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EXHIBIT 99.1
CERTAIN INFORMATION PROVIDED TO
PROSPECTIVE INVESTORS IN
PROPOSED PRIVATE PLACEMENT OF
SENIOR DEBT SECURITIES
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PRO FORMA CAPITALIZATION
The following sets forth our historical capitalization as of September
30, 2000 and our adjusted capitalization as of September 30, 2000, assuming our
proposed private placement of senior notes were consummated on such date.
<TABLE>
<CAPTION>
As of September 30, 2000
--------------------------------
Actual Adjusted
------ --------
<S> <C> <C>
Cash and Equivalents $ 2.9 $ 48.7
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Revolving Credit Facility 47.5 --
Current Maturities of long-term debt 5.0 5.0
Long-term debt, less current maturities
% Senior Notes due 2007 -- 200.0
Other long-term debt 19.0 19.0
Subordinated Note to Weatherford 100.0 --
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Total long-term debt, less current maturities 119.0 219.0
Stockholder's Equity 455.2 455.2
------ ------
Total Capitalization $626.7 $679.3
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</TABLE>
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CERTAIN FINANCIAL INFORMATION
The following summarizes certain financial information that we may provide to
prospective purchasers in our proposed private placement of senior notes
relating to our two operating segments: (1) drill stem products and (2)
enginneered connections and premium tubulars.
DRILL STEM PRODUCTS
The following chart sets forth for the periods presented (1) the number of feet
of drill pipe sold by Grant Prideco during the applicable period, (2) Grant's
consolidated EBITDA (earnings before interest, taxes, depreciation and
amortization for its drill stem segment during the applicable period, and (3)
the average price per foot for drill pipe sold during the applicable period.
<TABLE>
<CAPTION>
Twelve months ended 1999 Third quarter 2000 Annualized First Quarter 1998 Annualized
------------------------ ----------------------------- -----------------------------
<S> <C> <C> <C>
Volume 3.2 million ft. 6.0 million ft. 12.0 million ft.
EBITDA Nil $61 $160
Pricing $30/ft. $32/ft. $31/ft.
</TABLE>
ENGINEERED CONNECTIONS AND PREMIUM TUBING SEGMENT
The following chart sets forth for our engineered connections and premium
tubulars segment (1) revenues for such segment during the applicable period, (2)
EBITDA for such segment during the applicable period and (3) the percentage
amount that the average price received for products sold by such segment were
less than or exceeded prices received during the fourth quarter of 1997.
<TABLE>
<CAPTION>
Third Quarter of 2000 Fourth Quarter of 1997
Twelve Months Ended 1999 Annualized Annualized
------------------------ ---------------------- ------------------------
<S> <C> <C> <C>
Revenues $152 M $262 M $332 M
EBITDA $21 M $54 M $65 M
Pricing (15%) 15%+ No deviation:
Benchmark Price
</TABLE>
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Through acquisitions in late 1998 and during 1999, and due to a consolidation of
manufacturing operations, we believe we have reduced our cost structure from
that which existing during the period of peak demand for our products during the
fourth quarter of 1997 and the first quarter of 1998. The following chart sets
forth a general estimate of the amount that our annualized first quarter EBITDA
for our drill stem segment for the first quarter of 1998 would have increased
had these acquisitions and consolidations taken place prior to such period of
time. The following chart
1. Assumes industry conditions exactly the same as those existing in the first
quarter of 1998 (including demand for our products and services, prices of
raw materials from third parties, prices we receive for our products and
services and internal costs).
2. Assumes we sold 12 million ft of drill pipe at an average price of $31 foot
3. Assumes that no other factors or cost levels have changed since the first
quarter of 1998 (including energy costs, labor costs and other costs
incurred in our operations).
We cannot assure you that our operations or industry conditions will ever reach
the levels assumed in this chart, or that industry conditions will ever reach or
come close to that experienced during the first quarter of 1998. Demand for our
products and services have not returned to first quarter 1998 levels, thus we
currently are not experiencing the costs savings set forth in the following
chart and there can be no assurance that we ever will. Many factors affecting
our business have changed since then, including raw material costs, labor costs
and prices for raw materials, competitive landscapes, regulations, rig counts
and prices of oil and gas, thus it is impossible for us to estimate the actual
amount of savings, if any, these acquisitions and consolidations actually will
have on our results of operations. You should read the numerous factors set
forth in our filings with the Securities and Exchange Commission which outline
the risks associated with our business and why the benefits we believe we may
actually receive from these acquisitions and consolidations may differ from the
estimates set forth in our forward looking statements.
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Q1 '98 EBITDA $ 210
(Annualized)
Vertical 50
Integration**
Manufacturing 12
Consolidation***
Competitive 8
Consolidations****
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EBITDA $ 280
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**Estimated cost saving relating to our acquisitions of TF de Mexico and
investment in Voest Alpine, had such acquisition and investment occurred prior
to the first quarter of 1998. Savings from Voest Alpine include earnings we
would receive from our investment in Voest Alpine, which is accounted for under
the equity method of accounting.
***Estimated cost saving relating to plant consolidations had such
consolidations occurred prior to the first quarter of 1998. During 1999 and
2000, we began consolidating four U.S. manufacturing facilities into two and two
foreign manufacturing locations into one. Such consolidations should be
completed by the first quarter of 2001.
**** Estimated earnings relating to other acquisitions, assuming such
acquisitions occurred prior to the first quarter of 1998.
