HOUSTON, July 26 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; CBOE; PCX) today announced net income of $114.2 million, or $0.70
per diluted share, for the quarter ended June 30, 2005. The Company's
earnings per share improved 6% from the previous quarter and improved 56% from
last year's June quarter, excluding the effect of the Halliburton patent
infringement award recorded as income in last year's June quarter.
Revenues of $817.3 million generated during the quarter were up 3%
compared to the previous quarter and were 24% higher than last year's June
quarter.
Capital spending was $93.0 million for the quarter, resulting in year to
date spending of $225.6 million.
The Company purchased 1,128,400 shares of its common stock for
$56.5 million during the quarter. Year to date the Company has repurchased
1,991,000 shares for $98.3 million and has authorization remaining to purchase
up to $153.1 million in stock.
On April 25, 2005 the Company redeemed all of its outstanding Convertible
Senior Notes due 2022. The redemption of $422.4 million was funded with cash.
Cash and cash equivalents, as of June 30, 2005 was $260.3 million, which
exceeded total debt by $179.6 million.
Commenting on the results, Chairman and CEO Bill Stewart said, "BJ
generated another quarter of record operating results. Continued activity
increases in the U.S. market, together with improved pricing, helped offset
the seasonally weak Canadian results. In addition, our international pumping
service business outside North America experienced good top line growth and
our operating income margins continued to show improvement.
"We expect activity to remain strong with continuing improvement in our
major markets. Our earnings are forecasted to be in the range of $0.80 - 0.82
per diluted share for the quarter ending September 2005."
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(in thousands except per share amounts)
Three Months Ended
June 30 March 31
2005 2004 2005
Revenue $817,261 $658,662 $795,863
Operating Expenses:
Cost of sales and services 587,826 498,484 573,593
Research and engineering 13,370 11,923 13,083
Marketing 23,497 20,788 22,170
General and administrative 28,365 20,133 26,218
Loss on long-lived assets 184 1,117 392
Total operating
expenses 653,242 552,445 635,456
Operating income 164,019 106,217 160,407
Interest expense (2,219) (3,975) (3,790)
Interest income 2,272 1,279 3,609
Other income/(expense), net (1,764) 83,604 (282)
Income before income taxes 162,308 187,125 159,944
Income taxes 48,115 57,838 50,390
Net income $114,193 $129,287(A) $109,554
Earnings Per Share:
Basic $0.71 $0.80(A) $0.68
Diluted $0.70 $0.79(A) $0.66
Weighted Average Shares
Outstanding:
Basic 161,552 160,882 162,300
Diluted 164,229 163,915 164,858
Supplemental Data:
Depreciation and
amortization $34,301 $31,946 $32,865
Capital expenditures 92,995 55,928 77,668
Debt 80,727 498,849 501,918
Nine Months Ended
June 30
2005 2004
Revenue $2,350,906 $1,906,521
Operating Expenses:
Cost of sales and services 1,711,505 1,440,320
Research and engineering 38,915 34,256
Marketing 67,342 60,218
General and administrative 77,066 58,041
Loss on long-lived assets 1,514 2,045
Total operating expenses 1,896,342 1,594,880
Operating income 454,564 311,641
Interest expense (9,977) (12,321)
Interest income 8,844 2,997
Other income/(expense), net 7,555 83,008
Income before income taxes 460,986 385,325
Income taxes 142,206 121,262
Net income $318,780 $264,063(A)
Earnings Per Share:
Basic $1.97 $1.65(A)
Diluted $1.94 $1.62(A)
Weighted Average Shares Outstanding:
Basic 162,090 159,735
Diluted 164,730 163,034
Supplemental Data:
Depreciation and amortization $99,531 $93,908
Capital expenditures 225,602 139,329
(A) Includes $56 million for the Halliburton patent infringement award.
Segment Highlights
Following are the results of operations by segment for the three months
ended June 30, 2005, June 30, 2004 and March 31, 2005 and for the nine months
ended June 30, 2005 and June 30, 2004:
Three Months Ended Nine Months Ended
June 30 March 31 June 30
2005 2004 2005 2005 2004
U.S./Mexico Pressure
Pumping
Revenue 447,370 341,692 389,373 1,212,196 923,690
Operating Income 143,706 94,582 116,808 368,238 234,995
International
Pressure Pumping
Revenue 233,288 192,469 284,678 764,111 662,444
Operating Income 16,807 4,271 45,518 93,395 68,630
Other Oilfield
Services
Revenue 136,543 124,283 121,611 374,175 319,631
Operating Income 21,478 16,981 14,497 42,404 37,669
Corporate
Revenue 60 218 201 424 756
Operating Loss (17,972) (9,617) (16,416) (49,473) (29,653)
U.S./Mexico Pressure Pumping Services revenue increased 15% sequentially
and 31% year over year. The U.S. rig count averaged 1,336 during the quarter,
up 4% from the previous quarter and up 15% from the prior year's quarter. All
U.S. operating regions experienced revenue growth in excess of the growth in
rig activity. Our Mexico revenue was down 22% sequentially and 56% year over
year as result of activity reductions related to our integrated project in the
Burgos area.
The Company's U.S. operations continued to realize price improvement
during the quarter and operating income margins for U.S./Mexico improved to
32% from 30% reported in the previous quarter and 28% reported in last year's
quarter.
International Pressure Pumping Services revenue decreased 18% sequentially
and increased 21% from last year's quarter:
Region Sequential Year Over Year
Europe/Africa -2% 30%
Middle East 11% 27%
Asia Pacific 14% 10%
Russia 18% 9%
Latin America 19% 33%
Canada -60% 12%
The sequential revenue decline is primarily attributed to reduced activity
in Canada, resulting from Spring break up. Excluding Canada, international
revenue was up 11% sequentially. Revenue from the Europe/Africa region was
negatively affected by lower coiled tubing activity in the North Sea compared
to last quarter. Middle East revenue improved from activity increases in
India and Bangladesh. Activity increases in Thailand, Malaysia and China
accounted for the improvement in Asia Pacific. Russia benefited from increase
in stimulation activity and increases in coiled tubing activity in Venezuela
and Argentina contributed to the improvement in Latin America.
Year over year revenue, excluding Canada, was up 24%.
Operating income margins were 7% compared to 16% reported in the previous
quarter and 2% reported in last year's quarter. Excluding Canada, operating
income margins were 12%, increasing from 8% reported in the previous quarter
and from 6% reported in last year's quarter.
Other Oilfield Services revenue increased 12% sequentially and 10% year
over year:
Division Sequential Year Over Year
Tubular Services 11% 28%
Process & Pipeline Services 29% 2%
Chemical Services 2% 13%
Completion Tools 39% 13%
Completion Fluids -15% 10%
The sequential revenue increase from Tubular Services is primarily the
result of higher activity in the North Sea. Process and Pipeline Services
improved due to an increase in activity from their seasonally slow March
quarter. Our Completion Tools division benefited from an increase in
international tool deliveries, as well as an increase in Gulf of Mexico
deepwater activity. The Completion Fluids division experienced a decline in
revenue resulting from unfavorable product sales mix and exceptional activity
in the prior quarter.
The year over year growth from our Tubular Services division is
attributable to activity improvement in the North Sea and Asia Pacific. Our
Chemical Services and Completion Fluids businesses benefited from activity in
the U.S. while Completion Tools revenue improved from higher activity in
Brazil.
Other oilfield services operating income margins for the quarter were 16%,
up from 12% reported in the previous quarter and 14% 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 June 2005 quarter compared to
the March 2005 quarter (sequential) and the June 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. 14% 32%
Canada -56% 10%
-2% 29%
Latin America
(includes Mexico) 13% 0%
Europe/Africa 7% 29%
Russia 18% 9%
Middle East 17% 28%
Asia Pacific 18% 8%
13% 15%
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 third quarter fiscal 2005 earnings on
Tuesday, July 26, 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 913/981-4903,
10 minutes prior to the conference call start time and give the conference
code number 6429432. 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
6429432. 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:
Trey Whichard or Jeff Smith, both of BJ
Services Company, +1-713-462-4239
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