By a News Reporter-Staff News Editor at Investment Weekly News -- Frank's International N.V. (NYSE: FI) (the "Company") reported revenues of $272.9 million and net income of $50.0 million for the three months ended June 30, 2014. Diluted earnings per share for the second quarter were $0.23, with weighted average shares outstanding of 207.8 million. Adjusted EBITDA for the quarter was $103.2 million.
Results for the quarter were reduced by an out-of-period cumulative non-cash adjustment for share-based compensation of $7.5 million. In addition, the in-period second quarter share-based compensation expense was $7.8 million instead of the previous expectation of $5.0 million. The out-of-period adjustment and increase in quarterly share-based compensation expense was due to the Company determining that certain retirement provisions in the restricted stock unit agreements under its 2013 Long-Term Incentive Plan required accelerated recognition of compensation expense in connection with the Company's initial public offering. Total share-based compensation expense, which is accounted for within general and administrative expenses, for the quarter was $15.3 million or $0.07 per diluted share.
D. Keith Mosing, Frank's International's Chairman, Chief Executive Officer and President, said, "Frank's International has doubled its quarterly dividend to $0.15 per share. Our tremendous free cash flow positions us to return cash to shareholders while continuing to pursue growth opportunities globally, both organically and through acquisition."
Mr. Mosing continued, "We remain confident about our opportunities around the globe. Our International Services segment delivered 9% sequential revenue growth in the second quarter and is expected to grow revenue at least 10% this year. Our U.S. land business, which has previously been in decline, had 9% sequential revenue growth and is expected to grow sequentially the rest of the year. Lastly, we continue to be selected for work as we signed several meaningful contracts this quarter that further strengthen our pipeline of work for the remainder of 2014 and well into 2015 and 2016." Second Quarter 2014 Results Revenue was $272.9 million, up 3.2% compared to the first quarter of 2014, but down 6.8% compared to the second quarter of 2013
International Services revenue was $129.5 million, up 9.2% compared to the first quarter of 2014, and up 7.1% year-over-year
U.S. Services revenue was $105.6 million, up 1.7% compared to the first quarter of 2014, but down 8.7% year-over-year
Tubular Sales revenue was $37.9 million, down 10.0% compared to the first quarter of 2014 and down 32.9% year-over-year
Net income was $50.0 million with $35.2 million, or $0.23 per share, attributable to common shareholders
Diluted earnings per share were $0.23 with weighted average shares outstanding of 207.8 million
Adjusted EBITDA totaled $103.2 million with an Adjusted EBITDA margin of 37.8%
Effective tax rate for the second quarter of 2014 was 24.1%
Cash flow from operations for the first half of 2014 was $161.9 million, up 8.0% year-over-year
Adjusted EBITDA, Adjusted EBITDA margin and segment Adjusted EBITDA, which are financial measures not presented in accordance with U.S. generally accepted accounting principles ("GAAP"), are defined and reconciled to their most directly comparable GAAP financial measures below. Adjusted EBITDA, segment Adjusted EBITDA and the other segment data discussed below do not include income from discontinued operations. Segment Results International Services International Services revenue from external sales was $129.5 million in the second quarter of 2014, up 9.2% compared to the first quarter of 2014, and up 7.1% compared to the second quarter of 2013. Second quarter 2014 revenue increased sequentially in every region. Year-over-year, West Africa, Europe, Canada and the Middle East all had revenue growth.
Segment Adjusted EBITDA for the second quarter of 2014 of $48.9 million was down 4.2% compared to the first quarter of 2014, and down 10.2% compared to the second quarter of 2013. Segment Adjusted EBITDA margin for the second quarter 2014 was 37.8% of external revenue. Adjusted EBITDA was negatively impacted by increased labor and mobilization expenses related to positioning of equipment for upcoming projects. U.S. Services U.S. Services revenue from external sales was $105.6 million in the second quarter of 2014, up 1.7% compared to the first quarter of 2014, but down 8.7% compared to the second quarter of 2013.
For the second quarter, onshore revenue within the U.S. Services segment of $39.3 million was up 8.9% compared to the first quarter of 2014 and down 13.5% year-over-year. The Company has changed its strategy for the onshore U.S. region, adjusting pricing and margin expectations as well as committing to increasing capital expenditures in order to deliver revenue growth.
Offshore revenue within the U.S. Services segment for the second quarter declined 2.1% compared to the first quarter of 2014 and 5.6% year-over-year. Sequential declines were due to continued rig-related downtime and delays of new rigs entering the region.
Segment Adjusted EBITDA of $45.0 million was up 7.4% compared to the first quarter of 2014 and down 24.4% compared to the second quarter of 2013. Segment Adjusted EBITDA margin was 42.6% of external revenue for the second quarter of 2014. Tubular Sales Tubular Sales revenue from external sales was $37.9 million in the second quarter of 2014, down 10.0% compared to the first quarter of 2014, and down 32.9% compared to the second quarter of 2013. Year-over-year and sequential declines in revenue were due to timing of deliveries related to customers' projects. Deferred revenue increased 12% to $69.9 million compared to the first quarter 2014 balance.
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