HOUSTON, TX--(Marketwired - August 04, 2015) - Vantage Drilling Company ("Vantage" or the "Company") (NYSE MKT: VTG) reports net income for the three months ended June 30, 2015 of $25.0 million or $.07 per diluted share as compared to earnings of $10.2 million or $.03 per diluted share for the three months ended June 30, 2014.
The three months ended June 30, 2015 includes approximately $5.6 million of gains on the early retirement of debt as compared to a loss on the early retirement of debt of $1.4 million in the prior year. The strong operating results for the second quarter also required us to re-evaluate our effective tax rate for the year and combined with tax impact of the early retirement of debt resulted in a $2.7 million favorable adjustment to our tax provision as compared to a $3.5 million unfavorable adjustment in the second quarter 2014. Adjusting for these items, pro forma net income for the three months ended June 30, 2015 was approximately $16.6 million or $.05 per diluted share as compared to $15.1 million or $.05 per diluted share for the three months ended June 30, 2014.
The total debt retirement for the first half of 2015, including scheduled maturities and open market purchase of debt, totaled approximately $140.0 million at face value. Following the end of the quarter, we continued to acquire debt in the open market and have retired approximately $150.0 million of debt year to date with an annualized interest savings of approximately $9.7 million.
Paul Bragg, Chairman and Chief Executive Officer, commented, "During the 2nd quarter, we continued our strong operating performance and maintained our focus on strengthening the balance sheet. In just over six quarters, we have now retired approximately $350 million of outstanding debt and greatly reduced our current debt, improving our 2015 and 2016 liquidity."
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs. Vantage's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the company's filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.
Vantage Drilling Company
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2015 2014
--------- --------- --------- ---------
Revenue
Contract drilling services $ 202,888 $ 198,279 $ 410,869 $ 413,211
Management fees 1,902 5,969 3,783 10,551
Reimbursables 7,471 15,470 15,258 28,421
--------- --------- --------- ---------
Total revenue 212,261 219,718 429,910 452,183
--------- --------- --------- ---------
Operating costs and expenses
Operating costs 95,249 98,002 191,357 199,724
General and administrative 8,066 8,366 16,931 16,481
Depreciation 31,781 31,630 63,404 63,255
--------- --------- --------- ---------
Total operating costs and
expenses 135,096 137,998 271,692 279,460
--------- --------- --------- ---------
Income from operations 77,165 81,720 158,218 172,723
Other income (expense)
Interest income 5 11 11 24
Interest expense and other
financing charges (48,641) (54,286) (99,195) (108,773)
Gain (loss) on debt
extinguishment 5,616 (1,407) 26,222 (1,513)
Other, net 1,962 (539) 1,624 240
--------- --------- --------- ---------
Total other income (expense) (41,058) (56,221) (71,338) (110,022)
--------- --------- --------- ---------
Income before income taxes 36,107 25,499 86,880 62,701
Income tax provision 11,143 15,321 40,486 27,699
--------- --------- --------- ---------
Net income $ 24,964 $ 10,178 $ 46,394 $ 35,002
========= ========= ========= =========
Earnings per share
Basic $ 0.08 $ 0.03 $ 0.15 $ 0.11
Diluted $ 0.07 $ 0.03 $ 0.15 $ 0.11
Vantage Drilling Company
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
2015 2014 2014 2013
--------- --------- --------- ---------
Operating costs and expenses
Jackups $ 20,749 $ 22,401 $ 45,012 $ 46,161
Deepwater 60,861 51,233 116,944 107,043
Operations support 7,440 10,342 16,764 21,102
Reimbursables 6,199 14,026 12,637 25,418
--------- --------- --------- ---------
$ 95,249 $ 98,002 $ 191,357 $ 199,724
--------- --------- --------- ---------
Utilization
Jackups 75.0% 99.2% 85.5% 99.6%
Deepwater 98.2% 83.1% 95.9% 89.8%
Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
June 30, December 31,
2015 2014
------------ ------------
(Unaudited)
ASSETS
Current assets
Cash and cash equivalents $ 30,556 $ 82,812
Trade receivables 141,932 153,428
Inventory 67,037 65,892
Prepaid expenses and other current assets 20,188 28,618
------------ ------------
Total current assets 259,713 330,750
------------ ------------
Property and equipment
Property and equipment 3,553,789 3,524,566
Accumulated depreciation (469,361) (406,674)
------------ ------------
Property and equipment, net 3,084,428 3,117,892
------------ ------------
Other assets
Investment in joint venture 1,106 1,318
Other assets 68,603 79,897
------------ ------------
Total other assets 69,709 81,215
------------ ------------
Total assets $ 3,413,850 $ 3,529,857
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 46,540 $ 59,139
Accrued liabilities 97,088 101,537
Current maturities of long-term debt, net of
discount of $42 and $1,181 65,314 95,378
------------ ------------
Total current liabilities 208,942 256,054
------------ ------------
Long-term debt, net of discount of $18,903 and
$25,875 and current maturities 2,531,003 2,632,802
Other long-term liabilities 69,363 85,327
Commitments and contingencies
Shareholders' equity
Preferred shares, $0.001 par value, 10,000
shares authorized; none issued or outstanding - -
Ordinary shares, $0.001 par value, 500,000
shares authorized; 311,024 and 307,808 shares
issued and outstanding 311 308
Additional paid-in capital 907,607 905,136
Accumulated deficit (303,376) (349,770)
------------ ------------
Total shareholders' equity 604,542 555,674
------------ ------------
Total liabilities and shareholders' equity $ 3,413,850 $ 3,529,857
============ ============
Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------------------
2015 2014
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 46,394 $ 35,002
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation expense 63,404 63,255
Amortization of debt financing costs 5,139 5,834
Amortization of debt discount 5,392 5,676
Non-cash (gain) loss on debt extinguishment (26,213) 1,513
Share-based compensation expense 3,370 4,284
Deferred income tax benefit (534) (343)
Equity in loss of joint venture 212 235
Loss on disposal of assets 158 663
Changes in operating assets and liabilities:
Restricted cash - 2,125
Trade receivables 11,496 13,988
Inventory (1,145) (5,068)
Prepaid expenses and other current assets 8,905 5,054
Other assets 4,613 10,521
Accounts payable (12,599) (7,453)
Accrued liabilities and other long-term liabilities (23,546) 4,527
--------- ---------
Net cash provided by operating activities 85,046 139,813
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property and equipment (26,878) (19,262)
--------- ---------
Net cash used in investing activities (26,878) (19,262)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of long-term debt (110,424) (76,261)
Repayment of revolving credit agreement, net - (10,000)
--------- ---------
Net cash used in financing activities (110,424) (86,261)
--------- ---------
Net increase (decrease) in cash and cash
equivalents (52,256) 34,290
Cash and cash equivalents--beginning of period 82,812 54,686
--------- ---------
Cash and cash equivalents--end of period $ 30,556 $ 88,976
========= =========
FOR FURTHER INFORMATION PLEASE CONTACT:
Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700
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