HOUSTON, Oct. 31 /PRNewswire-FirstCall/ -- BJ Services Company (NYSE:
BJS; PCX; CBOE) today reported net income of $228.6 million for the fourth
fiscal quarter ended September 30, 2006, or $0.76 per diluted share. The
quarter's diluted earnings per share improved 85% compared to the $0.41 per
diluted share for the fourth quarter of fiscal 2005 and 13% compared to the
$0.67 per diluted share for the previous quarter.
Consolidated revenue in the fourth quarter of fiscal 2006 was $1,216.0
million, up 36% compared to $892.3 million in prior year's September
quarter and up 9% compared to $1,116.9 million reported in the previous
quarter. Consolidated operating income for the quarter was $340.0 million,
an 86% increase compared to $182.5 million for the same quarter last year
and an 11% increase compared to $306.9 million reported in the previous
quarter.
During the quarter, the Company's capital expenditures were $136.7
million. Other uses of cash during the quarter included dividend payments
of $15.8 million and the purchase of approximately 10.2 million shares of
the Company's common stock for $364.8 million. Fiscal year to date, the
Company has repurchased approximately 31.7 million shares for $1,133.3
million and has remaining authorization to purchase up to an additional
$469.3 million in stock.
Cash and cash equivalents decreased $290.4 million from the previous
quarter to $92.4 million primarily as a result of share repurchases.
Commenting on the results, Chairman and CEO Bill Stewart said, "The
rebound in Canadian activity and improvements in Africa, Latin America and
the Middle East have led to another record quarter for BJ. During the
quarter, we continued to repurchase treasury shares and completed the
purchase of the operating assets of Dyna-Coil, a capillary string
installation and production chemicals company.
"Our outlook for fiscal year 2007 is positive with consolidated revenue
growth expectations in excess of 20%. Revenue generated from our North
America Pressure Pumping operations is expected to grow in the range of
20%. We expect revenue growth for our International Pressure Pumping
operations outside North America and our Oilfield Services Group in the
range of 20% to 25% for the fiscal year. Based on our revenue growth
assumptions, we expect earnings per share for fiscal year 2007 to be $3.15
- $3.25, with earnings per share in the first fiscal quarter to be $0.75 -
$0.77."
CONSOLIDATED STATEMENT OF OPERATIONS
UNAUDITED
(in thousands except per share amounts)
Three Months Ended
September 30 June 30
2006 2005 2006
Revenue $1,215,979 $ 892,280 $1,116,906
Operating Expenses:
Cost of sales and services 799,410 622,693 734,717
Research and engineering 16,483 15,282 16,665
Marketing 28,201 24,913 25,571
General and administrative 33,354 34,219 32,310
Loss (gain) on long-lived
assets (1,446) 12,678 764
Total operating expenses 876,002 709,785 810,027
Operating income 339,977 182,495 306,879
Interest expense(A) (11,762) (974) (2,506)
Interest income 4,569 2,437 3,456
Other income/(expense), net(B) (409) 8,403 194
Income before income taxes 332,375 192,361 308,023
Income taxes 103,786 58,099 95,143
Net income $ 228,589 $ 134,262 $ 212,880
Earnings Per Share:
Basic $0.77 $0.42 $0.67
Diluted $0.76 $0.41 $0.67
Weighted Average Shares
Outstanding:
Basic 297,634 322,529 315,705
Diluted 301,251 328,294 319,502
Supplemental Data:
Depreciation and amortization $ 46,271 $ 37,330 $ 42,390
Capital expenditures 136,725 98,161 131,685
Debt 659,968 82,374 603,325
Twelve Months Ended
September 30
2006 2005
Revenue $4,367,864 $3,243,186
Operating Expenses:
Cost of sales and services 2,895,749 2,334,198
Research and engineering 63,875 54,197
Marketing 103,319 92,255
General and administrative 132,011 111,285
Loss on long-lived assets 1,174 14,192
Total operating expenses 3,196,128 2,606,127
Operating income 1,171,736 637,059
Interest expense(A) (14,558) (10,951)
Interest income 14,916 11,281
Other income/(expense), net(B) (11) 15,958
Income before income taxes 1,172,083 653,347
Income taxes 367,473 200,305
Net income $804,610 $453,042
Earnings Per Share:
Basic $2.55 $1.40
Diluted $2.52 $1.38
Weighted Average Shares Outstanding:
Basic 315,022 323,763
Diluted 318,820 329,115
Supplemental Data:
Depreciation and amortization $166,763 $136,861
Capital expenditures 459,974 323,763
(A) In April 2005 and February 2006, the Company redeemed debt of $422.4
million and $79.0, respectively. In June 2006, the Company completed
a public offering of $500 million aggregate principal amount of
Senior Notes and as of September 2006, had borrowings of $160 million
under its Revolving Credit Facility.
(B) Includes other income of $9.5 million for the quarter ended
September 30, 2005 and $9.0 million for the quarter ended
December 31, 2005 related to our ongoing investigations in the Asia-
Pacific region.
Operating Highlights
Following are the results of operations for the three months ended
September 30, 2006, September 30, 2005 and June 30, 2006 and for the twelve
months ended September 30, 2006 and September 30, 2005:
Three Months Ended Twelve Months Ended
September 30 June 30 September 30
2006 2005 2006 2006 2005
U.S./Mexico Pressure
Pumping
Revenue $645,512 $471,006 $644,070 $2,353,772 $1,683,202
Operating Income 247,747 156,655 260,618 899,213 524,893
Operating Income
Margins 38% 33% 40% 38% 31%
International Pressure
Pumping
Revenue $393,759 $277,799 $300,674 $1,366,050 $1,041,910
Operating Income 79,746 42,443 35,950 240,163 135,838
Operating Income
Margins 20% 15% 12% 18% 13%
Oilfield Services
Group
Revenue $176,708 $143,475 $172,162 $648,042 $517,650
Operating Income 35,956 25,222 39,389 132,420 67,626
Operating Income
Margins 20% 18% 23% 20% 13%
Corporate
Revenue $--- $--- $--- $--- $424
Operating Loss(A) (23,472) (41,825) (29,078) (100,060) (91,298)
(A) Includes stock based compensation expense of $1.0 million in the
quarter ended September 30, 2006, $6.8 million for the quarter ended
September 30, 2005, $5.9 million for the quarter ended June 30, 2006,
$18.0 million for fiscal 2006 and $13.4 million for fiscal 2005. Also
included in the fourth quarter 2005 were asset impairments of $11
million and Sarbanes-Oxley cost of $7 million that were partially
offset by the $9.0 million Asia Pacific liability reversal .
Year in Review
For the fiscal year ended September 30, 2006, consolidated revenue of
$4.4 billion increased 35% from the $3.2 billion generated during fiscal
2005 and earnings per diluted share of $2.52 improved 83% from the $1.38
reported in fiscal 2005.
Revenue from U.S./Mexico Pressure Pumping Services and Canada Pressure
Pumping Service increased 40% and 38%, respectively, from last year as a
result of higher activity and improved pricing. International Pressure
Pumping Services revenue excluding Canada increased 28%, largely due to
increases in our Latin American and Middle Eastern businesses. The Oilfield
Services Group's revenue increased 25% during 2006 with all service lines
contributing to the improvement.
September Quarter Review
U.S./Mexico Pressure Pumping Services fourth quarter 2006 revenue of
$645.5 million was slightly above the June 2006 quarter (sequential) and
increased 37% from the September 2005 quarter (year over year). Operating
income margin for U.S./Mexico was 38% compared to 40% reported in the
previous quarter and 33% reported in the same quarter last year. The lower
operating income margin sequentially is largely a result of job deferrals,
increasing headcount in the fourth quarter and higher maintenance expense
in preparation for expected upcoming activity improvement.
International Pressure Pumping Services fourth quarter 2006 revenue of
$393.8 million increased 31% sequentially and 42% year over year:
Region Sequential Year Over Year
Europe/Africa 28% 83%
Middle East 17% 28%
Asia Pacific -7% 30%
Russia -12% -1%
Latin America 7% 38%
Canada 107% 47%
The sequential improvement in international pressure pumping revenue
was largely the result of a 78% rig activity increase in Canada subsequent
to the seasonal Spring break up period experienced during the June quarter.
The Europe/Africa region also contributed to the sequential increase due to
growth in the Africa operations. As mentioned last quarter, on June 25,
2006, we acquired an additional 2% interest in our Algeria joint venture,
Societe Algerienne de Stimulation de Puits Productures d'Hydrocarbures
("BJSP"). As a result, we now control and consolidate BJSP in our financial
results. Excluding this acquisition, revenue for this region increased 6%
sequentially. The Middle East reported a strong sequential increase with
Saudi Arabia and India as the primary contributors. Latin America benefited
from activity gains in Argentina, Venezuela, Colombia and Brazil. The Asia
Pacific revenue decline was primarily due to lower activity in New Zealand
and Vietnam.
Year over year, Canada's revenue grew as a result of geographic
expansion and pricing increases. The Europe/Africa region revenue
improvement was due to improved North Sea and Africa activity. The Middle
East benefited from strong activity gains in Saudi Arabia, Azerbaijan,
Kazakhstan and India. Australia, Thailand, Malaysia and Vietnam were the
primary contributors in the improvement in Asia Pacific. Argentina,
Venezuela, Colombia and Brazil contributed to the revenue gain in Latin
America.
Operating income margins for international pressure pumping were 20%
compared to 12% reported in the previous quarter and 15% reported in last
year's September quarter. We continue to experience revenue and margin
growth in the international market.
Oilfield Services Group fourth quarter 2006 revenue of $176.7 million
increased 3% sequentially and increased 23% year over year.
Division Sequential Year Over Year
Tubular Services 8% 30%
Process & Pipeline Services -4% 11%
Chemical Services 12% 47%
Completion Tools 14% 15%
Completion Fluids -1% 33%
Market activity increases contributed to the revenue performance of the
Oilfield Services Group. Also contributing to Chemical Services was the
acquisition of Dyna-Coil, which closed in the middle of the quarter. This
was partially offset on a sequential basis by lower Process and Pipeline
Services revenue as we completed several large projects in the prior
quarter and by a less favorable job mix for Completion Fluids.
The Oilfield Services Group operating income margin for the quarter was
20%, down from 23% in the previous quarter and up from 18% reported in last
year's September quarter. The sequential decline is attributable to the
completion of high margin projects in the prior quarter.
Consolidated Geographic Highlights
The following table reflects the percentage change in consolidated
revenue by geographic area for the September 2006 quarter compared to the
June 2006 quarter and the September 2005 quarter. The information presented
is based on our combined service and product line offering by geographic
region.
Geographic Sequential Year Over Year
U.S. 0% 39%
Canada 76% 41%
8% 39%
Latin America
(includes Mexico) 3% 23%
Europe/Africa 27% 37%
Russia -12% -1%
Middle East 18% 28%
Asia Pacific -3% 40%
9% 36%
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 9:00 a.m. Central Time.
To participate in the conference call, please call 913/981-4912, 10
minutes prior to the conference call start time and give the conference
code number 5643889. 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 5643889. 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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