CB&I Reports Record Fourth Quarter and Full Year 2002 Results.Energy Editors/Business Editors THE WOODLANDS Woodlands refers to several places:
Full-Year Earnings Up 37%, Exceeding Consensus Estimates; New Business Taken Increases 41%; 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. Up 57% Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. Bridge & Iron Company N.V. (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 income from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the increased 37% to $52.8 million or $1.18 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 year ended Dec. 31, 2002, compared with $38.5 million or $0.86 per diluted share for 2001, excluding special charges for both years. Income from continuing operations for the fourth quarter of 2002 increased 16% to $15.0 million or $0.33 per diluted share, compared with $12.9 million or $0.30 per diluted share for the comparable 2001 period, excluding special charges for both periods. The per share amounts reflect the Company's two-for-one stock split, which was effective with trading as of Feb. 11, 2003. Cash on hand exceeded debt by $27.5 million at Dec. 31, 2002, compared with $30.4 million in net debt at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2001. Net income for the fourth quarter of 2002 was $14.3 million or $0.31 per diluted share, compared with $11.3 million or $0.26 per diluted share in the prior year period. Net income for full-year 2002 was $50.1 million or $1.12 per diluted share, compared with $19.7 million or $0.44 per diluted share in 2001. 2001 included a $12.2 million loss (net of tax) related to discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Special charges amounted to $4.0 million and $9.7 million, respectively, in 2002 and 2001. For the year ended Dec. 31, 2002, new business taken increased 41% to $1.6 billion from $1.2 billion in 2001. New business taken during the 2002 fourth quarter increased 22% to $370 million from $303 million in the year-earlier period. The most significant new contract in the fourth quarter was the previously announced award for the mechanical erection erection /erec·tion/ (e-rek´shun) the condition of being rigid and elevated, as erectile tissue when filled with blood. e·rec·tion n. 1. of an LNG LNG (liquefied natural gas): see under natural gas. expansion project in Nigeria Nigeria (nījĭr`ēə), officially Federal Republic of Nigeria, republic (2006 provisional pop. 140,003,542), 356,667 sq mi (923,768 sq km), W Africa. . Other awards included a refrigerated re·frig·er·ate tr.v. re·frig·er·at·ed, re·frig·er·at·ing, re·frig·er·ates 1. To cool or chill (a substance). 2. To preserve (food) by chilling. petrochemical petrochemical, any one of a large group of chemicals derived from a component of petroleum or natural gas. The cracking processes for manufacturing gasoline produce vast quantities of gaseous hydrocarbons. storage facility in China, a gasoline gasoline or petrol, light, volatile mixture of hydrocarbons for use in the internal-combustion engine and as an organic solvent, obtained primarily by fractional distillation and "cracking" of petroleum, but also obtained from natural gas, by hydrotreater 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. and a cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. gas plant 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. . Backlog at year-end 2002 increased 57% to $1.3 billion, compared with $835 million at year-end 2001. "By nearly all measures, 2002 was a year of impressive growth for CB&I," 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, 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 continued excellence in project execution helped produce a 27% increase in income from operations on a 6% increase in revenues. We achieved a record level of new business taken and entered 2003 with a very strong $1.3 billion backlog. Continuing to maintain a strong balance sheet, CB&I ended the year with cash on hand of $102.5 million, which exceeded our debt by $27.5 million." Revenues in 2002 of $1.1 billion rose 6% compared with 2001. Revenues for the fourth quarter of 2002 grew 8% to $328.7 million from $304.8 million in the fourth quarter of 2001. 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. , the increase in revenues year over year was due primarily to higher levels of 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). ) projects for 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 processing industries. These process-related revenues rose 52%, as backlog carried over from 2001 was put in place and strong new business continued in 2002. Revenues grew significantly in the Asia Pacific (AP) area, as several large projects got under way 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. . Revenues increased modestly in the Europe, Africa and the Middle East (EAME n. 1. Uncle. ) area, but were lower in 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. ), where large projects in Venezuela and the Caribbean neared completion. Gross profit in 2002 was $155.6 million or 13.5% of revenues, compared with $136.8 million or 12.6% of revenues in 2001, reflecting continued strong project execution, the growing mix of higher margin process-related EPC work and stringent cost control. Special charges for full-year 2002, consisting primarily of previously announced employee relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. costs, totaled $4.0 million, compared with $9.7 million in 2001. Excluding special charges, income from operations in 2002 increased 27% to $81.7 million, compared with $64.1 million in 2001. Fourth quarter 2002 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. excluding special charges was $22.9 million, compared with $19.6 million in the prior-year quarter. Analyzing results for 2002, in North America improved operating income resulted from a project mix that included increased levels of higher margin EPC work, while a volume shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. in standard product work was more than offset by improvements in project execution and control of overhead and administrative expenses. Higher volumes in EAME, combined with focused cost control and excellent execution, enabled the region to post significantly improved operating income. The AP area rebounded from a year-earlier loss, primarily due to improvement in Australia. The CSA area continued to be profitable due to the existing backlog of work and recognition of project cost savings. The Company's adoption of Financial Accounting Standard No. 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " as of Jan. 1, 2002, results in the elimination of goodwill amortization, which, in comparison with 2001, benefited fourth quarter and full-year income from operations by $0.9 million and $3.6 million, respectively. CB&I ended 2002 with net cash (cash and cash equivalents less total debt) of $27.5 million, compared with net debt of $30.4 million at year-end 2001. Cash and cash equivalents at year-end 2002 totaled $102.5 million, as the Company's ongoing focus on control of contract capital continued to produce positive results. Capital expenditures for 2002 totaled $23.9 million, compared with $8.9 million in 2001, and included $11.6 million of land acquisition and development costs for the Company's new administrative office in The Woodlands, Texas. "Again in 2002, CB&I's project execution model -- lump-sum, fixed-price contracts with controlled risk and superior execution -- proved successful in generating operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: that are better than those achieved by many of our peers in the engineering and construction industry," Glenn added. "Our management team and employees worldwide are executing our strategy and delivering improved results to our owners, as evidenced by our decision to announce a 33% increase in our quarterly dividend last month. "Looking ahead to the balance of 2003, demand in our major end markets -- 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 , natural gas, water and energy in general -- is growing, and we are positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. the opportunities before us. While we expect to achieve our 2003 forecast through organic growth of our existing businesses, we continue to evaluate potential acquisitions that would provide additional capacity to respond to this growing demand." 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 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 Federal Trade Commission 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 Amendment No. 3 to Registration Statement on Form S-3 (No. 333-86960) filed with the SEC on June 17, 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 and construction company offering a complete package of design, engineering, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , construction and maintenance services. Our products 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.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Twelve Months
Ended Dec. 31, Ended Dec. 31,
2002 2001 2002 2001
Revenues $328,689 $304,825 $1,148,478 $1,081,824
Cost of revenues 284,633 263,016 992,927 945,048
------- ------- --------- ---------
Gross profit 44,056 41,809 155,551 136,776
% of Revenues 13.4% 13.7% 13.5% 12.6%
Selling and
administrative
expenses 21,503 19,829 73,155 67,519
% of Revenues 6.5% 6.5% 6.4% 6.2%
Intangibles
amortization 718 2,000 2,529 5,819
Other operating
(income) loss, net (1,067) 376 (1,818) (691)
Special charges 971 2,146 3,972 9,686
------- ------- --------- ---------
Income from
operations 21,931 17,458 77,713 54,443
% of Revenues 6.7% 5.7% 6.8% 5.0%
Interest expense (1,658) (1,888) (7,114) (8,392)
Interest income 551 386 1,595 1,854
------- ------- --------- ---------
Income before
taxes and
minority interest 20,824 15,956 72,194 47,905
Income tax expense (5,849) (4,528) (20,233) (13,480)
------- ------- --------- ---------
Income before
minority interest 14,975 11,428 51,961 34,425
Minority interest in
income (652) (137) (1,812) (2,503)
------- ------- --------- ---------
Income from
continuing
operations 14,323 11,291 50,149 31,922
------- ------- --------- ---------
Discontinued
operations:
Loss from
discontinued
operations,
net of taxes -- -- -- (2,321)
Loss on disposal
of discontinued
operations,
net of taxes -- -- -- (9,898)
------- ------- --------- ---------
Net income $ 14,323 $ 11,291 $ 50,149 $ 19,703
======= ======= ========= =========
Net income (loss) per share
Basic:
Income from
continuing
operations $ 0.32 $ 0.27 $ 1.16 $ 0.74
Loss from
discontinued
operations -- -- -- (0.28)
------- ------- ------- -------
Net income $ 0.32 $ 0.27 $ 1.16 $ 0.46
======= ======= ======= =======
Diluted:
Income from
continuing
operations $ 0.31 $ 0.26 $ 1.12 $ 0.71
Loss from
discontinued
operations -- -- -- (0.27)
------- ------- ------- -------
Net income $ 0.31 $ 0.26 $ 1.12 $ 0.44
======= ======= ======= =======
Weighted average shares
outstanding
Basic 44,314 42,042 43,176 43,250
Diluted 45,812 43,146 44,736 44,734
Excluding special charges:
Income from
continuing
operations $ 14,964 $ 12,897 $ 52,771 $ 38,504
Net income (loss) per
share - diluted:
Income from
continuing
operations $ 0.33 $ 0.30 $ 1.18 $ 0.86
Loss from
discontinued
operations -- -- -- (0.27)
------- ------- ------- -------
Net income $ 0.33 $ 0.30 $ 1.18 $ 0.59
======= ======= ======= =======
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
Dec. 31, Dec. 31,
2002 2001
NEW BUSINESS TAKEN % of % of
Total Total
North America $208,544 56% $166,753 55%
Europe/Africa/Middle East 116,520 32% 34,273 11%
Asia Pacific 27,545 7% 82,487 27%
Central & South America 17,461 5% 19,262 7%
------- -------
Total $370,070 $302,775
======= =======
REVENUES % of % of
Total Total
North America $211,173 64% $206,106 68%
Europe/Africa/Middle East 43,606 13% 31,355 10%
Asia Pacific 40,362 13% 13,914 5%
Central & South America 33,548 10% 53,450 17%
------- -------
Total $328,689 $304,825
======= =======
INCOME (LOSS) FROM OPERATIONS % of % of
Excluding Special Charges Revenues Revenues
North America $ 14,722 7.0% $ 11,080 5.4%
Europe/Africa/Middle East 1,343 3.1% 2,179 6.9%
Asia Pacific 1,675 4.1% 799 5.7%
Central & South America 5,162 15.4% 5,546 10.4%
------- -------
Total $ 22,902 7.0% $ 19,604 6.4%
======= =======
INCOME (LOSS) FROM OPERATIONS
North America $ 14,081 $ 9,700
Europe/Africa/Middle East 1,221 1,885
Asia Pacific 1,556 704
Central & South America 5,073 5,169
------- -------
Total $ 21,931 $ 17,458
======= =======
Twelve Months Ended
Dec. 31, Dec. 31,
2002 2001
NEW BUSINESS TAKEN % of % of
Total Total
North America $1,014,375 62% $ 818,459 70%
Europe/Africa/Middle East 375,897 23% 87,724 8%
Asia Pacific 139,907 8% 105,788 9%
Central & South America 110,949 7% 148,403 13%
------- -------
Total $1,641,128 $1,160,374
========= =========
REVENUES % of % of
Total Total
North America $ 801,624 70% $ 726,629 67%
Europe/Africa/Middle East 132,853 12% 124,226 11%
Asia Pacific 95,935 8% 39,917 4%
Central & South America 118,066 10% 191,052 18%
------- -------
Total $1,148,478 $1,081,824
========= =========
INCOME (LOSS) FROM OPERATIONS % of % of
Excluding Special Charges Revenues Revenues
North America $ 52,100 6.5% $ 42,161 5.8%
Europe/Africa/Middle East 3,603 2.7% 1,402 1.1%
Asia Pacific 2,270 2.4% (203) (0.5%)
Central & South America 23,712 20.1% 20,769 10.9%
------- -------
Total $ 81,685 7.1% $ 64,129 5.9%
======= =======
INCOME (LOSS) FROM OPERATIONS
North America $ 49,413 $ 36,272
Europe/Africa/Middle East 3,032 (274)
Asia Pacific 1,950 (538)
Central & South America 23,318 18,983
------- -------
Total $ 77,713 $ 54,443
======= =======
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, December 31,
2002 2001
ASSETS
Current assets $382,423 $307,053
Property and equipment, net 109,271 105,998
Goodwill and other intangibles, net 191,459 173,953
Other non-current assets 57,283 61,261
------- -------
Total assets $740,436 $648,265
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $287,070 $257,271
Long-term debt 75,000 75,000
Other non-current liabilities 94,828 103,771
Shareholders' equity 283,538 212,223
------- -------
Total liabilities
and shareholders' equity $740,436 $648,265
======= =======
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
AND OTHER FINANCIAL DATA
(in thousands)
Twelve Months
Ended December 31,
2002 2001
CASH FLOWS
Cash flows from operating activities $ 72,030 $105,836
Cash flows from investing activities (36,957) (35,775)
Cash flows from financing activities 16,985 (27,034)
------- -------
Increase in cash and cash equivalents 52,058 43,027
Cash and cash equivalents,
beginning of the year 50,478 7,451
------- -------
Cash and cash equivalents,
end of the year $102,536 $ 50,478
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 19,661 $ 25,105
Capital expenditures 23,927 8,917
Change in contract capital 2,205 59,874
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