Boots & Coots Reports First Quarter Results

Boots & Coots, Inc. (NYSE:WEL), announced revenues of $53.3 million for the first quarter ended March 31, 2010, compared to revenues of $54.7 million for the same period last year. Net income for the quarter was $0.7 million, or $0.01 per diluted share, compared to $1.9 million, or $0.03 per diluted share for the first quarter of 2009. EBITDA (earnings before interest, income taxes, depreciation and amortization; see the reconciliation and rationale for this non-GAAP financial measure below), adjusted for foreign currency translation costs, was $6.5 million or 12.2% of revenues for the quarter, compared to $6.6 million or 12.1% of revenues for the first quarter of 2009.

“We have started to see signs of increased utilization in the domestic market, and demand for our services in the international markets continues to improve; however, several events had a negative impact on the quarter,” said Jerry Winchester, chief executive officer of Boots & Coots. “One event was the mobilization cost for the new ONGC secure and salvage project. By the end of the quarter we had mobilized and expect to realize the positive financial impact of the project in the second quarter. In addition there were costs associated with a higher than expected currency devaluation expense in Venezuela and expenses incurred relating to our announced merger agreement with Halliburton, both non-operational items.”

Business Segment Results

Pressure Control

For the quarter ended March 31, 2010, the Pressure Control segment generated revenues of $22.6 million compared to $27.0 million in the first quarter of 2009 and $23.1 million in the prior 2009 fourth quarter. Adjusted EBITDA for the first quarter was $2.2 million compared to $2.9 million for the first quarter of 2009 and $3.5 million for the prior quarter. The quarter-over-quarter decrease is primarily due to non-recurring international project revenue in the fourth quarter of 2009 and a reduction in the current quarter response revenue, offset by an increase in revenue from Safeguard contracts and other prevention and risk management projects in North Africa and North America. Margins in the quarter were also negatively impacted by the mobilization on the new ONGC project.