EX-99.1 2 pressrelease011905.htm PRESS RELEASE 011905 Press Release 011905
 
EXHIBIT 99.1
 
Rowan Companies, Inc.
News Release                                     2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056 (713) 621-7800

FOR IMMEDIATE RELEASE                            January 19, 2005

 
HOUSTON, TEXAS - Rowan reports improved continuing operating results.

For the three months ended December 31, 2004, Rowan Companies, Inc. (RDC-NYSE) generated income from continuing operations of $17.3 million, or $.16 per share, on revenues of $210.2 million, compared to income of $7.6 million, or $.08 per share, on revenues of $170.3 million in the fourth quarter of 2003. Net income was $12.0 million, or $.11 per share, in the fourth quarter of 2004, compared to $4.4 million, or $.05 per share, in the fourth quarter of 2003.

For the year ended December 31, 2004, Rowan generated income from continuing operations of $27.2 million, or $.25 per share, on revenues of $709.9 million, compared to a loss of $3.9 million, or $.04 per share, on revenues of $554.6 million in 2003. Net income was $8.5 million, or $.08 per share, in 2004, compared to a net loss of $7.8 million, or $.08 per share, in 2003.

Continuing operations in each period include the Company’s drilling and manufacturing divisions but exclude the aviation division which was sold on December 31, 2004. For the year ended December 31, 2004, Rowan incurred an after-tax loss from its discontinued aviation operations of $18.7 million, or $.18 per share, including the estimated loss on disposition recognized in the third quarter, compared to an after-tax loss of $3.8 million, or $.04 per share, in 2003.

Rowan’s offshore rig utilization was 99% during the fourth quarter of 2004, versus 97% in the third quarter and 92% in the year-earlier period. Our average Gulf of Mexico day rate was $50,600 during the fourth quarter, up by $4,100, or 9%, from the third quarter and by $8,200, or 19%, from the year-earlier period. Land rig utilization was 83% during the fourth quarter of 2004, versus 80% in the year-earlier period. Our average land rig day rate was $13,800 during the fourth quarter, up by $1,400, or 12%, from the third quarter and by $2,700, or 24%, from the year-earlier period.

Danny McNease, Chairman and Chief Executive Officer, commented, “The year 2004 marked a return to profitability for our drilling operations, and the trend over the last half of the year was decidedly favorable. Fourth quarter drilling revenues were an all-time quarterly high for Rowan and our average Gulf of Mexico day rate in December was the highest it has been in more than four years. We believe that this momentum will continue in 2005, assuming that oil and natural gas prices remain firm.

“Gorilla V just began a nine-month drilling assignment in the Glenelg Field in the North Sea. Before the end of this month, the Scooter Yeargain will begin its one-year assignment to drill an ultra deep well in the Gulf of Mexico.

  
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EXHIBIT 99.1

“Gorilla VII continues to produce two of the wells it has drilled in the North Sea’s Ardmore Field while the third well is being re-completed. A fourth well is scheduled to spud during the first quarter. In late December, we extended the contract at the existing day rate through 2005 and collected $9.6 million toward our outstanding receivables, which paid in full all amounts that originated prior to the fourth quarter. However, the contract could terminate earlier if field production is inadequate and our collection of additional amounts remains dependent upon cash flows from the project. As a result, we have deferred recognizing further drilling revenues under the contract until they are collected. Accordingly, we did not record fourth quarter revenues totaling $10.4 million, which reduced net income during the period by approximately $.06 per share, and left the year-end balance of recorded receivables related to this contract at zero. Even after this reduction, the Company has realized almost $65 million in revenues under the contract since its mid-2003 inception, including more than $35 million during 2004. The contract was extended following new investment by the project’s owners and provides for payment of our unrecorded revenues from project cash flows. Assuming that field production remains sufficient to sustain the project throughout the year, we believe the contract will continue to generate significant revenues for Rowan in 2005.
 
“The prospects for our manufacturing division remain solid. Fourth quarter revenues exceeded our previous quarterly high by 27%. Our manufacturing backlog of $79 million is at an all-time high, nearly doubling over the past year. Strong commodity prices should continue to generate demand for our front-end loaders. Our drilling products group recently organized an alliance with other drilling equipment manufacturers to market complete rig packages under the name SourceOne.”

Rowan Companies, Inc. is a major provider of international and domestic contract drilling services. The Company also operates a mini-steel mill, a manufacturing facility that produces heavy equipment for the mining, timber and transportation industries, and a drilling products division that has designed or built about one-third of all mobile offshore jack-up drilling rigs, including all 24 operated by the Company. The Company’s stock is traded on the New York Stock Exchange and the Pacific Exchange - Stock & Options. Common Stock trading symbol: RDC. Contact: William C. Provine, Vice-President - Investor Relations, 713-960-7575. Website: 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.
 
 
 

 
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EXHIBIT 99.1
ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited (In Thousands)
               
 
    
DECEMBER 31
  
     
2004
2003
ASSETS
              
               
Cash and cash equivalents
  
$
466,423
  
$
57,809
  
Accounts receivable
    
142,674
    
111,709
  
Inventories
    
167,714
    
157,645
  
Other current assets
    
23,342
    
69,157
  
    Total current assets
    
800,153
    
396,320
  
Property, plant and equipment - net
    
1,664,890
    
1,614,597
  
Other assets
    
16,003
    
17,150
  
Assets of discontinued aviation operations          
162,742
  
    TOTAL
  
$
2,481,046
  
$
2,190,809
  
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Current maturities of long-term debt
  
$
64,922
  
$
55,267
  
Other current liabilities
    
159,965
    
87,188
  
    Total current liabilities
    
224,887
    
142,455
  
Long-term debt
    
574,350
    
569,067
  
Other liabilities
    
247,535
    
318,482
  
Liabilities of discontinued aviation operations           
23,975
  
Stockholders' equity
    
1,434,274
    
1,136,830
  
    TOTAL
    $
2,481,046
  
$
2,190,809
  

 

 
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EXHIBIT 99.1
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited (In Thousands Except Per Share Amounts)
                   
   
THREE MONTHS
  
TWELVE MONTHS
  
   
ENDED DECEMBER 31
  
ENDED DECEMBER 31
  
   
2004
  
2003
  
2004
  
2003
  
REVENUES:
                  
   Drilling services
  
$                148,213
  
$                  123,806
  
$                511,681
  
$                  421,412
  
   Manufacturing sales and services
  
62,020
  
46,448
  
198,265
  
133,186
  
     Total
  
210,233
  
170,254
  
709,946
  
554,598
  
COSTS AND EXPENSES:
                  
   Drilling services
  
91,823
  
87,331
  
364,149
  
330,124
  
   Manufacturing sales and services
    
57,887
    
41,711
    
183,080
    
122,229
  
   Depreciation and amortization
    
19,903
    
19,286
    
77,828
    
69,362
  
   General and administrative
    
8,002
    
5,764
    
26,789
    
24,653
  
     Total
    
177,615
    
154,092
    
651,846
    
546,368
  
INCOME FROM OPERATIONS
    
32,618
    
16,162
    
58,100
    
8,230
 
OTHER INCOME (EXPENSE):
                          
   Interest expense
    
(5,478
)
  
(5,158
)
  
(20,911
)
  
(20,027
)
   Less interest capitalized
    
533
    
685
    
2,195
    
4,142
  
   Interest income
    
1,575
    
101
    
4,262
    
1,124
  
   Other - net
    
126
    
119
    
414
    
477
  
     OTHER INCOME (EXPENSE) - NET
    
(3,244
)
  
(4,253
)
  
(14,040
)
  
(14,284
)
INCOME (LOSS) BEFORE INCOME TAXES
    
29,374
    
11,909
    
44,060
 
  
(6,054
)
   Provision (credit) for income taxes
    
12,053
    
4,327
    
16,860
 
  
(2,114
)
INCOME (LOSS) FROM CONTINUING OPERATIONS
    
17,321
    
7,582
    
27,200
    
(3,940
)
   Loss from discontinued aviation operations, net of tax    
(5,319
) 
  
(3,137
) 
  
(18,699
)  
  
(3,834
) 
NET INCOME (LOSS)
  
$
12,002
  
$
4,445
  
$
8,501
$
(7,774
)
                           
PER SHARE AMOUNTS:
                          
   Income (loss) from continuing operations
  
$
.16
 
$
.08
  
$
.25
 
$
(.04
)
   Loss from discontinued aviation operations, net of tax  
$
(.05
) 
$
(.03
) 
$
(.18
 )
$
(.04
)
   Net income (loss)
  
$
.11
 
$
.05
  
$
.08
 
$
(.08
)
AVERAGE  DILUTED SHARES
    
108,519
    
96,044
    
107,132
    
93,820
  
 
 
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EXHIBIT 99.1
ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited (In Thousands)
           
   
TWELVE MONTHS
   
ENDED DECEMBER 31
  
     
2004
2003
 
CASH PROVIDED BY (USED IN):
              
  Operations:
              
    Net income (loss)
  
$
8,501
 
$
(7,774
)
    Adjustments to reconcile net income (loss) to net cash provided by operations:
              
      Depreciation and amortization
    
95,650
    
86,851
  
      Deferred income taxes
    
(1,458
)
  
(3,677
)
      Impairment charge related to sale of aviation operations
    
10,680
       
      Other - net
    
11,465
    
7,847
 
    Net changes in current assets and liabilities
    
(5,254
)
  
(34,596
)
    Net changes in other noncurrent assets and liabilities
    
961
    
(401
)
  Net cash provided by operations
    
120,545
    
48,250
 
               
  Investing activities:
              
    Property, plant and equipment additions
    
(139,878
)
  
(250,463
)
    Net proceeds from sale of aviation operations    
117,014
        
    Proceeds from disposals of property, plant and equipment
    
14,680
    
7,060
  
  Net cash used in investing activities
    
(8,184
)
  
(243,403
)
               
  Financing activities:
              
    Proceeds from borrowings
    
70,842
    
111,490
  
    Repayments of borrowings
    
(55,904
)
  
(42,458
)
    Proceeds from common stock offering, net of issue costs
    
264,952
        
    Proceeds from stock option and convertible debenture plans
    
15,945
    
5,592
  
  Net cash provided by financing activities
    
295,835
    
74,624
  
               
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
408,196
    
(120,529
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
58,227
   
178,756
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
466,423
  
$
58,227
  
               
 
 
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