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TUBOSCOPE VETCO INTERNATIONAL CORPORATION ANNOUNCES 1992 THIRD QUARTER FINANCIAL RESULTS

TUBOSCOPE VETCO INTERNATIONAL CORPORATION ANNOUNCES 1992 THIRD QUARTER
 FINANCIAL RESULTS
 HOUSTON, Oct. 22 /PRNewswire/ -- Tuboscope Vetco International Corporation (NASDAQ-NMS: TUBO) today announced financial results for the three months ended Sept. 30, 1992.
 The company reported net income of $1.1 million, or 5 cents per share (after preferred stock dividends of $175,000 and on weighted average shares of 18,222,362), for the third quarter of 1992, compared to net income of $1.4 million, or 12 cents per share (on weighted average shares of 12,055,783), for the third quarter of 1991.
 The company's reported third quarter revenue of $41.6 million was a $7.9 million, or 24 percent, increase over the third quarter of 1991. This revenue increase was due to an $11.0 million increase in international oilfield inspection operations, principally related to the acquisition of Vetco Services in October 1991. The international revenue increase was partially offset by a $8.7 million drop in North America oil country tubular goods inspection and coating services as the North American average rig count for the quarter fell to 777, a 15 percent reduction vs. the third quarter of 1991. Pipeline Services revenue decreased by $.3 million in the third quarter of 1992 compared to 1991 while revenue from Mill Systems and Sales was up $1.5 million mainly as the result of a large international mill equipment shipment in the third quarter of 1992. Revenue for industrial inspection services for the quarter was $4.7 million, an increase of $1.2 million over the second quarter of 1992.
 Despite the downturn in domestic operations, gross margin percent remained even with the third quarter of 1991, while gross profit declined only 3 percent. The company was able to retain gross margins as a result of cost reductions implemented earlier this year and throughout 1991. In addition to volume, the gross profit percent was negatively impacted by product mix, as revenue from one of the company's highest profit services, domestic coating, was down 39 percent. However, gross profit increased from 26.8 percent in the second quarter of 1992 to 27.1 percent in the third quarter. Selling, administrative, and general expense increased $1.5 million due to overhead costs associated with the acquired Vetco operations. Compared to the previous quarter, selling, administrative, and general expense was down 2 percent.
 In addition, the company incurred foreign exchange losses of $635,000 for the quarter, the majority of which was due to the significant drop in foreign exchange rates for the sterling pound and Italian lira, both of which declined greater than 10 percent in September compared to the dollar. The income tax benefit of $119,000 for the third quarter of 1992 was due to a reduction in the company's estimated 1992 effective income tax rate from 35 percent to 23 percent. The reduction in the effective income tax rate is the result of tax planning strategies implemented during 1992.
 Income before interest, taxes, and depreciation and amortization was $7.1 million for the third quarter of 1992, a $175,000 increase over the same period of 1991. Operating cash flow (defined as net income plus depreciation/amortization) per share was 22 cents for the third quarter of 1992 (on 18,222,362 shares and after preferred stock dividends of $175,000) compared to 29 cents for 1991 (on 12,055,783 shares).
 Tuboscope supplies worldwide inspection and coating services for oil country tubular goods, provides in-service inspection of oil, gas, and products pipelines, and provides in-line inspection equipment to manufacturers of oil country tubulars. Headquartered in Houston, the company employs more than 1,800 personnel worldwide and has operations in over 42 countries.
 The company's common stock is traded on the NASDAQ National Market System under the symbol "TUBO".
 TUBOSCOPE VETCO INTERNATIONAL CORPORATION
 Consolidated Statements of Operations (Unaudited)
 (In thousands, except share and per share data)
 Three months ended Sept. 30 1992 1991
 Revenue:
 Sale of services $38,302 $31,800
 Sale of products 2,367 810
 Rental income 961 1,089
 Total 41,630 33,699
 Costs and expenses:
 Costs of services sold 29,165 23,227
 Cost of products sold 1,174 217
 Selling, administrative and general 5,088 3,585
 Research and engineering costs 439 927
 Restructuring costs -- 700
 Total 35,866 28,656
 Operating profit 5,764 5,043
 Other expense (income):
 Interest expense 2,938 2,510
 Interest income (72) (46)
 Foreign exchange 635 (3)
 Gain on sale of TKC -- --
 Other, net 1,323 204
 Income before income taxes 940 2,378
 Provision (benefit) for income taxes (119) 962
 Net income 1,059 1,416
 Dividends applicable to redeemable
 preferred stock 175 --
 Net income applicable to common stock $ 884 $ 1,416
 Earnings per common share:
 Income before extraordinary item and after
 deduction of preferred stock dividends $ .05 $ .12
 Extraordinary item -- --
 Net income $ .05 $ .12
 Weighted average number of common shares
 outstanding 18,222,362 12,055,783
 Other data:
 Depreciation and amortization $ 3,215 $ 2,030
 Capital spending $ 1,083 $ 1,954
 Nine months ended Sept. 30 1992 1991
 Revenue:
 Sale of services $115,787 $95,771
 Sale of products 4,249 5,879
 Rental income 2,806 3,015
 Total 122,842 104,665
 Costs and expenses:
 Costs of services sold 89,634 71,669
 Cost of products sold 1,870 3,155
 Selling, administrative and general 15,156 11,374
 Research and engineering costs 2,500 2,580
 Restructuring costs 1,010 1,770
 Total 110,170 90,548
 Operating profit 12,672 14,117
 Other expense (income):
 Interest expense 9,142 7,659
 Interest income (500) (114)
 Foreign exchange 1,242 170
 Gain on sale of TKC (3,983) --
 Other, net 3,043 613
 Income before income taxes 3,728 5,789
 Provision (benefit) for income taxes 857 2,258
 Net income 2,871 3,531
 Dividends applicable to redeemable
 preferred stock 525 --
 Net income applicable to common stock $ 2,346 $ 3,531
 Earnings per common share:
 Income before extraordinary item and after
 deduction of preferred stock dividends $ .13 $ .29
 Extraordinary item -- --
 Net income $ .13 $ .29
 Weighted average number of common shares
 outstanding 18,206,227 12,041,565
 Other data:
 Depreciation and amortization 9,899 6,010
 Capital spending 3,050 3,721
 TUBOSCOPE VETCO INTERNATIONAL CORPORATION
 Revenue by Product Line
 (In thousands)
 Three months ended Sept. 30 1992 1991
 Oilfield Services:
 Inspection $18,597 $12,238
 Coating 9,687 13,229
 TKC -- 743
 Oilfield Services 28,284 26,210
 Industrial Inspection 4,650 --
 Pipeline Services 5,495 5,798
 Mill Systems & Sales 3,201 1,691
 Total Revenue $41,630 $33,699
 Nine months ended Sept. 30 1992 1991
 Oilfield Services:
 Inspection $60,519 $40,665
 Coating 31,261 36,915
 TKC -- 3,129
 Oilfield Services 91,780 80,709
 Industrial Inspection 11,632 --
 Pipeline Services 13,692 15,437
 Mill Systems & Sales 5,738 8,519
 Total Revenue $122,842 $104,665
 -0- 10/22/92
 /CONTACT: M. R. Reid or R. L. Koons of Tuboscope Vetco International Corporation, 713-799-5100/
 (TUBO) CO: Tuboscope Vetco International Corporation ST: Texas IN: OIL SU: ERN


GK -- NY084 -- 3569 10/22/92 12:06 EDT
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