LUFKIN, Texas, Oct. 14 /PRNewswire-FirstCall/ -- Lufkin Industries,
Inc. (NASDAQ:LUFK) today announced financial results for the third
quarter of 2009. Earnings from continuing operations for the
quarter declined to $5.1 million, or $0.34 per diluted share,
compared with $25.0 million, or $1.66 per diluted share, for the
third quarter of 2008. Revenues declined approximately 40% to
$117.7 million for the third quarter, compared with $195.1 million
for the third quarter of 2008. "Although there are encouraging
signs that activity levels may be responding to a more stable
commodity price environment, our operations continued to be
negatively affected by uncertainties surrounding the short term
direction and pace of the economic recovery and its impact on oil
and gas demand. As a result, we continued to see restricted capital
spending from our customers during the third quarter," said John F.
"Jay" Glick, president and chief executive officer of Lufkin.
"Bookings in our Oil Field Division were up substantially from the
second quarter of 2009, but they were down significantly from 2008
levels, when we saw historically high levels of new orders. High
levels of customer inventory continue to inhibit orders for new
units for our oilfield products. Bookings in the Power Transmission
Division fell 24% from both the second quarter of 2009 and from
last year's third quarter, as order awards on large projects were
delayed. "As a result, our combined order backlog declined to
$133.8 million in the third quarter from $413.9 million in the
third quarter of last year and from $162.3 million at the end of
the second quarter of 2009. "The fact that our Oilfield Division
had its strongest quarter of the year for new orders, with
September being the strongest month of the year, suggests that the
increase in the North American land drilling rig count is beginning
to translate into new orders. Additionally, order cancellations
virtually stopped at the end of July. If North American activity
continues to recover and international projects remain active, it
should bode well for the Oil Field Division in 2010," Glick added.
"We continue to take steps to reduce costs in order to improve our
competitive position and restore our operating margins. Efforts
undertaken last year to improve operational efficiencies through
the use of Lean methods are now beginning to have a positive impact
on profitability. "The near term outlook remains challenging, at
least through the next quarter. As a result of the poor order
intake in Power Transmission during the first quarter of this year,
and our inability to book short delivery orders to fill capacity in
this division during the second and third quarters, financial
results will be negatively affected by reduced revenues and the
deleveraging of fixed overhead in the fourth quarter." THIRD
QUARTER RESULTS Oil Field Division - Oil Field revenues for the
third quarter of 2009 decreased 50% to $73.7 million, compared to
$147.1 million in the third quarter of 2008; they were only
slightly lower than second quarter revenues of $75.0 million. The
year-over-year decrease was led by a 60% decline in new pumping
unit sales, primarily in North America, as well as a 49% drop in
Automation product sales. Sales from the March 2009 acquisition of
ILS contributed $4.7 million, an increase from the $4.2 million
during the second quarter of 2009. Oil Field's new business
bookings declined 78% from the third quarter of 2008 but were up
62% from the second quarter of 2009. Order backlog decreased to
$35.9 million at the end of the third quarter from $53.1 million at
the end of the second quarter and from $279.8 million at the end of
last year's third quarter. This decrease was caused by lower orders
for new pumping units, as customers deferred or cancelled drilling
programs in response to lower energy prices, and by the equipment
inventory overhang in a number of our customers' yards. Power
Transmission Division - Sales of Lufkin's power transmission
products fell to $44.0 million, compared to $48.0 million in last
year's third quarter and $48.7 million in the second quarter of
2009. Third quarter performance was negatively affected by a
decline in shipments across all our markets. Bookings in Power
Transmission declined to $32.8 million during the third quarter
from $43.2 million during the second quarter of this year and from
$ 43.4 million in last year's third quarter. Power Transmission
backlog at the end of the quarter decreased to $97.9 million from
$109.1 million at the end of the second quarter and $134.1 million
at September 30, 2008. Consolidated - Consolidated gross profit
margin for the third quarter decreased to 21.2% of revenues,
compared to 21.8% in the second quarter of this year and 28.6% of
revenues in last year's third quarter due to pricing pressure and
the loss of manufacturing fixed cost leverage. Operating income
decreased to $7.2 million in the third quarter, compared to $38.8
million in last year's third quarter. Selling, general and
administrative expenses as a percentage of revenues was flat versus
the second quarter at 15% of revenues but up from 9% in the
prior-year quarter as a result of declining revenues due to the
strategic decision to maintain employment levels for international
growth opportunities and product development. OUTLOOK "The
fundamentals of oil prices that appear to have stabilized in the
$65 - $75 price range, recent improvements in natural gas prices,
and a continued gradual growth in land drilling activity provide a
backdrop of cautious optimism. We expect the next quarter to be
challenging, with sluggish revenue growth and continued headwinds
from low utilization rates and competitive prices that keep margins
under pressure into the first half of 2010. However, if the
drilling rig count continues to grow, customer inventories will be
drawn down and the pace of new orders will continue to increase. As
a result, we are currently anticipating both an improved market
environment and higher levels of activity for 2010," said Glick.
CONFERENCE CALL Lufkin will discuss its third quarter financial and
operational results in a conference call today at 10:00 a.m.
Eastern Time (9:00 a.m. Central Time). To listen to the call, dial
(480) 629-9692 and ask for the Lufkin Industries call at least 10
minutes prior to the start of the call. The conference call will
also be broadcast live via the Internet and can be accessed through
the Investor Relations section of Lufkin's corporate website at
http://www.lufkin.com/. A telephonic replay will be available
through Oct. 21, by dialing (303) 590-3030 and entering reservation
number 4162564#. Lufkin Industries, Inc. sells and services oil
field pumping units, foundry castings and power transmission
products throughout the world. The Company has vertically
integrated all vital technologies required to design, manufacture
and market its products. FORWARD-LOOKING STATEMENTS This release
contains forward-looking statements and information that are based
on management's beliefs as well as assumptions made by and
information currently available to management. When used in this
release, the words "anticipate," "believe," "estimate," "expect"
and similar expressions are intended to identify forward-looking
statements. Such statements reflect the Company's current views
with respect to certain events and are subject to certain
assumptions, risks and uncertainties, many of which are outside the
control of the Company. These risks and uncertainties include, but
are not limited to, (i) oil prices, (ii) capital spending levels of
oil producers, (iii) availability and prices for raw materials and
(iv) general industry and economic conditions. Should one or more
of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially
from those anticipated, believed, estimated or expected. The
Company does not intend to update these forward-looking statements
and information. Contact: Christopher L. Boone Chief Financial
Officer (936) 631-2749 DRG&E Jack Lascar / 713-529-6600 Anne
Pearson / 210-408-6321 (Financial statements to follow) LUFKIN
INDUSTRIES, INC. Financial Highlights (In thousands, except per
share data) (unaudited) Three Months Ended Nine Months Ended
September 30, September 30, ------------- ------------- 2009 2008
2009 2008 ---- ---- ---- ---- Sales $ 117,688 $ 195,090 $ 394,565 $
510,648 Cost of sales 92,756 139,268 308,454 366,511 ------ -------
------- ------- Gross profit 24,932 55,822 86,111 144,137 Selling,
general and administrative expenses 17,751 16,983 54,774 50,724
Litigation reserve 0 0 5,000 0 ------ ------ ----- ----- Operating
income 7,181 38,839 26,337 93,413 Other income (expense), net 471
59 1,686 992 ---- ---- ----- ---- Earnings from continuing
operations before income tax provision 7,652 38,898 28,023 94,405
Income tax provision 2,597 13,937 9,134 32,681 ----- ------ -----
------ Earnings from continuing operations 5,055 24,961 18,889
61,724 Earnings (loss) from discontinued operations, net of tax
(63) (149) (422) (51) ---- ----- ----- ---- Net earnings $ 4,992 $
24,812 $ 18,467 $ 61,673 ===== ====== ====== ====== Basic earnings
per share: Earnings from continuing operations $ 0.34 $ 1.68 $ 1.27
$ 4.18 Earnings from discontinued operations $ (0.00) $ (0.01) $
(0.03) $ 0.00 ------ ------ ----- ---- Net earnings $ 0.34 $ 1.67 $
1.24 $ 4.18 ==== ==== ==== ==== Diluted earnings per share:
Earnings from continuing operations $ 0.34 $ 1.66 $ 1.27 $ 4.14
Earnings from discontinued operations $ (0.00) $ (0.01) $ (0.03) $
0.00 ------ ----- ----- ---- Net earnings $ 0.34 $ 1.65 $ 1.24 $
4.14 ==== ==== ==== ==== Dividends per share $ 0.25 $ 0.25 $ 0.75 $
0.75 ==== ==== ==== ==== LUFKIN INDUSTRIES, INC. Balance Sheet
Highlights (Thousands of dollars) Sept. 30, Dec. 31, 2009 2008 ----
---- Current assets $ 321,977 $ 385,738 Total assets 538,284
530,718 Current liabilities 68,563 88,813 Shareholders' equity
424,603 413,937 Working capital 253,414 296,925 LUFKIN INDUSTRIES,
INC. Division Performance (In thousands) Three Months Ended Nine
Months Ended Sept. 30, Sept. 30, --------- --------- 2009 2008 2009
2008 ---- ---- ---- ---- Sales: Oil Field $ 73,732 $ 147,073 $
260,408 $ 374,489 Power Transmission 43,956 48,017 134,157 136,159
Total $ 117,688 $ 195,090 $ 394,565 $ 510,648 ======= =======
======= ======= Sept. 30, June 30, Sept. 30, 2009 2009 2008 ----
---- ---- Backlog: Oil Field $ 35,941 $ 53,122 $ 279,775 Power
Transmission 97,868 109,138 134,117 Total $ 133,808 $ 162,260 $
413,892 ======= ======= ======= DATASOURCE: Lufkin Industries, Inc.
CONTACT: Christopher L. Boone, Chief Financial Officer of Lufkin
Industries, Inc., +1-936-631-2749; or Jack Lascar, +1-713-529-6600,
or Anne Pearson, +1-210-408-6321, both of DRG&E for Lufkin
Industries, Inc. Web Site: http://www.lufkin.com/
Copyright
Lufkin (NASDAQ:LUFK)
Historical Stock Chart
From Jul 2024 to Aug 2024
Lufkin (NASDAQ:LUFK)
Historical Stock Chart
From Aug 2023 to Aug 2024