HOUSTON, Aug. 6, 2014 /PRNewswire/ -- Parker Drilling
Company (NYSE-PKD), an international provider of contract drilling
and drilling-related services and rental tools to the energy
industry, today reported results for the quarter ended June 30, 2014, including net income of
$15.7 million, or $0.13 per diluted share, on revenues of
$254.2 million. Excluding
non-routine items, the Company earned net income of $15.1 million or $0.12 per diluted share, compared with similarly
adjusted 2014 first quarter net income of $5.5 million or $0.04 per diluted share, on revenues of
$229.2 million. Second quarter
adjusted EBITDA, excluding non-routine items, was $71.0 million, compared with $54.1 million for the preceding quarter.
"Second quarter results were largely in line with our
expectations," said Gary Rich,
chairman, president and chief executive officer. "We had
solid gains in revenues and earnings from both our drilling and
rental tools operations.
"Our U.S. Barge Drilling segment had strong results in the
second quarter, primarily due to higher utilization and
dayrates. We recently made significant investments in this
business which we believe will provide revenue and earnings growth
and attractive returns for our shareholders. We completed the
rebuild of Rig 55B and put it into service during the second
quarter. Also during the second quarter, we acquired Rig 30B,
a three-year old posted barge rig, at an attractive price.
The rig has been inspected, crewed and is now at work. These
rig additions give us more flexibility to meet customer
needs.
"Our International Drilling segment continued to have good
success in putting rigs to work. In the second quarter we put
Rig 122 to work in Mexico and
contracted Rig 216 to work in Kazakhstan later this year. Both rigs
had been idle since 2010. In addition, we re-contracted our
three 3,000-horsepower rigs in Mexico on four year terms at higher
dayrates.
"Our rental tools business capitalized on improving conditions
in the U.S. land market and achieved higher utilization and better
pricing during the quarter, leading to increased revenues and
profitability."
Outlook
"We continue to build a foundation from which to grow
Parker Drilling and consistently
produce solid operating performance and financial results," said
Mr. Rich. "We expect continued improvement in market
conditions in the U.S., on land and in the Gulf of Mexico.
Our recent gains in rental tools utilization and pricing in the
U.S. land drilling market are encouraging and position us to
benefit from further market growth that may develop. In addition,
we expect further expansion of our rental tools presence in the
Gulf of Mexico offshore drilling
market as committed contracts are initiated later this year. Recent
additions to our Gulf of Mexico
barge drilling fleet and strong dayrates should allow that
operation to continue contributing to revenues and earnings growth
into 2015.
"The international markets in which we work are expected to
provide good demand to support growth of our rental tools business
and strong tender activity and contract renewal opportunities for
our rig fleet. However, conditions in several key international
markets may delay our ability to benefit from these in the
near-term.
"We continue to focus on consistent execution of our strategy
and providing our customers with innovative, reliable and efficient
solutions to their operational needs. We expect this focus,
combined with increasing market demand, will provide additional
opportunities to produce further growth and enhanced returns."
Second Quarter Review
Parker Drilling's revenues for
the 2014 second quarter, compared with the 2014 first quarter,
increased 11 percent to $254.2
million from $229.2 million,
operating gross margin excluding depreciation and amortization
expense (segment gross margin) increased 26 percent to $79.7 million from $63.2
million and segment gross margin as a percentage of revenues
was 31.3 percent, compared with 27.6 percent for the prior
period.
The Company's combined drilling operations achieved increases in
revenues, gross margin and gross margin as a percentage of revenues
for the 2014 second quarter, compared with 2014 first quarter
results. Drilling operations' revenues increased 12 percent
to $167.1 million from $148.7 million, gross margin increased 35 percent
to $46.3 million from $34.4 million, and drilling operations' gross
margin as a percentage of revenues was 27.7 percent, compared with
23.2 percent. Higher rig fleet utilization and increases in
realized average dayrates were among the leading contributors to
these results.
- U.S. Barge Drilling segment revenues were $40.3 million, segment gross margin was
$21.5 million, and segment gross
margin as a percentage of revenues was 53.4 percent. Compared with
the 2014 first quarter, revenues increased 32 percent and segment
gross margin increased 82 percent. The increases in revenues and
segment gross margin were primarily the result of higher
utilization, an increase in average dayrate, and the addition of
Rig 55B.
- U.S. Drilling segment revenues were $20.0 million, segment gross margin was
$5.0 million and segment gross margin
as a percentage of revenues was 24.9 percent. Compared with the
2014 first quarter, revenues increased 3 percent and segment gross
margin declined 10 percent. Excluding the beneficial impact in the
prior quarter of a reduction in allowances for doubtful accounts,
segment revenues, gross margin and gross margin as a percentage of
revenues all increased.
- International Drilling segment revenues were $91.8 million, segment gross margin was
$18.8 million, and segment gross
margin as a percentage of revenues was 20.5 percent. Compared with
the 2014 first quarter, revenues increased 7 percent and segment
gross margin increased 15 percent. The growth in revenues and
segment gross margin reflects modest increases in utilization and
realized dayrates. Revenues rose further due to an increase in
reimbursables, and segment gross margin benefited from lower
operating expenses.
- Technical Services segment revenues were $15.0 million, segment gross margin was
$1.0 million, and segment gross
margin as a percentage of revenues was 6.8 percent. Compared with
the 2014 first quarter, revenues increased 12 percent and segment
gross margin increased 56 percent. Revenues and segment gross
margin both benefitted from the advanced development of a
customer-funded engineering and design project.
Rental Tools segment revenues were $87.2
million, segment gross margin was $33.3 million and segment gross margin as a
percentage of revenues was 38.2 percent. Compared with the
2014 first quarter, revenues increased 8 percent and segment gross
margin increased 16 percent. The increases in revenues and segment
gross margin were primarily due to higher utilization and modest
price improvements in our U.S. land markets, though the benefits
were dampened by difficult market conditions and operating
disruptions in some key international regions.
General and administrative expense declined to $7.0 million for the 2014 second quarter, from
$9.0 million for the 2014 first
quarter, primarily due to a non-routine item, the receipt in the
second quarter of $1.5 million from
an escrow account established in connection with the ITS
acquisition.
In addition to the $1.5 million of
escrow funds received, non-routine items in the second quarter
include $0.5 million in debt
extinguishment expenses associated with the refinancing of our
9.125 percent Senior Notes. Together, these non-routine items
increased 2014 second quarter net income by $0.6 million, or $0.01 per diluted share, and adjusted EBITDA by
$1.5 million.
Capital expenditures year-to-date through June 2014 were $106.2
million.
"Our attention remains focused on developing strong, durable and
competitive operations capable of providing our customers with
innovative, reliable and efficient business solutions while
producing sustainable and profitable results, solid returns and
continued growth for Parker
Drilling," concluded Mr. Rich.
Conference Call
Parker Drilling has scheduled a
conference call for 10:00 a.m. Central
time (11:00 a.m. Eastern time)
on Wednesday, August 6, 2014, to
review reported results. The call will be available by
telephone at (719) 325-2429. 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
from August 6, 2014 through
August 13, 2014 at (719) 457-0820,
using the access code 8098371#.
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 that address activities, events or developments
that 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 sales; successful negotiation
and execution of contracts; scheduled delivery of drilling rigs or
rental equipment for operation; the strengthening of the Company's
financial position; increases 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
that 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.
Company Description
Parker Drilling (NYSE: PKD)
provides contract drilling and drilling-related 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 international markets and harsh-environment regions
utilizing Parker Drilling-owned and
customer-owned equipment. The Company's rental tools 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.
PARKER DRILLING
COMPANY
|
Consolidated
Condensed Balance Sheets
|
(Dollars in
Thousands)
|
|
|
|
|
|
|
June 30,
2014
|
|
December 31,
2013
|
|
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and Cash
Equivalents
|
$
86,446
|
|
$
148,689
|
Accounts and Notes
Receivable, Net
|
258,578
|
|
257,889
|
Rig Materials and
Supplies
|
45,501
|
|
41,781
|
Deferred
Costs
|
9,621
|
|
13,682
|
Deferred Income
Taxes
|
8,876
|
|
9,940
|
Other Current
Assets
|
50,579
|
|
47,302
|
TOTAL CURRENT
ASSETS
|
459,601
|
|
519,283
|
|
|
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
906,099
|
|
871,356
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
Deferred Income
Taxes
|
121,483
|
|
102,420
|
Other
Assets
|
36,793
|
|
41,697
|
TOTAL OTHER
ASSETS
|
158,276
|
|
144,117
|
|
|
|
|
TOTAL
ASSETS
|
$ 1,523,976
|
|
$
1,534,756
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Current Portion
of Long-Term Debt
|
$
10,000
|
|
$
25,000
|
Accounts Payable and
Accrued Liabilities
|
191,269
|
|
182,152
|
TOTAL CURRENT
LIABILITIES
|
201,269
|
|
207,152
|
|
|
|
|
LONG-TERM
DEBT
|
610,000
|
|
628,781
|
|
|
|
|
LONG-TERM DEFERRED
TAX LIABILITY
|
47,915
|
|
38,767
|
|
|
|
|
OTHER LONG-TERM
LIABILITIES
|
20,357
|
|
26,914
|
|
|
|
|
TOTAL CONTROLLING
INTEREST IN STOCKHOLDERS' EQUITY
|
641,091
|
|
631,696
|
Noncontrolling
interest
|
3,344
|
|
1,446
|
TOTAL
EQUITY
|
644,435
|
|
633,142
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$ 1,523,976
|
|
$
1,534,756
|
|
|
|
|
|
|
|
|
Current
Ratio
|
2.28
|
|
2.51
|
|
|
|
|
Total Debt as a
Percent of Capitalization
|
49%
|
|
51%
|
|
|
|
|
Book Value Per Common
Share
|
$
5.27
|
|
$
5.24
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31,
|
|
Three Months Ended
June 30,
|
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
REVENUES
|
$ 254,234
|
|
$ 225,954
|
|
$
229,225
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
Operating
Expenses
|
174,569
|
|
143,401
|
|
166,025
|
Depreciation and
Amortization
|
36,180
|
|
32,280
|
|
34,337
|
|
210,749
|
|
175,681
|
|
200,362
|
TOTAL OPERATING GROSS
MARGIN
|
43,485
|
|
50,273
|
|
28,863
|
|
|
|
|
|
|
General and
Administrative Expense
|
(7,007)
|
|
(22,203)
|
|
(8,964)
|
Gain (Loss) on
Disposition of Assets, Net
|
1,019
|
|
517
|
|
(129)
|
|
|
|
|
|
|
TOTAL OPERATING
INCOME
|
37,497
|
|
28,587
|
|
19,770
|
|
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
|
|
Interest
Expense
|
(10,599)
|
|
(10,741)
|
|
(12,039)
|
Interest
Income
|
88
|
|
2,203
|
|
32
|
Loss on
extinguishment of debt
|
(479)
|
|
-
|
|
(29,673)
|
Change in fair value
of derivative positions
|
-
|
|
17
|
|
-
|
Other
|
1,032
|
|
(459)
|
|
895
|
TOTAL OTHER
EXPENSE
|
(9,958)
|
|
(8,980)
|
|
(40,785)
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
27,539
|
|
19,607
|
|
(21,015)
|
|
|
|
|
|
|
INCOME TAX
EXPENSE
|
11,702
|
|
11,233
|
|
(8,623)
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
15,837
|
|
8,374
|
|
(12,392)
|
Less: net income
(loss) attributable to noncontrolling interest
|
156
|
|
93
|
|
157
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$ 15,681
|
|
$
8,281
|
|
$
(12,549)
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE - BASIC
|
|
|
|
|
|
Net Income
(loss)
|
$
0.13
|
|
$
0.07
|
|
$
(0.10)
|
|
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
|
|
|
|
|
Net Income
(loss)
|
$
0.13
|
|
$
0.07
|
|
$
(0.10)
|
|
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING EARNINGS PER SHARE
|
|
|
|
|
|
Basic
|
121,078,359
|
|
119,483,780
|
|
120,368,650
|
Diluted
|
122,764,247
|
|
121,860,011
|
|
120,368,650
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended June
30,
|
|
2014
|
|
2013
|
|
|
|
|
REVENUES
|
$ 483,459
|
|
$ 393,090
|
|
|
|
|
EXPENSES:
|
|
|
|
Operating
Expenses
|
340,594
|
|
260,147
|
Depreciation and
Amortization
|
70,517
|
|
61,792
|
|
411,111
|
|
321,939
|
TOTAL OPERATING GROSS
MARGIN
|
72,348
|
|
71,151
|
|
|
|
|
General and
Administrative Expense
|
(15,971)
|
|
(35,049)
|
Gain on Disposition
of Assets, Net
|
890
|
|
1,665
|
|
|
|
|
TOTAL OPERATING
INCOME
|
57,267
|
|
37,767
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
Interest
Expense
|
(22,638)
|
|
(20,747)
|
Interest
Income
|
120
|
|
2,262
|
Loss on
extinguishment of debt
|
(30,152)
|
|
-
|
Change in fair value
of derivative positions
|
-
|
|
54
|
Other
|
1,927
|
|
(661)
|
TOTAL OTHER
EXPENSE
|
(50,743)
|
|
(19,092)
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
6,524
|
|
18,675
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
3,079
|
|
9,729
|
|
|
|
|
NET INCOME
(LOSS)
|
3,445
|
|
8,946
|
Less: net income
(loss) attributable to noncontrolling interest
|
313
|
|
73
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
3,132
|
|
$
8,873
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARE - BASIC
|
$
0.03
|
|
$
0.07
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
$
0.03
|
|
$
0.07
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING
|
|
|
|
EARNINGS PER
SHARE:
|
|
|
|
Basic
|
120,726,004
|
|
119,177,431
|
Diluted
|
122,586,056
|
|
121,498,223
|
PARKER DRILLING
COMPANY
|
Selected Financial
Data
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
March
31,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
Rental
Tools
|
|
$ 87,169
|
|
$ 82,022
|
|
$ 80,506
|
|
U.S. Barge
Drilling
|
|
40,289
|
|
38,301
|
|
30,490
|
|
U.S.
Drilling
|
|
20,039
|
|
17,910
|
|
19,417
|
|
International
Drilling
|
|
91,754
|
|
83,182
|
|
85,469
|
|
Technical
Services
|
|
14,983
|
|
4,539
|
|
13,343
|
|
Total
Revenues
|
|
254,234
|
|
225,954
|
|
229,225
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
Rental
Tools
|
|
53,842
|
|
43,675
|
|
51,755
|
|
U.S. Barge
Drilling
|
|
18,761
|
|
18,290
|
|
18,654
|
|
U.S.
Drilling
|
|
15,045
|
|
14,270
|
|
13,854
|
|
International
Drilling
|
|
72,954
|
|
62,707
|
|
69,070
|
|
Technical
Services
|
|
13,967
|
|
4,459
|
|
12,692
|
|
Total
Operating Expenses
|
|
174,569
|
|
143,401
|
|
166,025
|
|
|
|
|
|
|
|
|
OPERATING GROSS
MARGIN:
|
|
|
|
|
|
|
|
Rental
Tools
|
|
33,327
|
|
38,347
|
|
28,751
|
|
U.S. Barge
Drilling
|
|
21,528
|
|
20,011
|
|
11,836
|
|
U.S.
Drilling
|
|
4,994
|
|
3,640
|
|
5,563
|
|
International
Drilling
|
|
18,800
|
|
20,475
|
|
16,399
|
|
Technical
Services
|
|
1,016
|
|
80
|
|
651
|
|
Depreciation and
Amortization
|
|
(36,180)
|
|
(32,280)
|
|
(34,337)
|
|
Total
Operating Gross Margin
|
|
43,485
|
|
50,273
|
|
28,863
|
PARKER DRILLING
COMPANY
|
Adjusted
EBITDA
|
(Dollars in
Thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2014
|
|
March 31,
2014
|
|
December 31,
2013
|
|
September 30,
2013
|
|
June 30,
2013
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Controlling Interest
|
|
$ 15,681
|
|
$
(12,549)
|
|
$
10,174
|
|
$
7,970
|
|
$ 8,281
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
11,702
|
|
(8,623)
|
|
6,766
|
|
9,112
|
|
11,233
|
Interest
Expense
|
|
10,599
|
|
12,039
|
|
13,946
|
|
13,127
|
|
10,741
|
Other Income and
Expense
|
|
(641)
|
|
28,746
|
|
(2,313)
|
|
5,234
|
|
(1,761)
|
(Gain) Loss on
Disposition of Assets, Net
|
|
(1,019)
|
|
129
|
|
(1,234)
|
|
(1,094)
|
|
(517)
|
Depreciation and
Amortization
|
|
36,180
|
|
34,337
|
|
36,378
|
|
35,882
|
|
32,280
|
Provision for
Reduction in Carrying Value of Certain Assets
|
|
-
|
|
-
|
|
2,544
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
72,502
|
|
54,079
|
|
66,261
|
|
70,231
|
|
60,257
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Non-routine Items
|
|
(1,500)
|
|
-
|
|
3,306
|
|
4,819
|
|
11,390
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA after
Non-routine Items
|
|
$ 71,002
|
|
$
54,079
|
|
$
69,567
|
|
$
75,050
|
|
$ 71,647
|
|
*Adjusted EBITDA, 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.
|
SOURCE Parker Drilling Company