EXHIBIT 99.1
(NATIONAL OILWELL LOGO)
NEWS CONTACT: STEVE KRABLIN
(713) 346-7773
FOR IMMEDIATE RELEASE
NATIONAL OILWELL REPORTS FIRST QUARTER EARNINGS
HOUSTON, TX, April 28, 2004--National-Oilwell, Inc. (NYSE: NOI) today announced
results for the first quarter of 2004, reporting net income of $11.0 million, or
$0.13 per diluted share, compared to fourth quarter 2003 net income of $19.5
million, or $0.23 per diluted share. Revenues were $496 million for the period
compared to fourth quarter revenues of $530 million.
Backlog of capital equipment orders increased to $412 million at March 31, 2004,
compared to $339 million at December 31, 2003. Revenues from backlog for the
first quarter were $128 million, with order additions for the period of $201
million.
PRODUCTS AND TECHNOLOGY GROUP
Revenues of $305 million in the first quarter were down $44 million
sequentially, primarily due to a decrease in capital equipment revenues realized
in the current period. Operating income fell by $21 million due to the reduction
in revenues and lower margins on the capital equipment portion.
DISTRIBUTION SERVICES GROUP
Revenues of $218 million were up $7 million sequentially, primarily due to
strength in the U.S. market. Operating income rebounded strongly from the fourth
quarter of 2003.
"Our backlog of capital equipment orders jumped sharply during the quarter to
over $400 million, which we believe is the first tangible indication of the
start in the long awaited capital equipment replacement cycle," stated Pete
Miller, Chairman, President and CEO of National Oilwell. "After more than 20
years of fleet attrition in both land and offshore markets throughout the world,
the need for new, technologically advanced equipment is building. Global demand
for oil and gas continues to grow, and new supplies will only be available by
increased drilling in areas of ever increasing difficulty. While current demand
for capital equipment continues to come mainly from international land and
offshore customers, we believe the need for updated equipment also exists in
North America.
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"We are now marketing a new, highly mobile land rig designed to compete
effectively in the North American market. Known as the Ideal Rig(TM),
capabilities include drilling to depths of up to 18,000 feet and significantly
better utilization potential for drilling contractors due to its fast rig up and
mobilization characteristics. Backed by quality guarantees associated with all
National Oilwell products, we believe this rig, priced at $6.9 million after
volume rebates, can justify the replacement of older, less efficient equipment
built in the late 1970s and early 1980s.
"Our first quarter results suffered in part due to the positive outlook that we
see. We cannot justify significantly reducing fixed costs when we clearly see a
need that is only months away. Specifically, our capital equipment revenues in
the quarter fell to $128 million. This decline is purely an issue of timing, and
is certainly not an indicator of a slowdown in future business in 2004 and
beyond. Our margins in the first quarter were hurt by the lower revenues and by
higher costs of the components used to manufacture our products. We have
addressed the latter through broad price increases beginning April 1, and by
instituting a steel price surcharge on many of our outstanding quotations. These
actions should fully restore our margins for the second half of this year.
"The actions we took in Distribution after the fourth quarter of 2003 have had
positive effects, restoring margins to respectable levels. We continue to
believe we can achieve even better operating margins and return on capital
within this group."
The Company has scheduled a conference call today at 10:00 a.m. Central Time to
discuss first 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 719-457-2642
(participant code: 647839) 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):
Quarter Ended Quarter Ended
December 31, March 31,
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2003 2004 2003
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Revenues
Products and Technology Group $ 349,045 $ 304,767 $ 335,476
Distribution Services Group 211,424 218,108 184,336
Eliminations (30,123) (26,670) (19,236)
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Total $ 530,346 $ 496,205 $ 500,576
Operating Income
Products and Technology Group $ 44,921 (1) $ 23,496 $ 41,004 (1)
Distribution Services Group (3,710) (2) 5,480 2,782 (2)
Corporate (3,204) (3,224) (3,120)
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Total $ 38,007 (1)(2) $ 25,752 $ 40,666 (1)(2)
Net Income $ 19,509 (1)(2) $ 10,964 $ 17,341 (1)(2)
Average diluted shares outstanding 85,277 85,935 84,476
Net income per diluted share $ 0.23 (1)(2) $ 0.13 $ 0.21 (1)(2)
Backlog for capital equipment at quarter end $ 339,000 $ 412,000 $ 368,000
(1) Quarterly amounts in 2003 have been restated as described in our Annual Report.
(2) Quarterly amounts in 2003 have been restated as described in our Annual Report. Q4 2003 for Distribution Services
includes charges related to a purchasing system problem for ten quarters prior to 2003 totaling $6,251.
Condensed Balance Sheet Data:
Cash and cash equivalents $ 74,217 $ 67,691
Other current assets 1,172,183 1,183,536
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Total current assets 1,246,400 1,251,227
Net property, plant and equipment 252,365 249,342
Other assets 743,971 739,630
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Total assets $ 2,242,736 $ 2,240,199
Current liabilities $ 452,215 $ 436,541
Long-term debt 593,980 585,531
Other long-term liabilities 90,364 89,517
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Total liabilities 1,136,559 1,111,589
Minority interest 15,748 15,972
Shareholders' equity 1,090,429 1,112,638
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Total liabilities and equity $ 2,242,736 $ 2,240,199
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