SPN
$1.95
Superior Energy Services
($.22)
(10.14%)
Earnings Details
1st Quarter March 2019
Tuesday, April 23, 2019 4:15:00 PM
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Summary

Superior Energy Services Misses

Superior Energy Services (SPN) reported a 1st Quarter March 2019 loss of $0.31 per share on revenue of $467.2 million. The consensus estimate was a loss of $0.24 per share on revenue of $486.0 million. The Earnings Whisper number was for a loss of $0.22 per share. Revenue fell 3.1% compared to the same quarter a year ago.

Superior Energy Services Inc is a provider of specialized oilfield services and equipment. The Company operates four segments: Drilling Products and Services; Onshore Completion and Workover Services; Production Services; Subsea and Technical Solutions.

Results
Reported Earnings
($0.31)
Earnings Whisper
($0.22)
Consensus Estimate
($0.24)
Reported Revenue
$467.2 Mil
Revenue Estimate
$486.0 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Superior Energy Services Announces First Quarter 2019 Results

HOUSTON, April 23, 2019 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) today announced a net loss from continuing operations for the first quarter of 2019 of $47.7 million, or $0.31 per share, on revenue of $467.2 million.  This compares to a net loss from continuing operations of $750.2 million, or $4.85 per share, for the fourth quarter of 2018, on revenue of $539.3 million and a net loss from continuing operations of $59.9 million, or $0.39 per share for the first quarter of 2018, on revenue of $482.3 million

David Dunlap, President and CEO, commented, “First quarter results were in line with our expectations.  U.S. land revenues were sequentially lower as we operated fewer pressure pumping fleets due to a weak environment for pricing and utilization.  U.S. offshore results were also lower as activity levels skewed towards lower margin drilling activity.  Also, as expected, completion tools revenue in the Gulf of Mexico decreased during the quarter after a strong finish to 2018.  Despite the shift in activity mix, and expected seasonal lull experienced during the quarter, we believe that U.S. offshore activity will improve as the year progresses.  International activity levels were stable as oil field activity continues to steadily increase in these markets.

“There remains considerable uncertainty around the North American service market this year, primarily due to the lack of visibility we have into our customers’ plans for capital expenditures during the second half of the year.  Until we can gain confidence that our customers’ spending levels will support utilization and pricing levels that justify maintaining our assets in the field, an increasing proportion of our capital expenditures will be allocated toward offshore and international opportunities.  Overall, we are committed to a level of capital discipline that will foster free cash flow growth and improved corporate returns.

“We believe that the strength of our business lies in the diversity of our product offerings and geographic reach, as demonstrated by the substantial year over year growth of our first quarter international revenue.  This diversity is essential to the sustainability of our business and will become more pronounced as our results are increasingly supported by U.S. offshore and international oil field activity levels.”   

First Quarter 2019 Geographic Breakdown

U.S. land revenue was $305.8 million in the first quarter of 2019, a decrease of 14% as compared with revenue of $356.9 million in the fourth quarter of 2018, and an 8% decrease compared to revenue of $331.5 million in the first quarter of 2018.  U.S. offshore revenue decreased 23% to $69.3 million as compared with revenue of $89.5 million in the fourth quarter of 2018, and a 9% decrease from revenue of $76.0 million in the first quarter of 2018.  International revenue of $92.1 million was flat as compared to the fourth quarter of 2018 and increased 23% as compared to revenue of $74.8 million in the first quarter of 2018.

Drilling Products and Services Segment

The Drilling Products and Services segment revenue in the first quarter of 2019 was $101.1 million, a 4% decrease from fourth quarter 2018 revenue of $105.3 million and a 19% increase from first quarter 2018 revenue of $85.2 million.

U.S. land revenue increased 3% sequentially to $48.2 million, U.S. offshore revenue decreased 5% sequentially to $29.1 million and international revenue decreased 15% to $23.8 million.

Onshore Completion and Workover Services Segment

The Onshore Completion and Workover Services segment revenue in the first quarter of 2019 was $205.0 million, a 20% decrease from fourth quarter 2018 revenue of $255.1 million, and a 11% decrease from first quarter 2018 revenue of $231.5 million

Production Services Segment

The Production Services segment revenue in the first quarter of 2019 was $103.5 million, a 6% decrease from fourth quarter 2018 revenue of $109.9 million and a 3% increase from first quarter 2018 revenue of $100.8 million.

U.S. land revenue was $40.7 million a 14% decrease from fourth quarter revenue of $47.1 millionU.S. offshore revenue increased 4% sequentially to $19.3 million and international revenue decreased 2% sequentially to $43.5 million.

Technical Solutions Segment

The Technical Solutions segment revenue in the first quarter of 2019 was $57.6 million, a 17% decrease from fourth quarter 2018 revenue of $69.0 million and an 11% decrease from first quarter 2018 revenue of $64.8 million.

U.S. land revenue increased 49% sequentially to $11.9 million.  U.S. offshore revenue decreased 48% sequentially to $20.9 million and international revenue increased 20% to $24.8 million.

Conference Call Information

The Company will host a conference call at 9:00 a.m. Eastern Time on Wednesday, April 24, 2019.  The call can be accessed from the Company’s website at www.superiorenergy.com or by telephone at 888-317-6003 and using entry number 9456386.  For those who cannot listen to the live call, a telephonic replay will be available through May 1, 2019 and may be accessed by calling 877-344-7529 and using the access code 10130013.

About Superior Energy Services

Superior Energy Services (NYSE:SPN) serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialized oilfield services and equipment that are used throughout the economic life cycle of oil and gas wells.  For more information, visit: www.superiorenergy.com.

This press release contains, and future oral or written statements or press releases by us and our management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company’s financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by our management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause our actual results to differ materially from such statements.  Such risks and uncertainties include, but are not limited to: the conditions in the oil and gas industry, especially oil and natural gas prices and capital expenditures by oil and gas companies; our outstanding debt obligations and the potential effect of limiting our ability to fund future growth and operations and increasing our exposure to risk during adverse economic conditions; necessary capital financing may not be available at economic rates or at all; volatility of our common stock; operating hazards, including the significant possibility of accidents resulting in personal injury or death, property damage or environmental damage for which we may have limited or no insurance coverage or indemnification rights; we may not be fully indemnified against losses incurred due to catastrophic events; claims, litigation or other proceedings that require cash payments or could impair our financial condition; credit risk associated with our customer base; the effect of regulatory programs (including regarding worker health and safety laws) and environmental matters on our operations or prospects, including the risk that future changes in the regulation of hydraulic fracturing could reduce demand for our pressure pumping and fluid management services, or that future changes in climate change legislation could result in increased operating costs or reduced commodity demand globally; the impact that unfavorable or unusual weather conditions could have on our operations; the potential inability to retain key employees and skilled workers; political, legal, economic and other risks and uncertainties associated with our international operations; laws, regulations or practices in foreign countries could materially restrict our operations or expose us to additional risks; potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting our operating results; changes in competitive and technological factors affecting our operations; risks associated with the uncertainty of macroeconomic and business conditions worldwide; not realizing the benefits of acquisitions or divestitures; our operations may be subject to cyber-attacks that could have an adverse effect on our business operations; counterparty risks associated with reliance on key suppliers; challenges with estimating our potential liabilities related to our oil and natural gas property; and risks associated with potential changes of Bureau of Ocean Energy Management security and bonding requirements for offshore platforms.  These risks and other uncertainties related to our business are described in our periodic reports filed with the Securities and Exchange Commission.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after such statements are made, including for example the market prices of oil and gas and regulations affecting oil and gas operations, which we cannot control or anticipate. Further, we may make changes to our business strategies and plans (including our capital spending and capital allocation plans) at any time and without notice, based on any changes in the above-listed factors, our assumptions or otherwise, any of which could or will affect our results. For all these reasons, actual events and results may differ materially from those anticipated, estimated, projected or implied by us in our forward-looking statements. We undertake no obligation to update any of our forward-looking statements for any reason, notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(in thousands, except earnings per share amounts) 
(unaudited) 
   
  Three Months Ended  
  March 31, December 31,  
   2019   2018   2018   
         
Revenues $  467,176  $  482,318  $  539,331   
         
Cost of services and rentals (exclusive of depreciation, depletion, amortization and accretion)    330,163     343,460     384,445   
Depreciation, depletion, amortization and accretion    82,439     105,719     97,264   
General and administrative expenses    73,845     75,820     74,641   
Reduction in value of assets    -     -     739,725   
         
Loss from operations    (19,271)    (42,681)    (756,744)  
         
Other income (expense):        
  Interest expense, net    (25,121)    (24,887)    (24,745)  
  Other income (expense)    (1,612)    (1,735)    2,717   
         
Loss from continuing operations before income taxes    (46,004)    (69,303)    (778,772)  
         
Income taxes    1,701     (9,355)    (28,587)  
         
Net loss from continuing operations    (47,705)    (59,948)    (750,185)  
         
Income from discontinued operations, net of income tax    -     224     -   
         
Net loss $  (47,705) $  (59,724) $  (750,185)  
         
Basic and diluted loss per share $  (0.31) $  (0.39) $  (4.85)  
         
Weighted average shares outstanding    155,777     154,121     154,536   
         

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS 
(in thousands) 
(unaudited) 
      
  3/31/2019 12/31/2018 
ASSETS     
      
Current assets:     
  Cash and cash equivalents $  151,568 $  158,050 
  Accounts receivable, net    420,811    447,353 
  Prepaid expenses    52,241    45,802 
  Inventory and other current assets    127,646    121,700 
      
    Total current assets    752,266    772,905 
      
Property, plant and equipment, net     1,061,357    1,109,126 
Operating lease right-of-use assets    103,082    - 
Goodwill    137,495    136,788 
Notes receivable    64,993    63,993 
Restricted cash    2,722    5,698 
Intangible and other long-term assets, net    125,420    127,452 
      
    Total assets $  2,247,335 $  2,215,962 
      
LIABILITIES AND STOCKHOLDERS' EQUITY     
      
Current liabilities:     
  Accounts payable $  120,549 $  139,325 
  Accrued expenses    229,225    219,180 
  Income taxes payable     1,043    734 
  Current portion of decommissioning liabilities    3,565    3,538 
      
    Total current liabilities    354,382    362,777 
      
Long-term debt, net    1,283,862    1,282,921 
Decommissioning liabilities    128,062    126,558 
Operating lease liabilities    78,384    - 
Other long-term liabilities    154,579    152,967 
      
Total stockholders' equity    248,066    290,739 
      
    Total liabilities and stockholders' equity $  2,247,335 $  2,215,962 
      

 

 SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
 THREE MONTHS ENDED MARCH 31, 2019 AND 2018 
 (in thousands) 
 (unaudited) 
    2019   2018  
       
 Cash flows from operating activities:     
 Net loss $  (47,705) $  (59,724) 
 Adjustments to reconcile net loss to net cash provided by (used in) operating activities:     
 Depreciation, depletion, amortization and accretion    82,439     105,719  
 Other noncash items    4,467     (5,075) 
 Changes in working capital and other    (11,822)    (65,878) 
   Net cash provided by (used in) operating activities     27,379     (24,958) 
       
 Cash flows from investing activities:     
 Payments for capital expenditures    (41,160)    (65,734) 
 Proceeds from sales of assets    5,066     12,135  
   Net cash used in investing activities     (36,094)    (53,599) 
       
 Cash flows from financing activities:     
 Other    (1,667)    (4,715) 
   Net cash used in financing activities    (1,667)    (4,715) 
       
   Effect of exchange rate changes in cash    924     1,812  
       
   Net change in cash, cash equivalents, and restricted cash    (9,458)    (81,460) 
       
 Cash, cash equivalents and restricted cash at beginning of period    163,748     192,483  
       
 Cash, cash equivalents, and restricted cash at end of period $  154,290  $  111,023  
       

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
REVENUE BY GEOGRAPHIC REGION BY SEGMENT
(in thousands)
(unaudited)
 
  Three months ended,  
  March 31, 2019 December 31, 2018 March 31, 2018 
U.S. land       
  Drilling Products and Services $  48,217 $  46,732 $  40,717 
  Onshore Completion and Workover Services    205,038    255,056    231,489 
  Production Services    40,666    47,103    52,457 
  Technical Solutions    11,920    7,993    6,833 
Total U.S. land $  305,841 $  356,884 $  331,496 
        
U.S. offshore       
   Drilling Products and Services $  29,067 $  30,540 $  20,989 
   Onshore Completion and Workover Services    -    -    - 
   Production Services    19,272    18,603    17,500 
   Technical Solutions    20,933    40,325    37,562 
Total U.S. offshore $  69,272 $  89,468 $  76,051 
        
International       
   Drilling Products and Services $  23,795 $  28,028 $  23,496 
   Onshore Completion and Workover Services    -    -    - 
   Production Services    43,512    44,228    30,760 
   Technical Solutions    24,756    20,723    20,515 
Total International $  92,063 $  92,979 $  74,771 
        
Total Revenues $  467,176 $  539,331 $  482,318 
        

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES  
SEGMENT HIGHLIGHTS  
(in thousands)  
(unaudited)  
         
  Three months ended,   
Revenues March 31, 2019 December 31, 2018(1)March 31, 2018(1) 
Drilling Products and Services $  101,079  $  105,300  $  85,202   
Onshore Completion and Workover Services    205,038     255,056     231,489   
Production Services    103,450     109,934     100,717   
Technical Solutions    57,609     69,041     64,910   
Total Revenues $  467,176  $  539,331  $  482,318   
         
Income (Loss) from Operations        
Drilling Products and Services $  21,279  $  27,143  $  7,979   
Onshore Completion and Workover Services    (15,079)    (15,637)    (7,141)  
Production Services    1,617     (3,893)    (11,180)  
Technical Solutions    (916)    6,356     1,817   
Corporate and other    (26,172)    (27,054)    (26,064)  
Total Loss from Operations $  (19,271) $  (13,085) $  (34,589)  
         
EBITDA        
Drilling Products and Services $  44,305  $  53,193  $  37,620   
Onshore Completion and Workover Services    22,664     32,578     40,514   
Production Services    15,757     12,432     8,100   
Technical Solutions    5,394     11,677     9,547   
Corporate and other    (24,952)    (25,701)    (24,651)  
Total EBITDA $  63,168  $  84,179  $  71,130   
         
(1) Income (loss) from operations and EBITDA exclude the impact of reduction in value of assets and other items for the three months ended December 31, 2018 and for the three months ended March 31, 2018.  For Non-GAAP reconciliations, refer to Table 1 below.  
  
  
         

Non-GAAP Financial Measures

The following table reconciles net income/loss from continuing operations by segment, which is the directly comparable financial measure determined in accordance with GAAP, to adjusted income/loss from operations and adjusted EBITDA by segment (non-GAAP financial measures).  These financial measures are provided to enhance investors’ overall understanding of the Company’s current financial performance. 

  
Reconciliation of Adjusted Income (Loss) from Operations and Adjusted EBITDA by Segment 
(in thousands) 
(unaudited) 
Table 1 
              
  Three months ended March 31, 2019 
  Drilling
Products and
Services
 Onshore
Completion
and Workover
Services
 Production
Services
 
Technical
Solutions
 Corporate and
Other
 Consolidated
 
              
Reported net income (loss) from continuing operations $  21,279 $  (15,079) $  1,617  $  102  $  (55,624) $  (47,705) 
Interest expense, net    -    -     -     (1,018)    26,139     25,121  
Other expense    -    -     -     -     1,612     1,612  
Income taxes    -    -     -     -     1,701     1,701  
Income (loss) from operations $  21,279 $  (15,079) $  1,617  $  (916) $  (26,172) $  (19,271) 
Depreciation, depletion, amortization
  and accretion
    23,026    37,743     14,140     6,310     1,220     82,439  
EBITDA  $  44,305 $  22,664  $  15,757  $  5,394  $  (24,952) $  63,168  
              
              
  Three months ended December 31, 2018 
  Drilling
Products and
Services
 Onshore
Completion
and Workover
Services
 Production
Services
 
Technical
Solutions
 Corporate and
Other
 Consolidated
 
              
Reported net income (loss) from continuing operations $  26,678 $  (662,061) $  (97,425) $  7,280  $  (24,657) $  (750,185) 
Reduction in value of assets    -    644,813     92,252     -     2,660     739,725  
Restructuring costs    465    1,611     1,280     78     500     3,934  
Interest expense, net    -    -     -     (1,002)    25,747     24,745  
Other expense    -    -     -     -     (2,717)    (2,717) 
Income taxes    -    -     -     -     (28,587)    (28,587) 
 Adjusted income (loss) from operations $  27,143 $  (15,637) $  (3,893) $  6,356  $  (27,054) $  (13,085) 
Depreciation, depletion, amortization
  and accretion
    26,050    48,215     16,325     5,321     1,353     97,264  
Adjusted EBITDA  $  53,193 $  32,578  $  12,432  $  11,677  $  (25,701) $  84,179  
              
              
  Three months ended March 31, 2018 
  Drilling
Products and
Services
 Onshore
Completion
and Workover
Services
 Production
Services
 
Technical
Solutions
 Corporate and
Other
 Consolidated
 
              
Reported net income (loss) from continuing  operations $  7,967 $  (10,043) $  (14,092) $  2,273  $  (46,053) $  (59,948) 
Restructuring costs    12    2,902     2,912     500     1,766     8,092  
Interest expense, net    -    -     -     (956)    25,843     24,887  
Other expense    -    -     -     -     1,735     1,735  
Income taxes    -    -     -     -     (9,355)    (9,355) 
 Adjusted income (loss) from operations $  7,979 $  (7,141) $  (11,180) $  1,817  $  (26,064) $  (34,589) 
Depreciation, depletion, amortization
  and accretion
    29,641    47,655     19,280     7,730     1,413     105,719  
Adjusted EBITDA  $  37,620 $  40,514  $  8,100  $  9,547  $  (24,651) $  71,130  
              


FOR FURTHER INFORMATION CONTACT:
Paul Vincent, VP of Investor Relations, (713) 654-2200

Source: Superior Energy Services, Inc.