Superior Energy Services Inc. (SPN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Superior Energy Services Inc. has a market cap of $2 billion; its shares were traded at around $25.46 with a P/E ratio of 21.3 and P/S ratio of 1.4. Superior Energy Services Inc. had an annual average earning growth of 20.1% over the past 10 years. GuruFocus rated Superior Energy Services Inc. the business predictability rank of 4-star.SPN is in the portfolios of David Nierenberg of D3 Family of Funds, David Dreman of Dreman Value Management, RS Investment Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
Subsea and well enhancement segment revenue was $232.8 million, a 60% increase from the fourth quarter of 2009 (sequentially), and income from operations was $23.7 million as compared with a loss from operations of $176.6 million in the fourth quarter of 2009. The fourth quarter of 2009 included a $119.8 million charge for the reduction in value of assets and a $68.7 million reduction in revenue due to cost adjustments on the wreck removal project. The first quarter of 2010 included $19.7 million in revenue from the acquisitions of Hallin and the Bullwinkle platform and related oil and gas assets. Our domestic land revenue from this segment increased 32% as compared with the fourth quarter of 2009 due to increases in demand for production-related services such as coiled tubing, cased hole wireline, mechanical wireline and ancillary services. Our international revenue also increased 30% over the fourth quarter of 2009 due to the contribution from Hallin, as well as increases in demand for hydraulic workover and snubbing services. Gulf of Mexico revenue, exclusive of the wreck removal project, increased 45% due to increased demand for cased hole wireline and mechanical wireline services, as well as oil and gas production and production handling revenue from the Bullwinkle platform.
In our marine segment, revenue was $17.5 million and the loss from operations was $4.0 million, as compared with fourth quarter 2009 revenue of $21.2 million and a loss from operations of $2.9 million, which included a gain on sale of assets of $2.1 million and a $6.4 million write-down of liftboat components. The decline in financial performance is related to the fact that both of our 265-foot class liftboats were out of service for the entire period for repairs. We anticipate both liftboats will return to service in the third quarter of 2010. The other factor driving our performance was a 5% decrease in the average dayrate of our liftboat fleet relative to the fourth quarter of 2009, partially offset by a 4% increase in utilization, exclusive of the 265-foot class liftboats.
For the three months ended March 31, 2010, our revenues were $364.5 million, resulting in net income of $21.5 million, or $0.27 diluted earnings per share. For the three months ended March 31, 2009, revenues were $437.1 million and net income was $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 gain related to hedges in place for our equity-method investments. Revenues for the three months ended March 31, 2010 were lower in the subsea and well enhancement segment due to a decrease in work on our large-scale decommissioning project, partially offset by an increase in our international market areas. Revenue also decreased in the drilling products and services segment primarily due to decreased rentals of drill pipe and stabilization equipment in our domestic land market areas. During the three months ended March 31, 2010, revenue in our marine segment also decreased due to lower utilization, as well as lower dayrates.
Depreciation, depletion, amortization and accretion increased to $51.0 million in the three months ended March 31, 2010 from $49.9 million in the same period in 2009. Depreciation, depletion, amortization and accretion expense related to our subsea and well enhancement segment for the three months ended March 31, 2010 decreased approximately $1.6 million, or 7%, from the same period in 2009. This decrease is primarily attributable to the $119.8 million reduction in value of assets related to our domestic land market areas recorded in the fourth quarter of 2009. This decrease was partially offset by the acquisitions of Hallin and the Bullwinkle platform, along with 2009 and 2010 capital expenditures. Depreciation and amortization expense increased within our drilling products and services segment by $2.9 million, or 11%, due to 2009 and 2010 capital expenditures. Depreciation expense related to the marine segment for the three months ended March 31, 2010 remained constant from the same period in 2009. The decrease in depreciation expense from total lower utilization and the sale of the four 145-foot leg length liftboats in November 2009 was offset due to higher utilization in our larger fleet.
In the three months ended March 31, 2010, we generated net cash from operating activities of $87.4 million as compared to $16.3 million in the same period of 2009. This increase is primarily attributable to the billings and receipt of payments related to the large-scale decommissioning contract in the Gulf of Mexico, which is currently expected to be completed by the end of next quarter. Included in other current assets is approximately $192.4 million at March 31, 2010 and $209.5 million at December 31, 2009 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 costs and recognize revenue in advance of completing milestones. Our primary liquidity needs are for working capital, and to fund 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 $53.9 million at
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Superior Energy Services Inc. has a market cap of $2 billion; its shares were traded at around $25.46 with a P/E ratio of 21.3 and P/S ratio of 1.4. Superior Energy Services Inc. had an annual average earning growth of 20.1% over the past 10 years. GuruFocus rated Superior Energy Services Inc. the business predictability rank of 4-star.SPN is in the portfolios of David Nierenberg of D3 Family of Funds, David Dreman of Dreman Value Management, RS Investment Management, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
During the first quarter of 2010, revenue was $364.5 million, income from operations was $43.7 million, net income was $21.5 million and diluted earnings per share was $0.27. As compared with the fourth quarter of 2009, the period was marked by increases in activity across all geographic market areas for our subsea and well enhancement segment and our drilling products and services segment. We believe this to be a positive trend, especially since the first quarter is typically our weakest period of the year due to seasonality.Subsea and well enhancement segment revenue was $232.8 million, a 60% increase from the fourth quarter of 2009 (sequentially), and income from operations was $23.7 million as compared with a loss from operations of $176.6 million in the fourth quarter of 2009. The fourth quarter of 2009 included a $119.8 million charge for the reduction in value of assets and a $68.7 million reduction in revenue due to cost adjustments on the wreck removal project. The first quarter of 2010 included $19.7 million in revenue from the acquisitions of Hallin and the Bullwinkle platform and related oil and gas assets. Our domestic land revenue from this segment increased 32% as compared with the fourth quarter of 2009 due to increases in demand for production-related services such as coiled tubing, cased hole wireline, mechanical wireline and ancillary services. Our international revenue also increased 30% over the fourth quarter of 2009 due to the contribution from Hallin, as well as increases in demand for hydraulic workover and snubbing services. Gulf of Mexico revenue, exclusive of the wreck removal project, increased 45% due to increased demand for cased hole wireline and mechanical wireline services, as well as oil and gas production and production handling revenue from the Bullwinkle platform.
In our marine segment, revenue was $17.5 million and the loss from operations was $4.0 million, as compared with fourth quarter 2009 revenue of $21.2 million and a loss from operations of $2.9 million, which included a gain on sale of assets of $2.1 million and a $6.4 million write-down of liftboat components. The decline in financial performance is related to the fact that both of our 265-foot class liftboats were out of service for the entire period for repairs. We anticipate both liftboats will return to service in the third quarter of 2010. The other factor driving our performance was a 5% decrease in the average dayrate of our liftboat fleet relative to the fourth quarter of 2009, partially offset by a 4% increase in utilization, exclusive of the 265-foot class liftboats.
For the three months ended March 31, 2010, our revenues were $364.5 million, resulting in net income of $21.5 million, or $0.27 diluted earnings per share. For the three months ended March 31, 2009, revenues were $437.1 million and net income was $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 gain related to hedges in place for our equity-method investments. Revenues for the three months ended March 31, 2010 were lower in the subsea and well enhancement segment due to a decrease in work on our large-scale decommissioning project, partially offset by an increase in our international market areas. Revenue also decreased in the drilling products and services segment primarily due to decreased rentals of drill pipe and stabilization equipment in our domestic land market areas. During the three months ended March 31, 2010, revenue in our marine segment also decreased due to lower utilization, as well as lower dayrates.
Depreciation, depletion, amortization and accretion increased to $51.0 million in the three months ended March 31, 2010 from $49.9 million in the same period in 2009. Depreciation, depletion, amortization and accretion expense related to our subsea and well enhancement segment for the three months ended March 31, 2010 decreased approximately $1.6 million, or 7%, from the same period in 2009. This decrease is primarily attributable to the $119.8 million reduction in value of assets related to our domestic land market areas recorded in the fourth quarter of 2009. This decrease was partially offset by the acquisitions of Hallin and the Bullwinkle platform, along with 2009 and 2010 capital expenditures. Depreciation and amortization expense increased within our drilling products and services segment by $2.9 million, or 11%, due to 2009 and 2010 capital expenditures. Depreciation expense related to the marine segment for the three months ended March 31, 2010 remained constant from the same period in 2009. The decrease in depreciation expense from total lower utilization and the sale of the four 145-foot leg length liftboats in November 2009 was offset due to higher utilization in our larger fleet.
In the three months ended March 31, 2010, we generated net cash from operating activities of $87.4 million as compared to $16.3 million in the same period of 2009. This increase is primarily attributable to the billings and receipt of payments related to the large-scale decommissioning contract in the Gulf of Mexico, which is currently expected to be completed by the end of next quarter. Included in other current assets is approximately $192.4 million at March 31, 2010 and $209.5 million at December 31, 2009 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 costs and recognize revenue in advance of completing milestones. Our primary liquidity needs are for working capital, and to fund 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 $53.9 million at
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