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Producers Oilfield Services Inc. reports fourth quarter earnings
24 February 2006 This news release reports the operating results and financial performance of Producers Oilfield Services Inc. ("Producers" and/or the "Company") for the three and twelve month period ending December 31, 2005, with comparisons to the same period one year earlier. Due to the sale of Patch Point in the fourth quarter of 2005 and the international operations in January 2006, these businesses have been classified as discontinued operations and their results excluded from those of continuing operations. Continuing operations is comprised of the combination of what was previously referred to as the Oilfield Trucking segment, the Oilfield Waste segment, and the Corporate Segment. The trucking operations were added in a series of acquisitions beginning in January, 2005. As a result, the comparative amounts for the quarter and year ended December 31, 2004 relate to operations that are substantially different than the continuing operations of the Company.
Revenue from continuing operations in the fourth quarter ended December 31, 2005, was $86.1 million and operating income amounted to $22.6 million or 26.2% of revenue. Diluted earnings per share from continuing operations for the quarter was $0.14. Margins were lower than anticipated in the fourth quarter due to certain employee wage increases taking effect October 1 while customer rate increases were implemented effective December 1. In addition, the busy winter season started later than anticipated and our customers took a longer Christmas break. As a result, the Company carried costs associated with increased capacity, particularly in our northern branches, that was not utilized until the new year.
Revenue from continuing operations for the year ended December 31, 2005 amounted to $214.9 million and operating income was $56.0 million or 26.0% of revenue. Diluted earnings per share from continuing operations was $0.31.
Revenue from discontinued operations was $25.4 million for the year and operating income was $2.3 million. Net income from discontinued operations was reduced by a $2.9 million write down of the Company's investment in international operations to the amount realized on sale in January 2006.
"The fourth quarter was extremely busy for Producers as activity levels in the field were high and management and staff continued to work on integrating the businesses acquired throughout the year", commented Ric Peterson, Chief Executive Officer.
Mr. Peterson also stated that "the recently announced merger of Producers with Mullen Group Income Fund is a significant opportunity to continue to create value for our shareholders and increased security and career expansion for our employees."
A summary of the Company's operating results for the three and twelve month period ending December 31, 2005 are as follows:
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FINANCIAL HIGHLIGHTS (in 000's except per share amounts) - UNAUDITED
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Three months ended Year ended
December 31 December 31
2005 2004 2005 2004
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Continuing Operations
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Revenues 86,118 2,327 214,948 8,715
Operating Income(1) 22,553 672 55,967 2,033
Net Income 9,256 275 18,775 541
Earnings per share
- basic $0.14 $0.01 0.32 0.02
Earnings per share
- diluted $0.14 $0.01 0.31 0.02
Discontinued Operations
Revenue 6,077 3,327 25,381 18,549
Operating income 772 206 2,251 2,774
Net income (loss) (2,829) (18) (2,647) 1,356
Earnings (loss) per share
- basic $(0.04) $0.00 (0.05) 0.05
Earnings (loss) per share
- diluted $(0.04) $0.00 (0.04) 0.05
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The consolidated financial statements referred to are prepared according
to Canadian Generally Accepted Accounting Principles (GAAP), however some
of the analysis refers to non-GAAP terms such as: operating income, and
funds from operations, which are defined as:
(1) Operating income is defined as net income before interest, income
taxes, depreciation and amortization, earnings from equity
investments and gains or losses on sale of property, plant and
equipment. Management believes that in addition to net income,
operating income is a useful supplemental measure as it provides
an indication of the results generated by the Company's principle
business activities prior to consideration of how those
activities are financed, how the assets are amortized, or taxed
in various jurisdictions. Investors should be cautioned, however,
that operating income should not be construed as an alternative
to net income determined in accordance to GAAP as an indicator of
Producers Oilfield's performance. Producers Oilfield's method of
calculating operating income may differ from other companies and,
accordingly, operating income may not be comparable to measures
used by other companies.
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A conference call and webcast has been scheduled as follows:
Date: Thursday, February 23, 2006
Time: 11:00 a.m. EST
Conference Call Dial-in: 1-800-796-7558 (for participants in
North America)
416-644-3423 (Toronto or overseas
participants)
Webcast:
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1360480
A replay of the call will be available approximately one hour after the completion of the call until Thursday, March 2, 2006 by dialing 1-877-289-8525 or 416-640-1917 and entering passcode 21174489 followed by the number sign.
Producers Oilfield Services Inc. is an energy services company listed on the TSX under the symbol "POS".
This press release may contain forward-looking statements that are subject to risk factors associated with the oil and gas business and the overall economy. The Company believes that the expectations reflected in this press release are reasonable, but results may be affected by a variety of variables. The Company relies on litigation protection for "forward-looking" statements.
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%SEDAR: 00016389E
For further information: Producers Oilfield Services Inc., Contact Information, Phone: (403) 920-1111, Fax: (403) 920-1110, E-mail: investorrelations@producersoilfield.com, Internet: www.producersoilfield.com; Ric Peterson, Chief Executive Officer, Tel: (403) 920-1111, Fax: (403) 920-1110; Bob German, Vice President, Finance and Chief Financial Officer, Tel: (403) 920-1115, Fax: (403) 920-1110; Transfer Agents and Registrar, CIBC Mellon Trust Company, 600 The Dome Tower, 333 - 7th Avenue S.W., Calgary, Alberta, Canada, T2P 2Z1, Phone: (403) 232-2400, 1-800-387-0825, Fax: (403) 264-2100, Email: inquiries@cibcmellon.com, Internet: www.cibcmellon.com
Source: newswire
All trademarks and copyrighted information contained herein are the property of their respective owners.
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