Exhibit 99.1
Bronco Drilling Company, Inc. Announces First Quarter Results
OKLAHOMA CITY, May 8, 2009 (BUSINESS WIRE)—Bronco Drilling Company, Inc., (Nasdaq/GS:BRNC), announced today financial and operational results for the three months ended March 31, 2009.
Consolidated Results
Revenues for the first quarter of 2009 were $50.6 million compared to $76.0 million for the fourth quarter of 2008 and $62.3 million for the first quarter of 2008. Net loss for the first quarter of 2009 was $1.7 million compared to a net loss of $19.8 million for the previous quarter and net income of $8.1 million for the first quarter of 2008. The Company generated EBITDA of $13.1 million for the first quarter of 2009 compared to $20.5 million before impairments for the previous quarter and $25.9 million for the first quarter of 2008. The Company’s fully diluted earnings per share for the quarter ended March 31, 2009, were a loss of $0.06 based on 26.6 million shares.
The company’s effective tax rate was higher than it has been historically for the first quarter of 2009 due to the recognition of a permanent difference related to the company’s stock based compensation. This resulted in reducing the company’s tax benefit by $683,000.
Land Drilling
Average operating land rigs for the first quarter of 2009 were 45 compared to 43 for the previous quarter and 45 for the first quarter of 2008. Revenue days for the quarter decreased to 2,362 from 3,300 for the previous quarter and from 2,848 for the first quarter of 2008. Utilization for the first quarter of 2009 was 58% compared to 83% for the previous quarter and 69% for the first quarter of 2008. Average daily cash margins for our land drilling fleet for the quarter ended March 31, 2009, were $7,613 compared to $9,087 for the previous quarter and $7,333 for the first quarter of 2008.
Well Servicing
Average operating workover rigs for the first quarter of 2009 were 52 compared to 53 for the previous quarter and 48 for the first quarter of 2008. Revenue hours for the quarter decreased to 8,012 from 16,793 for the previous quarter and from 23,865 for the first quarter of 2008. Utilization for the first quarter of 2009 was 24% compared to 49% for the previous quarter and 77% for the first quarter of 2008. Average hourly cash margins for our well servicing fleet for the quarter ended March 31, 2009, were $58 compared to $60 for the previous quarter and $137 for the first quarter of 2008.
About Bronco Drilling
Bronco Drilling Company, Inc., a publicly held company headquartered in Edmond, Oklahoma, is a provider of contract land drilling services and workover 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) | |
| |
| | | March 31, | | | December 31, | |
| | | 2009 | | | 2008 | |
| ASSETS | | (Unaudited) | | | | |
| | | | | | | |
| CURRENT ASSETS | | | | | | |
| Cash and cash equivalents | | $ | 39,228 | | | $ | 26,676 | |
| Receivables | | | | | | | | |
| Trade and other, net of allowance for doubtful accounts of | | | | | | | | |
| $4,110 and $3,830 in 2009 and 2008, respectively | | | 39,583 | | | | 65,817 | |
| Unbilled receivables | | | 1,845 | | | | 2,940 | |
| Income tax receivable | | | 2,046 | | | | 2.072 | |
| Current deferred income taxes | | | 2,592 | | | | 2,844 | |
| Current maturities of note receivable from affiliate | | | 7,785 | | | | 6,900 | |
| Prepaid expenses | | | 1,418 | | | | 572 | |
| Total current assets | | | 94,497 | | | | 107,821 | |
| | | | | | | | | |
| PROPERTY AND EQUIPMENT - AT COST | | | | | | | | |
| Drilling rigs and related equipment | | | 516,421 | | | | 512,158 | |
| Transportation, office and other equipment | | | 43,449 | | | | 43,912 | |
| | | | 559,870 | | | | 556,070 | |
| Less accumulated depreciation | | | 135,778 | | | | 123,915 | |
| | | | 424,092 | | | | 432,155 | |
| | | | | | | | | |
| OTHER ASSETS | | | | | | | | |
| Note receivable from affiliate, less current maturities | | | 2,615 | | | | 3,451 | |
| Investment in Challenger | | | 63,287 | | | | 62,875 | |
| Intangibles, net, and other | | | 5,182 | | | | 6,052 | |
| | | | 71,084 | | | | 72,378 | |
| | | | | | | | | |
| | | $ | 589,673 | | | $ | 612,354 | |
| | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
| | | | | | | | | |
| CURRENT LIABILITIES | | | | | | | | |
| Accounts payable | | $ | 5,958 | | | $ | 18,473 | |
| Accrued liabilities | | | 12,355 | | | | 16,249 | |
| Current maturities of long-term debt | | | 85 | | | | 1,464 | |
| Total current liabilities | | | 18,398 | | | | 36,186 | |
| | | | | | | | | |
| LONG-TERM DEBT, less current maturities | | | 112,437 | | | | 116,083 | |
| | | | | | | | | |
| DEFERRED INCOME TAXES | | | 65,785 | | | | 66,074 | |
| | | | | | | | | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| Common stock, $.01 par value, 100,000 | | | | | | | | |
| shares authorized; 26,657 and 26,346 shares | | | | | | | | |
| issued and outstanding at March 31, 2009 and December 31, 2008 | | | 267 | | | | 267 | |
| | | | | | | | | |
| Additional paid-in capital | | | 304,766 | | | | 304,015 | |
| | | | | | | | | |
| Retained earnings | | | 88,020 | | | | 89,729 | |
| Total stockholders' equity | | | 393,053 | | | | 394,011 | |
| | | | | | | | | |
| | | $ | 589,673 | | | $ | 612,354 | |
| Bronco Drilling Company, Inc. and Subsidiaries | |
| CONSOLIDATED STATEMENTS OF OPERATIONS | |
| (Amounts in thousands, except per share amounts) | |
| | | | | | | |
| | | Three Months Ended March 31, | |
| | | 2009 | | | 2008 | |
| | | (Unaudited) | |
| REVENUES | | | | | | |
| Contract drilling revenues | | $ | 47,826 | | | $ | 54,073 | |
| Well service | | | 2,779 | | | | 8,223 | |
| Gain on Challenger transactions | | | - | | | | 4,707 | |
| | | | 50,605 | | | | 67,003 | |
| EXPENSES | | | | | | | | |
| Contract drilling | | | 29,844 | | | | 33,190 | |
| Well service | | | 2,315 | | | | 4,943 | |
| Depreciation and amortization | | | 12,526 | | | | 11,925 | |
| General and administrative | | | 5,188 | | | | 5,739 | |
| | | | 49,873 | | | | 55,797 | |
| | | | | | | | | |
| Income from operations | | | 732 | | | | 11,206 | |
| | | | | | | | | |
| OTHER INCOME (EXPENSE) | | | | | | | | |
| Interest expense | | | (2,299 | ) | | | (1,226 | ) |
| Interest income | | | 1 | | | | 734 | |
| Equity in income of Challenger | | | 412 | | | | 1,845 | |
| Other | | | (566 | ) | | | 141 | |
| | | | (2,452 | ) | | | 1,494 | |
| Income (loss) before income taxes | | | (1,720 | ) | | | 12,700 | |
| Income tax expense (benefit) | | | (11 | ) | | | 4,552 | |
| | | | | | | | | |
| NET INCOME (LOSS) | | $ | (1,709 | ) | | $ | 8,148 | |
| | | | | | | | | |
| Income (loss) per common share-Basic | | $ | (0.06 | ) | | $ | 0.31 | |
| | | | | | | | | |
| Income (loss) per common share-Diluted | | $ | (0.06 | ) | | $ | 0.31 | |
| | | | | | | | | |
| Weighted average number of shares outstanding-Basic | | | 26,589 | | | | 26,265 | |
| | | | | | | | | |
| Weighted average number of shares outstanding-Diluted | | | 26,589 | | | | 26,287 | |
| | | | | | | | | |
Non-GAAP Financial Measures
This press release includes a presentation of average daily cash margin for our land drilling fleet, average hourly cash margin for our well servicing fleet and EBITDA which are not financial measures 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, minus well service revenue, plus well service expense, income tax expense, other expense, general and administrative expense, depreciation and amortization and impairments divided by revenue days for the period. Average hourly cash margin is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, minus contract drilling revenue, plus contract drilling expense, income tax expense, other expense, general and administrative expense, depreciation and amortization and impairments divided by revenue hours for the period. EBITDA is a non-GAAP financial measure equal to net income, the most directly comparable GAAP financial measure, plus interest expense, income tax expense, depreciation and amortization and impairments. We have presented average daily cash margin, average hourly cash margin and EBITDA because we use these metrics as an integral part of our internal reporting to measure our performance and to evaluate the performance of our senior management. We consider these metrics 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, average hourly cash margin and EBITDA provide useful information to our investors regarding our performance and overall results of operations. Neither average daily cash margin, average hourly cash margin nor EBITDA is 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, none of these metrics is 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 and EBITDA 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, | |
| | | 2009 | | | 2008 | | | 2008 | |
| | | (Unaudited) | | | (Unaudited) | |
| Reconciliation of average daily | | | | | | | | | |
| cash margin to net income (loss): | | | | | | | | | |
| Net income (loss) | | $ | (1,709 | ) | | $ | 8,148 | | | $ | (19,813 | ) |
| Well service revenue | | | (2,779 | ) | | | (8,223 | ) | | | (6,267 | ) |
| Well service expense | | | 2,315 | | | | 4,943 | | | | 5,255 | |
| Income tax expense (benefit) | | | (11 | ) | | | 4,552 | | | | (12,308 | ) |
| Other expense | | | 2,452 | | | | (6,201 | ) | | | 1,864 | |
| General and administrative | | | 5,188 | | | | 5,739 | | | | 9,418 | |
| Depreciation and amortization | | | 12,526 | | | | 11,925 | | | | 13,067 | |
| Impairment of goodwill | | | - | | | | - | | | | 24,328 | |
| Impairment of investment in Challenger | | | - | | | | - | | | | 14,442 | |
| | | | | | | | | | | | | |
| Drilling margin | | | 17,982 | | | | 20,883 | | | | 29,986 | |
| | | | | | | | | | | | | |
| Revenue days | | | 2,362 | | | | 2,848 | | | | 3,300 | |
| | | | | | | | | | | | | |
| Average daily cash margin | | $ | 7,613 | | | $ | 7,333 | | | $ | 9,087 | |
| | | | Three Months Ended | | | Three Months Ended | |
| | | | March 31, | | | December 31, | |
| | | | 2009 | | | 2008 | | | 2008 | |
| | | | (Unaudited) | | | (Unaudited) | |
| Reconciliation of average hourly | | | | | | | | | |
| cash margin to net income (loss): | | | | | | | | | |
| Net income (loss) | | $ | (1,709 | ) | | $ | 8,148 | | | $ | (19,813 | ) |
| Contract drilling revenue | | | (47,826 | ) | | | (54,073 | ) | | | (69,753 | ) |
| Contract drilling expense | | | 29,844 | | | | 33,190 | | | | 39,767 | |
| Income tax expense (benefit) | | | (11 | ) | | | 4,552 | | | | (12,308 | ) |
| Other expense | | | 2,452 | | | | (6,201 | ) | | | 1,864 | |
| General and administrative | | | 5,188 | | | | 5,739 | | | | 9,418 | |
| Depreciation and amortization | | | 12,526 | | | | 11,925 | | | | 13,067 | |
| Impairment of goodwill | | | - | | | | - | | | | 24,328 | |
| Impairment of investment in Challenger | | | - | | | | - | | | | 14,442 | |
| | | | | | | | | | | | | | |
| Well service margin | | | 464 | | | | 3,280 | | | | 1,012 | |
| | | | | | | | | | | | | | |
| Operating hours | | | 8,012 | | | | 23,865 | | | | 16,793 | |
| | | | | | | | | | | | | | |
| Average hourly cash margin | | $ | 58 | | | $ | 137 | | | $ | 60 | |
