Varco acquired all of the shares of MIL, based in Great Yarmouth, England in September 2001, with a view to expand its sales of drilling equipment by packaging the equipment with rigs fabricated by MIL. In addition to its leading oilfield products and services, Varco is a major supplier of drilling machinery used primarily to handle and rotate pipe. The Company had not previously been engaged in the business of fabricating structural rig components, and stated that its financial results from the strategy have been disappointing for several quarters, which prompted its decision to exit rig fabrication. As a result, Varco expects that its fourth quarter 2003 results will be impacted by an operating loss from MIL, and by charges relating to the impairment of MIL goodwill and long-lived assets. The MIL operating loss and impairment charge are expected to be $16.9 million pre-tax or $0.15 per fully diluted share after tax in the fourth quarter, and are expected to be $0.22 per share for the full year. Varco's total consolidated earnings for the fourth quarter and full year will be announced prior to the open of the market on Tuesday, February 3, 2004.
The Company also expects to report that its total consolidated fourth quarter 2003 revenues will decline seven percent from its third quarter, due primarily to a decline in drilling equipment sales. Excluding MIL, its revenues are expected to be down six percent from the third quarter. Following its earnings release Varco will hold a conference call on Tuesday, February 3, 2004 at 10:00AM CST to discuss results. The dial-in number for the call is 866-482-6974 and the password number is 3987605. A replay will be available through February 10, 2004 at 866-219-1444 with the same password, or on the Company's website at www.varco.com.
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