EXHIBIT 99.1
EXHIBIT 99.1
Rowan Companies, Inc.
News Release 2800 Post Oak Boulevard, Suite 5450
Houston, Texas 77056 (713) 621-7800
FOR IMMEDIATE RELEASE March 9, 2005
ROWAN REVISES 2004 FINANCIAL INFORMATION
AND DISCLOSES MATERIAL WEAKNESS IN INTERNAL CONTROL
HOUSTON, TEXAS - Rowan Companies, Inc. (NYSE: RDC) (“Rowan”) today announced that its previously released condensed financial information for the quarter and year ended December 31, 2004 has been revised. As adjusted, Rowan’s after-tax income from continuing operations for the year ended December 31, 2004 is $26.4 million or $.25 per share, its after-tax loss from discontinued aviation operations is $27.6 million or $.26 per share, and its net loss is $1.3 million or $.01 per share.
The registered public accounting firm Deloitte & Touche LLP has completed their audit and has issued an unqualified opinion with respect to Rowan’s consolidated financial statements to be included in our 2004 Annual Report to stockholders.
The Company has made several adjustments and reclassifications to the unaudited consolidated financial information that was released on January 19, 2005, which had the following full year effects:
· | Consolidated revenues were reduced by $1.4 million or less than 1% |
· | Income from operations was reduced by $1.4 million or 2.4% |
· | After-tax income from continuing operations was reduced by $0.8 million or 1¢ per share |
· | The after-tax loss from discontinued operations was increased by $8.9 million or 8¢ per share, due to a deferred tax miscalculation which understated the loss on the sale of our aviation operations |
· | As a result, net income was reduced by $9.8 million or 9¢ per share |
· | Net operating cash flows were reduced $3.4 million or 2.9% |
· | Working capital was increased by $4.6 million or less than 1% |
· | Total assets were increased by $11.2 million or less than 1% |
The Company has determined that the aggregate effects of these adjustments are not material to any previous annual or interim period.
We have completed our assessment of the effectiveness of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002. Based upon our documentation and testing, Rowan did not maintain effective internal control over financial reporting as of December 31, 2004 within the context of the framework developed by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Our assessment identified a pervasive internal control deficiency that represented a material weakness. The control deficiency resulted from the lack of effective detective and monitoring controls within internal control over financial reporting. These conditions were manifested in a number of adjustments to the financial statements for the year ended December 31, 2004 that, although not material in the aggregate, affect various financial statement line items. We are working hard throughout the Rowan organization to remedy all internal control deficiencies relative to COSO and expect to be fully compliant by the end of 2005.
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 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. For additional information, contact William C. Provine, Vice-President - Investor Relations, at 713-960-7575 or visit Rowan’s website at 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 | |||||||
(In Thousands) | |||||||
DECEMBER 31 | |||||||
2004 | 2003 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 465,977 | $ | 57,809 | |||
Accounts receivable | 143,509 | 111,709 | |||||
Inventories | 171,709 | 157,645 | |||||
Other current assets | 33,498 | 69,157 | |||||
Total current assets | 814,693 | 396,320 | |||||
Property, plant and equipment - net | 1,661,898 | 1,614,597 | |||||
Other assets | 15,695 | 17,150 | |||||
Assets of discontinued aviation operations | 162,742 | ||||||
TOTAL | $ | 2,492,286 | $ | 2,190,809 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current maturities of long-term debt | $ | 64,922 | $ | 55,267 | |||
Other current liabilities | 169,878 | 87,188 | |||||
Total current liabilities | 234,800 | 142,455 | |||||
Long-term debt | 574,350 | 569,067 | |||||
Other liabilities | 274,252 | 318,482 | |||||
Lliabilities of discontinued aviation operations | 23,975 | ||||||
Stockholders' equity | 1,408,884 | 1,136,830 | |||||
TOTAL | $ | 2,492,286 | $ | 2,190,809 | |||
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EXHIBIT 99.1
ROWAN COMPANIES, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||
(In Thousands Except Per Share Amounts) | |||||||||||||
THREE MONTHS | TWELVE MONTHS | ||||||||||||
ENDED DECEMBER 31, | ENDED DECEMBER 31, | ||||||||||||
2004 | 2003 | 2004 | 2003 | ||||||||||
REVENUES: | |||||||||||||
Drilling services | $ | 137,460 | $ | 123,806 | $ | 500,928 | $ | 421,412 | |||||
Manufacturing sales and services | 64,703 | 48,246 | 207,573 | 137,043 | |||||||||
Total | 202,163 | 172,052 | 708,501 | 558,455 | |||||||||
COSTS AND EXPENSES: | |||||||||||||
Drilling services | 82,862 | 87,331 | 355,188 | 330,124 | |||||||||
Manufacturing sales and services | 55,986 | 40,686 | 178,087 | 114,644 | |||||||||
Depreciation and amortization | 19,903 | 19,286 | 77,828 | 69,362 | |||||||||
Selling, general and administrative | 12,217 | 8,587 | 40,721 | 36,095 | |||||||||
Total | 170,968 | 155,890 | 651,824 | 550,225 | |||||||||
INCOME FROM OPERATIONS | 31,195 | 16,162 | 56,677 | 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 | 1,721 | 101 | 4,408 | 1,124 | |||||||||
Other - net | 128 | 119 | 416 | 477 | |||||||||
OTHER INCOME (EXPENSE) - NET | (3,096 | ) | (4,253 | ) | (13,892 | ) | (14,284 | ) | |||||
INCOME (LOSS) BEFORE INCOME TAXES | 28,099 | 11,909 | 42,785 | (6,054 | ) | ||||||||
Provision (credit) for income taxes | 11,607 | 4,327 | 16,414 | (2,114 | ) | ||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 16,492 | 7,582 | 26,371 | (3,940 | ) | ||||||||
Loss from discontinued aviation operations, net of tax | (14,264 | ) | (3,137 | ) | (27,644 | ) | (3,834 | ) | |||||
NET INCOME (LOSS) | $ | 2,228 | $ | 4,445 | $ | (1,273 | ) | $ | (7,774 | ) | |||
PER SHARE AMOUNTS: | |||||||||||||
Income (loss) from continuing operations | $ | 0.15 | $ | 0.08 | $ | 0.25 | $ | (0.04 | ) | ||||
Loss from discontinued aviation operations, net of tax | $ | (0.13 | ) | $ | (0.03 | ) | $ | (0.26 | ) | $ | (0.04 | ) | |
Net income (loss) | $ | 0.02 | $ | 0.05 | $ | (0.01 | ) | $ | (0.08 | ) | |||
AVERAGE DILUTED SHARES | 108,521 | 96,044 | 105,472 | 93,820 | |||||||||
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EXHIBIT 99.1
ROWAN COMPANIES, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | |||||||
(In Thousands) | |||||||
TWELVE MONTHS | |||||||
ENDED DECEMBER 31 | |||||||
2004 | 2003 | ||||||
CASH PROVIDED BY (USED IN): | |||||||
Operations: | |||||||
Net income (loss) | $ | (1,273 | ) | $ | (7,774 | ) | |
Adjustments to reconcile net income (loss)to net cash provided by operations: | |||||||
Depreciation and amortization | 95,650 | 86,851 | |||||
Loss on sale of aviation operations | 24,441 | ||||||
Deferred income taxes | 866 | (3,677 | ) | ||||
Other - net | 11,465 | 7,847 | |||||
Net changes in current assets and liabilities | (14,857 | ) | (34,596 | ) | |||
Net changes in other noncurrent assets and liabilities | 815 | (401 | ) | ||||
Net cash provided by operations | 117,107 | 48,250 | |||||
Investing activities: | |||||||
Property, plant and equipment additions | (136,886 | ) | (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 | (5,192 | ) | (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 | 407,750 | (120,529 | ) | ||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 58,227 | 178,756 | |||||
CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 465,977 | $ | 58,227 | |||
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