Superior Well Services, Inc. Announces Fourth Quarter and Year-End Results
- Increased revenues for the eleventh consecutive year to a record
$520.9 million , an increase of 48% over 2007. - Increased EBITDA, a non-GAAP measure, to
$113.3 million , up 26% over 2007. - Generated operating income of
$69.1 million , an increase of 12% over 2007. - Net income rose to
$38.8 million , up 3% over 2007, resulting in diluted earnings per share of$1.64 and$0.48 for the twelve and three months endedDecember 31, 2008 , respectively. - Increased fleet to 1,789 vehicles, up 68% over 2007, to expand our national market presence.
Fourth Quarter 2008 Results
For the three months ended
“The current economic and credit environment has lowered demand for energy and resulted in significantly lower prices for crude oil and natural gas. Given the current commodity price and credit environment, we expect that drilling activity will be substantially lower in 2009 compared to 2008, which we believe will reduce demand and ultimately the prices we receive for our services in 2009. The extent and duration of the economic downturn and financial market deterioration is uncertain at this time, but we will continue to focus on operating and material cost reductions, as well as monitoring discretionary spending to respond to prevailing levels of activity. We are responding to this cyclical downturn by implementing cost control measures and a reduction in our capital expenditures. It seems clear that 2009 will be challenging, but we remain confident in our company’s ability to manage through the anticipated activity declines and believe we will be positioned to benefit from the markets eventual recovery.”
Stimulation and completion, nitrogen, cementing, down-hole surveying and fluid logistics revenues represented 68.4%, 5.8%, 15.2%, 6.7% and 3.9% of our total revenues of
Cost of revenues was
SG&A expenses increased 44.2% or
Operating income was
FULL YEAR 2008 Results
Revenue was
Cost of revenue increased 60.8% or
SG&A expenses increased 25.6% to
Operating income was
Capital Investments
During the year ended
We will host a conference call on
Superior Well Services, Inc. (Nasdaq: SWSI) is an oilfield services company operating in many of the major oil and natural gas producing regions in
(1) We define EBITDA as net income plus interest, taxes, non-cash stock compensation expense, depreciation and amortization. EBITDA is not a measure of financial performance under generally accepted accounting principles. You should not consider it in isolation from or as a substitute for net income or cash flow measures prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Additionally, EBITDA may not be comparable to other similarly titled measures of other companies. We have included EBITDA as a supplemental disclosure because its management believes that EBITDA provides useful information regarding our ability to service debt and to fund capital expenditures and provides investors a helpful measure for comparing its operating performance with the performance of other companies that have different financing and capital structures or tax rates. We use EBITDA as a measure of operating performance, as a measure for planning and forecasting overall expectations and for evaluating actual results against such expectations, to assess compliance with financial ratios and covenants included in credit facilities, in communications with lenders concerning our financial performance and to evaluate the viability of potential acquisitions and overall rates of return. Please see the reconciliation of EBITDA to net income following the consolidated statement of income included in this press release.
Except for historical information, statements made in this press release, including those relating to acquisition or expansion opportunities, future earnings, cash flow and capital expenditures are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Superior expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions made by Superior based on management’s experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond Superior’s control, which may cause Superior’s actual results to differ materially from those implied or expressed by the forward-looking statements. These risks include: a decrease in domestic spending by the oil and natural gas exploration and production industry; a decline in or substantial volatility of crude oil and natural gas commodity prices; current weakness in the credit and capital markets and lack of credit availability; overcapacity and competition in our industry; unanticipated costs, delays or other difficulties in executing our growth strategy, including difficulties associated with the integration of the Diamondback acquisition; the loss of one or more significant customers; the loss of or interruption in operations of one or more key suppliers; the incurrence of significant costs and liabilities in the future resulting from our failure to comply with new or existing environmental regulations or an accidental release of hazardous substances into the environment; and other factors detailed in our Securities and Exchange Commission filings. We undertake no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in our filings with the Securities and Exchange Commission, which are incorporated by reference.
SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited, amounts in thousands, except per share data)
Three Months Ended Year Ended
December 31, December 31,
% %
2007 2008 change 2007 2008 change
Revenue $94,938 $161,706 70.3% $350,770 $520,889 48.5%
Cost of revenue 72,961 125,145 71.5% 252,539 406,044 60.8%
Gross profit 21,977 36,561 66.4% 98,231 114,845 16.9%
Selling, general
and 9,768 14,088 44.2% 36,390 45,702 25.6%
administrative
expenses
Operating income 12,209 22,473 84.1% 61,841 69,143 11.8%
Interest expense 105 1,958 282 2,834
Other income
(expense), net (35) 2 766 (135)
Income before
income taxes 12,069 20,517 70.0% 62,325 66,174 6.2%
Income taxes
Current 527 418 14,110 7,057
Deferred 4586 8,189 10,460 20,304
5,113 8,607 24,570 27,362
Net income $6,956 $11,910 71.2% $37,755 $38,812 2.8%
Earnings per
share:
Basic $0.30 $0.51 70.0% $1.63 $1.67 2.5%
Fully
diluted $0.30 $0.48 60.0% $1.63 $1.64 0.6%
Weighted
average
shares
outstanding:
Basic 23,103,687 23,154,166 23,100,402 23,150,463
Fully
diluted 23,149,773 24,588,949 23,195,914 23,661,608
Revenue by operating region (amounts in thousands):
Three Months Ended Year Ended
December 31, December 31,
Region 2007 2008 2007 2008
Appalachian $45,633 48.1% $43,791 27.1% $158,894 45.3% $179,173 34.4%
Southeast 17,479 18.4 29,992 18.5 66,690 19.0 92,971 17.8
Rocky
Mountain 7,041 7.4 17,509 10.8 31,558 9.0 60,281 11.6
Southwest 10,378 10.9 32,739 20.3 37,565 10.7 82,857 15.9
Mid-
Continent 14,407 15.2 37,675 23.3 56,063 16.0 105,607 20.3
Total $94,938 100.0% $161,706 100.0% $350,770 100.0% $520,889 100.0%
Revenue by service type (amounts in thousands):
Three Months Ended Year Ended
December 31, December 31,
2007 2008 2007 2008
Technical
pumping
services $84,727 89.2% $144,530 89.4% $304,949 86.9% $465,471 89.4%
Down-hole
surveying
services 10,211 10.8 10,855 6.7 45,821 13.1 49,097 9.4
Fluid
logistics - - 6,321 3.9 - - 6,321 1.2
Total
revenue $94,938 100.0% $161,706 100.0% $350,770 100.0% $520,889 100.0%
Supplemental data (amounts in thousands):
Three Months
Ended Year Ended
December 31, December 31,
2007 2008 2007 2008
Depreciation and amortization $7,649 $13,252 $25,277 $41,806
Capital expenditures 32,522 14,905 127,705 174,666
Non-GAAP Financial Measures:
The following table presents a reconciliation of EBITDA with our net income for each of the periods indicated (amounts in thousands):
Three Months Year
Ended Ended
December 31, December 31,
2007 2008 2007 2008
Reconciliation of
EBITDA to Net Income:
Net income $6,956 $11,910 $37,755 $38,812
Income tax expense 5,113 8,607 24,570 27,362
Interest expense 105 1,958 282 2,834
Stock compensation expense 511 641 1,961 2,522
Depreciation and amortization 7,649 13,252 25,277 41,806
EBITDA $20,334 $36,368 $89,845 $113,336
SOURCE Superior Well Services, Inc.