EXHIBIT 99.1
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Complete Production Services, Inc. Reports
Fourth Quarter and Full Year 2007 Earnings
Fourth Quarter and Full Year 2007 Earnings
HOUSTON, February 5, 2008 (Business Wire) – Complete Production Services, Inc. (NYSE: CPX) today reported 2007 revenue of $1.66 billion versus $1.21 billion in 2006. Net income from continuing operations was $174.7 million before a $13.1 million goodwill impairment charge in Canada, up 27% compared to the prior year. Earnings per diluted share from continuing operations was $2.38 before the impairment charge of $0.18 per share versus $2.02 in 2006.
Fourth quarter revenue was $424.5 million, up 17% over the fourth quarter of 2006. Earnings before interest, taxes, depreciation, amortization and impairment charge (EBITDA, as defined below) totaled $114.2 million in the fourth quarter, an increase of 11% over the prior year. Fourth quarter income from continuing operations was $41.9 million, or $0.57 per diluted share before the Canadian goodwill impairment charge of $13.1 million or $0.18 per share. This compares with income from continuing operations of $44.1 million, or $0.61 per diluted share for the fourth quarter of 2006.
Revenue for the Completion and Production Services segment during the fourth quarter of 2007 was $330.1 million, up 23% over the prior year, with EBITDA of $102.5 million compared to $80.7 million for the same period in 2006. EBITDA margins for the segment were 31.0%, up from 30.0% for the fourth quarter of the prior year. Results in this segment benefited from the impact of investments in capital equipment and acquisitions offset somewhat by lower utilization and pricing in certain areas and lower activity levels in Canada.
Drilling Services revenue was $61.2 million for the fourth quarter of 2007, down slightly from the same quarter of the prior year and EBITDA margins of 25.9% were down from 37.3%. Lower utilization, lower pricing and higher costs negatively impacted contract drilling revenue. Rig logistics operations were also impacted by lower pricing and utilization in some markets and the effects of relocating an operation to more attractive markets.
Product Sales revenue was $33.2 million for the fourth quarter of 2007, with EBITDA margins of 11.9%.
“While we experienced some softness in the second half of the year, particularly in our Drilling Services and Products segments, we finished the year with a 37% increase in revenue and a 39% increase in EBITDA. We are proud of our accomplishments in 2007 and in the way our people responded to ever changing market conditions. We also made meaningful investments in our operations that will benefit Complete for years to come while lowering our leverage ratio,” commented Joe Winkler, Chairman and Chief Executive Officer. “While we may see some near-term continued softness due to additional capacity, many of our customers have indicated that activity levels in 2008
should remain healthy and we remain optimistic about the long-term fundamentals of North American natural gas.”
Conference Call
Complete will hold a conference call to discuss fourth quarter 2007 results on Wednesday, February 6 at 8:00 a.m. Central Time. To participate in the live conference call, dial (866) 314-9013 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 94118890. The conference call will be available for replay beginning at 10:00 a.m., February 6, 2008 and will be available until February 13, 2008. To access the conference call replay, please call (888) 286-8010 and use the passcode: 25309821. The call is also being webcast and can be accessed at our website at www.completeproduction.com.
The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risk and uncertainties. The forward-looking statements included herein are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry. The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.
Management evaluates the performance of Complete’s operating segments using a non-GAAP financial measure, EBITDA. EBITDA is calculated as net income from continuing operations before net interest expense, taxes, depreciation and amortization, impairment charge, and minority interest. EBITDA is not a substitute for the GAAP measures of earnings and cash flow. EBITDA is used in this press release because our management considers it an important supplemental measure of performance and believes it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
For more information, please contact:
Mike Mayer
Senior Vice President and Chief Financial Officer
281-372-2311
mmayer@completeproduction.com
Senior Vice President and Chief Financial Officer
281-372-2311
mmayer@completeproduction.com
Jose Bayardo
Vice President, Corporate Development and Investor Relations
281-372-2325
jbayardo@completeproduction.com
Vice President, Corporate Development and Investor Relations
281-372-2325
jbayardo@completeproduction.com
Complete Production Services, Inc.
Consolidated Statements of Operations
For the Quarters and Years Ended December 31, 2007 and 2006
(in thousands except per share data)
Consolidated Statements of Operations
For the Quarters and Years Ended December 31, 2007 and 2006
(in thousands except per share data)
Quarter Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 391,301 | $ | 331,218 | $ | 1,502,477 | $ | 1,088,748 | ||||||||
Products | 33,231 | 32,290 | 152,760 | 123,676 | ||||||||||||
424,532 | 363,508 | 1,655,237 | 1,212,424 | |||||||||||||
Cost of services | 232,271 | 187,257 | 863,705 | 622,786 | ||||||||||||
Cost of products | 24,077 | 21,137 | 116,557 | 88,175 | ||||||||||||
General and administrative expense | 53,975 | 52,249 | 210,147 | 167,334 | ||||||||||||
Depreciation and amortization | 38,103 | 25,854 | 135,961 | 79,465 | ||||||||||||
348,426 | 286,497 | 1,326,370 | 957,760 | |||||||||||||
Income from continuing operations before interest, taxes and minority interest | 76,106 | 77,011 | 328,867 | 254,664 | ||||||||||||
Interest expense | 15,308 | 11,447 | 62,673 | 40,759 | ||||||||||||
Interest income | (624 | ) | (109 | ) | (1,636 | ) | (1,387 | ) | ||||||||
Write-off of deferred financing costs | — | 170 | — | 170 | ||||||||||||
Impairment charge | 13,094 | — | 13,094 | — | ||||||||||||
Income from continuing operations before minority interest and taxes | 48,328 | 65,503 | 254,736 | 215,122 | ||||||||||||
Minority interest, net of tax | (342 | ) | (72 | ) | (569 | ) | (49 | ) | ||||||||
Income from continuing operations before taxes | 48,670 | 65,575 | 255,305 | 215,171 | ||||||||||||
Tax provision | 19,847 | 21,477 | 93,741 | 77,888 | ||||||||||||
Income from continuing operations | 28,823 | 44,098 | 161,564 | 137,283 | ||||||||||||
Income from discontinued operations (net of tax) | — | (518 | ) | — | 1,803 | |||||||||||
Net income | $ | 28,823 | $ | 43,580 | $ | 161,564 | $ | 139,086 | ||||||||
Basic earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.40 | $ | 0.62 | $ | 2.24 | $ | 2.09 | ||||||||
Discontinued operations | $ | — | $ | 0.00 | $ | — | $ | 0.02 | ||||||||
$ | 0.40 | $ | 0.62 | $ | 2.24 | $ | 2.11 | |||||||||
Diluted earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.39 | $ | 0.61 | $ | 2.20 | $ | 2.02 | ||||||||
Discontinued operations | $ | — | $ | (0.01 | ) | $ | — | $ | 0.02 | |||||||
$ | 0.39 | $ | 0.60 | $ | 2.20 | $ | 2.04 | |||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 72,343 | 70,670 | 71,991 | 65,843 | ||||||||||||
Diluted | 73,514 | 72,492 | 73,352 | 68,075 |
Complete Production Services, Inc.
Condensed Consolidated Balance Sheets
As of December 31, 2007 and 2006
(in thousands)
Condensed Consolidated Balance Sheets
As of December 31, 2007 and 2006
(in thousands)
December 31, | ||||||||
2007 | 2006 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Current assets | $ | 422,863 | $ | 390,640 | ||||
Property, plant and equipment, net | 1,034,136 | 771,703 | ||||||
Goodwill | 560,022 | 552,671 | ||||||
Other long-term assets | 31,214 | 25,310 | ||||||
Total assets | 2,048,235 | 1,740,324 | ||||||
Liabilities and stockholders’ equity: | ||||||||
Current liabilities | 164,286 | 175,401 | ||||||
Long-term debt | 825,873 | 750,577 | ||||||
Long-term deferred tax liabilities | 128,839 | 76,802 | ||||||
Minority interest | — | 2,323 | ||||||
Total liabilities and minority interest | 1,118,998 | 1,005,103 | ||||||
Common stock | 725 | 714 | ||||||
Treasury stock | (202 | ) | (202 | ) | ||||
Additional paid-in capital | 581,404 | 563,006 | ||||||
Retained earnings | 317,535 | 155,971 | ||||||
Cumulative translation adjustment | 29,775 | 15,732 | ||||||
Total stockholders’ equity | 929,237 | 735,221 | ||||||
Total liabilities and stockholders’ equity | $ | 2,048,235 | $ | 1,740,324 | ||||
Complete Production Services, Inc.
Cash Flow Data
For the Year Ended December 31, 2007
(in thousands)
Cash Flow Data
For the Year Ended December 31, 2007
(in thousands)
December 31, | ||||
2007 | ||||
(unaudited) | ||||
Cash flows provide by/(used for): | ||||
Operating activities | $ | 344,189 | ||
Investing activities: | ||||
Capital expenditures | $ | (372,033 | ) | |
Other investing activities | $ | (40,167 | ) | |
Financing activities | $ | 66,546 |
Complete Production Services, Inc.
Consolidated Segment Information
For the Quarters Ended December 31, 2007 and 2006, and September 30, 2007
and Years Ended December 31, 2007 and 2006
(in thousands, except percentages)
Consolidated Segment Information
For the Quarters Ended December 31, 2007 and 2006, and September 30, 2007
and Years Ended December 31, 2007 and 2006
(in thousands, except percentages)
Quarter Ended | ||||||||||||
December 31, | December 31, | September 30, | ||||||||||
2007 | 2006 | 2007 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenue: | ||||||||||||
Completion and production services | $ | 330,079 | $ | 269,041 | $ | 317,170 | ||||||
Drilling services | 61,222 | 62,177 | 60,566 | |||||||||
Products | 33,231 | 32,290 | 35,187 | |||||||||
Total revenues | $ | 424,532 | $ | 363,508 | $ | 412,923 | ||||||
EBITDA: (1) | ||||||||||||
Completion and production services | $ | 102,481 | $ | 80,705 | $ | 97,070 | ||||||
Drilling services | 15,856 | 23,176 | 16,701 | |||||||||
Products | 3,945 | 6,257 | 3,901 | |||||||||
Corporate and other | (8,073 | ) | (7,443 | ) | (5,579 | ) | ||||||
Total EBITDA | $ | 114,209 | $ | 102,695 | $ | 112,093 | ||||||
EBITDA as a % of Revenue: | ||||||||||||
Completion and production services | 31.0 | % | 30.0 | % | 30.6 | % | ||||||
Drilling services | 25.9 | % | 37.3 | % | 27.6 | % | ||||||
Products | 11.9 | % | 19.4 | % | 11.1 | % | ||||||
Total | 26.9 | % | 28.3 | % | 27.1 | % |
Year Ended December 31, | ||||||||
2007 | 2006 | |||||||
(unaudited) | (unaudited) | |||||||
Revenue: | ||||||||
Completion and production services | $ | 1,262,100 | $ | 873,493 | ||||
Drilling services | 240,377 | 215,255 | ||||||
Products | 152,760 | 123,676 | ||||||
Total revenues | $ | 1,655,237 | $ | 1,212,424 | ||||
EBITDA: (1) | ||||||||
Completion and production services | $ | 404,893 | $ | 257,630 | ||||
Drilling services | 69,628 | 78,543 | ||||||
Products | 18,443 | 18,708 | ||||||
Corporate and other | (28,136 | ) | (20,922 | ) | ||||
Total EBITDA | $ | 464,828 | $ | 333,959 | ||||
EBITDA as a % of Revenue: | ||||||||
Completion and production services | 32.1 | % | 29.5 | % | ||||
Drilling services | 29.0 | % | 36.5 | % | ||||
Products | 12.1 | % | 15.1 | % | ||||
Total | 28.1 | % | 27.5 | % |
(1) | EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release. |
Footnote: The results for all periods exclude discontinued operations.
Complete Production Services, Inc.
Reconciliation of EBITDA to the Most Comparable GAAP Measure
For the Quarters Ended December 31, 2007 and 2006 and September 30, 2007
and the Years Ended December 31, 2007 and 2006
(unaudited, in thousands)
Reconciliation of EBITDA to the Most Comparable GAAP Measure
For the Quarters Ended December 31, 2007 and 2006 and September 30, 2007
and the Years Ended December 31, 2007 and 2006
(unaudited, in thousands)
Completion | ||||||||||||||||||||
& Production | Drilling | Corporate & | ||||||||||||||||||
Services | Services | Products | Other | Total | ||||||||||||||||
Quarter Ended December 31, 2007: | ||||||||||||||||||||
EBITDA | $ | 102,481 | $ | 15,856 | $ | 3,945 | $ | (8,073 | ) | $ | 114,209 | |||||||||
Depreciation & amortization | 31,904 | 4,785 | 745 | 669 | 38,103 | |||||||||||||||
Impairment charge | 13,094 | — | — | — | 13,094 | |||||||||||||||
Operating income (loss) | $ | 57,483 | $ | 11,071 | $ | 3,200 | $ | (8,742 | ) | $ | 63,012 | |||||||||
Quarter Ended December 31, 2006: | ||||||||||||||||||||
EBITDA | $ | 80,705 | $ | 23,176 | $ | 6,257 | $ | (7,443 | ) | $ | 102,695 | |||||||||
Depreciation & amortization | 21,694 | 3,439 | 430 | 291 | 25,854 | |||||||||||||||
Write-off of deferred financing costs | — | — | — | (170 | ) | (170 | ) | |||||||||||||
Operating income (loss) | $ | 59,011 | $ | 19,737 | $ | 5,827 | $ | (7,564 | ) | $ | 77,011 | |||||||||
Quarter Ended September 30, 2007: | ||||||||||||||||||||
EBITDA | $ | 97,070 | $ | 16,701 | $ | 3,901 | $ | (5,579 | ) | $ | 112,093 | |||||||||
Depreciation & amortization | 29,817 | 4,586 | 793 | 200 | 35,396 | |||||||||||||||
Operating income (loss) | $ | 67,253 | $ | 12,115 | $ | 3,108 | $ | (5,779 | ) | $ | 76,697 | |||||||||
Year Ended December 31, 2007: | ||||||||||||||||||||
EBITDA | $ | 404,893 | $ | 69,628 | $ | 18,443 | $ | (28,136 | ) | $ | 464,828 | |||||||||
Depreciation & amortization | 114,139 | 17,023 | 2,918 | 1,881 | 135,961 | |||||||||||||||
Impairment charge | 13,094 | — | — | — | 13,094 | |||||||||||||||
Operating income (loss) | $ | 277,660 | $ | 52,605 | $ | 15,525 | $ | (30,017 | ) | $ | 315,773 | |||||||||
Year Ended December 31, 2006: | ||||||||||||||||||||
EBITDA | $ | 257,630 | $ | 78,543 | $ | 18,708 | $ | (20,922 | ) | $ | 333,959 | |||||||||
Depreciation & amortization | 65,317 | 10,599 | 1,943 | 1,606 | 79,465 | |||||||||||||||
Write-off of deferred financing costs | — | — | — | (170 | ) | (170 | ) | |||||||||||||
Operating income (loss) | $ | 192,313 | $ | 67,944 | $ | 16,765 | $ | (22,358 | ) | $ | 254,664 | |||||||||