National Oilwell Varco Reports Third Quarter 2017 Results
“Our team delivered solid results in the third quarter as higher
sequential sales of Wellbore Technologies and Completion & Production
Solutions products enabled NOV to overcome a retrenchment in rig
equipment demand,” commented
Rig Systems
Rig Systems generated revenues of
During the third quarter, the Company agreed with a customer to cancel
two jackup drilling equipment package orders in exchange for firm
commitments to continue forward with several other jackup packages the
customer has under contract, retention of down payments, and other
consideration. The agreement resulted in the deletion of approximately
Backlog for capital equipment orders for Rig Systems at
Rig Aftermarket
Rig Aftermarket generated revenues of
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion and Production Solutions generated revenues of
Backlog for capital equipment orders for Completion & Production
Solutions at
Significant Events and Achievements
Using NOV completions tools technologies, a major operator completed a
record-setting long-string completion in the
NOV’s recently-established directional measurement and
steerable technologies business continued to grow in the third quarter,
as the Company secured multiple orders in key international markets for
its Tolteq™ mud-pulse measurement-while-drilling (MWD) tools, including
the first sales of the Company’s iSeriesTM MWD kits into the
NOV booked additional orders of hydraulic fracturing equipment, bringing the Company’s total pressure pumping equipment orders above 400,000 HP year-to-date. Recent orders included two complete 50,000-HP frac spreads, several blenders, and a number of discrete pieces of support equipment, including hydration units and liquid additive systems. Additionally, the Company received customer commitments for extensive refurbishment programs, bringing committed refurbishments to over 100 frac units year-to-date.
To achieve even higher levels of safety, NOV introduced a new version of the Company’s TuboscopeTM WellChekTM on-site tubing inspection system. The new TuboChekC1D1 unit is the first of its kind to receive Class 1, Division 1 Certification as manufactured, indicating it is safe to use in explosive atmospheres. The new design also replaces the gamma radiation system traditionally used to detect tubing wall loss indicative of rod wear with a proprietary magnetic system. These changes will allow NOV to expand its wellhead inspection business into new global markets.
NOV booked the largest single order of Fiberspar™ spoolable
line pipe in the Company’s history for a customer in
NOV began producing 60-in. fiberglass fittings in
NOV’s customized drill bits with industry-leading shaped cutter
technology continue to set field records around the world.
In West Africa, an integrated oil company achieved record rate of
penetration (ROP) with a 12¼-in. TK66 Tektonic™ fixed cutter bit fitted
with Helios™ polished cutters. The bit reached total depth in a single
run, drilling 7,000 ft in 24 hours, while building inclination from 17
to 60 degrees at a 2.5-degree dogleg severity. The bit also set the
field interval record per run of 10,767 ft. In the
NOV successfully trialed ReedHycalog™ Hercules™ roller cone bits
designed to provide stable, reliable directional performance in
interbedded and intrusive formations. The enhanced lug design features
increased shirttail protection for improved durability, stability, and
more effective seal life. In the
NOV booked meaningful orders for its tubular coating and inspection
services in
NOV designed, manufactured, and delivered a 5,000-psi dual-bore surface
test tree that provides surface well isolation using an
emergency-shutdown actuated-valve technology for use capping depleted
wells in
NOV booked meaningful awards for its solids control and waste management
equipment and services in
Other Corporate Items
As of
Third Quarter Earnings Conference Call
NOV will hold a conference call to discuss its third quarter 2017
results on
About NOV
Visit www.nov.com for more information.
Cautionary Statement for the Purpose of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995
Statements made in this press release that are forward-looking in nature
are intended to be “forward-looking statements” within the meaning of
Section 21E of the Securities Exchange Act of 1934 and may involve risks
and uncertainties. These statements may differ materially from the
actual future events or results. Readers are referred to documents filed
by
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (In millions, except per share data) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
September 30, | June 30, | September 30, | ||||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | ||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||||
Rig Systems | $ | 330 | $ | 470 | $ | 346 | $ | 1,069 | $ | 1,960 | ||||||||||||||||
Rig Aftermarket | 311 | 322 | 341 | 973 | 1,077 | |||||||||||||||||||||
Wellbore Technologies | 693 | 526 | 614 | 1,862 | 1,668 | |||||||||||||||||||||
Completion & Production Solutions | 682 | 543 | 652 | 1,982 | 1,639 | |||||||||||||||||||||
Eliminations | (181 | ) | (215 | ) | (194 | ) | (551 | ) | (785 | ) | ||||||||||||||||
Total revenue | 1,835 | 1,646 | 1,759 | 5,335 | 5,559 | |||||||||||||||||||||
Gross profit (1) | 285 | 79 | 231 | 725 | 358 | |||||||||||||||||||||
Gross profit % | 15.5 | % | 4.8 | % | 13.1 | % | 13.6 | % | 6.4 | % | ||||||||||||||||
Selling, general, and administrative | 292 | 293 | 293 | 891 | 1,031 | |||||||||||||||||||||
Goodwill impairment | - | 972 | - | - | 972 | |||||||||||||||||||||
Operating loss | (7 | ) | (1,186 | ) | (62 | ) | (166 | ) | (1,645 | ) | ||||||||||||||||
Interest and financial costs | (26 | ) | (25 | ) | (26 | ) | (77 | ) | (80 | ) | ||||||||||||||||
Interest income | 11 | 3 | 4 | 19 | 11 | |||||||||||||||||||||
Equity loss in unconsolidated affiliates | (2 | ) | (6 | ) | (2 | ) | (4 | ) | (19 | ) | ||||||||||||||||
Other income (expense), net | (6 | ) | (30 | ) | (2 | ) | (19 | ) | (85 | ) | ||||||||||||||||
Loss before income taxes | (30 | ) | (1,244 | ) | (88 | ) | (247 | ) | (1,818 | ) | ||||||||||||||||
Provision for income taxes | (3 | ) | 120 | (14 | ) | (26 | ) | (119 | ) | |||||||||||||||||
Net loss | (27 | ) | (1,364 | ) | (74 | ) | (221 | ) | (1,699 | ) | ||||||||||||||||
Net income attributable to noncontrolling interests | (1 | ) | (2 | ) | 1 | 2 | (1 | ) | ||||||||||||||||||
Net loss attributable to Company | $ | (26 | ) | $ | (1,362 | ) | $ | (75 | ) | $ | (223 | ) | $ | (1,698 | ) | |||||||||||
Per share data: | ||||||||||||||||||||||||||
Basic | $ | (0.07 | ) | $ | (3.62 | ) | $ | (0.20 | ) | $ | (0.59 | ) | $ | (4.53 | ) | |||||||||||
Diluted | $ | (0.07 | ) | $ | (3.62 | ) | $ | (0.20 | ) | $ | (0.59 | ) | $ | (4.53 | ) | |||||||||||
Weighted average shares outstanding: | ||||||||||||||||||||||||||
Basic | 377 | 376 | 377 | 377 | 375 | |||||||||||||||||||||
Diluted | 377 | 376 | 377 | 377 | 375 |
(1) | Gross profit excluding other items was $285 million and $782 million for the three and nine months ended September 30, 2017, respectively. Gross profit excluding other items was $185 million and $624 million for the three and nine months ended September 30, 2016, respectively. Gross profit excluding other items was $261 million for the three months ended June 30, 2017. See GAAP to Non-GAAP reconciliation on page 10. |
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (In millions) |
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September 30, | December 31, | |||||||||
2017 | 2016 | |||||||||
(Unaudited) | ||||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 1,722 | $ | 1,408 | ||||||
Receivables, net | 2,060 | 2,083 | ||||||||
Inventories, net | 3,219 | 3,325 | ||||||||
Costs in excess of billings | 518 | 665 | ||||||||
Other current assets | 306 | 395 | ||||||||
Total current assets | 7,825 | 7,876 | ||||||||
Property, plant and equipment, net | 3,031 | 3,150 | ||||||||
Goodwill and intangibles, net | 9,542 | 9,597 | ||||||||
Other assets | 536 | 517 | ||||||||
Total assets | $ | 20,934 | $ | 21,140 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 447 | $ | 414 | ||||||
Accrued liabilities | 1,544 | 1,568 | ||||||||
Billings in excess of costs | 288 | 440 | ||||||||
Current portion of long-term debt and short-term borrowings | 506 | 506 | ||||||||
Accrued income taxes | 57 | 119 | ||||||||
Total current liabilities | 2,842 | 3,047 | ||||||||
Long-term debt | 2,707 | 2,708 | ||||||||
Other liabilities | 1,234 | 1,382 | ||||||||
Total liabilities | 6,783 | 7,137 | ||||||||
Total stockholders’ equity | 14,151 | 14,003 | ||||||||
Total liabilities and stockholders’ equity | $ | 20,934 | $ | 21,140 |
NATIONAL OILWELL VARCO, INC. OPERATING PROFIT (LOSS) – GAAP to Non-GAAP RECONCILIATION (Unaudited) (In millions) |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||
Rig Systems |
$ | 330 | $ | 470 | $ | 346 | $ | 1,069 | $ | 1,960 | |||||||||||||||
Rig Aftermarket | 311 | 322 | 341 | 973 | 1,077 | ||||||||||||||||||||
Wellbore Technologies | 693 | 526 | 614 | 1,862 | 1,668 | ||||||||||||||||||||
Completion & Production Solutions | 682 | 543 | 652 | 1,982 | 1,639 | ||||||||||||||||||||
Eliminations | (181 | ) | (215 | ) | (194 | ) | (551 | ) | (785 | ) | |||||||||||||||
Total revenue | $ | 1,835 | $ | 1,646 | $ | 1,759 | $ | 5,335 | $ | 5,559 | |||||||||||||||
Operating profit (loss): | |||||||||||||||||||||||||
Rig Systems | $ | 11 | $ | (962 | ) | $ | (7 | ) | $ | 13 | $ | (888 | ) | ||||||||||||
Rig Aftermarket | 64 | 72 | 76 | 201 | 203 | ||||||||||||||||||||
Wellbore Technologies | - | (94 | ) | (24 | ) | (81 | ) | (331 | ) | ||||||||||||||||
Completion & Production Solutions | 44 | (61 | ) | 27 | 79 | (132 | ) | ||||||||||||||||||
Eliminations and corporate costs | (126 | ) | (141 | ) | (134 | ) | (378 | ) | (497 | ) | |||||||||||||||
Total operating profit (loss) | $ | (7 | ) | $ | (1,186 | ) | $ | (62 | ) | $ | (166 | ) | $ | (1,645 | ) | ||||||||||
Other items: | |||||||||||||||||||||||||
Rig Systems | $ | - | $ | 994 | $ | 16 | $ | 23 | $ | 1,069 | |||||||||||||||
Rig Aftermarket | - | 3 | 1 | 6 | 16 | ||||||||||||||||||||
Wellbore Technologies | - | 24 | (4 | ) | (4 | ) | 112 | ||||||||||||||||||
Completion & Production Solutions | - | 51 | 17 | 32 | 123 | ||||||||||||||||||||
Eliminations and corporate costs | - | 6 | - | - | 16 | ||||||||||||||||||||
Total other items | $ | - | $ | 1,078 | $ | 30 | $ | 57 | $ | 1,336 | |||||||||||||||
Operating profit (loss) excluding other items: | |||||||||||||||||||||||||
Rig Systems | $ | 11 | $ | 32 | $ | 9 | $ | 36 | $ | 181 | |||||||||||||||
Rig Aftermarket | 64 | 75 | 77 | 207 | 219 | ||||||||||||||||||||
Wellbore Technologies | - | (70 | ) | (28 | ) | (85 | ) | (219 | ) | ||||||||||||||||
Completion & Production Solutions | 44 | (10 | ) | 44 | 111 | (9 | ) | ||||||||||||||||||
Eliminations and corporate costs | (126 | ) | (135 | ) | (134 | ) | (378 | ) | (481 | ) | |||||||||||||||
Total operating profit (loss) excluding other items | $ | (7 | ) | $ | (108 | ) | $ | (32 | ) | $ | (109 | ) | $ | (309 | ) |
NATIONAL OILWELL VARCO, INC. AS ADJUSTED BEFORE DEPRECIATION & AMORTIZATION SUPPLEMENTAL SCHEDULE (Unaudited) (In millions) |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
Operating profit (loss) excluding other items: | |||||||||||||||||||||||||
Rig Systems | $ | 11 | $ | 32 | $ | 9 | $ | 36 | $ | 181 | |||||||||||||||
Rig Aftermarket | 64 | 75 | 77 | 207 | 219 | ||||||||||||||||||||
Wellbore Technologies | - | (70 | ) | (28 | ) | (85 | ) | (219 | ) | ||||||||||||||||
Completion & Production Solutions | 44 | (10 | ) | 44 | 111 | (9 | ) | ||||||||||||||||||
Eliminations and corporate costs | (126 | ) | (135 | ) | (134 | ) | (378 | ) | (481 | ) | |||||||||||||||
Total operating profit (loss) excluding other items | $ | (7 | ) | $ | (108 | ) | $ | (32 | ) | $ | (109 | ) | $ | (309 | ) | ||||||||||
Depreciation & amortization: | |||||||||||||||||||||||||
Rig Systems | $ | 17 | $ | 18 | $ | 17 | $ | 51 | $ | 55 | |||||||||||||||
Rig Aftermarket | 5 | 6 | 6 | 16 | 17 | ||||||||||||||||||||
Wellbore Technologies | 94 | 96 | 94 | 283 | 289 | ||||||||||||||||||||
Completion & Production Solutions | 53 | 53 | 54 | 161 | 157 | ||||||||||||||||||||
Eliminations and corporate costs | 5 | 3 | 3 | 12 | 11 | ||||||||||||||||||||
Total depreciation & amortization | $ | 174 | $ | 176 | $ | 174 | $ | 523 | $ | 529 | |||||||||||||||
Adjusted EBITDA (Operating profit excluding other | |||||||||||||||||||||||||
items before depreciation & amortization) (Note 1): | |||||||||||||||||||||||||
Rig Systems | $ | 28 | $ | 50 | $ | 26 | $ | 87 | $ | 236 | |||||||||||||||
Rig Aftermarket | 69 | 81 | 83 | 223 | 236 | ||||||||||||||||||||
Wellbore Technologies | 94 | 26 | 66 | 198 | 70 | ||||||||||||||||||||
Completion & Production Solutions | 97 | 43 | 98 | 272 | 148 | ||||||||||||||||||||
Eliminations and corporate costs | (121 | ) | (132 | ) | (131 | ) | (366 | ) | (470 | ) | |||||||||||||||
Total Adjusted EBITDA | $ | 167 | $ | 68 | $ | 142 | $ | 414 | $ | 220 | |||||||||||||||
Adjusted EBITDA % (Note 1): | |||||||||||||||||||||||||
Rig Systems | 8.5 | % | 10.6 | % | 7.5 | % | 8.1 | % | 12.0 | % | |||||||||||||||
Rig Aftermarket | 22.2 | % | 25.2 | % | 24.3 | % | 22.9 | % | 21.9 | % | |||||||||||||||
Wellbore Technologies | 13.6 | % | 4.9 | % | 10.7 | % | 10.6 | % | 4.2 | % | |||||||||||||||
Completion & Production Solutions | 14.2 | % | 7.9 | % | 15.0 | % | 13.7 | % | 9.0 | % | |||||||||||||||
Total Adjusted EBITDA % | 9.1 | % | 4.1 | % | 8.1 | % | 7.8 | % | 4.0 | % | |||||||||||||||
Reconciliation of Adjusted EBITDA (Note 1): | |||||||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (26 | ) | $ | (1,362 | ) | $ | (75 | ) |
$ |
(223 | ) |
$ |
(1,698 |
) |
||||||||||
Net income attributable to noncontrolling interest | (1 | ) | (2 | ) | 1 | 2 | (1 | ) | |||||||||||||||||
Provision for income taxes | (3 | ) | 120 | (14 | ) | (26 | ) | (119 | ) | ||||||||||||||||
Interest expense | 26 | 25 | 26 | 77 | 80 | ||||||||||||||||||||
Interest income | (11 | ) | (3 | ) | (4 | ) | (19 | ) | (11 | ) | |||||||||||||||
Equity income (loss) in unconsolidated affiliates | 2 | 6 | 2 | 4 | 19 | ||||||||||||||||||||
Other income (expense), net | 6 | 30 | 2 | 19 | 85 | ||||||||||||||||||||
Depreciation & amortization | 174 | 176 | 174 | 523 | 529 | ||||||||||||||||||||
Other items in operating profit | - | 1,078 | 30 | 57 | 1,336 | ||||||||||||||||||||
Total Adjusted EBITDA: | $ | 167 | $ | 68 | $ | 142 | $ | 414 | $ | 220 |
NATIONAL OILWELL VARCO, INC. GAAP to Non-GAAP (Adjusted) RECONCILIATION (Unaudited) (In millions, except per share data) |
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Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
GAAP net income (loss) attributable to Company | $ | (26 | ) | $ | (1,362 | ) | $ | (75 | ) | $ | (223 | ) | $ | (1,698 | ) | ||||||||||
Other Items: | |||||||||||||||||||||||||
Severance, inventory charges, facility closures and other | - | 106 | 30 | 57 | 364 | ||||||||||||||||||||
Goodwill impairment | 972 | 972 | |||||||||||||||||||||||
Fixed asset write-down | - | 10 | - | 10 | 42 | ||||||||||||||||||||
GAAP net income (loss) less pre-tax other items | (26 | ) | (274 | ) | (45 | ) | (156 | ) | (320 | ) | |||||||||||||||
Tax impact on other items | - | (67 | ) | (9 | ) | (21 | ) | (156 | ) | ||||||||||||||||
Tax items | - | 213 | - | 34 | 213 | ||||||||||||||||||||
Adjusted net income (loss) attributable to Company (Note 1) | (26 | ) | (128 | ) | (54 | ) | (143 | ) | (263 | ) | |||||||||||||||
Noncontrolling interest | (1 | ) | (2 | ) | 1 | 2 | (1 | ) | |||||||||||||||||
Adjusted net income (loss) (Note 1) | $ | (27 | ) | $ | (130 | ) | $ | (53 | ) | $ | (141 | ) | $ | (264 | ) | ||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
GAAP net income (loss) attributable to Company per share | $ | (0.07 | ) | $ | (3.62 | ) | $ | (0.20 | ) | $ | (0.59 | ) | $ | (4.53 | ) | ||||||||||
Other items: | |||||||||||||||||||||||||
Severance, inventory charges, facility closures and other | - | 0.18 | 0.06 | 0.10 | 0.67 | ||||||||||||||||||||
Goodwill impairment | 2.51 | 2.51 | |||||||||||||||||||||||
Fixed asset write-down | - | 0.02 | - | 0.02 | 0.08 | ||||||||||||||||||||
Tax items | - | 0.57 | - | 0.09 | 0.57 | ||||||||||||||||||||
Adjusted earnings (loss) per share (Note 1) | $ | (0.07 | ) | $ | (0.34 | ) | $ | (0.14 | ) | $ | (0.38 | ) | $ | (0.70 | ) | ||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||||||||||
2017 | 2016 | 2017 | 2017 | 2016 | |||||||||||||||||||||
GAAP gross profit | $ | 285 | $ | 79 | $ | 231 | $ | 725 | $ | 358 | |||||||||||||||
Other items included in gross profit | - | 106 | 30 | 57 | 266 | ||||||||||||||||||||
Adjusted gross profit (Note 1) | $ | 285 | $ | 185 | $ | 261 | $ | 782 | $ | 624 | |||||||||||||||
GAAP selling, general, and administrative | $ | 292 | $ | 293 | $ | 293 | $ | 891 | $ | 1,031 | |||||||||||||||
Other items included in selling, general, and administrative | - | - | - | - | (98 | ) | |||||||||||||||||||
Adjusted selling, general, and administrative (Note 1) | $ | 292 | $ | 293 | $ | 293 | $ | 891 | $ | 933 | |||||||||||||||
Note 1: The Company discloses various non-GAAP financial measures in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. The Company uses these same non-GAAP measures internally to evaluate and manage the business. Each of these non-GAAP financial measures excludes the impact of certain other items and therefore has not been calculated in accordance with GAAP. A reconciliation of each non-GAAP financial measure to its most comparable GAAP financial measure is included herein. The non-GAAP financial measures are not intended to replace GAAP financial measures.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171026006676/en/
Source:
National Oilwell Varco, Inc.
Loren Singletary (713) 346-7807
Loren.Singletary@nov.com