EXHIBIT 99.1
ALLIS-CHALMERS CORPORATION ANNOUNCES THIRD QUARTER EARNINGS, AND THE RESULTS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2003
HOUSTON--(PRNEWSWIRE/FIRST CALL via COMTEX)--November 20, 2003--Allis-Chalmers
Corporation (OTC: ACLM.OB) today announced earnings for the third quarter of
2003.
Results for the Third Quarter Ended September 30, 2003.
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The Company announced that revenues for the three months ended
September 30, 2003 increased to $8,089,000 compared to $4,775,000 in the
comparable period of 2002. Revenues for the three months ended September 30,
2003 for the Casing, Directional Drilling, and Compressed Air Drilling Services
segments were $2,559,000, $3,353,000 and $2,177,000, respectively. Revenues for
the three months ended September 30, 2002 for the Casing, Directional Drilling
and Compressed Air Drilling Services were $2,197,000, $1,785,000 and $793,000,
respectively. Revenues for the third quarter of 2003 increased over the third
quarter of 2002 due to the increased activity in the drilling market in Mexico
and increased market share in the domestic market Casing, Directional Drilling
and Compressed Air Drilling Services. The consolidation of the operating results
of the joint venture between Mountain Air and M-I Air Drilling into the
financial statements of AirComp LLC and the Company also increased revenues in
the quarter.
The Company had operating income for the period of $727,000 compared to
an operating loss of ($680,000) in the third quarter of 2002. Operating income
(loss) for the three months ended September 30, 2003 for the Casing, Directional
Drilling, Compressed Air Drilling Services and General Corporate segments were
$913,000, $120,000, $171,000 and ($477,000), respectively. Operating income
(loss) for the three months ended September 30, 2002 for the Casing, Directional
Drilling, Compressed Air Drilling Services and General Corporate segments were
$749,000, ($44,000), ($269,000) and ($1,116,000), respectively.
The Company had net income of $1,224,000, or $0.06 per common share,
for the third quarter of 2003 compared with a loss of ($1,205,000), or ($0.08)
per common share, for the third quarter of 2002. The Company recorded a one-time
gain of $1,034,000 on the reduction of the note payable in the third quarter of
2003 as a result of settling a lawsuit against the former owners of Mountain Air
Drilling Service Company. The gain was calculated by discounting the note
payable to $1,469,152 using a present value calculation and accreting the note
payable to $1,863,195, the amount due in September 2007. The Company will record
interest expense totaling $394,043 over the life of the note payable beginning
July 2003.
Results for the Nine Months Ended September 30, 2003.
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The Company had revenues for the nine months ended September 30, 2003
of $22,428,000 compared to $12,265,000 in the comparable period of 2002.
Revenues for the nine months ended September 30, 2003 for the Casing,
Directional Drilling, and Compressed Air Drilling Services segments were
$7,712,000, $10,336,000 and $4,380,000, respectively. Revenues for the nine
months ended September 30, 2002 for the Casing, Directional Drilling and
Compressed Air Drilling Services were $5,445,000, $4,058,000 and $2,762,000,
respectively. Revenues for the nine months ended September 30, 2003 increased
over the same period of 2002 due to the increased activity in the drilling
market in Mexico and increased market share in the domestic operations of
Casing, Directional Drilling and Compressed Air Drilling Services. The joint
venture between Mountain Air and M-I Air Drilling and the consolidation of the
results of operations of AirComp into the financial statements of the Company
and the fact that our 2002 operations included only eight months of the
operations of Strata Directional Technologies, Inc. and Jens' Oilfield Service,
Inc., which were acquired effective February 6, 2002 reflected the increased
revenues in 2003 over the same period in the prior year.
The Company had operating income for the nine months ended September
30, 2003 of $2,457,000 compared to an operating loss of ($1,205,000) for the
nine months ended September 30, 2002. Operating income (loss) for the nine
months ended September 30, 2003 for the Casing, Directional Drilling, Compressed
Air Drilling Services and General Corporate segments were $3,070,000, $613,000,
($52,000) and ($1,278,000), respectively. Operating income (loss) for the nine
months ended September 30, 2002 for the Casing, Directional Drilling, Compressed
Air Drilling Services and General Corporate segments were $1,707,000,
($187,000), ($716,000) and ($2,009,000), respectively.
The Company had net income of $624,000, or $0.03 per common share, for
the nine months ended September 30, 2003 compared with a loss of ($3,247,000),
or ($0.18) per common share, for the nine months ended September 30, 2002. The
Company recorded a one-time gain of $1,034,000 on the reduction of the note
payable in the third quarter of 2003 as a result of settling a lawsuit against
the former owners of Mountain Air Drilling Service Company. The gain was
calculated by discounting the note payable to $1,469,152 using a present value
calculation and accreting the note payable to $1,863,195, the amount due in
September 2007. The Company will record interest expense totaling $394,043 over
the life of the note payable beginning July 2003.
Munawar H. Hidayatallah, the Company's Chairman and Chief Executive
Officer stated, "We are extremely proud of the dramatic turnaround at
Allis-Chalmers Corporation. The Company executed its strategic objectives
successfully including the formation of AirComp LLC, a joint venture between
Mountain Compressed Air and the Air Compressor Division of MI Fluids, which in
turn is a joint venture between Smith International and Schlumberger. The
successful implementation of the Company's business plan was due to the
dedication and commitment of the management team. Jens Mortensen has been
appointed Chief Executive Officer of Jens' Oilfield Services, Inc. and retains
the position of President and Chief Operating Officer of Allis-Chalmers
Corporation; Dave Wilde has been appointed as President, Chief Executive Officer
and a member of the Board of Directors of Strata Directional Technology, Inc.;
and Todd Seward will continue in his current position as Chief Accounting
Officer of Allis- Chalmers Corporation."
About Allis-Chalmers Corporation
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Allis-Chalmers Corporation provides a variety of products and services
to the oil and natural gas drilling industry through its subsidiaries Jens'
Oilfield Service, Inc., which supplies highly specialized equipment and
operations to install casing and production tubing required to drill and
complete oil and gas wells, Strata Directional Technology, Inc., which provides
high-end directional and horizontal drilling services for specific targeted
reservoirs that cannot be reached vertically, and its joint venture, AirComp LLC
which provides air drilling services to natural gas exploration operations.
Forward Looking Statements
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This Press Release contains forward-looking statements (within the
meaning of Section 27A of the Securities Act of 1933 (the "Securities Act") and
Section 21E of the Securities Exchange Act of 1934) regarding Allis-Chalmers
Corporation's business, financial condition, results of operations and
prospects. Words such as expects, anticipates, intends, plans, believes, seeks,
estimates and similar expressions or variations of such words are intended to
identify forward-looking statements, but are not the exclusive means of
identifying forward-looking statements in this Press Release.
Although forward-looking statements in this Press Release reflect the
good faith judgment of management, such statements can only be based on facts
and factors currently known to management. Consequently, forward-looking
statements are inherently subject to risks and uncertainties, and actual results
and outcomes may differ materially from the results and outcomes discussed in
the forward-looking statements. Factors that could cause or contribute to such
differences in results and outcomes include, but are not limited to demand for
oil and natural gas drilling services in the areas and markets in which the
Company operates, competition, obsolescence of products and services, the
Company's ability to obtain financing to support its operations, environmental
and other casualty risks, and the impact of government regulation. Further
information about the risks and uncertainties that may impact the Company are
set forth in the Company's most recent filings on Form 10K (including without
limitation in the "Risk Factors" Section) and Form 10-Q, and in the Company's
other SEC filings and publicly available documents. Readers are urged not to
place undue reliance on these forward-looking statements, which speak only as of
the date of this Press Release. The Company undertakes no obligation to revise
or update any forward-looking statements in order to reflect any event or
circumstance that may arise after the date of this Press Release.
ALLIS-CHALMERS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share)
Three Months Ended Nine Months Ended
September 30, September 30,
2003 2002 2003 2002
--------- --------- --------- ---------
(in thousands, except per share)
Sales $ 8,089 $ 4,775 $ 22,428 $ 12,265
Cost of sales 6,011 3,841 16,212 10,046
--------- --------- --------- ---------
Gross Margin 2,078 934 6,216 2,219
Marketing and administrative expense 1,351 886 3,759 2,696
Corporate reorganization costs -- 495 -- 495
Abandoned acquisition/private placement costs -- 233 -- 233
--------- --------- --------- ---------
Income/ (loss) from operations 727 (680) 2,457 (1,205)
Other Income (expense)
Interest expense (521) (558) (1,797) (1,581)
Minority interest (26) (105) (337) (145)
Factoring costs on note receivable -- (191) -- (191)
Settlement of lawsuit 1,034 -- 1,034 --
Other 10 29 (164) 107
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Net income/(loss) before income taxes 1,224 (1,505) 1,193 (3,015)
--------- --------- --------- ---------
Provision for income taxes -- -- -- --
--------- --------- --------- ---------
Net income/ (loss) 1,224 (1,505) 1,193 (3,015)
--------- --------- --------- ---------
Preferred stock dividend (88) (87) (569) (232)
--------- --------- --------- ---------
Net income/ (loss) attributed to common shares $ 1,136 $ (1,592) $ 624 $ (3,247)
========= ========= ========= =========
Net income/ (loss) per common share, basic $ 0.06 $ (0.08) $ 0.03 $ (0.18)
========= ========= ========= =========
Net income/ (loss) per common share, diluted $ 0.04 $ (0.08) $ 0.02 $ (0.18)
========= ========= ========= =========
Weighted average number of common shares
outstanding
Basic 19,633 19.633 19,633 18,506
========= ========= ========= =========
Diluted 31,700 19,633 31,700 18,506
========= ========= ========= =========
This interim statement is unaudited.
ALLIS-CHALMERS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except shares)
September 30, December 31,
2003 2002
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Assets
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Cash and cash equivalents $ 120 $ 146
Trade receivables, net 7,291 4,409
Lease deposit -- 525
Lease receivable, current 180 180
Prepaid and other current assets 1,357 317
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Total current assets 8,948 5,577
Property, plant and equipment, net 27,144 17,124
Goodwill 7,829 7,829
Other intangible assets, net 2,254 2,650
Debt issuance costs, net 554 515
Lease receivable 936 1,042
Other assets 6 41
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Total assets $ 47,671 $ 34,778
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Liabilities and Shareholders' Equity
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Current maturities of long-term debt $ 3,278 $ 13,890
Trade accounts payable 4,844 2,106
Accrued employee benefits and payroll taxes 405 280
Accrued interest 547 811
Accrued expenses 1,183 1,506
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Total current liabilities 10,257 18,593
Accrued postretirement benefit obligations 635 670
Long-term debt, less current portion 24,861 7,331
Other long-term liabilities 270 270
Redeemable warrants 1,500 1,500
Redeemable convertible preferred stock 4,390 3,821
Minority interest 2,503 1,584
Common shareholders' equity:
Common stock, $.15 par value (110,000,000 shares authorized;
19,633,340 issued and outstanding at September 30, 2003 and
December 31, 2002) 2,945 2,945
Capital in excess of par value 8,285 7,237
Accumulated (deficit) (7,975) (9,173)
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Total shareholders' equity 3,255 1,009
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Total liabilities and shareholders' equity $ 47,671 $ 34,778
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This interim statement is unaudited.
ALLIS-CHALMERS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Nine Months Ended
September 30,
2003 2002
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Cash flows from operating activities:
Net income (loss) $ 1,193 $(3,015)
Adjustments to reconcile net (loss) to net
cash provided (used) by operating activities:
Depreciation and amortization expense 2,050 1,755
(Gain) loss on settlement of lawsuit (1,034) --
Amortization of discount on debt 442 200
Minority interest in income of subsidiary 337 145
Changes in working capital:
Decrease (increase) in accounts receivable (2,882) 304
Decrease (increase) in due from related party -- 51
Decrease (increase) in other current assets (1,040) 910
Decrease (increase) in other assets 35 925
Decrease (increase) in lease deposit 525 --
Decrease (increase) in lease receivable 106 --
(Decrease) increase in accounts payable 2,738 863
(Decrease) increase in accrued interest (264) 125
(Decrease) increase in accrued expenses (323) (914)
(Decrease) increase in other long-term liabilities -- (124)
(Decrease) increase in accrued employee benefits and payroll taxes 90 (784)
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Net cash provided by operating activities 1,973 441
Cash flows from investing activities:
Acquisition of Jens, net of cash acquired -- (7,762)
Acquisition of Strata, net of cash acquired -- (373)
Purchase of equipment (4,386) (250)
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Net cash (used) by investing activities (4,386) (8,385)
Cash flows from financing activities:
Proceeds from issuance of long-term debt 9,616 8,657
Repayments of long-term debt (6,925) --
Debt issuance costs (304) (755)
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Net cash provided by financing activities 2,387 7,902
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Net (decrease) in cash and cash equivalents (26) (42)
Cash and cash equivalents at beginning of year 146 152
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Cash and cash equivalents at end of period $ 120 $ 110
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Supplemental information - interest paid $ 1,796 $ 1,177
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This interim statement is unaudited.