HOUSTON, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Frank’s International N.V. (NYSE: FI) today reported financial and operational results for the three and twelve months ended December 31, 2020.

Fourth Quarter 2020 Financial Highlights

• Delivered fourth quarter revenue of $96.3 million, a 14.1% increase over the prior period, primarily driven by 22.9% sequential revenue improvement in our Tubular Running Services segment.
• Fourth quarter net loss of $8.2 million, an improvement of more than 70% over the prior period.
• Generated fourth quarter Adjusted EBITDA of $4.6 million, moving the company back into positive territory compared to the prior two quarters, with profitability improving across all operating segments due to higher customer activity levels and continued realization of cost savings.
• Fourth quarter cash flows from operating activities totaled $14.3 million generating free cash flow of $11.6 million driven by a relentless focus on working capital, cost reductions and reducing capital expenditures.
• Completed Profitability Improvement Plan actions for the year which led to over $55 million of support cost savings during 2020.

“We delivered solid sequential revenue growth in the fourth quarter primarily due to significant improvement in our Tubular Running Services segment and a strengthening backdrop in our U.S. land business. In addition, our focus on cost reduction efforts this year helped drive further profitability improvements across all of our operating segments. Our Tubular Running Services segment was aided by the redeployment of several rigs sidelined by the COVID-19 pandemic, and the expected commencement of previously scheduled work toward the end of the fourth quarter, as well as some successful upselling of our technologically advanced products. Focusing specifically on our cost structure, we exceeded our 25% year-over-year reduction target in both operational and support costs, which has enabled us to permanently realign the support cost structure of our organization. During the fourth quarter, we also generated significant positive free cash flow and increased our already formidable liquidity position. After two very challenging quarters due to the COVID-19 pandemic, our fourth quarter represented a turning point, and we continue to demonstrate the strength and resiliency of our businesses, along with our ability to safely deliver enhanced service quality to our customers,” said Michael Kearney, the Company’s Chairman, President and Chief Executive Officer.

Full Year 2020 Financial Highlights

• Revenue of $390.4 million decreased 32.7% compared to the prior year period of $579.9 million due to unprecedented declines in customer spending and associated activity levels caused by the COVID-19 pandemic.
• Full year net loss of $156.2 million compared to $235.3 million in the prior year period.
• Adjusted EBITDA totaled $9.0 million, compared to $57.5 million in the prior year period, with associated margins of 2.3%.
• Year over year cost reductions totaled over $143 million including the effect of Profitability Improvement Plan actions.
• Generated $11.2 million in free cash flow during the year with total liquidity position of $233.8 million at year end.
• Delivered the best safety performance with the lowest TRIR in Company history despite the challenges created by the COVID-19 pandemic.

Mr. Kearney continued, “Despite the sudden downturn in our industry, we delivered on our stated goals for 2020 of appropriately right sizing our ongoing operations, exceeding our profit improvement cost reduction targets, deploying innovative technologies to the marketplace, and enhancing delivery of service quality and safety to all our customers.

“From an operations perspective, we consolidated into key operating basins and properly scaled our operations to more efficiently service our customers. As a result, we are well positioned to quickly pivot as market conditions improve, as we experienced during the fourth quarter. The combination of our operational efficiency improvements and cost reduction actions enabled our organization to generate substantially more free cash flow in 2020, on a materially smaller revenue base, when compared to prior year periods. The tough choices we made last year regarding permanent cost reductions will enable our organization to capture enhanced profitability faster as the market continues to improve.

“Throughout 2020, we commercialized and deployed various technologies designed to improve efficiency, reduce costs, and enhance operational service quality and safety. Several of our recently commercialized and successfully deployed technologies, such as our CENTRI-FI™ digital control system, are focused on improving safety by reducing headcount at well center as well as fewer personnel required to perform a job. During the fourth quarter, CENTRI-FI™ was deployed to a significant international operator resulting in efficiency gains during casing operations, garnering high praise for personnel reductions, increased safety and overall job cost savings. Additionally, we recently deployed our digital Remote CAM Viewer on multiple jobs in the U.S. land market. This technology allows for the combined operation of the tong and the monitoring of the torque-turn graphs by a single operator, which resulted in increased accuracy and a reduction of personnel on location. Our commitment to developing innovative technologies that focus on improving safety further reflect the environmental, social and governance centric values of our organization.

“In past quarters, I have acknowledged the dedication and resiliency of our workforce and I remain extremely proud of how our organization has stayed focused on managing things within its control and continuing to deliver excellent service quality to all our customers. The challenges we have overcome place our organization in a position of strength as we enter 2021. We saw positive operational momentum build in the fourth quarter of 2020 and we expect to see further gains as we move through the year. For 2021, we will remain focused on growing our Tubulars segment in select markets and continuing the expansion of our Cementing Equipment segment internationally. Even though the market is improving, and customer demand is increasing, we will maintain our disciplined approach to our capital spending and stay focused on properly managing our overall cost structure. We have built a solid operational platform that will enable our organization to continue to improve our service offerings and to bring additional technologies to market, that will not only reduce costs for our customers, but for our organization as well. In 2021 our focus remains on generating long-term value for our stakeholders, generating free cash flow, and bringing differentiated technologies to the market,” concluded Mr. Kearney.

Segment Results

Tubular Running Services

Tubular Running Services revenue totaled $65.0 million in the fourth quarter of 2020, compared to $52.9 million in the third quarter of 2020, and $93.4 million in the fourth quarter of 2019. The sequential improvement is attributable to the redeployment of rigs previously sidelined by the COVID-19 pandemic and a steady recovery in our U.S. land business as operators put rigs back to work throughout the fourth quarter.

Segment adjusted EBITDA in the fourth quarter of 2020 totaled $3.8 million, or 6% of revenue, compared to $1.0 million, or 2% of revenue, in the third quarter of 2020, and $18.6 million, or 20% of revenue, in the fourth quarter of 2019. The sequential increase in adjusted EBITDA was primarily due to an increase in customer activity levels concentrated in core operating areas such as the Gulf of Mexico.

Tubulars

Tubulars revenue in the fourth quarter of 2020 totaled $15.9 million, compared to $16.5 million in the third quarter of 2020, and $21.2 million in the fourth quarter of 2019. The sequential decrease was predominately due to strong product sales during the third quarter, which was partially offset by increased tubular product sales and drilling tools activity internationally during the fourth quarter.

Segment adjusted EBITDA in the fourth quarter of 2020 totaled $3.9 million, or 25% of revenue, compared to $1.8 million, or 11% of revenue, in the third quarter of 2020, and $3.1 million, or 14.5% of revenue, in the fourth quarter of 2019.

Cementing Equipment

Cementing Equipment revenue totaled $15.5 million in the fourth quarter of 2020, compared to $15.0 million in the third quarter of 2020, and $24.9 million in the fourth quarter of 2019. The year over year revenue decrease was primarily related to reduced customer activity levels in both the U.S. onshore and offshore markets, which was partially offset by a 35% year over year revenue increase internationally. During the fourth quarter, sequential revenue increased slightly principally due to improvements in the U.S. onshore market.

Segment adjusted EBITDA in the fourth quarter of 2020 totaled $4.0 million, or 26% of revenue, compared to $3.4 million, or 23% of revenue, in the third quarter of 2020, and $4.2 million, or 17% of revenue, in the fourth quarter of 2019. The year over year decrease was due to reduced customer activity levels in both the U.S. onshore and offshore markets. During the fourth quarter, the sequential increase in adjusted EBITDA was predominately driven by increased customer activity levels in U.S. offshore and international markets.

Profit Improvement Actions Update

The Company realized reductions in its overall cost structure of 27% year over year, which included approximately $88 million of operational cost savings and $55 million of indirect and SG&A support cost savings.

In the fall of 2019, the Company announced a Profitability Improvement Program (PIP) with a goal of saving $30 million in 2020 and an additional $15 million in 2021 related to indirect and SG&A savings. We are proud to announce that the cost reductions we achieved exceeded $55 million in 2020. These savings surpassed our original targets and were achieved on an accelerated timeline. Although cost reduction initiatives have largely been completed, the company will benefit from the full year effect of those completed initiatives during 2021 as well as further efficiencies that will be gained from the ERP implementation that is currently in process.

Other Financial Information

Capital expenditures related to property, plant and equipment and intangibles totaled $2.7 million in the fourth quarter of 2020 compared to $5.5 million in the prior quarter. In 2020, capital expenditures totaled $28.5 million, which was slightly below our previous annual capital expenditure guidance of approximately $30 million.

As of December 31, 2020, the Company’s consolidated cash and cash equivalents totaled $209.6 million, compared to $205.9 million as of the prior quarter end, and $195.4 million at year end 2019. The Company had no outstanding debt as of year-end. Company liquidity as of December 31, 2020 totaled $233.8 million, including cash and cash equivalents, and $24.2 million of availability under the Company’s credit facility. For the fourth quarter of 2020, the Company generated operating cash flow of $14.3 million resulting in free cash flow of $11.6 million. For the year ended December 31, 2020, the Company generated $39.7 million of operating cash flow resulting in free cash flow generation of $11.2 million. The Company will remain disciplined with its capital deployment strategy in 2021 focusing on generating free cash flow and maintaining a strong liquidity position.

Income taxes for the quarter represented a benefit of $3.9 million compared to an expense of $6.4 million in the third quarter. The change in income taxes was primarily driven by the geographical mix of income and year-end adjustments related to non-cash deferred items.

The financial measures provided that are not presented in accordance with U.S. generally accepted accounting principles (“GAAP”) are defined and reconciled to their most directly comparable GAAP measures. Please see “Use of Non-GAAP Financial Measures” and the reconciliations to the nearest comparable GAAP measures. 

About Frank’s International

Frank’s International N.V. is a global oil services company that provides a broad and comprehensive range of highly engineered tubular running services, tubular fabrication, and specialty well construction and well intervention solutions with a focus on complex and technically demanding wells. Founded in 1938, Frank’s has approximately 2,400 employees and provides services to leading exploration and production companies in both onshore and offshore environments in approximately 40 countries on six continents. The Company’s common stock is traded on the NYSE under the symbol “FI.” Additional information is available on the Company’s website, www.franksinternational.com.