Dril-Quip, Inc. Announces Results for Third Quarter 2009

HOUSTON, Nov. 6 /PRNewswire-FirstCall/ — Dril-Quip, Inc. (NYSE: DRQ) today announced net income of $25.1 million, or $0.63 per diluted share for the three months ended September 30, 2009, versus net income of $27.4 million, or $0.69 per diluted share for the third quarter of 2008. The third quarter 2009 results include an after-tax charge of $3.5 million, or $0.09 per diluted share, related to the recognition of employment contract termination expenses resulting from the death of Gary D. Smith, one of the Company’s Co-Chief Executive Officers, during the quarter. Total revenues were $138.2 million during the quarter ended September 30, 2009 compared to $132.3 million for the same period in 2008.

For the nine months ended September 30, 2009, net income was $76.5 million, or $1.94 per diluted share, compared with net income of $80.5 million, or $1.98 per diluted share, for the same period in 2008. Revenues for the nine months ended September 30, 2009 were $398.9 million, down from $407.2 million for the same period last year.

In addition, the Company announced that its backlog at September 30, 2009 was approximately $623 million, compared to its September 30, 2008 backlog of approximately $528 million. The Company expects its earnings per share for the quarter ending December 31, 2009 to approximate $0.62 to $0.72 per diluted share, excluding any unusual or special charges.

Dril-Quip is a leading manufacturer of highly engineered offshore drilling and production equipment, which is well suited for use in deepwater, harsh environment and severe service applications.

Statements contained herein relating to future operations and financial results that are forward looking statements are based upon certain assumptions and analyses made by the management of the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors. These statements are subject to risks beyond the Company’s control, including, but not limited to, the volatility of oil and natural gas prices and cyclicality of the oil and gas industry, the Company’s international operations, operating risks, and other factors detailed in the Company’s public filings with the Securities and Exchange Commission. Investors are cautioned that any such statements are not guarantees of future performance and actual outcomes may vary materially from those indicated.

                                     Dril-Quip, Inc.
                   Comparative Condensed Consolidated Statements of Income
                         (in thousands, except per share amounts)
                                       (Unaudited)

                              Three months ended        Nine months ended
                                 September 30,            September 30,
                              2008         2009        2008           2009

    Revenues               $132,271     $138,157     $407,228     $398,865
    Cost and expenses:
      Cost of sales          74,230       78,260      235,775      227,684
      Selling, general and
       administrative        15,734       13,260       43,539       40,697
      Engineering and product
       development            6,489        6,979       19,624       19,855
      Special item                -        5,224            -        5,224
                             96,453      103,723      298,938      293,460

    Operating income         35,818       34,434      108,290      105,405
    Interest income             497           66        3,130          410
    Interest expense            (47)         (20)        (149)         (97)
    Income before income
     taxes                   36,268       34,480      111,271      105,718
    Income tax provision      8,822        9,396       30,731       29,256
    Net income              $27,446      $25,084      $80,540      $76,462

    Diluted earnings per
     share                    $0.69        $0.63        $1.98        $1.94

    Weighted average shares -
     diluted                 39,832       39,565       40,625       39,440

    Depreciation and
     amortization            $4,366       $4,681      $12,656      $13,345

    Capital expenditures     $9,123      $15,230      $39,365      $38,113

SOURCE Dril-Quip, Inc.