SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 15, 2003
ROWAN COMPANIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
(STATE OR OTHER JURISDICTION OF INCORPORATION)
1-5491 75-0759420
(COMMISSION FILE NUMBER ) (IRS EMPLOYER IDENTIFICATION NO.)
2800 POST OAK BOULEVARD
SUITE 5450
HOUSTON, TEXAS 77056-6127
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)
(713) 621-7800
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit
Number Exhibit Description
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99 Press release of Rowan Companies, Inc. dated October 15, 2003
ITEM 9. REGULATION FD DISCLOSURE (INFORMATION PROVIDED UNDER ITEM 12 - RESULTS
OF OPERATIONS AND FINANCIAL CONDITION).
The following information is disclosed pursuant to Item 12 - Results of
Operations and Financial Condition. It is being furnished under Item 9 of this
Form 8-K in accordance with the interim guidance provided in SEC Release No.
33-8216.
On October 15, 2003, Rowan Companies, Inc. issued a press release announcing
its results for the third quarter of 2003. The press release is attached
as Exhibit 99.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROWAN COMPANIES, INC.
By: /s/ E. E. THIELE
-------------------------------------------
E. E. Thiele,
Senior Vice President - Administration
and Finance and Principal Financial Officer
Dated: October 15, 2003
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
Exhibit
Number Exhibit Description
------ -------------------
99 Press release of Rowan Companies, Inc. dated October 15, 2003
EXHIBIT 99
ROWAN COMPANIES, INC.
NEWS RELEASE 2800 POST OAK BOULEVARD, SUITE 5450
HOUSTON, TEXAS 77056 (713) 621-7800
FOR IMMEDIATE RELEASE October 15, 2003
HOUSTON, TEXAS -- ROWAN REPORTS IMPROVED OPERATING RESULTS.
For the three months ended September 30, 2003, Rowan Companies, Inc.
(RDC-NYSE) generated net income of $11.6 million, or $.12 per share, on revenues
of $193.9 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, and net income of
$10.2 million, or $.11 per share, on revenues of $184.2 million in the third
quarter of 2002.
Rowan's offshore rig utilization was 94% during the third quarter of 2003,
versus 88% in the second quarter and 93% in the year-earlier period, and our
average offshore day rate of $49,100 increased by $9,700, or 25%, from the
second quarter and by $7,200, or 17%, from the year-earlier period. Land rig
utilization was 72% during the third quarter of 2003, versus 76% in the
year-earlier period, and our average land rig day rate of $11,000 increased by
$300, or 3%, from the second quarter and by $1,400, or 15%, from the
year-earlier period.
Bob Palmer, Chairman of the Board, commented, "We are pleased to return to
profitability, but were disappointed with our third quarter performance.
Unanticipated downtime in our Gulf of Mexico fleet hindered our drilling
operations and our manufacturing and aviation financial results were less than
we anticipated. Our longer-term outlook, however, remains highly favorable.
"We believe that foreign drilling markets will continue to attract
competitive rigs, further tightening the Gulf of Mexico jack-up market. We are
witnessing increasing opportunities abroad for our own harsh environment
equipment. We expect that our average Gulf of Mexico jack-up day rates, which
increased by 10% in the third quarter, will continue improving during the fourth
quarter, and our fleet utilization will again increase. Of course, our optimism
is based upon oil and natural gas prices sufficiently high enough to encourage
exploration and development drilling by our customers. The prospects for our
manufacturing operations are improving as backlog more than doubled during the
third quarter to just over $45 million, which is a five-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.
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ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
Unaudited (In Thousands)
SEPTEMBER 30
-------------
2003 2002
---- ----
ASSETS
Cash and short-term investments $ 50,014 $ 168,294
Accounts receivable 120,066 130,412
Inventories 199,920 158,161
Other current assets 65,446 8,726
---------- ----------
Total current assets 435,446 465,593
Property, plant and equipment - net 1,686,716 1,538,008
Other assets 19,326 18,418
---------- ----------
TOTAL $ 2,141,488 $ 2,022,019
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $ 52,809 $ 42,458
Other current liabilities 91,065 76,434
---------- ----------
Total current liabilities 143,874 118,892
Long-term debt 552,110 494,848
Other liabilities 317,172 232,409
Stockholders' equity 1,128,332 1,175,870
---------- ----------
TOTAL $ 2,141,488 $ 2,022,019
========== ==========
CONSOLIDATED STATEMENT OF OPERATIONS
Unaudited (In Thousands Except Per Share Amounts)
For The Three Months For The Nine Months
Ended September 30, Ended September30,
------------------------- -----------------------
2003 2002 2003 2002
------------ ----------- --------- ---------
REVENUES:
Drilling services $ 124,582 $ 108,483 $ 297,606 $ 265,450
Manufacturing sales and services 27,067 28,754 86,738 92,340
Aviation services 42,234 46,916 98,994 112,666
------------ ----------- --------- ---------
Total 193,883 184,153 483,338 470,456
------------ ----------- --------- ---------
COSTS AND EXPENSES:
Drilling services 86,162 79,091 242,793 229,162
Manufacturing sales and services 25,199 26,852 80,518 86,896
Aviation services 33,327 32,005 86,697 89,681
Depreciation and amortization 21,740 20,330 62,973 57,332
General and administrative 6,126 6,434 19,420 19,251
------------ ---------- --------- ---------
Total 172,554 164,712 492,401 482,322
------------ ---------- --------- ---------
INCOME (LOSS) FROM OPERATIONS 21,329 19,441 (9,063) (11,866)
------------ ---------- --------- ---------
OTHER INCOME (EXPENSE):
Net proceeds from Gorilla V
settlement 157,125
Interest expense (5,213) (5,255) (14,869) (15,479)
Less interest capitalized 1,004 846 3,457 3,980
Interest income 139 945 1,023 3,267
Other - net 38 48 417 433
------------ ---------- --------- ---------
Other income (expense) - net (4,032) (3,416) (9,972) 149,326
------------ ----------- --------- ---------
INCOME (LOSS) BEFORE INCOME TAXES 17,297 16,025 (19,035) 137,460
Provision (credit) for
income taxes 5,710 5,861 (6,816) 48,358
------------ ----------- --------- ---------
NET INCOME (LOSS) $ 11,587 $ 10,164 $ (12,219) $ 89,102
============ =========== ========= =========
NET INCOME (LOSS) PER COMMON SHARE:
Basic $ .12 $ .11 $ (.13) $ .95
============ =========== ========= =========
Diluted $ .12 $ .11 $ (.13) $ .93
============ =========== ========= =========
DILUTED SHARES 95,877 95,177 93,738 95,433
============ =========== ========= =========
(CONTINUED)
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ROWAN COMPANIES, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
Unaudited (In Thousands)
FOR THE NINE MONTHS
ENDED SEPTEMBER 30
--------------------
2003 2002
---- ----
CASH PROVIDED BY (USED IN):
Operations:
Net income (loss) $ (12,219) $ 89,102
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operations:
Depreciation and amortization 62,973 57,332
Deferred income taxes (6,727) 44,286
Other - net (1,585) 5,341
Net changes in current assets and liabilities (45,202) (115,329)
Net changes in other noncurrent assets and liabilities (1,124) (218)
---------- ----------
Net cash provided by (used in) operations (3,884) 80,514
---------- ----------
Investing activities:
Property, plant and equipment additions (184,711) (176,581)
Proceeds from disposals of property, plant and equipment 6,360 4,387
---------- ----------
Net cash used in investing activities (178,351) (172,194)
---------- ----------
Financing activities:
Proceeds from borrowings 84,350 91,097
Repayments of borrowings (34,733) (34,733)
Proceeds from stock option and convertible debenture plans 3,876 2,188
Payment of cash dividends (23,511)
Payments to acquire treasury stock (12,056)
---------- ----------
Net cash provided by financing activities 53,493 22,985
---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (128,742) (68,695)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 178,756 236,989
---------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 50,014 $ 168,294
========== ==========
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