HOUSTON, Oct. 27, 2005 (PRIMEZONE) -- W-H Energy Services, Inc. (NYSE:WHQ) announced third quarter income from continuing operations of $12.8 million or $0.44 per share as compared to the $5.1 million or $0.18 per share reported for the same period in the prior year. In the preceding quarter, the Company reported income from continuing operations of $11.2 million or $0.39 per share ($12.4 million or $0.43 per share before select items as reconciled in this press release).
Earnings for the quarter ended September 30, 2005 were reduced as a result of Hurricanes Katrina and Rita and the associated shut-in of drilling and production activity in the Gulf of Mexico and along the Gulf Coast. In the third quarter of 2005, the Company estimates that these storms resulted in a $0.06 to $0.08 reduction of earnings per share. However, the Company's earnings more than doubled as compared to the same period last year despite the negative impact of the two hurricanes. The Company attributed the improvement in earnings to higher utilization and pricing, particularly in its drilling segment.
The Company projects that earnings per share will range from $0.44 to $0.48 for the quarter ending December 31, 2005. This projection anticipates that fourth quarter earnings per share will be negatively impacted by $0.04 to $0.06 per share as a result of the recent storms in the Gulf of Mexico.
Revenues for the third quarter of $161.3 million were 40 percent higher than the third quarter of 2004 and were 3 percent higher than the preceding quarter. Domestic revenues increased 33 percent as compared to the third quarter of last year and were relatively unchanged as compared to the preceding quarter. International revenues increased 119 percent as compared to the third quarter of last year and were 28 percent higher than the preceding quarter.
QUARTERLY SEGMENT RESULTS
Drilling
Revenues in the drilling segment were $105.4 million in the third quarter, 43 percent higher than the comparable period in the prior year and 5 percent higher than the preceding quarter. Operating income of $16.7 million was over triple than that posted in the comparable period in the prior year and 32 percent higher than the preceding quarter (before the $3.7 million of costs associated with the warehouse fire in that quarter).
Completion and workover
Third quarter revenues in the completion and workover segment were $55.9 million in the third quarter, 34 percent higher than the comparable period in the prior year and 1 percent lower than the preceding quarter. Operating income of $10.6 million recorded in the third quarter was 36 percent higher than the comparable period in the prior year and was 23 percent lower than the preceding quarter.
W-H Energy is a diversified oilfield service company that provides products and services used primarily for the drilling, completion and production of oil and natural gas wells. The Company has operations in North America and select areas internationally.
Statements in this press release that are not strictly historical are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward-looking statements due to, among other things, the current and expected future prices of crude oil and natural gas, the level of exploration, development and production activity of, and the corresponding capital spending by, our customers, risks associated with events that result in personal injuries, loss of life, damage to or destruction of property, equipment or the environment and suspension of operations, unavailability of or costs associated with insurance, competition in our industry, difficulty in continuing to develop, produce and commercialize technologically advanced products and services, loss of use of certain technologies and weather conditions in offshore markets. These and other risks are more fully described in W-H Energy Services, Inc.'s Annual Report filed on Form 10-K with the Securities and Exchange Commission. The Company disclaims any obligation to update the statements in this press release.
The W-H Energy Services, Inc. company logo can be found at http://www.primezone.com/newsroom/prs/?pkgid=1970
W-H ENERGY SERVICES, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except share and per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
2005 2004 2005 2004
------------ ------------ ------------ ------------
Revenues $ 161,343 $ 115,453 $ 461,060 $ 331,431
Costs and
Expenses:
Cost of
revenues 91,287 67,544 260,094 193,991
Selling,
general and
administrative 28,073 22,288 81,480 64,159
Warehouse fire
related costs (a) -- -- 3,690 --
Research and
development 3,363 3,871 12,624 10,214
Depreciation
and
amortization 14,367 11,785 42,132 33,554
------------ ------------ ------------ ------------
Total costs
and expenses 137,090 105,488 400,020 301,918
Operating
income 24,253 9,965 61,040 29,513
Other (income)
expenses:
Interest
expense, net (b) 2,874 1,619 7,879 9,188
Other (income)
expense, net 70 21 356 (67)
------------ ------------ ------------ ------------
Income before
income taxes 21,309 8,325 52,805 20,392
Provision for
income taxes 8,487 3,205 20,053 7,851
------------ ------------ ------------ ------------
Income from
continuing
operations 12,822 5,120 32,752 12,541
Income (loss) from
discontinued
operations, net
of tax -- 135 -- (724)
------------ ------------ ------------ ------------
Net income $ 12,822 $ 5,255 $ 32,752 $ 11,817
============ ============ ============ ============
Earnings (loss)
per common share:
Basic:
From
continuing
operations $ 0.45 $ 0.19 $ 1.17 $ 0.46
From
discontinued
operations -- -- -- (0.03)
------------ ------------ ------------ ------------
Total $ 0.45 $ 0.19 $ 1.17 $ 0.43
Diluted:
From
continuing
operations $ 0.44 $ 0.18 $ 1.13 $ 0.45
From
discontinued
operations -- 0.01 -- (0.03)
------------ ------------ ------------ ------------
Total $ 0.44 $ 0.19 $ 1.13 $ 0.42
Weighted average
shares
outstanding:
Basic 28,236,364 27,561,912 27,983,198 27,474,113
Diluted 29,284,755 28,321,330 28,897,057 28,146,237
(a) Warehouse fire related costs for the nine months ended
September 30, 2005 represents costs and expenses related to a
fire that occurred on April 17, 2005. For more information,
see "Unaudited Reconciliation of Non-GAAP Measures" in this
press release.
(b) Interest expense for the nine months ended September 30, 2004
includes a write-off of approximately $3.1 million ($1.9
million after tax) of non-cash financing costs associated with
the Company's previous credit facility.
W-H ENERGY SERVICES, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
September 30, 2005 December 31, 2004
-------------- -------------
(Unaudited)
Assets:
Cash and cash equivalents $ 16,398 $ 10,448
Accounts receivable, net 140,130 111,728
Inventory 54,362 48,317
Other current assets 13,576 15,566
-------------- -------------
Total current assets 224,466 186,059
Property and equipment, net 252,500 235,317
Other assets 131,198 127,235
-------------- -------------
Total assets $ 608,164 $ 548,611
============== =============
Liabilities and Shareholders' Equity:
Accounts payable and
accrued liabilities $ 69,925 $ 64,498
-------------- -------------
Total current liabilities 69,925 64,498
Long-term debt, net of
current maturities (a) 185,000 180,805
Other liabilities 39,013 34,713
-------------- -------------
Total liabilities 293,938 280,016
Shareholders' equity 314,226 268,595
-------------- -------------
Total liabilities and
shareholders' equity $ 608,164 $ 548,611
============== =============
(a) As of September 30, 2005, there was approximately $184 million
available under the Company's revolving credit facility.
W-H ENERGY SERVICES, INC.
UNAUDITED SEGMENTED AND SELECTED FINANCIAL DATA
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- ----------------------
2005 2004 2005 2004
---------- --------- ---------- ----------
SEGMENTED INFORMATION:
Revenue:
Drilling $ 105,414 $ 73,865 $ 297,955 $ 214,758
Completion and
workover 55,929 41,588 163,105 116,673
--------- --------- --------- ---------
Total revenue $ 161,343 $ 115,453 $ 461,060 $ 331,431
========= ========= ========= =========
Depreciation and amortization:
Drilling $ 9,112 $ 7,559 $ 26,918 $ 21,665
Completion and
workover 5,196 4,153 15,025 11,685
Corporate 59 73 189 204
--------- --------- --------- ---------
Total
depreciation and
amortization $ 14,367 $ 11,785 $ 42,132 $ 33,554
========= ========= ========= =========
Operating income:
Drilling (a) $ 16,736 $ 4,816 $ 33,504 $ 14,787
Completion and
workover 10,622 7,818 36,457 22,452
Corporate (3,105) (2,669) (8,921) (7,726)
--------- --------- --------- ---------
Total operating
income $ 24,253 $ 9,965 $ 61,040 $ 29,513
========= ========= ========= =========
(a) Drilling segment operating income for the nine months ended
September 30, 2005 includes approximately $3.7 million of costs
and expenses related to a fire that occurred on April 17, 2005.
For more information, see "Unaudited Reconciliation of
Non-GAAP Measures" in this press release.
W-H ENERGY SERVICES, INC.
UNAUDITED RECONCILIATION OF NON-GAAP MEASURES (a)
(in thousands, except per share amounts)
Nine Months Ended
September 30,
-------------------- Three Months Ended
2005 2004 June 30, 2005
-------- -------- --------
Income from continuing
operations
(as reported) $ 32,752 $ 12,541 $ 11,247
a)Warehouse fire related
costs 3,690 -- 3,690
Less: Tax impact of fire
related costs (1,445) -- (1,445)
-------- -------- --------
After tax charge of
fire related costs 2,245 -- 2,245
b)Tax related items (1,127) -- (1,127)
c)Write-off of non-cash
financing costs -- 3,123 --
Less: Tax impact of
write-off -- (1,202) --
-------- -------- --------
After tax write-off -- 1,921 --
-------- -------- --------
Income from
continuing
operations before
select items $ 33,870 $ 14,462 $ 12,365
======== ======== ========
Per diluted common share
information:
Income from continuing
operations (as reported) $ 1.13 $ 0.45 $ 0.39
a)Warehouse fire
related costs, net
of tax 0.08 -- 0.08
b)Tax related items (0.04) -- (0.04)
c)Write-off of
non-cash financing
costs, net of tax -- 0.07 --
-------- -------- --------
Income from
continuing
operations
before select
items $ 1.17 $ 0.51 $ 0.43
======== ======== ========
Drilling segment operating
income (as reported) $ 33,504 $ 14,787 $ 8,942
Warehouse fire related
costs 3,690 -- 3,690
-------- -------- --------
Drilling segment
operating income
before select
items $ 37,194 $ 14,787 $ 12,632
======== ======== ========
(a) Management believes that the non-GAAP measures included within
this press release are used by financial analysts and investors
to provide comparative financial information regarding the
continuing operations of the Company, particularly with regard
to select items including the Company's new credit facility that
was obtained in June 2004, the fire that occurred in April 2005
and the result of a 2005 foreign tax audit. These measures
should not be considered as an alternative to net income or any
other measure of operating performance calculated in accordance
with generally accepted accounting principles.