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8-K - FORM 8-K - RigNet, Inc.d620876d8k.htm

Exhibit 99

 

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PRESS RELEASE    FOR IMMEDIATE RELEASE

RigNet Announces Third Quarter 2013 Earnings Results

 

    Record quarterly revenue of $56.9 million, an 18.6% increase over the same quarter last year and a 10.8% increase over the previous quarter

 

    Record quarterly Adjusted EBITDA of $14.5 million, a 16.6% increase over the same quarter last year and a 3.9% increase over the previous quarter

 

    Net income attributable to common stockholders of $2.3 million, or $0.13 per diluted share, which includes $2.8 million of acquisition costs associated with the upcoming purchase of Inmarsat’s Energy Broadband business. Excluding acquisition costs, net income attributable to common stockholders was $5.1 million, or $0.29 per diluted share, an increase of $0.07 per diluted share, or 33.7%, over the same quarter last year

HOUSTON, TX – November 4, 2013 – RigNet, Inc. (NASDAQ: RNET), a leading global provider of remote communications services to the oil and gas industry, today reported quarterly results for the quarter ended September 30, 2013.

Record revenue of $56.9 million for the third quarter represents an increase of $9.0 million, or 18.6%, for the three months ended September 30, 2013, as compared to the same period of 2012, primarily due to increased systems integration revenue, sites served and increased revenue-per-site. Revenue increased by $5.6 million, or 10.8%, for the three months ended September 30, 2013, as compared to the previous quarter primarily due to increased systems integration revenue and increased revenue-per-site.

Record Adjusted EBITDA of $14.5 million in the third quarter, or 25.4% of revenue, represents an increase of $2.1 million, or 16.6%, over the same quarter last year and an increase of $0.5 million, or 3.9%, over the previous quarter. These increases are primarily due to growth in our core offshore business partially offset by costs associated with headcount additions to support our continued growth.

Net income attributable to common stockholders was $2.3 million, or $0.13 per diluted share, for the third quarter. This amount includes $2.8 million of acquisition costs associated with the upcoming purchase of Inmarsat’s Energy Broadband business. Excluding acquisition costs, net income attributable to common stockholders was $5.1 million, or $0.29 per diluted share, an increase of $0.07 per diluted share, or 33.7%, over the same quarter last year and an increase of $0.01 per diluted share, or 3.3%, over the previous quarter.

Capital expenditures were $9.1 million in the third quarter compared to $5.2 million in the same quarter last year and $8.5 million in the previous quarter.

Mark B. Slaughter, chief executive officer and president, commented, “I was very pleased with our solid third quarter results, which included record revenue and EBITDA, reflecting continued strong growth in our core offshore rig communications business. We have also made significant progress with the integration planning for our pending acquisition of Inmarsat’s Energy Broadband business, and expect to be well-positioned to operate that business upon closing in or before the first quarter of 2014.  Looking forward, we are maintaining a positive view of the market environment for our services and are extremely delighted with our new relationship with Inmarsat that includes the acquisition of their energy broadband business as well as our becoming a premier distribution partner in oil and gas for their Global Express and L-band service platforms.  Overall, we are very excited about the broadened services and capabilities we will soon be bringing to market that will better serve our customers and position the Company to enhance returns to stockholders.”

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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A conference call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Tuesday, November 5, 2013, to discuss RigNet’s 2013 third quarter results. The call may be accessed live over the telephone by dialing +1 (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.

 

Investor contact   
Marty Jimmerson    Tel: +1 (281) 674-0699
Chief Financial Officer, RigNet, Inc.    investor.relations@rig.net

 

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     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2013     2013     2012     2013     2012  
     (in thousands)  

Unaudited Consolidated Statements of Comprehensive Income Data:

          

Revenue

   $ 56,856      $ 51,329      $ 47,939      $ 161,003      $ 112,389   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Expenses:

          

Cost of revenue (excluding depreciation and amortization)

     31,140        25,927        24,850        86,189        54,193   

Depreciation and amortization

     5,450        5,249        4,837        15,668        12,571   

Selling and marketing

     937        1,029        891        2,753        2,278   

General and administrative

     13,036        11,530        10,428        36,326        26,833   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     50,563        43,735        41,006        140,936        95,875   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     6,293        7,594        6,933        20,067        16,514   

Other income (expense), net

     (1,305     (127     (952     (1,325     (1,103
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     4,988        7,467        5,981        18,742        15,411   

Income tax expense

     (2,581     (2,552     (2,808     (7,645     (6,883
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,407      $ 4,915      $ 3,173      $ 11,097      $ 8,528   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income Per Share—Basic and Diluted

          

Net income attributable to RigNet, Inc. common stockholders

   $ 2,347      $ 4,861      $ 3,238      $ 10,943      $ 8,503   

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

   $ 0.15      $ 0.30      $ 0.21      $ 0.69      $ 0.55   

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

   $ 0.13      $ 0.28      $ 0.19      $ 0.63      $ 0.50   

Weighted average shares outstanding, basic

     16,148        15,963        15,647        15,958        15,564   

Weighted average shares outstanding, diluted

     17,630        17,480        17,104        17,404        16,991   

Unaudited Non-GAAP Data:

          

Gross Profit (excluding depreciation and amortization)

   $ 25,716      $ 25,402      $ 23,089      $ 74,814      $ 58,196   

Gross Profit (excluding depreciation and amortization) margin

     45.2     49.5     48.2     46.5     51.8

Adjusted EBITDA

   $ 14,450      $ 13,902      $ 12,392      $ 40,973      $ 31,765   

Adjusted EBITDA margin

     25.4     27.1     25.8     25.4     28.3
     Three Months Ended     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2013     2013     2012     2013     2012  
     (in thousands)  

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

          

Gross profit

   $ 20,564      $ 20,414      $ 18,487      $ 59,946      $ 46,264   

Depreciation and amortization related to cost of revenue

     5,152        4,988        4,602        14,868        11,932   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (excluding depreciation and amortization)

   $ 25,716      $ 25,402      $ 23,089      $ 74,814      $ 58,196   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     Three Months Ended     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2013     2013     2012     2013     2012  
     (in thousands)  

Reconciliation of Net Income to Adjusted EBITDA:

          

Net income

   $ 2,407      $ 4,915      $ 3,173      $ 11,097      $ 8,528   

Interest expense

     432        440        611        1,379        927   

Depreciation and amortization

     5,450        5,249        4,837        15,668        12,571   

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

     93        33        (90     167        (141

Stock-based compensation

     696        713        592        2,226        1,874   

Acquisition costs

     2,791        —          461        2,791        1,123   

Income tax expense

     2,581        2,552        2,808        7,645        6,883   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 14,450      $ 13,902      $ 12,392      $ 40,973      $ 31,765   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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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     September 30,     December 31,  
     2013     2012  
     (in thousands)  

Unaudited Consolidated Balance Sheet Data:

    

Cash and cash equivalents

   $ 49,584      $ 59,744   

Restricted cash—current portion

     790        987   

Restricted cash—long-term

     1,345        1,809   

Total assets

     226,363        215,932   

Current maturities of long-term debt

     9,384        9,422   

Long-term debt

     44,778        51,871   
     Nine Months Ended
September 30,
 
     2013     2012  
     (in thousands)  

Unaudited Consolidated Statements of Cash Flows Data:

    

Cash and cash equivalents, January 1,

   $ 59,744      $ 53,106   

Net cash provided by operating activities

     15,353        17,459   

Net cash used in investing activities

     (21,391     (59,691

Net cash provided by (used in) financing activities

     (2,728     40,384   

Changes in foreign currency translation

     (1,394     2,422   
  

 

 

   

 

 

 

Cash and cash equivalents, September 30,

   $ 49,584      $ 53,680   
  

 

 

   

 

 

 

 

     3rd Quarter      4th Quarter      1st Quarter      2nd Quarter      3rd Quarter  
     2012      2012      2013      2013      2013  

Selected Operational Data:

              

Offshore drilling rigs (1)

     233         237         245         255         251   

U.S. onshore drilling rigs

     302         282         271         261         250   

Strategic initiatives (2)

     232         239         264         291         265   

Other sites (3)

     318         336         344         331         330   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,085         1,094         1,124         1,138         1,096   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

(1) Includes jack up, semi-submersible and drillship rigs
(2) Includes production facilities, energy support vessels and international land rigs
(3) Includes 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     Nine Months Ended  
     September 30,     June 30,     September 30,     September 30,     September 30,  
     2013     2013     2012     2013     2012  
     (in thousands)  

Americas:

          

Revenue

   $ 13,884      $ 13,141      $ 13,053      $ 39,440      $ 37,065   

Cost of revenue

     6,734        6,149        5,765        18,164        17,012   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     7,150        6,992        7,288        21,276        20,053   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     51.5     53.2     55.8     53.9     54.1

Depreciation and amortization

     1,924        1,848        1,909        5,566        5,536   

Selling, general and administrative

     2,000        2,090        2,012        5,767        5,738   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 3,226      $ 3,054      $ 3,367      $ 9,943      $ 8,779   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 5,142      $ 4,855      $ 5,235      $ 15,414      $ 14,328   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     37.0     36.9     40.1     39.1     38.7

Europe/Africa:

          

Revenue

   $ 26,277      $ 23,057      $ 21,972      $ 76,906      $ 41,292   

Cost of revenue

     17,576        12,807        13,536        47,905        21,869   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     8,701        10,250        8,436        29,001        19,423   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     33.1     44.5     38.4     37.7     47.0

Depreciation and amortization

     1,900        1,812        1,774        5,458        3,267   

Selling, general and administrative

     1,895        1,983        2,655        6,414        4,848   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 4,906      $ 6,455      $ 4,007      $ 17,129      $ 11,308   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 6,494      $ 8,805      $ 5,013      $ 23,553      $ 14,338   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     24.7     38.2     22.8     30.6     34.7

Middle East/Asia Pacific:

          

Revenue

   $ 16,695      $ 15,131      $ 12,914      $ 44,657      $ 34,032   

Cost of revenue

     5,685        5,503        4,512        16,196        12,442   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit (non-GAAP measure)

     11,010        9,628        8,402        28,461        21,590   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Gross Profit margin

     65.9     63.6     65.1     63.7     63.4

Depreciation and amortization

     1,407        1,385        1,153        4,074        3,767   

Selling, general and administrative

     1,371        2,915        1,088        5,403        3,085   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

   $ 8,232      $ 5,328      $ 6,161      $ 18,984      $ 14,738   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA (non-GAAP measure)

   $ 9,524      $ 6,657      $ 7,232      $ 22,887      $ 18,408   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA margin

     57.0     44.0     56.0     51.3     54.1

 

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