August 6, 2018 - 4:20 PM EDT
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RigNet Announces Second Quarter 2018 Earnings Results
  • Quarterly revenue of $60.0 million consisting of:
    - Managed Services revenue of $41.7 million
    - Applications and Internet-of-Things (Apps & IoT) revenue of $6.6 million
    - Systems Integration revenue of $11.7 million
     
  • Quarterly GAAP Net Loss attributable to common stockholders of $4.3 million, $0.23 per share
     
  • Quarterly Adjusted EBITDA (a non-GAAP measure) of $8.1 million             

HOUSTON, Aug. 06, 2018 (GLOBE NEWSWIRE) -- RigNet, Inc. (NASDAQ: RNET), a global technology company that provides customized communications services, applications, real-time machine learning, and cybersecurity solutions, today reported results for the quarter ended June 30, 2018.

Quarterly revenue was $60.0 million representing an increase of $10.8 million, or 22.1%, compared to the prior year quarter and an increase of $6.2 million, or 11.5%, compared to the prior quarter. Compared to the prior year quarter revenue grew in all segments: a $5.6 million increase in Systems Integration revenue, a $4.1 million increase in Apps & IoT and a $1.1 million increase in Managed Services revenue. The revenue increase compared to the prior quarter reflects a $5.3 million increase in Systems Integration revenue, a $1.2 million increase in Apps & IoT, partially offset by a $0.3 million decrease in Managed Services revenue. Revenue increased due to acquisitions, site count growth and our strategy of growth into the application layer and internet-of-things space.

GAAP net loss attributable to common stockholders was $4.3 million, or $0.23 per share, compared to net loss attributable to common stockholders of $4.2 million, or $0.24 per share, in the prior year quarter and net loss attributable to common stockholders of $5.6 million, or $0.31 per share, in the prior quarter.  

Quarterly Adjusted EBITDA was $8.1 million compared to $6.1 million in the prior year quarter and $7.4 million in the prior quarter. The increase was due primarily to increased operating activity and revenue.

Steven Pickett, chief executive officer and president, commented, “In the second quarter of 2018, the RigNet team delivered 22.1% revenue growth compared to the prior year quarter and 170.6% growth in the Apps & IoT segment compared to the prior year quarter. The RigNet team continues to demonstrate their ability to execute against our strategic growth plan.  That plan has made RigNet uniquely able to support our customers’ digital transformation with services that are always connected, always secure, and always learning.”

In the quarter ended June 30, 2018, the Company recorded $2.8 million for the change in fair value of an earn-out and $0.3 million in acquisition costs. In the quarter ended March 31, 2018, the Company recorded $0.8 million in acquisition costs and $0.2 million in executive departure costs. In the quarter ended June 30, 2017, the Company recorded $1.9 million in acquisition costs, and a gain of $0.8 million for the change in fair value of an earn-out. The acquisition costs, executive departure costs and change in fair value of the earn-out are added back to net loss in our non-GAAP measure Adjusted EBITDA below. In the third quarter of 2017, after the acquisition of Energy Satellite Services (ESS), the Company reorganized its business and reportable segments into Managed Services, Apps & IoT and Systems Integration. All historical segment financial data has been recast to conform to the current presentation.  

A conference call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Tuesday, August 7, 2018, to discuss RigNet’s second quarter 2018 results.  The call may be accessed live over the telephone by dialing +1 (877) 845-0777, or, for international callers, +1 (760) 298-5090.  Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RigNet’s website at www.rig.net in the Investors – Webcasts and Presentations section.  A replay of the conference call webcast will also be available on our website for approximately thirty days following the call.

Non-GAAP Financial Measure

This press release contains the non-GAAP measure Adjusted EBITDA.  Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles, or GAAP.  We refer you to the Company’s recent 10-K filing for the year ended December 31, 2017 for a more detailed discussion of the uses and limitations of Adjusted EBITDA.

We define Adjusted EBITDA as net loss plus interest expense, income tax expense (benefit), depreciation and amortization, impairment of goodwill, intangibles, property, plant and equipment, (gain) loss on sales of property, plant and equipment, net of retirements, change in fair value of earn-outs and contingent consideration, stock-based compensation, acquisition costs, executive departure costs, restructuring charges and non-recurring items. 

About RigNet

RigNet (NASDAQ: RNET) is a global technology company that provides customized communications services, applications, real-time machine learning, and cybersecurity solutions to enhance customer decision-making and business performance. RigNet delivers a digital transformation bundle that accelerates technology adoption and empowers customers to be always connected, always secure, and always learning. RigNet is headquartered in Houston, Texas with operations around the world.   

For more information on RigNet, please visit www.rig.net.  RigNet is a registered trademark of RigNet, Inc.

Forward Looking Statements

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 – that is, statements related to the future, not past, events.  The opinions, forecasts, projections, expected benefits and synergies from acquisitions, future opportunities for the combined company and products, and future financial performance are examples of forward-looking statements in this press release.  Forward-looking statements are based on the current expectations and include any statement that does not directly relate to a current or historical fact.  In this context, forward-looking statements often address our expected future business and financial performance, including the expected benefits of acquiring and integrating other businesses, and often contain words such as “anticipate,” “believe,” “intend,”, “will”, “expect,” “plan” or other similar words.  These forward-looking statements involve certain risks and uncertainties, including those risks set forth in Item 1A – Risk Factors of the Company’s most recent 10-K filing, and ultimately may not prove to be accurate.  Actual results and future events could differ materially from those anticipated in such statements.  For further discussion of risks and uncertainties, individuals should refer to RigNet’s SEC filings.  RigNet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release.  You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release.  All forward-looking statements are qualified in their entirety by this cautionary statement.

Media / Investor Relations Contact 
Jerri Dean Tel:  +1 (281) 674-0699
RigNet, Inc. [email protected]


  Three Months EndedSix Months Ended
 June 30,
2018
 March 31,
2018
 June 30,
2017
 June 30,
2018
 June 30,
2017
 
 (in thousands, except per share amounts)
Unaudited Consolidated Statements of Comprehensive Income Data:          
Revenue$  60,007 $  53,833 $  49,162 $  113,840 $  97,234 
Expenses:          
Cost of revenue (excluding depreciation and amortization)36,246 33,681 33,038 69,927 62,913 
Depreciation and amortization8,356 7,987 7,552 16,343 14,868 
Selling and marketing4,189 2,949 2,132 7,138 3,568 
General and administrative15,546 13,686 9,878 29,232 20,390 
Total expenses64,337 58,303 52,600 122,640 101,739 
Operating loss(4,330)(4,470)(3,438)(8,800)(4,505)
Other expense, net(895)(453)(873)(1,348)(1,379)
Loss before income taxes(5,225)(4,923)(4,311)(10,148)(5,884)
Income tax benefit (expense)926 (603)101 323 (313)
Net loss$  (4,299)$  (5,526)$  (4,210)$  (9,825)$  (6,197)
           
Loss Per Share - Basic and Diluted          
Net loss attributable to RigNet, Inc.
  common stockholders
$  (4,329)$  (5,556)$  (4,249)$  (9,885)$  (6,275)
Net loss per share attributable to
  RigNet, Inc. common stockholders, basic
$  (0.23)$  (0.31)$  (0.24)$  (0.54)$  (0.35)
Net loss per share attributable to
  RigNet, Inc. common stockholders, diluted
$  (0.23)$  (0.31)$  (0.24)$  (0.54)$  (0.35)
Weighted average shares outstanding, basic18,639 18,146 17,985 18,394 17,929 
Weighted average shares outstanding, diluted18,639 18,146 17,985 18,394 17,929 
           
Unaudited Non-GAAP Data:          
Adjusted EBITDA$  8,098 $  7,419 $  6,053 $  15,517 $  13,278 


  Three Months Ended Six Months Ended
 June 30,
2018
  March 31,
2018
  June 30,
2017
  June 30,
2018
  June 30,
2017
 
 (in thousands)
Reconciliation of Net Loss to Adjusted EBITDA:              
Net loss $  (4,299)  $  (5,526)  $  (4,210)  $  (9,825)  $  (6,197)
Interest expense  1,007    959    613    1,966    1,232 
Depreciation and amortization  8,356    7,987    7,552    16,343    14,868 
(Gain) loss on sales of property, plant and equipment, net of retirements  21    (53)   13    (32)   50 
Stock-based compensation  837    2,445    1,116    3,282    1,942 
Change in fair value of earn-out/contingent consideration  2,778    22    (846)   2,800    (846)
Executive departure costs  4    157    -    161    - 
Acquisition costs  320    825    1,916    1,145    1,916 
Income tax expense   (926)   603    (101)   (323)   313 
Adjusted EBITDA (non-GAAP measure) $  8,098   $  7,419   $  6,053   $  15,517   $  13,278 


  June 30,  December 31, 
  2018  2017 
  (in thousands)
Unaudited Consolidated Balance Sheet Data:      
Cash and cash equivalents  $  18,366   $  34,598 
Restricted cash - current portion   42    43 
Restricted cash - long-term portion   1,546    1,500 
Total assets   252,853    230,094 
Current maturities of long-term debt   4,949    4,941 
Long-term debt   53,195    53,173 
       
       
  Six Months Ended
June 30,
  2018  2017 
  (in thousands)
Unaudited Consolidated Statements of Cash Flows Data:      
Cash and cash equivalents including restricted cash, January 1,  $  36,141   $  58,805 
Net cash provided by operating activities   1,329    9,283 
Net cash used in investing activities   (17,613)   (11,175)
Net cash used in financing activities   (1,211)   (13,845)
Changes in foreign currency translation   1,308    1,172 
Cash and cash equivalents including restricted cash, June 30,  $  19,954   $  44,240 

 

  2nd Quarter 1st Quarter 4th Quarter 3rd Quarter 2nd Quarter
  2018 2018 2017 2017 2017
Selected Operational Data:          
Offshore drilling rigs (1) 190 188 182 184 173
Offshore Production 320 310 304 316 296
Maritime 177 176 172 165 134
Other sites (2) 610 525 513 510 448
Total 1,297 1,199 1,171 1,175 1,051
           
(1) Includes jack up, semi-submersible and drillship rigs
(2) Includes U.S. and International land sites, completion sites, man-camps, remote offices, and supply bases and offshore-related supply bases, shore offices, tender rigs and platform rigs


             
   Three Months Ended Six Months Ended
  June 30,
2018
 March 31,
2018
 June 30,
2017
  June 30,
2018
 June 30,
2017
 
  (in thousands)
Managed Services            
Revenue  $  41,712  $  42,050  $  40,625   $  83,762  $  82,288 
Cost of revenue   25,307   25,745   25,549    51,052   50,896 
Depreciation and amortization   5,645   5,726   6,222    11,371   12,245 
Selling, general and administrative   5,023   4,215   4,983    9,238   9,422 
Operating income  $  5,737  $  6,364  $  3,871   $  12,101  $  9,725 
             
Applications and Internet-of-Things            
Revenue  $  6,576  $  5,336  $  2,430   $  11,912  $  4,861 
Cost of revenue   3,165   3,085   1,995    6,250   3,450 
Depreciation and amortization   836   847   7    1,683   14 
Selling, general and administrative   430   354   298    784   786 
Operating income   $  2,145  $  1,050  $  130   $  3,195  $  611 
             
Systems Integration             
Revenue  $  11,719  $  6,447  $  6,107   $  18,166  $  10,085 
Cost of revenue   7,774   4,851   5,494    12,625   8,567 
Depreciation and amortization   665   652   611    1,317   1,198 
Selling, general and administrative   557   323   422    880   892 
Operating income (loss)   $  2,723  $  621  $  (420)  $  3,344  $  (572)
             
NOTE:  Consolidated balances include the segments above along with corporate activities and intercompany eliminations.

  

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Source: GlobeNewswire (August 6, 2018 - 4:20 PM EDT)

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