Parker Drilling Company reported results for the first quarter ended March 31, 2015, including net income of $3.2 million, or $0.03 per diluted share, on revenues of $204.1 million.
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First quarter adjusted EBITDA was $53.4 million, compared with $65.2 million for the preceding quarter.
Parker Drilling's revenues for the 2015 first quarter, compared with the 2014 fourth quarter, declined 16 percent to $204.1 million from $243.2 million, operating gross margin excluding depreciation and amortization expense (gross margin) declined 14 percent to $64.8 million from $75.2 million and gross margin as a percentage of revenues was 31.8 percent, compared with 30.9 percent for the prior period.
For the company's Drilling Services business, revenues declined 15 percent to $128.0 million from $150.8 million, gross margin declined 1 percent to $35.5 million from $35.9 million, and gross margin as a percentage of revenues was 27.7 percent, compared with 23.8 percent for the prior period.
The decrease in revenues is primarily due to the sharp decline in barge drilling activity in the U.S. Gulf of Mexico inland water drilling market and a decrease in revenues from reimbursable expenses.
U.S. (Lower 48) Drilling revenues were $14.1 million and gross margin was $0.1 million. Both revenues and gross margin were below 2014 fourth quarter levels, primarily due to lower utilization and average dayrate for our barge drilling rig fleet in the U.S. Gulf of Mexico.
International & Alaska Drilling revenues were $113.9 million, gross margin was $35.4 million, and gross margin as a percentage of revenues was 31.1 percent. Compared with the 2014 fourth quarter, revenues decreased 4 percent and gross margin increased 41 percent.
The decline in revenues was primarily due to a decrease in revenues from reimbursable expenses. The increase in gross margin reflects a greater contribution from O&M and project activities, the benefit of early termination and demobilization fees, and operating expense reductions.
Rental Tools Services revenues were $76.1 million, gross margin was $29.3 million and gross margin as a percentage of revenues was 38.5 percent. Compared with the 2014 fourth quarter, revenues decreased 18 percent and gross margin decreased 25 percent.
Reduced revenues and gross margin were primarily due to the continued decline in U.S. land and shallow water offshore drilling activity and the resulting lower demand and stiff price competition for U.S. rental tools services, as well as softer demand in international rental tools markets. This was partially offset by lower operating costs.
General and Administrative Expense increased to $10.8 million for the 2015 first quarter, from $9.7 million for the 2014 fourth quarter. The increased expense is primarily due to a one-time gain in the 2014 fourth quarter from a change in our employee benefit program and incremental expenses in the 2015 first quarter associated with implementation of our new ERP system.
Capital expenditures year-to-date through March 31, 2015 were $33.5 million. ■