Boots & Coots Scoots out of 2009 with $195MM

Boots & Coots announced revenues of $53.0 million for the quarter ended December 31, 2009 compared to $55.9 million for the same quarter of 2008. Net income for the quarter was $2.5 million or $0.03 per diluted share, compared to $5.1 million or $0.07 per diluted share for the 2008 fourth quarter. EBITDA (earnings before interest, income taxes, depreciation and amortization; see the reconciliation and rationale for this non-GAAP financial measure below) was $6.8 million or 12.8% of revenues for the quarter, compared to $9.8 million or 17.6% of revenues for the fourth quarter of 2008.

For the year ended December 31, 2009, Boots & Coots reported revenues of $195.1 million compared to $209.2 million for 2008. Net income for the 2009 period was $6.0 million or $0.08 per diluted share, compared to $21.8 million or $0.28 per diluted share for the prior year. EBITDA was $25.3 million for the year ended December 31, 2009 compared to $39.1 million for 2008.

"Year over year, revenues were down only 7% and we remained profitable despite nearly a 50% drop in domestic rig count from its 2008 high and the worldwide recession. We believe these results are a tremendous contrast relative to our peers and are due in large part to our global geographic diversity and the manner in which we deliver our products and services. Our focus continues to be broadening our international reach while continuing to focus on unconventional gas in North America and abroad," said Jerry Winchester, chief executive officer of Boots & Coots. "Our markets appear to be mostly rebounding from the lows experienced in the third quarter of 2009, and our international diversification and focus on shale plays in the U.S. make us very well positioned for growth as market conditions improve."

"We continue to expand operations in North Africa and have developed an increasing presence in Southeast Asia. We recently announced a new secure and salvage project with ONGC, which is our third project in India," concluded Mr. Winchester. "In 2010, we look forward to continuing our business development efforts in Africa, Asia and South America."

Business Segment Results

Pressure Control

For the quarter ended December 31, 2009, the Pressure Control segment generated revenues of $23.1 million compared to $27.5 million in the fourth quarter of 2008 and $14.9 million in the 2009 prior quarter. EBITDA for the fourth quarter was $3.5 million compared to $5.7 million for the fourth quarter of the prior year and $3.2 million for the third quarter of 2009. The segment’s sequential quarterly improvement was due to increases in both response and prevention and risk management services, partially offset by a bonus accrual in the fourth quarter attributable to the company’s performance.

For the year ended December 31, 2009, the Pressure Control segment generated revenues of $87.6 million and EBITDA of $12.0 million, compared to revenues of $92.8 million and EBITDA of $22.2 million for 2008. The year-over-year decreases were primarily due to a decrease in response revenue offset in part by an increase in international revenue from prevention and risk management projects.

Well Intervention

For the quarter ended December 31, 2009, the Well Intervention segment generated revenues of $23.2 million compared to $23.6 million in the fourth quarter of 2008 and $18.7 million in the 2009 third quarter. EBITDA for the fourth quarter was $1.9 million compared to $3.1 million for the fourth quarter of 2008 and $1.1 million for the third quarter of 2009. The company experienced increased activity compared to the prior third quarter both internationally and in the U.S. onshore and Gulf of Mexico, results of which were partially offset by the bonus accrual.

For the year ended December 31, 2009, the Well Intervention segment generated revenues of $81.0 million and EBITDA of $5.4 million, compared to revenues of $97.2 million and EBITDA of $12.6 million for the prior year. The changes in revenues and EBITDA were primarily due to the temporary suspension of services in Venezuela for part of the first half of the year, reduced business in the Middle East and lower levels of drilling activity in North America, offset by new business in North Africa. Also included in the 2008 results was $9.2 million in revenues related to a project in Bangladesh.

Equipment Services

For the quarter ended December 31, 2009, the Equipment Services segment generated revenues of $6.7 million compared to $4.8 million for the same period in 2008 and $6.7 million for the third quarter of 2009. EBITDA for the quarter was $1.4 million compared to EBITDA of $1.1 million for the fourth quarter of 2008 and $2.4 million for the 2009 third quarter. The sequential decline in EBITDA was primarily due to the bonus accrual.

For the year ended December 31, 2009, the Equipment Services segment generated record revenues of $26.4 million and EBITDA of $7.9 million, compared to revenues of $19.3 million and EBITDA of $4.3 million for 2008. The company continued to expand this business throughout the year.

For the quarter ended December 31, 2009, consolidated SG&A expenses were $2.9 million, compared to $2.6 million in the fourth quarter of 2008 and $2.0 for the 2009 third quarter. The sequential increase in SG&A was primarily due to the bonus accrual and an increase in other employee costs attributable to the company’s performance. For the year ended December 31, 2009 SG&A expenses were relatively flat at $10.3 million.

Interest expense in the 2009 fourth quarter was $0.9 million compared to $0.5 million in the fourth quarter the prior year and $1.0 million in the 2009 third quarter. Interest expense of $3.8 million for 2009 increased by $1.2 million compared to 2008. This increase included $0.6 million in fees related to the new syndicated credit agreement the Company entered into in February of 2009 and an increase in average outstanding borrowings.

For the quarter ended December 31, 2009, the effective income tax rate was 2.0% of pre-tax income compared to 22.3% of pre-tax income in the quarter ended December 31, 2008. The effective tax rate for the year was 31.8% of pre-tax income compared to 20.0% for 2008. The change in the Company's annual effective tax rate reflects, among other items, a change in the mix of pretax income from our various taxing jurisdictions, and our effective tax rate was adversely impacted by consolidating foreign losses from certain foreign tax jurisdictions which do not generate future tax benefits.

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