Superior Energy Services
11000 Equity Drive, Suite 300
Houston, Texas 77041
Phone: 281-999-0047
Fax: 281-999-6505
Email:
info@superiorenergy.com
Superior Energy Services, Inc. Announces First Quarter 2010 Results
NEW ORLEANS - April 28, 2010 - Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $21.5 million and diluted earnings per share of $0.27 on revenue of $364.5 million for the first quarter of 2010, as compared with net income of $56.8 million, or $0.72 diluted earnings per share on revenue of $437.1 million for the first quarter of 2009.
Terence Hall, Chairman and CEO of Superior, commented, "While our earnings are below year-ago levels, our financial and operational results are much improved from the fourth quarter of 2009, which is encouraging, especially since the first quarter is typically a seasonally weak period. The biggest factors driving the results were increased utilization of production-related services in the domestic land markets and higher demand for drilling products and services in the Gulf of Mexico, domestic land and international market areas."
The Company also reaffirms its previously announced full-year 2010 earnings guidance of $1.50 to $1.70 earnings per share.
Geographic Breakdown
For the first quarter of 2010, Gulf of Mexico revenue was approximately $162.7 million, a 56% increase from the fourth quarter of 2009 ("sequential"); domestic land revenue was approximately $92.6 million, a sequential increase of 27%; and international revenue was approximately $109.2 million, a sequential increase of 25%.
Subsea and Well Enhancement Segment
First quarter revenue for the Subsea and Well Enhancement Segment was $232.8 million, a 19% decrease from the first quarter of 2009 ("year-over-year") and a 60% increase sequentially. The first quarter of 2010 included $19.7 million in revenue from the recently acquired Hallin Marine and from oil and gas production and production-handling fees from the recently acquired Bullwinkle platform and related oil and gas assets. Revenue in the fourth quarter of 2009 was reduced by $68.7 million due to the cost adjustments related to the wreck removal project.
Segment revenue benefitted sequentially from increased demand for coiled tubing and cased hole wireline in the domestic land and Gulf of Mexico market areas, increased revenue from the wreck removal project and increased demand for hydraulic workover and snubbing services in international markets.
Income from operations was $23.7 million, or 10% of segment revenue as compared with $61.7 million, or 21% of segment revenue, in the first quarter of 2009, and a loss from operations of $176.6 million in the fourth quarter of 2009. The fourth quarter loss from operations includes $125.0 million in special charges and $68.7 million for total cost adjustments made to the wreck removal project. Excluding those charges, fourth quarter of 2009 income from operations would have been $17.1 million, or 8% of adjusted segment revenue.
Drilling Products and Services Segment
First quarter revenue for the Drilling Products and Services Segment was $114.3 million, 9% lower year-over-year and 17% higher sequentially. Income from operations was $23.9 million, or 21% of segment revenue, as compared with $35.3 million, or 28% of segment revenue in the first quarter of 2009, and $13.8 million, or 14% of segment revenue in the fourth quarter of 2009. The primary factors driving the higher sequential revenue were increased rentals of specialty tubulars and accommodations in the Gulf of Mexico, increased rentals of accommodations and stabilization equipment in the domestic land markets, and increased demand for drill pipe, specialty tubulars and ancillary equipment internationally in Brazil, the North Sea and Colombia.
Marine Segment
Marine Segment revenue was $17.5 million, a 24% decrease year-over-year and an 18% decrease sequentially. Loss from operations was $4.0 million, as compared with income from operations of $2.8 million, or 12% of segment revenue in the first quarter of 2009, and a loss from operations of $2.9 million in the fourth quarter of 2009.
The Company was without the services of both of its 265-foot class liftboats during the period. In addition, dayrates across most liftboat classes decreased sequentially. Average daily revenue in the first quarter was approximately $194,000, inclusive of subsistence revenue, as compared with approximately $257,000 per day in the first quarter of 2009 and approximately $230,000 in the fourth quarter of 2009. The decline was primarily due to the absence of the Company's 265-foot class liftboats which earn the highest dayrates in the fleet. Average fleet utilization was 47% as compared with 48% in the first quarter of 2009 and 45% in the fourth quarter of 2009.
Liftboat Average Dayrates and Utilization by
Class Size
Three Months Ended March 31, 2010
($ actual)
Average
Class Liftboats Dayrate Utilization
----- --------- ------- -----------
145'-155' 6 $5,740 22.8%
160'-175' 8 7,357 48.9%
200' 5 10,200 38.9%
230'-245' 3 22,554 69.3%
250' 2 32,031 96.1%
265'(1) 2 -- --
1 Out of service for repairs during the quarter.
Conference Call Information
The Company will host a conference call at 9 a.m. Central Time on Thursday, April 29, 2010. The call can be accessed from Superior's website at 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, May 6, 2010 and may be accessed by calling 303-590-3030 and using the pass code 4284277. 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 drilling products and services and its integrated well enhancement 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 Months Ended March 31, 2010 and 2009
(in thousands, except earnings per share amounts)
(unaudited)
2010 2009
---- ----
Revenues $364,511 $437,109
-------- --------
Cost of services (exclusive of items
shown separately below) 199,052 222,465
Depreciation, depletion, amortization
and accretion 51,048 49,868
General and administrative expenses 70,724 64,986
------ ------
Income from operations 43,687 99,790
Other income (expense):
Interest expense, net (14,038) (13,288)
Earnings from equity-method
investments, net 3,985 2,256
----- -----
Income before income taxes 33,634 88,758
Income taxes 12,108 31,953
------ ------
Net income $21,526 $56,805
======= =======
Basic earnings per share $0.27 $0.73
===== =====
Diluted earnings per share $0.27 $0.72
===== =====
Weighted average common shares used
in computing earnings per share:
Basic 78,534 78,032
====== ======
Diluted 79,353 78,428
====== ======
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 2010 AND DECEMBER 31, 2009
(in thousands)
3/31/2010 12/31/2009
--------- ----------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash and cash equivalents $53,948 $206,505
Accounts receivable, net 388,497 337,151
Income taxes receivable - 12,674
Prepaid expenses 26,539 20,209
Other current assets 278,471 287,024
------- -------
Total current assets 747,455 863,563
------- -------
Property, plant and equipment, net 1,263,760 1,058,976
Goodwill 575,183 482,480
Notes receivable 82,300 -
Equity-method investments 59,941 60,677
Intangible and other long-term
assets, net 72,363 50,969
------ ------
Total assets $2,801,002 $2,516,665
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $75,391 $63,466
Accrued expenses 149,640 133,602
Income taxes payable 2,315 -
Current portion of decommissioning
liabilities 18,633 -
Deferred income taxes 43,601 30,501
Current maturities of long-term
debt 810 810
--- ---
Total current liabilities 290,390 228,379
------- -------
Deferred income taxes 207,097 209,053
Decommissioning liabilities 109,232 -
Long-term debt, net 899,711 848,665
Other long-term liabilities 102,687 52,523
Total stockholders' equity 1,191,885 1,178,045
--------- ---------
Total liabilities and stockholders'
equity $2,801,002 $2,516,665
========== ==========
Superior Energy Services, Inc. and Subsidiaries
Segment Highlights
Three months ended March 31, 2010, December 31, 2009 and
March 31, 2009
(Unaudited)
(in thousands)
Revenue March 31, December 31, March 31,
--------- ------------ ---------
2010 2009 2009
---- ---- ----
Subsea and Well
Enhancement $232,766 $145,822 $288,057
Drilling Products and
Services 114,277 97,567 125,944
Marine 17,468 21,186 23,108
------ ------ ------
Total Revenues $364,511 $264,575 $437,109
======== ======== ========
Gross Profit (1) March 31, December 31, March 31,
--------- ------------ ---------
2010 2009 2009
---- ---- ----
Subsea and Well
Enhancement $89,897 $2,946 $122,568
Drilling Products and
Services 74,182 65,314 83,908
Marine 1,380 7,688 8,168
----- ----- -----
Total Gross Profit $165,459 $75,948 $214,644
======== ======= ========
Income (Loss) from
Operations March 31, December 31, March 31,
--------- ----------- ---------
2010 2009 2009
---- ---- ----
Subsea and Well
Enhancement (2) $23,697 $(176,585) $61,700
Drilling Products and
Services 23,947 13,771 35,309
Marine (3,957) (2,945) 2,781
--- --- -----
Total Income (Loss) from
Operations $43,687 $(165,759) $99,790
======= ========= =======
(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) Loss 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 fourth quarter 2009 earnings press
release.
SOURCE Superior Energy Services, Inc.