HOUSTON, Aug 04, 2009 /PRNewswire-FirstCall via COMTEX/ -- For the three months ended June 30, 2009, Rowan Companies, Inc. (NYSE: RDC) generated net income of $96.6 million or $0.85 per share, compared to $120.6 million or $1.06 per share in the second quarter of 2008 and $131.7 million or $1.16 per share in the first quarter of 2009. Revenues were $482.2 million in the second quarter of 2009, compared to $587.1 million in the second quarter of 2008 and $494.8 million in the first quarter of 2009.
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The second quarter results included an $8.0 million or $0.07 per share tax benefit related to a recent tax court ruling which provides that certain foreign-source income is not taxable in the US. The prior periods included gains on asset disposals of $1.5 million or $0.01 per share during the second quarter of 2008 and $4.7 million or $0.02 per share in the first quarter of 2009. There were no significant asset disposals in the second quarter of 2009.
Rowan's drilling operations generated revenues of $320.8 million in the second quarter of 2009, down by 13% from the prior-year quarter and by 16% from the first quarter of 2009 due primarily to lower rig utilization. The Company's income from drilling operations was $127.9 million in the second quarter of 2009, or 40% of drilling revenues, down by 19% from the prior-year quarter and by 32% from the first quarter of 2009.
The Company's manufacturing operations generated external revenues of $161.4 million in the second quarter of 2009, down by 27% from the prior-year quarter but up by 41% over the first quarter of 2009. Income from manufacturing operations was $2.7 million in the second quarter of 2009, or 2% of revenues, down by 89% from the prior-year quarter and by 76% from the first quarter of 2009.
Matt Ralls, President and Chief Executive Officer, commented, "Despite continued weakness in worldwide jack-up markets, our contract backlog and heightened focus on cost reduction contributed to a solid performance from our drilling operations during the second quarter. Our manufacturing operations showed sequential top-line growth, but margins were adversely affected by the mix of sales and warranty cost accruals related to certain drilling products. Regarding the latter, we are committed to ensuring that all LeTourneau products meet our proven standards for reliability and performance.
"Looking forward, we expect that excess rig capacity will continue to put downward pressure on day rates. Though we are seeing signs of a pick-up in drilling demand in certain areas, there are still more available rigs than drilling tenders. Nonetheless, we continue to believe that the quality of our rigs and our operational reputation will enable us to maintain above-average utilization and day rates for our available jack-ups. Rowan has weathered many down cycles in our 86-year history, and our strong liquidity following our recent note offering puts us in an excellent position to get through this one. We remain very confident in the long-term prospects for offshore drilling in general and for jack-ups in particular."
Rowan will conduct its earnings conference call on Tuesday, August 4, 2009, at 10:00 a.m. Central Daylight Time. Interested parties are invited to listen to the call by telephone or over the Internet. Individuals who wish to participate on the conference call by telephone can dial (877) 869-3847, or internationally (201) 689-8261. Alternatively, to access the online simulcast and rebroadcast of the conference call, please visit Rowan's website at www.rowancompanies.com. You should connect to our website at least 15 minutes prior to the conference call to register, download and install any necessary software.
Rowan Companies, Inc. is a worldwide provider of contract drilling services utilizing a fleet of 22 high-spec offshore jack-up rigs and 32 deep-well land drilling rigs. The Company also owns and operates a manufacturing division that produces equipment for the drilling, mining and timber industries. For more information on Rowan, please visit www.rowancompanies.com.
This report contains forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements as to the expectations, beliefs and future expected financial performance of the Company that are based on current expectations and are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected by the Company. Among the factors that could cause actual results to differ materially include oil and natural gas prices, the level of offshore expenditures by energy companies, energy demand, the general economy, including inflation, weather conditions in the Company's principal operating areas and environmental and other laws and regulations. Other relevant factors have been disclosed in the Company's filings with the U.S. Securities and Exchange Commission.
ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
Unaudited (In Millions)
JUNE 30, DECEMBER 31,
2009 2008
-------- ------------
ASSETS
Cash and cash equivalents $213.8 $222.4
Accounts receivable 368.1 485.0
Inventories 522.0 551.4
Other current assets 141.8 110.4
----- -----
Total current assets 1,245.7 1,369.2
Property, plant and equipment - net 3,327.9 3,147.5
Other assets 25.4 32.2
---- ----
TOTAL $4,599.0 $4,548.9
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $64.9 $64.9
Accounts payable 119.2 235.0
Other current liabilities 356.4 444.7
----- -----
Total current liabilities 540.5 744.6
Long-term debt 323.1 355.6
Other liabilities 838.0 788.9
Stockholders' equity 2,897.4 2,659.8
------- -------
TOTAL $4,599.0 $4,548.9
======== ========
ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (In Millions Except Per Share Amounts)
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
REVENUES $482.2 $587.1 $977.0 $1,072.6
------ ------ ------ --------
COSTS AND EXPENSES:
Operations 284.2 342.7 520.4 625.4
Depreciation and amortization 42.6 33.5 83.1 66.6
Selling, general and administrative 24.7 30.7 49.3 58.1
Loss (gain) on sale of property and
equipment 0.1 (1.5) (4.6) (6.9)
------ ------ ------ --------
Total 351.6 405.4 648.2 743.2
------ ------ ------ --------
INCOME FROM OPERATIONS 130.6 181.7 328.8 329.4
Net interest and other income 2.5 2.1 3.9 4.9
------ ------ ------ --------
INCOME BEFORE INCOME TAXES 133.1 183.8 332.7 334.3
Provision for income taxes 36.5 63.2 104.4 115.1
------ ------ ------ --------
NET INCOME $96.6 $120.6 $228.3 $219.2
====== ====== ====== ======
NET INCOME PER DILUTED SHARE $0.85 $1.06 $2.01 $1.94
====== ====== ====== ======
AVERAGE DILUTED SHARES 113.6 113.8 113.4 113.3
====== ====== ====== ======
NOTE: See pages 6 and 7 for supplemental operating information.
ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited (In Millions)
SIX MONTHS
ENDED JUNE 30
-------------
2009 2008
---- ----
CASH PROVIDED BY (USED IN):
Operations:
Net income $228.3 $219.2
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation and amortization 83.1 66.6
Deferred income taxes 42.2 28.1
Gain on disposals of assets (4.6) (6.9)
Other - net 11.0 6.9
Net changes in current assets and
liabilities (133.1) (135.0)
Net changes in other noncurrent assets
and liabilities (2.0) (14.3)
------ ------
Net cash provided by operations 224.9 164.6
------ ------
Investing activities:
Property, plant and equipment additions (210.3) (319.1)
Proceeds from disposals of property,
plant and equipment 5.5 19.2
Decrease in restricted cash balance - 50.0
------ ------
Net cash used in investing activities (204.8) (249.9)
------ ------
Financing activities:
Repayments of borrowings (32.5) (32.5)
Payment of cash dividends - (22.3)
Proceeds from equity compensation plans
and other 3.8 34.7
------ ------
Net cash used in financing activities (28.7) (20.1)
------ ------
DECREASE IN CASH AND CASH EQUIVALENTS (8.6) (105.4)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD 222.4 284.5
------ ------
CASH AND CASH EQUIVALENTS, END OF PERIOD $213.8 $179.1
====== ======
ROWAN COMPANIES, INC.
SUPPLEMENTAL DRILLING INFORMATION
Unaudited (dollars in millions, except where otherwise indicated)
THREE MONTHS ENDED
------------------
June 30, 2009
-------------
$ (a) Elims. $ (b) % Revs.
----- ------ ----- -------
DRILLING OPERATIONS:
Revenues $320.8 $320.8 100
Operating costs (excluding items
shown below) (137.1) $0.3 (136.8) (43)
Depreciation and amortization
expense (38.7) (38.7) (12)
Selling, general and
administrative expenses (c) (17.4) (17.4) (5)
Gain on sale of property and
equipment - - -
------ ------
Income from operations $127.6 $0.3 $127.9 40
====== ==== ====== ====
EBITDA (d) $166.3 $0.3 $166.6 52
====== ==== ====== ====
OFFSHORE RIG DAYS:
Operating 1,561
Available 2,002
-----
Utilization 78%
=====
LAND RIG DAYS:
Operating 1,721
Available 2,849
-----
Utilization 60%
=====
AVERAGE DAY RATES (in thousands):
Gulf of Mexico rigs $150.4
Middle East rigs 144.7
North Sea rigs 285.4
All offshore rigs 177.2
Land rigs 22.4
THREE MONTHS ENDED
------------------
March 31, 2009
--------------
$ (a) Elims. $ (b) % Revs.
----- ------ ----- -------
DRILLING OPERATIONS:
Revenues $380.4 $380.4 100
Operating costs (excluding items
shown below) (146.6) $1.2 (145.4) (38)
Depreciation and amortization
expense (36.8) (36.8) (10)
Selling, general and
administrative expenses (c) (15.8) (15.8) (4)
Gain on sale of property and
equipment 4.7 4.7 1
------ ------
Income from operations $185.9 $1.2 $187.1 49
====== ==== ====== ====
EBITDA (d) $218.0 $1.2 $219.2 58
====== ==== ====== ====
OFFSHORE RIG DAYS:
Operating 1,841
Available 1,980
-----
Utilization 93%
=====
LAND RIG DAYS:
Operating 2,055
Available 2,766
-----
Utilization 74%
=====
AVERAGE DAY RATES (in thousands):
Gulf of Mexico rigs $155.5
Middle East rigs 150.1
North Sea rigs 279.8
All offshore rigs 173.6
Land rigs 25.5
THREE MONTHS ENDED
------------------
June 30, 2008
-------------
$ (b) % Revs.
DRILLING OPERATIONS:
Revenues $367.4 100
Operating costs (excluding items shown below) (163.3) (44)
Depreciation and amortization expense (29.7) (8)
Selling, general and administrative expenses (c) (17.9) (5)
Gain on sale of property and equipment 1.5 0
------
Income from operations $158.0 43
====== ===
EBITDA (d) $186.2 51
====== ===
OFFSHORE RIG DAYS:
Operating 1,840
Available 1,911
-----
Utilization 96%
=====
LAND RIG DAYS:
Operating 2,604
Available 2,672
-----
Utilization 97%
=====
AVERAGE DAY RATES (in thousands):
Gulf of Mexico rigs $126.6
Middle East rigs 153.5
North Sea rigs 225.1
All offshore rigs 161.6
Land rigs 22.6
(a) Amounts include intercompany transactions between drilling and
manufacturing operations.
(b) Amounts exclude intercompany transactions.
(c) Amounts include corporate SG&A costs that are allocated between
operating segments.
(d) EBITDA (earnings before interest, taxes, depreciation and
amortization) is a non-GAAP financial measure that we believe is
relevant to our stockholders. We measure EBITDA as operating income
plus depreciation and any loss on sale of property and equipment, less
any gain on sale.
ROWAN COMPANIES, INC.
SUPPLEMENTAL MANUFACTURING INFORMATION
Unaudited (dollars in millions)
THREE MONTHS ENDED
------------------
June 30, 2009
-------------
$ (a) % Revs. Elims. $ (b) % Revs.
----- ------- ------ ----- -------
MANUFACTURING OPERATIONS:
Revenues $196.5 100 $(35.1) $161.4 100
Operating costs (excluding
items shown below) (172.6) (88) 25.2 (147.4) (91)
Depreciation and amortization
expense (3.9) (2) (3.9) (2)
Selling, general and
administrative expenses (c) (7.3) (4) (7.3) (5)
Gain (loss) on sale of property
and equipment (0.1) (0) (0.1) (0)
----- -----
Income from operations $12.6 6 $(9.9) $2.7 2
===== === ===== ===== ===
EBITDA (d) $16.6 8 $(9.9) $6.7 4
===== === ===== ===== ===
REVENUES:
Drilling Products and
Systems $141.9 72 $(35.1) $106.8 66
Mining, Forestry and
Steel Products 54.6 28 - 54.6 34
------ ------ ------
Total $196.5 100 $(35.1) $161.4 100
====== === ====== ====== ===
MANUFACTURING BACKLOG:
Drilling Products and
Systems $914.0 $(424.4) $489.6
Mining, Forestry and Steel
Products 28.2 - 28.2
------ ------- ------
Total $942.2 $(424.4) $517.8
THREE MONTHS ENDED
------------------
March 31, 2009
--------------
$ (a) % Revs. Elims. $ (b) % Revs.
----- ------- ------ ----- -------
MANUFACTURING OPERATIONS:
Revenues $187.9 100 $(73.5) $114.4 100
Operating costs (excluding
items shown below) (143.8) (77) 53.0 (90.8) (79)
Depreciation and amortization
expense (3.7) (2) (3.7) (3)
Selling, general and
administrative expenses (c) (8.8) (5) (8.8) (8)
Gain (loss) on sale of property
and equipment - - - -
----- -----
Income from operations $31.6 17 $(20.5) $11.1 10
===== === ===== ===== ===
EBITDA (d) $35.3 19 $(20.5) $14.8 13
===== === ===== ===== ===
REVENUES:
Drilling Products and
Systems $144.6 77 $(73.5) $71.1 62
Mining, Forestry and
Steel Products 43.3 23 - 43.3 38
------ ------ ------
Total $187.9 100 $(73.5) $114.4 100
====== === ====== ====== ===
MANUFACTURING BACKLOG:
Drilling Products and
Systems $994.8 $(448.9) $545.9
Mining, Forestry and
Steel Products 47.5 - 47.5
------ ------- ------
Total $1,042.3 $(448.9) $593.4
THREE MONTHS ENDED
------------------
June 30, 2008
-------------
$ (b) % Revs.
----- -------
MANUFACTURING OPERATIONS:
Revenues $219.7 100
Operating costs (excluding items shown below) (179.4) (82)
Depreciation and amortization expense (3.8) (2)
Selling, general and administrative expenses (c) (12.8) (6)
Gain (loss) on sale of property and equipment - -
------
Income from operations $23.7 11
===== ===
EBITDA (d) $27.5 13
===== ===
REVENUES:
Drilling Products and Systems $158.2 72
Mining, Forestry and Steel Products 61.5 28
------
Total $219.7 100
====== ===
MANUFACTURING BACKLOG:
Drilling Products and Systems $282.0
Mining, Forestry and Steel Products 75.4
------
Total $357.4
======
(a) Amounts include intercompany transactions between manufacturing and
drilling operations.
(b) Amounts exclude intercompany transactions.
(c) Amounts include corporate SG&A costs that are allocated between
operating segments.
(d) EBITDA (earnings before interest, taxes, depreciation and
amortization) is a non-GAAP financial measure that we believe is
relevant to our stockholders. We measure EBITDA as operating income
plus depreciation and any loss on sale of property and equipment, less
any gain on sale.
SOURCE Rowan Companies, Inc.
http://www.rowancompanies.com
