C&J Energy Services Announces Second Quarter 2011 Results

HOUSTON, Aug. 31, 2011 /PRNewswire/ -- C&J Energy Services, Inc. (NYSE: CJES) ("C&J" or the "Company") today reported net income of $33.2 million, or $0.68 per diluted share, for the three months ended June 30, 2011 compared with net income of $29.1 million, or $0.60 per diluted share, for the first quarter of 2011 and net income of $1.7 million, or $0.04 per share, for the same quarter a year ago. The increase in second quarter net income was primarily due to the contribution of additional hydraulic fracturing equipment, increased demand for C&J's services and improved pricing.  Revenues for the second quarter of 2011 grew 43% to $182.2 million compared to $127.2 million for the first quarter of 2011 and 336% compared to revenue of $41.8 million for the same quarter a year ago. Second quarter 2011 results included $4.9 million in loss on early extinguishment of debt, net of tax ($0.10 per diluted share).

The Company reported total earnings before net interest expense, income taxes, depreciation and amortization, loss on early extinguishment of debt and net gain or loss on disposal of assets ("Adjusted EBITDA") of $65.8 million in the second quarter of 2011, compared to $51.9 million for the previous quarter and $13.4 million for the second quarter of 2010.  Adjusted EBITDA is not a measure determined in accordance with generally accepted accounting principles ("GAAP") and is therefore reconciled to the nearest comparable GAAP financial measure, net income, in the accompanying financial tables.

"I am very pleased with our second quarter results, which continued our historical achievement of substantial quarter-over-quarter growth," commented Josh Comstock, Chairman, President and Chief Executive Officer. "In April 2011, we deployed our fourth hydraulic fracturing fleet, Fleet 4, to work primarily in the Haynesville Shale under a long term contract.  Our organic fleet expansion and continued focus on highly complex well completion projects produced significant increases in quarterly revenues and earnings.  We averaged monthly revenue per unit of horsepower of $371 during the quarter, which we believe to be higher than the comparable performance of our peers. In addition, with zero debt currently and full access to our new $200.0 million revolving credit facility, we are well positioned for future organic growth and opportunistic acquisitions as we continually look to capitalize on new opportunities in unconventional resource plays."

C&J took delivery of its fifth hydraulic fracturing fleet, Fleet 5, near the end of July, bringing the aggregate horsepower of the Company's fleets to 172,000.  All five of the Company's hydraulic fracturing fleets are operating under term contracts.  In addition, C&J has three hydraulic fracturing fleets on order with delivery and deployment of those fleets expected in the fourth quarter of 2011, the first half of 2012 and the second half of 2012, respectively.  The Company also has three new coiled tubing units on order, all of which are expected to be delivered and deployed before the end of this year.  With the addition of these new units, the Company will have a fleet of 18 coiled tubing units by the end of 2011.

Capital expenditures totaled $35.3 million in the second quarter of 2011, $33.1 million of which was for expansion capital.  

In April 2011, C&J completed its acquisition of Total E&S, Inc. ("Total"). Total is constructing the hydraulic fracturing pumps for all three of the Company's on-order hydraulic fracturing fleets as well as several coiled tubing units and pressure pumps. Following the acquisition of Total, the Company acquired approximately ten acres of adjacent property and began construction of an approximate 36,000 square foot manufacturing facility. By significantly increasing Total's manufacturing capacity, the Company expects to further increase its ability to service its hydraulic fracturing, coiled tubing and pressure pumping businesses as well as existing and future third-party customers.

Results for the Six Months Ended June 30, 2011

For the six months ended June 30, 2011, C&J reported net income of $62.3 million, or $1.28 per diluted share, on revenues of $309.4 million, compared to net income of $4.0 million, or $0.08 per diluted share, on revenues of $74.4 million for the six months ended June 30, 2010. The results for the six months ended June 30, 2011 included approximately $4.9 million in loss on early extinguishment of debt, net of tax ($0.10 per diluted share).  For the six months ended June 30, 2011, C&J reported Adjusted EBITDA of $117.7 million compared to $22.6 million for the six months ended June 30, 2010.  Capital expenditures for the period totaled $65.1 million, $61.1 million of which was for expansion capital.

Initial Public Offering

On July 28, 2011, the Company announced its initial public offering of 11,500,000 shares of common stock at a price to the public of $29.00 per share, of which 4,300,000 shares were sold by the Company, resulting in net proceeds to the Company of approximately $113.0 million. The underwriters subsequently exercised their over- allotment option with respect to an additional 1,725,000 shares sold by certain selling stockholders, from which the Company received no additional net proceeds. Net proceeds to the Company of approximately $113.0 million were used to repay all outstanding debt under the Company's new revolving credit facility and to partially fund the purchase price of the Company's on-order hydraulic fracturing fleets.

Conference Call Information

The Company will host a conference call on Thursday, September 1, 2011 at 9:00 a.m. Central Time to discuss its second quarter 2011 financial and operating results. Interested parties may listen to the conference call via a live webcast accessible on the Company's website at http://www.cjenergy.com or by dialing (888) 679-8035, and entering passcode 52467670 (please dial-in approximately 15 minutes before the scheduled call time). A replay of the conference call will be available on the Company's website for 12 months following the call or by dialing (888) 286-8010, and entering passcode 33265085 for one week following the call.

About C&J Energy Services, Inc.

C&J Energy Services, Inc. is an independent provider of hydraulic fracturing, coiled tubing and pressure pumping services with a focus on complex, technically demanding well completions. The Company has historically operated in South Texas, East Texas/North Louisiana and Western Oklahoma.    

Forward-Looking Statements and Cautionary Statements

This news release (and oral statements made regarding the subjects of this release, including on the conference call announced herein) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words "anticipate," "believe," "ensure," "expect," "if," "intend," "estimate," "project," "forecasts," "predict," "outlook," "aim," "will," "could," "should," "potential," "would," "may," "probable," "likely," and similar expressions, and the negative thereof, are intended to identify forward-looking statements.  Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company's business outlook and business plans, future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, costs and other guidance included in this press release. These statements are based on certain assumptions made by the Company based on management's experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance. Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such forward-looking statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the "Risk Factors" section of the Company's most recent Form 10-Q filing and those set forth from time to time in other of the Company's filings with the Securities and Exchange Commission. These risks include, but are not limited to, risks relating to economic conditions; volatility of crude oil and natural gas commodity prices; delays in or failure of delivery of our new fracturing fleets or future orders of specialized equipment; the loss of or interruption in operations of one or more key suppliers; oil and gas market conditions; the effects of government regulation, permitting and other legal requirements, including new legislation or regulation of hydraulic fracturing; operating risks; the adequacy of our capital resources and liquidity; weather; litigation; competition in the oil and natural gas industry; costs and availability of resources; and other important factors that could cause actual results to differ materially from those projected.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

SOURCE C&J Energy Services, Inc.