OSCA Announces First Quarter 2001 Results

Operating Income Up 480% on Record Revenue;

Updates Outlook for the Year



Apr 30, 2001, 01:00 ET from OSCA, Inc.

    LAFAYETTE, La., April 30 /PRNewswire/ -- OSCA, Inc. (Nasdaq:   OSCA), a
 major provider of specialized oil and gas well completion products and
 services announced another record revenue quarter and continued improvement in
 earnings for the first quarter ended March 31, 2001.
     The company reported 2001 first quarter revenue of $43.8 million, a 65%
 increase, compared to $26.5 million for the corresponding period in 2000.
 Operating income for the quarter increased almost six fold to $5.8 million
 from $1.0 million one year ago as all segments showed marked improvement.  Net
 income was $3.1 million, or $.21 per share before nonrecurring charges
 associated with the warehouse fire (involuntary conversion) in February 2001,
 as compared to net income of $0.7 million, or $.08 per share, one year ago.
     Sequentially, revenue increased $1.3 million from the fourth quarter of
 2000 and operating income improved by $0.7 million after elimination of the
 effect of the special credit recorded in the fourth quarter of 2000.  Net
 income increased by $.03 per share, or 17%, when earnings in both periods are
 adjusted for the nonrecurring charges relating to the warehouse fire in 2001
 and the special credit from the fourth quarter of 2000.  The improvements were
 primarily attributable to continued increases in pricing, accelerated drilling
 and workover activity in OSCA's markets, and additional market penetration in
 the Gulf of Mexico, Brazil and Venezuela.
 
     First Quarter Highlights
     --  Consolidated operating income rose 480%
     --  Completion Services revenue up 50%
     --  Completion Fluids revenue up 32%
     --  Completion Tools revenue up 182%
 
     Robert Hollier, chief executive officer and president, explained, "We are
 seeing significant improvement in pricing in all product sectors and we expect
 this trend to continue throughout 2001.  We should reach peak pricing during
 the second half of 2002 at a level 10-15% higher than the last peak cycle's
 pricing.  Our volume of business continues to expand and when you add the
 effects of the anticipated price improvement, OSCA is poised for a record year
 in revenues and earnings.  Just as the combination of volume and price
 contributed to the increase in operating margin during our first quarter, we
 expect increasing benefits for the remainder of 2001."
     Hollier added, "Regarding the outlook for 2001, we believe that as a
 result of the above combination of factors our earnings should be between
 $1.08 and $1.12 per share on revenue of $180 million to $185 million."
 
     Segment Discussion
     Completion Fluids posted healthy gains in revenue and operating income
 during the quarter.  Revenues increased 32% from the same period last year to
 $17.4 million, while operating income increased $1.1 million to $1.5 million
 in the quarter.  Higher volumes and improved pricing contributed to the gains
 this quarter.
     Hollier stated, "As a result of weather moderating during the first
 quarter of 2001 compared to the fourth quarter of 2000 we did not experience a
 product mix favoring the more expensive complex fluid formulations.  In
 addition, we received a raw material price increase of 10% on January 1, 2001.
 The combination of these two factors hampered our operating results on a
 sequential basis, however we do expect future price increases to more than
 offset the higher product cost.  Overall volumes remained high and selling
 prices continue to recover."
     Completion Tools reported record revenue of $13.8 million for the first
 quarter of 2001, a 182% increase compared to the same period one year ago.
 Operating income of $3.2 million was $3.0 million greater than the same
 quarter last year.  Sequentially, revenue and operating income increased
 $2.2 million and $2.3 million, respectively.  These increases reflect an
 improved product mix associated with new technology and improved manufacturing
 throughput, which has effectively doubled in the first quarter of 2001 over
 the average in 2000, allowing us to be more cost effective.
     Hollier added, "We are extremely proud of our growth in the completion
 tools business.  This is the most technically challenging product line that we
 offer and the broad acceptance by our customers is a strong indication that
 our emphasis on technology is paying high dividends."
     Completion Services reported revenue of $12.6 million for the first
 quarter of 2001, a 50% increase over the corresponding quarter one year ago.
 Market penetration in both Brazil and the Gulf of Mexico in conjunction with
 accelerated exploration and production activity contributed to the increase.
 Operating income for the quarter rose $0.8 million to $1.9 million, a 73%
 increase, reflecting increased volumes and higher selling prices.
 Sequentially, revenue was unchanged as was operating income when taking into
 consideration the special credit in the fourth quarter of 2000.  Our revenue
 was constrained as two of our vessels were in dry dock during the first
 quarter of 2001 for their triennial Coast Guard inspections.  In total we lost
 53 days of vessel availability during the quarter.  However, we expect
 significant revenue and profit growth in our completion services business
 during 2001 as a result of continuing price improvement and expansion into key
 land markets initiated during the second quarter.  In addition, we recently
 executed a contract extension with Petrobras for the M/V Elkhorn River
 commencing on May 10 with improved pricing.
     Hollier concluded, "We are very confident that our focused growth strategy
 will continue to generate positive results over the long-term.  We have a
 number of exciting new products which are entering the commercialization phase
 that will build on our technological leadership and solidify our position as
 'Best in Class' in well completions.  Our personnel are very energized and
 excited about our company, its accomplishments and the future."
 
     Forward-Looking Statement
     This news release contains forward-looking statements involving risks and
 uncertainties, including those described from time to time in OSCA, Inc.'s
 filings with the Securities and Exchange Commission (SEC), that could cause
 the actual results to differ materially from those anticipated by these
 forward-looking statements.  In particular, see the discussions on risks in
 the Company's most recent Annual Report on Form 10-K filed with the SEC.
 OSCA, Inc. assumes no obligation to update this forward-looking information.
     OSCA is a major provider of oil and gas well completion fluids, completion
 services and downhole completion tools to major oil companies and independent
 exploration and production companies in the Gulf of Mexico and select
 international markets.  For more information about OSCA, visit www.osca.com.
 
 
      OSCA, INC.
      Consolidated Statements of Income
      (millions, except per share data)
 
                                                          For the Three Months
                                                             Ended March 31,
                                                            2001        2000
 
     Net revenue                                         $  43.8     $  26.5
 
     Operating expenses:
       Cost of sales                                        32.5        20.4
       Selling, general & administrative expenses            5.5         5.1
       Total operating expenses                             38.0        25.5
 
     Operating income                                        5.8         1.0
 
     Interest expense                                        0.5         0.0
     Interest (income)                                      (0.1)       (0.1)
     Foreign currency (gains) losses                         0.3         0.1
     Other expense/(income) - net                            0.1        (0.2)
     Involuntary conversion                                  0.5         0.0
 
     Income before income taxes                              4.5         1.2
 
     Income tax expense                                      1.7         0.5
 
     Net income                                          $   2.8     $   0.7
 
     Basic earnings per share                            $  0.19     $  0.08
 
     Diluted earnings per share                          $  0.19     $  0.08
 
     Weighted average shares outstanding                    14.8         8.4
     Weighted average shares outstanding assuming
       dilution                                             14.9         8.4
 
      Business Unit Results
                                                          For the Three Months
                                                             Ended March 31,
                                                            2001        2000
 
     Net revenue to external customers:
       Completion Fluids                                 $  17.4     $  13.2
       Completion Services                                  12.6         8.4
       Downhole Completion Tools                            13.8         4.9
                                                         $  43.8     $  26.5
 
     Operating income (loss):
       Completion Fluids                                 $   1.5     $   0.4
       Completion Services                                   1.9         1.1
       Downhole Completion Tools                             3.2         0.2
       Corporate and Other                                  (0.8)       (0.7)
                                                         $   5.8     $   1.0
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X12457675
 
 

SOURCE OSCA, Inc.
    LAFAYETTE, La., April 30 /PRNewswire/ -- OSCA, Inc. (Nasdaq:   OSCA), a
 major provider of specialized oil and gas well completion products and
 services announced another record revenue quarter and continued improvement in
 earnings for the first quarter ended March 31, 2001.
     The company reported 2001 first quarter revenue of $43.8 million, a 65%
 increase, compared to $26.5 million for the corresponding period in 2000.
 Operating income for the quarter increased almost six fold to $5.8 million
 from $1.0 million one year ago as all segments showed marked improvement.  Net
 income was $3.1 million, or $.21 per share before nonrecurring charges
 associated with the warehouse fire (involuntary conversion) in February 2001,
 as compared to net income of $0.7 million, or $.08 per share, one year ago.
     Sequentially, revenue increased $1.3 million from the fourth quarter of
 2000 and operating income improved by $0.7 million after elimination of the
 effect of the special credit recorded in the fourth quarter of 2000.  Net
 income increased by $.03 per share, or 17%, when earnings in both periods are
 adjusted for the nonrecurring charges relating to the warehouse fire in 2001
 and the special credit from the fourth quarter of 2000.  The improvements were
 primarily attributable to continued increases in pricing, accelerated drilling
 and workover activity in OSCA's markets, and additional market penetration in
 the Gulf of Mexico, Brazil and Venezuela.
 
     First Quarter Highlights
     --  Consolidated operating income rose 480%
     --  Completion Services revenue up 50%
     --  Completion Fluids revenue up 32%
     --  Completion Tools revenue up 182%
 
     Robert Hollier, chief executive officer and president, explained, "We are
 seeing significant improvement in pricing in all product sectors and we expect
 this trend to continue throughout 2001.  We should reach peak pricing during
 the second half of 2002 at a level 10-15% higher than the last peak cycle's
 pricing.  Our volume of business continues to expand and when you add the
 effects of the anticipated price improvement, OSCA is poised for a record year
 in revenues and earnings.  Just as the combination of volume and price
 contributed to the increase in operating margin during our first quarter, we
 expect increasing benefits for the remainder of 2001."
     Hollier added, "Regarding the outlook for 2001, we believe that as a
 result of the above combination of factors our earnings should be between
 $1.08 and $1.12 per share on revenue of $180 million to $185 million."
 
     Segment Discussion
     Completion Fluids posted healthy gains in revenue and operating income
 during the quarter.  Revenues increased 32% from the same period last year to
 $17.4 million, while operating income increased $1.1 million to $1.5 million
 in the quarter.  Higher volumes and improved pricing contributed to the gains
 this quarter.
     Hollier stated, "As a result of weather moderating during the first
 quarter of 2001 compared to the fourth quarter of 2000 we did not experience a
 product mix favoring the more expensive complex fluid formulations.  In
 addition, we received a raw material price increase of 10% on January 1, 2001.
 The combination of these two factors hampered our operating results on a
 sequential basis, however we do expect future price increases to more than
 offset the higher product cost.  Overall volumes remained high and selling
 prices continue to recover."
     Completion Tools reported record revenue of $13.8 million for the first
 quarter of 2001, a 182% increase compared to the same period one year ago.
 Operating income of $3.2 million was $3.0 million greater than the same
 quarter last year.  Sequentially, revenue and operating income increased
 $2.2 million and $2.3 million, respectively.  These increases reflect an
 improved product mix associated with new technology and improved manufacturing
 throughput, which has effectively doubled in the first quarter of 2001 over
 the average in 2000, allowing us to be more cost effective.
     Hollier added, "We are extremely proud of our growth in the completion
 tools business.  This is the most technically challenging product line that we
 offer and the broad acceptance by our customers is a strong indication that
 our emphasis on technology is paying high dividends."
     Completion Services reported revenue of $12.6 million for the first
 quarter of 2001, a 50% increase over the corresponding quarter one year ago.
 Market penetration in both Brazil and the Gulf of Mexico in conjunction with
 accelerated exploration and production activity contributed to the increase.
 Operating income for the quarter rose $0.8 million to $1.9 million, a 73%
 increase, reflecting increased volumes and higher selling prices.
 Sequentially, revenue was unchanged as was operating income when taking into
 consideration the special credit in the fourth quarter of 2000.  Our revenue
 was constrained as two of our vessels were in dry dock during the first
 quarter of 2001 for their triennial Coast Guard inspections.  In total we lost
 53 days of vessel availability during the quarter.  However, we expect
 significant revenue and profit growth in our completion services business
 during 2001 as a result of continuing price improvement and expansion into key
 land markets initiated during the second quarter.  In addition, we recently
 executed a contract extension with Petrobras for the M/V Elkhorn River
 commencing on May 10 with improved pricing.
     Hollier concluded, "We are very confident that our focused growth strategy
 will continue to generate positive results over the long-term.  We have a
 number of exciting new products which are entering the commercialization phase
 that will build on our technological leadership and solidify our position as
 'Best in Class' in well completions.  Our personnel are very energized and
 excited about our company, its accomplishments and the future."
 
     Forward-Looking Statement
     This news release contains forward-looking statements involving risks and
 uncertainties, including those described from time to time in OSCA, Inc.'s
 filings with the Securities and Exchange Commission (SEC), that could cause
 the actual results to differ materially from those anticipated by these
 forward-looking statements.  In particular, see the discussions on risks in
 the Company's most recent Annual Report on Form 10-K filed with the SEC.
 OSCA, Inc. assumes no obligation to update this forward-looking information.
     OSCA is a major provider of oil and gas well completion fluids, completion
 services and downhole completion tools to major oil companies and independent
 exploration and production companies in the Gulf of Mexico and select
 international markets.  For more information about OSCA, visit www.osca.com.
 
 
      OSCA, INC.
      Consolidated Statements of Income
      (millions, except per share data)
 
                                                          For the Three Months
                                                             Ended March 31,
                                                            2001        2000
 
     Net revenue                                         $  43.8     $  26.5
 
     Operating expenses:
       Cost of sales                                        32.5        20.4
       Selling, general & administrative expenses            5.5         5.1
       Total operating expenses                             38.0        25.5
 
     Operating income                                        5.8         1.0
 
     Interest expense                                        0.5         0.0
     Interest (income)                                      (0.1)       (0.1)
     Foreign currency (gains) losses                         0.3         0.1
     Other expense/(income) - net                            0.1        (0.2)
     Involuntary conversion                                  0.5         0.0
 
     Income before income taxes                              4.5         1.2
 
     Income tax expense                                      1.7         0.5
 
     Net income                                          $   2.8     $   0.7
 
     Basic earnings per share                            $  0.19     $  0.08
 
     Diluted earnings per share                          $  0.19     $  0.08
 
     Weighted average shares outstanding                    14.8         8.4
     Weighted average shares outstanding assuming
       dilution                                             14.9         8.4
 
      Business Unit Results
                                                          For the Three Months
                                                             Ended March 31,
                                                            2001        2000
 
     Net revenue to external customers:
       Completion Fluids                                 $  17.4     $  13.2
       Completion Services                                  12.6         8.4
       Downhole Completion Tools                            13.8         4.9
                                                         $  43.8     $  26.5
 
     Operating income (loss):
       Completion Fluids                                 $   1.5     $   0.4
       Completion Services                                   1.9         1.1
       Downhole Completion Tools                             3.2         0.2
       Corporate and Other                                  (0.8)       (0.7)
                                                         $   5.8     $   1.0
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X12457675
 
 SOURCE  OSCA, Inc.