ALY,,, Earnings out...They look much better than I thought but the no of shares outstanding have grown faster than I thought they would,,, All in all a very good report,,,A pop is in the cards...THREE BAGS DOWN,,,SEVEN TO GO..hank
Energy Inc (ALY)
Industry: Oil Well Services & Equipment
Sector: Energy
Allis-Chalmers Energy Reports Record Second Quarter 2005 Results
HOUSTON, Aug 05, 2005 /PRNewswire-FirstCall via COMTEX/ -- Allis-Chalmers Energy Inc. ( AMEX:ALY) today announced its results for the second quarter ended June 30, 2005.
Revenue for the second quarter 2005 increased 106.5% to $23.6 million compared to $11.4 million for the second quarter of 2004, primarily due to increased market share, investment in additional equipment, the completion of strategic acquisitions and the overall strength of the oil and gas industry.
Income from operations grew 153.4% to $2.9 million for second quarter 2005 from $1.2 million in the second quarter of 2004 driven mainly by increased revenues, improved pricing and market conditions. Adjusted EBITDA increased 130.9% to $4.4 million for the 2005 second quarter from $1.9 million in the second quarter of 2004. As Adjusted EBITDA is a non-GAAP item, additional information and discussion regarding Adjusted EBITDA is provided later in this release.
Net income for the second quarter of 2005 attributed to common shares increased 369.2% to $1.8 million or $0.12 per diluted share, compared to net income attributed to common shares of $377,000 or $0.05 per diluted share in the same quarter of 2004. Weighted average shares of common stock outstanding on a diluted basis increased to 15.1 million shares for the second quarter of 2005 from 7.6 million shares for the second quarter of 2004.
Micki Hidayatallah, the Company's Chairman and Chief Executive Officer stated, "During the second quarter, we completed two acquisitions Delta Rental Service, Inc. in our rental tool segment and Capcoil Tubing Services in our production services segment. We continue to increase our market share in the drilling and production sectors in which we operate. We also believe that our new and expanded credit facility has strengthened our ability to grow organically and through acquisitions."
Revenue for the first six months of 2005 rose 103.6% to $42.9 million compared to $21.1 million for the first six months of 2004. Operating income grew at a faster pace than revenue to $5.2 million in 2005 from $2.2 million during the comparable six months in 2004, representing a 136.7% increase. Net income for the first six months of 2005 attributed to common shares rose 338.4% to $3.3 million, or $0.22 per diluted shares, from net income of $761,000 or $0.13 per diluted share in the first six months of 2004. Weighted average shares of common stock outstanding on a diluted basis increased to 14.9 million shares for the six month period of 2005 from 6.9 million shares for the second quarter of 2004.
Segment Results: * Directional Drilling. Operating income for the directional drilling
services segment increased 105.6% to $1.5 million from $727,000 in the
second quarter of 2004. The improved results were due to increased
market share in Texas and the Gulf Coast area, the establishment of new
operations in West Texas and Oklahoma, and the hiring of additional
directional drillers and sales personnel.
* Casing & Tubing. Operating income for the casing and tubing services
segment increased 72.9% to $1.4 million in 2005 from $783,000 in 2004.
The rise was due to increased drilling activity in Mexico and the
Company's expanded capacity in that market, additional personnel and
equipment and a new operating facility in Alice, Texas.
* Compressed Air Drilling. Operating income attributed to compressed air
drilling increased 195.6% to $1.0 million in the 2005 second quarter
from $339,000 in the comparable 2004 period due in part to the
acquisition of Diamond Air as of November 1, 2004, as well as improved
pricing in West Texas. In July 2005, Allis-Chalmers Energy increased
its ownership in AirComp LLC to 100% by acquiring the remaining 45%
interest in the company.
* Rental Tools. Operating income from this fairly new business was
$405,000 due to the acquisitions of Safco Oilfield Products in
September 2004 and of Delta Rental Service in April 2005.
* Production services. Allis-Chalmers Energy's newest operating segment
produced operating income of $36,000 during the 2005 second quarter.
The Company started this segment with the purchase of Downhole
Injection Systems in December 2004, and expanded its capabilities with
the recent purchase of Capcoil in May 2005. Restatement:
The Company's board of directors has determined, upon the recommendation of the audit committee, that the Company previously understated earnings per share due to an incorrect calculation of its weighted shares outstanding for the third and fourth quarters of 2003, for the first three quarters of 2004, for the year ended December 31, 2004 and for the quarter ended March 31, 2005. Consequently, the Company will restate its financial statements for each of those periods. Based on the proper application of FAS 128, weighted average diluted shares outstanding was 7,619,000 and 6,907,000 for the three and six months ended June 30, 2004, respectively, compared to the previously reported weighted average diluted shares outstanding of 10,237,000 and 8,394,000 for the three and six months ended June 30, 2004, respectively. For the three and six months ended June 30, 2004, the effect is to increase weighted average diluted earnings per share to $0.05 and $0.13, respectively, compared to the $0.04 and $.09 previously reported, respectively. For the year ended December 31, 2004, the effect is to increase weighted average diluted earnings per share to $0.09 compared to the $0.07 previously reported and decrease weighted average diluted shares outstanding to 9,510,000 from 11,959,000 as previously reported. For the three months ended March 31, 2005, weighted average diluted shares outstanding was 14,695,000 compared to the previously reported weighted average diluted shares outstanding of 17,789,000. The effect is to increase weighted average diluted earnings per share to $0.11 compared to the $0.09 previously reported. The Company plans to file its restated financial statements as soon as practicable.
Conference Call:
The Company will host a conference call to discuss its 2005 second quarter financial results and recent developments at 10:00 a.m. Eastern (9:00 a.m. Central) today, August 5, 2005. To participate in the call, please log on to alchenergy or dial (303) 205-0033 and ask for the Allis- Chalmers call at least 10 minutes prior to the start time. For those who cannot listen to the live call, a telephonic replay will be available through August 12, 2005, and may be accessed by calling (303) 590-3000 and using the pass code 11036565. A web cast archive will also be available at alchenergy shortly after the call is concluded.
About Allis-Chalmers Energy
Allis-Chalmers Energy Inc. provides a variety of products and services to the oil and natural gas industry. Through its subsidiaries, Allis-Chalmers is engaged in providing specialized equipment and operations to install casing and production tubing required to drill and complete oil and gas wells, directional and horizontal drilling services, the rental of heavy weight spiral drill pipe and related oilfield services, services to enhance production through the installation of small diameter coiled tubing and chemicals into producing oil and gas wells and air drilling services to natural gas exploration and development operators.
Forward-Looking Statements
This Press Release contains forward-looking statements (within the meaning of Section 27A of the Securities Act of 1933 (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934) regarding Allis-Chalmers Energy's business, financial condition, results of operations and prospects. Words such as expects, anticipates, intends, plans, believes, seeks, estimates and similar expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Press Release.
Although forward-looking statements in this Press Release reflect the good faith judgment of management, such statements can only be based on facts and factors currently known to management. Consequently, forward-looking statements are inherently subject to risks and uncertainties, and actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. Factors that could cause or contribute to such differences in results and outcomes include, but are not limited to, demand for oil and natural gas drilling services in the areas and markets in which the Company operates, competition, obsolescence of products and services, the Company's ability to obtain financing to support its operations, environmental and other casualty risks, and the impact of government regulation. Further information about the risks and uncertainties that may impact the Company are set forth in the Company's most recent filings on Form 10K (including without limitation in the "Risk Factors" Section) and Form 10-Q, and in the Company's other SEC filings and publicly available documents. Readers are urged not to place undue reliance on these forward- looking statements, which speak only as of the date of this Press Release. The Company undertakes no obligation to revise or update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Press Release.
Contact: Victor M. Perez, CFO
Allis-Chalmers Energy
713-369-0550 Lisa Elliott, Sr. VP
DRG&E / 713-529-6600 ALLIS-CHALMERS ENERGY INC.
CONSOLIDATED CONDENSED INCOME STATEMENTS
(in thousands, except per share amounts)
(unaudited) For the Three Months Ended For the Six Months Ended
June 30, June 30,
2005 2004 2005 2004
(Restated) (Restated) Revenues $23,588 $11,422 $42,922 $21,083 Cost of revenues
Direct costs 15,691 7,833 28,476 14,742
Depreciation 1,092 586 2,006 1,205 Total cost of
revenues 16,783 8,419 30,482 15,947 Gross margin 6,805 3,003 12,440 5,136
General and
administrative 3,465 1,670 6,459 2,554 Amortization 426 183 820 402 Income from
operations 2,914 1,150 5,161 2,180 Other income (expense):
Interest (645) (499) (1,166) (1,068)
Other 10 18 158 205 Total other income
(expense) (635) (481) (1,008) (863)
Net income before
minority interest
and income taxes 2,279 669 4,153 1,317 Minority interest in
income of subsidiaries (344) (139) (488) (212)
Provision for
foreign taxes (166) (117) (329) (220) Net income 1,769 413 3,336 885 Preferred stock dividend - (36) - (124)
Net income attributed
to common shareholders $1,769 $377 $3,336 $761
Net income per common
share:
Basic $0.13 $0.06 $0.24 $0.15
Diluted $0.12 $0.05 $0.22 $0.13 Weighted average shares
outstanding:
Basic 13,967 6,256 13,800 5,091
Diluted 15,103 7,619 14,900 6,907 ALLIS-CHALMERS ENERGY INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands, except for share amounts) June 30, December 31,
2005 2004
(unaudited) Assets
Cash and cash equivalents $2,693 $7,344
Trade receivables, net 18,001 12,986
Inventory 3,901 2,373
Lease receivable, current 180 180
Prepaid expenses and other 1,650 1,495
Total current assets 26,425 24,378 Property and equipment, net 49,585 37,679
Goodwill 11,892 11,776
Other intangible assets, net 6,175 5,057
Debt issuance costs, net 671 685
Lease receivable, less current portion 432 558
Other assets 119 59
Total assets $95,299 $80,192 Liabilities and Stockholders' Equity
Current maturities of long-term debt $3,952 $5,541
Trade accounts payable 6,907 5,694
Accrued salaries, benefits and payroll taxes 834 615
Accrued interest 509 470
Accrued expenses 2,815 1,852
Accounts payable, related parties 75 740
Total current liabilities 15,092 14,912 Accrued postretirement benefit obligations 661 687
Long-term debt, net of current maturities 33,938 24,932
Other long-term liabilities 502 129
Total liabilities 50,193 40,660 Commitments and contingencies Minority interests 4,911 4,423 Stockholders' Equity
Common stock, $0.01 par value (20,000,000
shares authorized; 14,022,800 and 13,611,525
issued and outstanding at June 30, 2005 and
December 31, 2004, respectively) 140 136
Capital in excess of par value 42,077 40,331
Accumulated deficit (2,022) (5,358)
Total stockholders' equity 40,195 35,109 Total liabilities and stockholders' equity $95,299 $80,192 ALLIS-CHALMERS ENERGY INC.
SEGMENT INFORMATION
(in thousands, except per share) For the Three For the Six
Months Ended Months Ended
June 30, June 30,
2005 2004 2005 2004
(Restated) (Restated)
Revenues
Directional drilling services $10,934 $6,422 $20,835 $11,675
Casing and tubing services 3,933 2,447 7,493 4,386
Compressed air drilling
services 4,866 2,553 9,047 5,022
Production services 2,289 - 3,607 -
Rental tools 1,566 - 1,940 -
$23,588 $11,422 $42,922 $21,083 Operating Income (Loss):
Directional drilling services $1,495 $727 $3,373 $1,389
Casing and tubing services 1,354 783 2,679 1,225
Compressed air drilling services 1,002 339 1,529 594
Production services 36 - (2) -
Rental tools 405 - 326 -
General corporate (1,378) (699) (2,744) (1,028)
$2,914 $1,150 $5,161 $2,180 Depreciation and Amortization:
Directional drilling services $207 $113 $357 $214
Casing and tubing services 468 356 908 717
Compressed air drilling services 422 275 870 626
Production services 189 - 325 -
Rental tools 176 - 265 -
General corporate 56 25 101 50
$1,518 $769 $2,826 $1,607 Interest Expense:
Directional drilling services $2 $67 $24 $142
Casing and tubing services 97 155 196 320
Compressed air drilling services 219 158 450 317
Production services 3 - 4 -
Rental tools 1 - 1 -
General corporate 323 119 491 289
$645 $499 $1,166 $1,068 Capital Expenditures:
Directional drilling services $937 $83 $1,200 $788
Casing and tubing services 217 46 1,857 425
Compressed air drilling services 1,147 338 1,926 664
Production services 253 - 290 -
Rental tools 7 - 7 -
General corporate 174 1 183 2
$2,735 $468 $5,463 $1,879 ALLIS-CHALMERS ENERGY INC.
REGULATION G RECONCILIATION Use of Adjusted EBITDA & Regulation G Reconciliation
This earnings release contains references to the non-GAAP financial measure of earnings (net income) before interest, taxes, depreciation, and amortization, gain on asset sales and litigation settlements, minority interest and other income and expense or Adjusted EBITDA. This term, as used and defined by Allis-Chalmers, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with GAAP. Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or loss, cash flows provided by operating, investing and financing activities, or other income or cash flow statement data prepared in accordance with GAAP. However, the Company believes Adjusted EBITDA is useful to an investor in evaluating ALY's operating performance because:
* It is widely used by investors in the energy industry to measure a
company's operating performance without regard to the items excluded
from Adjusted EBITDA, which can vary substantially from company to
company depending upon accounting methods and book value of assets,
capital structure and the method by which assets were acquired; and * It helps investors more meaningfully evaluate and compare the results
of the Company's operations from period to period by removing the
impact of the Company's capital structure and asset base from Allis-
Chalmers' operating results. * It is used by Allis-Chalmers' management as a measure of operating
performance, in presentations to its board of directors, as a basis for
strategic planning and forecasting, as a component for setting
incentive compensation and to assess compliance in financial ratios,
among others.
There are material limitations to using Adjusted EBITDA as a measure of performance, including the inability to analyze the impact of recurring and non-recurring items that are excluded from Adjusted EBITDA and materially impact results of operations, and the lack of compatibility of the results of operations of different companies.
Reconciliations of this financial measure to the most directly comparable GAAP financial measure are provided in the table below.
Reconciliation of Adjusted EBITDA to GAAP Net Income
($ in millions) For the Three Months Ended
June 30, June 30,
2005 2004 Consolidated Adjusted EBITDA $4.43 $1.92
Depreciation and amortization 1.52 0.77
GAAP Income from operations $2.91 $1.15
Interest expense 0.64 0.50
Foreign taxes 0.17 0.12
Gains on asset sales & litigation -- --
Minority Interest & other expense (income) 0.33 0.12
Net income $1.77 $0.41
SOURCE Allis-Chalmers Energy Inc.
CONTACT: Victor M. Perez, CFO, Allis-Chalmers Energy, +1-713-369-0550; or Lisa Elliott, Sr.
VP, DRG&E, +1-713-529-6600URL: prnewswire
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