ALICE, Texas, Nov. 14 /PRNewswire-FirstCall/ -- Forbes Energy Services Ltd. (TSX: FRB) today announced its financial and operating results for the third quarter ended September 30, 2008. Following are highlights for the quarter:
-- Revenues increased to $105.1 million for the third quarter of 2008 from $88.6 million during the second quarter of 2008;
-- EBITDA increased to $28.9 million for the third quarter of 2008 from $25.8 million for the second quarter of 2008;
-- Well servicing rig count increased to 169 as of September 30, 2008 from 149 at June 30, 2008. Six of these rigs were being "rigged up" at September 30, 2008.
-- Fluid transport heavy truck fleet increased to 362 as of September 30, 2008 from 328 at June 30, 2008.
EBITDA is defined as net income before interest, taxes, depreciation and amortization. For a reconciliation of EBITDA to net income, please see the disclosures at the end of this release.
Net income for the three months ended September 30, 2008 was $8.3 million or $0.15 per diluted share. Net loss for the nine months ended September 30, 2008 was $19.9 million, or $0.49 loss per share, which includes a one-time, non-cash $46.4 million charge for deferred income taxes related to the Company's reorganization into a taxable entity that occurred simultaneous with its IPO on May 29, 2008.
John Crisp, Forbes Energy's President and Chief Executive Officer, stated, "We delivered strong results this quarter despite several days of hurricane- related downtime in September. Our utilization remains strong although we do anticipate at least a moderate slowdown in activity during the coming months due to lower commodity prices and a slowing economy. As a result, we have scaled back our capital expenditure budget for the rest of 2008 and 2009. Our capital expenditure plans are very flexible, and will continue to evolve with ever-changing market conditions."
Business Segment Results
Well servicing revenues increased to $54.3 million during the third quarter of 2008 compared to $47.4 million in the second quarter of 2008. Well servicing segment gross margins in the third quarter of 2008 were $18.9 million, compared to $17.4 million in the second quarter of 2008.
Forbes recorded approximately 107,520 rig hours for the third quarter of 2008, compared to 97,860 in the second quarter of 2008. The Company has increased its well service fleet to 169 rigs at September 30, 2008 from 149 as of June 30, 2008, an increase of 20 rigs during the quarter. Six of these rigs were being "rigged up" as of September 30, 2008 and therefore did not contribute to operating results for the third quarter. Equipment additions for the well servicing segment totaled $28.2 million during the three months ended September 30, 2008.
Fluid logistics revenues in the third quarter of 2008 increased to $50.8 million compared to $41.2 million in the second quarter of 2008. The increase was primarily the result of additional equipment and an expanded customer base. Gross margins for the fluid logistics segment totaled $14.5 million compared to $13.1 million in the previous quarter.
Forbes recorded 313,750 truck hours during the third quarter of 2008 compared to 271,968 for the second quarter of 2008. The Company increased its fluid transport segment heavy truck fleet to 362 as of September 30, 2008 as compared to 328 as of June 30, 2008. Total equipment additions for the fluid logistics segment were $16.0 million for the three months ended September 30, 2008.
Forbes Energy will host a conference call to discuss its third quarter 2008 results on Friday, November 14, 2008, at 9:00 a.m. Eastern Time (8:00 a.m. Central). To access the call, please dial (303) 275-2170 and ask for the "Forbes Energy Services" call at least 10 minutes prior to the start time. The conference call will also be broadcast live via the Internet and can be accessed through the "Corporate" page of Forbes Energy's website, www.forbesenergyservices.com.
A telephonic replay of the conference call will be available until November 21, 2008 and may be accessed by calling (303) 590-3000 and using the pass code 11121428#. A webcast archive will be available at www.forbesenergyservices.com shortly after the call and will be accessible for approximately 30 days. For more information, please contact Donna Washburn at DRG&E at (713) 529-6600 or email at firstname.lastname@example.org.
About Forbes Energy
Forbes Energy Services Ltd. is an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas, Mississippi, and Mexico.
Forward-Looking Statements and Regulation G Reconciliation
This press release contains "forward-looking statements," as contemplated by the Private Securities Litigation Reform Act of 1995, in which the Company discusses factors it believes may affect its performance in the future. The accuracy of the Company's assumptions, expectations, beliefs and projections depend on events or conditions that change over time and are thus susceptible to change based on actual experience, new developments and known and unknown risks. The Company gives no assurance that the forward-looking statements will prove to be correct and does not undertake any duty to update them. The Company's actual future results might differ from the forward-looking statements made in this press release for a variety of reasons, which include: supply and demand for oilfield services and industry activity levels; potential for excess capacity; competition; and substantial capital requirements. Should one or more of the foregoing risks or uncertainties materialize, or should the Company's underlying assumptions prove incorrect, the Company's actual results may vary materially from those anticipated in its forward-looking statements, and the Company's business, financial condition and results of operations could be materially and adversely affected. Additional factors that you should consider are set forth in detail in the Risk Factors section of the Company's most recent quarterly report on Form 10- Q as well as other filings the Company has made with the Securities and Exchange Commission.
Forbes Energy's financial statements and management's discussion and analysis of financial condition and results of operations can be found in the Company's quarterly report on form 10-Q, which will be filed with the Securities and Exchange Commission and posted on the Company's website.
This press release also contains references to the non-GAAP financial measure of earnings, or net income, before interest, income taxes, depreciation and amortization, or EBITDA. For a reconciliation of EBITDA to net income, please see the table at the end of this release. Management's opinion regarding the usefulness of EBITDA to investors and a description of the ways in which management uses such measures can be found on the "Corporate" page of Forbes Energy's website, www.forbesenergyservices.com.
-Tables to Follow-
Selected Statement of Operations Data
Three Months Ended Nine Months Ended
September 30 September 30
Successor- Predecessor- Successor- Predecessor-
Consolidated Combined Consolidated Combined
2008 2007 2008 2007
Well servicing $54,343,084 $30,911,863 $141,003,486 $70,815,164
Fluid logistics 50,802,304 24,927,025 123,265,951 73,824,746
Total revenues 105,145,388 55,838,888 264,269,437 144,639,910
Well servicing 35,406,964 16,850,316 89,819,779 39,058,114
Fluid logistics 36,281,048 17,065,983 86,739,998 48,473,312
administrative 4,511,599 3,576,245 12,371,906 6,089,872
amortization 9,157,283 4,065,275 23,792,421 9,996,937
Total expenses 85,356,894 41,557,819 212,724,104 103,618,235
Operating income 19,788,494 14,281,069 51,545,333 41,021,675
Other income (expense)
Interest expense (6,532,810) (2,034,859) (19,091,945) (5,611,829)
Other income (expense) 2,493 33,525 109,060 58,563
Income before taxes 13,258,177 12,279,735 32,562,448 35,468,409
Income Tax Expense 4,928,570 - 52,509,787 -
Net income/(loss) $8,329,607 $12,279,735 $(19,947,339) $35,468,409
Earnings/(loss) per share
of common stock
Basic $0.15 $(0.49)
Diluted 0.15 (0.49)
Weighted average number
of shares outstanding
Basic 54,144,700 40,653,076
Diluted 54,144,700 40,653,076
Selected Balance Sheet Data
September 30, December 31,
Cash $10,027,617 $5,209,345
Accounts receivable 79,522,105 42,998,005
Working Capital (154,296) (28,247,697)
Goodwill and other intangibles 72,773,122 -
Total assets 518,594,889 259,995,166
Total debt 215,588,885 111,281,004
Deferred tax liability 47,828,963 500
Members'/Stockholders' equity $167,889,005 $70,459,267
Selected Operating Data
Three Months Ended September 30
Working days 64 61
Rig Hours 107,520 48,759
Truck hours 313,750 182,906
Reconciliation of EBITDA to Net Income
Three Months Ended Nine Months Ended
September 30 September 30
2008 2007 2008 2007
Net Income (loss) $8,330 $12,280 $(19,947) $35,468
Depreciation and amortization 9,157 4,065 23,792 9,997
Interest expense 6,533 2,035 19,092 5,612
Income tax expense 4,929 - 52,510 -
EBITDA $28,949 $18,380 $75,447 $51,077
Contacts: Forbes Energy Services Ltd.
L. Melvin Cooper, SVP & CFO
Ken Dennard, Managing Partner
Ben Burnham, AVP
SOURCE Forbes Energy Services Ltd.
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