To all: great results
NEWS RELEASE TRANSMITTED BY CANADIAN CORPORATE NEWS
FOR: WENZEL DOWNHOLE TOOLS LTD.
ASE SYMBOL: WZL
DECEMBER 14, 1998
Wenzel Downhole Tools Announces Second Quarter Results
CALGARY, ALBERTA--Wenzel Downhole Tools Ltd. is pleased to
announce another quarter of asset, revenue and earnings growth.
Contrary to much of the industry, we continue to expand our
business volumes. Our second quarter ended November 30, 1998
confirms management's belief that this will be our best year ever.
During the six months ended November 30, 1998, revenues increased
by 72 percent to $6,814,627 from $3,958,831 for the comparable
quarter in the previous year. Net income for the six months
increased by 78 percent to $1,708,962 from $958,858. Earnings per
share increased by 50 percent to $0.06 per share from $0.04 per
share. The continued growth comes from strong penetration of
foreign markets and never-increasing share of the Canadian
drilling market.
During the second quarter the Corporation added a second shift to
reduce overtime and improve our gross margin percentage. This
adjustment resulted in a gross margin percentage of 60 percent as
compared to 54 percent for the comparable period in the prior
year. Although the gross margin percentage varies from quarter to
quarter depending upon the sales mix, management expects to
achieve an average margin of 50 percent over time. General and
administration expenses were 11 percent of gross revenues.
Management targets 10 percent as an ongoing goal.
The increased market share locally is a result of the wide
acceptance of the company's "exchange tool" concept as explained
in our business plan dated October 19, 1998. The improvement in
the international sales is a continued benefit from acquiring the
Wenzel name and product line. The Corporation has projected
continued growth into the new-year.
Actual results for the six months ended November 30, 1998 were:
/T/
1998 1997
Revenue $6,814,627 $3,958,831
Direct Costs 2,739,306 1,836,006
---------- ----------
Gross Profit $4,075,321 $2,122,825
Net after tax earnings $1,708,962 $ 958,858
Fully diluted Earnings Per Share $0.06 $0.04
/T/
Management has now completed a business plan, which summarizes the
Corporation's near and long term goals and projects our cash flows
for the year ended May 31, 1999. The plan is available by
contacting Don Barber. |
