RigNet
Aug 6, 2012

RigNet Announces Second Quarter 2012 Earnings Results

HOUSTON, Aug. 6, 2012 (GLOBE NEWSWIRE) -- RigNet, Inc. (Nasdaq:RNET), a leading global provider of remote communication services to the oil and gas industry, today reported quarterly results for the quarter ended June 30, 2012.

Revenue was a record $33.2 million for the second quarter, an increase of 26.9% over the same quarter last year and a 6.5% increase over the previous quarter. Revenue increased by $7.0 million for the three months ended June 30, 2012 as compared to the same period of 2011 due primarily to increasing demand for our services in our offshore operations and continued growth in the U.S. land drilling market. Revenue increased by $2.0 million for the three months ended June 30, 2012 as compared to the previous quarter due primarily to increased demand for our services in our offshore operations.

Adjusted EBITDA was $10.1 million, or 30.4% of revenue, for the second quarter, an increase of 21.7% over the same quarter last year and an increase of 8.7% over the previous quarter. Adjusted EBITDA increased by $1.8 million over the prior year period and $0.8 million over the previous quarter, primarily due to the increased revenue described above partially offset by increased operating costs to support the increase in revenue and costs associated with head count additions and other professional fees.

Net income attributable to common stockholders was $2.9 million, or $0.17 per diluted share, for the second quarter compared to net income attributable to common stockholders of $2.1 million, or $0.13 per diluted share, in the same quarter last year and net income attributable to common stockholders of $2.4 million, or $0.14 per diluted share, in the previous quarter.

Capital expenditures were $4.8 million in the second quarter compared to $5.7 million in the same quarter last year and $6.0 million in the previous quarter.

Mark B. Slaughter, chief executive officer and president, commented, "Our record second quarter results came as a result of favorable demand for our services coupled with solid execution by our global management team. We are very pleased with our strong quarterly results, and the subsequent acquisition of Nessco, as we continue to position the Company for further growth going forward."

A conference call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Tuesday, August 7, 2012 to discuss RigNet's 2012 second quarter results. The call may be accessed live over the telephone by dialing (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 andPresentations section. A replay of the conference call webcast will also be available on our website for approximately thirty days following the call.

Non-GAAP Financial Measures

This press release contains the following non-GAAP measures: Gross Profit and Adjusted EBITDA. Gross Profit and Adjusted EBITDA are financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We refer you to the Company's most recent 10-K filing for the year ended December 31, 2011 for a more detailed discussion of the uses and limitations of our non-GAAP financial measures.

We define Gross Profit as revenue less cost of revenue. This measure is used to evaluate operating margins and the effectiveness of cost management.

We define Adjusted EBITDA as net income (loss) plus interest expense, income tax expense (benefit), depreciation and amortization, impairment of goodwill, (gain) loss on retirement of property and equipment, change in fair value of derivatives, stock-based compensation and IPO or merger/acquisition costs and related bonuses. Adjusted EBITDA should not be considered as an alternative to net income (loss), operating income (loss) or any other measure of financial performance calculated and presented in accordance with GAAP.

About RigNet

RigNet (Nasdaq:RNET) is a leading global provider of managed communications, networks and collaborative applications dedicated to the oil and gas industry. RigNet provides solutions ranging from fully-managed voice and data networks to more advanced applications that include video conferencing and real-time data services to remote sites in over thirty countries on six continents, effectively spanning the drilling and production industry. RigNet is based in Houston, Texas. For more information, please visit www.rig.net. RigNet is a registered trademark of RigNet, Inc.

The RigNet, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8418

Forward Looking Statements

This 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 the future, not past, events. Forward-looking statements are based on the 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, and often contain words such as "anticipate," "believe," "intend," "expect," "plan," "will" or other similar words. These forward-looking statements involve certain risks and uncertainties that 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.

         
  Three Months
Ended June 30,
 Six Months
Ended June 30,
 2012201120122011
  (in thousands)
Unaudited Consolidated Statements of Income Data:        
Revenue  $ 33,240  $ 26,197  $ 64,450  $ 50,664
Expenses:        
Cost of revenue (excluding depreciation and amortization)  15,162  11,399  29,343  22,572
Depreciation and amortization  3,806  3,600  7,734  7,112
Selling and marketing  729  591  1,387  1,053
General and administrative  8,860  6,234  16,405  12,500
Total expenses  28,557  21,824  54,869  43,237
Operating income   4,683  4,373  9,581  7,427
Other income (expense), net  110  (226)  (151)  (760)
Income before income taxes   4,793  4,147  9,430  6,667
Income tax expense  (1,932)  (1,946)  (4,075)  (4,443)
Net income  $ 2,861  $ 2,201  $ 5,355  $ 2,224
         
Income Per Share - Basic and Diluted        
Net income attributable to RigNet, Inc. common stockholders  $ 2,853  $ 2,120  $ 5,265  $ 2,095
Net income per share attributable to RigNet, Inc.common stockholders, basic  $ 0.18  $ 0.14  $ 0.34  $ 0.14
Net income per share attributable to RigNet, Inc. common stockholders, diluted  $ 0.17  $ 0.13  $ 0.31  $ 0.12
Weighted average shares outstanding, basic  15,566  15,420  15,515  15,331
Weighted average shares outstanding, diluted  16,977  16,894  16,939  16,768
         
Unaudited Non-GAAP Data:        
Gross Profit  $ 18,078  $ 14,798  $ 35,107  $ 28,092
Gross Profit margin54.4%56.5%54.5%55.4%
Adjusted EBITDA  $ 10,090  $ 8,289  $ 19,373  $ 14,884
Adjusted EBITDA margin30.4%31.6%30.1%29.4%
         
         
  Three Months
Ended June 30,
 Six Months
Ended June 30,
 2012201120122011
  (in thousands)
Reconciliation of Net Income        
to Adjusted EBITDA:        
Net income  $ 2,861  $ 2,201  $ 5,355  $ 2,224
Interest expense  129  349  316  795
Depreciation and amortization  3,806  3,600  7,734  7,112
Gain on retirement of property and equipment  (1)  (104)  (51)  (110)
Stock-based compensation  701  297  1,282  420
Acquisition costs  662  --  662  --
Income tax expense  1,932  1,946  4,075  4,443
Adjusted EBITDA (non-GAAP measure)  $ 10,090  $ 8,289  $ 19,373  $ 14,884
     
     
 June 30, 2012December 31, 2011
  (in thousands)
Unaudited Consolidated Balance Sheet Data:  
Cash and cash equivalents  $ 51,999  $ 53,106
Total assets  142,977  140,922
Current maturities of long-term debt  8,746  8,735
Long-term debt  10,409  14,785
     
     
  Six Months Ended June 30,
 20122011
  (in thousands)
Unaudited Consolidated Statements of Cash Flows Data:  
Cash and cash equivalents, January 1,  $ 53,106  $ 50,435
Net cash provided by operating activities  13,794  9,025
Net cash provided by (used in) investing activities  (10,505)  1,011
Net cash provided by (used in) financing activities  (4,175)  177
Changes in foreign currency translation  (221)  671
Cash and cash equivalents, June 30,  $ 51,999  $ 61,319
             
             
 1st Quarter 20112nd Quarter 20113rd Quarter 20114th Quarter 20111st Quarter 20122nd Quarter 2012
Selected Operational Data:            
Eastern Hemisphere            
Drilling rigs (1) 143 141 138 147 144 148
Other sites (2) 131 160 172 187 198 204
             
Western Hemisphere            
Drilling rigs (1) 80 78 79 81 89 86
Other sites (2) 159 138 140 144 135 130
             
U.S. Land            
Drilling rigs 323 331 330 338 323 308
Other sites (3) 82 106 132 157 160 182
             
(1) Eastern and Western Hemisphere include jack up, semi-submersible and drillship rigs
(2) Includes production facilities, energy support vessels, international land rigs, remote offices and supply bases
(3) Includes completion sites, production sites, man-camps, remote offices and supply bases
     
     
  Three Months Ended
June 30,
 Six Months Ended
June 30,
 2012201120122011
  (in thousands)
Eastern Hemisphere:        
Revenue  $ 21,071  $ 16,503  $ 40,438  $ 31,620
Cost of revenue (excluding depreciation and amortization)  8,670  6,202  16,264  11,879
Gross Profit (non-GAAP measure)  12,401  10,301  24,174  19,741
 Gross Profit margin 58.9 % 62.4 % 59.8 % 62.4 %
Depreciation and amortization  2,064  2,050  4,107  4,052
Selling, general and administrative  2,367  2,140  4,189  4,168
Operating income  $ 7,970  $ 6,111  $ 15,878  $ 11,521
Adjusted EBITDA (non-GAAP measure)  $ 10,334  $ 8,153  $ 20,043  $ 15,467
 Adjusted EBITDA margin 49.0 % 49.4 % 49.6 % 48.9 %
         
Western Hemisphere:        
Revenue  $ 7,199  $ 4,978  $ 13,934  $ 9,935
Cost of revenue (excluding depreciation and amortization)  3,434  2,309  6,647  4,896
Gross Profit (non-GAAP measure)  3,765  2,669  7,287  5,039
 Gross Profit margin 52.3 % 53.6 % 52.3 % 50.7 %
Depreciation and amortization  1,247  1,149  2,647  2,257
Selling, general and administrative  1,221  799  1,937  1,516
Operating income  $ 1,297  $ 721  $ 2,703  $ 1,266
Adjusted EBITDA (non-GAAP measure)  $ 2,453  $ 1,899  $ 5,403  $ 3,568
 Adjusted EBITDA margin 34.1 % 38.1 % 38.8 % 35.9%
         
U.S. Land:        
Revenue  $ 4,970  $ 4,713  $ 10,078  $ 9,106
Cost of revenue (excluding depreciation and amortization)  2,159  2,373  4,600  4,644
Gross Profit (non-GAAP measure)  2,811  2,340  5,478  4,462
 Gross Profit margin 56.6 % 49.6 % 54.4 % 49.0 %
Depreciation and amortization  500  452  980  909
Selling, general and administrative  866  720  1,789  1,469
Operating income  $ 1,445  $ 1,168  $ 2,709  $ 2,084
Adjusted EBITDA (non-GAAP measure)  $ 1,945  $ 1,621  $ 3,689  $ 2,993
 Adjusted EBITDA margin 39.1 % 34.4 % 36.6 % 32.9 %
         
NOTE: Consolidated balances include the three segments above along with corporate activities and intercompany eliminations.
CONTACT: Marty Jimmerson

         RigNet, Inc.

         +1 (281) 674-0699

         investor.relations@rig.net