CB&I Reports Second Quarter 2006 Results; Revenue Increases 36%; Operating Income up 73%.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 $32.6 million or $0.33 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, 2006, compared with $14.9 million or $0.15 per diluted share for the comparable period in 2005. "Our second quarter results were driven by the solid performance of our project 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. , which continues to grow substantially as we maximize the opportunities in our end markets," said Philip Philip, tetrarch of Ituraea Philip, d. A.D. 34, tetrarch of Ituraea, son of Herod the Great. He was perhaps the ablest of the Herod dynasty. He is mentioned in the Gospel of St. Luke. 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. . "Demand for our services in the energy sector is strong, and we are extremely pleased with the confidence demonstrated by our customer base in new awards this year, which through July July: see month. exceed $2.5 billion, including the recently announced Golden Pass LNG LNG (liquefied natural gas): see under natural gas. import terminal project near Sabine Pass, Texas Sabine Pass, Texas is a city located in Jefferson County, Texas, 15 miles south of Port Arthur, Texas, on the west bank of Sabine Pass, near the Louisiana border. Originally known as Sabine City, the original date of settlement of Sabine Pass is unknown, but is estimated at . Our relentless focus on solid operating performance, as well as the continuing 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. on global energy infrastructure, enable us to reaffirm re·af·firm tr.v. re·af·firmed, re·af·firm·ing, re·af·firms To affirm or assert again. re our previously stated guidance for the year." Highlights of the Company's second quarter 2006 results include: --New Awards -- New awards increased 16% to $636.8 million, compared with $550.5 million in the second quarter of 2005. Awards during the quarter included an oil sands project in Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of , a hydrogen plant 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 storage projects 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. and the Middle East. --Revenue -- Revenue increased 36% to $744.2 million from $548.8 million in the second quarter of 2005, with growth reported in each geographic segment. Revenue increased 14% in North America due mainly to a larger volume of process- related work in the United States. 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, Middle East segment more than doubled due
primarily to progress on LNG work in the United Kingdom and storage
projects in the Middle East. Asia Pacific reported a 20% increase due
mainly to progress on LNG work in China. 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 51% due to a larger volume of work in
much of the region, despite lower activity in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. .
--Income from Operations -- Income from operations increased 73% to $43.4 million, compared with $25.1 million in the corresponding year-earlier period. 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 improved operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: and increased revenue. --Cash and Cash Equivalents -- CB&I ended the quarter with cash and cash equivalents of $457.3 million, compared with $334.0 million at Dec. 31, 2005. --Stock 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. -- During the first six months of 2006, CB&I repurchased $29.1 million or 1.3 million shares of its common stock at an average price of $22.68 per share. 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 execution performance of contracts; the uncertain timing and 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 but not limited to 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 previously identified material weaknesses in the Company's internal control over financial reporting that 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 non-U adj. Chiefly British Not characteristic of the upper class, especially in language usage. [non- + U2. .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. ABOUT CB&I 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 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.
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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,
Restated Restated
2006 2005 2006 2005
Revenue $744,187 $548,775 $1,390,783 $1,027,558
Cost of revenue 670,469 496,621 1,257,865 924,541
------- ------- --------- ---------
Gross profit 73,718 52,154 132,918 103,017
% of Revenue 9.9% 9.5% 9.6% 10.0%
Selling and
administrative
expenses 29,533 28,262 68,482 53,779
% of Revenue 4.0% 5.2% 4.9% 5.2%
Intangibles
amortization 1,134 386 1,311 772
Other operating
income, net (344) (1,631) (434) (1,733)
------- ------- --------- ---------
Income from
operations 43,395 25,137 63,559 50,199
% of Revenue 5.8% 4.6% 4.6% 4.9%
Interest expense (2,324) (2,681) (4,713) (4,913)
Interest income 4,138 1,439 6,988 2,804
------- ------- --------- ---------
Income before
taxes and
minority interest 45,209 23,895 65,834 48,090
Income tax expense (11,307) (8,016) (17,775) (16,121)
------- ------- --------- ---------
Income before
minority interest 33,902 15,879 48,059 31,969
Minority interest in
income (1,284) (934) (2,105) (1,274)
------- ------- --------- ---------
Net income $ 32,618 $ 14,945 $ 45,954 $ 30,695
======= ======= ========= =========
Net income per share
Basic $ 0.34 $ 0.15 $ 0.47 $ 0.32
Diluted $ 0.33 $ 0.15 $ 0.46 $ 0.31
Weighted average shares
outstanding
Basic 97,216 97,582 97,302 97,347
Diluted 98,967 99,894 99,115 99,932
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
2006 2005
NEW AWARDS(a) % of % of
Total Total
North America $ 446,937 70% $ 309,296 56%
Europe/Africa/Middle East 128,299 20% 80,032 15%
Asia Pacific 35,151 6% 123,965 22%
Central & South America 26,453 4% 37,189 7%
------- -------
Total $ 636,840 $ 550,482
======= =======
Three Months Ended
Restated
June 30, June 30,
2006 2005
REVENUE % of % of
Total Total
North America $ 407,475 55% $ 356,996 65%
Europe/Africa/Middle East 245,810 33% 121,272 22%
Asia Pacific 61,621 8% 51,179 9%
Central & South America 29,281 4% 19,328 4%
------- -------
Total $ 744,187 $ 548,775
======= =======
INCOME FROM OPERATIONS % of % of
Revenue Revenue
North America $ 21,233 5.2% $ 18,791 5.3%
Europe/Africa/Middle East 13,139 5.3% 3,263 2.7%
Asia Pacific 5,864 9.5% 788 1.5%
Central & South America 3,159 10.8% 2,295 11.9%
------- -------
Total $ 43,395 5.8% $ 25,137 4.6%
======= =======
Six Months Ended
June 30, June 30,
2006 2005
NEW AWARDS(a) % of % of
Total Total
North America $1,051,668 70% $ 779,523 40%
Europe/Africa/Middle East 315,966 21% 917,495 47%
Asia Pacific 69,410 4% 194,742 10%
Central & South America 72,210 5% 65,086 3%
--------- ---------
Total $1,509,254 $1,956,846
========= =========
Six Months Ended
Restated
June 30, June 30,
2006 2005
REVENUE % of % of
Total Total
North America $ 765,707 55% $ 660,200 64%
Europe/Africa/Middle East 459,689 33% 241,819 23%
Asia Pacific 109,332 8% 88,915 9%
Central & South America 56,055 4% 36,624 4%
--------- ---------
Total $1,390,783 $1,027,558
========= =========
INCOME FROM OPERATIONS % of % of
Revenue Revenue
North America $ 24,363 3.2% $ 40,676 6.2%
Europe/Africa/Middle East 29,106 6.3% 3,950 1.6%
Asia Pacific 6,308 5.8% 2,726 3.1%
Central & South America 3,782 6.7% 2,847 7.8%
--------- ---------
Total $ 63,559 4.6% $ 50,199 4.9%
========= =========
(a) New awards represent 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.
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, Dec. 31,
2006 2005
ASSETS
Current assets $1,161,987 $ 950,603
Property and equipment, net 167,828 137,718
Goodwill and other intangibles, net 256,571 257,991
Other non-current assets 37,539 31,507
--------- ---------
Total assets $1,623,925 $1,377,819
========= =========
LIABILITIES, REDEEMABLE COMMON
STOCK AND SHAREHOLDERS' EQUITY
Current liabilities $ 955,713 $ 758,643
Long-term debt 25,000 25,000
Other non-current liabilities 110,689 110,508
Redeemable common stock 38,249 --
Shareholders' equity 494,274 483,668
--------- ---------
Total liabilities, redeemable
common stock and shareholders'
equity $1,623,925 $1,377,819
========= =========
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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,
2006 2005
CASH FLOWS
Cash flows from operating activities $ 202,650 $ 3,370
Cash flows from investing activities (64,054) (12,031)
Cash flows from financing activities (15,284) (6,813)
------- -------
Increase/(decrease) in cash and
cash equivalents 123,312 (15,474)
Cash and cash equivalents,
beginning of the year 333,990 236,390
------- -------
Cash and cash equivalents,
end of the period $ 457,302 $ 220,916
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 13,860 $ 9,854
Capital expenditures $ 43,166 $ 14,196
Increase in receivables, net $ (80,387) $ (64,891)
Decrease in contracts in progress,
net 229,254 6,748
Increase in non-current
contract retentions (6,882) (1,377)
Increase in accounts payable 21,800 13,041
------- -------
Change $ 163,785 $ (46,479)
======= =======
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