-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AjLOEvenlaaS1pMak5SDQQ/bJXtpjVGPolIKdT6AZlmkxm05xuho+iNflxerXTwa H67R6bLTBZRQj6hij28opA== 0000898430-96-001464.txt : 19960429 0000898430-96-001464.hdr.sgml : 19960429 ACCESSION NUMBER: 0000898430-96-001464 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960426 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: VARCO INTERNATIONAL INC CENTRAL INDEX KEY: 0000102993 STANDARD INDUSTRIAL CLASSIFICATION: OIL & GAS FILED MACHINERY & EQUIPMENT [3533] IRS NUMBER: 950472620 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08158 FILM NUMBER: 96551084 BUSINESS ADDRESS: STREET 1: 743 N ECKHOFF ST CITY: ORANGE STATE: CA ZIP: 92668 BUSINESS PHONE: 7149781900 MAIL ADDRESS: STREET 1: 743 NO ECKHOFF STREET CITY: ORANGE STATE: CA ZIP: 92668 10-Q 1 FORM 10-Q DATED 3/31/96 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from___________to________________ Commission File number 1-8158 VARCO INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) California 95-0472620 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 743 North Eckhoff Street, Orange, Ca 92668 (Address of principal executive offices) (Zip code) (714) 978-1900 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes__X__ No____ 30,231,786 (Number of shares of Common Stock outstanding at March 31, 1996) PART I-FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. Pursuant to General Instruction D to Form 10-Q, the Condensed Consolidated Statements of Cash Flows, Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Income of Varco International, Inc., (the "Company") and its subsidiaries included in the registrant's First Quarter Report to Shareholders for the three months ended March 31, 1996, filed as Exhibit 19 hereto are incorporated herein by reference. Such financial statements should be read in light of the following: ADJUSTMENTS. The financial statements contained in Exhibit 19 hereto include all adjustments which in the opinion of management are of a normal recurring nature, considered necessary to present fairly the results of operations for the interim periods presented. NET INCOME PER SHARE. Net income per share is based upon an average of 30,728,000 and 33,592,000 shares outstanding for the three months ended March 31, 1996, and 1995 respectively. INVENTORIES. The Company estimates the components of inventory at March 31, 1996, and December 31, 1995, to be as follows:
MARCH 31, 1996 DECEMBER 31, 1995 --------------- ------------------ Raw Materials $ 6,310,000 $ 5,480,000 Work in Process 26,823,000 18,061,000 Finished Goods 63,097,000 61,052,000 LIFO Reserves (14,145,000) (13,761,000) ------------ ------------ $ 82,085,000 $ 70,832,000 ============ ============
FIXED ASSETS. Fixed assets are stated net of accumulated depreciation of $62,484,000 at March 31, 1996, and $60,625,000 at December 31, 1995. COMMON STOCK AND ADDITIONAL PAID-IN-CAPITAL. On March 31, 1996, the Company's Common Stock account was $20,600,000 and Additional Paid-In-Capital accounts were $104,491,000. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Pursuant to General Instruction D to Form 10-Q, Management's Discussion and Analysis of Financial Condition and Results of Operations contained in the registrant's First Quarter Report to Shareholders for the three months ended March 31, 1996, filed as Exhibit 19 hereto, is incorporated herein by reference. PART II-OTHER INFORMATION ITEM 2. CHANGES IN SECURITIES On March 24, 1995, the Company commenced a "Dutch Auction" type tender offer (the "Tender Offer") to purchase up to 5,300,000 shares of its Common Stock at a purchase price not greater than $8.00 per share nor less than $6.75 per share. Pursuant to the Tender Offer, which terminated on April 21, 1995, the Company purchased 3,150,560 shares of its Common Stock at a purchase price of $8.00 per share. In July 1992 the Company sold $50.0 million aggregate principal amount of its 8.95% Senior Notes Due June 30, 1999 (the "Senior Notes") to a group of ten institutional investors pursuant to a Note Agreement dated as of July 1, 1992 (as amended, the "Note Agreement"). The principal of the Senior Notes is payable in five equal annual installments of $10.0 million, the first of which was made on June 30, 1995. The Note Agreement prohibits any "Restricted Payment" subsequent to July 17, 1992 unless after giving effect thereto, (i) the aggregate amount of all Restricted Payments subsequent to such date would not exceed $5,000,000 plus the cumulative sum of 50% of the Company's consolidated net income (or minus 100% in the case of a deficit) subsequent to March 31, 1992 and (ii) the Company could incur at least $1.00 of additional indebtedness under the Note Agreement covenant limiting indebtedness. The term "Restricted Payment" includes (a) any dividend (other than dividends payable in shares of capital stock) or other distributions on any shares of capital stock of the Company; (b) any purchase, redemption or other acquisition of any shares of the capital stock of the Company or any rights or options to purchase or acquire such shares; and ( c) any "Restricted Investment", which is generally defined as any investment other than an investment in a subsidiary of the Company or an investment in certain designated government or rated securities. In addition, the Company may purchase, redeem or otherwise acquire shares of its capital stock or make Restricted Investments from the net cash proceeds of the substantially concurrent sales of shares of capital stock or from the sale of securities convertible into such shares upon conversion. Pursuant to a waiver and amendment dated as of March 8, 1995, the holders of the Senior Notes (1) waived compliance with the limitations on Restricted Payments discussed above, (2) agreed that the amount expended in the Tender Offer would not constitute a Restricted Payment, and (3) amended certain covenants to take into account the effect of the consummation of the Tender Offer on certain financial ratios. On February 25, 1993 the Company entered into an unsecured revolving credit agreement with Citicorp USA, Inc. and Citibank, N.A. (as amended, the "Credit Agreement"). Effective as of March 17, 1995 the Credit Agreement was amended to (1) extend the maturity date from March 31, 1996 to October 31, 1998; (2) increase the total maximum facility from $20.0 to $35.0 million, consisting of a loan facility of $25.0 million in and a letter of credit facility of $10.0 million; and (3) to amend certain convenants to permit the Tender Offer and to take into account the effect of the consummation of the Tender Offer on certain financial rations. Under the terms of the Credit Agreement, the amount available for the payment of dividends on, and repurchases of, Common Stock is limited to 25% of the Company's consolidated net income arising after January 1, 1992, computed on a cumulative basis. In addition, pursuant to the December 31, 1995 amendment to the Credit Agreement discussed above, the Company may repurchase at any time prior to December 31, 1996 shares of its Common Stock for an aggregate cost not exceeding $50.0 million, including shares purchased pursuant to the Tender Offer. The Company may also purchase or otherwise acquire shares of Common Stock from the proceeds of othe substantially concurrent sale of shares of Common Stock. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits 11 Statement re computation of per share earnings for the three months ended March 31, 1996 and 1995. 19 Varco International, Inc. First Quarter Report to Shareholders, Three Months Ended March 31, 1996. 27 Financial Data Schedule (b) Reports on Form 8-K. No reports on Form 8-K were filed during the quarter for which this report is filed. 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 thereunto duly authorized. VARCO INTERNATIONAL, INC. DATE: APRIL 25, 1996 BY: /s/ RICHARD A. KERTSON ---------------------- VICE PRESIDENT-FINANCE AND CHIEF FINANCIAL OFFICER DATE: APRIL 25, 1996 BY: /s/ DONALD L. STICHLER ---------------------- CONTROLLER-TREASURER EXHIBIT INDEX 11 Statement re computation of per share earnings for the three months ended March 31, 1996 and 1995. 19 Varco International, Inc. First Quarter Report to Shareholders, Three Months Ended March 31, 1996. 27 Financial Data Schedule. EX-11 2 STATEMENT REGARDING COMPUTATIONS EXHIBIT 11 VARCO INTERNATIONAL, INC. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Three Months Ended March 31 1995 ------------------ A. CALCULATION OF ADJUSTED EARNINGS Net Income After Tax $2,913,000
Total Number Average Number Stock Option Shares Used Number of of Shares after of Shares Equivalent To Calculate Days Weighing Outstanding Shares EPS - --------------------------------------------------------------------------------------------------------------------------------- B. CALCULATION OF AVERAGE SHARES OUTSTANDING Common Stock Outstanding from time-to-time during: Three Months Ended March 31, 1995 90 3,002,305,918 33,358,955 233,045 33,592,000
C. CALCULATION OF EARNINGS PER SHARE Income Per Share = Net Income After Tax ------------------------ Total Shares Outstanding Income Per Share = Three Months Ended March 31, 1995 2,913,000 = $0.09 ---------- 33,592,000 EXHIBIT 11 VARCO INTERNATIONAL, INC. STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Three Months Ended March 31 1996 ------------------ A. CALCULATION OF ADJUSTED EARNINGS Net Income After Tax $3,028,000
Total Number Average Number Stock Option Shares Used Number of of Shares after of Shares Equivalent To Calculate Days Weighing Outstanding Shares EPS - --------------------------------------------------------------------------------------------------------------------------------- B. CALCULATION OF AVERAGE SHARES OUTSTANDING Common Stock Outstanding from time-to-time during: Three Months Ended March 31, 1996 91 2,747,512,520 30,192,445 535,138 30,727,583
C. CALCULATION OF EARNINGS PER SHARE Income Per Share = Net Income After Tax ------------------------ Total Shares Outstanding Income Per Share = Three Months Ended March 31, 1996 3,028,000 = $0.10 ---------- 30,727,583 EX-19 3 FIRST QUARTER REPORT EXHIBIT 19 TO OUR SHAREHOLDERS As 1996 begins to unfold, our industry is experiencing a wave of very positive sentiment, with offshore drilling providing most of the momentum. The fundamentals of the offshore drilling industry have improved significantly during the past twelve months, as capacity utilization of the worldwide offshore rig fleet is at its highest level in more than ten years and is continuing to edge upward. As a result, day rates have increased and contract lengths have extended, particularly for "premium" rigs. This trend favorably impacts Varco as the higher cost and more demanding environment associated with offshore drilling generally requires the use of higher capacity and more cost-effective drilling equipment. Additionally, our key customers, the offshore drilling contractors, are experiencing their best financial results in many years. These elements combine to create both the need and financial resources to upgrade rigs and invest in newer technology equipment. These industry conditions are reflected in our incoming orders, which totaled $102.2 million in the first quarter. This is the second consecutive quarter in which order bookings reached an all-time high for the Company, surpassing the $85.6 million recorded in the fourth quarter of last year. In the first quarter of l995 incoming orders were $76.9 million. The increase from the year ago period is attributable to our Shaffer Division, and is the direct result of orders for equipment involved in the upgrading of several floating offshore rigs to operate in deeper water. Net Income for the first quarter was $3.0 million, $.10 per share, on Revenues of $71.0 million. For the first quarter of 1995, Net Income was $2.9 million, $.09 per share, and Revenues were $57.6 million. Profitability continued to be adversely impacted in the first quarter by certain newer products of our Drilling Systems Division. As reported at the end of last year, these products have yielded less than typical manufacturing margins and incurred high field support costs. However, the impact was less than in the fourth quarter of last year and our profit improvement plans for these products are demonstrating progress. Industry conditions are generally more favorable today than at any time in recent years. The cold winter has caused oil and gas prices to increase, and many analysts believe that the long standing excess supply of these commodities has been substantially eliminated and that our industry is entering a period of improving economics. While we also sense a fundamental shift in the industry outlook, our view is tempered by the unpredictability which has characterized our industry in recent years. One change which we believe to be enduring is the emphasis by major oil companies on reducing the unit cost of finding and producing oil and gas. As noted previously this effort has led to drilling in deeper water and in more hostile environments, and to an increased reliance on new technology. All of these factors are particularly beneficial to Varco, and they play directly into the key strategies we have followed in recent years. Therefore, we will concentrate on continuing to effectively execute those strategies that have served us well to date. We appreciate your continued support. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL INDUSTRY CONDITIONS Worldwide drilling activity, as measured by the average number of active drilling rigs, increased slightly in the first three months of 1996 to an average of approximately 1,803 from an average of approximately 1,786 during the same period in 1995. The international component of active drilling rigs averaged approximately 780 in the first quarter of 1996 an increase of 30 over the prior year. The U.S. rig count was essentially unchanged in the first quarter of last year, while Canadian activity declined by 12 rigs, to an average of 315. Offshore drilling activity increased significantly year-to-year, as reflected by an increase in rig utilization (mobile offshore rigs under contract as a percent of available rigs). For the first quarter of 1996, mobile offshore rig utilization averaged 87%, the highest level in more than ten years, as compared to 81% in the first quarter of 1995. RESULTS OF OPERATIONS Set forth below are the net orders and revenues for the Company's five operating divisions:
Three Months Ended March 31, --------------------- 1996 1995 Net Orders Varco Drilling Systems $ 24,343 $23,280 Varco BJ Oil Tools 14,068 12,030 Martin-Decker/TOTCO Instrumentation 13,627 15,653 Shaffer 47,951 22,510 Thule Rigtech 2,231 3,447 -------- ------- Total $102,220 $76,920 ======== ======= Revenues Varco Drilling Systems $ 25,695 $19,848 Varco BJ Oil Tools 11,778 10,323 Martin-Decker/TOTCO Instrumentation 14,639 13,718 Shaffer 15,371 10,370
Thule Rigtech 2,773 2,913 -------- ------- Total $70,256 $57,172 ======== =======
Order bookings increased $25.3 million, 33%, in the first three months of 1996 as compared to the same period of 1995. The increase is attributable to the Shaffer Division and included orders to upgrade several offshore rigs (primarily floating offshore rigs used in deepwater drilling) with higher capacity pressure control, motion compensation and related equipment. The year- to-year variations in order rate at the other Divisions reflect typical quarterly fluctuations for these Divisions. The increase in revenues for Drilling Systems is primarily due to a $3.3 million increase in sales of pipe handling systems and to the shipment of 12 Top Drive Drilling Systems during the first quarter as compared to 10 units in the first quarter of 1995. The increase in revenue for Shaffer partially reflects the increased order rate for offshore equipment, although the full impact of Shaffer's increased order rate is yet to occur. Shaffer's backlog of unshipped orders at March 31, 1996 was approximately $64.5 million as compared to $16.0 million at March 31, 1995. The Company's new orders were $85.6 million for the fourth quarter of 1995 and $102.2 million for the first quarter of 1996. These rates compare to an average of $69.8 million for the first three quarters of 1995. Virtually all of these increases are attributable to the Shaffer Division, resulting from the offshore rig upgrades discussed above. At March 31, 1996 the Company's backlog of unshipped orders was approximately $107.3 million as compared to $75.4 million at December 31, 1995. In accordance with industry practice, orders and commitments generally are cancelable by customers at any time. The Company believes that most of the backlog will be shipped by December 31, 1996. Gross margins (net sales and rental income less costs of sales and rental income) as a percentage of net sales and rental income for the first quarter of 1996 was 35.2%. This compares to a gross margin of 41.6% for the same period in 1995. The decline is primarily due to lower margins on Drilling Systems' newer products. The lower Drilling Systems' margins reduced overall margins by approximately 4.3% and reflect a slightly negative margin on TDS-9S units ($2.8 million in revenue), which includes high field support cost, and lower than average margins on newer pipe handling products. The balance of the decline is due to higher Shaffer revenues which carry lower gross margins (due principally to price competition) than the combined gross margins of the other divisions. The increase in other income is due to the sale of an equity security that was previously received in settlement of a previously written-off trade receivable. The Company believes that new product development is a significant factor for the future of the Company. During the first three months of 1996 the Company spent $3.6 million or 5.0% of revenues on new product development. This compares to $3.2 million or 5.5% of revenue during the same period in 1995. Selling, general and administrative expenses increased approximately 6% in the first quarter 1996 as compared to the first quarter of 1995. As a percent of revenue, selling, general and administrative expenses decreased to 22.7% from 26.3% in the first quarter of 1996. The dollar increase is primarily due to selling costs associated with the higher revenue level. Overall Company employment at March 31, 1996 was 1,684 (including 210 temporary employees) which compares to 1,465 (including 220 temporary employees) a year ago. This increase is primarily due to an increase in manufacturing employees. The effective tax rate for the first quarter of 1996 was 36.5% as compared to 38.3% for the first quarter of 1995. The lower tax rate is due to a higher effective foreign tax rate in the first quarter of 1995 as compared to 1996. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1996 the Company had cash and cash equivalents of $4.7 million as compared to $6.8 million at December 31, 1995. This decline was due to an increase in working capital during the first quarter. On March 24, 1995, the Company commenced a "Dutch Auction" type tender offer (the "Tender Offer") to purchase up to 5,300,000 shares of its Common Stock at a purchase price not greater than $8.00 per share nor less than $6.75 per share. Pursuant to the Tender Offer, which terminated on April 21, 1995, the Company purchased 3,150,560 shares of its Common Stock at a purchase price of $8.00 per share. The aggregate cost to the Company of the Tender Offer, including expenses, was approximately $26.2 million, which was funded from cash and cash equivalents and short-term investments. In July 1992 the Company sold $50.0 million aggregate principal amount of its 8.95% Senior Notes Due June 30, 1999 (the "Senior Notes") to a group of ten institutional investors pursuant to a Note Agreement dated as of July 1, 1992 (the "Note Agreement"). The principal of the Senior Notes is payable in five equal annual installments of $10.0 million, the first of which was made on June 30, 1995. Effective as of March 8, 1995, the holders of the Senior Notes waived compliance with certain covenants contained in the Note Agreement in order to permit the Tender Offer and amended certain financial covenants to take into account the effect of the consummation of the Tender Offer. The Senior Notes include a yield maintenance prepayment penalty if any principal is repaid prior to the installment due date. Had the entire outstanding principal amount been prepaid at December 31, 1995 the prepayment penalty would have been approximately $1.8 million. On February 25, 1993 the Company entered into an unsecured revolving credit agreement with Citicorp USA, Inc. and Citibank, N.A. (the "Credit Agreement"). Effective as of March 17, 1995 the Credit Agreement was amended to (1) extend the maturity date from March 31, 1996 to October 31, 1998; (2) increase the total maximum facility from $20.0 to $35.0 million, consisting of a loan facility of $25.0 million and a letter of credit facility of $10.0 million; and (3) to amend certain covenants to permit the Tender Offer and to take into account the effect of the consummation of the Tender Offer on certain financial ratios. At March 31, 1996 there were $2.0 million in advances outstanding and $4.9 million in letters of credit outstanding under this facility. Both the Note Agreement and the Credit Agreement restrict the payment of dividends (other than dividends payable solely in shares of Common Stock) on, and repurchases of, Common Stock. Under the terms of the Credit Agreement, which is generally the more restrictive of these, the amount available for the payment of dividends on, and repurchases of, Common Stock is limited to 25% of the Company's consolidated net income arising after January 1, 1992, computed on a cumulative basis. In addition, pursuant to a December 31, 1995 amendment to the Credit Agreement, the Company may repurchase at any time prior to December 31, 1996 shares of its Common Stock for an aggregate cost not exceeding $50.0 million including shares purchased pursuant to the Tender Offer. The Company may also purchase or otherwise acquire shares of Common Stock from the proceeds of the substantially concurrent sale of shares of Common Stock. On May 26, 1994 the Company announced that its Board of Directors authorized the repurchase of up to one million shares of the Company's Common Stock for an aggregate purchase price not exceeding $6.0 million (the "Repurchase Program"). On May 26, 1995 the Company announced an increase and extension of the above Repurchase Program. The total number of shares authorized for repurchase was increased to 1,500,000; the maximum aggregate purchase price was increased to $11.0 million and the purchase period was extended through December 31, 1996. To date the Company has repurchased on the open market 627,600 shares of its Common Stock at an average price of approximately $8.00 per share. The last such purchase was on December 6, 1995. At March 31, 1996 the Company's working capital was $95.6 million as compared to $89.2 million at December 31, 1995 and its current ratio was 2.5 to 1.0 the same as at December 31, 1995. Long-term debt as a percent of total capitalization was 17% at March 31, 1996 as compared to 16% at December 31, 1995. The increase in working capital is primarily due to an increase in inventory and receivables during the first quarter of 1996. The Company's capital expenditures during the first quarter 1996 were $3.5 million as compared to $2.3 million for the first quarter 1995. The Company's current plans for capital expenditures in 1996 are approximately $13.5 million. The Company believes its revolving credit facility and its cash and cash equivalents will be sufficient to meet its capital expenditures, operating cash needs and the principal payment on the Senior Notes in 1996. VARCO INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
- ---------------------------------------------------------------------------------------- March 31, December 31, Assets 1996 1995 - ---------------------------------------------------------------------------------------- (in thousands) Current Assets: Cash and cash equivalents $ 4,713 $ 6,762 Receivables (net) 64,434 60,683 Inventories 82,085 70,832 Other 9,036 8,663 - ---------------------------------------------------------------------------------------- Total Current Assets 160,268 146,940 Property, plant and equipment at cost 50,953 50,622 less accumulated depreciation Cost in excess of net assets acquired 35,964 36,371 Other assets 11,759 12,638 - ---------------------------------------------------------------------------------------- Total Assets $258,944 $246,571 ======================================================================================== Liabilities and Shareholders' Equity - ---------------------------------------------------------------------------------------- Current Liabilities: Accounts payable $ 26,960 $ 21,356 Other liabilities 27,735 26,397 Current portion of long term debt 10,000 10,000 - ---------------------------------------------------------------------------------------- Total Current Liabilities 64,695 57,753 Long-term debt 31,583 29,539 Other non-current liabilities 8,076 8,100 - ---------------------------------------------------------------------------------------- Total Liabilities 104,354 95,392 Shareholders' Equity: Common stock and additional paid-in capital 125,091 124,552 Retained earnings 29,499 26,627 - ---------------------------------------------------------------------------------------- Total Shareholders' Equity 154,590 151,179 - ---------------------------------------------------------------------------------------- Total Liabilities and Shareholders' Equity $258,944 $246,571 ========================================================================================
VARCO INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
- ---------------------------------------------------------------------------- Three Months Ended March 31, 1996 1995 - ---------------------------------------------------------------------------- (in thousands) Cash Flows From (Used In) Operating Activities: Net income $ 3,028 $ 2,913 Depreciation and amortization 3,012 3,012 Increase (decrease) in operating cash flows Receivables (3,751) (2,782) Inventories (11,253) (8,655) Accounts payable 5,604 3,293 Interest payable (886) 1,120 Other 3,350 3,421 - ---------------------------------------------------------------------------- Net cash from operating activities (896) 2,322 - ---------------------------------------------------------------------------- Cash Flows From (Used in) Investing Activities: Short term investments 20,735 Equipment purchases (3,521) (2,252) Proceeds from equipment sales 172 249 - ---------------------------------------------------------------------------- Net cash from (used in) investing activities (3,349) 18,732 - ---------------------------------------------------------------------------- Cash Flows (Used in) Financing Activities: Increase in long-term debt and line of credit 2,000 Proceeds from issuance of Common Stock 196 Repurchase of Common Stock (19) - ---------------------------------------------------------------------------- Net cash (used in) financing activities 2,196 (19) - ---------------------------------------------------------------------------- Net change in cash and cash equivalents (2,049) 21,035 - ---------------------------------------------------------------------------- Cash and cash equivalents at beginning of year 6,762 8,793 - ---------------------------------------------------------------------------- Cash and cash equivalents at end of quarter $ 4,713 $29,828 ============================================================================
VARCO INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited)
Three Months Ended March 31, 1996 1995 ------------------- (in thousands except per share data) Revenues: Net Sales $63,832 $50,803 Rental Income 6,424 6,369 Other Income 713 473 - ----------------------------------------------------------------------------------- 70,969 57,645 - ----------------------------------------------------------------------------------- Cost and Expenses: Cost of Sales 43,603 31,554 Cost of Rental Income 1,907 1,831 Selling, General and Administrative expense 16,117 15,145 Research and Developments costs 3,572 3,190 Interest Expense 1,005 1,204 - ----------------------------------------------------------------------------------- 66,204 52,924 - ----------------------------------------------------------------------------------- Income Before Income Taxes 4,765 4,721 - ----------------------------------------------------------------------------------- Provision for Income Taxes 1,737 1,808 Net Income $ 3,028 $ 2,913 =================================================================================== Net Income per Share of Common Stock $ 0.10 $ 0.09 =================================================================================== Shares Used to Calculate Earnings Per Share 30,728 33,592 ===================================================================================
Note: These statements are condensed and do not contain disclosures required by generally accepted accounting principles. Reference should be made to the financial statements contained in the Annual Report to Shareholders for the year ended December 31, 1995. EX-27 4 FDS ARTICLE 5 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 This schedule contains summary financial information extracted from the financial statements of the registrant included in its first quarter report to shareholders for the three months ended March 31, 1996 and is qualified in its entirety by reference to such financial statements. 3-MOS DECEMBER 31, 1996 MARCH 31, 1996 4,713,000 0 62,693,000 (1,741,000) 82,085,000 160,268,000 113,437,000 62,484,000 258,944,000 64,695,000 31,583,000 125,091,000 0 0 29,499,000 258,944,000 70,256,000 70,969,000 45,510,000 61,627,000 3,572,000 0 1,005,000 4,765,000 1,737,000 3,028,000 0 0 0 3,028,000 0.10 0.10
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