Forbes Energy Services Reports 2013 Third Quarter Financial Results

Forbes Energy Services Reports 2013 Third Quarter Financial Results

ALICE, Texas, Nov. 8, 2013 (GLOBE NEWSWIRE) -- Forbes Energy Services Ltd.
(Nasdaq:FES) today announced financial and operating results for the three
months ended September 30, 2013.

The Company reported consolidated revenues of $104.9 million for the third
quarter of 2013, compared to $103.7 million for the second quarter of 2013.

Selected financial information from continuing operations for the quarter
ended September 30, 2013:

  oGross profit decreased to $19.8 million, or 18.9% of revenues, in the
    third quarter of 2013, compared to $26.7 million, or 25.8%, in the second
    quarter of 2013.

  oGAAP net loss attributable to common shares was $5.7 million, or $0.27 per
    diluted share, for the third quarter of 2013, compared to net loss
    attributable to common shares of $0.7 million, or $0.04 per diluted share
    for the second quarter of 2013.

  oAdjusted EBITDA from U.S. Operations* totaled $13.0 million in the third
    quarter of 2013 as compared to $20.0 million in the second quarter of
    2013.

^* Adjusted EBITDA from U.S. Operations, a non-GAAP financial measure, is
defined by the Company as income (loss) from continuing operations before
interest, taxes, depreciation, amortization, and non-cash stock based
compensation.For a reconciliation of such measure to net income, please see
the disclosures at the end of this release and on the Company's Website.

Overview

Forbes' president and chief executive officer, John Crisp, commented, "Our
third quarter results reflect the highly competitive market in which we are
operating. Our previous comments regarding the second half of the year were
supported by anticipated activity levels of our customers. However, the
intensely competitive and oversupplied market adversely impacted pricing and
subsequently utilization of our trucking and rental services.

"Our Well Servicing segment results improved over the previous quarter, and we
believe that if the market remains healthy, utilization for this business
should continue to trend upward."

"We anticipate fourth quarter to be affected by seasonal factors, as well as
continued competitive pressure in our fluid logistics business, and believe
utilization of our coiled tubing units and conventional rigs will have
incremental improvements over the next few quarters. We intend to continue
reducing costs and improving operating efficiencies and service quality."

Business Segment Results

Well Servicing Segment

In the third quarter of 2013, Well Servicing segment revenues increased 13.6%
to $62.1 million, compared to $54.6 million in the second quarter of 2013. The
increase in revenues was primarily driven by an increase in rig hours as well
as higher utilization of coiled tubing services. Segment gross profit totaled
$12.0 million, or 19.3% of revenues, in the third quarter of 2013 compared to
$12.1 million, or 22.2% of revenues, for the second quarter of 2013. The
decrease in gross margin was due to wage increases that took effect prior to
the implementation of price increases to the majority of our customers, an
increase in insurance costs, and increased supplies, repairs and maintenance
expense for the quarter incurred in the normal course of business.

The Company recorded approximately 112,447 well service rig hours for the
third quarter of 2013, compared to 107,345 in the second quarter of 2013.
Capital expenditures in the Well Servicing segment for the quarter ended
September 30, 2013, were approximately $11.2 million, which consisted of
payments for five new well service rigs and additional coiled tubing
equipment.Three of the well service rigs went into service in the third
quarter and the remaining two will be in service in the fourth quarter.

As of September 30, 2013, the Company had in operation 165 well service rigs,
nine tubing testing systems, four pump-down units and five coiled tubing
spreads.

Fluid Logistics Segment

In the third quarter of 2013, Fluid Logistics segment revenues decreased $6.3
million, or 12.8%, to $42.8 million, compared to $49.0 million in the second
quarter of 2013.The decrease in revenues was due to lower frac tank rental
days and rates, as well as a decrease in billable truck hours. Gross margin
for the Fluid Logistics segment totaled $7.8 million, or 18.2% of revenues, in
the third quarter of 2013, compared to $14.6 million, or 29.8% of revenues, in
the second quarter of 2013.The percentage margin decrease was partially due
to decreased frac tank rental revenues, which had no associated operating
expenses eliminated, an increase in insurance expense, and the balance related
to fixed costs and expenses such as labor, as adjustments tend to lag behind
revenue decreases.

The Company recorded 281,785 truck hours during the third quarter of 2013,
compared to 307,952 hours in the second quarter of 2013. The Company's heavy
truck fleet totaled 581 at September 30, 2013, which included 473 vacuum
trucks.Capital expenditures for the Fluid Logistics segment were
approximately $7.5 million for the quarter ended September 30, 2013 which
consisted of fluid mixing tanks, salt water disposal wells, facilities, and
equipment.

Liquidity and Capital Resources

As of September 30, 2013, the Company had $32.9 million in unrestricted cash
and $1.4 million of restricted cash.As of November 5, 2013, the Company had
$28.6 million in unrestricted cash and the newly amended and expanded $90.0
million secured credit facility remained undrawn, except for the letters of
credit in the amount of $2.9 million. The total borrowing credit under our
amended secured credit facility is subject to borrowing base availability, any
reserves established by the facility agent in its discretion, compliance with
certain financial covenants if availability under the facility falls below
certain thresholds and, for borrowings above $75.0 million, compliance with
the debt incurrence covenant in the indenture governing the 9% Senior Notes
that prohibits the incurrence of debt except for certain limited permissions,
including indebtedness incurred under the permitted credit facility debt
basket to the greater of $75.0 million or 18% of our consolidated tangible net
assets reported for the last fiscal quarter for which financial statements are
available. As of September 30, 2013, 18% of our consolidated tangible net
assets was approximately $84.8 million. As of September 30, 2013 the Company
also had $280.0 million of 9.0% Senior Notes and $15.9 million of other notes
outstanding.

Conference Call

The Company will host a conference call to discuss its third quarter results
at 10:00 a.m. Eastern Time (9:00 a.m. Central) Friday, November 8, 2013. To
access the call, please dial 877-303-1298 and provide the Conference ID:
98036310. The conference call also will be broadcast live via the Internet and
will be accessible through the "Investor Relations" page of the Company's
Website, www.forbesenergyservices.com. 

At the conclusion of the call, a replay will be available until November 21,
2013.To access the replay of the call, dial (855) 859-2056 and provide the
same Conference ID.A webcast archive will be available at
www.forbesenergyservices.com shortly after the call and will be accessible for
approximately 14 days.

About Forbes Energy Services

Forbes Energy Services Ltd. is an independent oilfield services contractor
that provides a broad range of drilling-related and production-related
services to oil and natural gas companies, primarily onshore in Texas,
Mississippi and Pennsylvania.More information on the Company can be found by
visiting www.forbesenergyservices.com.

Forward-Looking Statements and Regulation G Reconciliation

This press release contains "forward-looking statements," as contemplated by
the Private Securities Litigation Reform Act of 1995, in which the Company
discusses factors it believes may affect its performance in the future. These
statements include, in particular, statements regarding the acquisition and
benefit of new capital assets and market conditions and outlook.The accuracy
of the Company's assumptions, expectations, beliefs and projections depend on
events or conditions that change over time and are thus susceptible to change
based on actual experience, new developments of known and unknown risks. The
Company gives no assurance that the forward-looking statements will prove to
be correct and does not undertake any duty to update them. The Company's
actual future results might differ from the forward-looking statements made in
this press release for a variety of reasons, which include: supply and demand
for oilfield services and the level of oil and natural gas prices; the timing
of spending by customers in relation to their exploratory budgets; the
continued uncertainty in the global financial markets and its effect on
domestic spending in the oil and natural gas industry; the Company's ability
to maintain or improve pricing of its core services; the potential for excess
capacity in the industry; and levels of competition. Additional factors that
should be considered are set forth in detail in the Risk Factors section of
the Company's Annual Report on Form 10-K for the year ended December 31, 2012,
as well as other filings the Company has made with the Securities and Exchange
Commission. Should one or more of the foregoing risks or uncertainties
materialize, or should the Company's underlying assumptions prove incorrect,
the Company's actual results may vary materially from those anticipated in its
forward-looking statements, and the Company's business, financial condition
and results of operations could be materially and adversely affected.

The Company's financial statements and management's discussion and analysis of
financial condition and results of operations will be found in the Company's
quarterly report on Form 10-Q for the quarter ended September 30, 2013, which
will be submitted for filing next week with the Securities and Exchange
Commission and posted on the Company's Website.

This press release also contains references to the non-GAAP financial measure
of Adjusted EBITDA from U.S. Operations. For a reconciliation of such measure
to net income, please see the table at the end of this release. Management's
opinion regarding the usefulness of Adjusted EBITDA from U.S. Operations to
investors and a description of the ways in which management uses such measure
can be found on the "Investor Relations" page of the Company's Website.

All numbers herein are related to continuing operations only and exclude
operations in Mexico, which were sold in January of 2012.


Forbes Energy Services Ltd.
Selected Statement of Operations Data (unaudited)
(in thousands, except per share amounts)
                                                                
                                  Three Months Ended   NineMonths Ended
                                   September 30,        September 30,
                                  2013       2012       2013       2012
Revenues                                                         
Well servicing                     $62,079  $50,565  $166,876 $154,120
Fluid logistics                    42,775    63,755    143,398   211,470
Total revenues                     104,854   114,320   310,274   365,590
Expenses                                                         
Well servicing                     50,073    41,372    132,915   117,913
Fluid logistics                    34,973    47,186    106,851   151,396
General and administrative         7,955     7,278     22,906    26,023
Depreciation and amortization      13,376    13,187    39,573    37,074
Total expenses                     106,377   109,023   302,245   332,406
Operating income (loss)            (1,523)   5,297     8,029     33,184
Other income                                                     
Interest income                    13        20        18        70
Interest expense                   (7,103)   (7,158)   (21,120)  (20,921)
Income (loss) from continuing      (8,613)   (1,841)   (13,073)  12,333
operations before taxes
Income tax expense (benefit)       (2,961)   (571)     (4,156)   5,745
Income (loss) from continuing      (5,652)   (1,270)   (8,917)   6,588
operations
Loss from discontinued operations,
net of tax expense (benefit) of    (59)      (1,072)   (295)     (1,567)
($32), ($9), ($159), and $370
respectively
Net income (loss)                  (5,711)   (2,342)   (9,212)   5,021
Preferred shares dividends         (194)     (194)     (582)     (582)
Net income (loss) attributable to  $(5,905) $(2,536) $(9,794) $4,439
common shareholders
Income (loss) per share of common stock from continuing            
operations
Basic                              $(0.27)  $(0.07)  $(0.44)  $0.29
Diluted                            $(0.27)  $(0.07)  $(0.44)  $0.25
Loss per share of common stock from discontinued                   
operations
Basic                              $(0.01)  $(0.05)  $(0.02)  $(0.08)
Diluted                            $(0.01)  $(0.05)  $(0.02)  $(0.06)
Income (loss) per share of common stock                           
Basic                              $(0.28)  $(0.12)  $(0.46)  $0.21
Diluted                            $(0.28)  $(0.12)  $(0.46)  $0.19
Weighted average number of shares outstanding                     
Basic                              21,438    21,068    21,410    21,039
Diluted                            21,438    21,068    21,410    26,650

                                                             
                                                             
Forbes Energy                                                
Services Ltd.
Selected Balance
Sheet Data                                                    
(unaudited)
(in thousands, except                                        
per share amounts)
                                                             
                      September 30, December 31,               
                      2013        2012                     
Cash                 $32,943     $17,619                  
Accounts receivable,  76,713       92,596                    
net
Working capital      68,003       79,547                    
Other intangibles,    25,869       28,015                    
net
Total assets         504,011      512,701                   
Total debt           295,887      306,347                   
Deferred tax          22,367       26,587                    
liability
Shareholders' equity 125,054      132,168                   
                                                             
                                                             
                                                             
Forbes Energy Services                                        
Ltd.
Selected Operating                                            
Data
                                                             
                      Three Months Ended        NineMonths Ended September
                       September 30,             30,
                      2013        2012       2013         2012
Working days         66           65          195           195
                                                             
Rig hours            112,447      107,435     319,063       339,375
                                                             
Truck hours          281,785      412,421     914,074       1,302,114
                                                             
                                                             
                                                             
Forbes Energy                                                
Services Ltd.
Reconciliation of Net Income from
Continuing Operations to Adjusted                              
EBITDA
(Unaudited)                                                 
                                                             
                      Three Months Ended        NineMonths Ended September
                       September 30,             30,
                      2013        2012       2013         2012
Net Income (loss) from $(5,652)    $(1,270)   $(8,917)     $6,588
continuing operations
Depreciation and       13,376       13,187      39,573        37,074
amortization
Interest expense, net  7,090        7,138       21,102        20,851
Income tax expense     (2,961)      (571)       (4,156)       5,745
(benefit)
Share-based            1,194        708         2,822         4,346
compensation
Adjusted EBITDA from   $13,047     $19,192    $50,424      $74,604
U. S. Operations

CONTACT: Casey Stegman
         Investor Relations
         214-987-4121
 
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