Jul. 21, 2010 (Business Wire) -- Complete Production Services, Inc. (NYSE: CPX) today reported second quarter revenue of $360.2 million, an increase of 16% over the first quarter of 2010, Adjusted EBITDA (as defined below) of $85.3 million, an increase of 53% over the first quarter of 2010, operating income of $39.9 million and net income of $15.7 million, or $0.20 per diluted share. Cash balance increased to $141.6 million as of the second quarter, and the company’s $240 million credit facility remains undrawn.
Revenue for the Completion and Production Services segment during the second quarter of 2010 was $310.5 million, an increase of 17% over the prior quarter. Adjusted EBITDA for the segment was $84.7 million in the second quarter of 2010, up 47% versus the first quarter of 2010. Adjusted EBITDA margin was 27.3% during the second quarter of 2010 versus 21.7% for the first quarter of 2010. The segment continued to benefit from increased horizontal drilling and completion related activity and the associated escalation in service intensity within U.S. resource plays. All significant U.S. service lines contributed to the improved performance, with the largest contribution from pressure pumping and coiled tubing. Price improvement in some service lines and select geographic areas also positively impacted the results of the segment.
Drilling Services segment revenue was $40.4 million during the second quarter of 2010, versus $35.1 million reported for the prior quarter, representing an increase of 15%. The segment reported Adjusted EBITDA of $8.7 million, up 60% versus the first quarter of 2010. The improved performance of the segment is attributable to improved pricing and utilization for contract drilling and rig relocation services.
In comparison to the second quarter of 2009, consolidated revenue increased $121.8 million, or 51%, operating income increased $62.8 million, Adjusted EBITDA increased $56.8 million and net income increased by $41.5 million, or $0.54 per diluted share.
“We delivered outstanding performance during the second quarter,” commented Joe Winkler, Chairman and CEO. “U.S. activity levels continued to improve throughout the quarter, particularly in oil and liquid-rich resource plays, and we are executing well in the field.”
“We believe our reputation, market position and balance sheet will allow us to capitalize on attractive growth opportunities. Beginning in the third quarter of 2010, we will start deploying additional pressure pumping capacity, most of which will be committed under long-term contracts. The deployment will include two frac fleets in the Eagle Ford Shale of South Texas, a frac fleet in the Marcellus Shale and additional pressure pumping capacity in the Bakken Shale. As a result of our investments, we anticipate our 2010 capital expenditures will be between $155 and $165 million.”
“We remain pleased with how the company is positioned, believe activity in oil and liquid-rich plays will remain robust for the foreseeable future and are optimistic regarding the near-term and long-term outlook for the North American natural gas markets,” concluded Mr. Winkler.
Complete Production Services, Inc. is a leading oilfield service provider focused on the completion and production phases of oil and gas wells. The company has established a significant presence in unconventional oil and gas plays in North America that it believes have the highest potential for long-term growth.
Complete will hold a conference call to discuss second quarter 2010 results on Wednesday, July 21, 2010 at 2:30 p.m. Eastern Time. To participate in the live conference call, dial (866) 314-5050 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 33412145. The conference call will be available for replay beginning at 5:30 p.m. Eastern Time on July 21, 2010 and will be available until July 28, 2010. To access the conference call replay, please call (888) 286-8010 and use the passcode: 26086546. The call is also being webcast and can be accessed at our website at www.completeproduction.com.
The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risk and uncertainties. These forward-looking statements include statements regarding future market conditions, the company’s deployment of additional pressure pumping capacity, the company’s capital expenditures, the company’s business objectives in 2010 and the company’s future success. Such statements are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry, the uncertainty of near-term and long-term activity levels, general economic conditions in the United States and globally, and other risks described in the company’s most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.
Management evaluates the performance of Complete’s operating segments using non-GAAP financial measures, including Adjusted EBITDA. Adjusted EBITDA is calculated as net income from continuing operations before net interest expense, taxes, depreciation, amortization, impairment charges and non-controlling interest. Adjusted EBITDA is not a substitute for GAAP measures of earnings and cash flow. Adjusted EBITDA is used in this press release because our management considers this measure to be an important supplemental measure of performance and believes it is used by securities analysts, investors and other interested parties in the evaluation of companies in our industry.
| Complete Production Services, Inc. Consolidated Statements of Operations For the Quarters Ended June 30, 2010 and 2009 and March 31, 2010 And the Six Months Ended June 30, 2010 and 2009 (unaudited, in thousands, except per share data) | |||||||||||||||||||||||||
| Quarter Ended | Six Months Ended | ||||||||||||||||||||||||
| June 30, | March 31, | June 30, | |||||||||||||||||||||||
| 2010 | 2009 | 2010 | 2010 | 2009 | |||||||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
| Revenue: | |||||||||||||||||||||||||
| Services | $ | 350,905 | $ | 221,150 | $ | 301,392 | $ | 652,297 | $ | 544,067 | |||||||||||||||
| Products | 9,340 | 17,248 | 8,312 | 17,652 | 31,012 | ||||||||||||||||||||
| 360,245 | 238,398 | 309,704 | 669,949 | 575,079 | |||||||||||||||||||||
| Cost of services | 223,564 | 150,773 | 206,820 | 430,384 | 361,986 | ||||||||||||||||||||
| Cost of products | 7,323 | 13,492 | 6,124 | 13,447 | 23,987 | ||||||||||||||||||||
| General and administrative expense | 44,017 | 45,633 | 40,852 | 84,869 | 94,911 | ||||||||||||||||||||
| Depreciation and amortization | 45,472 | 51,402 | 45,319 | 90,791 | 103,091 | ||||||||||||||||||||
| 320,376 | 261,300 | 299,115 | 619,491 | 583,975 | |||||||||||||||||||||
| Income (loss) before interest and taxes | 39,869 | (22,902 | ) | 10,589 | 50,458 | (8,896 | ) | ||||||||||||||||||
| Interest expense | 14,760 | 13,899 | 14,741 | 29,501 | 28,357 | ||||||||||||||||||||
| Interest income | (95 | ) | (20 | ) | (48 | ) | (143 | ) | (30 | ) | |||||||||||||||
| Income (loss) before taxes | 25,204 | (36,781 | ) | (4,104 | ) | 21,100 | (37,223 | ) | |||||||||||||||||
| Tax provision (benefit) | 9,533 | (10,949 | ) | (1,342 | ) | 8,191 | (11,055 | ) | |||||||||||||||||
| Net income (loss) | $ | 15,671 | $ | (25,832 | ) | $ | (2,762 | ) | $ | 12,909 | $ | (26,168 | ) | ||||||||||||
| Basic earnings (loss) per share: | $ | 0.21 | $ | (0.34 | ) | $ | (0.04 | ) | $ | 0.17 | $ | (0.35 | ) | ||||||||||||
| Diluted earnings (loss) per share: | $ | 0.20 | $ | (0.34 | ) | $ | (0.04 | ) | $ | 0.17 | $ | (0.35 | ) | ||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||||
| Basic | 76,036 | 75,036 | 75,699 | 75,869 | 74,966 | ||||||||||||||||||||
| Diluted | 77,318 | 75,036 | 75,699 | 77,194 | 74,966 | ||||||||||||||||||||
| Complete Production Services, Inc. Condensed Consolidated Balance Sheets As of June 30, 2010 and December 31, 2009 (in thousands) | |||||||||||||
| June 30, | December 31, | ||||||||||||
| 2010 | 2009 | ||||||||||||
| (unaudited) | (unaudited) | ||||||||||||
| Assets: | |||||||||||||
| Cash | $ | 141,648 | $ | 77,360 | |||||||||
| Other current assets | 325,824 | 292,566 | |||||||||||
| Property, plant and equipment, net | 893,599 | 941,133 | |||||||||||
| Goodwill | 244,840 | 243,823 | |||||||||||
| Other long-term assets | 26,924 | 33,972 | |||||||||||
| Total assets | 1,632,835 | 1,588,854 | |||||||||||
| Liabilities and stockholders' equity: | |||||||||||||
| Current liabilities | 112,201 | 91,722 | |||||||||||
| Long-term debt | 650,000 | 650,002 | |||||||||||
| Long-term deferred tax liabilities | 151,995 | 148,240 | |||||||||||
| Total liabilities | 914,196 | 889,964 | |||||||||||
| Common stock | 761 | 752 | |||||||||||
| Treasury stock | (1,744 | ) | (334 | ) | |||||||||
| Additional paid-in capital | 645,086 | 636,904 | |||||||||||
| Retained earnings | 54,916 | 42,007 | |||||||||||
| Cumulative translation adjustment | 19,620 | 19,561 | |||||||||||
| Total stockholders' equity | 718,639 | 698,890 | |||||||||||
| Total liabilities and stockholders' equity | $ | 1,632,835 | $ | 1,588,854 | |||||||||
| Complete Production Services, Inc. Consolidated Segment Information For the Quarters Ended June 30, 2010 and 2009, and March 31, 2010 And the Six Months Ended June 30, 2010 and 2009 (in thousands, except percentages) | |||||||||||||||
| Quarter Ended | |||||||||||||||
| June 30, | June 30, | March 31, | |||||||||||||
| 2010 | 2009 | 2010 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | |||||||||||||
| Revenue: | |||||||||||||||
| Completion and production services | $ | 310,460 | $ | 196,441 | $ | 266,288 | |||||||||
| Drilling services | 40,445 | 24,709 | 35,104 | ||||||||||||
| Products | 9,340 | 17,248 | 8,312 | ||||||||||||
| Total revenues | $ | 360,245 | $ | 238,398 | $ | 309,704 | |||||||||
| Adjusted EBITDA: (1) | |||||||||||||||
| Completion and production services | $ | 84,748 | $ | 31,424 | $ | 57,756 | |||||||||
| Drilling services | 8,663 | 3,569 | 5,419 | ||||||||||||
| Products | 1,250 | 2,085 | 1,562 | ||||||||||||
| Corporate and other | (9,320 | ) | (8,578 | ) | (8,829 | ) | |||||||||
| Total | $ | 85,341 | $ | 28,500 | $ | 55,908 | |||||||||
| Adjusted EBITDA as a % of Revenue: | |||||||||||||||
| Completion and production services | 27.3 | % | 16.0 | % | 21.7 | % | |||||||||
| Drilling services | 21.4 | % | 14.4 | % | 15.4 | % | |||||||||
| Products | 13.4 | % | 12.1 | % | 18.8 | % | |||||||||
| Total | 23.7 | % | 12.0 | % | 18.1 | % | |||||||||
| Six Months Ended | |||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2010 | 2009 | ||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||
| Revenue: | |||||||||||||||
| Completion and production services | $ | 576,748 | $ | 483,967 | |||||||||||
| Drilling services | 75,549 | 60,100 | |||||||||||||
| Products | 17,652 | 31,012 | |||||||||||||
| $ | 669,949 | $ | 575,079 | ||||||||||||
| Adjusted EBITDA: (1) | |||||||||||||||
| Completion and production services | $ | 142,504 | $ | 97,648 | |||||||||||
| Drilling services | 14,082 | 10,456 | |||||||||||||
| Products | 2,812 | 4,635 | |||||||||||||
| Corporate and other | (18,149 | ) | (18,544 | ) | |||||||||||
| $ | 141,249 | $ | 94,195 | ||||||||||||
| Adjusted EBITDA as a % of Revenue: | |||||||||||||||
| Completion and production services | 24.7 | % | 20.2 | % | |||||||||||
| Drilling services | 18.6 | % | 17.4 | % | |||||||||||
| Products | 15.9 | % | 14.9 | % | |||||||||||
| Total | 21.1 | % | 16.4 | % | |||||||||||
| (1) Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release. | |||||||||||||||
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| Complete Production Services, Inc. Reconciliation of Adjusted EBITDA to Operating Income (Loss) For the Quarters Ended June 30, 2010 and 2009, and March 31, 2010 And the Six Months Ended June 30, 2010 and 2009 (unaudited, in thousands) | ||||||||||||||||||||||||
| Completion | ||||||||||||||||||||||||
| & Production | Drilling | Corporate & | ||||||||||||||||||||||
| Services | Services | Products | Other | Total | ||||||||||||||||||||
| Quarter Ended June 30, 2010: | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 84,748 | $ | 8,663 | $ | 1,250 | $ | (9,320 | ) | $ | 85,341 | |||||||||||||
| Depreciation & amortization | 39,770 | 4,644 | 561 | 497 | 45,472 | |||||||||||||||||||
| Operating income (loss) | $ | 44,978 | $ | 4,019 | $ | 689 | $ | (9,817 | ) | $ | 39,869 | |||||||||||||
| Quarter Ended June 30, 2009: | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 31,424 | $ | 3,569 | $ | 2,085 | $ | (8,578 | ) | $ | 28,500 | |||||||||||||
| Depreciation & amortization | 44,723 | 5,488 | 624 | 567 | 51,402 | |||||||||||||||||||
| Operating income (loss) | $ | (13,299 | ) | $ | (1,919 | ) | $ | 1,461 | $ | (9,145 | ) | $ | (22,902 | ) | ||||||||||
| Quarter Ended March 31, 2010: | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 57,756 | $ | 5,419 | $ | 1,562 | $ | (8,829 | ) | $ | 55,908 | |||||||||||||
| Depreciation & amortization | 39,793 | 4,458 | 576 | 492 | 45,319 | |||||||||||||||||||
| Operating income (loss) | $ | 17,963 | $ | 961 | $ | 986 | $ | (9,321 | ) | $ | 10,589 | |||||||||||||
| Six Months Ended June 30, 2010: | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 142,504 | $ | 14,082 | $ | 2,812 | $ | (18,149 | ) | $ | 141,249 | |||||||||||||
| Depreciation & amortization | 79,563 | 9,102 | 1,137 | 989 | 90,791 | |||||||||||||||||||
| Operating income (loss) | $ | 62,941 | $ | 4,980 | $ | 1,675 | $ | (19,138 | ) | $ | 50,458 | |||||||||||||
| Six Months Ended June 30, 2009: | ||||||||||||||||||||||||
| Adjusted EBITDA | $ | 97,648 | $ | 10,456 | $ | 4,635 | $ | (18,544 | ) | $ | 94,195 | |||||||||||||
| Depreciation & amortization | 89,649 | 11,036 | 1,258 | 1,148 | 103,091 | |||||||||||||||||||
| Operating income (loss) | $ | 7,999 | $ | (580 | ) | $ | 3,377 | $ | (19,692 | ) | $ | (8,896 | ) | |||||||||||
| Complete Production Services, Inc. Reconciliation of Operating Income (Loss) to Net Income (Loss) For the Quarters Ended June 30, 2010 and 2009, and March 31, 2010 And the Six Months Ended June 30, 2010 and 2009 (unaudited, in thousands) | ||||||||||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||||||||||
| June 30, | March 31, | June 30, | ||||||||||||||||||||
| 2010 | 2009 | 2010 | 2010 | 2009 | ||||||||||||||||||
| Segment operating income (loss) | 39,869 | (22,902 | ) | 10,589 | 50,458 | (8,896 | ) | |||||||||||||||
| Interest expense | 14,760 | 13,899 | 14,741 | 29,501 | 28,357 | |||||||||||||||||
| Interest income | (95 | ) | (20 | ) | (48 | ) | (143 | ) | (30 | ) | ||||||||||||
| Income taxes | 9,533 | (10,949 | ) | (1,342 | ) | 8,191 | (11,055 | ) | ||||||||||||||
| Net income (loss) | $ | 15,671 | $ | (25,832 | ) | $ | (2,762 | ) | $ | 12,909 | $ | (26,168 | ) | |||||||||
