EXHIBIT 99.1
[NATIONAL OILWELL LOGO]
NEWS CONTACT: STEVE KRABLIN
(713) 346-7773
FOR IMMEDIATE RELEASE
NATIONAL OILWELL REPORTS SECOND QUARTER EARNINGS
HOUSTON, TX, July 25, 2003--National-Oilwell, Inc. (NYSE: NOI) reported net
income of $20.4 million ($0.24 per diluted share) for its second quarter ended
June 30, 2003.
Financial Results
(in millions, except per share amounts)
- ----------------------------------------------------------------------------
Three Months Ended
-----------------------------------------
6/30/2003 3/31/2003 6/30/2002
--------- --------- ---------
Revenues $475,398 $500,576 $372,390
Net Income $ 20,360 $ 19,166 $ 16,961
Diluted Earnings Per Share $ 0.24 $ 0.23 $ 0.21
Consolidated revenues were down sequentially from the first quarter by $25
million, primarily due to lower capital equipment revenues. Consolidated
operating income as a percent of revenues was essentially flat in the second
quarter compared to the first.
Backlog of capital equipment at the end of the second quarter was $366 million,
also essentially flat on a sequential basis. Revenues from capital equipment for
the quarter totaled $155 million, and incoming orders declined to $153 million
from $174 million in the prior quarter. The China Joint Venture is not included
in backlog data.
Capital spending was $7.8 million, consistent with the first quarter of the year
and approximately 90% of the second quarter depreciation and amortization
charge.
PRODUCTS AND TECHNOLOGY GROUP
Product and Technology revenues declined due to the previously mentioned decline
in capital equipment revenues. Increased revenues in downhole tools and pump
expendables offset a portion of the decline. Operating income approximated 12%
of revenues.
- more -
PAGE 2
DISTRIBUTION SERVICES GROUP
Distribution revenues increased by $5 million as strength in the United States
and outside North America offset the seasonal slowdown in Canada. Operating
income approximated 3% of revenues.
Pete Miller, President and CEO of National Oilwell, stated "We are very pleased
that net income in the second quarter improved sequentially and year over year.
Based on the marketplace trends that we are seeing, we believe that we will
achieve further improvement in net income during each of the next two quarters.
"Many of our businesses benefit disproportionately from drilling activity in the
Gulf of Mexico which remained flat in the second quarter. We continue to see
indications of improvement in this market that should translate into increased
future revenues from this area. While capital equipment orders in the quarter
were down sequentially, the likely sustainability of the order flow actually
improved as, unlike the first quarter, there were no new large projects added to
the backlog. We experienced broad demand for all types of equipment, with
continued emphasis from the offshore and international land markets."
The Company has scheduled a conference call today at 10:00 a.m. Central Time to
discuss second 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 seven days following the conference.
Participants may also join the conference call by dialing 913-981-5530
(identification code: 211469) 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.
- more -
PAGE 3
The following table sets forth comparative data (in thousands, except per share
data):
Quarter Ended QUARTER ENDED SIX MONTHS ENDED
March 31, JUNE 30, JUNE 30,
----------- ----------------------------- ---------------------------
2003 2003 2002 2003 2002
----------- ----------- --------- --------- ---------
Revenues
Products and Technology Group $ 335,476 $ 311,464 $ 224,823 $ 646,940 $ 466,095
Distribution Services Group 184,336 189,257 168,835 373,593 336,364
Eliminations (19,236) (25,323) (21,268) (44,559) (41,083)
----------- ----------- --------- --------- ---------
Total $ 500,576 $ 475,398 $ 372,390 $ 975,974 $ 761,376
Operating Income
Products and Technology Group $ 41,832 $ 38,419 $ 30,067 $ 80,251 $ 65,517
Distribution Services Group 4,716 5,499 4,714 10,215 9,282
Corporate (3,120) (2,957) (2,544) (6,077) (4,846)
----------- ----------- --------- --------- ---------
Total $ 43,428 $ 40,961 $ 32,237 $ 84,389 $ 69,953
Net Income $ 19,166 $ 20,360 $ 16,961 $ 39,526 $ 38,146
Average diluted shares outstanding 84,476 84,990 81,985 84,733 81,785
Net income per diluted share $ 0.23 $ 0.24 $ 0.21 $ 0.47 $ 0.47
Backlog for capital equipment at quarter end $ 368,000 $ 366,000 $ 278,000 $ 366,000 $ 278,000
Condensed Balance Sheet Data:
Cash and cash equivalents $ 65,361 $ 62,153
Other current assets 1,083,769 1,097,553
----------- -----------
Total current assets 1,149,130 1,159,706
Net property, plant and equipment 240,451 236,464
Other assets 695,041 705,398
----------- -----------
Total assets $ 2,084,622 $ 2,101,568
Current liabilities $ 369,178 $ 347,396
Long-term debt 603,043 606,937
Other long-term liabilities 89,704 86,899
----------- -----------
Total liabilities 1,061,925 1,041,232
Minority interest 11,530 12,641
Shareholders' equity 1,011,167 1,047,695
----------- -----------
Total liabilities and equity $ 2,084,622 $ 2,101,568
# # # # #