compared with 27.7 percent in the 2015 fourth quarter. Reduced revenues and gross margin were primarily due to the continued decline in both the U.S. offshore and land drilling activity, as well as lower activity in certain international markets.
Consolidated
General and Administrative expenses were $9.8 million for the 2016 first quarter, up from $6.9 million for the 2015 fourth quarter. The increase in General and Administrative expenses was primarily due to reduced employee benefit expenses in the fourth quarter that did not recur, incentive plan adjustments, and higher professional fees.
Capital expenditures in the first quarter were $7.9 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, May 4, 2016, to review first quarter results. The call will be available by telephone by dialing +1 (412) 902-0003 and asking for the Parker Drilling First Quarter Conference Call. 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 through May 11, 2016 at +1 (201) 612-7415, conference ID 13636201.
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 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.
CONTACT: Jason Geach, Vice President, Investor Relations & Corporate Development, +1 (281) 406-2310, jason.geach@parkerdrilling.com.
PARKER DRILLING COMPANY
Consolidated Condensed Balance Sheets
(Dollars in Thousands)
March 31, 2016 December 31, 2015
-------------- -----------------
(Unaudited)
Assets
Current Assets
Cash and
Cash
Equivalents $108,427 $134,294
Accounts
and
Notes
Receivable,
net 175,382 175,105
Rig
Materials
and
Supplies 36,508 34,937
Other
Current
Assets 24,438 22,405
------ ------
Total
Current
Assets 344,755 366,741
------- -------
Property,
Plant
and
Equipment,
net 776,912 805,841
Other Assets
Deferred
Income
Taxes 78,992 139,282
Other
Assets 53,990 54,838
Total
Other
Assets 132,982 194,120
------- -------
Total
Assets $1,254,649 $1,366,702
========== ==========
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts
Payable
and
Accrued
Liabilities $120,973 $136,121
Total
Current
Liabilities 120,973 136,121
------- -------
Long-
Term
Debt,
net of
debt
issuance
costs 575,171 574,798
Long-
Term
Deferred
Tax
Liability 71,898 68,654
Other
Long-
Term
Liabilities 13,755 18,617
Total
Stockholders'
Equity 472,852 568,512
------- -------
Total
Liabilities
and
Stockholders'
Equity $1,254,649 $1,366,702
========== ==========
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months
Ended December
31,
---------------
Three Months Ended March 31,
----------------------------
2016 2015 2015
---- ---- ----
Revenues $130,503 $204,076 $148,748
Expenses:
Operating Expenses 108,117 139,270 114,488
Depreciation and
Amortization 35,814 40,539 37,720
143,931 179,809 152,208
------- ------- -------
Total Operating Gross
Margin (13,428) 24,267 (3,460)
------- ------ ------
General and
Administrative Expense (9,781) (10,837) (6,947)
Provision for Reduction
in Carrying Value of
Certain Assets - - (9,268)
Gain (Loss) on
Disposition of Assets,
net (60) 2,441 (1,043)
--- -----
Total Operating Income (23,269) 15,871 (20,718)
------- ------ -------
Other Income and (Expense)
Interest Expense (11,562) (11,078) (11,388)
Interest Income 7 183 60
Other 2,485 (1,380) (6,119)
Total Other Expense (9,070) (12,275) (17,447)
------ ------- -------
Income (Loss) before
Income Taxes (32,339) 3,596 (38,165)
Income Tax Expense
(Benefit) 63,496 (182) (2,519)
------ ---- ------
Net Income (Loss) (95,835) 3,778 (35,646)
------- ----- -------
Less: Net Income
Attributable to
Noncontrolling Interest - 556 -
Net Income (Loss)
Attributable to
Controlling Interest $(95,835) $3,222 $(35,646)
======== ====== ========
Earnings (Loss) per Share - Basic
Net Income (Loss) $(0.78) $0.03 $(0.29)
Earnings (Loss) per Share - Diluted
Net Income (Loss) $(0.78) $0.03 $(0.29)
Number of common shares used in computing
earnings per share:
Basic 123,090,238 121,887,072 122,951,598
Diluted 123,090,238 123,708,623 122,951,598
PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
March 31, December 31,
---------
2016 2015 2015
---- ---- ----
Revenues:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $2,085 $14,097 $3,451
International & Alaska
Drilling 88,619 113,921 95,546
------- ------
Total Drilling Services 90,704 128,018 98,997
Rental Tools 39,799 76,058 49,751
Total Revenues $130,503 $204,076 $148,748
Operating Expenses:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $5,422 $13,982 $5,616
International & Alaska
Drilling 69,725 78,529 72,902
------
Total Drilling Services 75,147 92,511 78,518
Rental Tools 32,970 46,759 35,970
------ ------ ------
Total Operating Expenses $108,117 $139,270 $114,488
Operating Gross Margin:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $(3,337) $115 $(2,165)
International & Alaska
Drilling 18,894 35,392 22,644
------ ------
Total Drilling Services 15,557 35,507 20,479
Rental Tools 6,829 29,299 13,781
Depreciation and
Amortization (35,814) (40,539) (37,720)
------- ------- -------
Total Operating Gross
Margin $(13,428) $24,267 $(3,460)
PARKER DRILLING COMPANY
Adjusted EBITDA (1)
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
March 31, 2016 December 31, 2015 September 30,
2015 June 30, 2015 March 31, 2015
-------------- ----------------- -------------- ------------- --------------
Net Income (Loss)
Attributable to Controlling
Interest $(95,835) $(35,646) $(48,620) $(14,029) $3,222
Interest Expense 11,562 11,388 11,293 11,396 11,078
Income Tax (Benefit) Expense 63,496 (2,519) 31,930 (6,916) (182)
Depreciation and Amortization 35,814 37,720 39,584 38,351 40,539
EBITDA 15,037 10,943 34,187 28,802 54,657
====== ====== ====== ====== ======
Adjustments:
Other Income and Expense (2,492) 6,059 712 1,510 1,197
(Gain) Loss on Disposition of
Assets, net 60 1,043 (383) 138 (2,441)
Provision for Reduction in
Carrying Value of Certain
Assets - 9,268 906 2,316 -
Special items (2) - 1,265 - - -
--- ----- --- --- ---
Adjusted EBITDA $12,605 $28,578 $35,422 $32,766 $53,413
======= ======= ======= ======= =======
(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
------------------
March 31, December 31,
---------
2016 2015 2015
---- ---- ----
Net Income (Loss) Attributable
to Controlling Interest $(95,835) $3,222 $(35,646)
Earnings per Diluted Share $(0.78) $0.03 $(0.29)
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 73,125 - -
Total adjustments 73,125 - 15,332
Tax effect of adjustments - - (3,010)
Net adjustments 73,125 - 12,322
Adjusted Net Income (Loss)
Attributable to Controlling
Interest (1) $(22,710) $3,222 $(23,324)
======== ====== ========
Adjusted Earnings (Loss) per
Diluted Share (1) $(0.18) $0.03 $(0.19)
====== ===== ======
(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.
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SOURCE Parker Drilling Company
