AllisChalmers Energy Inc. (ALY, Financial) filed Quarterly Report for the period ended 2010-06-30.
Allischalmers Energy Inc. has a market cap of $189.1 million; its shares were traded at around $2.61 with and P/S ratio of 0.4. Allischalmers Energy Inc. had an annual average earning growth of 15.6% over the past 5 years.ALY is in the portfolios of Chuck Royce of Royce& Associates.
Depreciation expense increased 7.0% to $20.5 million for the three months ended June 30, 2010 from $19.2 million for the three months ended June 30, 2009. The increase in depreciation expense is primarily due to our capital expenditure programs for our Drilling and Completion segment. Depreciation expense as a percentage of revenues decreased to 12.9% for the second quarter of 2010, compared to 17.0% for the second quarter of 2009, due to the increase in revenues from our Drilling and Completion and Oilfield Services segments.
Our direct costs for the six months ended June 30, 2010 increased 20.0% to $228.4 million, or 76.4% of revenues, compared to $190.4 million, or 73.9%, of revenues for the six months ended June 30, 2009. Our direct costs in our Oilfield Services and Drilling and Completion segments increased in absolute dollars in the six months ended June 30, 2010 compared to the six months ended June 30, 2009, but our direct costs for our Rental Services segment decreased over that same period. Our Oilfield Services segment revenues for the six months ended June 30, 2010 increased 20.9% from revenues for the six months ended June 30, 2009, while the direct costs increased 11.6% over that same period, resulting in an improvement in gross margin as a percentage of revenues to 25.6% for the six months ended June 30, 2010 compared to 19.3% for the six months ended June 30, 2009. Our Oilfield Services segment began to realize some price increases starting in the later part of the first quarter of 2010. In addition, we had $1.0 million of expenses recorded during the six months ended June 30, 2009 related to severance payments, the closing of unprofitable locations and downsizing other locations. Our Drilling and Completion segment revenues for the six months ended June 30, 2010 increased 25.5% from revenues for the six months ended June 30, 2009, while the direct costs increased 28.5% over that same period. As a result, direct costs as a percentage of revenues increased to 82.3% for the six months ended June 30, 2010 compared to 80.4% for the six months ended June 30, 2009. Our Rental Services segment revenues for the six months ended June 30, 2010 decreased 31.5% from revenues for the six months ended June 30, 2009, while the direct costs decreased 19.9% over that same period. Our direct costs for the Rental Services segment are largely fixed because they primarily relate to yard expenses to maintain the rental inventory. In addition, we realize lower margins on revenues from land drilling utilization of our equipment as compared to revenues generated in the Gulf of Mexico as the average term of deployment of the assets is greater when utilized offshore and requires less handling.
Depreciation expense increased 5.6% to $40.7 million for the six months ended June 30, 2010 from $38.6 million for the six months ended June 30, 2009. The increase in depreciation expense is primarily due to our capital expenditure programs for our Drilling and Completion segment. Depreciation expense as a percentage of revenues decreased to 13.6% for the first six months of 2010, compared to 15.0% for the first six months of 2009, due to the increase in revenues.
During the six months ended June 30, 2009, we recorded a gain of $26.4 million as a result of a tender offer that we completed on June 29, 2009. We purchased $30.6 million aggregate principal of our 9.0% senior notes and $44.2 million aggregate principal of 8.5% senior notes for approximately $46.4 million. The gain is net of a $1.5 million write-off of debt issuance costs related to the retired notes and we incurred approximately $466,000 in expenses related to the transactions.
Our income tax benefit for the six months ended June 30, 2010 was $5.2 million, or 25.8% of our net loss before income taxes, compared to an income tax benefit of $2.7 million, or 50.0% of our net loss before income taxes for the six months ended June 30, 2009. The decrease in income tax benefit as a percentage of our net loss was due to an increase in withholding taxes from foreign operations as a percentage of pre-tax income in the first half of 2010. The consolidated effective income tax benefit rate is impacted by the profitability and effective income tax rate of our operations in foreign jurisdictions.
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Allischalmers Energy Inc. has a market cap of $189.1 million; its shares were traded at around $2.61 with and P/S ratio of 0.4. Allischalmers Energy Inc. had an annual average earning growth of 15.6% over the past 5 years.ALY is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Our direct costs for the three months ended June 30, 2010 increased 38.4% to $120.7 million, or 76.1% of revenues, compared to $87.2 million, or 77.5%, of revenues for the three months ended June 30, 2009. Our direct costs in all of our segments increased in absolute dollars in the three months ended June 30, 2010 compared to the three months ended June 30, 2009. Our Oilfield Services segment revenues for the three months ended June 30, 2010 increased 68.7% from revenues for the three months ended June 30, 2009, while the direct costs increased 40.7% over that same period, resulting in an improvement in gross margin as a percentage of revenues to 26.4% for the three months ended June 30, 2010 compared to 11.8% for the three months ended June 30, 2009. Our Oilfield Services segment began to realize some price increases starting in the later part of the first quarter of 2010. In addition, we had $868,000 of expenses recorded during the three months ended June 30, 2009 related to severance payments, the closing of unprofitable locations and downsizing other locations. Our Drilling and Completion segment revenues for the three months ended June 30, 2010 increased 41.6% from revenues for the three months ended June 30, 2009, while the direct costs increased 40.0% over that same period, resulting in an improvement in gross margin as a percentage of revenues to 17.9% for the three months ended June 30, 2010 compared to 16.9% for the three months ended June 30, 2009. Part of the improvement in gross margin for our Drilling and Completion segment can be attributed to $329,000 of costs incurred during the three months ended June 30, 2009 to consolidate operating locations. Our Rental Services segment revenues for the three months ended June 30, 2010 decreased 15.1% from revenues for the three months ended June 30, 2009, while the direct costs increased 8.0% over that same period. Direct costs for the three months ended June 30, 2009 for our Rental Services segment included $235,000 to close a rental yard and to reduce our workforce. Our direct costs for the Rental Services segment are largely fixed because they primarily relate to yard expenses to maintain the rental inventory. In addition, we realize lower margins on revenues from land drilling utilization of our equipment as compared to revenues generated in the Gulf of Mexico as the average term of deployment of the assets is greater when utilized offshore and requires less handling.Depreciation expense increased 7.0% to $20.5 million for the three months ended June 30, 2010 from $19.2 million for the three months ended June 30, 2009. The increase in depreciation expense is primarily due to our capital expenditure programs for our Drilling and Completion segment. Depreciation expense as a percentage of revenues decreased to 12.9% for the second quarter of 2010, compared to 17.0% for the second quarter of 2009, due to the increase in revenues from our Drilling and Completion and Oilfield Services segments.
Our direct costs for the six months ended June 30, 2010 increased 20.0% to $228.4 million, or 76.4% of revenues, compared to $190.4 million, or 73.9%, of revenues for the six months ended June 30, 2009. Our direct costs in our Oilfield Services and Drilling and Completion segments increased in absolute dollars in the six months ended June 30, 2010 compared to the six months ended June 30, 2009, but our direct costs for our Rental Services segment decreased over that same period. Our Oilfield Services segment revenues for the six months ended June 30, 2010 increased 20.9% from revenues for the six months ended June 30, 2009, while the direct costs increased 11.6% over that same period, resulting in an improvement in gross margin as a percentage of revenues to 25.6% for the six months ended June 30, 2010 compared to 19.3% for the six months ended June 30, 2009. Our Oilfield Services segment began to realize some price increases starting in the later part of the first quarter of 2010. In addition, we had $1.0 million of expenses recorded during the six months ended June 30, 2009 related to severance payments, the closing of unprofitable locations and downsizing other locations. Our Drilling and Completion segment revenues for the six months ended June 30, 2010 increased 25.5% from revenues for the six months ended June 30, 2009, while the direct costs increased 28.5% over that same period. As a result, direct costs as a percentage of revenues increased to 82.3% for the six months ended June 30, 2010 compared to 80.4% for the six months ended June 30, 2009. Our Rental Services segment revenues for the six months ended June 30, 2010 decreased 31.5% from revenues for the six months ended June 30, 2009, while the direct costs decreased 19.9% over that same period. Our direct costs for the Rental Services segment are largely fixed because they primarily relate to yard expenses to maintain the rental inventory. In addition, we realize lower margins on revenues from land drilling utilization of our equipment as compared to revenues generated in the Gulf of Mexico as the average term of deployment of the assets is greater when utilized offshore and requires less handling.
Depreciation expense increased 5.6% to $40.7 million for the six months ended June 30, 2010 from $38.6 million for the six months ended June 30, 2009. The increase in depreciation expense is primarily due to our capital expenditure programs for our Drilling and Completion segment. Depreciation expense as a percentage of revenues decreased to 13.6% for the first six months of 2010, compared to 15.0% for the first six months of 2009, due to the increase in revenues.
During the six months ended June 30, 2009, we recorded a gain of $26.4 million as a result of a tender offer that we completed on June 29, 2009. We purchased $30.6 million aggregate principal of our 9.0% senior notes and $44.2 million aggregate principal of 8.5% senior notes for approximately $46.4 million. The gain is net of a $1.5 million write-off of debt issuance costs related to the retired notes and we incurred approximately $466,000 in expenses related to the transactions.
Our income tax benefit for the six months ended June 30, 2010 was $5.2 million, or 25.8% of our net loss before income taxes, compared to an income tax benefit of $2.7 million, or 50.0% of our net loss before income taxes for the six months ended June 30, 2009. The decrease in income tax benefit as a percentage of our net loss was due to an increase in withholding taxes from foreign operations as a percentage of pre-tax income in the first half of 2010. The consolidated effective income tax benefit rate is impacted by the profitability and effective income tax rate of our operations in foreign jurisdictions.
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