For whomever might be interested: Smith International, Inc. Reports First Quarter Earnings
HOUSTON, April 20 /PRNewswire/ -- Smith International, Inc. (NYSE, PSE: SII - news) today announced first quarter
earnings of $28.8 million, or 72 cents per share on a diluted basis, compared with net income of $21.1 million, or 53 cents
per share on a diluted basis, in the first quarter of 1997. The Company reported revenues of $423.4 million for the first
quarter of 1998, an 18 percent increase over the revenues for the first quarter of 1997. Revenues grew in all geographic
areas with particularly strong growth reported in the U.S., Canada and Latin America. Each business unit reported higher
revenues and earnings compared to the prior year quarter due to a combination of increased activity levels, market
penetration and the impact of acquired operations. Excluding the impact of revenues from acquisitions, revenues increased
12 percent over the first quarter of 1997.
Revenues for the M-I Fluids unit increased 12 percent over the comparable quarter of the prior year to $230.2 million. The
majority of the revenue growth was reported in Latin America, Canada and the U.S. The impact of acquired operations,
including Fleming Oilfield Services, and higher activity levels in the U.S. contributed to the revenue increase. Excluding the
impact of acquisitions, Fluids' revenues grew by 7 percent over the first quarter of 1997.
M-I SWACO reported revenues of $36.7 million, a 33 percent increase over the first quarter of 1997. The majority of the
revenue increase was reported in the U.S. which benefited from an alliance contract and incremental revenues associated
with the acquisition of DSR Companies finalized in the fourth quarter of 1997. Excluding the impact of acquisitions,
SWACO's revenues grew by 16 percent over the first quarter of 1997.
Smith Tool's revenues were $67.2 million for the first quarter, an increase of 15 percent over the comparable quarter of the
prior year. Revenue growth arose from increased sales of premium bits, higher Canadian activity and general market
penetration. Excluding mining bits, petroleum three-cone bit revenues grew by 19 percent over the first quarter of 1997.
Smith Diamond Technology reported revenues of $23.7 million, a 33 percent increase over the first quarter of the prior year.
Increased activity in the U.S. combined with increased sales in Europe/Africa and the Far East accounted for the majority of
the quarter-to-quarter revenue increase. On a combined basis, revenues for petroleum three-cone bits (excluding mining bits)
and diamond bits grew 23 percent over the prior year quarter.
Smith Drilling and Completions' revenues increased 37 percent over the first quarter of the prior year to $65.6 million. Over
70 percent of the revenue increase was reported in the U.S. and Latin America. The revenue growth related to the impact of
acquisitions and strong demand for drilling and remedial products and services. Excluding revenues from acquisitions,
revenues increased approximately 18 percent over the first quarter of 1997.
Commenting on the results, Chairman and CEO, Doug Rock stated, ''Despite lower oil prices, our people continue to
deliver more value to our customers and shareholders. Our high technology content business strategy is even more important
today because of our customers' need to reduce costs in a lower energy price environment.''
Loren Carroll, Executive Vice President also noted that, ''Key performance measures in the first quarter of 1998 compared
to the first quarter of 1997 continue to improve. The earnings increase of 36 percent was double the revenue percentage
increase of 18 percent. Operating margins improved to 15.3 percent of revenues compared to 12.6 percent for the first
quarter of 1997 and operating cash flow also continues to improve. Operating cash flow consisting of earnings before
interest, taxes and minority interests plus depreciation and amortization, after reduction for the effect of minority interests,
totaled $62.8 million, or $1.56 per share, for the first quarter of 1998 which is a 48 percent increase over the $42.6 million
reported in the first quarter of 1997.''
Smith International, Inc. is a leading worldwide supplier of premium products and services to the oil and gas exploration and
production industry through its five principal business units -- M-I Fluids, M-I SWACO, Smith Tool, Smith Diamond
Technology and Smith Drilling & Completions.
SMITH INTERNATIONAL, INC.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
March 31,
1998 1997
(Unaudited)
Revenues $423,441 $357,484
Costs and expenses:
Costs of revenues 269,320 236,219
Selling expenses 69,879 56,287
General and administrative
expenses 19,623 19,953
Total costs and expenses 358,822 312,459
Earnings before interest
and taxes 64,619 45,025
Interest expense, net 7,803 5,234
Income before income taxes and
minority interests 56,816 39,791
Income tax provision 16,967 9,967
Income before minority interests 39,849 29,824
Minority interests 11,088 8,711
Net income $ 28,761 $ 21,113
Earnings per share:
Basic $ 0.72 $ 0.53
Diluted $ 0.72 $ 0.53
Weighted average shares outstanding:
Basic 39,672 39,539
Diluted 40,153 40,068
OTHER DATA:
Depreciation and Amortization $ 13,394 $ 9,166
Capital Spending (a) $ 25,150 $ 14,708
EBIT excluding minority
interests (b) $ 51,867 $ 34,927
EBITDA excluding minority
interests (b) $ 62,798 $ 42,569
NOTE (a):
Capital spending is reported gross and not reduced for the proceeds
arising on lost-in-hole sales or sales of fixed asset equipment replaced.
The net capital spending was approximately $23.4 million and $13.2 million
for the first quarter of 1998 and 1997, respectively.
NOTE (b):
"Earnings before interest and taxes (EBIT) excluding minority interests"
and "Earnings before interest, taxes, depreciation and amortization
(EBITDA) excluding minority interests" represent the amount of EBIT and
EBITDA earned by the Company after reduction for the portion of the
respective amounts allocable to the minority interest ownership in M-I
L.L.C.
SMITH INTERNATIONAL, INC.
Revenue Analysis
(In thousands)
Three Months Ended
March 31,
1998 1997
(Unaudited)
M-I -- Fluids $230,228 $206,101
M-I -- SWACO 36,693 27,538
Smith Tool 67,213 58,242
Smith Diamond Technology 23,674 17,865
Smith Drilling & Completions 65,633 47,738
Total $423,441 $357,484 |
