Superior Energy Services Announces Second Quarter 2024 Results and Conference Call


HOUSTON, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ended June 30, 2024. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on August 16, 2024.

For the second quarter of 2024, the Company reported net income from continuing operations of $29.5 million, or $1.46 per diluted share, with revenue of $201.1 million. This compares to net income from continuing operations of $37.9 million or $1.88 per diluted share, with revenue of $208.6 million, for the first quarter of 2024.

The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 4) was $60.0 million compared to $68.1 million for the first quarter of 2024. Refer to pages 11 and 12 for a reconciliation of Adjusted EBITDA to GAAP results.

Brian Moore, Chief Executive Officer, commented, “Superior Energy’s second quarter results were consistent with the expectations indicated in our Q1 2024 Earnings Release. Recognizing changing market conditions, particularly in US Land and Latin America, our leaders and their teams’ nimble actions enabled us to deliver expected results. In the second quarter we generated $39 million Free Cash Flow while continuing to support our businesses with nearly $35 million in capital expenditures.”

Second Quarter 2024 Geographic Breakdown

U.S. land revenue was $39.0 million for the second quarter of 2024, a decrease of 16% compared to revenue of $46.5 million for the first quarter of 2024. The decline in U.S. land revenue was primarily driven by decreased activity from our premium drill pipe product line within our Rentals segment, consistent with a reduced U.S. land rig count.

U.S. offshore revenue was $53.8 million in the second quarter of 2024, a decrease of 19% compared to revenue of $66.1 million in the first quarter of 2024. U.S. offshore revenue decreased across both our Rentals and Well Services segments, with the most significant decline coming from our project based completion services product line, which had a strong first quarter of 2024.

International revenue was $108.4 million in the second quarter of 2024, an increase of 13% compared to revenue of $96.0 million in the first quarter of 2024. International revenue was up across both our Rentals and Well Services segments, with the increase being driven by our premium drill pipe business unit in the Rentals segment, and our Kuwait based production services business in the Well Services segment.

Second Quarter 2024 Segment Reporting

The Rentals segment revenue in the second quarter of 2024 was $99.9 million, an 8% decrease compared to revenue of $108.1 million in the first quarter of 2024, primarily due to decreases in U.S. land and U.S. offshore market activity for our premium drill pipe product line. In the second quarter of 2024, Rentals segment income from operations was $44.1 million as compared to $51.2 million in the first quarter of 2024. Adjusted EBITDA was $56.0 million, an 11% decrease from the first quarter of 2024. Adjusted EBITDA Margin (a non-GAAP measure defined on page 4) was 56%, a 2% decrease from the first quarter of 2024.

The Well Services segment revenue in the second quarter of 2024 was $101.2 million, a 1% increase compared to revenue of $100.5 million in the first quarter of 2024. This increase was primarily driven by improvements in our international production services businesses, which were partially offset by a decline in U.S. offshore completion service revenues. In the second quarter of 2024, Well Services segment income from operations was $10.7 million as compared to $13.4 million in the first quarter of 2024. Adjusted EBITDA for the second quarter of 2024 was $19.1 million with an Adjusted EBITDA Margin of 19%, as compared to Adjusted EBITDA of $21.5 million with an Adjusted EBITDA Margin of 21% in the first quarter of 2024.

Liquidity

As of June 30, 2024, the Company had cash, cash equivalents, and restricted cash of approximately $335.3 million. As of June 30, 2024, our borrowing base, as defined in our credit agreement, was approximately $89.4 million, and we had $36.7 million in letters of credit outstanding which reduced the borrowing availability to $52.7 million. At June 30, 2024, we had no outstanding borrowings under our credit facility.

Total cash proceeds received during the second quarter of 2024 from the sale of non-core businesses and assets were $0.7 million compared to total cash proceeds received during the first quarter of 2024 of $2.6 million. Additionally, during the first quarter of 2024, we paid a special cash dividend totaling $250.4 million to our shareholders.

During the second quarter of 2024, net cash from operating activities was $73.8 million. Free Cash Flow (a non-GAAP measure defined on page 4) for the second quarter of 2024 totaled $39.0 million as compared to $68.2 million for the first quarter of 2024. Refer to page 8 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities.

Second quarter 2024 capital expenditures were $34.7 million. The Company expects total capital expenditures for 2024 to be approximately $100 to $110 million. Approximately 89% of total 2024 capital expenditures are targeted for the replacement of existing assets. Of the total estimated 2024 capital expenditures, approximately 68% is expected to be invested in the Rentals segment.

2024 Guidance

We expect the third quarter of 2024 revenue to come in at a range of $190 million to $215 million with Adjusted EBITDA in a range of $55 million to $70 million.

In regard to full year 2024 guidance, we expect revenue to come in at a range of $780 million to $840 million with Adjusted EBITDA in a range of $235 million to $265 million.

Conference Call Information

The Company’s management team will host a conference call on Friday, August 16, 2024, at 10:00 a.m. Eastern Time. The call will be available via live webcast in the “Events” section at ir.superiorenergy.com. To access via phone, participants can register for the call here, where they will be provided a phone number and access code. The call will be available for replay until August 16, 2025 on Superior’s website at ir.superiorenergy.com. If you are a shareholder and would like to submit a question, please email your question beforehand to Jamie Spexarth at ir@superiorenergy.com.

About Superior Energy Services

Superior Energy Services serves the drilling, completion and production-related needs of oil and gas companies worldwide through a diversified portfolio of specialized oilfield services and equipment that are used throughout the economic life cycle of oil and gas wells. For more information, visit: www.superiorenergy.com.

Non-GAAP Financial Measures

To supplement Superior’s consolidated financial statements, which are prepared and presented in accordance with generally accepted accounting principles in the United States (“GAAP”), the Company also uses Adjusted EBITDA and Adjusted EBITDA Margin. Management uses Adjusted EBITDA and Adjusted EBITDA Margin internally for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company also believes these non-GAAP measures provide investors useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Non-GAAP financial measures are not recognized measures for financial statement presentation under U.S. GAAP and do not have standardized meanings and may not be comparable to similar measures presented by other public companies. Adjusted EBITDA and Adjusted EBITDA Margin should be considered as supplements to, and not as substitutes for, or superior to, the corresponding measures calculated in accordance with GAAP. We define Adjusted EBITDA as net income (loss) from continuing activities before net interest expense, income tax expense (benefit) and depreciation, amortization, accretion and depletion, restructuring and transaction expenses, adjusted for other gains and losses and other expenses, net, which management does not consider representative of our ongoing operations. We define Adjusted EBITDA Margin as Adjusted EBITDA by segment as a percentage of segment revenues. For a reconciliation of Adjusted EBITDA to net income, the most directly comparable GAAP financial measure, please see the tables under “―Superior Energy Services, Inc. and Subsidiaries Reconciliation of Adjusted EBITDA” included on pages 11 and 12 of this press release.

Free Cash Flow is defined as net cash from operating activities less payments for capital expenditures. Free Cash Flow is considered a non-GAAP financial measure under the SEC’s rules. Management believes, however, that Free Cash Flow is an important financial measure for use in evaluating the Company’s financial performance, as it measures our ability to generate additional cash from our business operations. Free Cash Flow should be considered in addition to, rather than as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity. Additionally, our definition of Free Cash Flow is limited and does not represent residual cash flows available for discretionary expenditures due to the fact that the measure does not deduct the payments required for debt service and other obligations or payments made for business acquisitions. Therefore, we believe it is important to view Free Cash Flow as supplemental to our entire Statement of Cash Flows.

The Company is unable to provide a reconciliation of the forward-looking non-GAAP financial measure, Adjusted EBITDA, contained in this press release to its most directly comparable GAAP financial measure, net income, as the information necessary for a quantitative reconciliation of the forward-looking non-GAAP financial measure to its respective most directly comparable GAAP financial measure is not (and was not, when prepared) available to the Company without unreasonable efforts due to the inherent difficulty and impracticability of predicting certain amounts required by GAAP with a reasonable degree of accuracy. Net income includes the impact of depreciation, income taxes and certain other items that impact comparability between periods, which may be significant and are difficult to project with a reasonable degree of accuracy. In addition, we believe such reconciliation could imply a degree of precision that might be confusing or misleading to investors. The probable significance of providing this forward-looking non-GAAP financial measure without the directly comparable GAAP financial measure is that such GAAP financial measure may be materially different from the corresponding non-GAAP financial measure.

Forward-Looking Statements

This press release contains, and future oral or written statements or press releases by the Company and its management may contain, certain forward-looking statements within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Generally, the words “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks”, “will,” “could,” “may” and “estimates,” variations of such words and similar expressions identify forward-looking statements, although not all forward-looking statements contain these identifying words. All statements other than statements of historical fact regarding the Company’s financial position and results, financial performance, liquidity, strategic alternatives (including dispositions, acquisitions, and the timing thereof), market outlook, future capital needs, capital allocation plans, business strategies and other plans and objectives of our management for future operations and activities are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company’s management in light of its experience and prevailing circumstances on the date such statements are made. Such forward-looking statements, and the assumptions on which they are based, are inherently speculative and are subject to a number of risks and uncertainties, including but not limited to conditions in the oil and gas industry, U.S. and global market and economic conditions generally and macroeconomic conditions worldwide, (including inflation, interest rates, supply chain disruptions and capital and credit markets conditions) that could cause the Company’s actual results to differ materially from such statements. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of uncertainties and factors, many of which are outside the control of the Company, which could cause actual results to differ materially from such statements.

While the Company believes that the assumptions concerning future events are reasonable, it cautions that there are inherent difficulties in predicting certain important factors that could impact the future performance or results of its business.

These forward-looking statements are also affected by the risk factors, forward-looking statements and challenges and uncertainties described in the Company’s Form 10-K for the year ended December 31, 2023 and subsequent reports on Form 10-Qs and those set forth from time to time in the Company’s other periodic filings with the Securities and Exchange Commission, which are available at www.superiorenergy.com. Except as required by law, the Company expressly disclaims any intention or obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise.

  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
CONSOLIDATED STATEMENTS OF OPERATIONS 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  March 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
                
Rentals $99,851  $108,091  $112,411  $207,942  $221,232 
Well Services  101,230   100,543   132,062   201,773   243,378 
Total revenues  201,081   208,634   244,473   409,715   464,610 
                
Rentals  36,596   37,766   35,021   74,362   71,489 
Well Services  71,672   68,873   85,733   140,545   166,986 
Total cost of revenues  108,268   106,639   120,754   214,907   238,475 
                
Depreciation, depletion, amortization and accretion  20,868   20,447   20,621   41,315   40,760 
General and administrative expenses  33,404   34,975   31,177   68,379   62,167 
Restructuring and transaction expenses  -   -   -   -   1,983 
Other (gains) and losses, net  (614)  (1,082)  47   (1,696)  (1,351)
Income from operations  39,155   47,655   71,874   86,810   122,576 
                
Other income (expense):               
Interest income, net  5,760   6,840   6,513   12,600   11,952 
Other expense  (2,082)  (1,813)  (1,836)  (3,895)  (3,988)
Income from continuing operations before income taxes  42,833   52,682   76,551   95,515   130,540 
Income tax expense  (13,370)  (14,787)  (9,147)  (28,157)  (33,212)
Net income from continuing operations  29,463   37,895   67,404   67,358   97,328 
Income (loss) from discontinued operations, net of income tax  1,896   -   (9)  1,896   280 
Net income $31,359  $37,895  $67,395  $69,254  $97,608 
                
Income per share - basic:               
Net income from continuing operations $1.46  $1.88  $3.35  $3.34  $4.84 
Income (loss) from discontinued operations, net of income tax  0.09   -   -   0.09   0.01 
Net income $1.55  $1.88  $3.35  $3.43  $4.85 
                
Income per share - diluted               
Net income from continuing operations $1.46  $1.88  $3.35  $3.34  $4.83 
Income (loss) from discontinued operations, net of income tax  0.09   -   -   0.09   0.02 
Net income $1.55  $1.88  $3.35  $3.43  $4.85 
                
Weighted-average shares outstanding               
Basic  20,172   20,162   20,126   20,167   20,116 
Diluted  20,183   20,180   20,143   20,181   20,136 


  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
CONSOLIDATED BALANCE SHEETS 
(in thousands, unaudited) 
  June 30,  December 31, 
  2024  2023 
ASSETS      
Current assets:      
Cash and cash equivalents $281,254  $391,684 
Accounts receivable, net  219,488   276,868 
Inventory  66,267   74,995 
Income taxes receivable  12,776   10,542 
Prepaid expenses  25,716   18,614 
Other current assets  7,148   7,922 
Total current assets  612,649   780,625 
Property, plant and equipment, net  309,994   294,960 
Notes receivable  71,443   69,005 
Restricted cash  54,003   85,444 
Deferred tax assets  55,790   67,241 
Other assets, net  42,114   43,718 
Total assets $1,145,993  $1,340,993 
       
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)      
Current liabilities:      
Accounts payable $38,515  $38,214 
Accrued expenses  93,786   103,782 
Income taxes payable  19,841   20,220 
Decommissioning liability  27,485   21,631 
Total current liabilities  179,627   183,847 
Decommissioning liability  147,284   148,652 
Other liabilities  39,790   47,583 
Total liabilities  366,701   380,082 
       
Total equity  779,292   960,911 
Total liabilities and equity $1,145,993  $1,340,993 


  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  March 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
                
Cash flows from operating activities               
Net income $31,359  $37,895  $67,395  $69,254  $97,608 
Adjustments to reconcile net loss to net cash from operating activities:        -       
Depreciation, depletion, amortization and accretion  20,868   20,447   20,621   41,315   40,760 
Other non-cash items  4,205   3,235   8,392   7,440   22,791 
Washington State Tax Settlement  -   -   (27,068)  -   (27,068)
Decommissioning costs  (143)  (430)  (2,878)  (573)  (2,878)
Changes in operating assets and liabilities:  17,487   27,747   (36,780)  45,234   (28,278)
Net cash from operating activities  73,776   88,894   29,682   162,670   102,935 
                
Cash flows from investing activities               
Payments for capital expenditures  (34,744)  (20,698)  (27,540)  (55,442)  (45,626)
Proceeds from sales of assets  669   2,616   3,578   3,285   15,147 
Net cash from investing activities  (34,075)  (18,082)  (23,962)  (52,157)  (30,479)
                
Cash flows from financing activities               
Distributions to shareholders  -   (250,417)  -   (250,417)  - 
Repurchase of shares  -   (962)  -   (962)  - 
Other  -   (1,005)  -   (1,005)  (1,116)
Net cash from financing activities  -   (252,384)  -   (252,384)  (1,116)
Net change in cash, cash equivalents, and restricted cash  39,701   (181,572)  5,720   (141,871)  71,340 
Cash, cash equivalents and restricted cash at beginning of period  295,556   477,128   404,727   477,128   339,107 
Cash, cash equivalents, and restricted cash at end of period $335,257  $295,556  $410,447  $335,257  $410,447 
                
Reconciliation of Free Cash Flow               
Net cash from operating activities $73,776  $88,894  $29,682  $162,670  $102,935 
Payments for capital expenditures  (34,744)  (20,698)  (27,540)  (55,442)  (45,626)
Free Cash Flow $39,032  $68,196  $2,142  $107,228  $57,309 
                
Free Cash Flow is a Non-GAAP measure. See Non-GAAP Measures for our definition of Free Cash Flow. 


  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
REVENUE BY GEOGRAPHIC REGION BY SEGMENT 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  Mar 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
U.S. land               
Rentals $32,713  $39,006  $44,730  $71,719  $89,863 
Well Services  6,242   7,466   5,806   13,708   12,161 
Total U.S. land  38,955   46,472   50,536   85,427   102,024 
                
U.S. offshore               
Rentals  30,644   37,251   37,516   67,895   73,186 
Well Services  23,125   28,872   23,405   51,997   39,726 
Total U.S. offshore  53,769   66,123   60,921   119,892   112,912 
                
International               
Rentals  36,494   31,834   30,165   68,328   58,183 
Well Services  71,863   64,205   102,851   136,068   191,491 
Total International  108,357   96,039   133,016   204,396   249,674 
Total Revenues $201,081  $208,634  $244,473  $409,715  $464,610 


  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
SEGMENT HIGHLIGHTS 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  Mar 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
Revenues               
Rentals $99,851  $108,091  $112,411  $207,942  $221,232 
Well Services  101,230   100,543   132,062   201,773   243,378 
Total Revenues $201,081  $208,634  $244,473  $409,715  $464,610 
                
Income (loss) from Operations               
Rentals $44,061  $51,211  $58,106  $95,272  $111,120 
Well Services  10,686   13,392   27,425   24,078   40,279 
Corporate and other  (15,592)  (16,948)  (13,657)  (32,540)  (28,823)
Income from operations $39,155  $47,655  $71,874  $86,810  $122,576 
                
Adjusted EBITDA               
Rentals $56,023  $63,021  $70,659  $119,044  $135,841 
Well Services  19,078   21,523   34,629   40,601   54,560 
Corporate and other  (15,078)  (16,442)  (12,793)  (31,520)  (25,082)
Total Adjusted EBITDA $60,023  $68,102  $92,495  $128,125  $165,319 
                
Adjusted EBITDA Margin               
Rentals  56%  58%  63%  57%  61%
Well Services  19%  21%  26%  20%  22%
Corporate and other n/a  n/a  n/a  n/a  n/a 
Total Adjusted EBITDA Margin  30%  33%  38%  31%  36%
                
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA and page 12 for a reconciliation to income (loss) from operations 


  
SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
RECONCILIATION OF ADJUSTED EBITDA 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  Mar 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
                
Net income from continuing operations $29,463  $37,895  $67,404  $67,358  $97,328 
Depreciation, depletion, amortization and accretion  20,868   20,447   20,621   41,315   40,760 
Interest income, net  (5,760)  (6,840)  (6,513)  (12,600)  (11,952)
Income tax expense  13,370   14,787   9,147   28,157   33,212 
Restructuring and transaction expenses  -   -   -   -   1,983 
Other losses, net  -   -   -   -    
Other expense, net  2,082   1,813   1,836   3,895   3,988 
Adjusted EBITDA $60,023  $68,102  $92,495  $128,125  $165,319 
                
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA. 
                


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES 
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT 
(in thousands, unaudited) 
                
  Three Months Ended  Six Months Ended 
  June 30,  Mar 31,  June 30,  June 30,  June 30, 
  2024  2024  2023  2024  2023 
Rentals               
Income from operations $44,061  $51,211  $58,106  $95,272  $111,120 
Depreciation, depletion, amortization and accretion  11,962   11,810   12,553   23,772   24,721 
Adjusted EBITDA $56,023  $63,021  $70,659  $119,044  $135,841 
                
Well Services               
Income from operations $10,686  $13,392  $27,425  $24,078  $40,279 
Depreciation, depletion, amortization and accretion  8,392   8,131   7,204   16,523   14,281 
Adjusted EBITDA $19,078  $21,523  $34,629  $40,601  $54,560 
                
Corporate               
Loss from operations $(15,592) $(16,948) $(13,657) $(32,540) $(28,823)
Depreciation, depletion, amortization and accretion  514   506   864   1,020   1,758 
Restructuring and transaction expenses  -   -   -   -   1,983 
Other adjustments  -   -   -   -   - 
Adjusted EBITDA $(15,078) $(16,442) $(12,793) $(31,520) $(25,082)
                
Total               
Income from operations $39,155  $47,655  $71,874  $86,810  $122,576 
Depreciation, depletion, amortization and accretion  20,868   20,447   20,621   41,315   40,760 
Restructuring and transaction expenses  -   -   -   -   1,983 
Other adjustments  -   -   -   -   - 
Adjusted EBITDA $60,023  $68,102  $92,495  $128,125  $165,319 
                
Adjusted EBITDA is a Non-GAAP measure. See Non-GAAP Measures for our definition of Adjusted EBITDA. 
  

FOR FURTHER INFORMATION CONTACT:
Jamie Spexarth, Chief Financial Officer
1001 Louisiana St., Suite 2900
Houston, TX 77002
Investor Relations, ir@superiorenergy.com, (713) 654-2200