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SEC Filings

10-Q
KEY ENERGY SERVICES INC filed this Form 10-Q on 11/09/2017
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to GAAP and no comparable GAAP measures are presented, management believes that providing this financial information is the most relevant and useful method for making comparisons between the periods.
The following table shows our consolidated results of operations for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands):
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
Three Months Ended September 30, 2017
 
 
Three Months Ended September 30, 2016
 
Nine Months Ended September 30, 2017
 
 
Nine Months Ended September 30, 2016
REVENUES
$
110,653

 
 
$
102,406

 
$
319,885

 
 
$
308,506

COSTS AND EXPENSES:
 
 
 
 
 

 
 

Direct operating expenses
87,115

 
 
96,071

 
237,981

 
 
276,088

Depreciation and amortization expense
21,114

 
 
33,467

 
63,325

 
 
105,075

General and administrative expenses
37,168

 
 
42,456

 
98,498

 
 
129,604

Impairment expense

 
 
40,000

 
187

 
 
40,000

Operating loss
(34,744
)
 
 
(109,588
)
 
(80,106
)
 
 
(242,261
)
Interest expense, net of amounts capitalized
8,090

 
 
21,120

 
23,672

 
 
64,061

Other (income) loss, net
(4,578
)
 
 
154

 
(5,779
)
 
 
(665
)
Reorganization items, net
60

 
 

 
1,501

 
 

Loss before income taxes
(38,316
)
 
 
(130,862
)
 
(99,500
)
 
 
(305,657
)
Income tax benefit
96

 
 
110

 
1,238

 
 
489

NET LOSS
$
(38,220
)
 
 
$
(130,752
)
 
$
(98,262
)
 
 
$
(305,168
)
Consolidated Results of Operations — Three Months Ended September 30, 2017 and 2016
Revenues
Our revenues for the three months ended September 30, 2017 increased $8.2 million, or 8.1%, to $110.7 million from $102.4 million for the three months ended September 30, 2016, due to an increase in spending from our customers as they react to improving commodity prices, particularly in our Coiled Tubing segment. Internationally, we had lower revenue primarily due to a decrease in customer activity in Russia and due to the sale during the third quarter of 2017 of these operations. See “Segment Operating Results — Three Months Ended September 30, 2017 and 2016” below for a more detailed discussion of the change in our revenues.
Direct Operating Expenses
Our direct operating expenses decreased $9.0 million, to $87.1 million (78.7% of revenues), for the three months ended September 30, 2017, compared to $96.1 million (93.8% of revenues) for the three months ended September 30, 2016. The decrease is primarily related to a decrease in insurance costs and repair and maintenance expense as we took steps to reduce our cost structure.
Depreciation and Amortization Expense
Depreciation and amortization expense decreased $12.4 million, or 36.9%, to $21.1 million during the three months ended September 30, 2017, compared to $33.5 million for the three months ended September 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 $5.3 million, to $37.2 million (33.6% of revenues), for the three months ended September 30, 2017, compared to $42.5 million (41.5% of revenues) for the three months ended September 30, 2016. The decrease is primarily due to a $13.1 million decrease in professional fees related to our 2016 corporate restructuring partially offset by a $11.6 million increase in legal settlement accruals.

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