(Source: PRNewswire-FirstCall)
HOUSTON, April 21 /PRNewswire-FirstCall/ -- BJ Services Company (NYSE: BJS; PCX; CBOE) today reported net income of $43.0 million, or $0.15 per diluted share, for the second quarter of fiscal 2009, which ended March 31, 2009. The quarter's diluted earnings per share decreased 71% compared to the $0.51 per diluted share reported in the previous quarter and decreased 65% compared to the $0.43 per diluted share for the second quarter of fiscal 2008.
Revenue in the second quarter of fiscal 2009 was $1.05 billion, a 26% decrease from the $1.43 billion reported in the previous quarter and an 18% decrease from the $1.28 billion reported in the prior year's March quarter. Operating income for the quarter was $58.0 million, a 74% decrease compared to $220.4 million for the previous quarter and a 69% decrease compared to $186.5 million reported in the second quarter of fiscal 2008. Operating income as a percentage of revenue was 5.5% in the second quarter of fiscal 2009, compared to 15.4% in the previous quarter and 14.5% in the comparable quarter of the prior year.
Commenting on the results, Chairman and CEO Bill Stewart said, "Lower demand for energy triggered by the global economic recession led to a precipitous decline in drilling activity this quarter, particularly in North America. North American drilling activity declined 28% sequentially and 27% year over year and, at the current level of 975 active rigs, the U.S. drilling rig count has reached its lowest level in six years. This decline in activity and intensive competition led to severe price reductions for our services and products. Our international customers responded to the lower commodity price environment sooner than expected, with average rig count outside North America declining 9% sequentially and 6% year over year, negatively impacting our results in these markets.
"In response to these unfavorable market conditions, we have taken specific steps to align our cost structure with the business climate. We have reduced our global workforce by approximately 11%, most of which took place in the United States. Severance costs related to these personnel reductions totaled $6.2 million during the quarter. Capital spending and discretionary spending have been reduced and strong efforts to seek cost reductions throughout our supply chain are well underway. We are maintaining our strong balance sheet with a focus on working capital reductions during this difficult period. Canada has entered its spring break-up period, and we expect that drilling activity in the United States will decline further over the next several quarters, and will not meaningfully improve until natural gas supply is in better balance with demand, which may occur some time next year. We expect some modest decline in drilling activity outside of North America in the near term, but not as severe as what we experienced in the second quarter."
During the quarter, cash and cash equivalents increased $71.4 million to $244.8 million and debt increased $9.0 million to $562.3 million. Uses of cash during the quarter included capital expenditures of $121.0 million and the payment of $14.6 million in dividends. Debt repayable within the next twelve months is approximately $64 million, and the Company has no borrowings outstanding under its $400 million bank credit facility.
