HOUSTON, Nov. 3 /CNW/ - Tesco Corporation ("TESCO" or the "Company") today reported a net loss for the quarter ended September 30, 2009 of $0.3 million, or $0.01 per diluted share. This compares to a net loss of $3.6 million, or $0.10 per diluted share, for the second quarter of 2009, and net income of $17.6 million, or $0.46 per diluted share, for the third quarter of 2008.

Revenue was $72.6 million for the quarter ended September 30, 2009, compared to revenue of $88.4 million for the second quarter of 2009 and $140.0 million for the third quarter of 2008.

Summary of Results

(in millions of U.S. $, except per share amounts)

U.S. GAAP-Unaudited

Quarter 3 Quarter 2 Nine Months Ended

------------------- --------- -------------------

2009 2008 2009 09/30/09 09/30/08

--------- --------- --------- --------- ---------

Revenue $ 72.6 $ 140.0 $ 88.4 $ 271.2 $ 395.5

Operating Income (Loss) $ 1.7 $ 25.4 $ (7.2) $ (1.5) $ 58.8

Net (Loss) Income $ (0.3) $ 17.6 $ (3.6) $ 0.6 $ 40.9

(Loss) Earnings per

Share (diluted) $ (0.01) $ 0.46 $ (0.10) $ 0.01 $ 1.08

Adjusted EBITDA(x)

(as defined) $ 10.3 $ 34.9 $ 4.2 $ 29.5 $ 87.2

(x) See explanation of Non-GAAP measure below

Commentary

Julio Quintana, TESCO's Chief Executive Officer, commented "The continued depressed drilling markets, particularly in North America, have reduced our revenue streams across all our business lines. However, our competitive positioning and balance sheet continue to improve. During the quarter, we generated positive cash flow and reduced our net debt outstanding to a net cash position of $11.9 million. We have taken measures to right size the Company to meet the current economic circumstances and market demands. In addition, we have reduced capital spending by 70% year over year. Longer term, we believe the fundamentals driving the growth of our global business remain intact, which we believe will give us the ability to maintain our core strengths and take advantage of opportunities as the market recovers."

Segment Information

(in millions of U.S. $)

Unaudited

Quarter 3 Quarter 2 Nine Months Ended

------------------- --------- -------------------

2009 2008 2009 09/30/09 09/30/08

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Revenue:

--------

Top Drives:

Sales $ 14.4 $ 46.0 $ 27.8 $ 70.9 $ 121.1

Rental Services 20.0 27.7 18.1 61.7 82.2

Aftermarket Sales

and Service 10.8 17.0 11.9 38.5 48.2

--------- --------- --------- --------- ---------

45.2 90.7 57.8 171.1 251.5

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Tubular Services(x):

Conventional 4.0 18.9 4.5 18.1 62.6

Proprietary(x) 20.3 23.9 23.4 71.1 60.7

--------- --------- --------- --------- ---------

24.3 42.8 27.9 89.2 123.3

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CASING DRILLING(TM)(x) 3.1 6.5 2.7 10.9 20.7

--------- --------- --------- --------- ---------

Total Revenue $ 72.6 $ 140.0 $ 88.4 $ 271.2 $ 395.5

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--------- --------- --------- --------- ---------

Operating Income (Loss):

------------------------

Top Drives $ 13.4 $ 32.1 $ 10.2 $ 39.5 $ 82.2

Tubular Services (1.4) 7.4 (1.7) (0.5) 16.9

CASING DRILLING(TM) (3.1) (3.0) (4.9) (9.3) (9.2)

Research and Engineering (2.1) (2.6) (1.8) (6.5) (8.1)

Corporate/Other (5.1) (8.5) (9.0) (24.7) (23.0)

--------- --------- --------- --------- ---------

Total Operating Income

(Loss) $ 1.7 $ 25.4 $ (7.2) $ (1.5) $ 58.8

--------- --------- --------- --------- ---------

--------- --------- --------- --------- ---------

(x) Effective December 31, 2008, we began reporting our CASING DRILLING

(TM) operations as a distinct operating segment separate from our

Tubular Services business and we have recast prior periods to be

presented consistently with this reporting method.

Q3 2009 Financial and Operating Highlights

Top Drives Segment

------------------

- Revenue from the Top Drive segment for Q3 2009 was $45.2 million,

down 22% from revenue of $57.8 million in Q2 2009, primarily due to a

decline in the number of Top Drive units sold during the current

quarter. Revenue for Q3 2008 was $90.7 million.

- Top Drive sales for Q3 2009 included 13 units (10 new and 3 from the

rental fleet), compared to 28 units (27 new and 1 from the rental

fleet) sold in Q2 2009 and 38 units sold in Q3 2008 (32 new and 6

from the rental fleet).

- At September 30, 2009, Top Drive backlog was 3 units, with a total

value of $4.8 million, versus 10 units at June 30, 2009, with a total

value of $10 million. This compares to a backlog of 65 units at

December 31, 2008 with a total value of $56.9 million.

- Operating days for the Top Drive rental fleet increased to 4,441 for

Q3 2009 from 3,682 in Q2 2009 but were down compared to 6,014 in Q3

2008. The improvement from Q2 was primarily due to a recovery in

rental activity throughout our operating units, particularly in the

Asia Pacific region and North America. Pricing pressures from

increased competition and decreased demand continued to reduce

revenue during Q3 2009.

- Revenue from after-market sales and services for Q3 2009 was $10.8

million, down 9% from revenue of $11.9 million in Q2 2009. With the

decrease in active rig count, our customers have decreased their

demand for after-market parts and maintenance and repair services.

- Our Top Drive operating margins were 30% in Q3 2009 compared to 18%

and 35% in Q2 2009 and Q3 2008, respectively. The margin increase

compared to Q2 2009 is primarily due to an increase in the higher

margin rental activities as a component of our total Top Drive

revenues during the current quarter. In addition, we recognized a

one-time gain of $1.6 million on the sale of certain top drive

related assets during Q3 2009.

Tubular Services Segment

------------------------

- Revenue from the Tubular Services segment for Q3 2009 was $24.3

million, down 13% from revenue of $27.9 million in Q2 2009. Revenue

was $42.8 million in Q3 2008. Revenue declined in both our

conventional and proprietary businesses and is directly tied to the

active rig count which has sharply declined over the past nine

months. Proprietary revenue declined compared to Q2 2009 primarily

due to pricing discounts given during the current quarter and lower

revenue from third party CDS(TM) sales. We performed a record total

of 683 proprietary casing running jobs in Q3 2009 compared to 538 in

Q2 2009 and 496 in Q3 2008. We remain focused on converting the

market to running casing with our proprietary CDS(TM) technology.

- Operating Loss in the Tubular Services segment for Q3 2009 was $1.4

million, compared to a loss of $1.7 million in Q2 2009 and income of

$7.4 million in Q3 2008. Operating results for Q3 2009 were

unfavorably impacted by continued pricing pressures, primarily in

North America.

CASING DRILLING(TM) Segment

---------------------------

- CASING DRILLING(TM) revenue in Q3 2009 was $3.1 million compared to

$2.7 million in Q2 2009 and $6.5 million in Q3 2008.