Pioneer Energy Services Reports Second Quarter 2018 Results

Jul 31, 2018

SAN ANTONIO, July 31, 2018 /PRNewswire/ -- Pioneer Energy Services (NYSE: PES) today reported financial and operating results for the quarter ended June 30, 2018. Second quarter and recent notable items include:

  • Executed a three-year, new-build drilling contract for a 1,500-horsepower, AC pad-optimal rig at a premium to current spot market dayrates for operations in West Texas beginning in the first quarter of 2019.
  • Revenues for our production services businesses increased 7% from the prior quarter and generated a gross margin of 23%.
  • Domestic drilling services utilization was 100% during the quarter, with average margin per day of $9,550.

Consolidated Financial Results

Revenues for the second quarter of 2018 were $154.8 million, up 7% from revenues of $144.5 million in the first quarter of 2018 ("the prior quarter") and up 44% from revenues of $107.1 million in the second quarter of 2017 ("the year-earlier quarter"). The increase from the prior quarter is primarily attributable to increased demand and pricing in wireline and well servicing, as well as increased drilling rig utilization in Colombia.

Net loss for the second quarter of 2018 was $18.2 million, or $0.23 per share, compared with net loss of $11.1 million, or $0.14 per share, in the prior quarter and net loss of $20.2 million, or $0.26 per share, in the year-earlier quarter.  Adjusted net loss(1) for the second quarter was $14.8 million, and adjusted EPS(2) was a loss of $0.19 per share as compared to adjusted net loss of $6.9 million, or an adjusted EPS loss of $0.09 per share, in the prior quarter.

Second quarter adjusted EBITDA(3) was $16.9 million, down from $23.4 million in the prior quarter and up from $12.9 million in the year-earlier quarter. The decrease from the prior quarter was primarily due to a $5.4 million increase in phantom stock expense during the latest quarter associated with the increase in fair value of the awards, lower utilization in coiled tubing services and higher mobilization and standby activity in Colombia. The increase from the year-earlier quarter was due to higher demand for all of our service offerings as the market steadily improved with increasing commodity prices throughout 2017 and 2018, which was partially offset by the increased expense related to phantom stock unit awards.

Operating Results

Production Services Business

Revenue from our production services business was $97.4 million in the second quarter, up 7% from the prior quarter and up 42% from the year-earlier quarter. Gross margin as a percentage of revenue from our production services business was 23% in the second quarter, down slightly from 24% in the prior quarter and flat with 23% in the year-earlier quarter. The decrease from the prior quarter was primarily due to decreased utilization of our coiled tubing services fleet, primarily small diameter coil services, increased equipment rental costs and additional expenses related to the closure of field offices supporting the under-performing offshore market.

The increase in revenues from the prior quarter was driven by increased demand for our wireline and well servicing operations, each of which experienced revenue growth of 10% sequentially. As compared to the year-earlier quarter, demand has improved for all of our production services business segments, resulting in increased revenues of 42%.

The number of wireline jobs completed in the second quarter increased by 7% sequentially and increased by 4% as compared to the year-earlier quarter, and continue to be weighted to more completion-related jobs. Well servicing average revenue per hour was $540 in the second quarter, up from $518 in the prior quarter and up from $514 in the year-earlier quarter. Well servicing rig utilization was 49% in the second quarter, up from 47% in both the prior and year-earlier quarters. Coiled tubing revenue days totaled 350 in the second quarter, as compared to 414 in the prior quarter and 400 in the year-earlier quarter.

Drilling Services Business

Revenue from our drilling services business was $57.4 million in the second quarter, reflecting a 7% increase from the prior quarter and a 48% increase from the year-earlier quarter.

Domestic drilling services rig utilization was 100% for both the second quarter and the prior quarter, and up from 92% in the year-earlier quarter. Domestic drilling average revenues per day were $24,508 in the second quarter, down from $24,949 in the prior quarter and up from $22,657 in the year-earlier quarter. Domestic drilling average margin per day was $9,550 in the second quarter, down from $10,436 in the prior quarter and up from $7,505 in the year-earlier quarter. Margin was negatively impacted in the second quarter by higher repair and maintenance expenses, which are expected to return to more typical levels in the third quarter. The increases in revenue per day and margin per day from the year-earlier quarter were driven by increasing dayrates.

International rig utilization was 85% for the second quarter, up from 76% in the prior quarter and up from 36% in the year-earlier quarter. International drilling average revenues per day were $35,061, up from $32,020 in the prior quarter and up from $31,702 in the year-earlier quarter, primarily due to higher utilization in the second quarter, versus both comparative periods. International drilling average margin per day for the second quarter was $7,583, down from $8,455 in the prior quarter and down from $8,923 in the year-earlier quarter, as a result of higher-than-anticipated mobilization and standby activity in the second quarter.

Currently, all 16 of our domestic drilling rigs are earning revenues, 14 of which are under term contracts, and seven of our eight rigs in Colombia are earning revenue, resulting in current utilization of 96%. The domestic new-build drilling rig is expected to begin operations in the first quarter of 2019.

Comments from our President and CEO 

"Our second quarter results reflect solid top-line performance," said Wm. Stacy Locke, President and Chief Executive Officer. "Despite continued strong demand for our services, we experienced some higher-than-anticipated expenses in all businesses during the quarter, which impacted our bottom line.

"Our domestic drilling operations delivered another strong quarter of results with utilization of 100% and a margin per day of $9,550. Higher repair and maintenance costs, largely attributable to the timing of annual inspections and re-certifications of rig masts, substructures and mud pumps, depressed margin per day relative to the first quarter. Our 16 domestic drilling rigs performed very well during the quarter allowing us to renew several contracts at higher dayrates and for longer term contract durations. In addition, we executed a three-year term contract with an existing client for a new-build drilling rig. This new-build will require an incremental investment of approximately $10 million to complete and will utilize stacked equipment previously ordered in 2014. We expect the rig to begin operations in the Permian in the first quarter of 2019.

"Similarly, our seven operating rigs in Colombia performed well during the quarter; however, two of the rigs experienced unanticipated events that negatively impacted our margins. One rig had two long mobilizations during the quarter that resulted in less than 30 days of full dayrate revenues, and another rig was placed on standby for a portion of June. The outlook for Colombia is bright and we expect margins to gradually improve in future quarters.

"In production services, demand for our onshore services increased sequentially and remains stable. Our strategic focus continues to be on the key shale provinces in the U.S.; therefore, in June, we exited the wireline and coiled tubing offshore markets due to reduced activity, and began redeploying and divesting of certain assets. We absorbed some additional costs associated with this strategic decision in the second quarter.

"Both wireline and well services performed well in the quarter. Demand continued to weaken for small diameter coil services; however, demand for large diameter coil is robust. We took delivery of a new 2 3/8" coiled tubing unit in July and this unit immediately went to work. We have an additional large diameter coiled tubing unit scheduled for delivery in the fourth quarter of 2018.

"Lateral lengths are increasing in all shale plays in the U.S. driving increased demand for large diameter coil and greater pumping capacities. Some operators are preferring to perform drill outs with a well servicing rig rather than a coiled tubing unit. These operators also require larger pump capacities and other ancillary equipment. We are positioning Pioneer to be a leader in this ever-changing marketplace.

"While we have experienced some near-term activity moderation in wireline and coiled tubing, it is not related to softness in the Permian due to takeaway capacity limitations. Several of our key clients in other markets in the U.S. are temporarily delayed due to events such as changing out frac providers, permitting issues, and being caught up on their backlog of uncompleted wells, but we are optimistic that activity will increase in the fall. The vast majority of Pioneer's exposure to the Permian is in land contract drilling with eight rigs which are fully contracted through 2018 and much of 2019. While we have limited exposure to the Permian on the production services side of our business, we are currently evaluating new, higher-margin opportunities that we see developing there," Mr. Locke said.

Third Quarter 2018 Guidance

In the third quarter of 2018, revenue from our production services business segments is estimated to be down 3% to 5% as compared to the second quarter of 2018. Margin from our production services business is estimated to be 23% to 25% of revenue. Domestic drilling services rig utilization is expected to be 100% and generate average margins per day of approximately $9,700 to $10,200. International drilling services rig utilization is estimated to average 85% to 87% and generate average margins per day of approximately $8,000 to $9,000.

Liquidity

Working capital at June 30, 2018 was $116.9 million, down from $130.6 million at December 31, 2017. Cash and cash equivalents, including restricted cash, were $63.5 million, down from $75.6 million at year-end 2017. In the first half of 2018, we used $31.5 million of cash for the purchase of property and equipment, and our cash provided by operations was $17.1 million.

Capital Expenditures

Cash capital expenditures during the six months ended June 30, 2018 were $31.5 million, including capitalized interest. We estimate total cash capital expenditures for 2018 to be approximately $65 million to $70 million, which includes $23 million for two large-diameter coiled tubing units, one of which was delivered in early July, three wireline units, two of which were delivered in January, high-pressure pump packages for completion operations, and the construction of the new-build drilling rig expected to be completed in 2019.

Conference Call

Pioneer Energy Services' management team will hold a conference call today at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) to discuss these results. To participate, dial (412) 902-0003 approximately 10 minutes prior to the call and ask for the Pioneer Energy Services conference call. A telephone replay will be available after the call until August 7th. To access the replay, dial (201) 612-7415 and enter the pass code 13681398.

The conference call will also be webcast on the Internet and accessible from Pioneer Energy Services' web site at www.pioneeres.com. To listen to the live call, visit our web site at least 10 minutes early to register and download any necessary audio software. For more information, please contact Donna Washburn at Dennard Lascar Investor Relations at (713) 529-6600 or e-mail dwashburn@dennardlascar.com.

About Pioneer

Pioneer Energy Services provides well servicing, wireline, and coiled tubing services to producers in the U.S. Gulf Coast, Mid-Continent and Rocky Mountain regions through its three production services business segments. Pioneer also provides contract land drilling services to oil and gas operators in Texas, the Mid-Continent and Appalachian regions and internationally in Colombia through its two drilling services business segments.

Cautionary Statement Regarding Forward-Looking Statements,
Non-GAAP Financial Measures and Reconciliations

Statements we make in this news release that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements made in good faith that are subject to risks, uncertainties and assumptions. Our actual results, performance or achievements, or industry results, could differ materially from those we express in the following discussion as a result of a variety of factors, including general economic and business conditions and industry trends, levels and volatility of oil and gas prices, the continued demand for drilling services or production services in the geographic areas where we operate, decisions about exploration and development projects to be made by oil and gas exploration and production companies, the highly competitive nature of our business, technological advancements and trends in our industry and improvements in our competitors' equipment, the loss of one or more of our major clients or a decrease in their demand for our services, future compliance with covenants under debt agreements, including our senior secured term loan, our senior secured revolving asset-based credit facility, and our senior notes, operating hazards inherent in our operations, the supply of marketable drilling rigs, well servicing rigs, coiled tubing units and wireline units within the industry, the continued availability of new components for drilling rigs, well servicing rigs, coiled tubing units and wireline units, the continued availability of qualified personnel, the success or failure of our acquisition strategy, including our ability to finance acquisitions, manage growth and effectively integrate acquisitions, the political, economic, regulatory and other uncertainties encountered by our operations, and changes in, or our failure or inability to comply with, governmental regulations, including those relating to the environment. We have discussed many of these factors in more detail in our Annual Report on Form 10-K for the year ended December 31, 2017, including under the headings "Special Note Regarding Forward-Looking Statements" in the Introductory Note to Part I and "Risk Factors" in Item 1A. These factors are not necessarily all the important factors that could affect us. Other unpredictable or unknown factors could also have material adverse effects on actual results of matters that are the subject of our forward-looking statements. All forward-looking statements speak only as of the date on which they are made and we undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise. We advise our shareholders that they should (1) recognize that important factors not referred to above could affect the accuracy of our forward-looking statements and (2) use caution and common sense when considering our forward-looking statements.

This news release contains non-GAAP financial measures as defined by SEC Regulation G. A reconciliation of each such measure to its most directly comparable U.S. Generally Accepted Accounting Principles (GAAP) financial measure, together with an explanation of why management believes that these non-GAAP financial measures provide useful information to investors, is provided in the following tables.

__________________________



(1)

Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the tables to this news release.



(2)

Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the tables to this news release.



(3)

Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies.  A reconciliation of net loss as reported to adjusted EBITDA is included in the tables to this news release.

 

Contacts:

Dan Petro, CFA, Treasurer and


Director of Investor Relations


Pioneer Energy Services Corp.


(210) 828-7689




Lisa Elliott / lelliott@dennardlascar.com


Anne Pearson / apearson@dennardlascar.com


Dennard Lascar Investor Relations / (713) 529-6600

 - Financial Statements and Operating Information Follow -

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)



Three months ended


Six months ended


June 30,


March 31,


June 30,


2018


2017


2018


2018


2017















Revenues

$

154,782



$

107,130



$

144,478



$

299,260



$

202,887












Costs and expenses:










Operating costs

114,197



79,059



102,766



216,963



151,787


Depreciation and amortization

23,287



24,740



23,747



47,034



49,732


General and administrative

24,829



16,112



19,194



44,023



33,856


Bad debt recovery, net of expense

(370)



(226)



(52)



(422)



(589)


Impairment

2,368



795





2,368



795


Gain on dispositions of property and equipment, net

(726)



(621)



(335)



(1,061)



(1,092)


Total costs and expenses

163,585



119,859



145,320



308,905



234,489


Loss from operations

(8,803)



(12,729)



(842)



(9,645)



(31,602)












Other income (expense):










Interest expense, net of interest capitalized

(9,642)



(6,418)



(9,513)



(19,155)



(12,477)


Other income (expense), net

44



73



504



548



(71)


Total other expense, net

(9,598)



(6,345)



(9,009)



(18,607)



(12,548)












Loss before income taxes

(18,401)



(19,074)



(9,851)



(28,252)



(44,150)


Income tax (expense) benefit

249



(1,135)



(1,288)



(1,039)



(1,183)


Net loss

$

(18,152)



$

(20,209)



$

(11,139)



$

(29,291)



$

(45,333)












Loss per common share:










Basic

$

(0.23)



$

(0.26)



$

(0.14)



$

(0.38)



$

(0.59)


Diluted

$

(0.23)



$

(0.26)



$

(0.14)



$

(0.38)



$

(0.59)












Weighted-average number of shares outstanding:










Basic

77,944



77,377



77,606



77,776



77,225


Diluted

77,944



77,377



77,606



77,776



77,225


 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)



June 30,
2018


December 31,
2017


(unaudited)


(audited)

ASSETS




Current assets:




Cash and cash equivalents

$

61,517



$

73,640


Restricted cash

2,000



2,008


Receivables, net of allowance for doubtful accounts

126,826



113,005


Inventory

17,719



14,057


Assets held for sale

6,433



6,620


Prepaid expenses and other current assets

6,710



6,229


Total current assets

221,205



215,559






Net property and equipment

533,277



549,623


Other noncurrent assets

2,562



1,687


Total assets

$

757,044



$

766,869






LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




Accounts payable

$

38,014



$

29,538


Deferred revenues

1,921



905


Accrued expenses

64,348



54,471


Total current liabilities

104,283



84,914






Long-term debt, less unamortized discount and debt issuance costs

463,072



461,665


Deferred income taxes

3,429



3,151


Other noncurrent liabilities

3,569



7,043


Total liabilities

574,353



556,773


Total shareholders' equity

182,691



210,096


Total liabilities and shareholders' equity

$

757,044



$

766,869


 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)



Six months ended


June 30,


2018


2017





Cash flows from operating activities:




Net loss

$

(29,291)



$

(45,333)


Adjustments to reconcile net loss to net cash provided by (used in) operating activities:




Depreciation and amortization

47,034



49,732


Allowance for doubtful accounts, net of recoveries

(422)



(589)


Gain on dispositions of property and equipment, net

(1,061)



(1,092)


Stock-based compensation expense

2,356



2,335


Amortization of debt issuance costs and discount

1,422



930


Impairment

2,368



795


Deferred income taxes

273



768


Change in other noncurrent assets

(199)



299


Change in other noncurrent liabilities

(3,480)



(1,563)


Changes in current assets and liabilities

(1,875)



(22,579)


Net cash provided by (used in) operating activities

17,125



(16,297)






Cash flows from investing activities:




Purchases of property and equipment

(31,485)



(40,032)


Proceeds from sale of property and equipment

2,225



7,748


Proceeds from insurance recoveries

541



3,119


Net cash used in investing activities

(28,719)



(29,165)






Cash flows from financing activities:




Debt repayments



(12,305)


Proceeds from issuance of debt



55,000


Proceeds from exercise of options

12




Purchase of treasury stock

(549)



(533)


Net cash provided by (used in) financing activities

(537)



42,162






Net decrease in cash, cash equivalents and restricted cash

(12,131)



(3,300)


Beginning cash, cash equivalents and restricted cash

75,648



10,194


Ending cash, cash equivalents and restricted cash

$

63,517



$

6,894


 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Operating Results by Segment

(in thousands)

(unaudited)



Three months ended


Six months ended


June 30,


March 31,


June 30,


2018


2017


2018


2018


2017

Revenues:










Domestic drilling

$

35,634



$

30,473



$

35,926



$

71,560



$

58,818


International drilling

21,773



8,306



17,611



39,384



18,977


Drilling services

57,407



38,779



53,537



110,944



77,795


Well servicing

23,162



21,017



21,114



44,276



39,751


Wireline services

62,137



39,832



56,601



118,738



72,378


Coiled tubing services

12,076



7,502



13,226



25,302



12,963


Production services

97,375



68,351



90,941



188,316



125,092


Consolidated revenues

$

154,782



$

107,130



$

144,478



$

299,260



$

202,887












Operating costs:










Domestic drilling

$

21,749



$

20,380



$

20,898



$

42,647



$

39,889


International drilling

17,064



5,968



12,961



30,025



13,566


Drilling services

38,813



26,348



33,859



72,672



53,455


Well servicing

16,680



15,091



15,570



32,250



29,128


Wireline services

46,716



30,032



42,486



89,202



55,978


Coiled tubing services

11,988



7,588



10,851



22,839



13,226


Production services

75,384



52,711



68,907



144,291



98,332


Consolidated operating costs

$

114,197



$

79,059



$

102,766



$

216,963



$

151,787












Gross margin:










Domestic drilling

$

13,885



$

10,093



$

15,028



$

28,913



$

18,929


International drilling

4,709



2,338



4,650



9,359



5,411


Drilling services

18,594



12,431



19,678



38,272



24,340


Well servicing

6,482



5,926



5,544



12,026



10,623


Wireline services

15,421



9,800



14,115



29,536



16,400


Coiled tubing services

88



(86)



2,375



2,463



(263)


Production services

21,991



15,640



22,034



44,025



26,760


Consolidated gross margin

$

40,585



$

28,071



$

41,712



$

82,297



$

51,100












Consolidated:










Net loss

$

(18,152)



$

(20,209)



$

(11,139)



$

(29,291)



$

(45,333)


Adjusted EBITDA (1)

$

16,896



$

12,879



$

23,409



$

40,305



$

18,854



(1)    Adjusted EBITDA represents income (loss) before interest expense, income tax (expense) benefit, depreciation and amortization, impairment, and any loss on extinguishment of debt. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities or (c) as a measure of liquidity. In addition, Adjusted EBITDA does not represent funds available for discretionary use. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies.  A reconciliation of net loss as reported to adjusted EBITDA is included in the table on page 13.

 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Operating Statistics

(unaudited)



Three months ended


Six months ended


June 30,


March 31,


June 30,


2018


2017


2018


2018


2017











Domestic drilling:










Average number of drilling rigs

16



16



16



16



16


Utilization rate

100

%


92

%


100

%


100

%


89

%

Revenue days

1,454



1,345



1,440



2,894



2,580












Average revenues per day

$

24,508



$

22,657



$

24,949



$

24,727



$

22,798


Average operating costs per day

14,958



15,152



14,513



14,736



15,461


Average margin per day

$

9,550



$

7,505



$

10,436



$

9,991



$

7,337












International drilling:










Average number of drilling rigs

8



8



8



8



8


Utilization rate

85

%


36

%


76

%


81

%


40

%

Revenue days

621



262



550



1,171



582












Average revenues per day

$

35,061



$

31,702



$

32,020



$

33,633



$

32,607


Average operating costs per day

27,478



22,779



23,565



25,640



23,309


Average margin per day

$

7,583



$

8,923



$

8,455



$

7,993



$

9,298












Drilling services business:










Average number of drilling rigs

24



24



24



24



24


Utilization rate

95

%


74

%


92

%


94

%


73

%

Revenue days

2,075



1,607



1,990



4,065



3,162












Average revenues per day

$

27,666



$

24,131



$

26,903



$

27,292



$

24,603


Average operating costs per day

18,705



16,396



17,015



17,877



16,905


Average margin per day

$

8,961



$

7,735



$

9,888



$

9,415



$

7,698












Well servicing:










Average number of rigs

125



125



125



125



125


Utilization rate

49

%


47

%


47

%


48

%


45

%

Rig hours

42,871



40,880



40,774



83,645



78,589


Average revenue per hour

$

540



$

514



$

518



$

529



$

506












Wireline services:










Average number of units

108



114



110



108



114


Number of jobs

3,022



2,908



2,830



5,852



5,762


Average revenue per job

$

20,562



$

13,697



$

20,000



$

20,290



$

12,561












Coiled tubing services:










Average number of units

14



17



14



14



17


Revenue days

350



400



414



764



738


Average revenue per day

$

34,503



$

18,755



$

31,947



$

33,118



$

17,565


 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Reconciliation of Net Loss to Adjusted EBITDA

and Consolidated Gross Margin

(in thousands)

(unaudited)



Three months ended


Six months ended


June 30,


March 31,


June 30,


2018


2017


2018


2018


2017











Net loss as reported

$

(18,152)



$

(20,209)



$

(11,139)



$

(29,291)



$

(45,333)












Depreciation and amortization

23,287



24,740



23,747



47,034



49,732


Impairment

2,368



795





2,368



795


Interest expense

9,642



6,418



9,513



19,155



12,477


Income tax expense (benefit)

(249)



1,135



1,288



1,039



1,183


Adjusted EBITDA(1)

16,896



12,879



23,409



40,305



18,854












General and administrative

24,829



16,112



19,194



44,023



33,856


Bad debt recovery, net of expense

(370)



(226)



(52)



(422)



(589)


Gain on dispositions of property and equipment, net

(726)



(621)



(335)



(1,061)



(1,092)


Other expense (income)

(44)



(73)



(504)



(548)



71


Consolidated gross margin

$

40,585



$

28,071



$

41,712



$

82,297



$

51,100


 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Reconciliation of Net Income (Loss) as Reported to Adjusted Net Income (Loss)

and Diluted EPS as Reported to Adjusted (Diluted) EPS

(in thousands, except per share data)

(unaudited)



Three months ended


June 30,


March 31,


2018


2017


2018







Net loss as reported

$

(18,152)



$

(20,209)



$

(11,139)


Impairment

2,368



795




Tax benefit related to adjustments

(556)



(295)




Valuation allowance adjustments on deferred tax assets

1,501



3,492



4,190


Adjusted net loss(2)

$

(14,839)



$

(16,217)



$

(6,949)








Basic weighted average number of shares outstanding, as reported

77,944



77,377



77,606


Effect of dilutive securities






Diluted weighted average number of shares outstanding, as adjusted

77,944



77,377



77,606








Adjusted (diluted) EPS(3)

$

(0.19)



$

(0.21)



$

(0.09)








Diluted EPS as reported

$

(0.23)



$

(0.26)



$

(0.14)



(2)    Adjusted net loss represents net loss as reported adjusted to exclude impairments and the related tax benefit and valuation allowance adjustments on deferred tax assets. We believe that adjusted net loss is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted net loss may not be comparable to other similarly titled measures reported by other companies. A reconciliation of net loss as reported to adjusted net loss is included in the table above.


(3)    Adjusted (diluted) EPS represents adjusted net loss divided by the weighted-average number of shares outstanding during the period, including the effect of dilutive securities, if any. We believe that adjusted (diluted) EPS is a useful measure to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers, although it is not a measure of financial performance under GAAP. Adjusted (diluted) EPS may not be comparable to other similarly titled measures reported by other companies. A reconciliation of diluted EPS as reported to adjusted (diluted) EPS is included in the table above.

 

PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES

Equipment Information

As of July 31, 2018



Multi-well, Pad-capable

Drilling Services Business Segments:

AC rigs


SCR rigs


Total

Domestic drilling

16





16


International drilling



8



8







24








Production Services Business Segments:

550 HP


600 HP


Total

Well servicing rigs, by horsepower (HP) rating

113



12



125









Onshore


Offshore


Total

Wireline services units

104





104


Coiled tubing services units

9



2



11


 

SOURCE Pioneer Energy Services


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