Superior Energy Services Announces Third Quarter 2024 Results and Conference Call

HOUSTON, Oct. 30, 2024 (GLOBE NEWSWIRE) — Superior Energy Services, Inc. (the “Company”) filed its Form 10-Q for the period ended September 30, 2024. In accordance with the Company’s Shareholders Agreement, it will host a conference call with shareholders on November 1, 2024.

For the third quarter of 2024, the Company reported net income from continuing operations of $21.9 million, or $1.09 per diluted share, with revenue of $197.3 million. This compares to net income from continuing operations of $29.5 million or $1.46 per diluted share, with revenue of $201.1 million, for the second quarter of 2024.

The Company’s Adjusted EBITDA (a non-GAAP measure defined on page 4) was $57.8 million compared to $60.0 million for the second quarter of 2024. Refer to pages 11 and 12 for a reconciliation of Adjusted EBITDA to GAAP results.

Third Quarter 2024 Geographic Breakdown

U.S. land revenue was $36.0 million for the third quarter of 2024, a decrease of 8% compared to revenue of $39.0 million for the second quarter of 2024. The decline in U.S. land revenue was primarily driven by decreased activity from our premium drill pipe and bottom hole accessories product lines within our Rentals segment, consistent with a reduced U.S. land rig count.

U.S. offshore revenue was $49.7 million in the third quarter of 2024, a decrease of 8% compared to revenue of $53.8 million in the second quarter of 2024. U.S. offshore revenue decreased primarily in our Well Services segments, with the most significant decline coming from our project-based completion services product line.  U.S. Offshore revenue in the Rentals segment for the third quarter of 2024 was up $1.6 million versus the second quarter of 2024, despite approximately $1.0 million of revenue slipping to the fourth quarter of 2024 due to hurricane activity in September.

International revenue was $111.6 million in the third quarter of 2024, an increase of 3% compared to revenue of $108.4 million in the second quarter of 2024. International revenue was up across both our Rentals and Well Services segments, with the increase being driven by our hydraulic snubbing and well control services product lines.

Third Quarter 2024 Segment Reporting

The Rentals segment revenue in the third quarter of 2024 was $97.9 million, a 2% decrease compared to revenue of $99.9 million in the second quarter of 2024, primarily driven by reduced activity in U.S. land and hurricane disruptions in the U.S. offshore market. In the third quarter of 2024, Rentals segment income from operations was $43.9 million as compared to $44.1 million in the second quarter of 2024. Adjusted EBITDA was $55.9 million, a decrease from $56.0 million in the second quarter of 2024. Adjusted EBITDA Margin (a non-GAAP measure defined on page 4) was 57%, a 1% increase from the second quarter of 2024.

The Well Services segment revenue in the third quarter of 2024 was $99.5 million, a 2% decrease compared to revenue of $101.2 million in the second quarter of 2024 and income from operations for the third quarter of 2024 was $3.8 million as compared to $10.7 million in the second quarter of 2024. Adjusted EBITDA for the third quarter of 2024 was $15.4 million with an Adjusted EBITDA Margin of 16%, as compared to Adjusted EBITDA of $19.1 million with an Adjusted EBITDA Margin of 19% in the second quarter of 2024. The Well Services segment sequential decline was primarily driven by lower activity in our project-based completion services product line.

Liquidity

As of September 30, 2024, the Company had cash, cash equivalents, and restricted cash of approximately $380.6 million.  As of September 30, 2024, our borrowing base, as defined in our credit agreement, was approximately $89.9 million, and we had $39.5 million in letters of credit outstanding which reduced the borrowing availability to $50.4 million. At September 30, 2024, we had no outstanding borrowings under our credit facility.

During the third quarter of 2024, we utilized an indirect foreign exchange mechanism known as a Blue Chip Swap. The transactions were completed at implied exchange rates that were approximately 63.0% higher than the official exchange rate, resulting in a loss of approximately $5.1 million during the third quarter of 2024.

During the third quarter of 2024, net cash from operating activities was $62.5 million. Free Cash Flow (a non-GAAP measure defined on page 4) for the third quarter of 2024 totaled $50.5 million as compared to $39.0 million for the second quarter of 2024. Refer to page 8 for a reconciliation of Free Cash Flow to Net Cash from Operating Activities.

Third quarter 2024 capital expenditures were $12.0 million. The Company expects total capital expenditures for 2024 to be approximately $100 to $110 million. Approximately 91% 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

Our full year 2024 guidance remains consistent from the second quarter 2024 guidance. We expect 2024 revenue to come in at a range of $780 million to $840 million with 2024 Adjusted EBITDA expected to be in a range of $235 million to $265 million.

Conference Call Information

The Company’s management team will host a conference call on Friday, November 1, 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 November 1, 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 [email protected].

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” and “—Superior Energy Services, Inc. and Subsidiaries Reconciliation of Adjusted EBITDA by Segment” 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. Please see table under “—Condensed Consolidated Statements of Cash Flows” included on page 8 of this press release.

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, 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) and other uncertainties (such as the war in Ukraine and conflict in Israel and broader geopolitical tensions in the Middle East and eastern Europe)  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												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
Rentals	$	97,857			$	99,851			$	113,201			$	305,799			$	334,433
Well Services		99,450				101,230				97,184				301,223				340,562
Total revenues		197,307				201,081				210,385				607,022				674,995
Rentals		35,227				36,596				37,769				109,589				109,258
Well Services		74,172				71,672				72,076				214,717				239,062
Total cost of revenues		109,399				108,268				109,845				324,306				348,320
Depreciation, depletion, amortization and accretion		21,077				20,868				20,490				62,392				61,250
General and administrative expenses		33,458				33,404				30,089				101,837				92,256
Restructuring and transaction expenses		5,891				–				–				5,891				1,983
Other gains, net		(133	)			(614	)			(4,073	)			(1,829	)			(5,424	)
Income from operations		27,615				39,155				54,034				114,425				176,610
Other income (expense):
Interest income, net		5,032				5,760				6,629				17,632				18,581
Loss on Blue Chip Swaps		(5,113	)			–				(12,120	)			(5,113	)			(12,120	)
Other income (expense)		979				(2,082	)			(4,520	)			(2,916	)			(8,508	)
Income from continuing operations before income taxes		28,513				42,833				44,023				124,028				174,563
Income tax expense		(6,597	)			(13,370	)			(11,403	)			(34,754	)			(44,615	)
Net income from continuing operations		21,916				29,463				32,620				89,274				129,948
Income from discontinued operations, net of income tax		–				1,896				128				1,896				408
Net income	$	21,916			$	31,359			$	32,748			$	91,170			$	130,356
Income per share – basic:
Net income from continuing operations	$	1.09			$	1.46			$	1.62			$	4.43			$	6.46
Income from discontinued operations, net of income tax		–				0.09				0.01				0.09				0.02
Net income	$	1.09			$	1.55			$	1.63			$	4.52			$	6.48
Income per share – diluted
Net income from continuing operations	$	1.09			$	1.46			$	1.62			$	4.42			$	6.45
Income from discontinued operations, net of income tax		–				0.09				–				0.10				0.02
Net income	$	1.09			$	1.55			$	1.62			$	4.52			$	6.47
Weighted-average shares outstanding
Basic		20,177				20,172				20,136				20,170				20,123
Diluted		20,186				20,183				20,159				20,182				20,144

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
	September 30,				December 31,
	2024				2023
ASSETS
Current assets:
Cash and cash equivalents	$	325,881			$	391,684
Accounts receivable, net		200,106				276,868
Inventory		70,293				74,995
Income taxes receivable		13,383				10,542
Prepaid expenses		23,363				18,614
Other current assets		7,765				7,922
Total current assets		640,791				780,625
Property, plant and equipment, net		306,285				294,960
Note receivable		72,694				69,005
Restricted cash		54,707				85,444
Deferred tax assets		59,555				67,241
Other assets, net		42,319				43,718
Total assets	$	1,176,351			$	1,340,993
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	38,897			$	38,214
Accrued expenses		106,203				103,782
Income taxes payable		20,100				20,220
Decommissioning liability		30,747				21,631
Total current liabilities		195,947				183,847
Decommissioning liability		140,030				148,652
Other liabilities		38,599				47,583
Total liabilities		374,576				380,082
Total equity		801,775				960,911
Total liabilities and equity	$	1,176,351			$	1,340,993

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
Cash flows from operating activities
Net income	$	21,916			$	31,359			$	32,748			$	91,170			$	130,356
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation, depletion, amortization and accretion		21,077				20,868				20,490				62,392				61,250
Loss on Blue Chip Swaps		5,113				–				12,120				5,113				12,120
Washington State Tax Settlement		–				–				–				–				(27,068	)
Decommissioning costs		(5,111	)			(143	)			(3,401	)			(5,684	)			(6,279	)
Other non-cash items		(2,642	)			4,205				566				4,798				23,357
Changes in operating assets and liabilities:		22,162				17,487				(10,112	)			67,396				(38,390	)
Net cash from operating activities		62,515				73,776				52,411				225,185				155,346
Cash flows from investing activities
Payments for capital expenditures		(12,005	)			(34,744	)			(21,592	)			(67,447	)			(67,218	)
Proceeds from sales of assets		292				669				9,563				3,577				24,710
Proceeds from sales of Blue Chip Swap securities		8,121				–				9,656				8,121				9,656
Purchases of Blue Chip Swap securities		(13,234	)			–				(21,776	)			(13,234	)			(21,776	)
Net cash from investing activities		(16,826	)			(34,075	)			(24,149	)			(68,983	)			(54,628	)
Cash flows from financing activities
Distributions to shareholders		–				–				–				(250,417	)			–
Repurchase of shares		–				–				–				(962	)			–
Other		(358	)			–				–				(1,363	)			(1,116	)
Net cash from financing activities		(358	)			–				–				(252,742	)			(1,116	)
Net change in cash, cash equivalents, and restricted cash		45,331				39,701				28,262				(96,540	)			99,602
Cash, cash equivalents and restricted cash at beginning of period		335,257				295,556				410,447				477,128				339,107
Cash, cash equivalents, and restricted cash at end of period	$	380,588			$	335,257			$	438,709			$	380,588			$	438,709
Reconciliation of Free Cash Flow
Net cash from operating activities	$	62,515			$	73,776			$	52,411			$	225,185			$	155,346
Payments for capital expenditures		(12,005	)			(34,744	)			(21,592	)			(67,447	)			(67,218	)
Free Cash Flow	$	50,510			$	39,032			$	30,819			$	157,738			$	88,128
Free Cash Flow is a Non-GAAP measure. See Non-GAAP Financial 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												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
U.S. land
Rentals	$	28,934			$	32,713			$	37,478			$	100,653			$	127,341
Well Services		7,027				6,242				8,223				20,735				20,384
Total U.S. land		35,961				38,955				45,701				121,388				147,725
U.S. offshore
Rentals		32,228				30,644				44,681				100,123				117,867
Well Services		17,489				23,125				14,459				69,486				54,185
Total U.S. offshore		49,717				53,769				59,140				169,609				172,052
International
Rentals		36,695				36,494				31,042				105,023				89,225
Well Services		74,934				71,863				74,502				211,002				265,993
Total International		111,629				108,357				105,544				316,025				355,218
Total Revenues	$	197,307			$	201,081			$	210,385			$	607,022			$	674,995

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
SEGMENT HIGHLIGHTS
(in thousands, unaudited)
	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
Revenues
Rentals	$	97,857			$	99,851			$	113,201			$	305,799			$	334,433
Well Services		99,450				101,230				97,184				301,223				340,562
Total Revenues	$	197,307			$	201,081			$	210,385			$	607,022			$	674,995
Income (loss) from Operations
Rentals	$	43,856			$	44,061			$	56,253			$	139,128			$	167,373
Well Services		3,789				10,686				10,581				27,867				50,860
Corporate and other		(20,030	)			(15,592	)			(12,800	)			(52,570	)			(41,623	)
Income from operations	$	27,615			$	39,155			$	54,034			$	114,425			$	176,610
Adjusted EBITDA
Rentals	$	55,915			$	56,023			$	68,791			$	174,959			$	204,632
Well Services		15,427				19,078				15,137				56,028				69,697
Corporate and other		(13,576	)			(15,078	)			(12,125	)			(45,096	)			(37,207	)
Total Adjusted EBITDA	$	57,766			$	60,023			$	71,803			$	185,891			$	237,122
Adjusted EBITDA Margin
Rentals		57	%			56	%			61	%			57	%			61	%
Well Services		16	%			19	%			16	%			19	%			20	%
Corporate and other	n/a				n/a				n/a				n/a				n/a
Total Adjusted EBITDA Margin		29	%			30	%			34	%			31	%			35	%
Adjusted EBITDA is a Non-GAAP measure.  See Non-GAAP Financial Measures for our definition of Adjusted EBITDA and pages 11 and 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												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
Net income from continuing operations	$	21,916			$	29,463			$	32,620			$	89,274			$	129,948
Depreciation, depletion, amortization and accretion		21,077				20,868				20,490				62,392				61,250
Interest income, net		(5,032	)			(5,760	)			(6,629	)			(17,632	)			(18,581	)
Income tax expense		6,597				13,370				11,403				34,754				44,615
Restructuring expenses and other adjustments (1)		9,074				–				(2,721	)			9,074				(738	)
Loss on Blue Chip Swap Securities		5,113				–				12,120				5,113				12,120
Other (income) expense, net		(979	)			2,082				4,520				2,916				8,508
Adjusted EBITDA	$	57,766			$	60,023			$	71,803			$	185,891			$	237,122
Adjusted EBITDA is a Non-GAAP measure.  See Non-GAAP Financial Measures for our definition of Adjusted EBITDA.
(1) Restructuring expenses and other adjustments for the three and nine months ended September 30, 2024 relate to costs associated with changes in our executive management and other restructuring costs.  Adjustments for the three and nine months ended September 30, 2023 relate to exit and disposal activities related to non-core businesses and other restructuring costs.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT
(in thousands, unaudited)
	Three Months Ended												Nine Months Ended
	September 30,				June 30,				September 30,				September 30,
	2024				2024				2023				2024				2023
Rentals
Income from operations	$	43,856			$	44,061			$	56,253			$	139,128			$	167,373
Depreciation, depletion, amortization and accretion		12,059				11,962				12,538				35,831				37,259
Adjusted EBITDA	$	55,915			$	56,023			$	68,791			$	174,959			$	204,632
Well Services
Income from operations	$	3,789			$	10,686			$	10,581			$	27,867			$	50,860
Depreciation, depletion, amortization and accretion		8,455				8,392				7,277				24,978				21,558
Restructuring expenses and other adjustments(1)		3,183				–				(2,721	)			3,183				(2,721	)
Adjusted EBITDA	$	15,427			$	19,078			$	15,137			$	56,028			$	69,697
Corporate
Loss from operations	$	(20,030	)		$	(15,592	)		$	(12,800	)		$	(52,570	)		$	(41,623	)
Depreciation, depletion, amortization and accretion		563				514				675				1,583				2,433
Restructuring expenses and other adjustments (1)		5,891				–				–				5,891				1,983
Adjusted EBITDA	$	(13,576	)		$	(15,078	)		$	(12,125	)		$	(45,096	)		$	(37,207	)
Total
Income from operations	$	27,615			$	39,155			$	54,034			$	114,425			$	176,610
Depreciation, depletion, amortization and accretion		21,077				20,868				20,490				62,392				61,250
Restructuring expenses and other adjustments (1)		9,074				–				(2,721	)			9,074				(738	)
Adjusted EBITDA	$	57,766			$	60,023			$	71,803			$	185,891			$	237,122
Adjusted EBITDA is a Non-GAAP measure.  See Non-GAAP Financial Measures for our definition of Adjusted EBITDA.
(1) Restructuring expenses and other adjustments for the three and nine months ended September 30, 2024 relate to costs associated with changes in our executive management and other restructuring costs.  Adjustments for the three and nine months ended September 30, 2023 relate to exit and disposal activities related to non-core businesses and other restructuring costs.

FOR FURTHER INFORMATION CONTACT:
Jamie Spexarth, Chief Financial Officer
1001 Louisiana St., Suite 2900
Houston, TX 77002
Investor Relations, [email protected], (713) 654-2200

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