CB&I Reports First Quarter 2006 Results; Revenue up 35%; Record Backlog of $3.4 Billion; Company Provides 2006 Guidance.THE WOODLANDS Woodlands refers to several places:
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 $13.3 million or $0.13 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 first quarter ended March 31, 2006, compared with $15.8 million or $0.16 per diluted share for the comparable period in 2005. Revenue for the first quarter of 2006 increased 35% to $646.6 million from $478.8 million in the comparable 2005 period, with growth reported in each geographic segment. Revenue grew 18% 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. as a result of a larger volume of process-related work in the U.S. Revenue increased 77% in the Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , Africa, Middle East segment due
primarily to continued progress on LNG LNG (liquefied natural gas): see under natural gas. projects in the U.K. Asia Pacific
reported a 26% increase as a result of the continued ramp-up of LNG work
in China and revenues 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. segment increased
55% due primarily to a larger volume of work in the field compared with
the previous period.
Backlog Backlog The 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, 2006, increased to a record $3.4 billion. New awards in the first three months of 2006 totaled $872.4 million. Awards during the quarter included a gas processing complex in Angola Angola (ăng-gō`lə), officially Republic of Angola (2005 est. pop. 11,191,000), including the exclave of Cabinda, 481,351 sq mi (1,246,700 sq km), SW Africa. , a liquefied petroleum gas liquefied petroleum gas or LPG, mixture of gases, chiefly propane and butane, produced commercially from petroleum and stored under pressure to keep it in a liquid state. (LPG LPG: see liquefied petroleum gas. 1. LPG - Linguaggio Procedure Grafiche (Italian for "Graphical Procedures Language"). dott. Gabriele Selmi. Roughly a cross between Fortran and APL, with graphical-oriented extensions and several peculiarities. ) storage project in Qatar, and process-related work 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. . "We reported strong revenue growth across each geographic segment in the first quarter, reflecting our solid customer base," said Philip K. Asherman, CB&I's 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. . "The underlying fundamentals of our business remain intact and strong. We have backlog of $3.4 billion which we are confident will result in both revenue and net income growth for the balance of the year." SG&A increased to $38.9 million or 6.0% of revenue as compared to $25.5 million or 5.3% of revenue in the first quarter of 2005. The majority of this increase in expenses was due to the adoption of SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123(R) for the accounting of restricted share grants, along with several non-recurring issues including professional fees associated with the Audit Committee inquiry and costs related to former executives. Income from operations for the first quarter of 2006 was $20.2 million. Income tax expense for the three months ended March 31, 2006, was $6.5 million, returning to a more normal 31.4% of pre-tax income. The Company ended the quarter with cash and cash equivalents of $319.0 million, up from $237.4 million at the end of the first quarter of 2005. Capital expenditures for the first quarter were $12.8 million, compared with $5.7 million in the year-earlier period. 2006 Guidance Looking ahead, the Company believes that it is extremely well-positioned to benefit from the surge in capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. in each market it serves. At present, the Company anticipates new awards for 2006 to be in the range of $3.5 - $4.0 billion with revenues in the range of $2.6 - $2.9 billion. Earnings for the year are expected to be between $0.95 and $1.00 per diluted share. CB&I will host a conference call at 9 a.m. Central time (10 a.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT ) Thursday, June 1, 2006, to discuss financial and operating results, and answer questions from investors. The conference call will be broadcast live over the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . To access the webcast and slide presentation, go to www.shareholder.com/cbi/medialist.cfm and select the conference call link. Please log on to this Web site at least 15 minutes prior to the start of the call to register and to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any necessary audio software. The webcast can also be accessed from the investor relations Investor relations The process by which the corporation communicates with its investors. section of CB&I's Web site (www.CBI.com) by selecting "Presentations and Webcasts". For those who are unable to participate in the live call, the webcast of the conference call will be available at the Web sites listed above following the event. In addition, a replay of the conference call can be accessed by telephone at 800-642-1687 (from within the U.S.) or 706-645-9291 (from outside the U.S.), passcode 1068845. Both the archived webcast and telephone replay will be available until close of business June 8, 2006. 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 those expressed or implied by any forward-looking statements. 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 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 price, target price or similar contracts; risks associated with percentage-of-completion accounting; the Company's ability to settle or negotiate unapproved un·ap·proved adj. Not approved or sanctioned: an unapproved vaccine; an unapproved protest march. change orders and claims; changes in the costs or availability of, or delivery schedule for, components, materials, labor or subcontractors; weather conditions that may affect performance and timeliness of completion, which could lead to increased costs and adversely affect the costs or availability of, or delivery schedule for, components, materials, labor or subcontractors; 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. revenue resulting from a number of factors, including the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. 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; lower than expected growth in the Company's primary end markets, including but not limited to LNG and clean fuels; risks inherent in the Company's acquisition strategy and its ability to obtain financing for proposed acquisitions; the Company's ability to integrate and successfully operate acquired businesses and the risks associated with those businesses; adverse outcomes of pending claims or litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. or the possibility of new claims or litigation, including pending securities class action litigation and the potential effect on the Company's business, financial condition and results of operations; the ultimate outcome or effect of the pending Federal Trade Commission order on the Company's business, financial condition and results of operations; two material weaknesses in the Company's internal control over financial reporting have been identified, which could adversely affect the Company's ability to report its financial condition and results of operations accurately and on a timely basis; lack of necessary liquidity to finance expenditures prior to the receipt of payment for the performance of contracts and to provide bid and performance bonds and letters of credit securing the Company's obligations under its bids and contracts; proposed and actual revisions to U.S. and non-U.S. tax laws, and interpretation of said laws, and U.S. tax treaties with non-U.S. countries (including The Netherlands), that seek to increase income taxes payable; political and economic conditions including, but not limited to, war, conflict or civil or economic unrest Unrest is a sociological phenomenon, for instance:
The transition point between a rising, expanding economy to a falling, contracting one. downturn A decline in security prices or economic activity following a period of rising or stable prices or activity. or disruption disruption /dis·rup·tion/ (dis-rup´shun) a morphologic defect resulting from the extrinsic breakdown of, or interference with, a developmental process. in the economy in general. Additional factors which could cause actual results to differ materially from such forward-looking statements are described under "Risk Factors" as set forth in the Company's 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. filed with the SEC for the year ended Dec. 31, 2005. 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 executes on average more than 700 projects each year and is one of the world's leading engineering, procurement and construction  The introduction to this article is vague. To comply with Wikipedia's guidelines, it should be improved. (EPC (1) (Entertainment PC) See HTPC.(2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). ) companies, specializing in lump-sum turnkey See turnkey system. projects for customers that produce, process, store and distribute the world's natural resources. With more than 60 locations and approximately 10,000 employees throughout the world, CB&I capitalizes on its global expertise and local knowledge to safely and reliably deliver projects virtually anywhere. Information about CB&I is available at www.CBI.com.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months
Ended March 31,
2006 2005
Revenue $646,596 $478,783
Cost of revenue 587,396 427,920
Gross profit 59,200 50,863
% of Revenue 9.2% 10.6%
Selling and administrative expenses 38,949 25,517
% of Revenue 6.0% 5.3%
Intangibles amortization 177 386
Other operating income, net (90) (102)
--------- ---------
Income from operations 20,164 25,062
% of Revenue 3.1% 5.2%
Interest expense (2,389) (2,232)
Interest income 2,850 1,365
--------- ---------
Income before taxes and minority
interest 20,625 24,195
Income tax expense (6,468) (8,105)
--------- ---------
Income before minority interest 14,157 16,090
Minority interest in income (821) (340)
--------- ---------
Net income $ 13,336 $ 15,750
======== ========
Net income per share
Basic $ 0.14 $ 0.16
Diluted $ 0.13 $ 0.16
Weighted average shares outstanding
Basic 97,390 96,779
Diluted 99,264 99,998
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
March 31, March 31,
2006 2005
% of % of
NEW BUSINESS TAKEN(a) Total Total
North America $604,731 69% $ 470,227 33%
Europe, Africa & Middle East 187,667 22% 837,463 60%
Asia Pacific 34,259 4% 70,777 5%
Central & South America 45,757 5% 27,897 2%
-------- ----------
Total $872,414 $1,406,364
======== ==========
% of % of
REVENUE Total Total
North America $358,232 56% $ 303,204 63%
Europe, Africa & Middle East 213,879 33% 120,547 25%
Asia Pacific 47,711 7% 37,736 8%
Central & South America 26,774 4% 17,296 4%
-------- ----------
Total $646,596 $ 478,783
======== ==========
% of % of
INCOME FROM OPERATIONS Revenue Revenue
North America $ 3,130 0.9% $ 21,885 7.2%
Europe, Africa & Middle East 15,967 7.5% 687 0.6%
Asia Pacific 444 0.9% 1,938 5.1%
Central & South America 623 2.3% 552 3.2%
-------- ----------
Total $ 20,164 3.1% $ 25,062 5.2%
======== ==========
(a) New business taken represents the value of new project commitments
received by the Company during a given period. These commitments
are included in backlog until work is performed and revenue is
recognized or until cancellation. Backlog may also fluctuate with
currency movements.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2006 2005
ASSETS
Current assets $ 993,196 $ 950,603
Property and equipment, net 144,831 137,718
Goodwill and other intangibles, net 257,501 257,991
Other non-current assets 33,891 31,507
----------- ------------
Total assets $1,429,419 $ 1,377,819
========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 790,858 $ 758,643
Long-term debt 25,000 25,000
Other non-current liabilities 111,999 110,508
Redeemable common stock 38,012 -
Shareholders' equity 463,550 483,668
----------- ------------
Total liabilities and shareholders'
equity $1,429,419 $ 1,377,819
========== ===========
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,
2006 2005
CASH FLOWS
Cash flows from operating activities $ 24,911 $ 6,642
Cash flows from investing activities (33,915) (5,250)
Cash flows from financing activities (5,966) (355)
----------- ------------
(Decrease) increase in cash and cash
equivalents (14,970) 1,037
Cash and cash equivalents, beginning of the
year 333,990 236,390
---------- -----------
Cash and cash equivalents, end of the period $ 319,020 $ 237,427
========== ===========
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 5,611 $ 5,594
Capital expenditures $ 12,790 $ 5,653
Increase in receivables, net $ (38,121) $ (3,407)
Decrease (increase) in contracts in progress,
net 74,516 (575)
Increase in non-current contract retentions (3,348) (1,177)
Decrease in accounts payable (13,722) (8,650)
---------- -----------
Change $ 19,325 $ (13,809)
========== ===========
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