- Earnings total $0.56 per share, including charge of $0.02 for
severance-related costs - Backlog increases, driven by subsea
orders HOUSTON, Nov. 3 /PRNewswire-FirstCall/ -- Cameron (NYSE:CAM)
reported net income of $124.9 million, or $0.56 per diluted share,
for the quarter ended September 30, 2009, compared with net income
of $163.0 million, or $0.71 per diluted share, for the third
quarter of 2008. The third quarter 2009 results include a pretax
charge of $5.9 million, or $0.02 per share, for severance-related
costs. Total revenues were $1,231.8 million for the quarter, down
18 percent from 2008's $1,504.7 million, while income before income
taxes was $168.6 million, down 30 percent from the $242.2 million
of a year ago. Cameron President and Chief Executive Officer Jack
B. Moore said, "The results reflect a continued focus on
exceptional execution by our team in a difficult market." Moore
also noted that margins held up well during the quarter. Orders in
subsea business drive increase in backlog Orders received during
the third quarter of 2009 totaled $1,343.0 million, up from the
levels of the first two quarters of 2009. "Drilling &
Production Systems' orders benefited from the bookings associated
with a multi-year frame agreement for subsea equipment offshore
Brazil," Moore said, "as well as a significant order for multiphase
pumping systems booked by Petreco, Cameron's process systems
business." He also noted that orders in Valves & Measurement
and Compression Systems reached their highest quarterly totals to
date during 2009; as a result, Cameron's total orders exceeded
revenues during the quarter for the first time since the third
quarter of 2008, driving an increase in the Company's total
backlog. At September 30, 2009, Cameron's backlog totaled $5.12
billion, up from the $5.02 billion level at the end of the second
quarter. Cash flow supporting reinvestment in business Moore said
that Cameron's cash flow from operations totaled $184.1 million
through the first nine months of 2009. "Year-to-date capital
expenditures total $163.7 million, compared with $160.4 million for
the 2008 period, and our current estimate for full-year spending is
about $240 million," he noted. "We have spent approximately $60
million so far this year on our new Romanian surface equipment
plant, which opened in early October and is ramping up its
manufacturing capabilities, and on the continuing expansion of our
subsea facility in Malaysia." Moore said that Cameron's financial
position remains solid. "At September 30, 2009, the cash and cash
equivalents on our balance sheet totaled $1.53 billion, and
exceeded our total debt by approximately $237 million," he said.
"We continue to evaluate possible acquisition opportunities, and we
expect to resume our share repurchase program once the restrictions
associated with the pending NATCO acquisition are lifted." NATCO
transaction expected to close during fourth quarter Cameron expects
to close the acquisition of NATCO Group Inc. during the fourth
quarter of 2009, subject to the resolution of remaining antitrust
issues and approval by NATCO's stockholders. Moore said that the
related Registration Statement on Form S-4 was declared effective
on October 16, NATCO's Proxy Statement was mailed to its
stockholders beginning October 19, and that NATCO's stockholders
are expected to approve the transaction at a November 18 special
meeting. "We expect to be in a position to close the acquisition
once the stockholder approval is confirmed, perhaps as soon as the
day of the special meeting," Moore noted. "We look forward to
completing the closing process and moving ahead with the
integration of NATCO's people and businesses with those of
Cameron." Full-year earnings per share expected to be $2.26 to
$2.30 "Cameron's full-year earnings, excluding any charges or
gains, are expected to be in the range of approximately $2.26 to
$2.30 per share," Moore said. "As always, the results will depend
on such factors as customers' spending, our project execution and
effective cost management." Moore noted that this guidance does not
include any impact from the pending NATCO acquisition. 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 order levels, revenues and earnings of the Company
(including fourth quarter and full-year 2009 earnings per share
estimates), as well as expectations regarding profitability, cash
flow, full-year capital spending, capital spending for construction
of new facilities, and completion of pending acquisitions, 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 systems
and drilling projects it has been awarded; the Company's ability to
convert backlog into revenues on a timely and profitable basis; the
Company's ability to successfully implement its capital
expenditures program; 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; 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 makes
as a result thereof 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 Nine Months
Ended September 30, Ended September 30, -------------------
------------------- 2008 2008 2009 (as revised) 2009 (as revised)
(1) (1) ---- ------------ ---- ------------ Revenues: Drilling
& Production Systems $791.5 $957.0 $2,459.1 $2,773.6 Valves
& Measurement 294.7 383.7 882.6 1,095.1 Compression Systems
145.6 164.0 417.1 455.9 ----- ----- ----- ----- Total revenues
1,231.8 1,504.7 3,758.8 4,324.6 ------- ------- ------- -------
Costs and Expenses: Cost of sales (exclusive of depreciation and
amortization shown separately below) 828.0 1,050.8 2,512.4 3,079.4
Selling and administrative expenses 169.7 165.3 517.2 484.5
Depreciation and amortization 38.4 32.5 112.3 95.7 Interest income
(1.4) (9.7) (5.4) (22.2) Interest expense 22.6 23.6 73.8 46.1
Restructuring expense 5.9 - 39.0 - --- --- ---- --- Total costs and
expenses 1,063.2 1,262.5 3,249.3 3,683.5 ------- ------- -------
------- Income before income taxes 168.6 242.2 509.5 641.1 Income
tax provision (43.7) (79.2) (131.3) (206.3) ------ ------ -------
------- Net income $124.9 $163.0 $378.2 $434.8 ====== ====== ======
====== Earnings per common share: Basic $0.57 $0.75 $1.74 $2.00
===== ===== ===== ===== Diluted $0.56 $0.71 $1.71 $1.88 ===== =====
===== ===== Shares used in computing earnings per common share:
Basic 219.6 218.5 217.8 217.3 ===== ===== ===== ===== Diluted 221.9
229.2 221.2 231.0 ===== ===== ===== ===== EBITDA: ------- Drilling
& Production Systems $171.8 $188.4 $549.2 $504.5 Valves &
Measurement 65.8 92.8 186.6 245.4 Compression Systems 24.6 32.3
71.2 84.1 Corporate and other(2) (34.0) (24.9) (116.8) (73.3)
------ ------ ------- ------ Total $228.2 $288.6 $690.2 $760.7
====== ====== ====== ====== (1) Amounts have been retrospectively
revised as a result of the adoption, effective January 1, 2009, of
FASB Accounting Standards Codification Topic 470-20, Debt with
Conversion and Other Options. (2) Corporate EBITDA amounts include
$5.9 million and $39.0 million of restructuring expense for the
three- and nine-month periods ended September 30, 2009. Cameron
Consolidated Condensed Balance Sheets ($ millions) September 30,
December 31, 2009 2008 ------------- ------------ (unaudited)
Assets: Cash and cash equivalents $1,527.5 $1,621.0 Receivables,
net 877.7 950.4 Inventories, net 1,698.6 1,336.9 Other 216.8 148.1
----- ----- Total current assets 4,320.6 4,056.4 Plant and
equipment, net 1,045.6 931.7 Goodwill 720.7 709.2 Other assets
220.0 205.1 ----- ----- Total Assets $6,306.9 $5,902.4 ========
======== Liabilities and Stockholders' Equity: Current portion of
long-term debt $61.1 $161.3 Accounts payable and accrued
liabilities 1,867.6 1,854.4 Accrued income taxes 38.1 95.5 ----
---- Total current liabilities 1,966.8 2,111.2 Long-term debt
1,229.1 1,218.6 Deferred income taxes 119.7 99.2 Other long-term
liabilities 112.9 128.9 ----- ----- Total liabilities 3,428.5
3,557.9 ------- ------- Stockholders' Equity: Common stock, par
value $.01 per share, 400,000,000 shares authorized, 239,473,764
shares issued at September 30, 2009 (236,316,873 shares issued at
December 31, 2008) 2.4 2.4 Capital in excess of par value 1,268.0
1,254.5 Retained earnings 2,188.1 1,809.9 Accumulated other
elements of comprehensive income 44.0 (84.2) Less: Treasury stock,
18,807,197 shares at September 30, 2009 (19,424,120 shares at
December 31, 2008) (624.1) (638.1) ------- ------- Total
stockholders' equity 2,878.4 2,344.5 ------- ------- Total
Liabilities and Stockholders' Equity $6,306.9 $5,902.4 ========
======== Cameron Unaudited Consolidated Condensed Statements of
Cash Flows ($ millions) Three Months Nine Months Ended September
30, Ended September 30, ------------------- -------------------
2009 2008(1) 2009 2008(1) ---- ------ ---- ------ Cash flows from
operating activities: Net income $124.9 $163.0 $378.2 $434.8
Adjustments to reconcile net income to net cash provided by
operating activities: Depreciation 28.3 25.2 82.3 72.6 Amortization
10.1 7.3 30.0 23.1 Non-cash stock compensation expense 6.1 7.6 22.0
23.6 Tax benefit of employee stock compensation plan transactions
and deferred income taxes 30.3 (19.0) 22.9 (20.3) Changes in assets
and liabilities, net of translation, acquisitions and non-cash
items: Receivables 28.0 (47.5) 111.0 (190.4) Inventories (12.4)
(12.7) (305.5) (31.3) Accounts payable and accrued liabilities 27.3
86.6 (40.7) 116.0 Other assets and liabilities, net (67.8) 52.8
(116.1) 84.6 ----- ---- ------ ---- Net cash provided by operating
activities 174.8 263.3 184.1 512.7 ----- ----- ----- ----- Cash
flows from investing activities: Capital expenditures (56.0) (64.4)
(163.7) (160.4) Acquisitions, net of cash acquired - (40.2) (23.2)
(97.7) Proceeds from sale of plant and equipment 0.8 0.8 3.5 1.7
--- --- --- --- Net cash used for investing activities (55.2)
(103.8) (183.4) (256.4) ----- ------ ------ ------ Cash flows from
financing activities: Short-term loan borrowings (repayments), net
(12.0) (59.6) 23.0 20.7 Redemption of convertible debt securities
(131.1) (106.9) (131.1) (106.9) Issuance of long-term senior notes
- - - 747.9 Debt issuance costs - - - (5.5) Purchase of treasury
stock - (60.8) (7.1) (215.3) Proceeds from stock option exercises,
net of tax payments from stock compensation plan transactions 1.6
7.0 5.1 17.1 Excess tax benefits from employee stock compensation
plan transactions 1.2 2.7 3.5 17.2 Principal payments on capital
leases (1.6) (1.8) (5.2) (5.2) ---- ---- ---- ---- Net cash (used
for) provided by financing activities (141.9) (219.4) (111.8) 470.0
------ ------ ------ ----- Effect of translation on cash 12.1
(38.7) 17.6 (30.7) ---- ----- ---- ------ Increase (decrease) in
cash and cash equivalents (10.2) (98.6) (93.5) 695.6 ----- -----
----- ----- Cash and cash equivalents, beginning of period 1,537.7
1,534.1 1,621.0 739.9 ------- ------- ------- ----- Cash and cash
equivalents, end of period $1,527.5 $1,435.5 $1,527.5 $1,435.5
======== ======== ======== ======== (1) Amounts have been
retrospectively revised as a result of the adoption, effective
January 1, 2009, of FASB Accounting Standards Codification Topic
470-20, Debt with Conversion and Other Options. Cameron Orders and
Backlog ($ millions) Orders Three Months Nine Months Ended
September 30, Ended September 30, -------------------
------------------- 2009 2008 2009 2008 ---- ---- ---- ----
Drilling & Production Systems $961.8 $1,945.4 $2,186.1 $4,511.0
Valves & Measurement 253.4 475.4 680.7 1,260.5 Compression
Systems 127.8 191.0 361.3 596.6 ----- ----- ----- ----- Total
$1,343.0 $2,611.8 $3,228.1 $6,368.1 ======== ======== ========
======== Backlog September 30, December 31, September 30, 2009 2008
2008 ------------- ------------ ------------- Drilling &
Production Systems $4,195.0 $4,416.8 $4,809.6 Valves &
Measurement 537.8 749.2 829.9 Compression Systems 384.8 440.5 511.3
----- ----- ----- Total $5,117.6 $5,606.5 $6,150.8 ========
======== ======== Cameron Reconciliation of GAAP to Non-GAAP
Financial Information ($ millions) Three Months Ended September 30,
2009 ------------------------------------- Drilling &
Production Valves & Compression Systems Measurement Systems
Corporate Total ---------- ----------- ----------- --------- -----
Income (loss) before income taxes $149.7 $56.5 $20.5 $(58.1) $168.6
Depreciation & amortization 22.1 9.3 4.1 2.9 38.4 Interest
income - - - (1.4) (1.4) Interest expense - - - 22.6 22.6 -----
----- ---- ---- ----- EBITDA $171.8 $65.8 $24.6 $(34.0) $228.2
====== ===== ===== ======= ====== Three Months Ended September 30,
2008 ------------------------------------- Drilling &
Production Valves & Compression Systems Measurement Systems
Corporate Total ---------- ----------- ----------- --------- -----
Income (loss) before income taxes $171.5 $84.7 $28.4 $(42.4) $242.2
Depreciation & amortization 16.9 8.1 3.9 3.6 32.5 Interest
income - - - (9.7) (9.7) Interest expense - - - 23.6 23.6 --- ---
--- ---- ---- EBITDA $188.4 $92.8 $32.3 $(24.9) $288.6 ====== =====
===== ====== ====== Cameron Reconciliation of GAAP to Non-GAAP
Financial Information ($ millions) Nine Months Ended September 30,
2009 ------------------------------------ Drilling & Production
Valves & Compression Systems Measurement Systems Corporate
Total ---------- ----------- ----------- --------- ----- Income
(loss) before income taxes $486.6 $160.1 $58.8 $(196.0) $509.5
Depreciation & amortization 62.6 26.5 12.4 10.8 112.3 Interest
income - - - (5.4) (5.4) Interest expense - - - 73.8 73.8 ---- ----
---- ---- ---- EBITDA $549.2 $186.6 $71.2 $(116.8) $690.2 ======
====== ===== ======== ====== Nine Months Ended September 30, 2008
------------------------------------ Drilling & Production
Valves & Compression Systems Measurement Systems Corporate
Total ---------- ----------- ----------- --------- ----- Income
(loss) before income taxes $453.7 $221.7 $72.9 $(107.2) $641.1
Depreciation & amortization 50.8 23.7 11.2 10.0 95.7 Interest
income - - - (22.2) (22.2) Interest expense - - - 46.1 46.1 ----
---- ---- ---- ---- EBITDA $504.5 $245.4 $84.1 $(73.3) $760.7
====== ====== ===== ====== ====== 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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