Parker Drilling: 2019 2Q Results – Revenue of $156m USD
Parker Drilling Company today announced results for the second quarter ended June 30, 2019, which included a net income of $4.6 million, or diluted earnings of $0.31 per share on revenues of $156.0 million. Second quarter Adjusted EBITDA was $37.8 million (1).
Gary Rich, the Company’s President and CEO, said, “Our second quarter results, as demonstrated by our positive net income and strong Adjusted EBITDA, is a testament to our strong operational execution, ability to capture additional opportunities and improved balance sheet.
“In our rental tools business, our International rentals segment benefited from whipstock sales and continued demand for tubular running services, in particular our proprietary casing running tool. Our U.S. rental tools segment performed admirably in the second quarter in spite of the U.S. land rig count continuing to decline. Despite this softness, the U.S. offshore market continues to show modest signs of strength, and we are confident in our ability to perform well in both the U.S. land and offshore markets this year.
“In our drilling services business, our ongoing shift to more capital efficient and increasingly profitable operating activities supported the second quarter results. We also benefited from ongoing O&M activities and improving rig utilization, in both our U.S. (lower 48) drilling and International and Alaska drilling segments, as rigs returned to service in the inland barge and Mexico markets.
“Despite current market softness in the U.S., our diversified global exposure, ability to adjust capex spending, and improved capital structure provide us the ability to execute on profitable projects and deliver solid returns.”
Second Quarter Review
Revenues were $156.0 million and $157.4 million for the second and first quarter, respectively. Operating gross margin, excluding depreciation and amortization expense (gross margin) was $43.4 million and $36.5 million for the second and first quarter, respectively.
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, revenues were $75.1 million and $73.7 million for the second and first quarter, respectively. Gross margin was $30.6 million and $29.5 million for the second and first quarter, respectively. Gross margin as a percentage of revenues was 40.8 percent and 40.1 percent for the second and first quarter, respectively.
U.S. Rental Tools
U.S. rental tools segment revenues were $52.9 million and $52.6 million for the second and first quarter, respectively. Gross margin was $27.7 million and $29.0 million for the second and first quarter, respectively. Our second-quarter revenues were primarily driven by customer activity in U.S. land and offshore shelf rentals.
International Rental Tools
International rental tools segment revenues were $22.2 million and $21.1 million for the second and first quarter, respectively. Gross margin was $2.9 million and $0.5 million for the second and first quarter, respectively. Our second-quarter revenues were primarily driven by well construction, well intervention services and surface and tubular services.
(1) | Adjusted EBITDA is a non-GAAP financial measure. See the reconciliation and table of net income/(loss) to EBITDA and Adjusted EBITDA later in this release for more information on non-GAAP financial measures. |
Drilling Services
For the Company’s drilling services business, which is comprised of the U.S. (lower 48) drilling and International & Alaska Drilling segments, revenues were $80.9 million and $83.7 million for the second and first quarter, respectively. Gross margin was $12.8 million and $7.0 million for the second and first quarter, respectively. Gross margin as a percentage of revenues was 15.8 percent, and 8.3 percent for the second and first quarter, respectively.
U.S. (Lower 48) Drilling
U.S. (lower 48) drilling segment revenues were $12.5 million and $6.6 million for the second and first quarter, respectively. Gross margin was $2.6 million for the second quarter and a loss of $0.7 million for the first quarter. Our second-quarter revenues were primarily driven by our inland barge rig fleet and operations and management (“O&M”) revenue.
International & Alaska Drilling
International & Alaska drilling segment revenues were $68.5 million and $77.1 million for the second and first quarter, respectively. Gross margin were $10.2 million and $7.7 million for the second and first quarter, respectively. Our second-quarter revenues were primarily driven by O&M revenue and revenue from Company-owned rigs in Sakhalin Island, Russia, Mexico and the Kurdistan region of Iraq.
Consolidated
General and administrative expense was $5.6 million for the 2019 second quarter. Total liquidity at the end of the quarter, exclusive of $2.0 million restricted cash, was $163.9 million, consisting of $139.1 million in unrestricted cash and cash equivalents and $24.8 million available under the Company’s credit facility.
Capital expenditures in the second quarter were $25.1 million, primarily related to the Company’s Rentals Tools Services business.
