Tesco Corporation Reports Third Quarter 2017 Results
Liquidity of $64.6 million and no debt at the end of the third quarter, after funding approximately $1.0 million of transaction-related payments and $1.4 million of restructuring payments during the third quarter
Reported U.S. GAAP diluted EPS was a loss of $(0.28) on a net loss of $13.0 million and adjusted EPS was a loss of $(0.20) on an adjusted net loss of $9.2 million, after $3.8 million in charges
Adjusted EBITDA loss improved 46% to $2.1 million in the third quarter on a sequential revenue increase of 1%
HOUSTON, November 7, 2017 -- Tesco Corporation ("TESCO" or the "Company") (NASDAQ: TESO) today reported third quarter 2017 financial and operating results.
Third Quarter Operating Results
Fernando Assing, TESCO's President and Chief Executive Officer, commented, "Our business continues to improve, especially in Tubular Services with a favorable mix to increased offshore and CDS sales and lower U.S. land ramp-up costs in the third quarter. Despite lower used top drive sales, revenue and EBITDA both improved sequentially. Also, while Hurricane Harvey had a minor impact on our financial results this quarter of approximately $0.2 million in EBITDA, it did have a significant direct impact on many of our employees. I am proud of the quick response our employees made to help those with both immediate and longer-term needs."
TESCO reported revenue of $40.5 million in the third quarter of 2017, up from $40.1 million, or 1%, in the second quarter of 2017, and up from $30.4 million, or 33%, in the third quarter of 2016.
TESCO reported a U.S. GAAP net loss of $13.0 million, or $(0.28) per share, in the third quarter of 2017. Adjusted net loss for the quarter was $9.2 million, or $(0.20) per share, excluding special items, consisting primarily of charges related to restructuring and transaction costs. Restructuring costs were mainly for facility consolidation and headcount reductions in Latin America. This compares to a U.S. GAAP net loss of $12.1 million, or $(0.26) per diluted share, in the second quarter of 2017, and a U.S. GAAP net loss of $22.1 million, or (0.48) per diluted share, in the third quarter of 2016. Adjusted net loss in the second quarter of 2017 was $11.6 million, or $(0.25) per diluted share, and in the third quarter of 2016 was $17.3 million, or $(0.37) per diluted share.
Adjusted EBITDA loss was $2.1 million in the third quarter of 2017 compared to an adjusted EBITDA loss of $3.9 million in the second quarter of 2017 on a 1% revenue increase. For the third quarter of 2017, U.S. GAAP operating loss was $12.7 million and adjusted operating loss was $8.4 million. This compares to the second quarter 2017 U.S. GAAP operating loss of $11.5 million and adjusted operating loss of $11.4 million, which excluded $0.1 million of charges.
Cash and cash equivalents as of September 30, 2017 decreased from the second quarter of 2017 by $7.9 million to $64.6 million primarily due to continued operating losses and $1.0 million of transaction-related payments. While working capital levels remained relatively flat compared to the end of the second quarter, working capital levels had been projected to decline. Certain international payments valued at over $4 million were delayed but are expected to be paid in the fourth quarter. Inventory ended higher by nearly $3 million primarily to support increased top drive sales expected in the fourth quarter.
Free cash flow was a use of cash of $7.9 million before approximately $1.0 million of transaction-related payments and $1.4 million of restructuring payments.
The following information was filed by Tesco Corp (TESO) on Tuesday, November 7, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.