EX-99.1 3 dex991.txt NEWS RELEASE DATED JANUARY 21, 2003 Exhibit 99.1 Investor Relations BJ Services Reports First Quarter Earnings HOUSTON, Jan. 21/PRNewswire-FirstCall/ -- BJ Services Company (NYSE: BJS; CBOE; PCX) reported net income of $33.5 million ($.21 per diluted share) for its fiscal quarter ended December 31, 2002. Financial Results (in millions, except per share amounts) 3 Months Ended 12/31/02 12/31/01 9/30/02 Revenue $473.1 $510.1 $473.7 Net Income $ 33.5 $ 66.9 $ 32.9 Diluted Earnings Per Share $ 0.21 $ 0.42 $ 0.21 Consolidated revenue was flat sequentially, with U.S./Mexico pressure pumping services up 1% and International pressure pumping services down 1%. Revenues from Other Oilfield Services were flat. Compared to prior year's first quarter, U.S./Mexico pressure pumping services revenues declined 22% and International pressure pumping services declined 4%. Revenues from Other Oilfield Services increased 65%, due primarily to the addition of the completion fluids and completion tools service lines acquired with OSCA in May 2002. Operating income margins were 11.5%, relatively unchanged from the preceding quarter. Compared to the prior year's first quarter, operating income margins declined from 20.6% due to market activity declines and price deterioration in U.S./Mexico pressure pumping services. Interest expense, net, increased $2.0 million from prior year's first quarter as a result of the issuance of convertible debt used to finance the OSCA acquisition. Capital spending for the quarter was $34.2 million. Cash at December 31, 2002 was $92.6 million. U.S./Mexico Pressure Pumping Revenues The Company's U.S./Mexico pressure pumping revenues increased 1% sequentially. Active drilling rigs averaged 847 (83% of which were drilling for natural gas) during the quarter, down 1% from an average of 853 rigs in the prior quarter. Compared to the first quarter of the prior fiscal year, revenue declined 22% due to a 16% decline in drilling activity, a 10% decline in workover activity and price deterioration. International Pressure Pumping Revenues The Company's international pressure pumping revenues were down 1% sequentially and 4% year-over-year. Outside of Canada, international revenues were down 2% sequentially and up 2% from prior year's first quarter. In Canada, revenues increased 2% sequentially and decreased 21% year-over-year. Average active drilling rigs in Canada increased 13% sequentially and 2% from prior year's first fiscal quarter. The activity increase was primarily in shallow drilling areas of Southern Canada as warm weather delayed rig movement into the North, an area with historically higher revenue per job. Latin America Pressure Pumping Revenues Despite the labor strike and political uncertainty in Venezuela, Latin America revenues increased 5% sequentially, primarily as a result of activity increases in Ecuador. Compared to the first quarter of last year, Latin America revenues declined 10%, as a result of depressed activity in Argentina caused by economic uncertainties and the strike related activity reduction in Venezuela. Revenue generated in Brazil from the Elkhorn River stimulation vessel acquired with OSCA, the Company's expansion into the coiled tubing market and increased fracturing activity helped to offset the revenue declines in Argentina and Venezuela. Eastern Hemisphere Pressure Pumping Revenues Revenues in the first quarter from Eastern Hemisphere operations declined 4% from the prior quarter, primarily due to activity delays in Russia resulting from extremely cold weather. Compared to the first quarter of the prior year, Eastern Hemisphere revenues increased 7% due to market share gains and increased activity in the Middle East and Asia Pacific regions. Other Oilfield Services Revenue from the Company's non-pressure pumping services lines (completion fluids, completion tools, process and pipeline services, tubular services and production chemicals) were flat sequentially as increases in the completion fluids and completion tools service lines were offset by declines in the process and pipeline and tubular services lines. Compared to the same quarter of the prior year, revenues increased 65% due primarily to the addition of completion fluids and completion tools service lines acquired with OSCA. In addition, revenues from process and pipeline services, tubular services and production chemicals increased 13%, 14%, and 3%, respectively, year-over-year. CEO Stewart Comments Chairman J.W. Stewart commented, "Based on gas market fundamentals, we remain optimistic about increased activity in the U.S. market, although we project that activity will continue at present levels until late Spring. Accordingly, we now believe earnings will be in the $.22 - .25 per share range for our second fiscal quarter and in the $1.05 - 1.15 per share range for our fiscal year ending September 30, 2003." Conference Call The Company has scheduled a conference call to discuss the results of today's earnings announcement. The call will begin at 9:00 a.m. Central Time. To participate in the conference call, please phone 719/457-2604, ten minutes prior to the start time and give the conference code number 413825. If you are unable to participate, the conference call will be available for playback three hours after its conclusion. The playback number is 719/457-0820 and the replay entry code is 413825. Playback will be available for three days. The conference call will also be available via real-time webcast at www.bjservices.com . Playback of the webcast will be available for seven days following the conference call. CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED) Three Months Ended 12/31/02 12/31/01 (In thousands, except per share data) Revenue $ 473,124 $ 510,061 Operating Expenses: Cost of sales and services 375,733 364,363 Research and engineering 9,314 8,814 Marketing 17,129 15,784 General and administrative 16,375 16,016 Total operating expenses $ 418,551 $404,977 Operating income 54,573 105,084 Interest expense (4,001) (1,896) Interest income 519 374 Other expense - net (1,506) (576) Income before income taxes 49,585 102,986 Income taxes 16,115 36,045 Net income $33,470 $66,941 Earnings Per Share: Basic $0.21 $0.42 Diluted $0.21 $0.42 Average Shares Outstanding: Basic 157,574 157,991 Diluted 160,684 160,839 Other Data: U.S./Mexico Pressure Pumping Revenue $ 211,982 $ 273,126 International Pressure Pumping Revenue 178,880 186,928 Other Oilfield Services Revenue 82,262 50,007 Depreciation and amortization 28,462 24,438 Capital expenditures 34,251 53,503 Interest-bearing debt 498,253 83,371 Cash 92,627 44,013 This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act that involve risks and uncertainties, including oil and gas price volatility, variations in demand for our services, operational and other risks, and other factors described from time to time in the Company's publicly available SEC reports, which could cause actual results to differ materially from those indicated in the forward-looking statements. In this press release, the words "expect," "estimate," "project," "believe," "achievable" and similar words are intended to identify forward-looking statements. BJ Services Company is a leading provider of pressure pumping and other oilfield services to the petroleum industry. (NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS) SOURCE BJ Services Company