HOUSTON, Aug. 06, 2020 (GLOBE NEWSWIRE) — RigNet, Inc. (NASDAQ: RNET, the “Company”), a leading provider of ultra-secure, intelligent networking solutions and specialized applications, announced its results for the quarter ended June 30, 2020.
Second quarter 2020 revenue of $53.4 million, net loss of $4.3 million or $0.21 per shareRevenue decreased by 9.1% to $53.4 million compared to prior quarterAdjusted EBITDA increased by 16.2% to $9.7 million compared to prior quarterManaged Communications Services (MCS) Sites served decreased 9.0% to 1,229 compared to the prior quarterSystem Integration project backlog of $15.9 million“RigNet’s team delivered strong second quarter results despite the challenging oil and gas dynamics that impacted our MCS business,” said Steven Pickett, Chief Executive Officer and President. “While total revenue declined, the team’s discipline around costs controls and continued contributions from our growing Apps & IoT business contributed to an increase in Adjusted EBITDA. During the quarter, offshore communications generally performed ahead of our expectations while onshore declined as anticipated due to reduced activity in the shale basins. Both Apps & IoT and SI continue to generate opportunities, though as we have previously discussed, we are seeing some delays in converting the opportunities into revenue as our customers’ decision-making processes have generally slowed. Looking ahead, we are focused on capitalizing on our available opportunities across all of our segments, further reducing costs, and ensuring we continue to deliver the industry-leading quality of service for which we’re known.” Quarterly revenue was $53.4 million, a decrease of $5.4 million, or 9.1%, compared to $58.8 million in the prior quarter and a decrease of $6.9 million, or 11.5%, compared to $60.3 million in the second quarter 2019. Compared to the first quarter 2020, Apps & IoT revenue grew by $0.1 million, or 0.7%, primarily driven our value-added applications. Systems Integration (SI) revenue grew by $0.3 million, or 3.2%, primarily due to the timing of projects. The increase was offset by a decrease in Managed Communications Services (MCS) revenue by $5.8 million, or 14.4%, due to decrease in site count and lower equipment resale. Compared to the second quarter of 2019, Apps & IoT revenue grew by $0.8 million, or 10.0%, primarily due to the continued strong performance of Intelie. The increase was offset by a $7.1 million decrease in MCS revenue due to decreased site counts, rig stacking, and lower equipment sales. SI revenue decreased by $0.7 million or 6.0%, compared to the second quarter of 2019 primarily due to differences in progress on certain large projects.Net loss attributable to common stockholders in the second quarter 2020 was $4.3 million, or $0.21 per share, compared to net loss attributable to common stockholders of $26.8 million, or $1.34 per share, in the first quarter of 2020 and net loss attributable to common stockholders of $6.2 million, or $0.32 per share, in the second quarter of 2019.First quarter 2020 results include a non-cash goodwill impairment of $23.1 million or $1.15 per share. Excluding this charge, net loss attributable to common stockholders in the first quarter 2020 was $3.7 million of $0.18 per share.Adjusted EBITDA, a non-GAAP measure defined and reconciled to GAAP net loss (as described below), was $9.7 million, an increase of 16.2% compared to $8.4 million in the first quarter of 2020 and a decrease of 0.8% compared to $9.8 million in the second quarter 2019.Capital expenditures for the three months ending June 30, 2020 totaled $3.1 million compared to $3.7 million for the three months ending March 31, 2020 and $4.6 million for the quarter ending June 30, 2019. Capital expenditures for the six months ending June 30, 2020 totaled $6.8 million compared to $11.7 million for the six months ending June 30, 2019. After accounting for accrued capital expenditures, capital expenditures on a cash basis were $3.3 million and $5.3 million in the quarters ended June 30, 2020 and March 31, 2020, respectively. Capital expenditures on cash basis was $8.6 million for the six months ended June 30, 2020.Contracting and Operational UpdateIn July 2020, RigNet announced a collaboration with CACI International Inc. on CACI’s Steelbox™ Secure Voice and Text App for government users. CACI’s Steelbox combines technologies from Microsoft Azure and from BlackBerry’s SecuSuite® to deliver a government cloud-hosted, FedRAMP-certified, secure mobile tenant environment. RigNet will provide telecommunications interconnectivity throughout the United States, increasing the utility and convenience to government entities.In June 2020, Intelie achieved “co-sell ready” status through the Microsoft One Commercial Partner Program. Intelie’s real-time machine learning platform, Intelie Live, is now available in the Microsoft Azure Marketplace and optimized to run within Azure. Microsoft’s co-sell ready status allows RigNet to work together with Microsoft’s sales organization, as well as other Microsoft partners, to rapidly expand the reach and deployment of Intelie Live running on Azure. Customers are able to deploy Intelie Live on Azure or in a multi-cloud platform and with an edge deployment model.MCS Site count in the second quarter 2020 decreased by 9.0% to 1,229 compared to 1,351 in the first quarter 2020 and decreased by 11.2% compared to 1,384 in the second quarter 2019.Project backlog (using percentage of completion accounting) was $15.9 million in the second quarter 2020 and $22.4 million in the first quarter 2020 and was $37.1 million in the second quarter 2019.Additional DetailIn the second quarter 2020, the Company recorded $3.9 million increase in the fair value of earn-out/contingent consideration related to Intelie, $0.7 million in one-time costs directly related to COVID-19 pandemic, such as costs associated with cleaning, testing, quarantine of employees, and modifications to our Gulf of Mexico microwave network, $0.3 million in executive departure costs, and $0.1 million in merger and acquisition costs. As of June 30, 2020, the Consolidated Leverage Ratio was 3.03 and Consolidated Fixed Charge Coverage Ratio was 2.32. In the first quarter 2020, the Company recorded a non-cash goodwill impairment charge of $23.1 million as result of the carrying amounts in two of our reporting units were in excess of their fair value as a result of the effect of COVID-19 and unprecedented oil and gas prices on the Company’s internal forecast. The charge primarily related to goodwill in MCS of $21.8 million and Systems Integration of $1.4 million. Additionally, in the first quarter 2020, the company recorded $0.1 million in merger and acquisition costs and $0.3 million in executive departure costs. In the quarter ended June 30, 2019, the Company recorded $2.2 million in GX dispute Phase II costs and $1.3 million increase in the fair value of earn-out/contingent consideration related to Intelie.Earnings Call InformationAn Earnings Call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Friday, August 7, 2020, to discuss RigNet’s second quarter 2020 results. The call may be accessed live over the telephone by dialing +1 (877) 845-0777, or, for international callers, +1 (760) 298-5090. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RigNet’s website at www.rig.net in the Investors – Webcasts and Presentations section. A replay of the conference call webcast will also be available on our website for approximately thirty days following the call.About RigNetRigNet (NASDAQ: RNET) delivers advanced software and communications infrastructure that allow our customers to realize the business benefits of digital transformation. With world-class, ultra-secure solutions spanning global IP connectivity, bandwidth-optimized OTT applications, IIoT big data enablement, and industry-leading machine learning analytics, RigNet supports the full evolution of digital enablement, empowering businesses to respond faster to high priority issues, mitigate the risk of operational disruption, and maximize their overall financial performance. RigNet is headquartered in Houston, Texas with operations around the world. For more information on RigNet, please visit www.rig.net. RigNet is a registered trademark of RigNet, Inc.Forward Looking StatementsThis press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 – that is, statements related to future, not past, events. Opinions, expectations with respect to conditions in the oil and gas industry, customer perceptions of value, entry into new customer contracts, growth prospects, and the ultimate payout amount of any earnout / contingent consideration are examples of forward-looking statements in this press release. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address our expected future business and financial performance, including the expected benefits of acquiring and integrating other businesses, and often contain words such as “anticipate,” “believe,” “intend,” “will,” “expect,” “plan” or other similar words. These forward-looking statements involve certain risks and uncertainties, including those risks set forth in Item 1A – Risk Factors of the Company’s most recent 10-K filing, and Item 1A- Risk Factors of the Company’s 10-Q filing for the quarter ended March 31, 2020, filed with the SEC on Monday, May 11, 2020, and ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. For further discussion of risks and uncertainties, individuals should refer to RigNet’s SEC filings. RigNet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.Non-GAAP Financial MeasureThis press release contains the non-GAAP measure Adjusted EBITDA, a measure we believe is useful to investors as a supplemental measure to evaluate overall operating performance and is an integral component of financial covenant ratios in our credit agreement. Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting principles, or GAAP. We refer you to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on Wednesday, March 11th, 2020, for a more detailed discussion of the uses and limitations of Adjusted EBITDA.We define Adjusted EBITDA as net loss plus interest expense; income tax expense (benefit); depreciation and amortization; impairment of goodwill, intangibles, property, plant and equipment; (gain) loss on sales of property, plant and equipment, net of retirements; change in fair value of earn-outs and contingent consideration; stock-based compensation; mergers and acquisitions costs; executive departure costs; restructuring charges; the GX dispute; the GX dispute Phase II costs, one-time costs directly related to COVID-19 pandemic one-time costs directly related to COVID-19 pandemic, such as costs associated with cleaning, testing, quarantine of employees, and modifications to our Gulf of Mexico microwave network, and non-recurring itemsA reconciliation of net loss to Adjusted EBITDA is found in the table below.
Bay Street News
