EXHIBIT 99.1
[NATIONAL OILWELL LOGO]
NEWS CONTACT: STEVE KRABLIN
(713) 346-7773
FOR IMMEDIATE RELEASE
NATIONAL OILWELL REPORTS FOURTH QUARTER AND 2003 EARNINGS
HOUSTON, TX, February 12, 2004--National-Oilwell, Inc. (NYSE: NOI) today
reported fourth quarter revenues of $530 million and net income of $14.6
million, or $0.17 per diluted share, after fourth quarter charges described
below which total $10.7 million ($0.13 per share). Full year revenues exceeded
$2 billion, and net income after the charges was $76.8 million, or $0.90 per
share.
The Company recorded an after tax charge of $6.9 million ($0.08 per share) to
correct an accumulated three-year clearing account problem within the
Distribution segment's SAP purchasing system. SAP was installed in 1999, and a
detail reconciliation problem began in the second quarter of 2000 and continued
undetected until the third quarter of 2003. Process changes have been
implemented to prevent any recurrence of this situation.
Fourth quarter results also included after tax charges to catch up depreciation
and amortization expense primarily related to finalization of purchase
accounting of $1.6 million ($0.02 per share) within the Products and Technology
Group and $0.5 million ($0.01 per share) within the Distribution Services Group.
Products and Technology also recorded a $1.7 million ($0.02 per share) after tax
charge resulting from an annual analysis of foreign pension accounting. An
analysis of the provision for income tax for 2003 determined that the proper
rate for the full year was 29%, and the fourth quarter contains a lower than
normal tax provision to reflect this full year rate.
Backlog of capital equipment orders totaled $339 million at December 31, 2003,
essentially the same as at the end of the third quarter, as revenues from
backlog of $151 million approximated new orders into backlog of $150 million.
PRODUCTS AND TECHNOLOGY GROUP
Revenues of $349 million in the fourth quarter are at a record pace, up 10% over
the third quarter of 2003 even though revenues from capital equipment were
essentially flat. Absent the charges discussed above, operating income also
improved sequentially by a similar percent.
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DISTRIBUTION SERVICES GROUP
Revenues again exceeded $200 million and were up slightly from the third quarter
of 2003. In addition to the charges discussed above, operating income declined
from the third quarter due to a number of individually small year-end
adjustments, including severance and inventory charges.
Pete Miller, president and CEO of National Oilwell, stated "Each of our business
groups, and each of the operations within a business group, achieved sequential
top line growth over the third quarter of 2003. Except for the non-cash charge
to Distribution and other normal year-end adjustments, consolidated operating
results also improved. We continue to see good demand for our capital equipment
from international markets, and we are optimistic about the prospects for 2004
and beyond. As an example of current market strength, we currently are quoting
on ten offshore premium jackups that we believe will become firm projects in
2004."
The Company has scheduled a conference call today at 10:00 a.m. Central Time to
discuss fourth quarter results. The call will be broadcast through the Investor
Relations link on National Oilwell's web site at www.natoil.com, and a replay
will be available on the site for thirty days following the conference.
Participants may also join the conference call by dialing 617-786-2962
(participant code: 78182453) five to ten minutes prior to the scheduled start
time.
National Oilwell is a worldwide leader in the design, manufacture and sale of
comprehensive systems and components used in oil and gas drilling and
production, as well as in providing supply chain integration services to the
upstream oil and gas industry.
Statements made in this press release that are forward-looking in nature are
intended to be "forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act of 1934 and may involve risks and uncertainties.
These statements may differ materially from actual future events or results.
Readers are referred to documents filed by National Oilwell with the Securities
and Exchange Commission, including the Annual Report on Form 10-K, which
identify significant risk factors which could cause actual results to differ
from those contained in the forward-looking statements.
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The following table sets forth comparative data (in thousands, except per share
data):
<Table>
<Caption>
Quarter Ended Quarter Ended Full Year Ended
September 30, December 31, December 31,
------------- --------------------------- ----------------------------
2003 2003 2002 2003 2002
------------- --------- --------- ---------- ----------
Revenues
Products and Technology Group $ 318,707 $ 349,045 $ 238,088 $1,314,692 $ 917,250
Distribution Services Group 206,947 211,424 174,194 791,964 686,174
Eliminations (27,054) (30,123) (18,641) (101,736) (81,478)
------------- --------- --------- ---------- ----------
Total $ 498,600 $ 530,346 $ 393,641 $2,004,920 $1,521,946
Operating Income
Products and Technology Group $ 42,390 $ 42,437 (1) $ 31,253 $ 165,078 (1) $ 127,011
Distribution Services Group 4,757 $ (8,475)(2) $ 4,293 $ 6,497 (2) $ 18,083
Corporate (3,306) $ (3,204) $ (3,078) $ (12,587) $ (10,771)
------------- --------- --------- ---------- ---------
Total $ 43,841 $ 30,758 $ 32,468 $ 158,988 $ 134,323
Net Income $ 22,714 $ 14,581 $ 17,167 $ 76,821 $ 73,069
Average diluted shares outstanding 85,198 85,277 81,743 84,985 81,709
Net income per diluted share $ 0.27 $ 0.17 (1)(2) $ 0.21 $ 0.90 (1)(2) $ 0.89
Backlog for capital equipment at quarter end $ 340,000 $ 339,000 $ 364,000 $ 339,000 $ 364,000
</Table>
(1) Includes $2,238 ($1,611, or $0.02 per share, after tax) charge for
depreciation and amortization relative to purchase price accounting of
acquisitions and $2,427 ($1,699, or $0.02 per share, after tax) to
adjust foreign pension expense.
(2) Includes $10,641 ($6,917, or $0.08 per share, after tax) charge to
correct purchasing system clearing account and $742 ($482, or $0.01 per
share, after tax) charge for depreciation adjustment.
Condensed Balance Sheet Data:
<Table>
<Caption>
Quarter Ended Quarter Ended
September 30, December 31,
------------- -----------------------------
2003 2003 2002
------------- ------------ ------------
Cash and cash equivalents $ 74,295 $ 74,217 $ 118,338
Other current assets 1,136,893 1,166,510 996,730
------------ ------------ ------------
Total current assets 1,211,188 1,240,727 1,115,068
Net property, plant and equipment 230,373 248,205 208,420
Other assets 713,448 731,125 645,174
------------ ------------ ------------
Total assets $ 2,155,009 $ 2,220,057 $ 1,968,662
Current liabilities $ 409,932 $ 413,580 $ 346,216
Long-term debt 571,126 610,152 594,637
Other long-term liabilities 84,676 95,755 84,841
------------ ------------ ------------
Total liabilities 1,065,734 1,119,487 1,025,694
Minority interest 13,643 15,748 9,604
Shareholders' equity 1,075,632 1,084,822 933,364
------------ ------------ ------------
Total liabilities and equity $ 2,155,009 $ 2,220,057 $ 1,968,662
</Table>
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