HOUSTON, Oct. 14, 2019 /PRNewswire/ -- INDEPENDENCE
CONTRACT DRILLING, INC. (the "Company") (NYSE: ICD) today announced
the timing of its third quarter earnings conference call and
provided the following financial and operational update for the
three months ended September 30,
2019. This update coincides with the Company's Board of
Directors approving the removal of a general black-out period under
the Company's Insider Trading Policy, which removal will be
effective Tuesday, October 15,
2019.
The Company expects to report the following financial results
for the three months ended September 30,
2019 when it reports earnings on October 31, 2019:
- Net loss between $0.12 and
$0.13 per share.
- Adjusted net loss, as defined below, between $0.10 and $0.11 per
share. Adjusted net loss excludes a non-cash impairment charge of
approximately $0.02 per share.
- Adjusted EBITDA, as defined below, between $7.9 million ($0.11
per share) and $7.4 million
($0.10 per share).
- Fleet utilization of 77% of its marketed fleet, representing
1,974 operating days during the quarter.
- Revenue per day of approximately $20,236 per day and fully-burdened cost per day
of approximately $14,676 per
day.
- Selling, general administrative expenses, of approximately
$3.8 million, including non-cash
stock- based compensation of $0.6
million.
- Net debt, excluding finance leases and net of deferred
financing costs, of approximately $118.2
million as of September 30,
2019.
- Financial liquidity as of September 30,
2019, of $46 million,
comprised of cash on hand of $9.1
million, $21.9 million of
availability under the Company's undrawn revolving line of credit
and $15 million of availability under
the Company's committed undrawn term-loan accordion.
Chief Executive Officer Anthony
Gallegos commented, "During the third quarter, ICD increased
its operating rig count and exited the third quarter with 23 rigs
earning revenues under contract which is more than at the beginning
of the quarter. We also successfully completed the budgeted upgrade
of one our rigs at the end of the quarter, increasing the rig's
racking and hook-load capabilities, and our first SCR-to-AC
conversion is on schedule for completion during the fourth quarter
of 2019.
Looking forward, we expect headwinds to remain for the industry
with the contracted U.S. land rig count continuing to decline as we
enter the fourth quarter, which will continue to create some cost
inefficiencies for us during the quarter. Nevertheless, we believe
ICD is well positioned. With our two rigs scheduled to re-enter the
marketed fleet as well as contract discussions surrounding other
rigs, we continue to expect our contracted rig count to increase as
we exit the fourth quarter of 2019. We have made continued progress
on our various equipment and technology initiatives leading to the
deployment and activation of our first drilling optimization
software system earlier this month and a second system deployment
with a major operator planned for later in the fourth quarter. With
respect to our stock repurchase program that was instituted in
early August, we have repurchased 595,211 shares to date under this
program, with the pace of this program being based on free cash
flow generation and prioritizing between our most economic
investment opportunities within our existing fleet, and debt
repayment."
The Company also provides the following additional information
and expectations for the fourth quarter of 2019.
- The Company's backlog of drilling contracts with original terms
of six months or longer was approximately $58 million as of September 30, 2019, representing 7.4 rig years of
activity. Approximately 48% of this backlog is expected to be
realized during the remainder of 2019. The Company also has five
rigs currently operating under short-term contracts with original
terms of less than six months that are not included in this
reported backlog.
- The Company's capital expenditure budget for 2019, net of asset
sales and recoveries, remains $29.0
million. During the third quarter of 2019, cash outlays for
capital expenditures, net of asset sales and recoveries, was
approximately $7.7 million.
- Based upon existing contract tenors and expected transition
time between contracts as the Company repositions its fleet into
its customers' 2020 budget programs, the Company currently expects
operating days to increase approximately 5% during the fourth
quarter of 2019 compared to the third quarter of 2019. Revenue per
day during the fourth quarter is expected to range between
$19,800 and $20,200, and fully burdened cost per day is
expected to range between $13,700 and
$14,100 per day.
Timing of Third Quarter Conference Call
The Company will release its third quarter 2019 results before
the New York Stock Exchange opens on Thursday, October 31, 2019. This release will be
followed by a conference call for investors at 11:00 a.m. Central Time (12:00 p.m. Eastern Time) to discuss the Company's
third quarter results.
The call can be accessed live over the telephone by dialing
(855) 239-3115 or for international callers, (412) 542-4125. A
replay will be available shortly after the call and can be accessed
by dialing (877) 344-7529 or for international callers, (412)
317-0088. The passcode for the replay is 10135676. The replay will
be available until November 7,
2019.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging onto the Company's website at
www.icdrilling.com in the Investor Relations section. A replay of
the webcast will also be available for approximately 30 days
following the call.
About Independence Contract Drilling, Inc.
Independence Contract Drilling provides land-based contract
drilling services for oil and natural gas producers in the United States. The Company constructs,
owns and operates a fleet of pad-optimal ShaleDriller rigs that are
specifically engineered and designed to accelerate its clients'
production profiles and cash flows from their most technically
demanding and economically impactful oil and gas properties. For
more information, visit www.icdrilling.com.
Forward-Looking Statements
This news release contains certain forward-looking statements
within the meaning of the federal securities laws. Words such as
"anticipated," "estimated," "expected," "planned," "scheduled,"
"targeted," "believes," "intends," "objectives," "projects,"
"strategies" and similar expressions are used to identify such
forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements relating to Independence Contract
Drilling's operations are based on a number of expectations or
assumptions which have been used to develop such information and
statements but which may prove to be incorrect. These statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict, and
there can be no assurance that actual outcomes and results will not
differ materially from those expected by management of Independence
Contract Drilling. For more information concerning factors that
could cause actual results to differ materially from those conveyed
in the forward-looking statements, please refer to the "Risk
Factors" section of the Company's Annual Report on Form 10-K, filed
with the SEC and the information included in subsequent amendments
and other filings. These forward-looking statements are based on
and include our expectations as of the date hereof. Independence
Contract Drilling does not undertake any obligation to update or
revise such forward-looking statements to reflect events or
circumstances that occur, or which Independence Contract Drilling
becomes aware of, after the date hereof.
Non-Financial and Non-GAAP Definitions
The information contained in this press release contains
non-GAAP financial measures of the Company's operating performance.
The Company believes this non-GAAP information is useful because it
provides a means to evaluate the operating performance of the
Company on an ongoing basis using criteria that are used by our
management. Additionally, it highlights operating trends and aids
analytical comparisons. However, this information has limitations
and should not be used as an alternative to operating income (loss)
or cash flow performance measures determined in accordance with
GAAP, as this information excludes certain costs that may affect
the Company's operating performance in future periods. Adjusted net
(loss) income, EBITDA and adjusted EBITDA are supplemental non-GAAP
financial measures that are used by management and external users
of our financial statements, such as industry analysts, investors,
lenders and rating agencies. In addition, adjusted EBITDA is
consistent with how EBITDA is calculated under our credit facility
for purposes of determining our compliance with various financial
covenants. We define "EBITDA" as earnings (or loss) before
interest, taxes, depreciation, and amortization, and we define
"adjusted EBITDA" as EBITDA before stock-based compensation,
non-cash asset impairments, gains or losses on disposition of
assets, and other non-recurring items added back to, or subtracted
from, net income for purposes of calculating EBITDA under our
credit facilities. Neither adjusted net (loss) income, EBITDA or
adjusted EBITDA is a measure of net income as determined by U.S.
generally accepted accounting principles ("GAAP").
Management believes adjusted net (loss) income, EBITDA and
adjusted EBITDA are useful because they allow our stockholders to
more effectively evaluate our operating performance and compliance
with various financial covenants under our credit facility and
compare the results of our operations from period to period and
against our peers without regard to our financing methods or
capital structure or non-recurring, non-cash transactions. We
exclude the items listed above from net income (loss) in
calculating adjusted net (loss) income, EBITDA and adjusted EBITDA
because these amounts can vary substantially from company to
company within our industry depending upon accounting methods and
book values of assets, capital structures and the method by which
the assets were acquired. None of adjusted net (loss) income,
EBITDA or adjusted EBITDA should be considered an alternative to,
or more meaningful than, net income (loss), the most closely
comparable financial measure calculated in accordance with GAAP, or
as an indicator of our operating performance or liquidity. Certain
items excluded from adjusted net (loss) income, EBITDA and adjusted
EBITDA are significant components in understanding and assessing a
company's financial performance, such as a company's return on
assets, cost of capital and tax structure. Our presentation of
adjusted net (loss) income, EBITDA and adjusted EBITDA should not
be construed as an inference that our results will be unaffected by
unusual or non-recurring items. Our computations of adjusted net
(loss) income, EBITDA and adjusted EBITDA may not be comparable to
other similarly titled measures of other companies.
The following provides information on the calculation of various
non-GAAP financial and operational measures.
- Marketed rigs exclude idle rigs that will not be reactivated
until upgrades or conversions are complete.
- Rig operating days represent the number of days our rigs are
earning revenue under a contract during the period, including days
that standby revenues are earned.
- Average number of operating rigs is calculated by dividing the
total number of rig operating days in the period by the total
number of calendar days in the period.
- Rig utilization is calculated as rig operating days divided by
the total number of days our marketed drilling rigs are available
during the applicable period.
- Average revenue per operating day represents total contract
drilling revenues earned during the period divided by rig operating
days in the period. Excluded in calculating average revenue per
operating day are revenues associated with the reimbursement of (i)
out-of-pocket costs paid by customers, and (ii) early termination
revenues.
- Average cost per operating day represents operating costs
incurred during the period divided by rig operating days in the
period. Excluded in calculating average cost per operating day are
out-of-pocket costs paid by customers.
- The following tables provide a reconciliation of net loss to
adjusted net loss and EBITDA to adjusted EBITDA included in this
press release:
Reconciliation of
Net Loss Per Share to Adjusted Net Loss Per Share
|
|
Per
Share
|
|
Per
Share
|
Expected range of
net loss
|
$
(0.12)
|
|
$
(0.13)
|
Add back: expected
non-cash impairment charges, merger related expenses, gain on sale
of assets and other
|
0.02
|
|
0.02
|
Expected range of
adjusted net loss
|
$
(0.10)
|
|
$
(0.11)
|
|
|
|
|
Reconciliation of
EBITDA Per Share to Adjusted EBITDA Per Share
|
|
|
|
|
Expected range of
adjusted net loss
|
$
(0.10)
|
|
$
(0.11)
|
Add back:
depreciation
|
0.15
|
|
0.15
|
Add back: interest
expense and tax expense
|
0.05
|
|
0.05
|
Expected range of
EBITDA
|
$
0.10
|
|
$
0.09
|
Add back: non cash
stock-based compensation
|
0.01
|
|
0.01
|
Expected range of
adjusted EBITDA
|
$
0.11
|
|
$
0.10
|
INVESTOR CONTACTS:
Independence Contract Drilling, Inc.
E-mail inquiries to: Investor.relations@icdrilling.com
Phone inquiries: (281) 598-1211
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SOURCE Independence Contract Drilling, Inc.