Key Energy Services, Inc. (“Key” or the “Company”) reported fourth
quarter 2018 consolidated revenues of $117.2 million and a net loss
of $23.1 million, or $(1.14) per share as compared to consolidated
revenues of $134.7 million and a net loss of $23.9 million, or
$(1.18) per share for the third quarter of 2018. The results for
the fourth quarter of 2018 include expenses of $1.3 million, or
$0.06 per share, associated with certain equity awards, and gains
on sale of assets of $2.2 million, or $0.11 per share. Excluding
these items, the Company reported a net loss of $24.0 million, or
$(1.19) per share for the fourth quarter of 2018. The results for
the third quarter of 2018 include expenses of $1.6 million, or
$0.08 per share, associated with certain equity awards, gains on
sale of assets of $1.9 million, or $0.10 per share, and costs
associated with executive changes of $1.2 million, or $0.06 per
share. Excluding these items, the Company reported a net loss of
$23.0 million, or $(1.14) per share for the third quarter of 2018.
Consolidated revenues for the full year of 2018
increased $85.5 million, or 19.6%, to $521.7 million from full year
2017 revenues of $436.2 million. The Company reduced its net loss
by $31.8 million to $88.8 million for the full year of 2018 from
$120.6 million for the full year of 2017, with diluted loss per
share improving by $1.62 per share to $(4.38) per share for the
year ended December 31, 2018 as compared to $(6.00) per share for
the full year of 2017. Full year 2018 results include expenses of
$5.2 million, or $0.26 per share, associated with certain equity
awards, gains on sale of assets of $9.6 million, or $0.47 per
share, and costs associated with executive changes of $1.2 million,
or $0.06 per share. Adjusted EBITDA for the full year of 2018
improved by $31.2 million to $22.0 million from negative EBITDA of
$9.2 million in 2017.
Overview and Outlook
Key’s President and Chief Executive Officer, Rob
Saltiel, stated, “Our fourth quarter results were impacted by a
general reduction in activity due to the completion of clients’
2018 budgets, the decline in oil prices from October onward
and the seasonal holiday slowdown. This particularly affected our
coiled tubing business and our 24-hour completion rigs in the
Permian Basin. Despite the decline in activity and revenues,
our results benefited from price increases during the fourth
quarter and our success in lowering our cost structure.
These factors lessened the impact on our net loss and
Adjusted EBITDA from the quarter-to-quarter decline in
revenue.”
Saltiel continued, “We ended 2018 with $74.3
million in total liquidity, of which $50.3 million was cash. We
expect that we will end 2019 with a total liquidity at least
equivalent to our liquidity at the end of 2018. For the first
quarter of 2019, we expect our revenues to increase from the fourth
quarter of 2018 between 1.0% to 5.0%, with further improvement in
the following quarter as we move past seasonal impacts and our
clients execute on their 2019 plans.”
Financial Overview
The following tables sets forth summary data for the fourth
quarter and twelve months of 2018 and prior comparable periods (in
millions except per share amounts, unaudited):
| |
|
Three Months Ended |
| |
|
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
| |
|
(unaudited) |
|
(unaudited) |
|
|
| |
|
|
|
|
|
|
| |
|
(in millions, except per share
amounts) |
| Revenues |
|
$ |
117.3 |
|
|
$ |
134.7 |
|
|
$ |
116.3 |
|
| Net loss |
|
(23.1 |
) |
|
(23.9 |
) |
|
(22.3 |
) |
| Diluted loss per
share |
|
(1.14 |
) |
|
(1.18 |
) |
|
(1.11 |
) |
| Adjusted EBITDA |
|
3.9 |
|
|
5.6 |
|
|
1.8 |
|
| |
|
Twelve Months Ended |
| |
|
December 31, 2018 |
|
December 31, 2017 |
| |
|
(unaudited) |
|
|
| |
|
|
|
|
| |
|
(in millions, except per share
amounts) |
| Revenues |
|
$ |
521.7 |
|
|
$ |
436.2 |
|
| Net loss |
|
(88.8 |
) |
|
(120.6 |
) |
| Diluted loss per
share |
|
(4.38 |
) |
|
(6.00 |
) |
| Adjusted EBITDA |
|
22.0 |
|
|
(9.2 |
) |
Fourth Quarter Segment
Results
Fourth quarter 2018 Rig Services
revenues were $69.1 million as compared to third quarter 2018
revenues of $77.2 million, with rig hours of approximately
156,000 hours. The decline in revenues was due to seasonal factors,
a lower oil price environment and a reduction in 24-hour completion
activity as our clients’ completed their 2018 budgets ahead of
year-end. The segment generated operating income of $4.1
million (5.9% of revenues) and Adjusted EBITDA of $11.0 million
(16.0% of revenue) in the fourth quarter of 2018 as compared to
operating income of $4.5 million (5.8% of revenue) and Adjusted
EBITDA of $11.9 million (15.4% of revenue) in the third quarter of
2018. Cost structure reductions and improved pricing during the
fourth quarter benefited margins and partially offset the
decline in income due to the lower activity.
Fourth quarter 2018 Fluid Management Services
revenues were $20.8 million as compared to the third quarter 2018
revenues of $21.9 million. The segment generated an operating loss
of $1.3 million and Adjusted EBITDA of $1.9 million (9.3% of
revenue) in the fourth quarter of 2018 as compared to an operating
loss of $2.8 million and Adjusted EBITDA of $1.6 million (7.3% of
revenue) in the third quarter of 2018. The quarter on quarter
improvement was due largely to lower repair and maintenance costs
and the Company’s relocation of assets into markets with better
economics.
Fourth quarter 2018 Fishing & Rental
Services revenues were $16.9 million as compared to third
quarter 2018 revenues of $17.5 million. The segment generated an
operating loss of $1.2 million and Adjusted EBITDA of $4.4 million
(26.0% of revenue) in the fourth quarter of 2018 as compared to
operating loss of $1.4 million and Adjusted EBITDA of $4.5 million
(25.7 % of revenue) in the third quarter of 2018. Improvements in
pricing partially offset the typical seasonal decline and benefited
margins.
Fourth quarter 2018 Coiled Tubing Services
revenues were $10.5 million as compared to third quarter 2018
revenues of $18.2 million. Utilization of large diameter coiled
tubing units declined during the fourth quarter of 2018 as clients
finished their completions schedules ahead of year-end. The segment
generated an operating loss of $2.3 million and negative Adjusted
EBITDA of $0.9 million ((8.8)% of revenue) in the fourth quarter of
2018 as compared to operating income of $0.4 million and Adjusted
EBITDA of $1.8 million (10.1% of revenue) in the third quarter of
2018. During the fourth quarter of 2018, the Company averaged
approximately 2.5 large diameter units working as compared to
approximately 5 in the prior quarter. Coiled Tubing Services
margins declined largely due to the lower activity and
associated labor cost inefficiencies.
General and Administrative
Expenses
General and Administrative (G&A) expenses
were $20.3 million for the fourth quarter of 2018 compared to $23.9
million in the prior quarter. Fourth quarter 2018 G&A expenses
included $1.3 million of stock-based compensation expense as
compared to $1.6 million of stock-based compensation expense for
the third quarter of 2018. G&A expense for the fourth quarter
of 2018 benefited largely from cost structure changes implemented
during the quarter.
Liquidity
As of December 31, 2018, Key had total liquidity
of $74.3 million, consisting of $50.3 million in unrestricted cash
and $24 million of borrowing capacity available under the Company’s
$100.0 million asset-based loan facility. This compares to total
liquidity of $72.8 million at September 30, 2018, consisting of
$43.3 million in unrestricted cash and $29.5 million of borrowing
capacity available under the Company’s $100.0 million asset-based
loan facility. The Company has no outstanding borrowings under its
$100.0 million asset-based loan facility. Capital expenditures for
the fourth quarter of 2018 were $9.0 million and $37.5 million for
the full year of 2018 with $15.4 million in asset sale proceeds for
the full year of 2018.
Conference Call
Information
As previously announced, Key management will
host a conference call to discuss its fourth quarter and full year
2018 financial results on Tuesday, February 26, 2019 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 352-204-8973.
All callers should ask for the “Key Energy Services Conference
Call” or provide the access code 9874648. 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, February 26, 2019, beginning approximately
two hours after the completion of the conference call and will
remain available for two weeks. To access the replay, call
855-859-2056 or 800-585-8367. The access code for the replay is
9874648. 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, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
REVENUES |
|
$ |
117,253 |
|
|
$ |
134,721 |
|
|
$ |
116,280 |
|
|
$ |
521,695 |
|
|
$ |
436,165 |
|
| COSTS AND
EXPENSES: |
|
|
|
|
|
|
|
|
|
|
| Direct
operating expenses |
|
92,335 |
|
|
106,103 |
|
|
94,351 |
|
|
406,396 |
|
|
332,332 |
|
| Depreciation
and amortization expense |
|
19,758 |
|
|
21,808 |
|
|
21,217 |
|
|
82,639 |
|
|
84,542 |
|
| General and
administrative expenses |
|
20,273 |
|
|
23,925 |
|
|
16,786 |
|
|
91,626 |
|
|
115,284 |
|
| Impairment
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
187 |
|
| Operating loss |
|
(15,113 |
) |
|
(17,115 |
) |
|
(16,074 |
) |
|
(58,966 |
) |
|
(96,180 |
) |
| Interest
expense, net of amounts capitalized |
|
8,738 |
|
|
8,708 |
|
|
8,125 |
|
|
34,163 |
|
|
31,797 |
|
| Other
income, net |
|
(382 |
) |
|
(213 |
) |
|
(1,408 |
) |
|
(2,354 |
) |
|
(7,187 |
) |
|
Reorganization items, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,501 |
|
| Loss before tax income
taxes |
|
(23,469 |
) |
|
(25,610 |
) |
|
(22,791 |
) |
|
(90,775 |
) |
|
(122,291 |
) |
| Income tax
benefit |
|
391 |
|
|
1,750 |
|
|
464 |
|
|
1,979 |
|
|
1,702 |
|
| NET
LOSS |
|
$ |
(23,078 |
) |
|
$ |
(23,860 |
) |
|
$ |
(22,327 |
) |
|
$ |
(88,796 |
) |
|
$ |
(120,589 |
) |
| Loss per
share: |
|
|
|
|
|
|
|
|
|
|
| Basic and
diluted |
|
$ |
(1.14 |
) |
|
$ |
(1.18 |
) |
|
$ |
(1.11 |
) |
|
$ |
(4.38 |
) |
|
$ |
(6.00 |
) |
| Weighted
average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
| Basic and
diluted |
|
20,297 |
|
|
20,252 |
|
|
20,116 |
|
|
20,250 |
|
|
20,105 |
|
Segment Revenue and Operating Income (in
thousands, except for percentages, unaudited):
| |
|
Three Months Ended |
|
Twelve Months Ended |
| |
|
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
| Rig Services |
|
$ |
69,056 |
|
|
$ |
77,153 |
|
|
$ |
64,804 |
|
|
$ |
296,969 |
|
|
$ |
248,830 |
|
| Fishing & Rental
Services |
|
16,890 |
|
|
17,477 |
|
|
13,364 |
|
|
64,691 |
|
|
59,172 |
|
| Coiled Tubing
Services |
|
10,500 |
|
|
18,220 |
|
|
14,861 |
|
|
71,013 |
|
|
41,866 |
|
| Fluid Management
Services |
|
20,807 |
|
|
21,871 |
|
|
23,251 |
|
|
89,022 |
|
|
80,726 |
|
| International |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,571 |
|
| Consolidated
Total |
|
$ |
117,253 |
|
|
$ |
134,721 |
|
|
$ |
116,280 |
|
|
$ |
521,695 |
|
|
$ |
436,165 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Operating
Income (Loss) |
|
|
|
|
|
|
|
|
|
|
| Rig Services |
|
$ |
4,078 |
|
|
$ |
4,470 |
|
|
$ |
(854 |
) |
|
$ |
19,552 |
|
|
$ |
(3,620 |
) |
| Fishing & Rental
Services |
|
(1,170 |
) |
|
(1,390 |
) |
|
(3,745 |
) |
|
(8,653 |
) |
|
7,506 |
|
| Coiled Tubing
Services |
|
(2,302 |
) |
|
413 |
|
|
1,737 |
|
|
5,196 |
|
|
1,631 |
|
| Fluid Management
Services |
|
(1,348 |
) |
|
(2,832 |
) |
|
(2,106 |
) |
|
(8,850 |
) |
|
(19,532 |
) |
| International |
|
— |
|
|
— |
|
|
(213 |
) |
|
— |
|
|
(4,993 |
) |
| Functional Support |
|
(14,371 |
) |
|
(17,776 |
) |
|
(10,893 |
) |
|
(66,211 |
) |
|
(77,172 |
) |
| Consolidated
Total |
|
$ |
(15,113 |
) |
|
$ |
(17,115 |
) |
|
$ |
(16,074 |
) |
|
$ |
(58,966 |
) |
|
$ |
(96,180 |
) |
| |
|
|
|
|
|
|
|
|
|
|
| Operating
Income (Loss) % of Revenues |
|
|
|
|
|
|
|
|
|
|
| Rig Services |
|
5.9 |
% |
|
5.8 |
% |
|
(1.3 |
)% |
|
6.6 |
% |
|
(1.5 |
)% |
| Fishing & Rental
Services |
|
(6.9 |
)% |
|
(8.0 |
)% |
|
(28.0 |
)% |
|
(13.4 |
)% |
|
12.7 |
% |
| Coiled Tubing
Services |
|
(21.9 |
)% |
|
2.3 |
% |
|
11.7 |
% |
|
7.3 |
% |
|
3.9 |
% |
| Fluid Management
Services |
|
(6.5 |
)% |
|
(12.9 |
)% |
|
(9.1 |
)% |
|
(9.9 |
)% |
|
(24.2 |
)% |
| International |
|
— |
% |
|
— |
% |
|
— |
% |
|
— |
% |
|
(89.6 |
)% |
| Consolidated
Total |
|
(12.9 |
)% |
|
(12.7 |
)% |
|
(13.8 |
)% |
|
(11.3 |
)% |
|
(22.1 |
)% |
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 |
|
Twelve Months Ended |
|
| |
|
December 31, 2018 |
|
September 30, 2018 |
|
December 31, 2017 |
|
December 31, 2018 |
|
December 31, 2017 |
|
| Net
loss |
|
$ |
(23,078 |
) |
|
$ |
(23,860 |
) |
|
$ |
(22,327 |
) |
|
$ |
(88,796 |
) |
|
$ |
(120,589 |
) |
|
| Income tax
benefit |
|
(391 |
) |
|
(1,750 |
) |
|
(464 |
) |
|
(1,979 |
) |
|
(1,702 |
) |
|
| Interest
expense, net of amounts capitalized |
|
8,738 |
|
|
8,708 |
|
|
8,125 |
|
|
34,163 |
|
|
31,797 |
|
|
| Interest
income |
|
(241 |
) |
|
(201 |
) |
|
(176 |
) |
|
(820 |
) |
|
(711 |
) |
|
|
Depreciation and amortization |
|
19,758 |
|
|
21,808 |
|
|
21,217 |
|
|
82,639 |
|
|
84,542 |
|
|
| EBITDA |
|
$ |
4,786 |
|
|
$ |
4,705 |
|
|
$ |
6,375 |
|
|
$ |
25,207 |
|
|
$ |
(6,663 |
) |
|
| % of
revenues |
|
4.1 |
% |
|
3.5 |
% |
|
5.5 |
% |
|
4.8 |
% |
|
(1.5 |
)% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Severance
costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,492 |
|
|
| Stock-based
compensation |
|
1,286 |
|
|
1,582 |
|
|
(3,989 |
) |
|
5,245 |
|
|
7,010 |
|
|
|
Restructuring items, net |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,501 |
|
|
| Impairment
expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
187 |
|
|
| Gain on
sales of assets |
|
(2,216 |
) |
|
(1,935 |
) |
|
(596 |
) |
|
(9,618 |
) |
|
(22,422 |
) |
|
| Legal
settlement |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11,562 |
|
|
| Gain on
sale of business in Russia |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,677 |
) |
|
|
Restructuring professional fees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,780 |
|
|
| Executive
changes |
|
— |
|
|
1,208 |
|
|
— |
|
|
1,208 |
|
|
— |
|
|
| Adjusted
EBITDA |
|
$ |
3,856 |
|
|
$ |
5,560 |
|
|
$ |
1,790 |
|
|
$ |
22,042 |
|
|
$ |
(9,230 |
) |
|
| % of
revenues |
|
3.3 |
% |
|
4.1 |
% |
|
1.5 |
% |
|
4.2 |
% |
|
(2.1 |
)% |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
|
$ |
117,253 |
|
|
$ |
134,721 |
|
|
$ |
116,280 |
|
|
$ |
521,695 |
|
|
$ |
436,165 |
|
|
| |
|
|
|
|
|
| |
Three Months Ended December 31,
2018 |
| |
Rig Services |
|
Fishing and Rental Services |
|
Coiled Tubing Services |
|
Fluid Management Services |
|
Functional Support |
|
Total |
| Net income (loss) |
$ |
4,105 |
|
|
$ |
(1,164 |
) |
|
$ |
(2,300 |
) |
|
$ |
(1,341 |
) |
|
$ |
(22,378 |
) |
|
$ |
(23,078 |
) |
| Income tax benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(391 |
) |
|
(391 |
) |
| Interest expense, net
of amounts capitalized |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,738 |
|
|
8,738 |
|
| Interest income |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(241 |
) |
|
(241 |
) |
| Depreciation and
amortization |
7,650 |
|
|
5,704 |
|
|
1,336 |
|
|
4,510 |
|
|
558 |
|
|
19,758 |
|
| EBITDA |
$ |
11,755 |
|
|
$ |
4,540 |
|
|
$ |
(964 |
) |
|
$ |
3,169 |
|
|
$ |
(13,714 |
) |
|
$ |
4,786 |
|
| % of
revenues |
17.0 |
% |
|
26.9 |
% |
|
(9.2 |
)% |
|
15.2 |
% |
|
— |
% |
|
4.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Stock-based
compensation |
24 |
|
|
45 |
|
|
64 |
|
|
— |
|
|
1,153 |
|
|
1,286 |
|
| Gain on sales of
assets |
(757 |
) |
|
(193 |
) |
|
(27 |
) |
|
(1,239 |
) |
|
— |
|
|
(2,216 |
) |
| Adjusted EBITDA |
$ |
11,022 |
|
|
$ |
4,392 |
|
|
$ |
(927 |
) |
|
$ |
1,930 |
|
|
$ |
(12,561 |
) |
|
$ |
3,856 |
|
| % of
revenues |
16.0 |
% |
|
26.0 |
% |
|
(8.8 |
)% |
|
9.3 |
% |
|
— |
% |
|
3.3 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
$ |
69,056 |
|
|
$ |
16,890 |
|
|
$ |
10,500 |
|
|
$ |
20,807 |
|
|
$ |
— |
|
|
$ |
117,253 |
|
| |
Three Months Ended September 30,
2018 |
| |
Rig Services |
|
Fishing and Rental Services |
|
Coiled Tubing Services |
|
Fluid Management Services |
|
Functional Support |
|
Total |
| Net income (loss) |
$ |
4,488 |
|
|
$ |
(1,378 |
) |
|
$ |
414 |
|
|
$ |
(2,827 |
) |
|
$ |
(24,557 |
) |
|
$ |
(23,860 |
) |
| Income tax benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,750 |
) |
|
(1,750 |
) |
| Interest expense, net
of amounts capitalized |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,708 |
|
|
8,708 |
|
| Interest income |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(201 |
) |
|
(201 |
) |
| Depreciation and
amortization |
8,212 |
|
|
6,012 |
|
|
1,403 |
|
|
5,262 |
|
|
919 |
|
|
21,808 |
|
| EBITDA |
$ |
12,700 |
|
|
$ |
4,634 |
|
|
$ |
1,817 |
|
|
$ |
2,435 |
|
|
$ |
(16,881 |
) |
|
$ |
4,705 |
|
| % of
revenues |
16.5 |
% |
|
26.5 |
% |
|
10.0 |
% |
|
11.1 |
% |
|
— |
% |
|
3.5 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Stock-based
compensation |
129 |
|
|
35 |
|
|
12 |
|
|
— |
|
|
1,406 |
|
|
1,582 |
|
| (Gain) loss on sales of
assets |
(912 |
) |
|
(180 |
) |
|
4 |
|
|
(847 |
) |
|
— |
|
|
(1,935 |
) |
| Executive changes |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,208 |
|
|
1,208 |
|
| Adjusted EBITDA |
$ |
11,917 |
|
|
$ |
4,489 |
|
|
$ |
1,833 |
|
|
$ |
1,588 |
|
|
$ |
(14,267 |
) |
|
$ |
5,560 |
|
| % of
revenues |
15.4 |
% |
|
25.7 |
% |
|
10.1 |
% |
|
7.3 |
% |
|
— |
% |
|
4.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
$ |
77,153 |
|
|
$ |
17,477 |
|
|
$ |
18,220 |
|
|
$ |
21,871 |
|
|
$ |
— |
|
|
$ |
134,721 |
|
| |
Twelve Months Ended December 31,
2018 |
| |
Rig Services |
|
Fishing and Rental Services |
|
Coiled Tubing Services |
|
Fluid Management Services |
|
Functional Support |
|
Total |
| Net income (loss) |
$ |
19,689 |
|
|
$ |
(8,622 |
) |
|
$ |
5,202 |
|
|
$ |
(8,773 |
) |
|
$ |
(96,292 |
) |
|
$ |
(88,796 |
) |
| Income tax benefit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,979 |
) |
|
(1,979 |
) |
| Interest expense, net
of amounts capitalized |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
34,163 |
|
|
34,163 |
|
| Interest income |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(820 |
) |
|
(820 |
) |
| Depreciation and
amortization |
31,519 |
|
|
23,361 |
|
|
5,223 |
|
|
20,091 |
|
|
2,445 |
|
|
82,639 |
|
| EBITDA |
$ |
51,208 |
|
|
$ |
14,739 |
|
|
$ |
10,425 |
|
|
$ |
11,318 |
|
|
$ |
(62,483 |
) |
|
$ |
25,207 |
|
| % of
revenues |
17.2 |
% |
|
22.8 |
% |
|
14.7 |
% |
|
12.7 |
% |
|
— |
% |
|
4.8 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Stock-based
compensation |
407 |
|
|
135 |
|
|
253 |
|
|
— |
|
|
4,450 |
|
|
5,245 |
|
| (Gain) loss on sales of
assets |
(3,329 |
) |
|
(738 |
) |
|
(3,230 |
) |
|
(2,348 |
) |
|
27 |
|
|
(9,618 |
) |
| Executive changes |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,208 |
|
|
1,208 |
|
| Adjusted EBITDA |
$ |
48,286 |
|
|
$ |
14,136 |
|
|
$ |
7,448 |
|
|
$ |
8,970 |
|
|
$ |
(56,798 |
) |
|
$ |
22,042 |
|
| % of
revenues |
16.3 |
% |
|
21.9 |
% |
|
10.5 |
% |
|
10.1 |
% |
|
— |
% |
|
4.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenues |
$ |
296,969 |
|
|
$ |
64,691 |
|
|
$ |
71,013 |
|
|
$ |
89,022 |
|
|
$ |
— |
|
|
$ |
521,695 |
|
“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 impairment
expense, severance expense, loss on debt extinguishment, gains or
losses on asset sales, 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.
Normalized operating loss is a non-GAAP
financial measure and is defined as operating loss plus or minus
certain items such as impairment expense, severance expense, FCPA
settlement costs and FCPA investigation costs. Normalized
operating loss is used as a supplemental financial measure by the
Company’s management and directors and by external users of the
Company’s financial statements, such as investors, primarily to
compare the Company’s core operating and financial performance from
period to period without regard to the many non-cash accounting
charges or unusual expenses that have impacted the Company’s GAAP
operating income and net income due to the severe downturn in the
company’s business.
EBITDA, Adjusted EBITDA and normalized operating
income 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,
Adjusted EBITDA and normalized operating income exclude some, but
not all, items that affect net income and operating income and
these measures may vary among other companies. Limitations in using
normalized operating loss as an analytical tool include that
normalized operating loss excludes certain cash costs and losses
actually incurred by the Company. 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 StatementsThis
press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Statements that are not historical in nature or that relate to
future events and conditions are, or may be deemed to be,
forward-looking statements. These forward-looking statements are
based on Key’s current expectations, estimates and projections and
its management’s beliefs and assumptions concerning future events
and financial trends affecting its financial condition and results
of operations. In some cases, you can identify these statements by
terminology such as “may,” “will,” “should,” “predicts,” “expects,”
“believes,” “anticipates,” “projects,” “potential” or “continue” or
the negative of such terms and other comparable terminology. These
statements are only predictions and are subject to substantial
risks and uncertainties and are not guarantees of performance.
Future actions, events and conditions and future results of
operations may differ materially from those expressed in these
statements. In evaluating those statements, you should carefully
consider the information above as well as the risks outlined in
“Item 1A. Risk Factors,” in Key’s Annual Report on Form 10-K for
the year ended December 31, 2017 and in other reports Key files
with the Securities and Exchange Commission.
Key undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date of this
press release except as required by law. All of Key’s written and
oral forward-looking statements are expressly qualified by these
cautionary statements and any other cautionary statements that may
accompany such forward-looking statements.
Important factors that may affect Key’s expectations, estimates
or projections include, but are not limited to, the following:
conditions in the oil and natural gas industry, especially oil and
natural gas prices and capital expenditures by oil and natural gas
companies; volatility in oil and natural gas prices; Key’s ability
to implement price increases or maintain pricing on its core
services; risks that Key may not be able to reduce, and could even
experience increases in, the costs of labor, fuel, equipment and
supplies employed in its businesses; industry capacity; asset
impairments or other charges; the periodic low demand for Key’s
services and resulting operating losses and negative cash flows;
Key’s highly competitive industry as well as operating risks, which
are primarily self-insured, and the possibility that its insurance
may not be adequate to cover all of its losses or liabilities;
significant costs and potential liabilities resulting from
compliance with applicable laws, including those resulting from
environmental, health and safety laws and regulations, specifically
those relating to hydraulic fracturing, as well as climate change
legislation or initiatives; Key’s historically high employee
turnover rate and its ability to replace or add workers, including
executive officers and skilled workers; Key’s ability to incur debt
or long-term lease obligations; Key’s ability to implement
technological developments and enhancements; severe weather impacts
on Key’s business, including hurricane activity; Key’s ability to
successfully identify, make and integrate acquisitions and its
ability to finance future growth of its operations or future
acquisitions; Key’s ability to achieve the benefits expected from
disposition transactions; the loss of one or more of Key’s larger
customers; Key’s ability to generate sufficient cash flow to meet
debt service obligations; the amount of Key’s debt and the
limitations imposed by the covenants in the agreements governing
its debt, including its ability to comply with covenants under its
current debt agreements; an increase in Key’s debt service
obligations due to variable rate indebtedness; Key’s inability to
achieve its financial, capital expenditure and operational
projections, including quarterly and annual projections of revenue
and/or operating income and its inaccurate assessment of future
activity levels, customer demand, and pricing stability which may
not materialize (whether for Key as a whole or for geographic
regions and/or business segments individually); Key’s ability to
respond to changing or declining market conditions, including Key’s
ability to reduce the costs of labor, fuel, equipment and supplies
employed and used in its businesses; Key’s ability to maintain
sufficient liquidity; the adverse impact of litigation; and other
factors affecting Key’s business described in “Item 1A. Risk
Factors” in its Annual Report on Form 10-K for the year ended
December 31, 2017, and other reports Key files with the Securities
and Exchange Commission.
About Key Energy ServicesKey
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.
Contact:Marshall Dodson713-651-4403
Grafico Azioni Key Energy Services (NYSE:KEG)
Storico
Da Dic 2024 a Gen 2025
Grafico Azioni Key Energy Services (NYSE:KEG)
Storico
Da Gen 2024 a Gen 2025
