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EXHIBIT 99.1
EVI WEATHERFORD ANNOUNCES SECOND QUARTER RESULTS
July 16, 1998, Houston, Texas - EVI Weatherford, Inc. (NYSE-EVI) today announced
income from continuing operations, excluding one-time expenses and charges
related to the merger with Weatherford Enterra, Inc., improved 38% to
$63,109,000 or $.65 per diluted share for the quarter ended June 30, 1998. The
Weatherford merger was completed on May 27, 1998 and was accounted for as a
pooling of interests. In connection with the merger, EVI Weatherford recorded a
charge of $120,000,000 before taxes ($78,000,000 or $.80 per diluted share after
tax) for merger related costs and expenses. The current quarter results compare
to income from continuing operations in the second quarter of 1997 of
$45,741,000 or $.47 per diluted share. Total revenues from continuing operations
increased by 19% to $530,833,000 for the second quarter of 1998 compared to
$445,685,000 for the similar period last year. Operating income for the second
quarter of 1998, excluding one-time Weatherford merger costs was $106,877,000, a
41% increase from the 1997 second quarter results of $75,705,000.
EVI Weatherford's Chairman and CEO, Bernard J. Duroc-Danner, commented, "Our
financial performance in the quarter demonstrated the benefits of the expanded
range of our product and service offerings, as well as the global reach and
operating discipline of our new company. The impact of the current low oil price
environment on land drilling in North America is being offset by continued
strength in offshore and international markets and our ability to size our
businesses quickly to changing activity levels elsewhere."
Income from continuing operations for the six months ended June 30, 1998,
excluding one-time Weatherford merger costs, was $124,252,000 or $1.27 per
diluted share on revenues of $1,104,293,000 compared to income from continuing
operations of $83,644,000 or $.86 per diluted share on revenues of $908,252,000
for the six months
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ended June 30, 1997. Operating income for the six months ended June 30, 1998,
excluding one-time Weatherford merger costs, was $217,477,000 versus
$142,693,000 for the six months ended June 30, 1997.
COMPLETION AND OILFIELD SERVICES
Operating income at the Company's Completion & Oilfield Services group excluding
one-time Weatherford merger costs, increased 16% to $54,806,000 on revenues of
$218,544,000 for the second quarter of 1998. The improvement in the quarter is a
result of increased sales volume in international locations coupled with reduced
costs in North America. International revenues increased by approximately $20
million from the 1997 period most notably in Europe and North Africa. The
Company currently expects that, even under existing industry conditions,
international volumes will remain consistent for the balance of the year. While
North American revenues declined by approximately $5 million from 1997 to 1998,
margins remained unchanged due to the impact of cost reduction programs
initiated during the second quarter of 1998. The Company currently expects that
North American costs should continue to decline over the balance of the year as
cost reduction programs take hold.
ARTIFICIAL LIFT SYSTEMS
Operating income at the Company's Artificial Lift Systems group excluding
one-time Weatherford merger costs, increased 62% to $14,261,000 on revenues of
$137,591,000 for the second quarter of 1998 compared to $8,787,000 on revenues
of $92,156,000 for the same period last year. The increase in revenues and
operating income is primarily due to the impact of second-half 1997 acquisitions
and strong growth in gas compression revenues, offset by reduced activity
primarily in North American oil markets. The Company has been aggressively
reducing costs in its North American operations since the beginning of the year.
The cost reductions are a result of lower activity in certain markets, as well
as planned reductions arising out of the consolidation of previously acquired
businesses.
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DRILLING PRODUCTS
Operating income at the Company's Drilling Products group excluding one-time
Weatherford merger costs, increased 69% to $44,967,000 on revenues of
$174,698,000 for the second quarter of 1998 from $26,671,000 on revenues of
$150,779,000 for the second quarter of 1997. Drill stem revenues increased 39%
and drill pipe shipments were approximately 2.9 million feet in the current
quarter. The Company expects that shipments of drill pipe in the third and
fourth quarter of this year will be consistent with those of the second quarter.
The backlog for drill stem products at June 30, 1998 was approximately $325
million, virtually unchanged from March 31, 1998 levels. Premium tubular and
subsea equipment revenues were flat from last year's second quarter as inventory
adjustments among premium distributors offset subsea equipment revenue
increases. For the balance of 1998, the Company currently expects that premium
tubular revenues should increase modestly from second quarter levels. The subsea
equipment business continues to experience strong growth. Based upon existing
backlog and new business inquiries, the Company has recently committed to
additional subsea manufacturing capacity in Europe and the Far East. The new
capacity is expected online by the middle of 1999.
MERGER COSTS
The merger related costs of $120,000,000 relate to transaction costs, product
line rationalization, facility closures, employee severance and other costs
associated with the combination of EVI, Inc. and Weatherford Enterra, Inc. After
giving effect to these costs, EVI Weatherford recorded a quarterly operating
loss and net loss of $13,123,000 and $14,891,000 or ($0.15) per diluted share,
respectively.
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
EVI Weatherford's prospects and development for its operations and the
integration of recent acquisitions, all of which are subject to certain risks,
uncertainties and assumptions. These risks and uncertainties, which are more
fully described in EVI Weatherford's
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Annual, Quarterly and Current Reports filed with the Securities and Exchange
Commission, include the impact of recent declines in the worldwide price of oil
and drilling activity on the demand and pricing of EVI Weatherford's products,
the ability to achieve the anticipated synergies and savings from the merger
with Weatherford, worldwide economic conditions, including Asia, and changing
market conditions. Should one or more of these risks or uncertainties
materialize, or should the assumptions prove incorrect, actual results may vary
in material aspects from those currently anticipated.
EVI Weatherford is an international provider of engineered products and
specialized services to the drilling, completion and production sectors of the
oil and gas industry.
Contact:
Don Galletly
Vice President
(713) 297-8466
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EVI WEATHERFORD, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In 000's Except Per Share Amounts)
Three Months Ended Six Months Ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
--------- ----------- ----------- ---------
Net Revenues:
Completion and Oilfield Services $ 218,544 $ 202,750 $ 448,306 $ 393,919
Artificial Lift Systems 137,591 92,156 290,444 179,861
Drilling Products 174,698 150,779 365,543 268,082
Divestitures -- 31,314 -- 66,390
--------- ----------- ----------- ---------
530,833 476,999 1,104,293 908,252
--------- ----------- ----------- ---------
Operating Income:
Completion and Oilfield Services 54,806 47,102 111,343 90,210
Artificial Lift Systems 14,261 8,787 30,850 17,407
Drilling Products 44,967 26,671 90,669 47,962
Divestitures -- 1,346 -- 3,879
Corporate Expenses (7,157) (8,201) (15,385) (16,765)
Merger-Related Costs (1) (120,000) -- (120,000) --
--------- ----------- ----------- ---------
(13,123) 75,705 97,477 142,693
Other Income (Expense):
Other, Net 3,961 5,260 3,334 7,438
Interest Expense (13,748) (10,603) (25,759) (21,148)
--------- ----------- ----------- ---------
Income Before Income Taxes (22,910) 70,362 75,052 128,983
Provision (Benefit) For Income Taxes (8,019) 24,621 28,800 45,339
--------- ----------- ----------- ---------
Net Income $ (14,891) $ 45,741 $ 46,252 $ 83,644
========= =========== =========== =========
Earnings Per Share:
Basic $ (0.15) $ 0.48 $ 0.48 $ 0.88
========= =========== =========== =========
Diluted $ (0.15) $ 0.47 $ 0.47 $ 0.86
========= =========== =========== =========
Weighted Average Shares Outstanding:
Basic 96,771 95,462 96,766 95,382
========= =========== =========== =========
Diluted 96,771 96,941 97,618 96,823
========= =========== =========== =========
Depreciation and Amortization:
Completion and Oilfield Services $ 22,422 $ 20,981 $ 45,044 $ 41,754
Artificial Lift Systems 10,641 7,563 21,663 14,643
Drilling Products 7,861 5,943 15,493 10,657
Divestitures -- 625 -- 1,441
Corporate 663 632 1,327 1,272
--------- ----------- ----------- ---------
$ 41,587 $ 35,744 $ 83,527 $ 69,767
========= =========== =========== =========
(1) A majority of these costs relate to parent company expenses and have not
been allocated to the segments.
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