SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 13, 2003
VARCO INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware (State or other jurisdiction of incorporation) | | 001-13309 (Commission File Number) | | 76-0252850 (I.R.S. Employer Identification No.) |
2000 W. Sam Houston Parkway South,
Suite 1700
Houston, Texas 77042
(Address of principal executive offices and zip code)
(281) 953-2200
(Registrant’s telephone number, including area code)
Item 9. Regulation FD Disclosure
The following tables set forth:
| | (1) | | Revenue and operating profit (excluding merger, transaction and litigation costs) of each business segment of Varco International, Inc. (the “Company”) for all quarterly periods in the years ended December 31, 2002 and 2001. The quarterly results have been restated to reflect recognition of revenue on bill and hold transactions upon shipment of the related product, rather than prior thereto, as discussed in Footnote 14 to the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2002 (filed with the SEC on May 21, 2003). |
| | (2) | | Reconciliations of certain restated non-GAAP financial information for the Company to the most directly comparable restated GAAP financial information for the Company for all quarterly periods in the years ended December 31, 2002 and 2001, including: |
| | • | | a reconciliation of restated operating profit excluding merger, transaction and litigation costs to restated operating profit; |
| | • | | a reconciliation of restated net income excluding merger, transaction and litigation costs to restated net income; and |
| | • | | a reconciliation of restated dilutive earnings per share excluding merger, transaction and litigation costs to restated dilutive earnings per share. |
Varco International, Inc.
Revenue and Operating Profit By Business Segment
By Quarter for the Years ended December 31, 2002 & 2001
(Unaudited)
(in thousands)
| | | 2002 | | | 2001 | |
| | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Total Year | | | First Quarter | | | Second Quarter | | | Third Quarter | | | Fourth Quarter | | | Total Year | |
| Revenue | | (restated)
| | | (restated)
| | | (restated)
| | | (restated)
| | |
| | | (restated)
| | | (restated)
| | | (restated)
| | | (restated)
| | |
| |
Drilling Equipment Sales | | $ | 110,276 | | | $ | 133,440 | | | $ | 120,344 | | | $ | 122,635 | | | $ | 486,695 | | | $ | 68,099 | | | $ | 92,372 | | | $ | 101,689 | | | $ | 133,390 | | | $ | 395,550 | |
Tubular Services | | | 75,039 | | | | 76,394 | | | | 91,339 | | | | 113,194 | | | | 355,966 | | | | 88,968 | | | | 87,835 | | | | 89,332 | | | | 86,489 | | | | 352,624 | |
Drilling Services | | | 71,252 | | | | 66,419 | | | | 69,525 | | | | 71,421 | | | | 278,617 | | | | 76,366 | | | | 78,686 | | | | 83,479 | | | | 75,740 | | | | 314,271 | |
Coiled Tubing & Wireline Products | | | 54,001 | | | | 59,800 | | | | 52,731 | | | | 47,254 | | | | 213,786 | | | | 40,924 | | | | 47,796 | | | | 53,156 | | | | 63,488 | | | | 205,364 | |
| | |
|
| |
|
|
Total | | $ | 310,568 | | | $ | 336,053 | | | $ | 333,939 | | | $ | 354,504 | | | $ | 1,335,064 | | | $ | 274,357 | | | $ | 306,689 | | | $ | 327,656 | | | $ | 359,107 | | | $ | 1,267,809 | |
| | |
|
| |
|
|
| | | | | | | | | | |
Operating Profit (1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Drilling Equipment Sales | | $ | 14,647 | | | $ | 20,881 | | | $ | 19,094 | | | $ | 17,008 | | | $ | 71,630 | | | $ | 2,858 | | | $ | 11,165 | | | $ | 9,445 | | | $ | 15,694 | | | $ | 39,162 | |
Tubular Services | | | 10,448 | | | | 11,040 | | | | 15,304 | | | | 17,613 | | | | 54,405 | | | | 18,353 | | | | 17,200 | | | | 17,466 | | | | 14,721 | | | | 67,740 | |
Drilling Services | | | 15,137 | | | | 11,652 | | | | 11,626 | | | | 12,061 | | | | 50,476 | | | | 18,200 | | | | 16,958 | | | | 19,146 | | | | 16,198 | | | | 70,502 | |
Coiled Tubing & Wireline Products | | | 9,967 | | | | 12,124 | | | | 9,187 | | | | 8,177 | | | | 39,455 | | | | 8,983 | | | | 10,948 | | | | 12,250 | | | | 12,721 | | | | 44,902 | |
Other | | | (11,474 | ) | | | (12,769 | ) | | | (14,148 | ) | | | (15,023 | ) | | | (53,414 | ) | | | (11,808 | ) | | | (12,561 | ) | | | (11,865 | ) | | | (11,446 | ) | | | (47,680 | ) |
| | |
|
| |
|
|
Total | | $ | 38,725 | | | $ | 42,928 | | | $ | 41,063 | | | $ | 39,836 | | | $ | 162,552 | | | $ | 36,586 | | | $ | 43,710 | | | $ | 46,442 | | | $ | 47,888 | | | $ | 174,626 | |
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|
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|
|
Merger, transaction and litigation costs excluded from operating profit | | $ | 2,829 | | | | — | | | $ | 2,369 | | | $ | 1,289 | | | $ | 6,487 | | | | — | | | $ | 16,500 | | | | — | | | | — | | | $ | 16,500 | |
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|
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|
|
(1) Excludes merger, transaction and litigation costs. Varco believes that reporting operating profit excluding merger, transaction and litigation costs provides useful supplemental information regarding the Company’s on-going economic performance and, therefore, uses this financial measure internally to evaluate and manage the Company’s operations. Varco has chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.
Varco International, Inc.
Impact of Excluding Merger, Transaction and Litigation Costs
Restated Operating Profit, Net Income & EPS
By Quarter for the Years ended December 31, 2002 & 2001
(Unaudited)
(in thousands)
| | | First Quarter 2002 | | Second Quarter 2002 | | Third Quarter 2002 | | Fourth Quarter 2002 |
| | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS |
| | |
| |
| |
| |
|
Restated | | $ | 35,896 | | $ | 17,287 | | $ | 0.18 | | $ | 42,928 | | $ | 21,063 | | $ | 0.22 | | $ | 38,694 | | $ | 20,052 | | $ | 0.21 | | $ | 38,547 | | $ | 21,405 | | $ | 0.22 |
Add back: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Merger, Transaction & Litigation Costs | | | 2,829 | | | 1,839 | | | 0.02 | | | — | | | — | | | — | | | 2,369 | | | 1,516 | | | 0.02 | | | 1,289 | | | 862 | | | 0.01 |
| | |
| |
| |
| |
|
Results Excluding Merger, Transaction & Litigation Costs (1) | | $ | 38,725 | | $ | 19,126 | | $ | 0.20 | | $ | 42,928 | | $ | 21,063 | | $ | 0.22 | | $ | 41,063 | | $ | 21,568 | | $ | 0.22 | | $ | 39,836 | | $ | 22,267 | | $ | 0.23 |
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| |
| |
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|
| | | | |
| | | First Quarter 2001 | | Second Quarter 2001 | | Third Quarter 2001 | | Fourth Quarter 2001 |
| | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS | | Operating
Profit | | Net
Income | | Dilutive
EPS |
| | |
| |
| |
| |
|
Restated | | $ | 36,586 | | $ | 19,089 | | $ | 0.20 | | $ | 27,210 | | $ | 12,573 | | $ | 0.13 | | $ | 46,442 | | $ | 24,968 | | $ | 0.26 | | $ | 47,888 | | $ | 26,338 | | $ | 0.27 |
Add back: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Merger, Transaction & Litigation Costs | | | — | | | — | | | — | | | 16,500 | | | 10,725 | | | 0.11 | | | — | | | — | | | — | | | — | | | — | | | — |
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| |
| |
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|
Results Excluding Merger, Transaction & Litigation Costs (1) | | $ | 36,586 | | $ | 19,089 | | $ | 0.20 | | $ | 43,710 | | $ | 23,298 | | $ | 0.24 | | $ | 46,442 | | $ | 24,968 | | $ | 0.26 | | $ | 47,888 | | $ | 26,338 | | $ | 0.27 |
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(1) Varco believes that reporting operating profit, net income and dilutive EPS excluding merger, transaction and litigation costs provides useful supplemental information regarding the Company’s on-going economic performance and, therefore, uses this financial measure internally to evaluate and manage the Company’s operations. Varco has chosen to provide this information to investors to enable them to perform more meaningful comparisons of operating results and as a means to emphasize the results of on-going operations.
Pursuant to Securities and Exchange Commission Release No. 33-8216, the Company is furnishing this information under Items 9 and 12 of Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | VARCO INTERNATIONAL, INC. |
| | | |
Date: June 13, 2003 | | | | By: | | /s/ Clay C. Williams
|
| | | | | | | Name: | | Clay C. Williams |
| | | | | | | Title: | | Vice President and Chief Financial Officer |
