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EXHIBIT 99.1
WEATHERFORD REPORTS RESULTS FOR
THE 1998 FOURTH QUARTER AND FULL YEAR
HOUSTON, February 18, 1999 - Weatherford International, Inc. (NYSE:WFT) today
announced 1998 fourth quarter income from continuing operations before special
charges of $24.6 million, or $0.25 per diluted share, on revenues of $426.8
million. These results compared to income from continuing operations of $59.4
million, or $0.60 per diluted share, on revenues of $551.1 million for the
fourth quarter of 1997. Including a special charge of $75.0 million ($48.8
million or $0.50 per diluted share after-tax) the Company reported a net loss
from continuing operations in the quarter of $24.2 million, or $0.25 per diluted
share. Operating income for the fourth quarter of 1998 was $45.9 million before
special charges versus $101.0 million for the fourth quarter of 1997.
Bernard J. Duroc-Danner, Weatherford Chairman and CEO, commented, "The second
half of 1998 turned out to be very different than the first. Continuing weakness
in emerging markets and the effect that weakness has had on energy demand and
oil and gas pricing resulted in a sharp drop in customer spending. For 1999, we
expect the same fundamentals to prevail and have adjusted our businesses
accordingly. We are continuing, however, to lay the seeds for future growth,
investing in products, technologies and markets where there are significant
opportunities for Weatherford to expand and grow."
For the year ended December 31, 1998 the Company reported net income of $191.6
million or $1.96 per diluted share before special charges on revenues of $2.0
billion. This result compared with net income of $187.8 million or $1.92 per
diluted share on revenues of $2.0 billion for the year ended December 31, 1997.
In 1998, special charges net of tax totalling $126.7 million, or $1.30 per
diluted share were recorded in the second and fourth quarters.
COMPLETION AND OILFIELD SERVICES
Operating income for the Completion and Oilfield Services division was $26.5
million in the current quarter, down from $62.0 million in the fourth quarter of
1997. The decrease occurred entirely in North America where the average rig
count dropped 38% from year to year. The
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decrease in North American results was partially offset by an increase in
international revenues, specifically in Europe, North Africa and the Middle
East. Since last fall, the division has undertaken targeted cost reduction
initiatives to adjust its North American operations to the reduced levels of
activity. In addition, several acquisitions and a joint venture have been
completed to position the division for growth opportunities in intelligent
completion, re-entry and underbalanced drilling markets.
COMPRESSION SERVICES
The Compression Services division reported operating income of $5.0 million in
the quarter versus $3.9 million in the prior year's quarter. The improvement
reflected strong compression fleet utilization and the impact of a manufacturing
cost reduction program.
Subsequent to the close of the fourth quarter, Weatherford announced a major new
compression services joint venture. Weatherford Compression Services joined with
GE Capital's Global Compression Services to form Weatherford Global Compression
Services. With a compression fleet of 1.0 million horsepower, Weatherford Global
is one of the largest compression services companies in the world. It is poised
for significant expansion both in North American and international markets
through Weatherford's more than 320 locations worldwide.
Weatherford owns 64% of the new joint venture.
ARTIFICIAL LIFT SYSTEMS
The Artificial Lift Systems division reported an operating loss of $1.9 million
in the fourth quarter of 1998 versus income of $6.2 million in the fourth
quarter of 1997. The decline reflected the division's historical reliance on
North American oil markets, which have been particularly hard hit by low oil
prices. While implementing an aggressive cost reduction program, the division
has been focusing on a strategic R&D program and growth in overseas markets.
Recently, Weatherford Artificial Lift Systems received two important project
awards, one in Argentina for YPF and the other in Venezuela for Mobil's Cerro
Negro project.
DRILLING PRODUCTS
Operating income at the Company's Drilling Products division decreased to $22.6
million in the fourth quarter of 1998 versus $38.3 million in the fourth quarter
of 1997. The decrease in operating income from 1997 to 1998 was due to a
significant drop in premium tubular revenues representing low distributor
reorder activity. Quarterly drill stem revenues remained essentially
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flat from 1997 to 1998 as a 10% drop in drill stem volume was offset by the
positive impact of product mix on prices.
SPECIAL CHARGES
In the fourth quarter, Weatherford recorded a special charge of $75.0 million
for asset dispositions, obsolete inventory and severance charges. On an
after-tax basis, the special charge was $48.8 million or $0.50 per diluted
share.
In 1998, Weatherford initiated cost reduction programs that resulted in
market-related headcount reductions of approximately 3,300 people, or 25% of its
workforce. In addition, the Company consolidated four manufacturing facilities
and more than 90 service locations, principally in North America.
Houston-based Weatherford International, Inc. is one of the world's largest
providers of engineered products and services to the drilling and production
segments of the oil and gas industry.
# # #
Contact:
Don Galletly
(713) 297-8466
This press release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 concerning, among other
things, Weatherford's prospects 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
Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed
with the Securities and Exchange Commission, include the impact of oil and
natural gas prices and worldwide economic conditions on drilling activity, the
demand and pricing of Weatherford's products, as well as the ability to achieve
the anticipated synergies and savings from the recent merger between EVI, Inc.
and Weatherford Enterra, Inc. 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.
WEATHERFORD INTERNATIONAL, INC.
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5 Post Oak Park, Suite 1760
Houston, Texas 77027-3415 713/297-8400
713-297-8416 Fax
www.weatherford.com
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WEATHERFORD INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In 000's Except Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------------------- --------------------------------
1998 1997 1998 1997
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Net Revenues:
Completion and Oilfield Services $ 192,545 $ 235,726 $ 848,219 $ 852,149
Compression Services 44,675 49,498 177,481 178,897
Artificial Lift Systems 61,630 90,353 329,196 249,476
Drilling Products 127,997 175,542 655,758 611,715
Divestitures -- -- -- 76,852
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426,847 551,119 2,010,654 1,969,089
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Operating Income (Loss):
Completion and Oilfield Services 26,470 62,048 180,476 210,818
Compression Services 4,990 3,894 18,592 14,774
Artificial Lift Systems (1,940) 6,248 21,577 22,792
Drilling Products 22,551 38,292 150,383 120,830
Divestitures -- -- -- 4,594
Corporate Expenses (6,158) (9,466) (26,980) (37,816)
Merger Costs and Other Charges (75,000) -- (195,000) --
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(29,087) 101,016 149,048 335,992
Other Income (Expense):
Other, Net 1,661 4,178 4,837 12,242
Interest Expense (14,015) (12,000) (54,497) (43,273)
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Income (Loss) Before Income Taxes (41,441) 93,194 99,388 304,961
Provision (Benefit) For Income Taxes (17,272) 33,791 34,551 108,188
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Income (Loss) From Continuing Operations (24,169) 59,403 64,837 196,773
Extraordinary Charge, Net of Taxes -- (9,010) -- (9,010)
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Net Income (Loss) $ (24,169) $ 50,393 $ 64,837 $ 187,763
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Basic Earnings (Loss) Per Share:
Income (Loss) From Continuing Operations $ (0.25) $ 0.61 $ 0.67 $ 2.04
Extraordinary Charge -- (0.09) -- (0.09)
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Net Income (Loss) $ (0.25) $ 0.52 $ 0.67 $ 1.95
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Basic Weighted Average Shares Outstanding 97,340 97,084 97,065 96,052
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Diluted Earnings (Loss) Per Share:
Income (Loss) From Continuing Operations $ (0.25) $ 0.60 $ 0.66 $ 2.01
Extraordinary Charge -- (0.09) -- (0.09)
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Net Income (Loss) $ (0.25) $ 0.51 $ 0.66 $ 1.92
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Diluted Weighted Average Shares Outstanding 97,340 98,526 97,757 97,562
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Depreciation and Amortization:
Completion and Oilfield Services $ 25,857 $ 21,626 $ 94,718 $ 84,597
Compression Services 4,987 5,598 23,079 21,666
Artificial Lift Systems 4,872 2,788 19,183 8,944
Drilling Products 8,909 6,296 31,951 23,610
Divestitures -- -- -- 1,541
Corporate 254 653 1,801 2,573
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$ 44,879 $ 36,961 $ 170,732 $ 142,931
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