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8-K - FORM 8-K - RigNet, Inc. | c17032e8vk.htm |
Exhibit 99
PRESS RELEASE
FOR IMMEDIATE RELEASE
Contact: Marty Jimmerson
RigNet, Inc.
+1 (281) 674-0699
investor.relations@rig.net
RigNet, Inc.
+1 (281) 674-0699
investor.relations@rig.net
RigNet, Inc. Announces First Quarter 2011 Earnings Results
HOUSTON, TX May 11, 2011
| Reported revenue of $24.5 million, a 12.4% increase over the same quarter last year and
a 0.8% increase over the previous quarter |
||
| Reported Adjusted EBITDA of $6.6 million, a 8.2% increase over the same quarter last
year and a 21.4% decrease from the previous quarter |
||
| Reported capital expenditures of $4.3 million, a 34.4% increase over the same quarter
last year and a 7.5% increase over the previous quarter |
||
| Balance sheet highlights as of March 31, 2011: |
| Cash was $55.1 million (excluding restricted cash of $10.0 million) |
||
| Working capital was $50.6 million |
||
| Debt was $30.0 million |
| Selected operational data as of March 31, 2011: |
Eastern | Western | |||||||||||
Hemisphere | Hemisphere | U.S. Land | ||||||||||
Drilling rigs (1) |
143 | 80 | 323 | |||||||||
Other sites (2) |
131 | 159 | 82 |
(1) | Eastern and Western Hemisphere include jack up, semi-submersible and drillship rigs |
|
(2) | Includes production facilities, energy support vessels, related remote support offices and supply bases |
For the three months ended March 31, 2011, RigNet, Inc. (RigNet or the Company) (NASDAQ: RNET),
today announced revenue of $24.5 million, Adjusted EBITDA of $6.6 million and net income of zero.
For the three months ended March 31, 2010, revenue was $21.8 million, Adjusted EBITDA was $6.1
million and net loss was zero. For the sequential comparison of the three months ended December
31, 2010, revenue was $24.3 million, Adjusted EBITDA was $8.4 million and net loss was $4.7
million.
Revenue increased by $2.7 million or 12.4% for the three months ended March 31, 2011 as compared to
the same period of 2010 due primarily to the recovery of the U.S. land drilling market, widened
geographic footprint in U.S. land drilling, and improvement in the U.S. Gulf of Mexico. Adjusted
EBITDA increased by $0.5 million or 8.2% over the prior year period primarily due to increased
revenue described above partially offset by additional costs related to operating as a
publicly-traded company. Net income increased by $30,000 for the three months ended March 31, 2011
as compared to the same period of 2010.
1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net
Page 2 of 5
Revenue increased by $0.2 million or 0.8% for the three months ended March 31, 2011 as compared to
the previous quarter due primarily to the recovery of the U.S. land drilling market and widened
geographic footprint in U.S. land drilling. Adjusted EBITDA decreased by $1.8 million or 21.4%
over the previous quarter primarily due to additional costs related to operating a public company.
Excluding the effect of pre-tax, non-cash derivatives charges of $4.8 million in the previous
quarter, net income decreased $70,000 for the three months ended March 31, 2011 as compared to the
prior quarter.
Mark B. Slaughter, Chief Executive Officer and President, commented, I am proud that we have
successfully completed our first full quarter as a public company and that we met our internal
financial expectations for the period. As anticipated, we incurred higher expenses associated with
operating as a public company, but we continue to see positive trends in our U.S. Land and Western
Hemisphere segments, the latter being led by robust activity in Brazil and an improving U.S. Gulf
of Mexico environment. Overall, I am pleased our management team both executed well in the quarter
and successfully transitioned to a public company.
A conference call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time)
tomorrow to discuss RigNets 2011 first quarter results. The call may be accessed live over the
telephone by dialing (877) 845-0777, or, for international callers, +1 (760) 298-5090. Interested
parties may also listen to a simultaneous webcast of the conference call by logging onto RigNets
website at www.rig.net in the Investors Webcasts and Presentations section. A replay of the
conference call webcast will also be available on our website for approximately thirty days
following the call.
Non-GAAP Financial Measures
This press release contains the following non-GAAP measures: Gross Profit and Adjusted EBITDA.
Gross Profit and Adjusted EBITDA are financial measures that are not calculated in accordance with
generally accepted accounting principles, or GAAP.
We define Gross Profit as revenue less cost of revenue. This measure is used to evaluate operating
margins and the effectiveness of cost management.
We define Adjusted EBITDA as net income (loss) plus interest expense, income tax expense (benefit),
depreciation and amortization, impairment of goodwill, (gain) loss on retirement of property and
equipment, change in fair value of derivatives, stock-based compensation and IPO costs and related
bonuses. Adjusted EBITDA should not be considered as an alternative to net income (loss),
operating income (loss) or any other measure of financial performance calculated and presented in
accordance with GAAP.
We refer you to the Companys most recent 10-K filing for the year ended December 31, 2010 for a
more detailed discussion of the uses and limitations of our non-GAAP financial measures.
About RigNet
RigNet (NASDAQ: RNET) is a leading global provider of managed communications, networks and
collaborative applications dedicated to the oil and gas industry. RigNet provides solutions
ranging from fully-managed voice and data networks to more advanced applications that include video
conferencing and real-time data services to remote sites in over 30 countries on six continents,
effectively spanning the drilling and production industry. RigNet is based in Houston, Texas. For
more information, please visit www.rig.net.
Forward Looking Statements
This press release includes forward-looking statements within the meaning of the safe harbor
provisions of the United States Private Securities Litigation Reform Act of 1995 that is,
statements related to the future, not past, events. Forward-looking statements are based on the
current expectations and include any statement that does not directly relate to a current or
historical fact. In this context, forward-looking statements often address our expected future
business and financial performance, and often contain words such as anticipate, believe,
intend, expect, plan, will or other similar words. These forward-looking statements
involve certain risks and uncertainties that ultimately may not prove to be accurate. Actual
results and future events could differ materially from those anticipated in such statements. For
further discussion of risks and uncertainties, individuals should refer to RigNets SEC filings.
RigNet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are
cautioned not to place undue reliance on these forward-looking statements, which speak only as of
the date of this press release. All forward-looking statements are qualified in their entirety by
this cautionary statement.
1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net
Page 3 of 5
Three Months | ||||||||
Ended March 31, | ||||||||
2011 | 2010 | |||||||
(in thousands) | ||||||||
Unaudited Consolidated Statements of Loss Data: |
||||||||
Revenue |
$ | 24,467 | $ | 21,820 | ||||
Expenses: |
||||||||
Cost of revenue |
11,173 | 10,272 | ||||||
Depreciation and amortization |
3,512 | 3,951 | ||||||
Selling and marketing |
462 | 466 | ||||||
General and administrative |
6,266 | 5,264 | ||||||
Total expenses |
21,413 | 19,953 | ||||||
Operating income |
3,054 | 1,867 | ||||||
Other expense, net |
(534 | ) | (808 | ) | ||||
Income before income taxes |
2,520 | 1,059 | ||||||
Income tax expense |
(2,497 | ) | (1,066 | ) | ||||
Net income (loss) |
$ | 23 | $ | (7 | ) | |||
Income (Loss) Per Share Basic and Diluted |
||||||||
Net loss attributable to RigNet, Inc.
common stockholders |
$ | (25 | ) | $ | (800 | ) | ||
Net income (loss) per share attributable to
RigNet, Inc.common stockholders, basic |
$ | 0.00 | $ | (0.15 | ) | |||
Net income (loss) per share attributable to
RigNet, Inc. common stockholders, diluted |
$ | 0.00 | $ | (0.15 | ) | |||
Weighted average shares outstanding, basic |
15,241 | 5,319 | ||||||
Weighted average shares outstanding, diluted |
15,241 | 5,319 | ||||||
Unaudited Non-GAAP Data: |
||||||||
Gross Profit |
$ | 13,294 | $ | 11,548 | ||||
Adjusted EBITDA |
$ | 6,595 | $ | 6,101 |
Three Months | ||||||||
Ended March 31, | ||||||||
2011 | 2010 | |||||||
(in thousands) | ||||||||
Reconciliation of Net Income (Loss) to Adjusted EBITDA: |
||||||||
Net income (loss) |
$ | 23 | $ | (7 | ) | |||
Interest expense |
446 | 412 | ||||||
Depreciation and amortization |
3,512 | 3,951 | ||||||
(Gain) loss on retirement of property and equipment |
(6 | ) | 14 | |||||
Change in fair value of preferred stock derivatives |
| 240 | ||||||
Stock-based compensation |
123 | 122 | ||||||
Initial public offering costs |
| 303 | ||||||
Income tax expense |
2,497 | 1,066 | ||||||
Adjusted EBITDA (non-GAAP measure) |
$ | 6,595 | $ | 6,101 | ||||
1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net
Page 4 of 5
March 31, | December 31, | |||||||
2011 | 2010 | |||||||
(in thousands) | ||||||||
Unaudited Consolidated Balance Sheet Data: |
||||||||
Cash and cash equivalents |
$ | 55,052 | $ | 50,435 | ||||
Restricted cash current portion |
2,500 | 2,500 | ||||||
Restricted cash long-term portion |
7,500 | 7,500 | ||||||
Total assets |
136,008 | 129,785 | ||||||
Current maturities of long-term debt |
8,659 | 8,655 | ||||||
Long-term debt |
21,315 | 23,484 |
Three Months Ended March 31, | ||||||||
2011 | 2010 | |||||||
(in thousands) | ||||||||
Unaudited Consolidated Statements of Cash Flows Data: |
||||||||
Cash and cash equivalents, January 1, |
$ | 50,435 | $ | 11,379 | ||||
Net cash provided by operating activities |
4,911 | 4,586 | ||||||
Net cash used by investing activities |
(2,957 | ) | (3,963 | ) | ||||
Net cash provided (used) by financing activities |
2,263 | (2,358 | ) | |||||
Changes in foreign currency translation |
400 | (559 | ) | |||||
Cash and cash equivalents, March 31, |
$ | 55,052 | $ | 9,085 | ||||
1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net
Page 5 of 5
Three Months Ended March 31, 2011 (Unaudited) | ||||||||||||||||||||
Eastern | Western | Corporate & | Consolidated | |||||||||||||||||
Hemisphere | Hemisphere | U.S. Land | Eliminations | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenue |
$ | 15,117 | $ | 4,957 | $ | 4,393 | $ | | $ | 24,467 | ||||||||||
Cost of revenue |
5,677 | 2,587 | 2,271 | 638 | 11,173 | |||||||||||||||
Gross Profit (non-GAAP measure) |
9,440 | 2,370 | 2,122 | (638 | ) | 13,294 | ||||||||||||||
Depreciation and amortization |
2,002 | 1,108 | 457 | (55 | ) | 3,512 | ||||||||||||||
Selling, general and administrative |
2,028 | 717 | 749 | 3,234 | 6,728 | |||||||||||||||
Operating income |
$ | 5,410 | $ | 545 | $ | 916 | $ | (3,817 | ) | $ | 3,054 | |||||||||
Adjusted EBITDA (non-GAAP measure) |
$ | 7,314 | $ | 1,669 | $ | 1,372 | $ | (3,760 | ) | $ | 6,595 | |||||||||
Three Months Ended March 31, 2010 (Unaudited) | ||||||||||||||||||||
Eastern | Western | Corporate & | Consolidated | |||||||||||||||||
Hemisphere | Hemisphere | U.S. Land | Eliminations | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenue |
$ | 15,067 | $ | 4,351 | $ | 2,668 | $ | (266 | ) | $ | 21,820 | |||||||||
Cost of revenue |
5,968 | 2,228 | 1,369 | 707 | 10,272 | |||||||||||||||
Gross Profit (non-GAAP measure) |
9,099 | 2,123 | 1,299 | (973 | ) | 11,548 | ||||||||||||||
Depreciation and amortization |
2,165 | 807 | 922 | 57 | 3,951 | |||||||||||||||
Selling, general and administrative |
1,883 | 569 | 474 | 2,804 | 5,730 | |||||||||||||||
Operating income |
$ | 5,051 | $ | 747 | $ | (97 | ) | $ | (3,834 | ) | $ | 1,867 | ||||||||
Adjusted EBITDA (non-GAAP measure) |
$ | 7,231 | $ | 1,559 | $ | 825 | $ | (3,514 | ) | $ | 6,101 | |||||||||
Three Months Ended December 31, 2010 (Unaudited) | ||||||||||||||||||||
Eastern | Western | Corporate & | Consolidated | |||||||||||||||||
Hemisphere | Hemisphere | U.S. Land | Eliminations | Total | ||||||||||||||||
(in thousands) | ||||||||||||||||||||
Revenue |
$ | 15,411 | $ | 5,032 | $ | 3,874 | $ | | $ | 24,317 | ||||||||||
Cost of revenue |
6,029 | 2,362 | 2,114 | 732 | 11,237 | |||||||||||||||
Gross Profit (non-GAAP measure) |
9,382 | 2,670 | 1,760 | (732 | ) | 13,080 | ||||||||||||||
Depreciation and amortization |
1,998 | 1,112 | 638 | (114 | ) | 3,634 | ||||||||||||||
Selling, general and administrative |
1,313 | 572 | 670 | 2,870 | 5,425 | |||||||||||||||
Operating income |
$ | 6,071 | $ | 986 | $ | 452 | $ | (3,488 | ) | $ | 4,021 | |||||||||
Adjusted EBITDA (non-GAAP measure) |
$ | 8,510 | $ | 2,100 | $ | 1,091 | $ | (3,272 | ) | $ | 8,429 | |||||||||
###
1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net