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W-H Energy Services Announces Fourth Quarter Results

Posted on: Friday, 1 February 2008, 03:00 CST

W-H Energy Services, Inc. (NYSE:WHQ) announced fourth quarter net income of $36.8 million or $1.18 per share as compared to the $32.3 million or $1.05 per share reported for the same period in the prior year. In the preceding quarter, the Company reported net income of $34.7 million or $1.11 per share. The sequential gain in quarterly earnings was driven by improved performance in the Company's completion and workover segment, primarily its cased-hole wireline business.

The Company projects that earnings per share will range from $1.17 to $1.22 for the quarter ending March 31, 2008.

Revenues for the fourth quarter of $293.4 million were 23 percent higher than the fourth quarter of 2006 and were 4 percent higher than the preceding quarter. Domestic revenues increased 21 percent as compared to the fourth quarter of last year and were 3 percent higher than the preceding quarter. International revenues also increased 44 percent as compared to the fourth quarter of last year and were 10 percent higher than the preceding quarter.

For the year ended December 31, 2007 revenues of $1.1 billion and earnings per share of $4.70 increased from $894.8 million and $3.78, respectively, that was reported for the year ended December 31, 2006.

QUARTERLY SEGMENT RESULTS

Drilling

Revenues in the drilling segment were $192.6 million in the fourth quarter, 28 percent higher than the comparable period in the prior year and 3 percent higher as compared to the preceding quarter. Operating income of $39.3 million was 17 percent higher than the comparable period in the prior year and 2 percent lower than the preceding quarter.

Completion and workover

Fourth quarter revenues in the completion and workover segment were $100.8 million, 15 percent higher than the comparable period in the prior year and 6 percent higher than the preceding quarter. Operating income of $26.3 million recorded in the fourth quarter was 7 percent higher than the comparable period in the prior year and 21 percent higher than the preceding quarter.

W-H Energy is a diversified oilfield service company that provides products and services used in connection with the drilling and completion of oil and natural gas wells and the production of oil and natural gas. The Company has operations in North America and select areas internationally.

Statements in this press release that are not strictly historical are "forward-looking" statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected in the forward-looking statements due to, among other things, the current and expected future prices of crude oil and natural gas, the level of exploration, development and production activity of, and the corresponding capital spending by, our customers, risks associated with events that result in personal injuries, loss of life, damage to or destruction of property, equipment or the environment and suspension of operations, unavailability of or costs associated with insurance, competition in our industry, difficulty in continuing to develop, produce and commercialize technologically advanced products and services, loss of use of certain technologies and weather conditions in offshore markets. These and other risks are more fully described in W-H Energy Services, Inc.'s Annual Report filed on Form 10-K with the Securities and Exchange Commission. The Company disclaims any obligation to update the statements in this press release.

W-H ENERGY SERVICES, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended December 31,

Year Ended December 31,

2007

2006

2007

2006

(as adjusted)

(as adjusted)

Revenues

$

293,376

$

238,339

$

1,127,007

$

894,754

Costs and Expenses:

Cost of revenues

161,055

126,130

610,500

471,896

Selling, general and administrative

44,336

36,271

175,900

147,202

Research and development

5,239

4,709

21,362

17,189

Depreciation and amortization

22,155

16,789

79,286

62,713

Total costs and expenses

232,785

183,899

887,048

699,000

Operating income

60,591

54,440

239,959

195,754

Other expenses:

Interest expense, net

2,163

2,327

8,388

8,864

Other expense (income), net

(7

)

35

(33

)

72

Income before income taxes

58,435

52,078

231,604

186,818

Provision for income taxes

21,634

19,778

85,193

71,212

Net income

$

36,801

$

32,300

$

146,411

$

115,606

Earnings per common share:

Basic

$

1.21

$

1.08

$

4.82

$

3.90

Diluted

$

1.18

$

1.05

$

4.70

$

3.78

Weighted average shares outstanding:

Basic

30,536

29,995

30,351

29,656

Diluted

31,290

30,786

31,154

30,572

(1) Prior period amounts have been adjusted for a change in accounting principle related to equipment costs that was adopted on January 1, 2007 and requires adjustment to all prior periods presented.

W-H ENERGY SERVICES, INC.UNAUDITED CONSOLIDATED CONDENSED BALANCE SHEETS(in thousands)

December 31, 2007

December 31, 2006

(as adjusted)

Assets:

Cash and cash equivalents

$

23,076

$

36,329

Accounts receivable, net

252,313

204,755

Inventory

102,584

78,127

Other current assets

40,004

22,776

Total current assets

417,977

341,987

Property and equipment, net

448,913

343,496

Other assets

153,389

138,798

Total assets

$

1,020,279

$

824,281

Liabilities and Shareholders' Equity:

Accounts payable and accrued liabilities

$

133,268

$

121,425

Total current liabilities

133,268

121,425

Long-term debt (2)

150,000

150,000

Other liabilities

81,483

57,630

Total liabilities

364,751

329,055

Shareholders' equity

655,528

495,226

Total liabilities and shareholders' equity

$

1,020,279

$

824,281

(1) Prior period amounts have been adjusted for a change in accounting principle related to equipment costs that was adopted on January 1, 2007 and requires adjustment to all prior periods presented.

(2) As of December 31, 2007, there was approximately $214.4 million available under the Company's revolving credit facility.

W-H ENERGY SERVICES, INC.

UNAUDITED SEGMENTED AND SELECTED FINANCIAL DATA

(in thousands)

For the Three Months Ended:

Dec. 31, 2007

Sept. 30, 2007

June 30, 2007

March 31, 2007

Dec. 31, 2006

SEGMENTED INFORMATION:

(as adjusted)

Revenue:

Drilling

$

192,555

$

187,456

$

179,141

$

179,261

$

150,810

Completion and workover

100,821

95,536

98,611

93,626

87,529

Total revenue

$

293,376

$

282,992

$

277,752

$

272,887

$

238,339

Depreciation and amortization:

Drilling

$

13,737

$

12,542

$

11,600

$

10,573

$

10,264

Completion and workover

8,352

7,825

7,493

6,933

6,475

Corporate

66

50

69

46

50

Total depreciation and amortization

$

22,155

$

20,417

$

19,162

$

17,552

$

16,789

Operating income:

Drilling (1)

$

39,272

$

40,114

$

41,307

$

38,982

$

33,470

Completion and workover

26,318

21,726

26,032

25,852

24,591

Corporate

(4,999

)

(5,147

)

(4,584

)

(4,914

)

(3,621

)

Total operating income

$

60,591

$

56,693

$

62,755

$

59,920

$

54,440

(1) Prior period amounts have been adjusted for a change in accounting principle related to equipment costs that was adopted on January 1, 2007 and requires adjustment to all prior periods presented.

Source: Business Wire

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