Globe Newswire 8-Nov-2018 4:06 PM
HOUSTON, Nov. 08, 2018 (GLOBE NEWSWIRE) -- RigNet, Inc. (NASDAQ:RNET), a global technology company that provides customized communications services, applications, real-time machine learning, and cybersecurity solutions, today reported results for the quarter ended September 30, 2018.
"RigNet continues to execute on our strategic growth plan which focuses on enabling our customers to realize the tangible business benefits of digital transformation," said Steven Pickett, Chief Executive Officer and President. "In the third quarter of 2018, and for the second consecutive quarter, the team grew both consolidated revenue and Adjusted EBITDA. Furthermore, revenue grew across all segments during the third quarter of 2018, both sequentially and year-on-year. Our customers continue to see increasing value in our bundled Apps & IoT solutions, particularly with respect to IntelieTM, our real time machine learning and artificial intelligence platform which secured new contracts with both onshore and offshore customers during the quarter."
Quarterly revenue was $64.8 million, an increase of $13.9 million, or 27.4%, compared to the third quarter 2017 and an increase of $4.8 million, or 7.9%, compared to the prior quarter. Compared to the third quarter 2017, revenue grew in all segments: a $6.7 million increase in Systems Integration (SI) revenue, a $4.7 million increase in Managed Services (MS) revenue, and a $2.5 million increase in Apps & IoT. The revenue increase compared to the prior quarter reflects a $3.2 million increase in MS revenue, a $0.9 million increase in Apps & IoT, and a $0.6 million increase in SI revenue.
Net loss attributable to common stockholders was $2.8 million, or $0.15 per share, compared to net loss attributable to common stockholders of $4.2 million, or $0.23 per share, in the third quarter 2017 and net loss attributable to common stockholders of $4.3 million, or $0.23 per share, in the prior quarter.
Project backlog (using percentage of completion accounting) was $41.4 million compared to $31.5 million in the third quarter 2017 and $19.6 million in the prior quarter. The increase was driven by new project wins primarily in the United States, both onshore and offshore.
Adjusted EBITDA, a non-GAAP measure defined below, was $8.7 million in the third quarter 2018 compared to $7.8 million in the third quarter 2017 and $8.1 million in the prior quarter. Adjusted EBITDA was $24.2 million for the nine months ended September 30, 2018 compared to $21.1 million for the nine months ended September 30, 2017.
The Company recorded $0.7 million in restructuring charges in the third quarter of 2018, as well as a $0.8 million decrease in the fair value of an earn-out related to the TECNOR acquisition, bringing the fair value to zero, and $0.9 million in acquisition costs. In the previous quarter, the Company recorded $2.8 million for the change in fair value of an earn-out related to the TECNOR acquisition and $0.3 million in acquisition costs. In the quarter ended September 30, 2017, the Company recorded $0.8 million in acquisition costs and $0.8 million in restructuring charges. The acquisition costs, restructuring charges and change in fair value of the earn-out are added back to net loss in our non-GAAP measure Adjusted EBITDA.
Capital expenditures for the three and nine months ending September 30, 2018 totaled $6.5 million and $19.7 million, respectively, compared to $5.9 million and $13.9 million, respectively, for the three and nine months ending September 30, 2017. Capital expenditures for the second quarter ending June 30, 2018 totaled $6.6 million.
Site count in the third quarter 2018 increased across all categories to 1,350 from 1,175 in the third quarter 2017 and 1,297 in the prior quarter.
Earnings Call Information
An Earnings Call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Friday, November 9, 2018, to discuss RigNet's third quarter 2018 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.
RigNet (NASDAQ: RNET) is a global technology company that provides customized communications services, applications, real-time machine learning, and cybersecurity solutions to enhance customer decision-making and business performance. RigNet delivers a digital transformation bundle that accelerates technology adoption and empowers customers to be always connected, always secure, and always learning. RigNet is headquartered in Houston, Texas with operations around the world.
For more information on RigNet, please visit www.rig.net. RigNet is a registered trademark of RigNet, Inc.
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. Opinions, expectations with respect to conditions in the oil and gas industry, and customer perceptions of value are examples of forward-looking statements in this press release. 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, including the expected benefits of acquiring and integrating other businesses, and often contain words such as "anticipate," "believe," "intend,", "will", "expect," "plan" or other similar words. These forward-looking statements involve certain risks and uncertainties, including those risks set forth in Item 1A – Risk Factors of the Company's most recent 10-K filing, and 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.
Non-GAAP Financial Measure
This press release contains the non-GAAP measure Adjusted EBITDA, a measure we believe is useful to investors as a supplemental measure to evaluate overall operating performance and is an integral component of financial covenant ratios in our credit agreement. Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles, or GAAP. We refer you to the Company's recent 10-K filing for the year ended December 31, 2017 for a more detailed discussion of the uses and limitations of Adjusted EBITDA.
We define Adjusted EBITDA as net loss plus interest expense, income tax expense (benefit), depreciation and amortization, impairment of goodwill, intangibles, property, plant and equipment, (gain) loss on sales of property, plant and equipment, net of retirements, change in fair value of earn-outs and contingent consideration, stock-based compensation, acquisition costs, executive departure costs, restructuring charges and non-recurring items.
A reconciliation of net loss to Adjusted EBITDA is found in the table below.
Media / Investor Relations Contact
Lee M. Ahlstrom Tel: +1 (281) 674-0480
RigNet, Inc. firstname.lastname@example.org
|CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS|
|Three Months Ended||Nine Months Ended|
|(in thousands, except per share amounts)|
|Cost of revenue (excluding depreciation and amortization)||40,734||36,246||32,385||110,661||95,298|
|Depreciation and amortization||8,413||8,356||7,999||24,756||22,867|
|Selling and marketing||2,728||4,189||2,400||9,866||5,968|
|General and administrative||13,916||15,546||11,011||43,148||31,401|
|Other expense, net||(1,465||)||(895||)||(480||)||(2,813||)||(1,859||)|
|Loss before income taxes||(2,486||)||(5,225||)||(3,431||)||(12,634||)||(9,315||)|
|Income tax benefit (expense)||(312||)||926||(762||)||11||(1,075||)|
|Loss Per Share - Basic and Diluted|
|Net loss attributable to RigNet, Inc. common stockholders||$||(2,847||)||$||(4,329||)||$||(4,232||)||$||(12,732||)||$||(10,507||)|
|Net loss per share attributable to RigNet, Inc. common stockholders, basic||$||(0.15||)||$||(0.23||)||$||(0.23||)||$||(0.69||)||$||(0.58||)|
|Net loss per share attributable to RigNet, Inc. common stockholders, diluted||$||(0.15||)||$||(0.23||)||$||(0.23||)||$||(0.69||)||$||(0.58||)|
|Weighted average shares outstanding, basic||18,905||18,639||18,086||18,566||17,982|
|Weighted average shares outstanding, diluted||18,905||18,639||18,086||18,566||17,982|
|Unaudited Non-GAAP Data:|
|Reconciliation of Net Loss to Adjusted EBITDA|
|Three Months Ended||Nine Months Ended|
|Depreciation and amortization||8,413||8,356||7,999||24,756||22,867|
|Loss on sales of property, plant and equipment, net of retirements||66||21||5||34||55|
|Change in fair value of earn-out/contingent consideration||(750||)||2,778||-||2,050||(846||)|
|Executive departure costs||-||4||-||161||-|
|Income tax expense (benefit)||312||(926||)||762||(11||)||1,075|
|Adjusted EBITDA (non-GAAP measure)||$||8,730||$||8,098||$||7,843||$||24,247||$||21,121|
|Three Months Ended||Nine Months Ended|
|Cost of revenue||27,930||25,307||24,902||78,982||75,798|
|Depreciation and amortization||5,641||5,645||5,263||17,012||17,509|
|Selling, general and administrative||3,779||5,023||3,013||13,017||12,435|
|Applications and Internet-of-Things|
|Cost of revenue||3,677||3,165||3,394||9,927||6,844|
|Depreciation and amortization||1,661||836||835||3,344||849|
|Selling, general and administrative||520||430||363||1,304||1,149|
|Cost of revenue||9,127||7,774||4,089||21,752||12,656|
|Depreciation and amortization||605||665||615||1,922||1,813|
|Selling, general and administrative||380||557||280||1,260||1,179|
|NOTE: Consolidated balances include the segments above along with corporate activities and intercompany eliminations.|
|CONDENSED CONSOLIDATED BALANCE SHEETS|
|September 30,||December 31,|
|(in thousands, except share amounts)|
|Cash and cash equivalents||$||20,726||$||34,598|
|Accounts receivable, net||68,161||49,021|
|Costs and estimated earnings in excess of billings on uncompleted contracts||4,395||2,393|
|Prepaid expenses and other current assets||6,388||5,591|
|Total current assets||99,712||91,646|
|Property, plant and equipment, net||60,835||60,344|
|Deferred tax and other assets||8,385||9,111|
|LIABILITIES AND EQUITY|
|Current maturities of long-term debt||4,943||4,941|
|Income taxes payable||-||1,601|
|Deferred revenue and other current liabilities||4,419||8,511|
|Total current liabilities||43,962||43,376|
|Deferred tax liability||3,281||189|
|Commitments and contingencies|
|Preferred stock - $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at September 30, 2018 or December 31, 2017||-||-|
|Common stock - $0.001 par value; 191,000,000 shares authorized; 19,411,467 and 18,232,872 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively||19||18|
|Treasury stock - 89,880 and 5,516 shares at September 30, 2018 and December 31, 2017, respectively, at cost||(1,246||)||(116||)|
|Additional paid-in capital||172,599||155,829|
|Accumulated other comprehensive loss||(19,295||)||(14,806||)|
|Total stockholders' equity||105,281||107,199|
|Non-redeemable, non-controlling interest||30||78|
|TOTAL LIABILITIES AND EQUITY||$||251,238||$||230,094|
|CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS|
|Nine Months Ended September 30,|
|Cash flows from operating activities:|
|Adjustments to reconcile net loss to net cash provided by operations:|
|Depreciation and amortization||24,756||22,867|
|Amortization of deferred financing costs||141||192|
|Change in fair value of earn-out/contingent consideration||2,050||(846||)|
|Accretion of discount of contingent consideration payable for acquisitions||368||417|
|Loss on sales of property, plant and equipment, net of retirements||34||55|
|Changes in operating assets and liabilities, net of effect of acquisition:|
|Accounts receivable, net||(15,428||)||(122||)|
|Costs and estimated earnings in excess of billings on uncompleted contracts||(1,095||)||716|
|Prepaid expenses and other assets||(1,634||)||3,714|
|Payout of TECNOR contingent consideration - inception to date change in fair value portion||(1,575||)||-|
|Net cash provided by operating activities||1,352||20,888|
|Cash flows from investing activities:|
|Acquisitions (net of cash acquired)||(5,405||)||(32,205||)|
|Proceeds from sales of property, plant and equipment||685||274|
|Net cash used in investing activities||(23,511||)||(45,117||)|
|Cash flows from financing activities:|
|Proceeds from issuance of common stock net of stock witheld to cover employee taxes on stock-based compensation||967||800|
|Stock withheld to cover employee taxes on stock-based compensation||(1,130||)||(116||)|
|Subsidiary distributions to non-controlling interest||(157||)||(76||)|
|Payout of TECNOR contingent consideration - fair value on acquisition date portion||(6,425||)||-|
|Proceeds from borrowings||16,750||15,000|
|Repayments of long-term debt||(3,848||)||(16,660||)|
|Net cash provided by (used) in financing activities||6,157||(1,052||)|
|Net change in cash and cash equivalents||(16,002||)||(25,281||)|
|Cash and cash equivalents including restricted cash:|
|Balance, January 1,||36,141||58,805|
|Changes in foreign currency translation||2,175||919|
|Balance, September 30,||$||22,314||$||34,443|
|Selected Operational Data|
|3rd Quarter||2nd Quarter||1st Quarter||4th Quarter||3rd Quarter|
|Offshore drilling rigs (1)||191||190||188||182||184|
|Other sites (2)||640||610||525||513||510|
|(1) Includes jack up, semi-submersible and drillship rigs|
|(2) Includes U.S. and International land sites, completion sites, man-camps, remote offices, and supply bases and offshore-related supply bases, shore offices, tender rigs and platform rigs|
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