EX-99.1 2 pressrelease07152004.htm PRESS RELEASE Press Release
EXHIBIT 99.1
 
Rowan Companies, Inc.
2800 Post Oak Boulevard, Suite 5450 
Houston, Texas 77056 (713) 621-7800
News Release                                                      
FOR IMMEDIATE RELEASE                                                                                                                                                              July 15, 2004

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

For the three months ended June 30, 2004, the Company incurred a net loss of $2.1 million, or $.02 per share, on revenues of $190.9 million, compared to a net loss of $6.6 million, or $.07 per share, on revenues of $158.1 million in the second quarter of 2003.
 
Rowan’s Gulf of Mexico rig utilization was 88% during the second quarter of 2004, versus 82% in the first quarter of 2004 and 93% in the year-earlier period, and our average Gulf of Mexico day rate of $42,200 increased by $2,500, or 6%, from the first quarter of 2004, and by $6,500, or 18%, from the year-earlier period. Land rig utilization was 82% during the second quarter of 2004, versus 73% in the first quarter of 2004 and 76% in the year-earlier period, and our average land rig day rate of $11,400 increased by $400, or 4%, from the first quarter of 2004, and by $800, or 7%, from the year-earlier period.

Danny McNease, Chairman and Chief Executive Officer, commented, “On June 2, we announced that all 25 Rowan offshore rigs were under contract for the first time in about six months. Two of our Gorilla rigs and one Super Gorilla class jack-up had been largely idle since January. Our offshore fleet utilization was 98% during June and has remained near 100% thus far in July. We have continued to add to our backlog of drilling commitments in the Gulf of Mexico and, in many instances, have obtained day rate increases as our contracts have turned over. We believe these favorable trends will continue throughout the third quarter, barring any dramatic decline in oil and natural gas prices.
 
“We continue to aggressively pursue overseas opportunities for our Gorilla and Super Gorilla class jack-ups. Gorilla V will conclude its current drilling assignment offshore eastern Canada within the next 30 days. As previously announced, the rig will then be relocated to the North Sea for a one-well contract expected to span almost eleven months of drilling, mobilization and outfitting time and provide approximately $38 million of revenues. We expect our departure from Canada to be temporary and believe that one of our Gorilla rigs currently positioned in the Gulf of Mexico could be relocated there by the second quarter of 2005. We are also pursuing contracts for work offshore Qatar, Trinidad and Venezuela beginning later this year or in early 2005.
 
“The revenues contributed by our manufacturing division during the second quarter of 2004 were the highest in their ten-year history. Our manufacturing backlog of $58.5 million is up by almost $42 million in the past year.
 
“Included in the second quarter results are the effects of gains on helicopter sales, which reduced aviation operating expenses by $4.8 million, and a $4.3 million reduction in estimated airline revenue accruals following the introduction of a new passenger ticket tracking system. Collectively, these items had a negligible effect on the Company’s per share loss during the period.”
 
  -1-  

EXHIBIT 99.1


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 24 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: E. E. Thiele, Chief Financial Officer, 713-960-7686. 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
  -2-  
 

ROWAN COMPANIES, INC.          
CONDENSED CONSOLIDATED BALANCE SHEET          

 Unaudited (In Thousands)             

                 
           

JUNE 30     

      
     
 		  
 
    
 
    
2004
    
2003
    
 
  
         
 		        
ASSETS
   
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Cash and short-term investments
   
 
  
$
294,680
  
$
73,651
    
 
  
Accounts receivable
   
 
    
149,522
    
115,281
    
 
  
Inventories
   
 
    
187,687
    
188,443
    
 
  
Other current assets
   
 
    
22,455
    
54,033
    
 
  
         
 
       
    Total current assets
   
 
    
654,344
    
431,408
    
 
  
Property, plant and equipment - net
   
 
    
1,752,027
    
1,661,341
    
 
  
Other assets
   
 
    
18,305
    
18,057
    
 
  
         
 
       
    TOTAL
   
 
  
$
2,424,676
  
$
2,110,806
    
 
  
     
 
   
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
LIABILITIES AND STOCKHOLDERS' EQUITY
   
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Current maturities of long-term debt
   
 
  
$
59,883
  
$
47,633
    
 
  
Other current liabilities
   
 
    
95,345
    
83,873
    
 
  
         
 
       
    Total current liabilities
   
 
    
155,228
    
131,506
    
 
  
Long-term debt
   
 
    
585,278
    
547,591
    
 
  
Other liabilities
   
 
    
289,456
    
318,124
    
 
  
Stockholders' equity
   
 
    
1,394,714
    
1,113,585
    
 
  
         
 
       
    TOTAL
   
 
  
$
2,424,676
  
$
2,110,806
    
 
  
     
 
   
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
CONSOLIDATED STATEMENT OF OPERATIONS          
Unaudited (In Thousands Except Per Share Amounts)          
 
    
 
    
 
    
 
    
 
  
 
    
 
FOR THE THREE MONTHS 
    
FOR THE SIX MONTHS
  
 
    

ENDED JUNE 30 

    
ENDED JUNE 30   
  
   
 		  
 		  
 
    
2004

 

 
2003

 

 
2004

 

 
2003
 
   
 
 
 
 
REVENUES:
   
 
    
 
    
 
    
 
  
     Drilling services
 
$
115,545
  
$
95,138
  
$
221,234
  
$
173,024
  
     Manufacturing sales and services
   
48,878
    
30,631
    
89,984
    
59,671
  
     Aviation services
   
26,433
    
32,331
    
50,119
    
56,760
  
   
 
 
 
 
TOTAL
   
190,856
    
158,100
    
361,337
    
289,455
  
   
 
 
 
 
COSTS AND EXPENSES:
   
 
    
 
    
 
    
 
  
     Drilling services
   
88,186
    
79,121
    
176,604
    
156,631
  
     Manufacturing sales and services
   
43,775
    
28,693
    
83,184
    
55,319
  
     Aviation services
   
28,829
    
29,936
    
55,479
    
53,370
  
     Depreciation and amortization
   
23,652
    
20,923
    
47,034
    
41,233
  
     General and administrative
   
6,169
    
6,789
    
12,384
    
13,294
  
   
 
 
 
 
TOTAL
   
190,611
    
165,462
    
374,685
    
319,847
  
   
 
 
 
 
INCOME (LOSS) FROM OPERATIONS
   
245
    
(7,362
)
 
(13,348
 )    
(30,392
)
   
 
 
 
 
OTHER INCOME (EXPENSE):
   
 
    
 
    
 
    
 
  
     Interest expense
   
(5,039
)
 
(4,797
)
 
(10,104
)
 
(9,656
)
     Less interest capitalized
   
535
    
1,355
    
1,332
    
2,453
  
     Interest income
   
868
    
362
    
1,528
    
884
 
     Other - net
   
134
    
259
    
330
    
379
  
   
 
 
 
 
OTHER INCOME (EXPENSE) - NET
   
(3,502
)
 
(2,821
)
 
(6,914
)
 
(5,940
 ) 
   
 
 
 
 
INCOME (LOSS) BEFORE INCOME TAXES
   
(3,257
)
 
(10,183
)
 
(20,262
)
 
(36,332
 ) 
     Provision (credit) for income taxes
   
(1,132
 )   
(3,559
)
 
(6,829
)
 
(12,526
 ) 
   
 
 
 
 
NET INCOME (LOSS)
 
$
(2,125
 )  
$
(6,624
)
$
(13,433
)
$
(23,806
 ) 
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
NET INCOME (LOSS) PER COMMON SHARE:
   
 
    
 
    
 
    
 
  
     Basic
 
$
(.02
)  
$
(.07
)
$
(.13
)
$
(.25
 ) 
   
 
 
 
 
     Diluted
 
$
(.02
 )  
$
(.07
)
$
(.13
)
$
(.25
 ) 
   
 
 
 
 
DILUTED SHARES
   
105,819
    
93,716
    
103,975
    
93,667
  
   
 
 
 
 
   
 
    
 
    
 
    

(CONTINUED) 

  

 

 
  -3-  
 
 

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

ENDED JUNE 30    

  
 
    
2004

 

 
2003
 
   
 
 
CASH PROVIDED BY (USED IN):
   
 
    
 
  
Operations:
   
 
    
 
  
   Net income (loss)
 
$
(13,433
)
$
(23,806
 ) 
   Adjustments to reconcile net income (loss) to net cash provided by operations:
   
 
    
 
  
     Depreciation and amortization
   
47,034
    
41,233
  
     Deferred income taxes
   
(6,990
)
 
(12,496
 ) 
     Other - net
   
12,909
    
12,170
  
   Net changes in current assets and liabilities
   
(27,114
)
 
(32,203
)
   Net changes in other noncurrent assets and liabilities
   
902
 
  
(664
) 
   
 
 
Net cash provided by (used in) operations
   
13,308
    
(15,766
 ) 
   
 
 
Investing activities:
   
 
    
 
  
   Property, plant and equipment additions
   
(76,914
)
 
(137,370
)
   Proceeds from disposals of property, plant and equipment
   
11,636
    
5,692
  
   
 
 
Net cash used in investing activities
   
(65,278
)
 
(131,678
)
   
 
 
Financing activities:
   
 
    
 
  
   Proceeds from borrowings
   
47,259
    
61,151
  
   Repayments of borrowings
   
(26,432
)
 
(21,229
)
   Proceeds from common stock offering, net of issue costs
    
264,980
        
   Proceeds from stock option and convertible debenture plans
   
2,616
    
2,417
  
   
 
 
Net cash provided by financing activities
   
288,423
    
42,339
  
   
 
 
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
   
236,453
  
(105,105
)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
   
58,227
    
178,756
  
   
 
 
CASH AND CASH EQUIVALENTS, END OF PERIOD
 
$
294,680
  
$
73,651
  
   
 
 
 
    
 
    
 
  
 
 
 
  -4-