Just finished reading (glancing at) VRC's report. Varco Announces First Quarter Results
ORANGE, Calif., April 22 /PRNewswire/ -- Varco International, Inc. (NYSE: VRC -
news) today announced results of operations for the first quarter ended March 31. Net
Income for the quarter totaled $11.7 million, $.18 per share (diluted), on Revenues of $152.2 million. For the first quarter of
1998 Net Income was $15.0 million, $.23 per share (diluted), and Revenues were $150.2 million.
Reflecting the sharp decline in worldwide drilling activity which began in 1998, incoming orders for the first quarter of 1999
totaled $72.3 million, excluding order cancellations of $15.8 million. For the comparable period of last year, incoming orders
were $299.6 million and cancellations were $13.0 million. The year-to-year decline in orders is attributable to the cessation of
new commitments to build offshore rigs, together with the overall impact of an approximate 33 per cent decline in worldwide
drilling activity. Backlog at March 31, 1999 was $272.1 million, as compared to $599.7 million one year ago, and $367.4
million at December 31, 1998. Most of the backlog is scheduled for delivery during the remainder of 1999, and as a result, the
full impact of the current industry slowdown on Varco's Revenues is not expected to occur until late 1999 or early 2000.
Set forth below are Revenues and orders for each of the Company's operating divisions for the quarters ended March 31,
1999 and 1998.
Revenues Orders
1999 1998 1999 1998
(In thousands)
Varco Systems $60,141 $53,496 $20,972 $134,730
Varco BJ 20,985 20,018 13,935 31,276
M/D Totco 13,647 23,609 12,836 31,951
Shaffer 53,735 47,212 20,344 93,555
Rigtech 3,233 5,408 4,176 8,038
Cancellations N/A N/A (15,831) (13,024)
151,741 149,743 56,432 286,526
In discussing the first quarter results, Varco's Chief Executive Officer George Boyadjieff said, ''Low oil prices continued to
have a devastating effect on our industry during the first quarter as the worldwide rig count reached its lowest level in more than
twenty-five years. Varco has been particularly affected by declining offshore rig utilization and a steep drop in the dayrates for
those rigs. The result has been less upgrading of existing rigs and an absence of new rig construction -- the two main factors
behind the growth in our business over the past three years.
''Although oil prices have increased recently as a result of the OPEC agreement to curtail production, the timing and degree of
any industry recovery remains uncertain. In the meantime we will continue to pursue the strategies that have made us successful,
emphasizing the development of products and technologies that help oil companies reduce the cost of drilling. Our strong
financial position provides the flexibility for us to pursue that strategy,'' Boyadjieff concluded.
QUARTER ENDED MARCH 31 1999 1998
(In $000's except per Share)
Revenues $152,168 $150,191
Income Before Income Taxes 18,145 22,760
Net Income 11,734 14,985
Basic Income Per Share .18 .23
Shares Used to Calculate
Basic Per Share Amounts 64,736 64,240
Diluted Income Per Share .18 .23
Shares Used to Calculate
Diluted Per Share Amounts 65,480 65,662
This press release contains forward-looking statements, which involve risks and uncertainties that may impact the Company's
results of operations. These statements include, among others, statements concerning the Company's general business
strategies, customer orders and cancellations, backlog and industry trends. See ''Cautionary Statement Pursuant to Private
Securities Litigation Reform Act of 1995'' included in Varco's 1998 Annual Report to Shareholders for a description of certain
of these risks and uncertainties.
Varco International, Inc. is a leader in the design and manufacture of drilling equipment and machinery and rig instrumentation
for oil and gas well drilling worldwide.
SOURCE: Varco International, Inc. |
