Key Energy Services Reports First Quarter 2016 Earnings

HOUSTON, May 9, 2016

• pre-tax costs of $6.8 million, or $0.04 per share, due to severance;
• a pre-tax charge of $5.0 million, or $0.03 per share, due to an accrual associated with the offer of settlement of the previously disclosed Foreign Corrupt Practices Act ("FCPA") investigations;
• pre-tax costs of $2.4 million, or $0.02 per share, related to the FCPA investigations; and
• a pre-tax charge of $2.1 million, or $0.01 per share, related to the loss on sale of certain U.S. assets.

Excluding these items, the Company reported a pre-tax loss of $65.5 million, or $0.41 per share. Due to the Company's net operating loss balance, it is not currently recognizing a tax benefit in 2016, yielding an effective tax rate of 0.3% for the first quarter; assuming a normalized effective tax rate of 36.0%, the Company reported a loss of $0.26 per share, excluding the aforementioned charges.

Fourth quarter 2015 consolidated revenues were $150.2 million with a pre-tax GAAP loss of $157.6 million, or $0.97 per share. The results for the fourth quarter included pre-tax charges of $62.9 million, or $0.39 per share, related to the loss on sale of and impairment of assets primarily associated with the Company's exit from markets outside North America, pre-tax charges of $23.1 million, or $0.14 per share, related to the loss on sale of assets, write-off of certain vendor deposits and a true-up to asset impairments in the third quarter in the Company's U.S. business, pre-tax costs of $2.7 million, or $0.02 per share, related to the FCPA investigations, pre-tax costs of $1.3 million, or $0.01 per share, due to severance and an after-tax charge of $23.5 million, or $0.15 per share of tax expense, related to deferred tax valuation allowances in the markets outside of the U.S. Excluding these items, the Company reported a fourth quarter 2015 pre-tax loss of $67.6 million, or $0.27 per share.

The following table sets forth summary data for the first quarter 2016 and prior comparable quarterly periods.

		Three Months Ended (unaudited)
		March 31, 2016				December 31, 2015 ARIVA.DE Börsen-Geflüster Kurse Key Energy Services -   0,00%				March 31, 2015
		(in millions, except per share amounts)
Revenues		$	111.1			$	150.2			$	267.8
Net loss		(81.6)				(152.5)				(59.7)
Diluted loss per share		(0.51)				(0.97)				(0.39)
Adjusted EBITDA*		(10.7)				(6.7)				0.6

Overview and Outlook

Key's President and Chief Executive Officer, Robert Drummond, stated, "Further deterioration in oil prices early in the first quarter drove another sequential decline in oilfield services activity. Key has remained aggressive in anticipating incremental activity declines and has continued to reshape its organizational structure and resize its cost structure to mitigate the negative impact of these declines. We recognized the potential for lower first quarter activity in the fourth quarter and executed cost reduction measures early in the first quarter at both the field and corporate level. As a result of the actions taken early in the quarter in our business, we were able to limit our normalized operating loss sequential decline, excluding International, to approximately $3 million, even as revenue declined approximately $38 million.

"While we remain diligent in evaluating options to reduce costs and mitigate the use of our liquidity, our liquidity declined by approximately $50 million sequentially as we made two interest payments on our outstanding debt instruments totaling $31.7 million and utilized approximately $18.6 million as restricted cash to supplement our borrowing base under our asset-based credit facility.

"While we believe the recent increase in oil prices is a positive signal relative to the demand for our services by our customers, we've not seen an uptick in activity commensurate with that of oil prices. We do expect, however, that as our customers gain more confidence in the sustainability of oil prices, our production-driven services will benefit as our customers look for capital-efficient avenues to increase production and cash flows.

"Finally, as previously disclosed, Key has been informed by the Department of Justice that the Department has closed its investigation into possible FCPA violations and that it has decided to decline prosecution of the Company. In addition, Key has been engaged in negotiations with the staff of the Division of Enforcement of the SEC in an effort to reach a resolution of the staff's investigation related to these same matters. Key has reached an agreement in principle with the staff on the terms of a proposed offer of settlement, which must be presented to the Commission for approval. In connection with the offer of settlement, Key has accrued a liability in the amount of $5 million."

U.S. Results

First quarter 2016 U.S. Rig Services revenues of $59.0 million were down 24.2% as compared to the fourth quarter of 2015. First quarter operating loss was $6.4 million, or -10.8% of revenue and includes severance of $0.6 million; excluding this loss, normalized operating loss was $5.8 million, or -9.9% of revenue. These results compare to fourth quarter operating loss, excluding non-recurring items of $5.6 million, of $0.8 million, or -1.1% of revenue. The sequential revenue decline was driven by California as activity declined by approximately 42% due to low oil prices.

First quarter 2016 Fluid Management Services revenues of $22.7 million were down 18.2% as compared to the fourth quarter of 2015. First quarter operating loss was $6.3 million, or -27.7% of revenue, and includes a loss on sale of assets of $2.7 million and severance of $0.2 million; excluding these losses, normalized operating loss was $3.4 million, or -15.1% of revenue. These results compare to fourth quarter operating loss, excluding non-recurring items of $10.7 million, of $5.9 million, or -21.1% of revenue. Normalized operating income improved sequentially as cost reduction measures implemented early in the first quarter were realized.

First quarter 2016 Coiled Tubing Services revenues of $9.5 million were down 41.8% as compared to the fourth quarter of 2015. First quarter operating loss was $6.1 million, or -64.5% of revenue and includes a loss on sale of assets of $1.1 million and severance of $0.1 million; excluding these losses, normalized operating loss was $5.0 million, or -52.2% of revenue. These results compare to fourth quarter operating loss, excluding non-recurring items of $7.1 million, of $3.6 million, or -22.0% of revenue. Activity declined sequentially as new-well completion activity continued to contract due to commodity prices.

First quarter 2016 Fishing & Rental Services revenues of $16.3 million were down 30.5% as compared to the fourth quarter of 2015. First quarter operating loss was $4.0 million, or -24.6% of revenue, and includes a gain on the sale of assets of $1.7 million and severance of $0.1 million; excluding these items, normalized operating loss was $5.6 million, or -34.6% of revenue. These results compare to fourth quarter operating loss, excluding non-recurring items of $0.3 million, of $4.4 million, or -18.7% of revenue.

International Segment

First quarter 2016 International revenues were $3.6 million, down 25.0% as compared to fourth quarter 2015 revenues of $4.8 million. First quarter operating loss was $5.1 million, or -139.9% of revenues, and includes a loss on sale of assets of $0.1 million and severance of $0.4 million; excluding these losses, normalized operating loss was $4.6 million, or -127.7% of revenue. These results compare to fourth quarter operating loss, excluding non-recurring items of $63.0 million, of $8.9 million, or -185.1% of revenues.  

General and Administrative Expenses 

General and Administrative (G&A) expenses were $46.2 million for the first quarter compared to $39.0 million in the prior quarter. First quarter G&A expenses included a $5.0 million accrual in connection with the offer of settlement related to the FCPA investigations, $2.4 million in costs associated with the FCPA investigations and $5.9 million in severance compared to fourth quarter G&A expenses that included $2.7 million in costs associated with the FCPA investigations and $0.7 million in severance. Excluding these items, G&A expense in the first quarter was $32.9 million as compared to $35.6 million in the fourth quarter.

Balance Sheet and Capital Expenditures

Key's consolidated cash balance at March 31, 2016 was $155.7 million compared to $204.4 million at December 31, 2015; additionally, Key had $18.6 million of restricted cash as of March 31, 2016 as compared to $0.0 as of December 31, 2015. Total debt at March 31, 2016 was $965.4 million compared to total debt of $964.9 million at December 31, 2015. The Company had $181.6 of total liquidity available at March 31, 2016. Key is engaged in discussions with certain of its lenders and noteholders regarding alternatives to address its level of indebtedness and liquidity.  Key is also discussing with its lenders an appraisal of Key's assets procured by certain of its term loan lenders that, if used in determining Key's compliance with the asset coverage ratio included in its term loan and asset-based credit facilities, would result in Key's not being in compliance with that covenant as of March 31, 2016.  Key had previously procured an appraisal of its assets that, if used for such purpose, results in Key being in compliance with the asset coverage ratio.  If the lenders' appraisal is used for covenant compliance purposes, Key expects to prepay amounts outstanding under the term loan less than $8 million and include additional term loan collateral as permitted under the term loan facility, which Key believes would cure this potential default. Capital expenditures were $2.7 million during the first quarter 2016.

Conference Call Information

As previously announced, Key management will host a conference call to discuss its first quarter 2016 financial results on Tuesday, May 10, 2016 at 10:00 a.m. CDT. 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 88186374. 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 Tuesday, May 10, 2016, 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 88186374. The replay will also be accessible at www.keyenergy.com under "Investor Relations" for a period of at least 90 days.

Contact:
West Gotcher
713-757-5539

Consolidated Statements of Operations (in thousands, except per share amounts, unaudited):
		Three Months Ended
		March 31, 2016				December 31, 2015				March 31, 2015
REVENUES		$	111,088			$	150,174			$	267,799
COSTS AND EXPENSES:
Direct operating expenses		90,598				176,761				204,530
Depreciation and amortization expense		35,752				41,894				47,211
General and administrative expenses		46,245				38,963				67,644
Impairment expense		—				29,100				21,700
Operating loss		(61,507)				(136,544)				(73,286)
Interest expense, net of amounts capitalized		21,584				21,743				13,342
Other (income) loss, net		(1,231)				(705)				4,432
Loss before tax income taxes		(81,860)				(157,582)				(91,060)
Income tax benefit		246				5,097 Werbung Mehr Nachrichten zur Key Energy Services Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 06:41 - PR Newswire Stellar Asset Management Ltd - Form 8.3 - Equals Group Plc 03:37 - PR Newswire Tellworth Investments LLP - Form 8.3 - Gresham Technologies Plc 02:00 - PR Newswire Kasei Digital Assets Plc - Launch of New Interactive Investor Hub SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59