Key Energy Provides Second Quarter Selected Financial Data
August 17 2007 - 7:30AM
PR Newswire (US)
HOUSTON, Aug. 17 /PRNewswire-FirstCall/ -- Key Energy Services,
Inc. (Pink Sheets: KEGS) announced its selected financial data for
the three and six months ended June 30, 2007. Financial Results
Financial results for the June 2007 quarter reflect continued
strong demand for the Company's services. As previously reported,
revenue improved due to higher pricing in the well servicing
segment and expanded capacity in the pressure pumping segment.
Additionally, general and administrative costs during the June 2007
quarter include approximately $10 million of financial
reporting-related expenses, including legal, accounting and
consulting costs. Total debt, including capitalized leases, at June
30, 2007 was $419.0 million while cash and short term investments
were $175.1 million. See "Selected Financial Data" below. As
previously reported, the Company's audited financial statements for
2004 through 2006 reflected the roll through effects of the
Company's restatement process. Additionally, the selected financial
data for the March 2007 quarter, which is incorporated into the
six-month data reported here, differ from the data that the Company
previously released for the period due to the effects of the roll
through changes. The principal differences were that revenue for
the well servicing segment for the first quarter 2007 increased
$2.9 million from the amount previously reported while direct costs
for the well servicing segment decreased $4.8 million and direct
costs for the pressure pumping segment increased $1.2 million from
the amount previously reported. While the Company believes that it
has substantially included the roll through effects in the selected
financial data for the six months ended June 30, 2007, there may be
additional immaterial impacts. The September 30, 2007 and
subsequent quarterly periods are not expected to be affected by
roll through effects of the restatement process. Selected Financial
Data The following selected financial information for the Company
is as of and for the three and six-months ended June 30, 2007, and
2006, respectively. This unaudited information has been prepared by
management in accordance with generally accepted accounting
principles. The selected financial data has not been reviewed or
audited by the Company's independent accountants. The table does
not contain all the financial statement line captions and notes
that would be presented in the Company's Quarterly Report on Form
10-Q for the three and six-months ended June 30, 2007. Quarter
Ended Quarter Ended June 30, 2007 June 30, 2006 (In thousands - (In
thousands - Select Statement of Operations Data: Unaudited)
Unaudited) (1) Revenue: Well servicing $308,842 $288,392 Pressure
pumping 77,289 60,199 Fishing and rental services 24,397 23,445
TOTAL REVENUE $410,528 $372,036 Costs and Expenses: Well servicing
$176,435 $177,172 Pressure pumping 47,332 34,020 Fishing and rental
services 13,467 14,415 General and administrative 56,489 43,739
Interest 10,116 10,030 Six Months Six Months Ended Ended June 30,
2007 June 30, 2006 (In thousands - (In thousands - Unaudited)
Unaudited)(1) Revenue: Well servicing $620,002 $561,307 Pressure
pumping 151,366 111,997 Fishing and rental services 48,079 46,689
TOTAL REVENUE $819,447 $719,993 Costs and Expenses: Well servicing
$351,704 $357,928 Pressure pumping 92,995 62,589 Fishing and rental
services 26,739 29,502 General and administrative 108,151 87,080
Interest 20,308 18,608 June 30, 2007 June 30, 2006 (In thousands -
(In thousands - Select Balance Sheet Data: Unaudited) Unaudited)
Current Assets: Cash and cash equivalents (2) (3) $60,088 $113,769
Short term investments 114,975 - Accounts receivable, net of
allowance for doubtful accounts 284,286 240,958 Inventory 21,523
17,581 Prepaid expenses and other current assets 46,931 40,805
TOTAL CURRENT ASSETS $527,803 $413,113 Current Liabilities:
Accounts payable 17,883 $17,727 Other accrued liabilities 176,198
183,321 Accrued interest 4,970 7,511 Current portion of long-term
debt and capital lease obligations 13,694 13,616 TOTAL CURRENT
LIABILITIES $212,745 $222,175 Long-term debt, less current portion
(4) $390,000 $394,000 Capital lease obligations, less current
portion 15,289 17,598 Non-current accrued expenses 58,261 62,825
Notes (1) The 2006 selected financial data incorporates the
roll-through effects arising out of the restatement process. A full
income statement and balance for the quarter ended June 30, 2006 is
included in the Company's Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006. (2) Capital expenditures were
approximately $74.5 million and $55.7 million for the quarters
ended June 30, 2007 and 2006, respectively. Capital expenditures
were approximately $123.1 million and $108.3 million for the six
months ended June 30, 2007 and 2006, respectively. (3) The Company
made estimated income tax payments of approximately $50.1 million
and $6.1 million during the quarters ended June 30 and March 31,
2007, respectively. (4) There were no outstanding borrowings under
the Company's revolving credit facility as of July 31, 2007. The
information herein represents the results for only one quarter and
the information herein is not necessarily indicative of the results
that may be reported for the fiscal year ended December 31, 2007.
The information herein is select financial data and does not
represent a complete set of financial statements, which would
include additional financial data and notes to financial
statements. Key Energy Services, Inc. is the world's largest
rig-based well service company. The Company provides oilfield
services including well servicing, pressure pumping, fishing and
rental tools, electric wireline and other oilfield services. The
Company has operations in all major onshore oil and gas producing
regions of the continental United States and internationally in
Argentina. Certain statements contained in this news release
constitute "forward- looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations,
estimates and projections about the Company, the Company's
industry, management's beliefs and certain assumptions made by
management. Whenever possible, the Company has identified these
"forward-looking statements" by words such as "expects,"
"believes," "anticipates" and similar phrases. Readers are
cautioned that any such forward-looking statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and assumptions that are difficult to predict,
including, but not limited to: risks that the Company will be
unable to complete its new capital investment plan, including that
it will be unable to complete acquisitions and integrate acquired
operations and that it will be unable to obtain loan covenant
modifications and/or new debt financing on acceptable terms and
conditions in order to enable it to complete acquisitions or
repurchase stock; possible legal consequences of failure to file
compliant SEC filings for 2003, 2004 and 2005; risks that the
Company will be unable to satisfy the requirements for re-listing
on a national stock exchange or the timing thereof; the effect of
on-going financial reporting and restatement- related expenses;
possible additional tax liabilities as a result of the restatement
of financial results; risks that the Company's efforts to remediate
internal control and accounting deficiencies will not be effective;
potential financial or other effects of on-going class action and
derivative litigation; risks affecting the ability of the Company
to maintain or improve operations, including the ability to
maintain price increases, possible over supply of new rigs coming
into the market and weather risk; and risks that the Company will
be unable to achieve budgeted financial targets and risks affecting
activity levels for rig hours including the risk that commodity
prices decline or the risk that capital budgets from the Company's
customers decrease. Readers should also refer to the section
entitled "Risk Factors" in the 2006 Annual Report on Form 10-K for
discussion of risks arising from the financial reporting process
and other risks to which the Company is subject. Because such
statements involve risks and uncertainties, the actual results and
performance of the Company may differ materially from the results
expressed or implied by such forward-looking statements. Given
these uncertainties, readers are cautioned not to place undue
reliance on such forward-looking statements. Unless otherwise
required by law, the Company also disclaims any obligation to
update its view of any such risks or uncertainties or to announce
publicly the result of any revisions to the forward-looking
statements made here; however, readers should review carefully
reports or documents the Company files periodically with the
Securities and Exchange Commission. Contact: John Daniel (713)
651-4300 DATASOURCE: Key Energy Services, Inc. CONTACT: John Daniel
of Key Energy Services, Inc., +1-713-651-4300 Web site:
http://www.keyenergy.com/
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