HOUSTON, April 25 /PRNewswire-FirstCall/ -- BJ Services Company (NYSE:
BJS; PCX; CBOE) today reported that net income for the quarter ended March
31, 2006 was $203.5 million, or $0.62 per diluted share, up 86% compared to
$109.6 million or $0.33 per diluted share for the second fiscal quarter of
2005 and up 27% compared to $159.7 million or $0.48 per diluted share for
the previous quarter.
Consolidated revenue in the second quarter of fiscal 2006 was $1,078.8
million, up 36% compared to $795.9 million in prior year's March quarter
and up 13% compared to $956.2 million reported in the previous quarter.
Consolidated operating income for the quarter was $295.3 million, an
84% increase compared to $160.4 million for the same quarter last year and
a 29% increase compared to $229.6 million reported in the previous quarter.
During the quarter, the Company's capital expenditures were $109.6
million. Other uses of cash during the quarter included dividend payments
of $16.1 million and the purchase of 2,784,782 shares of the Company's
common stock for $93.1 million. Fiscal year to date, the Company has
repurchased 3,322,382 shares for $112.0 million. On March 1, 2006, the
Company's Board of Directors authorized the expansion of its share
repurchase program, increasing the repurchase authority by $450 million.
The Company now has authorization to purchase up to an additional $490.9
million in stock. On February 1, 2006, the Company paid the remaining
balance of the outstanding unsecured 7% Series B Notes of $79.0 million,
reducing the debt balance to $0.5 million as of March 31, 2006. Cash and
cash equivalents decreased $100.1 million from the previous quarter to
$326.3 million.
Commenting on the results, Chairman and CEO Bill Stewart said,
"Activity increases in all reporting segments and price improvement have
contributed to the Company's record earnings performance.
"We continue to believe the worldwide market activity will remain
strong into the foreseeable future. We have also planned for a normal third
fiscal quarter spring breakup in Canada. Based on our current estimates, we
expect consolidated revenue for fiscal 2006 to increase 30% to 32% over
fiscal 2005 with earnings per share expected to be in the range of $2.30 -
$2.35, an increase of 67% to 70%."
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(in thousands except per share amounts)
Three Months Ended
March 31 December 31
2006 2005 2005
Revenue $1,078,818 $ 795,863 $956,161
Operating Expenses:
Cost of sales and services 712,358 573,593 649,266
Research and engineering 15,574 13,083 15,153
Marketing 24,953 22,170 24,592
General and administrative 28,756 26,218 37,591
Loss on long-lived assets 1,848 392 8
Total operating expenses 783,489 635,456 726,610
Operating income 295,329 160,407 229,551
Interest expense (A) (155) (3,790) (135)
Interest income 3,501 3,609 3,390
Other income/(expense), net (B) (748) (282) 952
Income before income taxes 297,927 159,944 233,758
Income taxes 94,443 50,390 74,101
Net income $203,484 $ 109,554 $159,657
Earnings Per Share:
Basic $0.63 $0.34 $0.49
Diluted $0.62 $0.33 $0.48
Weighted Average Shares Outstanding:
Basic 323,027 324,600 323,903
Diluted 326,859 329,716 329,596
Supplemental Data:
Depreciation and amortization $39,917 $32,865 $38,185
Capital expenditures 109,631 77,668 81,860
Debt 496 501,867 82,271
Six Months Ended
March 31
2006 2005
Revenue $2,034,979 $ 1,533,645
Operating Expenses:
Cost of sales and services 1,361,622 1,123,679
Research and engineering 30,727 25,545
Marketing 49,547 43,845
General and administrative 66,347 48,701
Loss on long-lived assets 1,856 1,330
Total operating expenses 1,510,099 1,243,100
Operating income 524,880 290,545
Interest expense (A) (290) (7,758)
Interest income 6,891 6,572
Other income/(expense), net (B) 204 9,319
Income before income taxes 531,685 298,678
Income taxes 168,544 94,091
Net income $363,141 $204,587
Earnings Per Share:
Basic $1.12 $.63
Diluted $1.11 $.62
Weighted Average Shares Outstanding:
Basic 323,469 324,716
Diluted 327,421 329,962
Supplemental Data:
Depreciation and amortization $78,102 $65,230
Capital expenditures 191,491 132,607
(A) Interest expense for the three months ended March 31, 2005 includes
interest on outstanding Convertible Senior Notes due 2022 as well as
interest on $79.0 million in unsecured 7% Series B Notes. The
Company redeemed all of the outstanding balance of the convertible
notes for $422.4 million in April 2005. On February 1, 2006, the
Company paid the outstanding balance of $79.0 million on the 7%
notes.
(B) Includes $2.8 million payment received from the Asia-Pacific Region
in the quarter ended December 31, 2005 related to the ongoing
investigation and $9.0 million recovery of misappropriated funds from
the Asia-Pacific region in the quarter ended December 31, 2004.
Segment Highlights
Following are the results of operations by segment for the three months
ended March 31, 2006, March 31, 2005 and December 31, 2005 and for the six
months ended March 31, 2006 and March 31, 2005:
Three Months Ended Six Months Ended
March 31 December 31 March 31
2006 2005 2005 2006 2005
U.S./Mexico Pressure
Pumping Revenue 566,896 389,373 497,294 1,064,190 764,826
Operating Income 215,369 116,808 175,479 390,848 224,532
Operating Income
Margins 38% 30% 35% 37% 29%
International Pressure
Pumping Revenue 355,623 284,678 315,994 671,617 530,823
Operating Income 67,077 45,518 57,390 124,467 76,588
Operating Income
Margins 19% 16% 18% 19% 14%
Other Oilfield Services
Revenue 156,299 121,611 142,873 299,172 237,632
Operating Income 31,922 14,497 25,153 57,075 20,926
Operating Income
Margins 20% 12% 18% 19% 9%
Corporate
Revenue 0 201 0 0 364
Operating Loss (A) (19,039) (16,416) (28,471) (47,510) (31,501)
(A) Includes stock based compensation expense of $7.5 million from the
adoption of FAS 123(R) in the quarter ended December 31, 2005, and
$3.9 million for the quarter ended March 31, 2006.
March Quarter Review
U.S./Mexico Pressure Pumping Services second quarter 2006 revenue of
$566.9 million increased 14% compared to the December 2005 quarter
(sequential) and 46% from the March 2005 quarter (year over year). The U.S.
rig count averaged 1,519, up 3% from the previous quarter and up 19% from
the prior year's quarter. Operating income margins for U.S./Mexico improved
to 38% from 35% reported in the previous quarter and 30% reported in the
same quarter last year. These results reflect higher activity and price
improvement during the quarter.
International Pressure Pumping Services second quarter 2006 revenue of
$355.6 increased 13% sequentially and increased 25% year over year:
Region Sequential Year Over Year
Europe/Africa 16% 8%
Middle East -10% 19%
Asia Pacific 40% 50%
Russia -15% -9%
Latin America 1% 28%
Canada 22% 31%
The sequential revenue improvement is primarily attributable to
increased drilling activity and pricing in Canada. Drilling activity in
Canada increased 16% from the previous quarter. Excluding Canada,
international revenue increased 6% from the previous quarter on a 4%
increase in drilling activity. Asia Pacific led the increase in
international revenue excluding Canada with significant contributions
primarily from New Zealand and Thailand operations.
Year over year revenue, excluding Canada, increased 20%. The Asia
Pacific increase of 50% was primarily from strong activity contributions in
New Zealand and Thailand. Our Latin America region continues to benefit
from favorable activity in the primary markets within the region. North Sea
operations also showed improvement in the Europe/Africa region. Extreme
winter weather in Siberia was the main cause for the decrease in revenue
sequentially and year over year for our Russian operations.
Operating income margins for international pressure pumping were 19%
compared to 18% reported in the previous quarter and 16% reported in last
year's March quarter.
Other Oilfield Services second quarter 2006 revenue of $156.3 million
increased 9% sequentially and increased 29% year over year.
Division Sequential Year Over Year
Tubular Services 8% 20%
Process & Pipeline Services -1% 18%
Chemical Services 19% 46%
Completion Tools 10% 40%
Completion Fluids 18% 32%
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 March quarter and increased
activity and improved sales mix in Brazil.
Other oilfield services operating income margins for the quarter were
20%, up from 18% in the previous quarter and up from 12% reported in last
year's March quarter.
Consolidated Geographic Highlights
The following table reflects the percentage change in the Company's
consolidated revenue by geographic area for the March 2006 quarter compared
to the December 2005 quarter (sequential) and the March 2005 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. 15% 48%
Canada 22% 27%
16% 43%
Latin America
(includes Mexico) -3% 15%
Europe/Africa 10% 8%
Russia -15% -9%
Middle East -4% 25%
Asia Pacific 31% 47%
4% 17%
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 will hold a conference call following this earnings
release. The call will take place at 8:00 a.m. Central Time.
To participate in the conference call, please call 913/981-4900, 10
minutes prior to the conference call start time and give the conference
code number 8632425. 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 8632425. 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, potential adverse results from our SEC
and DOJ investigations, 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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