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KEY ENERGY SERVICES INC filed this Form 8-K on 08/09/2017
Entire Document
Exhibit 99.1
Key Energy Services, Inc.
August 8, 2017
1301 McKinney Street
Suite 1800
Houston, TX 77010
West Gotcher
Key Energy Services Reports Second Quarter 2017 Earnings
Consolidated positive Adjusted EBITDA in the second quarter, excluding International segment
All U.S. business segments generated positive Adjusted EBITDA in the second quarter driven by top-line improvement and strong incremental margins
Enhanced liquidity position by approximately $12 million via divestitures of non-core assets
HOUSTON, TX, August 8, 2017 - Key Energy Services, Inc. reported second quarter 2017 consolidated revenues of $107.8 million and a pre-tax GAAP loss of $14.0 million, or $0.66 per share. The results for the second quarter include a $21.0 million gain on sale of assets, $4.0 million of stock-based compensation expense and $1.6 million of severance expense. Excluding these items, the Company reported a pre-tax loss of $29.4 million, or $1.42 per share.
Overview and Outlook
Key’s President and Chief Executive Officer, Robert Drummond, stated, “During the second quarter, each of our U.S. segments generated positive Adjusted EBITDA for the first time in well over a year driven by top-line improvement, particularly in Coiled Tubing Services, and strong incremental margins in each business as the benefits of our organizational restructuring initiatives continued to emerge. Margins also benefited from some sequential pricing increases in each business. In total, consolidated Adjusted EBITDA, excluding International results, increased by approximately $10 million sequentially. While we experienced increasing activity, oil price pressure dampened the activity momentum we anticipated entering the second quarter yielding lower than anticipated activity growth.
“Additionally, during the second quarter, we improved our liquidity position through the disposition of two non-core businesses. The proceeds realized from these divestitures, along with the removal of cash flow negative businesses, will allow us to deploy the capital to actionable return-accretive opportunities as broader market conditions and activity levels warrant these investments.”
Drummond continued, “Looking forward, I see significant opportunities in production services, particularly as it relates to the aging horizontal wellbore and the growing backlog of wells that have experienced deferred maintenance. We are pleased with how the Company is positioned to take advantage of these opportunities and with the incremental earnings generation capacity the