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| 8-K - FORM 8-K - Vantage Drilling CO | d34826d8k.htm |
Exhibit 99.1
Vantage Drilling Company Reports Second Quarter Results for 2015
HOUSTON, TX—(MARKET WIRE)—August 4, 2015 — Vantage Drilling Company (“Vantage” or the “Company”) (NYSE MKT: VTG) reports net income for the three months ended June 30, 2015 of $25.0 million or $.07 per diluted share as compared to earnings of $10.2 million or $.03 per diluted share for the three months ended June 30, 2014.
The three months ended June 30, 2015 includes approximately $5.6 million of gains on the early retirement of debt as compared to a loss on the early retirement of debt of $1.4 million in the prior year. The strong operating results for the second quarter also required us to re-evaluate our effective tax rate for the year and combined with tax impact of the early retirement of debt resulted in a $2.7 million favorable adjustment to our tax provision as compared to a $3.5 million unfavorable adjustment in the second quarter 2014. Adjusting for these items, pro forma net income for the three months ended June 30, 2015 was approximately $16.6 million or $.05 per diluted share as compared to $15.1 million or $.05 per diluted share for the three months ended June 30, 2014.
The total debt retirement for the first half of 2015, including scheduled maturities and open market purchase of debt, totaled approximately $140.0 million at face value. Following the end of the quarter, we continued to acquire debt in the open market and have retired approximately $150.0 million of debt year to date with an annualized interest savings of approximately $9.7 million.
Paul Bragg, Chairman and Chief Executive Officer, commented, “During the 2nd quarter, we continued our strong operating performance and maintained our focus on strengthening the balance sheet. In just over six quarters, we have now retired approximately $350 million of outstanding debt and greatly reduced our current debt, improving our 2015 and 2016 liquidity.”
Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of three ultra-deepwater drillships, the Platinum Explorer, the Titanium Explorer and the Tungsten Explorer, as well as an additional ultra-deepwater drillship, the Cobalt Explorer, now under construction, and four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs. Vantage’s primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. Vantage also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned drilling units, Vantage is a provider of offshore contract drilling services globally to major, national and large independent oil and natural gas companies.
The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the company’s filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.
Vantage Drilling Company
Consolidated Statement of Operations
(In thousands, except per share amounts)
(Unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Revenue |
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| Contract drilling services |
$ | 202,888 | $ | 198,279 | $ | 410,869 | $ | 413,211 | ||||||||
| Management fees |
1,902 | 5,969 | 3,783 | 10,551 | ||||||||||||
| Reimbursables |
7,471 | 15,470 | 15,258 | 28,421 | ||||||||||||
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| Total revenue |
212,261 | 219,718 | 429,910 | 452,183 | ||||||||||||
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| Operating costs and expenses |
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| Operating costs |
95,249 | 98,002 | 191,357 | 199,724 | ||||||||||||
| General and administrative |
8,066 | 8,366 | 16,931 | 16,481 | ||||||||||||
| Depreciation |
31,781 | 31,630 | 63,404 | 63,255 | ||||||||||||
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| Total operating costs and expenses |
135,096 | 137,998 | 271,692 | 279,460 | ||||||||||||
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| Income from operations |
77,165 | 81,720 | 158,218 | 172,723 | ||||||||||||
| Other income (expense) |
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| Interest income |
5 | 11 | 11 | 24 | ||||||||||||
| Interest expense and other financing charges |
(48,641 | ) | (54,286 | ) | (99,195 | ) | (108,773 | ) | ||||||||
| Gain (loss) on debt extinguishment |
5,616 | (1,407 | ) | 26,222 | (1,513 | ) | ||||||||||
| Other, net |
1,962 | (539 | ) | 1,624 | 240 | |||||||||||
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| Total other income (expense) |
(41,058 | ) | (56,221 | ) | (71,338 | ) | (110,022 | ) | ||||||||
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| Income before income taxes |
36,107 | 25,499 | 86,880 | 62,701 | ||||||||||||
| Income tax provision |
11,143 | 15,321 | 40,486 | 27,699 | ||||||||||||
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| Net income |
$ | 24,964 | $ | 10,178 | $ | 46,394 | $ | 35,002 | ||||||||
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| Earnings per share |
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| Basic |
$ | 0.08 | $ | 0.03 | $ | 0.15 | $ | 0.11 | ||||||||
| Diluted |
$ | 0.07 | $ | 0.03 | $ | 0.15 | $ | 0.11 | ||||||||
Vantage Drilling Company
Supplemental Operating Data
(Unaudited, in thousands, except percentages)
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2015 | 2014 | 2014 | 2013 | |||||||||||||
| Operating costs and expenses |
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| Jackups |
$ | 20,749 | $ | 22,401 | $ | 45,012 | $ | 46,161 | ||||||||
| Deepwater |
60,861 | 51,233 | 116,944 | 107,043 | ||||||||||||
| Operations support |
7,440 | 10,342 | 16,764 | 21,102 | ||||||||||||
| Reimbursables |
6,199 | 14,026 | 12,637 | 25,418 | ||||||||||||
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| $ | 95,249 | $ | 98,002 | $ | 191,357 | $ | 199,724 | |||||||||
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| Utilization |
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| Jackups |
75.0 | % | 99.2 | % | 85.5 | % | 99.6 | % | ||||||||
| Deepwater |
98.2 | % | 83.1 | % | 95.9 | % | 89.8 | % | ||||||||
Vantage Drilling Company
Consolidated Balance Sheet
(In thousands, except par value information)
| June 30, 2015 |
December 31, 2014 |
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| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current assets |
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| Cash and cash equivalents |
$ | 30,556 | $ | 82,812 | ||||
| Trade receivables |
141,932 | 153,428 | ||||||
| Inventory |
67,037 | 65,892 | ||||||
| Prepaid expenses and other current assets |
20,188 | 28,618 | ||||||
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| Total current assets |
259,713 | 330,750 | ||||||
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| Property and equipment |
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| Property and equipment |
3,553,789 | 3,524,566 | ||||||
| Accumulated depreciation |
(469,361 | ) | (406,674 | ) | ||||
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| Property and equipment, net |
3,084,428 | 3,117,892 | ||||||
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| Other assets |
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| Investment in joint venture |
1,106 | 1,318 | ||||||
| Other assets |
68,603 | 79,897 | ||||||
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| Total other assets |
69,709 | 81,215 | ||||||
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| Total assets |
$ | 3,413,850 | $ | 3,529,857 | ||||
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| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities |
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| Accounts payable |
$ | 46,540 | $ | 59,139 | ||||
| Accrued liabilities |
97,088 | 101,537 | ||||||
| Current maturities of long-term debt, net of discount of $42 and $1,181 |
65,314 | 95,378 | ||||||
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| Total current liabilities |
208,942 | 256,054 | ||||||
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| Long–term debt, net of discount of $18,903 and $25,875 and current maturities |
2,531,003 | 2,632,802 | ||||||
| Other long-term liabilities |
69,363 | 85,327 | ||||||
| Commitments and contingencies |
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| Shareholders’ equity |
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| Preferred shares, $0.001 par value, 10,000 shares authorized; none issued or outstanding |
— | — | ||||||
| Ordinary shares, $0.001 par value, 500,000 shares authorized; 311,024 and 307,808 shares issued and outstanding |
311 | 308 | ||||||
| Additional paid-in capital |
907,607 | 905,136 | ||||||
| Accumulated deficit |
(303,376 | ) | (349,770 | ) | ||||
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| Total shareholders’ equity |
604,542 | 555,674 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 3,413,850 | $ | 3,529,857 | ||||
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Vantage Drilling Company
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
| Six Months Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES |
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| Net income |
$ | 46,394 | $ | 35,002 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
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| Depreciation expense |
63,404 | 63,255 | ||||||
| Amortization of debt financing costs |
5,139 | 5,834 | ||||||
| Amortization of debt discount |
5,392 | 5,676 | ||||||
| Non-cash (gain) loss on debt extinguishment |
(26,213 | ) | 1,513 | |||||
| Share-based compensation expense |
3,370 | 4,284 | ||||||
| Deferred income tax benefit |
(534 | ) | (343 | ) | ||||
| Equity in loss of joint venture |
212 | 235 | ||||||
| Loss on disposal of assets |
158 | 663 | ||||||
| Changes in operating assets and liabilities: |
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| Restricted cash |
— | 2,125 | ||||||
| Trade receivables |
11,496 | 13,988 | ||||||
| Inventory |
(1,145 | ) | (5,068 | ) | ||||
| Prepaid expenses and other current assets |
8,905 | 5,054 | ||||||
| Other assets |
4,613 | 10,521 | ||||||
| Accounts payable |
(12,599 | ) | (7,453 | ) | ||||
| Accrued liabilities and other long-term liabilities |
(23,546 | ) | 4,527 | |||||
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| Net cash provided by operating activities |
85,046 | 139,813 | ||||||
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| CASH FLOWS FROM INVESTING ACTIVITIES |
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| Additions to property and equipment |
(26,878 | ) | (19,262 | ) | ||||
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| Net cash used in investing activities |
(26,878 | ) | (19,262 | ) | ||||
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| CASH FLOWS FROM FINANCING ACTIVITIES |
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| Repayment of long-term debt |
(110,424 | ) | (76,261 | ) | ||||
| Repayment of revolving credit agreement, net |
— | (10,000 | ) | |||||
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| Net cash used in financing activities |
(110,424 | ) | (86,261 | ) | ||||
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| Net increase (decrease) in cash and cash equivalents |
(52,256 | ) | 34,290 | |||||
| Cash and cash equivalents—beginning of period |
82,812 | 54,686 | ||||||
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| Cash and cash equivalents—end of period |
$ | 30,556 | $ | 88,976 | ||||
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Public & Investor Relations Contact:
Paul A. Bragg
Chairman & Chief Executive Officer
Vantage Drilling Company
(281) 404-4700