EXHIBIT 99.1
ALLIS-CHALMERS
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PRESS RELEASE
Contact: Victor M. Perez
For Immediate Release (713) 369-0550
ALLIS-CHALMERS ENERGY REVIEWS 2004 PERFORMANCE
HOUSTON, TEXAS, April 22, 2005 - Allis-Chalmers Energy Inc. (Amex:ALY) reported
revenues for the year ended December 31, 2004 of $47.7 million, an increase of
45.9% compared to $32.7 million for the year ended December 31, 2003. The
increase in revenues resulted from increased market share with existing
customers, the addition of new customers, and the acquisition of a rental tool
company in September 2004, a hammer and bit service company in November 2004,
and a capillary coil tubing company in December 2004. The acquisitions generated
revenues of $2.3 million representing only 7.0% of the aggregate revenue growth.
Income from operations for the year ended December 31, 2004 totaled $4.2 million
which was a 61.5% increase over $2.6 million in income from operations the prior
year. Changes in operating income in its primary divisions follows:
o CASING & TUBING: Comprising 43.6% of 2004 operating income (before corporate
G&A), income from operations for the casing and tubing services segment
decreased from $3.6 million in 2003 to $3.2 million in 2004 as significant
growth in Mexico was more than offset by increased competition in south
Texas.
o DIRECTIONAL DRILLING: Comprising 41.5% of 2004 operating income (before
corporate G&A), the directional drilling services segment had an increase in
income from operations from $1.1 million in 2003 to $3.1 million in 2004, an
increase of 181.8% as a result of an increased customer base and increased
capacity due to hiring directional drillers and purchasing additional
motors.
o COMPRESSED AIR DRILLING. Comprising 15.8% of 2004 operating income (before
corporate G&A), income from operations in the compressed air drilling
segment increased to $1.2 million in 2004 compared to $17,000 in 2003.
Principal growth drivers included $0.4 million of operating profit
contributed by the hammer and bit service division and a substantial
increase in operating revenues in both west Texas and New Mexico.
o OTHER. In 2004, Downhole's production services acquired on December 1 and
Safco's rental tool business acquired on September 1 had a loss from
operations of $67,000. The loss was a result of additional management
expenses allocated by Allis-Chalmers to the acquired operations prior to the
implementation and benefits of an integration strategy.
o GENERAL CORPORATE (G&A). G&A expense increased to $3.2 million from $2.1
million reflecting the continued expansion of Allis-Chalmers' capabilities
and service offerings, and the corporate personnel required to support a
growing public company.
In the year ended December 31, 2004, the Company had net income attributed to
common stockholders of $764,000 compared to $2.3 million. However, the year
ended December 31, 2003 included one-time non-cash gains of $3.4 million related
to a sale of an interest in a subsidiary in connection with the formation of
AirComp and a favorable settlement of a lawsuit. While this translated to a
decline in GAAP diluted earnings per share (EPS) of $0.07 in 2004 from $0.39 in
2003, absent the non-cash gains, non-GAAP EPS in 2003 would have been a loss of
$0.20 per share. Also in 2004, the Company incurred warrant expenses incurred in
the prepayment of debt, legal fees and transfer costs associated with the stock
offering, proxy statement, and S-1 registration statement, expenses related to
the listing on the American Stock Exchange, and management search fees.
The Company recapitalized in late 2004 and increased its stockholder's equity
from $4.5 million as of December 31, 2003 to $35.1 million at December 31, 2004.
Allis-Chalmers made significant headway in improving its balance sheet in 2004,
reducing net debt to capital to below 39% at year-end 2004 from 89% at year-end
2003. The increase in stockholder's equity was primarily a result of a
successful private placement of common stock of $18.4 million, conversion of
preferred shares into common stock of $4.3 million, and conversion of a minority
interest to common stock of $6.4 million
Mr. Micki H. Hidayatallah, Chief Executive Officer of Allis-Chalmers Energy,
stated "Fiscal 2004 was a pivotal year for the Company. We grew organically,
executed three strategic acquisitions, achieved positive net income from
operations for the first time, and improved our balance sheet to support future
growth. With this successful repositioning, we will continue in 2005 to
implement our organic growth initiatives to increase market share and customer
and geographic diversification. Simultaneously, we intend to acquire additional
businesses in casing and tubing instillation, compressed air drilling, rental
tools and services to the production market."
ABOUT ALLIS-CHALMERS ENERGY
Allis-Chalmers Energy Inc provides a variety of products and services to the oil
and natural gas industry. Through its subsidiaries, Allis-Chalmers is engaged in
providing specialized equipment and operations to install casing and production
tubing required to drill and complete oil and gas wells, directional and
horizontal drilling services, the rental of "hevi-wate" spiral drill pipe and
related oilfield services, services to enhance production through the
installation of small diameter coiled tubing and chemicals into producing oil
and gas wells and air drilling services to natural gas exploration and
development operators.
FORWARD LOOKING STATEMENTS
THIS PRESS RELEASE CONTAINS FORWARD-LOOKING STATEMENTS (WITHIN THE MEANING OF
SECTION 27A OF THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND SECTION 21E
OF THE SECURITIES EXCHANGE ACT OF 1934) REGARDING ALLIS-CHALMERS ENERGY'S
BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS AND PROSPECTS. WORDS SUCH
AS EXPECTS, ANTICIPATES, INTENDS, PLANS, BELIEVES, SEEKS, ESTIMATES AND SIMILAR
EXPRESSIONS OR VARIATIONS OF SUCH WORDS ARE INTENDED TO IDENTIFY FORWARD-LOOKING
STATEMENTS, BUT ARE NOT THE EXCLUSIVE MEANS OF IDENTIFYING FORWARD-LOOKING
STATEMENTS IN THIS PRESS RELEASE.
ALTHOUGH FORWARD-LOOKING STATEMENTS IN THIS PRESS RELEASE REFLECT THE GOOD FAITH
JUDGMENT OF MANAGEMENT, SUCH STATEMENTS CAN ONLY BE BASED ON FACTS AND FACTORS
CURRENTLY KNOWN TO MANAGEMENT. CONSEQUENTLY, FORWARD-LOOKING STATEMENTS ARE
INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, AND ACTUAL RESULTS AND OUTCOMES
MAY DIFFER MATERIALLY FROM THE RESULTS AND OUTCOMES DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES IN RESULTS AND OUTCOMES INCLUDE, BUT ARE NOT LIMITED TO, DEMAND FOR
OIL AND NATURAL GAS DRILLING SERVICES IN THE AREAS AND MARKETS IN WHICH THE
COMPANY OPERATES, COMPETITION, OBSOLESCENCE OF PRODUCTS AND SERVICES, THE
COMPANY'S ABILITY TO OBTAIN FINANCING TO SUPPORT ITS OPERATIONS, ENVIRONMENTAL
AND OTHER CASUALTY RISKS, AND THE IMPACT OF GOVERNMENT REGULATION. FURTHER
INFORMATION ABOUT THE RISKS AND UNCERTAINTIES THAT MAY IMPACT THE COMPANY ARE
SET FORTH IN THE COMPANY'S MOST RECENT FILINGS ON FORM 10K (INCLUDING WITHOUT
LIMITATION IN THE "RISK FACTORS" SECTION) AND FORM 10-Q, AND IN THE COMPANY'S
OTHER SEC FILINGS AND PUBLICLY AVAILABLE DOCUMENTS. READERS ARE URGED NOT TO
PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF
THE DATE OF THIS PRESS RELEASE. THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE
OR UPDATE ANY FORWARD-LOOKING STATEMENTS IN ORDER TO REFLECT ANY EVENT OR
CIRCUMSTANCE THAT MAY ARISE AFTER THE DATE OF THIS PRESS RELEASE.
-- TABLES TO FOLLOW --
ALLIS-CHALMERS ENERGY INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
YEARS ENDED DECEMBER 31,
2004 2003
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(RESTATED)
Revenues $ 47,726 $ 32,724
Cost of revenues 35,300 24,029
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Gross margin 12,426 8,695
General and administrative expense 8,011 6,169
Personnel restructuring costs -- --
Abandoned acquisition/private placement costs -- --
Post-retirement medical costs 188 (99)
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Total operating expenses 8,199 6,070
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Income(loss)from operations 4,227 2,625
Other income(expense):
Interest income 32 3
Interest expense (2,808) (2,467)
Minority interests in income of subsidiaries (321) (343)
Factoring costs on note receivable -- --
Settlement on lawsuit -- 1,034
Gain on sale of interest in AirComp -- 2,433
Other 272 12
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Total other income (expense) (2,825) 672
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Net income (loss) before income taxes 1,402 3,297
Provision for foreign income tax (514) (370)
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Net income (loss) 888 2,927
Preferred stock dividend (124) (656)
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Net income (loss) attributed to common stockholders $ 764 $ 2,271
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Income (loss) per common share - basic $ 0.10 $ 0.58
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Income (loss) per common share - diluted $ 0.07 $ 0.39
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Weighted average number of common shares outstanding:
Basic 7,930 3,927
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Diluted 11,959 5,761
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ALLIS-CHALMERS ENERGY INC.
CONSOLIDATED BALANCE SHEETS 2004 2003
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(in thousands, except for share amounts) (Restated)
ASSETS
Cash and cash equivalents $ 7,344 $ 1,299
Trade receivables, net of allowance for doubtful
accounts of $265 and $168 at December 31, 2004
and 2003, respectively 12,986 8,823
Inventory 2,373 --
Lease receivable, current 180 180
Prepaid expenses and other 1,495 887
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Total current assets 24,378 11,189
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Property and equipment, at costs net of accumulated depreciation of 37,679 31,128
$5,251 and $2,586 at December 31, 2004 and 2003, respectively
Goodwill 11,776 7,661
Other intangible assets, net of accumulated amortization of $2,036 and
$1,254 at December 31, 2004 and 2003, respectively 5,057 2,290
Debt issuance costs, net of accumulated amortization of
$828 and $462 at December 31, 2004 and 2003, respectively 685 567
Lease receivable, less current portion 558 787
Other Assets 59 40
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Total assets $ 80,192 $ 53,662
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $ 5,541 $ 3,992
Trade accounts payable 5,694 3,133
Accrued salaries, benefits and payroll taxes 615 591
Accrued interest 470 152
Accrued expenses 1,852 1,761
Accounts payable, related parties 740 787
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Total current liabilities 14,912 10,416
Accrued postretirement benefit obligations 687 545
Long-term debt, net of current maturities 24,932 28,241
Other long-term liabilities 129 270
Redeemable warrants -- 1,500
Redeemable convertible preferred stock, $0.01 par value (4,200,000 shares
authorized; 3,500,000 issued and outstanding at December 31, 2003)
($1 redemption value) including accrued dividends -- 4,171
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Total liabilities 40,660 45,143
Commitments and Contingencies
Minority interests 4,423 3,978
STOCKHOLDERS' EQUITY
Common stock, $0.01 par value (20,000,000 shares
authorized; 13,611,525 and 3,926,668 issue and outstanding
at December 31, 2004 and December 31, 2003, respectively 136 39
Capital in excess of par value 40,331 10,748
Accumulated deficit (5,358) (6,246)
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Total stockholders' equity 35,109 4,541
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Total liabilities and stockholders' equity $ 80,192 $ 53,662
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SEGMENT INFORMATION
YEAR ENDED DECEMBER 31,
2004 2003 % CHANGE
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(Restated)
REVENUES:
Casing services $ 10,391 $ 10,037 4%
Directional drilling services 24,787 16,008 55%
Compressed air drilling services 11,561 6,679 73%
Other services 987 -- NM
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Total revenues $ 47,726 $ 32,724 46%
OPERATING INCOME (LOSS):
Casing services $ 3,217 $ 3,628 (11)%
Directional drilling services 3,061 1,103 178%
Compressed air drilling services 1,169 17 NM
Other services (67) -- NM
General corporate (3,153) (2,123) 49%
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Total income (loss) from operations $ 4,227 $ 2,625 61%
ASSETS:
Casing services $ 21,197 $ 18,191 17%
Directional drilling services 14,166 1,529 823%
Compressed air drilling services 29,147 22,735 28%
Other services 7,097 -- NM
General corporate 8,585 1,207 611%
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Total assets $ 80,192 $ 53,662 50%
NM = not meaningful