Form 8-K - Current report

0001465872falseNONE00014658722023-08-102023-08-10

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 10, 2023

 

 

Vantage Drilling International

(Exact name of Registrant as Specified in Its Charter)

 

 

Cayman Islands			333-159299	98-1372204
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
c/o Vantage Energy Services, Inc. 777 Post Oak Boulevard Suite 440
Houston, Texas				77056
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: [phone]

 

(Not applicable)

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
N/A		N/A		N/A

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

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Item 2.02 Results of Operations and Financial Condition.

On August 10, 2023, Vantage Drilling International (the “Company”) issued a press release announcing operating results and developments for the fiscal quarter ended June 30, 2023. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number		Description of Exhibit
99.1		Press Release of Vantage Drilling International dated August 10, 2023
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			VANTAGE DRILLING INTERNATIONAL
Date:	August 10, 2023	By:	/s/ Rafael Blattner
			Rafael Blattner Chief Financial Officer

 

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Exhibit 99.1

Vantage Drilling International Reports Second Quarter Results for 2023

 

HOUSTON, August 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

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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

[phone]

 

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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

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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

 

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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

 

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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

 

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Document And Entity Information	Aug. 10, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 10, 2023
Entity Registrant Name	Vantage Drilling International
Entity Central Index Key	0001465872
Entity Emerging Growth Company	false
Securities Act File Number	333-159299
Entity Incorporation, State or Country Code	E9
Entity Tax Identification Number	98-1372204
Entity Address, Address Line One	c/o Vantage Energy Services, Inc.
Entity Address, Address Line Two	777 Post Oak Boulevard
Entity Address, Address Line Three	Suite 440
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77056
City Area Code	(281)
Local Phone Number	404-4700
Entity Information, Former Legal or Registered Name	(Not applicable)
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	N/A
No Trading Symbol Flag	true
Security Exchange Name	NONE

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