Hercules Offshore, Inc. reported net income of $31.3 million, or $0.35 per diluted share, on revenues of $262.9 million for the fourth quarter 2007, compared to net income of $35.5 million, or $1.09 per diluted share, on revenues of $114.7 million for the fourth quarter 2006.
Net income was $136.5 million, or $2.29 per diluted share, on revenues of $766.8 million for the twelve months ended December 31, 2007, compared to net income of $119.1 million or $3.70 per diluted share, on revenues of $344.3 million for the twelve months ended December 31, 2006.
The results from the twelve month period ended December 31, 2007 include $3.1 million in severance costs and other costs related to our July 2007 acquisition of TODCO, and a loss of $1.5 million related to the early retirement of debt, net of a $0.7 million gain on interest rate derivatives. On an after-tax basis, these items approximated $3.0 million, or $0.05 per diluted share. Excluding the effect of these items, net income for the year ended December 31, 2007, was $139.5 million or $2.34 per diluted share. A one-time gain of $18.6 million, net of tax, related to an insurance claim settled on the loss of Rig 25 in Hurricane Katrina, was included in the 2006 results. Excluding this gain, net income was $100.4 million or $3.12 per diluted share for the twelve month period ended December 31, 2006.
"2007 was a transformative year for Hercules Offshore," Randy Stilley, CEO and president of Hercules Offshore, Inc., stated. "Our company grew dramatically, tripling the size of our offshore drilling fleet as a result of our acquisition of TODCO. We quickly completed the integration of TODCO into our operations, using the best of both companies to form a leader in the industry. The acquisition also enhanced our financial flexibility and expanded our geographic footprint. Furthermore, in line with our strategy of focusing on shallow water offshore services, we divested of the nine legacy TODCO land rigs late last year."
"The past year also marked a period of transition for the US Gulf of Mexico. It was a year in which many of our customers retrenched, focusing on strengthening their balance sheets or digesting recent property acquisitions. Importantly however, supply also adjusted downward to reflect decreased demand. Going forward, based on our customers' indications of higher activity, and supported by the recent improvement in natural gas prices, we are confident that activity levels will commence a gradual upturn during 2008. Additionally, we will remain focused on managing our operating costs as we did so effectively during 2007, as well as seeking opportunities to further enhance our international presence."
During the fourth quarter 2007, revenues from Domestic Offshore increased by 44% to $70.7 million, from $49.1 million in the fourth quarter 2006. The increase was driven by additional operating days as a result of the TODCO acquisition, partially offset by a decline in utilization to 55.6% compared to 99.5% during the fourth quarter 2006 and a reduction in average daily revenue per rig of $26,563 to $62,796 in the fourth quarter 2007 as a result of softer demand. Average operating expense per rig per day declined to $23,408 in the fourth quarter 2007 from $25,824 in the prior year period largely due to the warm stacking of several idle rigs. Operating income decreased to $6.5 million in the fourth quarter 2007 from $30.4 million in the fourth quarter of 2006.
International Offshore revenues increased 194% during the fourth quarter of 2007 to $53.8 million from $18.3 million in the prior year period due to increased operating days stemming from the acquisition of TODCO. Our average daily revenue per rig declined by $16,945 to $89,458 during the fourth quarter 2007 compared with the prior year period due to a mix shift in the type of rigs in this segment. Our average operating expense per day declined to $32,622 in the fourth quarter 2007 from $41,999 in the fourth quarter of 2006. Operating income increased by $16.0 million to $24.6 million in the fourth quarter 2007 from $8.6 million in the prior year period.
During the fourth quarter 2007, we generated revenues of $53.5 million and operating income of $14.1 million in our inland segment. Average daily revenue per rig in this segment was $47,312 on utilization of 72.3%. Prior to the third quarter of 2007, we did not have inland barge operations.
Domestic Liftboats generated revenues of $32.2 million in the fourth quarter 2007 versus $38.1 million in the fourth quarter 2006. Operating income decreased to $10.9 million in the fourth quarter 2007 from $17.2 million in the same period of 2006. The results were impacted by a decline in our utilization to 65.2% during the fourth quarter 2007 from 74.2% in the same period in 2006, as well as a decline in our average revenue per liftboat per day to $11,656 from $12,398 over the same periods as we have largely completed repair work from the active 2005 hurricane season. Our average operating expenses per liftboat per day also declined to $3,379 in the fourth quarter 2007 from $3,777 in the fourth quarter 2006.
Our International Liftboats segment posted revenues of $17.3 million for the three-month period ended December 31, 2007, a significant increase from $9.2 million in the fourth quarter 2006. This increase is largely attributed to an increase in our operating days to 1,280 compared with 818 in the fourth quarter of 2006 as a result of our acquisition of eight liftboats and the bareboat charter of an additional five liftboats in late 2006. Average revenue per liftboat per day also increased to $13,480 from $11,277 for the same period of 2006 as we increased our dayrates due to robust demand. Operating income increased to $5.2 million in the fourth quarter 2007 from $2.2 million in the fourth quarter 2006.
Our Other segment includes the results of our wholly owned subsidiary, Delta Towing, and our former fleet of nine onshore drilling rigs, both of which were assumed as part of the TODCO acquisition. During the fourth quarter 2007, this segment generated revenues of $35.6 million and operating income of $6.5 million. As previously announced, we sold our fleet of nine land drilling rigs and related assets in late December 2007 for $107.0 million. These assets contributed $18.7 million in revenue and approximately $600,000 in operating income to our fourth quarter results.
At December 31, 2007, the Company's balance sheet reflected total assets of $3.6 billion, including cash & equivalents and marketable securities totaling $251.7 million, total debt of $928.6 million and stockholders' equity of $2.0 billion.
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