Hydril Sees Increase in 3Q05 Earnings

Hydril reported earnings for the third quarter ended September 30, 2005 of $0.81 per diluted share, up 13% sequentially from $0.72 reported in the second quarter of 2005, and up 33% from $0.61 reported for the third quarter of 2004. The current quarter included a gain on the sale of surplus real estate which, net of selling expenses, increased after-tax earnings by $0.06 per diluted share.

On a sequential basis, third quarter revenue of $93.0 million was up 2%, operating income of $27.2 million was up 9%, and net income of $19.6 million, which included the gain on the surplus real estate sale, was up 14%. Compared to the third quarter of 2004, revenue increased 19%, operating income increased 38%, and net income was up 36%.

Chris Seaver, President and CEO, commented, ``The third quarter presented a significant challenge to the company and especially our employees as a result of the two devastating hurricanes that hit the Gulf Coast. Although our Gulf Coast plants were temporarily shut down as a result of these hurricanes, through dedication and hard-work we were able to continue to meet the needs of our customers. I am pleased to report that all our Gulf Coast area plants are operational and our New Orleans area facility, although not at pre-hurricane levels, is making steady progress towards full production.''

Premium Connection Segment

Third quarter revenue for Hydril's premium connection segment increased 5% sequentially to $62.9 million and operating income increased 16% to $23 million. The increase in revenue was driven by higher demand for our products in international markets. The operating income increase resulted from manufacturing efficiencies in our international plants and lower sales, general and administration expenses.

Pressure Control Segment

Sequentially, third quarter revenue for the pressure control segment decreased 5% to $30 million and operating income decreased 10% to $8.6 million. Capital equipment revenue increased 19% to $14 million while aftermarket revenue decreased 20% to $16 million. The increase in capital equipment revenue resulted from progress associated with project orders for deepwater and jack-up blowout prevention systems, which are recorded on a percentage-of-completion accounting basis. Aftermarket revenue was down from an unusually strong second quarter.

The capital equipment backlog was $61 million at September 30, 2005, up 29% from $47 million at June 30, 2005, and more than triple the $16 million at September 30, 2004.

Market Indicators

As more fully described on our website at http://www.hydril.com on the ``Market Indicators'' page, our principal indicators are: (1) the U.S. rig count for rigs drilling at targets deeper than 15,000 feet, (2) Gulf of Mexico rigs under contract, (3) the international rig count, (4) the worldwide offshore rig count, and (5) the total U.S. rig count.

Conference Call

Hydril's conference call to discuss third quarter financial results is scheduled for Tuesday, October 25, 2005 at 8:30 a.m. EDT, (7:30 a.m. CDT, 5:30 a.m. PDT) and is accessible by dialing (800) 657-1269 (domestic) or (973) 409-9256 (international) and referencing passcode no. 6603991. For further information on the call or the webcast, please visit the company's website at http://www.hydril.com or see the company's press release announcing the earnings conference call dated October 14, 2005.

To the extent not provided in the call, reconciliations of any non-GAAP financial measures discussed in the call will be available on the Investor Relations page of Hydril's website.


 HYDRIL COMPANY

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (In Thousands, Except Share and Per Share Amounts)
 --------------------------------------------------

                                          Three Months Ended
                                              (unaudited)
                                  ------------------------------------
                                   Sept. 30,    June 30,    Sept. 30,
                                     2005         2005         2004
                                  ----------   ----------   ----------
 Revenue
  Premium Connection              $   62,928   $   59,904   $   53,404
  Pressure Control
   Aftermarket                        16,094       19,989       15,929
   Capital Equipment                  13,952       11,714        9,094
                                  ----------   ----------   ----------
    Subtotal Pressure Control         30,046       31,703       25,023

 Total Revenue                        92,974       91,607       78,427

 Total Gross Profit                   41,284       40,465       33,076
 Gross Margin                             44%          44%          42%

 Selling, General, and
  Admin. Expenses                     14,109       15,468       13,308
                                  ----------   ----------   ----------
 Operating Income (Loss)
  Premium Connection                  22,974       19,891       18,264
  Pressure Control                     8,628        9,572        5,441
  Corporate Administration            (4,427)      (4,466)      (3,937)
                                  ----------   ----------   ----------
 Total Operating Income               27,175       24,997       19,768
 Operating Margin                         29%          27%          25%

 Interest Income                         959          943          293
 Other Income/(Expense)                1,318         (146)        (101)
                                  ----------   ----------   ----------

 Income Before Income Taxes           29,452       25,794       19,960
 Provision for Income Taxes            9,840        8,545        5,519
                                  ----------   ----------   ----------
 Net Income                       $   19,612   $   17,249   $   14,441

 Net Income  Per Share:
   Basic                          $     0.83   $     0.74   $     0.63
   Diluted                        $     0.81   $     0.72   $     0.61

 Weighted Average Shares
  Outstanding:
   Basic                          23,550,685   23,455,850   23,030,468
   Diluted                        24,121,067   23,996,733   23,553,551

 Depreciation and Amortization
  Premium Connection              $    2,181   $    2,160   $    1,941
  Pressure Control                       797          755          731
  Corporate Administration               490          485          467
                                  ----------   ----------   ----------
 Total Depreciation                    3,468        3,400        3,139

 Capital Expenditures                  3,926        2,700        3,405

 Pressure Control Backlog
  Capital Equipment               $   61,164   $   47,305   $   15,898


                                         -----------------------------
                                              Nine Months Ended
                                                 (unaudited)
                                         -----------------------------
                                                   Sept. 30,
                                             2005             2004
                                         ------------     ------------
 Revenue
  Premium Connection                     $    173,340     $    126,392
  Pressure Control
   Aftermarket                                 52,326           46,209
   Capital Equipment                           37,732           26,227
                                         ------------     ------------
    Subtotal Pressure Control                  90,058           72,436

 Total Revenue                                263,398          198,828

 Total Gross Profit                           117,156           81,497
 Gross Margin                                      44%              41%

 Selling, General, and Admin. Expenses         42,885           37,905
                                         ------------     ------------
 Operating Income (Loss)
  Premium Connection                           61,270           40,438
  Pressure Control                             26,006           14,718
  Corporate Administration                    (13,005)         (11,564)
                                         ------------     ------------
 Total Operating Income                        74,271           43,592
 Operating Margin                                  28%              22%

 Interest Income                                2,563              647
 Other Income/(Expense)                         1,065              (74)
                                         ------------     ------------

 Income Before Income Taxes                    77,899           44,165
 Provision for Income Taxes                    26,026           12,828
                                         ------------     ------------
 Net Income                              $     51,873     $     31,337

 Net Income  Per Share:
   Basic                                 $       2.21     $       1.37
   Diluted                               $       2.16     $       1.34

 Weighted Average Shares
  Outstanding:
   Basic                                   23,456,702       22,930,889
   Diluted                                 23,993,313       23,304,555

 Depreciation and Amortization
  Premium Connection                     $      6,300     $      5,747
  Pressure Control                              2,312            2,174
  Corporate Administration                      1,496            1,423
                                         ------------     ------------
 Total Depreciation                            10,108            9,344

 Capital Expenditures                          10,690            6,391

 HYDRIL COMPANY

 CONSOLIDATED BALANCE SHEETS
 (In Thousands)
 ---------------------------------------------------------------------

                                         Sept. 30,       Dec. 31,
                                           2005            2004
                                           ----            ----
                                        (unaudited)
                                        -------------------------
 CURRENT ASSETS:
  Cash and cash equivalents              $ 58,600        $ 51,733
  Investments                             106,609          69,365
  Total receivables                        64,619          62,441
  Total inventories                        53,875          34,820
  Other current assets                      6,580          12,216
                                         --------        --------
    Total current assets                  290,283         230,575
                                         --------        --------

 LONG-TERM ASSETS:
  Property, net                           102,201         102,368
  Other long-term assets                   19,468          10,703
                                         --------        --------
    Total long-term assets                121,669         113,071
                                         --------        --------
 TOTAL                                   $411,952        $343,646
                                         ========        ========
 CURRENT LIABILITIES:
  Accounts payable                       $ 23,969        $ 23,292
  Accrued liabilities and other
   current liabilities                     34,273          31,061
                                         --------        --------
    Total current liabilities              58,242          54,353
                                         --------        --------

 LONG-TERM LIABILITIES:
  Post-retirement, pension
   benefits and other                      15,624          14,510
                                         --------        --------
    Total long-term liabilities            15,624          14,510
                                         --------        --------

 STOCKHOLDERS' EQUITY:
    Total stockholders' equity            338,086         274,783
                                         --------        --------
 TOTAL                                   $411,952        $343,646
                                         ========        ========

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