Printer Friendly

MAVERICK TUBE ANNOUNCES PLANT RELOCATION AND QUARTERLY RESULTS

 MAVERICK TUBE ANNOUNCES PLANT RELOCATION AND QUARTERLY RESULTS
 ST. LOUIS, April 24 /PRNewswire/ -- Maverick Tube Corporation (AMEX: MAV) today confirmed a decision had been reached, pending completion of certain financing arrangements, to relocate its manufacturing operations presently located in Union, Mo., to a new site in Hickman, Ark. The move is designed to lower production costs and broaden the company's product lines.
 Maverick is moving to Arkansas next to the new steel facility being built by Nucor Steel in Hickman, Ark., in order to gain several significant cost advantages. These advantages include: lower inbound and out-bound freight costs, reduced raw material prices, and lower labor and other operating costs. The company anticipates that variable costs at the new facility will be reduced by 14 percent after the new plant is fully operational in early 1993. The capital costs of the project are budgeted at $11.3 million and will be financed through an increase in long-term debt. The company also plans to devote 30 percent of the new facilities' capacity to the production of additional tubular products beginning in early 1994. New product offerings will be destined for non-energy related markets.
 Gregg Eisenberg, president and CEO, noted, "The company's decision to move to Arkansas demonstrates its commitment to being an even lower cost producer than it now is, as well as providing the low cost structure necessary for entry into new tubular markets. While the company's fixed costs will increase with the cost of servicing the new debt, I expect the volume necessary to break even in the new facility will be 20 percent less than it is in the current facility."
 Maverick also announced today the results for its second quarter and year-to-date ended March 31, 1992. The company reported a net loss during the quarter of $3.1 million, and a year-to-date net loss of $2.9 million due to the inclusion of a $5.1 million charge to earnings ($3.3 million after tax or $0.59 per share) resulting from the decision to relocate manufacturing operations. Net earnings, prior to the above referenced charge, was $211,000 during the quarter and $403,000 year-to- date, down from net earnings of $1.6 million and $3.9 million the year before. The losses per share for the second quarter and year-to-date respectively were $0.56 and $0.52. Excluding the relocation costs, earnings per share would have been $0.04 and $0.07 for the quarter and year-to-date, down from earnings of $0.37 and $0.96, respectively, in fiscal 1991.
 Sales for the quarter and year-to-date were $20.2 million and $42.7 million, respectively, compared to sales of $35.7 million and $78.3 million in the same periods of fiscal 1991.
 Second quarter results as compared to a year ago were severely hampered by lower shipments and declining selling prices. The decline in shipments was primarily attributable to lower industrywide demand for new domestic oil country tubular goods (OCTG) products. U.S. drilling activity for the quarter declined by 30 percent from the same quarter the previous year. Selling prices fell by 3.4 percent during the quarter, due primarily to continued competition for the reduced demand for OCTG products.
 Eisenberg also noted, "Domestic drilling for oil and gas continued to deteriorate during the last three months. Drilling rates currently represent a 50 year low. Despite these difficult industry conditions, we were able to operate at slightly above break even levels. This was accomplished thanks to further increases in our market share and reductions in our variable manufacturing costs."
 Maverick Tube Corporation is a St. Louis-based manufacturer of tubular products used in the energy industry in drilling, production and surface transportation applications.
 MAVERICK TUBE CORPORATION
 Selected Consolidated Financial Data
 (Unaudited, in thousands, except shipments and per share data)
 Periods ended: Second Quarter Six Months
 March 31 1992 1991 1992 1991
 Shipments (ton) 34,633 52,902 70,356 117,166
 Net sales $20,239 $35,768 $42,733 $78,283
 Gross profit 1,520 4,051 3,110 9,653
 Restructuring charge 5,074 -- 5,074 --
 Income from operations (4,706) 2,934 (4,259) 6,997
 Net earnings (A) (3,111) 1,552 (2,919) 3,920
 Earnings per share(B) $ (0.56) $ 0.37 $ (0.52) $ 0.96
 Weighted average
 number shares 5,578 4,147 5,578 4,096
 (A) -- Net Earnings in fiscal 1992 prior to the restructuring charge would have been $211,000 for the second quarter and $403,000 year-to- date.
 (B) -- EPS in fiscal 1992 prior to restructuring charge would have been $0.04 for the second quarter and $0.07 year-to-date.
 -0- 4/24/92
 /CONTACT: Charles O. Struckhoff, vice president-administration and secretary-investor relations of Maverick Tube, 314-537-1314/
 (MAV) CO: Maverick Tube Corporation ST: Missouri, Arkansas IN: OIL SU: ERN


TS -- NY050 -- 2491 04/24/92 13:03 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 24, 1992
Words:813
Previous Article:MET-ED FILES FIRST BASE RATE REQUEST IN SIX YEARS
Next Article:KIMBERLY-CLARK HOLDS ANNUAL MEETING


Related Articles
MAVERICK TUBE ANNOUNCES QUARTERLY RESULTS AND STOCK SALE
MAVERICK TUBE CORPORATION QUARTERLY RESULTS IMPROVED AS DRILLING PICKS UP
MAVERICK TUBE CORPORATION PROFITS CONTINUE AHEAD OF PRIOR YEAR
MAVERICK TUBE CORPORATION EARNINGS IMPROVE DUE TO SALES INCREASE
MAVERICK TUBE CORP. IMPROVED DRILLING ACTIVITY LEADS TO HIGHER PROFITS
MAVERICK TUBE CORPORATION MAJOR EQUIPMENT PURCHASE FOR PRODUCT LINE DIVERSIFICATION
MAVERICK TUBE CORPORATION ANNOUNCES PUBLIC SALE OF COMMON STOCK
Maverick Tube Corporation Reports First Quarter 1997 Results
Maverick Tube Corporation Reports Record Quarter and Fiscal Year 1997 Results
Maverick Tube Corporation Reduces Earnings Expectations for the Quarter; Company Announces Closing of Its Longview, WA Facility.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters