RigNet Announces Fourth Quarter and Full Year 2012 Earnings Results

RigNet Announces Fourth Quarter and Full Year 2012 Earnings Results

  *Record quarterly revenue of $49.3 million, including $13.1 million from
    our Nessco operations, a recently acquired subsidiary. Organic revenue
    increased 21.5% over the same quarter last year
    
  *Quarterly Adjusted EBITDA of $11.8 million, which included $1.0 million of
    expenses relating to a legal entity restructuring project. Adjusted EBITDA
    increased 28.3% over the same quarter last year
    
  *Net income attributable to common stockholders of $3.4 million, or $0.20
    per diluted share, an increase of $0.08 per diluted share over the same
    quarter last year

HOUSTON, March 7, 2013 (GLOBE NEWSWIRE) -- RigNet, Inc. (Nasdaq:RNET), a
leading global provider of managed remote communication services to the oil
and gas industry, today reported results for the quarterly and full year
periods ended December 31, 2012.

Revenue was a record $49.3 million for the fourth quarter, including $13.1
million from our Nessco operations, a recently acquired subsidiary. Organic
revenue increased by $6.4 million, or 21.5%, for the three months ended
December 31, 2012 as compared to the same period of 2011 primarily due to
increases in sites served and increasing demand for our services. Organic
revenue decreased by $1.4 million, or 3.7%, for the three months ended
December 31, 2012 as compared to the previous quarter primarily due to lower
revenue per site and lower U.S. onshore drilling rigs served.

Adjusted EBITDA was $11.8 million for the fourth quarter, which included
expenses of $1.0 million relating to a legal entity restructuring project that
was completed in December 2012. We expect that this legal restructuring will
result in more efficient and better optimization of our global cash. Adjusted
EBITDA of $11.8 million in the fourth quarter, or 24.0% of revenue, represents
an increase of 28.3% over the same quarter last year, but a decrease of 4.6%
over the previous quarter. Adjusted EBITDA increased by $2.6 million over the
prior year period primarily due to the increased revenue described above
partially offset by increased operating costs to support the increase in
revenue. The increase in Adjusted EBITDA was also partially offset by costs
associated with head count additions and professional fees associated with the
legal entity restructuring project and continued efforts to strengthen our
internal controls over financial reporting. Adjusted EBITDA decreased $0.6
million over the previous quarter, primarily due to the decreased revenue
described above.

Net income attributable to common stockholders was $3.4 million, or $0.20 per
diluted share, for the fourth quarter compared to net income attributable to
common stockholders of $2.0 million, or $0.12 per diluted share, in the same
quarter last year and net income attributable to common stockholders of $3.2
million, or $0.19 per diluted share, in the previous quarter.

Capital expenditures were $5.3 million in the fourth quarter compared to $5.1
million in the same quarter last year and $5.2 million in the previous
quarter.

For the full year 2012, RigNet reported record revenue of $161.7 million,
including $23.4 million from our Nessco operations, a 26.4% organic increase
over 2011 revenue of $109.4 million. RigNet reported record Adjusted EBITDA of
$43.6 million for the full year 2012, a 30.3% increase over 2011 Adjusted
EBITDA of $33.5 million. RigNet reported record net income attributable to
common stockholders of $11.9 million, or $0.70 per diluted share, an increase
of 25.2% over 2011 net income attributable to common stockholders of $9.5
million, or $0.57 per diluted share. RigNet reported record capital
expenditures of $21.2 million, an increase of 8.7% over 2011 capital
expenditures of $19.5 million.

Mark B. Slaughter, chief executive officer and president, commented, "I am
extremely proud of the outstanding performance by the management team and our
dedicated employees around the globe in 2012 as we delivered record financial
results and completed the acquisition of Nessco and its telecommunications
systems integration business, which positions RigNet to serve the oil and gas
industry with remote communications solutions across the life of the field.
Our strong fourth quarter performance also provides us with positive momentum
as we enter 2013, focused on meeting the mission critical requirements of our
customers."

A conference call for investors will be held at 11:00 a.m. Eastern Daylight
Time (10:00 a.m. CDT) on Tuesday, March 12, 2013 to discuss RigNet's 2012
fourth quarter and full year results. The call may be accessed live over the
telephone by dialing (877) 845-0777, or, for international callers, +1 (760)
298-5090. Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto RigNet's website at www.rig.net in the
Investors – Webcasts and Presentations section. A replay of the conference
call webcast will also be available on our website for approximately thirty
days following the call.

Non-GAAP Financial Measures

This press release contains the following non-GAAP measures: Gross Profit
(excluding depreciation and amortization) and Adjusted EBITDA. Gross Profit
(excluding depreciation and amortization) and Adjusted EBITDA are financial
measures that are not calculated in accordance with generally accepted
accounting principles, or GAAP. We refer you to the Company's most recent 10-K
filing for the year ended December 31, 2012 for a more detailed discussion of
the uses and limitations of our non-GAAP financial measures.

GAAP defines gross profit as revenue less cost of revenue, and includes in
costs of revenue depreciation and amortization expenses related to
revenue-generating long-lived and intangible assets. We define Gross Profit
(excluding depreciation and amortization) as revenue less cost of revenue
(excluding depreciation and amortization). This measure differs from the GAAP
definition of gross profit as we do not include the impact of depreciation and
amortization expenses related to revenue-generating long-lived and intangible
assets which represent non-cash expenses. We use this measure to evaluate
operating margins and the effectiveness of cost management.

We define Adjusted EBITDA as net income (loss) plus interest expense, income
tax expense (benefit), depreciation and amortization, impairment of goodwill,
(gain) loss on retirement of property and equipment, change in fair value of
derivatives, stock-based compensation and IPO or merger/acquisition costs and
related bonuses. Adjusted EBITDA should not be considered as an alternative to
net income (loss), operating income (loss) or any other measure of financial
performance calculated and presented in accordance with GAAP.

About RigNet

RigNet (Nasdaq:RNET) is a leading global provider of managed remote
communications, systems integration and collaborative applications dedicated
to the oil and gas industry, focusing on offshore and onshore drilling rigs,
energy production facilities and energy maritime. RigNet provides solutions
ranging from fully-managed voice and data networks to more advanced
applications that include video conferencing and real-time data services to
remote sites in over thirty countries on six continents, effectively spanning
the drilling and production industry. RigNet is based in Houston, Texas. For
more information, please visit www.rig.net. RigNet is a registered trademark
of RigNet, Inc.

The RigNet, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=8418

Forward Looking Statements

This press release includes "forward-looking statements" within the meaning of
the safe harbor provisions of the United States Private Securities Litigation
Reform Act of 1995 – that is, statements related to the future, not past,
events. Forward-looking statements are based on the current expectations and
include any statement that does not directly relate to a current or historical
fact. In this context, forward-looking statements often address our expected
future business and financial performance, and often contain words such as
"anticipate," "believe," "intend," "expect," "plan" or other similar words.
These forward-looking statements involve certain risks and uncertainties that
ultimately may not prove to be accurate. Actual results and future events
could differ materially from those anticipated in such statements. For further
discussion of risks and uncertainties, individuals should refer to RigNet's
SEC filings. RigNet undertakes no obligation and does not intend to update
these forward-looking statements to reflect events or circumstances occurring
after this press release. You are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date of this
press release. All forward-looking statements are qualified in their entirety
by this cautionary statement.

                                                               
                                                               
                          Three Months Ended           Year Ended
                          December  September December  December   December
                           31, 2012  30, 2012  31, 2011  31, 2012   31, 2011
                          (in thousands)
Unaudited Consolidated                                          
Statements of Income Data:
Revenue                    $49,280  $47,939 $29,786 $161,669 $109,355
Expenses:                                                       
Cost of revenue (excluding
depreciation and           26,878    24,850   13,109   81,071    48,645
amortization)
Depreciation and           4,963     4,837    3,755    17,534    14,584
amortization
Selling and marketing      803       891      639      3,081     2,276
General and administrative 10,351   10,428   7,903    37,184    26,960
Total expenses             42,995   41,006   25,406   138,870   92,465
Operating income          6,285    6,933    4,380    22,799    16,890
Other income (expense),    (942)    (952)    31       (2,045)   (636)
net
Income before income       5,343    5,981    4,411    20,754    16,254
taxes
Income tax expense         (1,850)  (2,808)  (2,358)  (8,733)   (6,502)
Net income                 $3,493  $3,173  $2,053  $12,021  $9,752
                                                               
Income Per Share - Basic                                        
and Diluted
Net income attributable to
RigNet, Inc. common        $3,379  $3,238  $1,972  $11,882  $9,518
stockholders
Net income per share
attributable to RigNet,    $0.22   $0.21   $0.13   $0.76    $0.62
Inc.common stockholders,
basic
Net income per share
attributable to RigNet,    $0.20   $0.19   $0.12   $0.70    $0.57
Inc. common stockholders,
diluted
Weighted average shares    15,680   15,647   15,443   15,591    15,387
outstanding, basic
Weighted average shares    17,151   17,104   16,822   17,017    16,814
outstanding, diluted
                                                               
Unaudited Non-GAAP Data:                                        
Gross Profit (excluding
depreciation and           $22,402 $23,089 $16,677 $80,598  $60,710
amortization)
Gross Profit (excluding
depreciation and           45.5%     48.2%     56.0%     49.9%      55.5%
amortization) margin
Adjusted EBITDA            $11,818 $12,392 $9,214  $43,583  $33,456
Adjusted EBITDA margin     24.0%     25.8%     30.9%     27.0%      30.6%
                                                               
                                                               
                                                               
                          Three Months Ended           Year Ended
                          December  September December  December   December
                           31, 2012  30, 2012  31, 2011  31, 2012   31, 2011
                          (in thousands)
Reconciliation of Gross
Profit to Gross Profit                                          
(excluding depreciation
and amortization):
Gross profit               17,700   18,487   13,114   63,964    46,890
Depreciation and
amortization related to    4,702    4,602    3,563    16,634    13,820
cost of revenue
Gross Profit (excluding
depreciation and           $22,402 $23,089 $16,677 $80,598  $60,710
amortization)
                                                               
                                                               
                                                               
                          Three Months Ended           Year Ended
                          December  September December  December   December
                           31, 2012  30, 2012  31, 2011  31, 2012   31, 2011
                          (in thousands)
Reconciliation of Net                                           
Income to Adjusted EBITDA:
Net income                 $3,493  $3,173  $2,053  $12,021  $9,752
Interest expense           625      611      219      1,552     1,249
Depreciation and           4,963    4,837    3,755    17,534    14,584
amortization
(Gain) loss on sales of
property and equipment,    10       (90)     (54)     (131)     (165)
net of retirements
Stock-based compensation   628      592      793      2,502     1,534
Acquisition costs          249      461      --       1,372     --
Income tax expense         1,850    2,808    2,358    8,733     6,502
Adjusted EBITDA (non-GAAP  $11,818 $12,392 $9,124  $43,583  $33,456
measure)

                                                                
                                                                
                                                    December 31, December 31,
                                                    2012         2011
                                                    (in thousands)
Unaudited Consolidated Balance Sheet Data:                       
Cash and cash equivalents                            $59,744    $53,106
Restricted cash - current portion                    987         --
Restricted cash - long-term                          1,809       --
Total assets                                         215,932     140,922
Current maturities of long-term debt                 9,422       8,735
Long-term debt                                       51,871      14,785
                                                                
                                                                
                                                    Year Ended December 31,
                                                    2012         2011
                                                    (in thousands)
Unaudited Consolidated Statements of Cash Flows                  
Data:
Cash and cash equivalents, January 1,                $53,106    $50,435
Net cash provided by operating activities            32,255      16,592
Net cash used in investing activities                (66,763)    (8,996)
Net cash provided by (used in) financing activities  37,707      (4,310)
Changes in foreign currency translation              3,439       (615)
Cash and cash equivalents, December 31,              $59,744    $53,106

                                                              
                                                              
                  4th Quarter 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
                  2011        2012        2012        2012        2012
Selected                                                       
Operational Data:
Offshore drilling  228         233         234         233         237
rigs (1)
U.S. onshore       338         323         308         302         282
drilling rigs
Other sites (2)    488         493         515         550         575
Total              1,054       1,049       1,057       1,085       1,094
                                                              
(1) Includes jack up, semi-submersible and drillship rigs
(2) Includes production facilities, energy support vessels, international land
rigs, completion sites, man-camps, remote offices and supply bases

                                                         
                                                         
                         Three Months Ended              Year Ended
                          December 31, September December  December  December
                         2012         30,       31,       31,       31,
                                       2012      2011      2012      2011
                         (in thousands)
Americas:                                                        
Revenue                   $12,816    $13,053 $11,352 $49,881 $41,517
Cost of revenue           5,586       5,765    5,391    22,598   20,484
Gross Profit (non-GAAP    7,230       7,288    5,961    27,283   21,033
measure)
Gross Profit margin       56.4 %      55.8 %   52.5 %   54.7 %   50.7 %
Depreciation and          1,873       1,909    1,810    7,409    6,743
amortization
Selling, general and      1,647       2,012    3,084    7,385    7,894
administrative
Operating income          $3,710     $3,367  $1,067  $12,489 $6,396
Adjusted EBITDA (non-GAAP $5,520     $5,235  $2,924  $19,848 $13,205
measure)
Adjusted EBITDA margin    43.1 %      40.1 %   25.8 %   39.8 %   31.8 %
                                                                
Europe/Africa:                                                   
Revenue                   $23,913    $21,972 $9,358  $65,205 $34,371
Cost of revenue           15,516      13,536   3,847    37,385   13,168
Gross Profit (non-GAAP    8,397       8,436    5,511    27,820   21,203
measure)
Gross Profit margin       35.1 %      38.4 %   58.9 %   42.7 %   61.7 %
Depreciation and          1,806       1,774    744      5,073    3,053
amortization
Selling, general and      2,711       2,655    1,639    7,559    5,411
administrative
Operating income          $3,880     $4,007  $3,128  $15,188 $12,739
Adjusted EBITDA (non-GAAP $5,473     $5,013  $4,069  $19,811 $16,247
measure)
Adjusted EBITDA margin    22.9 %      22.8 %   43.5 %   30.4 %   47.3 %
                                                                
Middle East/Asia Pacific:                                        
Revenue                   $12,551    $12,914 $9,321  $46,583 $33,784
Cost of revenue           4,671       4,512    3,279    17,113   12,335
Gross Profit (non-GAAP    7,880       8,402    6,042    29,470   21,449
measure)
Gross Profit margin       62.8 %      65.1 %   64.8 %   63.3 %   63.5 %
Depreciation and          1,243       1,153    1,228    5,010    4,968
amortization
Selling, general and      1,246       1,088    1,040    4,331    3,558
administrative
Operating income          $5,391     $6,161  $3,774  $20,129 $12,923
Adjusted EBITDA (non-GAAP $6,582     $7,232  $4,976  $24,990 $17,867
measure)
Adjusted EBITDA margin    52.4 %      56.0 %   53.4 %   53.6 %   52.9 %
                                                                
NOTE:Consolidated balances include the three segments above along with
corporate activities and intercompany eliminations.

CONTACT: Marty Jimmerson
         RigNet, Inc.
         +1 (281) 674-0699
         investor.relations@rig.net

RigNet, Inc. Logo
 
Press spacebar to pause and continue. Press esc to stop.