NBR-----Nice Qtr!!
Nabors 4Q97 Operating Income Up 175%, Net Equals $0.37 vs $0.21
HOUSTON, Nov. 12 /PRNewswire/ -- Nabors Industries, Inc. (Amex: NBR - news) today announced that its fiscal 1997 fourth quarter operating income was $57.8 million, representing an increase of 175% over the fiscal 1996 fourth quarter's $21.0 million and a 28% increase over the third quarter of 1997. Net income for the fourth quarter also increased significantly by 113% to $42.1 million or $0.37 per share compared to $19.7 million or $0.21 per share in the prior year's fourth quarter. For fiscal 1997 operating income doubled to $154.8 million compared to $77.1 million in fiscal 1996 while net income rose 63% to $114.8 million or $1.06 per share compared to $70.5 million or $0.75 per share. Revenues for the 1997 fourth quarter and the full fiscal year were $305.6 million and $1.0 billion compared to $210.8 million and $719.7 million in the prior periods.
Net income comparisons to the prior year periods are obscured by the large increase over fiscal 1996 in the effective tax rate due to the initial recording of deferred (non-cash) U.S. federal income taxes and to a lesser extent by an increase in the number of fully diluted shares using the treasury stock method. The increase in shares results from the effects of a much higher average share price and the inclusion of the Company's convertible subordinated notes. The net income results of future reporting periods should be more directly comparable as each will reflect the effects of full tax rates and the convertible notes. The Company is also planning to change its September 30 fiscal year to a calendar year, starting January 1, 1998.
Gene Isenberg, Nabors' Chairman and Chief Executive Officer commented, ''I am particularly pleased with the substantial increase in our operating income during the year. This reflects a number of positive trends and developments in each of our businesses. Most notable is the convergence of the supply and demand for rigs on a worldwide basis. The continued attrition in the supply of quality rigs, coupled with an increase in demand, is exerting upward pressure on rig pricing which is having a correspondingly positive effect on our results. The same situation is also generating higher utilization in almost all of our operating areas. This year's results also benefited for part of the year from the contribution of several acquisitions in our U.S. Lower 48 unit and additional rigs in Canada, Sundowner, Nabors Offshore Drilling and our International unit.
''During the year we invested heavily in acquiring good operating rigs with experienced crews. We also acquired a majority of the remaining high quality stacked rigs. Our recent acquisitions of the operations of two domestic land drilling companies, Veco Drilling and Diamond L Drilling, are further illustrations of our strategy to obtain high quality going concern rig operations that add both good equipment and people to our existing market positions. All of these investments will allow us to provide our customers with additional rigs at costs well below replacement levels while generating superior returns for our shareholders. While dayrates have increased materially in most of our markets, today's rig level cash flows are approximately 20 - 25% of those that are required to achieve a reasonable return on investment for newly constructed rigs.
''Our focus on additional wellsite activities has begun to yield the expected benefits as exemplified by this year's increase in Canrig's top drive production rate which more than doubled fiscal 1996 production levels. Our acquisition of EPOCH Well Logging, Inc. during the year represents another step in our longer term focus of providing more value-added services to our customers at their wellsites.''
Nabors actively markets approximately 385 land drilling rigs worldwide. Offshore, the Company operates 25 platform rigs, six jack-ups, and two barge drilling rigs. The Company participates in most of the significant oil, gas and geothermal drilling markets in the world. Nabors also manufactures top drives and drilling instrumentation systems and provides comprehensive oilfield engineering, civil construction, logistics, facilities maintenance and project management services.
Nabors' stock is listed on the American Stock Exchange (NBR). For further information, please contact: Dennis A. Smith, 281-874-0035. To request Investor Materials, 281-775-8000 ext. 6363.
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND YEAR ENDED SEPTEMBER 30, 1997 AND 1996
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Year Ended
September 30, September 30,
1997 1996 1997 1996
Revenues:
North America $258,542 $159,551 $852,368 $532,638
International 47,090 51,199 176,935 187,105
Total revenues 305,632 210,750 1,029,303 719,743
Operating expenses:
Direct costs 210,451 160,616 737,780 539,665
General and
administrative expenses 18,115 15,299 68,616 56,862
Depreciation and
amortization 19,312 13,807 66,391 46,117
Merger expenses (A) --- --- 1,755 ---
Total operating
expenses 247,878 189,722 874,542 642,644
Operating income:
North America 51,643 17,906 134,994 61,611
International 10,522 6,029 36,103 27,848
Corporate expenses (4,411) (2,907) (14,581) (12,360)
Merger expenses (A) --- --- (1,755) ---
Total operating income 57,754 21,028 154,761 77,099
Other income (expense):
Interest expense (4,377) (4,294) (16,520) (11,884)
Interest income 365 1,758 3,422 2,695
Other income; net 12,263 4,456 40,747 13,690
Other income 8,251 1,920 27,649 4,501
Income before income
taxes 66,005 22,948 182,410 81,600
Income taxes:
Current 4,120 2,070 11,459 8,488
Deferred 19,765 1,131 56,143 2,612
Total income taxes 23,885 3,201 67,602 11,100
Net income $ 42,120 $ 19,747 $114,808 $ 70,500
Earnings per share:
Primary $ .40 $ .21 $ 1.12 $ .76
Fully Diluted (B) $ .37 $ .21 $ 1.06 $ .75
Weighted average number
of shares outstanding:
Primary 106,060 95,186 102,200 93,162
Fully Diluted (B) 117,001 95,186 113,398 93,917
(A) Merger expenses relating to the Adcor merger.
(B) Fully diluted earnings per share for the three months and the year
ended September 30, 1997, equals net income plus $1,402 and $5,606,
respectively, of after tax interest expense incurred on the 5%
$172,500 Convertible Notes, issued on May 28, 1996, divided by
weighted average common shares outstanding after giving effect to
dilutive stock options and 9,517 shares assumed to be issued on
conversion of the Company's convertible securities. The convertible
securities are not included in the fully diluted earnings per share
calculation for the three months and the year ended September 30, 1996
because inclusion would have been anti-dilutive.
SOURCE: Nabors Industries, Inc.
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