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EXHIBIT 99.1
GRANT PRIDECO REPORTS QUARTERLY EARNINGS OF 7 CENTS PER SHARE
THE WOODLANDS, October 25, 2000-- Grant Prideco, Inc. (NYSE:GRP) today announced
third quarter net income of $7.3 million, or $0.07 per diluted share, a $17.7
million increase over the three months ended September 30, 1999. Third quarter
2000 revenues were $131.2 million with operating income of $15.9 million. For
the comparative third quarter of 1999, revenues were $58.8 million with an
operating loss of $11.7 million, which generated a net loss of $10.4 million, or
$0.10 per diluted share. The revenue increase of $72.4 million, a 123% increase,
reflects the improved worldwide rig count for oil and natural gas drilling and
completion activity. Results also benefited from price increases in our
Engineered Connections and Premium Tubulars segment as well as increased orders
for many of our newer, higher margin products that are designed for critical
deep gas and offshore applications.
As compared to the second quarter of 2000, revenues for the third quarter
increased by $18.7 million, which generated incremental operating income of $9.3
million, an incremental operating margin of 50%. The continued strength in oil
and natural gas prices and increased spending plans by major oil and gas
companies should result in improved operating income in the fourth quarter of
2000.
For the nine months ended September 30, 2000, revenues were $350.9 million, an
increase of $154.1 million, or 78% above last year's levels. Net income of $6.3
million, or $0.06 per diluted share, was reported for the nine months ended
September 30, 2000, versus a net loss of $17.4 million, or $0.18 per diluted
share, for the previous year. This represents a year on year increase in net
income of $23.7 million.
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Grant Prideco - Third Quarter 200 Results
DRILL STEM PRODUCTS
As compared to the third quarter of 1999, revenues for the Drill Stem segment
for the third quarter of 2000 increased by $48.5 million to $65.8 million.
Operating income was $11.6 million for the third quarter of 2000, an increase of
$16.7 million above last year's quarter. The increase reflects growing demand
for our drill stem products as a result of the improved worldwide rig count. The
operating performance benefited from better absorption of manufacturing costs
associated with improved volumes in all product lines as well as earnings
generated from our 50% owned seamless tubular facility.
In comparison to the second quarter of 2000, revenues were up by $17.2 million,
or 35%, generating incremental operating income of $8.7 million, an incremental
operating margin of 51%, as a result of continued strengthening sales and
improved absorption of manufacturing costs.
ENGINEERED CONNECTIONS AND PREMIUM TUBULARS
Revenues in the Engineered Connections and Premium Tubulars segment for the
third quarter of 2000 were $65.4 million, an increase of 57% as compared to the
third quarter of 1999. The growth in revenues reflects the continued demand for
our highly engineered tubing and casing products for critical deep gas and
offshore drilling and completion applications as well as the improved demand for
the Company's newly developed premium thread technology. Third quarter 2000
operating income of $9.5 million improved by $12.0 million compared to the prior
year. Operating income benefited from pricing improvements throughout the year
and continued demand for high-end products.
As compared to the second quarter of 2000, revenues increased by $1.5 million
with incremental operating margins of 45%.
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Grant Prideco - Third Quarter 200 Results
Grant Prideco (http://www.grantprideco.com), headquartered in The Woodlands,
Texas, is the world's leader in drill stem technology development and drill pipe
manufacturing, sales and service, in addition to being North America's
pre-eminent source for engineered connections and premium tubulars.
# # #
Contact:
Frances Powell (281) 297-8536
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 concerning, among other things,
Grant Prideco's prospects for its operations and future demand for its products
and services, all of which are subject to certain risks, uncertainties and
assumptions. These risks and uncertainties and assumptions, which are more fully
described in Grant Prideco, Inc.'s Registration Statement on Form 10 and
Quarterly Reports on Form 10-Q filed with the Securities and Exchange
Commission, include the impact of oil and natural gas prices and worldwide
economic conditions on drilling activity, the impact of drilling activity on
demand for and pricing of Grant Prideco's products, Grant Prideco's ability to
remain on the leading edge of technology in its products, the availability of
qualified operating and manufacturing personnel and manufacturing capacity and
Grant Prideco's assumptions relating thereto. Should one or more of these risks
or uncertainties materialize, or should the assumptions prove incorrect, actual
results may vary in material respects from those currently anticipated and
reflected in Grant Prideco's forward-looking statements.
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GRANT PRIDECO, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share amount)
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------------- ---------------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
REVENUES
Drill Stem ............................................... $ 65,831 $ 17,305 $ 162,353 $ 88,900
Premium Tubulars ......................................... 65,401 41,546 188,559 107,876
--------- --------- --------- ---------
131,232 58,851 350,912 196,776
OPERATING INCOME (LOSS)
Drill Stem ............................................... 11,589 (5,061) 14,177 4,034
Premium Tubulars ......................................... 9,502 (2,448) 23,753 (8,116)
Corporate Expenses ....................................... (5,188) (4,175) (15,196) (11,679)
--------- --------- --------- ---------
15,903 (11,684) 22,734 (15,761)
OTHER INCOME (EXPENSE)
Interest Expense ......................................... (4,262) (2,943) (11,572) (8,332)
Other, Net ............................................... 43 109 (347) 400
--------- --------- --------- ---------
(4,219) (2,834) (11,919) (7,932)
INCOME (LOSS) BEFORE INCOME TAXES .......................... 11,684 (14,518) 10,815 (23,693)
INCOME TAX (EXPENSE) BENEFIT ............................... (4,323) 4,075 (4,374) 6,293
--------- --------- --------- ---------
NET INCOME (LOSS) BEFORE MINORITY
INTEREST ................................................. 7,361 (10,443) 6,441 (17,400)
MINORITY INTEREST .......................................... (69) -- (138) --
--------- --------- --------- ---------
NET INCOME (LOSS) .......................................... $ 7,292 $ (10,443) $ 6,303 $ (17,400)
========= ========= ========= =========
INCOME (LOSS) PER SHARE
(Pro forma prior to effective date of spin-off)
Basic .................................................... $ 0.07 $ (0.10) $ 0.06 $ (0.18)
========= ========= ========= =========
Diluted .................................................. $ 0.07 $ (0.10) $ 0.06 $ (0.18)
========= ========= ========= =========
WEIGHTED AVERAGE SHARES OUTSTANDING
(Pro forma prior to effective date of spin-off)
Basic .................................................... 108,481 101,408 108,450 98,770
========= ========= ========= =========
Diluted .................................................. 110,595 101,408 110,335 98,770
========= ========= ========= =========
DEPRECIATION AND AMORTIZATION
Drill Stem ............................................... $ 3,775 $ 3,803 $ 11,662 $ 10,731
Premium Tubulars ......................................... 3,889 3,598 11,413 10,610
Corporate ................................................ 116 274 318 821
</TABLE>
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