Superior Energy Services Inc. (SPN, Financial) filed Quarterly Report for the period ended 2009-03-31.
SUPERIOR ENERGY SERVICES INC. is engaged in the business of providingoffshore plugging and abandonment and wireline services in the Gulf ofMexico the development manufacture and sale of electronic torque andpressure control equipment and thread protectors which are used inconnection with oil and gas exploration the development manufacture andsale of oil spill containment boom and ancillary equipment and the rental of specialized oil well equipment and fishing tools. Superior Energy Services Inc. has a market cap of $1.69 billion; its shares were traded at around $21.65 with a P/E ratio of 5.5 and P/S ratio of 0.9. Superior Energy Services Inc. had an annual average earning growth of 27.6% over the past 10 years. GuruFocus rated Superior Energy Services Inc. the business predictability rank of 4.5-star.
For the three months ended March 31, 2009, our revenues were $437.1 million, resulting in net income of $56.8 million, or $0.72 diluted earnings per share. Included in the results for the three months ended March 31, 2009 was a $3.2 million pre-tax net gain related to hedges in place for our equity-method investments. For the three months ended March 31, 2008, revenues were $441.4 million and net income was $99.5 million, or $1.21 diluted earnings per share. Included in the results for the three months ended March 31, 2008, were revenues of $55.1 million and income from operations of $64.6 million attributable to the operations of SPN Resources and the gain associated with the sale of 75% of our interest in that entity in March 2008. Revenue for the three months ended March 31, 2009 was higher in the well intervention segment primarily due to work related to a large-scale decommissioning project, which we expect to complete in the first half of 2010. Revenue decreased slightly in the rental tools segment due to decreased rentals of accommodations and stabilization equipment. During the three months ended March 31, 2009, revenue in our marine segment remained unchanged. No activity was recorded in our oil and gas segment for the three months ended March 31, 2009 as we sold 75% of our interest in SPN Resources on March 14, 2008.
Depreciation and amortization increased to $49.9 million in the three months ended March 31, 2009 from $41.9 million in the same period in 2008. Depreciation and amortization expense related to our well intervention and rental segments for the three months ended March 31, 2009 increased approximately $10.4 million, or 28%, from the same period in 2008. The increase in depreciation and amortization expense for these segments is primarily attributable to our 2009 and 2008 capital expenditures. Depreciation expense related to the marine segment for the three months ended March 31, 2009 increased approximately $0.4 million, or 18%, from the same period in 2008. The increase in depreciation expense for the marine segment is primarily attributable to the delivery of one new vessel partially offset by the decrease in utilization. These increases were offset by the $2.8 million decrease in the oil and gas segment as we sold 75% of our interest in SPN Resources in March 2008.
In the three months ended March 31, 2009, we generated net cash from operating activities of $16.3 million as compared to $124.3 million in the same period of 2008. This decrease is primarily attributable to the increase in costs and estimated earnings in excess of billings related to the large-scale decommissioning contract in the Gulf of Mexico, which is currently scheduled to end in the first half of 2010. Included in other current assets is approximately $238.7 million at March 31, 2009 and $164.3 million at December 31, 2008 of costs and estimated earnings in excess of billings related to this project. Billings and subsequent receipts are based on the completion of milestones. We are working on several aspects of this project at the same time, so we continue to incur cost and recognize revenue in advance of completing milestones. Our primary liquidity needs are for working capital, capital expenditures, debt service and acquisitions. Our primary sources of liquidity are cash flows from operations and available borrowings under our revolving credit facility. We had cash and cash equivalents of $110.4 million at March 31, 2009 compared to $44.9 million at December 31, 2008.
We made $82.3 million of capital expenditures during the three months ended March 31, 2009. Approximately $42.5 million was used to expand and maintain our rental tool equipment inventory, approximately $12.2 million was spent on our marine segment and approximately $24.9 million was used to expand and maintain the asset base of our well intervention segment.
We have a $250 million bank revolving credit facility. Any amounts outstanding under the revolving credit facility are due on June 14, 2011. At March 31, 2009, we had $133.4 million outstanding under the bank credit facility. We also had approximately $11.3 million of letters of credit outstanding, which reduces our borrowing capacity under this credit facility. The increase in the amount outstanding on the revolving credit facility is primarily due to increased working capital needs for our large-scale decommissioning project and tax payments. As of April 30, 2009, we had $69.3 million outstanding under the bank credit facility. Borrowings under the credit facility bear interest at a LIBOR rate plus margins that depend on our leverage ratio. Indebtedness under the credit facility is secured by substantially all of our assets, including the pledge of the stock of our principal subsidiaries. The credit facility contains customary events of default and requires that we satisfy various financial covenants. It also limits our ability to pay dividends or make other distributions, make acquisitions, create liens or incur additional indebtedness.
Read the The complete ReportSPN is in the portfolios of David Dreman of Dreman Value Management, David Dreman of Dreman Value Management.
SUPERIOR ENERGY SERVICES INC. is engaged in the business of providingoffshore plugging and abandonment and wireline services in the Gulf ofMexico the development manufacture and sale of electronic torque andpressure control equipment and thread protectors which are used inconnection with oil and gas exploration the development manufacture andsale of oil spill containment boom and ancillary equipment and the rental of specialized oil well equipment and fishing tools. Superior Energy Services Inc. has a market cap of $1.69 billion; its shares were traded at around $21.65 with a P/E ratio of 5.5 and P/S ratio of 0.9. Superior Energy Services Inc. had an annual average earning growth of 27.6% over the past 10 years. GuruFocus rated Superior Energy Services Inc. the business predictability rank of 4.5-star.
Highlight of Business Operations:
During the first quarter of 2009, revenue was $437.1 million, income from operations was $99.8 million, net income was $56.8 million and diluted earnings per share was $0.72. The results include pre-tax earnings of $3.2 million, which is the Companys share of non-cash unrealized earnings associated with mark-to-market changes in the value of outstanding hedging contracts put in place by the Companys equity-method investments, and is included in the income statement on the earnings from equity-method investments, net, line item.For the three months ended March 31, 2009, our revenues were $437.1 million, resulting in net income of $56.8 million, or $0.72 diluted earnings per share. Included in the results for the three months ended March 31, 2009 was a $3.2 million pre-tax net gain related to hedges in place for our equity-method investments. For the three months ended March 31, 2008, revenues were $441.4 million and net income was $99.5 million, or $1.21 diluted earnings per share. Included in the results for the three months ended March 31, 2008, were revenues of $55.1 million and income from operations of $64.6 million attributable to the operations of SPN Resources and the gain associated with the sale of 75% of our interest in that entity in March 2008. Revenue for the three months ended March 31, 2009 was higher in the well intervention segment primarily due to work related to a large-scale decommissioning project, which we expect to complete in the first half of 2010. Revenue decreased slightly in the rental tools segment due to decreased rentals of accommodations and stabilization equipment. During the three months ended March 31, 2009, revenue in our marine segment remained unchanged. No activity was recorded in our oil and gas segment for the three months ended March 31, 2009 as we sold 75% of our interest in SPN Resources on March 14, 2008.
Depreciation and amortization increased to $49.9 million in the three months ended March 31, 2009 from $41.9 million in the same period in 2008. Depreciation and amortization expense related to our well intervention and rental segments for the three months ended March 31, 2009 increased approximately $10.4 million, or 28%, from the same period in 2008. The increase in depreciation and amortization expense for these segments is primarily attributable to our 2009 and 2008 capital expenditures. Depreciation expense related to the marine segment for the three months ended March 31, 2009 increased approximately $0.4 million, or 18%, from the same period in 2008. The increase in depreciation expense for the marine segment is primarily attributable to the delivery of one new vessel partially offset by the decrease in utilization. These increases were offset by the $2.8 million decrease in the oil and gas segment as we sold 75% of our interest in SPN Resources in March 2008.
In the three months ended March 31, 2009, we generated net cash from operating activities of $16.3 million as compared to $124.3 million in the same period of 2008. This decrease is primarily attributable to the increase in costs and estimated earnings in excess of billings related to the large-scale decommissioning contract in the Gulf of Mexico, which is currently scheduled to end in the first half of 2010. Included in other current assets is approximately $238.7 million at March 31, 2009 and $164.3 million at December 31, 2008 of costs and estimated earnings in excess of billings related to this project. Billings and subsequent receipts are based on the completion of milestones. We are working on several aspects of this project at the same time, so we continue to incur cost and recognize revenue in advance of completing milestones. Our primary liquidity needs are for working capital, capital expenditures, debt service and acquisitions. Our primary sources of liquidity are cash flows from operations and available borrowings under our revolving credit facility. We had cash and cash equivalents of $110.4 million at March 31, 2009 compared to $44.9 million at December 31, 2008.
We made $82.3 million of capital expenditures during the three months ended March 31, 2009. Approximately $42.5 million was used to expand and maintain our rental tool equipment inventory, approximately $12.2 million was spent on our marine segment and approximately $24.9 million was used to expand and maintain the asset base of our well intervention segment.
We have a $250 million bank revolving credit facility. Any amounts outstanding under the revolving credit facility are due on June 14, 2011. At March 31, 2009, we had $133.4 million outstanding under the bank credit facility. We also had approximately $11.3 million of letters of credit outstanding, which reduces our borrowing capacity under this credit facility. The increase in the amount outstanding on the revolving credit facility is primarily due to increased working capital needs for our large-scale decommissioning project and tax payments. As of April 30, 2009, we had $69.3 million outstanding under the bank credit facility. Borrowings under the credit facility bear interest at a LIBOR rate plus margins that depend on our leverage ratio. Indebtedness under the credit facility is secured by substantially all of our assets, including the pledge of the stock of our principal subsidiaries. The credit facility contains customary events of default and requires that we satisfy various financial covenants. It also limits our ability to pay dividends or make other distributions, make acquisitions, create liens or incur additional indebtedness.
Read the The complete ReportSPN is in the portfolios of David Dreman of Dreman Value Management, David Dreman of Dreman Value Management.
