Q1 Results
NEWS RELEASE TRANSMITTED BY CCN - A NEWSWIRE SERVICE OF ITG
FOR: WENZEL DOWNHOLE TOOLS LTD.
TSE SYMBOL: WZL
OCTOBER 31, 2000 - 09:05 EST
Wenzel Downhole Tools Ltd. Announces Results of
Operations
CALGARY, ALBERTA and EDMONTON, ALBERTA--Wenzel Downhole Tools Ltd.
is pleased to announce the results of operations for the quarter
ended August 31, 2000. Gross revenues increased to $4,773,441 for
the quarter from $4,434,981 in the quarter ended August 31, 1999.
The joint venture in the USA is accounted for on the equity method
so that revenue from that business is not reflected in gross
revenues on the income statement. Without showing the Texas
revenue, revenue from the quarter on the income statement shows as
$3,079,827. If the Texas revenue were accounted for on the
consolidation basis the gross revenues would increase to
$4,773,411. It should be noted that Wenzel's share of before tax
net revenue from the Texas joint venture in the three months ended
August 31, 2000 was $788,724 as compared to $82,186 for the
nine-month period September 1, 1999 to May 31, 2000. The Texas
joint venture is expected to operate at close to 100% of capacity
and continue to grow over the next few years.
The net earnings of the Company (after restating the prior year's
numbers for the change in the CICA guidelines in accounting for
future income taxes) increased by 25.5% to $630,045 from $501,703.
Earnings per share increased by 12.5% to $0.018 from $0.016 in
1999.
The book value of the Company per share increased by 44% to $0.91
per share at August 31, 2000 from $0.63 per share at August 31,
1999. Book value ignores that the sales value of most of the
Company's assets would be close to double the cost value carried
on the balance sheet.
Although the quarter is normally a very slow period for the oil
and gas drilling industry, the underground construction market
proved that management's strategy of diversifying the business
risk between two separate markets for the tools was prudent.
Drilling activity in Western Canada was very low due to an
extremely wet spring and summer. Management expects that drilling
activity for the rest of the year in Western Canada will run the
tools at close to 100% of capacity. The Canadian results were more
than offset by the underground business in the United States and
international business generated through Barbados.
Management also announces that on Friday October 27, 2000 the
Company received final receipt on a prospectus that qualifies
2,571,800 shares for distribution. The clearing of this prospectus
meets the conditions of the special warrant issue completed in
June 2000. In addition to meeting the conditions of the special
warrant issue, the prospectus also clears the proposed sale of a
minimum of 1,000,000 and a maximum of 3,000,000 common shares at a
price of $2.50 per share.
Wenzel Downhole Tools Ltd. is an Edmonton based company that
designs and distributes drilling tools for the oil and gas and
underground construction markets. Wenzel has tools operating in
most areas of the world where holes are being drilled.
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FOR FURTHER INFORMATION PLEASE CONTACT:
Wenzel Downhole Tools Ltd.
Don Barber
(403) 205-6696
(403) 265-8154 (FAX)
E-mail: investorinfo@downhole.com
Website: www.downhole.com
The Toronto Stock Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release. |
