Strong growth in all of the Corporation's business segments contributed to the solid quarterly results. Top Drive revenue for the third quarter of 2005 was $40.5 million, an increase of 30% over the comparable prior year period and increased 20% compared to the quarter ended June 2005. Top Drive rental days increased 27% in the third quarter compared to 2004's third quarter. The Company sold 12 top drives during the quarter, an increase of four units compared to the prior year's third quarter. Casing Services revenue in the third quarter of 2005 was $21.1 million, up 43% over the comparable quarter in 2004 and 19% over the second quarter 2005 reflecting record high activity levels and increased prices.
Operating income for the third quarter 2005 was $5.8 million compared to $3.2 million for the comparable quarter in the prior year and $4.3 million in the quarter ending June 30, 2005. The improvement in operating income was driven by strong revenue growth in all segments resulting from increased market penetration of TESCO's proprietary technologies. The growth in revenue was partially offset by increased general and administrative costs and higher research and engineering expenses, both sequentially and compared to last year.
Nine Months Ended September 30, 2005
The Company reported net income of $10.9 million ($0.31 per diluted share) for the first nine months of 2005 compared to a net loss of $0.3 million ($0.01 per diluted share) in the same period of 2004. Revenue for the first nine months of 2005 was $167.7 million, up 26% compared to $133.5 million for the comparable period in 2004.
Top Drive revenue for the nine months of 2005 was $112.0 million, up 24% from $90.7 million in 2004, reflecting a higher number of rental days and increased unit sales in 2005. Casing Services reported revenue of $55.7 million for the first nine months of 2005, up 30% from $42.8 million in 2004, due mainly to higher pricing and increased customer acceptance of the Company's casing running and CASING DRILLING(R) services. Operating income for the first nine months of 2005 rose to $19.0 million, up over four-fold from $4.5 million in the comparable prior year period.
The Company says that it had acquired the assets of Tong Specialty and Cheyenne Services for a combined cash purchase price of approximately US$50 million. Both of these companies supply a wide range of equipment, personnel and other services for tubular running and casing installation in the US Gulf of Mexico and land drilling basins in Texas and Louisiana. These assets will be combined with TESCO's existing tubular services operations. TESCO entered into a new US$100 million credit facility with JPMorgan Chase to fund these transactions, potential future acquisitions and to provide working capital support.
Julio Quintana, TESCO's Chief Executive Officer commented, "We are very pleased with this quarter's strong revenue growth in all lines of business and continue to focus on improving the bottom line. Our rental of top drives has increased significantly and we had 28 top drive units in backlog as of September 30. Additionally, we continue to see very strong demand for our proprietary casing running and CASING DRILLING(R) services."
Quintana continued, "We are also excited about the two acquisitions we announced yesterday. They are a perfect complement to our existing casing running operations and will enable us to offer our proprietary Casing Drive System(TM) to a broader range of clients. Our casing services segment is our fastest growing segment and we believe these acquisitions will accelerate growth."
As of September 30, 2005, cash on hand totaled $17.6 million while debt totaled $10.9 million, resulting in a net cash position of $6.7 million at quarter end. Capital expenditures totaled $15.2 million for the first nine months of 2005.
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