HOUSTON, May 1, 2018
/PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today
announced results for the first quarter ended March 31, 2018,
including a reported net loss of $29.7
million, or a $0.21 loss per
common share, on revenues of $109.7
million.
First quarter Adjusted EBITDA was $11.9
million.
"Our first quarter results were down sequentially, primarily due
to three significant events: a full quarter of zero rate from one
rig in Alaska, a full quarter of
low standby rates for our rig that finished drilling on Sakhalin
Island, Russia in the fourth
quarter, and a full quarter of zero rate for our rig that went off
contract and demobilized in Kazakhstan in the fourth quarter," said
Gary Rich, the Company's chairman,
president and CEO. "During the first quarter, we worked with
our long-term partner in Indonesia
to convert our business into an Operation and Management (O&M)
arrangement. The conversion into an O&M structure is a
continuation of our strategy to build an asset-light operating
model in markets where we do not have a significant concentration
of assets, which should ultimately result in improved consolidated
returns on capital.
"In our Rental Tools Services business, we experienced a slight
decline in revenues and gross margin, but we see opportunities for
growth in certain markets. We are also experiencing
additional tendering activity for our Drilling Services business as
oil prices have stabilized above $60
per barrel; however, the pricing environment remains
challenging. We continue focusing on costs, enhancing
efficiency, and maximizing financial flexibility, while remaining
resilient and competitive in an evolving market," concluded Mr.
Rich.
First Quarter Review
Parker Drilling's revenues for
the 2018 first quarter, compared with the 2017 fourth quarter,
decreased 5.7 percent to $109.7
million from $116.3
million. Operating gross margin excluding depreciation
and amortization expense (gross margin) decreased 25.8 percent to
$18.1 million from $24.4 million and gross margin as a percentage of
revenues was 16.5 percent, compared with 21.0 percent for the 2017
fourth quarter.
Drilling Services
For the Company's Drilling Services business, which is comprised
of the U.S. (Lower 48) Drilling and International & Alaska
Drilling segments, first quarter revenues decreased 7.6 percent to
$57.5 million from $62.2 million for the 2017 fourth quarter.
Gross margin decreased 63.0 percent to $2.0
million from $5.4 million, and
gross margin as a percentage of revenues was 3.5 percent, compared
with 8.7 percent for the prior period. Contracted backlog was
$246 million at the end of the first
quarter compared to $241 million at
the end of the fourth quarter.
U.S. (Lower 48)
Drilling
U.S. (Lower 48) Drilling segment
revenues were $1.4 million, down from
$1.5 million for the 2017 fourth
quarter. Gross margin was a $2.7
million loss, unchanged from the 2017 fourth quarter.
Results were similar to the prior quarter as market activity
continues to be subdued in the inland waters of the Gulf of Mexico.
International & Alaska
Drilling
International & Alaska
Drilling segment revenues decreased 7.4 percent to $56.1 million from $60.6
million for the 2017 fourth quarter. Gross margin was
$4.7 million, a 41.3 percent decrease
from 2017 fourth quarter gross margin of $8.0 million. Revenues decreased primarily
due to the reduced rig activity in Alaska, Sakhalin Island, Russia, and Kazakhstan, partially offset by increased
reimbursable revenues. Gross margin was negatively impacted
by the aforementioned inactive rigs and increased expenses in
Kurdistan associated with a rig
start-up. These negative gross margin impacts were partially
offset by $3.0 million of inventory
and asset related write-offs in the fourth quarter of 2017 that did
not repeat in the first quarter.
Rental Tools Services
For the Company's Rental Tools Services business, which is
comprised of the U.S. Rental Tools and International Rental Tools
segments, first quarter revenues decreased 3.5 percent to
$52.2 million from $54.1 million for the 2017 fourth quarter.
Gross margin decreased 14.7 percent to $16.2
million from $19.0 million,
and gross margin as a percentage of revenues was 31.0 percent
compared with 35.1 percent for the prior period.
U.S. Rental Tools
U.S. Rental Tools segment revenues
decreased 4.4 percent to $34.7
million, from $36.3 million
for the 2017 fourth quarter. Gross margin decreased 16.8
percent to $15.8 million from
$19.0 million for the 2017 fourth
quarter. The decline in revenues was due to decreased
offshore rental activity partially offset by increased land
activity. Gross margin declined primarily as a result of the
change in revenue mix with lower offshore and increased land
activity as well as increased inspection and repair expenses
associated with the return of offshore rental equipment.
International Rental
Tools
International Rental Tools segment
revenues decreased 1.7 percent to $17.5
million from $17.8 million for
the 2017 fourth quarter. Gross margin improved to
$360 thousand from $11 thousand for the 2017 fourth
quarter. Revenues were slightly down due to the
timing of projects and gross margin was up, largely due to lower
operating costs.
Consolidated
General and Administrative expenses were $6.2 million for the 2018 first quarter, up from
$5.1 million for the 2017 fourth
quarter. The increase was primarily due to incentive
compensation adjustments during the 2017 fourth quarter.
Total liquidity at the end of the quarter was $170.2 million, consisting of $118.3 million cash and $51.9 million available under our revolving
credit facility. Our cash balance decreased $23.2 million during the quarter, predominantly
due to the semiannual interest payments of $20.6 million on our long-term debt.
Capital expenditures in the first quarter were $8.9 million, with 94% dedicated to our Rental
Tools Services business.
Conference Call
Parker Drilling has scheduled a
conference call for 10:00 a.m. Central
Time (11:00 a.m. Eastern Time)
on Wednesday, May 2, 2018, to review first quarter
results. The call will be available by telephone by dialing
(+1) (412) 902-0003 and asking for the Parker Drilling First
Quarter Conference Call. The call can also be accessed
through the Investor Relations section of the Company's
website. A replay of the call can be accessed on the
Company's website for 12 months and will be available by telephone
through May 9, 2018 at (+1) (201)
612-7415, conference ID 13678458#.
Cautionary Statement
This press release contains certain statements that may be
deemed to be "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934. All
statements in this press release other than statements of
historical facts addressing activities, events or developments the
Company expects, projects, believes, or anticipates will or may
occur in the future are forward-looking statements. These
statements include, but are not limited to, statements about
anticipated future financial or operational results; the outlook
for rental tools utilization and rig utilization and dayrates; the
results of past capital expenditures; scheduled start-ups of rigs;
general industry conditions such as the demand for drilling and the
factors affecting demand; competitive advantages such as
technological innovation; future operating results of the Company's
rigs, rental tools operations and projects under management; future
capital expenditures; expansion and growth opportunities;
acquisitions or joint ventures; asset purchases and sales;
successful negotiation and execution of contracts; scheduled
delivery of drilling rigs or rental equipment for operation; the
Company's financial position; changes in utilization or market
share; outcomes of legal proceedings; compliance with credit
facility and indenture covenants; and similar matters. These
statements are based on certain assumptions made by the Company
based on management's experience and perception of historical
trends, current conditions, anticipated future developments and
other factors believed to be appropriate. Although the Company
believes its expectations stated in this press release are based on
reasonable assumptions, such statements are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of the Company, that could cause actual results to differ
materially from those implied or expressed by the forward-looking
statements. These include risks relating to changes in worldwide
economic and business conditions, fluctuations in oil and natural
gas prices, compliance with existing laws and changes in laws or
government regulations, the failure to realize the benefits of, and
other risks relating to, acquisitions, the risk of cost overruns,
our ability to refinance our debt and other important factors, many
of which could adversely affect market conditions, demand for our
services, and costs, and all or any one of which could cause actual
results to differ materially from those projected. For more
information, see "Risk Factors" in the Company's Annual Report
filed on Form 10-K with the Securities and Exchange Commission and
other public filings and press releases. Each forward-looking
statement speaks only as of the date of this press release and the
Company undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
This news release contains non-GAAP financial measures as
defined by SEC Regulation G. A reconciliation of each such measure
to its most directly comparable U.S. Generally Accepted Accounting
Principles (GAAP) financial measure, together with an explanation
of why management believes that these non-GAAP financial measures
provide useful information to investors, is provided in the
following tables.
Company Description
Parker Drilling provides drilling
services and rental tools to the energy industry. The Company's
Drilling Services business serves operators in the inland waters of
the U.S. Gulf of Mexico utilizing
Parker Drilling's barge rig fleet
and in select U.S. and international markets and harsh-environment
regions utilizing Parker-owned and customer-owned equipment. The
Company's Rental Tools Services business supplies premium equipment
and well services to operators on land and offshore in the U.S. and
international markets. More information about Parker Drilling can be found on the Company's
website at www.parkerdrilling.com.
Contact: Nick Henley,
Director, Investor Relations, (+1) (281) 406-2082,
nick.henley@parkerdrilling.com.
PARKER DRILLING
COMPANY AND SUBSIDIARIES
|
CONSOLIDATED
CONDENSED BALANCE SHEETS
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
118,315
|
|
|
$
|
141,549
|
|
Accounts and Notes
Receivable, net
|
126,685
|
|
|
122,511
|
|
Rig materials and
supplies
|
31,822
|
|
|
31,415
|
|
Other current
assets
|
20,438
|
|
|
22,361
|
|
Total current
assets
|
297,260
|
|
|
317,836
|
|
|
|
|
|
Property, plant and
equipment, net
|
610,744
|
|
|
625,771
|
|
|
|
|
|
Other
Assets:
|
|
|
|
Deferred income
taxes
|
1,826
|
|
|
1,284
|
|
Other
assets
|
41,300
|
|
|
45,388
|
|
Total
other assets
|
43,126
|
|
|
46,672
|
|
|
|
|
|
Total
assets
|
$
|
951,130
|
|
|
$
|
990,279
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
94,563
|
|
|
$
|
103,676
|
|
Total current
liabilities
|
94,563
|
|
|
103,676
|
|
|
|
|
|
Long-term debt, net
of unamortized debt issuance costs
|
578,404
|
|
|
577,971
|
|
|
|
|
|
Long-term deferred
tax liability
|
78
|
|
|
78
|
|
|
|
|
|
Other long-term
liabilities
|
11,110
|
|
|
12,433
|
|
|
|
|
|
Total stockholders'
equity
|
266,975
|
|
296,121
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
|
951,130
|
|
|
$
|
990,279
|
|
PARKER DRILLING
COMPANY AND SUBSIDIARIES
|
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Three Months
Ended
March 31,
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
Revenues
|
$
|
109,675
|
|
|
$
|
98,271
|
|
|
$
|
116,334
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Operating
expenses
|
91,534
|
|
|
85,814
|
|
|
91,912
|
|
Depreciation and
amortization
|
28,549
|
|
|
32,202
|
|
|
29,122
|
|
|
120,083
|
|
|
118,016
|
|
|
121,034
|
|
Total operating gross
margin (loss)
|
(10,408)
|
|
|
(19,745)
|
|
|
(4,700)
|
|
|
|
|
|
|
|
General and
administrative expense
|
(6,201)
|
|
|
(7,040)
|
|
|
(5,100)
|
|
Provision for
Reduction in Carrying Value of Certain Assets
|
—
|
|
|
—
|
|
|
(1,938)
|
|
Gain (loss) on
disposition of assets, net
|
343
|
|
|
(352)
|
|
|
(2,483)
|
|
Total operating
income (loss)
|
(16,266)
|
|
|
(27,137)
|
|
|
(14,221)
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(11,240)
|
|
|
(10,870)
|
|
|
(11,194)
|
|
Interest
income
|
23
|
|
|
10
|
|
|
84
|
|
Other
|
291
|
|
|
530
|
|
|
(326)
|
|
Total other income
(expense)
|
(10,926)
|
|
|
(10,330)
|
|
|
(11,436)
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
(27,192)
|
|
|
(37,467)
|
|
|
(25,657)
|
|
|
|
|
|
|
|
Income tax expense
(benefit)
|
1,604
|
|
|
2,342
|
|
|
3,036
|
|
|
|
|
|
|
|
Net income
(loss)
|
(28,796)
|
|
|
(39,809)
|
|
|
(28,693)
|
|
Less: Mandatory
convertible preferred stock dividend
|
906
|
|
|
—
|
|
|
906
|
|
Net income (loss)
available to common stockholders
|
$
|
(29,702)
|
|
|
$
|
(39,809)
|
|
|
$
|
(29,599)
|
|
Basic earnings (loss)
per share:
|
$
|
(0.21)
|
|
|
$
|
(0.31)
|
|
|
$
|
(0.21)
|
|
Diluted earnings
(loss) per share:
|
$
|
(0.21)
|
|
|
$
|
(0.31)
|
|
|
$
|
(0.21)
|
|
Number of common
shares used in computing earnings per share:
|
|
|
|
|
|
Basic
|
138,765,995
|
|
|
130,142,527
|
|
|
138,675,403
|
|
Diluted
|
138,765,995
|
|
|
130,142,527
|
|
|
138,675,403
|
|
PARKER DRILLING
COMPANY AND SUBSIDIARIES
|
SELECTED FINANCIAL
DATA
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
1,354
|
|
|
$
|
1,215
|
|
|
$
|
1,546
|
|
International and
Alaska Drilling
|
|
56,096
|
|
|
63,213
|
|
|
60,648
|
|
|
Total Drilling
Services
|
|
57,450
|
|
|
64,428
|
|
|
62,194
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
34,748
|
|
|
$
|
20,231
|
|
|
$
|
36,324
|
|
International Rental
Tools
|
|
17,477
|
|
|
13,612
|
|
|
17,816
|
|
|
Total Rental Tools
Services
|
|
52,225
|
|
|
33,843
|
|
|
54,140
|
|
|
Total
revenues
|
|
$
|
109,675
|
|
|
$
|
98,271
|
|
|
$
|
116,334
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
4,053
|
|
|
$
|
4,200
|
|
|
$
|
4,205
|
|
International and
Alaska Drilling
|
|
51,426
|
|
|
52,184
|
|
|
52,619
|
|
|
Total Drilling
Services
|
|
55,479
|
|
|
56,384
|
|
|
56,824
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
18,938
|
|
|
$
|
13,455
|
|
|
$
|
17,283
|
|
International Rental
Tools
|
|
17,117
|
|
|
15,975
|
|
|
17,805
|
|
|
Total Rental Tools
Services
|
|
36,055
|
|
|
29,430
|
|
|
35,088
|
|
|
Total operating
expenses
|
|
$
|
91,534
|
|
|
$
|
85,814
|
|
|
$
|
91,912
|
|
|
|
|
|
|
|
|
|
Operating gross
margin:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
(2,699)
|
|
|
$
|
(2,985)
|
|
|
$
|
(2,659)
|
|
International and
Alaska Drilling
|
|
4,670
|
|
|
11,029
|
|
|
8,029
|
|
|
Total Drilling
Services
|
|
1,971
|
|
|
8,044
|
|
|
5,370
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
15,810
|
|
|
$
|
6,776
|
|
|
$
|
19,041
|
|
International Rental
Tools
|
|
360
|
|
|
(2,363)
|
|
|
11
|
|
|
Total Rental Tools
Services
|
|
16,170
|
|
|
4,413
|
|
|
19,052
|
|
|
Total Operating gross
margin, excluding depreciation and amortization
|
|
$
|
18,141
|
|
|
$
|
12,457
|
|
|
$
|
24,422
|
|
Total Depreciation
and amortization
|
|
(28,549)
|
|
|
(32,202)
|
|
|
(29,122)
|
|
|
Total operating gross
margin
|
|
(10,408)
|
|
|
(19,745)
|
|
|
(4,700)
|
|
PARKER DRILLING
COMPANY AND SUBSIDIARIES
|
ADJUSTED EBITDA
(1)
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
2018
|
|
December 31,
2017
|
|
September 30,
2017
|
|
June 30,
2017
|
|
March 31,
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
|
$
|
(29,702)
|
|
|
$
|
(29,599)
|
|
|
$
|
(21,217)
|
|
|
$
|
(31,127)
|
|
|
$
|
(39,809)
|
|
|
Interest
expense
|
|
11,240
|
|
|
11,194
|
|
|
11,067
|
|
|
11,095
|
|
|
10,870
|
|
|
Income tax expense
(benefit)
|
|
1,604
|
|
|
3,036
|
|
|
1,919
|
|
|
1,743
|
|
|
2,342
|
|
|
Depreciation and
amortization
|
|
28,549
|
|
|
29,122
|
|
|
30,067
|
|
|
30,982
|
|
|
32,202
|
|
|
Mandatory convertible
preferred stock dividend
|
|
906
|
|
|
906
|
|
|
906
|
|
|
1,239
|
|
|
—
|
|
|
EBITDA
|
|
12,597
|
|
|
14,659
|
|
|
22,742
|
|
|
13,932
|
|
|
5,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
Interest income and
other
|
|
(314)
|
|
|
242
|
|
|
510
|
|
|
(582)
|
|
|
(540)
|
|
|
(Gain) loss on
disposition of assets, net
|
|
(343)
|
|
|
2,483
|
|
|
(97)
|
|
|
113
|
|
|
352
|
|
|
Provision for
reduction in carrying value of certain assets
|
|
—
|
|
|
1,938
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Special items
(2)
|
|
—
|
|
|
3,033
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
11,940
|
|
|
$
|
22,355
|
|
|
$
|
23,155
|
|
|
$
|
13,463
|
|
|
$
|
5,417
|
|
|
|
(1) We believe
Adjusted EBITDA is an important measure of operating performance
because it allows management, investors and others to evaluate and
compare our core operating results from period to period by
removing the impact of our capital structure (interest expense from
our outstanding debt), asset base (depreciation and amortization),
remeasurement of foreign currency transactions, tax consequences,
impairment and other special items. Special items include items
impacting operating expenses that management believes detract from
an understanding of normal operating performance. Management uses
Adjusted EBITDA as a supplemental measure to review current period
operating performance and period to period comparisons. Our
Adjusted EBITDA may not be comparable to a similarly titled measure
of another company because other entities may not calculate EBITDA
in the same manner. EBITDA and Adjusted EBITDA are not measures of
financial performance under U.S. Generally Accepted Accounting
Principles (GAAP), and should not be considered in isolation or as
an alternative to operating income or loss, net income or loss,
cash flows provided by or used in operating, investing and
financing activities, or other income or cash flow statement data
prepared in accordance with GAAP.
|
|
(2) Special items
include:
- For the three months ended December 31, 2017, special items
include a $3.0 million write-off of inventory associated with
select international drilling assets. This item is recorded in
operating expenses in the Consolidated Statement Of
Operations.
|
PARKER DRILLING
COMPANY AND SUBSIDIARIES
|
RECONCILIATION OF
ADJUSTED EARNINGS PER SHARE
|
(Dollars in
Thousands, except Per Share)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2018
|
|
2017
|
|
2017
|
|
|
|
|
|
|
|
|
Net income (loss)
available to common stockholders
|
|
$
|
(29,702)
|
|
|
$
|
(39,809)
|
|
|
$
|
(29,599)
|
|
Diluted earnings
(loss) per share
|
|
$
|
(0.21)
|
|
|
$
|
(0.31)
|
|
|
$
|
(0.21)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
(Gain) loss on
disposition of assets, net
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,588
|
|
Provision for
reduction in carrying value of certain assets
|
|
—
|
|
|
—
|
|
|
1,938
|
|
Write-off
inventory
|
|
—
|
|
|
—
|
|
|
3,033
|
|
Net
adjustments
|
|
—
|
|
|
—
|
|
|
7,559
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) available to common
stockholders(1)
|
|
$
|
(29,702)
|
|
|
$
|
(39,809)
|
|
|
$
|
(22,040)
|
|
Adjusted
diluted earnings (loss) per share (1)
|
|
$
|
(0.21)
|
|
|
$
|
(0.31)
|
|
|
$
|
(0.16)
|
|
|
(1) We believe
Adjusted net income (loss) available to common stockholders and
adjusted income (loss) per diluted share are useful financial
measures for investors to assess and understand operating
performance for period to period comparisons. Management views the
adjustments to Net income (loss) available to common stockholders
and Income (Loss) per diluted share to be items outside of the
Company's normal operating results. Adjusted net income (loss)
available to common stockholders and Adjusted income (loss) per
diluted share are not measures of financial performance under GAAP,
and should not be considered in isolation or as an alternative to
Net income (loss) available to common stockholders or Income (loss)
per diluted share.
|
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content:http://www.prnewswire.com/news-releases/parker-drilling-reports-2018-first-quarter-results-300640536.html
SOURCE Parker Drilling Company