- Earnings total $0.62 per share, including charge of $0.03 for
severance-related costs, gain of $0.05 on tax-related matters -
Execution, strong margins, lower tax rate contribute to results -
Backlog remains above $5 billion - 2009 full-year earnings
expectations now $2.15 to $2.25 per share, excluding charges and
gains HOUSTON, Aug. 4 /PRNewswire-FirstCall/ -- Cameron (NYSE:CAM)
reported net income of $138.6 million, or $0.62 per diluted share,
for the quarter ended June 30, 2009, compared with net income of
$148.8 million, or $0.64 per diluted share, for the second quarter
of 2008. The second quarter 2009 results include a pretax charge of
$10.9 million, or $0.03 per diluted share, for severance-related
costs and a gain of $0.05 per diluted share related to certain tax
matters. The Company's results for the second quarter and first
half of 2008 have been revised to reflect a new accounting
standard, which became effective on January 1, 2009, related to
convertible debt. Total revenues were $1,270.0 million for the
quarter, down 14 percent from 2008's $1,480.6 million. Earnings
before interest, taxes and depreciation, excluding restructuring
costs, were $246.4 million, down 4 percent from the $255.5 million
of a year ago, while income before income taxes was $173.5 million,
down 21 percent from the $218.5 million of a year ago. Cameron
President and Chief Executive Officer Jack B. Moore said that the
results reflect solid performances in several areas across the
Company. "Our people continue to execute and perform well in a
difficult market," Moore said. "The Drilling & Production
Systems group (DPS), particularly the Drilling Systems business,
recorded a highly profitable mix of revenues, including the
delivery of certain projects earlier than originally scheduled. Our
Valves & Measurement group (V&M) and the Compression
Systems group saw revenues decline from year-ago levels, but they
also did an admirable job of maintaining margins." Moore noted that
Cameron's recent reinvestment in upgrading many of its
manufacturing facilities is having a meaningful impact on the
Company's financial performance. "Our efforts to improve
efficiency, reduce costs and lower cycle times have allowed us to
reinforce our position as a low-cost manufacturer in many of our
markets," he said. Moore also said that while the Company's
effective tax rate was approximately 20 percent for the quarter as
a result of the resolution of various tax uncertainties, Cameron
expects a 27 percent tax rate for the foreseeable future due to
several changes in the Company's overseas tax structure. Orders
decline year-over-year, approximate first quarter levels; backlog
still exceeds $5 billion Total orders for the second quarter of
2009 were $902 million, down from $1.8 billion a year ago. Moore
noted that while orders across all business lines are well below
year-ago levels, they were down only modestly on a sequential
basis. "Factors affecting orders include the lack of large subsea
orders in DPS, continued delays in large project orders in V&M
and the impact of weak global economies on Compression Systems'
centrifugal markets," Moore said. "We expect the second half of the
year to be more active in terms of subsea awards, and we hope to
see some pickup in orders in certain valve- and compression-related
markets." He noted that year-to-date orders totaled approximately
$1.9 billion, down from the $3.76 billion of the first half of
2008, and that at June 30, 2009, total backlog was $5.02 billion,
down from the first quarter of 2009's $5.27 billion and the June
30, 2008 level of $5.22 billion. Capital spending on track Moore
said that Cameron spent approximately $108 million in capital
expenditures in the first half, including approximately $49 million
related to the Malaysian subsea facility expansion and the new
Romanian surface equipment plant. "We expect to spend another $46
million on the completion of these two projects," Moore said, "and
we anticipate that capital expenditures will total approximately
$220 million for the full year 2009." NATCO transaction awaiting
regulatory approval Cameron has completed the required regulatory
filings related to the previously announced proposed acquisition of
NATCO Group Inc., including a Registration Statement on Form S-4
and antitrust filings in the applicable jurisdictions. Moore said
that the closing date of the acquisition will depend on the timing
of the receipt of all necessary regulatory approvals from the
agencies involved. He noted that Cameron and NATCO have received a
request for additional information from the Department of Justice,
and said the companies remain hopeful that the closing could take
place by the end of the third quarter or during the fourth quarter.
Balance sheet remains strong At June 30, 2009, Cameron's cash and
cash equivalents of $1.54 billion exceeded its total debt by
approximately $106 million. Moore noted that Cameron did not
repurchase any shares of its common stock during the second
quarter, and that there are restrictions on the Company buying its
common shares in the market until the NATCO transaction is closed.
"The pending acquisition has not diminished our interest in
additional acquisition targets," Moore said, "and we also expect to
be back in the market as an opportunistic buyer of our own stock
once we are free of the restrictions." Full-year earnings
expectations raised Moore said that Cameron's third quarter
earnings are expected to be in the range of approximately $0.50 to
$0.55 per share, and that full-year earnings, excluding severance
costs or other charges or gains, are expected to be approximately
$2.15 to $2.25 per share, compared with the Company's previous
guidance of $1.85 to $2.00 per share for the year. Moore also said
that these figures assume no impact from the pending acquisition of
NATCO. Cameron (NYSE:CAM) is a leading provider of flow equipment
products, systems and services to worldwide oil, gas and process
industries. Website: http://www.c-a-m.com/ In addition to the
historical data contained herein, this document includes
forward-looking statements regarding future earnings of the Company
(including third quarter and full year 2009 earnings per share
estimates), as well as expectations regarding future cash flows and
use of funds for capital spending, acquisitions and stock
repurchases, made in reliance upon the safe harbor provisions of
the Private Securities Litigation Reform Act of 1995. The Company's
actual results may differ materially from those described in
forward-looking statements. Such statements are based on current
expectations of the Company's performance and are subject to a
variety of factors, some of which are not under the control of the
Company, which can affect the Company's results of operations,
liquidity or financial condition. Such factors may include overall
demand for, and pricing of, the Company's products; the size and
timing of orders; the Company's ability to successfully execute the
large subsea and drilling systems projects it has been awarded; the
Company's ability to convert backlog into revenues on a timely and
profitable basis; changes in the price of (and demand for) oil and
gas in both domestic and international markets; raw material costs
and availability; political and social issues affecting the
countries in which the Company does business; fluctuations in
currency markets worldwide; and variations in global economic
activity. In particular, current and projected oil and gas prices
historically have generally directly affected customers' spending
levels and their related purchases of the Company's products and
services. Additionally, changes in oil and gas price expectations
may impact the Company's financial results due to changes it may
make in its cost structure, staffing or spending levels based on
these expectations. Finally, results could be affected by the
following factors related to the proposed acquisition of NATCO: the
ability to satisfy the closing conditions of the transaction,
including obtaining regulatory approvals for the transaction and
the approval of the merger agreement by the NATCO stockholders; the
timing of the satisfaction of the required approvals; the risk that
the businesses will not be integrated successfully; the risk that
the cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to
maintain relationships with customers, employees or suppliers; the
impact of other acquisitions that Cameron or NATCO have made or may
make before the transaction; and competition and its effect on
pricing. Because the information herein is based solely on data
currently available, it is subject to change as a result of changes
in conditions over which the Company has no control or influence,
and should not therefore be viewed as assurance regarding the
Company's future performance. Additionally, the Company is not
obligated to make public indication of such changes unless required
under applicable disclosure rules and regulations. Cameron
Unaudited Consolidated Condensed Results of Operations ($ and
shares in millions except per share data) Three Months Six Months
Ended June 30, Ended June 30, -------------- -------------- 2008
(as 2008 (as 2009 revised)(1) 2009 revised)(1) ----- -----------
---- ----------- Revenues: Drilling & Production Systems $862.3
$951.8 $1,667.6 $1,816.6 Valves & Measurement 271.8 366.9 587.9
711.4 Compression Systems 135.9 161.9 271.5 291.9 ----- ----- -----
----- Total revenues 1,270.0 1,480.6 2,527.0 2,819.9 -------
------- ------- ------- Costs and Expenses: Cost of sales
(exclusive of depreciation and amortization shown separately below)
840.7 1,063.2 1,684.4 2,028.6 Selling and administrative expenses
182.9 161.8 347.5 319.2 Depreciation and amortization 37.2 31.3
74.0 63.2 Interest income (1.8) (6.4) (4.0) (12.5) Interest expense
26.6 12.2 51.1 22.5 Restructuring expense 10.9 - 33.2 - ---- ---
---- --- Total costs and expenses 1,096.5 1,262.1 2,186.2 2,421.0
------- ------- ------- ------- Income before income taxes 173.5
218.5 340.8 398.9 Income tax provision (34.9) (69.7) (87.6) (127.1)
------ ------ ------ ------- Net income $138.6 $148.8 $253.2 $271.8
====== ====== ====== ====== Earnings per common share: Basic $0.64
$0.69 $1.17 $1.25 ===== ===== ===== ===== Diluted $0.62 $0.64 $1.15
$1.17 ===== ===== ===== ===== Shares used in computing earnings per
common share: Basic 217.1 216.6 217.0 216.7 ===== ===== ===== =====
Diluted 221.9 233.1 220.9 231.8 ===== ===== ===== ===== EBITDA:
------- Drilling & Production Systems $193.1 $169.4 $377.4
$316.1 Valves & Measurement 52.5 78.6 120.7 152.6 Compression
Systems 26.2 29.4 46.7 51.7 Corporate and other(2) (36.3) (21.9)
(82.9) (48.3) ------ ------ ------ ------ Total $235.5 $255.5
$461.9 $472.1 ====== ====== ====== ====== (1) Amounts have been
retrospectively revised as a result of the adoption, effective
January 1, 2009, of FASB Staff Position APB 14-1, Accounting for
Convertible Debt Instruments that may be settled in cash upon
conversion (including partial cash settlement). (2) Corporate
EBITDA amounts include $10.9 million and $33.2 million of
restructuring expense for the three and six month periods ended
June 30, 2009. Cameron Consolidated Condensed Balance Sheets ($
millions) June 30, December 31, 2009 2008 ---- ---- (unaudited)
Assets: Cash and cash equivalents $1,537.7 $1,621.0 Receivables,
net 895.4 950.4 Inventories, net 1,677.8 1,336.9 Other 214.7 148.1
----- ----- Total current assets 4,325.6 4,056.4 Plant and
equipment, net 1,008.6 931.7 Goodwill 727.2 709.2 Other assets
206.2 205.1 ----- ----- Total Assets $6,267.6 $5,902.4 ========
======== Liabilities and Stockholders' Equity: Current portion of
long-term debt $205.7 $161.3 Accounts payable and accrued
liabilities 1,849.2 1,854.4 Accrued income taxes 76.3 95.5 ----
---- Total current liabilities 2,131.2 2,111.2 Long-term debt
1,225.9 1,218.6 Deferred income taxes 108.4 99.2 Other long-term
liabilities 110.3 128.9 ----- ----- Total liabilities 3,575.8
3,557.9 ------- ------- Stockholders' Equity: Common stock, par
value $.01 per share, 400,000,000 shares authorized, 236,316,946
shares issued at June 30, 2009 (236,316,873 shares issued at
December 31, 2008) 2.4 2.4 Capital in excess of par value 1,263.2
1,254.5 Retained earnings 2,063.1 1,809.9 Accumulated other
elements of comprehensive income (6.8) (84.2) Less: Treasury stock,
19,051,961 shares at June 30, 2009 (19,424,120 shares at December
31, 2008) (630.1) (638.1) ------- ------- Total stockholders'
equity 2,691.8 2,344.5 ------- ------- Total Liabilities and
Stockholders' Equity $6,267.6 $5,902.4 ======== ======== Cameron
Unaudited Consolidated Condensed Statements of Cash Flows ($
millions) Three Months Six Months Ended June 30, Ended June 30,
-------------- -------------- 2009 2008(1) 2009 2008(1) ----
------- ---- ------- Cash flows from operating activities: Net
income $138.6 $148.8 $253.2 $271.8 Adjustments to reconcile net
income to net cash provided by operating activities: Depreciation
27.5 24.2 54.0 47.5 Amortization 9.7 7.1 20.0 15.7 Non-cash stock
compensation expense 8.2 6.0 15.9 16.0 Tax benefit of employee
stock compensation plan transactions and deferred income taxes
(10.2) 1.4 (7.4) (1.3) Changes in assets and liabilities, net of
translation, acquisitions and non-cash items: Receivables 85.4
(81.8) 83.0 (143.0) Inventories (105.3) 24.4 (293.1) (18.6)
Accounts payable and accrued liabilities (6.9) 60.1 (68.1) 29.4
Other assets and liabilities, net (9.5) 14.8 (48.3) 31.9 ----- ----
----- ---- Net cash provided by operating activities 137.5 205.0
9.2 249.4 ----- ----- --- ----- Cash flows from investing
activities: Capital expenditures (58.8) (50.9) (107.8) (96.0)
Acquisitions, net of cash acquired (23.2) - (23.2) (57.5) Proceeds
from sale of plant and equipment 1.2 0.6 2.7 0.9 --- --- --- ---
Net cash used for investing activities (80.8) (50.3) (128.3)
(152.6) ------ ------ ------ ------- Cash flows from financing
activities: Short-term loan borrowings (repayments), net 12.1
(90.2) 35.1 80.3 Issuance of long-term senior notes - 747.9 - 747.9
Debt issuance costs - (5.5) - (5.5) Purchase of treasury stock -
(34.1) (7.1) (154.5) Proceeds from stock option exercises, net of
tax payments from stock compensation plan transactions 4.6 9.2 3.5
10.1 Excess tax benefits from employee stock compensation plan
transactions 0.4 7.6 2.2 14.4 Principal payments on capital leases
(1.6) (1.6) (3.6) (3.3) ---- ---- ----- ----- Net cash provided by
financing activities 15.5 633.3 30.1 689.4 ---- ----- ---- -----
Effect of translation on cash 23.5 1.7 5.6 8.0 ---- --- --- ---
Increase (decrease) in cash and cash equivalents 95.7 789.7 (83.4)
794.2 ---- ----- ------ ----- Cash and cash equivalents, beginning
of period 1,442.0 744.4 1,621.0 739.9 ------- ----- ------- -----
Cash and cash equivalents, end of period $1,537.7 $1,534.1 $1,537.7
$1,534.1 ======== ======== ======== ======== (1) Amounts have been
retrospectively revised as a result of the adoption, effective
January 1, 2009, of FASB Staff Position APB 14-1, Accounting for
Convertible Debt Instruments that may be settled in cash upon
conversion (including partial cash settlement). Cameron Orders and
Backlog ($ millions) Orders Three Months Six Months Ended June 30,
Ended June 30, -------------- -------------- 2009 2008 2009 2008
---- ---- ---- ---- Drilling & Production Systems $597.5
$1,165.9 $1,224.4 $2,565.6 Valves & Measurement 194.1 418.6
427.3 785.1 Compression Systems 110.2 217.3 233.4 405.6 ----- -----
----- ----- Total $901.8 $1,801.8 $1,885.1 $3,756.3 ====== ========
======== ======== Backlog June 30, December 31, June 30, 2009 2008
2008 ---- ---- ---- Drilling & Production Systems $4,035.7
$4,416.8 $3,960.9 Valves & Measurement 579.6 749.2 768.5
Compression Systems 401.0 440.5 488.1 ----- ----- ----- Total
$5,016.3 $5,606.5 $5,217.5 ======== ======== ======== Cameron
Reconciliation of GAAP to Non-GAAP Financial Information ($
millions) Three Months Ended June 30, 2009
-------------------------------- Drilling & Production Valves
& Compression Systems Measurement Systems Corporate Total
------- ----------- ------- --------- ----- Income (loss) before
income taxes $172.7 $43.8 $22.0 $(65.0) $173.5 Depreciation &
amortization 20.4 8.7 4.2 3.9 37.2 Interest income - - - (1.8)
(1.8) Interest expense - - - 26.6 26.6 --- --- --- ---- ---- EBITDA
$193.1 $52.5 $26.2 $(36.3) $235.5 ====== ===== ===== ====== ======
Three Months Ended June 30, 2008 --------------------------------
Drilling & Production Valves & Compression Systems
Measurement Systems Corporate Total ------- ----------- -------
--------- ------ Income (loss) before income taxes $153.2 $70.8
$25.7 $(31.3) $218.4 Depreciation & amortization 16.2 7.8 3.7
3.6 31.3 Interest income - - - (6.4) (6.4) Interest expense - - -
12.2 12.2 --- --- --- ---- ---- EBITDA $169.4 $78.6 $29.4 $(21.9)
$255.5 ====== ===== ===== ====== ====== Cameron Reconciliation of
GAAP to Non-GAAP Financial Information ($ millions) Six Months
Ended June 30, 2009 ------------------------------ Drilling &
Production Valves & Compression Systems Measurement Systems
Corporate Total ------- ----------- ------- --------- ------ Income
(loss) before income taxes $336.9 $103.5 $38.3 $(137.9) $340.8
Depreciation & amortization 40.5 17.2 8.4 7.9 74.0 Interest
income - - - (4.0) (4.0) Interest expense - - - 51.1 51.1 --- ---
--- ---- ---- EBITDA $377.4 $120.7 $46.7 $(82.9) $461.9 ======
====== ===== ====== ====== Six Months Ended June 30, 2008
------------------------------ Drilling & Production Valves
& Compression Systems Measurement Systems Corporate Total
------- ----------- ------ --------- ----- Income (loss) before
income taxes $282.2 $137.0 $44.4 $(64.7) $398.9 Depreciation &
amortization 33.9 15.6 7.3 6.4 63.2 Interest income - - - (12.5)
(12.5) Interest expense - - - 22.5 22.5 --- --- --- ---- ----
EBITDA $316.1 $152.6 $51.7 $(48.3) $472.1 ====== ====== =====
====== ====== DATASOURCE: Cameron CONTACT: R. Scott Amann, Vice
President, Investor Relations of Cameron, +1-713-513-3344 Web Site:
http://www.c-a-m.com/
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