(BSNS WIRE) McDermott International Announces December Quarter Earnings
McDermott International Announces December Quarter Earnings
Business Editors
NEW ORLEANS--(BUSINESS WIRE)--Feb. 22, 2000--
-- Operating income of $22.9 million
-- Net loss of $23.2 million or $0.39 a diluted share, including loss
of $37.8 million or $0.64 a diluted share on curtailment of U.K.
pension plan
-- Curtailment of plan will increase cash by about $21 million later
in 2000
-- Total backlog improves to $3.3 billion
McDermott International, Inc. (NYSE: MDR) today reported a net
loss of $23.2 million or $0.39 a diluted share for the quarter ending
December 31, 1999. The quarter's results compare with net income of
$42.3 million or $0.71 a diluted share in the same quarter a year ago.
For the new fiscal period(1) ended December 31, net income was
$0.4 million or $0.01 a diluted share in 1999 compared with $215.5
million or $3.50 a diluted share in 1998. In the three and nine months
of 1999, a loss on the curtailment of a U.K. pension plan reduced net
income by $37.8 million. The nine months in 1998 included
non-recurring after-tax gains of $91.1 million.
For the 1999 quarter, revenues were $647.3 million compared with
$800.8 million a year ago. Revenues for the new fiscal period were
$1.9 billion in 1999, compared with $2.4 billion in the final nine
months of 1998. The lower revenues in the 1999 periods are primarily
attributable to a decline at J. Ray McDermott, the company's marine
construction services unit.
Operating income was $22.9 million and $74.7 million for the
quarter and new fiscal period in 1999 respectively, compared with
$46.3 million and $230.4 million in the three and nine months a year
ago. Operating income in 1999 included losses from investees of $3.9
million and $11.0 million in the quarter and new fiscal periods,
respectively, compared with income from investees of $0.5 million and
$14.3 million in the 1998 quarter and nine months, respectively. The
nine months in 1998 included net gains on asset disposals and
impairments of $37.0 million.
Other expense in the December 1999 quarter was $35.4 million and
for the new fiscal period was $39.6 million, including the pension
plan curtailment. This compares with other expense of $10.4 million in
the year ago quarter and other income of $1.6 million in the final
nine months of 1998. Interest income, interest expense and minority
interest all decreased in the 1999 periods.
The company expects to receive cash of about $21 million later in
2000 as a result of the curtailment of the pension plan.
Marine Construction Operations Post Strong Results
"A strong performance in North America led to marine construction
results beyond our expectations," said Roger Tetrault, chairman of the
board and chief executive officer of the company. "The remainder of
our operations performed about as we expected."
Backlog at December 31, 1999 stood at $3.3 billion, the third
consecutive quarter of backlog improvement since March 1999, when
backlog stood at $2.6 billion. The December increase was the result of
new bookings in government operations, which had a backlog of $1.2
billion at the end of December, compared with $861 million at the end
of March.
Tetrault said the company remains confident in its long-term
outlook, but continues to see delays in its marine construction
markets. The company expects backlog for that business to begin to
increase by mid to late 2000, with resulting improvements in operating
performance in 2001.
Marine Construction Services
Revenues from Marine Construction Services fell to $156.7 million
in December 1999 from $313.3 million in the same quarter a year ago,
reflecting decreases in volume from all geographical regions. Segment
operating income was $9.8 million in the 1999 quarter compared with
$21.9 million in 1998. Lower revenues in the 1999 period contributed
to lower segment operating income from marine construction in all
areas except North America, where segment operating income improved
from a year ago.
The loss of $6.4 million from investees in the December quarter
was primarily because of losses at a Mexican joint venture.
Marine Construction Services backlog was $516.2 million at the
end of December, compared with $407.2 million at the end of March
1999.
Power Generation
Higher volume in the power generation segment's original
equipment business was offset by lower volume from the segment's
service businesses, leading to a decline in revenues. Segment revenues
were $258.8 million in December 1999, compared with $292.7 million a
year ago. The lower revenues resulted in a decline in segment
operating income to $20.1 million, compared with $22.4 million a year
ago.
The segment's joint ventures reported income of about $0.4
million in December 1999 compared with $2.5 million in the same period
last year. The decline was the result of weakness in Asian markets.
Backlog in the power generation segment was $1.2 billion at the
end of December compared with $905 million at March 1999. The
improvement was the result of new bookings in both service and
original equipment markets.
Government Operations
Revenues from McDermott's government operations grew to $104.0
million in December 1999 from $89.3 million in the same quarter last
year. Revenue at all government operations improved over a year ago.
Segment operating income was $11.5 million in the 1999 quarter
compared with $7.1 million the year before.
Government operations' income from investees was about $3.0
million in the recent quarter, compared with $0.6 million a year ago.
Income from investees improved because of a better performance by
joint ventures in the management and operation of U.S. government
facilities.
Government operations backlog was $1.2 billion at the end of
December compared with $861.0 million at the end of March 1999. The
improvement was the result of new bookings in its naval reactors
programs.
Industrial Operations
Revenues from the company's industrial operations were $127.4
million in the December 1999 quarter compared with $106.5 million a
year ago. Volume was higher from year to year in engineering and
construction operations, but lower at Hudson Products. Industrial
operations reported a segment operating loss for the quarter of $0.2
million, compared with income of $4.8 million a year ago. The loss was
the result of weaker performances by both engineering and construction
operations and Hudson Products.
Improvements in engineering and construction led to industrial
operations backlog of $415.8 million in December, compared with $400.6
million at the end of March 1999.
Accounting Effect of B&W's Chapter 11 Filing
As announced earlier today, McDermott's Babcock & Wilcox
subsidiary filed for protection under Chapter 11 of the U.S.
Bankruptcy Code. Babcock & Wilcox's financial statements have
previously been consolidated with McDermott International's. However,
generally accepted accounting principles specifically require that any
entity whose financial statements are consolidated with its parent and
who files for protection under the U.S. Bankruptcy Code must be
deconsolidated in the future and presented on the cost method. This is
true whether the entity is solvent or insolvent.
The cost method will require McDermott to present the net assets
of B&W at February 22, 2000 as an investment and not recognize any
income or loss from B&W in the results of its operations while B&W is
in reorganization. When B&W emerges from the jurisdiction of the
Bankruptcy Court, the subsequent accounting will be determined based
on the terms of the reorganization plan.
Statements in this release which express a belief, expectation or
intention, as well as those which are not historical fact, are forward
looking. They involve a number of risks and uncertainties which may
cause actual results to differ materially from such forward looking
statements. These risks and uncertainties include factors detailed
from time to time in the company's filings with the Securities and
Exchange Commission.
McDermott International, Inc. is a leading worldwide energy
services company. The company's subsidiaries manufacture
steam-generating equipment, environmental equipment, and products for
the U.S. government. They also provide engineering and construction
services for industrial, utility, and hydrocarbon processing
facilities, and to the offshore oil and natural gas industry.
-0-
*T
A COMPARATIVE SUMMARY OF McDERMOTT INTERNATIONAL, INC. OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER, 1999 AND 1998
(In thousands, except for shares and per share amounts)
THREE MONTHS ENDED
December 31, December 31,
1999 1998
-------------- ------------
Earnings (Loss) Per Common Share
Basic $ (0.39) $ 0.72
Diluted (0.39) 0.71
-------------- ------------
Revenues $ 647,334 $ 800,825
Costs and Expenses:
Cost of operations 546,058 674,750
Depreciation and amortization 23,497 24,625
Selling, general and
administrative expenses 50,545 51,917
-------------- -----------
620,100 751,292
-------------- -----------
Losses on Asset Disposals
and Impairments-Net (430) (3,754)
-------------- -----------
Operating Income before
Income (Loss) from Investees 26,804 45,779
Income (Loss) from Investees (3,869) 531
-------------- -----------
Operating Income 22,935 46,310
Other Expense - net (35,424) (10,421)
-------------- -----------
Income (Loss) before Provision for
(Benefit from) Income Taxes (12,489) 35,889
Provision for (Benefit from)
Income Taxes 10,732 (6,400)
-------------- -----------
Net Income (Loss) $ (23,221) $ 42,289
-------------- -----------
Weighted Average Number of
Common Shares:
Basic 59,122,311 58,562,989
Diluted 59,122,311 59,620,152
A COMPARATIVE SUMMARY OF McDERMOTT INTERNATIONAL, INC. OPERATIONS
FOR THE NINE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(In thousands, except for shares and per share amounts)
NINE MONTHS ENDED
December 31, December 31,
1999 1998
--------------- ----------------
Earnings Per Common Share
Basic $ 0.01 $ 3.65
Diluted 0.01 3.50
---------------- ---------------
Revenues $ 1,891,088 $ 2,400,617
Costs and Expenses:
Cost of operations 1,583,195 1,984,603
Depreciation and amortization 67,649 72,922
Selling, general and
administrative expenses 152,835 163,961
---------------- ---------------
1,803,679 2,221,486
---------------- ---------------
Gains (Losses) on Asset Disposals
and Impairments-Net (1,720) 36,967
---------------- ---------------
Operating Income before
Income (Loss) from Investees 85,689 216,098
Income (Loss) from Investees (10,982) 14,277
---------------- ---------------
Operating Income 74,707 230,375
Other Income (Expense) - net (39,609) 1,613
---------------- ---------------
Income before Provision for
Income Taxes 35,098 231,988
Provision for Income Taxes 34,658 16,523
---------------- ---------------
Net Income $ 440 $ 215,465
---------------- ---------------
Weighted Average Number of
Common Shares:
Basic 59,033,154 59,095,770
Diluted 59,757,243 62,375,557
McDERMOTT INTERNATIONAL, INC.
SUMMARY OF OPERATIONS
(In thousands)
THREE MONTHS ENDED
----------------------
December 31, December 31,
1999 1998
--------- ---------
REVENUES:
Marine Construction Services $ 156,735 $ 313,348
Power Generation Systems 258,827 292,675
Government Operations 104,035 89,333
Industrial Operations 127,417 106,520
Adjustments and Eliminations 320 (1,051)
--------- ---------
Total Revenues $ 647,334 $ 800,825
========= =========
OPERATING INCOME:
Segment Operating Income (Loss):
Marine Construction Services $ 9,757 $ 21,932
Power Generation Systems 20,059 22,361
Government Operations 11,477 7,094
Industrial Operations (223) 4,811
--------- ---------
Total Segment Operating Income 41,070 56,198
--------- ---------
Gain (Loss) on Asset Disposals
and Impairments - Net:
Marine Construction Services (440) (4,229)
Power Generation Systems (15) 733
Government Operations 30 0
Industrial Operations (6) (259)
--------- ---------
Total Loss on Asset
Disposals and Impairments - Net (431) (3,755)
--------- ---------
Income (Loss) from Investees:
Marine Construction Services (6,395) (2,398)
Power Generation Systems 380 2,546
Government Operations 2,983 617
Industrial Operations (837) (234)
--------- ---------
Total Income (Loss) from Investees (3,869) 531
--------- ---------
Other Unallocated Items (6,313) 655
General Corporate Expenses - Net (7,522) (7,319)
--------- ---------
Total Operating Income $ 22,935 $ 46,310
========= =========
McDERMOTT INTERNATIONAL, INC.
SUMMARY OF OPERATIONS
(In thousands)
NINE MONTHS ENDED
--------------------------
December 31, December 31,
1999 1998
----------- -----------
REVENUES:
Marine Construction Services $ 490,719 $ 1,032,999
Power Generation Systems 729,969 775,559
Government Operations 306,282 290,489
Industrial Operations 366,582 305,598
Adjustments and Eliminations (2,464) (4,028)
----------- -----------
Total Revenues $ 1,891,088 $ 2,400,617
=========== ===========
OPERATING INCOME:
Segment Operating Income: $ 31,078 $ 114,199
Power Generation Systems 52,095 57,009
Government Operations 28,581 18,871
Industrial Operations 8,513 14,173
----------- -----------
Total Segment Operating Income 120,267 204,252
----------- -----------
Gain (Loss) on Asset Disposals
and Impairments - Net:
Marine Construction Services (1,652) 38,849
Power Generation Systems 1,261 938
Government Operations 26 138
Industrial Operations (5) (184)
----------- -----------
Total Gain (Loss) on Asset Disposals
and Impairments - Net (370) 39,741
----------- -----------
Income (Loss) from Investees:
Marine Construction Services (13,208) 7,335
Power Generation Systems (638) 6,255
Government Operations 4,322 1,824
Industrial Operations (1,458) (1,137)
----------- -----------
Total Income (Loss) from Investees (10,982) 14,277
----------- -----------
Other Unallocated Items (6,509) (1,229)
General Corporate Expenses - Net (27,699) (26,666)
----------- -----------
Total Operating Income $ 74,707 $ 230,375
=========== ===========
McDERMOTT INTERNATIONAL, INC.
KEY BALANCE SHEET STATISTICS
12/31/99 3/31/99
---------- ----------
(In thousands)
Cash and Cash Equivalents,
Short-Term Investments $ 273,838 $ 237,149
Investments 264,709 851,253
---------- ----------
Total Cash and Investments 538,547 1,088,402
---------- ----------
Notes Payable and Current
Maturities of Long-term Debt 86,499 31,126
Long-Term Debt 323,014 323,774
---------- ----------
Total Debt 409,513 354,900
---------- ----------
Net Cash and Investments $ 129,034 $ 733,502
========== ==========
BACKLOG
12/31/99 3/31/99
----------- -----------
(In thousands)
Marine Construction Services $ 516,236 $ 407,223
Power Generation Systems 1,203,416 905,042
Government Operations 1,151,994 860,981
Industrial Operations 415,820 400,649
Eliminations and other (2,169) (799)
----------- -----------
Total Backlog $ 3,285,297 $ 2,573,096
=========== ===========
(1) NOTE: Effective April 1, 1999, McDermott began a new fiscal
reporting period. The new period ends December 31. The company
previously reported annual results for a fiscal year ending March 31,
1999. The new period reported in this release covers the nine months
ending December 31, 1999. Future year-end results will cover a
12-month period ending December 31.
*T
--30--md/na*
CONTACT: McDermott International Inc., New Orleans
Don Washington, 504/587-4080
KEYWORD: LOUISIANA
INDUSTRY KEYWORD: OIL/GAS ENERGY EARNINGS
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: businesswire.com
*** end of story *** |
