National Oilwell Varco Reports Third Quarter 2019 Results
“In the third quarter, adjusted EBITDA improved significantly relative to second quarter results due to accelerating cost reductions, a favorable revenue shift towards higher-margin offshore and aftermarket businesses, and positive project close-out variances,” commented
“We were also pleased to see NOV post its strongest cash flow quarter in more than three years, as our concerted efforts to more efficiently manage working capital are making an impact. Overall, NOV’s unique strategic position within oil and gas, including its broad geographic and product diversity, its market leadership, and its large installed base, contributed to its improving results in the third quarter. As our industry battles deep cyclicality and divergent market conditions, the Company remains committed to improving its financial returns while also helping our customers improve the efficiency, environmental performance and safety of their operations.”
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 third quarter, the Company recognized
As of
Significant Achievements
NOV was awarded the equipment package and design orders for one of the world’s largest offshore wind turbine installation vessels by
NOV announced a contract award by a joint venture between Shapoorji Palloonji Oil and Gas and Bumi Armada Berhad for the Company’s submerged turret production (STP™) system. The STP system will be used for an FPSO vessel that will be deployed on the
NOV secured the first orders for the QuickLatch™ wireline wellhead connection systems from a major operator in
NOV received an award from a drilling contractor in the
NOV acquired
NOV introduced the Falcon™ series drill bit to
NOV successfully deployed its VectorZIEL rotary steerable systems (RSS) tools into
NOV shipped its first managed-pressure-drilling (MPD) package into
NOV’s SelectShift™ downhole adjustable motor helped a major independent operator improve drilling times and reduce bit repair costs in
Third Quarter Earnings Conference Call
NOV will hold a conference call to discuss its third quarter 2019 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.
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF INCOME (LOSS) (Unaudited) (In millions, except per share data) |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
793 |
|
|
$ |
847 |
|
|
$ |
850 |
|
|
$ |
2,450 |
|
|
$ |
2,351 |
|
Completion & Production Solutions |
|
|
728 |
|
|
|
735 |
|
|
|
663 |
|
|
|
1,972 |
|
|
|
2,143 |
|
Rig Technologies |
|
|
649 |
|
|
|
637 |
|
|
|
671 |
|
|
|
1,923 |
|
|
|
1,771 |
|
Eliminations |
|
|
(44 |
) |
|
|
(65 |
) |
|
|
(52 |
) |
|
|
(147 |
) |
|
|
(210 |
) |
Total revenue |
|
|
2,126 |
|
|
|
2,154 |
|
|
|
2,132 |
|
|
|
6,198 |
|
|
|
6,055 |
|
Gross profit |
|
|
151 |
|
|
|
393 |
|
|
|
62 |
|
|
|
469 |
|
|
|
1,035 |
|
Gross profit % |
|
|
7.1 |
% |
|
|
18.2 |
% |
|
|
2.9 |
% |
|
|
7.6 |
% |
|
|
17.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative |
|
|
293 |
|
|
|
320 |
|
|
|
417 |
|
|
|
1,014 |
|
|
|
911 |
|
Long-lived asset impairment |
|
|
12 |
|
|
|
— |
|
|
|
5,373 |
|
|
|
5,385 |
|
|
|
— |
|
Operating profit (loss) |
|
|
(154 |
) |
|
|
73 |
|
|
|
(5,728 |
) |
|
|
(5,930 |
) |
|
|
124 |
|
Interest and financial costs |
|
|
(25 |
) |
|
|
(24 |
) |
|
|
(25 |
) |
|
|
(75 |
) |
|
|
(71 |
) |
Interest income |
|
|
4 |
|
|
|
6 |
|
|
|
6 |
|
|
|
16 |
|
|
|
18 |
|
Equity income (loss) in unconsolidated affiliates |
|
|
(4 |
) |
|
|
(2 |
) |
|
|
(2 |
) |
|
|
(6 |
) |
|
|
(1 |
) |
Other income (expense), net |
|
|
(10 |
) |
|
|
(20 |
) |
|
|
(8 |
) |
|
|
(36 |
) |
|
|
(70 |
) |
Income (loss) before income taxes |
|
|
(189 |
) |
|
|
33 |
|
|
|
(5,757 |
) |
|
|
(6,031 |
) |
|
|
— |
|
Provision (benefit) for income taxes |
|
|
60 |
|
|
|
29 |
|
|
|
(373 |
) |
|
|
(323 |
) |
|
|
37 |
|
Net income (loss) |
|
|
(249 |
) |
|
|
4 |
|
|
|
(5,384 |
) |
|
|
(5,708 |
) |
|
|
(37 |
) |
Net (income) loss attributable to noncontrolling interests |
|
|
(5 |
) |
|
|
3 |
|
|
|
5 |
|
|
|
2 |
|
|
|
6 |
|
Net income (loss) attributable to Company |
|
$ |
(244 |
) |
|
$ |
1 |
|
|
$ |
(5,389 |
) |
|
$ |
(5,710 |
) |
|
$ |
(43 |
) |
Per share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.64 |
) |
|
$ |
0.00 |
|
|
$ |
(14.11 |
) |
|
$ |
(14.95 |
) |
|
$ |
(0.11 |
) |
Diluted |
|
$ |
(0.64 |
) |
|
$ |
0.00 |
|
|
$ |
(14.11 |
) |
|
$ |
(14.95 |
) |
|
$ |
(0.11 |
) |
Weighted average shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
382 |
|
|
|
379 |
|
|
|
382 |
|
|
|
382 |
|
|
|
378 |
|
Diluted |
|
|
382 |
|
|
|
383 |
|
|
|
382 |
|
|
|
382 |
|
|
|
378 |
|
NATIONAL OILWELL VARCO, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) (In millions) |
||||||||
|
|
September 30, |
|
|
December 31, |
|
||
|
|
2019 |
|
|
2018 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
1,313 |
|
|
$ |
1,427 |
|
Receivables, net |
|
|
1,799 |
|
|
|
2,101 |
|
Inventories, net |
|
|
2,537 |
|
|
|
2,986 |
|
Contract assets |
|
|
615 |
|
|
|
565 |
|
Other current assets |
|
|
251 |
|
|
|
200 |
|
Total current assets |
|
|
6,515 |
|
|
|
7,279 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
2,361 |
|
|
|
2,797 |
|
Lease right-of-use assets |
|
|
673 |
|
|
|
— |
|
Goodwill and intangibles, net |
|
|
4,102 |
|
|
|
9,284 |
|
Other assets |
|
|
354 |
|
|
|
436 |
|
Total assets |
|
$ |
14,005 |
|
|
$ |
19,796 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
716 |
|
|
$ |
722 |
|
Accrued liabilities |
|
|
983 |
|
|
|
1,088 |
|
Contract liabilities |
|
|
455 |
|
|
|
458 |
|
Current portion of lease liabilities |
|
|
113 |
|
|
|
7 |
|
Accrued income taxes |
|
|
9 |
|
|
|
66 |
|
Total current liabilities |
|
|
2,276 |
|
|
|
2,341 |
|
|
|
|
|
|
|
|
|
|
Lease liabilities |
|
|
673 |
|
|
|
222 |
|
Long-term debt |
|
|
2,484 |
|
|
|
2,482 |
|
Other liabilities |
|
|
443 |
|
|
|
862 |
|
Total liabilities |
|
|
5,876 |
|
|
|
5,907 |
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
8,129 |
|
|
|
13,889 |
|
Total liabilities and stockholders’ equity |
|
$ |
14,005 |
|
|
$ |
19,796 |
|
The Company adopted ASC 842, Leases, effective
NATIONAL OILWELL VARCO, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In millions) |
||||||||
|
|
Nine Months Ended |
|
|||||
|
|
September 30, |
|
|||||
|
|
2019 |
|
|
2018 |
|
||
Cash flows from operating activities: |
|
|
|
|||||
Net loss |
|
$ |
(5,708 |
) |
|
$ |
(37 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
433 |
|
|
|
519 |
|
Long-lived asset impairment |
|
|
5,385 |
|
|
|
— |
|
Working capital and other operating items, net |
|
|
131 |
|
|
|
(182 |
) |
Net cash provided by operating activities |
|
|
241 |
|
|
|
300 |
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(166 |
) |
|
|
(173 |
) |
Business acquisitions, net of cash acquired |
|
|
(180 |
) |
|
|
(280 |
) |
Other |
|
|
78 |
|
|
|
61 |
|
Net cash used in investing activities |
|
|
(268 |
) |
|
|
(392 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Cash dividends paid |
|
|
(58 |
) |
|
|
(57 |
) |
Other |
|
|
(15 |
) |
|
|
45 |
|
Net cash used in financing activities |
|
|
(73 |
) |
|
|
(12 |
) |
Effect of exchange rates on cash |
|
|
(14 |
) |
|
|
(40 |
) |
Decrease in cash and cash equivalents |
|
|
(114 |
) |
|
|
(144 |
) |
Cash and cash equivalents, beginning of period |
|
|
1,427 |
|
|
|
1,437 |
|
Cash and cash equivalents, end of period |
|
$ |
1,313 |
|
|
$ |
1,293 |
|
NATIONAL OILWELL VARCO, INC. RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME (LOSS) (Unaudited) (In millions) |
||||||||||||||||||||
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, severance accruals, and other restructuring costs. |
||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||||||
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
|
2018 |
|
|||||
Operating profit (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
42 |
|
|
$ |
40 |
|
|
$ |
(3,295 |
) |
|
$ |
(3,234 |
) |
|
$ |
90 |
|
Completion & Production Solutions |
|
|
(24 |
) |
|
|
46 |
|
|
|
(1,932 |
) |
|
|
(1,991 |
) |
|
|
102 |
|
Rig Technologies |
|
|
(110 |
) |
|
|
58 |
|
|
|
(422 |
) |
|
|
(501 |
) |
|
|
138 |
|
Eliminations and corporate costs |
|
|
(62 |
) |
|
|
(71 |
) |
|
|
(79 |
) |
|
|
(204 |
) |
|
|
(206 |
) |
Total operating profit (loss) |
|
$ |
(154 |
) |
|
$ |
73 |
|
|
$ |
(5,728 |
) |
|
$ |
(5,930 |
) |
|
$ |
124 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
3,345 |
|
|
$ |
3,384 |
|
|
$ |
(3 |
) |
Completion & Production Solutions |
|
|
79 |
|
|
|
— |
|
|
|
1,939 |
|
|
|
2,029 |
|
|
|
3 |
|
Rig Technologies |
|
|
194 |
|
|
|
— |
|
|
|
474 |
|
|
|
670 |
|
|
|
6 |
|
Corporate |
|
|
— |
|
|
|
— |
|
|
|
11 |
|
|
|
11 |
|
|
|
(18 |
) |
Total other items |
|
$ |
314 |
|
|
$ |
— |
|
|
$ |
5,769 |
|
|
$ |
6,094 |
|
|
$ |
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation & amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
50 |
|
|
$ |
95 |
|
|
$ |
84 |
|
|
$ |
234 |
|
|
$ |
284 |
|
Completion & Production Solutions |
|
|
27 |
|
|
|
53 |
|
|
|
45 |
|
|
|
124 |
|
|
|
161 |
|
Rig Technologies |
|
|
21 |
|
|
|
20 |
|
|
|
22 |
|
|
|
66 |
|
|
|
63 |
|
Corporate |
|
|
4 |
|
|
|
4 |
|
|
|
3 |
|
|
|
9 |
|
|
|
11 |
|
Total depreciation & amortization |
|
$ |
102 |
|
|
$ |
172 |
|
|
$ |
154 |
|
|
$ |
433 |
|
|
$ |
519 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wellbore Technologies |
|
$ |
133 |
|
|
$ |
135 |
|
|
$ |
134 |
|
|
$ |
384 |
|
|
$ |
371 |
|
Completion & Production Solutions |
|
|
82 |
|
|
|
99 |
|
|
|
52 |
|
|
|
162 |
|
|
|
266 |
|
Rig Technologies |
|
|
105 |
|
|
|
78 |
|
|
|
74 |
|
|
|
235 |
|
|
|
207 |
|
Eliminations and corporate costs |
|
|
(58 |
) |
|
|
(67 |
) |
|
|
(65 |
) |
|
|
(184 |
) |
|
|
(213 |
) |
Total Adjusted EBITDA |
|
$ |
262 |
|
|
$ |
245 |
|
|
$ |
195 |
|
|
$ |
597 |
|
|
$ |
631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income (loss) attributable to Company |
|
$ |
(244 |
) |
|
$ |
1 |
|
|
$ |
(5,389 |
) |
|
$ |
(5,710 |
) |
|
$ |
(43 |
) |
Noncontrolling interests |
|
|
(5 |
) |
|
|
3 |
|
|
|
5 |
|
|
|
2 |
|
|
|
6 |
|
Provision (benefit) for income taxes |
|
|
60 |
|
|
|
29 |
|
|
|
(373 |
) |
|
|
(323 |
) |
|
|
37 |
|
Interest expense |
|
|
25 |
|
|
|
24 |
|
|
|
25 |
|
|
|
75 |
|
|
|
71 |
|
Interest income |
|
|
(4 |
) |
|
|
(6 |
) |
|
|
(6 |
) |
|
|
(16 |
) |
|
|
(18 |
) |
Equity (income) loss in unconsolidated affiliate |
|
|
4 |
|
|
|
2 |
|
|
|
2 |
|
|
|
6 |
|
|
|
1 |
|
Other (income) expense, net |
|
|
10 |
|
|
|
20 |
|
|
|
8 |
|
|
|
36 |
|
|
|
70 |
|
Depreciation and amortization |
|
|
102 |
|
|
|
172 |
|
|
|
154 |
|
|
|
433 |
|
|
|
519 |
|
Other items |
|
|
314 |
|
|
|
— |
|
|
|
5,769 |
|
|
|
6,094 |
|
|
|
(12 |
) |
Total Adjusted EBITDA |
|
$ |
262 |
|
|
$ |
245 |
|
|
$ |
195 |
|
|
$ |
597 |
|
|
$ |
631 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20191028005744/en/
Source:
Blake McCarthy
Vice President, Corporate Development and Investor Relations
(713) 815-3535
Blake.McCarthy@nov.com