CB&I Reports Second Quarter Results; Earnings in Line with Revised Guidance; Revenue Continues on Record Pace.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 $4.9 million or $0.10 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, 2004, which is in line with previous guidance as revised. The Company reported $16.5 million or $0.35 per diluted share for the comparable period in 2003. Net income for the first half of 2004 was $19.5 million or $0.40 per diluted share, compared with $29.2 million or $0.63 per diluted share for the first six months of 2003. For the quarter ended June 30, 2004, new business taken was $398 million, compared with a record $539 million in the second quarter of 2003. New business during the quarter included an LNG LNG (liquefied natural gas): see under natural gas. terminal expansion project and hydrogen hydrogen (hī`drəjən) [Gr.,=water forming], gaseous chemical element; symbol H; at. no. 1; at. wt. 1.00794; m.p. −259.14°C;; b.p. −252.87°C;; density 0.08988 grams per liter at STP; valence usually +1. plant 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. , as previously announced. New business taken for the first half of 2004 was $746 million, compared with $863 million for the same period last year. The Company continues to anticipate full-year 2004 new business taken in the range of $1.8 billion to $1.9 billion. 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, 2004, stood at $1.5 billion, which was the same as the closing backlog at the end of the prior quarter, indicating that sales of new business were approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. equivalent to work performed for the period. "Consistent with the announcement we made on June 4, 2004, second quarter earnings were impacted by the recognition of potentially unrecoverable costs on two projects," 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. . "One of these projects is complete, CB&I personnel and equipment are off the job site, and the facility has been turned over to the owner. The other project is scheduled to be completed in a matter of weeks. We do not expect to see further deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. in the Company's financial performance related to these two projects. Meanwhile, project performance has been solid across the rest of the Company, our revenue continues to grow, cash flow has been very strong, and we are anticipating a significant upturn in new awards in the remainder of 2004." Revenue for the second quarter of 2004 increased 7% to $415.4 million from $389.3 million in the second quarter of 2003. Revenue grew 2% in the North America segment and increased 44% in the Company's 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. ) segment, which includes revenue from
CB&I John Brown acquired May 30, 2003. Revenue declined 17% in the
Asia Pacific (AP) segment and 16% 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, primarily due to the timing of project execution in the field.
Revenue for the first half of 2004 increased 21% to $858.9 million,
compared with $711.6 million in the year-earlier period, and is on pace
to reach a record level for full-year 2004.Second quarter 2004 gross profit decreased 40% to $29.6 million or 7.1% of revenue, compared with $49.4 million or 12.7% of revenue for the same period in 2003. As explained in the press release issued June 4, 2004, the decrease was attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to the recognition of potentially unrecoverable costs on the two projects mentioned above, one in the EAME segment's Saudi Arabia Saudi Arabia (sä  `dē ərā`bēə, sou`–, sô–), officially Kingdom of Saudi Arabia, kingdom (2005 est. pop. region that is nearing completion and the
other in the North America segment that has been completed. In the
second quarter the Company increased its estimate of all costs expected
to be incurred to complete these projects. As both projects are
currently forecasted to result in losses, provision for such losses was
made during the second quarter. As of the end of the quarter, the
Company has not recognized revenue for unapproved un·ap·proved adj. Not approved or sanctioned: an unapproved vaccine; an unapproved protest march. change orders or claims associated with these projects. For the first half of 2004, gross profit was $76.3 million, compared with $89.0 million in the first six months of 2003. Income from operations in the second quarter of 2004 was $5.5 million, compared with $25.2 million in the year-earlier period, primarily due to the impact of the provisions discussed above. For the first half of 2004, income from operations was $28.0 million, compared with $45.1 million in the first half of 2003. At June 30, 2004, CB&I had cash and cash equivalents of $116.9 million, compared with $57.4 million at the end of the second quarter 2003. Cash exceeded debt by $40.9 million at the end of the second quarter. Capital expenditures for the second quarter were $4.8 million, compared with $11.8 million in the year- earlier period. Capital expenditures for the first half of 2004 were $7.6 million, compared with $20.4 million in the first six months of 2003. "We want to assure our shareholders and investors that the problems we experienced on the two projects mentioned above were isolated and attributable to unique circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or specific to the projects in question," Glenn added. "I continue to have high confidence in our team and our execution model. We see growing demand in our major end markets and our prospect list is as strong as it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have ever been. Our financial position is solid, and we have the resources to take advantage of the right opportunities to complement the slate of services we can offer to our customers." 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 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; 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 Dec. 31, 2003. 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 (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 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 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.
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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,
2004 2003 2004 2003
Revenue $415,373 $389,309 $858,926 $711,618
Cost of revenue 385,808 339,954 782,598 622,602
------- ------- ------- -------
Gross profit 29,565 49,355 76,328 89,016
% of Revenue 7.1% 12.7% 8.9% 12.5%
Selling and
administrative
expenses 23,616 23,887 47,463 43,085
% of Revenue 5.7% 6.1% 5.5% 6.1%
Intangibles amortization 519 649 1,025 1,287
Other operating
income, net (97) (345) (120) (481)
------- ------- ------- -------
Income from
operations 5,527 25,164 27,960 45,125
% of Revenue 1.3% 6.5% 3.3% 6.3%
Interest expense (1,734) (1,558) (3,460) (3,245)
Interest income 243 510 449 976
------- ------- ------- -------
Income before taxes and
minority interest 4,036 24,116 24,949 42,856
Income tax expense (1,292) (7,307) (7,984) (12,918)
------- ------- ------- -------
Income before
minority interest 2,744 16,809 16,965 29,938
Minority interest in
loss (income) 2,200 (345) 2,583 (710)
------- ------- ------- -------
Net income $ 4,944 $ 16,464 $ 19,548 $ 29,228
======= ======= ======= =======
Net income per share
Basic $ 0.10 $ 0.37 $ 0.41 $ 0.66
Diluted $ 0.10 $ 0.35 $ 0.40 $ 0.63
Weighted average shares
outstanding
Basic 47,566 44,604 47,294 44,500
Diluted 49,491 46,863 49,403 46,557
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
2004 2003
NEW BUSINESS TAKEN(1) % of % of
Total Total
North America $332,969 83% $322,140 60%
Europe/Africa/Middle East 35,310 9% 151,286 28%
Asia Pacific 14,349 4% 41,173 8%
Central & South America 15,654 4% 23,975 4%
------- -------
Total $398,282 $538,574
======= =======
REVENUE % of % of
Total Total
North America $242,752 59% $239,046 62%
Europe/Africa/Middle East 112,236 27% 77,688 20%
Asia Pacific 42,694 10% 51,574 13%
Central & South America 17,691 4% 21,001 5%
------- -------
Total $415,373 $389,309
======= =======
INCOME/(LOSS) FROM OPERATIONS % of % of
Revenue Revenue
North America $ 10,155 4.2% $ 18,150 7.6%
Europe/Africa/Middle East (8,150) (7.3%) 2,343 3.0%
Asia Pacific 870 2.0% 2,986 5.8%
Central & South America 2,652 15.0% 1,685 8.0%
------- -------
Total $ 5,527 1.3% $ 25,164 6.5%
======= =======
Six Months Ended
June 30, June 30,
2004 2003
NEW BUSINESS TAKEN(1) % of % of
Total Total
North America $500,441 66% $553,724 64%
Europe/Africa/Middle East 132,549 18% 198,217 23%
Asia Pacific 79,364 11% 69,739 8%
Central & South America 33,660 5% 41,638 5%
------- -------
Total $746,014 $863,318
======= =======
REVENUE % of % of
Total Total
North America $499,802 58% $ 443,196 62%
Europe/Africa/Middle East 218,148 25% 136,641 19%
Asia Pacific 101,332 12% 92,606 13%
Central & South America 39,644 5% 39,175 6%
------- -------
Total $858,926 $711,618
======= =======
INCOME/(LOSS) FROM OPERATIONS % of % of
Revenue Revenue
North America $ 24,855 5.0% $ 29,650 6.7%
Europe/Africa/Middle East (4,699) (2.2%) 5,903 4.3%
Asia Pacific 2,550 2.5% 4,299 4.6%
Central & South America 5,254 13.3% 5,273 13.5%
------- -------
Total $ 27,960 3.3% $ 45,125 6.3%
======= =======
(1) 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.
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, Dec. 31,
2004 2003
ASSETS
Current assets $530,241 $512,427
Property and equipment, net 121,371 124,505
Goodwill and other intangibles, net 265,649 249,982
Other non-current assets 38,827 45,448
------- -------
Total assets $956,088 $932,362
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $355,992 $376,252
Long-term debt 75,000 75,000
Other non-current liabilities 108,321 91,946
Shareholders' equity 416,775 389,164
------- -------
Total liabilities
and shareholders' equity $956,088 $932,362
======= =======
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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,
2004 2003
CASH FLOWS
Cash flows from operating activities $ 7,013 $ 25,011
Cash flows from investing activities (8,883) (67,966)
Cash flows from financing activities 5,891 (2,136)
------- -------
Increase/(decrease) in cash and cash
equivalents 4,021 (45,091)
Cash and cash equivalents,
beginning of the year 112,918 102,536
------- -------
Cash and cash equivalents,
end of the period $116,939 $ 57,445
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 10,814 $ 9,770
Capital expenditures 7,554 20,363
(Increase)/decrease in receivables, net (45,368) 5,390
Decrease/(increase) in contracts in
progress, net 35,513 (29,719)
Decrease/(increase) in non-current
contract retentions 2,738 (4,323)
(Decrease)/increase in accounts payable (15,353) 33,272
------- -------
Change in contract capital $(22,470) $ 4,620
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