HOUSTON, Aug. 4, 2015 /PRNewswire/ -- Parker Drilling Company (NYSE: PKD) today announced a net loss of $14.0 million, or $0.11 loss per share on revenues of $185.9 million for the second quarter ended June 30, 2015. The results include a $2.3 million pre-tax expense to increase the provision for the reduction in carrying value of certain assets related to the Company's international rental tools and drilling rigs. Excluding this expense, the adjusted loss per share was $0.10.

Second quarter adjusted EBITDA was $32.8 million, compared with $53.4 million for the preceding quarter.

Gary Rich, Chairman, President and CEO of the Company, said, "As expected, results in the second quarter were down versus the first quarter as we experienced lower global drilling activity.  Despite a 35 percent sequential decline in the average number of rigs drilling for oil and gas in the U.S., our U.S. rental tools revenues were only 23 percent lower, reflecting our efforts to maintain our market position, both on land and offshore. The Gulf of Mexico barge rig business continues to be the most adversely impacted by current market conditions; however, we have continued to reduce its cost structure. While our international businesses were also lower sequentially, they remain less impacted relative to our U.S. businesses. We remain focused on strong cost management and maintaining positive free cash flow, while seeking growth opportunities that may arise in this environment."

Outlook

"Market indicators are mixed and remain weak, making it difficult to characterize the duration and magnitude of the current downturn. We continue to focus on what we can control, which means managing our business as if existing conditions will persist for an extended period.

"During the second half of 2015, we believe our Rental Tools business in the U.S. will continue to directionally follow the rig count. For our International Rental Tools business, we continue to expect margins will be better than last year, despite increasing market headwinds. We believe activity in our U.S. (Lower 48) Drilling segment will remain at current levels, while lower utilization will likely put downward pressure on the International & Alaska Drilling segment as we anticipated," Mr. Rich added.

Second Quarter Review

Parker Drilling's revenues for the 2015 second quarter, compared with the 2015 first quarter, declined 9 percent to $185.9 million from $204.1 million, operating gross margin excluding depreciation and amortization expense (gross margin) declined 35 percent to $42.4 million from $64.8 million and gross margin as a percentage of revenues was 22.8 percent, compared with 31.8 percent for the prior period.

For the Company's Drilling Services business, revenues declined 5 percent to $121.8 million from $128.0 million, gross margin declined 42 percent to $20.7 million from $35.5 million, and gross margin as a percentage of revenues was 17.0 percent, compared with 27.7 percent for the prior period.

• U.S. (Lower 48) Drilling revenues were $6.8 million, a 51.4 percent decrease from 2015 first quarter revenues of $14.1 million. Gross margin was a $2.0 million loss as compared with 2015 first quarter gross margin of $0.1 million. The declines in revenues and gross margin were primarily the result of lower utilization and dayrates, partially offset by lower operating costs, for the Company's barge drilling rig fleet in the U.S. Gulf of Mexico.
• International & Alaska Drilling revenues were $115.0 million, a 1 percent increase from 2015 first quarter revenues of $113.9 million. Gross margin was $22.6 million, a 36 percent decrease from 2015 first quarter gross margin of $35.4 million. Gross margin as a percentage of revenues was 19.7 percent as compared with 31.1 percent in the 2015 first quarter. The increase in revenues is attributable to an $8.7 million increase in reimbursable expenses, partially offset by a decrease in utilization. The change in gross margin as a percentage of revenue is due in part to lower utilization and higher revenue from reimbursable expenses. In addition, the prior period revenues and gross margin benefited from early contract termination and demobilization fees that did not repeat in the second quarter.

Rental Tools Services revenues were $64.1 million, gross margin was $21.7 million and gross margin as a percentage of revenues was 33.9 percent. Compared with the 2015 first quarter, revenues decreased 16 percent from $76.1 million and gross margin decreased 25.9 percent from $29.3 million, while gross margin as a percentage of revenues decreased from 38.5 percent. Reduced revenues and gross margin were primarily due to the continued decline in U.S. land drilling activity, as well as softer demand in certain international rental tools markets. This was partially offset by lower operating costs.

General and Administrative Expense decreased to $9.5 million for the 2015 second quarter, from $10.8 million for the 2015 first quarter, primarily due to lower third-party consulting expenses associated with the implementation of an enterprise resource planning system.

Capital expenditures year-to-date through June 30, 2015 were $54.6 million. 

"In current market conditions, we believe customers will value, more than ever, our unique experience and expertise. We are focused on consistent operational execution and on providing customers with innovative, reliable and efficient solutions that help them safely manage their costs and mitigate their risks. I am pleased with the progress we've made to ensure we remain agile and well positioned in the downturn. We believe we are in sound condition, prepared to meet the challenges ahead and capture opportunities that arise," concluded Mr. Rich.

Conference Call

Parker Drilling has scheduled a conference call for 10:00 a.m. Central Time (11:00 a.m. Eastern Time) on Wednesday, August 5, 2015, to review reported results. The call will be available by telephone at (888) 287-5563, access code 7196372. 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 or by telephone for 1 week from August 5, 2015 at (888) 203-1112, using the access code 7196372#.

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.

Company Description

Parker Drilling (NYSE: PKD) 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 international markets and harsh-environment regions utilizing Parker Drilling-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.

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SOURCE Parker Drilling Company