HOUSTON--(BUSINESS WIRE)--Complete Production Services, Inc. (NYSE:CPX) today reported second quarter revenue of $552.0 million, an increase of 11% over the first quarter of 2011, Adjusted EBITDA (as defined below) of $149.6 million, an increase of 19% over the first quarter of 2011, operating income of $100.1 million and net income of $54.5 million, or $0.69 per diluted share.
Revenue for the Completion and Production Services segment during the second quarter of 2011 was $491.9 million, an increase of $54.8 million over the prior quarter. Increasing activity in service intensive oil and liquid-rich plays and the deployment of new assets led to growth in all major service lines and more than offset the seasonal impact of the Canadian break-up and other weather related challenges. Adjusted EBITDA for the segment was $144.9 million in the second quarter of 2011, up $23.4 million versus the first quarter of 2011. Adjusted EBITDA margins increased to 29.5% from 27.8% in the first quarter of 2011.
Drilling Services segment revenue was $52.2 million during the second quarter of 2011, an increase of $2.1 million over the first quarter of 2011. Adjusted EBITDA for the segment increased $1.4 million to $13.9 million during the second quarter of 2011.
Compared to the second quarter of 2010, consolidated revenue increased $191.7 million, or 53%, Adjusted EBITDA increased $64.3 million, operating income increased $60.3 million, and net income increased by $38.8 million, or $0.49 per diluted share.
“We delivered another quarter of solid financial performance,” commented Joe Winkler, Chairman and CEO. “In addition to achieving record revenue and EBITDA while overcoming the impact of challenging weather conditions in certain of our operating areas, during the second quarter we:
- Completed a $15.6 million acquisition of a hydraulic snubbing and production testing business with operations in the Marcellus and Eagle Ford Shales;
- Invested a total of $93.4 million in capital expenditures, which included the deployment of four large-diameter extended-reach coiled tubing spreads; and
- Entered into a new five-year $300 million credit facility.”
“Additionally, in early July we successfully deployed our third frac spread in the Eagle Ford Shale and we divested our products business in Southeast Asia for $19.3 million.”
“We continue to invest in our business and execute key initiatives which improve our competitive position and our focus on critical completion and production services within the most active resource plays of North America. The actions we are taking and our position in the markets we serve will allow us to capitalize on activity levels that we believe will remain strong through 2012,” 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 2011 results on Friday, July 22, 2011 at 11:00 a.m. Eastern Time. To participate in the live conference call, dial (888) 268-4176 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 51812750. The conference call will be available for replay beginning at 2:00 p.m. Eastern Time on July 22, 2011, and will be available until July 29, 2011. To access the conference call replay, please call (888) 286-8010 and use the passcode: 28739479. 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 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, 2011 and 2010 and March 31, 2011 | |||||||||||||||||||||||||
And the Six Months Ended June 30, 2011 and 2010 | |||||||||||||||||||||||||
(unaudited, in thousands, except share and per share data) |
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Quarter Ended | Six Months Ended | ||||||||||||||||||||||||
June 30, | March 31, | June 30, | |||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | |||||||||||||||||||||
(unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Services | $ | 544,103 | $ | 350,905 | $ | 487,239 | $ | 1,031,342 | $ | 652,297 | |||||||||||||||
Products | 7,864 | 9,340 | 7,978 | 15,842 | 17,652 | ||||||||||||||||||||
551,967 | 360,245 | 495,217 | 1,047,184 | 669,949 | |||||||||||||||||||||
Cost of services | 346,645 | 223,564 | 314,522 | 661,167 | 430,384 | ||||||||||||||||||||
Cost of products | 5,335 | 7,323 | 5,953 | 11,288 | 13,447 | ||||||||||||||||||||
General and administrative expense | 50,380 | 44,017 | 49,351 | 99,731 | 84,869 | ||||||||||||||||||||
Depreciation and amortization | 49,465 | 45,472 | 49,148 | 98,613 | 90,791 | ||||||||||||||||||||
451,825 | 320,376 | 418,974 | 870,799 | 619,491 | |||||||||||||||||||||
Income before interest and taxes | 100,142 | 39,869 | 76,243 | 176,385 | 50,458 | ||||||||||||||||||||
Interest expense | 13,681 | 14,760 | 14,143 | 27,824 | 29,501 | ||||||||||||||||||||
Interest income | (132 | ) | (95 | ) | (95 | ) | (227 | ) | (143 | ) | |||||||||||||||
Income before taxes | 86,593 | 25,204 | 62,195 | 148,788 | 21,100 | ||||||||||||||||||||
Tax provision | 32,088 | 9,533 | 23,261 | 55,349 | 8,191 | ||||||||||||||||||||
Net income | $ | 54,505 | $ | 15,671 | $ | 38,934 | $ | 93,439 | $ | 12,909 | |||||||||||||||
Basic earnings per share: | $ | 0.70 | $ | 0.21 | $ | 0.51 | $ | 1.21 | $ | 0.17 | |||||||||||||||
Diluted earnings per share: | $ | 0.69 | $ | 0.20 | $ | 0.50 | $ | 1.18 | $ | 0.17 | |||||||||||||||
Weighted average shares outstanding: | |||||||||||||||||||||||||
Basic | 77,777 | 76,036 | 76,942 | 77,362 | 75,869 | ||||||||||||||||||||
Diluted | 79,187 | 77,318 | 78,599 | 78,895 | 77,194 |
Complete Production Services, Inc. | ||||||||
Condensed Consolidated Balance Sheets | ||||||||
As of June 30, 2011 and December 31, 2010 | ||||||||
(in thousands) | ||||||||
June 30, | December 31, | |||||||
2011 | 2010 | |||||||
(unaudited) | (unaudited) | |||||||
Assets: | ||||||||
Cash | $ | 170,554 | $ | 126,681 | ||||
Other current assets | 492,038 | 425,229 | ||||||
Property, plant and equipment, net | 1,001,810 | 956,028 | ||||||
Goodwill | 254,996 | 250,533 | ||||||
Restricted cash (1) |
17,000 | 17,000 | ||||||
Other long-term assets | 29,267 | 25,105 | ||||||
Total assets | 1,965,665 | 1,800,576 | ||||||
Liabilities and stockholders' equity: | ||||||||
Current liabilities | 153,533 | 148,404 | ||||||
Long-term debt | 650,000 | 650,000 | ||||||
Long-term deferred tax liabilities | 234,451 | 190,422 | ||||||
Other long-term liabilities | 6,150 | 5,916 | ||||||
Total liabilities | 1,044,134 | 994,742 | ||||||
Common stock | 778 | 765 | ||||||
Treasury stock | (7,346 | ) | (1,765 | ) | ||||
Additional paid-in capital | 684,174 | 657,992 | ||||||
Retained earnings | 219,604 | 126,165 | ||||||
Cumulative translation adjustment | 24,321 | 22,677 | ||||||
Total stockholders' equity | 921,531 | 805,834 | ||||||
Total liabilities and stockholders' equity | $ | 1,965,665 | $ | 1,800,576 |
(1) | Represents funds placed in escrow as a compensating balance for certain potential long-term insurance claim liabilities, effectively cash collateralizing and replacing a letter of credit. |
Complete Production Services, Inc. | |||||||||
Consolidated Segment Information | |||||||||
For the Quarters Ended June 30, 2011 and 2010, and March 31, 2011 |
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And Six Months Ended June 30, 2011 and 2010 |
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(in thousands, except percentages) | |||||||||
Quarter Ended | |||||||||
June 30, | March 31, | ||||||||
2011 | 2010 | 2011 | |||||||
(unaudited) | (unaudited) | (unaudited) | |||||||
Revenue: | |||||||||
Completion and production services | $ 491,881 | $ 310,460 | $ 437,087 | ||||||
Drilling services | 52,222 | 40,445 | 50,152 | ||||||
Products | 7,864 | 9,340 | 7,978 | ||||||
Total revenues | $ 551,967 | $ 360,245 | $ 495,217 | ||||||
Adjusted EBITDA: (1) |
|||||||||
Completion and production services | $ 144,931 | $ 84,748 | $ 121,514 | ||||||
Drilling services | 13,888 | 8,663 | 12,489 | ||||||
Products | 1,863 | 1,250 | 1,215 | ||||||
Corporate and other | (11,075) | (9,320) | (9,827) | ||||||
Total | $ 149,607 | $ 85,341 | $ 125,391 | ||||||
Adjusted EBITDA as a % of Revenue: | |||||||||
Completion and production services | 29.5% | 27.3% | 27.8% | ||||||
Drilling services | 26.6% | 21.4% | 24.9% | ||||||
Products | 23.7% | 13.4% | 15.2% | ||||||
Total | 27.1% | 23.7% | 25.3% | ||||||
Six Months Ended | |||||||||
June 30, | June 30, | ||||||||
2011 | 2010 | ||||||||
(unaudited) | (unaudited) | ||||||||
Revenue: | |||||||||
Completion and production services | $ 928,968 | $ 576,748 | |||||||
Drilling services | 102,374 | 75,549 | |||||||
Products | 15,842 | 17,652 | |||||||
$ 1,047,184 | $ 669,949 | ||||||||
Adjusted EBITDA: (1) |
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Completion and production services | $ 266,445 | $ 142,504 | |||||||
Drilling services | 26,376 | 14,082 | |||||||
Products | 3,077 | 2,812 | |||||||
Corporate and other | (20,900) | (18,149) | |||||||
$ 274,998 | $ 141,249 | ||||||||
Adjusted EBITDA as a % of Revenue: | |||||||||
Completion and production services | 28.7% | 24.7% | |||||||
Drilling services | 25.8% | 18.6% | |||||||
Products | 19.4% | 15.9% | |||||||
Total | 26.3% | 21.1% |
(1) |
Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release. |
Complete Production Services, Inc. | ||||||||||||||||||||
Reconciliation of Adjusted EBITDA to Net Income (Loss) |
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For the Quarters Ended June 30, 2011 and 2010, and March 31, 2011 |
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And the Six Months Ended June 30, 2011 and 2010 | ||||||||||||||||||||
(unaudited, in thousands) | ||||||||||||||||||||
Completion | ||||||||||||||||||||
& Production | Drilling | Corporate & | ||||||||||||||||||
Services | Services | Products | Other | Total | ||||||||||||||||
Quarter Ended June 30, 2011: | ||||||||||||||||||||
Adjusted EBITDA (1) |
$ | 144,931 | $ | 13,888 | $ | 1,863 | $ | (11,075 | ) | $ | 149,607 | |||||||||
Depreciation & amortization | 43,585 | 4,790 | 486 | 604 | 49,465 | |||||||||||||||
Operating income | $ | 101,346 | $ | 9,098 | $ | 1,377 | $ | (11,679 | ) | $ | 100,142 | |||||||||
Interest expense | 13,681 | |||||||||||||||||||
Interest income | (132 | ) | ||||||||||||||||||
Income taxes | 32,088 | |||||||||||||||||||
Net income | $ | 54,505 | ||||||||||||||||||
Quarter Ended June 30, 2010: | ||||||||||||||||||||
Adjusted EBITDA (1) |
$ | 84,748 | $ | 8,663 | $ | 1,250 | $ | (9,320 | ) | $ | 85,341 | |||||||||
Depreciation & amortization | 39,770 | 4,644 | 561 | 497 | 45,472 | |||||||||||||||
Operating income | $ | 44,978 | $ | 4,019 | $ | 689 | $ | (9,817 | ) | $ | 39,869 | |||||||||
Interest expense | 14,760 | |||||||||||||||||||
Interest income | (95 | ) | ||||||||||||||||||
Income taxes | 9,533 | |||||||||||||||||||
Net income | $ | 15,671 | ||||||||||||||||||
Quarter Ended March 31, 2011: | ||||||||||||||||||||
Adjusted EBITDA (1) |
$ | 121,514 | $ | 12,489 | $ | 1,215 | $ | (9,827 | ) | $ | 125,391 | |||||||||
Depreciation & amortization | 43,257 | 4,749 | 542 | 600 | 49,148 | |||||||||||||||
Operating income | $ | 78,257 | $ | 7,740 | $ | 673 | $ | (10,427 | ) | $ | 76,243 | |||||||||
Interest expense | 14,143 | |||||||||||||||||||
Interest income | (95 | ) | ||||||||||||||||||
Income taxes | 23,261 | |||||||||||||||||||
Net income | $ | 38,934 | ||||||||||||||||||
Six Months Ended June 30, 2011: | ||||||||||||||||||||
Adjusted EBITDA (1) |
$ | 266,445 | $ | 26,376 | $ | 3,077 | $ | (20,900 | ) | $ | 274,998 | |||||||||
Depreciation & amortization | 86,842 | 9,539 | 1,028 | 1,204 | 98,613 | |||||||||||||||
Operating income | $ | 179,603 | $ | 16,837 | $ | 2,049 | $ | (22,104 | ) | $ | 176,385 | |||||||||
Interest expense | 27,824 | |||||||||||||||||||
Interest income | (227 | ) | ||||||||||||||||||
Income taxes | 55,349 | |||||||||||||||||||
Net income | $ | 93,439 | ||||||||||||||||||
Six Months Ended June 30, 2010: | ||||||||||||||||||||
Adjusted EBITDA(1) | $ | 142,504 | $ | 14,082 | $ | 2,812 | $ | (18,149 | ) | $ | 141,249 | |||||||||
Depreciation & amortization | 79,563 | 9,102 | 1,137 | 989 | 90,791 | |||||||||||||||
Operating income | $ | 62,941 | $ | 4,980 | $ | 1,675 | $ | (19,138 | ) | $ | 50,458 | |||||||||
Interest expense | 29,501 | |||||||||||||||||||
Interest income | (143 | ) | ||||||||||||||||||
Income taxes | 8,191 | |||||||||||||||||||
Net income | $ | 12,909 |
(1) | Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release. |