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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 08/10/2017
Entire Document
 

The following table shows our consolidated results of operations for the three and six months ended June 30, 2017 and 2016, respectively (in thousands):
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
Three Months Ended June 30, 2017
 
 
Three Months Ended June 30, 2016
 
Six Months Ended June 30, 2017
 
 
Six Months Ended June 30, 2016
REVENUES
$
107,780

 
 
$
95,012

 
$
209,232

 
 
$
206,100

COSTS AND EXPENSES:
 
 
 
 
 

 
 

Direct operating expenses
63,560

 
 
89,419

 
150,866

 
 
180,017

Depreciation and amortization expense
20,910

 
 
35,856

 
42,211

 
 
71,608

General and administrative expenses
30,334

 
 
40,903

 
61,330

 
 
87,148

Impairment expense

 
 

 
187

 
 

Operating loss
(7,024
)
 
 
(71,166
)
 
(45,362
)
 
 
(132,673
)
Interest expense, net of amounts capitalized
7,872

 
 
21,357

 
15,582

 
 
42,941

Other (income) loss, net
(961
)
 
 
412

 
(1,201
)
 
 
(819
)
Reorganization items, net
101

 
 

 
1,441

 
 

Loss before income taxes
(14,036
)
 
 
(92,935
)
 
(61,184
)
 
 
(174,795
)
Income tax benefit
853

 
 
133

 
1,142

 
 
379

NET LOSS
$
(13,183
)
 
 
$
(92,802
)
 
$
(60,042
)
 
 
$
(174,416
)
Consolidated Results of Operations — Three Months Ended June 30, 2017 and 2016
Revenues
Our revenues for the three months ended June 30, 2017 increased $12.8 million, or 13.4%, to $107.8 million from $95.0 million for the three months ended June 30, 2016, due to an increase in spending from our customers as they plan for continuing recovery of commodity prices. Internationally, we had lower revenue primarily due to a decrease in customer activity in Russia. See “Segment Operating Results — Three Months Ended June 30, 2017 and 2016” below for a more detailed discussion of the change in our revenues.
Direct Operating Expenses
Our direct operating expenses decreased $25.9 million, to $63.6 million (59.0% of revenues), for the three months ended June 30, 2017, compared to $89.4 million (94.1% of revenues) for the three months ended June 30, 2016. The decrease is primarily related to a $21.0 million gain on the sale of certain assets and a decrease in employee compensation costs, fuel expense and repair and maintenance expense as we sought to reduce our cost structure.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased $14.9 million, or 41.7%, to $20.9 million during the three months ended June 30, 2017, compared to $35.9 million for the three months ended June 30, 2016. The decrease is primarily attributable to the reduction of property, plant and equipment due to the implementation of fresh start accounting in the fourth quarter of 2016.
General and Administrative Expenses
General and administrative expenses decreased $10.6 million, to $30.3 million (28.1% of revenues), for the three months ended June 30, 2017, compared to $40.9 million (43.1% of revenues) for the three months ended June 30, 2016. The decrease is primarily due to the decrease in professional fees related to our 2016 corporate restructuring.
Interest Expense, Net of Amounts Capitalized
Interest expense decreased $13.5 million, or 63.1%, to $7.9 million for the three months ended June 30, 2017, compared to $21.4 million for the same period in 2016. The decrease is primarily related to the elimination of the Predecessor Company’s senior secured notes in connection with our emergence from voluntary reorganization.

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