HOUSTON, May 2, 2017
/PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today
announced results for the first quarter ended March 31, 2017,
including a reported net loss of $39.8
million, or a $0.31 loss per
share, on revenues of $98.3
million.
First quarter Adjusted EBITDA was $5.4
million.
"Parker continues to execute well in a difficult market and our
first quarter results were in line with our expectations," said
Gary Rich, the Company's Chairman,
President and CEO. "Activity in the U.S. for both our rental
tools and barge businesses improved in the first quarter. Our
U.S. rental tools business performed well as U.S. land revenue
growth of 37 percent outpaced U.S. land rig count growth of 27
percent and incremental margins for the segment, including land and
offshore, were 67 percent. In the U.S. barge business, we
mobilized one barge rig during the quarter and began operating two
additional barge rigs in April. We are also in ongoing discussions
to place up to two additional barge rigs into service by the middle
of this year.
"Internationally, we believe our drilling activity is at or near
the bottom and we continue to see positive indicators across select
markets for projects with anticipated start-ups in late 2017 and
into 2018. In our international rentals business, the startup of
several new well construction contracts have now commenced and
should positively impact activity going forward.
"We also successfully completed a $75
million concurrent equity offering during the first quarter.
We believe the offering makes us a stronger company by
allowing us to be more aggressive in the recovery; giving us
greater flexibility to invest in growth opportunities, pursue
strategic acquisitions, and fund the working capital needed to
support growth. We are encouraged by the positive signals we are
seeing across all our business lines and we believe we are well
positioned to capitalize on these to drive improving financial
performance," concluded Rich.
First Quarter Review
Parker Drilling's revenues for
the 2017 first quarter, compared with the 2016 fourth quarter,
increased 4.6 percent to $98.3
million from $94.0
million. Operating gross margin excluding depreciation
and amortization expense (gross margin) decreased 7.4 percent to
$12.5 million from $13.5 million and gross margin as a percentage of
revenues was 12.7 percent, compared with 14.4 percent for the 2016
fourth quarter.
Drilling Services
For the Company's Drilling Services business, which is comprised
of the U.S. (Lower 48) Drilling and International & Alaska
Drilling segments, first quarter revenues increased 3.4 percent to
$64.4 million from $62.3 million for the 2016 fourth quarter.
Gross margin decreased 25.9 percent to $8.0
million from $10.8 million,
and gross margin as a percentage of revenues was 12.4 percent,
compared with 17.3 percent for the prior period. Contracted
backlog was $323 million at the end
of the first quarter compared with $379
million at the end of the fourth quarter.
U.S. (Lower 48)
Drilling
U.S. (Lower 48) Drilling segment
revenues increased 50.0 percent to $1.2
million from $0.8 million for
the 2016 fourth quarter. Gross margin increased 11.8 percent to a
$3.0 million loss from a loss of
$3.4 million for the 2016 fourth
quarter. The increase in revenues and gross margin improvement were
primarily the result of slightly increased activity.
International & Alaska
Drilling
International & Alaska
Drilling segment revenues increased 2.8 percent to $63.2 million from $61.5
million for the 2016 fourth quarter. Gross margin was
$11.0 million, a 22.5 percent
decrease from 2016 fourth quarter gross margin of $14.2 million. The increase in revenues was
attributable to an increase in reimbursable revenues. The
decrease in gross margin was primarily attributable to an O&M
contract that was completed in the quarter and increased operating
expenses that were largely due to the timing of certain payroll
taxes as well as cost benefits realized in the fourth quarter that
did not repeat in the first quarter.
Rental Tools Services
For the Company's Rental Tools Services business, which is
comprised of the U.S. Rental Tools and International Rental Tools
segments, first quarter revenues increased 6.6 percent to
$33.8 million from $31.7 million for the 2016 fourth quarter.
Gross margin increased 63.0 percent to $4.4
million from $2.7 million, and
gross margin as a percentage of revenues was 13.0 percent compared
with 8.5 percent for the prior period.
U.S. Rental Tools
U.S. Rental Tools segment revenues
increased 25.5 percent to $20.2
million, from $16.1 million
for the 2016 fourth quarter. Gross margin increased 70.0
percent to $6.8 million from
$4.0 million for the 2016 fourth
quarter. The increases in revenues and gross margin were
driven by increased oil & gas activity in the U.S. land
drilling market and select price increases.
International Rental
Tools
International Rental Tools segment
revenues decreased 12.8 percent to $13.6
million from $15.6 million for
the 2016 fourth quarter. Gross margin decreased 84.6 percent
to a $2.4 million loss from a
$1.3 million loss for the 2016 fourth
quarter. The decreases in revenues and in gross margin
were attributable to reduced rental activity in Europe and West
Africa.
Consolidated
General and Administrative expenses were $7.0 million for the 2017 first quarter, down
from $9.1 million for the 2016 fourth
quarter. The decrease was primarily due to incentive plan
adjustments during the 2017 first quarter and a severance charge
taken in the 2016 fourth quarter that did not repeat in the first
quarter.
Capital expenditures in the first quarter were $14.5 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, May 3, 2017, to review first quarter
results. The call will be available by telephone by dialing
(+1) (412) 902-0003 and asking for the Parker Drilling First
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 May 10, 2017 at (+1) (201)
612-7415, conference ID 13658797#.
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.
This news release contains non-GAAP financial measures as
defined by SEC Regulation G. A reconciliation of each such measure
to its most directly comparable U.S. Generally Accepted Accounting
Principles (GAAP) financial measure, together with an explanation
of why management believes that these non-GAAP financial measures
provide useful information to investors, is provided in the
following tables.
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-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)
|
|
|
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
(Unaudited)
|
|
|
ASSETS:
|
|
|
|
Current
Assets
|
|
|
|
Cash and Cash
Equivalents
|
$
|
149,688
|
|
|
$
|
119,691
|
|
Accounts and Notes
Receivable, net
|
118,114
|
|
|
113,231
|
|
Rig Materials and
Supplies
|
35,053
|
|
|
32,354
|
|
Other Current
Assets
|
23,092
|
|
|
21,042
|
|
Total Current
Assets
|
325,947
|
|
|
286,318
|
|
|
|
|
|
Property, Plant and
Equipment, net
|
676,881
|
|
|
693,439
|
|
|
|
|
|
Other
Assets
|
|
|
|
Deferred Income
Taxes
|
74,416
|
|
|
70,309
|
|
Other
Assets
|
52,311
|
|
|
53,485
|
|
Total Other
Assets
|
126,727
|
|
|
123,794
|
|
|
|
|
|
Total
Assets
|
$
|
1,129,555
|
|
|
$
|
1,103,551
|
|
|
|
|
|
LIABILITIES &
STOCKHOLDERS' EQUITY:
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts Payable and
Accrued Liabilities
|
$
|
93,709
|
|
|
$
|
102,921
|
|
Total Current
Liabilities
|
93,709
|
|
|
102,921
|
|
|
|
|
|
Long-Term Debt, net
of debt issuance costs
|
576,728
|
|
|
576,326
|
|
|
|
|
|
Deferred Tax
Liability
|
72,849
|
|
|
69,333
|
|
|
|
|
|
Other Long-Term
Liabilities
|
12,828
|
|
|
15,836
|
|
|
|
|
|
Total Stockholders'
Equity
|
373,441
|
|
|
339,135
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
|
1,129,555
|
|
|
$
|
1,103,551
|
|
PARKER DRILLING
COMPANY
|
Consolidated
Statements Of Operations
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
December 31,
|
|
Three Months Ended
March 31,
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
Revenues
|
$
|
98,271
|
|
|
$
|
130,503
|
|
|
$
|
94,025
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
Operating
Expenses
|
85,814
|
|
|
108,117
|
|
|
80,529
|
|
Depreciation and
Amortization
|
32,202
|
|
|
35,814
|
|
|
33,190
|
|
|
118,016
|
|
|
143,931
|
|
|
113,719
|
|
Total Operating Gross
Margin
|
(19,745)
|
|
|
(13,428)
|
|
|
(19,694)
|
|
|
|
|
|
|
|
General and
Administrative Expense
|
(7,040)
|
|
|
(9,781)
|
|
|
(9,132)
|
|
Gain (Loss) on
Disposition of Assets, net
|
(352)
|
|
|
(60)
|
|
|
(1,364)
|
|
Total Operating
Income (Loss)
|
(27,137)
|
|
|
(23,269)
|
|
|
(30,190)
|
|
|
|
|
|
|
|
Other Income
(Expense)
|
|
|
|
|
|
Interest
Expense
|
(10,870)
|
|
|
(11,562)
|
|
|
(11,048)
|
|
Interest
Income
|
10
|
|
|
7
|
|
|
10
|
|
Other
|
530
|
|
|
2,485
|
|
|
(1,409)
|
|
Total Other Income
(Expense)
|
(10,330)
|
|
|
(9,070)
|
|
|
(12,447)
|
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
(37,467)
|
|
|
(32,339)
|
|
|
(42,637)
|
|
|
|
|
|
|
|
Income Tax Expense
(Benefit)
|
2,342
|
|
|
63,496
|
|
|
6,292
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
(39,809)
|
|
|
(95,835)
|
|
|
(48,929)
|
|
Mandatory convertible
preferred stock dividend
|
—
|
|
|
—
|
|
|
—
|
|
Net Income (Loss)
Available to Common Stockholders
|
$
|
(39,809)
|
|
|
$
|
(95,835)
|
|
|
$
|
(48,929)
|
|
|
|
|
|
|
|
Income (Loss) per
Common Share - Basic
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
(0.31)
|
|
|
$
|
(0.78)
|
|
|
$
|
(0.39)
|
|
|
|
|
|
|
|
Income (Loss) per
Common Share - Diluted
|
|
|
|
|
|
Net Income
(Loss)
|
$
|
(0.31)
|
|
|
$
|
(0.78)
|
|
|
$
|
(0.39)
|
|
|
|
|
|
|
|
Number of common
shares used in computing earnings per share:
|
|
|
|
|
|
Basic
|
130,142,527
|
|
|
123,090,238
|
|
|
124,830,473
|
|
Diluted
|
130,142,527
|
|
|
123,090,238
|
|
|
124,830,473
|
|
PARKER DRILLING
COMPANY
|
Selected Financial
Data
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
1,215
|
|
|
$
|
2,085
|
|
|
$
|
848
|
|
International &
Alaska Drilling
|
|
63,213
|
|
|
88,619
|
|
|
61,478
|
|
|
Total Drilling
Services
|
|
64,428
|
|
|
90,704
|
|
|
62,326
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
20,231
|
|
|
$
|
22,555
|
|
|
$
|
16,130
|
|
International Rental
Tools
|
|
13,612
|
|
|
17,244
|
|
|
15,569
|
|
|
Total Rental Tools
Services
|
|
33,843
|
|
|
39,799
|
|
|
31,699
|
|
|
Total
Revenues
|
|
$
|
98,271
|
|
|
$
|
130,503
|
|
|
$
|
94,025
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
4,200
|
|
|
$
|
5,422
|
|
|
$
|
4,232
|
|
International &
Alaska Drilling
|
|
52,184
|
|
|
69,725
|
|
|
47,307
|
|
|
Total Drilling
Services
|
|
56,384
|
|
|
75,147
|
|
|
51,539
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
13,455
|
|
|
$
|
15,102
|
|
|
$
|
12,102
|
|
International Rental
Tools
|
|
15,975
|
|
|
17,868
|
|
|
16,888
|
|
|
Total Rental Tools
Services
|
|
29,430
|
|
|
32,970
|
|
|
28,990
|
|
|
Total
Operating Expenses
|
|
$
|
85,814
|
|
|
$
|
108,117
|
|
|
$
|
80,529
|
|
|
|
|
|
|
|
|
|
Operating Gross
Margin:
|
|
|
|
|
|
|
Drilling
Services:
|
|
|
|
|
|
|
U.S. (Lower 48)
Drilling
|
|
$
|
(2,985)
|
|
|
$
|
(3,337)
|
|
|
$
|
(3,384)
|
|
International &
Alaska Drilling
|
|
11,029
|
|
|
18,894
|
|
|
14,171
|
|
|
Total Drilling
Services
|
|
8,044
|
|
|
15,557
|
|
|
10,787
|
|
Rental Tools
Services:
|
|
|
|
|
|
|
U.S. Rental
Tools
|
|
$
|
6,776
|
|
|
$
|
7,453
|
|
|
$
|
4,028
|
|
International Rental
Tools
|
|
(2,363)
|
|
|
(624)
|
|
|
(1,319)
|
|
|
Total Rental Tools
Services
|
|
4,413
|
|
|
6,829
|
|
|
2,709
|
|
|
Total Operating Gross
Margin Excluding Depreciation and Amortization
|
|
$
|
12,457
|
|
|
$
|
22,386
|
|
|
$
|
13,496
|
|
Depreciation and
Amortization
|
|
(32,202)
|
|
|
(35,814)
|
|
|
(33,190)
|
|
|
Total Operating Gross
Margin
|
|
(19,745)
|
|
|
(13,428)
|
|
|
(19,694)
|
|
PARKER DRILLING
COMPANY
|
Adjusted EBITDA
(1)
|
(Dollars in
Thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2017
|
|
December 31,
2016
|
|
September 30,
2016
|
|
June 30,
2016
|
|
March 31,
2016
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(Loss)
|
|
$
|
(39,809)
|
|
|
$
|
(48,929)
|
|
|
$
|
(46,228)
|
|
|
$
|
(39,822)
|
|
|
$
|
(95,835)
|
|
Interest
Expense
|
|
10,870
|
|
|
11,048
|
|
|
11,015
|
|
|
12,187
|
|
|
11,562
|
|
Income Tax Expense
(Benefit)
|
|
2,342
|
|
|
6,292
|
|
|
5,295
|
|
|
(913)
|
|
|
63,496
|
|
Depreciation and
Amortization
|
|
32,202
|
|
|
33,190
|
|
|
34,474
|
|
|
36,317
|
|
|
35,814
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
5,605
|
|
|
1,601
|
|
|
4,556
|
|
|
7,769
|
|
|
15,037
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
Other (Income)
Expense
|
|
(540)
|
|
|
1,399
|
|
|
342
|
|
|
326
|
|
|
(2,492)
|
|
(Gain) Loss on
Disposition of Assets, net
|
|
352
|
|
|
1,364
|
|
|
187
|
|
|
2
|
|
|
60
|
|
Special items
(2)
|
|
—
|
|
|
876
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
5,417
|
|
|
$
|
5,240
|
|
|
$
|
5,085
|
|
|
$
|
8,097
|
|
|
$
|
12,605
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) Special items
include:
- For the three months
ended December 31, 2016, special items include $0.9 million of net
severance associated with the departure of three
executives.
|
PARKER DRILLING
COMPANY
|
Reconciliation of
Adjusted Earnings Per Share
|
(Dollars in
Thousands, Except Per Share Data)
|
(Unaudited)
|
|
|
|
Three Months
Ended
|
|
|
|
March 31,
|
|
December
31,
|
|
|
|
2017
|
|
2016
|
|
2016
|
|
|
|
|
|
|
|
|
Net Income (Loss)
Available to Common Shareholders
|
|
$
|
(39,809)
|
|
|
$
|
(95,835)
|
|
|
$
|
(48,929)
|
|
Income (Loss) per
Diluted Share
|
|
$
|
(0.31)
|
|
|
$
|
(0.78)
|
|
|
$
|
(0.39)
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
Valuation
Allowance
|
|
$
|
—
|
|
|
$
|
73,125
|
|
|
$
|
6,772
|
|
Special
Items
|
|
—
|
|
|
—
|
|
|
876
|
|
Total
adjustments
|
|
—
|
|
|
73,125
|
|
|
7,648
|
|
Tax effect of
adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
Net
adjustments
|
|
—
|
|
|
73,125
|
|
|
7,648
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (Loss) Available to Common
Shareholders(1)
|
|
$
|
(39,809)
|
|
|
$
|
(22,710)
|
|
|
$
|
(41,281)
|
|
Adjusted Income
(Loss) per Diluted Share (1)
|
|
$
|
(0.31)
|
|
|
$
|
(0.18)
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
|
|
|
(1) We believe
Adjusted Net Income (Loss) Available to Common Shareholders and
Adjusted Income (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 Income (Loss) Available to Common Shareholders
and Income (Loss) per Diluted Share to be items outside of the
Company's normal operating results. Adjusted Net Income (Loss)
Available to Common Shareholders and Adjusted Income (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 Income (Loss) or Income (Loss) per Diluted Share.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2017-first-quarter-results-300450001.html
SOURCE Parker Drilling Company