Maverick Tube Corporation Reports First Fiscal Quarter 1999 Results
ST. LOUIS, Jan. 19 /PRNewswire/ -- Maverick Tube Corporation (Nasdaq: MAVK - news) announced today results for the quarter ended December 31, 1998. The Company reported a net loss during the quarter of $2.4 million, or $0.15 per share, down from the profit reported in the same quarter last year of $6.6 million, or $0.42 per share. Net sales for the quarter were $41 million, down from $86 million in the prior year quarter. Included in the net loss for the quarter was a charge, which lowered net income by $0.03 per share, in order to reduce the carrying value of inventories in light of reduced pricing for the Company's products.
Total tons of the Company's energy related product lines shipped during the first fiscal quarter of 1999 declined by 58% compared to the first quarter of 1998, while product prices declined by 13%. Drilling rates in the United States during the quarter were down by 31% from the prior year quarter, due to a 49% decrease in oil related drilling and a 19% decrease in gas related drilling. Drilling decreased by 54% in Canada. Shipments of industrial products decreased by 10% compared to the same quarter last year.
Gregg Eisenberg, President and CEO said, ''Maverick's energy related business continued to decline during the first quarter. Both oil prices and natural gas prices fell, further eroding the cash flows of our end user customers and their interest in and willingness to drill at previous levels. During the quarter Maverick reduced its OCTG finished goods levels while industry wide inventory reductions reduced the demand for new OCTG by approximately 35%. Inventory reductions, coupled with the sharp decline in consumption, caused domestic OCTG industry shipments to fall by approximately 70% from the first quarter of 1998. Drilling levels have continued to decline since the end of the quarter and budgets are being reduced sharply from 1998 levels. Our hope is that the inventory adjustments can soon run their course so at least production can get back in line with shipment levels.''
Eisenberg went on to say, ''Things are moving forward in our new business of making cold drawn products. The quarter was negatively impacted by start up costs, which reduced net income by $.03 per share, but those efforts should start to contribute to earnings later in the fiscal year. Also, our industrial products business slowed a bit during the quarter as distributors pulled down their inventories, but demand for the product continued to be strong. We expect solid contributions from our industrial business in the coming months.''
Maverick Tube Corporation is a St. Louis, Mo., based manufacturer of tubular products used in the energy industry in drilling, production and surface transportation applications as well as industrial tubing products (HSS, standard pipe, and cold drawn mechanical tubing) used in various industrial applications.
This news release contains forward looking information with respect to Maverick's operations and beliefs. Actual results may differ from these forward looking statements due to numerous factors, including those discussed in Exhibit 99.1 to Maverick's Form 10-K for its fiscal year ended September 30, 1998. |
