FMC Technologies Reports Third Quarter 2009 Diluted Earnings per Share From Continuing Operations of $0.73
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HOUSTON, Oct. 27 /PRNewswire-FirstCall/ -- FMC Technologies, Inc. (NYSE: FTI) today reported third quarter 2009 revenue from continuing operations of $1.1 billion. Diluted earnings per share from continuing operations were $0.73, up one percent from $0.72 in the prior-year quarter.
(Logo: http://www.newscom.com/cgi-bin/prnh/20081222/LAM028LOGO)
Led by higher operating margin and volume in subsea systems, third quarter operating profit in Energy Production Systems increased 38 percent from the third quarter of 2008 to a record $140.4 million.
Total backlog for the company remained strong, ending the third quarter at $3.0 billion including $2.4 billion in subsea systems.
"Our execution of projects in backlog continued at the level we saw in the second quarter," said Peter D. Kinnear, Chairman, President and Chief Executive Officer. "As a result of our strong third quarter and our outlook for the fourth quarter, we are raising our 2009 guidance. We estimate our fourth quarter 2009 diluted earnings per share from continuing operations to be in a range of $0.70 to $0.75. Additionally, we were excited to announce two acquisitions during the quarter that will add to the technology that provides value to our customers."
Energy Production Systems
Energy Production Systems' third quarter revenue of $926.9 million increased three percent from the prior-year quarter. Revenue for subsea systems was $770 million for the third quarter, up seven percent from the prior-year quarter. Surface wellhead revenue was down 11 percent from the third quarter of 2008 but was flat compared to the second quarter of 2009.
Energy Production Systems' record operating profit of $140.4 million increased 38 percent over the prior-year quarter and the operating margin reached 15.1 percent. The increase in operating profit was primarily due to higher operating margins across the segment and increased volume in subsea systems.
Energy Production Systems' inbound orders for the third quarter were $841.6 million, including subsea systems orders of $715 million. Backlog for Energy Production Systems was $2.7 billion, including $2.4 billion in subsea backlog at the end of the third quarter.
Energy Processing Systems
Energy Processing Systems' third quarter revenue of $166.2 million was 27 percent lower than the prior-year quarter and five percent lower than the second quarter of 2009. The revenue decrease came primarily from the fluid control business, which continues to be impacted by the reduction in North American pressure pumping activity, and from the material handling business, which has several projects nearing completion.
Energy Processing Systems' third quarter operating profit of $24.8 million was down 42 percent from the prior-year quarter primarily driven by lower volume and operating margin in the fluid control business.
Energy Processing Systems' inbound orders were $140.8 million for the third quarter, and its backlog finished the quarter at $226.7 million.
Corporate Items
Corporate expense in the third quarter was $9.3 million, a decrease of $0.6 million from the prior-year quarter.
Other expense, net, was $21.0 million, an increase of $25.0 million from the prior-year quarter. Net foreign exchange losses in the quarter totaled $5.8 million compared to a net gain of $4.7 million in the third quarter of 2008. Additionally, the company had an increased liability of $2.1 million associated with company stock held in its non-qualified savings plan compared to a gain of $5.2 million in the prior-year quarter.
The company ended the quarter with net cash of $78.0 million. Net interest expense was $2.1 million in the quarter.
The company repurchased 917 thousand shares of common stock in the quarter for $38.5 million and now has 5.8 million shares remaining in its stock repurchase authorization.
Depreciation and amortization for the third quarter was $24.6 million, up $3.8 million from the previous quarter, and capital expenditures totaled $21.1 million.
The company recorded an effective tax rate of 31.3 percent for the third quarter.
During the quarter, the company announced the signing of definitive agreements to acquire Direct Drive Systems, Inc. (DDS) for approximately $120 million and Multi Phase Meters AS (MPM) for approximately $30 million plus an earn out. The MPM acquisition closed on October 20, 2009, while the DDS acquisition is expected to close in the fourth quarter of 2009.
Summary and Outlook
FMC Technologies reported diluted earnings per share from continuing operations of $0.73, up one percent from the prior-year quarter. Energy Production Systems' operating profit was up 38 percent over the third quarter of 2008 to a record $140.4 million. Total company backlog was $3.0 billion at the end of the quarter, including $2.4 billion in subsea systems.
The company increased its guidance for 2009. It estimates fourth quarter 2009 diluted earnings per share from continuing operations to be in a range of $0.70 to $0.75.
FMC Technologies, Inc. (NYSE: FTI) is a leading global provider of technology solutions for the energy industry. The Company designs, manufactures and services technologically sophisticated systems and products such as subsea production and processing systems, surface wellhead systems, high pressure fluid control equipment, measurement solutions, and marine loading systems for the oil and gas industry. Named by FORTUNE Magazine as America's Most Admired Oil and Gas Equipment, Service Company in 2008, FMC Technologies has approximately 10,400 employees and operates 19 manufacturing facilities in 14 countries. For more information, visit www.fmctechnologies.com.
This release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are information of a non-historical nature and are subject to risks and uncertainties that are beyond the Company's ability to control. These risks and uncertainties are described under the caption "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2008 and may be modified in subsequent quarterly reports filed by the Company with the Securities and Exchange Commission that may be accessed on the Company's website. The Company cautions shareholders and prospective investors that actual results may differ materially from those indicated by the forward-looking statements.
FMC Technologies, Inc. will conduct its third quarter 2009 conference call at 9:00 a.m. EDT on Wednesday, October 28, 2009. The event will be available at www.fmctechnologies.com. An archived audio replay will also be available after the event at the same website address. In the event of a disruption of service or technical difficulty during the call, information will be posted at www.fmctechnologies.com/earnings.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
-------------------------------------------
(Unaudited and in millions, except per share amounts)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $1,088.4 $1,127.6 $3,245.2 $3,345.8
Costs and expenses 947.2 982.6 2,851.5 2,955.4
----- ----- ------- -------
141.2 145.0 393.7 390.4
Other expense, net (5.7) (6.2) (2.4) (11.5)
----- ----- ----- -----
Income before net interest
expense and income taxes 135.5 138.8 391.3 378.9
Net interest expense (2.1) (0.9) (6.5) (0.8)
----- ----- ----- -----
Income from continuing
operations before income
taxes 133.4 137.9 384.8 378.1
Provision for income taxes 41.6 45.1 114.8 117.7
---- ---- ----- -----
Income from continuing
operations 91.8 92.8 270.0 260.4
Income (loss) from
discontinued operations,
net of income taxes 0.4 (9.7) 0.2 11.0
--- ---- --- ----
Net Income 92.2 83.1 270.2 271.4
Less: net income
attributable to
noncontrolling interests (0.6) (0.4) (1.6) (1.4)
----- ----- ------ ------
Net income attributable to FMC
Technologies, Inc. $91.6 $82.7 $268.6 $270.0
===== ===== ====== ======
Basic Earnings per share
attributable to FMC
Technologies, Inc.:
Income from continuing
operations $0.74 $0.73 $2.15 $2.01
Income (loss) from
discontinued operations - (0.08) - 0.09
----- ----- ----- ----
Basic earnings per share $0.74 $0.65 $2.15 $2.10
===== ===== ===== =====
Basic weighted average shares
outstanding 123.3 127.0 124.7 128.5
===== ===== ===== =====
Diluted earnings per share
attributable to FMC
Technologies, Inc.:
Income from continuing
operations $0.73 $0.72 $2.13 $1.99
Income (loss) from
discontinued operations - (0.08) - 0.08
----- ----- ----- ----
Diluted earnings per share $0.73 $0.64 $2.13 $2.07
===== ===== ===== =====
Diluted weighted average
shares outstanding 124.7 129.0 126.1 130.5
===== ===== ===== =====
Net income attributable to FMC
Technologies, Inc.:
Income from continuing
operations $91.2 $92.4 268.4 $259.0
Income (loss) from
discontinued operations 0.4 (9.7) 0.2 11.0
---- ---- ---- ----
Net income attributable to
FMC Technologies, Inc. $91.6 $82.7 268.6 $270.0
===== ===== ===== ======
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue
-------
Energy Production Systems $926.9 $896.2 $2,733.1 $2,697.9
Energy Processing Systems 166.2 229.0 521.3 653.6
Other revenue (1) and
intercompany eliminations (4.7) 2.4 (9.2) (5.7)
---- --- ---- ----
$1,088.4 $1,127.6 $3,245.2 $3,345.8
======== ======== ======== ========
Income before income taxes
--------------------------
Segment operating profit
------------------------
Energy Production Systems $140.4 $101.6 $384.9 $301.6
Energy Processing Systems 24.8 42.7 81.8 124.8
---- ---- ---- -----
Total segment operating profit 165.2 144.3 466.7 426.4
Corporate items
---------------
Corporate expense (9.3) (9.9) (25.2) (28.4)
Other revenue and other expense,
net (1) (21.0) 4.0 (51.8) (20.5)
Net interest expense (2.1) (0.9) (6.5) (0.8)
---- ---- ---- ----
Total corporate items (32.4) (6.8) (83.5) (49.7)
----- ---- ----- -----
Income from continuing operations
before income taxes
attributable to FMC
Technologies, Inc. $132.8 $137.5 $383.2 $376.7
====== ====== ====== ======
(1) Other revenue comprises certain unrealized gains and losses on
derivative instruments related to unexecuted sales contracts. Other
expense, net, generally includes stock-based compensation, other employee
benefits, LIFO adjustments, certain foreign exchange gains and losses, and
the impact of unusual or strategic transactions not representative of
segment operations.
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
BUSINESS SEGMENT DATA
---------------------
(Unaudited and in millions)
Three Months Ended Nine Months Ended
September 30 September 30
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Inbound Orders
--------------
Energy Production Systems $841.6 $551.3 $2,124.9 $2,451.7
Energy Processing Systems 140.8 237.2 434.8 698.5
----- ----- ----- -----
Subtotal Energy Systems 982.4 788.5 2,559.7 3,150.2
Intercompany eliminations (4.1) 3.5 (7.0) (4.4)
---- --- ---- ----
Total inbound orders $978.3 $792.0 $2,552.7 $3,145.8
====== ====== ======== ========
September 30
------------
2009 2008
---- ----
Order Backlog
-------------
Energy Production Systems $2,736.8 $3,916.4
Energy Processing Systems 226.7 375.4
----- -----
Subtotal Energy Systems 2,963.5 4,291.8
Intercompany eliminations (4.1) (1.1)
---- ----
Total order backlog $2,959.4 $4,290.7
======== ========
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(In millions)
September 30, December 31,
2009 2008
(Unaudited)
----------- ------------
Cash and cash equivalents $397.4 $340.1
Trade receivables, net 935.1 996.1
Inventories 609.4 559.3
Other current assets 383.4 542.8
----- -----
Total current assets 2,325.3 2,438.3
Property, plant and equipment, net 564.2 494.9
Goodwill 144.7 128.7
Intangible assets, net 66.7 70.2
Investments 140.5 151.2
Other assets 189.7 297.6
----- -----
Total assets $3,431.1 $3,580.9
======== ========
Short-term debt and current portion of
long-term debt $9.5 $23.0
Accounts payable, trade 350.5 439.8
Advance payments and progress billings 761.4 770.3
Other current liabilities 634.7 726.7
Liabilities of discontinued operations 2.2 3.5
----- -----
Total current liabilities 1,758.3 1,963.3
Long-term debt, less current portion 309.9 472.0
Other liabilities 345.7 446.9
Common stock 1.4 1.4
Other FMC Technologies, Inc.
stockholders' equity 1,005.9 689.0
Noncontrolling interest in consolidated
companies 9.9 8.3
----- -----
Total liabilities and equity $3,431.1 $3,580.9
======== ========
FMC TECHNOLOGIES, INC. AND CONSOLIDATED SUBSIDIARIES
----------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
(Unaudited and in millions)
Nine Months
Ended
September 30
------------
2009 2008
---- ----
Cash provided (required) by operating activities of
continuing operations:
Income from continuing operations $268.4 $259.0
Depreciation and amortization 64.7 53.4
Trade accounts receivable, net 143.4 (167.3)
Inventories (22.5) (69.0)
Accounts payable, trade (132.1) 25.2
Advance payments and progress billings (83.7) 148.5
Other 177.1 (35.0)
----- -----
Net cash provided by operating activities of
continuing operations 415.3 214.8
----- -----
Cash required by operating activities of
discontinued operations (1.2) (9.5)
---- ----
Cash provided (required) by investing activities of
continuing operations:
Capital expenditures (76.0) (117.8)
Proceeds on disposal of assets and other 18.8 3.1
Net cash required by investing activities of
continuing operations (57.2) (114.7)
----- ------
Cash required by investing activities of
discontinued operations - (4.7)
---- ----
Cash provided (required) by financing activities:
Net (repayment) issuance of debt (176.8) 246.4
Issuance of capital stock 1.4 4.9
Purchase of stock held in treasury (134.2) (324.0)
Proceeds from spin-off of JBT Corporation - 157.8
Other (7.2) 4.8
---- ----
Net cash provided (required) by financing activities (316.8) 89.9
------ ----
Effect of changes in foreign exchange rates on cash
and cash equivalents 17.2 0.7
---- ---
Increase in cash and cash equivalents 57.3 176.5
Cash and cash equivalents, beginning of period 340.1 129.5
----- -----
Cash and cash equivalents, end of period $397.4 $306.0
====== ======
SOURCE FMC Technologies, Inc.
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