ALICE, Texas, May 15 /PRNewswire-FirstCall/ -- Forbes Energy Services Ltd.
(TSX: FRB) today announced financial and operating results for the quarter
ended March 31, 2009.
Revenues for the first quarter declined to $63.4 million compared to $96.7
million in the fourth quarter of 2008 as a result of lower pricing and
utilization in both operating segments. Net loss for the three months ended
March 31, 2009 was $4.5 million, or a loss of $0.07 per share, compared to a
net loss of $2.3 million, or $0.04 per share, in the quarter ended December
31, 2008. EBITDA for the first quarter of 2009 totaled $9.0 million versus
$21.2 million in the 2008 fourth quarter. EBITDA is a non-GAAP financial
measure, defined by the Company as net income before interest, taxes,
depreciation and amortization. For a reconciliation of EBITDA to net income,
please see the disclosures at the end of this release.
John Crisp, Forbes Energy's President and Chief Executive Officer, stated, "As
expected, the U.S. operating environment was quite challenging during the
first quarter due to a significant decline in customer spending as a result of
lower energy prices. We have continued to implement cost cutting measures,
including headcount and salary reductions, in an effort to keep pace with
declining revenues. Going into the second quarter we continue to experience
utilization and pricing pressures, although indications are that the rate of
decline is slowing, and the market may begin stabilizing later this year.
"In contrast to the domestic environment, Mexico is truly a bright spot for
Forbes Energy. We put our first four rigs to work there in the first quarter,
and we have two more expected to be 'on well' before the end of the second
quarter. We anticipate that Mexico will be an area of continued growth for us
going forward," concluded Crisp.
Business Segment Results
Well Servicing
Well servicing revenues decreased to $31.5 million during the first quarter of
2009 compared to $49.0 million in the fourth quarter of 2008. Well servicing
segment gross margins in the first quarter of 2009 were $5.1 million, compared
to $10.2 million in the fourth quarter of 2008.
Forbes recorded approximately 73,522 rig hours for the first quarter of 2009,
including 4,748 hours in Mexico, compared to 97,588 total hours in the fourth
quarter of 2008. The Company had 170 rigs in its well service fleet at March
31, 2009, unchanged from December 31, 2008. Capital expenditures for the well
servicing segment totaled $6.0 million during the three months ended March 31,
2009.
Fluid Logistics
Fluid logistics revenues in the first quarter of 2009 decreased to $31.9
million compared to $47.7 million in the fourth quarter of 2008. Gross
margins for the fluid logistics segment totaled $8.7 million compared to $16.5
million in the previous quarter.
Forbes recorded 229,219 truck hours during the first quarter of 2009 compared
to 309,020 for the fourth quarter of 2008. The Company's fluid transport
segment heavy truck fleet totaled 370 as of March 31, 2009, unchanged from
December 31, 2008. Total capital expenditures for the fluid logistics segment
were $1.3 million for the three months ended March 31, 2009.
Form 10-Q
The Company's form 10-Q for the period ended March 31, 2009 has been filed
with the U.S. Securities & Exchange Commission and has received a May 18, 2009
file date. It also has been filed in Canada and will be available on SEDAR.
Previously Announced Restatements
The Company also announced that consistent with the previously announced need
to restate its First Quarter 2008 financial statements, it is posting to its
website today a Form 10-Q/A Amendment No. 1 for the quarterly period ended
March 31, 2008. Neither the original Form 10-Q or the Form 10-Q/A are being
filed with the Securities and Exchange Commission because the report covers a
period that predates the Company's obligations to file under the securities
laws. It is also anticipated that the amendments to the Forms 10-Q for
quarters ended June 30, 2008 and September 30, 2008 reflecting the previously
announced restatements for such quarters will be filed with the SEC in the
next few days.
Conference Call
Forbes Energy will host a conference call to discuss its first quarter 2009
results on Tuesday, May 19, 2009, at 10:00 a.m. Eastern Time (9:00 a.m.
Central). To access the call, please dial (480) 629-9863 and ask for the
"Forbes Energy Services" call at least 10 minutes prior to the start time. The
conference call will also be broadcast live via the Internet and can be
accessed through the "Investor Relations" page of Forbes Energy's website,
www.forbesenergyservices.com.
A telephonic replay of the conference call will be available until May 26,
2009, and may be accessed by calling (303) 590-3030 and using the pass code
4080060#. A webcast archive will be available at www.forbesenergyservices.com
shortly after the call and will be accessible for approximately 30 days. For
more information, please contact Donna Washburn at DRG&E at (713) 529-6600 or
email at dmw@drg-e.com.
About Forbes Energy
Forbes Energy Services Ltd. is an independent oilfield services contractor
that provides a broad range of drilling-related and production-related
services to oil and natural gas companies, primarily onshore in Texas,
Mississippi, and Mexico.
Forward-Looking Statements and Regulation G Reconciliation
This press release contains "forward-looking statements," as contemplated by
the Private Securities Litigation Reform Act of 1995, in which the Company
discusses factors it believes may affect its performance in the future. The
accuracy of the Company's assumptions, expectations, beliefs and projections
depend on events or conditions that change over time and are thus susceptible
to change based on actual experience, new developments and known and unknown
risks. The Company gives no assurance that the forward-looking statements will
prove to be correct and does not undertake any duty to update them. The
Company's actual future results might differ from the forward-looking
statements made in this press release for a variety of reasons, which include:
supply and demand for oilfield services and the level of oil and natural gas
prices; the continued uncertainty in the global financial markets and its
effect on domestic spending in the oil and natural gas industry; the Company's
ability to maintain pricing on its core services; the potential for excess
capacity in the industry; and competition. Should one or more of the foregoing
risks or uncertainties materialize, or should the Company's underlying
assumptions prove incorrect, the Company's actual results may vary materially
from those anticipated in its forward-looking statements, and the Company's
business, financial condition and results of operations could be materially
and adversely affected. Additional factors that you should consider are set
forth in detail in the Risk Factors section of the Company's Annual Report on
Form 10-K for the year ended December 31, 2008 (the "Form 10-K") as well as
other filings the Company has made with the Securities and Exchange
Commission.
Forbes Energy's financial statements and management's discussion and analysis
of financial condition and results of operations can be found in the Form
10-Q, which is being will be filed with the Securities and Exchange Commission
and posted on the Company's website.
This press release also contains references to the non-GAAP financial measure
of earnings, or net income, before interest, income taxes, depreciation and
amortization, or EBITDA. For a reconciliation of EBITDA to net income, please
see the table at the end of this release. Management's opinion regarding the
usefulness of EBITDA to investors and a description of the ways in which
management uses such measures can be found on the "Investor Relations" page of
Forbes Energy's website, www.forbesenergyservices.com.
Contacts: Forbes Energy Services Ltd.
L. Melvin Cooper, SVP & CFO
361-664-0549
DRG&E
Ken Dennard, Managing Partner
Ben Burnham, AVP
713-529-6600
-Tables to Follow-
Selected Statement of Operations Data
(Unaudited)
Three Months Ended March 31,
----------------------------
2009 2008
---- ----
(As Restated)
Revenues
Well servicing $31,539,008 $39,284,338
Fluid logistics 31,892,374 31,238,521
---------- ----------
Total revenues 63,431,382 70,522,859
---------- ----------
Expenses
Well servicing 26,395,709 24,404,782
Fluid logistics 23,231,621 22,294,883
General and administrative 5,773,879 3,142,681
Depreciation and amortization 9,691,372 7,040,023
--------- ---------
Total expenses 65,092,581 56,882,369
---------- ----------
Operating income (loss) (1,661,199) 13,640,490
Other income (expense)
Interest expense (6,653,677) (5,975,126)
Gain on extinguishment of debt 973,908 -
Other income (expense) 26,533 29,534
------ ------
Income (loss) before taxes (7,314,435) 7,694,898
Income tax expense (benefit) (2,778,945) 172,000
---------- -------
Net income (loss) ($4,535,490) $7,522,898
=========== ==========
Earnings (loss) per share of common stock
Basic $(0.07)
Diluted (0.07)
Weighted average number of shares outstanding
Basic 62,111,200
Diluted 62,111,200
Pro forma earnings per share(1)
Basic $0.09
Diluted 0.09
Weighted average number of shares outstanding
Basic 54,144,700
Diluted 54,144,700
(1) Historical net income per share was not presented for the three months
ended March 31, 2008 because the Company was structured as a limited liability
company, had limited member units and there were no ownership interests that
were convertible into common stock or a common stock equivalent. See Forbes
Energy's Form 10-Q for the period ended March 31, 2009 for additional
information.
Selected Balance Sheet Data
(Unaudited)
March 31, December 31,
2009 2008
---- ----
Cash $39,548,808 $23,469,067
Accounts receivable 50,867,905 69,095,522
Working Capital 51,427,775 42,707,044
Intangible assets (net) 38,744,678 39,459,977
Total assets 477,120,766 482,801,391
Total debt 219,722,866 212,189,842
Deferred tax liability 59,142,240 62,068,620
Shareholders'/members' equity 154,503,439 158,418,487
Selected Operating Data
Three Months Ended March 31,
-----------------------------
2009 2008
---- ----
Working days 63 64
Rig Hours
U.S. 68,774 75,689
Mexico 4,748 -
----- ---
Total rig hours 73,522 75,689
Truck hours 229,219 220,855
Reconciliation of Adjusted EBITDA to Net Income
(Unaudited)
Three Months Ended March 31,
-----------------------------
2009 2008
---- ----
(As Restated)
Net income (loss) $(4,535,490) $7,522,898
Depreciation and amortization 9,691,372 7,040,023
Interest expense 6,653,677 5,975,126
Income tax expense (benefit) (2,778,945) 172,000
---------- -------
Adjusted EBITDA $9,030,614 $20,710,047
========== ===========
SOURCE Forbes Energy Services Ltd.
L. Melvin Cooper, SVP & CFO of Forbes Energy Services Ltd., +1-361-664-0549;
or Ken Dennard, Managing Partner, or Ben Burnham, AVP, both of DRG&E,
+1-713-529-6600, for Forbes Energy Services Ltd.
