HOUSTON, Feb. 25 /PRNewswire-FirstCall/ -- Parker Drilling
(NYSE:PKD), a global drilling contractor and service provider,
today reported results for the year and three-month periods ended
December 31, 2009. The Company's results for the year included net
income of $9.3 million or $0.08 per diluted share on revenues of
$752.9 million, compared with net income of $22.7 million or $0.20
per diluted share on revenues of $829.8 million for the prior year.
Excluding the effects of non-routine items the Company reported
2009 net income of $16.5 million or $0.14 per diluted share,
compared with similarly adjusted 2008 net income of $92.6 million
or $0.82 per diluted share. Adjusted EBITDA, excluding non-routine
items, was $166.8 million, compared with $285.6 million for the
prior year. For the three months ended December 31, 2009, Parker
reported a net loss of $4.3 million or $0.04 per diluted share on
revenues of $175.8 million, compared with a net loss of $40.2
million or $0.36 per diluted share on revenues of $212.4 million
for the prior year's fourth quarter. Excluding the effects of
non-routine items the Company reported a 2009 fourth quarter net
loss of $0.5 million or $0.00 per diluted share, compared with
similarly adjusted 2008 fourth quarter net income of $29.2 million
or $0.26 per diluted share. Adjusted EBITDA, excluding non-routine
items, was $34.5 million, compared with $75.6 million for the prior
year's fourth quarter. "As a result of our business balance and
geographic diversity Parker was able to lessen the impact of the
volatile conditions and difficult market forces of 2009," said
president and chief executive officer David C. Mannon. "We
delivered sound financial results despite significant market
instability and uncertainty. Guided by our long-term strategy, we
continued to invest for future growth during this industry
down-cycle and to position ourselves for stronger performance in
the years ahead. In 2009 we captured the lead position in the U.S.
barge drilling market, expanded the presence of our rental tools
operation and moved forward on our projects to begin drilling
operations in Alaska, a growing market for us. We enter 2010 in
sound financial condition with sufficient resources to provide for
the needs of our current operations and to fund our growth
initiatives." Fourth Quarter Highlights -- Revenues of $175.8
million, though below the prior year's fourth quarter revenues,
were better than the 2009 third quarter in all but the Construction
Contracts segment; -- Gross margin for the Rental Tools segment
increased, compared to the 2009 third quarter, due to improving
demand and less price discounting; -- The U.S. Barge Drilling
segment reported a positive gross margin for the 2009 fourth
quarter. In doing so, it achieved a better-than-breakeven gross
margin for the year, believed to be one of the best performances in
that marketplace; -- The Company's Alaska projects continued to
progress. The BP-owned Liberty rig is being commissioned on site in
preparation to begin drilling operations in mid-2010. Construction
continued on the two Parker-owned arctic land rigs scheduled for
delivery to Alaska during the third quarter; -- Parker employees
set a new company record for safety. The Company's Total Recordable
Incident Rate (TRIR) for 2009 was 0.48, a better safety performance
than our 2008 record-setting level and significantly better than
the industry's average TRIR of 1.19. Mr. Mannon added, "Our 2009
results reflect the impact of the decline in domestic drilling and
slowdown of international activity and demonstrate the advantages
of our focused strategy. In the difficult market conditions we
faced we remained profitable and we made market gains in some key
areas." Commenting on the business outlook, Mr. Mannon said, "More
recently, market declines have moderated and there are signs in
some areas that improvements are underway. The utilization rate for
the U.S. Gulf of Mexico barge drilling fleet has improved, though
dayrates remain low. The domestic land rig count has recovered
significantly, particularly in the shale plays where rental tool
usage is more prevalent, leading to growing demand for rental tools
and a lessening of price discounts. The number of international rig
tenders has grown, yet commitments are slow to develop and pressure
on dayrates remains. Our project engineering and project management
opportunities are growing, indicating an expanded field for
Parker's unique capabilities and offering the prospect of
significant future growth from this business segment. "Though we
are encouraged by the recent direction of activity in some of our
markets, we remain cautious about the immediacy of a broad upturn
and the near term impact on our financial performance. We believe
we are well positioned to deliver profitable growth as the markets
improve. To enhance the potential of this, we will continue to
focus on cost management within our operations, improvements in
delivering efficient performance to our customers and maintaining a
safe working environment for our employees," Mannon concluded.
Fourth Quarter Review Results for the three months ended December
31, 2009, included the impact of several non-routine items that
decreased net income by $3.8 million. At the end of 2009 Parker
retired three unutilized and previously cold-stacked rigs - two
workover barge rigs and one international land rig. The effect of
these retirements was to reduce pre-tax income by $1.9 million or
$0.01 per diluted share, after taxes. In addition, the Company
received a settlement in connection with litigation over a
Parker-owned rig damaged in 2005, resulting in pre-tax income of
$3.8 million or $0.02 per diluted share, after taxes. Also included
in non-routine expenses are the costs related to the ongoing
Department of Justice and Securities and Exchange Commission
investigations and our related internal review regarding services
provided by a customs agent in certain countries and possible
violations of the Foreign Corrupt Practices Act and other laws, in
addition to a provision for other regulatory expenses. The fourth
quarter pre-tax cost of these was $3.9 million or $0.02 per diluted
share, after taxes. The Company also adjusted the expected impact
of a previously recorded recovery of foreign tax credits. The
fourth quarter impact of this was $2.5 million or $0.02 per diluted
share. The results for the 2008 fourth quarter included
non-routine, net after-tax expense of $69.8 million or $0.62 per
diluted share. Details of the non-routine items are provided in the
attached financial tables. Parker's revenues for the 2009 fourth
quarter declined to $175.8 million, or by 17 percent, from 2008
fourth quarter revenues of $212.4 million. The Company's 2009
fourth quarter gross margin declined to $43.0 million, or by 46
percent, from the 2008 fourth quarter gross margin of $79.6
million, while gross margin as a percentage of revenues decreased
to 24.5 percent in the 2009 fourth quarter from 37.5 percent in the
2008 fourth quarter. -- International Drilling revenues declined to
$72.7 million from $86.2 million, and gross margin declined to
$21.9 million from $27.7 million. The decrease in revenues was the
result of lower average fleet utilization, modestly higher average
dayrates and the impact of Barge Rig 257 being in a shipyard for a
scheduled overhaul and upgrade during part of the quarter. These
effects were partially offset by lower operating costs throughout
the segment. Average fleet utilization for the 2009 fourth quarter
was 64 percent, compared with 87 percent for the prior year's
fourth quarter and 61 percent for the preceding third quarter. For
the fourth quarter, the ten-rig Americas regional fleet operated at
80 percent utilization, the twelve-rig CIS/AME regional fleet
operated at 68 percent utilization, and the eight-rig Asia Pacific
regional fleet operated at 46 percent utilization. Rig 259 was
retired at the end of 2009, reducing the Company's international
fleet to 30 rigs and the CIS/AME regional fleet to eleven rigs.
(Additional rig fleet information is available on Parker's website
under "Investor Relations" at "Quarterly Support Materials"). --
U.S. Barge Drilling revenues declined to $14.5 million from $33.6
million, while gross margin fell to $1.3 million from $14.7
million. The operation produced a better-than-breakeven gross
margin despite the downturn in industry demand, lower fleet
utilization and significantly reduced dayrates. Average fleet
utilization for the 2009 fourth quarter was 51 percent, compared
with 61 percent for the prior year's fourth quarter and 33 percent
for the preceding third quarter. The Company's barge fleet dayrates
averaged $19,300 for the 2009 fourth quarter, compared with $39,400
for the prior year's fourth quarter and $26,200 for the preceding
third quarter. At year-end 2009, Parker's Gulf of Mexico barge rig
fleet was reduced to 13 rigs with the retirements of Rigs 6B and
16B. (Additional rig fleet information is available on Parker's
website under "Investor Relations" at "Quarterly Support
Materials"). -- Revenues for Rental Tools declined to $25.1 million
from $45.7 million, and the segment's gross margin declined to
$13.8 million from $28.7 million, primarily due to the decline in
U.S. land and Gulf of Mexico shelf drilling activity and the impact
of price discounting. This was partially offset by increased demand
for workover equipment, growing coverage in the U.S. shale drilling
areas and additional offshore deep drilling and international
placements. -- Project Management and Engineering Services revenues
declined to $27.6 million from $37.9 million, and gross margin
declined to $5.4 million from $8.1 million. The prior year included
revenues associated with the relocation and upgrade of the
"Yastreb" for ExxonNeftegas (ENL) on Sakhalin Island and
operational revenues for ENL's Orlan platform which has since moved
to a warm-stack rate with reduced crews. -- Construction Contract
revenues increased to $35.8 million from $8.9 million while gross
margin increased to $0.6 million from $0.5 million. These increases
are primarily due to the expanded scope and content of
reimbursables at this stage of the BP Liberty project. Capital
Spending and Capitalization Capital expenditures for 2009 were
$160.1 million, including $33.2 million for the 2009 fourth
quarter. The 2009 spending included $62.2 million for the
construction of Parker's two newbuild arctic land rigs for Alaska
and $36.8 million for tubular goods and other rental equipment. At
December 31, 2009, total debt was $423.8 million and the Company's
total debt-to-capitalization ratio was 41.6 percent, compared with
43.1 percent at the end of 2008. The Company's term loan is being
amortized through 2013. The remaining components of the Company's
debt do not mature until 2012 and 2013. Conference Call Parker
Drilling has scheduled a conference call for 10:00 a.m. CST (11:00
a.m. EST) on Thursday, February 25, 2010 to discuss its 2009 fourth
quarter results. Those interested in listening to the call by
telephone may do so by dialing 480-629-9770. Alternatively, the
call can be accessed through the Investor Relations section of the
Company's Web site at http://www.parkerdrilling.com/. A replay of
the call will be available by telephone from February 25 to March
4, 2010 by dialing 303-590-3030 and using the access code 4204147#,
and for 12 months on the Company's Web site. Cautionary Statement
This release contains certain statements that may be deemed to be
"forward-looking statements" within the meaning of the Securities
Acts. All statements, other than statements of historical facts,
that address activities, events or developments that the Company
expects, projects, believes, or anticipates will or may occur in
the future, including earnings per share guidance, the outlook for
rig utilization and dayrates, general industry conditions including
demand for drilling and customer spending and the factors affecting
demand, competitive advantages including cost effective integrated
solutions and technological innovation, future technological
innovation, future operating results of the Company's rigs, rental
tools operations and projects under management, capital
expenditures, expansion and growth opportunities, asset sales,
successful negotiation and execution of contracts, strengthening of
financial position, increase in market share and other such matters
are forward-looking statements. Although the Company believes that
its expectations stated in this release are based on reasonable
assumptions, actual results may differ materially from those
expressed or implied in the forward-looking statements due to
certain risk factors, including the ongoing credit crisis, the
volatility in oil and natural gas prices, which could reduce the
demand for drilling services. For a detailed discussion of risk
factors that could cause actual results to differ materially from
the Company's expectations, please refer to the Company's reports
filed with the SEC, including the report on Form 10-K for the year
December 31, 2008. Each forward-looking statement speaks only as of
the date of this release and the Company undertakes no obligation
to publicly update or revise any forward-looking statement. PARKER
DRILLING COMPANY AND SUBSIDIARIES Consolidated Condensed Balance
Sheets December 31, 2009 December 31, 2008 -----------------
----------------- (Unaudited) ASSETS (Dollars in Thousands) CURRENT
ASSETS Cash and Cash Equivalents $108,803 $172,298 Accounts and
Notes Receivable, Net 188,687 186,164 Rig Materials and Supplies
31,633 30,241 Deferred Costs 4,531 7,804 Deferred Income Taxes
9,650 9,735 Other Current Assets 100,225 67,049 ------- ------
TOTAL CURRENT ASSETS 443,529 473,291 ------- ------- PROPERTY,
PLANT AND EQUIPMENT, NET 716,798 675,548 OTHER ASSETS Deferred
Income Taxes 55,749 22,956 Other Assets 27,010 33,925 ------ ------
TOTAL OTHER ASSETS 82,758 56,881 ------ ------ TOTAL ASSETS
$1,243,086 $1,205,720 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY CURRENT LIABILITIES Current Portion of
Long-Term Debt $12,000 $6,000 Accounts Payable and Accrued
Liabilities 177,036 152,528 ------- ------- TOTAL CURRENT
LIABILITIES 189,036 158,528 ------- ------- LONG-TERM DEBT 411,831
435,394 LONG-TERM DEFERRED TAX LIABILITY 16,074 8,230 OTHER
LONG-TERM LIABILITIES 30,246 21,396 STOCKHOLDERS' EQUITY 595,899
582,172 ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $1,243,086 $1,205,720 ========== ========== Current Ratio
2.33 2.99 Total Debt as a Percent of Capitalization 42% 43% Book
Value Per Common Share $5.13 $5.13 PARKER DRILLING COMPANY AND
SUBSIDIARIES Consolidated Condensed Statements of Operations
(Unaudited) Three Months Ended Year Ended December 31, December 31,
----------------- ----------------- 2009 2008 2009 2008 ---- ----
---- ---- (Dollars in Thousands) (Dollars in Thousands) REVENUES:
International Drilling $72,712 $86,211 $293,338 $325,096 U.S.
Drilling 14,533 33,634 49,628 173,633 Project Management and
Engineering Services 27,631 37,928 109,445 110,147 Construction
Contract 35,800 8,911 185,442 49,412 Rental Tools 25,109 45,696
115,057 171,554 ------ ------ ------- ------- TOTAL REVENUES
175,785 212,380 752,910 829,842 ------- ------- ------- -------
OPERATING EXPENSES: International Drilling 50,858 58,494 191,486
231,409 U.S. Drilling 13,233 18,929 48,054 84,431 Project
Management and Engineering Services 22,202 29,858 85,799 91,677
Construction Contract 35,194 8,442 177,311 46,815 Rental Tools
11,302 17,034 52,740 67,048 Depreciation and Amortization 28,593
31,961 113,975 116,956 ------ ------ ------- ------- TOTAL
OPERATING EXPENSES 161,382 164,718 669,365 638,336 ------- -------
------- ------- TOTAL OPERATING GROSS MARGIN 14,403 47,662 83,545
191,506 ------ ------ ------ ------- General and Administrative
Expense (11,485) (10,288) (45,483) (34,708) Impairment of Goodwill
- (100,315) - (100,315) Provision for Reduction in Carrying Value
of Certain Assets (1,889) - (4,646) - Gain on Disposition of
Assets, Net 3,899 683 5,906 2,697 ----- --- ----- ----- TOTAL
OPERATING INCOME 4,928 (62,258) 39,322 59,180 ----- ------- ------
------ OTHER INCOME AND (EXPENSE): Interest Expense (6,787) (8,358)
(29,450) (29,266) Interest Income 146 284 1,041 1,405 Equity in
Loss of Unconsolidated Joint Venture and Related Charges, net of
tax - - - (1,105) Other Income (Expense) (721) (1,047) (1,086)
(544) ---- ------ ------ ---- TOTAL OTHER INCOME AND (EXPENSE)
(7,362) (9,121) (29,495) (29,510) ------ ------ ------- -------
INCOME (LOSS) BEFORE INCOME TAXES (2,434) (71,379) 9,827 29,670
------ ------- ----- ------ INCOME TAX EXPENSE (BENEFIT) Current
1,200 (14,563) 15,424 (1,539) Deferred 690 (16,615) (14,864) 8,481
--- ------- ------- ----- TOTAL INCOME TAX EXPENSE (BENEFIT) 1,890
(31,178) 560 6,942 ----- ------- --- ----- NET INCOME $(4,324)
$(40,201) $9,267 $22,728 ======= ======== ====== ======= EARNINGS
PER SHARE - BASIC Net Income $(0.04) $(0.36) $0.08 $0.20 EARNINGS
PER SHARE - DILUTED Net Income $(0.04) $(0.36) $0.08 $0.20 NUMBER
OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE Basic
113,288,308 111,866,943 113,000,555 111,400,396 Diluted 115,483,718
112,148,249 114,946,584 112,430,545 PARKER DRILLING COMPANY AND
SUBSIDIARIES Selected Financial Data (Unaudited) Three Months Ended
--------------------------------- December 31, September 30,
-------------- ------------- 2009 2008 2009 ---- ---- ---- (Dollars
in Thousands) REVENUES: International Drilling $72,712 $86,211
$63,966 U.S. Drilling 14,533 33,634 12,350 Project Management and
Engineering Services 27,631 37,928 25,869 Construction Contract
35,800 8,911 55,325 Rental Tools 25,109 45,696 23,899 ------ ------
------ Total Revenues 175,785 212,380 181,409 ------- -------
------- OPERATING EXPENSES: International Drilling 50,858 58,494
41,964 U.S. Drilling 13,233 18,929 10,057 Project Management and
Engineering Services 22,202 29,858 19,420 Construction Contract
35,194 8,442 52,203 Rental Tools 11,302 17,034 12,232 ------ ------
------ Total Operating Expenses 132,789 132,757 135,876 -------
------- ------- OPERATING GROSS MARGIN: International Drilling
21,854 27,717 22,002 U.S. Drilling 1,300 14,705 2,293 Project
Management and Engineering Services 5,429 8,070 6,449 Construction
Contract 606 469 3,122 Rental Tools 13,807 28,662 11,667
Depreciation and Amortization (28,593) (31,961) (29,307) -------
------- ------- Total Operating Gross Margin 14,403 47,662 16,226
General and Administrative Expense (11,485) (10,288) (9,812)
Impairment of Goodwill - (100,315) - Provision for Reduction in
Carrying Value of Certain Assets (1,889) - (2,757) Gain on
Disposition of Assets, Net 3,899 683 1,225 ------ -------- ------
TOTAL OPERATING INCOME $4,928 $(62,258) $4,882 ====== ========
====== Marketable Rig Count Summary As of December 31, 2009 Total
----- U.S. Gulf of Mexico Barge Rigs Intermediate 3 Deep 10 ---
Total U.S. Gulf of Mexico Barge Rigs 13 International Land and
Barge Rigs Asia Pacific 8 Americas 10 CIS/AME 11 Other 1 --- Total
International Land and Barge Rigs 30 --- Total Marketable Rigs 43
=== Adjusted EBITDA (Dollars in Thousands) Three Months Ended
---------------------------------------------------------- December
31, September 30, June 30, March 31, December 31, 2009 2009 2009
2009 2008 ------------ ------------- -------- ---------
------------ Previously Reported Net Income (Loss) $(4,324) $7,094
$4,391 $2,106 $(39,477) Restated Interest Expense, Net of Tax - Per
APB 14-1 - - - - (724) --- --- --- --- ---- Restated Net Income
(Loss) (4,324) 7,094 4,391 2,106 (40,201) Adjustments: Income Tax
(Benefit) Expense 1,890 (9,155) 5,079 2,746 (31,178) Total Other
Income and Expense 7,362 6,943 7,398 7,792 9,121 Loss/(Gain) on
Disposition of Assets, Net (3,899) (1,225) (704) (78) (683)
Impairment of Goodwill - - - - 100,315 Depreciation and
Amortization 28,593 29,307 28,951 27,124 31,961 Provision for
Reduction in Carrying Value of Certain Assets 1,889 2,757 - - -
----- ----- --- --- --- Adjusted EBITDA $31,511 $35,721 $45,115
$39,690 $69,335 ======= ======= ======= ======= =======
Adjustments: Non-routine Items 2,998 2,402 4,048 5,308 6,279 -----
----- ----- ----- ----- Adjusted EBITDA after Non-routine Items
$34,509 $38,123 $49,163 $44,998 $75,614 ======= ======= =======
======= ======= Three Months Ended
-----------------------------------------------------------
September 30, June 30, March 31, December 31, September 30, 2008
2008 2008 2007 2007 ------------- -------- --------- ------------
------------- Previously Reported Net Income (Loss) $18,551 $22,596
$23,888 $34,571 $22,653 Restated Interest Expense, Net of Tax - Per
APB 14-1 (721) (699) (686) (670) (562) ---- ---- ---- ---- ----
Restated Net Income (Loss) 17,830 21,897 23,202 33,901 22,091
Adjustments: Income Tax (Benefit) Expense 19,673 13,762 4,685
(21,830) 18,803 Total Other Income and Expense 6,344 6,531 7,514
31,385 9,706 Loss/(Gain) on Disposition of Assets, Net (799) (636)
(579) 784 (543) Impairment of Goodwill Depreciation and
Amortization 30,663 28,166 26,166 25,059 23,043 Provision for
Reduction in Carrying Value of Certain Assets - - - 371 1,091 ---
--- --- --- ----- Adjusted EBITDA $73,711 $69,720 $60,988 $69,670
$74,191 ======= ======= ======= ======= ======= Adjustments:
Non-routine Items 2,264 2,885 441 - - ----- ----- --- --- ---
Adjusted EBITDA after Non-routine Items $75,975 $72,605 $61,429
$69,670 $74,191 ======= ======= ======= ======= ======= PARKER
DRILLING COMPANY AND SUBSIDIARIES Reconciliation of Non-Routine
Items * (Unaudited) (Dollars in Thousands, except Per Share) Three
Months Ending Year Ending December 31, 2009 December 31, 2009
----------------- ----------------- Net income $(4,324) $9,267
Earnings per diluted share $(0.04) $0.08 Adjustments: Provision for
reduction in carrying value $1,889 $4,646 Rig 57B settlement
(3,750) (3,750) U.S. regulatory investigations / legal matters
3,944 15,702 ----- ------ Total adjustments $2,083 $16,598 Tax
effect of pre-tax non- routine adjustments (729) (5,809) Prior
Years Foreign Tax Credits/Fin 48 reserve 2,464 (3,589) ----- ------
Net non-routine adjustments $3,818 $7,200 ------ ------ Adjusted
net income $(506) $16,467 ===== ======= Adjusted earnings per
diluted share $(0.00) $0.14 ====== ===== Three Months Ending Year
Ending December 31, 2008 December 31, 2008 -----------------
----------------- Previously reported net income $(39,477) $25,558
Previously reported earnings per diluted share $(0.35) $0.23
Restated interest expense, net of tax - per APB 14-1 $(724)
$(2,830) Restated net income $(40,201) $22,728 Restated earnings
per share $(0.36) $0.20 Adjustments: Impairment of Goodwill
$100,315 $100,315 Saudi Arabia - 1,105 FIN 48 tax benefit -
Kazakhstan - (10,560) PNG tax - 4,127 Other FIN 48 adjustments -
2,407 Prior year tax credits (12,539) (12,539) DOJ investigation
6,279 11,869 ----- ------ Total adjustments $94,055 $96,724 Tax
effect of non-routine adjustments (24,672) (26,891) ------- -------
Net non-routine adjustments $69,384 $69,833 ------- -------
Adjusted net income $29,183 $92,561 ======= ======= Adjusted
earnings per diluted share $0.26 $0.82 ===== ===== * Adjusted net
income, a non-GAAP financial measure, excludes items that
management believes are of a non-routine nature and which detract
from an understanding of normal operating performance and
comparisons with other periods. Management also believes that
results excluding these items are more comparable to estimates
provided by securities analysts and used by them in evaluating the
Company's performance.
http://www.newscom.com/cgi-bin/prnh/20050620/PARKERDRILLINGLOGO
http://photoarchive.ap.org/ DATASOURCE: Parker Drilling CONTACT:
Media, Rose Maltby, +1-281-406-2212, or Investors, Richard
Bajenski, +1-281-406-2030, both of Parker Drilling Web Site:
http://www.parkerdrilling.com/
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