HOUSTON, Jan. 24 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; CBOE; PCX) today reported that net income for the quarter ended
December 31, 2005 was $159.7 million, or $0.48 per diluted share, up 66%
compared to $95.0 million or $0.29 per diluted share for the fiscal first
quarter of 2005 and up 17% compared to $134.3 million or $0.41 per diluted
share for the previous quarter.
Consolidated revenue in the first quarter of fiscal 2006 was
$956.2 million, up 30% compared to $737.8 million in prior year's December
quarter and up 7% compared to $892.3 million reported in the previous quarter.
Consolidated operating income for the quarter was $229.6 million, a 76%
increase compared to $130.1 million for the same quarter last year and a 26%
increase compared to $182.5 million reported in the previous quarter.
During the quarter, debt was consistent with prior quarter and cash and
cash equivalents increased $71.1 million to $427.6 million. The Company's
capital expenditures were $81.9 million, dividend payments were $16.1 million
and the Company purchased 537,600 shares of its common stock for $18.9 million
and has remaining authorization to purchase up to $134 million in stock.
Commenting on the results, Chairman and CEO Bill Stewart said, "Activity
increases and price improvement in the U.S. and Canada were the main
contributors to yet another record revenue and earnings performance for the
Company.
"We continue to believe the worldwide market activity will remain strong
into the foreseeable future. As a result, we now expect consolidated revenue
for fiscal 2006 to increase 20% to 25% over fiscal 2005 with earnings per
share expected to be in the range of $2.00 - $2.10, an increase of 45% to 52%
for the same period."
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(in thousands except per share amounts)
Three Months Ended
December 31 September 30
2005 2004 2005
Revenue $956,161 $737,782 $892,280
Operating Expenses:
Cost of sales and services 653,069 550,086 622,693
Research and engineering 14,801 12,462 15,282
Marketing 23,837 21,675 24,913
General and administrative 34,895 22,483 34,219
(Gain)/Loss on
long-lived assets (A) 8 938 12,678
Total operating expenses 726,610 607,644 709,785
Operating income 229,551 130,138 182,495
Interest expense (B) (135) (3,968) (974)
Interest income 3,390 2,963 2,437
Other income/(expense), net (C) 952 9,601 8,403
Income before income taxes 233,758 138,734 192,361
Income taxes 74,101 43,701 58,099
Net income $159,657 $95,033 $134,262
Earnings Per Share:
Basic $0.49 $0.29 $0.42
Diluted $0.48 $0.29 $0.41
Weighted Average Shares
Outstanding:
Basic 323,903 324,866 322,529
Diluted 329,596 330,426 328,294
Supplemental Data:
Depreciation and amortization $38,185 $32,365 $37,330
Capital expenditures 81,860 54,939 98,161
Debt 82,271 505,035 82,374
(A) Includes $11.7 million in asset impairments (reflected in the
Corporate segment) recorded in the quarter ended September 30, 2005.
(B) Interest expense for the three months ended December 31, 2004
includes interest on outstanding Convertible Senior Notes due
2022. The Company redeemed all of its outstanding balance of the
notes for $422.4 million in April 2005.
(C) Includes $2.8 million payment received from the Asia-Pacific Region
in the quarter ended December 31, 2005 related to the ongoing
investigation, $9.0 million recovery of misappropriated funds from
the Asia-Pacific region in the quarter ended December 31, 2004 and
$9.6 million reversal of excess liabilities in the Asia-Pacific
region in the quarter ended September 30, 2005.
Segment Highlights
Following are the results of operations by segment for the three months
ended December 31, 2005, December 31, 2004 and September 30, 2005:
Three Months Ended
December 31 September 30
2005 2004 2005
U.S./Mexico Pressure Pumping
Revenue 497,294 375,453 471,006
Operating Income 175,479 107,724 156,655
Operating Income Margins 35% 29% 33%
International Pressure Pumping
Revenue 315,994 246,145 277,799
Operating Income 57,390 31,070 42,443
Operating Income Margins 18% 13% 15%
Other Oilfield Services
Revenue 142,873 116,021 143,475
Operating Income 25,153 6,429 25,222
Operating Income Margins 18% 6% 18%
Corporate
Revenue 0 163 0
Operating Loss (A) (28,471) (15,085) (41,825)
(A) Includes asset impairment ($11.7 million) in the quarter ended
September 30, 2005 and stock based compensation expense
($7.5 million) from the adoption of FAS 123(R) in the quarter ended
December 31, 2005.
December Quarter Review
U.S./Mexico Pressure Pumping Services first quarter 2006 revenue of $497.3
million increased 6% sequentially and 32% year over year. The U.S. rig count
averaged 1,479, up 4% from the previous quarter and up 18% from the prior
year's quarter. The U.S. operations continued to realize price improvement
during the quarter and operating income margins for U.S./Mexico improved to
35% from 33% reported in the previous quarter and 29% reported in the same
quarter last year.
International Pressure Pumping Services first quarter 2006 revenue of
$316.0 increased 14% sequentially and increased 28% from last year's December
quarter:
Sequential Year Over Year
Region
Europe/Africa 20% 21%
Middle East 3% 43%
Asia Pacific -5% 7%
Russia -5% 28%
Latin America 4% 25%
Canada 32% 34%
The sequential revenue improvement is primarily attributable to increased
drilling activity in Canada. Drilling activity in Canada increased 15% from
the previous quarter. Excluding Canada, international revenue increased 4%
from the previous quarter on a 3% increase in drilling activity.
Europe/Africa led the increase in international revenue excluding Canada with
significant contributions primarily from the Company's North Sea operations.
Year over year revenue, excluding Canada, increased 25%. The Middle East
increase of 43% was due to strong activity gains in Saudi Arabia and blowout
work in Bangladesh. Our Latin America region is benefiting from favorable
activity in the primary markets within the region. North Sea operations also
showed improvement in the Europe/Africa region.
Operating income margins for international pressure pumping were 18%
compared to 15% reported in the previous quarter and 13% reported in last
year's December quarter.
Other Oilfield Services first quarter 2006 revenue of $142.9 million was
flat sequentially and increased 23% year over year.
Sequential Year Over Year
Division
Tubular Services 0% 19%
Process & Pipeline Services -18% 9%
Chemical Services 6% 37%
Completion Tools -1% 47%
Completion Fluids 32% 29%
Completion Fluids and Chemical Services improvements sequentially and year
over year were primarily from increased activity in the U.S., while Completion
Tools year over year increase was caused by improved sales mix in the Gulf of
Mexico compared to last year's quarter and screen sales in Brazil. Process
and Pipeline Services revenue was down sequentially due to normal seasonal
declines.
Other oilfield services operating income margins for the quarter were 18%,
consistent with the previous quarter and up from 6% reported in last year's
quarter.
Consolidated Geographic Highlights
The following table reflects the percentage change in the Company's
consolidated revenue by geographic area for the December 2005 quarter compared
to the September 2005 quarter (sequential) and the December 2004 quarter (year
over year). The information presented is based on the Company's combined
service and product line offering by geographic region.
Geographic Sequential Year Over Year
U.S. 7% 38%
Canada 27% 30%
11% 36%
Latin America
(includes Mexico) 4% 10%
Europe/Africa -4% 10%
Russia -5% 28%
Middle East -3% 40%
Asia Pacific -2% 6%
-1% 16%
Non-GAAP Financial Measures
A non-GAAP financial measure is a numerical measure of a registrant's
historical or future financial performance, financial position or cash flows
that 1) excludes amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly comparable measure
calculated and presented in accordance with GAAP in the statement of income,
balance sheet, or statement of cash flows, or 2) includes amounts, or is
subject to adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated and
presented.
Any unexpected disclosures of non-GAAP financial measures discussed on the
call will be posted on our website as soon as possible after the disclosure.
Conference Call
The Company is scheduled to report first quarter fiscal 2006 earnings on
January 24, 2006 and will hold a conference call following the earnings
release. The call will take place at 9:00 a.m. Central Time, following the
release of earnings scheduled for approximately 6:00 a.m. Central Time.
To participate in the conference call, please call 913/981-4902, 10
minutes prior to the conference call start time and give the conference code
number 4705021. If you are unable to participate, the conference call will be
available for playback three hours after conclusion of the conference call.
The playback number is 719/457-0820 and the replay entry code is 4705021.
Playback will be available for five days.
The conference call will also be available via real-time webcast at
http://www.bjservices.com . Playback of the webcast will be available
following the conference call.
This news release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenue, and
expenses and profits. These forward-looking statements are based on
assumptions that may prove to be inaccurate, and they are subject to risks and
uncertainties that may cause actual results to differ materially from expected
results. These risk factors include, without limitation, general global
business and economic conditions, drilling activity and rig count, pricing
volatility for oil and gas, reduction in demand for our services and products,
risks from operating hazards such as fire, explosion and oil spills,
unexpected litigation for which insurance and customer agreements do not
provide complete protection, changes in exchange rates and declines in the
U.S. dollar, and risks associated with our international operations, including
potential instability and hostilities. This list of risk factors is not
intended to be comprehensive. More extensive information concerning risk
factors may be found in our public filings with the Securities and Exchange
Commission.
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
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Related links:
http://www.bjservices.com
CONTACT:
Jeff Smith of BJ Services Company,
+1-713-462-4239
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