TESCO CORP - FORM 8-K - EX-99.1 - EX 99.1 - June 8, 2012

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8-K - TESCO 8-K - TESCO CORPsaleofcasingdrillingclosing.htm
EX-10.1 - FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT - TESCO CORPexhibit101firstamendmentto.htm
EXCEL - IDEA: XBRL DOCUMENT - TESCO CORPFinancial_Report.xls


 Exhibit 99.1
The unaudited pro forma condensed consolidated information has been prepared using estimates based on preliminary amounts and are subject to customary terms and adjustments, including adjustments for working capital.

TESCO CORPORATION
Pro Forma Condensed Consolidated Balance Sheet (Unaudited)
(in thousands)


 
March 31, 2012 Historical
 
Balances Attributable to Casing Drilling
 
March 31, 2012 Pro Forma
Assets
 
 
 
 
 
Current assets
 
 
 
 
 
Cash and cash equivalents
$
17,891

 
$
40,368

(a)
$
58,259

Accounts receivable trade, net
132,891

 
(4,864
)
 
128,027

Inventories, net
127,786

 
(6,910
)
 
120,876

Income taxes recoverable
3,007

 
—

 
3,007

Deferred income taxes
5,866

 
(1,605
)
(b)
4,261

Prepaid and other assets
30,531

 
—

 
30,531

Total current assets
317,972

 
26,989

 
344,961

Property, plant and equipment, net
207,546

 
(10,999
)
 
196,547

Goodwill
32,732

 
—

 
32,732

Deferred income taxes
12,020

 
—

 
12,020

Intangible and other assets, net
6,727

 
(415
)
 
6,312

Total assets
$
576,997

 
$
15,575

 
$
592,572

Liabilities and Shareholders’ Equity
 

 
 

 
 
Current liabilities
 

 
 

 
 
Current portion of long term debt
$
725

 
$
—

 
$
725

Accounts payable
53,779

 
—

 
53,779

Deferred revenue
23,392

 
—

 
23,392

Warranty reserves
7,472

 
—

 
7,472

Income taxes payable
2,057

 
1,289

(b)
3,346

Accrued and other current liabilities
25,570

 
—

 
25,570

Total current liabilities
112,995

 
1,289

 
114,284

Long term debt
25,575

 
—

 
25,575

Other liabilities
2,623

 
—

 
2,623

Deferred income taxes
7,694

 
699

(b)
8,393

Total liabilities
148,887

 
1,988

 
150,875

Shareholders’ equity
 

 
 

 
 
Common shares
207,457

 
—

 
207,457

Retained earnings
185,152

 
13,587

(c)
198,739

Accumulated comprehensive income
35,501

 
—

 
35,501

Total shareholders’ equity
428,110

 
13,587

 
441,697

Total liabilities and shareholders’ equity
$
576,997

 
$
15,575

 
$
592,572










TESCO CORPORATION
Pro Forma Condensed Consolidated Statement of Income (Unaudited)
Three months ended March 31, 2012
(in thousands, except per share information)

 
Tesco Historical
 
Operations Attributable to Casing Drilling (d)
 
Pro Forma Consolidated
Revenue
 
 
 
 
 
Products
$
68,941

 
$
—

 
$
68,941

Services
83,480

 
(6,642
)
 
76,838

 
152,421

 
(6,642
)
 
145,779

Operating expenses
 
 
 
 
 
Cost of sales and services
 
 
 
 
 
Products
52,310

 
—

 
52,310

Services
67,485

 
(6,842
)
 
60,643

 
119,795

 
(6,842
)
 
112,953

Selling, general and administrative
11,063

 
(108
)
 
10,955

Research and engineering
2,542

 
(1,339
)
 
1,203

Total operating expenses
133,400

 
(8,289
)
 
125,111

Operating income
19,021

 
1,647

 
20,668

Other expense (income)
 
 
 
 
 
Interest expense
(358
)
 
—

 
(358
)
Interest income
(31
)
 
—

 
(31
)
Foreign exchange losses
280

 
(27
)
 
253

Other expense (income)
(1,332
)
 
—

 
(1,332
)
Total other expense
(1,441
)
 
(27
)
 
(1,468
)
Income before income taxes
20,462

 
1,674

 
22,136

Income tax provision
6,043

 
547

 
6,590

Net income
$
14,419

 
$
1,127

 
$
15,546

Earnings per share:
 
 
 
 
 
Basic
$
0.37

 
 
 
$
0.40

Diluted
$
0.37

 
 
 
$
0.40

Weighted average number of shares:
 
 
 
 
 
Basic
38,583

 
 
 
38,583

Diluted
39,066

 
 
 
39,066







TESCO CORPORATION
Pro Forma Condensed Consolidated Statement of Income (Unaudited)
Year ended December 31, 2011
(in thousands, except per share information)

 
Tesco Historical
 
Operations Attributable to Casing Drilling (d)
 
Pro Forma Consolidated
Revenue
 
 
 
 
 
Products
$
211,313

 
$
—

 
$
211,313

Services
301,656

 
(16,241
)
 
285,415

 
512,969

 
(16,241
)
 
496,728

Operating expenses
 

 
 

 
 

Cost of sales and services
 

 
 

 
 

Products
155,168

 
—

 
155,168

Services
253,626

 
(24,791
)
 
228,835

 
408,794

 
(24,791
)
 
384,003

Selling, general and administrative
49,146

 
(918
)
 
48,228

Research and engineering
12,512

 
(7,991
)
 
4,521

Total operating expenses
470,452

 
(33,700
)
 
436,752

Operating income
42,517

 
17,459

 
59,976

Other expense (income)
 

 
 

 
 

Interest expense
1,504

 
—

 
1,504

Interest income
(2,596
)
 
—

 
(2,596
)
Foreign exchange losses
2,523

 
(178
)
 
2,345

Other expense (income)
(186
)
 
—

 
(186
)
Total other expense
1,245

 
(178
)
 
1,067

Income before income taxes
41,272

 
17,637

 
58,909

Income tax provision
14,276

 
5,051

 
19,327

Net income
$
26,996

 
$
12,586

 
$
39,582

Earnings per share:
 

 
 

 
 

Basic
$
0.71

 
 
 
$
1.04

Diluted
$
0.69

 
 
 
$
1.02

Weighted average number of shares:
 

 
 

 
 

Basic
38,211

 
 
 
38,211

Diluted
38,878

 
 
 
38,878







TESCO CORPORATION
Pro Forma Condensed Consolidated Financial Information (Unaudited)


(a)
Estimated net cash proceeds from sale, after estimated working capital adjustments of $2.5 million, estimated employee-related costs of $1.4 million and estimated transaction costs of $0.7 million. Of the $45.0 million of proceeds from the sale, $6.0 million is held in escrow by a third party money market deposit account until certain terms and conditions are satisfied by the Company.

(b)
Estimated income tax effects of the gain on sale of Casing Drilling.

(c)
Estimated after-tax gain on sale, which totals $13.6 million.

(d)
To reflect the removal of the operating results of Casing Drilling as if the transaction occurred on January 1, 2011. For the purposes of this unaudited pro forma condensed consolidated financial information, estimated tax rates of 30% for the three months ended March 31, 2012 and 33% for the twelve months ended December 31, 2011 have been used. The estimated income tax rates are based on applicable enacted statutory tax rates for the periods referenced above.


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