Superior Energy Services, Inc. Announces First Quarter 2013 Results PR Newswire HOUSTON, April 25, 2013 HOUSTON, April 25, 2013 /PRNewswire/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $63.7 million, or $0.40 per diluted share, on revenue of $1,135.5 million for the first quarter of 2013. These results compare with the first quarter of 2012 net income from continuing operations of $70.2 million, or $0.55 per diluted share, and net income of $53.9 million, or $0.42 per diluted share, on revenue of $966.8 million. The first quarter of 2012 included only a partial quarter from the legacy Complete Production Services businesses which are contained within the Onshore Completion and Workover and Production Services segments, making comparisons of the first quarter 2013 and 2012 for those segments less meaningful. David Dunlap, President and CEO of the Company, commented, "Our first quarter results came in at the midpoint of our expectations. Lower general and administrative expense partially offset lower gross profit and higher depreciation. Our goal has been to both reduce and defer expenditures until we see indications of increased drilling and completion activity in the U.S. land markets.For example, we limited our capital additions to $130 million for the quarter, well under our originally planned $200 million. "Modest increases in completions activity toward the end of the first quarter, coupled with continued improvement in our pressure pumping business yielded sequential increases in revenue and income from operations as a percentage of revenue ("operating margin") in our Onshore Completion and Workover Services segment. These were offset in part by sequential declines in operating margin in our other three segments. The Subsea and Technical Solutions segment was adversely impacted by anticipated seasonality in the shallow water Gulf of Mexico and offshore Asia Pacific market areas, as well as low profit margins on certain decommissioning projects in the Gulf of Mexico." First Quarter 2013 Geographic Breakdown U.S. land market revenue was approximately $732.8 million in the first quarter of 2013, as compared with $642.8 million in the first quarter of 2012 and $730.2 million in the fourth quarter of 2012. Gulf of Mexico revenue was approximately $208.0 million, as compared with $153.0 million in the first quarter of 2012 and $212.7 million in the fourth quarter of 2012. International revenue was approximately $194.7 million, as compared with $171.1 million in the first quarter of 2012 and $235.3 million in the fourth quarter of 2012. Drilling Products and Services Segment Drilling Products and Services segment revenue was $194.0 million, a 2% increase from first quarter 2012 revenue of $189.4 million and a 1% increase from fourth quarter 2012 revenue of $192.7 million. The primary factor driving the higher sequential revenue in this segment was a 4% increase in international market revenue to $50.1 million due to increased rentals of accommodations in Europe. Gulf of Mexico market revenue increased 2% sequentially to $69.9 million due to increased specialty rentals, while U.S. land market revenue decreased 2% to $74.0 million primarily due to lower demand for premium drill pipe and accommodations, partially offset by an increase in demand for bottom hole assemblies. Onshore Completion and Workover Services Segment Onshore Completion and Workover Services segment revenue in the first quarter was $426.0 million, a 52% increase from first quarter 2012 revenue of $279.7 million, and a 2% increase from fourth quarter 2012 revenue of $417.7 million. Virtually all of the revenue in this segment is generated from U.S. land market areas. On a sequential basis, revenue increases from pressure pumping and well service rigs were partially offset by a decline in fluid management revenue. The increase in pressure pumping revenue was due to additional utilization of contracted fleets, while well service rig revenue was higher as a result of increased utilization and pricing in certain basins. The decline in fluid management revenue was associated with reduced demand for transportation and storage assets. Production Services Segment Production Services segment revenue was $367.4 million, a 4% increase from first quarter 2012 revenue of $354.0 million and a 1% decline from fourth quarter 2012 revenue of $369.3 million. U.S. land market revenue declined 3% sequentially to $216.7 million, primarily due to reduced demand for pressure control, remedial pumping and snubbing services, which was partially offset by an increase in wireline services. Revenue from coiled tubing services was unchanged in the U.S. land market. International market revenue increased 7% to $96.8 million due to increased production testing activity in Argentina, remedial pumping in Brazil and cementing activity from our recent acquisition in Colombia. Gulf of Mexico revenue declined 5% to $53.9 million primarily due to seasonal factors in the shallow water market area. Subsea and Technical Solutions Segment Subsea and Technical Solutions segment revenue was $148.1 million, a 3% increase from first quarter 2012 revenue of $143.8 million and a 25% decrease from fourth quarter 2012 revenue of $198.5 million. Gulf of Mexico market revenue decreased 4% sequentially to $84.1 million due to seasonal factors resulting in lower activity levels for well control services and well and platform decommissioning services. International market revenue declined 50% to $47.8 million as a result of lower subsea construction and well control activity. U.S. land market revenue increased 8% sequentially to $16.2 million. 2013 Earnings Guidance Update The Company maintains its prior earnings per share guidance range of $1.85 to $2.35. Dunlap commented, "We maintained our prior guidance as the visibility regarding variables driving the range of potential outcomes – specifically the timing and intensity of utilization and rig activity in the U.S. land market areas – is still unknown. Our first quarter results came in as expected and we are certainly encouraged by what we experienced towards the latter stages of the quarter for certain completions-related services." Conference Call Information The Company will host a conference call at 10 a.m. Central Time on Friday, April 26, 2013. The call can be accessed from Company's website at www.superiorenergy.com, or by telephone at 480-629-9645. For those who cannot listen to the live call, a telephonic replay will be available through Friday, May 10, 2013 and may be accessed by calling 303-590-3030 and using the pass code 4613819#. An archive of the webcast will be available after the call for a period of 60 days at 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; risks associated with the integration of the Completion Production Services Inc.'s operations; 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. FOR FURTHER INFORMATION CONTACT: David Dunlap, President and CEO, (281) 999-0047; Robert Taylor, CFO or Greg Rosenstein, EVP of Corporate Development, (504) 587-7374 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES Consolidated Statements of Operations Three Months Ended March 31, 2013 and 2012 (in thousands, except earnings per share amounts) (unaudited) Three Months Ended March 31, 2013 2012 Revenues $ 1,135,479 $ 966,837 Cost of services (exclusive of items shown 707,487 546,767 separately below) Depreciation, depletion, amortization and 149,634 102,596 accretion General and administrative expenses 150,164 176,021 Income from continuing operations 128,194 141,453 Other income (expense): Interest expense, net (27,540) (30,494) Other 500 401 Income from continuing operations before 101,154 111,360 income taxes Income taxes 37,427 41,203 Net income from continuing operations 63,727 70,157 Loss from discontinued operations, net of - (16,237) income tax Net income $ 63,727 $ 53,920 Basic earnings per share: Net income from continuing operations $ 0.40 $ 0.56 Loss from discontinued operations - (0.13) Net income $ 0.40 $ 0.43 Diluted earnings per share: Net income from continuing operations $ 0.40 $ 0.55 Loss from discontinued operations - (0.13) Net income $ 0.40 $ 0.42 Weighted average common shares used in computing earnings per share: Basic 158,946 125,542 Diluted 160,433 127,344 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2013 AND DECEMBER 31, 2012 (in thousands) 3/31/2013 12/31/2012 (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $ 77,075 $ 91,199 Accounts receivable, net 1,030,674 1,027,218 Deferred income taxes 27,317 34,120 Prepaid expenses 93,936 93,190 Inventory and other current assets 244,090 214,630 Total current assets 1,473,092 1,460,357 Property, plant and equipment, net 3,220,215 3,255,220 Goodwill 2,547,497 2,532,065 Notes receivable 45,558 44,838 Intangible and other long-term assets, net 503,022 510,406 Total assets $ 7,789,384 $ 7,802,886 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 238,739 $ 252,363 Accrued expenses 331,520 346,490 Income taxes payable 39,371 153,212 Current maturities of long-term debt 20,000 20,000 Total current liabilities 629,630 772,065 Deferred income taxes 759,908 745,144 Decommissioning liabilities 94,565 93,053 Long-term debt, net 1,844,584 1,814,500 Other long-term liabilities 169,523 147,045 Total stockholders' equity 4,291,174 4,231,079 Total liabilities and stockholders' $ 7,789,384 $ 7,802,886 equity SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES SEGMENT HIGHLIGHTS THREE MONTHS ENDED MARCH 31, 2013, DECEMBER 31, 2012, AND MARCH 31, 2012 (unaudited) (in thousands) Three months ended, Revenue March 31, 2013 December 31, 2012 March 31, 2012 Drilling Products and $ $ $ Services 193,979 192,677 189,357 Onshore Completion and 425,983 417,738 279,676 Workover Services Production Services 367,397 369,341 354,041 Subsea and Technical 148,120 198,491 143,763 Solutions Total Revenues $ $ $ 1,135,479 1,178,247 966,837 Gross Profit (1) March 31, 2013 December 31, 2012 March 31, 2012 Drilling Products and $ $ $ Services 129,334 127,834 126,791 Onshore Completion and 144,244 144,626 94,014 Workover Services Production Services 114,342 120,228 156,026 Subsea and Technical 40,072 62,745 43,239 Solutions Total Gross Profit $ $ $ 427,992 455,433 420,070 Income from Continuing March 31, 2013 December 31, 2012 March 31, 2012 Operations (2) (3) Drilling Products and $ $ $ Services 56,597 57,424 57,229 Onshore Completion and 49,708 46,904 12,391 Workover Services Production Services 28,347 32,015 73,762 Subsea and Technical (6,458) 10,287 (1,929) Solutions Total Income from $ $ $ Continuing Operations 128,194 146,630 141,453 Gross profit is calculated by subtracting cost of services (exclusive of (1) depreciation, depletion, amortization and accretion) from revenue for each of the Company's segments. (2) Includes $2.1 million of additional consideration for an acquisition based on the acquired company exceeding performance goals. (3) Includes $29.0 million of transaction-related expenses. SOURCE Superior Energy Services, Inc. Website: http://www.superiorenergy.com
Superior Energy Services, Inc. Announces First Quarter 2013 Results
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