CARENCRO, La., Aug. 7 /PRNewswire-FirstCall/ -- OMNI ENERGY SERVICES CORP.
(Nasdaq: OMNI) today reported second quarter 2008 net income of $2.6 million,
or $0.10 per diluted share, on revenues of $48.9 million, compared to net
income of $3.8 million, or $0.15 per diluted share, on revenues of $48.1
million for the same period of 2007. The decrease in net income is due in part
to the shift in seismic drilling activity from higher margin transition zone
activity to highland areas, which have lower overall margins, which was in
line with our forecast. Offshore activity is steady but remains at activity
levels below the comparable period in 2007 resulting in reduced contribution
from our environmental services segment when compared to the second quarter of
2007. The integration of Industrial Lift Truck and Equipment Company, Inc.
("ILT") operations into OMNI's land division has been able to offset this
reduction, in part. Additionally, OMNI recorded incremental legal fees during
the second quarter of 2008 in respect of its actions with the former owners of
Preheat, Inc. ("Preheat") related to the previously announced Preheat
litigation as well as legal fees associated with the Siemens settlement.
The backlog in OMNI's seismic drilling division remains strong at
approximately $47.0 million. It is expected that this backlog will be
performed and converted to revenue during the remainder of 2008 and in the
first quarter of 2009.
Brian J. Recatto, President and Chief Executive Officer of OMNI, stated
"We are very pleased with the financial performance this quarter and continue
to be optimistic about the remainder of the year as our client base continues
to demonstrate strong demand for our services. We are excited about the
success we are beginning to realize from some of our organic expansion
efforts, particularly our new locations in the Haynesville Shale and Fort
Worth regions. The cost associated with modification and repair of idle
equipment in the first quarter of 2008, readying it for active service in
these regions, is paying off as expected."
Financial Highlights
-- Revenues: Second quarter 2008 revenues increased by $0.8 million, to
$48.9 million as compared to the second quarter of 2007. During the quarter,
the Company's acquisition of ILT, as well as having a full quarter
contribution from B.E.G. Liquid Mud Services Corp. ("BEG"), were accretive to
revenue which was partially offset by reduced revenue generation primarily in
the seismic drilling division due to a concentration of activity in the
highland drilling market as compared to the higher revenue generating
transition zone activity coupled with reduced activity in the offshore market
for our environmental services business in the same period in 2007.
-- Operating income: Second quarter 2008 operating income decreased by
$2.2 million, to $6.1 million as compared to the second quarter 2007 due in
large part to the reduced revenue in the seismic drilling division described
above compounded by the increase in general and administrative expense over
the second quarter 2007 due primarily to additional legal fees incurred in
respect of the Preheat and Siemens matters.
-- Net interest expense: Second quarter net 2008 interest expense was
essentially unchanged when compared to the same period in 2007.
-- Income tax expense: The effective tax rate for the second quarter 2008
was 38.6% compared to an expense of 38.8% in the same period in 2007.
-- Earnings before interest, taxes, depreciation and amortization, other
income (expense)and non-cash stock compensation ("Adjusted EBITDA"): Second
quarter 2008 Adjusted EBITDA was $9.8 million, 15.5% lower than the $11.6
million of Adjusted EBITDA reported for the comparable 2007 period. Adjusted
EBITDA, which is a non-GAAP financial measure, is provided herein to assist
investors to better understand OMNI's financial performance. See the
reconciliation of net income to Adjusted EBITDA on the last page of this press
release including a discussion of why OMNI believes this non-GAAP financial
measure is useful.
-- Balance Sheet: Total debt was $83.1 million and cash and cash
equivalents were $2.0 for a net debt position of $81.1 million as of June 30,
2008. OMNI did not borrow the maximum available balance on its revolving
credit facility as had been done in the past but did have available capacity
on its revolver of $6.4 million and outstanding revolver borrowings of $12.4
million in respect of this facility at the end of the second quarter which has
been included in the total debt amount reflected above.
Brian J. Recatto, President and Chief Executive Officer of OMNI commented
further, "The third quarter is off to a good start with all divisions
performing well and our outlook remains positive for the balance of the year.
We will continue to see improvement in our financial performance, especially
in our land based business segments. While the new management team has
identified and implemented some revenue and profit enhancement opportunities
and will see these benefits in the second half of this year, we feel it is
unlikely that we will be able to overcome the poor financial performance in
the first quarter and accordingly are providing revised guidance for 2008. We
project third and fourth quarter 2008 combined Revenue, Adjusted EBITDA, and
EPS in the range of $100.0 million to $110.0 million, $25.0 million to $28.0
million and $0.28 to $0.34 per diluted share, respectively. This will result
in full year 2008 Revenue, Adjusted EBITDA, and EPS in the range of 2008
$190.0 million to $200.0 million, $38.0 million to $41.0 million and $0.33 to
$0.39 per diluted share, respectively. Additionally, we will begin regularly
scheduled conference calls subsequent to earnings releases, commencing with
third quarter 2008."
Headquartered in Carencro, LA, OMNI Energy Services Corp. offers a broad
range of integrated services to geophysical companies engaged in the
acquisition of on-shore seismic data and to oil and gas companies operating
primarily in the Gulf of Mexico. OMNI provides its services through five
business segments: Seismic Drilling (including drilling, survey and permitting
services), Environmental Services, Equipment Leasing, Fluid and Transportation
Services and Other Services. OMNI's services play a significant role with
geophysical companies who have operations in marsh, swamp, shallow water and
the U.S. Gulf Coast also called transition zones and contiguous dry land areas
also called highland zones.
Forward-looking statements in this release are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Investors are cautioned that all forward-looking statements involve risks and
uncertainties associated with the ability to integrate successfully the
acquisitions referenced herein, the timely conversion of seismic drilling
backlog into revenue, OMNI's dependence on activity in the oil and gas
industry, labor shortages, permit delays, dependence on significant customers,
seasonality and weather risks, competition, technological evolution, the
ultimate outcome of pending litigation, the continued growth of our
environmental services and rental equipment business units, and other risks
detailed in OMNI's filings with the Securities and Exchange Commission.
OMNI ENERGY SERVICES CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Six Months
Ended Ended
June 30, June 30,
2007 2008 2007 2008
(in thousands, except per share amounts)
Operating revenue $48,121 $48,920 $87,010 $89,881
Operating expenses:
Direct costs 31,172 32,122 54,747 61,220
Depreciation and amortization 2,922 3,342 4,987 6,156
General and administrative
expenses (includes litigation
settlement of $2,400 in the
first quarter of 2008) 5,762 7,357 10,877 16,135
Total operating expenses 39,856 42,821 70,611 83,511
Operating income 8,265 6,099 16,399 6,370
Interest expense (1,759) (1,723) (3,329) (3,713)
Loss on debt extinguishment -- -- (1,004) --
Other income (expense), net 54 44 65 (203)
Income before income tax expense 6,560 4,420 12,131 2,454
Provision for income tax expense (2,543) (1,678) (4,687) (1,116)
Net income 4,017 2,742 7,444 1,338
Dividends and accretion of
preferred stock (127) (121) (254) (244)
Non-cash charge attributable
to beneficial conversion feature
of preferred stock (127) -- (255) --
Net income available to common
stockholders $3,763 $2,621 $6,935 $1,094
Basic income per share:
Net income available to common
stockholders $0.21 $0.14 $0.39 $0.06
Diluted income per share:
Net income available to common
stockholders $0.15 $0.10 $0.29 $0.05
Weighted average common shares
outstanding:
Basic 17,914 19,384 17,562 19,227
Diluted 26,412 27,544 25,802 22,521
EBITDA consists of earnings (net income or loss) before interest expense,
provision for income taxes, depreciation and amortization. Adjusted EBITDA
includes other income (expense) stock-based compensation because these items
are either non-recurring or non-cash. This term, as we define it, may not be
comparable to similarly titled measures employed by other companies and is not
a measure of performance calculated in accordance with U.S. generally accepted
accounting principles (GAAP).
The Securities and Exchange Commission (SEC) has adopted rules regulating
the use of non-GAAP financial measures, such as EBITDA and Adjusted EBITDA, in
disclosures and press releases. These rules require non-GAAP financial
measures to be presented with, and reconciled to, the most nearly comparable
financial measure calculated and presented in accordance with GAAP.
Set forth below is a reconciliation of net income to Adjusted EBITDA.
Management uses Adjusted EBITDA to measure the operating results and
effectiveness of our ongoing business. We believe this measurement is
important to our investors and financial analysts because it allows a more
effective evaluation of the Company's performance using the same measurements
that management uses. Adjusted EBITDA is an indication of the Company's
ability to generate cash available to internally fund our expansion plans and
service our debt obligations. This non-GAAP financial measure may not be
comparable to similarly titled measurements used by other companies and should
not be used as a substitute for net income, earnings per share, operating cash
flow or other GAAP operating measurements. The results shown below include
results for the second quarter 2007 and 2008, the six months ended June 30,
2008 as well as projected results for the six months and year ending December
31, 2008.
OMNI ENERGY SERVICES CORP.
OTHER FINANCIAL DATA
(Unaudited)
(in millions)
Six Months Six Months
Ended Ending Year Ending
Three Months June December 31, December 31,
Ended June 30, 30, 2008 2008
2007 2008 2008 Projected Projected
Low High Low High
Actual Actual Actual Range Range Range Range
Net income $4.0 $2.7 $1.3 $8.8 $10.7 $10.1 $12.0
Plus (less):
Interest 1.8 1.7 3.7 2.9 2.9 6.6 6.6
Other income -- -- 0.2 -- -- 0.2 0.2
Depreciation and
amortization 2.9 3.3 6.2 7.2 7.2 13.4 13.4
Non-cash stock
compensation 0.4 0.4 0.5 0.8 0.8 1.3 1.3
Income tax
expense 2.5 1.7 1.1 5.3 6.4 6.4 7.5
Adjusted EBITDA $11.6 $9.8 $13.0 $25.0 $28.0 $38.0 $41.0
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