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 November 3, 2015 - 5:44 PM EST
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Parker Drilling Reports 2015 Third Quarter Results

HOUSTON, Nov. 3, 2015 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced a net loss of $48.6 million, or a $0.40 loss per share on revenues of $173.4 million for the third quarter ended September 30, 2015. The net loss includes a $36.6 million non-cash valuation allowance taken primarily against U.S. foreign tax credits and certain foreign net operating losses that accounted for $0.30 of the reported loss per share. While the carry-forwards have been reserved on the Company's financial statements, they have not expired and remain available to offset future cash taxes. Excluding this valuation allowance, the adjusted loss per share was $0.10.

Third quarter adjusted EBITDA was $35.4 million, compared with $32.8 million for the preceding quarter.

Gary Rich, Chairman, President and CEO, said, "Both our adjusted EBITDA and our adjusted EBITDA as a percentage of revenue increased sequentially primarily due to strong results from our International & Alaska Drilling segment. In addition, we continued to benefit from company-wide cost efficiencies undertaken during the course of the year.

"From an outlook perspective, we anticipate that continued uncertainty over commodity prices will lead to further declines in customer spending and pricing during the remainder of the year. As a result, we anticipate lower activity for our drilling services and rental tools services businesses, which will drive lower operating results in the fourth quarter.

"We continue to manage our business as if this downturn will persist through 2016. Throughout this year, we have taken proactive steps to achieve our goal of generating free cash flow, including head count and operating expense reductions, maintaining our working capital diligence and reducing capital expenditures while striving to sustain utilization and market share. In addition, previously-announced amendments to our credit facility preserve our financial flexibility and enhance our position in this uncertain market. I believe our balanced profile of product and service mix, geographic diversity and backlog are enabling us to perform better than most of our peers. With our solid balance sheet and prudent management during this downturn, we believe we are positioned to grow once the market environment stabilizes and the outlook improves," Mr. Rich concluded.

Third Quarter Review

Parker Drilling's revenues for the 2015 third quarter, compared with the 2015 second quarter, decreased 6.7 percent to $173.4 million from $185.9 million, operating gross margin excluding depreciation and amortization expense (gross margin) increased 5.0 percent to $44.4 million from $42.3 million and gross margin as a percentage of revenues was 25.6 percent, compared with 22.8 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, revenues declined 4.3 percent to $116.6 million from $121.8 million, gross margin increased 31.4 percent to $27.2 million from $20.7 million, and gross margin as a percentage of revenues was 23.3 percent, compared with 17.0 percent for the prior period.

U.S. (Lower 48) Drilling

U.S. (Lower 48) Drilling segment revenues were $6.0 million, an 11.8 percent decrease from 2015 second quarter revenues of $6.8 million. Gross margin was a $1.9 million loss as compared with a 2015 second quarter gross margin loss of $2.0 million. The declines in revenues were primarily the result of lower activity in the Company's California O&M business, while gross margin improved as a result of slightly higher utilization and lower costs in the Gulf of Mexico drilling barge business.

International & Alaska Drilling

International & Alaska Drilling segment revenues were $110.7 million, a 3.7 percent decrease from 2015 second quarter revenues of $115.0 million. Gross margin was $29.1 million, a 28.8 percent increase from 2015 second quarter gross margin of $22.6 million. Gross margin as a percentage of revenues was 26.3 percent as compared with 19.7 percent in the 2015 second quarter. The decrease in revenues is attributable to a $7.1 million decrease in reimbursable expenses and lower Eastern Hemisphere rig utilization, partially offset by an increase in Latin America utilization and project services activities. The increase in gross margin is due to the increase in Latin America utilization and project services activities along with lower operating expenses.

Rental Tools Services

Rental Tools segment revenues were $56.8 million, an 11.4 percent decrease from 2015 second quarter revenues of $64.1 million. Gross margin was $17.2 million, a 20.7 percent decrease from 2015 second quarter gross margin of $21.7 million. Gross margin as a percentage of revenues was 30.3 percent as compared with 33.9 percent in the 2015 second quarter. Reduced revenues and gross margin were primarily due to the continued decline in U.S. land drilling activity, as well as lower pricing and business mix in certain international rental tools markets.

General and Administrative expense decreased to $8.9 million for the 2015 third quarter, from $9.5 million for the 2015 second quarter.

Capital expenditures in third quarter were $17.9 million, and year-to-date through September 30, 2015 were $72.5 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, November 4, 2015, to review reported results. The call will be available by telephone at (888) 287-5563, access code 235454. 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 or by telephone for 1 week from November 4, 2015 at (888) 203-1112, using the access code 235454#.

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 U.S. and international markets and harsh-environment regions utilizing Parker Drilling-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.

 

PARKER DRILLING COMPANY

Consolidated Condensed Balance Sheets

(Dollars in Thousands, Except Per Share Data)






September 30, 2015


December 31, 2014


(Unaudited)



ASSETS




CURRENT ASSETS




Cash and Cash Equivalents

$

104,651


$

108,456

Accounts and Notes Receivable, Net

224,996


270,952

Rig Materials and Supplies

38,516


47,943

Deferred Costs

2,961


5,673

Deferred Income Taxes

5,448


7,476

Other Current Assets

25,033


29,279

TOTAL CURRENT ASSETS

401,605


469,779





PROPERTY, PLANT AND EQUIPMENT, NET

841,923


895,940





OTHER ASSETS




Deferred Income Taxes

133,058


122,689

Other Assets

65,597


32,251

TOTAL OTHER ASSETS

198,655


154,940





TOTAL ASSETS

$

1,442,183


$

1,520,659





LIABILITIES AND STOCKHOLDERS' EQUITY




CURRENT LIABILITIES




Current Portion of Long-Term Debt

$


$

10,000

Accounts Payable and Accrued Liabilities

150,170


168,665

TOTAL CURRENT LIABILITIES

150,170


178,665





LONG-TERM DEBT

585,000


605,000





LONG-TERM DEFERRED TAX LIABILITY

75,197


52,115





OTHER LONG-TERM LIABILITIES

20,141


18,665





TOTAL CONTROLLING INTEREST IN STOCKHOLDERS' EQUITY

606,498


662,431

Noncontrolling interest

5,177


3,783

TOTAL EQUITY

611,675


666,214





TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,442,183


$

1,520,659









Current Ratio

2.67


2.63





Total Debt as a Percent of Capitalization

49%


48%





Book Value Per Common Share

$

4.92


$

5.43

 

PARKER DRILLING COMPANY

Consolidated Statement Of Operations

(Dollars in Thousands, Except Per Share Data)

(Unaudited)







Three Months Ended June 30,


Three Months Ended September 30,



2015


2014


2015







REVENUES

$

173,418


$

242,012


$

185,941







EXPENSES:






Operating Expenses

128,963


160,797


143,569

Depreciation and Amortization

39,584


36,149


38,351


168,547


196,946


181,920

TOTAL OPERATING GROSS MARGIN

4,871


45,066


4,021







General and Administrative Expense

(8,895)


(9,370)


(9,511)

Provision for Reduction in Carrying Value of Certain Assets

(906)



(2,316)

Gain (Loss) on Disposition of Assets, Net

383


(457)


(138)

TOTAL OPERATING INCOME

(4,547)


35,239


(7,944)







OTHER INCOME AND (EXPENSE):






Interest Expense

(11,293)


(10,848)


(11,396)

Interest Income

7


36


19

Other

(719)


(536)


(1,529)

TOTAL OTHER EXPENSE

(12,005)


(11,348)


(12,906)







INCOME (LOSS) BEFORE INCOME TAXES

(16,552)


23,891


(20,850)






INCOME TAX EXPENSE (BENEFIT)

31,930


11,014


(6,916)







NET INCOME (LOSS)

(48,482)


12,877


(13,934)

Less: net income attributable to noncontrolling interest

138


311


95

NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST

$

(48,620)


$

12,566


$

(14,029)







EARNINGS PER SHARE - BASIC






Net Income (loss)

$

(0.40)


$

0.10


$

(0.11)







EARNINGS PER SHARE - DILUTED






Net Income (loss)

$

(0.40)


$

0.10


$

(0.11)







NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE






Basic

122,933,518


121,523,674


122,481,425

Diluted

122,933,518


123,177,753


122,481,425

 

PARKER DRILLING COMPANY

Consolidated Statement Of Operations

(Dollars in Thousands, Except Per Share Data)

(Unaudited)






Nine Months Ended September 30,


2015


2014





REVENUES

$

563,435


$

725,471





EXPENSES:




Operating Expenses

411,802


501,391

Depreciation and Amortization

118,474


106,666


530,276


608,057

TOTAL OPERATING GROSS MARGIN

33,159


117,414





General and Administrative Expense

(29,243)


(25,341)

Provision for Reduction in Carrying Value of Certain Assets

(3,222)


Gain on Disposition of Assets, Net

2,686


433

TOTAL OPERATING INCOME

3,380


92,506





OTHER INCOME AND (EXPENSE):




Interest Expense

(33,767)


(33,486)

Interest Income

209


156

Loss on extinguishment of debt


(30,152)

Other

(3,628)


1,391

TOTAL OTHER EXPENSE

(37,186)


(62,091)





INCOME (LOSS) BEFORE INCOME TAXES

(33,806)


30,415





INCOME TAX EXPENSE (BENEFIT)

24,832


14,093





NET INCOME (LOSS)

(58,638)


16,322

Less: net income attributable to noncontrolling interest

789


624

NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST

$

(59,427)


$

15,698





EARNINGS PER SHARE - BASIC




Net Income (loss)

$

(0.49)


$

0.13





EARNINGS PER SHARE - DILUTED




Net Income (loss)

$

(0.49)


$

0.13





NUMBER OF COMMON SHARES USED IN COMPUTING EARNINGS PER SHARE




Basic

122,430,957


120,994,728

Diluted

122,430,957


122,972,014

 

PARKER DRILLING COMPANY

Selected Financial Data

(Dollars in Thousands)

(Unaudited)












Three Months Ended




September 30,


June 30,




2015


2014


2015









REVENUES:







Drilling Services:







U.S. (Lower 48) Drilling


$

5,961


$

44,409


$

6,848

International & Alaska Drilling


110,661


109,892


114,969


Total Drilling Services


116,622


154,301


121,817

Rental Tools


56,796


87,711


64,124


   Total Revenues


$

173,418


$

242,012


$

185,941









OPERATING EXPENSES:







Drilling Services:







U.S. (Lower 48) Drilling


$

7,820


$

22,687


$

8,829

International & Alaska Drilling


81,586


86,123


92,329


Total Drilling Services


89,406


108,810


101,158

Rental Tools


39,557


51,987


42,411


   Total Operating Expenses


$

128,963


$

160,797


$

143,569









OPERATING GROSS MARGIN:







Drilling Services:







U.S. (Lower 48) Drilling


$

(1,859)


$

21,722


$

(1,981)

International & Alaska Drilling


29,075


23,769


22,640


Total Drilling Services


27,216


45,491


20,659

Rental Tools


17,239


35,724


21,713

Depreciation and Amortization


(39,584)


(36,149)


(38,351)


   Total Operating Gross Margin


$

4,871


$

45,066


$

4,021

 

PARKER DRILLING COMPANY

Adjusted EBITDA

(Dollars in Thousands)

(Unaudited)














Three Months Ended



September 30, 2015


June 30, 2015


March 31, 2015


December 31, 2014


September 30, 2014












Net Income (Loss) Attributable to Controlling Interest


$

(48,620)


$

(14,029)


$

3,222


$

7,753


$

12,566

Adjustments:











Income Tax (Benefit) Expense


31,930


(6,916)


(182)


9,983


11,014

Interest Expense


11,293


11,396


11,078


10,779


10,848

Other Income and Expense


712


1,510


1,197


(1,187)


500

(Gain) Loss on Disposition of Assets, Net


(383)


138


(2,441)


(621)


457

Depreciation and Amortization


39,584


38,351


40,539


38,455


36,149

Provision for Reduction in Carrying Value of Certain Assets


906


2,316















Adjusted EBITDA*


35,422


32,766


53,413


65,162


71,534












Adjustments:











Non-routine Items






(1,250)












Adjusted EBITDA after Non-routine Items


$

35,422


$

32,766


$

53,413


$

65,162


$

70,284


*Adjusted EBITDA, a non-GAAP financial measure, excludes items that management believes are of a non-routine nature and which detract from an understanding of normal operating performance and comparisons with other periods. Management also believes that results excluding these items are more comparable to estimates provided by securities analysts and used by them in evaluating the Company's performance.

 

PARKER DRILLING COMPANY

Reconciliation of Adjusted Earnings Per Share

(Dollars in Thousands, except Per Share)

(Unaudited)




Three Months Ended




September 30,


June 30,




2015


2014


2015









Net income attributable to controlling interest


$

(48,620)


$

12,566


$

(14,029)

Earnings per diluted share


$

(0.40)


$

0.10


$

(0.11)









Adjustments:








Escrow clawback


$


$

(1,250)


$


Provision for reduction in carrying value of certain assets**


 



2,316


Valuation allowance


36,632




      Total adjustments


36,632


(1,250)


2,316


Tax effect of adjustments


 


500


(443)


      Net adjustments


36,632


(750)


1,873









Adjusted net income attributable to controlling interest*


$

(11,988)


$

11,816


$

(12,156)

Adjusted earnings per diluted share


$

(0.10)


$

0.10


$

(0.10)


*Adjusted net income, a non-GAAP financial measure, excludes items that management believes are of a non-routine nature and which detract from an understanding of normal operating performance and comparisons with other periods. Management also believes that results excluding these items are more comparable to estimates provided by securities analysts and used by them in evaluating the Company's performance.


**The three months ended September 30, 2015 excludes provision for reduction in carrying value of certain assets of $0.9 million ($0.5 million, net of tax) deemed not meaningful to adjusted earnings per diluted share for the period.

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/parker-drilling-reports-2015-third-quarter-results-300171756.html

SOURCE Parker Drilling Company


Source: PR Newswire (November 3, 2015 - 5:44 PM EST)

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