Complete Production Services, Inc. (NYSE:CPX) today reported first quarter revenue of $495.2 million, Adjusted EBITDA (as defined below) of $125.4 million, operating income of $76.2 million and net income of $38.9 million, or $0.50 per diluted share.

"Our results were solid overall during the first quarter of 2011," commented Joe Winkler, Chairman and Chief Executive Officer. "Excellent results in all of our major regions during the month of March and strong performance throughout the quarter in certain geographic areas more than offset challenging weather conditions in other regions. Activity in North Texas and Western Oklahoma, which typically account for approximately one-third of our revenue, was significantly impacted by poor weather conditions during the first two weeks of February, and North Dakota was affected throughout the quarter."

Revenue for the Completion and Production Services segment during the first quarter of 2011 was $437.1 million, an increase of $20.5 million over the prior quarter. Results for our fluid management, coiled tubing and pressure pumping businesses accounted for the majority of the increase in revenue. Adjusted EBITDA for the segment was $121.5 million in the first quarter of 2011, up $2.3 million compared to the fourth quarter of 2010. The segment benefited from increasing activity in service intensive oil and liquid-rich plays, as well as the deployment of our second frac fleet in the Eagle Ford Shale, partially offset by the impact of challenging weather conditions during the first quarter of 2011.

Drilling Services segment revenue was $50.2 million during the first quarter of 2011, compared to $48.7 million during the fourth quarter of 2010. Adjusted EBITDA for the segment increased $0.5 million from the prior quarter to $12.5 million during the first quarter of 2011. The segment was positively impacted by increased activity in our rig logistics business and lower repair and maintenance costs in our contract drilling operations.

In comparison to the first quarter of 2010, consolidated revenue increased $185.5 million, or 60%, Adjusted EBITDA increased $69.5 million, operating income increased $65.7 million, and net income increased by $41.7 million, or $0.53 per diluted share.

"We achieved record results in March as increased demand for all of our major services resulted in greater utilization, revenue and earnings. Activity levels in the long-lateral service intensive wells within oil and liquid-rich plays continue to increase driving additional demand for quality completion services. To address our customers' growing needs, we expect to deploy a 50,000 hydraulic horsepower frac spread in the Eagle Ford Shale, our third fleet in the region, and three large diameter extended reach coil tubing units during the second quarter of 2011," concluded Mr. Winkler.

Complete Production Services, Inc. is a leading oilfield service provider focused on the completion and production phases of oil and gas wells. The company has established a significant presence in unconventional oil and gas plays in North America that it believes have the highest potential for long-term growth.

Complete will hold a conference call to discuss first quarter 2011 results on Thursday, April 21, 2011 at 12:00 p.m. Eastern Time. To participate in the live conference call, dial (866) 804-6926 at least ten minutes prior to the scheduled start of the call. When prompted, provide the passcode: 53743009. The conference call will be available for replay beginning at 3:00 p.m. Eastern Time on April 21, 2011 and will be available until April 28, 2011. To access the conference call replay, please call (888) 286-8010 and use the passcode: 33181293. The call is also being webcast and can be accessed at our website at www.completeproduction.com.

The foregoing contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are those that do not state historical facts and are, therefore, inherently subject to risk and uncertainties. These forward-looking statements include statements regarding future market conditions, the company's deployment of additional pressure pumping and coiled tubing capacity, growth in oil and liquid-rich plays, increased service intensity, demand for our services and the company's future success. Such statements are based on current expectations and entail various risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Such risks and uncertainties include, among other things, risks associated with the general nature of the oilfield service industry, the uncertainty of near-term and long-term activity levels, general economic conditions in the United States and globally, and other risks described in the company's most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. The company undertakes no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this press release.

Management evaluates the performance of Complete's operating segments using non-GAAP financial measures, including Adjusted EBITDA. Adjusted EBITDA is calculated as net income from continuing operations before net interest expense, taxes, depreciation, amortization, impairment charges and non-controlling interest. Adjusted EBITDA is not a substitute for GAAP measures of earnings and cash flow. Adjusted EBITDA is used in this press release because our management considers this measure to be an important supplemental measure of performance and believes it is used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. Non-GAAP financial measures are reconciled to the most directly comparable GAAP financial measures in the financial tables of this press release.

Complete Production Services, Inc.
Consolidated Statements of Operations

For the Quarters Ended March 31, 2011 and 2010, and December 31, 2010

(in thousands, except per share data)
     
Quarter Ended

March 31,

December 31,
2011 2010 2010
(unaudited) (unaudited) (unaudited)
Revenue:
Services $ 487,239 $ 301,392 $ 465,264
Products   7,978     8,312     7,571  
495,217 309,704 472,835
 
Cost of services 314,522 206,820 297,221
Cost of products 5,953 6,124 6,154
General and administrative expense 49,351 40,852 48,787
Depreciation and amortization   49,148     45,319     46,227  
418,974 299,115 398,389
 
Income before interest and taxes 76,243 10,589 74,446
 
Interest expense 14,143 14,741 14,016
Interest income   (95 )   (48 )   (122 )
Income (loss) before taxes 62,195 (4,104 ) 60,552
 
Tax provision (benefit)   23,261     (1,342 )   22,333  
 
Net income (loss) $ 38,934   $ (2,762 ) $ 38,219  
 
Basic earnings (loss) per share: $ 0.51   $ (0.04 ) $ 0.50  
 
Diluted earnings (loss) per share: $ 0.50   $ (0.04 ) $ 0.49  
 
Weighted average shares outstanding:
Basic 76,942 75,699 76,318
Diluted 78,599 75,699 78,545
 
Complete Production Services, Inc.
Condensed Consolidated Balance Sheets
As of March 31, 2011 and December 31, 2010
(in thousands)
   
March 31, December 31,
2011 2010
(unaudited) (unaudited)
Assets:
Cash $ 144,011 $ 126,681
Other current assets 475,859 425,229
Property, plant and equipment, net 958,757 956,028
Goodwill 250,563 250,533

Restricted cash (1)

 17,000 17,000
Other long-term assets   24,487     25,105  
Total assets   1,870,677     1,800,576  
 
Liabilities and stockholders' equity:
Current liabilities 147,722 148,404
Long-term debt 650,000 650,000
Long-term deferred tax liabilities 211,219 190,422
Other long-term liabilities   6,035     5,916  
Total liabilities 1,014,976 994,742
 
Common stock 775 765
Treasury stock (7,280 ) (1,765 )
Additional paid-in capital 672,573 657,992
Retained earnings 165,099 126,165
Cumulative translation adjustment   24,534     22,677  
Total stockholders' equity 855,701 805,834
 
Total liabilities and stockholders' equity $ 1,870,677   $ 1,800,576  
 

    (1)

   Represents funds placed in escrow as a compensating balance for certain potential long-term insurance claim liabilities, effectively cash collateralizing and replacing a letter of credit.
 
Complete Production Services, Inc.
Consolidated Segment Information

For the Quarters Ended March 31, 2011 and 2010, and December 31, 2010

(in thousands, except percentages)
     
Quarter Ended
March 31, December 31,
2011 2010 2010
(unaudited) (unaudited) (unaudited)
Revenue:
Completion and production services $ 437,087 $ 266,288 $ 416,592
Drilling services 50,152 35,104 48,672
Products   7,978     8,312     7,571  
Total revenues $ 495,217   $ 309,704   $ 472,835  
 

Adjusted EBITDA: (1)

Completion and production services $ 121,514 $ 57,756 $ 119,217
Drilling services 12,489 5,419 11,955
Products 1,215 1,562 695
Corporate and other   (9,827 )   (8,829 )   (11,194 )
Total $ 125,391   $ 55,908   $ 120,673  
 
Adjusted EBITDA as a % of Revenue:
Completion and production services 27.8 % 21.7 % 28.6 %
Drilling services 24.9 % 15.4 % 24.6 %
Products 15.2 % 18.8 % 9.2 %
Total 25.3 % 18.1 % 25.5 %
 

    (1)

   Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release.
 
Complete Production Services, Inc.

Reconciliation of Adjusted EBITDA to Net Income (Loss)

For the Quarters Ended March 31, 2011 and 2010, and December 31, 2010

(unaudited, in thousands)
         
Completion
& Production Drilling Corporate &
Services Services Products Other Total
Quarter Ended March 31, 2011:
Adjusted EBITDA (1) $ 121,514 $ 12,489 $ 1,215 $ (9,827 ) $ 125,391
Depreciation & amortization   43,257   4,749   542   600     49,148  
Operating income (loss) $ 78,257 $ 7,740 $ 673 $ (10,427 ) $ 76,243
Interest expense 14,143
Interest income (95 )
Income taxes   23,261  
Net income (loss) $ 38,934  
 
 
Quarter Ended March 31, 2010
Adjusted EBITDA (1) $ 57,756 $ 5,419 $ 1,562 $ (8,829 ) $ 55,908
Depreciation & amortization   39,793   4,458   576   492     45,319  
Operating income (loss) $ 17,963 $ 961 $ 986 $ (9,321 ) $ 10,589
Interest expense 14,741
Interest income (48 )
Income taxes   (1,342 )
Net income (loss) $ (2,762 )
 
 
Quarter Ended December 31, 2010:
Adjusted EBITDA (1) $ 119,217 $ 11,955 $ 695 $ (11,194 ) $ 120,673
Depreciation & amortization   40,469   4,705   535   518     46,227  
Operating income (loss) $ 78,748 $ 7,250 $ 160 $ (11,712 ) $ 74,446
Interest expense 14,016
Interest income (122 )
Income taxes   22,333  
Net income (loss) $ 38,219  
 

    (1)

   Adjusted EBITDA is a non-GAAP measure used by management, as defined in the last paragraph of this press release.

Complete Production Services, Inc.
Jose Bayardo, 281-372-2300
Sr. Vice President and Chief Financial Officer