HOUSTON, Aug. 4, 2015
/PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today
announced a net loss of $14.0
million, or $0.11 loss per
share on revenues of $185.9 million
for the second quarter ended June 30, 2015. The results
include a $2.3 million pre-tax
expense to increase the provision for the reduction in carrying
value of certain assets related to the Company's international
rental tools and drilling rigs. Excluding this expense, the
adjusted loss per share was $0.10.
Second quarter adjusted EBITDA was $32.8
million, compared with $53.4
million for the preceding quarter.
Gary Rich, Chairman, President
and CEO of the Company, said, "As expected, results in the second
quarter were down versus the first quarter as we experienced lower
global drilling activity. Despite a 35 percent sequential
decline in the average number of rigs drilling for oil and gas in
the U.S., our U.S. rental tools revenues were only 23 percent
lower, reflecting our efforts to maintain our market position, both
on land and offshore. The Gulf of
Mexico barge rig business continues to be the most adversely
impacted by current market conditions; however, we have continued
to reduce its cost structure. While our international businesses
were also lower sequentially, they remain less impacted relative to
our U.S. businesses. We remain focused on strong cost management
and maintaining positive free cash flow, while seeking growth
opportunities that may arise in this environment."
Outlook
"Market indicators are mixed and remain weak, making it
difficult to characterize the duration and magnitude of the current
downturn. We continue to focus on what we can control, which means
managing our business as if existing conditions will persist for an
extended period.
"During the second half of 2015, we believe our Rental Tools
business in the U.S. will continue to directionally follow the rig
count. For our International Rental Tools business, we continue to
expect margins will be better than last year, despite increasing
market headwinds. We believe activity in our U.S. (Lower 48)
Drilling segment will remain at current levels, while lower
utilization will likely put downward pressure on the International
& Alaska Drilling segment as we anticipated," Mr. Rich
added.
Second Quarter Review
Parker Drilling's revenues for
the 2015 second quarter, compared with the 2015 first quarter,
declined 9 percent to $185.9 million
from $204.1 million, operating gross
margin excluding depreciation and amortization expense (gross
margin) declined 35 percent to $42.4
million from $64.8 million and
gross margin as a percentage of revenues was 22.8 percent, compared
with 31.8 percent for the prior period.
For the Company's Drilling Services business, revenues declined
5 percent to $121.8 million from
$128.0 million, gross margin declined
42 percent to $20.7 million from
$35.5 million, and gross margin as a
percentage of revenues was 17.0 percent, compared with 27.7 percent
for the prior period.
- U.S. (Lower 48) Drilling revenues were $6.8 million, a 51.4 percent decrease from 2015
first quarter revenues of $14.1
million. Gross margin was a $2.0
million loss as compared with 2015 first quarter gross
margin of $0.1 million. The declines
in revenues and gross margin were primarily the result of lower
utilization and dayrates, partially offset by lower operating
costs, for the Company's barge drilling rig fleet in the U.S.
Gulf of Mexico.
- International & Alaska Drilling revenues were $115.0 million, a 1 percent increase from 2015
first quarter revenues of $113.9
million. Gross margin was $22.6
million, a 36 percent decrease from 2015 first quarter gross
margin of $35.4 million. Gross margin
as a percentage of revenues was 19.7 percent as compared with 31.1
percent in the 2015 first quarter. The increase in revenues is
attributable to an $8.7 million
increase in reimbursable expenses, partially offset by a decrease
in utilization. The change in gross margin as a percentage of
revenue is due in part to lower utilization and higher revenue from
reimbursable expenses. In addition, the prior period revenues and
gross margin benefited from early contract termination and
demobilization fees that did not repeat in the second quarter.
Rental Tools Services revenues were $64.1
million, gross margin was $21.7
million and gross margin as a percentage of revenues was
33.9 percent. Compared with the 2015 first quarter, revenues
decreased 16 percent from $76.1
million and gross margin decreased 25.9 percent from
$29.3 million, while gross margin as
a percentage of revenues decreased from 38.5 percent. Reduced
revenues and gross margin were primarily due to the continued
decline in U.S. land drilling activity, as well as softer demand in
certain international rental tools markets. This was partially
offset by lower operating costs.
General and Administrative Expense decreased to $9.5 million for the 2015 second quarter, from
$10.8 million for the 2015 first
quarter, primarily due to lower third-party consulting expenses
associated with the implementation of an enterprise resource
planning system.
Capital expenditures year-to-date through June 30, 2015 were $54.6
million.
"In current market conditions, we believe customers will value,
more than ever, our unique experience and expertise. We are focused
on consistent operational execution and on providing customers with
innovative, reliable and efficient solutions that help them safely
manage their costs and mitigate their risks. I am pleased with the
progress we've made to ensure we remain agile and well positioned
in the downturn. We believe we are in sound condition, prepared to
meet the challenges ahead and capture opportunities that arise,"
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 5, 2015, to
review reported results. The call will be available by
telephone at (888) 287-5563, access code 7196372. 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 or by telephone for 1 week from
August 5, 2015 at (888) 203-1112,
using the access code 7196372#.
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.
Company Description
Parker Drilling (NYSE: PKD)
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 international
markets and harsh-environment regions utilizing Parker Drilling-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.
PARKER DRILLING
COMPANY
|
Consolidated
Condensed Balance Sheets
|
(Dollars in
Thousands, Except Per Share Data)
|
|
|
|
|
|
June 30,
2015
|
|
December 31,
2014
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and Cash
Equivalents
|
$ 116,943
|
|
$
108,456
|
Accounts and Notes
Receivable, Net
|
235,834
|
|
270,952
|
Rig Materials and
Supplies
|
44,274
|
|
47,943
|
Deferred
Costs
|
7,281
|
|
5,673
|
Deferred Income
Taxes
|
5,818
|
|
7,476
|
Other Current
Assets
|
33,788
|
|
29,279
|
TOTAL CURRENT
ASSETS
|
443,938
|
|
469,779
|
|
|
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
865,291
|
|
895,940
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
Deferred Income
Taxes
|
154,463
|
|
122,689
|
Other
Assets
|
57,986
|
|
32,251
|
TOTAL OTHER
ASSETS
|
212,449
|
|
154,940
|
|
|
|
|
TOTAL
ASSETS
|
$ 1,521,678
|
|
$
1,520,659
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Current Portion
of Long-Term Debt
|
$
—
|
|
$
10,000
|
Accounts Payable and
Accrued Liabilities
|
188,841
|
|
168,665
|
TOTAL CURRENT
LIABILITIES
|
188,841
|
|
178,665
|
|
|
|
|
LONG-TERM
DEBT
|
585,000
|
|
605,000
|
|
|
|
|
LONG-TERM DEFERRED
TAX LIABILITY
|
69,793
|
|
52,115
|
|
|
|
|
OTHER LONG-TERM
LIABILITIES
|
19,184
|
|
18,665
|
|
|
|
|
TOTAL CONTROLLING
INTEREST IN STOCKHOLDERS' EQUITY
|
653,765
|
|
662,431
|
Noncontrolling
interest
|
5,095
|
|
3,783
|
TOTAL
EQUITY
|
658,860
|
|
666,214
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$ 1,521,678
|
|
$
1,520,659
|
|
|
|
|
|
|
|
|
Current
Ratio
|
2.35
|
|
2.63
|
|
|
|
|
Total Debt as a
Percent of Capitalization
|
47 %
|
|
48 %
|
|
|
|
|
Book Value Per Common
Share
|
$
5.31
|
|
$
5.43
|
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,
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
REVENUES
|
$ 185,941
|
|
$ 254,234
|
|
$
204,076
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
Operating
Expenses
|
143,569
|
|
174,569
|
|
139,270
|
Depreciation and
Amortization
|
38,351
|
|
36,180
|
|
40,539
|
|
181,920
|
|
210,749
|
|
179,809
|
TOTAL OPERATING GROSS
MARGIN
|
4,021
|
|
43,485
|
|
24,267
|
|
|
|
|
|
|
General and
Administrative Expense
|
(9,511)
|
|
(7,007)
|
|
(10,837)
|
Provision for
Reduction in Carrying Value of Certain Assets
|
(2,316)
|
|
—
|
|
—
|
Gain (Loss) on
Disposition of Assets, Net
|
(138)
|
|
1,019
|
|
2,441
|
TOTAL OPERATING
INCOME
|
(7,944)
|
|
37,497
|
|
15,871
|
|
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
|
|
Interest
Expense
|
(11,396)
|
|
(10,599)
|
|
(11,078)
|
Interest
Income
|
19
|
|
88
|
|
183
|
Loss on
extinguishment of debt
|
—
|
|
(479)
|
|
—
|
Other
|
(1,529)
|
|
1,032
|
|
(1,380)
|
TOTAL OTHER
EXPENSE
|
(12,906)
|
|
(9,958)
|
|
(12,275)
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
(20,850)
|
|
27,539
|
|
3,596
|
|
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
(6,916)
|
|
11,702
|
|
(182)
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
(13,934)
|
|
15,837
|
|
3,778
|
Less: net income
attributable to noncontrolling interest
|
95
|
|
156
|
|
556
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
(14,029)
|
|
$
15,681
|
|
$
3,222
|
|
|
|
|
|
|
EARNINGS PER
SHARE - BASIC
|
|
|
|
|
|
Net Income
(loss)
|
$
(0.11)
|
|
$
0.13
|
|
$
0.03
|
|
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
|
|
|
|
|
Net Income
(loss)
|
$
(0.11)
|
|
$
0.13
|
|
$
0.03
|
|
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING EARNINGS PER SHARE
|
|
|
|
|
|
Basic
|
122,481,425
|
|
121,078,359
|
|
121,887,072
|
Diluted
|
122,481,425
|
|
122,764,247
|
|
123,708,623
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended June
30,
|
|
2015
|
|
2014
|
|
|
|
|
REVENUES
|
$ 390,017
|
|
$ 483,459
|
|
|
|
|
EXPENSES:
|
|
|
|
Operating
Expenses
|
282,839
|
|
340,594
|
Depreciation and
Amortization
|
78,890
|
|
70,517
|
|
361,729
|
|
411,111
|
TOTAL OPERATING GROSS
MARGIN
|
28,288
|
|
72,348
|
|
|
|
|
General and
Administrative Expense
|
(20,348)
|
|
(15,971)
|
Provision for
Reduction in Carrying Value of Certain Assets
|
(2,316)
|
|
—
|
Gain on Disposition
of Assets, Net
|
2,303
|
|
890
|
TOTAL OPERATING
INCOME
|
7,927
|
|
57,267
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
Interest
Expense
|
(22,474)
|
|
(22,638)
|
Interest
Income
|
202
|
|
120
|
Loss on
extinguishment of debt
|
—
|
|
(30,152)
|
Other
|
(2,909)
|
|
1,927
|
TOTAL OTHER
EXPENSE
|
(25,181)
|
|
(50,743)
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
(17,254)
|
|
6,524
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
(7,098)
|
|
3,079
|
|
|
|
|
NET INCOME
(LOSS)
|
(10,156)
|
|
3,445
|
Less: net income
attributable to noncontrolling interest
|
651
|
|
313
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
(10,807)
|
|
$
3,132
|
|
|
|
|
EARNINGS PER
SHARE - BASIC
|
|
|
|
Net Income
(loss)
|
$
(0.09)
|
|
$
0.03
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
|
|
|
Net Income
(loss)
|
$
(0.09)
|
|
$
0.03
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING EARNINGS PER SHARE
|
|
|
|
Basic
|
122,175,511
|
|
120,726,004
|
Diluted
|
122,175,511
|
|
122,586,056
|
PARKER DRILLING
COMPANY
|
Selected Financial
Data
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June
30,
|
|
March
31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$ 6,848
|
|
$ 46,085
|
|
$ 14,097
|
|
International &
Alaska Drilling
|
|
114,969
|
|
120,980
|
|
113,921
|
|
Rental
Tools
|
|
64,124
|
|
87,169
|
|
76,058
|
|
Total
Revenues
|
|
$ 185,941
|
|
$ 254,234
|
|
$ 204,076
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$ 8,829
|
|
$ 23,263
|
|
$ 13,982
|
|
International &
Alaska Drilling
|
|
92,329
|
|
97,464
|
|
78,529
|
|
Rental
Tools
|
|
42,411
|
|
53,842
|
|
46,759
|
|
Total
Operating Expenses
|
|
$ 143,569
|
|
$ 174,569
|
|
$ 139,270
|
|
|
|
|
|
|
|
|
OPERATING GROSS
MARGIN:
|
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$ (1,981)
|
|
$ 22,822
|
|
$ 115
|
|
International &
Alaska Drilling
|
|
22,640
|
|
23,516
|
|
35,392
|
|
Rental
Tools
|
|
21,713
|
|
33,327
|
|
29,299
|
|
Depreciation and
Amortization
|
|
(38,351)
|
|
(36,180)
|
|
(40,539)
|
|
Total
Operating Gross Margin
|
|
$ 4,021
|
|
$ 43,485
|
|
$ 24,267
|
PARKER DRILLING
COMPANY
|
Adjusted
EBITDA
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
June 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Controlling Interest
|
|
$
(14,029)
|
|
$
3,222
|
|
$
7,753
|
|
$
12,566
|
|
$
15,681
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
(6,916)
|
|
(182)
|
|
9,983
|
|
11,014
|
|
11,702
|
Interest
Expense
|
|
11,396
|
|
11,078
|
|
10,779
|
|
10,848
|
|
10,599
|
Other Income and
Expense
|
|
1,510
|
|
1,197
|
|
(1,187)
|
|
500
|
|
(641)
|
(Gain) Loss on
Disposition of Assets, Net
|
|
138
|
|
(2,441)
|
|
(621)
|
|
457
|
|
(1,019)
|
Depreciation and
Amortization
|
|
38,351
|
|
40,539
|
|
38,455
|
|
36,149
|
|
36,180
|
Provision for
Reduction in Carrying Value of Certain Assets
|
|
2,316
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
32,766
|
|
53,413
|
|
65,162
|
|
71,534
|
|
72,502
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Non-routine
Items
|
|
—
|
|
—
|
|
—
|
|
(1,250)
|
|
(1,500)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA after
Non-routine Items
|
|
$
32,766
|
|
$
53,413
|
|
$
65,162
|
|
$
70,284
|
|
$
71,002
|
|
*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.
|
PARKER DRILLING
COMPANY
|
Reconciliation of
Adjusted Earnings Per Share
|
(Dollars in
Thousands, except Per Share)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
Net income
attributable to controlling interest
|
|
$ (14,029)
|
|
$ 15,681
|
|
$ 3,222
|
Earnings per diluted
share
|
|
$ (0.11)
|
|
$ 0.13
|
|
$ 0.03
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Escrow
clawback
|
|
$
—
|
|
$ (1,500)
|
|
$
—
|
|
Extinguishment of
debt
|
|
—
|
|
479
|
|
—
|
|
Provision for
reduction in carrying value of certain assets
|
|
2,316
|
|
—
|
|
—
|
|
Total
adjustments
|
|
2,316
|
|
(1,021)
|
|
—
|
|
Tax effect of
adjustments
|
|
(443)
|
|
408
|
|
—
|
|
Net
adjustments
|
|
1,873
|
|
(613)
|
|
—
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to controlling interest*
|
|
$ (12,156)
|
|
$ 15,068
|
|
$ 3,222
|
Adjusted earnings per
diluted share
|
|
$ (0.10)
|
|
$ 0.12
|
|
$ 0.03
|
|
*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.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2015-second-quarter-results-300123795.html
SOURCE Parker Drilling Company