EX-99.1 3 earningsthirdq.htm EARNINGS RELEASE 110105 Earnings Release 110105
 
EXHIBIT 99.1
 
Rowan Companies, Inc.
News Release                                     2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056 (713) 621-7800

FOR IMMEDIATE RELEASE                            November 1, 2005

 
ROWAN REPORTS RECORD QUARTERLY REVENUES
AND IMPROVED OPERATING RESULTS
 
HOUSTON, TEXAS -- For the three months ended September 30, 2005, Rowan Companies, Inc. (RDC - NYSE) generated net income of $74.6 million, or 67¢ per share, compared to $9.9 million, or 9¢ per share, in the same period of 2004. Revenues were a record $284.4 million in the third quarter of 2005, compared to $181.6 million in the third quarter of 2004. The current period results included gains on asset sales and a loss related to hurricane damage that together contributed approximately 18¢ per share, net of tax.

The Company generated income from continuing operations of $148.4 million, or $1.35 per share, on revenues of $751.4 million during the nine months ended September 30, 2005, compared to income from continuing operations of $11.1 million, or 10¢ per share, on revenues of $489.0 million during the same period of 2004. Net income was $160.3 million, or $1.46 per share, for the nine months ended September 30, 2005, compared to a net loss of $3.5 million, or 3¢ per share, for the nine months ended September 30, 2004.
 
Rowan’s offshore rig utilization was 97% during the third quarter of 2005, unchanged from the comparable 2004 period. The Company’s average Gulf of Mexico day rate was a record $74,400 during the third quarter of 2005, up by $7,800, or 12%, from the second quarter and by $27,900, or 60%, from the comparable 2004 period. Rowan’s land rig utilization was 89% during the third quarter of 2005, up from 83% in the comparable 2004 period. The Company’s average land rig day rate was $18,800 during the third quarter of 2005, up by $1,700, or 10%, from the second quarter and by $6,400, or 52%, from the comparable 2004 period.

As previously reported, Rowan lost four jack-up rigs and had one jack-up severely damaged during Hurricanes Katrina and Rita. The Company recorded an $8.9 million loss during the third quarter of 2005 related to these events. The excess of Rowan’s insurance coverage over the carrying value of the rigs of approximately $26 million will be recognized upon collection. The Company lost 58 rig operating days associated with these rigs during the third quarter and approximately $4 million of drilling revenues.



Danny McNease, Chairman and Chief Executive Officer, commented, “Our drilling operations continue to produce record results and our near-term outlook remains very favorable. Rowan’s average offshore day rate worldwide is currently around $100,000 or about 20% higher than our average during the 2005 third quarter. And, despite the loss of revenues from five rigs and the recent sale of two others, our daily offshore drilling revenues in early December should be higher than they were in mid-August, when those seven rigs were still part of the Company’s offshore fleet. Absent a significant change in market fundamentals, we believe that the upward pressure on day rates will continue.

“We plan to expand our revenue base using our existing working capital and cash flows from operations. As previously reported, by the middle of next year we will have eight new land rigs and one refurbished land rig working under term contracts and generating approximately $200,000 of incremental drilling revenues per day. The Hank Boswell, our third Tarzan Class jack-up, is on schedule for delivery during the fourth quarter of 2006. In addition, we will soon commence the construction of a fourth Tarzan Class rig, which should be delivered during the third quarter of 2007.

“Our external manufacturing backlog is a record $318 million and includes one jack-up rig and three rig kits that should provide approximately $206 million in revenues over the next two years. In addition, we have orders for 14 mining loaders and 41 mud pumps that will be delivered within the next 12 months.”

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 and timber industries, and a drilling products division that has designed or built about one-third of all mobile offshore jack-up drilling rigs, including all that are operated by the Company. The Company’s stock is traded on the New York Stock Exchange and the Pacific Stock Exchange. 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 SHEETS
Unaudited (In Thousands)
               
               
 
    
SEPTEMBER 30
  
     
2005
 
 
2004
 
ASSETS
              
               
Cash and cash equivalents
  
$
516,422
  
$
292,983
  
Accounts receivable
    
245,737
   
140,134
 
Inventories
    
192,546
   
168,284
 
Other current assets
    
89,212
   
15,775
 
   Total current assets
    
1,043,917
   
617,176
 
Property, plant and equipment - net
    
1,674,130
   
1,657,138
 
Other assets
    
15,525
   
16,404
 
Assets of discontinued operations
    
458
   
149,967
 
   TOTAL
  
$
2,734,030
  
$
2,440,685
  
               
               
LIABILITIES AND STOCKHOLDERS' EQUITY
              
               
Current maturities of long-term debt
  
$
64,922
  
$
60,243
  
Other current liabilities
    
165,854
   
79,299
 
   Total current liabilities
    
230,776
   
139,542
 
Long-term debt
    
563,657
   
577,053
 
Other liabilities
    
391,131
   
279,713
 
Liabilities of discontinued operations
          
28,504
 
Stockholders' equity
    
1,548,466
   
1,415,873
 
   TOTAL
  
$
2,734,030
  
$
2,440,685
  
               
 
 
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EXHIBIT 99.1
 

ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited (In Thousands Except Per Share Amounts)
                           
                           
 
    
FOR THE THREE MONTHS
    
FOR THE NINE MONTHS
  
 
    
ENDED SEPTEMBER 30
    
ENDED SEPTEMBER 30
  
     
2005
 
 
2004
 
 
2005
 
 
2004
  
REVENUES:
                          
  Drilling services
  
$
217,381
  
$
133,952
  
$
560,297
  
$
346,081
  
  Manufacturing sales and services
    
67,017
   
47,622
   
191,053
   
142,870
 
    TOTAL
    
284,398
   
181,574
   
751,350
   
488,951
 
COSTS AND EXPENSES:
                          
  Drilling services
    
100,204
   
88,773
   
288,811
   
252,952
 
  Manufacturing sales and services
    
57,950
   
39,777
   
166,311
   
121,382
 
  Depreciation and amortization
    
20,261
   
20,041
   
60,221
   
58,386
 
  Selling, general and administrative
    
17,941
   
10,137
   
47,287
   
28,504
 
  Gain on sales of property and equipment
    
(40,781
)
  
(811
)
  
(50,963
)
  
(1,214
)
  Loss from hurricane damage
    
8,907
   
-
   
8,907
   
-
 
    TOTAL
    
164,482
   
157,917
   
520,574
   
460,010
 
INCOME FROM OPERATIONS
    
119,916
   
23,657
   
230,776
   
28,941
 
OTHER INCOME (EXPENSE):
                          
  Interest expense
    
(6,694
)
  
(5,329
)
  
(18,868
)
  
(15,433
)
  Less interest capitalized
    
1,182
   
330
   
3,041
   
1,662
 
  Interest income
    
4,349
   
1,160
   
10,460
   
2,687
 
  Gain on sales of investments
    
-
   
-
   
9,553
   
-
 
  Other - net
    
(41
)
  
114
   
528
   
288
 
    OTHER INCOME (EXPENSE) - NET
    
(1,204
)
  
(3,725
)
  
4,714
   
(10,796
)
INCOME BEFORE INCOME TAXES
    
118,712
   
19,932
   
235,490
   
18,145
 
Provision for income taxes
    
44,087
   
7,649
   
87,140
   
7,046
 
INCOME FROM CONTINUING OPERATIONS
    
74,625
   
12,283
   
148,350
   
11,099
 
Income (loss) from discontinued operations, net of tax
    
-
   
(2,351
)
  
11,963
   
(14,600
)
NET INCOME (LOSS)
  
$
74,625
  
$
9,932
  
$
160,313
  
$
(3,501
)
PER SHARE AMOUNTS:
                          
  Income from continuing operations
  
$
.67
  
$
.11
  
$
1.35
  
$
.10
  
  Income (loss) from discontinued operations, net of tax
  
$
-
  
$
(.02
)
$
.11
  
$
(.14
)
  Net income (loss)
  
$
.67
  
$
.09
  
$
1.46
  
$
(.03
)
AVERAGE SHARES
    
110,605
   
108,054
   
109,944
   
106,549
 
 
 
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EXHIBIT 99.1

 
ROWAN COMPANIES, INC.     
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
Unaudited (In Thousands)     
               
 
    
FOR THE NINE MONTHS
 
 
    
ENDED SEPTEMBER 30
  
     
2005
 
  
2004
 
CASH PROVIDED BY (USED IN):
              
Operations:
              
Net income (loss)
  
$
160,313
  
$
(3,501
)
Adjustments to reconcile net income (loss)to net cash provided by operations:
              
Depreciation and amortization
    
60,308
   
71,375
 
Deferred income taxes
    
82,882
   
(2,444
)
Contributions to pension plans
    
(89,057
)
  
(18,576
)
Net gain on asset disposals
    
(51,609
)
  
(6,312
)
Other - net
    
19,434
    
39,691
 
Net changes in current assets and liabilities
    
(52,759
)
  
(48,549
)
Net changes in other noncurrent assets and liabilities
    
73
   
1,237
 
Net cash provided by operations
    
129,585
   
32,921
 
               
Investing activities:
              
Property, plant and equipment additions
    
(122,127
)
  
(102,458
)
Proceeds from asset disposals
    
81,856
   
13,894
 
Net cash used in investing activities
    
(40,271
)
  
(88,564
)
               
Financing activities:
              
Proceeds from borrowings
    
37,486
   
58,101
 
Repayments of borrowings
    
(48,179
)
  
(45,139
)
Proceeds from stock option and convertible debenture plans
    
26,004
   
12,457
 
Payments of cash dividends
    
(54,180
)
  
-
 
Proceeds from common stock offering, net of issue costs
          
264,980
 
Net cash provided by (used in) financing activities
    
(38,869
)
  
290,399
 
               
INCREASE IN CASH AND CASH EQUIVALENTS
    
50,445
   
234,756
 
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    
465,977
   
58,227
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
  
$
516,422
  
$
292,983
  
 
 
 
 
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