| Fourth Quarter |
Thursday February 13, 2003 8:02 am Eastern Time
Company Press ReleaseLufkin Industries Announces Earnings Per Diluted Share Of $0.16 for the Fourth Quarter of 2002LUFKIN, Texas, Feb. 13 -- Lufkin Industries, Inc. (Nasdaq: LUFK) today announced results for the fourth quarter and year ended December 31, 2002. For the fourth quarter, net income was $1.1 million, or $0.16 per share (diluted), compared with $4.6 million, or $0.70 per share (diluted), for the fourth quarter of 2001. The Company's guidance for the quarter was for earnings per share (diluted) in a range of $0.10 to $0.23. Net sales for the fourth quarter were $56.0 million versus $66.6 million for the fourth quarter of 2001. For the year ended December 31, 2002, net income was $8.5 million, or $1.26 per share (diluted), compared with $19.5 million, or $3.03 per share (diluted), for 2001. The Company's guidance for 2002 was for earnings per share (diluted) in a range of $1.21 to $1.33. Net sales for 2002 were $228.7 million compared with $278.9 million for 2001. "Lufkin's results for both the fourth quarter and all 2002 primarily reflected the reduced volumes of our oil field business against the strong performance for 2001," said Douglas V. Smith, president and chief executive officer. "While the oil field business performed reasonably well on an absolute basis, it is clear that, relative to 2001, our results were negatively affected by the substantial uncertainty in the global oil markets. Significant increases in oil and natural gas prices drove improved fourth-quarter performance in our international oil field business, but our domestic business remained soft. Influenced by the uncertainties inherent in a frail economy and the Middle East, spending in the domestic oil markets was sluggish, as indicated by the low rig count. Lufkin's power transmission and trailer businesses each achieved strong growth in both the fourth quarter and full year, partially offsetting the reduced oil field business results." Sales of oil field products for the fourth quarter of 2002 were $27.3 million compared with $41.4 million for the fourth quarter of 2001. Power transmission product sales increased 11.4% to $18.7 million for the quarter from $16.8 million for the fourth quarter last year, while trailer product sales rose 18.8% to $10.0 million compared with $8.4 million. For full-year 2002, oil field products sales were $118.7 million compared with $182.3 million for 2001. Power transmission product sales were $70.5 million, up 12.7% from $62.5 million. Trailer product sales increased 15.9% to $39.6 million from $34.1 million. Lufkin's total backlog at December 31, 2002, was $53.6 million compared with $64.4 million at December 31, 2001, and $63.9 million at September 30, 2002. The backlog for oil field equipment was $12.6 million at year end compared with $19.4 million at the end of 2001; the power transmission products backlog was $30.9 million compared with $31.5 million; and the trailer products backlog was $10.1 million compared with $13.5 million. Mr. Smith continued, "The decline in our backlog at year end from the third quarter of 2002 and the fourth quarter of 2001 is consistent with the level of activity we currently see in the oil field business. With better-than-expected revenue growth in the trailer business for the fourth quarter and for 2002, we believe the decline in the trailer backlog is representative of the still weak economic environment, although we have experienced increased strength in trailer demand since the start of 2003. "Our guidance for earnings per share diluted for 2003 is necessarily based on a continuation of the current economic environment. As a result, we currently expect earnings per share (diluted) for the year in a range of $1.17 to $1.58 and for the first quarter of 2003 in a range of $0.08 to $0.16. "Our focus during this period of economic uncertainty has been, and will be, to maintain Lufkin's position as a leader in its respective markets, because we are confident of the value inherent in that position when the economic cycle strengthens," Mr. Smith concluded. "As an integral element of this strategy, we have steadily strengthened the Company's financial position, through both comparable-quarter and sequential-quarter debt reduction, increases in cash and cash equivalents and growth in shareholders' equity. Through this strategy, we believe we have improved our ability to take full advantage of opportunities for profitable growth that result either from the current market malaise or as the economy improves." Lufkin will discuss its results for the fourth quarter ended December 31, 2002, in a teleconference call today at 9:00 a.m. (central time). To listen to the call, participants should dial (719) 867-0640 approximately 10 minutes prior to the start of the call. A telephonic replay will be available from 11:00 a.m. (central time) February 13, 2003, through 6:00 p.m. (central time) February 14, 2003, by dialing (719) 457-0820 and entering reservation number 646455. Lufkin Industries, Inc. sells and services oil field pumping units, foundry castings, power transmission products, and highway trailers throughout the world. The Company has vertically integrated all vital technologies required to design, manufacture and market its products. 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. LUFKIN INDUSTRIES, INC.
Financial Highlights
(Thousands of dollars, except per share data)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
------------------ ------------------
2002 2001 2002 2001
-------- -------- -------- --------
Net sales $55,999 $66,622 $228,724 $278,907
Cost of sales 45,632 50,576 181,886 210,858
-------- -------- -------- --------
Gross profit 10,367 16,046 46,838 68,049
Selling, general and
administrative expenses 8,752 8,491 33,428 35,045
-------- -------- -------- --------
Operating income 1,615 7,555 13,410 33,004
Interest and other income
(expense), net (139) 40 357 (704)
-------- -------- -------- --------
Earnings before income taxes 1,476 7,595 13,767 32,300
Income tax provision 376 3,000 5,232 12,758
-------- -------- -------- --------
Net earnings $1,100 $4,595 $8,535 $19,542
======== ======== ======== ========
Net earnings per share:
Basic $0.17 $0.72 $1.29 $3.12
======== ======== ======== ========
Diluted $0.16 $0.70 $1.26 $3.03
======== ======== ======== ========
Cash dividends per share $0.18 $0.18 $0.72 $0.72
======== ======== ======== ========
LUFKIN INDUSTRIES, INC.
Balance Sheet Highlights
(Thousands of dollars)
Dec. 31, Dec. 31,
2002 2001
-------- --------
Current assets $95,236 $98,393
Total assets 248,355 246,069
Current liabilities 30,815 37,049
Shareholders' equity 178,949 170,999
Working capital 64,421 61,344
LUFKIN INDUSTRIES, INC.
Division Performance
(Thousands of dollars)
Three Months Ended Year Ended
12/31/02 12/31/01 12/31/02 12/31/01
------------------ ------------------
Revenue:
Oil field $27,318 $41,436 $118,700 $182,271
Power transmission 18,707 16,790 70,455 62,498
Trailer 9,974 8,396 39,569 34,138
-------- -------- -------- --------
Total $55,999 $66,622 $228,724 $278,907
======== ======== ======== ========
Dec. 31, Sept. 30, Dec. 31,
2002 2002 2001
-------- -------- --------
Backlog:
Oil field $12,600 $18,300 $19,400
Power transmission 30,900 33,600 31,500
Trailer 10,100 12,000 13,500
------- ------- -------
Total $53,600 $63,900 $64,400
======= ======= =======
|
Lufkin Industries Inc., Lufkin
R. D. Leslie, 936/637-5325