Boots & Coots' Services in Demand in 1Q
Boots & Coots announced revenues of $53.3 million for the first quarter ended March 31, 2010, compared to revenues of $54.7 million for the same period last year. Net income for the quarter was $0.7 million, or $0.01 per diluted share, compared to $1.9 million, or $0.03 per diluted share for the first quarter of 2009. EBITDA (earnings before interest, income taxes, depreciation and amortization; see the reconciliation and rationale for this non-GAAP financial measure below), adjusted for foreign currency translation costs, was $6.5 million or 12.2% of revenues for the quarter, compared to $6.6 million or 12.1% of revenues for the first quarter of 2009.
"We have started to see signs of increased utilization in the domestic market, and demand for our services in the international markets continues to improve; however, several events had a negative impact on the quarter," said Jerry Winchester, chief executive officer of Boots & Coots. "One event was the mobilization cost for the new ONGC secure and salvage project. By the end of the quarter we had mobilized and expect to realize the positive financial impact of the project in the second quarter. In addition there were costs associated with a higher than expected currency devaluation expense in Venezuela and expenses incurred relating to our announced merger agreement with Halliburton, both non-operational items."
Business Segment Results
For the quarter ended March 31, 2010, the Pressure Control segment generated revenues of $22.6 million compared to $27.0 million in the first quarter of 2009 and $23.1 million in the prior 2009 fourth quarter. Adjusted EBITDA for the first quarter was $2.2 million compared to $2.9 million for the first quarter of 2009 and $3.5 million for the prior quarter. The quarter-over-quarter decrease is primarily due to non-recurring international project revenue in the fourth quarter of 2009 and a reduction in the current quarter response revenue, offset by an increase in revenue from Safeguard contracts and other prevention and risk management projects in North Africa and North America. Margins in the quarter were also negatively impacted by the mobilization on the new ONGC project.
For the quarter ended March, 2010, the Well Intervention segment generated revenues of $23.3 million compared to $20.5 million in the first quarter of 2009 and $23.2 million in the prior 2009 fourth quarter. Adjusted EBITDA for the first quarter was $2.8 million compared to $0.9 million for the first quarter of 2009 and $1.9 million for the prior quarter. The increases were primarily due to the increased performance and utilization in North Africa and North America.
For the quarter ended March 31, 2010, the Equipment Services segment generated revenues of $7.4 million compared to $7.2 million for the same period in 2009 and $6.7 million for the fourth quarter of 2009. Adjusted EBITDA for the quarter was $1.4 million compared to $2.8 million for the first quarter of 2009 and $1.4 million for the fourth quarter of 2009. During the quarter EBITDA was negatively impacted by expenses associated with new offices and personnel added in South Texas to service customers operating in the Eagle Ford shale.
For the quarter ended March 31, 2010, consolidated SG&A expenses were $3.2 million, compared to $2.9 million in the first quarter of 2009 and $2.9 for the prior quarter. The increase in total SG&A expense was primarily due to increases in professional fees related to our recently announced merger agreement with Halliburton.
Interest expense in the 2010 first quarter was $0.8 million compared to $1.0 million in the first quarter of last year and $0.9 million in the prior fourth quarter. The first quarter of 2009 included a write off of the remaining deferred financing charges from the credit facility that was replaced by a new syndicated credit agreement in February 2009. The remaining decrease from last year’s first quarter was due to a lower composite interest rate resulting from the February 2009 repayment of the $21.2 million subordinated debt to Oil States Energy Services, Inc.
The Company incurred foreign currency translation costs of $1.2 million in the first quarter due to the devaluation of the Venezuelan Bolivar effective January 11, 2010.
For the quarter ended March 31, 2010, the effective income tax rate was 37.3% of pre-tax income compared to 31.6% of pre-tax income in the quarter ended March 31, 2009. The change in the Company’s annual effective rate reflects, among other items, our best estimates of operating results and foreign currency exchange rates.
- ONGC Fights Fire at Olpad-31 Gas Well in India, 12 Injured (Apr 20)
- Halliburton Finalizes Acquisition of Boots & Coots (Sep 20)
- Boots & Coots' Services in Demand in 1Q (May 06)