HOUSTON, May 6 /PRNewswire-FirstCall/ -- Parker Drilling Company
(NYSE: PKD), a global drilling contractor and service provider,
today reported financial and operating results for the 2009 first
quarter. For the period, Parker Drilling reported net income of
$2.1 million or $0.02 per diluted share on revenues of $173.9
million. Excluding non-routine items the Company reported net
income of $5.6 million or $0.05 per diluted share. (A
reconciliation of net income excluding non-routine items is
provided in the attached financial tables). Significant results and
achievements of the first quarter include: -- Revenues of $173.9
million, on par with the prior year's first quarter, with revenue
increases in the International Drilling and Project Management and
Engineering Services segments. Including revenues from the new
Construction Contract segment, these offset declines in U.S.
Drilling and Rental Tools; -- A significant year-to-year increase
in segment gross margin as a percent of revenues for International
Drilling, reaching 35.7 percent for the quarter; -- International
average rig utilization of 79 percent, ahead of last year's first
quarter average utilization of 73 percent; -- On-schedule progress
in the construction of the BP-owned Liberty rig and two
Parker-owned arctic Alaska rigs; and -- A first quarter company
safety performance of 0.77 Total Recordable Incident Rate (TRIR),
better than the Company's 2009 TRIR goal of 0.92. "In a difficult
market that has impacted every sector of the worldwide energy
industry, Parker delivered a successful performance for the
quarter, supported by our geographical diversification and balanced
business mix," said Robert L. Parker Jr., chairman and chief
executive officer. "The Gulf of Mexico barge business has pared
back its operating costs to sustain itself through the downturn in
its market while capturing a significant portion of the drilling
work that has been available. The longer-term nature and oil
drilling focus of our international operations have provided a
strong boost to revenues and earnings. The impact on Rental Tools
from the decline in U.S. land drilling was softened by its position
in the stronger shale regions and the strength of its customer
relationships. "The industry outlook for 2009 remains subdued, and
will continue to impact the near-term prospects for the Company.
Nevertheless, I expect our operating performance to improve as the
year progresses, as we gain the benefits of a leaner cost
structure; our strong technical, operational and safety leadership
and our employee commitment to customer service," Mr. Parker
concluded. 2009 First Quarter Financial Review For the three months
ended March 31, 2009, Parker Drilling posted net income of $2.1
million, or $0.02 per diluted share, on revenues of $173.9 million,
compared to net income of $23.2 million, or $0.21 per diluted
share, on revenues of $173.3 million for the first quarter 2008.
Excluding the impact of non-routine items, adjusted net income for
the 2009 first quarter was $5.6 million or $0.05 per diluted share,
compared with 2008 first quarter adjusted net income of $18.1
million or $0.16 per diluted share. (The results for 2008 have been
restated for the impact of the recently adopted FASB Staff Position
APB 14-1, "Accounting for Convertible Debt Instruments That May Be
Settled in Cash Upon Conversion (Including Partial Cash
Settlement)"). The 2009 first quarter included non-routine net
after-tax expense of $3.5 million, or $0.03 per diluted share
related to the previously disclosed investigations by the
Department of Justice and the Securities and Exchange Commission
regarding the Company's utilization of the services of a customs
agent in certain countries and an internal investigation regarding
U.S. economic sanctions related primarily to the Company's
operations in Turkmenistan. The results for the first quarter 2008
included net after-tax income of $5.1 million, or $0.05 per diluted
share, for non-routine items. (Details of the non-routine items are
provided in the attached financial tables.) Total revenues for the
2009 first quarter were relatively unchanged compared to the same
period last year. U.S. Barge Drilling revenues declined 78 percent,
to $9.9 million from $45.9 million, due to lower utilization and
dayrates for the Gulf of Mexico barge drilling fleet. International
Drilling revenues rose 13 percent to $77.4 million from $68.7
million, primarily the result of higher average fleet utilization.
Rental Tools revenues decreased 4 percent to $37.9 million from
$39.5 million, with the impact of the recent decline in U.S. land
and Gulf of Mexico shelf drilling mostly offset by increased
coverage in the active shale regions and an increase in demand for
workover equipment. Revenues for Project Management and Engineering
Services increased to $32.1 million from $19.2 million, primarily
as a result of higher revenues from the Sakhalin projects and
additional engineering and operations and maintenance (O&M)
services. Construction Contract segment revenues of $16.7 million
reflect the quarter's progress on the construction contract for the
BP-owned Liberty ultra-extended-reach rig. Adjusted EBITDA for the
first quarter 2009 was $39.7 million compared to $61.0 million in
the first quarter 2008. (Adjusted EBITDA is a non-GAAP financial
measure. The calculations of adjusted EBITDA and reconciliation to
the most directly comparable GAAP measure are shown on the attached
tables). The Company's U.S. Barge Drilling segment's EBITDA was a
loss of $3.3 million, compared to income of $24.4 million in the
prior year's first quarter, reflecting the impact of lower
utilization and dayrates. The International Drilling segment's
EBITDA increased 71 percent to $27.6 million, compared to first
quarter 2008 segment EBITDA of $16.1 million, primarily the result
of an increase in fleet utilization and lower operating costs.
Rental Tools achieved segment EBITDA of $21.4 million, 9 percent
below the prior year first quarter segment EBITDA of $23.7 million.
Delivering high quality products and customer service has provided
support to strong operating margins for Quail Tools. Segment EBITDA
for Project Management and Engineering Services increased 75
percent to $6.2 million, compared to the prior year's first quarter
level of $3.5 million, reflecting higher revenues for the Sakhalin
projects and additional O&M and engineering projects.
Operations Review -- Average utilization for the Company's Gulf of
Mexico barge rigs for the first quarter 2009 was 25 percent,
compared to the 77 percent reported for the first quarter 2008 and
the 61 percent reported for the fourth quarter 2008. Currently,
barge rig utilization is 40 percent. The Company's barge dayrates
in the Gulf of Mexico averaged $28,000 per day during the first
quarter 2009, compared to $41,200 per day in the first quarter 2008
and $39,400 per day in the fourth quarter 2008. (Average dayrates
for each classification of barge by quarter are available in the
"Dayrates - GOM" schedule posted on Parker's Web site under
"Investor Relations" at "Quarterly Support Materials".) -- Average
utilization of international rigs, both land and barge rigs, for
the first quarter 2009 was 79 percent, compared to 73 percent
reported for the first quarter 2008 and 87 percent reported for the
fourth quarter 2008. (Average utilization for each international
region's rig fleet by quarter is available in the "Rig Utilization
Schedule" posted on Parker's Web site under "Investor Relations" at
"Quarterly Support Materials".) -- The Company's Americas region
operated at 90 percent utilization, with nine of ten rigs working
throughout the quarter. Most of the working rigs in this region are
on multi-well contracts that extend beyond 2009. -- Parker's twelve
rigs located in the Commonwealth of Independent States / Africa
Middle East (CIS / AME) region achieved average utilization of 86
percent during the quarter. Eleven rigs worked during the quarter,
with one rig completing its contracted work in January. The
majority of the working rigs in the CIS / AME region are operating
under contracts that extend beyond 2009. -- The eight-rig Parker
fleet located in the Asia Pacific region operated at 64 percent
utilization during the quarter. Five of the eight rigs worked
during the quarter, one of which completed its contracted work in
January. Most contracts in this region are for short duration
projects. One working rig is on a contract that extends beyond
2009. -- In Project Management and Engineering Services, the
Yastreb rig, operated by Parker Drilling for the Sakhalin-1
consortium, completed its move north and spent much of the first
quarter preparing to drill the Odoptu field. Capital expenditures
for the three months ended March 31, 2009 totaled $51.4 million,
including $17.5 million for the construction of Parker's two
newbuild land rigs for Alaska; and $17.2 million for tubular goods
and other rental equipment. At the end of the period total debt was
$446.5 million, and the Company's total debt-to-capitalization
ratio was 43.2 percent. Adjusted for the Company's cash and cash
equivalents balance of $148.4 million at March 31, 2009, Parker's
ratio of net-debt-to-net capitalization increased to 33.7 percent
from 31.6 percent at the end of 2008. The Company's $50 million
term loan begins to amortize at $3.0 million per quarter beginning
the third quarter 2009, while the remaining components of the
Company's debt do not mature until 2012 and 2013. Conference Call
Parker Drilling has scheduled a conference call at 10:00 a.m. CDT
(11:00 a.m. EDT) on Wednesday, May 6, 2009 to discuss first quarter
2009 results. Those interested in listening to the call by
telephone may do so by dialing (303) 228-2964. Alternatively, the
call can be accessed through the Investor Relations section of the
Company's Web site at http://www.parkerdrilling.com/. A replay of
the call will be available by telephone from May 6 through May 13
by dialing (303) 590-3000 and using the access code 11130198#, and
for 12 months on the Company's Web site. 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 and the factors affecting
demand, competitive advantages including cost effective integrated
solutions and technological innovation, 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 and execution 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 due to certain risk factors, including
the ongoing credit crisis which has created volatility in oil and
natural gas prices and could result in reduced demand for drilling
services. 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, 2008. 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 Balance
Sheets March 31, 2009 December 31, 2008 --------------
----------------- (Unaudited) ASSETS (Dollars in Thousands) CURRENT
ASSETS Cash and Cash Equivalents $148,403 $172,298 Accounts and
Notes Receivable, Net 182,333 186,164 Rig Materials and Supplies
30,201 30,241 Deferred Costs 7,044 7,804 Deferred Income Taxes
9,735 9,735 Other Current Assets 61,546 67,049 ------ ------ TOTAL
CURRENT ASSETS 439,262 473,291 ------- ------- PROPERTY, PLANT AND
EQUIPMENT, NET 707,128 675,548 OTHER ASSETS Deferred Income Taxes
25,852 22,956 Other Assets 33,060 33,925 ------ ------ TOTAL OTHER
ASSETS 58,912 56,881 ------ ------ TOTAL ASSETS $1,205,302
$1,205,720 ========== ========== LIABILITIES AND STOCKHOLDERS'
EQUITY CURRENT LIABILITIES Current Portion of Long-Term Debt $9,000
$6,000 Accounts Payable and Accrued Liabilities 145,635 152,528
------- ------- TOTAL CURRENT LIABILITIES 154,635 158,528 -------
------- LONG-TERM DEBT 437,464 435,394 LONG-TERM DEFERRED TAX
LIABILITY 7,133 8,230 OTHER LONG-TERM LIABILITIES 19,342 21,396
STOCKHOLDERS' EQUITY 586,728 582,172 ---------- ---------- TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY $1,205,302 $1,205,720
========== ========== Current Ratio 2.84 2.99 Total Debt as a
Percent of Capitalization 43% 43% Book Value Per Common Share $5.04
$5.13 PARKER DRILLING COMPANY AND SUBSIDIARIES Consolidated
Condensed Statements of Operations (Unaudited) Three Months Ended
March 31, ----------------- 2009 2008 ---- ---- (Dollars in
Thousands) REVENUES: U.S. Drilling $9,856 $45,888 International
Drilling 77,381 68,740 Project Management and Engineering Services
32,054 19,179 Construction Contract 16,745 - Rental Tools 37,889
39,471 ------ ------ TOTAL REVENUES 173,925 173,278 ------- -------
OPERATING EXPENSES: U.S. Drilling 13,136 21,522 International
Drilling 49,777 52,621 Project Management and Engineering Services
25,894 15,661 Construction Contract 15,914 - Rental Tools 16,454
15,818 Depreciation and Amortization 27,124 26,166 ------ ------
TOTAL OPERATING EXPENSES 148,299 131,788 ------- ------- TOTAL
OPERATING GROSS MARGIN 25,626 41,490 ------ ------ General and
Administrative Expense (13,060) (6,668) Gain on Disposition of
Assets, Net 78 579 -- --- TOTAL OPERATING INCOME 12,644 35,401
------ ------ OTHER INCOME AND (EXPENSE): Interest Expense (8,066)
(6,837) Interest Income 286 368 Equity in Loss of Unconsolidated
Joint Venture and Related Charges, net of tax - (1,105) Other
Income (12) 60 --- -- TOTAL OTHER INCOME AND (EXPENSE) (7,792)
(7,514) ------ ------ INCOME BEFORE INCOME TAXES 4,852 27,887 -----
------ INCOME TAX EXPENSE (BENEFIT) Current 6,738 (10,643) Deferred
(3,992) 15,328 ------ ------ TOTAL INCOME TAX EXPENSE (BENEFIT)
2,746 4,685 ----- ----- NET INCOME $2,106 $23,202 ====== =======
EARNINGS PER SHARE - BASIC Net Income $0.02 $0.21 EARNINGS PER
SHARE - DILUTED Net Income $0.02 $0.21 NUMBER OF COMMON SHARES USED
IN COMPUTING EARNINGS PER SHARE Basic 112,260,517 110,546,311
Diluted 113,366,444 111,481,301 PARKER DRILLING COMPANY AND
SUBSIDIARIES Selected Financial Data (Unaudited) Three Months Ended
------------------------------ March 31, December 31, -------------
------------ 2009 2008 2008 ---- ---- ---- (Dollars in Thousands)
REVENUES: U.S. Drilling $9,856 $45,888 $33,634 International
Drilling 77,381 68,740 86,211 Project Management and Engineering
Services 32,054 19,179 37,928 Construction Contract 16,745 - 8,911
Rental Tools 37,889 39,471 45,696 ------ ------ ------ Total
Revenues 173,925 173,278 212,380 ------- ------- ------- OPERATING
EXPENSES: U.S. Drilling 13,136 21,522 18,929 International Drilling
49,777 52,621 58,494 Project Management and Engineering Services
25,894 15,661 29,858 Construction Contract 15,914 - 8,442 Rental
Tools 16,454 15,818 17,034 ------ ------ ------ Total Operating
Expenses 121,175 105,622 132,757 ------- ------- ------- OPERATING
GROSS MARGIN: U.S. Drilling (3,280) 24,366 14,705 International
Drilling 27,604 16,119 27,717 Project Management and Engineering
Services 6,160 3,518 8,070 Construction Contract 831 - 469 Rental
Tools 21,435 23,653 28,662 Depreciation and Amortization (27,124)
(26,166) (31,961) ------- ------- ------- Total Operating Gross
Margin 25,626 41,490 47,662 General and Administrative Expense
(13,060) (6,668) (10,288) Impairment of Goodwill - - (100,315) Gain
on Disposition of Assets, Net 78 579 683 ------- ------- --------
TOTAL OPERATING INCOME (LOSS) $12,644 $35,401 $(62,258) =======
======= ======== Marketable Rig Count Summary As of March 31, 2009
Total ----- U.S. Gulf of Mexico Barge Rigs Workover 2 Intermediate
3 Deep 10 -- Total U.S. Gulf of Mexico Barge Rigs 15 International
Land and Barge Rigs Asia Pacific 8 Americas 10 CIS/AME 12 Other 1 -
Total International Land and Barge Rigs 31 -- Total Marketable Rigs
46 == Adjusted EBITDA (Unaudited) (Dollars in Thousands) Three
Months Ended
----------------------------------------------------------- March
31, December 31, September 30, June 30, March 31, 2009 2008 2008
2008 2008 --------- ------------ ------------- -------- ---------
Previously Reported Net Income (Loss) $2,106 $(39,477) $18,551
$22,596 $23,888 Restated Interest Expense, Net of Tax - Per APB
14-1 - (724) (721) (699) (686) ------ ---- ---- ---- ---- Restated
Net Income (Loss) 2,106 (40,201) 17,830 21,897 23,202 Adjustments:
Income Tax (Benefit) Expense 2,746 (31,178) 19,673 13,762 4,685
Total Other Income and Expense 7,792 9,121 6,344 6,531 7,514
Loss/(Gain) on Disposition of Assets, Net (78) (683) (799) (636)
(579) Impairment of Goodwill - 100,315 Depreciation and
Amortization 27,124 31,961 30,663 28,166 26,166 Provision for
Reduction in Carrying Value of Certain Assets - - - - - ------
------ ------ ------ ------ Adjusted EBITDA $39,690 $69,335 $73,711
$69,720 $60,988 ======= ======= ======= ======= ======= Three
Months Ended ---------------------------------------------------
December 31, September 30, June 30, March 31, 2007 2007 2007 2007
------------- ------------- --------- --------- Previously Reported
Net Income (Loss) $34,571 $22,653 $16,860 $29,994 Restated Interest
Expense, Net of Tax - Per APB 14-1 (670) (562) - - ---- ---- -----
------ Restated Net Income (Loss) 33,901 22,091 16,860 29,994
Adjustments: Income Tax (Benefit) Expense (21,830) 18,803 15,813
24,109 Total Other Income and Expense 31,385 9,706 4,231 5,920
Loss/(Gain) on Disposition of Assets, Net 784 (543) (269) (16,404)
Impairment of Goodwill Depreciation and Amortization 25,059 23,043
19,642 18,059 Provision for Reduction in Carrying Value of Certain
Assets 371 1,091 - - --- ----- ------ ----- Adjusted EBITDA $69,670
$74,191 $56,277 $61,678 ======= ======= ======= ======= PARKER
DRILLING COMPANY AND SUBSIDIARIES Reconciliation of Non-Routine
Items * (Unaudited) (Dollars in Thousands, except Per Share) Three
Months Ending March 31, 2009 -------------- Net income $2,106
Earnings per diluted share $0.02 Adjustments: DOJ investigation
5,308 ----- Total adjustments $5,308 Tax effect of non-routine
adjustments (1,858) ------ Net non-routine adjustments $3,450
------ Adjusted net income $5,556 ====== Adjusted earnings per
diluted share $0.05 ===== Three Months Ending March 31, 2008
-------------- Previously reported net income $23,888 Previously
reported earnings per diluted share $0.21 Restated interest
expense, net of tax - per APB 14-1 $(686) Restated net income
$23,202 Restated earnings per share $0.21 Adjustments: Saudi Arabia
$1,105 FIN 48 tax benefit - Kazakhstan (10,560) PNG tax 4,127 DOJ
investigation 441 --- Total adjustments $(4,887) Tax effect of
non-routine adjustments (175) ---- Net non-routine adjustments
$(5,062) ------- Adjusted net income $18,140 ======= Adjusted
earnings per diluted share $0.16 ===== * Adjusted net income, a
non-GAAP financial measure, excludes items that management believes
are of a non-routine nature and which detract from an understanding
of normal operating performance and comparisons with other periods.
Management also believes that results excluding these items are
more comparable to estimates provided by securities analysts and
used by them in evaluating the Company's performance.
http://www.newscom.com/cgi-bin/prnh/20050620/PARKERDRILLINGLOGO
http://photoarchive.ap.org/ DATASOURCE: Parker Drilling Company
CONTACT: Media, Rose Maltby, +1-281-406-2212, or Investors, Richard
Bajenski, +1-281-406-2030, both of Parker Drilling Company Web
Site: http://www.parkerdrilling.com/
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