HOUSTON, Jul 21, 2003 /PRNewswire-FirstCall via COMTEX/ -- Weatherford International Ltd. (NYSE: WFT) today reported 2003 second quarter revenues of $617.7 million and net income of $39.0 million, or $0.31 per diluted share, before non-recurring charges. Non-recurring items affecting the quarter were after-tax charges of $10.2 million, or $0.08 per share, primarily related to severance and Weatherford's percentage of Universal Compression Holdings, Inc. debt restructuring charge. Including the charges, net income for the quarter was $28.8 million, or $0.23 per diluted share. In the second quarter of 2002, revenues and net income were $593.9 million and $38.9 million ($0.31 per diluted share), respectively.
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In the first six months of 2003, revenues were $1.2 billion and net income, excluding the severance and debt restructuring charges, was $72.6 million, or $0.57 per diluted share. In 2002, reported revenues for the first six months were $1.2 billion and net income was $84.1 million, or $0.66 per diluted share.
On a sequential basis, second quarter revenues and earnings per diluted share, excluding the charges, increased 5 percent and 15 percent above the first quarter of 2003, respectively. The sequential revenue increase reflects higher activity levels throughout the Eastern Hemisphere and Latin America. Non-North American revenues had sequential revenue gains of 10 percent, versus a 3 percent rig count increase. All regions contributed to the growth with the most significant improvements occurring in the Latin American and Asia Pacific regions. Despite a 12 percent North American rig count decline, revenues were flat sequentially as the 7 percent revenue increase in the United States offset Canada's seasonal revenue decline of 13 percent.
Drilling Services
Revenues of $362.0 million in the second quarter were 5 percent above the level of the first quarter of 2003. Operating income of $65.7 million was 2 percent higher on the same sequential basis. Sequentially strong revenue and operating income growth in the Eastern Hemisphere and Latin America was offset by the impact of spring break up in Canada. The seasonal decline was more severe than expected and was associated with higher repair and maintenance expenses.
Production Systems
Second quarter revenues of $255.7 million were 5 percent higher on a sequential basis. Strong revenue performances in Latin America, Asia Pacific and the United States were offset primarily by the seasonal impact of Canada. A sequential operating profit decline of 7 percent reflected the negative impact of the cost structure reduction process underway. The Production Systems division bears the brunt of the cost reduction change. The other factor contributing to a decline in operating profit was a shift in product mix.
The Company's Research and Development expenditures were $22 million, or 11 percent above the prior quarter due to the non-linear nature of project expenses. Other Income was $5.6 million, primarily due to currency gains in the current quarter.
Conference Call
The Company will host a conference call with financial analysts to discuss the second quarter and year-to-date 2003 results on July 21, 2003, at 9:00 a.m. (CST). The Company invites investors to listen to a play back of the conference call at the Company's website, www.weatherford.com in the "investor relations" section. Further, the "investor relations/financial information" section of the Company's website includes a disclosure and reconciliation of non-GAAP financial measures that may be used periodically by management when discussing the Company's financial results with investors and analysts.
Weatherford 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 100 countries and employs approximately 16,000 people worldwide.
This press release contains 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 successful re-alignment of its businesses, all of which are subject to certain risks, uncertainties and assumptions. These risks and uncertainties, which are more fully described in Weatherford International Ltd.'s reports and registration statements filed with the SEC, include the impact of oil and natural gas prices and worldwide economic conditions on drilling activity, the demand for and pricing of Weatherford's products and services, domestic and international economic and regulatory conditions and changes in tax and other laws affecting our business. 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.
Contact: Lisa W. Rodriguez (713) 693-4746
Chief Financial Officer
Weatherford International Ltd.
Consolidated Condensed Statements of Income
(In 000's, Except Per Share Amounts)
Three Months Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
Net Revenues:
Drilling Services $362,044 $339,944 $707,720 $678,303
Production Systems 255,659 253,922 499,321 483,812
617,703 593,866 1,207,041 1,162,115
Operating Income (Loss):
Drilling Services 65,656 67,124 129,989 141,022
Production Systems 28,426 39,997 59,069 75,746
Research and Development (22,120) (18,539) (42,119) (35,523)
Equity in Earnings 302 6,342 4,864 13,195
Non-recurring Expense (7,710) -- (7,710) --
Corporate Expenses (9,680) (14,806) (19,494) (24,086)
54,874 80,118 124,599 170,354
Other Income (Expense):
Other, Net 5,602 (1,215) 3,031 (1,974)
Interest Expense, Net (20,932) (20,041) (41,740) (40,997)
Income Before Income Taxes 39,544 58,862 85,890 127,383
Provision for Income Taxes (10,716) (20,010) (23,461) (43,312)
Net Income $28,828 $38,852 $62,429 $84,071
Earnings Per Share:
Basic $0.24 $0.32 $0.51 $0.70
Diluted $0.23 $0.31 $0.49 $0.66
Weighted Average Shares
Outstanding:
Basic 121,471 120,033 121,328 119,597
Diluted 127,489 135,759 127,021 134,783
Weatherford International Ltd.
Supplemental Information
(In 000's)
Three Months Six Months
Ended June 30, Ended June 30,
2003 2002 2003 2002
Geographic Revenues:
Eastern Hemisphere $247,635 $273,277 $483,592 $514,982
United States 213,998 193,703 413,308 390,124
Canada 94,672 74,564 203,280 156,794
Latin America 61,398 52,322 106,861 100,215
$617,703 $593,866 $1,207,041 $1,162,115
Depreciation and Amortization:
Drilling Services $43,343 $40,982 $85,768 $80,404
Production Systems 12,182 10,772 24,030 20,136
Research and Development 1,382 807 2,667 1,532
Other 919 745 1,647 1,268
$57,826 $53,306 $114,112 $103,340
Research and Development:
Drilling Services $10,863 $7,609 $20,940 $15,028
Production Systems 11,257 10,930 21,179 20,495
$22,120 $18,539 $42,119 $35,523
The Company reports it financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP performance measures and ratios may provide users of this financial infomation additional meaningful comparisons between current results and results in prior operating periods. See the table below for supplemental financial data and corresponding reconciliations to GAAP financial measures for the three and six months ended June 30, 2003. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company's reported results prepared in accordance with GAAP.
Weatherford International Ltd.
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited)
(In thousands, except per share data)
For the three months ended June 30, 2003
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income before Income Taxes $39,544 $12,360 $51,904
Provision for Income Taxes (10,716) (2,153) (12,869)
Net Income $28,828 $10,207 $39,035
Diluted Earnings Per Share $0.23 $0.31
Diluted Weighted Average Shares
Outstanding 127,489 127,489
* Primarily relates to severance and our equity investment's,
Universal Compression Holdings, Inc., debt restructuring charges.
For the six months ended June 30, 2003
Items Non-GAAP
impacting Adjusted
GAAP the period* Earnings
Income before Income Taxes $85,890 $12,360 $98,250
Provision for Income Taxes (23,461) (2,153) (25,614)
Net Income $62,429 $10,207 $72,636
Diluted Earnings Per Share $0.49 $0.57
Diluted Weighted Average Shares
Outstanding 127,021 127,021
* Primarily relates to severance and our equity investment's,
Universal Compression Holdings, Inc., debt restructuring charges.
SOURCE Weatherford International Ltd.
Lisa Rodriguez Chief Financial Officer of Weatherford International, +1-713-693-4746