Complete Production Services, Inc. (NYSE:CPX) today
reported second quarter 2006 net income of $27.2 million, or $0.39 per
diluted share on revenue of $275.4 million compared to net income of
$8.4 million or $0.17 per diluted share on revenue of $168.6 million
for the second quarter of 2005. This represents a 224% increase in net
income and a 63% increase in revenue over the same period in 2005.
Operating income of $51.4 million increased 114% year-over-year
resulting in an operating profit margin of 18.7% as compared to 14.2%
in the prior year quarter. Segment revenues increased on a
year-over-year basis with Completion and Production services up 62%
compared to the second quarter of 2005, Drilling Services up 78%, and
Product Sales up 52% over the same period.
"Quarter two results reflect the impact of our growth strategy.
Revenues, earnings and margins increased year-over-year due to higher
demand for our services, improved pricing, our investment in capital
equipment and selective acquisitions," commented Joe Winkler,
President and Chief Executive Officer. "As expected, our second
quarter results were impacted by the typical seasonal decline in the
Canadian market."
The Company continued its investment program during the second
quarter investing $73.5 million in capital equipment. In addition, the
Company closed two acquisitions at and subsequent to quarter end for
total consideration of approximately $31 million cash. These
transactions will augment future growth, with one a rental and fishing
company having a presence in the Fayetteville Shale, and the other a
fluid handling operation in East Texas. "It is exciting to see our
acquisition program result in two additions in the last 30 days and we
expect to be able to announce more in the future," added Mr. Winkler.
"Our outlook is positive as we see continued strong demand for our
services. We expect to benefit from the various price initiatives
implemented during the course of the year, our investment in capital
equipment and our acquisition program. Year to date, we have spent
$132.4 million on capital equipment, the full benefit of which will
occur in the second half of 2006 and beyond. Based upon the demand for
our services, we are increasing our 2006 capital equipment forecast by
approximately $30.0 million to approximately $230.0 million," said Mr.
Winkler.
As a result of the recent initial public offering, the Company
reduced total debt to approximately $441 million and ended the quarter
with cash and cash investments of approximately $123 million.
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 second quarter 2006 results on
Friday, July 28, 2006, at 9:00 a.m. Central Time. To participate in
the live conference call, dial 866-362-4829 at least ten minutes prior
to the scheduled start of the call. When prompted, provide the
passcode: 94880369. The conference call will be available for replay
beginning at 12:00 p.m., July 28, 2006, and will be available until
August 4, 2006. To access the conference call replay, please call
888-286-8010 and use the passcode: 63976543. 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 before interest expense, taxes, depreciation and
amortization and minority interest. EBITDA is not a substitute for
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.
-0-
*T
Complete Production Services, Inc.
Consolidated Statements of Operations
For the Quarters and Six Months Ended June 30, 2006 and 2005
(in thousands)
Quarter Ended June 30, Six Months Ended June 30,
------------------------- -------------------------
2006 2005 2006 2005
------------ ------------ ------------ ------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenue:
Services $234,420 $141,628 $469,539 $273,615
Products 41,006 27,011 81,623 56,275
------------ ------------ ------------ ------------
275,426 168,639 551,162 329,890
Cost of services 139,323 87,440 274,834 167,110
Cost of products 30,949 20,294 61,322 42,877
General and
administrative
expense 36,627 26,130 74,242 48,016
Depreciation and
amortization 17,125 10,804 32,852 20,578
------------ ------------ ------------ ------------
224,024 144,668 443,250 278,581
------------ ------------ ------------ ------------
Operating
income 51,402 23,971 107,912 51,309
Interest expense 9,488 5,634 20,170 9,649
Interest income 1,015 - 1,022 -
------------ ------------ ------------ ------------
Income from
continuing
operations
before minority
interest and
taxes 42,929 18,337 88,764 41,660
Minority
interest, net of
tax (161) 3,354 144 6,566
------------ ------------ ------------ ------------
Income before
taxes 43,090 14,983 88,620 35,094
Tax provision 15,936 6,607 33,353 14,963
------------ ------------ ------------ ------------
Net income $27,154 $8,376 $55,267 $20,131
============ ============ ============ ============
Earnings per
share:
Basic earnings
per share $0.40 $0.19 $0.90 $0.47
------------ ------------ ------------ ------------
Diluted
earnings per
share $0.39 $0.17 $0.86 $0.43
------------ ------------ ------------ ------------
Weighted average
shares
outstanding:
Basic 67,067 43,471 61,366 42,477
Diluted 69,065 48,378 63,953 47,126
Complete Production Services, Inc.
Condensed Consolidated Balance Sheets
As of June 30, 2006 and December 31, 2005
(in thousands)
June 30, December 31,
2006 2005
------------ ------------
(unaudited) (unaudited)
Assets:
Current assets $395,610 $247,486
Property, plant and equipment, net 500,864 384,580
Goodwill 346,684 298,297
Other long-term assets 7,363 7,290
------------ ------------
Total assets 1,250,521 937,653
============ ============
Liabilities and Stockholders' Equity:
Current liabilities 125,935 120,203
Long-term debt 434,898 509,990
Long-term deferred tax liabilities 59,682 54,334
Minority interest 2,614 2,365
------------ ------------
Total liabilities and minority
interest 623,129 686,892
Common stock 698 555
Treasury stock (202) (202)
Additional paid-in capital 535,242 220,786
Deferred compensation - (3,803)
Retained earnings 72,152 16,885
Cumulative translation adjustment 19,502 16,540
------------ ------------
Total stockholders' equity 627,392 250,761
------------ ------------
Total liabilities and stockholders'
equity $1,250,521 $937,653
============ ============
Cash Flow Data
For the Six Months Ended June 30, 2006
(in thousands)
June 30,
2006
------------
(unaudited)
Cash flows provide by/(used for):
Operating activities $73,440
Investing activities:
Capital expenditures $(132,423)
Other investing activities $(145,090)
Financing activities $203,612
Complete Production Services, Inc.
Consolidated Segment Information
For the Quarters Ended June 30, 2006 and 2005, and March 31, 2006
and Six Months Ended June 30, 2006 and 2005
(in thousands)
Quarter Ended
--------------------------------------
June 30, June 30, March 31,
2006 2005 2006
------------ ------------ ------------
(unaudited) (unaudited) (unaudited)
Revenue:
Completion and production
services $183,270 $112,866 $191,089
Drilling services 51,150 28,762 44,030
Products 41,006 27,011 40,617
------------ ------------ ------------
Total revenues $275,426 $168,639 $275,736
============ ============ ============
EBITDA: (1)
Completion and production
services $49,091 $23,739 $54,609
Drilling services 18,236 8,647 16,020
Products 5,188 3,516 5,547
Corporate and other (3,988) (1,127) (3,932)
------------ ------------ ------------
Total EBITDA $68,527 $34,775 $72,244
============ ============ ============
EBITDA as a % of Revenue:
Completion and production
services 26.8% 21.0% 28.6%
Drilling services 35.7% 30.1% 36.4%
Products 12.7% 13.0% 13.7%
Total 24.9% 20.6% 26.2%
Six Months Ended June 30,
-------------------------
2006 2005
------------ ------------
(unaudited) (unaudited)
Revenue:
Completion and production
services $374,359 $218,259
Drilling services 95,180 55,356
Products 81,623 56,275
------------ ------------
Total revenues $551,162 $329,890
============ ============
EBITDA: (1)
Completion and production
services $103,701 $49,848
Drilling services 34,256 16,519
Products 10,734 7,453
Corporate and other (7,927) (1,933)
------------ ------------
Total EBITDA $140,764 $71,887
============ ============
EBITDA as a % of Revenue:
Completion and production
services 27.7% 22.8%
Drilling services 36.0% 29.8%
Products 13.2% 13.2%
Total 25.5% 21.8%
(1) EBITDA is a non-GAAP measure used by management, as defined in the
last paragraph of this press release.
Complete Production Services, Inc.
Reconciliation of EBITDA to the Most Comparable GAAP Measure
For the Quarters Ended June 30, 2006 and 2005 and March 31, 2006
and the Six Months Ended June 30, 2006 and 2005
(unaudited, in thousands)
Completion
& Production Drilling Corporate
Services Services Products & Other Total
------------ --------- --------- ---------- ---------
Quarter Ended
June 30, 2006:
---------------
EBITDA $49,091 $18,236 $5,188 $(3,988) $68,527
Depreciation &
amortization 14,001 2,284 575 265 17,125
------------ --------- --------- ---------- ---------
Operating
Income
(loss) $35,090 $15,952 $4,613 $(4,253) $51,402
============ ========= ========= ========== =========
Quarter Ended
June 30, 2005:
---------------
EBITDA $23,739 $8,647 $3,516 $(1,127) $34,775
Depreciation &
amortization 8,634 1,322 369 479 10,804
------------ --------- --------- ---------- ---------
Operating
Income
(loss) $15,105 $7,325 $3,147 $(1,606) $23,971
============ ========= ========= ========== =========
Quarter Ended
March 31,
2006:
---------------
EBITDA $54,609 $16,020 $5,547 $(3,932) $72,244
Depreciation &
amortization 12,932 2,018 503 274 15,727
------------ --------- --------- ---------- ---------
Operating
Income
(loss) $41,677 $14,002 $5,044 $(4,206) $56,517
============ ========= ========= ========== =========
Six Months
Ended June 30,
2006:
----------------
EBITDA $103,701 $34,256 $10,734 $(7,927) $140,764
Depreciation &
amortization 26,835 4,302 1,078 637 32,852
------------ --------- --------- ---------- ---------
Operating
Income
(loss) $76,866 $29,954 $9,656 $(8,564) $107,912
============ ========= ========= ========== =========
Six Months
Ended June 30,
2005:
----------------
EBITDA $49,848 $16,519 $7,453 $(1,933) $71,887
Depreciation &
amortization 16,750 2,537 745 546 20,578
------------ --------- --------- ---------- ---------
Operating
Income
(loss) $33,098 $13,982 $6,708 $(2,479) $51,309
============ ========= ========= ========== =========
*T
