Lone Star Technologies, Inc. Reports Record First Quarter 2001 Earnings

Apr 16, 2001, 01:00 ET from Lone Star Technologies, Inc.

    DALLAS, April 16 /PRNewswire/ -- Lone Star Technologies, Inc. (NYSE:   LSS)
 (Lone Star), reported record first quarter 2001 net income of $13.4 million,
 or $.55 per diluted share, which was an increase of 9% from the previous
 record quarter ended December 31, 2000 net income of $12.3 million, or $.51
 per diluted share, and compared to net income of $7.1 million, or $.29 per
 diluted share, in the first quarter of 2000.
     First quarter 2001 revenues rose 11% to $179.4 million from the fourth
 quarter of 2000.  Oilfield revenues of $114.8 million were up 13% on 14%
 higher shipment volumes over the quarter ended December 31, 2000.  The average
 active rig count increased 6% from the last quarter in 2000 to 1,141 in the
 quarter ended March 31, 2001.  In the first quarter of 2001, high-strength
 premium tubulars were 61% of oil country tubular goods (OCTG) revenues versus
 57% in year 2000, and line pipe demand rose with line pipe comprising 30% of
 oilfield products tonnage shipped.  The high mix of line pipe, partially
 offset by increased sales of premium alloy-grade OCTG, resulted in slightly
 lower average oilfield product prices compared to the fourth quarter of 2000.
     Specialty tubing revenues of $46.9 million decreased 1% from the last
 quarter of 2000 due to continued lower demand for precision mechanical
 tubulars for general industrial and automotive applications and some first
 quarter 2001 finned tubing shipments that were delayed until the second
 quarter.  Demand for precision mechanical tubulars is expected to remain the
 same in the second quarter, while finned tubing demand is expected to resume
 growth at previous levels.  Lone Star will be expanding its capacity for
 finned tubulars with new production equipment in Mexico and Canada to meet
 increased demand for heat recovery steam generators used in combined-cycle
 electrical power plants in North America.  Flat rolled steel and other tubular
 revenues were up 38% principally due to increased sales to an alliance mill
 partner and our largest flat rolled steel customer.
     Following two expandable casing records -- an ultra-deepwater installation
 with expandable casing set in two different sizes to extend total well depth
 and the deepest installation at over 16,000 feet -- Lone Star's expandable
 casing will be used in several of the most demanding Gulf of Mexico wells in
 the second quarter, further accelerating and broadening commercial
 applications of our new product.
     Rhys J. Best, Chairman, President and Chief Executive Officer, stated,
 "Our two recent line pipe alliances that increase our capacity and allow us to
 offer the widest line pipe product offering in North America will benefit us
 as line pipe markets continue to improve throughout the year.  We began
 production of high-strength tubulars on our third production line for heat-
 treated alloy-grade tubulars at the end of the first quarter.  With 79% of the
 1,198 active rigs drilling for natural gas last Thursday, this newly installed
 facility gives us additional capacity to serve our customers' increasing needs
 for high-strength premium OCTG for deeper gas drilling.  Our second quarter
 finned tubing facilities expansion in Canada and Mexico will provide new
 production capacity to supply growing customer demand as combined-cycle power
 plant construction further accelerates in the second half of this year."
     Lone Star Technologies, Inc. is a holding company whose principal
 operating subsidiaries manufacture and market oilfield casing, tubing, and
 line pipe, specialty tubing products including finned tubes used in a variety
 of heat recovery applications, and flat rolled steel and other tubular
 products and services.
     This release contains forward looking statements based on assumptions that
 are subject to a wide range of business risks.  There is no assurance that the
 estimates and expectations in this release will be realized.  Important
 factors that could cause actual results to differ materially from the forward
 looking statements are described in the periodic filings of Lone Star
 Technologies, Inc. with the Securities and Exchange Commission, including its
 Annual Report on Form 10-K for the year ended December 31, 2000.
 
 
                            LONE STAR TECHNOLOGIES, INC.
                          CONSOLIDATED STATEMENTS OF INCOME
                   (Unaudited, in millions, except per share data)
 
                                               For the Quarter Ended March 31,
                                                     2001              2000
 
     Net revenues                                  $179.4            $156.6
     Cost of goods sold                            (154.9)           (138.7)
       Gross profit                                  24.5              17.9
     Selling, general and administrative
      expenses                                       (8.4)             (8.1)
       Operating income                              16.1               9.8
     Interest income                                  0.5               0.5
     Interest expense                                (3.0)             (3.0)
     Other income                                     0.2               0.2
       Income before income tax                      13.8               7.5
     Income tax                                      (0.4)             (0.4)
       Net income                                   $13.4              $7.1
 
     Per common share - basic:
       Net income available to common
        shareholders                                $0.56             $0.30
 
     Per common share - diluted:
       Net income available to common
        shareholders                                $0.55             $0.29
 
     Weighted average shares outstanding
       Basic                                         23.7              23.4
       Diluted                                       24.4              24.0
 
 
     Attention:  Certain charges for shipping and handling costs have been
 reclassified in accordance with a recently issued accounting pronouncement.
 The pronouncement requires freight charges billed to customers to be
 classified in revenues and shipping costs incurred to be classified in cost of
 goods sold.  Lone Star previously reported such amounts net in revenues.  The
 resulting reclassification increased revenues and cost of goods sold.  Gross
 profit, operating income and net income are unchanged for the quarter ended
 March 31, 2000 as a result of the reclassification.
 
 
                                                 Revenues by Segment
                                                   ($ in millions)
 
                                            For the Quarter Ended March 31,
                                                2001              2000
                                              $       %         $       %
     Oilfield products                      114.8     64       82.2     53
     Specialty tubing products               46.9     26       58.6     37
     Flat rolled steel and other
      products                               17.7     10       15.8     10
     Consolidated net revenues              179.4    100      156.6    100
 
 
                                                Shipments by Segment
                                                      (in tons)
 
                                           For the Quarter Ended March 31,
                                             2001     %       2000      %
     Oilfield products                     165,000    65     125,400    58
     Specialty tubing products              37,300    15      50,300    23
     Flat rolled steel and other
      products                              49,400    20      42,200    19
     Total shipments                       251,700   100     217,900   100
 
 

SOURCE Lone Star Technologies, Inc.
    DALLAS, April 16 /PRNewswire/ -- Lone Star Technologies, Inc. (NYSE:   LSS)
 (Lone Star), reported record first quarter 2001 net income of $13.4 million,
 or $.55 per diluted share, which was an increase of 9% from the previous
 record quarter ended December 31, 2000 net income of $12.3 million, or $.51
 per diluted share, and compared to net income of $7.1 million, or $.29 per
 diluted share, in the first quarter of 2000.
     First quarter 2001 revenues rose 11% to $179.4 million from the fourth
 quarter of 2000.  Oilfield revenues of $114.8 million were up 13% on 14%
 higher shipment volumes over the quarter ended December 31, 2000.  The average
 active rig count increased 6% from the last quarter in 2000 to 1,141 in the
 quarter ended March 31, 2001.  In the first quarter of 2001, high-strength
 premium tubulars were 61% of oil country tubular goods (OCTG) revenues versus
 57% in year 2000, and line pipe demand rose with line pipe comprising 30% of
 oilfield products tonnage shipped.  The high mix of line pipe, partially
 offset by increased sales of premium alloy-grade OCTG, resulted in slightly
 lower average oilfield product prices compared to the fourth quarter of 2000.
     Specialty tubing revenues of $46.9 million decreased 1% from the last
 quarter of 2000 due to continued lower demand for precision mechanical
 tubulars for general industrial and automotive applications and some first
 quarter 2001 finned tubing shipments that were delayed until the second
 quarter.  Demand for precision mechanical tubulars is expected to remain the
 same in the second quarter, while finned tubing demand is expected to resume
 growth at previous levels.  Lone Star will be expanding its capacity for
 finned tubulars with new production equipment in Mexico and Canada to meet
 increased demand for heat recovery steam generators used in combined-cycle
 electrical power plants in North America.  Flat rolled steel and other tubular
 revenues were up 38% principally due to increased sales to an alliance mill
 partner and our largest flat rolled steel customer.
     Following two expandable casing records -- an ultra-deepwater installation
 with expandable casing set in two different sizes to extend total well depth
 and the deepest installation at over 16,000 feet -- Lone Star's expandable
 casing will be used in several of the most demanding Gulf of Mexico wells in
 the second quarter, further accelerating and broadening commercial
 applications of our new product.
     Rhys J. Best, Chairman, President and Chief Executive Officer, stated,
 "Our two recent line pipe alliances that increase our capacity and allow us to
 offer the widest line pipe product offering in North America will benefit us
 as line pipe markets continue to improve throughout the year.  We began
 production of high-strength tubulars on our third production line for heat-
 treated alloy-grade tubulars at the end of the first quarter.  With 79% of the
 1,198 active rigs drilling for natural gas last Thursday, this newly installed
 facility gives us additional capacity to serve our customers' increasing needs
 for high-strength premium OCTG for deeper gas drilling.  Our second quarter
 finned tubing facilities expansion in Canada and Mexico will provide new
 production capacity to supply growing customer demand as combined-cycle power
 plant construction further accelerates in the second half of this year."
     Lone Star Technologies, Inc. is a holding company whose principal
 operating subsidiaries manufacture and market oilfield casing, tubing, and
 line pipe, specialty tubing products including finned tubes used in a variety
 of heat recovery applications, and flat rolled steel and other tubular
 products and services.
     This release contains forward looking statements based on assumptions that
 are subject to a wide range of business risks.  There is no assurance that the
 estimates and expectations in this release will be realized.  Important
 factors that could cause actual results to differ materially from the forward
 looking statements are described in the periodic filings of Lone Star
 Technologies, Inc. with the Securities and Exchange Commission, including its
 Annual Report on Form 10-K for the year ended December 31, 2000.
 
 
                            LONE STAR TECHNOLOGIES, INC.
                          CONSOLIDATED STATEMENTS OF INCOME
                   (Unaudited, in millions, except per share data)
 
                                               For the Quarter Ended March 31,
                                                     2001              2000
 
     Net revenues                                  $179.4            $156.6
     Cost of goods sold                            (154.9)           (138.7)
       Gross profit                                  24.5              17.9
     Selling, general and administrative
      expenses                                       (8.4)             (8.1)
       Operating income                              16.1               9.8
     Interest income                                  0.5               0.5
     Interest expense                                (3.0)             (3.0)
     Other income                                     0.2               0.2
       Income before income tax                      13.8               7.5
     Income tax                                      (0.4)             (0.4)
       Net income                                   $13.4              $7.1
 
     Per common share - basic:
       Net income available to common
        shareholders                                $0.56             $0.30
 
     Per common share - diluted:
       Net income available to common
        shareholders                                $0.55             $0.29
 
     Weighted average shares outstanding
       Basic                                         23.7              23.4
       Diluted                                       24.4              24.0
 
 
     Attention:  Certain charges for shipping and handling costs have been
 reclassified in accordance with a recently issued accounting pronouncement.
 The pronouncement requires freight charges billed to customers to be
 classified in revenues and shipping costs incurred to be classified in cost of
 goods sold.  Lone Star previously reported such amounts net in revenues.  The
 resulting reclassification increased revenues and cost of goods sold.  Gross
 profit, operating income and net income are unchanged for the quarter ended
 March 31, 2000 as a result of the reclassification.
 
 
                                                 Revenues by Segment
                                                   ($ in millions)
 
                                            For the Quarter Ended March 31,
                                                2001              2000
                                              $       %         $       %
     Oilfield products                      114.8     64       82.2     53
     Specialty tubing products               46.9     26       58.6     37
     Flat rolled steel and other
      products                               17.7     10       15.8     10
     Consolidated net revenues              179.4    100      156.6    100
 
 
                                                Shipments by Segment
                                                      (in tons)
 
                                           For the Quarter Ended March 31,
                                             2001     %       2000      %
     Oilfield products                     165,000    65     125,400    58
     Specialty tubing products              37,300    15      50,300    23
     Flat rolled steel and other
      products                              49,400    20      42,200    19
     Total shipments                       251,700   100     217,900   100
 
 SOURCE  Lone Star Technologies, Inc.