News Column

C&J Energy Services Announces Second Quarter 2014 Results

August 15, 2014



By a News Reporter-Staff News Editor at Energy Weekly News -- C&J Energy Services, Inc. (NYSE: CJES) reported net income of $11.1 million, or $0.20 per diluted share on record revenue of $367.9 million for the second quarter of 2014, and Adjusted Net Income((1)) of $15.7 million, or $0.28 per diluted share((1)), after excluding a $4.6 million after-tax ($0.08 per diluted share) charge related to transaction costs associated primarily with the proposed acquisition of Nabors' Completion and Production Services businesses ("NCPS"). These results compare with net income of $11.6 million, or $0.21 per diluted share, on revenue of $316.5 million for the first quarter of 2014. For the second quarter of 2013, the Company recorded net income of $20.8 million, or $0.38 per diluted share, on revenue of $267.0 million. Adjusted EBITDA((1)) for the second quarter of 2014 was $53.0 million, compared to $43.0 million for the first quarter of 2014 and $53.9 million for the second quarter of 2013.

Second quarter results improved sequentially primarily due to increased utilization levels across our operations as completion activity continued to strengthen in the U.S. A job-mix involving more service intensive work and higher volumes of certain consumables used in our hydraulic fracturing services contributed to the growth in revenue, but the associated input and logistics costs negatively impacted margins. The sequential increases in Adjusted EBITDA and Adjusted Net Income were offset by additional costs associated with our strategic initiatives and increased direct labor costs primarily related to the deployment of new equipment.

Founder, Chairman and Chief Executive Officer Josh Comstock commented, "We successfully carried forward our momentum from the first quarter, achieving another quarter of record-breaking revenue. This outstanding performance was driven by utilization improvements across our core service lines, especially in our hydraulic fracturing, wireline and pumpdown operations. We continued to benefit from increased completion activity and capitalize on industry trends towards more service intensive jobs, which aligns with our operating strategy. We successfully deployed 20,000 new hydraulic fracturing horsepower in late April and 40,000 additional horsepower in July to meet increasing customer demand. Our coiled tubing operations again produced solid results, and our wireline operations, which include our pumpdown service line, delivered another strong quarter.

"The second quarter of 2014 was transformative for C&J. In addition to the previously announced agreement to combine with Nabors' Completion and Production Services, we acquired Tiger Cased Hole Services, a leading provider of cased-hole wireline services on the West Coast. Tiger's strong experience and relationships with many of the top operators in a market that is new to C&J advances our objective to further grow through the expansion of our assets, customer base and geographic reach.

"We are excited about the proposed combination with Nabors' Completion and Production Services and what it means for the future of our business. This transaction will accelerate C&J's long-term growth strategy, making C&J the fifth-largest provider of hydraulic fracturing services in North America, while diversifying our service offerings with the addition of cementing to our suite of completion services and an industry leading production services business. We believe that the added scale, geographic reach and service capabilities will provide substantial market penetration in the U.S. and opens up new opportunities for our international growth.

"We are also proud to announce that we have now commenced operations in Saudi Arabia under our first international contract for coiled tubing work on a provisional basis. Our team mobilized on location for our customer in late June and we successfully performed our first job in early July. We believe that our rapid progress in entering this market is unprecedented for a company of our size, which is an encouraging indication of our potential in the region.

"Based on this quarter's results and achievements, and in light of current activity levels, we are excited about the remainder of 2014. We remain on track to deploy an incremental 40,000 hydraulic fracturing horsepower, as well as additional coiled tubing, wireline and pumpdown equipment, later in the year. We remain focused on providing best-in-class service to our customers, maximizing equipment utilization, expanding market share, operating efficiently and growing our operating capacity. We look forward to combining our Company with NCPS, welcoming all of our new employees and integrating our operations as soon as possible."

Keywords for this news article include: C&J Energy Services Inc.

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Source: Energy Weekly News


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