Global Marine Reports First Quarter 2001 Results

- Earnings Up 223 Percent From Prior Year's Level -



Apr 17, 2001, 01:00 ET from Global Marine Inc.

    HOUSTON, April 17 /PRNewswire/ -- Global Marine Inc. (NYSE:   GLM) today
 reported net income for the quarter ended March 31, 2001, of $40.7 million, or
 $0.23 per diluted share, on revenues of $275 million.  This compares to net
 income of $12.6 million, or $0.07 per diluted share, on revenues of
 $204 million for the quarter ended March 31, 2000.
     Global Marine Chairman, President and Chief Executive Officer Bob Rose
 said, "Our contract drilling business performed extremely well during the
 first quarter as our core markets in the U.S. Gulf of Mexico, West Africa and
 the North Sea continued to improve."  For the first quarter of 2001, operating
 income from the company's contract drilling segment increased 154 percent on
 revenues that were 67 percent higher, as compared to the same period a year
 ago.
     The strengthening of the harsh-environment semisubmersible market provided
 Global Marine the opportunity to reactivate its two remaining idle
 semisubmersible rigs during the first quarter.  The company's fleet
 utilization averaged 89 percent in the first quarter of 2001 compared to
 76 percent in 2000's first quarter.  In addition, the company's last idle
 jackup rig was reactivated this month, bringing its fleet utilization to
 100 percent for the first time since July 1998.
     Dayrates continued their upward trend during the first quarter of 2001.
 The average dayrate for Global Marine's premium jackup rigs in the Gulf of
 Mexico increased 7.3 percent to $51,200 from $47,700 in fourth quarter 2000.
 "Our international markets also strengthened during the first quarter," said
 Rose.  "The U.K. North Sea market improved significantly as the traditional
 drilling season began in late March, and the West Africa market tightened as
 more drilling programs began receiving governmental approval."
     Continuing, Rose said, "We have been anticipating a significant upturn in
 the West Africa offshore rig market for some time, and it is finally
 occurring.  Recent letters of intent for our jackup rigs in West Africa
 reflect price increases averaging more than 20 percent."
     Global Marine's two new ultra-deepwater drillships, the Glomar C.R. Luigs
 and the Glomar Jack Ryan, performed exceptionally well during the first
 quarter.  The Glomar Jack Ryan is currently working offshore Trinidad for
 ExxonMobil, and the Glomar C.R. Luigs is drilling offshore Brazil for BP.
 Non-revenue downtime on the two new rigs was about one percent in the first
 quarter of 2001, and less than two percent on the entire ultra-deepwater
 fleet.
     Operating income from Global Marine's drilling management services segment
 was only slightly positive in the first quarter.  "We experienced a typical
 first quarter lull in turnkey drilling in the Gulf of Mexico, where we
 employed an average of only eight rigs during the period," said Rose.  "With
 that level of activity, we were unable to overcome the effects of a previously
 announced $4.4 million loss we incurred in January of this year on a well
 which encountered mechanical difficulties."
     "However," added Rose, "as the second quarter begins, turnkey drilling
 activity is increasing."  ADTI, Global Marine's domestic drilling management
 services subsidiary, has been experiencing increased bidding activity and now
 has 14 rigs under contract.  "We expect drilling management services revenue
 in the second quarter to be up significantly over the first quarter level,"
 Rose said.
     At March 31, 2001, Global Marine's net debt (long-term debt, less cash)
 stood at $703 million compared to $894 million a year ago.  "Reduced capital
 spending requirements following the completion of our deepwater expansion
 program, combined with improved rig utilization and higher dayrates, put us in
 an extremely strong financial position today," concluded Rose.
     Houston-based Global Marine is one of the largest offshore drilling
 contractors with an active fleet of 33 mobile rigs worldwide.  In addition,
 the company is the world's largest provider of offshore drilling management
 services.
     Global Marine's analyst conference call to discuss the first quarter 2001
 earnings can be heard live on the company's website (www.glm.com).  The call
 will begin at 9:30 a.m. Central Time (10:30 a.m. Eastern Time) on Tuesday,
 April 17, 2001.  To listen to the call, it is recommended that you login on
 our website approximately 8 to 10 minutes prior to the start of the conference
 call.
 
                           Forward-Looking Statements
     Under the Private Securities Litigation Reform Act of 1995, companies are
 provided a "safe harbor" for discussing their expectations regarding future
 performance.  We believe it is in the best interests of our stockholders and
 the investment community to use these provisions and provide such forward-
 looking information.  We do so in this news release and in other
 communications.  Our forward-looking statements include things such as our
 observation that a significant upturn in the West Africa offshore rig market
 is finally occurring; our assertion that turnkey drilling activity is
 increasing; our expectation that drilling management services revenue in the
 second quarter will be up significantly over the first quarter level; and
 other statements that are not historical facts.
     Our forward-looking statements speak only as of the date of this news
 release and are based on available industry, financial and economic data and
 our operating plans as of that date.  They are also inherently uncertain, and
 investors must recognize that events could turn out to be materially different
 from what we expect.
     Factors that could cause or contribute to such differences include, but
 are not limited to, (a) changes in demand for our services resulting from
 changes in our customers' budgets for their oil and gas drilling programs
 worldwide or in certain regions, which could be brought on by changes in oil
 and gas prices or in operating costs due to general economic trends affecting
 the need for oil and gas or the prices for services and supplies, or by
 changes affecting the risks of operating in international markets, such as
 changes in political, economic, trade or regulatory climates; (b) renewed
 consolidation or other changes among the companies that constitute our
 customer base; (c) the operational risks and uncertainties inherent in
 offshore oil and gas drilling, particularly on a turnkey basis; (d)
 fundamental changes in drilling markets, such as a major shift away from
 turnkey drilling; and (e) such other risk factors as may be discussed in our
 latest annual report on Form 10-K and subsequent reports filed with the U.S.
 Securities and Exchange Commission.
     We disclaim any obligation or undertaking to disseminate any updates or
 revisions to our statements, forward-looking or otherwise, to reflect changes
 in our expectations or any change in events, conditions or circumstances on
 which any such statements are based.
 
      CONTACT:  Michael R. Dawson
                281/596-5809
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                    Condensed Consolidated Statement of Income
                      (In millions, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                      2001              2000
     Revenues:
       Contract drilling                             $184.9            $110.4
       Drilling management                             83.6              90.0
       Oil and gas                                      6.3               3.7
         Total revenues                               274.8             204.1
 
     Expenses:
       Contract drilling                               88.2              63.6
       Drilling management                             83.0              82.6
       Oil and gas                                      0.7               0.3
       Depreciation, depletion, and amortization       32.7              23.4
       Restructure costs                                ---               5.2
       General and administrative                       5.6               6.2
         Total operating expenses                     210.2             181.3
         Operating income                              64.6              22.8
 
     Other income (expense):
       Interest expense                               (14.1)            (16.8)
       Interest capitalized                             ---              10.9
       Interest income                                  2.9               0.8
         Total other income (expense)                 (11.2)             (5.1)
 
         Income before income taxes                    53.4              17.7
 
     Provision for income taxes:
       Current tax provision                            2.7               1.4
       Deferred tax provision                          10.0               3.7
         Total provision for income taxes              12.7               5.1
 
     Net income                                       $40.7             $12.6
 
     Earnings per share:
       Basic                                          $0.23             $0.07
       Diluted                                        $0.23             $0.07
 
     Average common shares:
       Basic                                          176.2             174.7
       Diluted                                        180.3             178.1
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                       Condensed Consolidated Balance Sheet
                                   (In millions)
 
                                                    March 31,         Dec. 31,
                                                      2001              2000
     Current assets:
       Cash and cash equivalents                     $201.3            $144.3
       Accounts receivable, net of allowances         152.9             189.7
       Costs incurred on turnkey drilling
        contracts in progress                          21.2              11.2
       Prepaid expenses                                 7.2               8.2
       Future income tax benefits                      50.0              50.0
       Other current assets                             1.2               1.4
         Total current assets                         433.8             404.8
 
     Net properties                                 1,917.6           1,940.1
     Future income tax benefits                        12.7              20.1
     Other assets                                      33.8              31.8
 
         Total assets                              $2,397.9          $2,396.8
 
     Current liabilities:
       Accounts payable                               $78.7            $116.7
       Accrued liabilities                             55.4              66.6
         Total current liabilities                    134.1             183.3
 
     Long-term debt                                   904.0             901.3
     Capital lease obligation                          17.6              17.3
     Other long-term liabilities                       22.9              24.0
 
     Shareholders' equity:
       Common stock and additional paid-in capital    375.6             367.7
       Retained earnings                              945.7             905.0
       Accumulated other comprehensive loss            (2.0)             (1.8)
         Total shareholders' equity                 1,319.3           1,270.9
 
         Total liabilities and
          shareholders' equity                     $2,397.9          $2,396.8
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                   Condensed Consolidated Statement of Cash Flows
                                   (In millions)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001               2000
     Cash flows from operating activities:
       Net income                                     $40.7              $12.6
       Adjustments to reconcile net income to net
        cash flow provided by operating activities:
         Depreciation, depletion, and amortization     32.7               23.4
         Deferred income taxes                         10.0                3.7
         Decrease (increase) in accounts receivable    40.8               (9.1)
         (Increase) decrease in costs incurred on
           turnkey drilling contracts in progress     (10.0)               5.2
         Decrease in prepaid expenses and
          other current assets                          1.2                3.5
         Decrease in accounts payable                 (38.0)             (19.2)
         (Decrease) increase in accrued liabilities   (11.2)               3.0
         Other, net                                    (5.6)              (0.1)
           Net cash flow provided by operating
            activities                                 60.6               23.0
 
     Cash flows from investing activities:
       Capital expenditures                            (9.9)             (59.7)
       Proceeds from sales of properties
        and equipment                                   0.8                0.6
       Proceeds from maturities of held-
        to-maturity securities                          ---                0.3
           Net cash flow used in investing activities  (9.1)             (58.8)
 
     Cash flows from financing activities:
       Increases in long-term debt                      ---              237.3
       Reductions of long-term debt                     ---             (256.9)
       Proceeds from exercises of
        employee stock options                          5.5                3.9
         Net cash flow provided by (used in)
          financing activities                          5.5              (15.7)
 
     Increase (decrease) in cash and cash
      equivalents                                      57.0              (51.5)
     Cash and cash equivalents at
      beginning of period                             144.3               83.3
 
     Cash and cash equivalents at end of period      $201.3              $31.8
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                     Results of Operations by Business Segment
                 (Dollars in millions, except for average dayrate)
 
                                                         Three Months Ended
                                                             March 31,
                                                      2001              2000
 
     Revenues:
       Contract drilling                             $189.1            $112.3
       Drilling management                             84.5              92.7
       Oil and gas                                      6.3               3.7
       Elimination                                     (5.1)             (4.6)
         Total revenues                              $274.8            $204.1
 
     Operating income:
       Contract drilling                              $65.1             $25.6
       Drilling management                              0.5               7.3
       Oil and gas                                      5.0               2.1
       Restructure costs                                ---              (5.2)
       Corporate expenses                              (6.0)             (7.0)
         Total operating income                        64.6              22.8
     Interest expense, net of interest income         (11.2)             (5.1)
         Income before income taxes                   $53.4             $17.7
 
     Depreciation, depletion, and amortization
       included in operating income:
       Contract drilling                              $31.6             $21.2
       Drilling management                              0.1               0.1
       Oil and gas                                      0.6               1.3
       Corporate                                        0.4               0.8
                                                      $32.7             $23.4
 
     Average rig utilization rate                        89%               76%
 
     Average dayrate                                $71,100           $52,000
 
     Turnkey wells drilled                               21                29
 
     Turnkey well completions                             7                 7
 
 

SOURCE Global Marine Inc.
    HOUSTON, April 17 /PRNewswire/ -- Global Marine Inc. (NYSE:   GLM) today
 reported net income for the quarter ended March 31, 2001, of $40.7 million, or
 $0.23 per diluted share, on revenues of $275 million.  This compares to net
 income of $12.6 million, or $0.07 per diluted share, on revenues of
 $204 million for the quarter ended March 31, 2000.
     Global Marine Chairman, President and Chief Executive Officer Bob Rose
 said, "Our contract drilling business performed extremely well during the
 first quarter as our core markets in the U.S. Gulf of Mexico, West Africa and
 the North Sea continued to improve."  For the first quarter of 2001, operating
 income from the company's contract drilling segment increased 154 percent on
 revenues that were 67 percent higher, as compared to the same period a year
 ago.
     The strengthening of the harsh-environment semisubmersible market provided
 Global Marine the opportunity to reactivate its two remaining idle
 semisubmersible rigs during the first quarter.  The company's fleet
 utilization averaged 89 percent in the first quarter of 2001 compared to
 76 percent in 2000's first quarter.  In addition, the company's last idle
 jackup rig was reactivated this month, bringing its fleet utilization to
 100 percent for the first time since July 1998.
     Dayrates continued their upward trend during the first quarter of 2001.
 The average dayrate for Global Marine's premium jackup rigs in the Gulf of
 Mexico increased 7.3 percent to $51,200 from $47,700 in fourth quarter 2000.
 "Our international markets also strengthened during the first quarter," said
 Rose.  "The U.K. North Sea market improved significantly as the traditional
 drilling season began in late March, and the West Africa market tightened as
 more drilling programs began receiving governmental approval."
     Continuing, Rose said, "We have been anticipating a significant upturn in
 the West Africa offshore rig market for some time, and it is finally
 occurring.  Recent letters of intent for our jackup rigs in West Africa
 reflect price increases averaging more than 20 percent."
     Global Marine's two new ultra-deepwater drillships, the Glomar C.R. Luigs
 and the Glomar Jack Ryan, performed exceptionally well during the first
 quarter.  The Glomar Jack Ryan is currently working offshore Trinidad for
 ExxonMobil, and the Glomar C.R. Luigs is drilling offshore Brazil for BP.
 Non-revenue downtime on the two new rigs was about one percent in the first
 quarter of 2001, and less than two percent on the entire ultra-deepwater
 fleet.
     Operating income from Global Marine's drilling management services segment
 was only slightly positive in the first quarter.  "We experienced a typical
 first quarter lull in turnkey drilling in the Gulf of Mexico, where we
 employed an average of only eight rigs during the period," said Rose.  "With
 that level of activity, we were unable to overcome the effects of a previously
 announced $4.4 million loss we incurred in January of this year on a well
 which encountered mechanical difficulties."
     "However," added Rose, "as the second quarter begins, turnkey drilling
 activity is increasing."  ADTI, Global Marine's domestic drilling management
 services subsidiary, has been experiencing increased bidding activity and now
 has 14 rigs under contract.  "We expect drilling management services revenue
 in the second quarter to be up significantly over the first quarter level,"
 Rose said.
     At March 31, 2001, Global Marine's net debt (long-term debt, less cash)
 stood at $703 million compared to $894 million a year ago.  "Reduced capital
 spending requirements following the completion of our deepwater expansion
 program, combined with improved rig utilization and higher dayrates, put us in
 an extremely strong financial position today," concluded Rose.
     Houston-based Global Marine is one of the largest offshore drilling
 contractors with an active fleet of 33 mobile rigs worldwide.  In addition,
 the company is the world's largest provider of offshore drilling management
 services.
     Global Marine's analyst conference call to discuss the first quarter 2001
 earnings can be heard live on the company's website (www.glm.com).  The call
 will begin at 9:30 a.m. Central Time (10:30 a.m. Eastern Time) on Tuesday,
 April 17, 2001.  To listen to the call, it is recommended that you login on
 our website approximately 8 to 10 minutes prior to the start of the conference
 call.
 
                           Forward-Looking Statements
     Under the Private Securities Litigation Reform Act of 1995, companies are
 provided a "safe harbor" for discussing their expectations regarding future
 performance.  We believe it is in the best interests of our stockholders and
 the investment community to use these provisions and provide such forward-
 looking information.  We do so in this news release and in other
 communications.  Our forward-looking statements include things such as our
 observation that a significant upturn in the West Africa offshore rig market
 is finally occurring; our assertion that turnkey drilling activity is
 increasing; our expectation that drilling management services revenue in the
 second quarter will be up significantly over the first quarter level; and
 other statements that are not historical facts.
     Our forward-looking statements speak only as of the date of this news
 release and are based on available industry, financial and economic data and
 our operating plans as of that date.  They are also inherently uncertain, and
 investors must recognize that events could turn out to be materially different
 from what we expect.
     Factors that could cause or contribute to such differences include, but
 are not limited to, (a) changes in demand for our services resulting from
 changes in our customers' budgets for their oil and gas drilling programs
 worldwide or in certain regions, which could be brought on by changes in oil
 and gas prices or in operating costs due to general economic trends affecting
 the need for oil and gas or the prices for services and supplies, or by
 changes affecting the risks of operating in international markets, such as
 changes in political, economic, trade or regulatory climates; (b) renewed
 consolidation or other changes among the companies that constitute our
 customer base; (c) the operational risks and uncertainties inherent in
 offshore oil and gas drilling, particularly on a turnkey basis; (d)
 fundamental changes in drilling markets, such as a major shift away from
 turnkey drilling; and (e) such other risk factors as may be discussed in our
 latest annual report on Form 10-K and subsequent reports filed with the U.S.
 Securities and Exchange Commission.
     We disclaim any obligation or undertaking to disseminate any updates or
 revisions to our statements, forward-looking or otherwise, to reflect changes
 in our expectations or any change in events, conditions or circumstances on
 which any such statements are based.
 
      CONTACT:  Michael R. Dawson
                281/596-5809
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                    Condensed Consolidated Statement of Income
                      (In millions, except per share amounts)
 
                                                        Three Months Ended
                                                             March 31,
                                                      2001              2000
     Revenues:
       Contract drilling                             $184.9            $110.4
       Drilling management                             83.6              90.0
       Oil and gas                                      6.3               3.7
         Total revenues                               274.8             204.1
 
     Expenses:
       Contract drilling                               88.2              63.6
       Drilling management                             83.0              82.6
       Oil and gas                                      0.7               0.3
       Depreciation, depletion, and amortization       32.7              23.4
       Restructure costs                                ---               5.2
       General and administrative                       5.6               6.2
         Total operating expenses                     210.2             181.3
         Operating income                              64.6              22.8
 
     Other income (expense):
       Interest expense                               (14.1)            (16.8)
       Interest capitalized                             ---              10.9
       Interest income                                  2.9               0.8
         Total other income (expense)                 (11.2)             (5.1)
 
         Income before income taxes                    53.4              17.7
 
     Provision for income taxes:
       Current tax provision                            2.7               1.4
       Deferred tax provision                          10.0               3.7
         Total provision for income taxes              12.7               5.1
 
     Net income                                       $40.7             $12.6
 
     Earnings per share:
       Basic                                          $0.23             $0.07
       Diluted                                        $0.23             $0.07
 
     Average common shares:
       Basic                                          176.2             174.7
       Diluted                                        180.3             178.1
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                       Condensed Consolidated Balance Sheet
                                   (In millions)
 
                                                    March 31,         Dec. 31,
                                                      2001              2000
     Current assets:
       Cash and cash equivalents                     $201.3            $144.3
       Accounts receivable, net of allowances         152.9             189.7
       Costs incurred on turnkey drilling
        contracts in progress                          21.2              11.2
       Prepaid expenses                                 7.2               8.2
       Future income tax benefits                      50.0              50.0
       Other current assets                             1.2               1.4
         Total current assets                         433.8             404.8
 
     Net properties                                 1,917.6           1,940.1
     Future income tax benefits                        12.7              20.1
     Other assets                                      33.8              31.8
 
         Total assets                              $2,397.9          $2,396.8
 
     Current liabilities:
       Accounts payable                               $78.7            $116.7
       Accrued liabilities                             55.4              66.6
         Total current liabilities                    134.1             183.3
 
     Long-term debt                                   904.0             901.3
     Capital lease obligation                          17.6              17.3
     Other long-term liabilities                       22.9              24.0
 
     Shareholders' equity:
       Common stock and additional paid-in capital    375.6             367.7
       Retained earnings                              945.7             905.0
       Accumulated other comprehensive loss            (2.0)             (1.8)
         Total shareholders' equity                 1,319.3           1,270.9
 
         Total liabilities and
          shareholders' equity                     $2,397.9          $2,396.8
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                   Condensed Consolidated Statement of Cash Flows
                                   (In millions)
 
                                                         Three Months Ended
                                                              March 31,
                                                       2001               2000
     Cash flows from operating activities:
       Net income                                     $40.7              $12.6
       Adjustments to reconcile net income to net
        cash flow provided by operating activities:
         Depreciation, depletion, and amortization     32.7               23.4
         Deferred income taxes                         10.0                3.7
         Decrease (increase) in accounts receivable    40.8               (9.1)
         (Increase) decrease in costs incurred on
           turnkey drilling contracts in progress     (10.0)               5.2
         Decrease in prepaid expenses and
          other current assets                          1.2                3.5
         Decrease in accounts payable                 (38.0)             (19.2)
         (Decrease) increase in accrued liabilities   (11.2)               3.0
         Other, net                                    (5.6)              (0.1)
           Net cash flow provided by operating
            activities                                 60.6               23.0
 
     Cash flows from investing activities:
       Capital expenditures                            (9.9)             (59.7)
       Proceeds from sales of properties
        and equipment                                   0.8                0.6
       Proceeds from maturities of held-
        to-maturity securities                          ---                0.3
           Net cash flow used in investing activities  (9.1)             (58.8)
 
     Cash flows from financing activities:
       Increases in long-term debt                      ---              237.3
       Reductions of long-term debt                     ---             (256.9)
       Proceeds from exercises of
        employee stock options                          5.5                3.9
         Net cash flow provided by (used in)
          financing activities                          5.5              (15.7)
 
     Increase (decrease) in cash and cash
      equivalents                                      57.0              (51.5)
     Cash and cash equivalents at
      beginning of period                             144.3               83.3
 
     Cash and cash equivalents at end of period      $201.3              $31.8
 
 
                        GLOBAL MARINE INC. AND SUBSIDIARIES
                     Results of Operations by Business Segment
                 (Dollars in millions, except for average dayrate)
 
                                                         Three Months Ended
                                                             March 31,
                                                      2001              2000
 
     Revenues:
       Contract drilling                             $189.1            $112.3
       Drilling management                             84.5              92.7
       Oil and gas                                      6.3               3.7
       Elimination                                     (5.1)             (4.6)
         Total revenues                              $274.8            $204.1
 
     Operating income:
       Contract drilling                              $65.1             $25.6
       Drilling management                              0.5               7.3
       Oil and gas                                      5.0               2.1
       Restructure costs                                ---              (5.2)
       Corporate expenses                              (6.0)             (7.0)
         Total operating income                        64.6              22.8
     Interest expense, net of interest income         (11.2)             (5.1)
         Income before income taxes                   $53.4             $17.7
 
     Depreciation, depletion, and amortization
       included in operating income:
       Contract drilling                              $31.6             $21.2
       Drilling management                              0.1               0.1
       Oil and gas                                      0.6               1.3
       Corporate                                        0.4               0.8
                                                      $32.7             $23.4
 
     Average rig utilization rate                        89%               76%
 
     Average dayrate                                $71,100           $52,000
 
     Turnkey wells drilled                               21                29
 
     Turnkey well completions                             7                 7
 
 SOURCE  Global Marine Inc.