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