Cooper Cameron Second Quarter Earnings Per Share $0.35 * Earnings
Per Share Total $0.35 Versus $0.37 a Year Ago * 2004 Full-Year
Earnings Expectations Raised to $1.70 to $1.75 Per Share HOUSTON,
July 28 /PRNewswire-FirstCall/ -- Cooper Cameron Corporation
(NYSE:CAM) reported net income of $18.7 million, or $0.35 per
share, for the quarter ended June 30, 2004, including a non-cash
after-tax write-off of debt issuance costs of $4.6 million, or
$0.09 per share. This compares with net income of $20.8 million, or
$0.37 per share, for the second quarter of 2003. Total revenues
were $544.6 million for the quarter, up from 2003's $400.9 million.
Consolidated EBITDA (earnings before interest, taxes, depreciation
and amortization) was $57.0 million, up from 2003's $49.5 million,
and income before income taxes was $27.8 million, down from $28.1
million a year ago. Subsea shipments, acquisition fuel revenue
gains Cooper Cameron Chairman, President and Chief Executive
Officer Sheldon R. Erikson said that the higher revenues were
attributable to increased shipments in Cameron's subsea business
and the March 2004 acquisition of Petreco, which contributed
approximately $35 million to this quarter's revenues. Cameron shows
significant revenue increase Erikson noted that excluding Petreco,
Cameron achieved record revenues for the quarter, and including
Petreco, revenues were up more than 50 percent from year-ago
levels, due primarily to increased shipments from subsea backlog.
"The increase in subsea revenues, however, includes a material
amount of third-party content, which flows through our revenues at
lower margins and kept Cameron's overall profit margins below
traditional levels," he said. "In addition, the drilling business
posted solid increases in revenues, both sequentially and compared
to year-ago levels, due to project-related shipments." Erikson said
that given the reduction in subsea backlog achieved this quarter,
he does not expect Cameron's revenues to increase significantly
during the second half of the year, and that the actual level of
orders and revenues will, to a large extent, be a function of the
pace of activity in a few key markets, including North America and
Europe. CCV revenues at historical highs CCV's revenues reached the
highest quarterly total in their history, due to previously noted
improvement in orders for engineered products, including pipeline
ball valves. Erikson said the current order activity and business
related to the U.S. rig count should keep CCV on pace toward
posting the highest full-year revenues in its history. Cooper
Compression benefits from international markets Cooper Compression
also posted sequential and year-over-year increases in revenues, as
international markets continue to be strong and pipeline customers
return to a more historically normal level of spending on
aftermarket parts and services. Erikson said he expects revenues
and profits for Cooper Compression to increase in the second half
of the year. Orders increase from year-ago levels due to Petreco
addition Orders received during the second quarter of 2004 totaled
$492 million, up 20 percent from year-ago levels, and year-to-date
orders were $913 million, down slightly from the first half of
2003. Erikson noted that the second quarter increase from 2003
reflected the addition of Petreco and, despite the absence of any
large projects, relatively strong subsea orders. "Although we did
not book any major projects during the first half of 2004 -- unlike
the first quarter of 2003 -- our year-to-date orders for all of
Cooper Cameron are about even with the first half of 2003, and we
expect to see full-year orders exceed our year-ago totals." At June
30, 2004, total backlog was $955 million, down from the prior
quarter's $1.02 billion and the June 30, 2003 level of $989
million, largely due to the delivery of equipment out of Cameron's
subsea backlog and continuing delays in major subsea project
awards. Balance sheet reflects refinancing steps At June 30, 2004,
Cooper Cameron's total debt was $469.8 million, and cash was $208.6
million, resulting in net debt of $261.2 million and a net debt-to-
capitalization ratio of approximately 19.1 percent. Erikson said
that during the second quarter, the Company repurchased all $260
million of its zero- coupon convertible debentures; repurchased
$185 million of its $200 million of 1.75 percent convertible
debentures under a cash tender offer; and issued $238 million of
1.50 percent convertible debentures in a new offering. "The
repurchases of the two original series of convertibles removed
approximately 4.5 million shares from our fully diluted earnings
per share computation," Erikson said. "The new 1.50 percent issue
is a contingent convertible, meaning that the underlying common
shares are not included in the fully diluted calculation, subject
to the Company's stock price reaching certain levels." Erikson said
that the recent repurchase of the debentures required the non-cash
after-tax write-off of some $4.6 million of previously capitalized
debt issuance costs. He also noted that, in concert with the new
convertible offering, the Company repurchased approximately 939,000
shares of its common stock at an average price of approximately
$48.96 per share, and will continue to consider acquisition
opportunities and share repurchases as uses for its cash. Erikson
also said the Company generated approximately $64.2 million of cash
from operating activities during the quarter and $69.2 million for
the first six months, and that net capital spending through the
first half of the year totaled approximately $20.6 million.
Earnings expectations raised Erikson said that Cooper Cameron's
third quarter earnings are expected to increase to approximately
$0.50 to $0.55 per share. He also noted that full- year earnings
are expected to be approximately $1.70 to $1.75 per share,
including severance charges totaling approximately $5.0 million
after-tax, or $0.09 per share, and the write-off of debt issuance
costs of $4.6 million after-tax, or $0.09 per share. "We expect
improved earnings performance in the second half of the year from
all three of our divisions," he said. Cooper Cameron Corporation is
a leading international manufacturer of oil and gas pressure
control equipment, including valves, wellheads, controls, chokes,
blowout preventers and assembled systems for oil and gas drilling,
production and transmission used in onshore, offshore and subsea
applications, and provides oil and gas separation equipment. Cooper
Cameron is also a leading manufacturer of centrifugal air
compressors, integral and separable gas compressors and
turbochargers. Website: http://www.coopercameron.com/ In addition
to the historical data contained herein, this document includes
forward-looking statements regarding the future revenues and
earnings of the Company (including third quarter and full year 2004
earnings per share estimates), as well as expectations regarding
customer spending levels, severance costs and orders, 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
that 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 projects it has been awarded; changes in the price of (and
demand for) oil and gas in both domestic and international markets;
political and social issues affecting the countries in which the
Company does business; fluctuations in currency markets worldwide;
fluctuations in debt and equity markets; and variations in global
economic activity. In particular, 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, though they have not done so recently. 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.
Cooper Cameron Corporation Unaudited Consolidated Results Of
Operations ($ and shares in millions except per share data) Three
Months Ended Six Months Ended June 30, June 30, 2004 2003 2004 2003
Revenues: Cameron $ 376.5 $ 243.3 $ 687.0 $ 470.6 Cooper Cameron
Valves 85.4 75.9 162.6 147.8 Cooper Compression 82.7 81.7 157.5
143.6 Total revenues 544.6 400.9 1,007.1 762.0 Costs and Expenses:
Cost of sales (exclusive of depreciation and amortization) 416.4
283.4 762.2 540.5 Selling and administrative expenses 71.2 68.0
142.1 139.6 Depreciation and amortization 19.7 20.4 40.2 40.8
Interest income (0.9) (1.0) (2.2) (2.4) Interest expense 10.4 2.0
12.8 4.1 Total costs and expenses 516.8 372.8 955.1 722.6 Income
before income taxes 27.8 28.1 52.0 39.4 Income tax provision (9.1)
(7.3) (16.1) (10.2) Net income $ 18.7 $ 20.8 $ 35.9 $ 29.2 Earnings
per share: Basic $ 0.35 $ 0.38 $ 0.67 $ 0.53 Diluted $ 0.35 $ 0.37
$ 0.66 $ 0.53 Average common shares outstanding 53.2 54.7 53.5 54.7
Average shares utilized in diluted calculation 53.7 60.2 54.0 55.5
EBITDA: Cameron $ 41.9 $ 34.1 $ 73.4 $ 62.5 Cooper Cameron Valves
11.9 11.7 23.3 23.5 Cooper Compression 9.4 9.2 17.6 8.0 Other (6.2)
(5.5) (11.5) (12.1) Total $ 57.0 $ 49.5 $ 102.8 $ 81.9 Cooper
Cameron Corporation Consolidated Balance Sheets ($ millions, except
shares and per share data) June 30, Dec. 31, 2004 2003 (unaudited)
Current Assets: Cash and cash equivalents $ 208.6 $ 292.1
Short-term investments --- 22.0 Receivables, net 366.1 316.2
Inventories, net 425.0 473.2 Other 112.6 44.2 Total current assets
1,112.3 1,147.7 Plant and equipment, net 453.1 471.3 Goodwill, net
390.9 316.1 Other assets 219.9 205.6 Total Assets $ 2,176.2 $
2,140.7 Current Liabilities: Current portion of long-term debt $
10.8 $ 265.0 Accounts payable and accrued liabilities 461.1 397.3
Accrued income taxes 15.4 17.6 Total current liabilities 487.3
679.9 Long-term debt 459.0 204.1 Postretirement benefits other than
pensions 43.6 43.4 Deferred income taxes 47.8 46.1 Other long-term
liabilities 30.1 30.5 Total liabilities 1,067.8 1,004.0
Stockholders' Equity: Common stock, par value $.01 per share,
150,000,000 shares authorized, 54,933,658 shares issued at June 30,
2004 and December 31, 2003 0.5 0.5 Capital in excess of par value
954.7 957.9 Retained earnings 213.5 177.6 Accumulated other
elements of comprehensive income 37.9 55.3 Less: Treasury stock,
2,052,409 shares at June 30, 2004 (1,130,600 shares at December 31,
2003) (98.2) (54.6) Total stockholders' equity 1,108.4 1,136.7
Total Liabilities and Stockholders' Equity $ 2,176.2 $ 2,140.7
Cooper Cameron Corporation Unaudited Consolidated Statements Of
Cash Flows ($ millions) Three Months Ended Six Months Ended June
30, June 30, 2004 2003 2004 2003 Cash flows from operating
activities: Net income $ 18.7 $ 20.8 $ 35.9 $ 29.2 Adjustments to
reconcile net income to net cash provided by operating activities:
Depreciation 16.8 16.6 34.0 33.6 Amortization (primarily
capitalized software) 2.9 3.8 6.2 7.2 Write-off of unamortized debt
issuance costs associated with retired debt 6.8 --- 6.8 ---
Deferred income taxes and other 2.0 0.9 (1.6) (2.0) Changes in
assets and liabilities, net of translation, acquisitions and
non-cash items: Receivables (32.0) 58.7 (29.2) 33.7 Inventories
61.8 (20.5) 46.7 (32.8) Accounts payable and accrued liabilities
16.3 (45.3) (5.6) 10.4 Other assets and liabilities, net (29.1) 3.5
(24.0) (1.1) Net cash provided by operating activities 64.2 38.5
69.2 78.2 Cash flows from investing activities: Capital
expenditures (14.3) (13.2) (24.2) (29.1) Acquisitions, net of cash
acquired (0.2) --- (85.6) --- Sales of short-term investments 5.0
37.5 36.5 62.8 Purchases of short-term investments 0.2 (34.1)
(14.5) (61.9) Other 1.9 0.6 3.6 1.4 Net cash used for investing
activities (7.4) (9.2) (84.2) (26.8) Cash flows from financing
activities: Loan repayments, net (0.3) (1.0) (0.3) (0.8) Issuance
of long-term senior and convertible debt 238.0 --- 437.9 ---
Redemption of convertible debt (443.9) --- (443.9) --- Debt
issuance costs (5.5) --- (6.4) --- Purchase of treasury stock
(46.0) --- (56.9) --- Activity under stock option plans and other
3.0 0.5 6.8 0.5 Net cash used for financing activities (254.7)
(0.5) (62.8) (0.3) Effect of translation on cash (4.6) 6.0 (5.7)
3.8 Increase (decrease) in cash and cash equivalents (202.5) 34.8
(83.5) 54.9 Cash and cash equivalents, beginning of period 411.1
293.9 292.1 273.8 Cash and cash equivalents, end of period $ 208.6
$ 328.7 $ 208.6 $ 328.7 Cooper Cameron Corporation Orders and
Backlog ($ millions) Orders Three Months Ended Six Months Ended
June 30, June 30, 2004 2003 2004 2003 Cameron $ 315.3 $ 239.0 $
547.9 $ 593.3 Cooper Cameron Valves 87.5 80.5 177.0 158.9 Cooper
Compression 89.6 89.9 187.8 170.5 Total $ 492.4 $ 409.4 $ 912.7 $
922.7 Backlog June 30, Dec. 31, June 30, 2004 2003 2003 Cameron $
742.3 $ 771.8 $ 820.6 Cooper Cameron Valves 83.5 72.4 68.1 Cooper
Compression 129.2 102.4 100.6 Total $ 955.0 $ 946.6 $ 989.3 Cooper
Cameron Corporation Reconciliation of GAAP to Non-GAAP Financial
Information ($ millions) Three Months Ended June 30, 2004 Cooper
Cameron Cooper Cameron Valves Compression Corporate Total Income
(loss) before income taxes $ 29.6 $ 9.2 $ 5.3 $(16.3) $ 27.8
Depreciation & amortization 12.3 2.7 4.1 0.6 19.7 Interest
income --- --- --- (0.9) (0.9) Interest expense --- --- --- 10.4
10.4 EBITDA $ 41.9 $ 11.9 $ 9.4 $ (6.2) $ 57.0 Three Months Ended
June 30, 2003 Cooper Cameron Cooper Cameron Valves Compression
Corporate Total Income (loss) before income taxes $ 21.6 $ 8.3 $
5.3 $ (7.1) $ 28.1 Depreciation & amortization 12.5 3.4 3.9 0.6
20.4 Interest income --- --- --- (1.0) (1.0) Interest expense ---
--- --- 2.0 2.0 EBITDA $ 34.1 $ 11.7 $ 9.2 $ (5.5) $ 49.5 Cooper
Cameron Corporation Reconciliation of GAAP to Non-GAAP Financial
Information ($ millions) Six Months Ended June 30, 2004 Cooper
Cameron Cooper Cameron Valves Compression Corporate Total Income
(loss) before income taxes $ 48.5 $ 17.9 $ 8.9 $(23.3) $ 52.0
Depreciation & amortization 24.9 5.4 8.7 1.2 40.2 Interest
income --- --- --- (2.2) (2.2) Interest expense --- --- --- 12.8
12.8 EBITDA $ 73.4 $ 23.3 $ 17.6 $(11.5) $102.8 Six Months Ended
June 30, 2003 Cooper Cameron Cooper Cameron Valves Compression
Corporate Total Income (loss) before income taxes $ 37.4 $ 17.0 $
0.1 $(15.1) $ 39.4 Depreciation & amortization 25.1 6.5 7.9 1.3
40.8 Interest income --- --- --- (2.4) (2.4) Interest expense ---
--- --- 4.1 4.1 EBITDA $ 62.5 $ 23.5 $ 8.0 $(12.1) $ 81.9
http://www.newscom.com/cgi-bin/prnh/20010706/CAMLOGO
http://photoarchive.ap.org/ DATASOURCE: Cooper Cameron Corporation
CONTACT: R. Scott Amann, Vice President, Investor Relations of
Cooper Cameron Corporation, +1-713-513-3344 Web site:
http://www.coopercameron.com/
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