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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (Date of earliest event reported): APRIL 17, 2000
WEATHERFORD INTERNATIONAL, INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-13086 04-2515019
(State of (Commission (I.R.S. Employer
Incorporation) File No.) Identification No.)
515 POST OAK BLVD., SUITE 600
HOUSTON, TEXAS 77027
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 693-4000
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EXHIBIT INDEX APPEARS ON PAGE 4
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ITEM 5. OTHER EVENTS
GRANT PRIDECO SPIN-OFF
On April 17, 2000, we announced the completion of the spin-off to our
stockholders of our Grant Prideco drilling products division. Each of our
stockholders received one share of Grant Prideco common stock for each share of
our common stock held by such stockholder as of the close of business on March
23, 2000. A copy of the press release announcing the spin-off is filed as
Exhibit 99.1 and is hereby incorporated herein by reference.
NEW CONVERSION PRICE FOR DEBENTURES
On April 17, 2000, we announced that the conversion price of our 5%
Convertible Subordinated Preferred Equivalent Debentures due 2027 was adjusted
following the spin-off of Grant Prideco. The Debentures previously were
convertible into Weatherford common stock at $80 per share. As a result of the
spin-off, the new conversion price for the Debentures is $53.34 per share.
EARNINGS RELEASE
On April 26, 2000, we announced our earnings for the quarter ended
March 31, 2000. A copy of the press release announcing our earnings for the
quarter ended March 31, 2000, is filed as Exhibit 99.2 and is hereby
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99.1 Press release dated April 17, 2000, announcing the completion
of the Grant Prideco Spin-off.
99.2 Press release dated April 26, 2000, announcing Weatherford's
earnings for the quarter ended March 31, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WEATHERFORD INTERNATIONAL, INC.
Dated: April 26, 2000 /s/ CURTIS W. HUFF
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Curtis W. Huff
Executive Vice President
and Chief Financial Officer
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INDEX TO EXHIBITS
Number Exhibit
------ -------
99.1 Press release dated April 17, 2000, announcing
the completion of the Grant Prideco Spinoff.
99.2 Press release dated April 26, 2000, announcing
Weatherford's earnings for the quarter ended
March 31, 2000.
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EXHIBIT 99.1
[WEATHERFORD LOGO] NEWS RELEASE
WEATHERFORD ANNOUNCES COMPLETION OF GRANT PRIDECO SPIN-OFF
HOUSTON, April 17, 2000 - - Weatherford International, Inc. (NYSE: WFT)
announced that it has completed the spin-off of its formerly wholly owned
subsidiary, Grant Prideco, Inc., the world's largest provider of drill stem
products and a leading provider of engineered connections.
Weatherford announced on July 21, 1999, its decision to distribute to its
stockholders all of Grant Prideco's common stock. Weatherford's Board of
Directors fixed the close of business on March 23, 2000 as the record date for
the spin-off. The distribution of one share of Grant Prideco common stock for
each outstanding share of Weatherford common stock was completed at the close of
business on April 14, 2000.
Houston-based Weatherford International, Inc. (HTTP://WWW.WEATHERFORD.COM)
is one of the largest global providers of innovative mechanical solutions,
technology and services for the drilling and production sectors of the oil and
gas industry. Weatherford's four divisions - Drilling and Intervention Services,
Completion Systems, Artificial Lift Systems and Weatherford Global Compression
Services - operate in over 50 countries and employ approximately 10,000 people
worldwide.
# # #
Contact:
Don Galletly (713) 693-4148
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EXHIBIT 99.2
[WEATHERFORD LOGO] NEWS RELEASE
WEATHERFORD REPORTS FIRST QUARTER 2000 RESULTS
HOUSTON, April 26, 2000 - - Weatherford International, Inc. (NYSE: WFT) today
reported first quarter income from continuing operations of $10.0 million ($0.09
per diluted share), an improvement of 166 percent over the prior year result of
$3.8 million ($0.04 per diluted share). Revenues for the first quarter were
$395.4 million or 49 percent higher than the prior year. First quarter cash
earnings from continuing operations (after-tax earnings, excluding goodwill
amortization) were $18.0 million ($0.16 per diluted share) or, 124 percent
higher than the prior year's cash earnings of $8.0 million ($0.08 per diluted
share).
The significant improvements in the first quarter reflected higher activity
levels in North America, where the average rig count rose 48 percent year to
year, the contribution of acquired businesses during the last down cycle and the
ongoing geographical leveraging of the Company's products and services.
International markets outside North America were soft through much of the first
quarter; however, international conditions began to improve late in the quarter
with gradually increasing drilling activity.
Results for the quarter continued the sequential improvement in revenues,
operating income and EBITDA that began in the second half of 1999. Consolidated
revenues for the quarter showed a 6% increase over the fourth quarter of 1999,
while operating income increased 18% from the prior quarter. Revenues improved
steadily through the quarter with March revenues at approximately $145 million.
The improved first quarter results were primarily driven by strong
performances in the Company's Drilling & Intervention Services division and
Artificial Lift Systems division. The results in these divisions were partially
offset by lower operating income in Weatherford's contract compression services
joint venture. This division was in the process of reorganizing its operations
in the quarter to reduce costs and improve its efficiencies.
WEATHERFORD DRILLING & INTERVENTION SERVICES
- --------------------------------------------
Revenues in the Drilling & Intervention Services division were $187.5 million,
31 percent higher than the prior year. Better results in North America, where
revenues increased 90 percent, led
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First Quarter 2000 Earnings
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the improvement. Fishing and Rental services and Cementation products produced
the greatest gains. The division also benefited from acquisitions made last year
that added new capabilities in underbalanced drilling and downhole services.
Overall revenue growth, while significant, was tempered by weak activity levels
in international markets, where the average rig count declined 8 percent versus
last year. First quarter EBITDA for the division increased 24 percent to $56.9
million.
WEATHERFORD COMPLETION SYSTEMS
- ------------------------------
The Weatherford Completion Systems division was formed late last year as the
result of several strategic acquisitions that allowed the division to evolve
from a manufacturer of niche products to an integrated systems provider. The new
division showed steady improvement in the first quarter. Revenues of $47.6
million more than doubled the level of last year and EBITDA margins improved to
a positive $1.3 million for the quarter from a negative $2.7 million for the
first quarter of 1999. First quarter revenues and EBITDA also improved
sequentially from the fourth quarter of 1999. Since its formation, the division
has developed the operating base it needs to operate on a global scale and it
has also established the engineering capability necessary to complete and
enhance its product offering. The consolidation of the division's manufacturing
operations, as well as the capacity expansion of its expandable sand screen
product line, are expected to be substantially complete by the end of the second
quarter.
WEATHERFORD ARTIFICIAL LIFT SYSTEMS
- -----------------------------------
Weatherford Artificial Lift Systems revenues increased 74 percent in the first
quarter to $100.2 million led by North America, up 85 percent, and Latin
America, up 38 percent. Throughout North America the improvements were due
primarily to well maintenance activity and in Canada to heavy oil completions.
Progressing cavity pumps (PCP) and reciprocating lift showed the most
significant product line revenue advances in the quarter, with PCP revenues more
than doubling in the first quarter from the first quarter of 1999. A combination
of the higher volumes, improving pricing and a lower cost structure resulted in
an increase in operating income to $8.3 million from an operating loss of $0.8
million in the first quarter of 1999. EBITDA also increased 255 percent to $14.2
million from $4.0 million in the first quarter of 1999.
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First Quarter 2000 Earnings
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WEATHERFORD GLOBAL COMPRESSION SERVICES
- ---------------------------------------
The Compression Services division reported revenues of $60.0 million for the
quarter compared to $42.6 million for the first quarter of 1999. Operating
income declined to $2.2 million in the quarter from $5.0 million the first
quarter of 1999. EBITDAR (earnings before interest, taxes, depreciation,
amortization and rental expenses) was up to $16.1 million compared to $14.2
million for the first quarter of 1999. The decline in operating income for the
quarter was primarily attributable to higher costs related to the reorganization
of the division during the quarter, lower average margins due to product mix and
$4.7 million in increased lease and depreciation costs. The Company is currently
in the process of reducing the cost structure in this division and focusing its
operations on higher margin sales.
DISCONTINUED OPERATIONS
- -----------------------
Discontinued operations include the results of Grant Prideco, formerly
Weatherford's Drilling Products division, which was spun off to shareholders on
April 14, 2000 (NYSE: GRP). The loss from discontinued operations includes
approximately $1 million, net of taxes and additional spin-off costs.
Houston-based Weatherford International, Inc. (HTTP://WWW.WEATHERFORD.COM) is
one of the largest global providers of innovative mechanical solutions,
technology and services for the drilling and production sectors of the oil and
gas industry. Weatherford operates in over 50 countries and employs
approximately 10,000 people worldwide.
# # #
Contact:
Don Galletly (713) 693-4148
This press release may contain forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 concerning, among other
things, Weatherford's prospects for its operations and the integration of recent
acquisitions, all of which are subject to certain risks, uncertainties and
assumptions. These risks and uncertainties, which are more fully described in
Weatherford International, Inc.'s Annual, Quarterly and Current Reports filed
with the Securities and Exchange Commission, include the impact of oil and
natural gas prices and worldwide economic conditions on drilling activity and
the demand for and pricing of Weatherford's products. Should one or more of
these risks or uncertainties materialize, or should the assumptions prove
incorrect, actual results may vary in material aspects from those currently
anticipated.
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WEATHERFORD INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(In 000's, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ende
March 31,
----------------------
2000 1999
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<S> <C> <C>
Net Revenues:
Drilling and Intervention Services $ 187,529 $ 142,634
Completion Systems 47,621 22,653
Artificial Lift Systems 100,217 57,471
Compression Services 60,015 42,583
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395,382 265,341
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Operating Income (Loss):
Drilling and Intervention Services 30,844 22,172
Completion Systems (5,115) (5,142)
Artificial Lift Systems 8,298 (844)
Compression Services 2,224 5,016
Corporate Expenses (8,578) (5,572)
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27,673 15,630
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Other Expense:
Other, Net 1,587 569
Interest Expense (13,022) (10,000)
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Income Before Income Taxes 16,238 6,199
Provision for Income Taxes (5,682) (1,699)
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Income Before Minority Interest 10,556 4,500
Minority Interest Expense, Net of Taxes (563) (738)
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Net Income from Continuing Operations 9,993 3,762
Loss from Discontinued Operations, Net of Taxes (3,458) (1,224)
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Net Income $ 6,535 $ 2,538
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Basic Earnings Per Share:
Income from Continuing Operations $ 0.09 $ 0.04
Loss from Discontinued Operations (0.03) (0.01)
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Net Income Per Share $ 0.06 $ 0.03
========= =========
Basic Weighted Average Shares Outstanding 108,752 97,315
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Diluted Earnings Per Share:
Income from Continuing Operations $ 0.09 $ 0.04
Loss from Discontinued Operations (0.03) (0.01)
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Net Income Per Share $ 0.06 $ 0.03
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Diluted Weighted Average Shares Outstanding 111,318 98,007
========= =========
Depreciation and Amortization:
Drilling and Intervention Services $ 26,009 $ 23,856
Completion Systems 6,451 2,427
Artificial Lift Systems 5,874 4,835
Compression Services 9,329 7,568
Corporate 751 363
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$ 48,414 $ 39,049
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</TABLE>
