##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-51435
 SUPERIOR WELL SERVICES, INC.
  Delaware
    
    20-2535684(State or other jurisdiction
    
    (I.R.S. Employerof incorporation or organization)
    
    Identification No.)
 1380 Rt. 286 East, Suite #121
Indiana, Pennsylvania 15701
 (724) 465-8904
 þ o
  o o þ
 o þ




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##### 



SUPERIOR WELL SERVICES, INC. QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006
 TABLE OF CONTENTS
 PAGEPART I
    
    FINANCIAL INFORMATIONItem 1.
    
    Unaudited Financial Statements- Unaudited Consolidated Balance Sheets
    
    
    1- Unaudited Consolidated Statements of Income
    
    
    2- Unaudited Consolidated Statement of Changes in Stockholders Equity
    
    
    3- Unaudited Consolidated Statement of Changes in Capital
    
    
    3- Unaudited Consolidated Statements of Cash Flows
    
    
    4- Notes to Unaudited Consolidated Financial Statements
    
    
    5Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    13Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    27PART II
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    28Item 1.A
    
    Risk Factors
    
    
    28Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    28Item 6.
    
    Exhibits
    
    
    28Signatures
    
    
    29Index to Exhibits
    
    
    30EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Unaudited)
 December 31,2005
    
    
    June 30, 2006(in thousands, except per share data)Current Assets:Cash and cash equivalents
    
    $
    10,765
    
    
    $
    76Trade accounts receivable, net of allowance of
$134 and $284, respectively
    
    
    23,381
    
    
    
    32,381Inventories
    
    
    3,761
    
    
    
    4,050Prepaid expenses
    
    
    1,157
    
    
    
    978Deferred income taxes
    
    
    303
    
    
    
    711Total current assets
    
    
    39,367
    
    
    
    38,196Property, Plant and Equipment:Land
    
    
    420
    
    
    
    420Building and improvements
    
    
    1,842
    
    
    
    2,240Equipment and vehicles
    
    
    84,184
    
    
    
    108,888Construction in progress
    
    
    8,760
    
    
    
    11,52695,206
    
    
    
    123,074Accumulated depreciation
    
    
    (22,515
    )
    
    
    (28,553
    )Total property, plant and equipment, net
    
    
    72,691
    
    
    
    94,521Intangible assets, net of accumulated
amortization of $665 and $808, respectively
    
    
    760
    
    
    
    796Other assets
    
    
    273
    
    
    
    262Total assets
    
    $
    113,091
    
    
    $
    133,775Current Liabilities:Accounts payable-trade
    
    $
    7,737
    
    
    $
    9,041Income taxes payable
    
    
    
    
    
    
    1,515Current portion of long-term debt
    
    
    179
    
    
    
    384401(k) plan contribution and withholding
    
    
    911
    
    
    
    933Advance payments on servicing contracts
    
    
    479
    
    
    
    760Accrued wages and health benefits
    
    
    841
    
    
    
    1,877Accrued insurance payable
    
    
    
    
    
    
    402Other accrued liabilities
    
    
    706
    
    
    
    1,235Total current liabilities
    
    
    10,853
    
    
    
    16,147Long-term debt
    
    
    1,258
    
    
    
    1,413Deferred income taxes
    
    
    9,587
    
    
    
    10,883Stockholders Equity:Common stock, voting, par $.01 per share,
70,000,000 shares authorized, 19,376,667 and
19,655,567 shares issued at December 31, 2005
and June 30, 2006, respectively
    
    
    194
    
    
    
    197Additional paid-in capital
    
    
    91,944
    
    
    
    93,093Retained earnings (deficit)
    
    
    (745
    )
    
    
    12,042Total stockholders equity
    
    
    91,393
    
    
    
    105,332Total liabilities and stockholders equity
    
    $
    113,091
    
    
    $
    133,775
  1




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##### Table of Contents



SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF INCOME
 (Unaudited)
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    
    
    
    
    20062005
    
    
    (Superior Well
    
    
    2005
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)
    
    
    (Partnerships)
    
    
    Services, Inc.)(in thousands, except per share data)Revenue
    
    $
    29,585
    
    
    $
    54,589
    
    
    $
    55,610
    
    
    $
    102,276Cost of revenue
    
    
    21,404
    
    
    
    37,704
    
    
    
    38,784
    
    
    
    69,440Gross profit
    
    
    8,181
    
    
    
    16,885
    
    
    
    16,826
    
    
    
    32,836Selling, general and administrative
expenses
    
    
    3,585
    
    
    
    6,153
    
    
    
    6,866
    
    
    
    11,679Operating income
    
    
    4,596
    
    
    
    10,732
    
    
    
    9,960
    
    
    
    21,157Interest expense
    
    
    224
    
    
    
    49
    
    
    
    383
    
    
    
    87Other (expense) income
    
    
    29
    
    
    
    50
    
    
    
    39
    
    
    
    191Income before income taxes
    
    
    4,401
    
    
    
    10,733
    
    
    
    9,616
    
    
    
    21,261Income taxesCurrent
    
    
    
    
    
    
    3,755
    
    
    
    
    
    
    
    7,585Deferred
    
    
    
    
    
    
    547
    
    
    
    
    
    
    
    889
    
    
    
    4,302
    
    
    
    
    
    
    
    8,474Net income
    
    $
    4,401
    
    
    $
    6,431
    
    
    $
    9,616
    
    
    $
    12,787Pro forma data (unaudited):Historical income before taxes
    
    $
    4,401
    
    
    
    
    
    
    $
    9,616Pro forma income tax expense
    
    
    1,804
    
    
    
    
    
    
    
    4,066Net income adjusted for pro forma
income tax expense
    
    $
    2,597
    
    
    
    
    
    
    $
    5,550Earnings per common share:Basic and fully diluted
    
    
    
    
    
    $
    0.33
    
    
    
    
    
    
    $
    0.66Pro forma basic and fully diluted
    
    $
    0.13
    
    
    
    
    
    
    $
    0.29
  2




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
 (Unaudited)
 Superior Well Services, Inc.Additional
    
    
    RetainedCommon
    
    
    Paid-in
    
    
    EarningsStock
    
    
    Capital
    
    
    (Deficit)
    
    
    Total(in thousands)BALANCE, DECEMBER 31, 2005
    
    $
    194
    
    
    $
    91,944
    
    
    $
    (745
    )
    
    $
    91,393Net income
    
    
    
    
    
    
    
    
    
    
    12,787
    
    
    
    12,787Issuance of restricted stock awards (Note 10)
    
    
    3
    
    
    
    276
    
    
    
    
    
    
    
    279Stock-based compensation (Note 10)
    
    
    
    
    
    
    873
    
    
    
    
    
    
    
    873BALANCE, JUNE 30, 2006
    
    $
    197
    
    
    $
    93,093
    
    
    $
    12,042
    
    
    $
    105,332
  SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENT OF CHANGES IN CAPITAL
 (Unaudited)
 PartnershipsAccumulatedPartners
    
    
    Comprehensive
    
    
    Less: NotesCapital
    
    
    Income
    
    
    Receivable
    
    
    Total(in thousands)BALANCE, DECEMBER 31, 2004
    
    $
    33,885
    
    
    $
    2
    
    
    $
    (68
    )
    
    $
    33,819Net income prior to reorganization
    
    
    9,616
    
    
    
    
    
    
    
    
    
    
    
    9,616Unrealized gains on interest rate swaps
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,637Distributions to partners
    
    
    (4,297
    )
    
    
    
    
    
    
    
    
    
    
    (4,297
    )Collection of notes receivable
    
    
    
    
    
    
    
    
    
    
    68
    
    
    
    68BALANCE, JUNE 30, 2005
    
    $
    39,204
    
    
    $
    23
    
    
    $
    
    
    
    $
    39,227
  3




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months EndedJune 3020062005
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)(in thousands)Cash flows from operations:Net income
    
    $
    9,616
    
    
    $
    12,787Adjustments to reconcile net income to net
cash provided by operations:Deferred income taxes
    
    
    
    
    
    
    889Depreciation and amortization
    
    
    4,157
    
    
    
    6,189Stock-based compensation
    
    
    
    
    
    
    873Changes in assets and liabilities:Trade accounts receivable
    
    
    (6,745
    )
    
    
    (9,000
    )Inventory
    
    
    (530
    )
    
    
    (289
    )Prepaid expenses and other assets
    
    
    (688
    )
    
    
    10Accounts payable
    
    
    1,995
    
    
    
    1,304Income taxes payable
    
    
    
    
    
    
    1,515401(k) plan contribution and withholding
    
    
    (281
    )
    
    
    22Advance payments on servicing
contracts
    
    
    446
    
    
    
    281Accrued wages and health benefits
    
    
    608
    
    
    
    1,036Accrued insurance payable
    
    
    
    
    
    
    402Other accrued liabilities
    
    
    (535
    )
    
    
    529Net cash provided by operations
    
    
    8,043
    
    
    
    16,548Cash flows from investing:Expenditure for property, plant and
equipment
    
    
    (14,670
    )
    
    
    (27,426
    )Notes receivable advances
    
    
    68
    
    
    
    Net cash used in investing
    
    
    (14,602
    )
    
    
    (27,426
    )Cash flows from financing:Principal payments on long-term debt
    
    
    (857
    )
    
    
    (3,590
    )Proceeds from long-term borrowings
    
    
    5,365
    
    
    
    3,500Proceeds from notes payable, net
    
    
    6,553
    
    
    
    Issuance of restricted stock awards (Note 10)
    
    
    
    
    
    
    279Distributions to partners
    
    
    (4,297
    )
    
    
    Net cash provided by financing
    
    
    6,764
    
    
    
    189Net increase (decrease) in cash and cash
equivalents
    
    
    205
    
    
    
    (10,689
    )Cash and cash equivalents, beginning of period
    
    
    1,544
    
    
    
    10,765Cash and cash equivalents, end of period
    
    $
    1,749
    
    
    $
    76Supplemental disclosure of cash flow data:Interest paid
    
    $
    357
    
    
    $
    32Income taxes paid
    
    
    
    
    
    
    6,070Non-cash transactions:Equipment acquired through seller financed debt
    
    
    
    
    
    
    450
  4




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 1. Organization
     2. Summary of Significant Accounting Policies
 Basis of Presentation
   Estimates and Assumptions
  5




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Cash and Cash Equivalents
  Trade Accounts Receivable
  Property, Plant and Equipment
    Revenue Recognition
  Inventories
  6




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Insurance Expense
  Income Taxes
 Accounting for Income Taxes.
 Interest Rate Risk Management
  Fair Value of Financial Instruments
    Intangible Assets
  7




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 Concentration of Credit Risk
  Stock Based Compensation
  Weighted average shares outstanding
  Recently Issued Guidance
  3. Notes Receivable  Limited Partners
  8




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##### Table of Contents



SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 4. Debt
     2005
    
    
    2006Notes payable to sellers with nominal
interest rates due through December
2010, collateralized by specific
buildings and equipment
    
    $
    292
    
    
    $
    245Mortgage notes payable to a bank with
interest at the banks prime lending
rate minus 1%, payable in monthly
installments of $7,111 plus interest
through January 2019, collateralized
by real property
    
    
    1,145
    
    
    
    1,102Note payable to sellers with nominal
interest rates due through June 2008,
collateralized by equipment
    
    
    
    
    
    
    4501,437
    
    
    
    1,797Less  Payments due within one year
    
    
    179
    
    
    
    384Total
    
    $
    1,258
    
    
    $
    1,413
 5. Note Payable
  6. Income taxes
   9




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##### Table of Contents



SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
  Period ended June 30, 2006Three
Months Ended
    
    

Six
Months EndedCurrent:State and local
    
    $
    667
    
    
    $
    1,382U.S. federal
    
    
    3,088
    
    
    
    6,203Total current
    
    
    3,755
    
    
    
    7,585Deferred:State and local
    
    
    96
    
    
    
    157U.S. federal
    
    
    451
    
    
    
    732Total deferred
    
    
    547
    
    
    
    889Provision for income tax expense
    
    $
    4,302
    
    
    $
    8,474
  December 31,
    
    
    June 30,2005
    
    
    2006Deferred tax assets:Restricted stock
    
    $
    
    
    
    $
    344Accrued expenses and other
    
    
    252
    
    
    
    255Allowance for doubtful accounts receivable
    
    
    51
    
    
    
    112Total deferred tax assets
    
    
    303
    
    
    
    711Deferred tax liabilities:Depreciation differences on property, plant and equipment
    
    
    (9,587
    )
    
    
    (10,883
    )Total deferred
    
    
    (9,587
    )
    
    
    (10,883
    )Net deferred taxes
    
    $
    (9,284
    )
    
    $
    (10,172
    )
  Period ended June 30, 2006Three months
    
    
    Six monthsended
    
    
    endedIncome before income taxes
    
    $
    10,733
    
    
    $
    21,261Statutory U.S. income tax rate
    
    
    35
    %
    
    
    35
    %Tax expense using statutory U.S. income tax rate
    
    
    3,757
    
    
    
    7,441State income taxes
    
    
    496
    
    
    
    1,000Other
    
    
    49
    
    
    
    33Income tax expense
    
    $
    4,302
    
    
    $
    8,474Effective income tax rate
    
    
    40
    %
    
    
    40
    %
 10




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
 7. 401(k) Plan
  8. Related-Party Transactions
      9. Commitments and Contingencies
   11




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SUPERIOR WELL SERVICES, INC. AND SUBSIDIARIES
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
   10. Stock Incentive Plan
   Percentage of Total NumberOf Restricted Shares as to WhichNumber of Full Years
    
    Forfeiture Restrictions LapseLess than 1 year
    
    
    0
    %1 year
    
    
    15
    %2 years
    
    
    30
    %3 years
    
    
    45
    %4 years
    
    
    60
    %5 years or more
    
    
    100
    %
     12




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.
 The following discussion and analysis should be read in conjunction with the unaudited
consolidated financial statements and notes thereto included elsewhere in this report. The terms
Superior Well Services, Superior, we, us and our refer to Superior Well Services, Inc.,
together with its two operating partnerships, Superior Well Services, Ltd. and Bradford Resources,
Ltd., and their general partner, Superior GP, L.L.C., each of which became wholly owned
subsidiaries of Superior Well Services, Inc. in connection with its initial public offering.
 Overview
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2005
    
    
    2006
    
    
    2005
    
    
    2006Technical pumping services
    
    $
    26,644
    
    
    
    90.1
    %
    
    $
    49,008
    
    
    
    89.8
    %
    
    $
    50,260
    
    
    
    90.4
    %
    
    $
    92,027
    
    
    
    90.0
    %Down-hole surveying services
    
    
    2,941
    
    
    
    9.9
    
    
    
    5,581
    
    
    
    10.2
    
    
    
    5,350
    
    
    
    9.6
    
    
    
    10,249
    
    
    
    10.0Total revenue
    
    $
    29,585
    
    
    
    100.0
    %
    
    $
    54,589
    
    
    
    100.0
    %
    
    $
    55,610
    
    
    
    100.0
    %
    
    $
    102,276
    
    
    
    100.0
    %
  Technical Pumping Services
  Down-Hole Surveying Services
  13




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How We Generate Our Revenue
   How We Evaluate Our Operations
  Operating Income per Operating Region.
   Material and Labor Expenses as a Percentage of Revenue.
   14




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Selling, General and Administrative Expenses as a Percentage of Revenue.
  EBITDA.
  
    
    as a measure of operating performance because it assists us in comparing our performance
on a consistent basis, since it removes the impact of our capital structure and asset base
from our operating results;
    
    as a measure for planning and forecasting overall expectations and for evaluating actual
results against such expectations;
    
    to assess compliance with financial ratios and covenants included in credit facilities;
    
    in communications with lenders concerning our financial performance; and
    
    to evaluate the viability of potential acquisitions and overall rates of return.
 How We Manage Our Operations
  Service Crew Performance.
  Equipment Maintenance Performance.
  15




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##### Table of Contents



Inventory Turnover Rates.
  Customer Satisfaction.
  Safety Performance.
  Our Growth Strategy
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2005
    
    
    2006
    
    
    2005
    
    
    2006RegionAppalachian
    
    $
    16,104
    
    
    
    54.4
    %
    
    $
    28,035
    
    
    
    51.4
    %
    
    $
    31,465
    
    
    
    56.6
    %
    
    $
    52,555
    
    
    
    51.4
    %Southeast
    
    
    7,843
    
    
    
    26.5
    
    
    
    13,814
    
    
    
    25.3
    
    
    
    15,384
    
    
    
    27.7
    
    
    
    26,203
    
    
    
    25.6Rocky Mountain
    
    
    356
    
    
    
    1.2
    
    
    
    2,833
    
    
    
    5.2
    
    
    
    356
    
    
    
    0.6
    
    
    
    3,947
    
    
    
    3.9Mid-Continent
    
    
    5,282
    
    
    
    17.9
    
    
    
    9,907
    
    
    
    18.1
    
    
    
    8,405
    
    
    
    15.1
    
    
    
    19,571
    
    
    
    19.1Total
    
    $
    29,585
    
    
    
    100.0
    %
    
    $
    54,589
    
    
    
    100.0
    %
    
    $
    55,610
    
    
    
    100.0
    %
    
    $
    102,276
    
    
    
    100.0
    %
 16




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Cautionary Statement Regarding Forward-Looking Statements
  
    
    a decrease in domestic spending by the oil and natural gas exploration and production industry;
    
    a decline in or substantial volatility of crude oil and natural gas commodity prices;
    
    the loss of one or more significant customers;
    
    the loss of or interruption in operations of one or more key suppliers;
    
    the incurrence of significant costs and liabilities in the future resulting from our
failure to comply with new or existing environmental regulations or an accidental release
of hazardous substances into the environment; and
    
    other financial, operational and legal risks and uncertainties detailed from time to
time in our Securities and Exchange Commission filings.
  17




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##### Table of Contents



Our Results of Operations
   Three Months Ended June 30,
    
    
    Six Months Ended June 30,2005
    
    
    2006
    
    
    2005
    
    
    2006Statement of Operations Data:Revenues:Technical pumping services
    
    $
    26,644
    
    
    $
    49,008
    
    
    $
    50,260
    
    
    $
    92,027Down-hole surveying services
    
    
    2,941
    
    
    
    5,581
    
    
    
    5,350
    
    
    
    10,249Total revenues
    
    
    29,585
    
    
    
    54,589
    
    
    
    55,610
    
    
    
    102,276Expenses:Cost of revenue
    
    
    21,404
    
    
    
    37,704
    
    
    
    38,784
    
    
    
    69,440Selling, general and administrative
    
    
    3,585
    
    
    
    6,153
    
    
    
    6,866
    
    
    
    11,679Total expense
    
    
    24,989
    
    
    
    43,857
    
    
    
    45,650
    
    
    
    81,119Operating income
    
    $
    4,596
    
    
    $
    10,732
    
    
    $
    9,960
    
    
    $
    21,157
 Three Months Ended June 30, 2006 Compared to Three Months Ended June 30, 2005
 Revenue.
    18




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Cost of Revenue.
  Selling, General and Administrative Expenses (SG&A).
  Operating Income.
  19




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Six Months Ended June 30, 2006 Compared to Six Months Ended June 30, 2005
 Revenue.
    Cost of Revenue.
  Selling, General and Administrative Expenses.
  20




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Operating Income.
  Items Impacting Comparability of Our Financial Results
  Changes in Our Legal Structure.
   21




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##### Table of Contents



Public Company Expenses.
  Non-cash compensation expense.
  Liquidity and Capital Resources
  Financial Condition and Cash Flows
 Financial Condition.
  Cash flows from operations.
  22




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##### Table of Contents



Cash flows used in investing activities.
  Cash flows from financing activities.
  Capital Requirements
  
    
    expansion capital expenditures, such as those to acquire additional equipment and other
assets to grow our business; and
    
    maintenance or upgrade capital expenditures, which extend the useful life or upgrade the
operational capabilities of existing assets.
   Off-Balance Sheet Arrangements
  Description of Our Indebtedness
   23




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Recent Accounting Pronouncements
  Critical Accounting Policies
   Revenue Recognition
   Property, Plant and Equipment
  24




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##### Table of Contents



Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-Lived
Assets,
  
    
    changes in general economic conditions in regions in which our services are located;
    
    the price of crude oil and natural gas;
    
    our ability to negotiate favorable sales arrangements; and
    
    our competition from other service providers.
  Intangible Assets
  Contingent Liabilities
  Insurance Expenses
  25




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##### Table of Contents



Stock Based Compensation
  Non-GAAP Accounting Measures
  
    
    as a measure of operating performance because it assists us in comparing our performance
on a consistent basis as it removes the impact of our capital structure and asset base from
our operating results;
    
    as a measure for planning and forecasting overall expectations and for evaluating actual
results against such expectations;
    
    to assess compliance with financial ratios and covenants included in credit facilities;
    
    in communications with lenders concerning our financial performance; and
    
    to evaluate the viability of potential acquisitions and overall rates of return.
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    
    
    
    
    20062005
    
    
    (Superior Well
    
    
    2005
    
    
    (Superior Well(Partnerships)
    
    
    Services, Inc.)
    
    
    (Partnerships)
    
    
    Services, Inc.)Reconciliation of EBITDA to Net Income:Net income (1)
    
    $
    2,597
    
    
    $
    6,431
    
    
    $
    5,550
    
    
    $
    12,787Income tax expense
    
    
    1,804
    
    
    
    4,302
    
    
    
    4,066
    
    
    
    8,474Interest expense
    
    
    224
    
    
    
    49
    
    
    
    383
    
    
    
    87Depreciation and amortization
    
    
    2,562
    
    
    
    3,196
    
    
    
    4,157
    
    
    
    6,189EBITDA
    
    $
    7,187
    
    
    $
    13,978
    
    
    $
    14,156
    
    
    $
    27,537
 
 (1)
    
    -2005 amounts include pro forma income tax expense 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk.
  Interest Rate Risk.
 26




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Concentration of Credit Risk.
 Commodity Price Risk.
 
 Item 4. Controls and Procedures.
   27




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 1A. Risk Factors
  
 Item 4. Submission of Matters to a Vote of Security Holders
  Number ofAffirmative
    
    
    
    
    
    NumberNames
    
    Votes
    
    Against
    
    WithheldMark A. Snyder
    
    
    16,239,238
    
    
    
    
    
    
    
    1,289,562Anthony J. Mendicino
    
    
    16,139,879
    
    
    
    
    
    
    
    1,388,921Following the annual meeting John A. Staley, IV, David E. Snyder, Charles C. Neal and David E.
Wallace continued in their terms as directors.The number of affirmative votes, the number of affirmative votes, negative votes and the
number of abstentions with respect to the ratification of the appointment of Schneider Downs & Co.,
Inc. were as follows:Number ofAffirmative
    
    
    
    
    
    NumberVotes
    
    Against
    
    WithheldRatification of appointment of
Schneider Downs & Co., Inc.
    
    
    15,517,377
    
    
    
    2,010,778
    
    
    
    645
 
 Item 6. Exhibits.
  28




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SIGNATURES
  SUPERIOR WELL SERVICES, INC.
     RegistrantDated: August 8, 2006
    By:

/s/ David E. WallaceDavid E. WallaceChief Executive Officer and
Chairman of the Board of Directors Dated: August 8, 2006
    By:

/s/ Thomas W. StoelkThomas W. StoelkVice President and Chief Financial Officer 29




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##### Table of Contents



INDEX TO EXHIBITS
 OF
SUPERIOR WELL SERVICES, INC.
 (a) Exhibits
 3.1
    
    Amended and Restated Certificate of Incorporation
(incorporated herein by reference to Exhibit 3.1 to Superior
Well Services, Inc.s Current Report on Form 8-K filed August 3,
2005).3.2
    
    Amended and Restated Bylaws (incorporated herein by
reference to Exhibit 3.2 to Superior Well Services, Inc.s
Current Report on Form 8-K filed August 3, 2005).4.1
    
    Specimen Stock Certificate representing common stock
(incorporated herein by reference to Exhibit 4.1 to Superior
Well Services, Inc.s Registration Statement on Form S-1/ A
filed June 24, 2005).4.3
    
    Form of Restricted Stock Agreement for Employees without
Employment Agreements (incorporated herein by reference to
Exhibit 4.1 to Superior Well Services, Inc.s Registration
Statement on Form S-8 filed December 22, 2005).4.4
    
    Form of Restricted Stock Agreement for Executives with
Employment Agreements (incorporated herein by reference to
Exhibit 4.2 to Superior Well Services, Inc.s Registration
Statement on Form S-8 filed December 22, 2005).4.5
    
    Form of Restricted Stock Agreement for Non-Employee
Directors (incorporated herein by reference to Exhibit 4.3 to
Superior Well Services, Inc.s Registration Statement on Form
S-8 filed December 22, 2005).31.1*
    
    Sarbanes-Oxley Section 302 certification of David E. Wallace for
Superior Well Services, Inc. for the June 30, 2006 Quarterly
Report on Form 10-Q.31.2*
    
    Sarbanes-Oxley Section 302 certification of Thomas W. Stoelk for
Superior Well Services, Inc. for the June 30, 2006 Quarterly
Report on Form 10-Q.32.1*
    
    Sarbanes-Oxley Section 906 certification of David E. Wallace for
Superior Well Services, Inc. for the June 30, 2006 Quarterly
Report on Form 10-Q.32.2*
    
    Sarbanes-Oxley Section 906 certification of Thomas W. Stoelk for
Superior Well Services, Inc. for the June 30, 2006 Quarterly
Report on Form 10-Q.
 
 *
    
    Filed herewith. 30