Core Laboratories Earns $0.24 Per Diluted Share From Continuing
Operations for Second Quarter 1998
HOUSTON, July 30 /PRNewswire/ -- Core Laboratories (NYSE: CLB - news) announced that its continuing operations
earned $0.24 per diluted share during the second quarter of 1998, an increase of over 41% compared to last year's results of
$0.17 per diluted share for the same quarter. Increased demand for production related services and increases in operating
margins from continuing operations were primarily responsible for the significant increase in operational earnings. Revenues
from continuing operations for the second quarter increased 16% to $59,069,000 from $51,028,000, while operating margins
for the quarter reached 17% compared to 13% recorded in the year earlier period. Year over year six month revenues from
continuing operations increased 51% to $116,504,000 while earnings per share from continuing operations increased more
than 60% to $0.41 per diluted share from $0.25. Operating margins for the first six months expanded to over 15% from under
13% for the same year-ago period. For six months ended June 1998, income from continuing operations increased 87% to
$10,565,000 from $5,663,000 in 1997.
As previously disclosed in the Company's most recent 10Q filing of 8 May, 1998, Core has taken a one-time charge for the 6
April, 1998 sale of its packaged analyzer units. The charge associated with these discontinued product lines totaled
$3,374,000 or $0.13 per diluted share. Core sold these business units to focus on its more rapidly growing and higher margin
reservoir optimization services. The improvement in second quarter 1998 operating results shows the immediate positive
impact of these dispositions.
Second quarter net income, after the charge, was $2,721,000 yielding $0.11 per diluted share. For the first six months of
1998, net income grew 29% to $6,974,000 from $5,404,000 even after factoring in the one-time charge. Diluted net income
per share for the six months ended June 1998 increased over 12% to $0.27 from $0.24 in 1997 after taking the one time
charge into account.
''We are very pleased with the continued execution of our business strategy which revolves around providing reservoir
description, production enhancement and reservoir optimization services,'' said President and CEO David M. Demshur. ''The
divestment of slower growth, lower margin businesses enables Core management to focus on internal development of new
technology and leveraging these new services throughout our worldwide network. We also will continue to acquire companies
with superior and unique technologies that expand our platform of reservoir optimization services. Our success is directly tied
to providing proprietary technologies that enable oil companies to produce the incremental barrel of oil which has a cost basis
much lower than the finding costs of a new barrel,'' Demshur added.
During the second quarter, more than 80 percent of the Company's petroleum services revenues were derived from production
projects such as large international offshore projects related to production enhancement and reservoir optimization of existing
fields. Core experienced increased demand for dynamic flow tests related to water, miscible gas and CO2 field floods and
from reservoir pressure maintenance projects. Proprietary services related to reducing formation damage and maximizing the
effectiveness of wellbore stimulations were provided in increased numbers and from more worldwide locations. The Company
expects the percentage of revenues from its production related service lines to increase further for the remainder of 1998.
Moreover, revenues from characterizing the phase behavior relationships of reservoir fluids is expected to also increase during
the last two quarters of 1998. During the second quarter of 1998, Core generated slightly more service revenues from
reservoir fluid projects than from petrophysical services. Operating margins from the Company's reservoir fluid related services
tend to be slightly higher than those of its petrophysical services.
Core closed its purchase of all the outstanding shares of Owen Oil Tools (''Owen''), a privately held Fort Worth, Texas
company, on 30 June, 1998. Owen is the world's largest independent provider of technically advanced well perforating
systems. The Owen transaction will be recorded using the purchase accounting method. Therefore, Owens' revenues and
earnings will be included in Core's financial results beginning in the third quarter of 1998. The Company also recently
announced its intentions to purchase the remaining 50 percent of Jaex S.A. de C.V. shares not already acquired through its
purchase of Owen. In addition, Core announced its plans to acquire Petrak, a Swiss-based company providing crude-oil
characterization services in West Africa and the former Soviet Union, and to acquire Integra Geoservices Inc., a Calgary
based company providing geophysical based reservoir description and reservoir optimization services.
''Core is currently ahead of our business plan for operating margin expansion which enabled us to post much better than
expected earnings from our ongoing operations,'' said CFO Richard L. Bergmark. ''Although the industry continues to operate
in a lower- priced commodity environment, demand for production enhancement and reservoir optimization services remains
robust. Oil companies view expenditures with Core as investments rather than costs,'' Bergmark explained.
The Company listed its shares with the New York Stock Exchange and began trading under the symbol CLB on 10 July,
1998. ''Listing our shares on the NYSE was a natural progression for Core,'' said Board member Joseph R. Perna. ''Being
listed on the most recognized and most liquid market in the world will be useful to our ongoing global acquisition strategy.
International investors and management teams are more comfortable holding NYSE shares, and that should create additional
opportunities for Core,'' Perna said in closing. |
