Chicago Bridge & Iron updates outlook for third quarter.PLAINFIELD, Ill.--(BUSINESS WIRE)--Oct. 3, 1997--Chicago 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. ) announced today that the Company expects earnings per share for the third quarter ended September 30, 1997 will likely be in line with analysts current expectations. However, based on preliminary July and August results, the Company expects revenue and 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. for the third quarter to fall below analysts current estimates, primarily because of problems associated with the consolidation and streamlining of North American operations North American operation Surgical oncology Radical surgery of a 'frozen pelvis', consisting of radical en bloc resection of the uterus and urinary bladder. See 'Frozen pelvis.'. Cf 'All-American' and 'South American' operations. . The impact of these factors on net income will be substantially offset by non- recurring income. The third quarter 1997 revenue and operating income have been affected by start-up problems associated with the expansion of the Houston fabricating facility and implementation of new integrated computerized systems being piloted at Houston. These factors have resulted in additional costs and delays in some material reaching construction sites, postponing the recognition of revenue and resulting in lower operating income. Notwithstanding these issues, revenues for the third quarter should be modestly higher than revenues earned in the second quarter of 1997. Commenting on the situation, Gerald M. Glenn, 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. , said, "These problems are temporary and affect only our North American operations. The expansion of the Houston plant is now substantially complete and it is capable of operating near capacity. Difficulties encountered in the implementation of integrated computerized systems, although disappointing, are not uncommon. We are confident we have identified the major issues and initiated corrective action A corrective action is a change implemented to address a weakness identified in a management system. Normally corrective actions are instigated in response to a customer complaint, abnormal levels if internal nonconformity, nonconformities identified during an internal audit or . We expect this action will produce immediate results. At this point, we do not expect these issues to impact 1998 earnings." Third quarter 1997 income from operations will be favorably impacted by non-recurring income of approximately $5 million, including the resolution of disputed liabilities as well as recognition of income related to a favorable appeals court decision. New Business Taken Increases; Debt Reduction Continues The Company also announced that new business taken remained strong in what has been a seasonally-weak third quarter. For the quarter ended September 30, 1997, new business taken was $173 million, a 24% increase over the third quarter of 1996. Year-to- date new business taken increased 18% to $561 million, an $87 million increase over the nine months of the previous year. The Companys aggressive working capital reduction programs have resulted in a 44% reduction in long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. from $75 million in April 1997 to $42 million at the end of the third quarter. Glenn added, "Despite the near-term concerns regarding our North American operations, we continue to be encouraged by our success in winning geographically diversified new business, including in Asia Pacific. The fundamentals that drive our markets continue to be very strong. We remain committed to achieving our stated goals." The Company expects to report third quarter results on October 30, 1997. This press release contains certain forward looking statements including statements about revenues, costs and earnings that involve a number of risks and uncertainties, including those associated with consolidation and streamlining of North American operations. Actual events or results may differ materially from the Companys expectations. In addition to matters described elsewhere in this press release, 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 revenues and cash flow, and competitive conditions, as well as other risk factors listed in the Companys Registration Statement on Form S-1 (No. 333-18065), as amended, and subsequent filings with the SEC, may affect the actual results achieved by the Company. These 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. represent the Companys judgment as of the date of this release. CB&I is a global engineering and construction company specializing in the engineering and design, fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. , erection and repair of petroleum terminals, steel tanks, refinery 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 storage facilities and the other steel plate structures and their associated systems. CONTACT: Chicago Bridge & Iron Company N.V. Media: Bruce Steimle, 815/439-4006 Analysts: Jean Brown, 815/439-4072 |
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