Vantage Drilling International Reports Second Quarter Results for 2023


HOUSTON, Aug. 10, 2023 (GLOBE NEWSWIRE) -- Vantage Drilling International ("Vantage" or the “Company”) reported net income attributable to controlling interest of approximately $1.5 million, or $0.11 per diluted share, for the three months ended June 30, 2023, based on the weighted average shares outstanding, as compared to a net income attributable to controlling interest of $48.1 million, or $3.61 per diluted share, for the three months ended June 30, 2022.

As of June 30, 2023, Vantage had approximately $82.4 million in cash, including $2.7 million of restricted cash, compared to $93.3 million in cash, including $19.2 million of restricted cash, at December 31, 2022. At June 30, 2023, Vantage maintained $16.9 million of cash pre-funded by our Managed Services customers to address near-term obligations during the second quarter of 2023. Excluding cash used in connection with our Managed Services customers, the Company generated $7.5 million in cash during the second quarter of 2023.

Ihab Toma, CEO, commented: “I am very pleased to announce that the Company reported net income for, and generated cash during, the quarter ended June 30, 2023. These solid results reflect continued hard work by our operations team with all of our owned rigs, our two managed rigs and the three supported rigs working during the quarter.”

Vantage, a Cayman Islands exempted company, is an offshore drilling contractor, with a fleet of two ultra-deepwater drillships, and two premium jackup drilling rigs. Vantage's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells globally for major, national and independent oil and gas companies. Vantage also markets, operates and provides management services in respect of, third party-owned drilling units. www.vantagedrilling.com

The information above includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are subject to certain risks, uncertainties and assumptions identified above or as disclosed from time to time in the Company's filings with the Securities and Exchange Commission. As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements. Vantage disclaims any intention or obligation to update publicly or revise such statements, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

We report our financial results in accordance with generally accepted accounting principles (GAAP) in the United States. However, in our earnings release and during our earnings calls we may reference company information that does not conform to GAAP. Generally, a non-GAAP financial measure is a numerical measure of a company's performance, financial position, or cash flows that excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the Company and allows investors to better evaluate the financial results of the Company. However, these measures should not be viewed as an alternative to or substitute for GAAP measures of performance, and these non-GAAP measures may not be consistent with previously published Company reports on Forms 10-K, 10-Q and 8-K. Non-GAAP measures we may reference have been reconciled to the nearest GAAP measure in the tables entitled Reconciliation of GAAP to Non-GAAP Financial Measures below.

Public & Investor Relations Contact:
Rafael Blattner
Chief Financial Officer
Vantage Drilling International
C/O Vantage Energy Services, Inc.
777 Post Oak Blvd., Suite 440
Houston, Texas 77056
(281) 404-4700


Vantage Drilling International 
Consolidated Statement of Operations 
(In thousands, except per share data) 
(Unaudited) 
             
  Three Months Ended June 30,  Six Months Ended June 30, 
  2023  2022  2023  2022 
Revenue            
Contract drilling services $67,673  $42,744  $115,590  $87,657 
Management fees  5,569   2,840   7,689   3,943 
Reimbursables and other  34,598   27,654   61,633   39,969 
Total revenue  107,840   73,238   184,912   131,569 
Operating costs and expenses            
Operating costs  74,383   59,405   140,938   103,338 
General and administrative  5,161   6,910   9,992   13,492 
Depreciation  11,045   11,087   22,094   22,382 
(Gain) loss on EDC Sale     (60,781)  3   (60,781)
Total operating costs and expenses  90,589   16,621   173,027   78,431 
Income from operations  17,251   56,617   11,885   53,138 
Other (expense) income            
Interest income  141   7   190   11 
Interest expense and other financing charges  (5,346)  (8,503)  (10,904)  (17,007)
Other, net  (457)  (1,011)  (135)  (1,786)
Total other expense  (5,662)  (9,507)  (10,849)  (18,782)
Income before income taxes  11,589   47,110   1,036   34,356 
Income tax provision (benefit)  10,584   (1,221)  2,606   217 
Net income (loss)  1,005   48,331   (1,570)  34,139 
Net (loss) income attributable to noncontrolling interests  (457)  232   (746)  938 
Net income (loss) attributable to shareholders $1,462  $48,099  $(824) $33,201 
             
EBITDA (1) $28,296  $66,461  $34,590  $72,796 
             
Earnings (loss) per share            
Basic $0.11  $3.67  $(0.06) $2.53 
Diluted $0.11  $3.61  $(0.06) $2.49 
Weighted average ordinary shares outstanding,            
Basic  13,229   13,115   13,204   13,115 
Diluted  13,320   13,332   13,204   13,330 
             
(1) EBITDA represents net income (loss) before (i) interest income (expense), (ii) provision for income taxes and (iii) depreciation and amortization expense. EBITDA is not a financial measure under GAAP as defined under the rules of the SEC, and is intended as a supplemental measure of our performance. We believe this measure is commonly used by analysts and investors to analyze and compare companies on the basis of operating performance. 
             
Vantage Drilling International 
Supplemental Operating Data 
(Unaudited, in thousands, except percentages) 
             
  Three Months Ended June 30,  Six Months Ended June 30, 
  2023  2022  2023  2022 
Operating costs and expenses            
Jackups $3,736  $10,249  $7,722  $18,674 
Deepwater  24,154   15,934   43,118   30,477 
Managed Rigs  17,319   7   34,258   1 
Held for Sale (2)     3,891      10,712 
Operations support  2,924   2,930   5,575   5,867 
Reimbursables  26,250   26,394   50,265   37,607 
Total operating costs and expenses $74,383  $59,405  $140,938  $103,338 
Utilization            
Jackups  94.4%  98.8%  97.2%  79.6%
Deepwater  95.2%  99.7%  79.1%  99.2%
Held for Sale (2) N/A   47.0% N/A   62.3%
             
(2) Included in the sale of Emerald Driller Company, which owns the Emerald Driller, Sapphire Driller and Aquamarine Driller. Each of these rigs were classified as held for sale on our Consolidated Balance Sheets up to the closing date, which was on May 27, 2022. 
  


Vantage Drilling International 
Consolidated Balance Sheets 
(In thousands, except share and par value information) 
(Unaudited) 
       
  June 30, 2023  December 31, 2022 
       
ASSETS      
Current assets      
Cash and cash equivalents $79,650  $74,026 
Restricted cash  455   16,450 
Trade receivables, net of allowance for credit losses of $3,850 and $4,962, respectively  83,109   62,776 
Materials and supplies  44,759   41,250 
Prepaid expenses and other current assets  40,166   25,621 
Total current assets  248,139   220,123 
Property and equipment      
Property and equipment  649,910   647,909 
Accumulated depreciation  (330,911)  (309,453)
Property and equipment, net  318,999   338,456 
Operating lease ROU assets  812   1,648 
Other assets  12,659   18,334 
Total assets $580,609  $578,561 
       
LIABILITIES AND SHAREHOLDERS' EQUITY      
Current liabilities      
Accounts payable $55,570  $57,775 
Other current liabilities  65,770   66,179 
Total current liabilities  121,340   123,954 
Long–term debt, net of discount and financing costs of $11,080 and $773, respectively  188,920   179,227 
Other long-term liabilities  9,678   12,881 
Commitments and contingencies      
Shareholders' equity      
Ordinary shares, $0.001 par value, 50 million shares authorized; 13,229,280 and 13,115,026 shares issued and outstanding, each period  13   13 
Additional paid-in capital  633,605   633,863 
Accumulated deficit  (373,971)  (373,147)
Controlling interest shareholders' equity  259,647   260,729 
Noncontrolling interests  1,024   1,770 
Total equity  260,671   262,499 
Total liabilities and shareholders' equity $580,609  $578,561 


  
Vantage Drilling International 
Consolidated Statement of Cash Flows 
(In thousands) 
(Unaudited) 
  Six Months Ended June 30, 
  2023  2022 
CASH FLOWS FROM OPERATING ACTIVITIES      
Net (loss) income $(1,570) $34,139 
Adjustments to reconcile net (loss) income to net cash used in operating activities      
Depreciation expense  22,094   22,382 
Amortization of debt financing costs  862   820 
Share-based compensation expense  25   44 
Loss on debt extinguishment  703    
Deferred income tax expense  733   410 
Gain on disposal of assets     (1,630)
Loss (gain) on EDC Sale  3   (60,781)
Changes in operating assets and liabilities:      
Trade receivables, net  (20,333)  (58,864)
Materials and supplies  (3,509)  (1,811)
Prepaid expenses and other current assets  (5,379)  3,369 
Other assets  5,269   (25,043)
Accounts payable  (2,205)  29,564 
Other current liabilities and other long-term liabilities  (7,773)  17,696 
Net cash used in operating activities  (11,080)  (39,705)
CASH FLOWS FROM INVESTING ACTIVITIES      
Additions to property and equipment  (2,637)  (7,736)
Net proceeds from EDC Sale     200,000 
Net proceeds from sale of assets     3,100 
Net cash (used in) provided by investing activities  (2,637)  195,364 
CASH FLOWS FROM FINANCING ACTIVITIES      
Proceeds from 9.50% First Lien Notes  194,000    
Repayment of long-term debt  (180,000)   
Shares repurchased for tax withholdings on settlement of RSUs  (246)   
Payments of dividend equivalents  (5,278)   
Debt issuance costs  (5,645)   
Net cash provided by financing activities  2,831    
Net (decrease) increase in unrestricted and restricted cash and cash equivalents  (10,886)  155,659 
Unrestricted and restricted cash and cash equivalents—beginning of period  93,257   90,608 
Unrestricted and restricted cash and cash equivalents—end of period $82,371  $246,267 


  
Vantage Drilling International 
Non-GAAP Measures 
(In thousands) 
(Unaudited) 
             
  Three Months Ended June 30,  Six Months Ended June 30, 
Reconciliation of EBITDA 2023  2022  2023  2022 
Net income (loss) attributable to shareholders $1,462  $48,099  $(824) $33,201 
Depreciation  11,045   11,087   22,094   22,382 
Interest income  (141)  (7)  (190)  (11)
Interest expense and other financing costs  5,346   8,503   10,904   17,007 
Income tax provision (benefit)  10,584   (1,221)  2,606   217 
EBITDA $28,296  $66,461  $34,590  $72,796