HOUSTON, Feb. 1 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) reported a 23% increase in revenue during the quarter
ended December 31, 2004 compared to the same quarter of the prior year.
Earnings of $0.58 per diluted share improved 53% versus the prior year's
quarter and includes income before taxes of $9 million from the return of
misappropriated funds recovered during the quarter.
Financial Results
(in millions, except per share amounts)
3 Months Ended
12/31/04 9/30/04 12/31/03
Revenue $737.8 $694.5 $600.8
Net Income $95.0 (A) $97.0 (B) $61.5
Diluted Earnings
Per Share $0.58 $0.59 $0.38
(A) Includes $9.0 million profit before taxes for the recovery of
misappropriated funds.
(B) Includes $12.2 million profit before taxes for the reversal of
excess liabilities as a result of the comprehensive review performed
in the Asia Pacific Region
Sequentially, consolidated revenue for the quarter increased 6%.
U.S./Mexico Pressure Pumping Services increased 8%, International Pressure
Pumping Services increased 7% and Other Oilfield Services decreased 3%.
Compared to prior year's first quarter, consolidated revenue increased 23%,
with U.S./Mexico Pressure Pumping Services increasing 32%, International
Pressure Pumping Services increasing 11%, and Other Oilfield Services up 22%.
Operating income margins during the quarter were 17.6%, down from 18.3%
reported in the previous quarter and up from 15.8% reported in last year's
first quarter. Decreased margins in the Other Oilfield Services segment was
the primary reason for the decrease in operating income margins on a
sequential basis. The improvement year over year was primarily due to
favorable margins on activity gains in the U.S. pressure pumping market.
Capital spending was $54.9 million for the quarter. Cash plus short term
investments, as of December 31, 2004 was $693.9 million, which exceeded total
debt by $188.9 million at December 31, 2004.
U.S./Mexico Pressure Pumping Services
The Company's U.S./Mexico Pressure Pumping Services revenue increased 8%
sequentially, primarily as a result of improved pricing and activity gains in
the U.S. The combined U.S. and Mexico average drilling rig count increased
1%.
Compared to the first quarter of the prior year, revenue in U.S./Mexico
increased 32%, on the strength of a 12% combined average drilling rig count
increase for the U.S. and Mexico and better pricing and activity gains in the
U.S. market.
International Pressure Pumping Services
International Pressure Pumping Services revenue increased 7% sequentially
primarily from a 31% revenue increase in Canada. Drilling rig activity in
Canada increased 29% on a sequential basis. International revenue excluding
Canada was down 3% sequentially. This is primarily a result of a significant
reduction in workscope by the customer who contracted for the Company's
stimulation vessel in the North Sea, lower stimulation activity and cold
weather delays in Russia, and lower activity in Indonesia and Malaysia. These
decreases were offset somewhat by increases in the Middle East region.
Year over year, International Pressure Pumping Services revenue was up 11%
led by Canadian revenue improvement of 18%. International revenue excluding
Canada was up 7%, primarily from increased activity in Saudi Arabia, India and
Argentina. These increases were partially offset by reduced activity for the
Company's stimulation vessel in the North Sea.
Other Oilfield Services
Revenue from the Company's Other Oilfield Services (completion fluids,
completion tools, process and pipeline services, casing and tubular services
and production chemical services) was down 3% sequentially. Process and
Pipeline Services revenue was down 7% due to seasonal declines and revenue
from Completion Tools was down 22% due to sales mix in the Gulf of Mexico.
This was partially offset by increased revenue of 18% in Completion Fluids.
Compared to the first quarter of the prior year, revenue for these services
increased 22%, with all services showing improvement, except for Completion
Tools.
CEO Stewart Comments
Chairman and CEO Bill Stewart commented, "The Company's revenue
performance was better than our earlier expectations, led by improvements in
our North American pumping service business. However, revenue shortfalls from
the North Sea stimulation vessel and our other service lines, together with
unexpected costs incurred during the quarter negatively affected our margin
contribution on the revenue overachievement.
"We continue to remain optimistic that worldwide activity will remain
strong. We are forecasting earnings for the March quarter in the range of
$0.58 - 0.61 per diluted share and now expect our 2005 fiscal year earnings to
be in the range of $2.30 - 2.40 per diluted share."
Geographic Highlights
The following table reflects the percentage change in the Company's
consolidated revenue by geographic area for the December 2004 quarter compared
to the September 2004 quarter (sequential) and December 2003 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. 6% 33%
Canada 27% 19%
10% 30%
Latin America
(includes Mexico) -2% 4%
Europe/Africa -3% 7%
Russia -15% 19%
Middle East 18% 41%
Asia Pacific -5% -2%
6% 23%
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.
The Company anticipates utilizing non-GAAP financial measures in today's
earnings release conference call -- free cash flow and operating income
incremental margin. The reconciliation of free cash flow to the most
comparable GAAP measure is posted on the Investor's section of our website at
http://www.bjservices.com . The required disclosure for this measure was
included in our September 30, 2004 Form 10-K, also posted on our website.
Operating income incremental margin is computed by utilizing GAAP numbers. It
is calculated by dividing the change in operating income by the change in
revenue. Management believes incremental margins provide useful information
to investors as a measure of earnings growth. The computation is posted on
the Investors section of our website. 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 2005 earnings on
Tuesday, February 1, 2005 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 8:15 a.m.
Central Time.
To participate in the conference call, please call 719/457-2727,
10 minutes prior to the conference call start time and give the conference
code number 4550961. 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
4550961. Playback will be available for three 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.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended
12/31/04 12/31/03
(In thousands except per share data)
Revenue $737,782 $600,799
Operating Expenses:
Cost of sales and services 550,086 457,730
Research and engineering 12,462 10,505
Marketing 21,675 19,297
General and administrative 22,483 17,881
(Gain)/loss on long-lived assets 938 378
Total operating expenses 607,644 505,791
Operating income 130,138 95,008
Interest expense (3,968) (4,202)
Interest income 2,963 820
Other income/(expense), net 9,601 (496)
Income before income taxes 138,734 91,130
Income tax expense 43,701 29,617
Net income $ 95,033 $ 61,513
Earnings Per Share:
Basic $ 0.59 $ 0.39
Diluted $ 0.58 $ 0.38
Weighted Average Shares Outstanding:
Basic 162,433 158,859
Diluted 165,213 161,905
Supplemental Data:
Depreciation and amortization $ 32,365 $ 30,694
Capital expenditures 54,939 38,121
Debt 505,035 502,163
Segment Data:
U.S./Mexico Pressure Pumping Revenue 375,453 284,442
Operating Income 107,724 66,207
International Pressure Pumping Revenue 246,145 221,209
Operating Income 31,070 25,199
Other Oilfield Services Revenue 116,021 94,907
Operating Income 6,429 12,127
Corporate Revenue 163 241
Operating Loss (15,085) (8,525)
This press 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:
Trey Whichard of BJ Services Company,
+1-713-462-4239
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