EX-99.1 2 h43684exv99w1.htm PRESS RELEASE exv99w1
 

EXHIBIT 99.1
(COMPLETE LOGO)
Complete Production Services, Inc. Reports
Fourth Quarter Earnings Per Share of $0.61
HOUSTON, February 15, 2007 (BUSINESS WIRE) — Complete Production Services, Inc. (NYSE: CPX) today reported record revenue, net income and earnings per diluted share from continuing operations for the fourth quarter of 2006. Revenue for the quarter increased 64% to $363.5 million compared to $221.6 million in the fourth quarter of 2005. Net income from continuing operations for the quarter was $44.1 million, or $0.61 per diluted share, up 196% and 135%, respectively, compared to the fourth quarter of 2005.
Operating income for the quarter increased to $77.0 million, representing an operating profit margin of 21.2%. This compares to $33.9 million and 15.3% in the prior year. Operating income for the year increased to $254.7 million from $112.2 million in the prior year, as operating profit margin rose to 21.0% from 15.6% in 2005. Incremental operating profit margin for the fourth quarter and full year were 30.4% and 28.9%, respectively.
Full year 2006 revenue from continuing operations was $1.2 billion, up 68% over the prior year, while net income from continuing operations was $137.3 million, up 170% compared to the prior year. Full year 2006 earnings per diluted share from continuing operations was $2.02 per share versus $1.00 per share in 2005. As previously disclosed, the Company sold its manufacturing, fabrication and unrelated production enhancement products business in Canada during the fourth quarter of 2006. Accordingly, these operations are accounted for as discontinued operations for each period presented within this release.
“2006 was an outstanding year for Complete Production Services. Our strategy of balanced growth within targeted basins of North America is evident in our performance,” said Joe Winkler, President and Chief Executive Officer of Complete. “Approximately 75% of our $492 million in annual revenue growth was from organic initiatives with the balance from selective acquisitions.”
“During the year we invested in excess of $240 million in growth capital, taking advantage of our solid market position in the resource plays to quickly and efficiently deploy new equipment to meet our customer’s demands for our services. In addition, we completed approximately $420 million in acquisitions to strengthen our already existing position, expand our geographic reach and to enter new service lines. Although harsh winter weather and holidays slowed our year end pace, our business performed quite well during Quarter 4. Overall, we are very pleased with the outcome of our 2006 strategic initiatives and believe they have set the foundation for our performance in 2007.”

 

 

Earnings before interest, taxes, depreciation and amortization (EBITDA, as defined below) totals $102.7 million for the current quarter, up 108% compared to the fourth quarter of 2005. As a percentage of revenue, EBITDA was 28.3% in the current quarter, 22.2% in the fourth quarter of 2005 and 29.0% in the third quarter of 2006.
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 fourth quarter 2006 results on Friday, February 16 at 10:00 a.m. Central Time. To participate in the live conference call, dial (866) 362-5158 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 21153858. The conference call will be available for replay beginning at 1:00 p.m., February 16, 2007, and will be available until February 23, 2007. To access the conference call replay, please call (888) 286-8010 and use the passcode: 87590401. 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 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

 

 

Complete Production Services, Inc.
Unaudited Consolidated Statements of Operations
For the Quarters and Years Ended December 31, 2006 and 2005
(in thousands, except per share data)
                                 
    Quarter Ended     Year Ended  
    December 31,     December 31,  
    2006     2005     2006     2005  
    (unaudited)     (unaudited)     (unaudited)     (unaudited)  
Revenue:
                                
Services
   $ 331,218     $ 199,251     $ 1,088,748     $ 639,421  
Products
     32,290       22,313       123,676       80,768  
 
                        
 
     363,508       221,564       1,212,424       720,189  
 
                                
Cost of services
     187,257       122,087       622,786       393,856  
Cost of products
     21,137       14,486       88,175       56,862  
General and administrative expense
     52,249       35,255       167,334       108,766  
Depreciation and amortization
     25,854       15,837       79,465       48,510  
 
                        
 
     286,497       187,665       957,760       607,994  
 
                        
 
                                
Operating income
     77,011       33,899       254,664       112,195  
 
                                
Interest expense
     11,447       8,844       40,759       24,460  
Interest income
     (109 )     —       (1,387 )     —  
Write-off of deferred financing costs
     170       471       170       3,315  
 
                        
 
                                
Income from continuing operations before minority interest and taxes
     65,503       24,584       215,122       84,420  
 
                                
Minority interest, net of tax
     (72 )     4       (49 )     384  
 
                        
 
                                
Income from continuing operations before taxes
     65,575       24,580       215,171       84,036  
 
                                
Tax provision
     21,477       9,707       77,888       33,115  
 
                        
 
                                
Income from continuing operations
     44,098       14,873       137,283       50,921  
 
                                
Income (loss) from discontinued operations (net of tax)
     (518 )     1,077       1,803       2,941  
 
                        
 
                                
Net income
   $ 43,580     $ 15,950     $ 139,086     $ 53,862  
 
                        
 
                                
Basic earnings per share:
                                
Continuing Operations
   $ 0.62     $ 0.27     $ 2.09     $ 1.09  
Discontinued Operations
   $ (0.00 )   $ 0.02     $ 0.02     $ 0.07  
 
                        
 
   $ 0.62     $ 0.29     $ 2.11     $ 1.16  
 
                        
 
                                
Diluted earnings per share:
                                
Continuing Operations
   $ 0.61     $ 0.26     $ 2.02     $ 1.00  
Discontinued Operations
   $ (0.01 )   $ 0.02     $ 0.02     $ 0.06  
 
                        
 
   $ 0.60     $ 0.28     $ 2.04     $ 1.06  
 
                        
 
                                
Weighted average shares outstanding:
                                
Basic
     70,670       55,361       65,843       46,603  
Diluted
     72,492       57,360       68,075       50,656  

 

 

Complete Production Services, Inc.
Unaudited Condensed Consolidated Balance Sheets
As of December 31, 2006 and 2005
(in thousands)
                 
    December 31,     December 31,  
    2006     2005  
    (unaudited)     (unaudited)  
Assets:
                
Current assets
   $ 390,640     $ 228,818  
Property, plant and equipment, net
     771,703       383,707  
Goodwill
     552,671       293,651  
Other long-term assets
     25,310       6,558  
Discontinued operations
     —       24,919  
 
            
Total assets
     1,740,324       937,653  
 
            
 
                
Liabilities and Stockholders’ Equity:
                
Current liabilities
     175,401       114,753  
Long-term debt
     750,577       509,981  
Long-term deferred tax liabilities
     76,802       54,084  
Minority interest
     2,323       2,365  
Discontinued operations
     —       5,709  
 
            
Total liabilities and minority interest
     1,005,103       686,892  
 
                
Common stock
     714       555  
Treasury stock
     (202 )     (202 )
Additional paid-in capital
     563,006       220,786  
Deferred compensation
     —       (3,803 )
Retained earnings
     155,971       16,885  
Cumulative translation adjustment
     15,732       16,540  
 
            
Total stockholders’ equity
     735,221       250,761  
 
            
Total liabilities and stockholders’ equity
   $ 1,740,324     $ 937,653  
 
            

 

 

Complete Production Services, Inc.
Unaudited Consolidated Segment Information
For the Quarters Ended December 31, 2006 and 2005 and September 30, 2006
and Years Ended December 31, 2006 and 2005
(in thousands)
                         
    Quarter Ended  
    December 31,     December 31,     September 30,  
    2006     2005     2006  
 
   (unaudited)   (unaudited)   (unaudited)
Revenue:
                        
Completion and production services
   $ 269,041     $ 159,150     $ 230,093  
Drilling services
     62,177       40,101       57,898  
Products
     32,290       22,313       34,043  
 
                  
Total revenues
   $ 363,508     $ 221,564     $ 322,034  
 
                  
 
                        
EBITDA: (1)
                        
Completion and production services
   $ 80,705     $ 34,475     $ 73,003  
Drilling services
     23,176       14,837       21,110  
Products
     6,257       4,163       4,677  
Corporate and other
     (7,443 )     (4,210 )     (5,551 )
 
                  
Total EBITDA
   $ 102,695     $ 49,265     $ 93,239  
 
                  
 
                        
EBITDA as a % of Revenue:
                        
Completion and production services
     30.0 %     21.7 %     31.7 %
Drilling services
     37.3 %     37.0 %     36.5 %
Products
     19.4 %     18.7 %     13.7 %
Total
     28.3 %     22.2 %     29.0 %
                 
    Year Ended December 31,  
    2006     2005  
    (unaudited)     (unaudited)  
Revenue:
                
Completion and production services
   $ 873,493     $ 510,304  
Drilling services
     215,255       129,117  
Products
     123,676       80,768  
 
            
Total revenues
   $ 1,212,424     $ 720,189  
 
            
 
                
EBITDA: (1)
                
Completion and production services
   $ 257,630     $ 114,033  
Drilling services
     78,543       42,336  
Products
     18,708       12,634  
Corporate and other
     (20,922 )     (11,613 )
 
            
Total EBITDA
   $ 333,959     $ 157,390  
 
            
 
                
EBITDA as a % of Revenue:
                
Completion and production services
     29.5 %     22.3 %
Drilling services
     36.5 %     32.8 %
Products
     15.1 %     15.6 %
Total
     27.5 %     21.9 %
 
(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 December 31, 2006 and 2005 and September 30, 2006
and the Years Ended December 31, 2006 and 2005
(unaudited, in thousands)
                                         
    Completion                            
    & Production     Drilling             Corporate &        
    Services     Services     Products     Other     Total  
Quarter Ended December 31, 2006:
                                        
EBITDA
   $ 80,705     $ 23,176     $ 6,257     $ (7,443 )   $ 102,695  
Depreciation & amortization
     21,694       3,439       430       291       25,854  
Write-off of deferred financing costs
     —       —       —       (170 )     (170 )
 
                              
Operating Income (loss)
   $ 59,011     $ 19,737     $ 5,827     $ (7,564 )   $ 77,011  
 
                              
 
                                        
Quarter Ended December 31, 2005:
                                        
EBITDA
   $ 34,475     $ 14,837     $ 4,163     $ (4,210 )   $ 49,265  
Depreciation & amortization
     13,049       1,698       275       815       15,837  
Write-off of deferred financing costs
     —       —       —       (471 )     (471 )
 
                              
Operating Income (loss)
   $ 21,426     $ 13,139     $ 3,888     $ (4,554 )   $ 33,899  
 
                              
 
                                        
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  
 
                              
 
                                        
Year Ended December 31, 2006
                                        
EBITDA
   $ 257,630     $ 78,543     $ 18,708     $ (20,922 )   $ 333,959  
Depreciation & amortization
     65,317       10,599       1,943       1,606       79,465  
Write-off of deferred financing costs
     —       —       —       (170 )     (170 )
 
                              
Operating Income (loss)
   $ 192,313     $ 67,944     $ 16,765     $ (22,358 )   $ 254,664  
 
                              
 
                                        
Year Ended December 31, 2005
                                        
EBITDA
   $ 114,033     $ 42,336     $ 12,634     $ (11,613 )   $ 157,390  
Depreciation & amortization
     40,149       5,666       1,250       1,445       48,510  
Write-off of deferred financing costs
     —       —       —       (3,315 )     (3,315 )
 
                              
Operating Income (loss)
   $ 73,884     $ 36,670     $ 11,384     $ (9,743 )   $ 112,195