Exhibit 99.1
Bronco Drilling Company, Inc. Announces First Quarter 2011 Results
OKLAHOMA CITY, May 6, 2011 (BUSINESS WIRE)—Bronco Drilling Company, Inc., (Nasdaq/GS:BRNC), announced today financial and operational results for the three months ended March 31, 2011.
Consolidated Results
Revenues for the first quarter of 2011 were $37.0 million compared to $37.3 million for the fourth quarter of 2010 and $22.3 million for the first quarter of 2010. Net loss for the first quarter of 2011 was $7.4 million compared to a net loss of $2.5 million for the previous quarter and a net loss of $7.4 million for the first quarter of 2010. The Company’s fully diluted earnings per share for the quarter ended March 31, 2011, were a loss of $0.27 based on 27.5 million shares.
In the quarter the company recognized certain non-recurring charges related to the fluctuation in the fair value of a warrant in the amount of $10.3 million, a one-time charge related to the early extinguishment of debt in the amount of $2.0 million and a loss on sale and impairment of drilling rigs and related equipment of $1.9 million. Absent these non-recurring charges results from recurring items was a profit of $.05 per fully diluted share for the quarter.
Land Drilling
Average marketed land rigs for the first quarter of 2011 was 24 flat from the previous quarter and down from 37 for the first quarter of 2010. Revenue days for the quarter decreased to 2,088 from 2,152 for the previous quarter and increased from 1,428 for the first quarter of 2010. Utilization for the first quarter of 2011 was 96% compared to 96% for the previous quarter and 43% for the first quarter of 2010. Average daily cash margin for our land drilling fleet for the quarter ended March 31, 2011 was $6,324 compared to $6,008 for the previous quarter and $2,897 for the first quarter of 2010.
About Bronco Drilling
Bronco Drilling Company, Inc., a publicly held company headquartered in Edmond, Oklahoma, is a provider of contract land drilling services to oil and natural gas exploration and production companies. Bronco’s common stock is quoted on The Nasdaq Global Select Market under the symbol “BRNC.” For more information about Bronco Drilling Company, Inc., visit http://www.broncodrill.com.
Bronco Drilling Company, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share par value)
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except share par value)
| March 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 14,797 | $ | 11,854 | ||||
| Restricted cash | — | 2,700 | ||||||
| Receivables | ||||||||
| Trade and other, net of allowance for doubtful accounts of $968 and $891 in 2011 and 2010, respectively | 22,796 | 24,656 | ||||||
| Affiliate receivables, net of allowance of $800 | 1,546 | 1,508 | ||||||
| Unbilled receivables | 856 | 428 | ||||||
| Income tax receivable | 5,671 | 5,700 | ||||||
| Current deferred income taxes | 2,558 | 2,765 | ||||||
| Current maturities of note receivable from affiliate | 1,639 | 1,607 | ||||||
| Prepaid expenses | 1,038 | 329 | ||||||
| Total current assets | 50,901 | 51,547 | ||||||
| PROPERTY AND EQUIPMENT — AT COST | ||||||||
| Drilling rigs and related equipment | 304,886 | 315,085 | ||||||
| Transportation, office and other equipment | 16,281 | 16,236 | ||||||
| 321,167 | 331,321 | |||||||
| Less accumulated depreciation | 104,093 | 105,242 | ||||||
| 217,074 | 226,079 | |||||||
| OTHER ASSETS | ||||||||
| Investment in Challenger | 38,730 | 38,730 | ||||||
| Investment in Bronco MX | 21,433 | 20,632 | ||||||
| Debt issue costs and other | 4,617 | 3,362 | ||||||
| Non-current assets held for sale and discontinued operations | 7,000 | 1,680 | ||||||
| 71,780 | 64,404 | |||||||
| $ | 339,755 | $ | 342,030 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 8,674 | $ | 7,945 | ||||
| Accrued liabilities | 8,757 | 7,847 | ||||||
| Current maturities of long-term debt | 96 | 95 | ||||||
| Total current liabilities | 17,527 | 15,887 | ||||||
| LONG-TERM DEBT, less current maturities | 4,150 | 6,730 | ||||||
| WARRANT | 14,690 | 4,407 | ||||||
| DEFERRED INCOME TAXES | 17,387 | 21,664 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Common stock, $.01 par value, 100,000 shares authorized; 27,598 and 27,236 shares issued and outstanding at March 31, 2011 and December 31, 2010 | 276 | 277 | ||||||
| Additional paid-in capital | 309,874 | 310,580 | ||||||
| Accumulated other comprehensive income | 1,811 | 1,012 | ||||||
| Retained earnings (Accumulated deficit) | (25,960 | ) | (18,527 | ) | ||||
| Total stockholders’ equity | 286,001 | 293,342 | ||||||
| $ | 339,755 | $ | 342,030 | |||||
Bronco Drilling Company, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share amounts)
| Three Months Ended March 31, | ||||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
| REVENUES | ||||||||
| Contract drilling revenues | $ | 37,006 | $ | 22,295 | ||||
| EXPENSES | ||||||||
| Contract drilling | 23,801 | 18,159 | ||||||
| Depreciation and amortization | 5,659 | 7,705 | ||||||
| General and administrative | 4,209 | 4,217 | ||||||
| Loss (gain) on Bronco MX transaction | — | (1,058 | ) | |||||
| Impairment of drilling rigs and related equipment | 679 | — | ||||||
| Loss on sale of drilling rigs and related equipment | 1,175 | — | ||||||
| 35,523 | 29,023 | |||||||
| Income (loss) from continuing operations | 1,483 | (6,728 | ) | |||||
| OTHER INCOME (EXPENSE) | ||||||||
| Interest expense | (571 | ) | (1,456 | ) | ||||
| Loss from extinguishment of debt | (1,975 | ) | — | |||||
| Interest income | — | 46 | ||||||
| Equity in income (loss) of Challenger | — | (599 | ) | |||||
| Equity in income (loss) of Bronco MX | 1 | (209 | ) | |||||
| Other | 25 | 48 | ||||||
| Change in fair value of warrant | (10,283 | ) | 272 | |||||
| (12,803 | ) | (1,898 | ) | |||||
| Loss from continuing operations before income taxes | (11,320 | ) | (8,626 | ) | ||||
| Income tax benefit | (3,981 | ) | (2,621 | ) | ||||
| Loss from continuing operations | (7,339 | ) | (6,005 | ) | ||||
| Loss from discontinued operations, net of tax | (94 | ) | (1,414 | ) | ||||
| NET LOSS | $ | (7,433 | ) | $ | (7,419 | ) | ||
| Loss per common share-Basic | ||||||||
| Continuing operations | (0.27 | ) | (0.23 | ) | ||||
| Discontinued operations | (0.00 | ) | (0.05 | ) | ||||
| Loss per common share-Basic | $ | (0.27 | ) | $ | (0.28 | ) | ||
| Loss per common share-Diluted | ||||||||
| Continuing operations | (0.27 | ) | (0.23 | ) | ||||
| Discontinued operations | (0.00 | ) | (0.05 | ) | ||||
| Loss per common share-Diluted | $ | (0.27 | ) | $ | (0.28 | ) | ||
| Weighted average number of shares outstanding-Basic | 27,468 | 26,850 | ||||||
| Weighted average number of shares outstanding-Diluted | 27,468 | 26,850 | ||||||
Non-GAAP Financial Measures
This press release includes a presentation of average daily cash margin for our land drilling fleet, which is not a financial measure recognized under generally accepted accounting principles, or GAAP. Average daily cash margin is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus income tax expense, other expense, general and administrative expense and depreciation, amortization and impairment, and divided by revenue days for the period. We have presented average daily cash margin because we use this metric as an integral part of our internal reporting to measure our performance and to evaluate the performance of our senior management. We consider this metric to be important indicators of the operational strength of our business. A limitation of these metrics, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in our business. Management evaluates the costs of such tangible and intangible assets through other financial measures, such as capital expenditures, investment spending and return on capital. Therefore, we believe that average daily cash margin provides useful information to our investors regarding our performance and overall results of operations. Average daily cash margin is not intended to be a performance measure that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, this metric is not intended to represent funds available for dividends, reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. These non-GAAP financial measures may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in our various agreements.
The following presents a reconciliation of average daily cash margin to net income, the most directly comparable GAAP financial measure (in thousands, except revenue days and average daily cash margin):
| Three Months Ended | Three Months Ended | |||||||||||
| March 31, | December 31, | |||||||||||
| 2011 | 2010 | 2010 | ||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| Reconciliation of average daily cash margin to net loss: | ||||||||||||
| Net loss | $ | (7,433 | ) | $ | (7,419 | ) | $ | (2,497 | ) | |||
| Loss from discontinued operations, net of tax | 94 | 1,414 | 233 | |||||||||
| Income tax benefit | (3,981 | ) | (2,621 | ) | (1,047 | ) | ||||||
| General and administrative | 4,209 | 4,217 | 4,176 | |||||||||
| Depreciation and amortization | 5,659 | 7,705 | 5,933 | |||||||||
| Gain on Bronco MX transaction | — | (1,058 | ) | — | ||||||||
| Other and Non-Recurring | 14,657 | 1,899 | 6,132 | |||||||||
| Drilling margin | 13,205 | 4,137 | 12,930 | |||||||||
| Revenue days | 2,088 | 1,428 | 2,152 | |||||||||
| Average daily cash margin | $ | 6,324 | $ | 2,897 | $ | 6,008 | ||||||
| Contact: | Bob Jarvis | |
| Investor Relations | ||
| Bronco Drilling Company | ||
| (405) 242-4444 EXT: 102 | ||
| bjarvis@broncodrill.com |