Press Releases
Parker Drilling First Quarter 2007 Net Income Increases 162%
HOUSTON, May 8 /PRNewswire-FirstCall/ -- Parker Drilling Company (NYSE: PKD), a global drilling contractor and service provider, today reported strong financial and operating results for the first quarter 2007 as net income increased 162 percent and earnings before interest, taxes, depreciation and amortization (EBITDA) increased 23 percent over the first quarter 2006.
First Quarter Earnings and Financial Highlights
For the three months ended March 31, 2007, Parker posted net income of $30.0 million, or $0.27 per diluted share, on revenues of $151.3 million, compared to revenues of $147.3 million and net income of $11.5 million, or $0.11 per diluted share, for the first quarter 2006. Net income in the first quarter 2007 included net non-routine income of $0.07 per diluted share, or $8.2 million, relating to the gain on the sale of two workover barge rigs in January. In addition, Parker recognized a non-cash charge to tax expense of $1.9 million, or $0.02 per diluted share, for potential interest and exchange rate fluctuations relating to a tax liability recorded on January 1, 2007, associated with the adoption of the Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"). The first quarter 2006 included $0.01 per diluted share benefit of non-routine items relating to a change in value of derivative instruments. (The details of the non-routine items for the quarter are available on Parker's website and can be viewed or downloaded by going to "Investor Relations" and then to "Reconciliation of Non-Routine Items.")
EBITDA was $61.7 million for the first quarter 2007, 23 percent higher than the $50.3 million in the first quarter 2006. Significantly higher dayrates resulted in a 59 percent EBITDA improvement for Parker's U.S. operations over the first quarter 2006. Quail Tools also showed improvement, with a 12 percent increase from the first quarter 2006. (The details of the EBITDA calculation, a non-GAAP financial measure, for the current and prior eight quarters are defined and reconciled later in this press release to their most directly comparable GAAP financial measure.)
Capital expenditures for the three months ended March 31, 2007 totaled $53.0 million. Total debt was $329.2 million, and the Company's cash, cash equivalents and marketable securities totaled $157.6 million at March 31, 2007.
Average utilization for the Gulf of Mexico barge rigs for the first quarter 2007 was 73 percent, the same as reported for the first quarter 2006 and higher than the 68 percent reported for the fourth quarter 2006. Current barge rig utilization is 65 percent. The Company's deep drilling barge dayrates in the Gulf of Mexico continued to experience record levels, averaging $51,600 per day during the first quarter 2007, up approximately 37 percent, or $13,900 per day, from the first quarter 2006 and up $2,100 per day from the fourth quarter 2006. (Average dayrates for each classification of barge by quarter are available on Parker's website and can be viewed or downloaded by going to "Investor Relations" and then to "Dayrates - GOM.")
The average utilization of international land rigs for the first quarter 2007 was 66 percent, up 20 percent from the 46 percent reported for the fourth quarter 2006, but lower than the 84 percent in the first quarter 2006. Current international utilization, including contracts for three rigs announced today, is 75 percent and is expected to further increase during 2007 as rigs continue to reposition between contracts.
Quail Tools, Parker Drilling's drilling and production rental tools subsidiary, continued its outstanding performance as it recorded EBITDA of $18.8 million in the first quarter 2007, up $2.0 million from the first quarter 2006. The expansion of Quail is well underway as equipment is being delivered to Quail's new facility in Texarkana, Texas, which opened on April 2. The new facility provides increased coverage of the Barnett, Fayetteville and Woodford shale areas in East Texas, Arkansas and Oklahoma.
Summary
Robert L. Parker Jr., Chairman, President and Chief Executive Officer of Parker Drilling, said: "We continue to focus on the execution of our strategic growth plan, as we delivered two new international land rigs to Algeria and today announced three-year contracts for two new rigs in Mexico and a two-year contract for Rig 230 in Turkmenistan. Once these rigs are delivered to Mexico, we will have five land rigs and one barge rig operating in Mexico, all under long-term contracts."
"Looking ahead, we expect increasing contributions from our international segments as we continue to focus on our international markets," said Parker. "Domestically, we experienced steady demand for our preferred barge rigs in our U.S. Gulf of Mexico transition zone market. We view recent softening in the U.S. Gulf of Mexico as a reflection of the uncertainty in the U.S. gas market. Although this uncertainty has reduced rates from historic highs, we believe that there is sufficient demand to generate strong financial results from our domestic barge fleet through 2007. Finally, we also expect continued outstanding performance from our rental tools segment, as the benefits of our organic expansion and capital investment in Quail Tools are realized. Importantly, we experienced no lost-time accidents during the quarter. Safety is essential to recruiting and retaining the best people. Parker's preferred drilling solutions deliver a lower total cost of drilling through efficient, safe operations and drilling quality wells. We expect our competitive advantage to drive continued improvements in utilization and profits into 2007."
Parker has scheduled a conference call at 10:00 a.m. CDT (11:00 a.m. EDT) May 8, 2007 to discuss first quarter 2007 results. Those interested in participating in the call may dial in at (303) 262-2138. The conference call replay can be accessed from May 8 through May 15 by dialing (800) 405-2236 and using the access code 11088402#. Alternatively, the call can be accessed live through the Company's website at http://www.parkerdrilling.com and will be archived on the site for 12 months.
This release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Securities Acts. All statements, other than statements of historical facts, that address activities, events or developments that the Company expects, projects, believes or anticipates will or may occur in the future, including earnings per share guidance, the outlook for rig utilization and dayrates, general industry conditions including demand for drilling and customer spending, competitive advantages including cost effective integrated solutions, future technological innovation, future operating results of the Company's rigs and rental tool operations, capital expenditures, expansion and growth opportunities, asset sales, successful negotiation of contracts, strengthening of financial position, increase in market share and other such matters, are forward-looking statements. Although the Company believes that its expectations stated in this release are based on reasonable assumptions, actual results may differ materially from those expressed or implied in the forward-looking statements. For a detailed discussion of risk factors that could cause actual results to differ materially from the Company's expectations, please refer to the Company's reports filed with the SEC, and in particular, the report on Form 10-K for the year ended December 31, 2006. Each forward-looking statement speaks only as of the date of this release, and the Company undertakes no obligation to publicly update or revise any forward- looking statement.
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Statements of Operations
(Unaudited)
Three Months Ended March 31,
2007 2006
(Dollars in Thousands)
DRILLING AND RENTAL REVENUES
U.S. Drilling $61,624 $40,253
International Drilling 59,674 79,830
Rental Tools 29,975 27,251
TOTAL DRILLING AND RENTAL REVENUES 151,273 147,334
DRILLING AND RENTAL OPERATING EXPENSES
U.S. Drilling 26,761 18,259
International Drilling 45,783 62,575
Rental Tools 11,163 10,470
Depreciation and Amortization 18,059 16,957
TOTAL DRILLING AND RENTAL OPERATING EXPENSES 101,766 108,261
TOTAL DRILLING AND RENTAL OPERATING INCOME 49,507 39,073
General and Administrative Expense (5,888) (5,702)
Gain on Disposition of Assets, Net 16,404 448
TOTAL OPERATING INCOME 60,023 33,819
OTHER INCOME AND (EXPENSE)
Interest Expense (6,330) (9,101)
Change in Fair Value of Derivative Position (381) 813
Interest Income 1,784 1,406
Other Income (Expense) - Net (993) (983)
TOTAL OTHER INCOME AND (EXPENSE) (5,920) (7,865)
INCOME BEFORE INCOME TAXES 54,103 25,954
INCOME TAX EXPENSE
Current Tax Expense 22,012 5,563
Deferred Tax Expense 2,097 8,933
TOTAL INCOME TAX EXPENSE 24,109 14,496
NET INCOME $29,994 $11,458
EARNINGS PER SHARE - BASIC
Net Income $0.28 $0.11
EARNINGS PER SHARE - DILUTED
Net Income $0.27 $0.11
AVERAGE COMMON SHARES OUTSTANDING
Basic 107,704,763 104,469,893
Diluted 109,425,555 106,003,562
PARKER DRILLING COMPANY AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(Unaudited)
March 31, December 31,
2007 2006
ASSETS (Dollars in Thousands)
CURRENT ASSETS
Cash and Cash Equivalents $74,124 $92,203
Marketable Securities 83,493 62,920
Accounts and Notes Receivable, Net 123,229 112,359
Rig Materials and Supplies 15,957 15,000
Deferred Costs 5,468 6,662
Deferred income taxes 17,307 17,307
Other Current Assets 11,792 11,123
TOTAL CURRENT ASSETS 331,370 317,574
PROPERTY, PLANT AND EQUIPMENT, NET 471,077 435,473
OTHER ASSETS
Goodwill 100,315 100,315
Deferred Taxes --- 13,405
Other Assets 27,671 34,534
TOTAL OTHER ASSETS 127,986 148,254
TOTAL ASSETS $930,433 $901,301
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current Portion of Long-Term Debt $--- $---
Accounts Payable and Accrued Liabilities 98,891 101,903
TOTAL CURRENT LIABILITIES 98,891 101,903
LONG-TERM DEBT 329,206 329,368
LONG-TERM DEFERRED TAXES 48,982 ---
OTHER LIABILITIES 16,244 10,931
STOCKHOLDERS' EQUITY 437,110 459,099
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $930,433 $901,301
Current Ratio 3.35 3.12
Total Long-Term Debt as a Percent
of Capitalization 43% 42%
Book Value Per Common Share $3.94 $4.17
PARKER DRILLING COMPANY AND SUBSIDIARIES
Selected Financial Data
(Unaudited)
Three Months Ended
March 31 December
2007 2006 2006
DRILLING AND RENTAL REVENUES (Dollars in Thousands)
U.S. Offshore Drilling $55,152 $40,253 $50,830
U.S. Land Drilling 6,472 --- 5,098
International Land Drilling 51,875 66,126 49,146
International Offshore Drilling 7,799 13,704 9,663
Rental Tools 29,975 27,251 31,593
Total Drilling and Rental Revenues 151,273 147,334 146,330
DRILLING AND RENTAL OPERATING EXPENSES
U.S. Offshore Drilling 22,136 18,259 22,696
U.S. Land Drilling 4,625 --- 2,889
International Land Drilling 40,694 50,414 41,909
International Offshore Drilling 5,089 12,161 7,696
Rental Tools 11,163 10,470 12,666
Drilling and Rental Operating
Expenses 83,707 91,304 87,856
DRILLING AND RENTAL OPERATING INCOME
U.S. Offshore Drilling 33,016 21,994 28,134
U.S. Land Drilling 1,847 --- 2,209
International Land Drilling 11,181 15,712 7,237
International Offshore Drilling 2,710 1,543 1,967
Rental Tools 18,812 16,781 18,927
Depreciation and Amortization (18,059) (16,957) (17,605)
Total Drilling and Rental
Operating Income 49,507 39,073 40,869
General and Administrative Expense (5,888) (5,702) (6,773)
Gain on Disposition of Assets, Net 16,404 448 672
TOTAL OPERATING INCOME $60,023 $33,819 $34,768
Marketable Rig Count Summary
As of March 31, 2007
Total
U.S. Land Rigs 4
U.S. Gulf of Mexico Barge Rigs
Workover 3
Intermediate 4
Deep 10
Total U.S. Gulf of Mexico Barge Rigs 17
International Land Rigs
Asia Pacific 9
Africa - Middle East 2
Latin America 3
CIS 8
Total International Land Rigs 22
International Barge Rigs
Mexico 1
Caspian Sea 1
Total International Barge Rigs 2
Total Marketable Rigs 45
Adjusted EBITDA
(Unaudited)
Three Months Ending
March 31, December 31, September 30,
2007 2006 2006
Income (Loss) from Continuing
Operations $29,994 $37,168 $18,639
Adjustments:
Income Tax Expense 24,109 (5,954) 13,173
Total Other Income and Expense 5,920 3,554 8,741
Loss/(Gain) on Disposition
of Assets, Net (16,404) (672) (4,328)
Depreciation and Amortization 18,059 17,605 16,993
Provision for Reduction in Carrying
Value --- --- ---
Adjusted EBITDA $61,678 $51,701 $53,218
Adjusted EBITDA
(Unaudited)
Three Months Ending
June 30, March 31, December 31,
2006 2006 2005
Income (Loss) from Continuing
Operations $13,761 $11,458 $56,707
Adjustments:
Income Tax Expense 14,694 14,496 (39,087)
Total Other Income and Expense 5,731 7,865 10,251
Loss/(Gain) on Disposition
of Assets, Net (2,125) (448) (3,185)
Depreciation and Amortization 17,715 16,957 16,619
Provision for Reduction in Carrying
Value --- --- 2,584
Adjusted EBITDA $49,776 $50,328 $43,889
Adjusted EBITDA
(Unaudited)
Three Months Ending
September 30, June 30, March 31,
2005 2005 2005
Income (Loss) from Continuing
Operations $18,073 $20,194 $3,838
Adjustments:
Income Tax Expense 2,165 3,486 4,852
Total Other Income and Expense 9,627 15,140 9,877
Loss/(Gain) on Disposition
of Assets, Net (5,943) (15,898) (552)
Depreciation and Amortization 16,563 17,146 16,876
Provision for Reduction in Carrying
Value 2,300 --- ---
Adjusted EBITDA $42,785 $40,068 $34,891
SOURCE Parker Drilling Company
Released May 8, 2007