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8-K - 8-K - RigNet, Inc.d497144d8k.htm

Exhibit 99

 

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PRESS RELEASE

FOR IMMEDIATE RELEASE

Contact: Marty Jimmerson

RigNet, Inc.

+1 (281) 674-0699

investor.relations@rig.net

RigNet Announces Fourth Quarter and Full Year 2012 Earnings Results

 

  Record quarterly revenue of $49.3 million, including $13.1 million from our Nessco operations, a recently acquired subsidiary. Organic revenue increased 21.5% over the same quarter last year

 

  Quarterly Adjusted EBITDA of $11.8 million, which included $1.0 million of expenses relating to a legal entity restructuring project. Adjusted EBITDA increased 28.3% over the same quarter last year

 

  Net income attributable to common stockholders of $3.4 million, or $0.20 per diluted share, an increase of $0.08 per diluted share over the same quarter last year

HOUSTON, TX – March 7, 2013 – RigNet, Inc. (NASDAQ: RNET), a leading global provider of remote communication services to the oil and gas industry, today reported results for the quarterly and full year periods ended December 31, 2012.

Revenue was a record $49.3 million for the fourth quarter, including $13.1 million from our Nessco operations, a recently acquired subsidiary. Organic revenue increased by $6.4 million, or 21.5%, for the three months ended December 31, 2012 as compared to the same period of 2011 primarily due to increases in sites served and increasing demand for our services. Organic revenue decreased by $1.4 million, or 3.7%, for the three months ended December 31, 2012 as compared to the previous quarter primarily due to lower revenue per site and lower U.S. onshore drilling rigs served.

Adjusted EBITDA was $11.8 million for the fourth quarter, which included expenses of $1.0 million relating to a legal entity restructuring project that was completed in December 2012. We expect that this legal restructuring will result in more efficient and better optimization of our global cash. Adjusted EBITDA of $11.8 million in the fourth quarter, or 24.0% of revenue, represents an increase of 28.3% over the same quarter last year, but a decrease of 4.6% over the previous quarter. Adjusted EBITDA increased by $2.6 million over the prior year period primarily due to the increased revenue described above partially offset by increased operating costs to support the increase in revenue. The increase in Adjusted EBITDA was also partially offset by costs associated with head count additions and professional fees associated with the legal entity restructuring project and continued efforts to strengthen our internal controls over financial reporting. Adjusted EBITDA decreased $0.6 million over the previous quarter, primarily due to the decreased revenue described above.

Net income attributable to common stockholders was $3.4 million, or $0.20 per diluted share, for the fourth quarter compared to net income attributable to common stockholders of $2.0 million, or $0.12 per diluted share, in the same quarter last year and net income attributable to common stockholders of $3.2 million, or $0.19 per diluted share, in the previous quarter.

Capital expenditures were $5.3 million in the fourth quarter compared to $5.1 million in the same quarter last year and $5.2 million in the previous quarter.

1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100  FAX 281.674.0101 http://www.rig.net


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For the full year 2012, RigNet reported record revenue of $161.7 million, including $23.4 million from our Nessco operations, a 26.4% organic increase over 2011 revenue of $109.4 million. RigNet reported record Adjusted EBITDA of $43.6 million for the full year 2012, a 30.3% increase over 2011 Adjusted EBITDA of $33.5 million. RigNet reported record net income attributable to common stockholders of $11.9 million, or $0.70 per diluted share, an increase of 25.2% over 2011 net income attributable to common stockholders of $9.5 million, or $0.57 per diluted share. RigNet reported record capital expenditures of $21.2 million, an increase of 8.7% over 2011 capital expenditures of $19.5 million.

Mark B. Slaughter, chief executive officer and president, commented, “I am extremely proud of the outstanding performance by the management team and our dedicated employees around the globe in 2012 as we delivered record financial results and completed the acquisition of Nessco and its telecommunications systems integration business, which positions RigNet to serve the oil and gas industry with remote communications solutions across the life of the field. Our strong fourth quarter performance also provides us with positive momentum as we enter 2013, focused on meeting the mission critical requirements of our customers.”

A conference call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Tuesday, March 12, 2013 to discuss RigNet’s 2012 fourth quarter and full year 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 RigNet’s 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 (excluding depreciation and amortization) and Adjusted EBITDA. Gross Profit (excluding depreciation and amortization) and Adjusted EBITDA are financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We refer you to the Company’s most recent 10-K filing for the year ended December 31, 2012 for a more detailed discussion of the uses and limitations of our non-GAAP financial measures.

GAAP defines gross profit as revenue less cost of revenue, and includes in costs of revenue depreciation and amortization expenses related to revenue-generating long-lived and intangible assets. We define Gross Profit (excluding depreciation and amortization) as revenue less cost of revenue (excluding depreciation and amortization). This measure differs from the GAAP definition of gross profit as we do not include the impact of depreciation and amortization expenses related to revenue-generating long-lived and intangible assets which represent non-cash expenses. We use this measure 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 or merger/acquisition 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.

About RigNet

RigNet (NASDAQ: RNET) is a leading global provider of managed remote communications, systems integration and collaborative applications dedicated to the oil and gas industry, focusing on offshore and onshore drilling rigs, energy production facilities and energy maritime. 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 thirty 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. RigNet is a registered trademark of RigNet, Inc.

 

1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


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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” 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 RigNet’s 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


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     Three Months Ended     Year Ended  
     December 31,     September 30,     December 31,     December 31,     December 31,  
     2012     2012     2011     2012     2011  
     (in thousands)  

Unaudited Consolidated Statements of Income Data:

          

Revenue

   $ 49,280      $ 47,939      $ 29,786      $ 161,669      $ 109,355   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

          

Cost of revenue (excluding depreciation and amortization)

     26,878        24,850        13,109        81,071        48,645   

Depreciation and amortization

     4,963        4,837        3,755        17,534        14,584   

Selling and marketing

     803        891        639        3,081        2,276   

General and administrative

     10,351        10,428        7,903        37,184        26,960   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     42,995        41,006        25,406        138,870        92,465   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     6,285        6,933        4,380        22,799        16,890   

Other income (expense), net

     (942     (952     31        (2,045     (636
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     5,343        5,981        4,411        20,754        16,254   

Income tax expense

     (1,850     (2,808     (2,358     (8,733     (6,502
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 3,493      $ 3,173      $ 2,053      $ 12,021      $ 9,752   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income Per Share—Basic and Diluted

          

Net income attributable to RigNet, Inc. common stockholders

   $ 3,379      $ 3,238      $ 1,972      $ 11,882      $ 9,518   

Net income per share attributable to RigNet, Inc. common stockholders, basic

   $ 0.22      $ 0.21      $ 0.13      $ 0.76      $ 0.62   

Net income per share attributable to RigNet, Inc. common stockholders, diluted

   $ 0.20      $ 0.19      $ 0.12      $ 0.70      $ 0.57   

Weighted average shares outstanding, basic

     15,680        15,647        15,443        15,591        15,387   

Weighted average shares outstanding, diluted

     17,151        17,104        16,822        17,017        16,814   

Unaudited Non-GAAP Data:

          

Gross Profit (excluding depreciation and amortization)

   $ 22,402      $ 23,089      $ 16,677      $ 80,598      $ 60,710   

Gross Profit (excluding depreciation and amortization) margin

     45.5     48.2     56.0     49.9     55.5

Adjusted EBITDA

   $ 11,818      $ 12,392      $ 9,214      $ 43,583      $ 33,456   

Adjusted EBITDA margin

     24.0     25.8     30.9     27.0     30.6
     Three Months Ended     Year Ended  
     December     September     December     December     December  
     31, 2012     30, 2012     31, 2011     31, 2012     31, 2011  
     (in thousands)  

Reconciliation of Gross Profit to Gross Profit (excluding depreciation and amortization):

          

Gross profit

     17,700        18,487        13,114        63,964        46,890   

Depreciation and amortization related to cost of revenue

     4,702        4,602        3,563        16,634        13,820   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (excluding depreciation and amortization)

   $ 22,402      $ 23,089      $ 16,677      $ 80,598      $ 60,710   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended     Year Ended  
     December     September     December     December     December  
     31, 2012     30, 2012     31, 2011     31, 2012     31, 2011  
     (in thousands)  

Reconciliation of Net Income to Adjusted EBITDA:

          

Net income

   $ 3,493      $ 3,173      $ 2,053      $ 12,021      $ 9,752   

Interest expense

     625        611        219        1,552        1,249   

Depreciation and amortization

     4,963        4,837        3,755        17,534        14,584   

(Gain) loss on sales of property and equipment, net of retirements

     10        (90     (54     (131     (165

Stock-based compensation

     628        592        793        2,502        1,534   

Acquisition costs

     249        461        —          1,372        —     

Income tax expense

     1,850        2,808        2,358        8,733        6,502   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 11,818      $ 12,392      $ 9,124      $ 43,583      $ 33,456   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


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     December 31,      December 31,  
     2012      2011  
     (in thousands)  

Unaudited Consolidated Balance Sheet Data:

     

Cash and cash equivalents

   $ 59,744       $ 53,106   

Restricted cash—current portion

     987         —     

Restricted cash—long-term

     1,809         —     

Total assets

     215,932         140,922   

Current maturities of long-term debt

     9,422         8,735   

Long-term debt

     51,871         14,785   

 

     Year Ended December 31,  
     2012     2011  
     (in thousands)  

Unaudited Consolidated Statements of Cash Flows Data:

    

Cash and cash equivalents, January 1,

   $ 53,106      $ 50,435   

Net cash provided by operating activities

     32,255        16,592   

Net cash used in investing activities

     (66,763     (8,996

Net cash provided by (used in) financing activities

     37,707        (4,310

Changes in foreign currency translation

     3,439        (615
  

 

 

   

 

 

 

Cash and cash equivalents, December 31,

   $ 59,744      $ 53,106   
  

 

 

   

 

 

 

 

     4th Quarter      1st Quarter      2nd Quarter      3rd Quarter      4th Quarter  
     2011      2012      2012      2012      2012  

Selected Operational Data:

              

Offshore drilling rigs (1)

     228         233         234         233         237   

U.S. onshore drilling rigs

     338         323         308         302         282   

Other sites (2)

     488         493         515         550         575   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,054         1,049         1,057         1,085         1,094   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes jack up, semi-submersible and drillship rigs
(2) Includes production facilities, energy support vessels, international land rigs, completion sites, man-camps, remote offices and supply bases

 

1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


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     Three Months Ended     Year Ended  
     December     September     December     December     December  
     31, 2012     30, 2012     31, 2011     31, 2012     31, 2011  
     (in thousands)  

Americas:

          

Revenue

   $ 12,816      $ 13,053      $ 11,352      $ 49,881      $ 41,517   

Cost of revenue

     5,586        5,765        5,391        22,598        20,484   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     7,230        7,288        5,961        27,283        21,033   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     56.4     55.8     52.5     54.7     50.7

Depreciation and amortization

     1,873        1,909        1,810        7,409        6,743   

Selling, general and administrative

     1,647        2,012        3,084        7,385        7,894   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 3,710      $ 3,367      $ 1,067      $ 12,489      $ 6,396   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 5,520      $ 5,235      $ 2,924      $ 19,848      $ 13,205   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     43.1     40.1     25.8     39.8     31.8

Europe/Africa:

          

Revenue

   $ 23,913      $ 21,972      $ 9,358      $ 65,205      $ 34,371   

Cost of revenue

     15,516        13,536        3,847        37,385        13,168   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     8,397        8,436        5,511        27,820        21,203   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     35.1     38.4     58.9     42.7     61.7

Depreciation and amortization

     1,806        1,774        744        5,073        3,053   

Selling, general and administrative

     2,711        2,655        1,639        7,559        5,411   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 3,880      $ 4,007      $ 3,128      $ 15,188      $ 12,739   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 5,473      $ 5,013      $ 4,069      $ 19,811      $ 16,247   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     22.9     22.8     43.5     30.4     47.3

Middle East/Asia Pacific:

          

Revenue

   $ 12,551      $ 12,914      $ 9,321      $ 46,583      $ 33,784   

Cost of revenue

     4,671        4,512        3,279        17,113        12,335   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     7,880        8,402        6,042        29,470        21,449   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     62.8     65.1     64.8     63.3     63.5

Depreciation and amortization

     1,243        1,153        1,228        5,010        4,968   

Selling, general and administrative

     1,246        1,088        1,040        4,331        3,558   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 5,391      $ 6,161      $ 3,774      $ 20,129      $ 12,923   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 6,582      $ 7,232      $ 4,976      $ 24,990      $ 17,867   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     52.4     56.0     53.4     53.6     52.9

NOTE: Consolidated balances include the three segments above along with corporate activities and intercompany eliminations.

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1880 SOUTH DAIRY ASHFORD, SUITE 300 HOUSTON, TEXAS 77077 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net