CB&I Reports First Quarter 2003 Results; Net Income and Revenues Increase 24%; Balance Sheet Remains Strong.Business Editors THE WOODLANDS Woodlands refers to several places:
CB&I (NYSE NYSE See: New York Stock Exchange :CBI CBI abbr. cumulative book index CBI Confederation of British Industry CBI n abbr (= Confederation of British Industry) → C.E.O.E. ) today reported net income of $12.8 million or $0.28 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for the three months ended March 31, 2003, compared with $10.3 million or $0.24 per diluted share for the first quarter of 2002. For the three months ended March 31, 2003, new business taken was $325 million compared with $424 million in 2002. The Qatif Qatif or Al-Qatif (also spelled Qateef or Al-Qateef; Arabic: القطيف Al-Qaṭīf 2 gas/oil separation plant project in Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. , valued at $105 million, was
awarded in the first quarter of 2002, while there were no awards of this
magnitude in the first quarter of 2003. The Company expects that
significant new contracts currently under negotiation or pending full
release will be awarded beginning in the second quarter of 2003 and
continues to anticipate full-year 2003 new business taken in the range
of $1.6 billion to $1.7 billion. New contracts during the quarter
included an award for a butane butane (by`tān), C4H10, gaseous alkane, a hydrocarbon that is obtained from natural gas or by refining petroleum. storage facility in China and three clean
fuels-related projects in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Backlog BacklogThe total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. at March 31, 2003 stood at $1.3 billion compared with $997 million at the end of the first quarter 2002. "The new CB&I continues to perform at levels that meet or exceed our expectations," said Gerald Gerald - ["Gerald: An Exceptional Lazy Functional Programming Language", A.C. Reeves et al, in Functional Programming, Glasgow 1989, K. Davis et al eds, Springer 1990]. M. Glenn, CB&I's Chairman, President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our record backlog going into 2003 has positioned us well for the balance of the year, and we expect the pace of new awards will increase in the coming months. We continue to maintain a strong balance sheet, ending the first quarter with cash on hand of $98.8 million, which exceeded our debt by $23.8 million." Revenues for the first quarter of 2003 grew 24% to $322.3 million from $259.3 million in the first quarter of 2002. Revenues increased substantially in the Company's Europe, Africa, Middle East (EAME n. 1. Uncle. ) and Asia Pacific (AP) segments, due primarily to the strong backlog going into the year, with large projects now under way in Saudi Arabia and Australia. Revenues increased in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. , due mainly to a higher volume of process-related work, but declined in the Central and South America South America, fourth largest continent (1991 est. pop. 299,150,000), c.6,880,000 sq mi (17,819,000 sq km), the southern of the two continents of the Western Hemisphere. (CSA (1) (Canadian Standards Association, Toronto, Ontario, www.csa.ca) A standards-defining organization founded in 1919. It is involved in many industries, including electronics, communications and information technology. ) segment, as a result of lower new awards during 2002 in certain Latin American markets. While gross profit for the three months ended March 31, 2003 was $39.7 million or 12.3% of revenues compared with $35.1 million or 13.5% of revenues in 2002, income from operations for the first quarter of 2003 increased 26% to $20.0 million from $15.8 million in the prior year quarter. Gross margin performance was consistent with as-sold margins and better than plan but was slightly lower than the previous year due to the mix of projects being executed in the first quarter. No exit costs or other special charges were recorded in the first quarter of 2003. During the first quarter of 2002 the Company reported exit costs of $1.2 million. CB&I had cash in excess of debt of $23.8 million at March 31, 2003, compared with debt in excess of cash of $41.3 million at the end of first quarter 2002. Cash and cash equivalents totaled $98.8 million at the end of the first quarter. Capital expenditures in the first quarter of 2003, including $4.8 million for the new administrative office building, were $8.5 million compared with $2.7 million for the year-earlier period. "CB&I continues to move forward with our strategy of growth through selective acquisitions," Glenn added. "As we announced earlier this week, the acquisition of Petrofac's U.S. operations expands our capacity to handle the growing volume of process- related EPC (1) (Entertainment PC) See HTPC. (2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). work that we are winning from customers in the oil refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar and natural gas industries, and will also provide access to new customers and technology. Fully integrating this newly-acquired capacity into our CB&I Process and Technology operations will result in significant synergies." Any statements made in this release that are not based on historical fact are forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. and represent management's best judgment as to what may occur in the future. The actual outcome and results are not guaranteed, are subject to risks, uncertainties and assumptions and may differ materially from what is expressed. A variety of factors could cause business conditions and results to differ materially from what is contained in the forward-looking statements including, but not limited to, the Company's ability to realize cost savings from its expected execution performance of contracts; the uncertain timing and the funding of new contract awards, and project cancellations Project cancellation hits around half of U.S. software development projects, whether developed for in-house corporate use or for sale as retail software. When a project is cancelled early on, it has little financial impact but if project sponsors wait until the project has gone and operating risks Operating risk The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk. ; cost overruns Noun 1. cost overrun - excess of cost over budget; "the cost overrun necessitated an additional allocation of funds in the budget" cost - the total spent for goods or services including money and time and labor on fixed priced contracts; increased competition; fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. revenues resulting from a number of factors, including the cyclic cyclic /cyc·lic/ (sik´lik) pertaining to or occurring in a cycle or cycles; applied to chemical compounds containing a ring of atoms in the nucleus. cy·clic or cy·cli·cal adj. 1. nature of the individual markets in which the Company's customers operate; lower than expected activity in the hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen industry, demand from which is the largest component of the Company's revenue, or lower than expected growth in the Company's other primary end markets; the Company's ability to integrate and successfully operate acquired businesses and the risks associated with those businesses; and the ultimate outcome or effect of the pending FTC FTC See Federal Trade Commission (FTC). proceeding on the Company's business, financial condition and results of operations. Additional factors which could cause actual results to differ from such forward-looking statements are set forth in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2002. The Company does not undertake to update any forward- looking statements contained herein, whether as a result of new information, future events or otherwise. CB&I is a global specialty engineering In systems engineering, Specialty Engineering includes the engineering domains that are not typical of the main engineering effort. Hardware engineering, software engineering, and human factors engineering may be used as major elements in a majority of systems engineering efforts , procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. and construction (EPC) company serving customers in several primary end markets, including hydrocarbon refining, natural gas, water and the energy sector in general. We offer a complete package of design, engineering, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , procurement, construction and maintenance services. Our projects include hydrocarbon processing plants, LNG terminals Liquefied natural gas is used to transport natural gas over long distances, often by sea. In most cases, LNG terminals are purpose built ports used exclusively to export or import LNG. and peak shaving plants, bulk liquid terminals, water storage and treatment facilities, and other steel structures and their associated systems. Information about CB&I is available at www.chicagobridge.com.
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months
Ended March 31,
2003 2002
Revenues $322,309 $259,272
Cost of revenues 282,648 224,182
------- -------
Gross profit 39,661 35,090
% of Revenues 12.3% 13.5%
Selling and
administrative
expenses 19,198 17,907
% of Revenues 6.0% 6.9%
Intangibles amortization 638 626
Other operating income,
net (136) (419)
Exit costs - 1,159
------- -------
Income from operations 19,961 15,817
% of Revenues 6.2% 6.1%
Interest expense (1,687) (1,813)
Interest income 466 346
------- -------
Income before
taxes and minority
interest 18,740 14,350
Income tax expense (5,611) (4,018)
------- -------
Income before
minority interest 13,129 10,332
Minority interest in
income (365) (74)
------- -------
Net income $ 12,764 $ 10,258
======= =======
Net income per share
Basic $ 0.29 $ 0.24
Diluted $ 0.28 $ 0.24
Weighted average shares
outstanding
Basic 44,394 42,030
Diluted 46,248 43,546
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
March 31, March 31,
2003 2002
NEW BUSINESS TAKEN % of % of
Total Total
North America $231,584 71% $205,736 49%
Europe/Africa/Middle East 46,931 15% 159,001 37%
Asia Pacific 28,566 9% 43,313 10%
Central & South America 17,663 5% 16,191 4%
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Total $324,744 $424,241
======= =======
REVENUES % of % of
Total Total
North America $204,150 63% $195,299 75%
Europe/Africa/Middle East 58,953 18% 23,320 9%
Asia Pacific 41,032 13% 11,000 4%
Central & South America 18,174 6% 29,653 12%
------- -------
Total $322,309 $259,272
======= =======
INCOME (LOSS) FROM OPERATIONS % of % of
Excluding Exit Costs Revenues Revenues
North America $ 11,500 5.6% $ 10,518 5.4%
Europe/Africa/Middle East 3,560 6.0% 348 1.5%
Asia Pacific 1,313 3.2% (461) (4.2%)
Central & South America 3,588 19.7% 6,571 22.2%
------- -------
Total $ 19,961 6.2% $ 16,976 6.5%
======= =======
EXIT COSTS $ - $ 1,159
======= =======
INCOME (LOSS) FROM OPERATIONS
North America $ 11,500 $ 9,776
Europe/Africa/Middle East 3,560 112
Asia Pacific 1,313 (510)
Central & South America 3,588 6,439
------- -------
Total $ 19,961 $ 15,817
======= =======
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2003 2002
ASSETS
Current assets $381,856 $382,423
Property and equipment, net 113,628 109,271
Goodwill and other intangibles, net 192,427 191,459
Other non-current assets 63,282 57,283
------- -------
Total assets $751,193 $740,436
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $278,120 $287,070
Long-term debt 75,000 75,000
Other non-current liabilities 103,631 96,219
Shareholders' equity 294,442 282,147
------- -------
Total liabilities
and shareholders' equity $751,193 $740,436
======= =======
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND OTHER FINANCIAL DATA
(in thousands)
Three Months
Ended March 31,
2003 2002
CASH FLOWS
Cash flows from operating activities $ 5,627 $ (5,518)
Cash flows from investing activities (8,618) (4,988)
Cash flows from financing activities (705) (432)
------- -------
Increase in cash and cash equivalents (3,696) (10,938)
Cash and cash equivalents,
beginning of the year 102,536 50,478
------- -------
Cash and cash equivalents,
end of the period $ 98,840 $ 39,540
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 4,855 $ 4,862
Capital expenditures 8,539 2,678
Decrease in receivables, net 17,191 8,184
Increase in contracts in progress, net (7,619) (7,888)
Decrease in accounts payable (7,127) (7,389)
------- -------
Change in contract capital $ 2,445 $ (7,093)
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