EXHIBIT 99.1
![(COMPLETE LOGO)](https://capedge.com/proxy/8-K/0000950134-07-003537/h43684h4368450.gif)
Complete Production Services, Inc. Reports
Fourth Quarter Earnings Per Share of $0.61
Fourth Quarter Earnings Per Share of $0.61
HOUSTON, February 15, 2007 (BUSINESS WIRE) — Complete Production Services, Inc. (NYSE: CPX) today reported record revenue, net income and earnings per diluted share from continuing operations for the fourth quarter of 2006. Revenue for the quarter increased 64% to $363.5 million compared to $221.6 million in the fourth quarter of 2005. Net income from continuing operations for the quarter was $44.1 million, or $0.61 per diluted share, up 196% and 135%, respectively, compared to the fourth quarter of 2005.
Operating income for the quarter increased to $77.0 million, representing an operating profit margin of 21.2%. This compares to $33.9 million and 15.3% in the prior year. Operating income for the year increased to $254.7 million from $112.2 million in the prior year, as operating profit margin rose to 21.0% from 15.6% in 2005. Incremental operating profit margin for the fourth quarter and full year were 30.4% and 28.9%, respectively.
Full year 2006 revenue from continuing operations was $1.2 billion, up 68% over the prior year, while net income from continuing operations was $137.3 million, up 170% compared to the prior year. Full year 2006 earnings per diluted share from continuing operations was $2.02 per share versus $1.00 per share in 2005. As previously disclosed, the Company sold its manufacturing, fabrication and unrelated production enhancement products business in Canada during the fourth quarter of 2006. Accordingly, these operations are accounted for as discontinued operations for each period presented within this release.
“2006 was an outstanding year for Complete Production Services. Our strategy of balanced growth within targeted basins of North America is evident in our performance,” said Joe Winkler, President and Chief Executive Officer of Complete. “Approximately 75% of our $492 million in annual revenue growth was from organic initiatives with the balance from selective acquisitions.”
“During the year we invested in excess of $240 million in growth capital, taking advantage of our solid market position in the resource plays to quickly and efficiently deploy new equipment to meet our customer’s demands for our services. In addition, we completed approximately $420 million in acquisitions to strengthen our already existing position, expand our geographic reach and to enter new service lines. Although harsh winter weather and holidays slowed our year end pace, our business performed quite well during Quarter 4. Overall, we are very pleased with the outcome of our 2006 strategic initiatives and believe they have set the foundation for our performance in 2007.”
Earnings before interest, taxes, depreciation and amortization (EBITDA, as defined below) totals $102.7 million for the current quarter, up 108% compared to the fourth quarter of 2005. As a percentage of revenue, EBITDA was 28.3% in the current quarter, 22.2% in the fourth quarter of 2005 and 29.0% in the third quarter of 2006.
Complete Production Services, Inc. provides completion, production and drilling services and products to the oil and gas industry in many of the most active basins throughout North America. We will hold our quarterly conference call to discuss fourth quarter 2006 results on Friday, February 16 at 10:00 a.m. Central Time. To participate in the live conference call, dial (866) 362-5158 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 21153858. The conference call will be available for replay beginning at 1:00 p.m., February 16, 2007, and will be available until February 23, 2007. To access the conference call replay, please call (888) 286-8010 and use the passcode: 87590401. 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 our 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 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
Complete Production Services, Inc.
Unaudited Consolidated Statements of Operations
For the Quarters and Years Ended December 31, 2006 and 2005
(in thousands, except per share data)
Unaudited Consolidated Statements of Operations
For the Quarters and Years Ended December 31, 2006 and 2005
(in thousands, except per share data)
Quarter Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 331,218 | $ | 199,251 | $ | 1,088,748 | $ | 639,421 | ||||||||
Products | 32,290 | 22,313 | 123,676 | 80,768 | ||||||||||||
363,508 | 221,564 | 1,212,424 | 720,189 | |||||||||||||
Cost of services | 187,257 | 122,087 | 622,786 | 393,856 | ||||||||||||
Cost of products | 21,137 | 14,486 | 88,175 | 56,862 | ||||||||||||
General and administrative expense | 52,249 | 35,255 | 167,334 | 108,766 | ||||||||||||
Depreciation and amortization | 25,854 | 15,837 | 79,465 | 48,510 | ||||||||||||
286,497 | 187,665 | 957,760 | 607,994 | |||||||||||||
Operating income | 77,011 | 33,899 | 254,664 | 112,195 | ||||||||||||
Interest expense | 11,447 | 8,844 | 40,759 | 24,460 | ||||||||||||
Interest income | (109 | ) | — | (1,387 | ) | — | ||||||||||
Write-off of deferred financing costs | 170 | 471 | 170 | 3,315 | ||||||||||||
Income from continuing operations before minority interest and taxes | 65,503 | 24,584 | 215,122 | 84,420 | ||||||||||||
Minority interest, net of tax | (72 | ) | 4 | (49 | ) | 384 | ||||||||||
Income from continuing operations before taxes | 65,575 | 24,580 | 215,171 | 84,036 | ||||||||||||
Tax provision | 21,477 | 9,707 | 77,888 | 33,115 | ||||||||||||
Income from continuing operations | 44,098 | 14,873 | 137,283 | 50,921 | ||||||||||||
Income (loss) from discontinued operations (net of tax) | (518 | ) | 1,077 | 1,803 | 2,941 | |||||||||||
Net income | $ | 43,580 | $ | 15,950 | $ | 139,086 | $ | 53,862 | ||||||||
Basic earnings per share: | ||||||||||||||||
Continuing Operations | $ | 0.62 | $ | 0.27 | $ | 2.09 | $ | 1.09 | ||||||||
Discontinued Operations | $ | (0.00 | ) | $ | 0.02 | $ | 0.02 | $ | 0.07 | |||||||
$ | 0.62 | $ | 0.29 | $ | 2.11 | $ | 1.16 | |||||||||
Diluted earnings per share: | ||||||||||||||||
Continuing Operations | $ | 0.61 | $ | 0.26 | $ | 2.02 | $ | 1.00 | ||||||||
Discontinued Operations | $ | (0.01 | ) | $ | 0.02 | $ | 0.02 | $ | 0.06 | |||||||
$ | 0.60 | $ | 0.28 | $ | 2.04 | $ | 1.06 | |||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 70,670 | 55,361 | 65,843 | 46,603 | ||||||||||||
Diluted | 72,492 | 57,360 | 68,075 | 50,656 |
Complete Production Services, Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2006 and 2005
(in thousands)
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2006 and 2005
(in thousands)
December 31, | December 31, | |||||||
2006 | 2005 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Current assets | $ | 390,640 | $ | 228,818 | ||||
Property, plant and equipment, net | 771,703 | 383,707 | ||||||
Goodwill | 552,671 | 293,651 | ||||||
Other long-term assets | 25,310 | 6,558 | ||||||
Discontinued operations | — | 24,919 | ||||||
Total assets | 1,740,324 | 937,653 | ||||||
Liabilities and Stockholders’ Equity: | ||||||||
Current liabilities | 175,401 | 114,753 | ||||||
Long-term debt | 750,577 | 509,981 | ||||||
Long-term deferred tax liabilities | 76,802 | 54,084 | ||||||
Minority interest | 2,323 | 2,365 | ||||||
Discontinued operations | — | 5,709 | ||||||
Total liabilities and minority interest | 1,005,103 | 686,892 | ||||||
Common stock | 714 | 555 | ||||||
Treasury stock | (202 | ) | (202 | ) | ||||
Additional paid-in capital | 563,006 | 220,786 | ||||||
Deferred compensation | — | (3,803 | ) | |||||
Retained earnings | 155,971 | 16,885 | ||||||
Cumulative translation adjustment | 15,732 | 16,540 | ||||||
Total stockholders’ equity | 735,221 | 250,761 | ||||||
Total liabilities and stockholders’ equity | $ | 1,740,324 | $ | 937,653 | ||||
Complete Production Services, Inc.
Unaudited Consolidated Segment Information
For the Quarters Ended December 31, 2006 and 2005 and September 30, 2006
and Years Ended December 31, 2006 and 2005
(in thousands)
Unaudited Consolidated Segment Information
For the Quarters Ended December 31, 2006 and 2005 and September 30, 2006
and Years Ended December 31, 2006 and 2005
(in thousands)
Quarter Ended | ||||||||||||
December 31, | December 31, | September 30, | ||||||||||
2006 | 2005 | 2006 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenue: | ||||||||||||
Completion and production services | $ | 269,041 | $ | 159,150 | $ | 230,093 | ||||||
Drilling services | 62,177 | 40,101 | 57,898 | |||||||||
Products | 32,290 | 22,313 | 34,043 | |||||||||
Total revenues | $ | 363,508 | $ | 221,564 | $ | 322,034 | ||||||
EBITDA: (1) | ||||||||||||
Completion and production services | $ | 80,705 | $ | 34,475 | $ | 73,003 | ||||||
Drilling services | 23,176 | 14,837 | 21,110 | |||||||||
Products | 6,257 | 4,163 | 4,677 | |||||||||
Corporate and other | (7,443 | ) | (4,210 | ) | (5,551 | ) | ||||||
Total EBITDA | $ | 102,695 | $ | 49,265 | $ | 93,239 | ||||||
EBITDA as a % of Revenue: | ||||||||||||
Completion and production services | 30.0 | % | 21.7 | % | 31.7 | % | ||||||
Drilling services | 37.3 | % | 37.0 | % | 36.5 | % | ||||||
Products | 19.4 | % | 18.7 | % | 13.7 | % | ||||||
Total | 28.3 | % | 22.2 | % | 29.0 | % |
Year Ended December 31, | ||||||||
2006 | 2005 | |||||||
(unaudited) | (unaudited) | |||||||
Revenue: | ||||||||
Completion and production services | $ | 873,493 | $ | 510,304 | ||||
Drilling services | 215,255 | 129,117 | ||||||
Products | 123,676 | 80,768 | ||||||
Total revenues | $ | 1,212,424 | $ | 720,189 | ||||
EBITDA: (1) | ||||||||
Completion and production services | $ | 257,630 | $ | 114,033 | ||||
Drilling services | 78,543 | 42,336 | ||||||
Products | 18,708 | 12,634 | ||||||
Corporate and other | (20,922 | ) | (11,613 | ) | ||||
Total EBITDA | $ | 333,959 | $ | 157,390 | ||||
EBITDA as a % of Revenue: | ||||||||
Completion and production services | 29.5 | % | 22.3 | % | ||||
Drilling services | 36.5 | % | 32.8 | % | ||||
Products | 15.1 | % | 15.6 | % | ||||
Total | 27.5 | % | 21.9 | % |
(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, 2006 and 2005 and September 30, 2006
and the Years Ended December 31, 2006 and 2005
(unaudited, in thousands)
Reconciliation of EBITDA to the most Comparable GAAP Measure
For the Quarters Ended December 31, 2006 and 2005 and September 30, 2006
and the Years Ended December 31, 2006 and 2005
(unaudited, in thousands)
Completion | ||||||||||||||||||||
& Production | Drilling | Corporate & | ||||||||||||||||||
Services | Services | Products | Other | Total | ||||||||||||||||
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 December 31, 2005: | ||||||||||||||||||||
EBITDA | $ | 34,475 | $ | 14,837 | $ | 4,163 | $ | (4,210 | ) | $ | 49,265 | |||||||||
Depreciation & amortization | 13,049 | 1,698 | 275 | 815 | 15,837 | |||||||||||||||
Write-off of deferred financing costs | — | — | — | (471 | ) | (471 | ) | |||||||||||||
Operating Income (loss) | $ | 21,426 | $ | 13,139 | $ | 3,888 | $ | (4,554 | ) | $ | 33,899 | |||||||||
Quarter Ended September 30, 2006: | ||||||||||||||||||||
EBITDA | $ | 73,003 | $ | 21,110 | $ | 4,677 | $ | (5,551 | ) | $ | 93,239 | |||||||||
Depreciation & amortization | 16,895 | 2,858 | 574 | 678 | 21,005 | |||||||||||||||
Operating Income (loss) | $ | 56,108 | $ | 18,252 | $ | 4,103 | $ | (6,229 | ) | $ | 72,234 | |||||||||
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 | |||||||||
Year Ended December 31, 2005 | ||||||||||||||||||||
EBITDA | $ | 114,033 | $ | 42,336 | $ | 12,634 | $ | (11,613 | ) | $ | 157,390 | |||||||||
Depreciation & amortization | 40,149 | 5,666 | 1,250 | 1,445 | 48,510 | |||||||||||||||
Write-off of deferred financing costs | — | — | — | (3,315 | ) | (3,315 | ) | |||||||||||||
Operating Income (loss) | $ | 73,884 | $ | 36,670 | $ | 11,384 | $ | (9,743 | ) | $ | 112,195 | |||||||||