CB&I Reports Growth in First Quarter Results; Revenue Up 38%; Net Income and Backlog Up 14%.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 increased 14% to $14.6 million or $0.30 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, 2004, compared with $12.8 million or $0.28 per diluted share for the comparable period in 2003. For the quarter ended March 31, 2004, new business taken increased 7% to $348 million, compared with $325 million in 2003. The Company continues to anticipate full-year 2004 new business taken in the range of $1.8 billion to $1.9 billion. New business during the quarter included the previously announced LNG LNG (liquefied natural gas): see under natural gas. storage terminal in Equatorial Guinea Equatorial Guinea (gĭn`ē), officially Republic of Equatorial Guinea, republic (2005 est. pop. 536,000), 10,830 sq mi (28,051 sq km), W central Africa. , large storage tank projects in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. and the Middle East, and process-related work 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. . 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, 2004, increased 14% to $1.5 billion, compared with $1.3 billion at the end of the year-earlier period. "We're we're Contraction of we are. we're we are pleased to report that first quarter EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. exceeded our expectations, which has given us a solid start to 2004," said Gerald 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. . "With record backlog going into the year, we anticipate continually con·tin·u·al adj. 1. Recurring regularly or frequently: the continual need to pay the mortgage. 2. improving revenue and earnings performance for the year, and we expect the pace of new business awards to increase." Revenue for the first quarter of 2004 increased 38% to $443.6 million from $322.3 million in the first quarter of 2003. The increase in revenue was attributable to the strong backlog going into 2004, which produced significant revenue growth as projects moved into the field construction phase. Revenue grew 26% in North America, including a higher volume of process-related work. Revenue increased 80% in the Company's Europe, Africa, Middle East (EAME n. 1. Uncle. ) segment, which includes revenue from CB&I John Brown acquired May 30, 2003, and revenue grew 43% in the Asia Pacific (AP) segment, due primarily to large projects now under way in China and Australia. Revenue grew 21% 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 projects sold in 2003 moved into the field construction phase. First quarter 2004 gross profit was $46.8 million, up 18% compared with $39.7 million in the comparable 2003 period. Gross profit as a percentage of revenue was lower compared with the prior-year period. This was partially attributable to the mix and timing of work and to the recognition of costs for work performed on certain projects for which the Company is contractually obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. without the benefit of immediate owner approval. As these costs are approved, associated revenue will be recognized. Excluding the impact of this work, the gross profit percentage for the quarter would have been comparable to the prior quarter. Income from operations in the first quarter of 2004 increased 12% to $22.4 million, compared with $20.0 million in the year-earlier period. Higher revenue and continued control of overhead costs overhead costs see fixed costs. and administrative expenses led to better results in the North America and AP segments, while operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. in the EAME segment declined slightly. Operating income declined in the CSA segment as a result of project mix. At March 31, 2004, the Company had cash and cash equivalents of $81.8 million, compared with $98.8 million at the end of the first quarter 2003. Capital expenditures for the first quarter were $2.7 million, compared with $8.5 million in the year-earlier period. CB&I had cash in excess of debt of $6.3 million at March 31, 2004. "CB&I's operations continue to grow and to perform well, and we are tracking increasingly abundant opportunities in our key markets worldwide, especially in clean fuels and LNG," Glenn added. "We continue to maintain a solid balance sheet, so that CB&I will be well positioned to pursue targeted acquisitions that will fit our culture and complement or extend our existing business lines. We are confident our outstanding corps of employees worldwide will continue to produce growth in value for our shareholders and investors." 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; changes in the costs of or delivery schedule for components and materials; 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 Form S-3 filed with the SEC on April 6, 2004. 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 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. companies, specializing in lump-sum turnkey See turnkey system. projects for customers that produce, process, store and distribute the
earth'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.CBIepc.com.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months
Ended March 31,
2004 2003
Revenue $443,553 $322,309
Cost of revenue 396,790 282,648
------- -------
Gross profit 46,763 39,661
% of Revenue 10.5% 12.3%
Selling and
administrative
expenses 23,847 19,198
% of Revenue 5.4% 6.0%
Intangibles
amortization 506 638
Other operating
income, net (23) (136)
------- -------
Income from
operations 22,433 19,961
% of Revenue 5.1% 6.2%
Interest expense (1,726) (1,687)
Interest income 206 466
------- -------
Income before
taxes and
minority interest 20,913 18,740
Income tax expense (6,692) (5,611)
------- -------
Income before
minority interest 14,221 13,129
Minority interest in
loss (income) 383 (365)
------- -------
Net income $ 14,604 $ 12,764
======= =======
Net income per share
Basic $ 0.31 $ 0.29
Diluted $ 0.30 $ 0.28
Weighted average shares
outstanding
Basic 47,021 44,394
Diluted 49,315 46,248
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
March 31, March 31,
2004 2003
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $167,472 48% $231,584 71%
Europe/Africa/Middle East 97,239 28% 46,931 15%
Asia Pacific 65,015 19% 28,566 9%
Central & South America 18,006 5% 17,663 5%
------- -------
Total $347,732 $324,744
======= =======
REVENUE % of % of
Total Total
North America $257,050 58% $204,150 63%
Europe/Africa/Middle East 105,912 24% 58,953 18%
Asia Pacific 58,638 13% 41,032 13%
Central & South America 21,953 5% 18,174 6%
------- -------
Total $443,553 $322,309
======= =======
INCOME FROM OPERATIONS % of % of
Revenues Revenues
North America $ 14,700 5.7% $ 11,500 5.6%
Europe/Africa/Middle East 3,451 3.3% 3,560 6.0%
Asia Pacific 1,680 2.9% 1,313 3.2%
Central & South America 2,602 11.9% 3,588 19.7%
------- -------
Total $ 22,433 5.1% $ 19,961 6.2%
======= =======
(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, Dec. 31,
2004 2003
ASSETS
Current assets $513,291 $512,427
Property and equipment, net 122,324 124,505
Goodwill and other intangibles, net 253,452 249,982
Other non-current assets 37,130 45,448
------- -------
Total assets $926,197 $932,362
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $353,452 $376,252
Long-term debt 75,000 75,000
Other non-current liabilities 91,646 91,946
Shareholders' equity 406,099 389,164
------- -------
Total liabilities
and shareholders' equity $926,197 $932,362
======= =======
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,
2004 2003
CASH FLOWS
Cash flows from operating activities $(27,547) $ 5,627
Cash flows from investing activities (2,914) (8,618)
Cash flows from financing activities (663) (705)
------- -------
Decrease in cash and cash
equivalents (31,124) (3,696)
Cash and cash equivalents,
beginning of the year 112,918 102,536
------- -------
Cash and cash equivalents,
end of the period $ 81,794 $ 98,840
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 5,292 $ 4,855
Capital expenditures 2,748 8,539
(Increase)/decrease in receivables, net (52,195) 17,323
Decrease/(increase) in contracts in
progress, net 14,326 (9,675)
Decrease in non-current contract
retentions 3,211 1,924
Decrease in accounts payable (14,217) (7,127)
------- -------
Change in contract capital $(48,875) $ 2,445
======= =======
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