HOUSTON, Feb. 18, 2015 /PRNewswire/ -- Key Energy
Services, Inc. (NYSE: KEG) reported fourth quarter 2014
consolidated revenues of $354.8
million and a pre-tax GAAP loss of $80.8 million, or $0.34 per share. The results for the fourth
quarter include a pre-tax charge of $31.7
million, or $0.13 per share,
for a true-up to the impairment charge of the Company's U.S. assets
taken in the third quarter and an additional impairment of the
Company's goodwill in the fourth quarter, pre-tax costs of
$19.6 million, or $0.08 per share, related to the previously
disclosed Foreign Corrupt Practices Act ("FCPA") investigations and
a pre-tax loss of $3.7 million, or
$0.02 per share, on the disposal of
obsolete assets. Excluding these items, the Company reported a
pre-tax loss of $24.7 million, or
$0.10 per share. Third quarter 2014
consolidated revenues were $365.8
million with a pre-tax GAAP loss of $97.0 million, or $0.41 per share. The results for the third
quarter included a pre-tax charge of $60.8
million, or $0.25 per share,
for an impairment of the Company's U.S. assets and pre-tax costs of
$16.1 million, or $0.07 per share, related to the FCPA
investigations. Excluding these two items, in the third quarter the
Company reported a pre-tax loss of $20.1
million, or $0.08 per share.
The following table sets forth summary data for
the fourth quarter 2014 and prior comparable quarterly periods.
|
|
Three Months
Ended (unaudited)
|
|
|
December
31,
2014
|
|
September
30,
2014
|
|
December
31,
2013
|
|
|
(in
millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$ 354.8
|
|
|
|
$ 365.8
|
|
|
|
$362.2
|
|
Loss attributable to
Key
|
|
(52.3)
|
|
|
|
(62.2)
|
|
|
|
(12.5)
|
|
Diluted loss per
share attributable to Key
|
|
(0.34)
|
|
|
|
(0.41)
|
|
|
|
(0.08)
|
|
Adjusted
EBITDA*
|
|
16.1
|
|
|
|
28.1
|
|
|
|
57.3
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
For the full-year 2014, consolidated revenues were $1.43 billion, down 10.3% compared to
$1.59 billion for the full-year 2013.
Full-year 2014 GAAP net loss was $178.6
million, or $1.16 per share,
compared to full-year 2013 GAAP net loss of $21.8 million, or $0.14 per share.
The following table sets forth summary data from continuing
operations for the full-year 2014 and 2013.
|
|
Twelve
Months Ended
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
(unaudited)
|
|
|
|
|
|
(in millions,
except per share amounts)
|
Revenues
|
|
$1,427.3
|
|
|
|
$1,591.7
|
|
|
Income attributable
to Key
|
|
(178.6)
|
|
|
|
(21.8)
|
|
|
Diluted loss per
share attributable to Key
|
|
(1.16)
|
|
|
|
(0.14)
|
|
|
Adjusted EBITDA
(unaudited)*
|
|
124.1
|
|
|
|
268.4
|
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
U.S. Results
We revised our reporting segments as of the
fourth quarter of 2014. The revised reporting segments are U.S. Rig
Services, Fluid Management Services, Coiled Tubing Services,
Fishing and Rental Services, all of which previously comprised our
U.S. Segment, along with our Functional Support and International
Segments, which are unchanged.
Fourth quarter 2014 U.S. Rig Services revenues of
$166.1 million were down 6.8% as
compared to the third quarter of 2014. Fourth quarter operating
income was $20.9 million, or 12.6% of
revenue, compared to third quarter operating income of $28.1 million, or 15.8% of revenue. Fourth
quarter results were impacted by seasonal effects, including
holidays and severe weather in certain of our principal operating
regions. Although revenue for this segment was down
sequentially, our largest well service rigs exhibited strong
performance with activity up 3% sequentially, driven by growing
demand in horizontal well maintenance work.
Fourth quarter 2014 Fluid Management Services
revenues of $62.1 million were down
2.7% as compared to the third quarter of 2014. Fourth quarter
operating income was $0.2 million, or
0.3% of revenue, compared to third quarter operating loss of
$0.1 million, or -0.2% of revenue.
Fourth quarter results include a loss on the sale of obsolete frac
tanks in the Bakken of $3.7 million;
excluding this loss, operating income was $3.9 million, or 6.2% of revenue. More efficient
use of our assets helped offset expected seasonal activity declines
and yielded improved results.
Fourth quarter 2014 Fishing & Rental Services
revenues of $54.5 million were down
1.7% as compared to the third quarter of 2014. Fourth quarter
operating loss was $7.2 million, or
-13.1% of revenue, compared to third quarter operating loss of
$55.4 million, or -99.8% of revenue.
During the third and fourth quarters, we recorded impairments of
frac stack and well testing assets, included in our Fishing &
Rental Services segment, of $60.8
million and $12.6 million,
respectively. Excluding these impairments, segment operating income
was $5.4 million, or 9.7% of revenue
in third quarter and $5.4 million, or
10.0% of revenue, in the fourth quarter. Fourth quarter results for
our traditional fishing and rental services were impacted adversely
by typical seasonal effects, however, improved operational
execution in our frac stack and well testing services helped to
offset these seasonal factors.
Fourth quarter 2014 Coiled Tubing Services
revenues of $43.5 million were up
2.7% as compared to the third quarter of 2014. Fourth quarter
operating loss was $16.4 million, or
-37.7% of revenue, compared to third quarter operating income of
less than $0.1 million, or 0.0% of
revenue. Fourth quarter results include an impairment of
$19.1 million to the goodwill of this
segment; excluding this impairment, operating income was
$2.7 million, or 6.2% of revenue.
Fourth quarter results improved as compared to the third quarter as
two previously out-of-service 2 3/8" coiled tubing units returned
to service, helping to offset typical seasonal factors.
International Segment
Fourth quarter 2014 International revenues were
$28.6 million, up 10.3% as compared
to third quarter 2014 revenues of $26.0
million. Fourth quarter operating loss was $8.8 million, or -30.9% of revenues, compared to
third quarter operating loss of $9.3
million, or -35.7% of revenues. The contract that was
awarded to Key by PEMEX in the third quarter contributed to the
sequential revenue improvement. Costs associated with readying
previously idle rigs to work under this contract offset the profit
generation from our new contract.
General and Administrative
Expenses
General and Administrative (G&A) expenses
were $73.7 million for the fourth
quarter compared to $65.2 million in
the prior quarter. The sequential increase was partly attributable
to expenses associated with the FCPA investigation, which increased
by $3.5 million in the fourth
quarter. The Special Committee of our Board of Directors currently
expects to substantially complete the fact-finding phase of its
FCPA investigation by the end of March
2015.
Capital Expenditures and Balance Sheet
Capital expenditures were $53.5 million during the fourth quarter 2014 and
$161.6 for the full-year 2014. Key's
consolidated cash balance at December 31,
2014 was $27.3 million
compared to $57.4 million at
September 30, 2014. Total debt at
December 31, 2014 was $748.4 million compared to total debt of
$758.6 million at September 30, 2014. At the end of the quarter,
there was $279.6 million available
under the Company's $400 million
senior secured credit facility. Net debt to total capitalization at
December 31, 2014 was 39.9%.
Overview and Outlook
Key's Chairman, President and Chief Executive
Officer, Dick Alario, stated, "We
are pleased that several of our U.S. segments were able to achieve
improved financial performance in the face of adverse seasonal
conditions due to better operational execution. I'd like to thank
Key's managers and employees for their on-going efforts to improve
our Company's performance.
"As conditions in the U.S. services market are
unfolding in 2015, we are enacting a series of cost cutting
initiatives at both the corporate and field levels, which include
fixed-cost, headcount and wage reductions, along with supply-chain
efficiencies, in order to help mitigate margin pressures our
businesses will face in this market.
"We see the economic rationale for our customers
to exploit existing wellbores as one of the few resilient service
opportunities in the U.S. landscape, and we also see it at the core
of Key's future. Further, we expect that as the secular trend of
the aging horizontal wellbore continues, the importance of our
services will continue to grow, perhaps even more so in a moderated
oil price environment, and Key has positioned itself to capitalize
on this element of production maintenance demand. We believe that
we are taking the appropriate actions, including sizing our cost
structure to survive this downturn and preserving capital, to
emerge a stronger company."
Conference Call Information
As previously announced, Key management will host
a conference call to discuss its fourth quarter and full-year 2014
financial results on Thursday, February 19,
2015 at 10:00 a.m. CST.
Callers from the U.S. and Canada
should dial 888-794-4637 to access the call. International callers
should dial 660-422-4879. All callers should ask for the "Key
Energy Services Conference Call" or provide the access code
69570008. The conference call will also be available live via the
internet. To access the webcast, go to www.keyenergy.com and select
"Investor Relations."
A telephonic replay of the conference call will
be available on Thursday, February 19,
2015, beginning approximately two hours after the completion
of the conference call and will remain available for one week. To
access the replay, call 855-859-2056 or 800-585-8367. The access
code for the replay is 69570008. The replay will also be accessible
at www.keyenergy.com under "Investor Relations" for a period of at
least 90 days.
Consolidated
Statements of Operations (in thousands, except per share amounts,
unaudited):
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
December
31,
2014 (1)
|
|
September
30,
2014 (1)
|
|
December
31,
2013 (1)
|
|
December
31,
2014 (1)
|
|
December
31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
REVENUES
|
|
$ 354,802
|
|
$ 365,798
|
|
$
362,164
|
|
$
1,427,336
|
|
$1,591,676
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND
EXPENSES:
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses
|
|
266,354
|
|
272,112
|
|
259,881
|
|
1,059,651
|
|
1,114,462
|
Depreciation and amortization expense
|
|
46,535
|
|
50,924
|
|
55,934
|
|
200,738
|
|
225,297
|
General and administrative expenses
|
|
73,675
|
|
65,224
|
|
48,107
|
|
249,646
|
|
221,753
|
Impairment expense
|
|
31,697
|
|
60,792
|
|
-
|
|
121,176
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income (loss)
|
|
(63,459)
|
|
(83,254)
|
|
(1,758)
|
|
(203,875)
|
|
30,164
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net of amounts capitalized
|
|
13,830
|
|
13,417
|
|
13,602
|
|
54,227
|
|
55,204
|
Other (income) loss, net
|
|
3,463
|
|
348
|
|
75
|
|
1,009
|
|
(803)
|
|
|
(80,752)
|
|
(97,019)
|
|
(15,435)
|
|
(259,111)
|
|
(24,237)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit
|
|
28,448
|
|
34,790
|
|
2,917
|
|
80,483
|
|
3,064
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(52,304)
|
|
(62,229)
|
|
(12,518)
|
|
(178,628)
|
|
(21,173)
|
|
|
|
|
|
|
|
|
|
|
|
Income attributable to noncontrolling interest
|
|
-
|
|
-
|
|
-
|
|
-
|
|
595
|
|
|
|
|
|
|
|
|
|
|
|
LOSS
ATTRIBUTABLE TO KEY
|
|
$ (52,304)
|
|
$ (62,229)
|
|
$
(12,518)
|
|
$
(178,628)
|
|
$ (21,768)
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share
attributable to Key:
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$ (0.34)
|
|
$
(0.41)
|
|
$
(0.08)
|
|
$
(1.16)
|
|
$ (0.14)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
153,501
|
|
153,550
|
|
152,335
|
|
153,371
|
|
152,271
|
|
|
|
|
|
|
|
|
|
|
|
1)
Unaudited
|
|
|
|
|
|
|
|
|
|
|
Condensed
Consolidated Balance Sheets (in thousands):
|
|
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$ 27,304
|
|
$ 28,306
|
|
Other current
assets
|
|
406,491
|
|
477,847
|
|
|
|
|
|
|
|
Total current
assets
|
|
433,795
|
|
506,153
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
1,235,258
|
|
1,365,646
|
Goodwill
|
|
582,739
|
|
624,875
|
Other assets,
net
|
|
81,706
|
|
90,796
|
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
$ 2,333,498
|
|
$2,587,470
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
$ 77,631
|
|
$ 58,826
|
|
Other current
liabilities
|
|
164,227
|
|
173,518
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
241,858
|
|
232,344
|
|
|
|
|
|
|
|
Long-term debt, less
current portion
|
|
748,426
|
|
763,981
|
Other non-current
liabilities
|
|
285,151
|
|
340,052
|
|
|
|
|
|
|
|
Equity
|
|
1,058,063
|
|
1,251,093
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
EQUITY
|
|
$ 2,333,498
|
|
$2,587,470
|
Consolidated Cash
Flow Data (in thousands, unaudited):
|
|
|
|
Twelve
Months Ended
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 164,168
|
|
$ 228,643
|
Net cash used in
investing activities
|
|
(146,840)
|
|
(160,881)
|
Net cash used in
financing activities
|
|
(22,058)
|
|
(85,492)
|
Effect of exchange
rates on cash
|
|
3,728
|
|
87
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(1,002)
|
|
(17,643)
|
Cash and cash
equivalents, beginning of period
|
|
28,306
|
|
45,949
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$ 27,304
|
|
$ 28,306
|
|
|
|
|
|
Segment Revenue
and Operating Income (in thousands, except for percentages,
unaudited):
|
|
|
|
Three Months
Ended (Unaudited)
|
Revenues
|
|
|
December 31,
2014
|
|
September
30, 2014
|
|
December 31,
2013
|
|
|
|
|
|
|
|
|
U.S Rig
Services
|
|
|
$ 166,095
|
|
$ 178,220
|
|
$ 165,964
|
Fluid Management
Services
|
|
|
62,096
|
|
63,818
|
|
64,214
|
Coiled Tubing
Services
|
|
|
43,452
|
|
42,309
|
|
41,152
|
Fishing & Rental
Services
|
|
|
54,546
|
|
55,502
|
|
52,754
|
International
|
|
|
28,613
|
|
25,949
|
|
38,080
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
|
$ 354,802
|
|
$ 365,798
|
|
$ 362,164
|
|
|
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
U.S Rig
Services
|
|
|
$ 20,947
|
|
$ 28,137
|
|
$ 35,485
|
Fluid Management
Services
|
|
|
164
|
|
(142)
|
|
3,802
|
Coiled Tubing
Services
|
|
|
(16,391)
|
|
16
|
|
3,602
|
Fishing & Rental
Services
|
|
|
(7,162)
|
|
(55,415)
|
|
4,078
|
International
|
|
|
(8,839)
|
|
(9,256)
|
|
(20,213)
|
Functional
Support
|
|
|
(52,178)
|
|
(46,594)
|
|
(28,512)
|
|
|
|
|
|
|
|
|
Consolidated Total
|
|
|
$ (63,459)
|
|
$ (83,254)
|
|
$ (1,758)
|
|
|
|
|
|
|
|
|
Operating Income
(Loss) % of Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rig-Based
Services
|
|
|
12.6%
|
|
15.8%
|
|
21.4%
|
Fluid Management
Services
|
|
|
0.3%
|
|
(0.2)%
|
|
5.9%
|
Coiled Tubing
Services
|
|
|
(37.7)%
|
|
0.0%
|
|
8.8%
|
Fishing & Rental
Services
|
|
|
(13.1)%
|
|
(99.8)%
|
|
7.7%
|
International
|
|
|
(30.9)%
|
|
(35.7)%
|
|
(53.1)%
|
Consolidated Total
|
|
|
(17.9)%
|
|
(22.8)%
|
|
(0.5)%
|
|
|
Twelve
Months Ended
|
|
|
December 31,
2014
|
|
December 31,
2013
|
Revenues
|
|
(Unaudited)
|
|
|
|
|
|
|
|
U.S Rig
Services
|
|
$ 679,045
|
|
$ 673,465
|
Fluid Management
Services
|
|
249,589
|
|
271,709
|
Coiled Tubing
Services
|
|
173,364
|
|
193,184
|
Fishing & Rental
Services
|
|
212,598
|
|
238,611
|
International
|
|
112,740
|
|
214,707
|
|
|
|
|
|
Consolidated Total
|
|
$ 1,427,336
|
|
$ 1,591,676
|
|
|
|
|
|
Operating Income
(Loss)
|
|
|
|
|
|
|
|
|
|
U.S Rig
Services
|
|
$ 96,387
|
|
$ 133,558
|
Fluid Management
Services
|
|
3,327
|
|
4,038
|
Coiled Tubing
Services
|
|
(10,819)
|
|
23,427
|
Fishing & Rental
Services
|
|
(58,944)
|
|
31,309
|
International
Operations
|
|
(65,432)
|
|
(26,657)
|
Functional
Support
|
|
(168,394)
|
|
(135,511)
|
|
|
|
|
|
Consolidated Total
|
|
$ (203,875)
|
|
$ 30,164
|
|
|
|
|
|
Operating Income
(Loss) % of Revenues
|
|
|
|
|
|
|
|
|
|
Rig-Based
Services
|
|
14.2%
|
|
19.8%
|
Fluid Management
Services
|
|
1.3%
|
|
1.5%
|
Coiled Tubing
Services
|
|
(6.2)%
|
|
12.1%
|
Fishing & Rental
Services
|
|
(27.7)%
|
|
13.1%
|
International
|
|
(58.0)%
|
|
(12.4)%
|
Consolidated Total
|
|
(14.3)%
|
|
1.9%
|
Following is a reconciliation of net loss as presented in
accordance with United States
generally accepted accounting principles (GAAP) to EBITDA and
Adjusted EBITDA as required under Regulation G of the Securities
Exchange Act of 1934.
Reconciliations of
EBITDA and Adjusted EBITDA to net loss (in thousands, except for
percentages, unaudited):
|
|
|
Three Months
Ended
|
|
|
December 31,
2014
|
|
September
30, 2014
|
|
December 31,
2013
|
|
|
|
|
|
|
|
Net loss
|
|
$
(52,304)
|
|
$
(62,229)
|
|
$ (12,518)
|
Income tax
benefit
|
|
(28,448)
|
|
(34,790)
|
|
(2,917)
|
Interest expense, net
of amounts capitalized
|
|
13,830
|
|
13,417
|
|
13,602
|
Interest
income
|
|
(19)
|
|
(14)
|
|
(90)
|
Depreciation and
amortization
|
|
46,535
|
|
50,924
|
|
55,934
|
|
|
|
|
|
|
|
EBITDA
|
|
$
(20,406)
|
|
$
(32,692)
|
|
$ 54,011
|
|
|
|
|
|
|
|
%
of revenues
|
|
-5.8%
|
|
-8.9%
|
|
14.9%
|
|
|
|
|
|
|
|
Severance
costs
|
|
1,086
|
|
-
|
|
3,337
|
Impairment
expense
|
|
31,697
|
|
60,792
|
|
-
|
Loss on sales of
assets
|
|
3,700
|
|
-
|
|
-
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
$
16,077
|
|
$
28,100
|
|
$ 57,348
|
|
|
|
|
|
|
|
%
of revenues
|
|
4.5%
|
|
7.7%
|
|
15.8%
|
|
|
|
|
|
|
|
Revenues
|
|
$
354,802
|
|
$
365,798
|
|
$ 362,164
|
|
|
|
|
|
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
Net loss
|
|
$ (178,628)
|
|
$ (21,173)
|
Income tax
benefit
|
|
(80,483)
|
|
(3,064)
|
Income attributable
to noncontrolling
interest, excluding depreciation and
amortization
|
|
-
|
|
(1,369)
|
Interest expense, net
of amounts capitalized
|
|
54,227
|
|
55,204
|
Interest
income
|
|
(81)
|
|
(219)
|
Depreciation and
amortization
|
|
200,738
|
|
225,297
|
|
|
|
|
|
EBITDA
|
|
$ (4,227)
|
|
$ 254,676
|
|
|
|
|
|
%
of revenues
|
|
-0.3%
|
|
16.0%
|
|
|
|
|
|
Severance
costs
|
|
3,413
|
|
9,658
|
Impairment
expense
|
|
121,176
|
|
-
|
Cancellation
fees
|
|
-
|
|
1,937
|
Loss on sales of
assets
|
|
3,700
|
|
-
|
Executive
retirement
|
|
-
|
|
2,153
|
|
|
|
|
|
Adjusted
EBITDA*
|
|
$ 124,062
|
|
$ 268,424
|
|
|
|
|
|
%
of revenues
|
|
8.7%
|
|
16.9%
|
|
|
|
|
|
Revenues
|
|
$ 1,427,336
|
|
$ 1,591,676
|
|
|
|
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
|
Three Months Ended
December 31, 2014
|
|
U.S. Rig
Services
|
|
Fluid Management
Services
|
|
Coiled Tubing
Services
|
|
Fishing and Rental
Services
|
|
International
|
|
Functional
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
20,463
|
|
$
(13)
|
|
$ (16,526)
|
|
$
(7,325)
|
|
$ (8,577)
|
|
$
(40,326)
|
|
$ (52,304)
|
Income tax
benefit
|
-
|
|
-
|
|
-
|
|
-
|
|
(2,836)
|
|
(25,612)
|
|
(28,448)
|
Interest expense, net
of amounts capitalized
|
-
|
|
-
|
|
1
|
|
-
|
|
3
|
|
13,826
|
|
13,830
|
Interest
income
|
-
|
|
-
|
|
-
|
|
-
|
|
(18)
|
|
(1)
|
|
(19)
|
Depreciation and
amortization
|
15,024
|
|
7,336
|
|
5,720
|
|
8,358
|
|
6,923
|
|
3,174
|
|
46,535
|
EBITDA
|
$
35,487
|
|
$
7,323
|
|
$ (10,805)
|
|
$
1,033
|
|
$ (4,505)
|
|
$
(48,939)
|
|
$ (20,406)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of revenues
|
21.4%
|
|
11.8%
|
|
-24.9%
|
|
1.9%
|
|
-15.7%
|
|
0.0%
|
|
-5.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
costs
|
29
|
|
86
|
|
9
|
|
-
|
|
241
|
|
721
|
|
1086
|
Impairment
expense
|
-
|
|
-
|
|
19,100
|
|
12,597
|
|
-
|
|
-
|
|
31,697
|
Loss on sales of
assets
|
-
|
|
3,700
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
35,516
|
|
$
11,109
|
|
$ 8,304
|
|
$
13,630
|
|
$ (4,264)
|
|
$
(48,218)
|
|
$ 16,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of revenues
|
21.4%
|
|
17.9%
|
|
19.1%
|
|
25.0%
|
|
-14.9%
|
|
0.0%
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
166,095
|
|
$
62,096
|
|
$ 43,452
|
|
$
54,546
|
|
$ 28,613
|
|
-
|
|
$ 354,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months
Ended December 31, 2014
|
|
U.S. Rig
Services
|
|
Fluid Management
Services
|
|
Coiled Tubing
Services
|
|
Fishing and Rental
Services
|
|
International
|
|
Functional
Support
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
96,922
|
|
3,581
|
|
(10,443)
|
|
(58,794)
|
|
(57,206)
|
|
(152,688)
|
|
(178,628)
|
Income tax
benefit
|
-
|
|
-
|
|
-
|
|
-
|
|
(11,718)
|
|
(68,765)
|
|
(80,483)
|
Interest expense, net
of amounts capitalized
|
-
|
|
-
|
|
-
|
|
-
|
|
32
|
|
54,195
|
|
54,227
|
Interest
income
|
-
|
|
-
|
|
-
|
|
-
|
|
(54)
|
|
(27)
|
|
(81)
|
Depreciation and
amortization
|
59,190
|
|
31,870
|
|
23,375
|
|
44,004
|
|
30,311
|
|
11,988
|
|
200,738
|
EBITDA
|
$
156,112
|
|
$
35,451
|
|
$ 12,932
|
|
$
(14,790)
|
|
$ (38,635)
|
|
$
(155,297)
|
|
$ (4,227)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of revenues
|
23.0%
|
|
14.2%
|
|
7.5%
|
|
-7.0%
|
|
-34.3%
|
|
0.0%
|
|
-0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance
costs
|
122
|
|
86
|
|
9
|
|
32
|
|
2,251
|
|
913
|
|
3,413
|
Impairment
expense
|
-
|
|
-
|
|
19,100
|
|
73,389
|
|
28,687
|
|
-
|
|
121,176
|
Loss on sales of
assets
|
-
|
|
3,700
|
|
-
|
|
-
|
|
-
|
|
-
|
|
3,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA*
|
$
156,234
|
|
$
39,237
|
|
$ 32,041
|
|
$
58,631
|
|
$ (7,697)
|
|
$
(154,384)
|
|
$ 124,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
%
of revenues
|
23.0%
|
|
15.7%
|
|
18.5%
|
|
27.6%
|
|
-6.8%
|
|
0.0%
|
|
8.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
$
679,045
|
|
$
249,589
|
|
$ 173,364
|
|
$
212,598
|
|
$ 112,740
|
|
-
|
|
$1,427,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Adjusted EBITDA
does not exclude costs incurred in connection with the Company's
on-going FCPA investigations.
|
|
|
|
|
|
"EBITDA" is defined as income or loss
attributable to Key before interest, taxes, depreciation, and
amortization.
"Adjusted EBITDA" is EBITDA as further
adjusted for certain non-recurring or extraordinary items such as
loss on debt extinguishment, certain other gains or losses, asset
retirements and impairments, and certain non-recurring transaction
or other costs.
EBITDA and Adjusted EBITDA are non-GAAP
measures that are used as supplemental financial measures by the
Company's management and directors and by external users of the
Company's financial statements, such as investors, to
assess:
- The financial performance of the Company's
assets without regard to financing methods, capital structure or
historical cost basis;
- The ability of the Company's assets to
generate cash sufficient to pay interest on its
indebtedness;
- The Company's operating performance and
return on invested capital as compared to those of other companies
in the well services industry, without regard to financing methods
and capital structure; and
- The Company's operating trends underlying
the items that tend to be of a non-recurring nature.
EBITDA and Adjusted EBITDA have limitations as
analytical tools and should not be considered an alternative to net
income, operating income, cash flow from operating activities, or
any other measure of financial performance or liquidity presented
in accordance with GAAP. EBITDA and Adjusted EBITDA exclude some,
but not all, items that affect net income and operating income and
these measures may vary among other companies. Limitations to using
EBITDA and Adjusted EBITDA as an analytical tool include:
- EBITDA and Adjusted EBITDA do not reflect
Key's current or future requirements for capital expenditures or
capital commitments;
- EBITDA and Adjusted EBITDA do not reflect
changes in, or cash requirements necessary to service, interest or
principal payments on Key's debt;
- EBITDA and Adjusted EBITDA do not reflect
income taxes;
- Although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized will
often have to be replaced in the future, and EBITDA and Adjusted
EBITDA do not reflect any cash requirements for such
replacements;
- Other companies in Key's industry may
calculate EBITDA and Adjusted EBITDA differently than Key does,
limiting their usefulness as a comparative measure; and
- EBITDA and Adjusted EBITDA are a different
calculation from earnings before interest, taxes, depreciation and
amortization as defined for purposes of the financial covenants in
the Company's senior secured credit facility, and therefore should
not be relied upon for assessing compliance with
covenants.
Forward-Looking Statements
This press release contains "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Any statements as to matters that are not of
historic fact are forward-looking statements. These forward-looking
statements are based on Key's current expectations, estimates and
projections about Key, its industry, its management's beliefs and
certain assumptions made by management, and include statements
regarding estimated capital expenditures, future operational and
activity expectations, international growth, and anticipated
financial performance for 2015. No assurance can be given that such
expectations, estimates or projections will prove to have been
correct. Whenever possible, these "forward-looking statements" are
identified by words such as "expects," "believes," "anticipates"
and similar phrases.
Readers are cautioned that any such
forward-looking statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions
that are difficult to predict, including, but not limited to:
risks that Key will be unable to achieve its financial, capital
expenditure and operational projections, including quarterly and
annual projections of revenue and/or operating income and risks
that Key's expectations regarding future activity levels, customer
demand, and pricing stability may not materialize (whether for Key
as a whole or for geographic regions and/or business segments
individually); risks that fundamentals in the U.S. oil and gas
markets may not yield anticipated future growth in Key's
businesses, or could further deteriorate or worsen from the
recent market declines, and/or that Key could experience further
unexpected declines in activity and demand for its rig service,
fluid management service, coiled tubing service, and fishing and
rental service businesses; risks relating to Key's ability to
implement technological developments and enhancements; risks
relating to compliance with environmental, health and safety laws
and regulations, as well as actions by governmental and regulatory
authorities; risks relating to compliance with the FCPA and
anti-corruption laws, including risks related to increased costs in
connection with FCPA investigations; risks regarding the timing or
conclusion of the FCPA investigations; risks affecting Key's
international operations, including risks that Key may not be able
to achieve its international growth and mobilization strategy in
the foreign countries in which Key operates; risks that Key may be
unable to achieve the benefits expected from acquisition and
disposition transactions, and risks associated with integration of
the acquired operations into Key's operations; risks, in responding
to changing or declining market conditions, that Key may not be
able to reduce, and could even experience increases in, the costs
of labor, fuel, equipment and supplies employed and used in Key's
businesses; risks relating to changes in the demand for or the
price of oil and natural gas; risks that Key may not be able to
execute its capital expenditure program and/or that any such
capital expenditure investments, if made, will not generate
adequate returns; risks that Key may not be able to refinance its
credit facility as expected; risks that Key may not have sufficient
liquidity; and other risks affecting Key's ability to maintain or
improve operations, including its ability to maintain prices for
services under market pricing pressures, weather risks, and the
impact of potential increases in general and administrative
expenses.
Because such statements involve risks and
uncertainties, many of which are outside of Key's control, Key's
actual results and performance may differ materially from the
results expressed or implied by such forward-looking statements.
Given these risks and uncertainties, readers are cautioned not to
place undue reliance on such forward-looking statements. Other
important risk factors that may affect Key's business, results of
operations and financial position are discussed in its most
recently filed Annual Report on Form 10-K, recent Quarterly Reports
on Form 10-Q, recent Current Reports on Form 8-K and in other
Securities and Exchange Commission filings. Unless otherwise
required by law, Key also disclaims any obligation to update its
view of any such risks or uncertainties or to announce publicly the
result of any revisions to the forward-looking statements made
here. However, readers should review carefully reports and
documents that Key files periodically with the Securities and
Exchange Commission.
About Key Energy Services
Key Energy
Services is the largest onshore, rig-based well servicing
contractor based on the number of rigs owned. Key provides a
complete range of well intervention services and has operations in
all major onshore oil and gas producing regions of the continental
United States and internationally
in Mexico, Colombia, Ecuador, the Middle
East and Russia.
Contact:
West Gotcher, Investor Relations
713-757-5539
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/key-energy-services-reports-fourth-quarter-and-full-year-2014-earnings-300038228.html
SOURCE Key Energy Services, Inc.