Dril-Quip, Inc. Updates Transformation Efforts with Announcement of Forge Facilities Transaction
HOUSTON, Sept. 10, 2019 (GLOBE NEWSWIRE) -- Dril-Quip, Inc. (NYSE: DRQ) today announced it has entered into agreements with AFGlobal Corporation, pursuant to which AFGlobal will lease Dril-Quip’s forge facilities and equipment located at its Houston manufacturing campus with the option to acquire those same assets. Effective October 1, 2019, AFGlobal’s industrial forging division will assume all operational responsibility of Dril-Quip’s forge facilities and continue to supply Dril-Quip with forgings pursuant to a supply agreement while also serving AFGlobal’s other customers and markets with the capacity from these facilities.
Dril-Quip expects this transaction to contribute approximately $11 - $13 million annually towards the Company’s previously announced transformation cost savings target of $40 - $50 million.
Blake DeBerry, Dril-Quip's President and Chief Executive Officer, commented, "We are pleased to announce that we have entered into this transaction with AFGlobal, which provides strategic benefits for both companies and marks the completion of a key footprint rationalization initiative as part of our overall business transformation. With this transaction, we have achieved the lower range of our targeted savings ahead of schedule with additional transformation efforts ongoing. It is also a very good outcome for us to align our forging assets with such a high-quality operator as AFGlobal.”
About Dril-Quip
Dril-Quip is a leading manufacturer of highly engineered drilling and production equipment for use onshore and offshore, which is particularly well suited for use in deep water, harsh environments and severe service applications.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding anticipated costs savings, lease payments and benefits of the transaction with AFGlobal. Forward-looking statements are based upon certain assumptions and analyses made by 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, operating risks, decisions by other parties to terminate agreements and other factors detailed in the Company’s public filings with the Securities and Exchange Commission. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and actual outcomes may vary materially from those indicated.
