Core Laboratories Announces Record 2Q Revenues, Earns $0.10/Share
HOUSTON, July 30 /PRNewswire/ -- Core Laboratories (NYSE: CLB - news) announced record second quarter revenues of $72,294,000 while the Company earned $0.10 per fully diluted share in the quarter. The record second quarter revenues reflected the benefits of prior year acquisitions and increasing demand for the Company's proprietary technology related to production enhancement since production-related budgets were the first to be restored by oil companies.
Last year, Core reported second quarter revenues of $69,682,000 while continuing operations earned $0.23 per diluted share. After accounting for the sale of a discounted operation, the Company reported earnings per diluted share of $0.10 for the second quarter of 1998. Second quarter 1999 income from continuing operations fell approximately 52% to $2,887,000 from the $6,026,000 posted a year ago.
First-half 1999 revenue totals of $136,425,000 were also at record levels for the Company compared to $132,143,000 from the year earlier period. Revenues increased over 13% from Q1 to Q2 1999, as production budgets were restored due to higher crude oil and natural gas prices. Production-related budgets were the last to be reduced in the 18-month downturn in commodity prices, and they were the first to be increased as oil and gas prices improved. The 1999 income for the first six months from continuing operations before charges was $3,824,000 compared to $9,731,000 during the similar period in 1998. Earnings per diluted share were $0.13 from continuing operations before charges for the first half of 1999 down from $0.38 reported during the first six months of 1998.
''We are very pleased with revenue totals for the second quarter and first half of 1999, although we still need further improvement in our operating margins and earnings,'' said David M. Demshur, Core's President and CEO. ''However, our operations have taken actions that should result in increased margins for the second half of 1999. Most of our clients have started to restore their production-related budgets. We are confident that our actions, coupled with new technologies, increased oil company spending and the acquisitions of Coherence Technology Company and Reservoirs, Inc. should produce marked improvements in the second half of 1999.''
The Company cited the resumption or continuation of development, production and production enhancement projects in Canada, Europe, West Africa and the Middle East for helping to increase revenues. In Canada, Core is providing services for the development of offshore fields on the east coast. These projects continued through the downturn. Several large production-related projects in Europe and West Africa utilized the Company's reservoir description and reservoir management services. One particular project involved a multi-million dollar equity study of a giant oil and gas field in the North Sea which will continue into the third quarter. Several production enhancement projects in the Middle East, including the design of a field flood in one of the world's largest oilfields, helped bolster second quarter results.
The integration of Coherence Technology Company into Core's reservoir management service line has progressed ahead of plan. In combining with Reservoirs, Inc., Core Laboratories plans to leverage the industry's largest non-exclusive, detailed reservoir characterization project of deepwater reservoirs in the Gulf of Mexico. The regional geological and petrophysical study has over 20 current participants and will include reservoir sections from over 100 deepwater wells. The results can be used to plan additional development wells that can maximize daily production and ultimate field recovery. In addition, results can be used to limit formation damage and to design effective completion, fracture stimulation and gravel packing programs. Core plans similar deepwater reservoir studies in offshore West Africa and the east coast of South America. These areas contain some of the world's best prospective targets, and activity levels should remain high over the next several years.
Core Laboratories N.V. is a leading provider of proprietary and patented reservoir description, production enhancement, reservoir management and reservoir monitoring services. The Company has over 70 offices in more than 50 countries and is located in every major oil-producing province in the world.
The Company's outlook is subject to various important cautionary factors as more fully described in the Company's 1998 Form 10-K filed 31 March, 1999, and in other securities filings. This release includes forward-looking statements regarding the future revenues and profitability of the Company made in reliance upon the safe harbor provisions of Federal securities law. The Company's actual results may differ materially from those described in these forward-looking statements. Such statements are based on current expectations of the Company's performance and are subject to a variety of factors, some of which are not under the control of the Company. Because the information herein is based solely on data currently available, and because it is subject to change as a result of changes in conditions over which the Company has no control or influence, such forward-looking statements should not be viewed as assurance regarding the Company's future performance.
CORE LABORATORIES N.V. & SUBSIDIARIES
Consolidated Statements of Income
(amounts in thousands, except share and per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
REVENUE $72,294 $69,682 $136,425 $132,143
OPERATING EXPENSES:
Costs of services
and sales 59,469 53,752 113,892 104,284
General and
administrative
expenses 2,964 2,010 5,711 3,892
Depreciation and
amortization 4,359 3,465 8,837 6,888
Other expenses
(income), net (606) 399 (1,103) 350
INCOME FROM CONTINUING
OPERATIONS BEFORE
TRANSACTION COST,
ONE TIME CHARGE,
INTEREST EXPENSE
AND INCOME TAXES 6,108 10,056 9,088 16,729
GEOSCIENCE TRANSACTION
COST -- -- 3,691 -- ONE TIME CHARGE -- -- 6,979 --
INTEREST EXPENSE 1,799 1,447 3,381 2,827
INCOME (LOSS) FROM
CONTINUING OPERATIONS
BEFORE INCOME TAXES 4,309 8,609 (4,963) 13,902
INCOME TAX EXPENSE
(BENEFIT) 1,422 2,583 (1,638) 4,171
INCOME (LOSS) FROM
CONTINUING
OPERATIONS 2,887 6,026 (3,325) 9,731
LOSS FROM DISCONTINUED
OPERATIONS,
net of tax -- -- -- (217) LOSS ON DISPOSITION
OF DISCONTINUED
OPERATIONS,
net of tax -- (3,374) -- (3,374) NET INCOME (LOSS) $2,887 $2,652 $(3,325) $6,140
DILUTED EARNINGS
PER SHARE:
Income from
continuing
operations
before
transaction
cost and one
time charge $0.10 $0.23 $0.13 $0.38
GeoScience
transaction cost -- -- (0.08) --
One time charge -- -- (0.16) -- Loss from discontinued
operations -- -- -- (0.01)
Loss on disposition of
discontinued
operations -- (0.13) -- (0.13)
Net Income (loss) $0.10 $0.10 $(0.11) $0.24
WEIGHTED AVERAGE
DILUTED COMMON
SHARES
OUTSTANDING 29,997,569 26,775,487 30,125,083 25,701,550
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