<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM_____TO_____
ROWAN COMPANIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 1-5491 75-0759420
------------------------------- ---------------- -------------------
(State or other jurisdiction of Commission File (I.R.S. Employer
incorporation or organization) Number Identification No.)
</TABLE>
<TABLE>
<S> <C>
5450 Transco Tower, 2800 Post Oak Boulevard, Houston, Texas 77056-6196
- ----------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
(713) 621-7800
--------------------------------------------------
Registrant's telephone number, including area code
Inapplicable
--------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- -----
The number of shares of common stock, $.125 par value, outstanding at October
31, 1995 was 84,781,537.
<PAGE> 2
ROWAN COMPANIES, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. Financial Information:
Consolidated Balance Sheet --
September 30, 1995 and December 31, 1994 . . . . . . . . 2
Consolidated Statement of Operations --
Three and Nine Months Ended September 30, 1995
and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statement of Cash Flows --
Nine Months Ended September 30, 1995
and 1994 . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . 6
Management's Discussion and Analysis
of Financial Condition and Results
of Operations . . . . . . . . . . . . . . . . . . . . . . 8
PART II. Other Information:
Exhibits and Reports on Form 8-K . . . . . . . . . . . . 12
</TABLE>
<PAGE> 3
PART I. FINANCIAL INFORMATION
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
ASSETS (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents . . . . . . . . . . . . . . . . $ 88,509 $ 111,070
Receivables - trade and other . . . . . . . . . . . . . . 85,848 78,317
Inventories - at cost:
Raw materials and supplies . . . . . . . . . . . . . . 48,699 42,364
Work-in-progress . . . . . . . . . . . . . . . . . . . 17,750 14,238
Finished goods . . . . . . . . . . . . . . . . . . . . 2,310 2,784
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 13,791 3,290
Cost of turnkey drilling contracts in progress . . . . . 8,478 1,642
------------ ------------
Total current assets . . . . . . . . . . . . . . . . 265,385 253,705
------------ ------------
INVESTMENT IN AND ADVANCES TO 49% OWNED COMPANIES . . . . . 30,615 34,476
------------ ------------
PROPERTY, PLANT AND EQUIPMENT - at cost:
Drilling equipment . . . . . . . . . . . . . . . . . . . 969,179 961,391
Aircraft and related equipment . . . . . . . . . . . . . 182,307 176,874
Manufacturing plant and equipment . . . . . . . . . . . . 21,353 18,955
Other property and equipment . . . . . . . . . . . . . . 88,480 86,883
------------ ------------
Total . . . . . . . . . . . . . . . . . . . . . . . . 1,261,319 1,244,103
Less accumulated depreciation and amortization . . . . . 773,712 737,982
------------ ------------
Property, plant and equipment - net . . . . . . . . . 487,607 506,121
------------ ------------
OTHER ASSETS AND DEFERRED CHARGES . . . . . . . . . . . . . 9,893 10,877
------------ ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . $ 793,500 $ 805,179
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-2-
<PAGE> 4
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt . . . . . . . . . . $ 300 $ 289
Accounts payable - trade . . . . . . . . . . . . . . . . 23,401 20,513
Other current liabilities . . . . . . . . . . . . . . . . 44,539 36,958
------------ ------------
Total current liabilities . . . . . . . . . . . . . . 68,240 57,760
------------ ------------
LONG-TERM DEBT - less current maturities . . . . . . . . . 248,278 248,504
------------ ------------
OTHER LIABILITIES . . . . . . . . . . . . . . . . . . . . . 38,119 36,557
------------ ------------
DEFERRED CREDITS:
Income taxes . . . . . . . . . . . . . . . . . . . . . . 4,413 4,468
Gain on sale/leaseback transactions . . . . . . . . . . . 13,151 15,543
Other . . . . . . . . . . . . . . . . . . . . . . . . . . 89
------------ ------------
Total deferred credits . . . . . . . . . . . . . . . 17,653 20,011
------------ ------------
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value:
Authorized 5,000,000 shares issuable in series:
Series I Preferred Stock, authorized 6,500 shares,
none issued
Series II Preferred Stock, authorized 6,000 shares,
none issued
Series III Preferred Stock, authorized 10,300 shares,
none issued
Series A Junior Preferred Stock, authorized
1,500,000 shares, none issued
Common stock, $.125 par value:
Authorized 150,000,000 shares; issued 86,226,706
shares at September 30, 1995 and 85,737,581 shares
at December 31, 1994 . . . . . . . . . . . . . . . . 10,778 10,717
Additional paid-in capital . . . . . . . . . . . . . . . . 394,505 390,925
Retained earnings . . . . . . . . . . . . . . . . . . . . . 18,412 43,190
Less cost of 1,457,919 treasury shares . . . . . . . . . . 2,485 2,485
------------ ------------
Total stockholders' equity . . . . . . . . . . . . 421,210 442,347
------------ ------------
TOTAL . . . . . . . . . . . . . . . . . . . . . . . $ 793,500 $ 805,179
============ ============
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
<PAGE> 5
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
For The Three Months For The Nine Months
Ended September 30, Ended September 30,
----------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ----------- -----------
(Unaudited)
<S> <C> <C> <C> <C>
REVENUES:
Drilling services . . . . . . . . . . . . . . . $ 65,738 $ 66,383 $ 174,529 $ 191,183
Manufacturing sales and services . . . . . . . 37,107 25,397 100,165 68,818
Aircraft services . . . . . . . . . . . . . . . 31,498 37,439 69,828 75,302
---------- ---------- ----------- -----------
Total . . . . . . . . . . . . . . . . . . 134,343 129,219 344,522 335,303
---------- ---------- ----------- -----------
COSTS AND EXPENSES:
Drilling services . . . . . . . . . . . . . . . 55,471 56,298 151,517 155,006
Manufacturing sales and services . . . . . . . 33,491 22,223 91,986 62,901
Aircraft services . . . . . . . . . . . . . . . 22,606 23,987 60,940 58,483
Depreciation and amortization . . . . . . . . . 12,591 12,852 38,271 38,026
General and administrative . . . . . . . . . . 3,770 3,288 10,992 10,545
---------- ---------- ----------- -----------
Total . . . . . . . . . . . . . . . . . . 127,929 118,648 353,706 324,961
---------- ---------- ----------- -----------
INCOME (LOSS) FROM OPERATIONS . . . . . . . . . . 6,414 10,571 (9,184) 10,342
---------- ---------- ----------- -----------
OTHER INCOME (EXPENSE):
Interest expense . . . . . . . . . . . . . . . (6,933) (6,985) (20,771) (20,593)
Gain on disposals of property, plant
and equipment . . . . . . . . . . . . . . . . 153 764 1,230 980
Interest income . . . . . . . . . . . . . . . . 1,071 1,224 3,825 3,269
Other - net . . . . . . . . . . . . . . . . . . 170 93 408 205
---------- ---------- ----------- -----------
Other income (expense) - net . . . . . . (5,539) (4,904) (15,308) (16,139)
---------- ---------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES . . . . . . . . 875 5,667 (24,492) (5,797)
Provision for income taxes . . . . . . . . . . 212 21 286 377
---------- ---------- ----------- -----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . $ 663 $ 5,646 $ (24,778) $ (6,174)
========== ========== =========== ===========
EARNINGS (LOSS) PER COMMON SHARE (Note 4) . . . . $ .01 $ .07 $ (.29) $ (.07)
========== ========== =========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
<PAGE> 6
ROWAN COMPANIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
For The Nine Months
Ended September 30,
---------------------------
1995 1994
----------- -----------
(Unaudited)
<S> <C> <C>
CASH PROVIDED BY (USED IN):
Operations:
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . $ (24,778) $ (6,174)
Noncash charges (credits) to net income (loss):
Depreciation and amortization . . . . . . . . . . . . . . . . . . 38,271 38,026
Gain on disposals of property, plant and equipment . . . . . . . (1,230) (980)
Compensation expense . . . . . . . . . . . . . . . . . . . . . . 3,153 3,549
Change in sale/leaseback payable . . . . . . . . . . . . . . . . (3,138) (2,996)
Amortization of sale/leaseback gain . . . . . . . . . . . . . . . (2,392) (2,392)
Provision for pension and postretirement benefits . . . . . . . . 5,597 4,983
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . (767) (519)
Changes in current assets and liabilities:
Receivables- trade and other . . . . . . . . . . . . . . . . . . (7,531) (160)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,373) (3,377)
Other current assets . . . . . . . . . . . . . . . . . . . . . . (17,337) (642)
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . 10,440 11,380
Net changes in other noncurrent assets and liabilities . . . . . . 894 (3,515)
----------- -----------
Net cash provided by (used in) operations . . . . . . . . . . . . . . . (8,191) 37,183
----------- -----------
Investing activities:
Capital expenditures:
Property, plant and equipment additions . . . . . . . . . . . . . . (20,457) (25,748)
Acquisition of net manufacturing assets . . . . . . . . . . . . . . (10,414)
Repayments from affiliates . . . . . . . . . . . . . . . . . . . . . 3,676
Proceeds from disposals of property, plant and equipment . . . . . . 2,138 1,585
----------- -----------
Net cash used in investing activities . . . . . . . . . . . . . . . . . (14,643) (34,577)
----------- -----------
Financing activities:
Repayments of borrowings . . . . . . . . . . . . . . . . . . . . . . (215) (6,094)
Other - net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 488 315
----------- -----------
Net cash provided by (used in) financing activities . . . . . . . . . . 273 (5,779)
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . . . . . . (22,561) (3,173)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD . . . . . . . . . . . . 111,070 116,778
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . . . . . . . $ 88,509 $ 113,605
=========== ===========
</TABLE>
See Notes to Consolidated Financial Statements.
-5-
<PAGE> 7
ROWAN COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The consolidated financial statements of the Company included herein have
been prepared without audit pursuant to generally accepted accounting
principles and the rules and regulations of the Securities and Exchange
Commission. Certain information and notes have been condensed or omitted
pursuant to such rules and regulations and the Company believes that the
disclosures included herein are adequate. It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and related notes included in the Company's 1994 Annual Report
to Stockholders incorporated by reference in the Form 10-K for the year
ended December 31, 1994.
2. In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments and reclassifications, which
are of a normal recurring nature, necessary to present fairly its
financial position as of September 30, 1995 and December 31, 1994, and the
results of its operations for the three and nine month periods ended
September 30, 1995 and 1994 and its cash flows for the nine months ended
September 30, 1995 and 1994.
3. The results of operations for the three and nine month periods ended
September 30, 1995 are not necessarily indicative of the results to be
expected for the full year.
-6-
<PAGE> 8
4. Computation of primary and fully diluted earnings (loss) per share is as
follows (in thousands except per share amounts):
<TABLE>
<CAPTION>
For The For The
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -------------------------
1995 1994 1995 1994
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Weighted average shares of common
stock outstanding . . . . . . . . . . . . . . . 84,727 84,177 84,518 84,038
Stock options (treasury stock method) . . . . . . 2,165(A) 1,935(A) 1,614(A) 1,492(A)
---------- ---------- ----------- ---------
Weighted average shares for primary
earnings (loss) per share calculation . . . . . 86,892 86,112 86,132 85,530
Stock options (treasury stock method) . . . . . . 22(A)
Shares issuable from assumed conversion
of floating rate convertible subordinated
debentures . . . . . . . . . . . . . . . . . . 2,004(A) 478(A) 2,004(A) 478(A)
---------- ---------- ----------- ---------
Weighted average shares for fully diluted
earnings (loss) per share calculation . . . . . 88,896 86,590 88,158 86,008
========== ========== =========== =========
Net income (loss) for primary calculation . . . . $ 663 $ 5,646 $ (24,778) $ (6,174)
Subordinated debenture interest, net of
income tax effect . . . . . . . . . . . . . . . 96 80 279 210
---------- ---------- ----------- ---------
Net income (loss) for fully diluted
calculation . . . . . . . . . . . . . . . . . . $ 759 $ 5,726 $ (24,499) $ (5,964)
========== ========== =========== =========
Earnings (loss) per share:
Primary . . . . . . . . . . . . . . . . . . . . $ .01 $ .07 $ (.29) $ (.07)
========== ========== =========== =========
Fully diluted . . . . . . . . . . . . . . . . . $ .01 $ .07 $ (.28)(B) $ (.07)
========== ========== =========== =========
</TABLE>
(A) Included in accordance with Regulation S-K Item 601 (b)(11) although not
required to be provided by Accounting Principles Board ("APB") Opinion No.
15 because the effect is insignificant.
(B) This calculation is submitted in accordance with Regulation S-K Item 601
(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an antidilutive result.
-7-
<PAGE> 9
ROWAN COMPANIES, INC. AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1995 Compared to
Nine Months Ended September 30, 1994
The Company incurred a net loss of $24.8 million in the first nine
months of 1995 compared to a net loss of $6.2 million in the same period of
1994. The increase in loss between periods was primarily due to lower drilling
day rates in the Gulf of Mexico which combined with less than expected aviation
operating results to more than offset improved manufacturing and land drilling
operations.
A comparison of the revenues and operating profit (loss) from
drilling, manufacturing, aviation and consolidated operations for the first
nine months of 1995 and 1994, respectively, is reflected below (dollars in
thousands):
<TABLE>
<CAPTION>
Drilling Manufacturing Aviation Consolidated
--------------------- --------------------- --------------------- ---------------------
1995 1994 1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $174,529 $191,183 $100,165 $ 68,818 $ 69,828 $ 75,302 $344,522 $335,303
Percent of Consolidated
Revenues 51% 57% 29% 21% 20% 22% 100% 100%
Operating Profit (Loss)(1) $ (5,215) $ 6,609 $ 6,954 $ 5,146 $ 69 $ 9,132 $ 1,808 $ 20,887
</TABLE>
- ---------------------------------------------------
(1) Income (loss) from operations before deducting general and administrative
expenses.
As reflected above, the Company's consolidated operating profit
declined by $19.1 million when the first nine months of 1995 is compared to the
first nine months of 1994. Day rate drilling revenues increased by $1.3
million between periods as utilization of the Company's Gulf of Mexico rigs
improved from 77% to 88% which, coupled with growing land operations, more than
offset lower Gulf of Mexico day rates. While Gulf of Mexico day rates have
begun to improve in recent months, they averaged 15% below year-ago levels
during the period and soft natural gas prices continue to act as a constraint.
Day rate drilling expenses increased by $11.2 million between periods primarily
as a result of the Company's expanding land rig operations in Argentina.
Turnkey drilling generated revenues of $34.3 million and an incremental
operating profit of $.2 million for the first nine months of 1995, compared to
$52.2 million and $3.4 million, respectively, for the comparable 1994 period.
The increases between periods in manufacturing revenues and operating
profits of 46% and 35%, respectively, reflect improving business conditions in
the intermodal, mining, timber and marine industries and the Company's
increased emphasis on marketing, product reliability and on-time deliveries.
The Company's aviation operating results declined between periods primarily due
to the conclusion of work for the United Nations in the former Yugoslavia in
December 1994 and a 50% decrease in forest fire control services.
-8-
<PAGE> 10
Three Months Ended September 30, 1995 Compared to
Three Months Ended September 30, 1994
The Company generated net income of $.7 million in the third quarter
of 1995 compared to net income of $5.6 million in the same period of 1994. The
decrease in profit was primarily due to a decline in aviation operations which
more than offset improved drilling operations.
A comparison of the revenues and operating profit from drilling,
manufacturing, aviation and consolidated operations for the third quarter of
1995 and 1994, respectively, is reflected below (dollars in thousands):
<TABLE>
<CAPTION>
Drilling Manufacturing Aviation Consolidated
--------------------- --------------------- --------------------- ---------------------
1995 1994 1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 65,738 $ 66,383 $ 37,107 $ 25,397 $ 31,498 $ 37,439 $134,343 $129,219
Percent of Consolidated
Revenues 49% 51% 28% 20% 23% 29% 100% 100%
Operating Profit $ 1,039 $ 96 $ 3,185 $ 3,028 $ 5,960 $ 10,735 $ 10,184 $ 13,859
</TABLE>
As reflected above, the Company's consolidated operating results
declined by $3.7 million when the third quarter of 1995 is compared to the
third quarter of 1994. Day rate drilling revenues increased by $10.8 million
between periods, as offshore activity improved by 16% and the Company's land
drilling revenues grew by $4.2 million, while related costs increased only $9.2
million. Despite strengthening of late, offshore day rates were, on average,
down 16% during the quarter from year-ago levels. Turnkey drilling generated
third quarter 1995 revenues of $14.3 million and an incremental operating
profit of $.2 million, compared to $25.7 million and $1.5 million,
respectively, for the third quarter of 1994. The Company's manufacturing
operations have yielded operating profits and increasing revenues in every
quarter since their acquisition in early 1994. The Company's aviation
operating results declined between periods primarily due to the conclusion of
work for the United Nations in the former Yugoslavia in December 1994 and a 61%
decrease in forest fire control services.
Perceptible trends in the offshore drilling markets in which the
Company is currently operating and the number of Company- operated rigs in each
of those markets are as follows:
<TABLE>
<CAPTION>
AREA RIGS PERCEPTIBLE INDUSTRY TRENDS
---- ---- ---------------------------
<S> <C> <C>
Gulf of Mexico 15 Moderately improving levels of exploration and
development activity
North Sea 4 Improving market conditions for jack-up rigs used in the
exploration and development of natural gas
Eastern Canada 1 Improving demand
Trinidad 1 Generally stable demand
</TABLE>
-9-
<PAGE> 11
The preceding table reflects the sale of the Company's three barge
rigs located in the Gulf of Mexico for about $12 million, which should be
completed during the fourth quarter, and the mobilization of Rowan Gorilla II
to Trinidad effective October 21, 1995.
Perceptible trends in the aviation markets in which the Company is
currently operating and the number of Company aircraft based in each of those
markets are as follows:
<TABLE>
<CAPTION>
COMPANY-OWNED
AREA AIRCRAFT (1) PERCEPTIBLE INDUSTRY TRENDS
---- ------------- ---------------------------
<S> <C> <C>
Alaska 66 Normal seasonal decline
Gulf of Mexico 38 Moderately improving market conditions
China 1 Generally stable flight support activity
Argentina 1 Generally stable flight support activity
North Sea (Dutch) 10 Generally stable flight support activity
North Sea (U. K.) 5 Improving flight support activity
</TABLE>
- --------------------------------------
(1) Includes 13 units in the North Sea which are 49% owned.
The drilling and aviation markets in which the Company competes
frequently experience significant changes in supply and demand. Drilling
utilization and day rates achievable in offshore markets are affected by
material changes in overall exploration and development expenditures, as well
as by shifts of such expenditures between markets. These expenditures, in
turn, are driven by major discoveries of oil and natural gas reserves, shifts
in the political climate, regulatory changes, seasonal weather patterns,
contractual requirements under leases or concessions and changes in oil and
natural gas prices, the last being perhaps the most disruptive of all. The
markets in which the Company's aviation division competes are similarly
affected by these factors, since servicing offshore energy operations remains a
significant source of that division's business. The Company can, as it has
done in the past, relocate its drilling rigs and aircraft from one geographic
area to another in response to such changing market dynamics, but only when
these moves are economically justified.
The volatile nature of the various factors affecting the level of
offshore expenditures by energy companies and shifts of such expenditures
between markets prevent the Company from being able to predict whether the
perceptible market trends reflected in the preceding tables will continue.
The Company's manufacturing operations are considerably less volatile
than its drilling and aviation operations and, given a current order backlog in
excess of $40 million and barring unforeseen circumstances, should continue to
contribute positive operating results throughout the remainder of 1995. In the
opinion of management, based upon current and anticipated market conditions,
the Company should be profitable in the fourth quarter of 1995.
-10-
<PAGE> 12
LIQUIDITY AND CAPITAL RESOURCES
A comparison of key balance sheet figures and ratios as of September
30, 1995 and December 31, 1994 is as follows (dollars in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
---- ----
<S> <C> <C>
Cash and cash equivalents $88,509 $111,070
Current assets $265,385 $253,705
Current liabilities $68,240 $57,760
Current ratio 3.89 4.39
Current maturities of long-term debt $300 $289
Long-term debt $248,278 $248,504
Stockholders' equity $421,210 $442,347
Long-term debt/total capitalization .37 .36
</TABLE>
Reflected in the comparison above are the effects in the first nine
months of 1995 of net cash used in operations of $8.2 million and capital
expenditures of $20.5 million. The operating cash deficit resulted primarily
from outstanding insurance recoveries related to the Rowan Odessa repair, a
build-up of inventories consistent with improving manufacturing operations,
start- up costs associated with expanding Argentina land rig operations and
deferred turnkey drilling costs incurred on projects in progress. Capital
expenditures consisted primarily of the purchase of five aircraft and
modifications to certain offshore rigs.
On April 28, 1995, the Company announced plans for the design and
construction of Rowan Gorilla V, an enhanced version of the Company's Gorilla
Class jack-up, which will be the world's largest bottom supported mobile
offshore drilling unit. The rig will be constructed at the Company's
Vicksburg, Mississippi shipyard and should be completed during the second
quarter of 1998 at an estimated cost of $135 million. The Company expects to
finance a significant portion of the construction cost and is currently
evaluating credit alternatives. The reactivation of the Company's Vicksburg
shipyard is estimated to cost approximately $20 million.
The Company estimates capital expenditures will be between $20 million
and $25 million during the fourth quarter, or $40 to $45 million for 1995. The
Company currently anticipates that 1996 capital expenditures will be
approximately $65 million, primarily for the Rowan Gorilla V construction and
related Vicksburg shipyard reactivation discussed above and to upgrade existing
offshore rigs and acquire additional aircraft as justified by prevailing market
conditions.
In the opinion of management, based upon current and anticipated
market conditions, existing working capital and cash provided by
operations should be adequate to sustain planned capital expenditures and debt
service requirements for the remainder of 1995 and in 1996. The Company does
not currently have any unused lines of credit.
Under the terms of its 11 7/8% Senior Notes, the Company is prohibited
from paying a cash dividend on its common stock.
In March 1995, the Financial Accounting Standards Board published, to
be effective in 1996, standards governing accounting for the impairment of
long-lived assets. The Company believes the adoption of such standards will
not materially effect its financial position or results of operations.
-11-
<PAGE> 13
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant
during the third quarter of fiscal year 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ROWAN COMPANIES, INC.
(Registrant)
Date: November 14, 1995 /s/ E. E. THIELE
------------------------------------------
E. E. Thiele
Senior Vice President - Finance,
Administration and Treasurer
(Chief Financial Officer)
Date: November 14, 1995 /s/ W. H. WELLS
------------------------------------------
W. H. Wells
Controller
(Chief Accounting Officer)
-12-
<PAGE> 14
EXHIBIT INDEX
Exhibit
No. Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ROWAN COMPANIES, INC. FOR THE NINE MONTHS
ENDED SEPTEMBER 30, 1995 INCLUDED IN ITS FORM 10-Q FOR THE QUARTERLY PERIOD THEN
ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 88,509
<SECURITIES> 0
<RECEIVABLES> 85,848
<ALLOWANCES> 0
<INVENTORY> 68,759
<CURRENT-ASSETS> 265,385
<PP&E> 1,261,319
<DEPRECIATION> 773,712
<TOTAL-ASSETS> 793,500
<CURRENT-LIABILITIES> 68,240
<BONDS> 248,278
<COMMON> 10,778
0
0
<OTHER-SE> 410,432
<TOTAL-LIABILITY-AND-EQUITY> 793,500
<SALES> 88,311
<TOTAL-REVENUES> 344,522
<CGS> 73,824
<TOTAL-COSTS> 353,706
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 20,771
<INCOME-PRETAX> (24,492)
<INCOME-TAX> 286
<INCOME-CONTINUING> (24,778)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (24,778)
<EPS-PRIMARY> (0.29)
<EPS-DILUTED> (0.29)
</TABLE>
