EXHIBIT 99.1
ALLIS-CHALMERS
--------------
PRESS RELEASE
Contact: Victor M. Perez
(713) 369-0550
FOR IMMEDIATE RELEASE
ALLIS-CHALMERS CORPORATION REPORTS
THIRD QUARTER 2004 EARNINGS
HOUSTON, TEXAS, November 12, 2004 - Allis-Chalmers Corporation (Amex:ALY) today
announced its results for the third quarter ended September 30, 2004. Revenues
increased to $11.9 million for the third quarter of 2004, an increase of 47.0 %
from revenues of $8.1 million for the third quarter of 2003. Net income for the
third quarter of 2004 attributed to common shares was $576,000 or $0.04 per
share (diluted), compared to net income attributed to common shares of $1.0
million or $0.16 per share (diluted), which included a one-time $1.0 million
gain from the settlement of a law suit, for the third quarter of 2003.
The Company reported revenues of $33.0 million for the first nine months of
2004, an increase of 47.1% compared to revenues of $22.4 million for the first
nine months of 2003. Net income for the first nine months of 2004 attributed to
common shares was $1.5 million, or $0.15 per share (diluted), compared to net
income attributed to common shares of $281,000 or $0.04 per share (diluted),
which included a one-time $1.0 million gain from the settlement of a lawsuit,
for the first nine months of 2003.
The Company announced that revenues and operating results improved for the third
quarter and first nine months of 2004, compared to the 2003 periods, primarily
due to the general increase in oil and gas drilling activity. Revenues and
operating results increased most significantly at its directional drilling
services segment due to increased activity as well as the addition of operations
and sales personnel which resulted in increased capacity and market presence.
The nine-month period ended September 30, 2004 was also impacted by the
inclusion of the operations of AirComp LLC, the Company's 55%-owned compressed
air drilling joint venture for the entire nine month period. AirComp was formed
in July 2003.
Munawar H. Hidayatallah, the Company's Chairman and Chief Executive Officer
stated, "We are very pleased with the continued growth of our company. During
the quarter we also took major steps to improve our capital structure and
increase our ability to grow. As previously announced, during the quarter we
completed two private placements of our common stock aggregating $16.3 million,
and in September our shares began trading on the American Stock Exchange. In
addition, we acquired Safco in September and acquired Diamond Air Drilling in
November 2004, which we anticipate will make significant contributions to our
future growth.
ALLIS-CHALMERS CORPORATION PROVIDES A VARIETY OF PRODUCTS AND SERVICES TO THE
OIL AND NATURAL GAS DRILLING INDUSTRY. THROUGH ITS SUBSIDIARIES, THE COMPANY
SUPPLIES SPECIALIZED EQUIPMENT AND OPERATIONS TO INSTALL CASING AND PRODUCTION
TUBING REQUIRED TO DRILL AND COMPLETE OIL AND GAS WELLS, HIGH-END DIRECTIONAL
AND HORIZONTAL DRILLING SERVICES FOR SPECIFIC TARGETED RESERVOIRS THAT CANNOT BE
REACHED VERTICALLY, AND THROUGH ITS JOINT VENTURE, AIRCOMP LLC, AIR DRILLING
PRODUCTS AND SERVICES TO NATURAL GAS EXPLORATION AND DEVELOPMENT COMPANIES.
FORWARD LOOKING STATEMENTS
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 BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS) SEPTEMBER 30 DECEMBER 31
2004 2003
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ASSETS
Cash and Cash Equivalents $ 12,992 $ 1,299
Trade Receivables, net of allowance for doubtful
accounts of $168 and $168 respectively 10,419 8,823
Lease Receivable, current 180 180
Prepaids and Other Current Assets 1,496 887
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Total Current Assets 25,087 11,189
Property and Equipment, net of accumulated
depreciation of $3,972 and $2,487 at
September 30, 2004 and December 31, 2003, respectively 28,818 26,339
Goodwill 10,331 7,661
Other Intangible Assets, net of accumulated
amortization of $1,773 and $1,254 at
September 30, 2004 and December 31, 2003, respectively 3,089 2,290
Debt Issuance Costs, net of accumulated
amortization of $711 and $462 at
September 30, 2004 and December 31, 2003, respectively 635 567
Lease Receivable, less current portion 590 787
Other Assets 79 40
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Total Assets 68,629 48,873
=============== ===============
LIABILITIES AND STOCKHOLDERS EQUITY
Current Maturities of Long Term Debt 4,858 5,150
Trade Accounts Payable 2,566 3,133
Accrued Salaries, Benefits and Payroll Taxes 481 591
Accrued Interest 283 152
Accrued Expenses 1,331 1,761
Accounts Payable, related parties 406 787
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Total Current Liabilities 9,925 11,574
Accrued Post Retirement Benefit Obligations 510 545
Long Term Debt, net of current maturities 25,241 27,083
Other Long Term Liabilities 129 270
Redeemable Warrants 1,500 1,500
Redeemable Convertible Preferred Stock, $0.01 par value
(4,200,000 shares authorized; 3,500,000 issued and
outstanding at December 31, 2003 and none issued or
outstanding at September 30, 2004) ($1 redemption
value) including accrued dividends -- 4,171
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Total Liabilities 37,305 45,143
Commitments and Contingencies
Minority Interests 886 2,523
COMMON STOCKHOLDERS EQUITY
Common Stock, $.01 par value (20,000,000 shares
authorized; 3,926,668 issued and outstanding at
December 31,2003 and 13,042,081 issued and
outstanding at September 30, 2004) 132 2,945
Capital in excess of par value 37,423 6,887
Accumulated (deficit) (7,117) (8,625)
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Total Stockholders Equity 30,438 1,207
Total Liabilities and Stockholders Equity $ 68,629 $ 48,873
=============== ===============
ALLIS-CHALMERS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE)
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
2004 2003 2004 2003
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Revenues $ 11,888 $ 8,089 $ 32,989 $ 22,428
Cost of Sales 8,145 6,011 23,893 16,212
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Gross Profit 3,743 2,078 9,096 6,216
General & Administrative Expense 2,425 1,351 5,381 3,759
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Income/(Loss) From Operations 1,318 727 3,715 2,457
Other Income (Expense)
Interest Expense (566) (521) (1,634) (1,797)
Minority Interest (56) (26) (315) (337)
Settlement of Lawsuit -- 1,034 -- 1,034
Other 19 10 224 (164)
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Net Income/(Loss) Before Income Taxes 715 1,224 1,990 1,193
Provision for Income Taxes 139 93 359 343
Net Income/(Loss) 576 1,131 1,631 850
Preferred Stock Dividend -- (88) (124) (569)
Net Income/(Loss) Attributed to Common Shares $ 576 $ 1,043 $ 1,507 $ 281
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Net Income/(Loss) Attributed to Common Shares, Basic $ 0.05 $ 0.27 $ 0.21 $ 0.07
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Net Income/(Loss) Attributed to Common Shares, Diluted $ 0.04 $ 0.16 $ 0.15 $ 0.04
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Weighted average number of common shares outstanding
Basic 11,599 3,927 7,285 3,927
Diluted 14,407 6,340 9,980 6,340
Supplemental Information:
Depreciation and Amortization $ 710 $ 660 $ 2,098 $ 2,225