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Global Industries, Ltd. Announces Results for the Third Quarter of 2010

November 3, 2010

HOUSTON, Nov. 3, 2010 /PRNewswire-FirstCall/ — Global Industries, Ltd. (Nasdaq: GLBL) today announced revenues of $189.5 million for the third quarter of 2010 compared to $203.7 million for the third quarter of 2009. Net loss was $27.9 million, or $0.24 per diluted share, for the third quarter of 2010 compared to net income of $14.0 million, or $0.12 per diluted share, for the third quarter of 2009.

Included in the third quarter results is a goodwill impairment of $37.4 million in the company’s Latin America and North America OCD segments, related to project losses booked in our Latin America segment and downturn in the offshore construction industry. Also included in the third quarter of 2010 are $23.3 million of net gains on asset disposals/impairments predominately in our Latin America, West Africa, and North America OCD segments, and $0.8 million of relocation and severance costs related to our efforts to centralize certain critical operating functions to Houston, Texas. Excluding these items, net loss was $12.7 million or $0.11 per diluted share.

For the nine months ended September 30, 2010, the Company reported revenues, net loss and loss per diluted share of $418.1 million, $47.8 million and $0.42, respectively, as compared to revenue, net income and earnings per diluted share of $768.0 million, $79.0 million and $0.69, respectively, for the nine months ended September 30, 2009.

Included in the 2010 year-to-date results is the $37.4 million goodwill impairment, $12.5 million of net gains on asset disposals/impairments and the $0.8 million of relocation and severance costs. Excluding these items, net loss was $23.8 million or $0.21 per diluted share.

Project awards for the third quarter of 2010 were $216.9 million and backlog at September 30, 2010 was $274.5 million, an increase of $27.4 million from the June 30, 2010 backlog and an increase of $126.9 million from the September 30, 2009 backlog.

Commenting on the third quarter results, Chief Executive Officer John Reed stated, “The results of our Latin America segment are disappointing. As stated before, we are focused on improving project execution and have been diligently building our team and centralizing critical activities over the past few months. We expect these efforts to improve our performance in the future. In addition, our results continue to be adversely affected by the downturn in our industry and are reflective of the low level of project activity worldwide. Although the government moratorium on deepwater drilling in the U.S. Gulf of Mexico was recently lifted, we continue to be affected by the oil spill as permitting delays and uncertainty in the market have resulted in project delays and cancellations.”

A conference call will be held at 9:00 a.m. Central Time on November 4, 2010. Anyone wishing to listen to the conference call may dial 888-677-0183 (domestic) or 1-773-756-0451 (international) and request connection to the “Global Third Quarter Earnings” call. Phone lines will open fifteen minutes prior to the start of the call. The call will also be webcast in real time on the Company’s website at www.globalind.com, where it will also be archived for anytime reference until November 25, 2010.

All individuals listening to the conference call or the replay are reminded that all conference call material is copyrighted by Global and cannot be recorded or rebroadcast without Global’s express written consent.

Global Industries, Ltd. is a leading offshore solutions provider of offshore construction, engineering, project management, and support services including pipeline construction, platform installation and removal, deepwater/SURF installations, IRM, and diving to the oil and gas industry worldwide. The Company’s shares are traded on The NASDAQ Global Select Market under the symbol “GLBL.”

This press release may contain forward-looking information based on current information and expectations of the Company that involve a number of risks, uncertainties, and assumptions. Among the factors that could cause the actual results to differ materially are: industry conditions, prices of crude oil and natural gas, the Company’s ability to obtain and the timing of new projects, and changes in competitive factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual outcomes could vary materially from those indicated. Set forth are our Company’s results of operations for the periods indicated.


                                      RESULTS OF OPERATIONS
                            (In thousands, except per share amounts)
                                           (Unaudited)
                                                    Three Months Ended
                                                       September 30
                                                       ------------
                                                       2010              2009
                                                       ----              ----

     Revenues                                      $189,501          $203,718
     Cost of operations                             179,707           163,855
         Gross profit                                 9,794            39,863
     Goodwill  impairment                            37,388                --
     Loss (gain) on asset disposals and
      impairments                                   (23,271)              274
     Relocation costs                                   838                --
     Selling, general and administrative
      expenses                                       16,633            19,075
                                                     ------            ------
         Operating income (loss)                    (21,794)           20,514
     Interest income                                    516               402
     Interest expense                                (2,649)           (2,756)
     Other income (expense), net                      1,275                 9
                                                      -----               ---
         Income (loss) before taxes                 (22,652)           18,169
     Income tax expense (benefits)                    5,067             4,151
                                                      -----             -----
         Net income (loss)                          (27,719)           14,018
    Less:   Net income attributable to
     noncontrolling interest                            139                --
                                                        ---               ---
         Net income (loss)                         $(27,858)          $14,018
                                                   ========           =======

     Earnings (Loss) Per Common Share
       Basic:
        Net income (loss) attributable to
         Global Industries, Ltd.                     $(0.24)            $0.12
       Diluted:
        Net income (loss) attributable to
         Global Industries, Ltd.                     $(0.24)            $0.12

    Weighted Average Common Shares
     Outstanding
      Basic                                         113,959           112,693
      Diluted                                       113,959           113,278

    Other Data
         Depreciation and Amortization              $14,173           $17,924
         Backlog at end of period


                                                   Nine Months Ended
                                                      September 30
                                                      ------------
                                                     2010            2009
                                                     ----            ----

     Revenues                                    $418,080        $768,010
     Cost of operations                           405,352         617,609
         Gross profit                              12,728         150,401
     Goodwill  impairment                          37,388              --
     Loss (gain) on asset disposals and
      impairments                                 (12,483)         (8,249)
     Relocation costs                                 838              --
     Selling, general and administrative
      expenses                                     51,572          55,635
                                                   ------          ------
         Operating income (loss)                  (64,587)        103,015
     Interest income                                1,249           1,594
     Interest expense                              (7,308)         (9,978)
     Other income (expense), net                      269           6,579
                                                      ---           -----
         Income (loss) before taxes             (70,377))         101,210
     Income tax expense (benefits)                (22,706)         22,228
                                                  -------          ------
         Net income (loss)                        (47,671)         78,982
    Less:   Net income attributable to
     noncontrolling interest                          139              --
                                                      ---             ---
         Net income (loss)                       $(47,810)        $78,982
                                                 ========         =======

     Earnings (Loss) Per Common Share
       Basic:
        Net income (loss) attributable to
         Global Industries, Ltd.                   $(0.42)          $0.69
       Diluted:
        Net income (loss) attributable to
         Global Industries, Ltd.                   $(0.42)          $0.69

    Weighted Average Common Shares
     Outstanding
      Basic                                       113,721         112,550
      Diluted                                     113,721         113,118

    Other Data
         Depreciation and Amortization            $42,127         $52,634
         Backlog at end of period                $274,538        $147,584

Effective January 1, 2010, we combined our Middle East and Asia Pacific/India segments into the Asia Pacific/Middle East segment. This change has been reflected as a retrospective change to the financial information for the three months and nine months ended September 30, 2009 presented below. This change did not affect our consolidated results of operations or tax reporting.

Set forth are our Company’s results of operations by reportable segment for the periods indicated.


                     RESULTS OF OPERATIONS BY REPORTABLE SEGMENT
                                    (In thousands)
                                     (Unaudited)

                                         Three Months Ended
                                            September 30
                                            ------------
                                       2010              2009
                                        ----              ----
                                           (In thousands)
     Total segment revenues
       North America OCD               $26,442           $60,011
       North America Subsea             42,380            46,343
       Latin America                    72,020            35,749
       West Africa                          --              (529)
       Asia Pacific/Middle East         57,867            76,101
                                        ------            ------
        Subtotal                       198,709           217,675
                                       -------           -------

     Intersegment eliminations
       North America OCD                (5,902)               --
       North America Subsea             (3,306)          (13,957)
        Subtotal                        (9,208)          (13,957)
                                        ------           -------

     Consolidated revenues            $189,501          $203,718
                                      ========          ========

     Income (loss) before taxes
       North America OCD                $4,192           $12,903
       North America Subsea              8,656            10,267
       Latin America                   (50,882)          (10,642)
       West Africa                      10,490            (2,709)
       Asia Pacific/Middle East         12,798            15,670
       Corporate                        (7,906)           (7,320)
                                        ------            ------

     Consolidated income (loss)
      before taxes                    $(22,652)          $18,169
                                      ========           =======

                                               Nine Months Ended
                                                  September 30
                                                  ------------
                                               2010             2009
                                               ----             ----
                                                   (In thousands)
     Total segment revenues
       North America OCD                      $45,846         $108,961
       North America Subsea                   102,873          112,093
       Latin America                          148,462          185,534
       West Africa                                 --          101,039
       Asia Pacific/Middle East               132,843          285,777
                                              -------          -------
        Subtotal                              430,024          793,404
                                              -------          -------

     Intersegment eliminations
       North America OCD                       (5,902)              --
       North America Subsea                    (6,042)         (25,394)
        Subtotal                              (11,944)         (25,394)
                                              -------          -------

     Consolidated revenues                   $418,080         $768,010
                                             ========         ========

     Income (loss) before taxes
       North America OCD                     $(10,603)          $4,924
       North America Subsea                     3,920           25,972
       Latin America                          (62,438)          11,825
       West Africa                              7,170           30,150
       Asia Pacific/Middle East                15,634           50,264
       Corporate                              (24,060)         (21,925)
                                              -------          -------

     Consolidated income (loss)
      before taxes                           $(70,377)        $101,210
                                             ========         ========


                              CONSOLIDATED BALANCE SHEETS
                                    (In thousands)

                                          September           December
                                               30,                31,
                                               2010              2009
                                               ----              ----
                                           (Unaudited)
    ASSETS
    Current Assets
      Cash and cash equivalents             $322,369          $344,855
      Restricted cash                          4,547             1,139
      Marketable securities                       --            30,750
      Accounts receivable - net of
       allowance of $2,794 for 2010
      and $2,765 for 2009                     57,890           160,273
      Unbilled work on uncompleted
       contracts                              73,259            92,569
      Contract costs incurred not
       yet recognized                         33,303               489
      Deferred income taxes                    6,380             2,945
      Assets held for sale                    17,127            16,152
      Prepaid expenses and other              37,648            31,596
                                              ------            ------
            Total current assets             552,523           680,768

    Property and Equipment, net              819,866           722,819
                                             -------
    Other Assets
      Marketable securities - long-
       term                                       --            11,097
      Accounts receivable - long-
       term                                    8,677            12,294
      Deferred charges, net                   30,933            49,866
      Goodwill                                    --            37,388
      Other                                   21,110             9,961
                                              ------             -----
            Total other assets                60,720           120,606

            Total                         $1,433,109        $1,524,193
                                                 ===              ===

    LIABILITIES AND EQUITY
    Current Liabilities
      Current maturities of long
       term debt                              $3,960            $3,960
      Accounts payable                       140,599           192,008
      Employee-related liabilities            22,050            18,079
      Income taxes payable                    26,385            45,301
      Accrued anticipated contract
       losses                                 15,484               322
      Other accrued liabilities               18,034            15,489
                                              ------            ------
             Total current
             liabilities                     226,512           275,159

    Long-Term Debt                           297,100           294,366
    Deferred Income Taxes                     64,863            69,998
    Other Liabilities                         17,420            15,171

    Commitments and Contingencies                 --                --

    Equity
      Common stock, $0.01 par
       value, 250,000 shares
       authorized, and 115,133 and
       119,989 shares issued at
       September 30, 2010 and
       December 31, 2009,
       respectively                            1,151             1,200
      Additional paid-in capital             413,952           513,353
      Retained earnings                      420,620           468,430
      Treasury stock at cost, 6,130
       shares at December 31, 2009                --          (105,038)
      Accumulated other
       comprehensive loss                     (8,708)           (8,446)
                                              ------            ------
          Shareholders' equity-Global
           Industries, Ltd.                  827,015           869,499
      Noncontrolling interest                    199                --

            Total equity                     827,214           869,499

            Total                         $1,433,109        $1,524,193
                                                 ===               ===

SOURCE Global Industries, Ltd.


Source: newswire



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