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FORT WORTH, Texas, Nov 07, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- Union Drilling, Inc. (Nasdaq: UDRL) announced today financial and operating results for the three and nine month periods ended September 30, 2006.
Revenues for the third quarter of 2006 were $69.5 million, up 60.7% compared to revenues of $43.2 million in the third quarter of 2005. EBITDA for the third quarter of 2006 was $23.6 million, compared to $7.5 million reported in the same period last year. For additional information regarding EBITDA as a non-GAAP financial measure, please refer to the disclosures contained at the end of this release. Net income in the third quarter of 2006 was $9.8 million or $0.45 per diluted share versus net income of $13,000 or $0.00 per diluted share during the third quarter of 2005.
Christopher D. Strong, Union Drilling's President and Chief Executive Officer, stated, "We are pleased with our results from the third quarter. All three drivers of our business improved: we had more rigs earning higher margins at increased utilization rates and demand for our services continues to be good.
"We now have taken delivery of three of our new 1,500 horsepower Ideal(R) rigs, each of which is currently under contract in the Barnett Shale. Three additional Ideal(R) rigs are scheduled for delivery in December and January."
For the first nine months of 2006, Union Drilling reported revenues of $184.9 million, EBITDA of $57.1 million and net income of $23.2 million, or $1.08 per share, compared to the first three quarters of 2005 when the company had revenues of $95.2 million, EBITDA of $15.9 million and net income of $1.3 million, or $0.08 per share.
Operating Statistics
The Company's average revenue per revenue day was $14,683 for the third quarter of 2006 compared to $11,728 for the third quarter of 2005. Revenue days totaled 4,732 days, compared to 3,686 days for the same period last year. Drilling margins totaled $28.6 million or 41% of revenues for the third quarter of 2006, versus $11.6 million or 27% of revenues in the third quarter of 2005. For additional information regarding drilling margin as a non-GAAP financial measure, please refer to the disclosures contained at the end of this release. Average marketed rig utilization for the third quarter was 79.0%, up from 67.1% in the same period last year.
Average dayrates for the nine months ending September 30 were $13,766 per day for 2006 compared to $11,337 per day for 2005. The Company totaled 13,430 revenue days at 77.4% utilization during the first three quarters of 2006 compared to 8,394 days at 58.9% utilization during the same period of 2005. Drilling margin was $71.6 million, or 39% of revenues, for the first nine months of 2006, versus $24.7 million, or 26% of revenues for the first nine months of 2005.
Conference Call
Union Drilling's management team will be holding a conference call on Wednesday, November 8, 2006, at 9:30 a.m. eastern time. To participate in the call, dial (303) 262-2141 at least ten minutes before the conference call begins and ask for the Union Drilling conference call. To listen to the live call on the web, please visit Union Drilling's web site at least fifteen minutes early to register, download and install any necessary audio software. For those who cannot listen to the live call, a telephonic replay will be available through November 15, 2006 and may be accessed by calling (303) 590- 3000 and using the pass code 11073859#. Also, an archive of the webcast will be available after the call for a period of 60 days on the "Investor Relations" section of the Company's website at http://www.uniondrilling.com .
About Union Drilling
Union Drilling, Inc., headquartered in Ft. Worth, Texas, provides contract land drilling services and equipment, primarily to natural gas producers, in the United States. Union Drilling currently owns or operates 74 rigs and specializes in unconventional drilling techniques.
UDRL-E
This press release contains various forward-looking statements and information that are based on management's belief as well as assumptions made by and information currently available to management. Forward-looking information includes statements regarding the Company's anticipated growth, demand from the Company's customers, capital spending by oil and gas companies and the Company's expectations regarding its new rigs and the U. S. land drilling sector. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Such statements are subject to certain risks, uncertainties and assumptions, including, among other matters: general and regional economic conditions and industry trends; the continued strength or weakness of the contract land drilling industry in the geographic areas where the Company operates; decisions about onshore exploration and development projects to be made by oil and gas companies; the highly competitive nature of the contract land drilling business; the Company's future financial performance, including availability, terms and deployment of capital; the continued availability of qualified personnel; and changes in governmental regulations, including those relating to the environment. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expected. These risks, as well as others, are discussed in greater detail in the Company's filings with the Securities and Exchange Commission, including the Company's 10-K.
- Tables to follow -
Union Drilling, Inc.
Consolidated Statements of Income
(in thousands, except share and per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues
Nonaffiliates $69,482 $42,042 $184,877 $91,026
Related party --- 1,188 --- 4,138
Total revenues 69,482 43,230 184,877 95,164
Cost and expenses
Drilling operations 40,836 31,639 113,298 70,448
Depreciation and amortization 6,334 4,251 17,079 10,387
General and administrative 5,200 4,324 15,034 9,175
Total cost and expenses 52,370 40,214 145,411 90,010
Operating income 17,112 3,016 39,466 5,154
Interest expense (212) (901) (213) (1,905)
Gain on sale of assets (41) 82 282 153
Other income 152 108 279 160
Income before income taxes 17,011 2,305 39,814 3,562
Income tax expense 7,217 2,292 16,589 2,292
Net income $9,794 $13 $23,225 $1,270
Earnings per common share:
Basic $0.46 $0.00 $1.09 $0.08
Diluted $0.45 $0.00 $1.08 $0.08
Weighted-average common
shares outstanding:
Basic 21,337,507 16,226,591 21,239,735 15,205,373
Diluted 21,636,504 17,174,310 21,567,444 16,015,059
Union Drilling, Inc.
Operating Statistics
(in thousands, except per day data)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Revenues $69,482 $43,230 $184,877 $95,164
Drilling margins $28,646 $11,591 $71,579 $24,716
Revenue days 4,732 3,686 13,430 8,394
Marketed rig utilization 79.0% 67.1% 77.4% 58.9%
Revenue per revenue day $14,683 $11,728 $13,766 $11,337
Drilling margin per revenue day $6,054 $3,145 $5,330 $2,944
Union Drilling, Inc.
Consolidated Balance Sheets
(in thousands, except share and per share data)
September 30, December 31,
2006 2005
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $146 $2,388
Accounts receivable (net of allowance
for doubtful accounts of $870
and $313 at September 30, 2006 and
December 31, 2005, respectively) 46,294 27,579
Accounts receivable - related party --- 482
Inventories 1,356 860
Prepaid expenses and deposits 3,041 4,930
Deferred taxes 6,574 10,543
Total current assets 57,411 46,782
Goodwill 7,678 5,425
Intangible assets (net of accumulated
amortization of $427 and $203 at
September 30, 2006 and December 31, 2005,
respectively) 3,573 3,798
Property, buildings and equipment
(net of accumulated depreciation of
$62.060 and $46,251 at September 30, 2006
and December 31, 2005, respectively) 171,318 120,783
Other assets 467 700
Total assets $240,447 $177,488
Liabilities and Stockholders' equity:
Current liabilities:
Accounts payable $11,560 $9,241
Current portion of long-term obligations 2,366 2,014
Other current obligations 650 3,308
Current portion of advances from customers 429 1,265
Accrued expense and other liabilities 8,439 5,353
Total current liabilities 23,444 21,181
Revolving credit facility 30,203 ---
Long-term obligations 5,295 5,812
Deferred taxes 23,563 17,917
Advances from customers 139 139
Total liabilities 82,644 45,049
Stockholders' equity:
Common stock, par value $.01 per
share; 75,000,000 shares
authorized; 21,367,192 and
21,166,109 shares issued and
outstanding at September 30, 2006
and December 31, 2005 214 212
Additional paid in capital 135,518 133,381
Retained earnings (deficit) 22,071 (1,154)
Total stockholders' equity 157,803 132,439
Total liabilities and stockholders' equity $240,447 $177,488
EBITDA is earnings before net interest, income taxes and depreciation and amortization. The Company believes EBITDA is a useful measure of evaluating its financial performance because of its focus on the Company's results from operations before net interest, income taxes, depreciation and amortization. EBITDA is not a measure of financial performance under generally accepted accounting principles. However, EBITDA is a common alternative measure of operating performance used by investors, financial analysts and rating agencies. A reconciliation of EBITDA to net earnings is included below. EBITDA as presented may not be comparable to other similarly titled measures reported by other companies.
Union Drilling, Inc.
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Calculation of EBITDA:
Net income $9,794 $13 $23,225 $1,270
Interest expense 212 901 213 1,905
Income tax expense 7,217 2,292 16,589 2,292
Depreciation expense 6,334 4,251 17,079 10,387
EBITDA $23,557 $7,457 $57,106 $15,854
Drilling margin represents contract drilling revenues less contract drilling costs. Union Drilling believes that drilling margin is a useful measure for evaluating its financial performance, although it is not a measure of financial performance under generally accepted accounting principles. However, drilling margin is a common measure of operating performance used by investors, financial analysts, rating agencies and Union Drilling's management. A reconciliation of drilling margin to operating income is included below. Drilling margin as presented may not be comparable to other similarly titled measures reported by other companies.
Union Drilling, Inc.
(in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
2006 2005 2006 2005
Calculation of drilling margin:
Operating income $17,112 $3,016 $39,466 $5,154
Depreciation and amortization 6,334 4,251 17,079 10,387
General and administrative 5,200 4,324 15,034 9,175
Drilling margin $28,646 $11,591 $71,579 $24,716
Revenue days during the period 4,732 3,686 13,430 8,394
Drilling margin per revenue day $6,054 $3,145 $5,330 $2,944
Contacts: Union Drilling, Inc.
Christopher D. Strong, CEO
817-735-8777
Dan Steigerwald, CFO
817-735-8776
DRG&E
Ken Dennard / Ben Burnham
713-529-6600
SOURCE Union Drilling, Inc.
Christopher D. Strong, CEO of Union Drilling, Inc., +1-817-735-8777, or Dan Steigerwald, CFO, +1-817-735-8776; or Ken Dennard, or Ben Burnham, both of DRG&E, +1-713-529-6600, for Union Drilling, Inc.
http://www.uniondrilling.com
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