EXHIBIT 99.1
ALLIS-CHALMERS
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PRESS RELEASE
Contact: Victor M. Perez
(713) 369-0550
FOR IMMEDIATE RELEASE
HOUSTON, TEXAS, August 16, 2004 - Allis-Chalmers Corporation (OTC Bulletin
Board: ALHS) today announced net income for the second quarter of 2004
attributed to common shares of $434,000 or $0.04 per share (diluted), on
revenues of $11.4 million. This compares to a net loss attributed to common
shares of $422,000, or $(0.11) per share (diluted), on revenues of $7.3 million
for the second quarter of 2003. Allis-Chalmers reported net income for the first
six months of 2004 attributed to common shares of $935,000, or $0.11 per share
(diluted), on revenues of $21.1 million. This compares to a net loss attributed
to common shares of $763,000, or $(0.19) per share (diluted), on revenues of
$14.3 million for the first six months of 2003.
The Company announced that net income increased for the second quarter and the
first six months of 2004, compared to the 2003 periods, principally due to
increased revenues for its compressed air drilling segment and its directional
drilling segment.
Munawar H. Hidayatallah, the Company's Chairman and Chief Executive Officer
stated, "We are very pleased with the improvement in operating results. We are
also encouraged by the progress we're making in improving our capital structure
and increasing our financial flexibility to support the growth of our existing
businesses and make acquisitions."
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 Six Months Ended
June 30, June 30,
2004 2003 2004 2003
--------- --------- --------- ---------
(in thousands, except per share)
Revenues $ 11,422 $ 7,340 $ 21,083 $ 14,339
Cost of sales 8,340 5,410 15,729 10,405
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Gross Profit 3,082 1,930 5,354 3,934
General and administrative expense 1,853 1,020 2,956 2,001
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Income/ (loss) from operations 1,229 910 2,398 1,933
Other Income (expense)
Interest income -- -- -- --
Interest expense (499) (843) (1,068) (1,480)
Other 18 (186) 205 (174)
Minority interest (161) (124) (256) (311)
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Net income/(loss) before income taxes 587 (243) 1,279 (32)
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Provision for income taxes 117 92 220 250
--------- --------- --------- ---------
Net income/ (loss) 470 (335) 1,059 (282)
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Preferred stock dividend (36) (87) (124) (481)
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Net income/ (loss) attributed to common shares $ 434 $ (422) $ 935 $ (763)
========= ========= ========= =========
Net income/ (loss) per common share basic $ 0.07 $ (0.11) $ 0.18 $ (0.19)
========= ========= ========= =========
Net income/ (loss) per common share diluted $ 0.04 $ (0.11) $ 0.11 $ (0.19)
========= ========= ========= =========
Weighted average number of common shares
outstanding
Basic 6,253 3,927 5,077 3,927
========= ========= ========= =========
Diluted 10,237 3,927 8,394 3,927
========= ========= ========= =========
This interim statement is unaudited.
ALLIS-CHALMERS CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
2004 2003
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ASSETS
Cash and cash equivalents $ 485 $ 1,299
Trade receivables, net 10,305 8,823
Lease receivable, current 180 180
Deferred offering costs 2,650 -
Prepaids and other current assets 1,137 887
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Total current assets 14,757 11,189
Property and equipment, net 27,234 26,339
Goodwill 7,661 7,661
Other intangible assets, net 2,054 2,290
Debt issuance costs, net 612 567
Lease receivable 664 787
Other assets 79 40
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Total assets $ 53,061 $ 48,873
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current maturities of long-term debt $ 4,848 $ 5,150
Trade accounts payable 3,391 3,133
Accrued salaries, benefits and payroll taxes 677 591
Accrued interest 212 152
Accrued expenses 1,332 1,761
Accounts payable, related parties 541 787
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Total current liabilities 11,001 11,574
Accrued postretirement benefit obligations 520 545
Long-term debt, net of current maturities 26,163 27,083
Other long-term liabilities 129 270
Redeemable warrants 1,500 1,500
Redeemable convertible preferred stock - 4,171
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Total liabilities 39,313 45,143
Commitments and Contingencies (Note 9 and Note 19)
Minority interests 2,782 2,523
COMMON SHAREHOLDERS' EQUITY
Common stock, $.01 par value (20,000,000 shares authorized;
6,264,758 and 3,926,668 issued and outstanding, respectively) 63 39
Capital in excess of par value 18,593 9,793
Accumulated (deficit) (7,690) (8,625)
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Total shareholders' equity 10,966 1,207
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Total liabilities and shareholders' equity $ 53,061 $ 48,873
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This interim statement is unaudited.
ALLIS-CHALMERS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2004 2003
-------- --------
Cash flows from operating activities:
Net income (loss) $ 1,059 $ (282)
Adjustments to reconcile net (loss) to net
cash provided by operating activities:
Depreciation and amortization expense 1,389 1,380
Fair value of warrant issued to consultant 14 --
(Gain) loss on sale of fixed assets -- 181
Amortization of discount on debt 109 367
Minority interest in income of subsidiary 256 311
Changes in working capital:
Decrease (increase) in accounts receivable (1,482) (1,597)
Decrease (increase) in other current assets (250) (619)
Decrease (increase) in other assets 84 35
Decrease (increase) in lease deposit -- 525
(Decrease) increase in accounts payable 258 1,385
(Decrease) increase in accrued interest 60 468
(Decrease) increase in accrued expenses (429) (393)
(Decrease) increase in other long-term liabilities (141) --
(Decrease) increase in accrued employee benefits and payroll taxes (185) (88)
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Net cash provided by operating activities 742 1,673
Cash flows from investing activities:
Proceeds from sale of fixed assets -- 700
Purchase of equipment (1,879) (821)
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Net cash provided (used) by investing activities (1,879) (121)
Cash flows from financing activities:
Proceeds from issuance of common stock, net 1,865 --
Repayments of long-term debt (1,331) (1,668)
Debt issuance costs (211) --
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Net cash provided (used) by financing activities 323 (1,668)
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Net increase (decrease) in cash and cash equivalents (814) (116)
Cash and cash equivalents at beginning of year 1,299 146
-------- --------
Cash and cash equivalents at end of period $ 485 $ 30
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Supplemental information - interest paid $ 1,068 $ 1,480
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This interim statement is unaudited.