HOUSTON, Feb. 2, 2011 /PRNewswire/ -- Cameron (NYSE: CAM)
reported net income of $164.6
million, or $0.66 per diluted
share, for the quarter ended December 31,
2010, compared with net income in the prior year's fourth
quarter of $97.3 million, or
$0.41 per diluted share. The fourth
quarter 2010 results include after-tax charges of $6.2 million, or $0.03 per share, primarily related to litigation
costs associated with the Deepwater Horizon matter and the
continued integration of NATCO Group Inc. The fourth quarter
2009 results included after-tax charges of $31.1 million, or $0.13 per share, comprised of severance-related
costs and charges associated with the NATCO acquisition.
Excluding the above items, the Company's earnings per diluted
share were $0.69 for the fourth
quarter of 2010, compared with $0.54
for the fourth quarter of 2009.
Revenues up 23 percent for quarter, 17 percent for year; both
represent new highs
Revenues for the fourth quarter of 2010 were a record
$1.81 billion, up more than 23
percent from the prior year, and revenues for the year were
$6.13 billion, up more than 17
percent from 2009's $5.22 billion,
and also a new record. Earnings per diluted share for 2010
were $2.27, compared to $2.11 for 2009; excluding unusual items, earnings
per diluted share were $2.42 for 2010
and $2.38 for 2009.
Cameron President and Chief
Executive Officer Jack B. Moore said
that the increased revenues were due primarily to record deliveries
of subsea equipment, where revenues exceeded 2009 levels by more
than $450 million. "Despite
this increase in subsea revenues, margins in the Drilling &
Production Systems (DPS) group actually increased from the third
quarter as each business within DPS saw sequential margin
improvement," Moore said. He noted that Cameron's full-year
results exceeded the Company's early 2010 forecasts and reflected
strength in many of the shorter-cycle businesses and efficient
execution on large-scale projects in the subsea and drilling
markets.
Orders increase for third consecutive quarter; backlog
exceeds $4.8 billion at
year-end
Orders booked in 2010's fourth quarter totaled $1.71 billion, up from the $1.37 billion of a year ago, as total orders
increased for the third quarter in a row. Year-over-year orders
were higher in all three of the Company's operating groups.
Full-year orders totaled $5.79
billion, up 26 percent from 2009, and represented the
second-highest order year in the Company's history.
Moore noted that while orders in the DPS group were helped by
sizable subsea project awards in the fourth quarter, the strength
in the V&M and PCS businesses were significant contributors to
the increase over prior-year levels. "V&M posted a record
level of orders in 2010, and the PCS group recorded its first
billion-dollar orders year," Moore said. "We continue to be
pleased with the balance in our business lines and the
opportunities that our diverse product offerings provide."
Cash flow to improve, capital spending to increase in
2011
Moore said that Cameron's cash flow from operations totaled
approximately $294 million in 2010,
compared with $613 million in 2009.
"We spent approximately $200
million in capital expenditures during the year," Moore
said, "with an emphasis on enhancing aftermarket reach and
capability and improving manufacturing efficiency and cost
structures."
Moore said that he expects Cameron's capital spending to
increase significantly during 2011 as a result of a combination of
factors. "We see a mix of needs and opportunities for our
businesses during the year that will push our capital expenditures
to a new record," he noted. "We expect an increased level of
maintenance spending and have numerous capital requests from our
divisions for specific projects that will continue to improve
efficiency, lower costs and expand our product and service
exposure, particularly in the aftermarket business. In
addition, we see opportunities on several other fronts. We
expect to spend approximately $50 to $75
million to expand our facilities in Brazil, including enhancements to our subsea
manufacturing capacity, aftermarket exposure and our research and
development capability. We will invest nearly $50 million in creating a fleet of Cameron
equipment to increase our presence in the frac valve, tree and
manifold markets, further expanding our exposure in shale gas."
Moore said he expects 2011 capital expenditures to total
approximately $250 to $300 million,
depending on timing of certain projects. He also noted that
he expects cash flow from operations to improve over the 2010
levels, as the Company's working capital needs should moderate
during 2011.
2011 earnings expected to reach $2.65
to $2.75 per share
Moore said Cameron currently expects its 2011 earnings to be in
the range of $2.65 to $2.75 per
diluted share, excluding any charges related to litigation
associated with the Deepwater Horizon matter or any other charges
that may arise. "We expect revenues in 2011 to increase by
approximately three to five percent over the 2010 levels, with
strength in our shorter-cycle businesses more than offsetting a 14
percent decline in subsea revenues following 2010's record
deliveries." Moore noted that he expects Cameron's EBITDA
margins to improve over 2010's levels as the Company continues to
work through much of the lower-margin backlog that was on the books
at the beginning of last year.
Moore also said Cameron's first quarter 2011 earnings, excluding
charges, are expected to be approximately $0.63 to $0.66 per diluted share, up from
$0.51 in the first quarter of 2010,
reflecting improving performance in both the DPS and PCS
groups.
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
market strength, customer spending and order levels, revenues and
earnings of the Company (including first quarter and full year 2011
earnings per share estimates), as well as expectations regarding
equipment deliveries, margins, profitability, the ability to
control raw material, overhead and operating costs, capital
spending and cash flow, 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; 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 possibility of cancellation of orders in
backlog; the Company's ability to convert backlog into revenues on
a timely and profitable basis; the impact of acquisitions the
Company has made or may make; 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 ability of companies to obtain drilling permits
following the lifting of a temporary moratorium imposed by
the United States government on
drilling activities in deepwater areas of the Gulf of Mexico; 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 in 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 December
31,
|
Twelve
Months
Ended December
31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Revenues:
|
|
|
|
|
|
Drilling & Production
Systems (1)
|
$ 1,118.2
|
$ 852.6
|
$ 3,718.3
|
$ 3,110.5
|
|
Valves &
Measurement
|
336.2
|
312.1
|
1,273.3
|
1,194.7
|
|
Process & Compression
Systems (1)
|
353.9
|
299.7
|
1,143.2
|
918.0
|
|
Total revenues
|
1,808.3
|
1,464.4
|
6,134.8
|
5,223.2
|
|
|
|
|
|
|
|
Costs and Expenses:
|
|
|
|
|
|
Cost of sales (exclusive
of depreciation and amortization shown separately below)
|
1,264.9
|
1,027.6
|
4,212.4
|
3,540.1
|
|
Selling and administrative
expenses
|
250.4
|
198.4
|
862.3
|
715.6
|
|
Depreciation and
amortization
|
47.9
|
44.3
|
201.6
|
156.6
|
|
Interest income
|
(1.2)
|
(0.5)
|
(4.2)
|
(5.9)
|
|
Interest
expense
|
22.9
|
18.6
|
82.2
|
92.4
|
|
Other costs
|
8.1
|
42.6
|
47.2
|
81.6
|
|
Total costs and
expenses
|
1,593.0
|
1,331.0
|
5,401.5
|
4,580.4
|
|
|
|
|
|
|
|
Income before income
taxes
|
215.3
|
133.4
|
733.3
|
642.8
|
|
Income tax provision
|
(50.7)
|
(36.1)
|
(170.4)
|
(167.3)
|
|
Net income
|
$
164.6
|
$
97.3
|
$
562.9
|
$
475.5
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
Basic
|
$
0.68
|
$
0.42
|
$
2.32
|
$
2.15
|
|
Diluted
|
$
0.66
|
$
0.41
|
$
2.27
|
$
2.11
|
|
|
|
|
|
|
|
Shares used in computing
earnings per common share:
|
|
|
|
|
|
Basic
|
243.1
|
232.1
|
243.1
|
221.4
|
|
Diluted
|
249.0
|
236.1
|
247.5
|
225.0
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
Drilling & Production
Systems (1)
|
$ 227.0
|
$ 158.5
|
$ 759.7
|
$ 659.5
|
|
Valves &
Measurement
|
61.0
|
60.9
|
230.4
|
247.5
|
|
Process & Compression
Systems (1)
|
45.9
|
50.0
|
186.8
|
169.4
|
|
Corporate and other
(2)
|
(49.0)
|
(73.6)
|
(164.0)
|
(190.5)
|
|
Total
|
$
284.9
|
$
195.8
|
$
1,012.9
|
$
885.9
|
|
|
|
(1)
Prior period segment data has
been retrospectively revised to reflect the change in segments
during the third quarter of 2010.
|
|
|
|
(2)
Corporate EBITDA amounts include
$8.1 and $42.6 million of other costs for the three-month periods
ended December 31, 2010 and 2009 respectively; and $47.2 and $81.6
million for the years ended December 31, 2010 and 2009,
respectively.
|
|
|
|
|
|
|
Cameron
|
|
Consolidated Condensed Balance
Sheets
|
|
($ millions)
|
|
|
|
|
December 31,
|
December 31,
|
|
|
2010
|
2009
|
|
|
(unaudited)
|
|
|
Assets:
|
|
|
|
Cash and cash
equivalents
|
$ 1,832.5
|
$ 1,861.0
|
|
Receivables, net
|
1,056.1
|
959.0
|
|
Inventories, net
|
1,779.3
|
1,664.2
|
|
Other
|
265.0
|
230.0
|
|
Total current assets
|
4,932.9
|
4,714.2
|
|
|
|
|
|
Plant and equipment,
net
|
1,247.8
|
1,192.4
|
|
Goodwill
|
1,475.8
|
1,441.6
|
|
Other assets
|
348.6
|
377.2
|
|
Total Assets
|
$
8,005.1
|
$
7,725.4
|
|
|
|
|
|
Liabilities and Stockholders'
Equity:
|
|
|
|
Current portion of long-term
debt
|
$ 519.9
|
$ 22.2
|
|
Accounts payable and accrued
liabilities
|
2,016.0
|
2,208.2
|
|
Accrued income taxes
|
38.0
|
65.9
|
|
Total current
liabilities
|
2,573.9
|
2,296.3
|
|
|
|
|
|
Long-term debt
|
772.9
|
1,232.3
|
|
Deferred income taxes
|
95.7
|
123.0
|
|
Other long-term
liabilities
|
170.2
|
154.1
|
|
Total
liabilities
|
3,612.7
|
3,805.7
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
Common stock, par value
$.01 per share, 400,000,000 shares authorized, 263,111,472 shares
issued at December 31, 2010 and 2009
|
2.6
|
2.6
|
|
Capital in excess of par
value
|
2,259.3
|
2,244.0
|
|
Retained
earnings
|
2,848.3
|
2,285.4
|
|
Accumulated other elements
of comprehensive income
|
(27.1)
|
9.5
|
|
Less: Treasury
stock, 19,197,642 shares at December 31, 2010 and 18,453,758 shares
at December 31, 2009
|
(690.7)
|
(621.8)
|
|
Total stockholders'
equity
|
4,392.4
|
3,919.7
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
$
8,005.1
|
$
7,725.4
|
|
|
|
|
|
|
Cameron
|
|
Unaudited Consolidated Condensed
Statements Of Cash Flows
|
|
($ millions)
|
|
|
|
|
Three
Months
Ended December
31,
|
Twelve
Months
Ended December
31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
Net income
|
$ 164.6
|
$ 97.3
|
$ 562.9
|
$ 475.5
|
|
Adjustments to reconcile
net income to net
cash
provided by operating activities:
|
|
|
|
|
|
Depreciation
|
34.8
|
32.4
|
142.6
|
114.7
|
|
Amortization
|
13.1
|
11.9
|
59.0
|
41.9
|
|
Non-cash stock
compensation expense
|
9.3
|
5.7
|
34.5
|
27.7
|
|
Tax benefit of employee
stock compensation
plan
transactions and deferred income taxes
|
(13.7)
|
(58.7)
|
(19.1)
|
(35.8)
|
|
Changes in assets and
liabilities, net of translation, acquisitions and non-cash
items:
|
|
|
|
|
|
Receivables
|
(34.4)
|
54.2
|
(81.4)
|
165.2
|
|
Inventories
|
87.2
|
84.6
|
(3.8)
|
(220.9)
|
|
Accounts payable and
accrued liabilities
|
107.1
|
180.6
|
(291.7)
|
139.8
|
|
Other assets and
liabilities, net
|
(13.2)
|
21.4
|
(108.8)
|
(94.6)
|
|
Net cash provided by
operating
activities
|
354.8
|
429.4
|
294.2
|
613.5
|
|
|
|
|
|
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
Capital
expenditures
|
(85.7)
|
(77.1)
|
(200.7)
|
(240.9)
|
|
Acquisitions, net of cash
acquired
|
–
|
34.4
|
(40.9)
|
11.2
|
|
Proceeds
from sale of plant and equipment
|
3.5
|
0.5
|
12.4
|
4.1
|
|
Net cash used for
investing activities
|
(82.2)
|
(42.2)
|
(229.2)
|
(225.6)
|
|
|
|
|
|
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
Short-term loan borrowings
(repayments), net
|
(1.8)
|
(42.0)
|
(8.4)
|
(18.9)
|
|
Redemption of convertible
debt securities
|
–
|
–
|
–
|
(131.1)
|
|
Purchase of treasury
stock
|
–
|
(22.1)
|
(124.0)
|
(29.2)
|
|
Proceeds
from stock option exercises, net of tax payments from stock
compensation plan transactions
|
45.9
|
5.1
|
36.3
|
10.2
|
|
Excess tax
benefits from stock compensation
plan transactions
|
10.1
|
3.0
|
16.4
|
6.4
|
|
Principal payments on
capital leases
|
(1.7)
|
(1.5)
|
(6.6)
|
(6.7)
|
|
Net cash (used for)
provided by financing activities
|
52.5
|
(57.5)
|
(86.3)
|
(169.3)
|
|
|
|
|
|
|
|
Effect of translation on
cash
|
(4.4)
|
3.8
|
(7.2)
|
21.4
|
|
|
|
|
|
|
|
Increase (decrease) in cash and
cash equivalents
|
320.7
|
333.5
|
(28.5)
|
240.0
|
|
|
|
|
|
|
|
Cash and cash equivalents,
beginning of period
|
1,511.8
|
1,527.5
|
1,861.0
|
1,621.0
|
|
|
|
|
|
|
|
Cash and cash equivalents, end
of period
|
$
1,832.5
|
$
1,861.0
|
$
1,832.5
|
$
1,861.0
|
|
|
|
|
|
|
|
|
Cameron
|
|
Orders and
Backlog
|
|
($ millions)
|
|
|
|
Orders
|
|
|
|
|
|
|
Three
Months
Ended December
31,
|
Twelve
Months
Ended December
31,
|
|
|
2010
|
2009
|
2010
|
2009
|
|
|
|
|
|
|
|
Drilling & Production
Systems (1)
|
$ 932.6
|
$ 872.7
|
$ 2,967.2
|
$ 2,875.1
|
|
Valves &
Measurement
|
442.2
|
323.4
|
1,579.2
|
1,004.1
|
|
Process & Compression
Systems (1)
|
335.8
|
171.0
|
1,244.1
|
716.0
|
|
Total
|
$
1,710.6
|
$
1,367.1
|
$
5,790.5
|
$
4,595.2
|
|
|
|
|
|
|
|
|
Backlog
|
|
|
|
|
December
31,
|
December
31,
|
|
|
2010
|
2009
|
|
|
|
|
|
Drilling & Production
Systems (1)
|
$ 3,195.9
|
$ 4,019.3
|
|
Valves &
Measurement
|
833.8
|
547.1
|
|
Process & Compression
Systems (1)
|
787.4
|
623.4
|
|
Total
|
$
4,817.1
|
$
5,189.8
|
|
|
|
(1)
Prior period segment data has
been retrospectively revised to reflect the change in segments
during the third quarter of 2010.
|
|
|
|
|
Cameron
|
|
Reconciliation of GAAP to
Non-GAAP Financial Information
|
|
($ millions)
|
|
|
|
|
|
|
Three Months
Ended December 31, 2010
|
|
|
Drilling
&
Production
Systems
|
Valves
&
Measurement
|
Process
&
Compression
Systems
|
Corporate
|
Total
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$ 202.9
|
$ 50.6
|
$ 35.5
|
$ (73.7)
|
$ 215.3
|
|
Depreciation &
amortization
|
24.1
|
10.4
|
10.4
|
3.0
|
47.9
|
|
Interest income
|
–
|
–
|
–
|
(1.2)
|
(1.2)
|
|
Interest
expense
|
–
|
–
|
–
|
22.9
|
22.9
|
|
|
|
|
|
|
|
|
EBITDA
|
$
227.0
|
$
61.0
|
$
45.9
|
$
(49.0)
|
$
284.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2009
|
|
|
Drilling
&
Production
Systems
(1)
|
Valves
&
Measurement
|
Process
&
Compression
Systems
(1)
|
Corporate
|
Total
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$ 133.7
|
$ 51.2
|
$ 43.0
|
$ (94.5)
|
$ 133.4
|
|
Depreciation &
amortization
|
24.8
|
9.7
|
7.0
|
2.8
|
44.3
|
|
Interest income
|
−
|
−
|
−
|
(0.5)
|
(0.5)
|
|
Interest
expense
|
−
|
−
|
−
|
18.6
|
18.6
|
|
|
|
|
|
|
|
|
EBITDA
|
$
158.5
|
$
60.9
|
$
50.0
|
$
(73.6)
|
$
195.8
|
|
|
|
(1) Prior period
segment data has been retrospectively revised to reflect the change
in segments during the third quarter of 2010.
|
|
|
|
|
|
|
|
Cameron
|
|
Reconciliation of GAAP to
Non-GAAP Financial Information
|
|
($ millions)
|
|
|
|
|
Twelve
Months Ended December 31, 2010
|
|
|
Drilling
&
Production
Systems
|
Valves
&
Measurement
|
Process
&
Compression
Systems
|
Corporate
|
Total
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$ 666.7
|
$ 188.0
|
$ 131.9
|
$ (253.3)
|
$ 733.3
|
|
Depreciation &
amortization
|
93.0
|
42.4
|
54.9
|
11.3
|
201.6
|
|
Interest income
|
–
|
–
|
–
|
(4.2)
|
(4.2)
|
|
Interest
expense
|
–
|
–
|
–
|
82.2
|
82.2
|
|
|
|
|
|
|
|
|
EBITDA
|
$
759.7
|
$
230.4
|
$
186.8
|
$
(164.0)
|
$
1,012.9
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31, 2009
|
|
|
Drilling
&
Production
Systems
(1)
|
Valves
&
Measurement
|
Process
&
Compression
Systems
(1)
|
Corporate
|
Total
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
$ 574.7
|
$ 211.3
|
$ 147.4
|
$ (290.6)
|
$ 642.8
|
|
Depreciation &
amortization
|
84.8
|
36.2
|
22.0
|
13.6
|
156.6
|
|
Interest income
|
−
|
−
|
−
|
(5.9)
|
(5.9)
|
|
Interest
expense
|
−
|
−
|
−
|
92.4
|
92.4
|
|
|
|
|
|
|
|
|
EBITDA
|
$
659.5
|
$
247.5
|
$
169.4
|
$
(190.5)
|
$
885.9
|
|
|
|
(1) Prior period
segment data has been retrospectively revised to reflect the change
in segments during the third quarter of 2010.
|
|
|
|
|
|
|
|
SOURCE Cameron