Foster Wheeler Announces Second-Quarter and First-Half Financial Results.Business Editors
HAMILTON Hamilton, city, Bermuda
Hamilton, city (1990 est. pop. 3,100), capital of Bermuda, on Bermuda Island. It is a port at the head of Great Sound, a huge lagoon and deepwater harbor protected by coral reefs. , Bermuda--(BUSINESS WIRE)--July 31, 2001
- Results in line with expectations - Previously announced special items taken - Lower earnings expected in second half of 2001 - Power market remains buoyant
Foster Wheeler Ltd. (NYSE NYSE
See: New York Stock Exchange :FWC FWC Fish and Wildlife Conservation Commission (Florida)
FWC Foster Wheeler Corporation (Clinton, NJ)
FWC Family Winemakers of California
FWC Fresh Water Cooling
FWC Flight Warning Computer ) today reported second-quarter and first-half results, which were in line with expectations before previously announced special items.
Net earnings before special items for the quarter ended June June: see month. 29, 2001, were $ 8.9 million, or $0.22 per share, on $840.2 million in revenues, compared with $8.6 million or $0.21 per share on revenues of $1,023 million for the second quarter of 2000. Net earnings for the current quarter after special items of $6.9 million, or $0.17 per share, were $2.0 million, or $0.05 per share.
New orders booked for the quarter were $1.2 billion, which is approximately the same as last year's second-quarter level. The ending backlog Backlog
The total value of sales orders waiting to be fulfilled.
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. for the current quarter was $6.3 billion, which is slightly higher than last quarter.
For the six months ended June 29, 2001, revenues were $1,538 million, a decrease from $1,859 million in the first half of last year. Net earnings before special items and cumulative effect of a change in accounting principles relative to pension expense were $17.0 million, or $0.42 per share, the same as those in the first six months of 2000. New orders booked for the six months were $2.1 billion versus $2.4 billion in the same period of last year.
The previously announced after-tax af·ter-tax also af·ter·tax
Relating to or being that which remains after payment, especially of income taxes: after-tax profits. special items in the second quarter include $5.0 million, or $0.12 per share, on the sale of two hydrogen plants, and $1.9 million, or $0.05 per share, primarily related to a retirement agreement with Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000.
Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a J. Swift, the company'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. .
"The first half of 2001 has unfolded as anticipated with improvements in the second quarter over the first quarter in revenues, bookings and earnings before special items," said Swift. "However, the market turnaround Turnaround
A situation where a company that has had poor performance for an extended period of time experiences a positive reversal.
A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. we expected has not yet arrived and we now anticipate that the realization of growth in projects will begin in 2002. Also, because of the timing of bookings, we have lowered our revenue and profit expectations for the remainder of 2001.
"Looking at business prospects, I believe there are a number of positive factors in the worldwide marketplace that bode bode 1
v. bod·ed, bod·ing, bodes
1. To be an omen of: heavy seas that boded trouble for small craft.
2. well for Foster Wheeler, from the heightened demand for power 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. through the increasing demands for pharmaceuticals worldwide to the need for increased oil and gas production and processing. The Energy Equipment Group's business continues to grow significantly, with bookings in the second quarter up almost 50 percent from the previous year, as the U.S. continues to grapple with to enter into contest with, resolutely and courageously.
See also: Grapple the need for more generating capacity.
"There are signs of real growth potential in the Engineering and Construction (E&C) Group's business. In our oil and gas markets, we are seeing a lot of preliminary work, such as front-end front-end
1. Of or relating to the initial phase of a project: a front-end investment.
2. Of or relating to the forward parts of a vehicle: a front-end alignment. engineering studies, which are prerequisites for much larger project awards. In addition, the pharmaceutical and environmental services The various combinations of scientific, technical, and advisory activities (including modification processes, i.e., the influence of manmade and natural factors) required to acquire, produce, and supply information on the past, present, and future states of space, atmospheric, markets continue to expand and are making important contributions to our business. While these favorable fa·vor·a·ble
1. Advantageous; helpful: favorable winds.
2. Encouraging; propitious: a favorable diagnosis.
3. market trends will not help 2001, we expect increased business opportunities to begin in 2002. We are well-positioned with the products, technologies and project experience to contribute to this necessary expansion."
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
The Gilles are the oldest and principal participants in the Carnival of Binche. A. Renaud Renaud may refer to:
a change of consistency, with loss of firmness or hardness. of revenues, primarily in our E&C Group, which was a result of delays in the realization of awards and a shift to projects with less flow-through costs. With some 60 percent of our business outside the United States, we have been affected also by the strong dollar, which negatively impacted our results by about $2.0 million year-to-date Year-to-date (YTD)
The period beginning at the start of the calendar year up to the current date. , or $0.05 per share.
"These unfavorable trends were offset in the first half of the year by higher margin rates, which we do not expect to be sustained in the second half. As a result, earnings from operations for the year (excluding special items) are now estimated between $0.55 and $0.65.
"In the second quarter, the company continued to improve the financial structure of its business. We completed our change in legal domicile domicile (dŏm`əsīl'), one's legal residence. This may or may not be the place where one actually resides at any one time. The domicile is the permanent home to which one is presumed to have the intention of returning whenever the purpose from New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of State to Bermuda Bermuda (bûrmy`də), British dependency (2005 est. pop. 65,400), 21 sq mi (53 sq km), comprising some 150 coral rocks, islets, and islands (of which some 20 are inhabited), in the , which will give us, among other advantages, better operational flexibility, including improved worldwide cash management and, over the long term, an improvement in our effective tax rate. We had a very successful $200 million convertible subordinated note issue. The proceeds from this were used to repay existing borrowings under the company's revolving credit Revolving Credit
A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facilities. Finally, we sold our interest in two hydrogen production Hydrogen production is commonly completed from hydrocarbon fossil fuels via a chemical path. Hydrogen may also be extracted from water via biological production in an algae bioreactor, or using electricity (by electrolysis) or heat (by thermolysis); these methods are presently not plants in 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. , which was another step toward disposing of our Power Systems assets. Despite these actions, we are not satisfied with progress in reducing net debt and so the board of directors has decided to discontinue dis·con·tin·ue
v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues
1. To stop doing or providing (something); end or abandon: payment of the dividend on our common stock. We believe that ultimately shareholders will enjoy a greater benefit from utilizing cash to reduce debt than with dividends," he said.
Engineering and Construction Group
Bookings in the E&C Group for the quarter decreased by 29 percent to $635.1 million from $892.3 million in the second quarter of 2000. The Group's ending backlog was $4.4 billion compared to $4.5 billion last quarter. Revenues were $535.7 million compared to $793.0 million in the second quarter of 2000. For the first half of the year, E&C bookings were down to $1.2 billion from $1.7 billion for the first six months of 2000. Revenues for the six months were $1,009.3 million, compared to $1,409.0 million in the same period of last year.
Energy Equipment Group
The expansion of business in the Energy Equipment Group was largely led by increasing orders for heat recovery steam generators A heat recovery steam generator or HRSG is a heat exchanger that recovers heat from a hot gas stream. It produces steam that can be used in a process or used to drive a steam turbine. and selective catalytic reduction Selective catalytic reduction (SCR) is a means of removing nitrogen oxides, often the most abundant and polluting component in exhaust gases, through a chemical reaction between the exhaust gases, a (reductant) additive, and a catalyst. units for power generating plants, as well as a major order for CFB CFB Canadian Forces Base boilers in Estonia. The Group's bookings grew approximately 50 percent to $525.8 million, compared with $351.5 million for the second quarter of 2000. Backlog at the end of the quarter was $2.0 billion, compared with $1.8 billion last quarter. Revenues rose 25 percent to $313.4 million from $250.7 million in the same quarter of 2000. For the six-month period, bookings were $904.7 million, a 16 percent increase over $777.0 million in 2000. Revenues for the half-year grew 14 percent to $552.0 million from $483.5 million in the same period last year.
Notes to Editors:
1. Consolidated Statements follow.
2. Foster Wheeler will conduct a conference call with analysts
tomorrow (August 1) at 11:00 a.m. (Eastern Daylight Savings time),
which will also be webcast live on the Internet Internet
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the . The webcast may
be accessed at www.fwc.com in the Investor Relations Investor relations
The process by which the corporation communicates with its investors. section.
3. Foster Wheeler Ltd. is a global company offering, through its
subsidiaries, a broad range of design, engineering, construction,
manufacturing, project development and management, research, plant
operation and environmental services. The corporation is based in
Hamilton, Bermuda, and its operational headquarters are in
Clinton, N.J. For more information about Foster Wheeler, visit our
World-Wide Web (World-Wide Web, networking, hypertext) World-Wide Web - (WWW, W3, The Web) An Internet client-server hypertext distributed information retrieval system which originated from the CERN High-Energy Physics laboratories in Geneva, Switzerland. site at www.fwc.com.
4. Safe Harbor Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement
This news release contains 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. that are based on management's assumptions, expectations and projections about the various industries within which the Corporation operates. Such forward-looking statements by their nature involve a degree of risk and uncertainty. The corporation cautions that a variety of factors, including but not limited to the following, could cause business conditions and results to differ materially from what is contained in forward-looking statements: changes in the rate of economic growth in the United States and other major international economies, changes in investment by the energy, power and environmental industries, changes in regulatory environment, changes in project schedules, changes in trade, monetary and fiscal policies worldwide, currency fluctuations, outcomes of pending and future 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. , protection and validity of patents and other intellectual property rights, and increasing competition by foreign and domestic companies.
FOSTER WHEELER LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF EARNINGS - SUMMARY (In Thousands of Dollars, Except per Share Amounts) Three Months Ended Six Months Ended ------------------ ---------------- June 2001 June 2000 June 2001 June 2000 --------- --------- --------- --------- New orders booked $ 1,162,802 $ 1,238,988 $ 2,113,253 $ 2,430,854 Unfilled orders 6,332,562 6,366,110 6,332,562 6,366,110 ============ ============ ============ ============ Revenues: Operating revenues 826,882 1,004,979 1,509,525 1,827,015 Other income 13,301 17,764 28,893 32,024 -------- ---------- ----------- ----------- Total revenues 840,183 1,022,743 1,538,418 1,859,039 -------- ---------- ----------- ----------- Cost and Expenses: Cost of operating revenues 742,461 923,123 1,350,146 1,664,681 Selling, general & administrative expenses 56,944 54,940 108,341 109,041 Other deductions/ Minority interest 21,769 28,180 46,478 51,191 Dividends on preferred security of subsidiary trust 3,938 3,938 7,875 7,875 Special items(2) 7,700 - 7,700 - -------- ---------- ----------- ----------- Total costs and expenses 832,812 1,010,181 1,520,540 1,832,788 -------- ---------- ----------- ----------- Earnings before income taxes 7,371 12,562 17,878 26,251 Provision for income taxes 5,382 3,915 7,784 9,232 -------- ---------- ----------- ----------- Earnings before cumulative effect of a change in accounting principle 1,989 8,647 10,094 17,019 Cumulative effect on prior years (to December 29, 2000) of a change in accounting principle(4) - - (1,200) - --------- ---------- ----------- ----------- Net earnings $ 1,989 $ 8,647 $ 8,894 $ 17,019 ========= ========== =========== =========== Earnings per share: Basic and diluted: Before cumulative effect of a change in accounting principle $ 0.05 $ 0.21 $ 0.25 $ 0.42 Cumulative effect on prior years of a change in accounting principle(4) - - (0.03) - ------ ------ ------ ------ Earnings per share(3) $ 0.05 $ 0.21 $ 0.22 $ 0.42 ====== ====== ====== ====== Cash dividends paid per share $ 0.06 $ 0.06 $ 0.12 $ 0.12 ====== ====== ====== ====== Shares outstanding: Basic: Weighted average number of shares outstanding (In thousands) 40,891 40,795 40,863 40,786 Diluted - Effect of stock options 360 13 335 5 ------ ------ ------ ------ Total Diluted(1) 41,251 40,808 41,198 40,791 ====== ====== ====== ====== (1) In 2001, the convertible subordinated notes of $210 million were excluded from the computation of diluted earnings per share due to their antidilutive effect. (2) Special items include $5,000 ($5,000 after tax) loss on the sale of a hydrogen plant and $2,700 ($1,900 after tax) primarily for CEO retirement. (3) Earnings per share excluding special items and cumulative effect of a change in accounting principle were $.22 for the 2nd quarter and $.42 for the six months ended June 29, 2001, respectively. (4) During the second quarter of 2001, the Corporation changed its pension plan asset valuation method from current market value to a smoothed four-year market value. Foster Wheeler Ltd. and Subsidiaries Major Business Groups (In Millions of Dollars) Three Months Ended Six Months Ended June 2001 June 2000 June 2001 June 2000 --------- --------- --------- --------- Engineering and Construction Unfilled orders $ 4,410.4 $ 4,836.4 $ 4,410.4 $ 4,836.4 New orders booked 635.1 892.3 1,212.1 1,659.2 Revenues 535.7 793.0 1,009.3 1,409.0 Interest expense 1.1 2.8 1.4 3.4 Earnings before income taxes 20.3 25.5 39.1 45.5 Energy Equipment Unfilled orders 2,023.9 1,642.6 2,023.9 1,642.6 New orders booked 525.8 351.5 904.7 777.0 Revenues 313.4 250.7 552.0 483.5 Interest expense 6.0 7.7 12.1 16.7 Earnings before income taxes 8.1 9.2 17.8 18.6 Earnings before income taxes & special items (1) 13.0 9.2 22.7 18.6 Corporate and Financial Services* Unfilled orders (101.7) (112.9) (101.7) (112.9) New orders booked 1.9 (4.8) (3.5) (5.3) Revenues (8.9) (21.0) (22.9) (33.5) Interest expense(3) 12.2 9.0 26.6 18.8 Earnings before income taxes and cumulative effect of a change in accounting principle(4) (22.8) (22.1) (39.0) (37.8) Earnings before income taxes, special items and cumulative effect of a change in accounting principle (2)(4) (18.3) (22.1) (36.3) (37.8) Total Unfilled orders 6,332.6 6,366.1 6,332.6 6,366.1 New orders booked 1,162.8 1,239.0 2,113.3 2,430.9 Revenues 840.2 1,022.7 1,538.4 1,859.0 Interest expense (3) 19.3 19.5 40.1 38.9 Earnings before income taxes 7.4 12.6 17.9 26.3 Provision for income taxes 5.4 4.0 7.8 9.3 Earnings before cumulative effect of a change in accounting principle $ 2.0 $ 8.6 $ 10.1 $ 17.0 Cumulative effect on prior years (to December 29, 2000) of a change in accounting principle(4) - - (1.2) - Net earnings $ 2.0 $ 8.6 $ 8.9 $ 17.0 Net earnings excluding special items (1)(2) $ 8.9 $ 8.6 $ 17.0 $ 17.0 * Includes intersegment eliminations. 1) Excludes loss on sale of hydrogen plant of $5.0 ($5.0 after tax). 2) Excludes cost of CEO of $2.7 ($1.9 after tax). 3) Includes dividends on preferred security of subsidiary trust. 4) During the second quarter of 2001, the Corporation changed its pension plan asset valuation method from current market value to a smoothed four-year market value.