Key Energy Reports Profit and Record EBITDA for Fourth Quarter
EAST BRUNSWICK, N.J.--(BUSINESS WIRE)--Aug. 21, 2000--Key Energy
Services, Inc. (NYSE: KEG) today reported a profit of approximately
$332,000 or slightly more than $0.00 per basic share for the quarter
ended June 30, 2000 compared to a loss of approximately $13.2 million
or ($0.24) per basic share for the quarter ended June 30, 1999.
EBITDA, defined as earnings before interest, taxes and depreciation
and amortization, increased 130% to approximately $34.8 million for
the quarter ended June 30, 2000 compared to approximately $15.1
million for the same period last year. Revenues for the quarter ended
June 30, 2000 increased 37% to approximately $169.9 million compared
to $124.4 million for the quarter ended June 30, 1999. For the fiscal
year ended June 30, 2000, Key reported a 30% increase in revenues to
approximately $637.7 million, a 73% increase in EBITDA to
approximately $116.6 million and a substantially lower loss of
approximately ($0.23) per share compared to ($1.94) per share for the
fiscal year ended June 30, 1999. Well service rig, drilling rig and
fluid hauling operations each experienced a significant sequential
increase in utilization reflected in total hours worked during the
quarter compared to the previous quarter ended March 30, 2000 and was
vastly improved over the June 1999 quarter. Operating margins in all
of Key's businesses continued to improve as well service rig hours,
drilling rig hours and daily rates increased with improving customer
demand.
Key significantly reduced debt and strengthened its balance sheet
during the fiscal year ended June 30, 2000. Net debt to capitalization
at June 30, 2000, including the cash proceeds from the equity offering
that was completed on June 30, 2000, has improved to approximately
59%. The Company has used the net proceeds from the equity offering to
repay approximately $100 million of long-term debt and has also repaid
an additional $16.7 million of long-term debt during June and July
2000 from existing cash. Net income for the three months and the
fiscal year ended June 30, 2000 includes an approximately $1.6 million
gain from the early retirement of $10.2 million of long-term debt.
Key's current outstanding long-term debt, excluding capitalized
leases, is approximately $542 million. The Company has excellent
liquidity with only $22 million outstanding under its $150 million
revolving credit facility. Key has generated five consecutive quarters
of sequential improvement in EBITDA and EBITDA margins and expects
this trend to continue as the market improves.
Currently, demand for Key's services in all operating areas
continues to increase. Total well service and drilling rig hours are
averaging more than 52,000 hours per week since the 4th of July
holiday week, compared to an average of 49,000 hours during the June
2000 quarter. The Company has recently instituted another round of
rate increases for its well service rigs, drilling rigs and fluid
hauling services that will phase in from July 15, 2000 through
September 30, 2000.
Francis D. John, the Company's Chairman and Chief Executive
Officer, stated, "We are very excited about Key's prospects as market
conditions are expected to strengthen in all operating areas. With
strong natural gas prices and the U.S. drilling rig count approaching
1,000 units, we believe the next several quarters will show continued
growth in revenues and earnings. We have done an outstanding job of
reducing debt and fixed charges while also reducing operating costs as
evidenced by our improving operating earnings and margins. In fact,
Key's operations have been consistently profitable since May 2000.
With the further benefit of the equity offering, the Company believes
that its balance sheet and credit statistics are vastly improved which
should enable Key to refinance its bank debt at more favorable rates."
"We have clearly turned the corner," Mr. John continued, "Key is
exceptionally well positioned to benefit from the improved stability
and strength of oil and gas prices. We have more than 300 additional
well service and drilling rigs which, when deployed, will allow Key to
grow without the need for acquisitions. We have multi-week wait lists
in many of our regions, we are actively refurbishing equipment and we
have just opened our second employee training school near Houston, TX
to supply a steady stream of highly trained personnel to better serve
our customers." |
