BJ Services Reports Record Revenue and Profits

Apr 26, 2001, 01:00 ET from BJ Services Company

    HOUSTON, April 26 /PRNewswire/ -- BJ Services Company
 (NYSE:   BJS; CBOE) reported record revenue of $549.7 million for its second
 fiscal quarter ended March 31, 2001, an increase of 41% from the previous
 year's second fiscal quarter.  Net income for the quarter of
 $80.8 million ($.96 per diluted share) was also a record and was 175% higher
 than the prior year's second quarter earnings of $29.3 million ($.35 per
 diluted share).  Cash earnings per share (EPS excluding goodwill amortization
 and non-cash tax expense) was $1.42 per diluted share.  The record results
 were attributed to continued improvements in U.S. drilling activity and
 strengthening international results, particularly in the Latin America, Middle
 East and Asia Pacific regions.
     On a sequential quarter basis, consolidated revenues increased by 12%,
 with U.S./Mexico pressure pumping revenues increasing by 15% and international
 pressure pumping revenues increasing by 13%.  The Company's Canadian
 operations showed sequential revenue improvement of 51%, while pressure
 pumping revenues outside North America declined sequentially 3% primarily due
 to seasonal factors.
     The quarter's operating income margins improved to 23.1% from 12.8% in the
 prior year's second fiscal quarter and 20.6% in the immediately preceding
 quarter.  The incremental margin improvement represents 49% of the year over
 year revenue increase, and 43% on a sequential basis.  The margin improvements
 were primarily a result of improved U.S. pricing, better equipment utilization
 and labor efficiencies.
     Interest expense continued to decline on a sequential and year over year
 basis due to lower outstanding debt resulting from improved free cash flow
 from operations and from the proceeds of the exercise of warrants in April
 2000.  The Company's quarterly effective tax rate of 34% remained unchanged
 compared to the prior year's second fiscal quarter.  The Company's effective
 cash tax rate was approximately 6%.
     The Company's interest bearing debt was $161.5 million as of
 March 31, 2001, resulting in a debt to capitalization ratio of 11.4%.
 
     U.S./Mexico Pressure Pumping Revenues Increase 67%
     The Company's U.S./Mexico revenues increased by 67% from the prior year's
 second fiscal quarter due to improved drilling activity and pricing.  U.S.
 drilling activity increased by 48% to an average of 1,139 active rigs (79% of
 which were drilling for natural gas) during the quarter.  This compares to
 770 active rigs for the prior year's quarter and is the highest average since
 the quarter ended March 1986.  U.S. workover activity levels also increased by
 19% compared to the prior year's quarter.  Each of the Company's major U.S.
 service lines, including cementing, stimulation, coiled tubing and downhole
 tools showed sizable revenue increases, and all U.S. operating regions
 realized revenue increases in excess of 50% compared with the prior year's
 second quarter.  During the quarter the Company completed the acquisition of
 Preeminent Energy Services, a Louisiana based coiled tubing company,
 strengthening the Company's existing Gulf Coast and South Texas capabilities.
 
     International Pressure Pumping Revenues Increase 20%
     The Company's international revenues increased by 20%, primarily driven by
 Canadian gas drilling, increased stimulation activity in several regions and
 contributions from geographic expansions.
     Middle East revenues increased by 46% as a result of stimulation work in
 Saudi Arabia and the start-up of a multi-year project in Kazakhstan.  Latin
 America revenues improved by 43% versus the prior year's second quarter with
 broad-based activity increases in every country except Peru.  In particular,
 improved levels of stimulation activity occurred in Argentina, Venezuela and
 Colombia.  Coiled tubing work in Malaysia and Philippines along with new
 contracts in Vietnam led to an increase in Asia Pacific revenues of 30%
 despite of activity delays in Indonesia caused by the country's civil
 disorder.
     While the Europe and Africa region recorded a 6% decline in revenue, this
 was solely due to an abnormally slow quarter for North Sea vessel stimulation
 work as a result of project delays.  Aside from vessel activity, which has
 since recovered, Europe and Africa revenues increased by 10%, primarily as a
 result of expansion related activities in West Africa.
     Revenues in Russia and China increased by 57% with new projects beginning
 in Russia and increased fracturing work being performed in China.
     With drilling activity averaging 515 rigs, 7.4% higher than the prior
 year, Canadian revenues were 11% higher than the prior year's quarter.
 
     Other Services
     Revenue from the Company's non-pressure pumping service lines increased by
 18% on a year over year basis, primarily as a result of increased activity
 from its process and pipeline inspection service line in Canada and Europe.
 
     CEO Stewart Comments
     CEO J. W. Stewart commented, "We are very pleased to announce our second
 consecutive quarter of record results.  We expect the strong demand for our
 services to continue as our international customers implement their spending
 plans and our U.S. and Canadian customers continue to focus on drilling and
 production enhancement opportunities in the very strong North American gas
 market.  With the improved activity levels in most geographic regions,
 particularly in North America, we expect to generate strong year over year
 earnings improvement for the remainder of the fiscal and calendar years.
     Based on the second fiscal quarter results and current activity and
 pricing levels, our earnings guidance has been revised.  We now forecast that
 earnings in the third fiscal quarter should approximate $.96 per diluted share
 despite the normal seasonal decline in Canada.  Fiscal year earnings should
 approximate $3.80 per diluted share, while calendar year 2001 earnings are now
 estimated at $4.00 per diluted share."
 
     Conference Call
     The Company has scheduled a conference call to discuss the results of
 today's earnings announcement.  The call will begin at 9:00 a.m. Central Time.
 To participate in the conference call, please call 719/457-2641, ten minutes
 prior to the conference call start time and give the conference code number
 430443.  If you are unable to participate, the conference call will be
 available for playback three hours after conclusion of the conference call.
 The playback number is 719/457-0820 and the replay entry code is 430443.
 Playback will be available for three days.
     The conference call will also be available via real-time webcast at
 www.bjservices.com.  Playback of the webcast will be available for seven days
 following the conference call.
 
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
 
                                    Three Months Ended       Six Months Ended
                                    3/31/01    3/31/00     3/31/01     3/31/00
                                       (In thousands except per share data)
     Revenue                       $549,661   $390,755   $1,039,339   $745,575
     Operating Expenses:
        Cost of sales and services  377,743    302,997      725,062    584,449
        Research and engineering      8,877      7,241       16,770     13,284
        Marketing                    15,638     13,411       29,769     26,147
        General and administrative   16,903     13,862       32,803     27,560
        Goodwill amortization         3,375      3,368        6,749      6,737
           Total operating expenses 422,536    340,879      811,153    658,177
     Operating income               127,125     49,876      228,186     87,398
     Interest expense                (3,773)    (5,015)      (7,817)   (11,984)
     Interest income                    470        163          873        249
     Other income (expense) - net    (1,471)      (861)      (2,735)    (1,410)
     Income before income taxes     122,351     44,163      218,507     74,253
     Income taxes                    41,599     14,839       74,292     24,467
     Net income                     $80,752    $29,324     $144,215    $49,786
 
     Earnings Per Share(B):
        Basic                         $ .98      $ .38       $ 1.76      $ .66
        Diluted                         .96        .35         1.72        .60
     Average Shares Outstanding:
        Basic                        82,039     76,717       82,044     75,699
        Diluted                      83,819     84,933       83,871     83,226
     Other Data:
        Depreciation and
         amortization                25,993     25,302       51,493     51,784
        Capital expenditures         46,740     18,844       74,809     32,589
        U.S./Mexico Pressure
         Pumping Revenue            290,964    173,913      544,878    340,501
        International Pressure
         Pumping Revenue            211,410    176,741      399,173    322,151
        Other revenue                47,287     40,101       95,288     82,923
         Cash earnings per
          diluted share (A)          $ 1.42     $ 0.50       $ 2.51     $ 0.88
 
     (A)  After-tax earnings per share excluding goodwill amortization and
          noncash taxes.
     (B)  Earnings per share data does not reflect the effects of the 2 for 1
          stock split declared by the Company on March 22, 2001, expected to be
          effective for shareholders of record on May 17, 2001.  The split is
          subject to the May 10, 2001 shareholder approval of an increase in
          the Company's authorized share capital.
 
     This news release contains forward-looking statements within the meaning
 of the Securities Litigation Reform Act that involve risks and uncertainties,
 including price volatility, operational and other risks, and other factors
 described from time to time in the Company's publicly available SEC reports,
 which could cause actual results to differ materially from those indicated in
 the forward-looking statements.  In this press release, the words "expect,"
 "estimate," "project," "believe," and similar words are intended to identify
 forward-looking statements.
     BJ Services Company is a leading provider of pressure pumping and other
 oilfield services to the petroleum industry.
     (NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X34484553
 
 

SOURCE BJ Services Company
    HOUSTON, April 26 /PRNewswire/ -- BJ Services Company
 (NYSE:   BJS; CBOE) reported record revenue of $549.7 million for its second
 fiscal quarter ended March 31, 2001, an increase of 41% from the previous
 year's second fiscal quarter.  Net income for the quarter of
 $80.8 million ($.96 per diluted share) was also a record and was 175% higher
 than the prior year's second quarter earnings of $29.3 million ($.35 per
 diluted share).  Cash earnings per share (EPS excluding goodwill amortization
 and non-cash tax expense) was $1.42 per diluted share.  The record results
 were attributed to continued improvements in U.S. drilling activity and
 strengthening international results, particularly in the Latin America, Middle
 East and Asia Pacific regions.
     On a sequential quarter basis, consolidated revenues increased by 12%,
 with U.S./Mexico pressure pumping revenues increasing by 15% and international
 pressure pumping revenues increasing by 13%.  The Company's Canadian
 operations showed sequential revenue improvement of 51%, while pressure
 pumping revenues outside North America declined sequentially 3% primarily due
 to seasonal factors.
     The quarter's operating income margins improved to 23.1% from 12.8% in the
 prior year's second fiscal quarter and 20.6% in the immediately preceding
 quarter.  The incremental margin improvement represents 49% of the year over
 year revenue increase, and 43% on a sequential basis.  The margin improvements
 were primarily a result of improved U.S. pricing, better equipment utilization
 and labor efficiencies.
     Interest expense continued to decline on a sequential and year over year
 basis due to lower outstanding debt resulting from improved free cash flow
 from operations and from the proceeds of the exercise of warrants in April
 2000.  The Company's quarterly effective tax rate of 34% remained unchanged
 compared to the prior year's second fiscal quarter.  The Company's effective
 cash tax rate was approximately 6%.
     The Company's interest bearing debt was $161.5 million as of
 March 31, 2001, resulting in a debt to capitalization ratio of 11.4%.
 
     U.S./Mexico Pressure Pumping Revenues Increase 67%
     The Company's U.S./Mexico revenues increased by 67% from the prior year's
 second fiscal quarter due to improved drilling activity and pricing.  U.S.
 drilling activity increased by 48% to an average of 1,139 active rigs (79% of
 which were drilling for natural gas) during the quarter.  This compares to
 770 active rigs for the prior year's quarter and is the highest average since
 the quarter ended March 1986.  U.S. workover activity levels also increased by
 19% compared to the prior year's quarter.  Each of the Company's major U.S.
 service lines, including cementing, stimulation, coiled tubing and downhole
 tools showed sizable revenue increases, and all U.S. operating regions
 realized revenue increases in excess of 50% compared with the prior year's
 second quarter.  During the quarter the Company completed the acquisition of
 Preeminent Energy Services, a Louisiana based coiled tubing company,
 strengthening the Company's existing Gulf Coast and South Texas capabilities.
 
     International Pressure Pumping Revenues Increase 20%
     The Company's international revenues increased by 20%, primarily driven by
 Canadian gas drilling, increased stimulation activity in several regions and
 contributions from geographic expansions.
     Middle East revenues increased by 46% as a result of stimulation work in
 Saudi Arabia and the start-up of a multi-year project in Kazakhstan.  Latin
 America revenues improved by 43% versus the prior year's second quarter with
 broad-based activity increases in every country except Peru.  In particular,
 improved levels of stimulation activity occurred in Argentina, Venezuela and
 Colombia.  Coiled tubing work in Malaysia and Philippines along with new
 contracts in Vietnam led to an increase in Asia Pacific revenues of 30%
 despite of activity delays in Indonesia caused by the country's civil
 disorder.
     While the Europe and Africa region recorded a 6% decline in revenue, this
 was solely due to an abnormally slow quarter for North Sea vessel stimulation
 work as a result of project delays.  Aside from vessel activity, which has
 since recovered, Europe and Africa revenues increased by 10%, primarily as a
 result of expansion related activities in West Africa.
     Revenues in Russia and China increased by 57% with new projects beginning
 in Russia and increased fracturing work being performed in China.
     With drilling activity averaging 515 rigs, 7.4% higher than the prior
 year, Canadian revenues were 11% higher than the prior year's quarter.
 
     Other Services
     Revenue from the Company's non-pressure pumping service lines increased by
 18% on a year over year basis, primarily as a result of increased activity
 from its process and pipeline inspection service line in Canada and Europe.
 
     CEO Stewart Comments
     CEO J. W. Stewart commented, "We are very pleased to announce our second
 consecutive quarter of record results.  We expect the strong demand for our
 services to continue as our international customers implement their spending
 plans and our U.S. and Canadian customers continue to focus on drilling and
 production enhancement opportunities in the very strong North American gas
 market.  With the improved activity levels in most geographic regions,
 particularly in North America, we expect to generate strong year over year
 earnings improvement for the remainder of the fiscal and calendar years.
     Based on the second fiscal quarter results and current activity and
 pricing levels, our earnings guidance has been revised.  We now forecast that
 earnings in the third fiscal quarter should approximate $.96 per diluted share
 despite the normal seasonal decline in Canada.  Fiscal year earnings should
 approximate $3.80 per diluted share, while calendar year 2001 earnings are now
 estimated at $4.00 per diluted share."
 
     Conference Call
     The Company has scheduled a conference call to discuss the results of
 today's earnings announcement.  The call will begin at 9:00 a.m. Central Time.
 To participate in the conference call, please call 719/457-2641, ten minutes
 prior to the conference call start time and give the conference code number
 430443.  If you are unable to participate, the conference call will be
 available for playback three hours after conclusion of the conference call.
 The playback number is 719/457-0820 and the replay entry code is 430443.
 Playback will be available for three days.
     The conference call will also be available via real-time webcast at
 www.bjservices.com.  Playback of the webcast will be available for seven days
 following the conference call.
 
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (UNAUDITED)
 
                                    Three Months Ended       Six Months Ended
                                    3/31/01    3/31/00     3/31/01     3/31/00
                                       (In thousands except per share data)
     Revenue                       $549,661   $390,755   $1,039,339   $745,575
     Operating Expenses:
        Cost of sales and services  377,743    302,997      725,062    584,449
        Research and engineering      8,877      7,241       16,770     13,284
        Marketing                    15,638     13,411       29,769     26,147
        General and administrative   16,903     13,862       32,803     27,560
        Goodwill amortization         3,375      3,368        6,749      6,737
           Total operating expenses 422,536    340,879      811,153    658,177
     Operating income               127,125     49,876      228,186     87,398
     Interest expense                (3,773)    (5,015)      (7,817)   (11,984)
     Interest income                    470        163          873        249
     Other income (expense) - net    (1,471)      (861)      (2,735)    (1,410)
     Income before income taxes     122,351     44,163      218,507     74,253
     Income taxes                    41,599     14,839       74,292     24,467
     Net income                     $80,752    $29,324     $144,215    $49,786
 
     Earnings Per Share(B):
        Basic                         $ .98      $ .38       $ 1.76      $ .66
        Diluted                         .96        .35         1.72        .60
     Average Shares Outstanding:
        Basic                        82,039     76,717       82,044     75,699
        Diluted                      83,819     84,933       83,871     83,226
     Other Data:
        Depreciation and
         amortization                25,993     25,302       51,493     51,784
        Capital expenditures         46,740     18,844       74,809     32,589
        U.S./Mexico Pressure
         Pumping Revenue            290,964    173,913      544,878    340,501
        International Pressure
         Pumping Revenue            211,410    176,741      399,173    322,151
        Other revenue                47,287     40,101       95,288     82,923
         Cash earnings per
          diluted share (A)          $ 1.42     $ 0.50       $ 2.51     $ 0.88
 
     (A)  After-tax earnings per share excluding goodwill amortization and
          noncash taxes.
     (B)  Earnings per share data does not reflect the effects of the 2 for 1
          stock split declared by the Company on March 22, 2001, expected to be
          effective for shareholders of record on May 17, 2001.  The split is
          subject to the May 10, 2001 shareholder approval of an increase in
          the Company's authorized share capital.
 
     This news release contains forward-looking statements within the meaning
 of the Securities Litigation Reform Act that involve risks and uncertainties,
 including price volatility, operational and other risks, and other factors
 described from time to time in the Company's publicly available SEC reports,
 which could cause actual results to differ materially from those indicated in
 the forward-looking statements.  In this press release, the words "expect,"
 "estimate," "project," "believe," and similar words are intended to identify
 forward-looking statements.
     BJ Services Company is a leading provider of pressure pumping and other
 oilfield services to the petroleum industry.
     (NOT INTENDED FOR DISTRIBUTION TO BENEFICIAL OWNERS)
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X34484553
 
 SOURCE  BJ Services Company