Exhibit 99.1
CB&I Reports Record New Business in Second Quarter;
Net Income Up 33%; Revenues Up 37%; Backlog Up 45%
THE WOODLANDS, Texas--(BUSINESS WIRE)--July 30, 2003--CB&I
(NYSE:CBI) today reported net income increased 33% to $16.5 million or
$0.35 per diluted share for the three months ended June 30, 2003,
compared with $12.4 million or $0.28 per diluted share for the second
quarter of 2002. Net income for the first half of 2003 increased 29%
to $29.2 million or $0.63 per diluted share, compared with $22.7
million or $0.52 per diluted share for the first six months of 2002.
For the three months ended June 30, 2003, new business taken
increased 31% to a record $539 million compared with $411 million in
2002. Significant new contracts during the quarter included the
previously announced liquefied natural gas (LNG) terminal projects in
Russia and the southeastern United States, three clean fuels projects
in the U.S. and refrigerated storage projects in Australia and Qatar.
New business taken for the first half of 2003 was $863 million
compared with $836 million for the same period last year. Backlog at
June 30, 2003, stood at $1.6 billion compared with $1.1 billion at the
end of the second quarter 2002 and $1.3 billion at year end 2002.
"We're pleased to report another very successful quarter for
CB&I," said Gerald M. Glenn, CB&I's Chairman, President and CEO. "In
addition to achieving record sales and exceeding our revenue target,
we completed two acquisitions that expand the capabilities of our
Process & Technology group and that will be accretive for the full
year. And we introduced CB&I's new brand architecture that better
reflects our expanded capabilities and global presence."
Revenues for the second quarter of 2003 grew 37% to $389.3 million
from $284.7 million in the second quarter of 2002. Revenues more than
doubled in the Company's Europe, Africa, Middle East (EAME) and Asia
Pacific (AP) segments, due primarily to the strong backlog going into
the year, with large projects now under way in Saudi Arabia, Nigeria
and Australia. Revenues increased in North America, due mainly to a
higher volume of process-related work, but declined in the Central and
South America (CSA) segment as a result of lower new awards during
2002 and early 2003 in certain Latin American markets. Revenues for
the first half of 2003 increased 31% to $711.6 million compared with
$544.0 million for the comparable 2002 period.
Gross profit for the three months ended June 30, 2003 increased
29% to $49.4 million or 12.7% of revenues compared with 12.3% of
revenues in the first quarter of 2003 and 13.4% of revenues for the
comparable period in 2002. Gross margin performance was consistent
with as-sold margins and better than plan but was slightly lower than
the previous year due to the mix of projects being executed in the
period. For the first half of 2003, gross profit increased 22% to
$89.0 million compared with $73.2 million in the first six months of
2002.
Second quarter 2003 income from operations increased 28% to $25.2
million compared with $19.6 million in second quarter 2002. North
American results increased primarily due to the significantly higher
volume of engineering, procurement and construction (EPC) projects for
the hydrocarbon industry. Higher revenues and project cost savings led
to improved operating income in the EAME segment, while the AP segment
benefited from several significant projects currently under way in
Australia. Operating income declined in the CSA segment due to lower
revenues and a lack of comparable project cost savings that were
generated in the prior year period when several major contracts were
nearing completion. For the first half of 2003, income from operations
increased 27% to $45.1 million compared with $35.4 million in the
comparable 2002 period.
No exit costs or other special charges were recorded in the second
quarter or first half of 2003. In 2002, the Company reported exit
costs of $1.1 million in the second quarter and $2.3 million for the
first six months.
The Company used approximately $49 million of its cash during the
second quarter to fund the acquisitions of Petrofac Limited's U.S. EPC
business and John Brown Hydrocarbons Limited. Following these
expenditures, CB&I ended the quarter with cash and cash equivalents of
$57.4 million. Capital expenditures in the second quarter of 2003,
including $7.7 million for the new administrative office building,
were $11.8 million compared with $9.9 million for the year-earlier
period. Capital expenditures for the first half of 2003 were $20.4
million compared with $12.6 million in the comparable 2002 period.
CB&I had net debt (total debt less cash and cash equivalents) of $24.3
million at June 30, 2003, compared with $40.1 million at the end of
second quarter 2002.
The Company recently completed a 9.9 million share follow-on
equity offering, including 1.3 million shares sold as a result of the
underwriters exercising their over-allotment option. CB&I sold 1
million primary shares in this offering, receiving the proceeds in the
third quarter.
"We continue to be gratified by customer interest in our expanded
EPC capabilities -- as well as our traditional storage systems -- and
by investor confidence in our future prospects," Glenn added. "Our
strong sales of more than a half billion dollars in the quarter are
indicative of our success in selectively pursuing and winning process
and storage projects worldwide in a very competitive marketplace. Our
recent equity offering has significantly broadened our institutional
shareholder base. We are confident that CB&I's growing technical
competence and geographic reach -- bolstered by our acquisitions of
Petrofac's U.S. EPC business and John Brown -- will enable us to
better serve our customers and lead to continued growth in shareholder
value."
Any statements made in this release that are not based on
historical fact are forward-looking statements 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 and operating risks; cost
overruns on fixed priced contracts; increased competition; fluctuating
revenues resulting from a number of factors, including the cyclic
nature of the individual markets in which the Company's customers
operate; lower than expected activity in the hydrocarbon 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; the Company's ability to integrate and successfully operate
acquired businesses and the risks associated with those businesses;
and the ultimate outcome or effect of the pending 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
Registration Statement on Form S-3 (No. 333-103972) filed with the SEC
on June 26, 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 a global specialty engineering, procurement and
construction (EPC) company serving customers in several primary end
markets, including hydrocarbon refining, natural gas, water and the
energy sector in general. We offer a complete package of design,
engineering, fabrication, procurement, construction and maintenance
services. Our projects include hydrocarbon processing plants, LNG
terminals and peak shaving plants, bulk liquid terminals, water
storage and treatment facilities, and other steel structures and their
associated systems. 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,
2003 2002 2003 2002
Revenues $389,309 $284,686 $711,618 $543,958
Cost of revenues 339,954 246,548 622,602 470,730
------- ------- ------- -------
Gross profit 49,355 38,138 89,016 73,228
% of Revenues 12.7% 13.4% 12.5% 13.5%
Selling and
administrative
expenses 23,887 16,915 43,085 34,822
% of Revenues 6.1% 5.9% 6.1% 6.4%
Intangibles amortization 649 588 1,287 1,214
Other operating income,
net (345) (104) (481) (523)
Exit costs - 1,115 - 2,274
------- ------- ------- -------
Income from operations 25,164 19,624 45,125 35,441
% of Revenues 6.5% 6.9% 6.3% 6.5%
Interest expense (1,558) (1,829) (3,245) (3,642)
Interest income 510 338 976 684
------- ------- ------- -------
Income before
taxes and minority
interest 24,116 18,133 42,856 32,483
Income tax expense (7,307) (5,077) (12,918) (9,095)
------- ------- ------- -------
Income before
minority interest 16,809 13,056 29,938 23,388
Minority interest in
income (345) (662) (710) (736)
------- ------- ------- -------
Net income $ 16,464 $ 12,394 $ 29,228 $ 22,652
======= ======= ======= =======
Net income per share
Basic $ 0.37 $ 0.29 $ 0.66 $ 0.54
Diluted $ 0.35 $ 0.28 $ 0.63 $ 0.52
Weighted average shares
outstanding
Basic 44,604 42,202 44,500 42,116
Diluted 46,863 43,954 46,557 43,756
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
2003 2002
NEW BUSINESS TAKEN* % of % of
Total Total
North America $322,140 60% $236,901 58%
Europe/Africa/Middle East 151,286 28% 62,347 15%
Asia Pacific 41,173 8% 53,330 13%
Central & South America 23,975 4% 58,756 14%
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Total $538,574 $411,334
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REVENUES % of % of
Total Total
North America $239,046 62% $210,277 71%
Europe/Africa/Middle East 77,688 20% 32,275 11%
Asia Pacific 51,574 13% 20,771 7%
Central & South America 21,001 5% 30,363 11%
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Total $389,309 $284,686
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INCOME (LOSS) FROM OPERATIONS % of % of
Excluding Exit Costs Revenues Revenues
North America $ 18,150 7.6% $ 12,734 6.3%
Europe/Africa/Middle East 2,343 3.0% 501 1.6%
Asia Pacific 2,986 5.8% 269 1.3%
Central & South America 1,685 8.0% 7,235 23.8%
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Total $ 25,164 6.5% $ 20,739 7.3%
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EXIT COSTS $ - $ 1,115
======= =======
INCOME (LOSS) FROM OPERATIONS
North America $ 18,150 $ 11,930
Europe/Africa/Middle East 2,343 383
Asia Pacific 2,986 189
Central & South America 1,685 7,122
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Total $ 25,164 $ 19,624
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Six Months Ended
June 30, June 30,
2003 2002
NEW BUSINESS TAKEN* % of % of
Total Total
North America $553,724 64% $442,637 53%
Europe/Africa/Middle East 198,217 23% 221,348 26%
Asia Pacific 69,739 8% 96,643 12%
Central & South America 41,638 5% 74,947 9%
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Total $863,318 $835,575
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REVENUES % of % of
Total Total
North America $443,196 62% $396,576 73%
Europe/Africa/Middle East 136,641 19% 55,595 10%
Asia Pacific 92,606 13% 31,771 6%
Central & South America 39,175 6% 60,016 11%
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Total $711,618 $543,958
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INCOME (LOSS) FROM OPERATIONS % of % of
Excluding Exit Costs Revenues Revenues
North America $ 29,650 6.7% $ 23,252 5.9%
Europe/Africa/Middle East 5,903 4.3% 849 1.5%
Asia Pacific 4,299 4.6% (192) (0.6%)
Central & South America 5,273 13.5% 13,806 23.0%
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Total $ 45,125 6.3% $ 37,715 6.9%
======= =======
EXIT COSTS $ - $ 2,274
======= =======
INCOME (LOSS) FROM OPERATIONS
North America $ 29,650 $ 21,706
Europe/Africa/Middle East 5,903 495
Asia Pacific 4,299 (321)
Central & South America 5,273 13,561
------- -------
Total $ 45,125 $ 35,441
======= =======
* New business taken represents the value of new project
commitments received by the Company during a given period. Such
commitments are included in backlog until work is performed and
revenue 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, December 31,
2003 2002
ASSETS
Current assets $398,661 $382,423
Property and equipment, net 126,371 109,271
Goodwill and other intangibles, net 236,735 191,459
Other non-current assets 71,725 57,283
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Total assets $833,492 $740,436
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $337,660 $287,070
Long-term debt 75,000 75,000
Other non-current liabilities 107,513 96,219
Shareholders' equity 313,319 282,147
------- -------
Total liabilities
and shareholders' equity $833,492 $740,436
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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,
2003 2002
CASH FLOWS
Cash flows from operating activities $ 25,011 $ 5,906
Cash flows from investing activities (67,966) (14,345)
Cash flows from financing activities (2,136) (6,679)
------- -------
Decrease in cash and cash equivalents (45,091) (15,118)
Cash and cash equivalents,
beginning of the year 102,536 50,478
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Cash and cash equivalents,
end of the period $ 57,445 $ 35,360
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OTHER FINANCIAL DATA
Depreciation and amortization expense $ 9,770 $ 9,893
Capital expenditures 20,363 12,618
Decrease/(increase) in receivables, net 6,414 (7,116)
Increase in contracts in progress, net (35,066) (889)
Increase/(decrease) in accounts payable 33,272 (9,063)
------- -------
Change in contract capital $ 4,620 $(17,068)
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CONTACT: Chicago Bridge & Iron Company
Media: Bruce Steimle, 832-513-1111
Analysts: Marty Spake, 832-513-1245