RigNet, Inc. (NASDAQ:RNET) Q2 2019 Earnings Conference Call - Final Transcript

Aug 06, 2019 • 11:00 am ET


RigNet, Inc. (NASDAQ:RNET) Q2 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, welcome to the RigNet's Second Quarter 2019 Earnings Conference Call. My name is Jerome, and I will be your coordinator for today. [Operator Instructions] I will now turn over the presentation to Lee Ahlstrom, RigNet's Senior Vice President and Chief Financial Officer. Mr. Ahlstrom, please proceed.

Lee M. Ahlstrom

Thank you, Jerome, and good morning and welcome to RigNet's second quarter 2019 earnings call. A copy of our earnings press release with supporting schedules, including schedules which reconcile the non-GAAP metrics we will discuss today to GAAP metrics is posted to our website, www.rig.net under our Investor Relations page. For those of you who would like the release in a PDF format, we posted that as well.

Before we get started, I'd like to make you aware that we will be making forward-looking statements today. Any statements that are not historical facts, including statements related, but not limited to, market expectations and future plans are forward-looking statements that involve certain risks, uncertainties and assumptions. These include, but are not limited to, risks associated with the general nature of the oil and gas industry, customer and other third-party interactions, our strategy and other factors detailed in the Risk Factors section of RigNet's most recent Annual Report on Form 10-K and in our other filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. RigNet disclaims any duty to update the information presented on this call.

And now, I'd like to turn the call over to Steve Pickett, RigNet's Chief Executive Officer and President. Steve?

Steven E. Pickett

Thank you, Lee. Good morning everyone and thank you for joining today's call. We're glad to be back in front of you to talk about our latest performance and our results. After my opening comments, Lee will review financial highlights. Following that, as always, we'll open it up for questions.

Yesterday, RigNet reported a net loss for the second quarter of $6.2 million or $0.32 per share based on revenues of $60.3 million. Adjusted EBITDA, a non-GAAP measure we defined in our press release and one of our key performance metrics, was $9.8 million for the second quarter. Both revenue and adjusted EBITDA were up compared to first quarter 2019 and compared to the prior year quarter. Lee will provide some color on that in his remarks.

During the quarter, we resolved the GX dispute with Inmarsat. In case you missed the news, at the end of June we agreed to settle the matter associated with this early 2014 contract between the companies by agreeing to pay $50.75 million or the approximate value of the interim arbitration award. We paid $45 million at the end of June, $5 million at the beginning of July and the final $750,000 is due mid next year.

We spoke about our rationale in agreeing to settle. But, briefly, as preparations for the Phase II hearing progressed and we looked at Inmarsat's