HOUSTON, Feb. 28, 2017 /PRNewswire/ -- Dril-Quip,
Inc. (NYSE: DRQ) today announced net income of $1.3 million, or $0.03 per diluted share, for the three months
ended December 31, 2016, versus net
income of $48.4 million, or
$1.28 per diluted share, for the
fourth quarter of 2015. The fourth quarter 2016 results were
favorably impacted by an after-tax foreign exchange gain of
$2.9 million, or $0.08 per diluted share. In addition, the fourth
quarter 2016 results were negatively impacted by the following
after-tax amounts: inventory valuation adjustments of $4.8 million ($0.13
per diluted share), acquisition costs and fees of $2.6 million ($0.07
per diluted share) and net loss from operations of TIW Corporation
of $3.1 million ($0.08 per diluted share). The fourth quarter 2015
results were favorably impacted by an after-tax foreign exchange
gain of $3.1 million, or $0.08 per diluted share. Total revenues were
$106.1 million during the quarter
ended December 31, 2016 compared to
$201.6 million for the same period in
2015.
For the year ended December 31,
2016, net income was $93.2
million, or $2.47 per diluted
share, compared with net income of $192.0
million, or $4.98 per diluted
share, for 2015. The results for the twelve months ended
December 31, 2016 were favorably
impacted by an after-tax foreign exchange gain of $25.6 million, or $0.68 per diluted share. The full year 2016
results were negatively impacted by the following after-tax
amounts: inventory valuation adjustments of $4.8 million ($0.13
per diluted share), acquisition costs and fees of $3.5 million ($0.09
per diluted share) and net loss from operations of TIW Corporation
of $3.1 million ($0.08 per diluted share). The results for the
year ended December 31, 2015 were
favorably impacted by an after-tax foreign exchange gain of
$3.9 million, or $0.10 per diluted share. Total revenues for the
year ended December 31, 2016 were
$538.7 million, compared to
$844.3 million for the same period in
2015.
In addition, the Company announced that its backlog at
December 31, 2016 was $318 million, compared to $685 million at December
31, 2015.
Blake DeBerry, Dril-Quip's
President and CEO stated, "Our disappointing fourth quarter results
were primarily driven by revenue shortfalls in each of our major
operating regions as operators continued to defer spending in the
face of difficult market conditions. In addition, our fourth
quarter results were negatively impacted by a number of
non-recurring items, including costs associated with the TIW
acquisition and one-time inventory adjustments.
"2017 will be a very challenging year for us and for the entire
offshore sector. Accordingly, our diminished backlog will
limit our manufacturing flexibility and will require an even higher
level of execution in order for us to meet our revenue
targets. Regarding costs, we continue to minimize
expenditures while maintaining our ability to capitalize on the
eventual market rebound. Following a series of reductions
dating back to 2015, we further reduced our employee headcount in
the first quarter of 2017. In addition, reductions in pay
have been instituted globally.
"Due to our reduced backlog level and the uncertainty of
book-and-ship order volumes, we do not believe that it would be
prudent to provide 2017 earnings-per-share guidance at this time.
The first quarter of 2017 is expected to be our most challenging
quarter of the year with the impact of severance costs and only
benefiting from a partial quarter of pay reductions. However,
we do expect to be net income and free cash flow positive during
2017, allowing us to continue to execute our long-term
strategies.
"Looking forward, we believe that our existing operating cost
structure, combined with a debt-free balance sheet and a
significant cash position, leaves us well-positioned for an
anticipated market upturn."
Dril-Quip is a leading manufacturer of highly engineered
offshore drilling and production equipment, which is well suited
for use in deepwater, harsh environment and severe service
applications.
Statements contained herein relating to future operations and
financial results that are forward-looking statements are based
upon certain assumptions and analyses made by the management of the
Company in light of its experience and perception of historical
trends, current conditions, expected future developments and other
factors. These statements are subject to risks beyond the Company's
control, including, but not limited to, the volatility of oil and
natural gas prices and cyclicality of the oil and gas industry,
project terminations, suspensions or scope adjustments to
contracts, uncertainties regarding the effects of new governmental
regulations, the Company's international operations, operating
risks, and other factors detailed in the Company's public filings
with the Securities and Exchange Commission. Investors are
cautioned that any such statements are not guarantees of future
performance and actual outcomes may vary materially from those
indicated.
Dril-Quip,
Inc.
Comparative Condensed
Consolidated Statements of Income
|
|
(In thousands, except
per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
Three months
ended
December 31,
|
|
Year ended
December 31,
|
|
|
2016
|
2015
|
|
2016
|
2015
|
|
Revenues
|
$ 106,091
|
$ 201,630
|
|
$ 538,731
|
$ 844,310
|
|
Cost and
expenses:
|
|
|
|
|
|
|
Cost of
sales
|
77,794
|
108,352
|
|
328,404
|
459,286
|
|
Selling, general and
administrative
|
21,656
|
20,173
|
|
53,143
|
88,044
|
|
Engineering and
product development
|
11,275
|
12,797
|
|
44,325
|
48,145
|
|
|
|
|
|
|
|
|
|
110,725
|
141,322
|
|
425,872
|
595,475
|
|
|
|
|
|
|
|
|
Operating
income
|
(4,634)
|
60,308
|
|
112,859
|
248,835
|
|
Interest
income
|
1,069
|
389
|
|
3,037
|
948
|
|
Interest
expense
|
(13)
|
(2)
|
|
(28)
|
(12)
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
(3,578)
|
60,695
|
|
115,868
|
249,771
|
|
Income tax
provision
|
(4,880)
|
12,341
|
|
22,647
|
57,763
|
|
|
|
|
|
|
|
Net income
|
$
1,302
|
$
48,354
|
|
$
93,221
|
$ 192,008
|
|
|
|
|
|
|
|
|
Diluted earnings per
share
|
$
0.03
|
$
1.28
|
|
$
2.47
|
$
4.98
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares–diluted
|
37,588
|
37,845
|
|
37,667
|
38,531
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
$
8,765
|
$
7,700
|
|
$
31,857
|
$
30,477
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
$
5,474
|
$
10,333
|
|
$
25,763
|
$
27,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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visit:http://www.prnewswire.com/news-releases/dril-quip-inc-announces-results-for-4th-quarter--year-end-2016-300414390.html
SOURCE Dril-Quip, Inc.