Key Energy Services, Inc.
February 26, 2017
1301 McKinney Street
Houston, TX 77010
FOR IMMEDIATE RELEASE
Key Energy Services Reports Fourth Quarter and Full-Year 2016 Earnings
Price increases began in the fourth quarter of 2017 across all services and continuing in the first quarter of 2018
U.S. revenue grew approximately 6% in the fourth quarter of 2017, in spite of typical fourth quarter seasonality, with workover rig demand increasing
Coiled Tubing Services revenue grew 19% in the fourth quarter of 2017 with three large diameter units deployed late in the fourth quarter of 2017 for a total of nine deployed large diameter units by the end of 2017
Fluid Management Services grew approximately 12% in the fourth quarter of 2017 on increasing water volumes
HOUSTON, TX, February 26, 2018 - Key Energy Services, Inc. (“Key” or the “Company”) reported fourth quarter 2017 consolidated revenues of $116.3 million and a pre-tax GAAP loss of $22.8 million, or $1.11 per share. The results for the fourth quarter include a gain of $4.0 million, or $0.20 per share associated with the cancellation of certain
equity awards and a $0.6 million, or $0.03 per share gain on the sale of assets. Excluding this item, the Company reported a pre-tax loss of $27.4 million, or $1.34 per share.
Overview and Outlook
Key’s President and Chief Executive Officer, Robert Drummond, stated, “Fourth quarter consolidated revenues grew 5% sequentially, with revenue in our U.S. Rig Services and Fluid Management Services segments overcoming the usual fourth quarter seasonal activity declines. We also had another consecutive quarter of double-digit revenue growth in our Coiled Tubing Services segment and had nine coiled tubing units deployed by the end of the fourth quarter of 2017. The impact of adding crews and equipment as we prepared to meet rising demand for our services negatively impacted our margins in the fourth quarter.
Drummond continued “With activity increasing and labor tightening, we began to pursue price increases across all of our lines of business. While some price increases were implemented during the fourth quarter and thus far in the first quarter, we do not expect to begin to fully benefit from these actions until late in the first quarter. We expect a full quarter’s benefit from price in the second quarter.”
Upon emergence from Chapter 11 bankruptcy on December 15, 2016, the Company adopted fresh start accounting, which resulted in the Company becoming a new entity for financial reporting purposes. References to "Successor" relate to the financial position of the reorganized Key as of and subsequent to December 16, 2016; references to "Predecessor" refer to the financial position of Key as of and prior to December 15, 2016 and the results of operations through December 15, 2016. References to fourth quarter 2016 will reflect pro-forma results for the Predecessor and Successor entities.