HOUSTON, Aug. 2, 2016
/PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced
results for the second quarter ended June 30, 2016, including
a reported net loss of $39.8 million,
or a $0.32 loss per share, on
revenues of $105.3 million.
Second quarter adjusted EBITDA was $8.1
million, compared with $12.6
million for the preceding quarter.
"The current business environment continues to be very
challenging despite signs that industry fundamentals are beginning
to improve," said Gary Rich, the
Company's Chairman, President and CEO. "As a result, our
second quarter results were lower than the first quarter, as
expected.
"However, during the second quarter we secured important
contract successes. In our Sakhalin Island, Russia operations, we extended an operations
and maintenance (O&M) contract for three customer-owned rigs
from June 2017 to June 2019 while adding a fourth, newly
constructed, customer-owned rig to the contract. In
Canada, we signed a new 7-year
O&M contract for the offshore customer-owned Hibernia
rig. As a result of the new contracts, our contracted backlog
increased from $228 million at the
end of the first quarter to $446
million as of June 30.
"Finally, we amended our credit facility and secured significant
covenant relief that provides us good runway and flexibility.
We currently have nearly $200 million
in liquidity with $109 million in
cash and an undrawn revolver," concluded Rich.
Second Quarter Review
Parker Drilling's revenues for
the 2016 second quarter, compared with the 2016 first quarter,
decreased 19.3 percent to $105.3
million from $130.5 million,
operating gross margin excluding depreciation and amortization
expense (gross margin) decreased 28.1 percent to $16.1 million from $22.4
million and gross margin as a percentage of revenues was
15.3 percent, compared with 17.2 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, second quarter revenues decreased 19.5 percent
to $73.0 million from $90.7 million, gross margin decreased 10.9
percent to $13.9 million from
$15.6 million, and gross margin as a
percentage of revenues was 19.0 percent, compared with 17.2 percent
for the first quarter of 2016.
U.S. (Lower 48)
Drilling
U.S. (Lower 48) Drilling segment
revenues were $1.1 million compared
to $2.1 million in the 2016 first
quarter. Gross margin was a $3.9
million loss as compared with a 2016 first quarter loss of
$3.3 million. The declines in
revenues and gross margin were primarily the result of lower
utilization.
International & Alaska
Drilling
International & Alaska
Drilling segment revenues were $71.9
million, an 18.8 percent decrease from 2016 first quarter
revenues of $88.6 million. Gross
margin was $17.8 million, a 5.8
percent decrease from 2016 first quarter gross margin of
$18.9 million. Gross margin as a
percentage of revenues was 24.8 percent as compared with 21.3
percent in the 2016 first quarter. The decrease in revenues and
gross margin were attributable to lower rig utilization, increased
standby days, and reduced project services activity, partially
offset by a rig contract early termination fee and the release of
accruals related to the wind down of operations in certain
locations.
Rental Tools Services
Rental Tools segment revenues were $32.3
million, an 18.8 percent decrease from 2016 first quarter
revenues of $39.8 million. Gross
margin was $2.2 million, a 67.6
percent decrease from 2016 first quarter gross margin of
$6.8 million. Gross margin as a
percentage of revenues was 6.8 percent as compared with 17.1
percent in the 2016 first quarter. Reduced revenues and gross
margin were primarily due to price competition, lower utilization,
and work that was either delayed or canceled in both our U.S. and
international locations.
Consolidated
General and Administrative expenses were $8.0 million for the 2016 second quarter, down
from $9.8 million for the 2016 first
quarter. The decrease was primarily due to lower professional
fees and incentive plan adjustments.
Capital expenditures in the second quarter were $8.4 million, and year-to-date through
June 30, 2016 were $16.3
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, August 3, 2016, to
review second quarter results. The call will be available by
telephone by dialing +1 (412) 902-0003 and asking for the Parker
Drilling Second 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 August 10, 2016 at +1 (201)
612-7415, conference ID 13640306.
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 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: Jason Geach, Vice
President, Investor Relations & Corporate Development, (+1)
(281) 406-2310, jason.geach@parkerdrilling.com.
PARKER DRILLING
COMPANY
|
Consolidated
Condensed Balance Sheets
|
(Dollars in
Thousands)
|
|
|
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
(Unaudited)
|
|
|
Assets
|
|
|
|
Current
Assets
|
|
|
|
Cash and Cash
Equivalents
|
$
|
109,034
|
|
|
$
|
134,294
|
|
Accounts and Notes
Receivable, net
|
153,189
|
|
|
175,105
|
|
Rig Materials and
Supplies
|
32,615
|
|
|
34,937
|
|
Other Current
Assets
|
26,805
|
|
|
22,405
|
|
Total Current
Assets
|
321,643
|
|
|
366,741
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
747,017
|
|
|
805,841
|
|
|
|
|
|
Other
Assets
|
|
|
|
Deferred Income
Taxes
|
87,311
|
|
|
139,282
|
|
Other
Assets
|
56,800
|
|
|
54,838
|
|
Total Other
Assets
|
144,111
|
|
|
194,120
|
|
|
|
|
|
Total
Assets
|
$
|
1,212,771
|
|
|
$
|
1,366,702
|
|
|
|
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts Payable and
Accrued Liabilities
|
$
|
114,868
|
|
|
$
|
136,121
|
|
Total Current
Liabilities
|
114,868
|
|
|
136,121
|
|
|
|
|
|
Long-Term Debt, net
of debt issuance costs
|
575,548
|
|
|
574,798
|
|
|
|
|
|
Long-Term Deferred
Tax Liability
|
76,475
|
|
|
68,654
|
|
|
|
|
|
Other Long-Term
Liabilities
|
15,049
|
|
|
18,617
|
|
|
|
|
|
Total Stockholders'
Equity
|
430,831
|
|
|
568,512
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
1,212,771
|
|
|
$
|
1,366,702
|
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
Three Months Ended
June 30,
|
|
March 31,
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
Revenues
|
$
|
105,287
|
|
|
$
|
185,941
|
|
|
$
|
130,503
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Operating
Expenses
|
89,195
|
|
|
143,569
|
|
|
108,117
|
|
Depreciation and
Amortization
|
36,317
|
|
|
38,351
|
|
|
35,814
|
|
|
125,512
|
|
|
181,920
|
|
|
143,931
|
|
Total Operating Gross
Margin
|
(20,225)
|
|
|
4,021
|
|
|
(13,428)
|
|
|
|
|
|
|
|
General and
Administrative Expense
|
(7,995)
|
|
|
(9,511)
|
|
|
(9,781)
|
|
Provision for
Reduction in Carrying Value of Certain Assets
|
—
|
|
|
(2,316)
|
|
|
—
|
|
Loss on Disposition
of Assets, net
|
(2)
|
|
|
(138)
|
|
|
(60)
|
|
Total Operating
Loss
|
(28,222)
|
|
|
(7,944)
|
|
|
(23,269)
|
|
|
|
|
|
|
|
Other Income and
(Expense)
|
|
|
|
|
|
Interest
Expense
|
(12,187)
|
|
|
(11,396)
|
|
|
(11,562)
|
|
Interest
Income
|
32
|
|
|
19
|
|
|
7
|
|
Other
|
(358)
|
|
|
(1,529)
|
|
|
2,485
|
|
Total Other
Expense
|
(12,513)
|
|
|
(12,906)
|
|
|
(9,070)
|
|
|
|
|
|
|
|
Loss before Income
Taxes
|
(40,735)
|
|
|
(20,850)
|
|
|
(32,339)
|
|
|
|
|
|
|
|
Income Tax Expense
(Benefit)
|
(913)
|
|
|
(6,916)
|
|
|
63,496
|
|
|
|
|
|
|
|
Net Loss
|
(39,822)
|
|
|
(13,934)
|
|
|
(95,835)
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
—
|
|
|
95
|
|
|
—
|
|
Net Loss Attributable
to Controlling Interest
|
$
|
(39,822)
|
|
|
$
|
(14,029)
|
|
|
$
|
(95,835)
|
|
|
|
|
|
|
|
Loss per Share -
Basic
|
|
|
|
|
|
Net Loss
|
$
|
(0.32)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.78)
|
|
|
|
|
|
|
|
Loss per Share -
Diluted
|
|
|
|
|
|
Net Loss
|
$
|
(0.32)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.78)
|
|
|
|
|
|
|
|
Number of common
shares used in computing earnings per share:
|
|
|
|
|
|
Basic
|
124,101,349
|
|
|
122,481,425
|
|
|
123,090,238
|
|
Diluted
|
124,101,349
|
|
|
122,481,425
|
|
|
123,090,238
|
|
PARKER DRILLING
COMPANY
|
Consolidated
Statement Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Six Months Ended June
30,
|
|
2016
|
|
2015
|
|
|
|
|
Revenues
|
$
|
235,790
|
|
|
$
|
390,017
|
|
|
|
|
|
Expenses:
|
|
|
|
Operating
Expenses
|
197,312
|
|
|
282,839
|
|
Depreciation and
Amortization
|
72,131
|
|
|
78,890
|
|
|
269,443
|
|
|
361,729
|
|
Total Operating Gross
Margin
|
(33,653)
|
|
|
28,288
|
|
|
|
|
|
General and
Administrative Expense
|
(17,776)
|
|
|
(20,348)
|
|
Provision for
Reduction in Carrying Value of Certain Assets
|
—
|
|
|
(2,316)
|
|
Gain (Loss) on
Disposition of Assets, net
|
(62)
|
|
|
2,303
|
|
Total Operating
Income (Loss)
|
(51,491)
|
|
|
7,927
|
|
|
|
|
|
Other Income and
(Expense)
|
|
|
|
Interest
Expense
|
(23,749)
|
|
|
(22,474)
|
|
Interest
Income
|
39
|
|
|
202
|
|
Other
|
2,127
|
|
|
(2,909)
|
|
Total Other
Expense
|
(21,583)
|
|
|
(25,181)
|
|
|
|
|
|
Loss before Income
Taxes
|
(73,074)
|
|
|
(17,254)
|
|
|
|
|
|
Income Tax Expense
(Benefit)
|
62,583
|
|
|
(7,098)
|
|
|
|
|
|
Net Loss
|
(135,657)
|
|
|
(10,156)
|
|
Less: Net Income
Attributable to Noncontrolling Interest
|
—
|
|
|
651
|
|
Net Loss Attributable
to Controlling Interest
|
$
|
(135,657)
|
|
|
$
|
(10,807)
|
|
|
|
|
|
Loss per Share -
Basic
|
|
|
|
Net Loss
|
$
|
(1.10)
|
|
|
$
|
(0.09)
|
|
|
|
|
|
Loss per Share -
Diluted
|
|
|
|
Net Loss
|
$
|
(1.10)
|
|
|
$
|
(0.09)
|
|
|
|
|
|
Number of common
shares used in computing earnings per share:
|
|
|
|
Basic
|
123,595,793
|
|
|
122,175,511
|
|
Diluted
|
123,595,793
|
|
|
122,175,511
|
|
PARKER DRILLING
COMPANY
|
Selected Financial
Data
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
1,065
|
|
|
$
|
6,848
|
|
|
$
|
2,085
|
|
International &
Alaska Drilling
|
|
71,926
|
|
|
114,969
|
|
|
88,619
|
|
|
Total Drilling
Services
|
|
72,991
|
|
|
121,817
|
|
|
90,704
|
|
Rental
Tools
|
|
32,296
|
|
|
64,124
|
|
|
39,799
|
|
|
Total
Revenues
|
|
$
|
105,287
|
|
|
$
|
185,941
|
|
|
$
|
130,503
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
4,967
|
|
|
$
|
8,829
|
|
|
$
|
5,422
|
|
International &
Alaska Drilling
|
|
54,110
|
|
|
92,329
|
|
|
69,725
|
|
|
Total Drilling
Services
|
|
59,077
|
|
|
101,158
|
|
|
75,147
|
|
Rental
Tools
|
|
30,118
|
|
|
42,411
|
|
|
32,970
|
|
|
Total
Operating Expenses
|
|
$
|
89,195
|
|
|
$
|
143,569
|
|
|
$
|
108,117
|
|
|
|
|
|
|
|
|
|
Operating Gross
Margin:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
(3,902)
|
|
|
$
|
(1,981)
|
|
|
$
|
(3,337)
|
|
International &
Alaska Drilling
|
|
17,816
|
|
|
22,640
|
|
|
18,894
|
|
|
Total Drilling
Services
|
|
13,914
|
|
|
20,659
|
|
|
15,557
|
|
Rental
Tools
|
|
2,178
|
|
|
21,713
|
|
|
6,829
|
|
Depreciation and
Amortization
|
|
(36,317)
|
|
|
(38,351)
|
|
|
(35,814)
|
|
|
Total
Operating Gross Margin
|
|
$
|
(20,225)
|
|
|
$
|
4,021
|
|
|
$
|
(13,428)
|
|
PARKER DRILLING
COMPANY
|
Adjusted EBITDA
(1)
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2016
|
|
March 31,
2016
|
|
December
31, 2015
|
|
September
30, 2015
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Attributable
to Controlling Interest
|
|
$
|
(39,822)
|
|
|
$
|
(95,835)
|
|
|
$
|
(35,646)
|
|
|
$
|
(48,620)
|
|
|
$
|
(14,029)
|
|
Interest
Expense
|
|
12,187
|
|
|
11,562
|
|
|
11,388
|
|
|
11,293
|
|
|
11,396
|
|
Income Tax (Benefit)
Expense
|
|
(913)
|
|
|
63,496
|
|
|
(2,519)
|
|
|
31,930
|
|
|
(6,916)
|
|
Depreciation and
Amortization
|
|
36,317
|
|
|
35,814
|
|
|
37,720
|
|
|
39,584
|
|
|
38,351
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
7,769
|
|
|
15,037
|
|
|
10,943
|
|
|
34,187
|
|
|
28,802
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Other Income and
Expense
|
|
326
|
|
|
(2,492)
|
|
|
6,059
|
|
|
712
|
|
|
1,510
|
|
(Gain) Loss on
Disposition of Assets, net
|
|
2
|
|
|
60
|
|
|
1,043
|
|
|
(383)
|
|
|
138
|
|
Provision for
Reduction in Carrying Value of Certain Assets
|
|
—
|
|
|
—
|
|
|
9,268
|
|
|
906
|
|
|
2,316
|
|
Special items
(2)
|
|
—
|
|
|
—
|
|
|
1,265
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
8,097
|
|
|
$
|
12,605
|
|
|
$
|
28,578
|
|
|
$
|
35,422
|
|
|
$
|
32,766
|
|
|
(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) For the three
months ended December 31, 2015, special items include a $1.3
million write-off of inventory associated with our decision to no
longer provide drilling services in Colombia.
|
PARKER DRILLING
COMPANY
|
Reconciliation of
Adjusted Earnings Per Share
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2016
|
|
2015
|
|
2016
|
|
|
|
|
|
|
|
|
Net Loss Attributable
to Controlling Interest
|
|
$
|
(39,822)
|
|
|
$
|
(14,029)
|
|
|
$
|
(95,835)
|
|
Loss per Diluted
Share
|
|
$
|
(0.32)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.78)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Provision for
Reduction in Carrying Value of Certain Assets
|
|
—
|
|
|
2,316
|
|
|
—
|
|
|
Valuation
Allowance
|
|
—
|
|
|
—
|
|
|
73,125
|
|
|
Total adjustments
|
|
—
|
|
|
2,316
|
|
|
73,125
|
|
|
Tax effect of
adjustments
|
|
—
|
|
|
(443)
|
|
|
—
|
|
|
Net adjustments
|
|
—
|
|
|
1,873
|
|
|
73,125
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Loss Attributable to Controlling Interest (1)
|
|
$
|
(39,822)
|
|
|
$
|
(12,156)
|
|
|
$
|
(22,710)
|
|
Adjusted Loss
per Diluted Share (1)
|
|
$
|
(0.32)
|
|
|
$
|
(0.10)
|
|
|
$
|
(0.18)
|
|
|
(1) We believe
Adjusted Net Loss Attributable to Controlling Interest and Adjusted
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 Loss
Attributable to Controlling Interest and Loss per Diluted Share to
be items outside of the Company's normal operating results.
Adjusted Net Loss Attributable to Controlling Interest and
Adjusted 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 Loss or Loss per Diluted
Share.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2016-second-quarter-results-300308010.html
SOURCE Parker Drilling Company