EX-99.1 2 h48418exv99w1.htm PRESS RELEASE exv99w1
 

EXHIBIT 99.1
(Complete Production Services, Inc. Logo)
Complete Production Services, Inc. Second Quarter
Earnings Increase 65%
HOUSTON, July 24, 2007 (Business Wire) — Complete Production Services, Inc. (NYSE: CPX) today reported a 65% increase in second quarter income from continuing operations to $43.8 million, or $0.60 per diluted share, compared with income from continuing operations of $26.6 million, or $0.39 per diluted share for the second quarter of 2006. Revenue for the quarter was $410.7 million, up 55% over the second quarter of 2006. Operating income increased to $83.9 million for the quarter, up 66% compared to the second quarter of 2006 operating income, with operating income margins at 20.4% and 19.1% for the quarters, respectively.
“I am pleased to report another quarter of solid results for Complete,” noted Joe Winkler, Chairman and Chief Executive Officer, “especially in light of the stronger than average seasonal downturn in Canada, and the heavy rainfall and flooding encountered during the quarter in some of our most active areas.”
Second quarter 2007 earnings before interest, taxes, depreciation and amortization (EBITDA, as defined below), totaled $117.4 million, up 74% over the prior year. EBITDA margins increased to 28.6% in the quarter, up from 25.5% in the second quarter of 2006 due primarily to strong performance in the Completion and Production Services segment.
Revenues for the Completion and Production Services segment for the second quarter of 2007 were $307.2 million, up 68% over the prior year, with EBITDA of $101.2 million compared to $49.3 million for the second quarter of the prior year. EBITDA margins for the segment were 32.9%, up from 26.9% in the prior year quarter. “The significant revenue growth and excellent margin contributions were the result of our long-term strategies to selectively position ourselves in basins which we believe will have the strongest activity levels and to invest in the best people and equipment,” commented Mr. Winkler. “We will continue to execute our plan throughout the remainder of 2007.”
Drilling Services revenue was $60.2 million for the second quarter of 2007, up 18% over the prior year quarter with EBITDA margins of 31.6%, and Product Sales revenue increased 44% to $43.3 million for the second quarter of 2007, with EBITDA margins of 12.6%.
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 second quarter 2007 results on Wednesday, July 25 at 11:00 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: 19022240. The conference call will be available for replay beginning at 2:00 p.m., July 25, 2007, and will be available until August 1, 2007. To access the conference call replay, please call (888) 286-8010 and use the passcode: 65835333. 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 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
Jose Bayardo
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 Six Months Ended June 30, 2007 and 2006
(in thousands except per share data)
                                 
    Quarter Ended     Six Months Ended  
    June 30,     June 30,  
    2007     2006     2007     2006  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Revenue:
                                
Services
   $ 367,405     $ 234,420     $ 733,440     $ 469,539  
Products
     43,310       30,116       84,342       57,343  
 
                        
 
     410,715       264,536       817,782       526,882  
 
                                
Cost of services
     204,364       139,323       407,877       274,834  
Cost of products
     33,654       21,942       65,465       41,825  
General and administrative expense
     55,344       35,752       105,914       72,198  
Depreciation and amortization
     33,492       16,999       62,462       32,606  
 
                        
 
     326,854       214,016       641,718       421,463  
 
                        
 
                                
Operating income
     83,861       50,520       176,064       105,419  
 
                                
Interest expense
     15,064       9,488       30,689       20,170  
Interest income
     (316 )     (1,015 )     (528 )     (1,022 )
 
                        
 
                                
Income from continuing operations before minority interest and taxes
     69,113       42,047       145,903       86,271  
 
                                
Minority interest, net of tax
     (205 )     (161 )     56       144  
 
                        
 
                                
Income from continuing operations before taxes
     69,318       42,208       145,847       86,127  
 
                                
Tax provision
     25,535       15,607       54,714       32,611  
 
                        
 
                                
Income from continuing operations
     43,783       26,601       91,133       53,516  
 
                                
Income from discontinued operations (net of tax)
     —       553       —       1,751  
 
                        
Net income
   $ 43,783     $ 27,154     $ 91,133     $ 55,267  
 
                        
 
                                
Basic earnings per share:
                                
Continuing operations
   $ 0.61     $ 0.40     $ 1.27     $ 0.87  
Discontinued operations
   $ —     $ (0.00 )   $ —     $ 0.03  
 
                        
 
   $ 0.61     $ 0.40     $ 1.27     $ 0.90  
 
                        
Diluted earnings per share:
                                
Continuing operations
   $ 0.60     $ 0.39     $ 1.25     $ 0.84  
Discontinued operations
   $ —     $ (0.00 )   $ —     $ 0.02  
 
                        
 
   $ 0.60     $ 0.39     $ 1.25     $ 0.86  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     71,916       67,067       71,711       61,366  
Diluted
     73,367       69,065       73,195       63,953  

 

 

Complete Production Services, Inc.
Condensed Consolidated Balance Sheets
As of June 30, 2007 and December 31, 2006
(in thousands)
                 
    June 30,     December 31,  
    2007     2006  
    (unaudited)     (unaudited)  
Assets:
                
Current assets
   $ 400,657     $ 390,640  
Property, plant and equipment, net
     927,484       771,703  
Goodwill
     571,644       552,671  
Other long-term assets
     28,338       25,310  
 
            
Total assets
     1,928,123       1,740,324  
 
            
 
                
Liabilities and Stockholders’ Equity:
                
Current liabilities
     134,703       161,405  
Long-term debt
     839,813       750,577  
Long-term deferred tax liabilities
     105,496       90,805  
Minority interest
     2,631       2,316  
 
            
Total liabilities and minority interest
     1,082,643       1,005,103  
 
                
Common stock
     721       714  
Treasury stock
     (202 )     (202 )
Additional paid-in capital
     574,273       563,006  
Retained earnings
     247,104       155,971  
Cumulative translation adjustment
     23,584       15,732  
 
            
Total stockholders’ equity
     845,480       735,221  
 
            
 
                
Total liabilities and stockholders’ equity
   $ 1,928,123     $ 1,740,324  
 
            

 

 

Complete Production Services, Inc.
Cash Flow Data
For the Six Months Ended June 30, 2007
(in thousands)
         
    June 30,  
    2007  
    (unaudited)  
Cash flows provide by/(used for):
        
Operating activities
   $ 139,924  
Investing activities:
        
Capital expenditures
   $ (194,479 )
Other investing activities
   $ (36,628 )
Financing activities
   $ 82,235  

 

 

Complete Production Services, Inc.
Consolidated Segment Information
For the Quarters Ended June 30, 2007 and 2006 and March 31, 2007
(in thousands, except percentages)
                         
    Quarter Ended  
    June 30,     June 30,     March 31,  
    2007     2006     2007  
    (unaudited)     (unaudited)     (unaudited)  
Revenue:
                        
Completion and production services
   $ 307,212     $ 183,270     $ 307,639  
Drilling services
     60,193       51,150       58,396  
Products
     43,310       30,116       41,032  
 
                  
Total revenues
   $ 410,715     $ 264,536     $ 407,067  
 
                  
 
                        
EBITDA: (1)
                        
Completion and production services
   $ 101,180     $ 49,291     $ 104,162  
Drilling services
     19,004       18,236       18,068  
Products
     5,440       3,988       5,157  
Corporate and other
     (8,271 )     (3,996 )     (6,214 )
 
                  
Total EBITDA
   $ 117,353     $ 67,519     $ 121,173  
 
                  
 
                        
EBITDA as a % of Revenue:
                        
Completion and production services
     32.9 %     26.9 %     33.9 %
Drilling services
     31.6 %     35.7 %     30.9 %
Products
     12.6 %     13.2 %     12.6 %
Total
     28.6 %     25.5 %     29.8 %
                 
    Six Months Ended June 30,  
    2007     2006  
    (unaudited)     (unaudited)  
Revenue:
                
Completion and production services
   $ 614,851     $ 374,359  
Drilling services
     118,589       95,180  
Products
     84,342       57,343  
 
            
Total revenues
   $ 817,782     $ 526,882  
 
            
 
                
EBITDA: (1)
                
Completion and production services
   $ 205,342     $ 103,901  
Drilling services
     37,072       34,257  
Products
     10,596       7,794  
Corporate and other
     (14,484 )     (7,927 )
 
            
Total EBITDA
   $ 238,526     $ 138,025  
 
            
 
                
EBITDA as a % of Revenue:
                
Completion and production services
     33.4 %     27.8 %
Drilling services
     31.3 %     36.0 %
Products
     12.6 %     13.6 %
Total
     29.2 %     26.2 %
 
(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 June 30, 2007 and 2006 and March 31, 2007
And the Six Months Ended June 30, 2007 and 2006
(unaudited, in thousands)
                                         
    Completion                            
    & Production     Drilling             Corporate &        
    Services     Services     Products     Other     Total  
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  
 
                              
 
                                        
Quarter Ended June 30, 2006:
                                        
EBITDA
   $ 49,291     $ 18,236     $ 3,988     $ (3,996 )   $ 67,519  
Depreciation & amortization
     14,001       2,284       449       265       16,999  
 
                              
Operating income (loss)
   $ 35,290     $ 15,952     $ 3,539     $ (4,261 )   $ 50,520  
 
                              
 
                                        
Quarter Ended March 31, 2007:
                                        
EBITDA
   $ 104,162     $ 18,068     $ 5,157     $ (6,214 )   $ 121,173  
Depreciation & amortization
     24,284       3,635       678       373       28,970  
 
                              
Operating income (loss)
   $ 79,878     $ 14,433     $ 4,479     $ (6,587 )   $ 92,203  
 
                              
 
                                        
Six Months Ended June 30, 2007:
                                        
EBITDA
   $ 205,342     $ 37,072     $ 10,596     $ (14,484 )   $ 238,526  
Depreciation & amortization
     52,418       7,652       1,380       1,012       62,462  
 
                              
Operating income (loss)
   $ 152,924     $ 29,420     $ 9,216     $ (15,496 )   $ 176,064  
 
                              
 
                                        
Six Months Ended June 30, 2006:
                                        
EBITDA
   $ 103,901     $ 34,257     $ 7,794     $ (7,927 )   $ 138,025  
Depreciation & amortization
     26,835       4,302       832       637       32,606  
 
                              
Operating income (loss)
   $ 77,066     $ 29,955     $ 6,962     $ (8,564 )   $ 105,419