HOUSTON, Feb. 25, 2010 (GLOBE NEWSWIRE) -- T-3 Energy Services, Inc. (Nasdaq:TTES) reported fourth quarter 2009 net income of $3.4 million, or $0.26 per diluted share, compared to $4.1 million, or $0.32 per diluted share for the third quarter of 2009. The third quarter results include the benefit of an insurance claim settlement related to Hurricane Ike of just under $1.1 million, or $0.05 per diluted share after tax.
Full year 2009 net income was $16.2 million, or $1.26 per diluted share, compared to full year 2008 net income of $13.0 million, or $1.02 per diluted share. Net income for 2009 included pre-tax charges for separation and acquisition costs of $4.2 million, or $0.21 per diluted share after tax, as well as the previously mentioned insurance claim settlement. Net income for 2008 included a goodwill impairment charge of $23.5 million, or $1.60 per diluted share after tax, as well as costs related to the pursuit of strategic alternatives of $4.7 million, or $0.24 per diluted share after tax.
Revenues for the fourth quarter increased to $52.4 million from $47.5 million in the third quarter of 2009. Revenues increased primarily due to a large international order, representing over $9.0 million of revenues, which shipped in the fourth quarter of 2009. While backlog decreased to $34.5 million at December 31 versus $41.2 million at September 30, 2009, net bookings for the quarter increased slightly to $45.7 million compared to $43.3 million in the prior quarter. Revenues for the full year 2009 were $218.5 million compared to $285.3 million for 2008.
Steve Krablin, T-3's Chairman, President and Chief Executive Officer, commented, "Our revenues and earnings continue to benefit from relatively stronger offshore and international markets, and we had strong cash flow for both the fourth quarter and 2009. Fourth quarter revenues on products destined for international delivery represented 56% of total revenues, up from 50% in the prior quarter.
"The large international order we delivered in the fourth quarter represented a customer-driven engineered response for a fracturing system that no other competitor offered. This multiple well stimulation and concurrent well intervention system, which has been operating in the field for approximately 45 days, is performing well above customer expectations and has resulted in strong industry interest in our products, including this fracturing system. While we believe systems similar to this have application in many areas that use horizontal drilling, the $9 million fracturing system revenues from the fourth quarter will not repeat in the near term, and our revenues will decline in the first quarter of 2010 as a result.
"Longer term, the outlook is stronger. We continue to see steady increases in quarterly bookings since their trough in the second quarter of 2009, and we expect this trend, driven by increased industry activity, to continue. We currently anticipate a meaningful recovery in the second half of the year."
T-3 Energy Services, Inc. provides a broad range of oilfield products and services primarily to customers in the drilling and completion of new oil and gas wells, the workover of existing wells and the production and transportation of oil and gas.
Except for historical information, statements made in this release, including those relating to potential future revenues, bookings, cash flow, backlog, growth, business trends and prospects constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Whenever possible, the Company has identified these "forward-looking" statements by words such as "believe", "encouraged", "expect", "expected", "anticipate", "should" and similar phrases. The forward-looking statements are based upon management's expectations and beliefs and, although these statements are based upon reasonable assumptions, actual results might differ materially from expected results due to a variety of factors including, but not limited to, overall demand for and pricing of the Company's products, changes in the level of oil and natural gas exploration and development, and variations in global business and economic conditions. The Company assumes no obligation to update or revise publicly any forward-looking statements whether as a result of new information, future events or otherwise. For a discussion of additional risks and uncertainties that could impact the Company's results, review the T-3 Energy Services, Inc. Annual Report on Form 10-K for the year ended December 31, 2008 and other filings of the Company with the Securities and Exchange Commission.
| T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES | |||||
| CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||
| (in thousands, except per share amounts) | |||||
| Three Months Ended | Year Ended | ||||
| December 31, | September 30, | December 31, | |||
| 2009 | 2008 | 2009 | 2009 | 2008 | |
| Revenues: | |||||
| Products | $ 44,430 | $ 65,942 | $ 39,098 | $ 186,075 | $ 241,328 |
| Services | 8,007 | 12,689 | 8,392 | 32,386 | 44,001 |
| 52,437 | 78,631 | 47,490 | 218,461 | 285,329 | |
| Cost of revenues: | |||||
| Products | 29,670 | 40,852 | 25,819 | 119,896 | 148,667 |
| Services | 4,498 | 7,450 | 5,049 | 18,986 | 25,784 |
| 34,168 | 48,302 | 30,868 | 138,882 | 174,451 | |
| Gross profit | 18,269 | 30,329 | 16,622 | 79,579 | 110,878 |
| Operating Expenses: | |||||
| Impairment of goodwill | --- | 23,500 | --- | --- | 23,500 |
| Selling, general and administrative expenses | 13,817 | 14,092 | 12,876 | 58,239 | 58,318 |
| 13,817 | 37,592 | 12,876 | 58,239 | 81,818 | |
| Equity in earnings (loss) of unconsolidated affiliates | 245 | (60) | 359 | 1,157 | 115 |
| Income (loss) from operations | 4,697 | (7,323) | 4,105 | 22,497 | 29,175 |
| Interest expense | (189) | (411) | (159) | (830) | (2,357) |
| Interest income | 9 | 5 | 15 | 24 | 148 |
| Other income, net | 143 | 285 | 1,219 | 1,612 | 453 |
|
Income (loss) from continuing operations before provision for income taxes |
4,660 | (7,444) | 5,180 | 23,303 | 27,419 |
| Provision for income taxes | 1,282 | 1,246 | 1,101 | 7,138 | 14,374 |
| Income (loss) from continuing operations | 3,378 | (8,690) | 4,079 | 16,165 | 13,045 |
| Loss from discontinued operations, net of tax | --- | (28) | --- | --- | (48) |
| Net income (loss) | $ 3,378 | $ (8,718) | $ 4,079 | $ 16,165 | $ 12,997 |
| Basic earnings (loss) per common share: | |||||
| Continuing operations | $ .26 | $ (.69) | $ .32 | $ 1.27 | $ 1.05 |
| Discontinued operations | $ --- | $ --- | $ --- | $ --- | $ --- |
| Net income (loss) per common share | $ .26 | $ (.69) | $ .32 | $ 1.27 | $ 1.05 |
| Diluted earnings (loss) per common share: | |||||
| Continuing operations | $ .26 | $ (.69) | $ .32 | $ 1.26 | $ 1.02 |
| Discontinued operations | $ --- | $ --- | $ --- | $ --- | $ --- |
| Net income (loss) per common share | $ .26 | $ (.69) | $ .32 | $ 1.26 | $ 1.02 |
| Weighted average common shares outstanding: | |||||
| Basic | 12,860 | 12,514 | 12,811 | 12,711 | 12,457 |
| Diluted | 13,020 | 12,514 | 12,887 | 12,806 | 12,812 |
| T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||
| (in thousands, except for share amounts) | ||
| December 31, | December 31, | |
| 2009 | 2008 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 11,747 | $ 838 |
| Accounts receivable – trade, net | 28,450 | 47,822 |
| Inventories | 53,689 | 58,422 |
| Deferred income taxes | 2,485 | 5,131 |
| Prepaids and other current assets | 7,311 | 4,585 |
| Total current assets | 103,682 | 116,798 |
| Property and equipment, net | 49,353 | 46,071 |
| Goodwill, net | 88,779 | 87,929 |
| Other intangible assets, net | 32,091 | 33,477 |
| Other assets | 5,916 | 2,837 |
|
Total assets |
$ 279,821 | $ 287,112 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: |
|
|
| Accounts payable – trade | $ 17,213 | $ 26,331 |
| Accrued expenses and other | 14,359 | 19,274 |
| Current maturities of long-term debt | --- | 5 |
| Total current liabilities | 31,572 | 45,610 |
| Long-term debt, less current maturities | --- | 18,753 |
| Other long-term liabilities | 1,144 | 1,628 |
| Deferred income taxes | 8,009 | 10,026 |
| Commitments and contingencies | ||
| Stockholders' equity: | ||
|
Preferred stock, $.001 par value, 25,000,000 shares authorized, no shares issued or outstanding |
--- |
--- |
|
Common stock, $.001 par value, 50,000,000 shares authorized, 13,038,143 and 12,547,458 shares issued and outstanding at December 31, 2009 and 2008 |
13 | 13 |
| Warrants, 10,157 issued and outstanding at December 31, 2009 and 2008 | 20 | 20 |
| Additional paid-in capital | 181,115 | 171,042 |
| Retained earnings | 56,201 | 40,036 |
| Accumulated other comprehensive income (loss) | 1,747 | (16) |
| Total stockholders' equity | 239,096 | 211,095 |
| Total liabilities and stockholders' equity | $ 279,821 | $ 287,112 |
| T-3 ENERGY SERVICES, INC. AND SUBSIDIARIES | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | ||
| (in thousands) | ||
|
Year Ended December 31, |
||
| 2009 | 2008 | |
| Cash flows from operating activities: | ||
| Net income | $ 16,165 | $ 12,997 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
| Loss from discontinued operations, net of tax | --- | 48 |
| Bad debt expense | 488 | 384 |
| Depreciation and amortization | 8,932 | 8,349 |
| Amortization and/or write-off of deferred loan costs | 228 | 212 |
| Loss (gain) on sale of assets | 65 | (26) |
| Deferred taxes | (585) | (2,900) |
| Employee stock-based compensation expense | 6,753 | 5,529 |
| Excess tax benefits from stock-based compensation | (558) | (1,820) |
| Equity in earnings of unconsolidated affiliate | (1,157) | (115) |
| Write-off of inventory and property and equipment, net | 1,119 | 416 |
| Impairment of goodwill | --- | 23,500 |
|
Changes in assets and liabilities, net of effect of acquisitions and dispositions: |
||
| Accounts receivable – trade | 21,128 | (4,247) |
| Inventories | 6,109 | (12,174) |
| Prepaids and other current assets | (2,695) | 896 |
| Other assets | (103) | (414) |
| Accounts payable – trade | (10,933) | 5,714 |
| Accrued expenses and other | (5,098) | 6,789 |
| Net cash provided by operating activities | 39,858 | 43,138 |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (6,230) | (11,300) |
| Proceeds from sales of property and equipment | 195 | 94 |
| Cash paid for acquisitions, net of cash acquired | (7,474) | (2,732) |
| Equity investments in unconsolidated affiliates | (2,039) | --- |
| Collections on notes receivable | 31 | 15 |
| Net cash used in investing activities | (15,517) | (13,923) |
| Cash flows from financing activities: | ||
| Net borrowings (repayments) under swing line credit facility | (750) | (2,665) |
| Borrowings under revolving credit facility | 19,000 | 5,000 |
| Repayments under revolving credit facility | (37,000) | (45,000) |
| Payments on long-term debt | (113) | (97) |
| Debt financing costs | --- | (78) |
| Proceeds from exercise of stock options | 3,861 | 3,211 |
| Proceeds from exercise of warrants | --- | 38 |
| Excess tax benefits from stock-based compensation | 558 | 1,820 |
| Net cash used in financing activities | (14,444) | (37,771) |
| Effect of exchange rate changes on cash and cash equivalents | 1,012 | (34) |
| Cash flows of discontinued operations: | ||
| Operating cash flows | --- | (94) |
| Net cash used in discontinued operations | --- | (94) |
| Net increase (decrease) in cash and cash equivalents | 10,909 | (8,684) |
| Cash and cash equivalents, beginning of year | 838 | 9,522 |
| Cash and cash equivalents, end of year | $ 11,747 | $ 838 |