Boots & Coots' Third Quarter Drops
Boots & Coots announced net income attributable to common stockholders of $1.3 million, or $0.02 per diluted share for the quarter ended September 30, 2007, compared to $3.4 million, or $0.05 per diluted share for the same quarter last year.
Revenues for the quarter were $25.0 million compared to $28.3 million for the same quarter last year. EBITDA (earnings before interest, income taxes, depreciation and amortization; see the reconciliation and rationale for this non-GAAP financial measure below) was $4.1 million for the quarter compared to $7.2 million for the third quarter last year.
For the nine months ended September 30, 2007, Boots & Coots reported net income attributable to common stockholders of $2.1 million, or $0.03 per diluted share, compared to $7.3 million, or $0.13 per diluted share for the same period last year. Revenues for the nine months were $69.2 million compared to $63.3 million for the same period last year. EBITDA was $8.9 million for the nine months ended September 30, 2007 compared to $15.8 million for first nine months of 2006. During the current nine-month period, Boots & Coots incurred start-up expenses of $1.8 million for: expansion of the Company's snubbing/workover services into North Texas, international expansion of the Company's snubbing and prevention services, and entrance into the pressure control rental tool business.
"Domestically, business continues to grow in the Mid-Continent and the Rockies, where we have acquired four rig-assist units and deployed an additional hydraulic unit," stated Jerry Winchester, president and CEO. "Work in the Gulf of Mexico continued to improve sequentially, but remains at a lower level compared to last year. As a result, we have redeployed a number of our hydraulic units to Wyoming, Texas, Africa, the Middle East and Asia where current demand exists for our services, and we continue to look for other deployment opportunities."
"Internationally, weaker activity levels in Venezuela have been somewhat offset by strong growth in the Middle East and North Africa as we leverage our existing work and pull through other services for our customers," added Winchester. "Both our snubbing and prevention services continue to grow in those regions. We are also moving into Bangladesh under a contract to perform workover and SafeGuard services."
"Regarding our recently launched rental tool line, we mobilized on our first job in September and expect additional growth during the fourth quarter and in 2008," concluded Mr. Winchester. "With the integration of our snubbing/workover business and addition of our new pressure control rental tool line, we are starting to realize the benefits of having a suite of related service lines. And we believe the opportunity to offer additional services and move into new locations will continue to grow as we build our reputation as the premier provider of pressure control services in the industry."
For the quarter ended September 30, 2007, the Well Intervention segment generated revenues of $21.5 million and EBITDA of $2.7 million, compared to revenues of $21.3 million and EBITDA of $4.4 million for the same quarter last year. The increase in revenues is due to growth initiatives in the Company's international prevention services and in snubbing/workover services in Wyoming, North Texas and Egypt, offset by lower activity in the Gulf of Mexico and Venezuela. The increase in costs is due to revenue mix and the semi-fixed costs related to the snubbing/workover business in the Gulf of Mexico and Venezuela, and to start-up expenses of $0.4 million for the Company's snubbing/workover operations in North Texas and for entry into the pressure control rental tool business.
For the nine months ended September 30, 2007, Well Intervention generated revenues of $60.7 million and EBITDA of $5.7 million, compared to revenues of $54.1 million and EBITDA of $12.3 million for the same period last year. The inclusion of nine months of snubbing/workover results in 2007 compared to seven months in 2006 accounted for $5.3 million of the increase in revenues. The Company also realized a 43.1% increase in prevention services year over year. During the period, revenues and margins were negatively affected by the lower activity in the Gulf of Mexico and Venezuela coupled with the semi-fixed costs associated with the snubbing/workover business. EBITDA margins also declined due to start-up costs of $1.8 million for: expansion of the Company's snubbing/workover services into North Texas, international expansion of the Company's snubbing and prevention services, and entrance into the pressure control rental tool business.
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