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 ir@superiorenergy.com.

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, ir@superiorenergy.com, (713) 654-2200

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