Boots & Coots Sees Improved Revenues, Margins in September

Boots & Coots announced revenues of $40.3 million for the quarter ended September 30, 2009 compared to $56.5 million for the same quarter of 2008. Net income for the quarter was $0.8 million or $0.01 per diluted share, compared to $5.4 million or $0.07 per diluted share for the 2008 third quarter. EBITDA  was $6.6 million or 16.5% of revenues for the quarter, compared to $10.2 million or 18.0% of revenues for the third quarter of 2008.

For the nine months ended September 30, 2009, Boots & Coots reported revenues of $142.0 million compared to $153.4 million for 2008. Net income for the 2009 period was $3.5 million or $0.04 per diluted share, compared to $16.7 million or $0.21 per diluted share for the prior nine month period. EBITDA was $18.4 million for the nine months ended September 30, 2009 compared to $29.3 million for the 2008 period.

For the quarter ended September 30, 2009, the effective income tax rate was 65.6% of pre-tax income compared to 23.3% of pre-tax income in the quarter ended September 30, 2008. The effective tax rate for the 2009 nine month period was 44.1% of pre-tax income compared to 19.2% for the same period in 2008. The Company's estimated annual effective tax rate reflects, among other items, our best estimates of operating results across various tax jurisdictions. A change in the mix of forecasted annual pretax income across these various jurisdictions had a significant negative impact on the Company's effective tax rate.

"Our strategic direction toward the international market and domestic shale plays protected us from the falling rig count in North America. That along with conservatively managing our costs helped to significantly improve EBITDA margins from the second quarter," said Jerry Winchester, chief executive officer of Boots & Coots. "Although we've not been immune to certain projects being pushed back both domestically and internationally, our strategy has proven it is the right one to pursue in this market."

"Furthermore, all our business segments reported revenue increases and margin improvements in September," continued Mr. Winchester. "Even though it's too early to tell if September's higher activity levels are the result of an industry recovery, those levels have remained through October and are expected to positively affect fourth quarter revenues and margins. We are encouraged by this trend, but will continue to conservatively manage our business."

Business Segment Results

Pressure Control

For the quarter ended September 30, 2009, the Pressure Control segment generated revenues of $14.9 million and EBITDA of $3.2 million, compared to revenues of $28.3 million and EBITDA of $7.3 million for the third quarter of 2008. The 2008 third quarter results include a non-recurring well control salvage and secure project in India. For the nine months ended September 30, 2009, the Pressure Control segment generated revenues of $64.5 million and EBITDA of $8.5 million, compared to revenues of $65.3 million and EBITDA of $16.5 million for the 2008 nine month period. The decrease in results was primarily due to a decrease in higher margin response revenue and the non-recurring project in India, partially offset by an increase in revenue from prevention and risk management projects.

Well Intervention

For the quarter ended September 30, 2009, the Well Intervention segment generated revenues of $18.7 million and EBITDA of $1.1 million, compared to revenues of $23.6 million and EBITDA of $2.2 million for the third quarter of 2008. Lower utilization rates in Venezuela and the Middle East, as well as the slowdown in the domestic regions of the Gulf of Mexico and Rocky Mountains were offset by improved results in the Northeast and Southeast regions of the U.S. and continued expansion in North Africa. For the nine months ended September 30, 2009, the Well Intervention segment generated revenues of $57.8 million and EBITDA of $3.5 million, compared to revenues of $73.6 million and EBITDA of $9.5 million for the 2008 nine month period. The changes in revenues and EBITDA were primarily due to the temporary suspension of services in Venezuela during the second quarter and continued low levels of North America drilling activity, offset by continued expansion in North Africa. Also included in the 2008 nine month results is a non-recurring project in Bangladesh that occurred in early 2008.

Equipment Services

For the quarter ended September 30, 2009, the Equipment Services segment generated revenues of $6.7 million and EBITDA of $2.4 million, compared to revenues of $4.6 million and EBITDA of $0.7 million for the third quarter of 2008. For the nine months ended September 30, 2009, the Equipment Services segment generated revenues of $19.7 million and EBITDA of $6.5 million, compared to revenues of $14.5 million and EBITDA of $3.3 million for the 2008 nine month period. The increases in revenues and EBITDA were primarily due to the continued growth in demand for our equipment and services since its inception in August 2007.
 

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