Parker Drilling Reports 2018 Second Quarter Results

HOUSTON, Aug. 1, 2018 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced results for the second quarter ended June 30, 2018, including a reported net loss of $23.8 million on revenues of $118.6 million. This equates to a loss of $2.56 per common share taking into account the 1-for-15 reverse stock split effective July 27, 2018, or a loss of $0.17 per common share on a pre-split basis.

Second quarter Adjusted EBITDA was $18.7 million.

Gary Rich, the Company's Chairman, President and CEO, stated, "Our second quarter results improved noticeably from the prior quarter, driven primarily by increased activity in our Rental Tools Services business. During the second quarter, our U.S. Rental Tools segment grew at a higher rate than the U.S. rig count, and we are very pleased with the contributions this segment continues to provide. Additionally, our International Rentals segment posted improved revenues and margins as we continue to see stronger demand for tubular running services in many of our markets.

"In our Drilling Services business, our U.S. (Lower 48) Drilling segment results also improved in the second quarter driven by higher utilization. The International and Alaska Drilling segment reactivated two rigs during the quarter, one in the Kurdistan Region of Iraq and the other in Kazakhstan, and we are actively participating in numerous tenders. While we are pleased to see improved equipment utilization and tendering activity across our Drilling Services business, pricing remains soft given high capacity available in the market."

Mr. Rich added, "We continue to be judicious with respect to capital spending, prioritizing opportunities with strong rates of return and quick payback periods. Also, to increase our financial flexibility, we are carefully evaluating options to enhance our capital structure in light of upcoming debt maturities."

Second Quarter Review

Parker Drilling's revenues for the 2018 second quarter, compared with the 2018 first quarter, increased 8.1 percent to $118.6 million from $109.7 million. Operating gross margin excluding depreciation and amortization expense (gross margin) increased 49.2 percent to $27.0 million from $18.1 million and gross margin as a percentage of revenues was 22.8 percent, compared with 16.5 percent for the 2018 first 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, second quarter revenues decreased 1.6 percent to $56.6 million from $57.5 million for the 2018 first quarter. Gross margin increased 80.0 percent to $3.6 million from $2.0 million, and gross margin as a percentage of revenues was 6.4 percent, compared with 3.5 percent for the prior period. Contracted backlog was approximately $215.5 million at the end of the second quarter, compared to $246.0 million at the end of the first quarter.

U.S. (Lower 48) Drilling

U.S. (Lower 48) Drilling segment revenues increased 135.7 percent to $3.3 million from $1.4 million for the 2018 first quarter. Gross margin increased 48.1 percent to a $1.4 million loss, compared to the gross margin loss of $2.7 million in the first quarter. Improvements in revenues and gross margin were primarily due to increased utilization in the second quarter.

International & Alaska Drilling

International & Alaska Drilling segment revenues decreased 5.0 percent to $53.3 million from $56.1 million for the 2018 first quarter. However, gross margin increased 6.4 percent to $5.0 million from first quarter gross margin of $4.7 million. The decrease in revenues was primarily due to lower reimbursable revenues from our operations on Sakhalin Island, Russia. Excluding reimbursables, which have a minimal impact on margins, segment revenues were down 2.6 percent from the first quarter. Gross margin was positively impacted by lower operating expenses in Sakhalin, partially offset by higher operating expense in Kurdistan associated with a rig reactivation.

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, second quarter revenues increased 18.8 percent to $62.0 million from $52.2 million for the first quarter. Gross margin increased 44.4 percent to $23.4 million from $16.2 million, and gross margin as a percentage of revenues was 37.7 percent compared with 31.0 percent for the prior period.

U.S. Rental Tools

U.S. Rental Tools segment revenues increased 21.3 percent to $42.1 million, from $34.7 million for the 2018 first quarter. Gross margin increased 44.3 percent to $22.8 million from $15.8 million for the 2018 first quarter. The increase in revenues was primarily due to strong activity and volume in U.S. land. Gross margin increased as a result of incremental revenues, combined with lower operating costs.

International Rental Tools

International Rental Tools segment revenues increased 13.7 percent to $19.9 million from $17.5 million for the prior quarter. Gross margin increased 50.0 percent to $0.6 million from $0.4 million for the 2018 first quarter. Revenue and gross margin improvements resulted predominately from the continued demand for our tubular running services.

Consolidated

General and Administrative expenses were $8.3 million for the 2018 second quarter, up from $6.2 million for the 2018 first quarter. The increase was largely due to professional fees related to ongoing capital structure analysis during the quarter. Total liquidity at the end of the quarter was $167.0 million, consisting of $114.5 million in cash and cash equivalents and $52.5 million available under our revolving credit facility.

Capital expenditures in the second quarter were $23.6 million. Year to date through June 30, 2018, capital expenditures were $32.5 million, with 97.3 percent dedicated to our Rental Tools Services business.

Conference Call

Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Thursday, August 2, 2018, to review second quarter results. The call will be available by telephone by dialing (+1) (412) 902-0003 and asking for the Parker Drilling Second 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 August 9, 2018 at (+1) (201) 612-7415, conference ID 13681009#.

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 our evaluation of options to enhance our capital structure in light of upcoming debt maturities, 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: Nick Henley, Director, Investor Relations, (+1) (281) 406-2082, [email protected].

 

 

 

 

 

 

 

 

View original content:http://www.prnewswire.com/news-releases/parker-drilling-reports-2018-second-quarter-results-300690620.html

SOURCE Parker Drilling Company