Superior Energy Services, Inc. Announces First Quarter 2013 Results

HOUSTON, April 25, 2013 /PRNewswire/ -- Superior Energy Services, Inc. (NYSE: SPN) today announced net income of $63.7 million, or $0.40 per diluted share, on revenue of $1,135.5 million for the first quarter of 2013.

These results compare with the first quarter of 2012 net income from continuing operations of $70.2 million, or $0.55 per diluted share, and net income of $53.9 million, or $0.42 per diluted share, on revenue of $966.8 million. The first quarter of 2012 included only a partial quarter from the legacy Complete Production Services businesses which are contained within the Onshore Completion and Workover and Production Services segments, making comparisons of the first quarter 2013 and 2012 for those segments less meaningful.

David Dunlap, President and CEO of the Company, commented, "Our first quarter results came in at the midpoint of our expectations. Lower general and administrative expense partially offset lower gross profit and higher depreciation. Our goal has been to both reduce and defer  expenditures until we see indications of increased drilling and completion activity in the U.S. land markets. For example, we limited our capital additions to $130 million for the quarter, well under our originally planned $200 million.

"Modest increases in completions activity toward the end of the first quarter, coupled with continued improvement in our pressure pumping business yielded sequential increases in revenue and income from operations as a percentage of revenue ("operating margin") in our Onshore Completion and Workover Services segment.  These were offset in part by sequential declines in operating margin in our other three segments. The Subsea and Technical Solutions segment was adversely impacted by anticipated seasonality in the shallow water Gulf of Mexico and offshore Asia Pacific market areas, as well as low profit margins on certain decommissioning projects in the Gulf of Mexico."

First Quarter 2013 Geographic Breakdown

U.S. land market revenue was approximately $732.8 million in the first quarter of 2013, as compared with $642.8 million in the first quarter of 2012 and $730.2 million in the fourth quarter of 2012. Gulf of Mexico revenue was approximately $208.0 million, as compared with $153.0 million in the first quarter of 2012 and $212.7 million in the fourth quarter of 2012. International revenue was approximately $194.7 million, as compared with $171.1 million in the first quarter of 2012 and $235.3 million in the fourth quarter of 2012.

Drilling Products and Services Segment

Drilling Products and Services segment revenue was $194.0 million, a 2% increase from first quarter 2012 revenue of $189.4 million and a 1% increase from fourth quarter 2012 revenue of $192.7 million.

The primary factor driving the higher sequential revenue in this segment was a 4% increase in international market revenue to $50.1 million due to increased rentals of accommodations in Europe. Gulf of Mexico market revenue increased 2% sequentially to $69.9 million due to increased specialty rentals, while U.S. land market revenue decreased 2% to $74.0 million primarily due to lower demand for premium drill pipe and accommodations, partially offset by an increase in demand for bottom hole assemblies.

Onshore Completion and Workover Services Segment

Onshore Completion and Workover Services segment revenue in the first quarter was $426.0 million, a 52% increase from first quarter 2012 revenue of $279.7 million, and a 2% increase from fourth quarter 2012 revenue of $417.7 million. Virtually all of the revenue in this segment is generated from U.S. land market areas.

On a sequential basis, revenue increases from pressure pumping and well service rigs were partially offset by a decline in fluid management revenue. The increase in pressure pumping revenue was due to additional utilization of contracted fleets, while well service rig revenue was higher as a result of increased utilization and pricing in certain basins. The decline in fluid management revenue was associated with reduced demand for transportation and storage assets.

Production Services Segment

Production Services segment revenue was $367.4 million, a 4% increase from first quarter 2012 revenue of $354.0 million and a 1% decline from fourth quarter 2012 revenue of $369.3 million.

U.S. land market revenue declined 3% sequentially to $216.7 million, primarily due to reduced demand for pressure control, remedial pumping and snubbing services, which was partially offset by an increase in wireline services.  Revenue from coiled tubing services was unchanged in the U.S. land market. International market revenue increased 7% to $96.8 million due to increased production testing activity in Argentina, remedial pumping in Brazil and cementing activity from our recent acquisition in Colombia. Gulf of Mexico revenue declined 5% to $53.9 million primarily due to seasonal factors in the shallow water market area.

Subsea and Technical Solutions Segment

Subsea and Technical Solutions segment revenue was $148.1 million, a 3% increase from first quarter 2012 revenue of $143.8 million and a 25% decrease from fourth quarter 2012 revenue of $198.5 million.

Gulf of Mexico market revenue decreased 4% sequentially to $84.1 million due to seasonal factors resulting in lower activity levels for well control services and well and platform decommissioning services. International market revenue declined 50% to $47.8 million as a result of lower subsea construction and well control activity. U.S. land market revenue increased 8% sequentially to $16.2 million.

2013 Earnings Guidance Update

The Company maintains its prior earnings per share guidance range of $1.85 to $2.35.

Dunlap commented, "We maintained our prior guidance as the visibility regarding variables driving the range of potential outcomes – specifically the timing and intensity of utilization and rig activity in the U.S. land market areas – is still unknown. Our first quarter results came in as expected and we are certainly encouraged by what we experienced towards the latter stages of the quarter for certain completions-related services."

Conference Call Information

The Company will host a conference call at 10 a.m. Central Time on Friday, April 26, 2013.  The call can be accessed from Company's website at www.superiorenergy.com, or by telephone at 480-629-9645.  For those who cannot listen to the live call, a telephonic replay will be available through Friday, May 10, 2013 and may be accessed by calling 303-590-3030 and using the pass code 4613819#. An archive of the webcast will be available after the call for a period of 60 days at www.superiorenergy.com.

Superior Energy Services, Inc. serves the drilling, completion and production-related needs of oil and gas companies worldwide through its brand name drilling products and its integrated completion and well intervention services and tools, supported by an engineering staff who plan and design solutions for customers.

 

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; risks associated with the integration of the Completion Production Services Inc.'s operations; 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 the Company or any other person that the projected outcomes can or will be achieved.

 

 

FOR FURTHER INFORMATION CONTACT:
David Dunlap, President and CEO, (281) 999-0047;
Robert Taylor, CFO or Greg Rosenstein, EVP of Corporate Development, (504) 587-7374

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

Three Months Ended March 31, 2013 and 2012

(in thousands, except earnings per share amounts)

(unaudited)




Three Months Ended




March 31,




2013


2012








Revenues


$ 1,135,479


$ 966,837








Cost of services (exclusive of items shown separately below)


707,487


546,767


Depreciation, depletion, amortization and accretion


149,634


102,596


General and administrative expenses


150,164


176,021








Income from continuing operations


128,194


141,453








Other income (expense):






  Interest expense, net


(27,540)


(30,494)


  Other


500


401








Income from continuing operations before income taxes


101,154


111,360








Income taxes


37,427


41,203








Net income from continuing operations


63,727


70,157








Loss from discontinued operations, net of income tax


-


(16,237)








Net income


$      63,727


$   53,920














Basic earnings per share:






Net income from continuing operations


$          0.40


$       0.56


Loss from discontinued operations


-


(0.13)


Net income


$          0.40


$       0.43








Diluted earnings per share:






Net income from continuing operations


$          0.40


$       0.55


Loss from discontinued operations


-


(0.13)


Net income


$          0.40


$       0.42








Weighted average common shares used






  in computing earnings per share:






    Basic


158,946


125,542


    Diluted


160,433


127,344








 

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

MARCH 31, 2013 AND DECEMBER 31, 2012 

(in thousands)









3/31/2013


12/31/2012



(Unaudited)


(Audited)






ASSETS










Current assets:





  Cash and cash equivalents


$       77,075


$      91,199

  Accounts receivable, net


1,030,674


1,027,218

  Deferred income taxes


27,317


34,120

  Prepaid expenses


93,936


93,190

  Inventory and other current assets


244,090


214,630






        Total current assets


1,473,092


1,460,357






Property, plant and equipment, net 


3,220,215


3,255,220

Goodwill


2,547,497


2,532,065

Notes receivable


45,558


44,838

Intangible and other long-term assets, net


503,022


510,406






        Total assets


$  7,789,384


$ 7,802,886






LIABILITIES AND STOCKHOLDERS' EQUITY










Current liabilities:





  Accounts payable


$     238,739


$    252,363

  Accrued expenses


331,520


346,490

  Income taxes payable 


39,371


153,212

  Current maturities of long-term debt


20,000


20,000






        Total current liabilities


629,630


772,065






Deferred income taxes 


759,908


745,144

Decommissioning liabilities


94,565


93,053

Long-term debt, net


1,844,584


1,814,500

Other long-term liabilities


169,523


147,045






Total stockholders' equity


4,291,174


4,231,079






        Total liabilities and stockholders' equity


$  7,789,384


$ 7,802,886






 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

THREE MONTHS ENDED MARCH 31, 2013, DECEMBER 31, 2012, AND MARCH 31, 2012

(unaudited)

(in thousands)










Three months ended,

Revenue


March 31, 2013


December 31, 2012


March 31, 2012








Drilling Products and Services


$          193,979


$                      192,677


$          189,357








Onshore Completion and Workover Services


425,983


417,738


279,676








Production Services


367,397


369,341


354,041








Subsea and Technical Solutions


148,120


198,491


143,763















Total Revenues


$       1,135,479


$                   1,178,247


$          966,837















Gross Profit (1)


March 31, 2013


December 31, 2012


March 31, 2012








Drilling Products and Services


$          129,334


$                      127,834


$          126,791








Onshore Completion and Workover Services


144,244


144,626


94,014








Production Services


114,342


120,228


156,026








Subsea and Technical Solutions


40,072


62,745


43,239








Total Gross Profit


$          427,992


$                      455,433


$          420,070















Income from Continuing Operations


March 31, 2013


December 31, 2012 (2)


March 31, 2012 (3)








Drilling Products and Services


$            56,597


$                        57,424


$            57,229








Onshore Completion and Workover Services


49,708


46,904


12,391








Production Services


28,347


32,015


73,762








Subsea and Technical Solutions


(6,458)


10,287


(1,929)








Total Income from Continuing Operations


$          128,194


$                      146,630


$          141,453








(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)

Includes $2.1 million of additional consideration for an acquisition based on the acquired company exceeding performance goals.

(3)

Includes $29.0 million of transaction-related expenses.

SOURCE Superior Energy Services, Inc.



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