Service & Supply | Quarterly / Earnings Reports | Oilfield Services | Second Quarter (2Q) Update
Forbes Energy Services Sustains Momentum in 2Q
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Forbes Energy Services Ltd. announced financial and operating results for the three months ended June 30, 2014.
The Company reported consolidated revenues of $113.2 million for the second quarter of 2014, compared to $109.9 million for the first quarter of 2014.
Highlights:
- Gross profit increased to $27.5 million, or 24.3% of revenues, in the second quarter of 2014, compared to $27.1 million, or 24.7%, in the first quarter of 2014.
- GAAP net loss attributable to common shares was $1.7 million, or $0.08 per diluted share, for the second quarter of 2014, compared to net loss attributable to common shares of $1.5 million, or $0.07 per diluted share for the first quarter of 2014.
- Adjusted EBITDA totaled $19.6 million in the second quarter of 2014, as compared to $19.5 million in the first quarter of 2014.
John Crisp, president and chief executive officer of Forbes Energy Services, commented: "The company's second quarter results were consistent with the market's activity levels as customers pressed on at a steady pace.
"We had a slight increase in revenue quarter over quarter in both our business segments, which we attribute to higher utilization from both existing assets and additions made in the quarter.
"Margin performance in our well servicing segment was the normal occurrence of pre-deployment expenses of new equipment, and in our fluid logistics segment, the result of our management's continued focus on operations and utilization. We look for the industry pace to be steady as we go into the second half of the year."
Business Segment Results
Well Servicing Segment
In the second quarter of 2014, well servicing segment revenues increased $1.3 million, or 1.9%, to $70.4 million, compared to $69.1 million in the first quarter of 2014. The increase in revenues was essentially a derivative of higher utilization generated by the diversity of well servicing work. Segment gross profit totaled $16.3 million, or 23.2% of revenues, in the second quarter of 2014, compared to $16.7 million, or 24.2% of revenues, for the first quarter of 2014.
The Company recorded approximately 125,486 well service hours for the second quarter of 2014, compared to 127,977 in the first quarter of 2014. Capital expenditures in the well servicing segment for the quarter ended June 30, 2014, were approximately $6.6 million. Capital additions included one coiled tubing unit and related equipment, one new well servicing rig and related equipment, and vehicles.
As of June 30, 2014, the Company had 169 well service rigs, nine tubing testing systems, four pump-down units and six coiled tubing spreads.
Fluid Logistics Segment
In the second quarter of 2014, fluid logistics segment revenues increased $2.0 million, or 4.9%, to $42.8 million, compared to $40.8 million in the first quarter of 2014. The increase in revenues was primarily due to increased truck hours. Gross operating profit for the fluid logistics segment totaled $11.2 million, or 26.2% of revenues, in the second quarter of 2014, compared to $10.5 million, or 25.6% of revenues, in the first quarter of 2014.
The Company recorded 270,964 truck hours during the second quarter of 2014, compared to 250,769 hours in the first quarter of 2014. The Company's heavy truck fleet totaled 591 at June 30, 2014, which included 463 vacuum trucks. Capital expenditures for the fluid logistics segment were approximately $5.2 million for the quarter ended June 30, 2014, and were mainly associated with the procurement of specialized fluid-related equipment.
Liquidity and Capital Resources
As of June 30, 2014, the Company had $16.8 million in unrestricted cash and $1.4 million of restricted cash. As of August 12, 2014, the Company had $31.3 million in unrestricted cash and the secured credit facility remained undrawn, except for the letters of credit in the amount of $5.9 million. The Company also had $280.0 million in aggregate face amount of 9.0% Senior Notes and $15.0 million of other notes outstanding.