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Superior Energy Services, Inc. Reports Third Quarter 2012 Results



      Superior Energy Services, Inc. Reports Third Quarter 2012 Results

Earnings of $0.59 Per Diluted Share

PR Newswire

HOUSTON, Oct. 24, 2012

HOUSTON, Oct. 24, 2012 /PRNewswire/ -- Superior Energy Services, Inc. (NYSE:
SPN) today announced net income of $93.9 million, or $0.59 per diluted share,
on revenue of $1,179.7 million for the third quarter of 2012.

Non-GAAP adjusted earnings was $95.3 million, or $0.60 per diluted share,
which excludes $2.3 million of pre-tax loss on the partial prepayment of the
Company's $300 million 6.875% senior notes due 2014 during the third quarter.

These results are compared with net income from continuing operations of $54.8
million, or $0.67 per diluted share, and net income of $59.6 million, or $0.73
per diluted share, on revenue of $537.0 million for the third quarter of 2011.
Non-GAAP adjusted earnings from continuing operations was $51.1 million, or
$0.63 per diluted share, for the third quarter of 2011.

For the nine months ended September 30, 2012, the Company's net income from
continuing operations was $306.9 million, or $2.07 per diluted share, and net
income was $289.7 million, or $1.95 per diluted share, on revenue of $3,389.8
million.

For the nine months ended September 30, 2011, the Company's net income from
continuing operations was $106.1 million, or $1.31 per diluted share, and net
income was $123.2 million, or $1.52 per diluted share, on revenue of $1,401.9
million.

David Dunlap, CEO of Superior, commented, "As previously announced, our
results were impacted by a contracting market for U.S. land completion and
intervention services, hurricane-related downtime in the Gulf of Mexico and
delays on the completion of an arctic containment system for a customer in
Alaska. The contraction in the U.S. land market has been at a slightly faster
pace than what we predicted, which has resulted in lower utilization for
services such as pressure pumping, coiled tubing and fluid management. As a
result, our U.S. land revenue declined 11% from the second quarter of 2012.

"International revenue increased 7% sequentially in part due to completion
tools product sales in Asia Pacific and incremental service growth in Latin
America as we continue to make good progress on our international expansion
efforts. We anticipate increases in international revenue growth during the
fourth quarter as we commence snubbing contracts in Thailand and Saudi Arabia
as well as pumping service work in Latin America.

"The income from operations as a percentage of revenue ('operating margin')
for U.S. land completion and intervention services was at or near our
expectations, while the operating margin in the Drilling and Products Services
segment was at 32%, the highest margin since the fourth quarter of 2008."

Geographic Breakdown
For the third quarter of 2012, U.S. land revenue was approximately $787.6
million, Gulf of Mexico revenue was approximately $189.4 million and
international revenue was approximately $202.7 million.

Subsea and Well Enhancement Segment
Third quarter 2012 revenue in the Subsea and Well Enhancement Segment, which
includes all of the legacy operations of Complete Production Services that
were acquired in February 2012, was $984.8 million, as compared with $373.6
million in the third quarter of 2011 and $1,045.2 million in the second
quarter of 2012, or a 6% sequential decrease.

U.S. land revenue was $702.6 million, which represents an 11% sequential
decline primarily due to lower demand for pressure pumping, coiled tubing and
fluid management services. Gulf of Mexico revenue increased 16% sequentially
to $127.8 million primarily due to an increase in platform decommissioning
services. International revenue increased 9% sequentially to $154.4 million
primarily due to increased product sales of completion tools in Asia Pacific
and additional service activity in Latin America.

Drilling Products and Services Segment
Third quarter 2012 revenue for the Drilling Products and Services Segment was
$194.9 million, as compared with $163.5 million in the third quarter of 2011,
or a 19% year-over-year improvement, and $198.2 million in the second quarter
of 2012, or a 2% sequential decline.

U.S. land revenue decreased 5% sequentially to $85.0 million due to small
declines in demand for premium drill pipe and bottom hole assemblies in dry
gas basins. Gulf of Mexico revenue increased 1% sequentially to $61.6 million
due to increased rentals of bottom hole assemblies and premium drill pipe.
International revenue increased 1% to $48.3 million due to increased demand
for accommodations and bottom hole assemblies.

2012 Earnings Guidance Update
The Company anticipates fourth quarter earnings from continuing operations to
be in a range of $0.48 and $0.52 per diluted share, resulting in a 2012
non-GAAP adjusted earnings from continuing operations range of between $2.62
and $2.66 per diluted share

Mr. Dunlap commented, "We anticipate the rate of activity decline in the U.S.
will ease from third quarter levels as we believe the market has already
absorbed the steepest reductions in customer activity and associated rig count
changes. In the Gulf of Mexico, we think activity levels will experience
typical seasonal declines. We believe the international momentum we are
building will serve us well in the fourth quarter and beyond."

Conference Call Information
The Company will host a conference call at 10 a.m. Central Time on Thursday,
October 25, 2012.  The call can be accessed from Superior's website at
www.superiorenergy.com, or by telephone at 480-629-9643.  For those who cannot
listen to the live call, a telephonic replay will be available through
Thursday, November 8, 2012 and may be accessed by calling 303-590-3030 and
using the pass code 4568469.  An archive of the webcast will be available
after the call for a period of 60 days at http://www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling, completion and
production-related needs of oil and gas companies worldwide through its brand
name drilling products and its integrated completion and well intervention
services and tools, supported by an engineering staff who plan and design
solutions for customers.

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 risks, 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 uncertainty of macroeconomic
and business conditions worldwide, as well as the global credit markets; risks
associated with the Company's rapid growth; 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 the Company or
any other person that the projected outcomes can or will be achieved.

Any forward-looking statement made in this press release is based only on
information currently available to the Company and speaks only as of the date
on which it is made.  The Company undertakes no obligation to publicly update
any forward-looking statement, whether written or oral, that may be made from
time to time, whether as a result of new information, future developments or
otherwise.  

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Three and Nine Months Ended September 30, 2012 and 2011
(in thousands, except earnings per share amounts)
(unaudited)
                         Three Months Ended         Nine Months Ended
                         September 30,              September 30,
                         2012           2011 *      2012          2011 *
Revenues                 $ 1,179,665    $ 537,042   $ 3,389,821   $ 1,401,932
Cost of services
(exclusive of items      708,608        285,124     1,966,659     752,813
shown separately below)
Depreciation,
depletion, amortization  128,160        61,807      366,272       177,651
and accretion
General and              163,458        93,813      496,998       272,243
administrative expenses
Income from continuing   179,439        96,298      559,892       199,225
operations
Other income (expense):
  Interest expense, net  (28,118)       (18,894)    (88,101)      (47,309)
  Loss on early          (2,294)        -           (2,294)       -
extinguishment of debt
  Earnings (losses)
from equity-method       -              8,198       (287)         13,724
investments, net
  Gain on sale of
equity-method            -              -           17,880        -
investment
Income from continuing
operations before        149,027        85,602      487,090       165,640
income taxes
Income taxes             55,140         30,803      180,223       59,589
Net income from          93,887         54,799      306,867       106,051
continuing operations
Income (loss) from
discontinued             -              4,781       (17,207)      17,141
operations, net of
income tax
Net income               $      93,887  $   59,580  $    289,660  $    123,192
Basic earnings per
share:
Net income from          $              $           $             $        
continuing operations     0.60          0.69         2.09          1.33
Income (loss) from       -              0.06        (0.11)        0.22
discontinued operations
Net income               $              $           $             $        
                          0.60          0.75         1.98          1.55
Diluted earnings per
share:
Net income from          $              $           $             $        
continuing operations     0.59          0.67         2.07          1.31
Income (loss) from       -              0.06        (0.12)        0.21
discontinued operations
Net income               $              $           $             $        
                          0.59          0.73         1.95          1.52
Weighted average common
shares used
  in computing earnings
per share:
    Basic                157,153        79,836      146,611       79,537
    Diluted              158,576        81,254      148,369       81,125
* As adjusted for discontinued operations

 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2012 AND DECEMBER 31, 2011
(in thousands)
                                                 9/30/2012       12/31/2011
                                                 (Unaudited)     (Audited)
ASSETS
Current assets:
  Cash and cash equivalents                      $       79,086  $      80,274
  Accounts receivable, net                       1,129,714       540,602
  Deferred income taxes                          31,306          -
  Prepaid expenses                               102,206         34,037
  Inventory and other current assets             180,197         228,309
  Available-for-sale securities                  20,321          -
        Total current assets                     1,542,830       883,222
Property, plant and equipment, net               3,163,273       1,507,368
Goodwill                                         2,528,312       581,379
Notes receivable                                 44,129          73,568
Equity-method investments                        -               72,472
Intangible and other long-term assets, net       511,074         930,136
        Total assets                             $  7,789,618    $ 4,048,145
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                               $     268,812   $    178,645
  Accrued expenses                               360,647         197,574
  Income taxes payable                           148,857         717
  Deferred income taxes                          -               831
  Current portion of decommissioning             -               14,956
liabilities
  Current maturities of long-term debt           20,000          810
        Total current liabilities                798,316         393,533
Deferred income taxes                            727,034         297,458
Decommissioning liabilities                      91,012          108,220
Long-term debt, net                              1,909,416       1,685,087
Other long-term liabilities                      114,771         110,248
Total stockholders' equity                       4,149,069       1,453,599
        Total liabilities and stockholders'      $  7,789,618    $ 4,048,145
equity

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

THREE MONTHS ENDED SEPTEMBER 30, 2012, JUNE 30, 2012 AND SEPTEMBER 30,
2011^(1)

(Unaudited)

(in thousands)
                         Three months ended,
Revenue                  September 30,        June 30, 2012     September 30,
                         2012                                   2011
Subsea and Well          $                    $    1,045,169    $            
Enhancement              984,783                                    373,586
Drilling Products and    194,882              198,150           163,456
Services
Total Revenues           $                    $    1,243,319    $            
                          1,179,665                                 537,042
Gross Profit (2)         September 30,        June 30, 2012     September 30,
                         2012                                   2011
Subsea and Well          $                    $       400,370   $            
Enhancement              338,134                                    147,000
Drilling Products and    132,923              131,665           104,918
Services
Total Gross Profit       $                    $       532,035   $            
                         471,057                                    251,918
Income from              September 30,        June 30, 2012     September 30,
Continuing Operations    2012                                   2011
Subsea and Well          $                    $       179,692   $            
Enhancement              116,680                                      53,458
Drilling Products and    62,759               59,308            42,840
Services
Total Income from        $                    $       239,000   $            
Operations               179,439                                      96,298
(1) Adjusted for discontinued operations
(2) Gross profit is calculated by subtracting cost of services (exclusive of
depreciation, depletion, amortization and accretion) from revenue for each of
the Company's segments.

 

NON-GAAP RECONCILIATION

We report our financial results in conformity with U.S. generally accepted
accounting principles (GAAP). However, the Company provides non-GAAP adjusted
net income and non-GAAP adjusted earnings per share because certain items are
customarily excluded by analysts in published estimates and management
believes, for purposes of comparability to financial performance in other
periods and to evaluate the Company's trends, that it is appropriate for these
items to be excluded. Management uses adjusted net income and adjusted diluted
earnings per share to evaluate the Company's operational trends and historical
performance on a consistent basis. The adjusted amounts are not measures of
financial performance under GAAP.

A reconciliation of net income, the GAAP measure most directly comparable to
non-GAAP adjusted earnings and non-GAAP adjusted earnings per share, is
below.  In making any comparisons to other companies, investors need to be
aware that the non-GAAP financial measures used by the Company may be
calculated differently from, and therefore may not be directly comparable to,
similarly titled measures used by other companies. Investors should pay close
attention to the specific definition being used and to the reconciliation
between such measures and the corresponding GAAP measures provided by each
company under applicable SEC rules. Non-GAAP financial measures should be
viewed in addition to, and not as an alternative for, or superior to, the
Company's reported results prepared in accordance with GAAP.

Reconciliation of Net Income from Continuing Operations 
to Non-GAAP Adjusted Net Income from Continuing Operations and Earnings per
Share
For the three months ended September 30, 2012 and 2011
(in thousands, except earnings per share amounts)
                                                         Three months ended 
                                                         September 30, 
                                                        2012        2011
Net income from continuing operations as reported       $ 93,887    $ 54,799
Pre-tax adjustments:
Loss on early extinguishment of debt                    2,294       -
Equity-method investments' hedging activities           -           (5,786)
Total pre-tax adjustments                               2,294       (5,786)
Income tax effect of adjustments                        (849)       2,083
Non-GAAP adjusted net income from continuing            $ 95,332    $ 51,096
operations
Non-GAAP adjusted diluted earnings per share            $     0.60  $     0.63
Weighted average common shares used in computing
diluted earnings per share                              158,576     81,254

 

FOR FURTHER INFORMATION CONTACT:
David Dunlap, President and CEO, (281) 999-0047; 
Robert Taylor, CFO or Greg Rosenstein, EVP, (504) 587-7374  

SOURCE Superior Energy Services, Inc.

Website: http://www.superiorenergy.com
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