CB&I Reports Strong Third Quarter Results; Net Income up 20%; New Business Exceeds $500 Million.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 increased 20% to $21.6 million or $0.44 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 third quarter ended September September: see month. 30, 2004, compared with $18.0 million or $0.37 per diluted share for the comparable period in 2003. Net income for the first nine months of 2004 was $41.2 million or $0.83 per diluted share, compared with $47.3 million or $1.00 per diluted share for the first nine months of 2003. For the quarter ended September 30, 2004, new business taken increased 13% to $504 million, compared with $445 million in the third quarter of 2003. New business during the quarter included an LNG LNG (liquefied natural gas): see under natural gas. peak shaving project and refinery clean fuels 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. . New business taken for the first nine months of 2004 was $1.25 billion, compared with $1.31 billion for the same period last year. 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 September 30, 2004, stood at $1.51 billion, up slightly from the prior quarter. "We are pleased to report that results are on track for the third quarter of 2004," 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. . "Project performance is good, we're we're Contraction of we are. we're we are on pace for record-setting revenue in 2004, cash flow remains strong and we are still confident of surpassing our new business target of $1.8 billion to $1.9 billion for the full year." Revenue for the third quarter of 2004 increased 8% to $465.5 million, compared with $429.1 million in the third quarter of 2003. Revenue grew 3% in the North America segment and increased 56% 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. Revenue
declined 33% in the Asia Pacific (AP) segment, primarily 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. ,
and 15% 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. Revenue for the
first nine months of 2004 increased 16% to $1.32 billion, compared with
$1.14 billion in the year-earlier period.Third quarter 2004 gross profit increased 16% to $59.7 million or 12.8% of revenue, compared with $51.5 million or 12.0% of revenue for the same period in 2003. Gross profit as a percentage of revenue improved as a result of timing and mix of projects being executed executed 1) adj. to have been completed. (Example: "it is an executed contract") 2) v. to have completed or fully performed. (Example: "he executed all the promises made in the contract") 3) v. . For the first nine months of 2004, gross profit was $136.0 million, compared with $140.5 million in the comparable 2003 period. Due to the changing mix of materials and subcontract sub·con·tract n. A contract that assigns some of the obligations of a prior contract to another party. intr. & tr.v. sub·con·tract·ed, sub·con·tract·ing, sub·con·tracts components in the work that we are winning and executing, gross profit percentages have become a less meaningful indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of CB&I's profitability than was true in prior years. In the future, income from operations will be our key pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta profitability metric. Income from operations in the third quarter of 2004 increased 27% to a quarterly record of $35.7 million, compared with $28.1 million in the year-earlier period, primarily due to the combination of higher revenue in the EAME segment and continued control of overhead and administrative expenses. For the first nine months of 2004, income from operations was $63.7 million, compared with $73.2 million in the first nine months of 2003. At September 30, 2004, CB&I had cash and cash equivalents of $143.3 million, compared with $95.4 million at September 30, 2003. Cash exceeded debt by $59.7 million at the end of the third quarter of 2004. Capital expenditures for the third quarter of 2004 were $4.4 million, compared with $7.2 million in the year-earlier period. Capital expenditures for the first nine months of 2004 were $12.0 million, compared with $27.6 million in the first nine months of 2003. "We believe CB&I is well positioned for 2005," Glenn added. "Our substantial backlog should continue to generate solid revenue performance, while growing international demand for LNG and clean fuels projects is a strong driver for our new business prospects. We continue to explore numerous opportunities to provide our customers with single-source solutions that capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. upon our core strengths in process technology, storage and worldwide field execution. We have confidence in our business model and look forward to continued growth in 2005. "We are in the early stages of developing our 2005 business plan, but it is already apparent that 2005 will be another good year for the Company. We currently anticipate earnings per share in the $1.75 to $1.82 range for 2005, representing significant growth from this year and returning to the growth curve the Company has enjoyed in previous years." 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 December December: see month. 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 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.
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share data)
Three Months Nine Months
Ended Sept. 30, Ended Sept. 30,
2004 2003 2004 2003
Revenue $465,539 $429,123 $1,324,465 $1,140,741
Cost of revenue 405,869 377,610 1,188,467 1,000,212
------- ------- --------- ---------
Gross profit 59,670 51,513 135,998 140,529
% of Revenue 12.8% 12.0% 10.3% 12.3%
Selling and
administrative
expenses 23,347 25,050 70,810 68,135
% of Revenue 5.0% 5.8% 5.3% 6.0%
Intangibles
amortization 404 650 1,429 1,937
Other operating
expense (income),
net 180 (2,249) 60 (2,730)
------- ------- --------- ---------
Income from
operations 35,739 28,062 63,699 73,187
% of Revenue 7.7% 6.5% 4.8% 6.4%
Interest expense (2,380) (1,648) (5,840) (4,893)
Interest income 717 85 1,166 1,061
------- ------- --------- ---------
Income before
taxes and
minority interest 34,076 26,499 59,025 69,355
Income tax expense (11,494) (8,055) (19,478) (20,973)
------- ------- --------- ---------
Income before
minority interest 22,582 18,444 39,547 48,382
Minority interest in
(income) loss (962) (416) 1,621 (1,126)
------- ------- --------- ---------
Net income $ 21,620 $ 18,028 $ 41,168 $ 47,256
======= ======= ========= =========
Net income per share
Basic $ 0.45 $ 0.39 $ 0.87 $ 1.05
Diluted $ 0.44 $ 0.37 $ 0.83 $ 1.00
Weighted average shares
outstanding
Basic 47,879 45,986 47,490 45,001
Diluted 49,465 48,527 49,424 47,219
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
Sept. 30, Sept. 30,
2004 2003
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $433,817 86% $305,376 69%
Europe/Africa/Middle East 29,088 6% 77,413 17%
Asia Pacific 15,742 3% 45,241 10%
Central & South America 25,067 5% 16,716 4%
------- -------
Total $503,714 $444,746
======= =======
REVENUE % of % of
Total Total
North America $263,054 57% $256,222 60%
Europe/Africa/Middle East 144,516 31% 92,771 22%
Asia Pacific 38,182 8% 56,974 13%
Central & South America 19,787 4% 23,156 5%
------- -------
Total $465,539 $429,123
======= =======
INCOME FROM OPERATIONS % of % of
Revenue Revenue
North America $ 22,525 8.6% $ 21,255 8.3%
Europe/Africa/Middle East 8,879 6.1% 2,691 2.9%
Asia Pacific 1,088 2.8% 2,003 3.5%
Central & South America 3,247 16.4% 2,113 9.1%
------- -------
Total $ 35,739 7.7% $ 28,062 6.5%
======= =======
Nine Months Ended
Sept. 30, Sept. 30,
2004 2003
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 934,258 74% $ 859,100 66%
Europe/Africa/Middle East 161,637 13% 275,630 21%
Asia Pacific 95,106 8% 114,980 9%
Central & South America 58,727 5% 58,354 4%
--------- ---------
Total $1,249,728 $1,308,064
========= =========
REVENUE % of % of
Total Total
North America $ 762,856 58% $ 699,418 61%
Europe/Africa/Middle East 362,664 27% 229,412 20%
Asia Pacific 139,514 11% 149,580 13%
Central & South America 59,431 4% 62,331 6%
--------- ---------
Total $1,324,465 $1,140,741
========= =========
INCOME FROM OPERATIONS % of % of
Revenue Revenue
North America $ 47,380 6.2% $ 50,905 7.3%
Europe/Africa/Middle East 4,180 1.2% 8,594 3.7%
Asia Pacific 3,638 2.6% 6,302 4.2%
Central & South America 8,501 14.3% 7,386 11.8%
--------- ---------
Total $ 63,699 4.8% $ 73,187 6.4%
========= =========
(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.
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
Sept. 30, Dec. 31,
2004 2003
ASSETS
Current assets $ 572,868 $ 512,427
Property and equipment, net 119,701 124,505
Goodwill and other intangibles, net 261,884 249,982
Other non-current assets 43,523 45,448
--------- ---------
Total assets $ 997,976 $ 932,362
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 402,792 $ 376,252
Long-term debt 50,000 75,000
Other non-current liabilities 105,193 91,946
Shareholders' equity 439,991 389,164
--------- ---------
Total liabilities
and shareholders' equity $ 997,976 $ 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)
Nine Months
Ended Sept. 30,
2004 2003
CASH FLOWS
Cash flows from operating activities $ 37,893 $ 49,638
Cash flows from investing activities (21,330) (75,545)
Cash flows from financing activities 13,778 18,752
------- -------
Increase/(decrease) in cash and cash
equivalents 30,341 (7,155)
Cash and cash equivalents,
beginning of the year 112,918 102,536
------- -------
Cash and cash equivalents,
end of the period $143,259 $ 95,381
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 16,511 $ 15,559
Capital expenditures 11,977 27,586
(Increase)/decrease in receivables, net (30,079) 1,004
Decrease/(increase) in contracts in
progress, net 13,028 (47,906)
Decrease/(increase) in non-current
contract retentions 2,022 (6,404)
(Decrease)/increase in accounts payable (14,644) 31,069
------- -------
Change in contract capital $(29,673) $(22,237)
======= =======
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