Exhibit 99.1
FOR IMMEDIATE RELEASE
BLACK WARRIOR WIRELINE CORP. ANNOUNCES IMPROVED OPERATING RESULTS AND EXPIRATION
OF LETTER OF INTENT
TUESDAY, AUGUST 16, 2005
Columbus, Mississippi. Black Warrior Wireline Corp. (OTCBB-BWWL) ("Black
Warrior" or the "Company") today reported improved operating results for both
the second fiscal quarter of 2005 and the six months ended June 30, 2005 as
compared to the same periods of 2004. The Company also announced that it has
determined that it is unable to reach a definitive merger agreement with Centre
Partners Management LLC and Centre Southwest Partners LLC on terms acceptable to
the Company and the letter of intent entered into with them dated April 28, 2005
and its exclusivity provisions have expired.
Revenues for the three months ended June 30, 2005 of $19,709,482 increased by
$6,539,134 over revenues for the three months ended June 30, 2004 of $13,170,348
or an increase of approximately 50%. Revenues for the six months ended June 30,
2005 of $34,157,254 increased by $10,447,586 over revenues for the six months
ended June 30, 2004 of $23,709,668 or an increase of approximately 44%. Income
before discontinued operations was $3,713,570 and $4,359,874 for the three and
six months ended June 30, 2005 compared with a loss before discontinued
operations of $(266,031) and $(1,941,653) for the three and six months ended
June 30, 2004. For the three and six months ended June 30, 2005, Black Warrior
had net income of $3,713,570 and $4,359,874, respectively, compared with net
losses of $(420,742) and $(3,432,821), respectively, for the three and six
months ended June 30, 2004. The net losses in 2004 included losses from
operations of the discontinued directional drilling segment of $(154,711) and
$(1,491,168), respectively, for the three and six month periods of 2004. Net
income per share, basic and diluted, was $0.30 during the three months ended
June 30, 2005 and $0.35 during the six months ended June 30, 2005. For the three
and six months ended June 30, 2004, the net loss per share, basic and diluted
was $(0.03) and $(0.28), respectively. Excluded from the computation of earnings
per share are 136,820,709 shares at June 30, 2005 and 153,039,851 shares at June
30, 2004 issuable on exercise or conversion of outstanding options, warrants and
convertible notes of which 136,815,709 shares and 153,034,851 shares,
respectively are issuable at an exercise or conversion price of $0.75 per share,
and the remaining shares are exercisable on exercise of options at higher
exercise prices up to $2.63 per share. These shares were not included in the
computation in either 2005 or 2004 because the effect would have been
anti-dilutive.
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EBITDA* for the three months ended June 30, 2005 of $6,243,218 increased by
$3,782,739 over EBITDA for the three months ended June 30, 2004 of $2,460,479 or
an increase of approximately 65%. EBITDA for the six months ended June 30, 2005
of $9,124,209 increased by $5,850,643 over EBITDA for the six months ended June
30, 2004 of $3,273,566 or an increase of approximately 179%.
Management attributed the improved performance to an increase in demand in the
oilfield service sector. Bill Jenkins, President and CEO, commented, "Our
operating results for the first two quarters of 2005 have shown significant
improvements and we expect continued improved performance through the balance of
2005 as compared to 2004."
Black Warrior is an oil and gas service company providing services to oil and
gas well operators primarily in the United States and in the Gulf of Mexico. It
is headquartered in Columbus, Mississippi. Additional information may be
obtained by contacting Ron Whitter at (662) 329-1047.
* See attached Reconciliation of Non-GAAP Financial Measures
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Black Warrior Wireline Corp.
Summarized Financial Information
(In thousands, except for per share income (loss) data)
THREE MONTHS SIX MONTHS
ENDED ENDED
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
-------------- -------------- -------------- --------------
INCOME STATEMENT DATA
Revenues $ 19,709 $ 13,170 $ 34,157 $ 23,710
Expenses
Operating Costs $ 11,222 $ 8,251 $ 20,629 $ 15,865
Selling, general and administrative
expenses $ 2,245 $ 2,459 $ 4,404 $ 4,571
Depreciation and amortization $ 1,279 $ 1,538 $ 2,563 $ 2,737
EBITDA * $ 6,243 $ 2,460 $ 9,124 $ 3,274
Net income (loss) $ 3,714 $ (421) $ 4,360 $ (3,433)
Per Share Data
Net Income (loss) - basic and diluted $ 0.30 $ (0.03) $ 0.35 $ (0.28)
Weighted average shares outstanding -
Basic and diluted 12,499,528 12,499,528 12,499,528 12,499,528
DECEMBER 31,
JUNE 30, 2005 2004
------------- ------------
BALANCE SHEET DATA
Total current assets $ 18,707 $ 15,665
Total assets $ 35,008 $ 30,109
Total current
liabilities $ 8,317 $ 8,789
Total Stockholders' deficit $(20,849) $(25,209)
Total liabilities and stockholders' deficit $ 35,008 $ 30,109
* See attached Reconciliation of Non-GAAP Financial Measures
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Reconciliation of Non-GAAP Financial Measures
To fully assess Black Warrior's operating results, management believes that,
although not prescribed under generally accepted accounting principals ("GAAP"),
EBITDA is an appropriate measure of Black Warrior's ability to satisfy capital
expenditure obligations and working capital requirements. EBITDA is a non-GAAP
financial measure as defined under SEC rules. Black Warrior's EBITDA should not
be considered in isolation or as a substitute for other financial measurements
prepared in accordance to GAAP or as a measure of the Company's profitability or
liquidity. As EBITDA excludes some, but not all, items that affect net income
and may vary among companies, the EBITDA presented below may not be comparable
to similarly titled measures of other companies. Management believes that
operating income (loss) calculated in accordance with GAAP is the most directly
comparable measure most similar to EBITDA.
EBITDA is defined as net income (loss) plus interest expense, depreciation and
amortization, deferred income taxes and other non-cash items. The following
table provides a reconciliation of EBITDA to income (loss) from operations for
the periods presented (in thousands).
Three months Six months
ended June 30, ended June 30,
2005 2004 2005 2004
------------ ----------- ---------- -----------
Reconciliation of income from
continuing operations
Income from continuing operations $ 4,964 $ 922 $ 6,561 $ 536
Depreciation and amortization 1,279 1,538 2,563 2,737
--------- -------- ------- --------
EBITDA $ 6,243 $ 2,460 $ 9,124 $ 3,273
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CAUTIONARY STATEMENT FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995.
WITH THE EXCEPTION OF HISTORICAL MATTERS, THE MATTERS DISCUSSED IN THIS
PRESS RELEASE ARE "FORWARD-LOOKING STATEMENTS" AS DEFINED UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, THAT INVOLVE RISKS AND UNCERTAINTIES. THE
COMPANY INTENDS THAT THE FORWARD-LOOKING STATEMENTS HEREIN BE COVERED BY THE
SAFE-HARBOR PROVISIONS FOR FORWARD-LOOKING STATEMENTS CONTAINED IN THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, AND THIS STATEMENT IS INCLUDED FOR
THE PURPOSE OF COMPLYING WITH THESE SAFE-HARBOR PROVISIONS. FORWARD-LOOKING
STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THE MATTERS DESCRIBED HEREIN. SUCH
FORWARD-LOOKING STATEMENTS RELATE TO THE COMPANY'S ABILITY TO GENERATE REVENUES
AND ATTAIN AND MAINTAIN IMPROVED OPERATING RESULTS, PROFITABILITY AND CASH FLOW,
THE STABILITY AND LEVEL OF PRICES FOR OIL AND NATURAL GAS, PREDICTIONS AND
EXPECTATIONS AS TO THE FLUCTUATIONS IN THE LEVELS OF OIL AND NATURAL GAS PRICES,
PRICING IN THE OIL AND NATURAL GAS SERVICES INDUSTRY AND THE WILLINGNESS OF
CUSTOMERS TO COMMIT FOR OIL AND NATURAL GAS WELL SERVICES, THE ABILITY OF THE
COMPANY TO COMPLETE OR ENGAGE IN A STRATEGIC TRANSACTION, INCLUDING ANY POSSIBLE
RECAPITALIZATION OR RESTRUCTURING OF ITS BALANCE SHEET, INCLUDING A POSSIBLE
REFINANCING OF ITS OUTSTANDING INDEBTEDNESS, A MERGER OR SALE OF ITS ASSETS OR
ENGAGE IN ANOTHER BUSINESS COMBINATION TRANSACTION, THE ABILITY OF THE COMPANY
TO RAISE DEBT OR EQUITY CAPITAL TO RECAPITALIZE OR RESTRUCTURE ITS BALANCE SHEET
AND TO OBTAIN ADDITIONAL FINANCING WHEN AND IF REQUIRED, THE COMPANY'S ABILITY
TO MAINTAIN COMPLIANCE WITH THE COVENANTS OF ITS VARIOUS LOAN DOCUMENTS AND
OTHER AGREEMENTS PURSUANT TO WHICH SECURITIES, INCLUDING DEBT INSTRUMENTS, HAVE
BEEN ISSUED AND OBTAIN WAIVERS OF VIOLATIONS THAT OCCUR AND CONSENTS TO
AMENDMENTS AS REQUIRED, THE COMPANY'S ABILITY TO IMPLEMENT AND, IF APPROPRIATE,
EXPAND A COST-CUTTING PROGRAM, IF REQUIRED, THE ABILITY OF THE COMPANY TO
COMPETE IN THE PREMIUM OIL AND NATURAL GAS SERVICES MARKET, THE ABILITY OF THE
COMPANY TO RE-DEPLOY ITS EQUIPMENT AMONG REGIONAL OPERATIONS AS REQUIRED, AND
THE ABILITY OF THE COMPANY TO PROVIDE SERVICES USING STATE OF THE ART TOOLING.
THE INABILITY OF THE COMPANY TO MEET THESE OBJECTIVES OR REQUIREMENTS OR THE
CONSEQUENCES ON THE COMPANY FROM ADVERSE DEVELOPMENTS IN GENERAL ECONOMIC
CONDITIONS, CHANGES IN CAPITAL MARKETS, ADVERSE DEVELOPMENTS IN THE OIL AND
NATURAL GAS INDUSTRY, DEVELOPMENTS IN INTERNATIONAL RELATIONS AND THE
COMMENCEMENT OR EXPANSION OF HOSTILITIES BY THE UNITED STATES OR OTHER
GOVERNMENTS AND EVENTS OF TERRORISM, DECLINES AND FLUCTUATIONS IN THE PRICES FOR
OIL AND NATURAL GAS, AND OTHER FACTORS COULD HAVE A MATERIAL ADVERSE EFFECT ON
THE COMPANY. MATERIAL DECLINES IN THE PRICES FOR OIL AND NATURAL GAS CAN BE
EXPECTED TO ADVERSELY AFFECT THE COMPANY'S REVENUES. THE COMPANY CAUTIONS
READERS THAT VARIOUS RISK FACTORS COULD CAUSE THE COMPANY'S OPERATING RESULTS
AND FINANCIAL CONDITION TO DIFFER MATERIALLY FROM THOSE EXPRESSED IN ANY
FORWARD-LOOKING STATEMENTS MADE BY THE COMPANY AND COULD ADVERSELY AFFECT THE
COMPANY'S FINANCIAL CONDITION AND ITS ABILITY TO PURSUE ITS BUSINESS STRATEGY
AND PLANS. READERS SHOULD REFER TO THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND
THE RISK FACTORS DISCLOSED THEREIN.
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