EXHIBIT 99.1
Complete Production Services, Inc. Reports Third Quarter Earnings
HOUSTON, October 24, 2007 (Business Wire) — Complete Production Services, Inc. (NYSE: CPX) today reported third quarter income from continuing operations of $41.6 million, or $0.57 per diluted share, compared with income from continuing operations of $39.7 million, or $0.55 per diluted share for the third quarter of 2006. Revenue for the quarter was $412.9 million, up 28% over the third quarter of 2006. Operating income increased to $76.7 million for the quarter, up 6% compared to the third quarter of 2006, with operating income margins of 18.6% and 22.4%, respectively.
Third quarter 2007 earnings before interest, taxes, depreciation and amortization (EBITDA, as defined below), totaled $112.1 million, an increase of 20% over the prior year. EBITDA margins decreased to 27.1% from 29.0% in the third quarter of 2006.
Revenues for the Completion and Production Services segment during the third quarter of 2007 were $317.2 million, up 38% over the prior year, with EBITDA of $97.1 million compared to $73.0 million for the third quarter of the prior year. EBITDA margins for the segment were 30.6%, down from 31.7%. Growth in the Completion and Production Services segment was the result of executing the company’s acquisition strategy and organic growth investments. The positive contributions from acquisitions and from most service lines within the segment were offset by lower utilization and pricing primarily in fluid handling, an adverse shift in revenue mix within coiled tubing, and a slower recovery in the Canadian market.
Drilling Services revenue was $60.6 million for the third quarter of 2007, up slightly from the same quarter of the prior year and EBITDA margins of 27.6% were down from 36.5%. Contract drilling revenues increased due to the net addition of two drilling rigs versus the same period last year, but lower utilization rates and higher costs adversely impacted margins. Additionally, the relocation of a rig logistics district to a more attractive market took longer than anticipated resulting in lower revenues and higher costs.
Product Sales revenue was $35.2 million for the third quarter of 2007, with EBITDA margins of 11.1%.
“Activity levels in the basins in which we operate continue to be good; however, issues including high gas storage inventory levels, large basis differentials in the Rockies and additional service capacity that has come to market will continue to put pressure on our financial performance in the near-term. We do remain confident that the long-term fundamentals of natural gas markets in the resource plays of North America remain strong,” noted Mr. Winkler.
Complete Production Services, Inc. is a leading oilfield service provider focused on the completion and production phases of oil and gas wells. The company has established a significant presence in unconventional gas plays in North America that it believes have the highest potential for long-term growth.
Conference Call
Complete will hold a conference call to discuss third quarter 2007 results on Thursday, October 25 at 9:00 a.m. Central Time. To participate in the live conference call, dial (866) 831-6243 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 66493460. The conference call will be available for replay beginning at 12:00 p.m., October 25 and will be available until November 1, 2007. To access the conference call replay, please call (888) 286-8010 and use the passcode: 24901113. The call is also being webcast and can be accessed at our website atwww.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 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 Nine Months Ended September 30, 2007 and 2006
(in thousands except per share data)
Consolidated Statements of Operations
For the Quarters and Nine Months Ended September 30, 2007 and 2006
(in thousands except per share data)
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||
Revenue: | ||||||||||||||||
Services | $ | 377,736 | $ | 287,991 | $ | 1,111,176 | $ | 757,530 | ||||||||
Products | 35,187 | 34,043 | 119,529 | 91,386 | ||||||||||||
412,923 | 322,034 | 1,230,705 | 848,916 | |||||||||||||
Cost of services | 223,557 | 160,695 | 631,434 | 435,529 | ||||||||||||
Cost of products | 27,015 | 25,213 | 92,480 | 67,038 | ||||||||||||
General and administrative expense | 50,258 | 42,887 | 156,172 | 115,085 | ||||||||||||
Depreciation and amortization | 35,396 | 21,005 | 97,858 | 53,611 | ||||||||||||
336,226 | 249,800 | 977,944 | 671,263 | |||||||||||||
Operating income | 76,697 | 72,234 | 252,761 | 177,653 | ||||||||||||
Interest expense | 16,676 | 9,142 | 47,365 | 29,312 | ||||||||||||
Interest income | (484 | ) | (256 | ) | (1,012 | ) | (1,278 | ) | ||||||||
Income from continuing operations | ||||||||||||||||
before minority interest and taxes | 60,505 | 63,348 | 206,408 | 149,619 | ||||||||||||
Minority interest, net of tax | (283 | ) | (121 | ) | (227 | ) | 23 | |||||||||
�� | ||||||||||||||||
Income from continuing operations before taxes | 60,788 | 63,469 | 206,635 | 149,596 | ||||||||||||
Tax provision | 19,180 | 23,800 | 73,894 | 56,411 | ||||||||||||
Income from continuing operations | 41,608 | 39,669 | 132,741 | 93,185 | ||||||||||||
Income from discontinued operations (net of tax) | — | 570 | — | 2,321 | ||||||||||||
Net income | $ | 41,608 | $ | 40,239 | $ | 132,741 | $ | 95,506 | ||||||||
Basic earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.58 | $ | 0.57 | $ | 1.85 | $ | 1.45 | ||||||||
Discontinued operations | $ | — | $ | 0.01 | $ | — | $ | 0.04 | ||||||||
$ | 0.58 | $ | 0.58 | $ | 1.85 | $ | 1.49 | |||||||||
Diluted earnings per share: | ||||||||||||||||
Continuing operations | $ | 0.57 | $ | 0.55 | $ | 1.81 | $ | 1.40 | ||||||||
Discontinued operations | $ | — | $ | 0.01 | $ | — | $ | 0.03 | ||||||||
$ | 0.57 | $ | 0.56 | $ | 1.81 | $ | 1.43 | |||||||||
Weighted average shares outstanding: | ||||||||||||||||
Basic | 72,191 | 69,816 | 71,873 | 64,216 | ||||||||||||
Diluted | 73,495 | 71,738 | 73,296 | 66,587 |
Complete Production Services, Inc.
Condensed Consolidated Balance Sheets
As of September 30, 2007 and December 31, 2006
(in thousands)
Condensed Consolidated Balance Sheets
As of September 30, 2007 and December 31, 2006
(in thousands)
September 30, | December 31, | |||||||
2007 | 2006 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Current assets | $ | 403,802 | $ | 390,640 | ||||
Property, plant and equipment, net | 975,058 | 771,703 | ||||||
Goodwill | 570,493 | 552,671 | ||||||
Other long-term assets | 28,372 | 25,310 | ||||||
Total assets | 1,977,725 | 1,740,324 | ||||||
Liabilities and stockholders’ equity: | ||||||||
Current liabilities | 141,685 | 161,405 | ||||||
Long-term debt | 820,549 | 750,577 | ||||||
Long-term deferred tax liabilities | 116,341 | 90,805 | ||||||
Minority interest | 2,507 | 2,316 | ||||||
Total liabilities and minority interest | 1,081,082 | 1,005,103 | ||||||
Common stock | 723 | 714 | ||||||
Treasury stock | (202 | ) | (202 | ) | ||||
Additional paid-in capital | 577,599 | 563,006 | ||||||
Retained earnings | 288,712 | 155,971 | ||||||
Cumulative translation adjustment | 29,811 | 15,732 | ||||||
Total stockholders’ equity | 896,643 | 735,221 | ||||||
Total liabilities and stockholders’ equity | $ | 1,977,725 | $ | 1,740,324 | ||||
Complete Production Services, Inc.
Cash Flow Data
For the Nine Months Ended September 30, 2007
(in thousands)
Cash Flow Data
For the Nine Months Ended September 30, 2007
(in thousands)
September 30, | ||||
2007 | ||||
(unaudited) | ||||
Cash flows provide by/(used for): | ||||
Operating activities | $ | 240,148 | ||
Investing activities: | ||||
Capital expenditures | $ | (274,759 | ) | |
Other investing activities | $ | (35,682 | ) | |
Financing activities | $ | 61,698 |
Complete Production Services, Inc.
Consolidated Segment Information
For the Quarters Ended September 30, 2007 and 2006 and June 30, 2007
(in thousands, except percentages)
Consolidated Segment Information
For the Quarters Ended September 30, 2007 and 2006 and June 30, 2007
(in thousands, except percentages)
Quarter Ended | ||||||||||||
September 30, | September 30, | June 30, | ||||||||||
2007 | 2006 | 2007 | ||||||||||
(unaudited) | (unaudited) | (unaudited) | ||||||||||
Revenue: | ||||||||||||
Completion and production services | $ | 317,170 | $ | 230,093 | $ | 307,212 | ||||||
Drilling services | 60,566 | 57,898 | 60,193 | |||||||||
Products | 35,187 | 34,043 | 43,310 | |||||||||
Total revenues | $ | 412,923 | $ | 322,034 | $ | 410,715 | ||||||
EBITDA: (1) | ||||||||||||
Completion and production services | $ | 97,070 | $ | 73,003 | $ | 101,180 | ||||||
Drilling services | 16,701 | 21,110 | 19,004 | |||||||||
Products | 3,901 | 4,677 | 5,440 | |||||||||
Corporate and other | (5,579 | ) | (5,551 | ) | (8,271 | ) | ||||||
Total EBITDA | $ | 112,093 | $ | 93,239 | $ | 117,353 | ||||||
EBITDA as a % of Revenue: | ||||||||||||
Completion and production services | 30.6 | % | 31.7 | % | 32.9 | % | ||||||
Drilling services | 27.6 | % | 36.5 | % | 31.6 | % | ||||||
Products | 11.1 | % | 13.7 | % | 12.6 | % | ||||||
Total | 27.1 | % | 29.0 | % | 28.6 | % |
Nine Months Ended September 30, | ||||||||
2007 | 2006 | |||||||
(unaudited) | (unaudited) | |||||||
Revenue: | ||||||||
Completion and production services | $ | 932,021 | $ | 604,452 | ||||
Drilling services | 179,155 | 153,078 | ||||||
Products | 119,529 | 91,386 | ||||||
Total revenues | $ | 1,230,705 | $ | 848,916 | ||||
EBITDA: (1) | ||||||||
Completion and production services | $ | 302,412 | $ | 176,904 | ||||
Drilling services | 53,772 | 55,367 | ||||||
Products | 14,498 | 12,471 | ||||||
Corporate and other | (20,063 | ) | (13,478 | ) | ||||
Total EBITDA | $ | 350,619 | $ | 231,264 | ||||
EBITDA as a % of Revenue: | ||||||||
Completion and production services | 32.4 | % | 29.3 | % | ||||
Drilling services | 30.0 | % | 36.2 | % | ||||
Products | 12.1 | % | 13.6 | % | ||||
Total | 28.5 | % | 27.2 | % |
(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 September 30, 2007 and 2006 and June 30, 2007
And the Nine Months Ended September 30, 2007 and 2006
(unaudited, in thousands)
Reconciliation of EBITDA to the Most Comparable GAAP Measure
For the Quarters Ended September 30, 2007 and 2006 and June 30, 2007
And the Nine Months Ended September 30, 2007 and 2006
(unaudited, in thousands)
Completion | ||||||||||||||||||||
& Production | Drilling | Corporate & | ||||||||||||||||||
Services | Services | Products | Other | Total | ||||||||||||||||
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 | |||||||||
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 | |||||||||
Quarter Ended June 30, 2007: | ||||||||||||||||||||
EBITDA | $ | 101,180 | $ | 19,004 | $ | 5,440 | $ | (8,271 | ) | $ | 117,353 | |||||||||
Depreciation & amortization | 28,134 | 4,017 | 702 | 639 | 33,492 | |||||||||||||||
Operating income (loss) | $ | 73,046 | $ | 14,987 | $ | 4,738 | $ | (8,910 | ) | $ | 83,861 | |||||||||
Nine Months Ended September 30, 2007: | ||||||||||||||||||||
EBITDA | $ | 302,412 | $ | 53,772 | $ | 14,498 | $ | (20,063 | ) | $ | 350,619 | |||||||||
Depreciation & amortization | 82,235 | 12,238 | 2,173 | 1,212 | 97,858 | |||||||||||||||
Operating income (loss) | $ | 220,177 | $ | 41,534 | $ | 12,325 | $ | (21,275 | ) | $ | 252,761 | |||||||||
Nine Months Ended September 30, 2006: | ||||||||||||||||||||
EBITDA | $ | 176,904 | $ | 55,367 | $ | 12,471 | $ | (13,478 | ) | $ | 231,264 | |||||||||
Depreciation & amortization | 43,730 | 7,160 | 1,406 | 1,315 | 53,611 | |||||||||||||||
Operating income (loss) | $ | 133,174 | $ | 48,207 | $ | 11,065 | $ | (14,793 | ) | $ | 177,653 | |||||||||