HOUSTON, April 27 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; PCX; CBOE) reported earnings of $0.45 per diluted share for its
second fiscal quarter ended March 31, 2004, up 61% from the prior year's
earnings of $0.28 per diluted share.
Financial Results
(in millions, except per share amounts)
3 Months Ended
3/31/04 12/31/03 3/31/03
Revenue $647.1 $600.8 $534.6
Net Income $73.3 $61.5 $44.8
Diluted Earnings
Per Share $0.45 $0.38 $0.28
Sequentially, consolidated revenue increased 8%, with U.S./Mexico Pressure
Pumping Services up 5%, International Pressure Pumping Services up 12% and
Other Oilfield Services up 6%. Compared to prior year's second quarter,
consolidated revenue increased 21%, with U.S./Mexico Pressure Pumping Services
increasing 28%, International Pressure Pumping Services increasing 14%, and
Other Oilfield Services up 19%.
Operating income margins during the quarter were 17.1%, up from 15.8%
reported in the previous quarter and 13.5% reported in last year's second
quarter. The improvement, both sequentially and year over year, was primarily
due to favorable margins on activity gains in the U.S., Mexico and Canada.
Capital spending was $45.3 million for the quarter. Cash and cash
equivalents as of March 31, 2004 was $387.9 million. Debt (net of cash and
cash equivalents) to total capitalization was 6.2% at the end of March 2004,
down from 10.5% at the end of December 2003.
U.S./Mexico Pressure Pumping Services
The Company's U.S./Mexico Pressure Pumping Services Revenue increased 5%
sequentially. The combined average U.S. and Mexico drilling rig count during
the quarter was up 1%.
Compared to the second quarter of the prior year, revenue in U.S./Mexico
increased 28%, corresponding to a 25% increase in the combined average U.S.
and Mexico drilling rig activity. During the second quarter of fiscal 2004,
86% of the U.S. rigs were drilling for natural gas, a slight increase from the
prior year.
International Pressure Pumping Services
The Company experienced a record revenue quarter in Canada, up 31%
sequentially on the strength of a 29% increase in rig activity. International
revenue excluding Canada was up 2% sequentially, as activity increased in our
Middle East region, led by the resumption of fracturing activity in Saudi
Arabia. The increases from Saudi Arabia were offset somewhat by activity
declines with our North Sea stimulation vessel and in Nigeria.
Year over year, Canadian revenue increased 39% with drilling activity up
7%. The year over year increase in revenue is attributed to activity gains of
16%, price improvement of 5% and favorable foreign exchange translation of
18%. International revenue excluding Canada was up 2% year over year as
improved activity in Venezuela and for our North Sea stimulation vessel was
offset by declines in the U.K., Norway, and Saudi Arabia.
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 up 6% sequentially. Completion fluids,
tubular services and chemical services showed improvement sequentially, offset
by a decline in our process and pipeline services. Compared to the second
quarter of the prior year, revenue for these services increased 19%.
CEO Stewart Comments
Chairman and CEO Bill Stewart commented, "Stimulation activity in our
North American markets was up significantly during the quarter, contributing
to our sequential and year over year earnings improvement. U.S. rig activity
increased throughout the quarter and our forecast assumes U.S. activity will
continue increasing for the balance of fiscal year 2004. The market increase
as well as inflationary pressures have prompted BJ to issue a revised U.S.
price book effective May 1st. The new price book will reflect an average
increase of 7% from the current price book that was issued on May 1, 2003.
During the June quarter, we estimate rig activity in the U.S. to average 3-4%
higher compared to the March quarter. We have also planned for a normal
spring break-up in Canada which will more than offset activity gains in the
U.S. market.
"On April 5th, our lawsuit filed against Halliburton in March 2000 for
infringing on BJ's patented Vistar (R) fracturing system was finally resolved.
BJ has received the judgment award and will record an estimated gain of
$56 million, after taxes, during the June quarter. Accordingly, we believe
earnings per share, inclusive of the Halliburton award, will be in the $.72 to
$.76 range for our third fiscal quarter of 2004 and in the range of $2.03 to
$2.11 for the fiscal year ending September 30, 2004."
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. The most common non-GAAP financial measures
used by the Company include EBITDA, EBITDA margin, free cash flow, net debt,
and net interest expense. The reconciliations to the most comparable GAAP
measure are posted on the Investor's section of our website at
http://www.bjservices.com . The required disclosures for these measures were
included in our September 30, 2003 Form 10-K, also posted on 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 has scheduled a conference call today 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 719/457-2637, ten
minutes prior to the start time and give the conference code number 242098.
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 242098. 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 for twelve
months following the conference call.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Six Months Ended
3/31/04 3/31/03 3/31/04 3/31/03
(In thousands except per share data)
Revenue $647,060 $534,580 $1,247,859 $1,007,704
Operating Expenses:
Cost of sales and services 484,106 415,031 941,836 790,764
Research and engineering 11,828 10,365 22,333 19,679
Marketing 20,133 18,345 39,430 35,474
General and administrative 20,027 18,947 37,908 35,322
(Gain)/Loss on
long-lived assets 550 (331) 928 269
Total operating expenses 536,644 462,357 1,042,435 881,508
Operating income 110,416 72,223 205,424 126,196
Interest expense (4,144) (3,741) (8,346) (7,742)
Interest income 898 344 1,718 863
Other expense, net (100) (2,444) (596) (3,350)
Income before income taxes 107,070 66,382 198,200 115,967
Income taxes 33,806 21,574 63,424 37,689
Net income $73,264 $44,808 $134,776 $78,278
Earnings Per Share:
Basic $0.46 $0.28 $0.85 $0.50
Diluted $0.45 $0.28 $0.83 $0.49
Weighted Average Shares
Outstanding:
Basic 159,474 157,813 159,165 157,692
Diluted 163,229 160,985 162,583 160,833
Supplemental Data:
Depreciation and
amortization $31,268 $29,530 $61,962 $57,992
Capital expenditures 45,280 36,664 83,401 70,915
U.S./Mexico Pressure
Pumping Revenue 297,556 232,156 581,998 444,138
International Pressure
Pumping Revenue 248,766 217,671 469,975 396,551
Other Oilfield Services
Revenue 100,738 84,753 195,886 167,015
Debt 508,443 494,058
This press release contains forward-looking statements that anticipate
future performance such as the Company's prospects, expected revenues, 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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