Hydril Announces First Quarter 2005 Earnings Per Share


HOUSTON, April 25, 2005 (PRIMEZONE) -- Hydril (Nasdaq:HYDL) reported earnings for the first quarter ended March 31, 2005 of $0.63 per diluted share, down 1% sequentially from $0.64 reported in the fourth quarter of 2004, while up 85% from $0.34 reported for the first quarter of 2004. The first quarter of 2004 included an income tax benefit of $0.04 per diluted share, related to prior years.

Compared to the first quarter of 2004, revenue and operating income increased 37% and 111%, respectively, with net income up 91%. On a sequential basis, first quarter revenue of $78.8 million was down 9%, operating income of $22.1 million was down 3%, and net income of $15 million was essentially flat with the fourth quarter.

Chris Seaver, President and CEO, commented, "The first quarter results met our expectations and we were pleased by our strong financial returns and free cash flow generation. While demand for premium connections continued to improve in most regions, revenue was lower sequentially primarily as the result of a return to a more normal level of business in Venezuela following the shipment of large restocking orders in late 2004. We continue to be encouraged by further announcements during the quarter from deepwater drilling contractors of higher day rates and longer term contracts for deepwater rigs, and specifically the announcement by Diamond Offshore Drilling, Inc. (NYSE: DO) of plans to upgrade the Ocean Endeavor rig which resulted in Hydril obtaining an $18 million capital equipment order."

Premium Connection Segment

First quarter revenue for Hydril's premium connection segment decreased 13% sequentially to $50.5 million and operating income decreased 10% to $18.4 million. In addition to reduced shipments to Venezuela, the decrease in revenue was partially a result of the timing of pipe deliveries in select international markets which will shift revenue to the second quarter. The operating income decrease was primarily due to the lower sales, partially offset by a slightly higher operating margin of 36%.

Pressure Control Segment

Sequentially, first quarter revenue for the pressure control segment increased slightly to $28.3 million and operating income increased 25% to $7.8 million. Aftermarket revenue increased 8% to $16.2 million, while capital equipment revenue decreased 8% to $12.1 million. The increase in aftermarket revenue resulted from increased spare parts sales, which was driven by improving rig counts. The operating income increase was the result of the increase in higher-margin aftermarket shipments and lower operating costs.

The capital equipment backlog was $30 million at March 31, 2005, compared to $14.6 million at December 31, 2004 and $11.9 million at March 31, 2004. The first quarter backlog includes the $18 million order received during the quarter from a subsidiary of Diamond Offshore for a deepwater subsea blowout prevention system for Diamond's semi-submersible drilling rig Ocean Endeavor and a fleet spare blowout preventer stack, all of which is scheduled for delivery in early 2006.

Business Drivers

As more fully described on our website at www.hydril.com on the "Business Drivers" page, our principal business drivers are: (1) the U.S. rig count for rigs drilling at targets deeper than 15,000 feet, (2) the 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 first quarter financial results is scheduled for Tuesday, April 26, 2005 at 8:30 a.m. EDT, (7:30 a.m. CDT) and is accessible by dialing (800) 657-1269 (domestic) or (973) 409-9256 (international) and referencing passcode no. 5964056. For further information on the call or the webcast, please visit the company's website at www.hydril.com or see the company's press release announcing the earnings conference call dated April 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, headquartered in Houston, Texas, is engaged worldwide in engineering, manufacturing and marketing premium connection and pressure control products used for oil and gas drilling and production.

The Hydril logo can be found at: http://www.primezone.com/newsroom/prs/?pkgid=1511

Forward-Looking Statements

This press release contains forward-looking statements concerning expected future results. These statements relate to future events and the company's future financial performance, including the company's business strategy and product development plans, and involve known and unknown risks, uncertainties and assumptions. These risks, uncertainties and assumptions, many of which are more fully described in Hydril Company's Annual Report on Form 10-K for the year-ended December 31, 2004 filed with the Securities and Exchange Commission, include but are not limited to the impact of changes in oil and natural gas prices and worldwide and domestic economic conditions on drilling activity and demand for and pricing of Hydril's products, the impact of geo-political and other events affecting international markets and trade, Hydril's ability to successfully develop new technologies and products and maintain and increase its market share, the impact of international and domestic trade laws, the loss of or change to distribution methods of premium connections in the U.S. and Canada, overcapacity in the pressure control industry, and high fixed costs that could affect the pricing of Hydril's products. These factors may cause Hydril's or the industry's actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by the forward-looking statements.



 HYDRIL COMPANY

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

                                        Three Months Ended
                                           (unaudited)
                             ----------------------------------------
                              March 31,      Dec. 31,       March 31,
                                2005           2004           2004
                             ----------     ----------     ----------
 Revenue
  Premium Connection         $   50,508     $   58,389     $   33,425
  Pressure Control
   Aftermarket                   16,243         14,995         15,620
   Capital Equipment             12,066         13,140          8,452
                             ----------     ----------     ----------
    Subtotal Pressure
     Control                     28,309         28,135         24,072

 Total Revenue                   78,817         86,524         57,497

 Total Gross Profit              35,407         36,916         22,350
 Gross Margin                        45%            43%            39%

 Selling, General,
  and Admin. Expenses            13,308         14,103         11,893
                             ----------     ----------     ----------

 Operating Income (Loss)
  Premium Connection             18,405         20,460          9,397
  Pressure Control                7,806          6,253          4,786
  Corporate Administration       (4,112)        (3,900)        (3,726)
                             ----------     ----------     ----------
 Total Operating Income          22,099         22,813         10,457
 Operating Margin                    28%            26%            18%

 Interest Income                    661            466            184
 Other Income/(Expense)            (107)          (261)          (105)
                             ----------     ----------     ----------

 Income Before Income Taxes      22,653         23,018         10,536
 Provision for Income Taxes       7,641          7,869          2,662
                             ----------     ----------     ----------
 Net Income                  $   15,012     $   15,149     $    7,874

 Net Income  Per Share:
  Basic                      $     0.64     $     0.65     $     0.34
  Diluted                    $     0.63     $     0.64     $     0.34

 Weighted Average
 Shares Outstanding:
  Basic                      23,361,493     23,191,513     22,847,662
  Diluted                    23,920,538     23,765,644     23,137,955

 Depreciation
  Premium Connection         $    1,959     $    2,068     $    1,905
  Pressure Control                  760            746            720
  Corporate Administration          521            479            481
                             ----------     ----------     ----------
 Total Depreciation               3,240          3,293          3,106


 Capital Expenditures             4,064          5,965          1,402

 Pressure Control Backlog
  Capital Equipment          $   29,966     $   14,576     $   11,880



 HYDRIL COMPANY
 CONSOLIDATED BALANCE SHEETS
 (In Thousands)
 --------------------------------------------------------------------
                                         March 31,       December 31,
                                           2005              2004
                                         --------          --------
                                        (unaudited)
                                         --------------------------
 CURRENT ASSETS:
  Cash and cash equivalents              $ 58,595          $ 51,733
  Investments                              86,271            69,365
  Total receivables                        56,091            62,441
  Total inventories                        36,235            34,820
  Other current assets                     11,357            12,216
                                         --------          --------
   Total current assets                   248,549           230,575
                                         --------          --------

 LONG-TERM ASSETS:
  Property, net                           102,084           102,368
  Other long-term assets                   10,425            10,703
                                         --------          --------
   Total long-term assets                 112,509           113,071
                                         --------          --------
 TOTAL                                   $361,058          $343,646
                                         ========          ========

 CURRENT LIABILITIES:
  Accounts payable                       $ 22,444          $ 23,292
  Accrued liabilities and other
   current liabilities                     28,599            31,061
                                         --------          --------
   Total current liabilities               51,043            54,353
                                         --------          --------

 LONG-TERM LIABILITIES:
  Post retirement, pension benefits
   and other                               15,291            14,510
                                         --------          --------
   Total long-term liabilities             15,291            14,510
                                         --------          --------

 STOCKHOLDERS' EQUITY:
   Total stockholders' equity             294,724           274,783
                                         --------          --------
 TOTAL                                   $361,058          $343,646
                                         ========          ========


            

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