PARKER DRILLING COMPANY HOUSTON, Aug. 2, 2016 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced results for the second quarter ended June 30, 2016, including a reported net loss of $39.8 million, or a $0.32 loss per share, on revenues of $105.3 million.
Second quarter adjusted EBITDA was $8.1 million, compared with $12.6 million for the preceding quarter.
"The current business environment continues to be very challenging despite signs that industry fundamentals are beginning to improve," said Gary Rich, the Company's Chairman, President and CEO. "As a result, our second quarter results were lower than the first quarter, as expected.
"However, during the second quarter we secured important contract successes. In our Sakhalin Island, Russia operations, we extended an operations and maintenance (O&M) contract for three customer-owned rigs from June 2017 to June 2019 while adding a fourth, newly constructed, customer-owned rig to the contract. In Canada, we signed a new 7-year O&M contract for the offshore customer-owned Hibernia rig. As a result of the new contracts, our contracted backlog increased from $228 million at the end of the first quarter to $446 million as of June 30.
"Finally, we amended our credit facility and secured significant covenant relief that provides us good runway and flexibility. We currently have nearly $200 million in liquidity with $109 million in cash and an undrawn revolver," concluded Rich.
Second Quarter Review
Parker Drilling's revenues for the 2016 second quarter, compared with the 2016 first quarter, decreased 19.3 percent to $105.3 million from $130.5 million, operating gross margin excluding depreciation and amortization expense (gross margin) decreased 28.1 percent to $16.1 million from $22.4 million and gross margin as a percentage of revenues was 15.3 percent, compared with 17.2 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, second quarter revenues decreased 19.5 percent to $73.0 million from $90.7 million, gross margin decreased 10.9 percent to $13.9 million from $15.6 million, and gross margin as a percentage of revenues was 19.0 percent, compared with 17.2 percent for the first quarter of 2016.
U.S. (Lower 48) Drilling
U.S. (Lower 48) Drilling segment revenues were $1.1 million compared to $2.1 million in the 2016 first quarter. Gross margin was a $3.9 million loss as compared with a 2016 first quarter loss of $3.3 million. The declines in revenues and gross margin were primarily the result of lower utilization.
International & Alaska Drilling
International & Alaska Drilling segment revenues were $71.9 million, an 18.8 percent decrease from 2016 first quarter revenues of $88.6 million. Gross margin was $17.8 million, a 5.8 percent decrease from 2016 first quarter gross margin of $18.9 million. Gross margin as a percentage of revenues was 24.8 percent as compared with 21.3 percent in the 2016 first quarter. The decrease in revenues and gross margin were attributable to lower rig utilization, increased standby days, and reduced project services activity, partially offset by a rig contract early termination fee and the release of accruals related to the wind down of operations in certain locations.
Rental Tools Services
Rental Tools segment revenues were $32.3 million, an 18.8 percent decrease from 2016 first quarter revenues of $39.8 million. Gross margin was $2.2 million, a 67.6 percent decrease from 2016 first quarter gross margin of $6.8 million. Gross margin as a percentage of revenues was 6.8 percent as compared with 17.1 percent in the 2016 first quarter. Reduced revenues and gross margin were primarily due to price competition, lower utilization, and work that was either delayed or canceled in both our U.S. and international locations.
Consolidated
General and Administrative expenses were $8.0 million for the 2016 second quarter, down from $9.8 million for the 2016 first quarter. The decrease was primarily due to lower professional fees and incentive plan adjustments.
Capital expenditures in the second quarter were $8.4 million, and year-to-date through June 30, 2016 were $16.3 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, August 3, 2016, to review second quarter results. The call will be available by telephone by dialing +1 (412) 902-0003 and asking for the Parker Drilling Second 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 August 10, 2016 at +1 (201) 612-7415, conference ID 13640306.
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)
June 30, 2016 December 31, 2015
------------- -----------------
(Unaudited)
Assets
Current Assets
Cash and
Cash
Equivalents $109,034 $134,294
Accounts
and
Notes
Receivable,
net 153,189 175,105
Rig
Materials
and
Supplies 32,615 34,937
Other
Current
Assets 26,805 22,405
------ ------
Total
Current
Assets 321,643 366,741
------- -------
Property,
Plant and
Equipment,
net 747,017 805,841
Other Assets
Deferred
Income
Taxes 87,311 139,282
Other
Assets 56,800 54,838
Total
Other
Assets 144,111 194,120
------- -------
Total
Assets $1,212,771 $1,366,702
========== ==========
Liabilities and
Stockholders' Equity
Current Liabilities
Accounts
Payable
and
Accrued
Liabilities $114,868 $136,121
Total
Current
Liabilities 114,868 136,121
------- -------
Long-
Term
Debt,
net of
debt
issuance
costs 575,548 574,798
Long-
Term
Deferred
Tax
Liability 76,475 68,654
Other
Long-
Term
Liabilities 15,049 18,617
Total
Stockholders'
Equity 430,831 568,512
------- -------
Total
Liabilities
and
Stockholders'
Equity $1,212,771 $1,366,702
========== ==========
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
Three Months Ended June 30, March 31,
--------------------------- ---------
2016 2015 2016
---- ---- ----
Revenues $105,287 $185,941 $130,503
Expenses:
Operating Expenses 89,195 143,569 108,117
Depreciation and
Amortization 36,317 38,351 35,814
125,512 181,920 143,931
------- ------- -------
Total Operating Gross
Margin (20,225) 4,021 (13,428)
------- ----- -------
General and
Administrative Expense (7,995) (9,511) (9,781)
Provision for Reduction
in Carrying Value of
Certain Assets - (2,316) -
Loss on Disposition of
Assets, net (2) (138) (60)
--- ----
Total Operating Loss (28,222) (7,944) (23,269)
------- ------ -------
Other Income and (Expense)
Interest Expense (12,187) (11,396) (11,562)
Interest Income 32 19 7
Other (358) (1,529) 2,485
Total Other Expense (12,513) (12,906) (9,070)
------- ------- ------
Loss before Income Taxes (40,735) (20,850) (32,339)
Income Tax Expense
(Benefit) (913) (6,916) 63,496
---- ------ ------
Net Loss (39,822) (13,934) (95,835)
------- ------- -------
Less: Net Income
Attributable to
Noncontrolling Interest - 95 -
Net Loss Attributable to
Controlling Interest $(39,822) $(14,029) $(95,835)
======== ======== ========
Loss per Share - Basic
Net Loss $(0.32) $(0.11) $(0.78)
Loss per Share - Diluted
Net Loss $(0.32) $(0.11) $(0.78)
Number of common shares used in computing
earnings per share:
Basic 124,101,349 122,481,425 123,090,238
Diluted 124,101,349 122,481,425 123,090,238
PARKER DRILLING COMPANY
Consolidated Statement Of Operations
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Six Months Ended June 30,
-------------------------
2016 2015
---- ----
Revenues $235,790 $390,017
Expenses:
Operating
Expenses 197,312 282,839
Depreciation
and
Amortization 72,131 78,890
269,443 361,729
------- -------
Total
Operating
Gross
Margin (33,653) 28,288
------- ------
General
and
Administrative
Expense (17,776) (20,348)
Provision
for
Reduction
in
Carrying
Value
of
Certain
Assets - (2,316)
Gain
(Loss)
on
Disposition
of
Assets,
net (62) 2,303
--- -----
Total
Operating
Income
(Loss) (51,491) 7,927
------- -----
Other Income and
(Expense)
Interest
Expense (23,749) (22,474)
Interest
Income 39 202
Other 2,127 (2,909)
Total
Other
Expense (21,583) (25,181)
------- -------
Loss
before
Income
Taxes (73,074) (17,254)
Income
Tax
Expense
(Benefit) 62,583 (7,098)
------ ------
Net
Loss (135,657) (10,156)
-------- -------
Less:
Net
Income
Attributable
to
Noncontrolling
Interest - 651
Net
Loss
Attributable
to
Controlling
Interest $(135,657) $(10,807)
========= ========
Loss per Share - Basic
Net
Loss $(1.10) $(0.09)
Loss per Share - Diluted
Net
Loss $(1.10) $(0.09)
Number of common shares
used in computing
earnings per share:
Basic 123,595,793 122,175,511
Diluted 123,595,793 122,175,511
PARKER DRILLING COMPANY
Selected Financial Data
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
June 30, March 31,
--------
2016 2015 2016
---- ---- ----
Revenues:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $1,065 $6,848 $2,085
International & Alaska
Drilling 71,926 114,969 88,619
------- ------
Total Drilling Services 72,991 121,817 90,704
Rental Tools 32,296 64,124 39,799
Total Revenues $105,287 $185,941 $130,503
Operating Expenses:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $4,967 $8,829 $5,422
International & Alaska
Drilling 54,110 92,329 69,725
------
Total Drilling Services 59,077 101,158 75,147
Rental Tools 30,118 42,411 32,970
------ ------ ------
Total Operating Expenses $89,195 $143,569 $108,117
Operating Gross Margin:
Drilling Services:
------------------
U.S. (Lower 48) Drilling $(3,902) $(1,981) $(3,337)
International & Alaska
Drilling 17,816 22,640 18,894
------ ------
Total Drilling Services 13,914 20,659 15,557
Rental Tools 2,178 21,713 6,829
Depreciation and
Amortization (36,317) (38,351) (35,814)
------- ------- -------
Total Operating Gross
Margin $(20,225) $4,021 $(13,428)
PARKER DRILLING COMPANY
Adjusted EBITDA (1)
(Dollars in Thousands)
(Unaudited)
Three Months Ended
------------------
June 30, March 31, December September June 30,
2016 2016 31, 2015 30, 2015 2015
---- ---- -------- -------- ----
Net Loss Attributable to
Controlling Interest $(39,822) $(95,835) $(35,646) $(48,620) $(14,029)
Interest Expense 12,187 11,562 11,388 11,293 11,396
Income Tax (Benefit) Expense (913) 63,496 (2,519) 31,930 (6,916)
Depreciation and Amortization 36,317 35,814 37,720 39,584 38,351
EBITDA 7,769 15,037 10,943 34,187 28,802
===== ====== ====== ====== ======
Adjustments:
Other Income and Expense 326 (2,492) 6,059 712 1,510
(Gain) Loss on Disposition of
Assets, net 2 60 1,043 (383) 138
Provision for Reduction in
Carrying Value of Certain
Assets - - 9,268 906 2,316
Special items (2) - - 1,265 - -
--- --- ----- --- ---
Adjusted EBITDA $8,097 $12,605 $28,578 $35,422 $32,766
====== ======= ======= ======= =======
Error occurred while generating ASCII Content for table
PARKER DRILLING COMPANY
Reconciliation of Adjusted Earnings Per Share
(Dollars in Thousands, Except Per Share Data)
(Unaudited)
Three Months Ended
------------------
June 30, March 31,
--------
2016 2015 2016
---- ---- ----
Net Loss Attributable to
Controlling Interest $(39,822) $(14,029) $(95,835)
Loss per Diluted Share $(0.32) $(0.11) $(0.78)
Adjustments:
Provision for Reduction in
Carrying Value of Certain
Assets - 2,316 -
Valuation Allowance - - 73,125
Total adjustments - 2,316 73,125
Tax effect of adjustments - (443) -
Net adjustments - 1,873 73,125
Adjusted Net Loss Attributable
to Controlling Interest (1) $(39,822) $(12,156) $(22,710)
======== ======== ========
Adjusted Loss per Diluted Share
(1) $(0.32) $(0.10) $(0.18)
====== ====== ======
(1) We believe Adjusted Net Loss
Attributable to Controlling
Interest and Adjusted Loss 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 Loss
Attributable to Controlling
Interest and Loss per Diluted
Share to be items outside of the
Company's normal operating
results. Adjusted Net Loss
Attributable to Controlling
Interest and Adjusted Loss per
Diluted Share are not measures of
financial performance under GAAP,
and should not be considered in
isolation or as an alternative to
Net Loss or Loss per Diluted
Share.
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SOURCE Parker Drilling Company
