EX-99.1 EARNINGS 3 earnings.htm EARNINGS RELEASE Earnings release

EXHIBIT 99.1
Rowan Companies, Inc.
News Release                                   2800 Post Oak Boulevard, Suite 5450
                                                                           Houston, Texas 77056 (713) 621-7800

FOR IMMEDIATE RELEASE                                        April 14, 2004


HOUSTON, TEXAS -- Rowan reports first quarter operating results.

For the three months ended March 31, 2004, the Company incurred a net loss of $11.3 million, or $.11 per share, on revenues of $170.5 million, compared to a loss of $17.2 million, or $.18 per share, on revenues of $131.4 million in the first quarter of 2003.
 
Rowan’s Gulf of Mexico rig utilization was 82% during the first quarter of 2004, versus 92% in the fourth quarter of 2003 and 90% in the year-earlier period, and our average Gulf of Mexico day rate of $39,700 decreased by $2,700, or 6%, from the fourth quarter of 2003, but was up by $5,000, or 14%, from the year-earlier period. Land rig utilization was 73% during the first quarter of 2004, versus 80% in the fourth quarter of 2003 and 66% in the year-earlier period, and our average land rig day rate of $11,000 decreased by less than $200, or 1%, from the fourth quarter of 2003, but was up by $1,200, or 12%, from the year-earlier period.

Danny McNease, President and Chief Executive Officer, commented, “Our first quarter 2004 results, while improved over the prior year period, were down from the fourth quarter of 2003 and well below what we had originally anticipated. The primary cause of our poor financial performance in the first quarter was the inadequate utilization of several of our Gulf of Mexico rigs, including two Gorillas and one Super Gorilla class jack-up that have been largely idle since January. In addition, the amendment of our North Sea drilling contract for Gorilla VII had the effect of reducing our drilling revenues by more than $2 million during the quarter.

“We continue to see signs of more favorable business conditions on the horizon. We believe that as the Gulf of Mexico jack-up market continues to tighten, the upward pressure on day rates will intensify. We look forward to the addition to our fleet later this month of our first Tarzan Class jack-up, the Scooter Yeargain, which will enhance our capability in the emerging deep shelf market. We are continuing to pursue overseas opportunities for our Gorilla and Super Gorilla class jack-ups and fully expect that one or more of such rigs currently positioned in the Gulf of Mexico will be relocated abroad before the end of this year.

“Gorilla V completed its most recent assignment offshore eastern Canada in late-March, and we expect to have the rig working again in the area by the end of April. As previously announced, our agreement to temporarily reduce the day rate on Gorilla VII’s drilling/production contract in the North Sea was made to assist in extending the productive life of the Ardmore field, and could yield work beyond the contract’s minimum 18-month term.


(CONTINUED)
     

“The prospects for our mining equipment group have never been better and our manufacturing backlog of $58 million is at a six-year high.”

Rowan Companies, Inc. is a major provider of international and domestic offshore contract drilling and aviation 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 23 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.


(CONTINUED)
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ROWAN COMPANIES, INC.          
CONDENSED CONSOLIDATED BALANCE SHEET          

 Unaudited (In Thousands)             

                 
           

MARCH 31     

      
     
 		  
 
    
 
    
2004
   
2003
   
 
  
         
 		        
ASSETS
   
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Cash and short-term investments
   
 
  
$
306,435
 
$
115,013
    
 
  
Accounts receivable
   
 
    
123,817
    
98,069
    
 
  
Inventories
   
 
    
183,189
    
179,710
    
 
  
Other current assets
   
 
    
25,289
    
35,412
    
 
  
         
 
       
Total current assets
   
 
    
638,730
    
428,204
    
 
  
Property, plant and equipment - net
   
 
    
1,748,800
    
1,616,098
    
 
  
Other assets
   
 
    
18,275
    
17,829
    
 
  
         
 
       
TOTAL
   
 
  
$
2,405,805
  
$
2,062,131
    
 
  
     
 
   
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
LIABILITIES AND STOCKHOLDERS' EQUITY
   
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Current maturities of long-term debt
   
 
  
$
55,887
  
$
47,285
    
 
  
Other current liabilities
   
 
    
93,287
    
72,990
    
 
  
         
 
       
Total current liabilities
   
 
    
149,174
    
120,275
    
 
  
Long-term debt
   
 
    
579,466
    
520,365
    
 
  
Other liabilities
   
 
    
283,486
    
305,562
    
 
  
Stockholders' equity
   
 
    
1,393,679
    
1,115,929
    
 
  
         
 
       
TOTAL
   
 
  
$
2,405,805
  
$
2,062,131
    
 
  
     
 
   
 
    
 
    
 
    
 
    
 
  

 

CONSOLIDATED STATEMENT OF OPERATIONS          
Unaudited (In Thousands Except Per Share Amounts)          
 
    
 
    
 
  
 
    
 
FOR THE THREE MONTHS 
  
 
    

ENDED MARCH 31 

  
   
 		  
 
    
2004

 

 
2003
 
   
 
 
REVENUES:
   
 
    
 
  
 Drilling services
 
$
105,689
  
$
77,886
  
 Manufacturing sales and services
   
41,106
    
29,040
  
 Aviation services
   
23,686
    
24,429
  
   
 
 
TOTAL
   
170,481
    
131,355
  
   
 
 
COSTS AND EXPENSES:
   
 
    
 
  
 Drilling services
   
88,418
    
77,510
  
 Manufacturing sales and services
   
39,409
    
26,626
  
 Aviation services
   
26,650
   
23,434
  
 Depreciation and amortization
   
23,382
   
20,310
  
 General and administrative
   
6,215
    
6,505
  
   
 
 
TOTAL
   
184,074
    
154,385
  
   
 
 
INCOME (LOSS) FROM OPERATIONS
   
(13,593
 )   
(23,030
) 
   
 
 
OTHER INCOME (EXPENSE):
   
 
    
 
  
 Net proceeds from Gorilla V settlement
   
 
    
 
  
 Interest expense
   
(5,065
)
 
(4,859
) 
 Less interest capitalized
   
797
    
1,098
  
 Interest income
   
660
    
522
  
 Other - net
   
196
    
120
  
   
 
 
OTHER INCOME (EXPENSE) - NET
   
(3,412
)
 
(3,119
) 
   
 
 
INCOME (LOSS) BEFORE INCOME TAXES
   
(17,005
 )   
(26,149
 ) 
 Provision (credit) for income taxes
   
(5,697
)   
(8,967
 ) 
   
 
 
NET INCOME (LOSS)
 
$
(11,308
 ) 
$
(17,182
 )  
   
 
 
 
    
 
    
 
  
NET INCOME (LOSS) PER COMMON SHARE:
   
 
    
 
  
 Basic
 
$
(.11
)  
$
(.18
) 
   
 
 
 Diluted
 
$
(.11
)  
$
(.18
) 
   
 
 
DILUTED SHARES
   
102,132
    
93,617
 
   
 
 
   
 
    
 
  

 
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ROWAN COMPANIES, INC.      
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS      
Unaudited (In Thousands)      
 
    
 
    
 
  
   
FOR THE THREE MONTHS
   

ENDED MARCH 31    

  
 
    
2004

 

 
2003
  
   
 
 
CASH PROVIDED BY (USED IN):
   
 
    
 
  
 Operations:
   
 
    
 
  
  Net income (loss)
 
$
(11,308
)
$
(17,182
 ) 
  Adjustments to reconcile net income (loss) to net cash provided by operations:
   
 
    
 
  
   Depreciation and amortization
   
23,382
    
20,310
  
   Deferred income taxes
   
(5,661
)
 
(8,636
 ) 
   Other - net
   
9,344
   
4,903
  
  Net changes in current assets and liabilities
   
(2,478
)
 
(8,839
)
  Net changes in other noncurrent assets and liabilities
   
   905
  
(403
 ) 
   
 
 
Net cash provided by (used in) operations
   
14,184
    
(9,847
 ) 
   
 
 
Investing activities:
   
 
    
 
  
  Property, plant and equipment additions
   
(47,777
)
 
(69,975
)
  Proceeds from disposals of property, plant and equipment
   
4,487
    
3,576
  
   
 
 
Net cash used in investing activities
   
(43,290
)
 
(66,399
)
   
 
 
Financing activities:
   
 
    
 
  
  Proceeds from borrowings
   
29,726
    
25,852
  
  Repayments of borrowings
   
(18,707
)
 
(13,504
)
  Proceeds from common stock offering, net of issue costs     264,993        
  Proceeds from stock option and convertible debenture plans
   
1,302
   
155
  
   
 
 
Net cash provided by financing activities
   
277,314
    
12,503
  
   
 
 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
   
248,208
 
  
(63,743
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   
58,227
    
178,756
  
   
 
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
306,435
  
$
115,013
  
   
 
 
 
    
 
    
 
  
 
 
 
  4