INVESTOR'S BUSINESS DAILY
MONDAY, MAY 12, 2008
Leading New Issues
IBD New Issues Index
Real Goods Solar Finds Small Gain
Date Offering Current % change EPS RS Company Symbol offering price price from offer Rating Rating Industry group Titan Machinery Inc TITN 12/ 6/07 8.50 20.16 137.2 99 99 Retail/Whlsle-Bldg Prds 8.00 17.61 120.1 74 99 Comml Svcs-Advertising VisionChina Media Inc VISN 12/ 6/07 93.2 74 98 Oil&Gas-U S Expl&Prod SandRidge Energy Inc SD 11/ 6/07 26.00 50.23 88.3 69 98 Financial Services-Misc Visa Inc V 3/19/08 44.00 82.86 85.3 82 98 Oil&Gas-U S Expl&Prod Approach Resources Inc AREX 11/ 8/07 12.00 22.23 79.9 74 84 Medical/Dental-Services Genoptix Inc GXDX 10/30/07 17.00 30.59 79.3 99 61 Comml Svcs-Schools American Public Educatio APEI 11/ 9/07 20.00 35.87 78.5 69 89 Financial Services-Misc MSCI Inc MXB 11/15/07 18.00 32.13
Real Goods SolarRSOL edged up Friday, but was still below its Thursday IPO price. The residential solar installer climbed 4 cents to 8.84. It debuted at 10, the low end of its range. But this year’s other solar offering, Chinese wafer maker ReneSolaSOL, was up 49% from its Jan. 29 IPO. It closed at 19.49.
Lead underwriter Craig–Hallum Crdt Suisse Frst Bos Lehman Brothers Morgan J P Morgan J P Lehman Brothers Blair William & Co Morgan Stanley
THE NEW AMERICA T 3 E N E R G Y S E R V I C E S I N C . Houston, Texas
Oil-Rig Equipment Maker Goes Global As Energy Prices Keep Rising BY KEVIN HARLIN INVESTOR'S BUSINESS DAILY
High oil and natural-gas prices are making for blowout earnings for energy companies. T3 Energy Services is growing quickly by preventing blowouts. The company manufactures and services the valves and other equipment used for drilling and piping oil and gas. Its latest foray is in subsea blowout preventers — car-size valves stacked on a well that can instantly seal off the well if excess pressure is detected. BOPs, as they’re called, can save lives and machinery. Recent acquisitions give T3TTES more proprietary technology and reach in the higher-margin BOP business for those deep-sea wells. In addition to getting wet, the company also is going overseas, signing business in places such as Russia and the Middle East. Originally, the Houston-based company serviced and rebuilt other manufacturers’ equipment. But Michael Anderson, T3’s vice president of investor relations and business development, said customers asked it a few years ago if it could provide new equipment itself. Subsea BOPs, surface wellheads and pipeline valves were all in high demand. But existing manufacturers had long delivery times. For exploration companies paying hundreds of thousands of dollars a day to rent drilling rigs, the delays were
T3 Energy Services Inc.
In The Black Gold
High oil and natural gas prices keep drillers busy. That creates business for T3 Energy. The drilling equipment company is shifting toward designing and manufacturing more of its own equipment, such as deep-sea blowout preventers
Prices and rigs
WTI oil (per barrel)
Natural gas (mtf)
North American drilling rigs 2,159
Rigs outside North America
Ticker Share price 12-month sales 5-year profit growth rate IBD SmartSelect Corporate Ratings
Composite Rating Earnings Per Share Relative Price Strength Industry Group Relative Strength Sales+Profit Margins+ROE Accumulation/Distribution
TTES Near 60 $238 mil 105% 99 98 98 A A A-
See investors.com for more details
“They’re a very wellmanaged company. They’re not big risk takers, but they do enough to grow significantly every year.”
Brian Uhlmer, Pritchard Capital analyst
T3 earnings per share $4
1 0 -1
Sources: Company reports, Department of Energy, Baker Hughes
costly. “This is something that T3 has been able to capitalize on, by providing attractive delivery with valuebased pricing,” Anderson said. The shift has paid off. T3 posted revenue of 67 million in
2004. By last year, sales reached $217 million. Earnings per share grew from 27 cents in ’04 to $2.35 in 2007. Analysts surveyed by Thomson Reuters expect EPS of $3.16 in 2008. T3 said its original equipment rep-
resented 76% of total revenue for 2007, compared with 65% the year before. The company, first known as Industrial Holdings, incorporated in 1989. In 2001 it merged with crosstown rival T3 Energy Services. The new company took the T3 name. In 2003, the company hired its current chief executive, Gus Halas, and began to rethink its business. That’s when it began to beef up its own engineering and manufacturing capa-
bilities. At first, T3 came out with copycat products, analysts say. Last year, it spent about $96 million to buy Energy Equipment and HP&T Products — related companies that manufactured and sold deep-sea BOPs and other equipment. That gave T3 access to new technologies and markets. It shipped its first subsea BOPs in late September. “The best part of thiscompany really is the management,” said Brian Uhlmer, analyst with Pritchard Capital. “They’re a very well-managed company. They’re not big risk takers, but they do enough to grow significantly every year.” T3 now has 21 manufacturing facilities in North America. The companysays it plans to buy HP&T’s manufacturing operation in India, which would give it a lower-cost source. “People are recognizing who they are and not seeing them as a cheap knockoff,” Uhlmer said. Oil and natural-gas prices have beenhigh, whichkeeps T3’s customers busy looking for new deposits. Oil, for instance, is in record territory, at around $125 a barrel. Anderson said the demand for T3’s services are there even if energy prices come down. “Even if you take that away and remove some of that marginal activity, you still have a very strong industry, even at $90 a barrel,” Anderson said. There are some potential head winds.
RBC Capital Markets analyst Victor Marchon thinks orders for more types of offshore rigs already have peaked. With declining orders, the three major competitors in the subsea BOP market — Cameron InternationalCAM, Hydril and National Oilwell VarcoNOV — are not likely to easily cede ground. But despite the competition and tough market, Marchon thinks T3 could find buyers. “When you look at what’s happening in the deep-water drilling market, there’s still a lot of opportunity for it,” he said. T3 also is signing more business overseas. Last month, it announced an $8 million multiple rig order in Russia. It expects that contract order to grow. T3’s Anderson said the deal will also serve as a beachhead into the Russian market. Those international orders tend to be larger — with companies ordering entire drilling rig systems, rather than the a la carte component ordering more common in the U.S. That makes revenue more lumpy, the company says. But as international opportunities grow, companies are insulated from turmoil in any one region, analysts say. When T3 reports first-quarter results next month, analysts expect 70 cents a share, on revenue of $69.6 million. That would be a 37% improvement from a year ago in EPS, and a 45% gain in revenue.
Which airline is next? Ne Nearly half a dozen U.S. airlines have closed their doors or filed for bankruptcy clo in the past few months. While the theories about their demise are broad the an and varied, one fact is certain: Po Poor management doesn’t help.
ABX Stock Takes a
DAYTON DAILY NEWS
Shares now trad
ing for or les less than
Tuesday, July 24, 2007
ABX rejects ASTAR offer to buy company ASTAR had offered $7.75 per share for ABX, in a bid with a totall value of more than $450 million.
April 21, 2008
ABX Execs Get Golden Parachutes
ABX Air can’t afford any missteps.
Demand answers from management. Attend the 2008 Annual Meeting of Stockholders: Who: Shareholders of record, as of the close of business on March 17, 2008 When: May 13, 2008, at 11:00 a.m. EST Where: At the Roberts Convention Centre, 188 Roberts Road, Wilmington, Ohio
AskJoeHete.com We have our plan. Does management have theirs?
This message paid for and authorized by Airline Professionals Association / Teamsters Union Local 1224, Captain Dave Ross, President. 2754 Old State Route 73, Wilmington, OH 45177
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