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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