Houston, July 27, 2000
Weatherford International, Inc. (NYSE: WFT) today reported second quarter income from continuing operations of $13.2 million ($0.12 per diluted share), an improvement of 583 percent over the prior year result of $1.9 million ($0.02 per diluted share). Second quarter cash earnings from continuing operations (after-tax earnings, excluding goodwill amortization, net of tax) were $21.6 million ($0.19 per diluted share), or 247 percent higher than the prior year’s cash earnings of $6.2 million ($0.06 per diluted share). Net income in the quarter, also $0.12 per diluted share, compared favorably with a net loss in the prior year quarter of $0.02 per diluted share, which included a loss from discontinued operations of $0.04. Revenues for the second quarter of $421.8 million were 51 percent higher than the prior year.
Sequential improvement in revenues, operating income and EBITDA continued in the second quarter, up 7 percent, 26 percent and 8 percent respectively.
The improved results reflect the impact of higher drilling and production activity in the United States and the beginning of a turnaround in activity in key international markets. Sequentially, the rig count grew 9 percent both in the United States and in international markets outside North America. The company’s performance also benefited from products and services added during the downturn. These additional capabilities provide a foundation for future growth.
For the first six months, net income per diluted share was $0.18 versus $0.01 in the prior year, which included a $0.05 per share loss from discontinued operations. Revenues of $817.2 million and operating income of $62.6 million were 50 percent and 143 percent higher than the prior year, respectively.
Weatherford Drilling & Intervention Services - Revenues in the Drilling & Intervention Services division were $206.7 million in the second quarter, 51 percent higher than the prior year and 10 percent higher than the preceding quarter. EBITDA of $63.8 million was 63 percent higher than the prior year and 12 percent higher than the preceding quarter.
On a sequential basis, gains were experienced across all major product lines as demand for drilling products and services increased with the higher rig activity. Gains were also experienced in re-entry and thru tubing activities, reflecting successful introduction of their offerings into new geographic markets.
Growth in North America was moderated by the seasonal decline in Canada. Revenues and operating income in Canada for this division declined approximately $6 million and $3 million, respectively, in the second quarter compared to the first quarter. Internationally, the division generated revenue gains throughout most regions, signaling the beginning of a recovery in those markets.
Weatherford Completion Systems - Weatherford Completion Systems division revenues were approximately double the level of a year ago. EBITDA of $1.8 million was significantly higher than the loss of $3.5 million last year and 31 percent above the preceding quarter.
Sequentially, the division had a slight revenue decline due to the impact of the Canadian spring breakup. Revenues were also affected by the relocation and expansion of this division's European manufacturing facilities that is currently underway. The decline in Canada affected revenues by $3.5 million and operating income by $1.3 million. Strong performances occurred in the Asia Pacific region and in the Company's sand control product lines. The division continues to experience growing demand for its innovative products, particularly its expandable sand control line, traditional well screens, flow control products and liner hangers. The division is adding substantial manufacturing capacity to handle the increased activity anticipated in the second half of 2000 and beyond.
Weatherford Artificial Lift Systems - Weatherford Artificial Lift Systems division second quarter revenues of $104.2 million increased 68 percent over the prior year and 4 percent over the prior quarter. EBITDA in the quarter of $15.1 million nearly doubled the level of a year ago and was 7 percent higher than the prior quarter.
Sequentially, division performance improved despite the impact of the Canadian breakup. The improvement reflected higher drilling and workover related activity for oil in the United States where the number of rigs drilling for oil increased approximately 28 percent and well servicing and workover jobs increased an estimated 7 and 12 percent, respectively. In addition, Latin American production activity has been increasing, creating higher artificial lift requirements.
Weatherford Global Compression Services - The Compression Services division reported revenues of $64.3 million, 15 percent higher than the prior year and 7 percent higher than the prior quarter. EBITDAR (earnings before interest, taxes, depreciation, amortization and rental expenses) was $15.3 million, below both the levels of the prior year and the prior quarter.
Efforts to reorganize this division and reduce its cost structure that began last quarter continued in the second quarter, contributing to the lower profitability. These efforts have been largely completed at the end of the second quarter and the division is expected to begin to generate improved results in the second half of the year.
Houston-based Weatherford International, Inc. (www.weatherford.com) is one of the largest global providers of innovative mechanical solutions, technology and services for the drilling and production sectors of the oil and gas industry. Weatherford operates in over 50 countries and employs approximately 10,000 people worldwide.
Weatherford International, Inc. |
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Three Months Ended |
Six Months Ended |
||||||||
June 30, |
June 30, |
||||||||
2000 |
1999 |
2000 |
1999 |
||||||
Net Revenues: |
|||||||||
Drilling and Intervention Services |
$ 206,748 |
$ 136,730 |
$ 394,277 |
$ 279,364 |
|||||
Completion Systems |
46,544 |
23,681 |
94,165 |
46,334 |
|||||
Artificial Lift Systems |
104,235 |
62,227 |
204,452 |
119,698 |
|||||
Compression Services |
64,321 |
55,950 |
124,336 |
98,533 |
|||||
421,848 |
278,588 |
817,230 |
543,929 |
||||||
Operating Income (Loss): |
|||||||||
Drilling and Intervention Services |
38,810 |
15,510 |
69,654 |
37,682 |
|||||
Completion Systems |
(4,395) |
(5,758) |
(9,510) |
(10,900) |
|||||
Artificial Lift Systems |
8,949 |
2,671 |
17,247 |
1,827 |
|||||
Compression Services |
609 |
4,656 |
2,833 |
9,672 |
|||||
Corporate Expenses |
(9,088) |
(6,993) |
(17,666) |
(12,565) |
|||||
34,885 |
10,086 |
62,558 |
25,716 |
||||||
Other Income (Expense): |
|||||||||
Other, Net |
2,486 |
3,689 |
4,073 |
4,258 |
|||||
Interest Expense |
(16,520) |
(10,898) |
(29,542) |
(20,898) |
|||||
Income Before Income Taxes |
20,851 |
2,877 |
37,089 |
9,076 |
|||||
Provision For Income Taxes |
(7,502) |
(356) |
(13,184) |
(2,055) |
|||||
Income Before Minority Interest |
13,349 |
2,521 |
23,905 |
7,021 |
|||||
Minority Interest Expense, Net of Tax |
(145) |
(588) |
(708) |
(1,326) |
|||||
Net Income from Continuing Operations |
13,204 |
|
1,933 |
23,197 |
5,695 |
||||
Loss from Discontinued Operations, Net of Taxes |
- |
(3,953) |
(3,458) |
(5,177) |
|||||
Net Income (Loss) |
$ 13,204 |
$ (2,020) |
$ 19,739 |
$ 518 |
|||||
Basic Earnings Per Share: |
|||||||||
Income from Continuing Operations |
0.12 |
0.02 |
0.21 |
0.06 |
|||||
Loss from Discontinued Operations |
- |
(0.04) |
(0.03) |
(0.05) |
|||||
Net Income (Loss) Per Share |
0.12 |
(0.02) |
0.18 |
0.01 |
|||||
Basic Weighted Average Shares Outstanding |
108,896 |
97,586 |
108,824 |
97,451 |
|||||
Diluted Earnings Per Share: |
|||||||||
Income from Continuing Operations |
0.12 |
0.02 |
0.21 |
0.06 |
|||||
Loss from Discontinued Operations |
- |
(0.04) |
(0.03) |
(0.05) |
|||||
Net Income (Loss) Per Share |
0.12 |
(0.02) |
0.18 |
0.01 |
|||||
Diluted Weighted Average Shares Outstanding |
112,905 |
99,430 |
112,111 |
98,718 |
|||||
Other Information |
|||||||||
Cash Earnings Per Diluted Share from Continuing Operations |
$ 0.19 |
$ 0.06 |
$ 0.35 |
$ 0.14 |
|||||
Depreciation and Amortization: |
|||||||||
Drilling and Intervention Services |
$ 24,983 |
$ 23,509 |
$ 50,992 |
$ 47,365 |
|||||
Completion Systems |
6,146 |
2,283 |
12,597 |
4,710 |
|||||
Artificial Lift Systems |
6,166 |
4,835 |
12,040 |
9,670 |
|||||
Compression Services |
9,521 |
9,166 |
18,850 |
16,734 |
|||||
Corporate |
827 |
509 |
1,578 |
872 |
|||||
$ 47,643 |
$ 40,302 |
$ 96,057 |
$ 79,351 |
Contacts:
Don Galletly (713) 693-4148
This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning, among other things, Weatherford's prospects for its operations and the integration of recent acquisitions, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed with the Securities and Exchange Commission, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand and pricing of Weatherford's products, as well as the ability to achieve the anticipated synergies and savings from the recent merger between EVI, Inc. and Weatherford Enterra, Inc. Should one or more of these risks or uncertainties materialize, or should the assumptions prove incorrect, actual results may vary in material aspects from those currently anticipated.
Weatherford International, Inc.
515 Post Oak Blvd, Suite 600
Houston, Texas 77027
713-693-4000