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NATCO Group, Inc.
2950 North Loop West, Suite 750, Houston, TX 77092 * (713) 683-9292
Business Description The company is a leading provider of wellhead equipment, systems and services used in the production of oil and gas. The company's production system are used to separate oil and gas and to remove contaminants from the oil and gas stream.
Offering
Information

Company has
gone public

Trading As  NTG (NASNTL) Industry  Manufacturing (SIC 3443)
Type of Stock Offered  Common Shares Filing Date  3/30/98
Domestic Shares Offered  7,500,000 Offer Date  1/27/00
Foreign Shares Offered  0 Filing Range  $10.00 - $12.00
Company Shares  4,000,000 Offer Price  $10.00
Selling Shrhldrs Shares  3,500,000 Gross Spread  $0.700
Gross Proceeds  $75,000,000 Selling  $0.420
Expenses  - - Reallowance  $0.100
Post-IPO Shares  - - Employees  1515
Primary
Underwriting
Group
Underwriter NameParticipationUnderwriter Phone
Donaldson, Lufkin & Jenrette Securities Corp. Lead Manager (212) 371-0641
DLJDirect, Inc. Co-manager (800) 825-5723
Salomon Smith Barney Co-manager (212) 723-7300
Simmons & Company Co-manager (713) 223-7840
Income
Statement
and
Cash Flow
Summary
  Prior
Audited
Income
Latest
Unaudited
Income
  Full Year Audited Figures 9 Months Ending
Figures in U.S. millions except per share data     3/31/95 3/31/96 3/31/97 12/31/96 12/31/97
Revenues   - - 109.909 112.724 126.657 91.375 146.653
Income from Oper.   - - - - -0.429 1.311 5.137
Net Income   - - 4.990 -0.336 -0.488 0.760 4.419
E.P.S   - - 0.770 -0.060 -0.080 0.130 0.590
Revenue Growth (%)      - - 2.56 12.360   60.50
Net Income Growth (%)      - - - -   481.45
Oper. Profit Margin (%)    - - - - - 3.50 1.43
Net Profit Margin (%)    - - 4.54 - - 3.01 0.83
Cash Flow - Oper.     -3.62 -3.52 -4.02
Cash Flow - Inv.     -0.80 -0.47 -20.79
Cash Flow - Fin.     3.64 2.44 25.45
Balance Sheet
Summary
and
Financial
Ratios
Balance sheet as of: 12/31/97 Financial Ratios
Total Assets    96.74 Current Assets    74.78 Current Ratio    1.58
Total Liab.    91.27 Current Liab.    47.34 Debt Ratio    94.35%
Total Equity    5.47 Working Cap.    27.44 Debt to Equity Ratio    16.69
Cash    1.45    Return on Assets   4.57%
Use Of
Proceeds
The proceeds from the proposed offering will be used to pay the cash portion of the consideration for the Cynara Acquisition, to repay outstanding indebtedness under the company's bank credit facilities, to pay deferred employee compensation and for general corporate purposes.
Legal Counsel
Registrar
Auditor
Issuer's Law Firm  Vinson & Elkins
Bank's Law Firm  Akin, Gump, Strauss, Hauer & Feld
Auditor  KPMG Peat Marwick
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Industry
Competition
Production equipment companies servicing the oil and gas industry compete intensely for available projects. Contracts for the Company's products and services are generally awarded on a competitive basis. Customers may consider, among other things, the availability and capabilities of equipment, the contractor's reputation, experience and safety record. Price and ability to meet a customer's delivery schedule are the principal factors in determining which qualified contractor is awarded the job. Historically, the market for oilfield services and equipment has experienced overcapacity which has resulted in increased price competition in many areas of the Company's business. The Company competes with a large number of companies, some of which may offer different technologies or possess greater financial and other resources than the Company. In addition, because of subsidies, import duties and fees, taxes imposed on foreign operators and lower wage rates in foreign countries along with fluctuations in the value of the United States dollar and other factors, the Company may not be able to remain competitive with foreign contractors for projects designed for use in international locations.
Business
Plan
The Company has achieved a 25% compounded annual growth rate in Adjusted EBITDA over the four fiscal years ended March 31, 1997, principally as a result of increasing its market penetration of the production equipment and services industry. The Company's strategy for increasing EBITDA and earnings per share in the future is to expand its existing market position and improve productivity through: (I) Focusing on Customer Alliances, (ii) Providing Turnkey Integrated Systems and Solutions, (iii) Introducing New Technologies and Products, (iv) Pursuing Complementary Acquisitions, (v) Expanding International Presence and (vi) Improving Productivity.

Last updated: 5/29/00 12:56:50 AM
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