HOUSTON, Nov. 2 /PRNewswire-FirstCall/ -- BJ Services Company
(NYSE: BJS; CBOE; PCX) reported the highest revenue quarter in its history
during its fourth fiscal quarter ended September 30, 2004. Earnings improved
41% to $0.52 per diluted share compared to the same quarter of the prior year.
Financial Results
(in millions, except per share amounts)
3 Months Ended
9/30/04 6/30/04 9/30/03
Revenue $694.5 $658.7 $588.6
Net Income $85.6 $129.3(A) $60.4
Diluted Earnings
Per Share $0.52 $0.79(A) $0.37
(A) Includes $56 million profit after taxes for the Halliburton patent
infringement award.
Sequentially, consolidated revenue for the quarter increased 5%.
U.S./Mexico Pressure Pumping Services increased 1%, International Pressure
Pumping Services increased 19% and Other Oilfield Services decreased 4%.
Compared to prior year's fourth quarter, consolidated revenue increased 18%,
with U.S./Mexico Pressure Pumping Services increasing 28%, International
Pressure Pumping Services increasing 3%, and Other Oilfield Services up 25%.
Operating income margins during the quarter were 17.9%, up from 16.1%
reported in the previous quarter and up from 15.5% reported in last year's
fourth quarter. Sequential increases in operating income were generated
throughout the Company, with the most significant contributor being Canada.
The improvement year over year was primarily due to favorable margins on
activity gains in the U.S. pressure pumping market.
Capital spending was $61.2 million for the quarter. Cash plus short term
investments, as of September 30, 2004 was $650.9 million, which exceeded total
debt by $152.4 million at September 30, 2004.
U.S./Mexico Pressure Pumping Services
The Company's U.S./Mexico Pressure Pumping Services revenue increased 1%
sequentially. Despite a 5% increase in the combined U.S. and Mexico average
drilling rig count and favorable pricing, revenues were negatively impacted by
hurricanes in the Gulf of Mexico and lower Mexico activity.
Compared to the fourth quarter of the prior year, revenue in U.S./Mexico
increased 28%, on the strength of a 13% combined average drilling rig count
increase for the U.S. and Mexico and better pricing in the U.S. market.
International Pressure Pumping Services
International Pressure Pumping Services revenue increased 19% sequentially
primarily from a 73% revenue increase in Canada. Drilling rig activity in
Canada increased 61% during the fourth quarter as the market exited the spring
break-up period. International revenue excluding Canada was up 4%
sequentially, led by increased activity in Brazil and Argentina. These
increases were offset somewhat by declines in the U.K. and Malaysia.
Year over year, International Pressure Pumping Services revenue was up 3%
led by a Russia revenue improvement of 28%. In addition, revenue increased in
Argentina and India but was partially offset by declines in Norway and Canada.
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 4% sequentially. Process and
Pipeline Services revenue was down 7% as they came off of their seasonally
best quarter. Revenue from Completion Tools was down 10% and Completion
Fluids was down 5% as a result of the Gulf of Mexico hurricanes. Compared to
the fourth quarter of the prior year, revenue for these services increased
25%, with all services showing improvement.
Year in Review
Increased drilling activity in the U.S. and Canada, pricing improvement in
the U.S. and improved revenue from all service lines in the Other Oilfield
Services segment resulted in $2.6 billion of revenue for the fiscal year ended
September 30, 2004. This represents a 21% increase over fiscal 2003 revenue
of $2.1 billion. Earnings per diluted share for the fiscal year ended
September 30, 2004 was $2.14, which includes $56 million profit after taxes
for the Halliburton patent infringement award. Before inclusion of the income
associated with the Halliburton award, earnings increased 54% from the
$1.17 per diluted share generated during the fiscal year ended September 30,
2003.
CEO Stewart Comments
Chairman and CEO Bill Stewart commented, "Despite some significant
disruptions in our business, the Company generated its highest ever revenue
during the quarter and earnings were up nicely from the prior quarter.
Excluding the Halliburton award, our income before taxes improved 22%
sequentially and we began to see improvement in our international margins
outside of Canada.
"We believe the worldwide market activity will remain strong into the
foreseeable future. The U.S. and Canadian markets should continue improving
and we expect to see growth in the international markets we have been
targeting for expansion. We are projecting our fiscal 2005 revenue to
increase about 10% versus fiscal 2004 and believe our earnings will improve
25 - 30%, resulting in guidance for the 2005 fiscal year of $2.25 - 2.35 per
diluted share."
Geographic Highlights
The following table reflects the percentage change in the Company's
consolidated revenue by geographic area for the September 2004 quarter
compared to the June 2004 quarter (sequential), and September 2003 quarter
(year over year - quarter) and fiscal 2004 compared to fiscal 2003 (year over
year - fiscal). The information presented is based on the Company's combined
service and product line offering by geographic region.
Geographic Sequential Year Over Year
Quarter Fiscal
U.S. 2% 30% 27%
Canada 56% -3% 30%
9% 23% 28%
Latin America
(includes Mexico) -3% 16% 17%
Europe/Africa 10% 5% 8%
Russia -8% 28% 25%
Middle East -14% 2% 9%
Asia Pacific 3% 9% 3%
(1%) 10% 11%
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 measure
used by the Company is free cash flow. 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 719/457-2622, ten
minutes prior to the start time and give the conference code number 919351.
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 919351. 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.
Merrill Lynch Oil & Gas Exploration and Production and Oil Services
Conference
Bill Stewart will present at the Merrill Lynch Oil & Gas Exploration and
Production and Oil Services Conference on Thursday, November 4, 2004, at
10:05 a.m. Eastern Time (9:05 a.m. Central Time). Stewart's remarks will be
available via real-time webcast at http://www.bjservices.com . Playback of
the webcast will be available for 14 days.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
Three Months Ended Twelve Months Ended
9/30/04 9/30/03 9/30/04 9/30/03
(In thousands except per share data)
Revenue $694,465 $588,597 $2,600,986 $2,142,877
Operating Expenses:
Cost of sales and
services 511,910 451,571 1,952,230 1,665,545
Research and engineering 13,031 10,525 47,287 40,810
Marketing 21,887 19,215 82,105 73,665
General and
administrative 22,499 16,493 80,540 69,449
(Gain)/loss on
long-lived assets 1,164 (431) 3,209 167
Total operating expenses 570,491 497,373 2,165,371 1,849,636
Operating income 123,974 91,224 435,615 293,241
Interest expense (4,068) (4,484) (16,389) (15,948)
Interest income 3,076 1,096 6,073 2,141
Other income/(expense), net 224 (137) 83,232 (3,762)
Income before income taxes 123,206 87,699 508,531 275,672
Income tax expense 37,604 27,344 158,866 87,495
Net income $85,602 $60,355 $349,665 $188,177
Earnings Per Share:
Basic $0.53 $0.38 $2.18 $1.19
Diluted $0.52 $0.37 $2.14 $1.17
Weighted Average
Shares Outstanding:
Basic 161,499 158,287 160,179 157,943
Diluted 164,498 161,587 163,414 161,257
Supplemental Data:
Depreciation and
amortization $31,760 $30,327 $125,668 $120,213
Capital expenditures 61,248 45,801 200,577 167,183
U.S./Mexico Pressure
Pumping Revenue 346,096 270,267 1,269,786 982,630
International Pressure
Pumping Revenue 228,983 222,775 891,427 801,746
Other Oilfield
Services Revenue 119,386 95,555 439,773 358,501
Debt 498,521 499,642
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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