Market Overview

Superior Energy Services Announces Second Quarter 2020 Results

Share:

HOUSTON, Aug. 10, 2020 /PRNewswire/ -- Superior Energy Services, Inc. (NYSE:SPN) (the "Company") today announced a net loss from continuing operations for the second quarter of 2020 of $58.9 million, or $3.97 per share, on revenue of $183.9 million.  This compares to a net loss from continuing operations of $32.3 million, or $2.18 per share, for the first quarter of 2020, on revenue of $321.5 million and a net loss from continuing operations of $18.4 million, or $1.18 per share, for the second quarter of 2019, on revenue of $367.4 million

The Company reported $9.1 million in severance and other related costs, and $8.6 million of merger-related transaction costs. The resulting adjusted net loss from continuing operations for the second quarter of 2020 was $45.3 million, or $3.06 per share.

David Dunlap, President and CEO, commented, "We expected a significant reduction in oil field activity resulting from the COVID-19 related economic slow-down during the second quarter, and our sequential revenue decline of 43% was in line with those expectations. 

"As we manage these troubling and uncertain times, we have prioritized our balance sheet and cost structure.  Measures taken during the quarter include lower levels of spending, structural cost reductions, and disciplined operations, resulting in a 10% sequential increase of our cash balance, which grew to $278 million.  Our cash balance at quarter-end does not reflect a tax refund of approximately $30 million, which was received in July. 

"Despite an uncertain forward outlook, we are observing signals that oil field activity, particularly completion related operations, will increase during the second half of the year as broader economic activity improves. We expect the impact of the COVID-19 pandemic to persist well into the future, and we will continue to be agile in our approach as the landscape evolves."

Second Quarter 2020 Geographic Breakdown

U.S. land revenue was $55.0 million in the second quarter of 2020, a decrease of 59% as compared with revenue of $134.7 million in the first quarter of 2020, and a 72% decrease compared to revenue of $194.1 million in the second quarter of 2019.  U.S. offshore revenue decreased 27% to $58.6 million as compared with revenue of $80.1 million in the first quarter of 2020, and decreased 29%  from revenue of $83.0 million in the second quarter of 2019.  International revenue of $70.3 million decreased by 34% as compared with revenue of $106.8 million in the first quarter of 2020 and decreased 22% as compared to revenue of $90.4 million in the second quarter of 2019.

Drilling Products and Services Segment                                                                                         

The Drilling Products and Services segment revenue in the second quarter of 2020 was $67.4 million, a 35% decrease from first quarter 2020 revenue of $104.0 million and a 33% decrease from second quarter 2019 revenue of $100.7 million.

U.S. land revenue decreased 47% from first quarter 2020 to $19.5 million, U.S. offshore revenue decreased 23% sequentially to $28.6 million and international revenue decreased by 36% to $19.2 million.

Onshore Completion and Workover Services Segment

The Onshore Completion and Workover Services segment revenue in the second quarter of 2020 was $21.2 million, a 65% decrease from first quarter 2020 revenue of $61.2 million, and a 78% decrease from second quarter 2019 revenue of $94.6 million.

Production Services Segment

The Production Services segment revenue decreased in the second quarter of 2020 by 46% to $54.5 million from $101.5 million in the first quarter of 2020 and decreased by 47% from second quarter 2019 revenue of $103.0 million.

U.S. land revenue was $11.1 million, a 64% decrease from first quarter 2020 revenue of $30.7 million.  U.S. offshore revenue decreased 44% sequentially to $6.4 million and international revenue decreased by 38% from the first quarter 2020 to $37.0 million.

Technical Solutions Segment

The Technical Solutions segment revenue in the second quarter of 2020 was $40.8 million, a 25% decrease from first quarter 2020 revenue of $54.8 million and a 41% decrease from second quarter 2019 revenue of $69.1 million.

U.S. land revenue decreased 48% sequentially to $3.2 million.  U.S. offshore revenue decreased 25% sequentially to $23.6 million and international revenue decreased 18% to $14.1 million.

About Superior Energy Services

Superior Energy Services (NYSE:SPN) serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialized oilfield services and equipment that are used throughout the economic life cycle of oil and gas wells.  For more information, visit: www.superiorenergy.com.

Forward-Looking Statements

This press release contains, and future oral or written statements or press releases by the Company and its management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Generally, the words "expects," "anticipates," "targets," "goals," "projects," "intends," "plans," "believes," "seeks" and "estimates," variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company's financial position, financial performance, liquidity, strategic alternatives, market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company's management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties that could cause the Company's actual results to differ materially from such statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements.

While the Company believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business. Among the factors that could cause results to differ materially from those indicated by such forward-looking statements are: the conditions in the oil and gas industry; the effects of public health threats, pandemics and epidemics, and the adverse impact thereof on our business, financial condition, results of operations and liquidity, including, but not limited to, our growth, operating costs, supply chain, labor availability, logistical capabilities, customer demand and industry demand generally, margins, utilization, cash position, taxes, the price of our securities, and our ability to access capital markets, including the macroeconomic effects from the continuing COVID-19 pandemic; the ability of the members of the Organization of the Petroleum Exporting Countries and its broader partners ("OPEC+") to agree on and to maintain crude oil price and production controls; our outstanding debt obligations and the potential effect of limiting our ability to fund future growth; inability to generate enough cash flows to meet our debt obligations; necessary capital financing may not be available at economic rates or at all; volatility of our common stock; operating hazards, including the significant possibility of accidents resulting in personal injury or death, or property damage for which we may have limited or no insurance coverage or indemnification rights; possibly not being fully indemnified against losses incurred due to catastrophic events; claims, litigation or other proceedings that require cash payments or could impair the Company's financial condition; credit risk associated with the customer base; the effect of regulatory programs  and environmental matters on our operations or prospects; the impact of unfavorable or unusual weather conditions could have on our operations; the potential inability to retain key employees and skilled workers; political, legal, economic and other risks and uncertainties associated with the Company's international operations; laws, regulations or practices in foreign countries could materially restrict  operations or expose us to additional risks; potential changes in tax laws, adverse positions taken by tax authorities or tax audits impacting operating results; changes in competitive and technological factors affecting operations; risks associated with the uncertainty of macroeconomic and business conditions worldwide; potential impacts of cyber-attacks on operations; counterparty risks associated with reliance on key suppliers; challenges with estimating the Company's potential liabilities related to its oil and natural gas property; risks associated with potential changes of Bureau of Ocean Energy Management security and bonding requirements for the Company's offshore platforms; the amount of the costs, fees, expenses and charges incurred as a result of terminating the Combination; the potential impact on our business and financial results due to the failure to close the Combination. 

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company's Form 10-K, the Company's Form 10-Q for the quarter ended March 31, 2020, and those set forth from time to time in the Company's other periodic filings with the Securities and Exchange Commission, which are available at www.superiorenergy.com. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements whether as a result of new information, future events or otherwise.

 

 



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except earnings per share amounts)

(unaudited)




Three Months Ended


Six Months Ended



June 30,


March 31,


June 30,



2020


2019


2020


2020


2019












Revenues


$      183,853


$      367,438


$      321,497


$       505,350


$     732,712












Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)


128,803


229,532


211,686


340,489


469,585

Depreciation, depletion, amortization and accretion

36,786


51,271


41,355


78,141


107,614

General and administrative expenses


59,707


71,038


65,157


124,864


142,150

Reduction in value of assets


-


7,556


16,522


16,522


7,556












Income/(Loss) from operations


(41,443)


8,041


(13,223)


(54,666)


5,807












Other income (expense):











  Interest expense, net


(24,749)


(24,650)


(25,134)


(49,883)


(49,771)

  Other income (expense)


821


490


(4,232)


(3,411)


(1,122)












Loss from continuing operations before income taxes

(65,371)


(16,119)


(42,589)


(107,960)


(45,086)












Income taxes


(6,508)


2,322


(10,254)


(16,762)


5,999












Net loss from continuing operations


(58,863)


(18,441)


(32,335)


(91,198)


(51,085)












Loss from discontinued operations, net of income tax

(6,243)


(52,609)


(47,129)


(53,372)


(67,670)












Net loss


$      (65,106)


$      (71,050)


$      (79,464)


$     (144,570)


$   (118,755)












Basic and diluted loss per share











Net loss from continuing operations


$          (3.97)


$          (1.18)


$          (2.18)


$           (6.18)


$         (3.29)

Income from discontinued operations


(0.42)


(3.37)


(3.18)


(3.61)


(4.35)

Basic and diluted loss per share


$          (4.39)


$          (4.55)


$          (5.36)


$           (9.79)


$         (7.64)























Weighted average shares outstanding


14,826


15,600


14,809


14,767


15,538

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands)

(unaudited)








6/30/2020


12/31/2019

ASSETS










Current assets:





  Cash and cash equivalents


$       278,409


$       272,624

  Accounts receivable, net


219,410


332,047

  Income taxes receivable


32,648


740

  Prepaid expenses


42,893


49,132

  Inventory and other current assets


118,309


117,629

 Assets held for sale


116,163


216,197






        Total current assets


807,832


988,369






Property, plant and equipment, net 


599,114


664,949

Operating lease right-of-use assets


71,376


80,906

Goodwill


136,006


137,695

Notes receivable


70,350


68,092

Restricted cash


2,774


2,764

Intangible and other long-term assets, net

46,988


50,455






        Total assets


$    1,734,440


$    1,993,230






LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)






Current liabilities:





  Accounts payable


$         64,604


$         92,966

  Accrued expenses


147,304


182,934

  Current portion of decommissioning liabilities

3,706


3,649

  Liabilities held for sale


7,252


44,938






        Total current liabilities


222,866


324,487






Long-term debt, net


1,288,663


1,286,629

Decommissioning liabilities


135,677


132,632

Operating lease liabilities


54,087


62,354

Deferred income taxes 


2,531


3,247

Other long-term liabilities


125,743


134,308






Total stockholders' equity (deficit)


(95,127)


49,573






        Total liabilities and stockholders' equity (deficit)

$    1,734,440


$    1,993,230






 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED JUNE 30, 2020 AND 2019

(in thousands)

(unaudited)



2020


2019






Cash flows from operating activities:





Net loss


$       (144,570)


$         (118,755)

Adjustments to reconcile net loss to net cash provided by operating activities:





Depreciation, depletion, amortization and accretion


78,141


157,657

Reduction in value of assets


16,522


31,381

Reduction in value of assets held for sale


49,361


-

Other noncash items


14,614


17,788

Changes in working capital and other


(14,641)


(19,241)

Net cash provided by (used in) operating activities 


(573)


68,830






Cash flows from investing activities:





Payments for capital expenditures


(30,518)


(79,136)

Proceeds from sales of assets


39,445


84,557

Net cash provided by investing activities 


8,927


5,421






Cash flows from financing activities:





Other


(208)


(1,026)

Net cash used in financing activities


(208)


(1,026)






Effect of exchange rate changes in cash


(2,351)


(102)






Net change in cash, cash equivalents, and restricted cash

5,795


73,123






Cash, cash equivalents and restricted cash at beginning of period


275,388


163,748






Cash, cash equivalents, and restricted cash at end of period


$         281,183


$          236,871

 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

REVENUE BY GEOGRAPHIC REGION BY SEGMENT

(in thousands)

(unaudited)




Three months ended, 





June 30, 2020


March 31, 2020


June 30, 2019



U.S. land









     Drilling Products and Services

$                    19,538


$                    36,656


$                    47,267



     Onshore Completion and Workover Services

21,180


61,218


94,618



     Production Services


11,097


30,667


38,808



     Technical Solutions


3,166


6,137


13,385



Total U.S. land


$                    54,981


$                  134,678


$                  194,078












U.S. offshore









     Drilling Products and Services

$                    28,587


$                    37,224


$                    28,085



     Onshore Completion and Workover Services

-


-


-



     Production Services


6,363


11,299


21,410



     Technical Solutions


23,611


31,533


33,492



Total U.S. offshore


$                    58,561


$                    80,056


$                    82,987












International









     Drilling Products and Services

$                    19,225


$                    30,113


$                    25,330



     Onshore Completion and Workover Services

-


-


-



     Production Services


37,033


59,538


42,784



     Technical Solutions


14,053


17,112


22,259



Total International


$                    70,311


$                  106,763


$                    90,373












Total Revenues


$                  183,853


$                  321,497


$                  367,438












 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

SEGMENT HIGHLIGHTS

(in thousands)

(unaudited)




Three months ended, 


Revenues


June 30, 2020

(1)

March 31, 2020

(1)

June 30, 2019

(1)

Drilling Products and Services

$                   67,350


$                 103,993


$                 100,682


Onshore Completion and Workover Services

21,180


61,218


94,618


Production Services


54,493


101,504


103,002


Technical Solutions


40,830


54,782


69,136


Total Revenues


$                 183,853


$                  321,497


$                  367,438










Income (Loss) from Operations







Drilling Products and Services

$                    18,804


$                    36,867


$                    26,087


Onshore Completion and Workover Services

(10,321)


(1,870)


3,031


Production Services


(7,350)


756


3,442


Technical Solutions


(4,709)


(2,292)


8,473


Corporate and other


(20,206)


(19,803)


(24,174)


Total Income from Operations


$                  (23,782)


$                    13,658


$                    16,859










EBITDA








Drilling Products and Services

$                    34,632


$                    54,657


$                    47,577


Onshore Completion and Workover Services

(4,807)


4,443


12,471


Production Services


2,832


11,594


16,614


Technical Solutions


(374)


3,053


14,452


Corporate and other


(19,279)


(18,734)


(22,984)


Total EBITDA


$                    13,004


$                    55,013


$                    68,130










(1) Income (loss) from operations and EBITDA exclude the impact of special items for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019.  For Non-GAAP reconciliations, refer to Table 2 below.




 

 

Reconciliation of Consolidated Adjusted Net Loss From Continuing Operations





(in thousands)





(unaudited)





Table 1




















Three months ended,



June 30, 2020


March 31, 2020


June 30, 2019



Consolidated


Per Share


Consolidated


Per Share


Consolidated


Per Share














Reported net loss from continuing operations


$           (58,863)


$      (3.97)


$           (32,335)


$      (2.18)


$           (18,441)


$          (1.18)














Reduction in value of assets


-


-


16,522


1.12


7,556


0.48

Severance and other related costs


9,104


0.61


6,020


0.41


1,262


0.08

Merger-related transaction costs


8,557


0.58


4,339


0.29


-


-

Income taxes


(4,097)


(0.28)


(6,236)


(0.42)


(2,046)


(0.13)














Adjusted net loss from continuing operations


$            (45,299)


$       (3.06)


$           (11,690)


$       (0.78)


$            (11,669)


$         (0.75)

 

 

 

Reconciliation of Adjusted Income (Loss) from Operations and Adjusted EBITDA by Segment

(in thousands)

(unaudited)

Table 2
















Three months ended June 30, 2020



Drilling Products and Services


Onshore
Completion
and Workover
Services


Production
Services



Technical
Solutions


Corporate and Other


Consolidated














Reported net income (loss) from continuing operations


$            18,108


$          (12,578)


$        (11,162)


$          (5,788)


$         (47,443)


$          (58,863)

Severance and other related costs

696


2,257


3,812


2,183


156


9,104

Merger-related costs


-


-


-


-


8,557


8,557

Interest expense, net


-


-


-


(1,104)


25,853


24,749

Other expense


-


-


-


-


(821)


(821)

Income taxes


-


-


-


-


(6,508)


(6,508)

Income (loss) from operations


$             18,804


$           (10,321)


$           (7,350)


$           (4,709)


$          (20,206)


$           (23,782)

Depreciation, depletion, amortization
  and accretion


15,828


5,514


10,182


4,335


927


36,786

Adjusted EBITDA 


$             34,632


$              (4,807)


$            2,832


$              (374)


$          (19,279)


$             13,004





























Three months ended March 31, 2020



Drilling Products and Services


Onshore
Completion
and Workover
Services


Production
Services



Technical
Solutions


Corporate and Other


Consolidated














Reported net income (loss) from continuing operations


$            36,727


$             (2,998)


$           (3,897)


$         (17,329)


$          (44,838)


$           (32,335)

Severance and other related costs

140


1,128


557


3,784


411


6,020

Merger-related costs


-


-


-


-


4,339


4,339

Reduction in value of assets


-


-


4,096


12,426


-


16,522

Interest expense, net


-


-


-


(1,173)


26,307


25,134

Other expense


-


-


-


-


4,232


4,232

Income taxes


-


-


-


-


(10,254)


(10,254)

 Adjusted income (loss) from operations

$            36,867


$              (1,870)


$               756


$           (2,292)


$          (19,803)


$            13,658

Depreciation, depletion, amortization
  and accretion


17,790


6,313


10,838


5,345


1,069


41,355

Adjusted EBITDA 


$            54,657


$               4,443


$          11,594


$            3,053


$          (18,734)


$            55,013





























Three months ended June 30, 2019



Drilling Products and Services


Onshore
Completion
and Workover
Services


Production
Services



Technical
Solutions


Corporate and Other


Consolidated














Reported net income (loss) from continuing  operations


$            26,087


$              (4,525)


$            3,442


$            9,508


$          (52,953)


$           (18,441)

Severance and other related costs

-


-


-


-


1,262


1,262

Reduction in value of assets


-


7,556


-


-


-


7,556

Interest expense, net


-


-


-


(1,035)


25,685


24,650

Other expense


-


-


-


-


(490)


(490)

Income taxes


-


-


-


-


2,322


2,322

 Adjusted income (loss) from operations

$            26,087


$               3,031


$            3,442


$            8,473


$          (24,174)


$             16,859

Depreciation, depletion, amortization
  and accretion


21,490


9,440


13,172


5,979


1,190


51,271

Adjusted EBITDA 


$            47,577


$             12,471


$          16,614


$          14,452


$          (22,984)


$             68,130














 

 

Cision View original content:http://www.prnewswire.com/news-releases/superior-energy-services-announces-second-quarter-2020-results-301108654.html

SOURCE Superior Energy Services, Inc.

View Comments and Join the Discussion!