HOUSTON, July 17, 2014 /PRNewswire/ -- Key Energy
Services, Inc. (NYSE: KEG) today provided the following updates for
the second quarter 2014:
Key expects to report a second quarter 2014 loss in the range of
$0.14 – $0.15, excluding goodwill and asset impairments
and utilizing an effective tax rate of approximately 29%.
Additionally:
- Key expects its consolidated revenue to be down approximately
2% compared to the first quarter 2014; additionally, the Company
expects its U.S. segment revenue to be approximately flat on a
sequential basis as its production-driven businesses outside of
California did not see sufficient
activity increases to offset lower activity in California.
- The Company expects to record a $30 -
$35 million pre-tax charge for goodwill and other assets
impairments related to its operations in Russia.
- Pre-tax expenses of approximately $5
million were incurred in connection with the previously
disclosed Foreign Corrupt Practices Act investigations.
- Redeployment and make-ready pre-tax costs of approximately
$2 million were incurred in
association with the previously disclosed movement of rigs from
Mexico to the U.S.
- Pre-tax severance costs of approximately $1 million were incurred in association with
headcount reductions, primarily in Mexico.
- Capital expenditures were $41
million during the second quarter 2014; total debt at
June 30, 2014 was $719 million and the Company paid $45 million towards its $550 million senior secured credit facility
leaving $461 million undrawn.
- Including an estimated goodwill and other assets impairments
pre-tax charge of $30 - $35 million,
Key expects to report a second quarter 2014 loss in the range of
$0.35 - $0.38.
Conference Call Information
The Company will report
second quarter 2014 financial results after market close on
Wednesday, August 6, 2014, and Key
management will host a conference call to discuss these results on
Thursday, August 7, 2014 at
10:00 a.m. CST.
Callers from the U.S. and Canada should dial 888-794-4637 to access the
call. International callers should dial 660-422-4879. All callers
should ask for the "Key Energy Services Conference Call" or provide
the access code 76087755. The conference call will also be
available live via the internet. To access the webcast, go to
www.keyenergy.com and select "Investor Relations."
A telephonic replay of the conference call will be available on
Thursday, August 7, 2014, beginning
approximately two hours after the completion of the conference call
and will remain available for one week. To access the replay, call
855-859-2056 or 800-585-8367. The access code for the replay is
76087755. The replay will also be accessible at www.keyenergy.com
under "Investor Relations" for a period of at least 90 days.
Forward-Looking Statements
This press release
contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Any statements as
to matters that are not of historic fact are forward-looking
statements. These forward-looking statements are based on Key's
current expectations, estimates and projections about Key, its
industry, its management's beliefs and certain assumptions made by
management, and include statements regarding estimated capital
expenditures, future operational and activity expectations,
international growth, and anticipated financial performance in the
second quarter and remainder of 2014. No assurance can be given
that such expectations, estimates or projections will prove to have
been correct. Whenever possible, these "forward-looking statements"
are identified by words such as "expects," "believes,"
"anticipates" and similar phrases.
Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict, including, but not limited to: risks that
Key will be unable to achieve its financial, capital expenditure
and operational projections, including quarterly and annual
projections of revenue and/or operating income and risks that
Key's expectations regarding future activity levels, customer
demand, and pricing stability may not materialize (whether for Key
as a whole or for geographic regions and/or business segments
individually); risks that fundamentals in the U.S. oil and gas
markets may not yield anticipated future growth in Key's
businesses, or could further deteriorate or worsen from the
recent market declines, and/or that Key could experience further
unexpected declines in activity and demand for its rig
service, fluid management service, coiled tubing service, and
fishing and rental service businesses; risks relating to Key's
ability to implement technological developments and enhancements;
risks relating to compliance with environmental, health and safety
laws and regulations, as well as actions by governmental and
regulatory authorities; risks relating to compliance with the FCPA
and anti-corruption laws, including FCPA investigations affecting
Key's Mexico and Russia businesses; risks affecting Key's
international operations, including risks that Key may not be able
to achieve its international growth and mobilization strategy
in the foreign countries in which Key operates; risks that Key
may be unable to achieve the benefits expected from acquisition and
disposition transactions, and risks associated with integration of
the acquired operations into Key's operations; risks, in responding
to changing or declining market conditions, that Key may not be
able to reduce, and could even experience increases in, the costs
of labor, fuel, equipment and supplies employed and used in Key's
businesses; risks relating to changes in the demand for or the
price of oil and natural gas; risks that Key may not be able
to execute its capital expenditure program and/or that any such
capital expenditure investments, if made, will not generate
adequate returns; and other risks affecting Key's ability to
maintain or improve operations, including its ability to maintain
prices for services under market pricing pressures, weather
risks, and the impact of potential increases in general and
administrative expenses.
Because such statements involve risks and uncertainties, many
of which are outside of Key's control, Key's actual results and
performance may differ materially from the results expressed or
implied by such forward-looking statements. Given these risks and
uncertainties, readers are cautioned not to place undue reliance on
such forward-looking statements. Other important risk factors that
may affect Key's business, results of operations and financial
position are discussed in its most recently filed Annual Report on
Form 10-K, recent Quarterly Reports on Form 10-Q, recent Current
Reports on Form 8-K and in other Securities and Exchange Commission
filings. Unless otherwise required by law, Key also disclaims any
obligation to update its view of any such risks or uncertainties or
to announce publicly the result of any revisions to the
forward-looking statements made here. However, readers should
review carefully reports and documents that Key files periodically
with the Securities and Exchange Commission.
About Key Energy Services
Key Energy Services is the
largest onshore, rig-based well servicing contractor based on the
number of rigs owned. Key provides a complete range of well
intervention services and has operations in all major onshore oil
and gas producing regions of the continental United States and internationally in
Mexico, Colombia, Ecuador, the Middle
East and Russia.
Contact:
West Gotcher, Investor Relations
713-757-5539
SOURCE Key Energy Services, Inc.