Superior Energy Services, Inc. Announces First Quarter 2014 Results PR Newswire HOUSTON, April 24, 2014 HOUSTON, April 24, 2014 /PRNewswire/ --Superior Energy Services, Inc. (NYSE: SPN) today announced net income from continuing operations of $42.6 million, or $0.27 per diluted share, and net income of $36.7 million, or $0.23 per diluted share, on revenue of $1,061.4 million for the first quarter of 2014. These results compare with the first quarter of 2013 net income from continuing operations of $80.6 million, or $0.51 per diluted share, and net income of $63.7 million, or $0.40 per diluted share, on revenue of $1,086.9 million. During 2014, the Company has repurchased and retired approximately 2.8 million shares of its common stock for a total purchase price of $82.3 million (average price of $29.12) pursuant to the Company's $400 million share repurchase program. David Dunlap, President and CEO of the Company, commented, "We anticipated that extreme winter weather in the U.S. would create challenges during the first quarter. As weather improved during the second half of the quarter, we witnessed activity increases, driven by an increase in horizontal drilling. In addition, U.S. margins were positively impacted by the cost improvement initiatives that we enacted during 2013. Our U.S. land revenue was 7% lower than the same period a year ago and 1% higher than the fourth quarter of 2013. Gulf of Mexico revenue was 13% higher as compared with the first quarter of 2013, but 3% lower than fourth quarter of 2013 primarily due to seasonal factors. International revenue was 1% higher than the first quarter of 2013, but 8% lower than the fourth quarter of 2013 primarily due to lower revenue in drilling products and services. "Overall, the quarter finished up strong and should serve as a foundation to achieve further growth as the year progresses, particularly in the U.S. land markets, driven by higher utilization across various products and services. "We continue to focus on operational efficiency and returning cash to shareholders. We have repurchased about $93 million under our $400 million share repurchase program since inception in October 2013 and issued our first quarterly dividend of $0.08 per share in February 2014." First Quarter 2014 Geographic Breakdown U.S. land market revenue was $681.3 million in the first quarter of 2014, as compared with $732.8 million in the first quarter of 2013 and $673.1 million in the fourth quarter of 2013. Gulf of Mexico market revenue was $211.0 million, as compared with $186.8 million in the first quarter of 2013 and $218.0 million in the fourth quarter of 2013. International market revenue was $169.1 million, as compared with $167.3 million in the first quarter of 2013 and $184.6 million in the fourth quarter of 2013. Discontinued Operations Discontinued operations include the Company's subsea construction and conventional decommissioning businesses. As a result, the Subsea and Technical Solutions segment has been renamed Technical Solutions. Drilling Products and Services Segment Drilling Products and Services segment revenue was $220.2 million, a 14% increase from first quarter 2013 revenue of $194.0 million and a 2% decrease from fourth quarter 2013 revenue of $223.6 million. On a sequential basis, Gulf of Mexico market revenue increased 11% to $101.4 million, which was offset by a 21% decline in international market revenue to $51.4 million. U.S. land market revenue was unchanged at $67.4 million. Gulf of Mexico market revenue was higher due to increased demand for premium drill pipe and accommodations. The primary drivers of the lower international revenue were lower demand for premium drill pipe in the North Sea and accommodations in Latin America. Onshore Completion and Workover Services Segment Onshore Completion and Workover Services segment revenue in the first quarter was $389.9 million, an 8% decrease from first quarter 2013 revenue of $426.0 million, and a 4% increase from fourth quarter 2013 revenue of $374.5 million. Virtually all of the revenue in this segment is generated from U.S. land market areas. On a sequential basis, revenue increased in fluid management services, which more than offset small declines in revenue from pressure pumping and well service rigs. The increase in fluid management revenue was primarily associated with increased demand for heating-related activity. Production Services Segment Production Services segment revenue was $321.2 million, a 13% decrease from first quarter 2013 revenue of $367.4 million and an 8% decrease from fourth quarter 2013 revenue of $349.4 million. U.S. land market revenue declined 6% sequentially to $202.3 million, primarily due to reduced demand for coiled tubing, remedial pumping and snubbing services. International market revenue decreased 3% to $84.3 million primarily due to a decline in hydraulic workover andsnubbing activity, partially offset by an increase in remedial pumping in Latin America. Gulf of Mexico revenue declined 28% to $34.6 million primarily due to seasonal factors in the shallow water market area, leading to lower activity for coiled tubing, wireline and hydraulic workover and snubbing services. Technical Solutions Segment Technical Solutions segment revenue, which includes revenue from continuing operations only, was $130.1 million, a 31% increase from first quarter 2013 revenue of $99.5 million and a 1% increase from fourth quarter 2013 revenue of $128.2 million. Gulf of Mexico market revenue decreased 5% sequentially to $74.9 million due to a reduction in well control work following the completion of large projects in the prior quarter. International market revenue increased 3% to $33.4 million as a result of an increase in well control work. U.S. land market revenue increased 28% sequentially to $21.8 million primarily due to an increase in demand for completion tools and products. Conference Call Information The Company will host a conference call at 9 a.m. Eastern Time on Friday, April 25, 2014. The call can be accessed from Company's website at www.superiorenergy.com, or by telephone at 480-629-9771. For those who cannot listen to the live call, a telephonic replay will be available through Friday, May 9, 2014 and may be accessed by calling 303-590-3030 and using the pass code 4678489#. 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. The press release contains certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks," "estimates," variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements involve risks and uncertainties. Such forward-looking statements are subject to uncertainties that could cause actual results to differ materially from such statements. Such uncertainties include, but are not limited to: risks inherent in acquiring businesses, the effect of regulatory programs and environmental matters on the Company's performance, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for the Company's pressure pumping services; risks associated with business growth outpacing the capabilities of the Company's infrastructure and workforce; risks associated with the uncertainty of macroeconomic and business conditions worldwide; the cyclical nature and volatility of the oil and gas industry, including the level of exploration, production and development activity and the volatility of oil and gas prices; changes in competitive factors affecting the Company's operations; political, economic and other risks and uncertainties associated with international operations; the impact that unfavorable or unusual weather conditions could have on the Company's operations; the potential shortage of skilled workers; the Company's dependence on certain customers; the risks inherent in long-term fixed-price contracts; and, operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, the Company can give no assurance that such expectations will prove to be correct. Investors are cautioned that many of the assumptions on which the Company's forward-looking statements are based are likely to change after the forward-looking statements are made, including for example the market prices of oil and natural gas and regulations affecting oil and gas operations, which the Company cannot control or anticipate. Further, the Company may make changes to its business plans that could or will affect the Company's results. The Company undertakes no obligation to update any of its forward-looking statements and it does not intend to update its forward-looking statements more frequently than quarterly, notwithstanding any changes in the assumptions, changes in the Company's business plans, our actual experience, or other changes. FOR FURTHER INFORMATION CONTACT: David Dunlap, President and CEO, (713) 654-2200; 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, 2014 and 2013 (in thousands, except earnings per share amounts) (unaudited) Three Months Ended March 31, 2014 2013 Revenues $ 1,061,418 $ 1,086,872 Cost of services (exclusive of items shown 651,605 651,594 separately below) Depreciation, depletion, amortization and 162,318 144,964 accretion General and administrative expenses 155,919 145,896 Income from operations 91,576 144,418 Other income (expense): Interest expense, net (23,881) (28,261) Other income (expense) (35) 4,575 Income from continuing operations before 67,660 120,732 income taxes Income taxes 25,034 40,114 Net income from continuing operations 42,626 80,618 Loss from discontinued operations, net of (5,954) (16,891) income tax Net income $ 36,672 $ 63,727 Basic earnings (losses) per share: Net income from continuing operations $ 0.27 $ 0.51 Loss from discontinued operations (0.04) (0.11) Net income $ 0.23 $ 0.40 Diluted earnings (losses) per share: Net income from continuing operations $ 0.27 $ 0.51 Loss from discontinued operations (0.04) (0.11) Net income $ 0.23 $ 0.40 Weighted average common shares used in computing earnings per share: Basic 158,212 158,946 Diluted 160,912 160,433 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS MARCH 31, 2014 AND DECEMBER 31, 2013 (in thousands) 3/31/2014 12/31/2013 (Unaudited) (Audited) ASSETS Current assets: Cash and cash equivalents $ 145,848 $ 196,047 Accounts receivable, net 906,235 937,195 Deferred income taxes 6,367 8,785 Income taxes receivable - 5,532 Prepaid expenses 69,031 70,421 Inventory and other current assets 202,027 258,449 Assets held for sale 321,484 - Total current assets 1,650,992 1,476,429 Property, plant and equipment, net 2,779,345 3,002,194 Goodwill 2,458,409 2,458,109 Notes receivable 24,073 23,708 Intangible and other long-term assets, net 435,209 450,867 Total assets $ 7,348,028 $ 7,411,307 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 205,029 $ 216,029 Accrued expenses 310,282 376,049 Income taxes payable 3,034 - Current portion of decommissioning liabilities 27,322 27,322 Current maturities of long-term debt 20,000 20,000 Liabilities held for sale 84,453 - Total current liabilities 650,120 639,400 Deferred income taxes 734,842 736,080 Decommissioning liabilities 57,330 56,197 Long-term debt, net 1,641,242 1,646,535 Other long-term liabilities 168,816 201,651 Total stockholders' equity 4,095,678 4,131,444 Total liabilities and stockholders' $ 7,348,028 $ 7,411,307 equity SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES SEGMENT HIGHLIGHTS THREE MONTHS ENDED MARCH 31, 2014, DECEMBER 31, 2013, AND MARCH 31, 2013 ^(2) (unaudited) (in thousands) Three months ended, Revenue March 31, 2014 December 31, 2013 March 31, 2013 Drilling Products and $ $ $ Services 220,210 223,591 193,979 Onshore Completion and 389,877 374,489 425,983 Workover Services Production Services 321,235 349,370 367,397 Technical Solutions 130,096 128,194 99,513 Total Revenues $ $ $ 1,061,418 1,075,644 1,086,872 Gross Profit (1) March 31, 2014 December 31, 2013 March 31, 2013 Drilling Products and $ $ $ Services 153,058 152,963 129,334 Onshore Completion and 105,642 110,467 144,244 Workover Services Production Services 94,010 94,391 114,342 Technical Solutions 57,103 54,163 47,358 Total Gross Profit $ $ $ 409,813 411,984 435,278 Income (Loss) from March 31, 2014 December 31, 2013 March 31, 2013 Continuing Operations Drilling Products and $ $ $ Services 66,881 68,294 56,194 Onshore Completion and 6,070 (3,613) 49,235 Workover Services Production Services 5,014 (26,840) 23,694 Technical Solutions 13,611 (246,550) 15,296 Total Income (Loss) from $ $ $ Continuing Operations 91,576 (208,709) 144,419 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. Income (loss) from Continuing Operations for all prior periods has been (2) adjusted for discontinued operations from the Technical Solutions segment. No portion of the goodwill impairment for the three months ended December 31, 2013 has been allocated to discontinued operations. SOURCE Superior Energy Services, Inc. Website: http://www.superiorenergy.com
Superior Energy Services, Inc. Announces First Quarter 2014 Results
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