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CARENCRO, La., Nov 6, 2008 (GlobeNewswire via COMTEX News Network) -- OMNI Energy Services Corp. (Nasdaq:OMNI) today reported third quarter 2008 net income of $4.0 million, or $0.15 per diluted share, on revenues of $53.3 million, compared to net income of $4.1 million, or $0.16 per diluted share, on revenues of $44.1 million for the same period of 2007 and compared favorably to net income of $2.6 million, or $0.10 per diluted share, on revenues of $48.9 million for the second quarter of 2008.
When comparing the third quarter 2008 to the same quarter for 2007, net income is essentially flat, due in part to the shift in seismic drilling activity from higher margin transition zone activity to highland areas, generating lower overall margins, which was in line with our forecast. Offshore activity continues to be below the comparable period in 2007, generating reduced contribution from our environmental services segment when compared to the third quarter of 2007. The continuation of cost, without corresponding revenue, during the two hurricanes (Gustav and Ike) contributed to the pressure on our margin. The full quarter contributions of B.E.G. Liquid Mud Services Corp. ("BEG") and Industrial Lift Truck and Equipment Company, Inc. ("ILT") operations into OMNI's land division was able to essentially offset these reductions.
Brian J. Recatto, President and Chief Executive Officer of OMNI, stated, "We are again very pleased with OMNI's financial performance this quarter despite the effect of the two hurricanes mentioned above. The two storms are estimated to have reduced revenue for the third quarter 2008 by approximately $4.5 million and net income was likewise reduced by $0.9 million or $0.04 per diluted share. We continue to be optimistic about the remainder of the year as demand for our services continues to be healthy. We continue to monitor activity in our sector in these uncertain economic times. Fortunately, activity levels remain high in the geographic regions we currently service and our clients remain committed to continued drilling and production activity."
Financial Highlights
* Revenues: Third quarter 2008 revenues increased by $9.2 million,
to $53.3 million as compared to the third quarter of 2007. During
the quarter, full quarter contributions from BEG and ILT were
accretive to revenue, which was partially offset by reduced
revenue generation, primarily in the environmental services
segment, due to reduced activity in the offshore market in the
same period in 2007.
* Operating income: Third quarter 2008 operating income increased
by $0.9 million, to $8.1 million as compared to the third quarter
2007 due in large part to the increased activity in the land based
operations described above as related to BEG and ILT. General
and administrative expense increased by $1.9 million to $7.3
million as compared to the third quarter 2007, due primarily
to increased expenses associated with the operations of BEG
and ILT.
* Net interest expense: Third quarter 2008 net interest expense
was essentially unchanged when compared to the same period
in 2007.
* Income tax expense: The effective tax rate for the third quarter
2008 was 38.5% compared to an expense of 28.3% in the same period
in 2007. The lower tax rate experienced in the third quarter
2007 was due primarily to the recognition of deferred tax assets
due to the reversal of a valuation allowance originally recorded
against our net deferred tax assets which were adjusted in the
third quarter 2007 due to the reasonable expectation of generating
taxable income in the future.
* Earnings before interest, taxes, depreciation and amortization,
other income (expense) and non-cash stock compensation ("Adjusted
EBITDA"): Third quarter 2008 Adjusted EBITDA was $12.2 million,
19.6% higher than the $10.2 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 at the end
of this press release including a discussion of why OMNI believes
this non-GAAP financial measure is useful.
* Balance Sheet: Total debt as of September 30, 2008 was $76.7
million and cash and cash equivalents (including restricted cash)
were $3.3 million for a net debt position of $73.4 million. OMNI
had available capacity on its revolver of $15.7 million ($2.7
million of which is currently being used to secure outstanding
standby letters of credit and other contingencies) and outstanding
revolver borrowings of $9.3 million in respect of this facility at
the end of the third quarter 2008 which has been included in the
total debt amount reflected above.
Brian J. Recatto, President and Chief Executive Officer of OMNI commented further, "The fourth quarter is off to a great start with all segments performing well and activity exceeding pre-hurricane levels. Our forecast remains positive for the balance of the year. Our financial performance will depend upon the ability of our client base to continue current activity levels in current credit and capital markets. The revenue and profit enhancement opportunities identified and put in place are being realized and accordingly we are confirming guidance for 2008. We project full year 2008 Revenue, Adjusted EBITDA, and EPS in the range of $190.0 million to $200.0 million, $38.0 million to $41.0 million and $0.33 to $0.39 per diluted share, respectively."
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 in the Gulf of Mexico as well as the prolific oil and gas producing regions of the continental United States of America. 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.
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 continued return of business activity to pre-hurricane levels, the timely conversion of seismic drilling backlog into revenue, the acceptance and use of OMNI's expanded environmental cleaning services, 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 lease 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 Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
2007 2008 2007 2008
--------- --------- --------- ---------
(in thousands, except per share amounts)
Operating revenue:
Services $ 35,731 $ 40,676 $ 107,519 $ 111,496
Rentals 8,406 12,608 23,628 31,669
--------- --------- --------- ---------
Total operating
revenue 44,137 53,284 131,147 143,165
--------- --------- --------- ---------
Operating expenses:
Direct costs (exclusive
of depreciation and
amortization shown
separately below):
Services 24,806 27,856 72,849 79,524
Rentals 3,970 6,392 10,674 15,945
Depreciation and
amortization 2,749 3,620 7,736 9,776
General and
administrative
expenses (exclusive of
depreciation and
amortization shown
separately above)
(includes litigation
settlement of $2,400
in the first quarter
of 2008) 5,434 7,282 16,311 23,417
--------- --------- --------- ---------
Total operating
expenses 36,959 45,150 107,570 128,662
--------- --------- --------- ---------
Operating income 7,178 8,134 23,577 14,503
Interest expense (1,568) (1,518) (4,897) (5,231)
Loss on debt
extinguishment -- -- (1,004) --
Other income (expense),
net 234 65 299 (137)
--------- --------- --------- ---------
Income before income tax
expense 5,844 6,681 17,975 9,135
Provision for income tax
expense (1,656) (2,572) (6,343) (3,688)
--------- --------- --------- ---------
Net income 4,188 4,109 11,632 5,447
Dividends and accretion
of preferred stock (124) (123) (378) (367)
Non-cash charge
attributable to
beneficial conversion
feature of preferred
stock -- -- (255) --
--------- --------- --------- ---------
Net income available to
common stockholders $ 4,064 $ 3,986 $ 10,999 $ 5,080
========= ========= ========= =========
Basic income per share:
Net income available to
common stockholders $ 0.22 $ 0.20 $ 0.62 $ 0.26
========= ========= ========= =========
Diluted income per
share:
Net income available to
common stockholders $ 0.16 $ 0.15 $ 0.45 $ 0.21
========= ========= ========= =========
Weighted average common
shares outstanding:
Basic 18,509 19,919 17,881 19,460
Diluted 26,359 27,480 26,067 26,384
EBITDA consists of earnings (net income or loss) before interest expense, provision for income taxes, depreciation and amortization. Adjusted EBITDA includes other income (expense) and stock-based compensation because these items are either non-recurring or non-cash. Adjusted EBITDA, 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 financial statement 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 third quarter 2007 and 2008 as well as projected results for the year ending December 31, 2008.
OMNI ENERGY SERVICES CORP.
OTHER FINANCIAL DATA
(Unaudited)
(in millions)
Three Months Ended Year Ending
------------------ -----------
September 30, December 31, 2008
------------- -----------------
2007 2008 Projected
---- ---- ---------
Low High
Actual Actual Range Range
-------- -------- -------- --------
Net income $ 4.2 $ 4.1 $ 10.1 $ 12.0
Plus (less):
Interest 1.6 1.5 6.6 6.6
Other income (0.2) (0.1) 0.2 0.2
Depreciation and amortization 2.7 3.6 13.4 13.4
Non-cash stock compensation 0.2 0.5 1.3 1.3
Income tax expense 1.7 2.6 6.4 7.5
-------- -------- -------- --------
Adjusted EBITDA $ 10.2 $ 12.2 $ 38.0 $ 41.0
======== ======== ======== ========
OMNI&
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: OMNI Energy Services Corp.
OMNI Energy Services Corp.
Ronald D. Mogel, Senior Vice President
and Chief Financial Officer
(337) 896-6664
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