CB&I Reports Third Quarter 1998 Results.

PLAINFIELD, Ill.--(BUSINESS WIRE)--Oct. 29, 1998--

Nine-Month EPS Up 35%;

Double Digit Increase in Revenues;

Debt Continues to Decline

Chicago Bridge & Iron Company N.V. (NYSE & ASE: CBI) today reported net income of $4.6 million or $0.38 per share for the three months ended September 30, 1998, compared with net income of $1.1 million or $0.09 per share for the same period in 1997. Net income for the first nine months of 1998 was $11.9 million or $0.97 per share compared with net income of $9.0 million or $0.72 per share for the first nine months of 1997, excluding the effect of a one-time, non-cash special charge of $16.7 million ($10.1 million after tax) related to the contribution of common shares to a management compensation program in connection with the Company's initial public offering in 1997. Including the one-time, non-cash special charge, the Company reported a net loss of $1.1 million or $0.09 per share in the first nine months of 1997.

For the three months ended September 30, 1998, new business taken was $162.3 million compared with $173.0 million in the third quarter of 1997. For the nine months ended September 30, 1998, new business taken increased to $577.0 million from $561.1 million reported in the comparable 1997 period. More than 60% of the new business taken during the nine months was for contracts awarded outside of North America. For the first three quarters of 1998, new business taken increased 53% in the Europe, Africa, Middle East (EAME) area, 45% in the Central and South America (CSA) area, declined 49% in the Asia Pacific (AP) area and was even in North America. Backlog at September 30, 1998, was $522.4 million compared with a $559.0 million backlog reported at September 30, 1997, and a $555.0 million backlog at year-end 1997.

"We believe our focused marketing approach has helped us secure a solid level of new business this year," said Gerald M. Glenn, Chairman and CEO. "Our year-to-date new business total is the highest in recent years. Several significant awards resulted from expanding our traditional work scope on existing projects."

Revenues for the third quarter of 1998 rose 23% to $205.0 million, compared with $166.8 million in the third quarter of 1997. The increase was due primarily to a significantly greater amount of work put in place in the EAME area and higher revenues at CB&I Constructors, a part of the Company's North American operations. Revenues for the first nine months of 1998 increased 21% to $576.7 million compared with $477.5 million for the first nine months of 1997.

Gross profit for the three months ended September 30, 1998, amounted to $18.1 million, or 8.8% of revenues, compared with $8.6 million, or 5.1% of revenues, in the prior year quarter. Gross profit for the nine-month period of 1998 was $52.6 million, or 9.1% of revenues, compared with $43.4 million, or 9.1% of revenues, for the first nine months of 1997. For the 1998 year-to-date period, an improved gross profit percentage in North American operations was offset by lower gross profit percentages in the AP and CSA regions.

Selling and administrative expenses for the 1998 third quarter were $11.6 million and decreased to 5.7% of revenues compared with $11.1 million or 6.7% of revenues for the prior year quarter. For the first nine months of 1998, selling and administrative expenses of $35.3 million or 6.1% of revenues compared with $33.4 million or 7.0% of revenues in the 1997 period.

Income from operations for the third quarter of 1998 was $6.5 million compared with $1.5 million for the third quarter of 1997. Third quarter 1997 income from operations was negatively affected by an operating loss at CB&I Constructors, which was partially offset by $4.1 million of other operating income. Third quarter 1998 operating income was boosted by strong results in the EAME area, which more than offset improving but still significantly below planned results in CSA. Income from operations for the first nine months of 1998 was $17.9 million compared with operating income of $14.3 million in the 1997 period, excluding the one-time, non-cash special charge. Including the one-time, non-cash special charge, the Company reported an operating loss of $2.3 million in the first nine months of 1997.

"CB&I's business strategy centers on operational excellence, a deliberate marketing approach, and lowering our cost of doing business," Glenn stated. "In this period of economic uncertainty, we are focusing on those areas over which we have control in order to win new business and improve profitability. As a measure of confidence in our Company's future, we have acquired 737,000 shares of CB&I stock under the recently approved stock repurchase program."

Interest expense was $0.9 million for the third quarter of 1998 compared with $0.5 million in the comparable period of 1997. While debt levels continue to be reduced worldwide, third quarter 1998 interest expense was affected by the higher cost of short-term borrowings outside the U.S. Interest expense for the third quarter 1997 included a $0.4 million reduction due to capitalized interest. For the nine-month period, interest expense was $2.8 million in 1998 compared with $3.1 million in 1997. Cash and cash equivalents at September 30, 1998 were $12.5 million. Long-term debt decreased to $27 million from $44 million at year-end 1997 and $39 million at June 30, 1998. Other income consisted primarily of interest earned on cash balances at foreign subsidiaries.

For the three months ended September 30, 1998, the Company generated cash from operations of $11.9 million. Capital expenditures during the third quarter of 1998 were $1.9 million, bringing the year-to-date total to $8.2 million, compared with $26.7 million for the first nine months of 1997 (which included $12.5 million of modifications to the North American fabrication facility).

This press release contains certain forward-looking statements 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, operating risks, risks associated with fixed price contracts, risks associated with percentage of completion accounting, fluctuating 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.

CB&I is a global engineering and construction company specializing in the design and engineering, fabrication, field erection and repair of bulk liquid terminals, steel tanks, pressure vessels, low temperature and cryogenic storage facilities and other steel plate structures and their associated systems.

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       CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF INCOME
                   (in thousands, except share data)

                             Three Months          Nine Months
                            Ended Sept. 30,      Ended Sept. 30,

                             1998      1997       1998      1997

Revenues                 $204,965  $166,755   $576,654  $477,500

Cost of revenues          186,835   158,204    524,098   434,082
                          -------   -------    -------   -------

Gross profit               18,130     8,551     52,556    43,418

Selling and
 administrative expenses   11,589    11,096     35,344    33,436
Management Plan charge          -         -          -    16,662
Other operating income,
 net                           21    (4,053)      (643)   (4,356)
                           ------   -------    -------   -------

Income (loss) from
 operations                 6,520     1,508     17,855    (2,324)

Interest expense             (857)     (506)    (2,806)   (3,131)
Other income                  473       369      1,232     1,233
                          -------   -------    -------   -------
Income (loss) before
 taxes and minority
 interest                   6,136     1,371     16,281    (4,222)

Income tax (expense)
 benefit                   (1,717)     (384)    (4,558)    2,990
                          -------   -------    -------   -------
Income (loss) before
 minority interest          4,419       987     11,723    (1,232)

Minority interest in
 (income) loss                219       125        192       143
                          -------   -------    -------   -------

Net income (loss)        $  4,638  $  1,112   $ 11,915  $ (1,089)
                          =======   =======    =======   =======
Net income (loss)
 per common share(1)

 Basic and Diluted       $   0.38  $   0.09   $   0.97  $  (0.09)

Net income, excluding
 Management Plan charge

  Amount                 $  4,638  $  1,112   $ 11,915  $  8,975
  Per common share(1)    $   0.38  $   0.09   $   0.97  $   0.72

Weighted average common
 shares outstanding(1)

  Basic               12,258,132 12,517,552 12,315,087 12,517,552

  Diluted             12,281,942 12,517,552 12,323,111 12,517,552

    (1) Net income (loss) per common share and the weighted average
common shares outstanding for 1997 are presented as if the Offering
and the Reorganization had occurred at the beginning of the year.