Oilfield services company Dril-Quip has revealed its plans for new acquisitions if an opportune candidate is found, despite posting a decrease in income for the first quarter of 2017.
The company recorded a net income of $94,000 for the 1Q 2017 versus a net income of $36.8 million for the same quarter of 2016.
Dril-Quip said that its first quarter results were negatively impacted by after-tax severance payments of $1.3 million and a net loss from operations of TIW Corporation of $0.9 million.
In addition, total revenues for the 1Q 2017 were $119.2 million, a drop compared to $166.6 million for the same period in 2016. Product bookings were approximately $71.1 million during this year’s first quarter which is significantly higher compared to $32.2 million for the same quarter in 2016.
Dril-Quip’s backlog in 1Q 2017 was $296 million, significantly less than the $522 million backlog in 1Q 2016.
Blake DeBerry, Dril-Quip’s President and CEO, focused on revenues and product bookings for the quarter as positive indicators by stating that both saw an increase when compared to the fourth quarter of 2016.
Regarding future plans, DeBerry said: “Looking ahead, we plan to continue to minimize expenses and proceed with our forward-focused strategy, which includes the pursuit of acquisition candidates, the continuation of our research and development activities and the repurchase of shares on an opportunistic basis.”
To remind, the company already made two acquisitions, one in 2016 and one in 2017. Dril-Quip’s first ever acquisition was in November 2016 and saw the company buy Houston-based TIW Corporation, a manufacturer of consumable downhole products for the oil and gas market, for approximately $143 million.
Dril-Quip also bought offshore equipment provider OilPatch Technologies (OPT) for approximately $20 million in early January 2017.
DeBerry added that the company’s debt-free balance sheet and strong cash position would help the company when the industry rebounds.
“There is no doubt that the remainder of 2017 will be difficult for the offshore sector. However, we continue to believe that we will be net income and free cash flow positive for the year, barring any unexpected deterioration in market conditions,” he said.
Offshore Energy Today Staff