Parker Drilling Reports 2017 Third Quarter Results

HOUSTON, Nov. 1, 2017 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced results for the third quarter ended September 30, 2017, including a reported net loss available to common stockholders of $21.2 million, or a $0.15 loss per common share, on revenues of $118.3 million. 

Third quarter Adjusted EBITDA was $23.2 million.

"Parker delivered strong third quarter results led by our U.S. Rental Tools segment, which saw a 20.2 percent sequential increase in revenues and a 43.1 percent increase in gross margin for the quarter," said Gary Rich, the Company's Chairman, President and CEO.  "This represents the fourth consecutive quarter our U.S. rental tools business has far outpaced the growth in the U.S. rig count, which was up roughly 6 percent during the quarter. 

"Internationally, we are encouraged by the emerging recovery in global activities.  Our International rentals revenues rose 7.7 percent sequentially with a 35 percent increase in gross margin.  Our International & Alaska Drilling segment revenues increased 3.3 percent sequentially with a 33.3 percent increase in gross margin, reflecting a continued focus on efficiency and cost management. 

"I believe the third quarter results attest to our discipline in managing our business in a tough environment," concluded Mr. Rich.

Third Quarter Review

Parker Drilling's revenues for the 2017 third quarter, compared with the 2017 second quarter, increased 7.9 percent to $118.3 million from $109.6 million.  Operating gross margin excluding depreciation and amortization expense (gross margin) increased 51.0 percent to $30.2 million from $20.0 million and gross margin as a percentage of revenues was 25.5 percent, compared with 18.2 percent for the 2017 second quarter.

Drilling Services

For the Company's Drilling Services business, which is comprised of the U.S. (Lower 48) Drilling and International & Alaska Drilling segments, third quarter revenues increased 2.4 percent to $67.3 million from $65.7 million for the 2017 second quarter.  Gross margin increased 45.1 percent to $11.9 million from $8.2 million, and gross margin as a percentage of revenues was 17.7 percent, compared with 12.5 percent for the prior period.  Contracted backlog was $257 million at the end of the third quarter compared to $289 million at the end of the second quarter.

U.S. (Lower 48) Drilling

U.S. (Lower 48) Drilling segment revenues decreased $0.4 million to $4.6 million from $5.0 million for the 2017 second quarter. Gross margin improved 50.0 percent to a $0.5 million loss from a loss of $1.0 million for the 2017 second quarter. The decrease in revenues was due to lower utilization and slightly lower day rates.  Gross margin was up primarily as a result of lower operating expenses associated with lower rig utilization, an increase in standby days, and a favorable adjustment to workers' compensation reserves.

International & Alaska Drilling

International & Alaska Drilling segment revenues increased 3.3 percent to $62.7 million from $60.7 million in the 2017 second quarter. Gross margin was $12.4 million, a 33.3 percent increase from 2017 second quarter gross margin of $9.3 million.  The increases in revenues and gross margin were primarily due to higher earnings from our joint venture in Kazakhstan, mobilization of our rig in the Kurdistan Region of Iraq and increased earnings on our O&M activities.

Rental Tools Services

For the Company's Rental Tools Services business, which is comprised of the U.S. Rental Tools and International Rental Tools segments, third quarter revenues increased 16.2 percent to $51.0 million from $43.9 million for the 2017 second quarter.  Gross margin increased 56.4 percent to $18.3 million from $11.7 million, and gross margin as a percentage of revenues was 35.9 percent compared with 26.7 percent for the prior period.

U.S. Rental Tools

U.S. Rental Tools segment revenues increased 20.2 percent to $35.7 million, from $29.7 million for the 2017 second quarter.  Gross margin increased 43.1 percent to $19.6 million from $13.7 million for the 2017 second quarter.  The increases in revenues and gross margin were driven by increased U.S. land drilling activity, higher completion activity in the Gulf of Mexico and select price increases.

International Rental Tools

International Rental Tools segment revenues increased 7.7 percent to $15.3 million from $14.2 million for the 2017 second quarter.  Gross margin improved 35.0 percent to a $1.3 million loss from a $2.0 million loss for the 2017 second quarter.  The increase in revenues was attributable to increased tubular running services in the Middle East and increased rentals in Europe, partially offset by reduced fishing services activity in India.  Gross margin improvement was due to increased activity and lower payroll taxes and benefits.

Consolidated

General and Administrative expenses were $7.0 million for the 2017 third quarter, up from $6.5 million for the 2017 second quarter.  The increase was primarily due to incentive compensation adjustments during the 2017 second quarter.

Capital expenditures in the third quarter were $18.2 million, and year-to-date through September 30, 2017 were $44.8 million.

Conference Call

Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, November 2, 2017, to review third quarter results.  The call will be available by telephone by dialing (+1) (412) 902-0003 and asking for the Parker Drilling Third Quarter Conference Call.  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 and will be available by telephone through November 9, 2017 at (+1) (201) 612-7415, conference ID 13671916#.

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.

This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable U.S. Generally Accepted Accounting Principles (GAAP) financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.

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-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.

Contact: Jason Geach, Vice President, Investor Relations & Corporate Development, (+1) (281) 406-2310, [email protected].

 

 

 

 

 

 

 

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SOURCE Parker Drilling Company