HOUSTON, Nov. 3, 2015 /PRNewswire/ -- Parker Drilling
Company (NYSE: PKD) today announced a net loss of $48.6 million, or a $0.40 loss per share on revenues of $173.4 million for the third quarter ended
September 30, 2015. The net loss
includes a $36.6 million non-cash
valuation allowance taken primarily against U.S. foreign tax
credits and certain foreign net operating losses that accounted for
$0.30 of the reported loss per share.
While the carry-forwards have been reserved on the Company's
financial statements, they have not expired and remain available to
offset future cash taxes. Excluding this valuation allowance, the
adjusted loss per share was $0.10.
Third quarter adjusted EBITDA was $35.4
million, compared with $32.8
million for the preceding quarter.
Gary Rich, Chairman, President
and CEO, said, "Both our adjusted EBITDA and our adjusted EBITDA as
a percentage of revenue increased sequentially primarily due to
strong results from our International & Alaska Drilling
segment. In addition, we continued to benefit from company-wide
cost efficiencies undertaken during the course of the year.
"From an outlook perspective, we anticipate that continued
uncertainty over commodity prices will lead to further declines in
customer spending and pricing during the remainder of the year. As
a result, we anticipate lower activity for our drilling services
and rental tools services businesses, which will drive lower
operating results in the fourth quarter.
"We continue to manage our business as if this downturn will
persist through 2016. Throughout this year, we have taken proactive
steps to achieve our goal of generating free cash flow, including
head count and operating expense reductions, maintaining our
working capital diligence and reducing capital expenditures while
striving to sustain utilization and market share. In addition,
previously-announced amendments to our credit facility preserve our
financial flexibility and enhance our position in this uncertain
market. I believe our balanced profile of product and service mix,
geographic diversity and backlog are enabling us to perform better
than most of our peers. With our solid balance sheet and prudent
management during this downturn, we believe we are positioned to
grow once the market environment stabilizes and the outlook
improves," Mr. Rich concluded.
Third Quarter Review
Parker Drilling's revenues for
the 2015 third quarter, compared with the 2015 second quarter,
decreased 6.7 percent to $173.4
million from $185.9 million,
operating gross margin excluding depreciation and amortization
expense (gross margin) increased 5.0 percent to $44.4 million from $42.3
million and gross margin as a percentage of revenues was
25.6 percent, compared with 22.8 percent for the prior period.
Drilling Services
For the Company's Drilling Services business, which is comprised
of the U.S. (Lower 48) Drilling and International & Alaska
Drilling segments, revenues declined 4.3 percent to $116.6 million from $121.8
million, gross margin increased 31.4 percent to $27.2 million from $20.7
million, and gross margin as a percentage of revenues was
23.3 percent, compared with 17.0 percent for the prior period.
U.S. (Lower 48)
Drilling
U.S. (Lower 48) Drilling segment revenues were $6.0 million, an 11.8 percent decrease from 2015
second quarter revenues of $6.8
million. Gross margin was a $1.9
million loss as compared with a 2015 second quarter gross
margin loss of $2.0 million. The
declines in revenues were primarily the result of lower activity in
the Company's California O&M business, while gross margin
improved as a result of slightly higher utilization and lower costs
in the Gulf of Mexico drilling
barge business.
International & Alaska
Drilling
International & Alaska Drilling segment revenues were
$110.7 million, a 3.7 percent
decrease from 2015 second quarter revenues of $115.0 million. Gross margin was $29.1 million, a 28.8 percent increase from 2015
second quarter gross margin of $22.6
million. Gross margin as a percentage of revenues was 26.3
percent as compared with 19.7 percent in the 2015 second quarter.
The decrease in revenues is attributable to a $7.1 million decrease in reimbursable expenses
and lower Eastern Hemisphere rig utilization, partially offset by
an increase in Latin America
utilization and project services activities. The increase in gross
margin is due to the increase in Latin
America utilization and project services activities along
with lower operating expenses.
Rental Tools Services
Rental Tools segment revenues were $56.8
million, an 11.4 percent decrease from 2015 second quarter
revenues of $64.1 million. Gross
margin was $17.2 million, a 20.7
percent decrease from 2015 second quarter gross margin of
$21.7 million. Gross margin as a
percentage of revenues was 30.3 percent as compared with 33.9
percent in the 2015 second quarter. Reduced revenues and gross
margin were primarily due to the continued decline in U.S. land
drilling activity, as well as lower pricing and business mix in
certain international rental tools markets.
General and Administrative expense decreased to $8.9 million for the 2015 third quarter, from
$9.5 million for the 2015 second
quarter.
Capital expenditures in third quarter were $17.9 million, and year-to-date through
September 30, 2015 were $72.5 million.
Conference Call
Parker Drilling has scheduled a
conference call for 10:00 a.m. Central
Time (11:00 a.m. Eastern Time)
on Wednesday, November 4, 2015, to
review reported results. The call will be available by telephone at
(888) 287-5563, access code 235454. 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 November 4, 2015 at (888) 203-1112, using the
access code 235454#.
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 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
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)
|
|
|
|
|
|
September 30,
2015
|
|
December 31,
2014
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash and Cash
Equivalents
|
$
|
104,651
|
|
$
|
108,456
|
Accounts and Notes
Receivable, Net
|
224,996
|
|
270,952
|
Rig Materials and
Supplies
|
38,516
|
|
47,943
|
Deferred
Costs
|
2,961
|
|
5,673
|
Deferred Income
Taxes
|
5,448
|
|
7,476
|
Other Current
Assets
|
25,033
|
|
29,279
|
TOTAL CURRENT
ASSETS
|
401,605
|
|
469,779
|
|
|
|
|
PROPERTY, PLANT AND
EQUIPMENT, NET
|
841,923
|
|
895,940
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
Deferred Income
Taxes
|
133,058
|
|
122,689
|
Other
Assets
|
65,597
|
|
32,251
|
TOTAL OTHER
ASSETS
|
198,655
|
|
154,940
|
|
|
|
|
TOTAL
ASSETS
|
$
|
1,442,183
|
|
$
|
1,520,659
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
Current Portion of
Long-Term Debt
|
$
|
—
|
|
$
|
10,000
|
Accounts Payable and
Accrued Liabilities
|
150,170
|
|
168,665
|
TOTAL CURRENT
LIABILITIES
|
150,170
|
|
178,665
|
|
|
|
|
LONG-TERM
DEBT
|
585,000
|
|
605,000
|
|
|
|
|
LONG-TERM DEFERRED
TAX LIABILITY
|
75,197
|
|
52,115
|
|
|
|
|
OTHER LONG-TERM
LIABILITIES
|
20,141
|
|
18,665
|
|
|
|
|
TOTAL CONTROLLING
INTEREST IN STOCKHOLDERS' EQUITY
|
606,498
|
|
662,431
|
Noncontrolling
interest
|
5,177
|
|
3,783
|
TOTAL
EQUITY
|
611,675
|
|
666,214
|
|
|
|
|
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY
|
$
|
1,442,183
|
|
$
|
1,520,659
|
|
|
|
|
|
|
|
|
Current
Ratio
|
2.67
|
|
2.63
|
|
|
|
|
Total Debt as a
Percent of Capitalization
|
49%
|
|
48%
|
|
|
|
|
Book Value Per Common
Share
|
$
|
4.92
|
|
$
|
5.43
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Three Months Ended
September 30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
REVENUES
|
$
|
173,418
|
|
$
|
242,012
|
|
$
|
185,941
|
|
|
|
|
|
|
EXPENSES:
|
|
|
|
|
|
Operating
Expenses
|
128,963
|
|
160,797
|
|
143,569
|
Depreciation and
Amortization
|
39,584
|
|
36,149
|
|
38,351
|
|
168,547
|
|
196,946
|
|
181,920
|
TOTAL OPERATING GROSS
MARGIN
|
4,871
|
|
45,066
|
|
4,021
|
|
|
|
|
|
|
General and
Administrative Expense
|
(8,895)
|
|
(9,370)
|
|
(9,511)
|
Provision for
Reduction in Carrying Value of Certain Assets
|
(906)
|
|
—
|
|
(2,316)
|
Gain (Loss) on
Disposition of Assets, Net
|
383
|
|
(457)
|
|
(138)
|
TOTAL OPERATING
INCOME
|
(4,547)
|
|
35,239
|
|
(7,944)
|
|
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
|
|
Interest
Expense
|
(11,293)
|
|
(10,848)
|
|
(11,396)
|
Interest
Income
|
7
|
|
36
|
|
19
|
Other
|
(719)
|
|
(536)
|
|
(1,529)
|
TOTAL OTHER
EXPENSE
|
(12,005)
|
|
(11,348)
|
|
(12,906)
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
(16,552)
|
|
23,891
|
|
(20,850)
|
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
31,930
|
|
11,014
|
|
(6,916)
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
(48,482)
|
|
12,877
|
|
(13,934)
|
Less: net income
attributable to noncontrolling interest
|
138
|
|
311
|
|
95
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
|
(48,620)
|
|
$
|
12,566
|
|
$
|
(14,029)
|
|
|
|
|
|
|
EARNINGS PER SHARE -
BASIC
|
|
|
|
|
|
Net Income
(loss)
|
$
|
(0.40)
|
|
$
|
0.10
|
|
$
|
(0.11)
|
|
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
|
|
|
|
|
Net Income
(loss)
|
$
|
(0.40)
|
|
$
|
0.10
|
|
$
|
(0.11)
|
|
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING EARNINGS PER SHARE
|
|
|
|
|
|
Basic
|
122,933,518
|
|
121,523,674
|
|
122,481,425
|
Diluted
|
122,933,518
|
|
123,177,753
|
|
122,481,425
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
|
|
|
REVENUES
|
$
|
563,435
|
|
$
|
725,471
|
|
|
|
|
EXPENSES:
|
|
|
|
Operating
Expenses
|
411,802
|
|
501,391
|
Depreciation and
Amortization
|
118,474
|
|
106,666
|
|
530,276
|
|
608,057
|
TOTAL OPERATING GROSS
MARGIN
|
33,159
|
|
117,414
|
|
|
|
|
General and
Administrative Expense
|
(29,243)
|
|
(25,341)
|
Provision for
Reduction in Carrying Value of Certain Assets
|
(3,222)
|
|
—
|
Gain on Disposition
of Assets, Net
|
2,686
|
|
433
|
TOTAL OPERATING
INCOME
|
3,380
|
|
92,506
|
|
|
|
|
OTHER INCOME AND
(EXPENSE):
|
|
|
|
Interest
Expense
|
(33,767)
|
|
(33,486)
|
Interest
Income
|
209
|
|
156
|
Loss on
extinguishment of debt
|
—
|
|
(30,152)
|
Other
|
(3,628)
|
|
1,391
|
TOTAL OTHER
EXPENSE
|
(37,186)
|
|
(62,091)
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAXES
|
(33,806)
|
|
30,415
|
|
|
|
|
INCOME TAX EXPENSE
(BENEFIT)
|
24,832
|
|
14,093
|
|
|
|
|
NET INCOME
(LOSS)
|
(58,638)
|
|
16,322
|
Less: net income
attributable to noncontrolling interest
|
789
|
|
624
|
NET INCOME (LOSS)
ATTRIBUTABLE TO CONTROLLING INTEREST
|
$
|
(59,427)
|
|
$
|
15,698
|
|
|
|
|
EARNINGS PER SHARE -
BASIC
|
|
|
|
Net Income
(loss)
|
$
|
(0.49)
|
|
$
|
0.13
|
|
|
|
|
EARNINGS PER SHARE -
DILUTED
|
|
|
|
Net Income
(loss)
|
$
|
(0.49)
|
|
$
|
0.13
|
|
|
|
|
NUMBER OF COMMON
SHARES USED IN COMPUTING EARNINGS PER SHARE
|
|
|
|
Basic
|
122,430,957
|
|
120,994,728
|
Diluted
|
122,430,957
|
|
122,972,014
|
PARKER DRILLING
COMPANY
|
Selected Financial
Data
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
September
30,
|
|
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
REVENUES:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
5,961
|
|
$
|
44,409
|
|
$
|
6,848
|
International &
Alaska Drilling
|
|
110,661
|
|
109,892
|
|
114,969
|
|
Total Drilling
Services
|
|
116,622
|
|
154,301
|
|
121,817
|
Rental
Tools
|
|
56,796
|
|
87,711
|
|
64,124
|
|
Total
Revenues
|
|
$
|
173,418
|
|
$
|
242,012
|
|
$
|
185,941
|
|
|
|
|
|
|
|
|
OPERATING
EXPENSES:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
7,820
|
|
$
|
22,687
|
|
$
|
8,829
|
International &
Alaska Drilling
|
|
81,586
|
|
86,123
|
|
92,329
|
|
Total Drilling
Services
|
|
89,406
|
|
108,810
|
|
101,158
|
Rental
Tools
|
|
39,557
|
|
51,987
|
|
42,411
|
|
Total
Operating Expenses
|
|
$
|
128,963
|
|
$
|
160,797
|
|
$
|
143,569
|
|
|
|
|
|
|
|
|
OPERATING GROSS
MARGIN:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
(1,859)
|
|
$
|
21,722
|
|
$
|
(1,981)
|
International &
Alaska Drilling
|
|
29,075
|
|
23,769
|
|
22,640
|
|
Total Drilling
Services
|
|
27,216
|
|
45,491
|
|
20,659
|
Rental
Tools
|
|
17,239
|
|
35,724
|
|
21,713
|
Depreciation and
Amortization
|
|
(39,584)
|
|
(36,149)
|
|
(38,351)
|
|
Total
Operating Gross Margin
|
|
$
|
4,871
|
|
$
|
45,066
|
|
$
|
4,021
|
PARKER DRILLING
COMPANY
|
Adjusted
EBITDA
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2015
|
|
June 30,
2015
|
|
March 31,
2015
|
|
December 31,
2014
|
|
September 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Attributable to Controlling Interest
|
|
$
|
(48,620)
|
|
$
|
(14,029)
|
|
$
|
3,222
|
|
$
|
7,753
|
|
$
|
12,566
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Income Tax (Benefit)
Expense
|
|
31,930
|
|
(6,916)
|
|
(182)
|
|
9,983
|
|
11,014
|
Interest
Expense
|
|
11,293
|
|
11,396
|
|
11,078
|
|
10,779
|
|
10,848
|
Other Income and
Expense
|
|
712
|
|
1,510
|
|
1,197
|
|
(1,187)
|
|
500
|
(Gain) Loss on
Disposition of Assets, Net
|
|
(383)
|
|
138
|
|
(2,441)
|
|
(621)
|
|
457
|
Depreciation and
Amortization
|
|
39,584
|
|
38,351
|
|
40,539
|
|
38,455
|
|
36,149
|
Provision for
Reduction in Carrying Value of Certain Assets
|
|
906
|
|
2,316
|
|
—
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
35,422
|
|
32,766
|
|
53,413
|
|
65,162
|
|
71,534
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Non-routine
Items
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,250)
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA after
Non-routine Items
|
|
$
|
35,422
|
|
$
|
32,766
|
|
$
|
53,413
|
|
$
|
65,162
|
|
$
|
70,284
|
|
*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
|
|
|
|
September
30,
|
|
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
|
|
|
|
|
|
|
Net income
attributable to controlling interest
|
|
$
|
(48,620)
|
|
$
|
12,566
|
|
$
|
(14,029)
|
Earnings per diluted
share
|
|
$
|
(0.40)
|
|
$
|
0.10
|
|
$
|
(0.11)
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Escrow
clawback
|
|
$
|
—
|
|
$
|
(1,250)
|
|
$
|
—
|
|
Provision for
reduction in carrying value of certain assets**
|
|
—
|
|
—
|
|
2,316
|
|
Valuation
allowance
|
|
36,632
|
|
—
|
|
—
|
|
Total
adjustments
|
|
36,632
|
|
(1,250)
|
|
2,316
|
|
Tax effect of
adjustments
|
|
—
|
|
500
|
|
(443)
|
|
Net
adjustments
|
|
36,632
|
|
(750)
|
|
1,873
|
|
|
|
|
|
|
|
|
Adjusted net income
attributable to controlling interest*
|
|
$
|
(11,988)
|
|
$
|
11,816
|
|
$
|
(12,156)
|
Adjusted earnings per
diluted share
|
|
$
|
(0.10)
|
|
$
|
0.10
|
|
$
|
(0.10)
|
|
*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.
|
|
**The three months
ended September 30, 2015 excludes provision for reduction in
carrying value of certain assets of $0.9 million ($0.5 million, net
of tax) deemed not meaningful to adjusted earnings per
diluted share for the period.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2015-third-quarter-results-300171756.html
SOURCE Parker Drilling Company