National Oilwell Varco Reports Second Quarter 2020 Results
“The oil & gas industry is bearing the full brunt of the economic damage wrought by the COVID-19 pandemic that has driven drilling activity to record lows,” commented
“We are determined to re-size the organization to fit lower levels of demand and continue to make good progress executing the numerous initiatives required to meet our objective. During the second quarter, we exceeded our cost reduction targets and generated
“To the extent oil and gas companies and oilfield service companies continue to work, we find them gravitating to NOV as their supplier of choice. They know they can depend on us for superior quality, technology, value, and to be there to support their efforts for the long-term. With our market-leading technology, global footprint, diverse product portfolio, and customer-centric business model, NOV is positioned to exit this down-cycle stronger than ever before.”
Wellbore Technologies
Wellbore Technologies generated revenues of
Completion & Production Solutions
Completion & Production Solutions generated revenues of
New orders booked during the quarter totaled
Rig Technologies
Rig Technologies generated revenues of
New orders booked during the quarter totaled
Other Corporate Items
During the second quarter, the Company recognized
As of
Significant Achievements
NOV continued to gain market adoption and expand the capabilities of its eVolve™ optimization and automation services. NOV’s M/D Totco business unit commenced operations on two new multi-year projects in the
NOV successfully completed the first commercial run of its fully-integrated rotary steerable (RSS) and logging-while drilling (LWD) system with a customer in Russia. The system combines NOV’s VectorZIEL™ 400 tool with an integrated symmetric propagation resistivity LWD tool and was used to successfully drill an entire 4,900-foot horizontal section while providing real-time LWD measurements within 35 feet from the bit. The combination of a rotary steerable device and a logging-while-drilling instrument into the same tool significantly improves the capabilities of NOV’s independent directional driller customers.
NOV continued to adapt and disseminate its leading technologies, which helped drive the critical efficiency gains that enabled the shale revolution, for use in international markets. During the second quarter, a Vector™ Series 36E drilling motor with a 5-in., 6/7 lobe 8.0 stage ERT™ power section, a drilling motor configuration from NOV Downhole that had previously never been used in the
NOV booked an order for a three-million-pound landing string, the first in the history of the industry that will be used for a 20k PSI project in the
NOV successfully commercialized its new large-bore FracMaxx™ articulated frac arm, which complements its Elmar™ big-bore QuickLatch™ system and Anson™ flow iron for multi-well frac pads. To date, the FracMaxx™ has completed 120 stages with pressures reaching 9,000 PSI and rates up to 90 BPM. By significantly reducing time between stages and removing excess flow iron from the wellsite, this technology aids operators in their effort to improve efficiencies while significantly reducing crew exposure to unnecessary risks.
NOV completed a milestone project for the first mechanically-connected pipeline offshore
NOV deployed the ReedHycalog™ 8⅜-in. TKC59 Tektonic™ Sabretooth™ drill bit in response to a request from a key customer in
Second Quarter Earnings Conference Call
NOV will hold a conference call to discuss its second quarter 2020 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
Certain prior period amounts have been reclassified in this press release to be consistent with current period presentation.
|
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|
|
Three Months Ended |
|
|
Six Months Ended |
|
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|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
442 |
|
|
$ |
850 |
|
|
$ |
691 |
|
|
$ |
1,133 |
|
|
$ |
1,657 |
|
Completion & Production Solutions |
|
|
611 |
|
|
|
663 |
|
|
|
675 |
|
|
|
1,286 |
|
|
|
1,244 |
|
Rig Technologies |
|
|
476 |
|
|
|
671 |
|
|
|
557 |
|
|
|
1,033 |
|
|
|
1,274 |
|
Eliminations |
|
|
(33 |
) |
|
|
(52 |
) |
|
|
(40 |
) |
|
|
(73 |
) |
|
|
(103 |
) |
Total revenue |
|
|
1,496 |
|
|
|
2,132 |
|
|
|
1,883 |
|
|
|
3,379 |
|
|
|
4,072 |
|
Gross profit |
|
|
137 |
|
|
|
62 |
|
|
|
224 |
|
|
|
361 |
|
|
|
318 |
|
Gross profit % |
|
|
9.2 |
% |
|
|
2.9 |
% |
|
|
11.9 |
% |
|
|
10.7 |
% |
|
|
7.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative |
|
|
237 |
|
|
|
417 |
|
|
|
283 |
|
|
|
520 |
|
|
|
721 |
|
|
|
|
— |
|
|
|
3,186 |
|
|
|
1,378 |
|
|
|
1,378 |
|
|
|
3,186 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
2,187 |
|
|
|
513 |
|
|
|
513 |
|
|
|
2,187 |
|
Operating loss |
|
|
(100 |
) |
|
|
(5,728 |
) |
|
|
(1,950 |
) |
|
|
(2,050 |
) |
|
|
(5,776 |
) |
Interest and financial costs |
|
|
(22 |
) |
|
|
(25 |
) |
|
|
(22 |
) |
|
|
(44 |
) |
|
|
(50 |
) |
Interest income |
|
|
2 |
|
|
|
6 |
|
|
|
3 |
|
|
|
5 |
|
|
|
12 |
|
Equity loss in unconsolidated affiliates |
|
|
(6 |
) |
|
|
(2 |
) |
|
|
(233 |
) |
|
|
(239 |
) |
|
|
(2 |
) |
Other income (expense), net |
|
|
(8 |
) |
|
|
(8 |
) |
|
|
(3 |
) |
|
|
(11 |
) |
|
|
(26 |
) |
Loss before income taxes |
|
|
(134 |
) |
|
|
(5,757 |
) |
|
|
(2,205 |
) |
|
|
(2,339 |
) |
|
|
(5,842 |
) |
Benefit for income taxes |
|
|
(47 |
) |
|
|
(373 |
) |
|
|
(156 |
) |
|
|
(203 |
) |
|
|
(383 |
) |
Net loss |
|
|
(87 |
) |
|
|
(5,384 |
) |
|
|
(2,049 |
) |
|
|
(2,136 |
) |
|
|
(5,459 |
) |
Net (income) loss attributable to noncontrolling interests |
|
|
6 |
|
|
|
5 |
|
|
|
(2 |
) |
|
|
4 |
|
|
|
7 |
|
Net loss attributable to Company |
|
$ |
(93 |
) |
|
$ |
(5,389 |
) |
|
$ |
(2,047 |
) |
|
$ |
(2,140 |
) |
|
$ |
(5,466 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.24 |
) |
|
$ |
(14.11 |
) |
|
$ |
(5.34 |
) |
|
$ |
(5.57 |
) |
|
$ |
(14.35 |
) |
Diluted |
|
$ |
(0.24 |
) |
|
$ |
(14.11 |
) |
|
$ |
(5.34 |
) |
|
$ |
(5.57 |
) |
|
$ |
(14.35 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
385 |
|
|
|
382 |
|
|
|
383 |
|
|
|
384 |
|
|
|
381 |
|
Diluted |
|
|
385 |
|
|
|
382 |
|
|
|
383 |
|
|
|
384 |
|
|
|
381 |
|
|
||||||||
|
|
|
|
|
|
|
||
|
|
2020 |
|
|
2019 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,447 |
|
|
$ |
1,171 |
|
Receivables, net |
|
|
1,502 |
|
|
|
1,855 |
|
Inventories, net |
|
|
1,929 |
|
|
|
2,197 |
|
Contract assets |
|
|
508 |
|
|
|
643 |
|
Other current assets |
|
|
204 |
|
|
|
247 |
|
Total current assets |
|
|
5,590 |
|
|
|
6,113 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
2,010 |
|
|
|
2,354 |
|
Lease right-of-use assets |
|
|
605 |
|
|
|
674 |
|
|
|
|
2,018 |
|
|
|
3,659 |
|
Other assets |
|
|
224 |
|
|
|
349 |
|
Total assets |
|
$ |
10,447 |
|
|
$ |
13,149 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
556 |
|
|
$ |
715 |
|
Accrued liabilities |
|
|
815 |
|
|
|
949 |
|
Contract liabilities |
|
|
408 |
|
|
|
427 |
|
Current portion of lease liabilities |
|
|
115 |
|
|
|
114 |
|
Accrued income taxes |
|
|
60 |
|
|
|
42 |
|
Total current liabilities |
|
|
1,954 |
|
|
|
2,247 |
|
|
|
|
|
|
|
|
|
|
Lease liabilities |
|
|
637 |
|
|
|
674 |
|
Long-term debt |
|
|
2,029 |
|
|
|
1,989 |
|
Other liabilities |
|
|
294 |
|
|
|
393 |
|
Total liabilities |
|
|
4,914 |
|
|
|
5,303 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
5,533 |
|
|
|
7,846 |
|
Total liabilities and stockholders’ equity |
|
$ |
10,447 |
|
|
$ |
13,149 |
|
|
||||||||
|
|
Six Months Ended |
|
|||||
|
|
|
|
|||||
|
|
2020 |
|
|
2019 |
|
||
Cash flows from operating activities: |
|
|
|
|||||
Net loss |
|
$ |
(2,136 |
) |
|
$ |
(5,459 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
187 |
|
|
|
331 |
|
|
|
|
1,378 |
|
|
|
3,186 |
|
Long-lived asset impairment |
|
|
513 |
|
|
|
2,187 |
|
Working capital and other operating items, net |
|
|
475 |
|
|
|
(356 |
) |
Net cash provided by (used in) operating activities |
|
|
417 |
|
|
|
(111 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(124 |
) |
|
|
(97 |
) |
Business acquisitions, net of cash acquired |
|
|
— |
|
|
|
(65 |
) |
Other |
|
|
13 |
|
|
|
6 |
|
Net cash used in investing activities |
|
|
(111 |
) |
|
|
(156 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Cash dividends paid |
|
|
(19 |
) |
|
|
(38 |
) |
Other |
|
|
(8 |
) |
|
|
(1 |
) |
Net cash used in financing activities |
|
|
(27 |
) |
|
|
(39 |
) |
Effect of exchange rates on cash |
|
|
(3 |
) |
|
|
— |
|
Increase (decrease) in cash and cash equivalents |
|
|
276 |
|
|
|
(306 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,171 |
|
|
|
1,427 |
|
Cash and cash equivalents, end of period |
|
$ |
1,447 |
|
|
$ |
1,121 |
|
|
||||||||||||||||||||
The Company discloses Adjusted EBITDA (defined as Operating Profit excluding Depreciation, Amortization and, when applicable, Other Items) in its periodic earnings press releases and other public disclosures to provide investors additional information about the results of ongoing operations. The Company uses Adjusted EBITDA internally to evaluate and manage the business. Adjusted EBITDA is not intended to replace GAAP financial measures, such as Net Income. Other items include impairment charges, inventory charges and severance and other restructuring costs. |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2020 |
|
|
2019 |
|
|||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
(67 |
) |
|
$ |
(3,295 |
) |
|
$ |
(663 |
) |
|
$ |
(730 |
) |
|
$ |
(3,276 |
) |
Completion & Production Solutions |
|
|
42 |
|
|
|
(1,932 |
) |
|
|
(1,013 |
) |
|
|
(971 |
) |
|
|
(1,967 |
) |
Rig Technologies |
|
|
(25 |
) |
|
|
(422 |
) |
|
|
(202 |
) |
|
|
(227 |
) |
|
|
(391 |
) |
Eliminations and corporate costs |
|
|
(50 |
) |
|
|
(79 |
) |
|
|
(72 |
) |
|
|
(122 |
) |
|
|
(142 |
) |
Total operating loss |
|
$ |
(100 |
) |
|
$ |
(5,728 |
) |
|
$ |
(1,950 |
) |
|
$ |
(2,050 |
) |
|
$ |
(5,776 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
62 |
|
|
$ |
3,345 |
|
|
$ |
715 |
|
|
$ |
777 |
|
|
$ |
3,343 |
|
Completion & Production Solutions |
|
|
12 |
|
|
|
1,939 |
|
|
|
1,054 |
|
|
|
1,066 |
|
|
|
1,950 |
|
Rig Technologies |
|
|
20 |
|
|
|
474 |
|
|
|
238 |
|
|
|
258 |
|
|
|
476 |
|
Corporate |
|
|
8 |
|
|
|
11 |
|
|
|
16 |
|
|
|
24 |
|
|
|
11 |
|
Total other items |
|
$ |
102 |
|
|
$ |
5,769 |
|
|
$ |
2,023 |
|
|
$ |
2,125 |
|
|
$ |
5,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
47 |
|
|
$ |
84 |
|
|
$ |
51 |
|
|
$ |
98 |
|
|
$ |
184 |
|
Completion & Production Solutions |
|
|
14 |
|
|
|
45 |
|
|
|
30 |
|
|
|
44 |
|
|
|
97 |
|
Rig Technologies |
|
|
19 |
|
|
|
22 |
|
|
|
20 |
|
|
|
39 |
|
|
|
45 |
|
Corporate |
|
|
2 |
|
|
|
3 |
|
|
|
4 |
|
|
|
6 |
|
|
|
5 |
|
Total depreciation & amortization |
|
$ |
82 |
|
|
$ |
154 |
|
|
$ |
105 |
|
|
$ |
187 |
|
|
$ |
331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
42 |
|
|
$ |
134 |
|
|
$ |
103 |
|
|
$ |
145 |
|
|
$ |
251 |
|
Completion & Production Solutions |
|
|
68 |
|
|
|
52 |
|
|
|
71 |
|
|
|
139 |
|
|
|
80 |
|
Rig Technologies |
|
|
14 |
|
|
|
74 |
|
|
|
56 |
|
|
|
70 |
|
|
|
130 |
|
Eliminations and corporate costs |
|
|
(40 |
) |
|
|
(65 |
) |
|
|
(52 |
) |
|
|
(92 |
) |
|
|
(126 |
) |
Total Adjusted EBITDA |
|
$ |
84 |
|
|
$ |
195 |
|
|
$ |
178 |
|
|
$ |
262 |
|
|
$ |
335 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net loss attributable to Company |
|
$ |
(93 |
) |
|
$ |
(5,389 |
) |
|
$ |
(2,047 |
) |
|
$ |
(2,140 |
) |
|
$ |
(5,466 |
) |
Noncontrolling interests |
|
|
6 |
|
|
|
5 |
|
|
|
(2 |
) |
|
|
4 |
|
|
|
7 |
|
Benefit for income taxes |
|
|
(47 |
) |
|
|
(373 |
) |
|
|
(156 |
) |
|
|
(203 |
) |
|
|
(383 |
) |
Interest expense |
|
|
22 |
|
|
|
25 |
|
|
|
22 |
|
|
|
44 |
|
|
|
50 |
|
Interest income |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(3 |
) |
|
|
(5 |
) |
|
|
(12 |
) |
Equity loss in unconsolidated affiliate |
|
|
6 |
|
|
|
2 |
|
|
|
233 |
|
|
|
239 |
|
|
|
2 |
|
Other (income) expense, net |
|
|
8 |
|
|
|
8 |
|
|
|
3 |
|
|
|
11 |
|
|
|
26 |
|
Depreciation and amortization |
|
|
82 |
|
|
|
154 |
|
|
|
105 |
|
|
|
187 |
|
|
|
331 |
|
Other items |
|
|
102 |
|
|
|
5,769 |
|
|
|
2,023 |
|
|
|
2,125 |
|
|
|
5,780 |
|
Total Adjusted EBITDA |
|
$ |
84 |
|
|
$ |
195 |
|
|
$ |
178 |
|
|
$ |
262 |
|
|
$ |
335 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20200727005824/en/
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com
Source: