CB&I Reports Second Quarter 1999 Results; Operating Income Increases 26%; EPS Up 27% YTD; New Business Taken Remains Strong.PLAINFIELD Plainfield, city (1990 pop. 46,567), Union co., NE N.J.; settled 1684 by Friends, inc. as a city 1869. Formerly a residential city in the New York metropolitan area, it has become the urban center of 10 closely allied municipalities, with diversified industries, , Ill.--(BUSINESS WIRE)--July 29, 1999-- 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 & ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. : 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 $4.4 million or $0.38 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, a 19% increase, for the three months ended June June: see month. 30, 1999, compared with net income of $3.9 million or $0.32 per diluted share for the same period in 1998. Net income for the first six months of 1999 was $8.6 million or $0.75 per diluted share, a 27% increase, compared with net income of $7.3 million or $0.59 per diluted share for the first half of 1998. Income from operations in the second quarter increased 26% to $7.5 million compared with $5.9 million in the year-earlier period. For the three months ended June 30, 1999, the Company reported new business taken of $202 million compared with $204 million in the year-earlier period. New contract awards in the quarter included a large low temperature tank and several large tankage tankage made from heat-digested animal abattoir residues without gut contents, hide, horn, hoof. Concentrated and dried and possessing a high biological value protein content of 60%. See also meat meal. projects 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 (EAME n. 1. Uncle. ) area, including the company's first
significant project in Egypt Egypt (ē`jĭpt), Arab. Misr, biblical Mizraim, officially Arab Republic of Egypt, republic (2005 est. pop. 77,506,000), 386,659 sq mi (1,001,449 sq km), NE Africa and SW Asia. in nearly a decade. During the quarter, new
business taken increased 56% in the EAME area and 25% 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. ,
but declined 59% in the Asia Pacific (AP) area and 61% 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. ) area. For the six months ended June 30, 1999,
new business taken was $395 million compared with $415 million in the
first half of 1998. 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 June 30, 1999 stood at $534 million, compared with a $508 million backlog 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. 1998. "In the second quarter, CB&I continued to deliver solid new business and earnings results despite challenging conditions for the engineering and construction industry," noted 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]. Glenn, Chairman 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. . "We are winning our share of good work in a soft overall market, and we are confident that the Company's focused marketing effort to obtain targeted projects will produce positive results. Our effort to improve project execution once again helped us to produce improved earnings." Revenues for the second quarter of 1999 were $181.2 million compared with $181.8 million in the second quarter of 1998. Revenues increased in North America and in the CSA area as a result of work being put in place that follows from last year's record level of new business taken. The EAME area and the AP area reported lower revenues in the second quarter, as EAME benefited from particularly strong revenues in the comparable 1998 period. It is common for the Company to experience such shifts of revenue among geographic regions given the changing mix of projects worldwide. Revenues for the first six months of 1999 were $351.9 million compared with $371.7 million for the first half of 1998. Gross profit for the three months ended June 30, 1999 increased 8% to $18.9 million, or 10.4% of revenues, compared with $17.5 million, or 9.6% of revenues, in the prior year quarter. The improvement was due primarily to significantly better results in the CSA area. Gross profit for the first half of 1999 was $36.9 million, or 10.5% of revenues, compared with $34.4 million, or 9.3% of revenues, for the first six months of 1998. Selling and administrative expenses for the quarter ended June 30, 1999 were $11.9 million or 6.6% of revenues, matching the prior year quarter. In the 1999 first half, selling and administrative expenses of $23.9 million matched the level for the comparable 1998 period. Income from operations for the second quarter of 1999 increased 26% to $7.5 million compared with 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. of $5.9 million for the second quarter of 1998. Operating income was favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by significantly improved results in CSA, which more than offset lower income in EAME and North America, both of which benefited from several large projects in the 1998 period. Income from operations for the first six months of 1999 was $14.1 million compared with $11.3 million in the first half of 1998. Interest expense was $0.8 million for the second quarter of 1999 compared with $1.0 million in the comparable period of 1998. The decrease was primarily due to lower debt levels. Compared with the prior-year period, income tax expense increased in the second quarter of 1999 due to increased income and a higher effective tax rate. For the three months ended June 30, 1999, the Company generated cash from operations of $12.2 million, reducing cash used from operations to $8.2 million for the first half of 1999. Cash and cash equivalents at the end of the second quarter were $8.4 million. Capital expenditures were $3.6 million during the quarter, bringing the year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. total to $6.5 million. Long- long- Adverb (in combination) for or lasting a long time: long-established, long-lasting term debt stood at $26 million as of June 30, 1999, down from $30 million at the end of the first quarter but up from an unusually low level of $5 million at year end 1998. "Our management team has charted a course through turbulent waters, and the results for this quarter -- particularly new business taken and operating income -- show that we've we've Contraction of we have. we've have chosen the right tack," Glenn stated. "Having accomplished these results in a difficult market impacted by low oil prices and the Asian economic crisis, we have established a foundation for sustained, profitable growth as market conditions improve. We continue to believe that our stock represents a good value, and we have acquired or have agreements to acquire more than 700,000 shares of CB&I stock so far this year." This press release contains certain 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. that involve a number of risks and uncertainties. Actual events or results may differ materially from the Company's expectations. In addition to matters described in the press release, the uncertain timing of awards and contracts, project cancellation 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 risks, 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. , risks associated with fixed price contracts, risks associated with percentage of completion accounting, 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 and cash flow and competitive conditions, as well as risk factors listed from time to time in the Company's SEC filings and reports, may affect the actual results achieved by the Company. These forward-looking statements represent the Company's judgment as of the date of this release. The Company does not undertake to update any forward-looking statement that may be made from time to time by or on behalf of the Company. CB&I is a global engineering and construction company specializing in the design and engineering, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , field 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. and repair of bulk liquid terminals, steel tanks, pressure vessels Pressure vessel A cylindrical or spherical metal container capable of withstanding pressures exerted by the material enclosed. Pressure vessels are important because many liquids and gases must be stored under high pressure. , low temperature and cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. storage facilities and other steel plate structures and their associated systems. Information about Chicago Bridge & Iron is available from the Company's Web site 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 Six Months
Ended June 30, Ended June 30,
1999 1998 1999 1998
Revenues $181,202 $181,808 $351,883 $371,689
Cost of revenues 162,329 164,270 315,008 337,263
------- ------- ------- -------
Gross profit 18,873 17,538 36,875 34,426
% of Revenues 10.4% 9.6% 10.5% 9.3%
Selling and
administrative expenses 11,927 11,963 23,870 23,755
% of Revenues 6.6% 6.6% 6.8% 6.4%
Other operating income,
net (505) (336) (1,051) (664)
------- ------- ------- -------
Income from operations 7,451 5,911 14,056 11,335
% of Revenues 4.1% 3.3% 4.0% 3.0%
Interest expense (774) (956) (1,330) (1,949)
Interest income 195 529 463 759
------- ------- ------- -------
Income before taxes
and minority interest 6,872 5,484 13,189 10,145
Income tax expense (2,062) (1,536) (3,957) (2,841)
------- ------- ------- -------
Income before
minority interest 4,810 3,948 9,232 7,304
Minority interest in
(income) loss (444) (21) (640) (27)
------- ------- ------- -------
Net income $ 4,366 $ 3,927 $ 8,592 $ 7,277
======= ======= ======= =======
Net income per share
Basic $ 0.39 $ 0.32 $ 0.76 $ 0.59
Diluted $ 0.38 $ 0.32 $ 0.75 $ 0.59
Weighted average shares
outstanding
Basic 11,296 12,284 11,329 12,344
Diluted 11,409 12,284 11,445 12,344
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
1999 1998
REVENUES % of % of
Total Total
North America $ 82,443 46% $ 72,288 40%
Europe/Africa/Middle East 34,237 19% 57,326 32%
Asia Pacific 22,109 12% 33,626 18%
Central & South America 42,413 23% 18,568 10%
------- -------
Total $181,202 $181,808
======= =======
INCOME FROM OPERATIONS % of % of
Revenues Revenues
North America $ 2,352 2.9% $ 2,973 4.1%
Europe/Africa/Middle East 819 2.4% 6,586 11.5%
Asia Pacific 806 3.6% 913 2.7%
Central & South America 3,474 8.2% (4,561) (24.6%)
------- -------
Total $ 7,451 4.1% $ 5,911 3.3%
======= =======
Six Months Ended
June 30, June 30,
1999 1998
REVENUES % of % of
Total Total
North America $155,091 44% $162,580 44%
Europe/Africa/Middle East 75,514 22% 98,787 27%
Asia Pacific 42,492 12% 63,908 17%
Central & South America 78,786 22% 46,414 12%
------- -------
Total $351,883 $371,689
======= =======
INCOME FROM OPERATIONS % of % of
Revenues Revenues
North America $ 4,297 2.8% $ 4,918 3.0%
Europe/Africa/Middle East 3,669 4.9% 10,153 10.3%
Asia Pacific 1,263 3.0% 1,096 1.7%
Central & South America 4,827 6.1% (4,832) (10.4%)
------- -------
Total $ 14,056 4.0% $ 11,335 3.0%
======= =======
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, December 31,
1999 1998
ASSETS
Current assets $207,352 $208,260
Property and equipment 108,166 110,481
Goodwill 17,807 18,051
Other non-current assets 11,948 11,917
------- -------
Total assets $345,273 $348,709
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $145,894 $174,910
Long-term debt 26,000 5,000
Other non-current liabilities 68,721 67,143
Shareholders' equity 104,658 101,656
------- -------
Total liabilities
and shareholders' equity $345,273 $348,709
======= =======
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Six Months
Ended June 30,
1999 1998
Cash flows from operating activities $ (8,233) $ 20,003
Cash flows from investing activities (4,859) (4,837)
Cash flows from financing activities 15,846 (8,356)
------- -------
Increase in cash and cash equivalents 2,754 6,810
Cash and cash equivalents,
beginning of the year 5,636 10,240
------- -------
Cash and cash equivalents,
end of the period $ 8,390 $ 17,050
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