HOUSTON, Aug. 4 /PRNewswire-FirstCall/ -- Cameron (NYSE: CAM) reported net income of
$129.2 million, or $0.52 per diluted share, for the quarter ended
June 30, 2010, compared with net
income of $138.6 million, or
$0.62 per diluted share, for the
second quarter of 2009. The second quarter 2010 results
include pretax charges of $18.4
million, or $0.06 per diluted
share, related to the continued integration of the NATCO Group Inc.
acquisition, as well as severance-related costs and costs
associated with investigations and litigation related to the
Deepwater Horizon matter. The second quarter 2009 results
included 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.
Total revenues were $1,452.7
million for the quarter, up 14 percent from 2009's
$1,270.0 million. Earnings
before interest, taxes and depreciation (EBITDA), excluding
charges, were $263.0 million, up
seven percent from the $246.4 million
of a year ago, while income before income taxes was $172.3 million, down slightly from the
$173.5 million of a year ago.
Cameron President and Chief Executive Officer Jack B. Moore said that the gains in revenues
and EBITDA reflect an exceptional focus on execution by the
Company's employees across numerous businesses in the wake of the
Deepwater Horizon tragedy. "Revenues increased in Drilling
& Production Systems (DPS) and Valves & Measurement
(V&M) both year-over-year and sequentially," Moore said, "while
the Compression Systems group saw revenues decline from year-ago
levels due to continuing softness in their industrial markets
worldwide." Moore noted that the year-over-year gains in DPS
revenues reflect the 2009 acquisition of NATCO and increased subsea
systems deliveries. With regard to margins, Moore said, "We
expected to see a decline in the overall EBITDA margins for DPS as
subsea deliveries became a larger component of the revenue mix, but
solid performances across the drilling, surface and process systems
businesses more than offset this impact, driving a sequential
increase in margins. We do still expect some moderation in
margins as we work through our subsea backlog, and this has been
incorporated into our guidance."
Orders increase 54 percent over prior year, backlog declines
modestly
Total orders for the second quarter of 2010 were $1.39 billion, up from $902 million a year ago. Moore noted that
increases in DPS' drilling business and in V&M were the primary
drivers, with surface and process systems also posting solid gains.
"North American markets continued to be strong during the
quarter," Moore said, "including the booking of a sizable surface
production equipment order in the Gulf of
Mexico for the Davy Jones development, as well as the
initial order of a Cameron
20,000-psi BOP, for use on a jackup rig." He noted that
year-to-date orders totaled approximately $2.60 billion, up from the $1.89 billion of the first half of 2009, and that
at June 30, 2010, total backlog was
$4.92 billion, down modestly from the
first quarter of 2010's $4.98
billion.
Capital reinvestment continues, balance sheet remains
strong
Cameron's operations utilized
cash totaling $155.4 million in the
first six months of 2010, reflecting an ongoing build in working
capital as project-related activity, particularly in subsea
systems, continued to ramp up. Moore also noted that
Cameron spent approximately
$68 million in capital expenditures
in the first half. "We now expect capital spending to total
approximately $200 million for 2010,"
Moore said, "as we continue to focus on investments in our
aftermarket facilities and efficiency gains."
At June 30, 2010, Cameron's cash and cash equivalents of
$1.43 billion exceeded its total debt
by approximately $158 million.
Moore said that year-to-date, Cameron has repurchased approximately 3.2
million shares of its common stock at a total cost of nearly
$124 million.
Full-year earnings expectations raised
Moore said that Cameron's third
quarter earnings are expected to be in the range of approximately
$0.58 to $0.60 per share, and that
full-year earnings, excluding charges, are expected to be
approximately $2.30 to $2.35 per
share, compared with the Company's previous guidance of
$2.20 to $2.30 per share.
Cameron (NYSE: CAM) is a
leading provider of flow equipment products, systems and services
to worldwide oil, gas and process industries.
Website: 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
2010 earnings per share estimates), as well as expectations
regarding future cash flows and use of funds for capital spending
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
the ultimate outcome of the claims that have been made against the
Company arising out of or related to the Deepwater Horizon matter;
the 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,
including the United States, which
has imposed an offshore drilling moratorium; fluctuations in
currency markets worldwide; and variations in global economic
activity. In general, current and projected oil and gas
prices historically have 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.
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
Ended June 30,
|
Six Months
Ended June 30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited)
|
|
Revenues:
|
|
|
|
|
|
Drilling & Production
Systems
|
$ 1,017.9
|
$ 862.3
|
$ 1,961.3
|
$ 1,667.6
|
|
Valves &
Measurement
|
325.3
|
271.8
|
624.4
|
587.9
|
|
Compression Systems
|
109.5
|
135.9
|
213.7
|
271.5
|
|
Total revenues
|
1,452.7
|
1,270.0
|
2,799.4
|
2,527.0
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
Cost of
sales (exclusive of depreciation and
amortization shown separately
below)
|
984.7
|
840.7
|
1,898.8
|
1,684.4
|
|
Selling and
administrative expenses
|
205.0
|
182.9
|
401.7
|
347.5
|
|
Depreciation
and amortization
|
52.9
|
37.2
|
101.0
|
74.0
|
|
Interest
income
|
(0.7)
|
(1.8)
|
(1.6)
|
(4.0)
|
|
Interest
expense
|
20.1
|
26.6
|
38.0
|
51.1
|
|
Other
costs
|
18.4
|
10.9
|
28.7
|
33.2
|
|
Total costs and
expenses
|
1,280.4
|
1,096.5
|
2,466.6
|
2,186.2
|
|
|
|
|
|
|
|
Income before income
taxes
|
172.3
|
173.5
|
332.8
|
340.8
|
|
Income tax provision
|
(43.1)
|
(34.9)
|
(83.2)
|
(87.6)
|
|
Net income
|
$
129.2
|
$
138.6
|
$
249.6
|
$
253.2
|
|
|
|
|
|
|
|
Earnings per
common share:
|
|
|
|
|
|
Basic
|
$
0.53
|
$
0.64
|
$
1.02
|
$
1.17
|
|
Diluted
|
$
0.52
|
$
0.62
|
$
1.01
|
$
1.15
|
|
|
|
|
|
|
|
Shares used
in computing earnings per common share:
|
|
|
|
|
|
Basic
|
242.9
|
217.1
|
243.6
|
217.0
|
|
Diluted
|
246.4
|
221.9
|
247.7
|
220.9
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
Drilling & Production
Systems
|
$ 209.2
|
$ 193.1
|
$ 398.6
|
$ 377.4
|
|
Valves &
Measurement
|
56.2
|
52.5
|
115.4
|
120.7
|
|
Compression Systems
|
15.0
|
26.2
|
32.8
|
46.7
|
|
Corporate and
other(1)
|
(35.8)
|
(36.3)
|
(76.6)
|
(82.9)
|
|
Total
|
$
244.6
|
$
235.5
|
$
470.2
|
$
461.9
|
|
|
|
(1) Corporate
EBITDA amounts include $18.4 million and $28.7
million of other costs for the three- and
six-month
periods ended June 30, 2010; and $10.9 million and $33.2 million
for the three- and six-month
periods
ended June 30, 2009.
|
|
|
|
|
|
|
Cameron
Consolidated Condensed Balance Sheets
($ millions)
|
June 30,
2010
|
December 31,
2009
|
|
|
(unaudited)
|
|
|
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
1,428.5
|
$ 1,861.0
|
|
Receivables, net
|
940.1
|
959.0
|
|
Inventories, net
|
1,800.3
|
1,664.2
|
|
Other
|
291.7
|
230.0
|
|
Total current assets
|
4,460.6
|
4,714.2
|
|
|
|
|
|
Plant and equipment,
net
|
1,164.0
|
1,192.4
|
|
Goodwill
|
1,443.0
|
1,441.6
|
|
Other assets
|
362.4
|
377.2
|
|
Total Assets
|
$
7,430.0
|
$
7,725.4
|
|
|
|
|
|
Liabilities and Stockholders'
Equity:
|
|
|
|
Current portion of long-term
debt
|
$ 497.1
|
$ 22.2
|
|
Accounts payable and accrued
liabilities
|
1,879.5
|
2,208.2
|
|
Accrued income taxes
|
48.2
|
65.9
|
|
Total current
liabilities
|
2,424.8
|
2,296.3
|
|
|
|
|
|
Long-term debt
|
773.8
|
1,232.3
|
|
Deferred income taxes
|
146.9
|
123.0
|
|
Other long-term
liabilities
|
177.5
|
154.1
|
|
Total liabilities
|
3,523.0
|
3,805.7
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
Common
stock, par value $.01 per share, 400,000,000 shares
authorized,
263,111,472 shares issued at
June 30, 2010 and December 31, 2009
|
2.6
|
2.6
|
|
Capital in excess of par
value
|
2,244.6
|
2,244.0
|
|
Retained earnings
|
2,535.0
|
2,285.4
|
|
Accumulated
other elements of comprehensive
income (loss)
|
(140.9)
|
9.5
|
|
Less:
Treasury stock, 20,929,347 shares at June 30, 2010
(18,453,758
shares at December 31,
2009)
|
(734.3)
|
(621.8)
|
|
Total stockholders'
equity
|
3,907.0
|
3,919.7
|
|
|
|
|
|
Total Liabilities and
Stockholders' Equity
|
$
7,430.0
|
$
7,725.4
|
|
|
|
|
|
|
Cameron
Unaudited Consolidated Condensed Statements of Cash
Flows
($ millions)
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
(unaudited)
|
|
Cash flows
from operating activities:
|
|
|
|
|
|
Net income
|
$ 129.2
|
$ 138.6
|
$ 249.6
|
$ 253.2
|
|
Adjustments to reconcile net
income to net cash
provided by (used for) operating
activities:
|
|
|
|
|
|
Depreciation
|
37.6
|
27.5
|
71.4
|
54.0
|
|
Amortization
|
15.3
|
9.7
|
29.6
|
20.0
|
|
Non-cash stock compensation
expense
|
6.4
|
8.2
|
18.5
|
16.0
|
|
Tax benefit of employee stock
compensation plan
transactions and
deferred income taxes
|
12.9
|
(10.2)
|
7.5
|
(7.4)
|
|
Changes in assets and
liabilities, net of translation, acquisitions and non-cash
items:
|
|
|
|
|
|
Receivables
|
(39.8)
|
85.4
|
20.1
|
83.0
|
|
Inventories
|
(21.9)
|
(105.3)
|
(65.9)
|
(293.1)
|
|
Accounts payable and accrued
liabilities
|
(139.8)
|
(6.9)
|
(367.5)
|
(68.1)
|
|
Other assets and liabilities,
net
|
(39.6)
|
(9.5)
|
(118.7)
|
(48.3)
|
|
Net cash provided by (used for)
operating
activities
|
(39.7)
|
137.5
|
(155.4)
|
9.3
|
|
|
|
|
|
|
|
Cash flows
from investing activities:
|
|
|
|
|
|
Capital expenditures
|
(38.2)
|
(58.8)
|
(68.1)
|
(107.8)
|
|
Acquisitions, net of cash
acquired
|
(13.0)
|
(23.2)
|
(40.9)
|
(23.2)
|
|
Proceeds from sale of plant and
equipment
|
4.7
|
1.2
|
7.6
|
2.7
|
|
Net cash used for investing
activities
|
(46.5)
|
(80.8)
|
(101.4)
|
(128.3)
|
|
|
|
|
|
|
|
Cash flows
from financing activities:
|
|
|
|
|
|
Short-term loan borrowings
(repayments), net
|
(2.1)
|
12.1
|
(18.7)
|
35.1
|
|
Purchase of treasury
stock
|
(84.1)
|
-
|
(123.9)
|
(7.1)
|
|
Proceeds from stock option
exercises, net of tax
payments from stock compensation
plan
transactions
|
(5.7)
|
4.6
|
(12.2)
|
3.5
|
|
Excess tax benefits from
employee stock compensation plan
transactions
|
1.5
|
0.4
|
5.4
|
2.2
|
|
Principal payments on capital
leases
|
(1.7)
|
(1.6)
|
(3.3)
|
(3.6)
|
|
Net cash provided by (used for)
financing
activities
|
(92.1)
|
15.5
|
(152.7)
|
30.1
|
|
|
|
|
|
|
|
Effect of
translation on cash
|
(12.2)
|
23.5
|
(23.0)
|
5.6
|
|
|
|
|
|
|
|
Increase
(decrease) in cash and cash equivalents
|
(190.5)
|
95.7
|
(432.5)
|
(83.3)
|
|
|
|
|
|
|
|
Cash and
cash equivalents, beginning of period
|
1,619.0
|
1,442.0
|
1,861.0
|
1,621.0
|
|
|
|
|
|
|
|
Cash and
cash equivalents, end of period
|
$
1,428.5
|
$
1,537.7
|
$
1,428.5
|
$
1,537.7
|
|
|
|
|
|
|
|
|
Cameron
Orders and Backlog
($ millions)
Orders
|
Three Months
Ended June 30,
|
Six Months
Ended June 30,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Drilling & Production
Systems
|
$ 914.3
|
$ 597.5
|
$ 1,609.3
|
$ 1,224.4
|
|
Valves &
Measurement
|
339.1
|
194.1
|
740.2
|
427.3
|
|
Compression Systems
|
135.7
|
110.2
|
250.5
|
233.4
|
|
Total
|
$
1,389.1
|
$
901.8
|
$
2,600.0
|
$
1,885.1
|
|
|
|
|
|
|
|
|
Backlog
|
June 30,
2010
|
December 31,
2009
|
June 30,
2009
|
|
|
|
|
|
|
Drilling & Production
Systems
|
$ 3,982.0
|
$
4,364.1
|
$ 4,035.7
|
|
Valves &
Measurement
|
630.8
|
547.1
|
579.6
|
|
Compression Systems
|
308.8
|
278.6
|
401.0
|
|
Total
|
$
4,921.6
|
$
5,189.8
|
$
5,016.3
|
|
|
|
|
|
Cameron
Reconciliation of GAAP to Non-GAAP Financial
Information
($ millions)
|
Three Months Ended June 30,
2010
|
|
|
Drilling &
Production
Systems
|
Valves &
Measurement
|
Compression
Systems
|
Corporate
|
Total
|
|
Income
(loss) before income taxes
|
$ 173.9
|
$ 45.3
|
$ 11.0
|
$ (57.9)
|
$ 172.3
|
|
Depreciation
& amortization
|
35.3
|
10.9
|
4.0
|
2.7
|
52.9
|
|
Interest
income
|
-
|
-
|
-
|
(0.7)
|
(0.7)
|
|
Interest
expense
|
-
|
-
|
-
|
20.1
|
20.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA
|
$
209.2
|
$
56.2
|
$
15.0
|
$
(35.8)
|
$
244.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30,
2009
|
|
|
Drilling &
Production
Systems
|
Valves &
Measurement
|
Compression
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
|
|
|
|
|
|
|
|
|
|
Cameron
Reconciliation of GAAP to Non-GAAP Financial
Information
($ millions)
|
Six Months Ended June 30,
2010
|
|
|
Drilling &
Production
Systems
|
Valves &
Measurement
|
Compression
Systems
|
Corporate
|
Total
|
|
|
|
|
|
|
|
|
Income
(loss) before income taxes
|
$ 332.1
|
$ 94.3
|
$ 24.8
|
$
(118.4)
|
$ 332.8
|
|
Depreciation
& amortization
|
66.5
|
21.1
|
8.0
|
5.4
|
101.0
|
|
Interest
income
|
-
|
-
|
-
|
(1.6)
|
(1.6)
|
|
Interest
expense
|
-
|
-
|
-
|
38.0
|
38.0
|
|
|
|
|
|
|
|
|
EBITDA
|
$
398.6
|
$
115.4
|
$
32.8
|
$
(76.6)
|
$
470.2
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2009
|
|
|
Drilling &
Production
Systems
|
Valves &
Measurement
|
Compression
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
|
|
|
|
|
|
|
|
|
|
SOURCE Cameron
Copyright g. 4 PR Newswire