CB&I Reports Improved Second Quarter Earnings and New Business; Earnings Exceed Expectations; Company Raises Guidance on 2005 New Business.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 $21.1 million or $0.21 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 second quarter ended June June: see month. 30, 2005, compared with $4.9 million or $0.05 per diluted share for the comparable period in 2004. Net income for the first half of 2005 increased to $36.9 million or $0.37 per diluted share, compared with $19.5 million or $0.20 per diluted share for the first six months of 2004. For the quarter ended June 30, 2005, new business increased 38% to $550 million, compared with $398 million in the second quarter of 2004. Contract awards during the quarter included the previously announced LNG LNG (liquefied natural gas): see under natural gas. import terminal in China, refinery sulfur sulfur or sulphur (sŭl`fər), nonmetallic chemical element; symbol S; at. no. 16; at. wt. 32.06; m.p. 112.8°C; (rhombic), 119.0°C; (monoclinic), about 120°C; (amorphous); b.p. 444.674°C;; sp. gr. at 20°C;, 2. processing projects in the U.S. and storage projects in the Middle East. New business taken for the first half of 2005 was $2.0 billion, compared with $746 million for the same period last year. For the first half of 2005, new business taken outside 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. amounted to 60% of the total. 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 June 30, 2005, stood at $3.1 billion, compared with $1.5 billion at the end of the year-earlier period. "It is gratifying grat·i·fy tr.v. grat·i·fied, grat·i·fy·ing, grat·i·fies 1. To please or satisfy: His achievement gratified his father. See Synonyms at please. 2. to report that CB&I earnings grew substantially in the second quarter," 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. . "With new business taken of $2.0 billion for the first half, and solid prospects for the balance of the year, we now expect full-year 2005 new business taken to reach at least $3.0 billion, up about 30% from our previous guidance of $2.2-$2.4 billion." Revenue for the second quarter of 2005 increased 32% to $549.3 million from $415.4 million in the second quarter of 2004. The Company experienced revenue growth in each of its geographic geographic /geo·graph·ic/ (je?o-graf´ik) in pathology, of or referring to a pattern that is well demarcated, resembling outlines on a map. geographic pertaining to geography. segments. In the North America segment, revenue increased 47% due mainly to higher backlog going into the year and a larger volume of process-related work. Revenue 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 and Middle East (EAME n. 1. Uncle. ) segment increased
8% primarily as a result of the continued ramp-up of LNG work in the
U.K., while revenue in the Asia Pacific (AP) segment grew 20%, due
mainly to higher volume 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. . Revenue 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 8%. For the first six months of 2005, revenue
grew 20% to $1.0 billion, compared with $858.9 million for the first
half of 2004.Income from operations in the second quarter of 2005 was $33.5 million, compared with $5.5 million in the second quarter of 2004. 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. grew as a result of higher volume and a lack of significant project cost provisions that affected the year-earlier period. The increase in operating income in the North America and EAME segments was due primarily to higher volume and the lack of project cost provisions, while operating income grew in the AP segment as a result of higher volume and project cost savings in Australia. CB&I had $138.3 million of cash in excess of debt at June 30, 2005. The Company had cash and cash equivalents of $220.9 million at the end of the second quarter of 2005, compared with $116.9 million at the end of the second quarter of 2004. Capital expenditures for the second quarter were $8.5 million, compared with $4.8 million for the year-earlier period. Capital expenditures for the first six months of 2005 were $14.2 million, compared with $7.6 million in 2004. During the quarter, the Company used $4.0 million of cash to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. 191,500 shares of its common stock. "The record backlog we carried into 2005 and our strong new business performance so far this year has provided CB&I with substantial momentum for future growth," Glenn added. "As we implement our strategy to expand our capabilities to deliver complex EPC (1) (Entertainment PC) See HTPC. (2) (Electronic Product Code) A standard code for RFID tags administered by EPCglobal Inc. (www.epcglobalinc.org). projects anywhere in the world, we believe our markets will continue to broaden. We expect growing demand in these markets, combined with solid project execution, will lead to continued growth in shareholder value." 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 or availability of or delivery schedule for components, materials and labor; 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 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 -- including but not limited to LNG and clean fuels projects -- 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; a downturn Downturn 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. in the economy in general; political and economic conditions including, but not limited to, war, conflict or civil or economic unrest Unrest is a sociological phenomenon, for instance:
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 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 December December: see month. 31, 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. (EPC) 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 ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 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 Six Months
Ended June 30, Ended June 30,
2005 2004 2005 2004
Revenue $549,322 $415,373 $1,028,105 $ 858,926
Cost of revenue 488,762 385,808 916,682 782,598
Selling and
administrative
expenses 28,262 23,616 53,779 47,463
% of Revenue 5.1% 5.7% 5.2% 5.5%
Intangibles
amortization 386 519 772 1,025
Other operating
income, net (1,631) (97) (1,733) (120)
------- ------- --------- ---------
Income from
operations 33,543 5,527 58,605 27,960
% of Revenue 6.1% 1.3% 5.7% 3.3%
Interest expense (2,681) (1,734) (4,913) (3,460)
Interest income 1,439 243 2,804 449
------- ------- --------- ---------
Income before
taxes and
minority interest 32,301 4,036 56,496 24,949
Income tax expense (10,256) (1,292) (18,361) (7,984)
------- ------- --------- ---------
Income before
minority interest 22,045 2,744 38,135 16,965
Minority interest in
(income) loss (934) 2,200 (1,274) 2,583
------- ------- --------- ---------
Net income $ 21,111 $ 4,944 $ 36,861 $ 19,548
======= ======= ========= =========
Net income per share
Basic $ 0.22 $ 0.05 $ 0.38 $ 0.21
Diluted $ 0.21 $ 0.05 $ 0.37 $ 0.20
Weighted average shares
outstanding
Basic 97,582 95,132 97,347 94,588
Diluted 99,894 98,982 99,932 98,806
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
2005 2004
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 309,296 56% $ 332,969 83%
Europe/Africa/Middle East 80,032 15% 35,310 9%
Asia Pacific 123,965 22% 14,349 4%
Central & South America 37,189 7% 15,654 4%
------- -------
Total $ 550,482 $ 398,282
======= =======
REVENUE % of % of
Total Total
North America $ 357,342 65% $ 242,752 59%
Europe/Africa/Middle East 121,540 22% 112,236 27%
Asia Pacific 51,390 9% 42,694 10%
Central & South America 19,050 4% 17,691 4%
------- -------
Total $ 549,322 $ 415,373
======= =======
INCOME/(LOSS) FROM % of % of
OPERATIONS Revenue Revenue
North America $ 24,390 6.8% $ 10,155 4.2%
Europe/Africa/Middle East 4,755 3.9% (8,150) (7.3%)
Asia Pacific 2,381 4.6% 870 2.0%
Central & South America 2,017 10.6% 2,652 15.0%
------- -------
Total $ 33,543 6.1% $ 5,527 1.3%
======= =======
Six Months Ended
June 30, June 30,
2005 2004
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 779,523 40% $ 500,441 66%
Europe/Africa/Middle East 917,495 47% 132,549 18%
Asia Pacific 194,742 10% 79,364 11%
Central & South America 65,086 3% 33,660 5%
--------- ---------
Total $1,956,846 $ 746,014
========= =========
REVENUE % of % of
Total Total
North America $ 660,546 64% $ 499,802 58%
Europe/Africa/Middle East 242,087 24% 218,148 25%
Asia Pacific 89,126 9% 101,332 12%
Central & South America 36,346 3% 39,644 5%
--------- ---------
Total $1,028,105 $ 858,926
========= =========
INCOME/(LOSS) FROM % of % of
OPERATIONS Revenue Revenue
North America $ 46,275 7.0% $ 24,855 5.0%
Europe/Africa/Middle East 5,442 2.2% (4,699) (2.2%)
Asia Pacific 4,319 4.8% 2,550 2.5%
Central & South America 2,569 7.1% 5,254 13.3%
--------- ---------
Total $ 58,605 5.7% $ 27,960 3.3%
========= =========
(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)
June 30, Dec. 31,
2005 2004
ASSETS
Current assets $ 795,140 $ 685,279
Property and equipment, net 124,431 119,474
Goodwill and other intangibles, net 260,067 262,732
Other non-current assets 40,202 35,233
--------- ---------
Total assets $1,219,840 $1,102,718
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 557,658 $ 481,190
Long-term debt 50,000 50,000
Other non-current liabilities 108,797 102,290
Shareholders' equity 503,385 469,238
--------- ---------
Total liabilities
and shareholders' equity $1,219,840 $1,102,718
========= =========
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND OTHER FINANCIAL DATA
(in thousands)
Six Months
Ended June 30,
2005 2004
CASH FLOWS
Cash flows from operating activities $ 3,370 $ 7,013
Cash flows from investing activities (12,031) (8,883)
Cash flows from financing activities (6,813) 5,891
------- -------
(Decrease)/increase in cash and
cash equivalents (15,474) 4,021
Cash and cash equivalents,
beginning of the year 236,390 112,918
------- -------
Cash and cash equivalents,
end of the period $ 220,916 $ 116,939
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 9,854 $ 10,814
Capital expenditures $ 14,196 $ 7,554
Increase in receivables, net $ (64,891) $ (45,368)
Decrease in contracts in progress,
net 6,201 35,513
(Increase)/decrease in non-current
contract retentions (1,377) 2,738
Increase/(decrease) in accounts
payable 13,041 (15,353)
------- -------
Change $ (47,026) $ (22,470)
======= =======
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