Fourth Quarter Core Earnings of $0.21 Per Diluted Share Before
Charges and Project Cost Increases NEW ORLEANS, Feb. 24
/PRNewswire-FirstCall/ -- Superior Energy Services, Inc. (NYSE:SPN)
today announced a net loss of $114.6 million, or $1.46 per share on
revenue of $264.6 million for the fourth quarter of 2009, as
compared with net income of $83.3 million, or $1.06 per diluted
share, on revenue of $491.8 million for the fourth quarter of 2008.
Excluding the previously announced special charges and the impact
of the wreck removal project cost increases, for the fourth quarter
of 2009, the Company had adjusted net income of $16.5 million, or
$0.21 per diluted share, compared with net income of $88.5 million,
or $1.13 per diluted share, for the fourth quarter of 2008. For the
year ended December 31, 2009, the Company's net loss was $102.3
million, or $1.31 per share on revenue of $1,449.3 million as
compared with net income of $351.5 million, or $4.33 per diluted
share on revenue of $1,881.1 million for the year ended December
31, 2008. Excluding special charges taken during the year and the
impact of the wreck removal project cost increases, for the year
ended December 31, 2009, the Company had adjusted net income of
$112.9 million, or $1.44 per diluted share, as compared with
adjusted net income of $325.0 million, or $4.00 per diluted share
for the year ended December 31, 2008. Terence Hall, Chairman and
CEO of Superior, stated, "During 2009, we generated positive core
earnings in a very challenging market environment, had operating
cash flow of $276 million, expanded into new international markets
and further positioned the Company to participate in subsea markets
worldwide. Looking ahead, we're excited about the additional
opportunities we'll have as a result of the Hallin Marine and
Bullwinkle Field acquisitions. We expect to build momentum
throughout the year as seasonal factors in the Gulf of Mexico
improve and activity increases." Overview of Previously Announced
Special Charges and Project Cost Increases in Fourth Quarter of
2009 The Company incurred a non-cash, pre-tax charge of $119.8
million, or $0.98 per share after tax, related to the impairment of
domestic land well enhancement assets. The Company also incurred
pre-tax charges of $15.9 million, or $0.13 per share after tax, in
the aggregate for transaction-related expenses for the acquisition
of Hallin Marine Subsea International plc, a write down of
components from one of the Company's 265-ft. class liftboats and a
reduction of the net realizable value of accounts receivable as a
result of continuing economic uncertainties in Venezuela. The
Company increased the estimated total cost to complete the wreck
removal project, which negatively impacted the Company's revenue
and the associated pre-tax income by $68.7 million, or $0.56 per
share after tax. Two Segments Renamed The Company has renamed two
of its reporting segments to more accurately describe the markets
and customers served by the businesses operating in each segment.
The "Well Intervention Segment" will now be called the "Subsea and
Well Enhancement Segment." The "Rental Tools Segment" will now be
called the "Drilling Products and Services Segment." Geographic
Breakdown For the fourth quarter of 2009, Gulf of Mexico revenue
was approximately $104.5 million. Excluding the $68.7 million
impact from cost adjustments to the wreck removal project, Gulf of
Mexico revenue was $173.2 million, or 22% lower sequentially.
Domestic land revenue was approximately $72.7 million, a sequential
increase of 2%, and international revenue was approximately $87.4
million, a sequential decrease of 5%. Subsea and Well Enhancement
Segment Fourth quarter revenue for the Subsea and Well Enhancement
Segment was $145.8 million. Excluding the $68.7 million impact from
cost adjustments to the wreck removal project, segment revenue was
$214.5 million. Loss from operations was $176.6 million. Without
the aforementioned charges that impacted this segment, income from
operations would have been approximately $17.1 million as compared
with $67.5 million in the fourth quarter of 2008 and $31.6 million
in the third quarter of 2009. Sequentially, seasonal factors led to
a decline in Gulf of Mexico activity across most product and
service lines. In the domestic land market, revenue increased 2%
sequentially due to increased demand for coiled tubing and cased
hole wireline services. International revenue in this segment
decreased 1% sequentially due to the suspension of an inspection,
repair and maintenance project in Angola, which was partially
offset by increased demand for well control services. As stated in
the pre-earnings announcement, the Company estimates that the
suspension of the Angola project reduced pre-tax income by
approximately $4.0 million, or $0.03 per share after tax. Drilling
Products and Services Segment Fourth quarter revenue for the
Drilling Products and Services Segment was $97.6 million. Income
from operations was $13.8 million, or 14% of segment revenue, as
compared with $50.7 million, or 34% of segment revenue in the
fourth quarter of 2008, and $17.9 million, or 18% of segment
revenue in the third quarter of 2009. On a sequential basis, Gulf
of Mexico revenue declined 4% due to decreased demand for specialty
tubulars and accessories, while international revenue declined 5%
due to decreased demand for accommodations. Revenue from domestic
land markets increased 2% sequentially primarily as a result of
increased rentals of accommodations and stabilization equipment.
Marine Segment Marine Segment revenue was $21.2 million. Loss from
operations was $2.9 million, as compared with income from
operations of $13.1 million, or 35% of segment revenue in the
fourth quarter of 2008, and compared with income from operations of
$5.1 million, or 16% of segment revenue in the third quarter of
2009. As previously announced, the Company estimates that downtime
associated with the removal of the Company's two 265-ft. class
liftboats - the Superior Influence and the Superior Respect - from
the fleet in early November following Hurricane Ida reduced pre-tax
income by $4.0 million, or $0.03 per share after tax. The Company
anticipates that the Superior Influence will return to service
during the second quarter of 2010 and that the Superior Respect
will return to service during the third quarter of 2010. Average
daily revenue in the fourth quarter of 2009 was approximately
$230,000, inclusive of subsistence revenue, as compared with
approximately $415,000 per day in the fourth quarter of 2008 and
approximately $340,000 in the third quarter of 2009. Average fleet
utilization in the fourth quarter of 2009 was 45% as compared with
76% in the fourth quarter of 2008 and 62% in the third quarter of
2009. The Company sold four of its 145-ft. class liftboats during
the fourth quarter. Liftboat Average Dayrates and Utilization by
Class Size Three Months Ended December 31, 2009 ($ actual) Average
Class Liftboats Dayrate Utilization ----- --------- -------
----------- 145'-155'(1) 6 $4,782 17.1% 160'-175' 8 7,834 41.4%
200' 5 10,880 55.4% 230'-245' 3 25,551 62.3% 250' 2 32,337 100.0%
265'(2) 2 36,786 89.0% (1) Dayrates and utilization for 10
liftboats through November 23, 2009, and six liftboats for
remainder of the quarter. (2) Dayrates and utilization through
early November, before both liftboats were temporarily removed from
fleet. Conference Call Information The Company will host a
conference call at 11 a.m. Central Time on Thursday, February 25,
2010. The call can be accessed from Superior's website at
http://www.superiorenergy.com/, or by telephone at 480-629-9690.
For those who cannot listen to the live call, a telephonic replay
will be available through Thursday, March 4, 2010 and may be
accessed by calling 303-590-3030 and using the pass code 4218211#.
An archive of the webcast will be available after the call for a
period of 60 days on http://www.superiorenergy.com/. Superior
Energy Services, Inc. serves the drilling and production-related
needs of oil and gas companies worldwide through its brand name
rental tools and its integrated well intervention services and
tools, supported by an engineering staff who plan and design
solutions for customers. Offshore projects are delivered by the
Company's fleet of modern marine assets. This press release
contains certain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 which involve
known and unknown risks, uncertainties and other factors. Among the
factors that could cause actual results to differ materially are
volatility of the oil and gas industry, including the level of
exploration, production and development activity; risks associated
with the uncertainty of macroeconomic and business conditions
worldwide, as well as the global credit markets; risks associated
with the Company's rapid growth; changes in competitive factors and
other material factors that are described from time to time in the
Company's filings with the Securities and Exchange Commission.
Actual events, circumstances, effects and results may be materially
different from the results, performance or achievements expressed
or implied by the forward-looking statements. Consequently, the
forward-looking statements contained herein should not be regarded
as representations by Superior or any other person that the
projected outcomes can or will be achieved. FOR FURTHER INFORMATION
CONTACT: Terence Hall, CEO; Robert Taylor, CFO; Greg Rosenstein, VP
of Investor Relations, (504) 587-7374 SUPERIOR ENERGY SERVICES,
INC. AND SUBSIDIARIES Consolidated Statements of Operations Three
and Twelve Months Ended December 31, 2009 and 2008 (in thousands,
except earnings per share amounts) (unaudited) Three Months Ended
Twelve Months Ended December 31, December 31, ------------------
------------------- 2009 2008 2009 2008 ---- ---- ---- ---- As
Adjusted As Adjusted (Note 1) (Note 1) Oilfield service and rental
revenues $264,575 $491,796 $1,449,300 $1,826,052 Oil and gas
revenues - - - 55,072 --- --- --- ------ Total revenues 264,575
491,796 1,449,300 1,881,124 ------- ------- --------- ---------
Cost of oilfield services and rentals 188,627 235,469 824,034
885,308 Cost of oil and gas sales - - - 12,986 --- --- --- ------
Total cost of services, rentals and sales (exclusive of items shown
separately below) 188,627 235,469 824,034 898,294 ------- -------
------- ------- Depreciation, depletion, amortization and accretion
53,548 46,825 207,114 175,500 General and administrative expenses
70,399 78,173 259,093 282,584 Reduction in value of assets 119,844
- 212,527 - Gain on sale of businesses 2,084 - 2,084 40,946 -----
--- ----- ------ Income (loss) from operations (165,759) 131,329
(51,384) 565,692 Other income (expense): Interest expense, net
(12,081) (12,821) (49,409) (47,686) Earnings (losses) from
equity-method investments, net (1,269) 5,014 (22,600) 24,373
Reduction in value of equity-method investment - - (36,486) - ---
--- ------- --- Income (loss) before income taxes (179,109) 123,522
(159,879) 542,379 Income taxes (64,479) 40,237 (57,556) 190,904
------- ------ ------- ------- Net income (loss) $(114,630) $83,285
$(102,323) $351,475 ========= ======= ========= ======== Basic
earnings (loss) per share $(1.46) $1.07 $(1.31) $4.39 ====== =====
====== ===== Diluted earnings (loss) per share $(1.46) $1.06
$(1.31) $4.33 ====== ===== ====== ===== Weighted average common
shares used in computing earnings per share: Basic 78,305 77,901
78,171 79,990 ====== ====== ====== ====== Diluted 78,305 78,406
78,171 81,213 ====== ====== ====== ====== Note 1 On January 1,
2009, we adopted the provisions of a new accounting standard which
changed the accounting for the Company's 1.5% senior exchangeable
notes. The comparative Statements of Operations for the three and
twelve months ended December 31, 2008 have been adjusted to comply
with this standard on a retrospective basis. SUPERIOR ENERGY
SERVICES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2009 AND DECEMBER 31, 2008 (in thousands) 12/31/2009
12/31/2008 ---------- ---------- (Unaudited) As Adjusted (Note 1)
ASSETS Current assets: Cash and cash equivalents $206,505 $44,853
Accounts receivable, net 337,151 360,357 Income taxes receivable
12,674 - Prepaid expenses 20,209 18,041 Other current assets
287,024 208,739 ------- ------- Total current assets 863,563
631,990 ------- ------- Property, plant and equipment, net
1,058,976 1,114,941 Goodwill 482,480 477,860 Equity-method
investments 60,677 122,308 Intangible and other long-term assets,
net 50,969 143,046 ------ ------- Total assets $2,516,665
$2,490,145 ========== ========== LIABILITIES AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable $63,466 $87,207
Accrued expenses 133,602 152,536 Income taxes payable - 20,861
Deferred income taxes 30,501 36,830 Current maturities of long-term
debt 810 810 --- --- Total current liabilities 228,379 298,244
------- ------- Deferred income taxes 209,053 246,824 Long-term
debt, net 848,665 654,199 Other long-term liabilities 52,523 36,605
Total stockholders' equity 1,178,045 1,254,273 --------- ---------
Total liabilities and stockholders' equity $2,516,665 $2,490,145
========== ========== Note 1 On January 1, 2009, we adopted the
provisions of a new accounting standard which changed the
accounting for the Company's 1.5% senior exchangeable notes. The
comparative Balance Sheet as of December 31, 2008 has been adjusted
to comply with this standard on a retrospective basis. Superior
Energy Services, Inc. and Subsidiaries Segment Highlights Three
months ended December 31, 2009, September 30, 2009 and December 31,
2008 (Unaudited) (in thousands) Three months ended
------------------ Revenue December 31, 2009 September 30, 2009
December 31, 2008 ----------------- ------------------
----------------- Subsea and Well Enhancement $145,822 $254,335
$304,417 Drilling Products and Services 97,567 100,832 149,239
Marine 21,186 31,288 38,140 ------ ------ ------ Total Revenues
$264,575 $386,455 $491,796 ======== ======== ======== Gross Profit
(1) December 31, 2009 September 30, 2009 December 31, 2008
----------------- ------------------ ----------------- Subsea and
Well Enhancement $2,946 $94,098 $134,073 Drilling Products and
Services 65,314 64,621 102,533 Marine 7,688 12,062 19,721 -----
------ ------ Total Gross Profit $75,948 $170,781 $256,327 =======
======== ======== Income (Loss) from Operations December 31, 2009
September 30, 2009 December 31, 2008 -----------------
------------------ ----------------- Subsea and Well Enhancement
(2) $(176,585) $31,563 $67,474 Drilling Products and Services
13,771 17,940 50,709 Marine (2,945) 5,133 13,146 ------ -----
------ Total Income (Loss) from Operations $(165,759) $54,636
$131,329 ========= ======= ======== (1) Gross profit is calculated
by subtracting cost of services (exclusive of depreciation,
depletion, amortization and accretion) from revenue for each of the
Company's segments. (2) Income from operations in the Subsea and
Well Enhancement Segment for the three months ended December 31,
2009 includes a reduction in value of assets of $119.8 million,
adjustments to the estimated total cost of the wreck removal
project of $68.7 million and other special charges mentioned in the
press release. NON-GAAP RECONCILIATION ($ in thousands) We report
our financial results in conformity with U.S. generally accepted
accounting principles (GAAP). However, the Company provides
non-GAAP adjusted net income and non-GAAP adjusted earnings per
share because those items are customarily excluded by analysts in
published estimates and management believes, for purposes of
comparability to financial performance in other periods and to
evaluate the Company's trends, that it is appropriate for these
items to be excluded. Management uses adjusted net income and
adjusted diluted earnings per share to evaluate the Company's
operational trends and historical performance on a consistent
basis. The adjusted amounts are not measures of financial
performance under GAAP. A reconciliation of net income, the GAAP
measure most directly comparable to non-GAAP adjusted earnings and
non-GAAP adjusted earnings per share, is below. In making any
comparisons to other companies, investors need to be aware that the
non-GAAP financial measures used by the Company may be calculated
differently from, and therefore may not be directly comparable to,
similarly titled measures used by other companies. Investors should
pay close attention to the specific definition being used and to
the reconciliation between such measures and the corresponding GAAP
measures provided by each company under applicable SEC rules.
Non-GAAP financial measures should be viewed in addition to, and
not as an alternative for, or superior to, the Company's reported
results prepared in accordance with GAAP. Three Months Ended
December 31, ------------------ 2009 2008 ---- ---- Net income
(loss) as reported $(114,630) $83,285 Pre-tax adjustments:
-------------------- Reduction in value of assets 119,844 - Impact
of adjustment to estimated total cost of wreck removal project
68,678 - Write-down of liftboat components 6,446 - Expenses related
to Hallin Marine acquisition 4,878 - Reduction in net realizable
value of Venezuelan accounts receivable 4,565 - Losses from
equity-method investment in Beryl Oil & Gas - 12,760 Unrealized
(earnings) losses from equity-method investment hedging contracts,
excluding Beryl Oil & Gas 2,518 (15,411) Discretionary
contribution in connection with the adoption of the SERP - 10,000
Other non-cash charges related to SPN Resources - 333 Gain on sale
of liftboats (2,084) - ------ --- Total pre-tax adjustments 204,845
7,682 Income tax effect of adjustments (73,744) (2,504) -------
------ Non-GAAP adjusted net income $16,471 $88,463 ======= =======
Non-GAAP adjusted diluted earnings per share $0.21 $1.13 =====
===== Weighted average common shares used in computing diluted
earnings per share 78,305 78,406 ====== ====== Twelve Months Ended
December 31, ------------------- 2009 2008 ---- ---- Net income
(loss) as reported $(102,323) $351,475 Pre-tax adjustments:
-------------------- Reduction in value of assets 212,527 - Impact
of adjustment to estimated total cost of wreck removal project
43,425 - Reduction in value of equity-method investment in Beryl
Oil & Gas 36,486 - Losses from equity-method investment in
Beryl Oil & Gas 14,009 9,920 Unrealized (earnings) losses from
equity-method investment hedging contracts, excluding Beryl Oil
& Gas 11,393 (14,920) Other non-cash charges related to SPN
Resources 4,641 333 Write-down of liftboat components 6,446 -
Expenses related to acquisitions and dispositions 4,878 4,517
Reduction in net realizable value of Venezuelan accounts receivable
4,565 - Discretionary contribution in connection with the adoption
of the SERP - 10,000 Cessation of depreciation and depletion
related to assets held for sale - (9,745) Gain on sale of
businesses (2,084) (40,946) ------ ------- Total pre-tax
adjustments 336,286 (40,841) Income tax effect of adjustments
(121,063) 14,376 -------- ------ Non-GAAP adjusted net income
$112,900 $325,010 ======== ======== Non-GAAP adjusted diluted
earnings per share $1.44 $4.00 ===== ===== Weighted average common
shares used in computing diluted earnings per share 78,171 81,213
====== ====== DATASOURCE: Superior Energy Services, Inc. CONTACT:
Terence Hall, CEO, or Robert Taylor, CFO, or Greg Rosenstein, VP of
Investor Relations, all of Superior Energy Services, Inc.,
+1-504-587-7374, fax, +1-504-362-1818 Web Site:
http://www.superiorenergy.com/
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