Maverick Tube Corporation Reports Record First Quarter Results

Business Wire, April 25, 2006

ST. LOUIS -- Maverick Tube Corporation (NYSE:MVK) announced today its results for the quarter ended March 31, 2006. The Company reported record net income for the first quarter of $70.9 million, or $1.80 per diluted share, compared to net income for the same quarter last year of $31.2 million, or $0.72 per diluted share, and net income of $63.2 million, or $1.54 per diluted share, for the fourth quarter 2005. Net revenues were a record $543.1 million for the quarter ended March 31, 2006, up from net revenues of $410.8 million for the first quarter 2005, and $484.7 million for the fourth quarter 2005.

First quarter 2006 energy products net revenues increased 39.6% to $465.6 million from $333.6 million in the first quarter 2005, and 13.6% from $409.7 million in the fourth quarter 2005. Drilling activity, measured by the average Baker Hughes Incorporated active rig count, increased in the first quarter 2006 compared to the fourth quarter 2005 by 2.8% in the United States and 16.3% in Canada, while drilling activity declined 3.5% in the rest of the world. The 13.6% increase in net revenues of energy products over last quarter is attributable to a 13.6% increase in tons shipped. Average selling prices remained constant during both periods.

First quarter 2006 electrical products net revenues were $77.4 million compared to $77.2 million in the first quarter 2005 and $75.0 million in the fourth quarter of 2005. The 3.2% increase in net revenues over the fourth quarter 2005 is attributable to an 11.8% increase in volume, to about 62,800 tons, partially offset by lower selling prices.

Maverick's operating margin improved to 20.6% in the first quarter 2006 compared to 12.1% in the first quarter 2005 and 20.3% in the fourth quarter 2005. This improvement over fourth quarter 2005 is attributable to a $4.5 million reduction in selling, general and administrative ("S,G&A") expenses and a $2.1 million nonrecurring charge in the fourth quarter 2005 related to the impairment of intangible assets partially offset by a lower gross profit margin. The lower gross profit margin is principally attributable to lower gross margins on sales of electrical products.

Maverick's net debt to total capitalization improved to 39.0% at March 31, 2006 compared to 43.8% at December 31, 2005. Earnings before interest, taxes, depreciation and amortization ("EBITDA") were $121.2 million in the first quarter 2006 compared to $56.4 million in the first quarter 2005 and $107.1 million in the fourth quarter 2005.

C. Robert Bunch, the Company's Chairman, President and Chief Executive Officer, said, "We are very pleased with the contributions of all of our business units to this quarter's record results. In particular, we had especially strong performances by Maverick Tubular Products, our U.S. OCTG and line pipe business, as well as TuboCaribe, our Latin American OCTG business, and Precision Tube, our coiled tubing business. In addition, Prudential, our Canadian OCTG and line pipe business, had another outstanding quarter. Canadian energy activity was the driver for about 37% of our consolidated net revenues this quarter. Our electrical products segment performed in line with expectations. And, our efforts over the past several quarters to reduce S,G&A expenses and create a more nimble, responsive and focused organization are beginning to bear fruit."

Mr. Bunch continued, "While we expect our second quarter to be impacted by the typical seasonal decline in Canadian drilling activity, we remain very optimistic about the balance of 2006. We believe global drilling activity will remain robust and that Maverick will continue to benefit from the growth and other initiatives we've completed over the last few years."

Maverick Tube Corporation is a St. Louis, Missouri based manufacturer of tubular products in the energy industry for exploration, production, and transmission, as well as industrial tubing products (steel electrical conduit, standard pipe, pipe piling, and mechanical tubing) used in various applications.

This news release may contain forward-looking information that is based on assumptions that are subject to numerous business risks, many of which are beyond the control of the Company. There is no assurance that such assumptions will prove to be accurate. Actual results may differ from these forward-looking statements due to numerous factors, including those described under "Risk Factors" and elsewhere in Maverick's Form 10-K for its year ended December 31, 2005.