Exhibit 99.1
CB&I Reports Strong Third Quarter Results; Net Income Up 37%;
Revenues Up 56%; Backlog Continues to Grow
THE WOODLANDS, Texas--(BUSINESS WIRE)--Oct. 29, 2003--CB&I
(NYSE:CBI) today reported its net income increased 37% to $18.0
million or $0.37 per diluted share for the three months ended Sept.
30, 2003, exceeding Wall Street consensus estimates by $0.01 per
share, compared with $13.2 million or $0.29 per diluted share for the
third quarter of 2002. Net income for the first nine months of 2003
increased 32% to $47.3 million or $1.00 per diluted share, compared
with $35.8 million or $0.81 per diluted share for the first nine
months of 2002.
For the three months ended Sept. 30, 2003, sales exceeded plan
with new business taken reported at $445 million compared with $435
million in 2002. Significant new contracts during the quarter included
the previously announced liquefied natural gas (LNG) terminal project
in the southern United States. New business taken for the first nine
months of 2003 was $1.31 billion compared with $1.27 billion for the
same period last year. Backlog at Sept. 30, 2003, stood at $1.6
billion compared with $1.3 billion at the end of the third quarter
2002.
"Visibility of CB&I's revenues continues to improve with the
Company's growing backlog, as new business taken has again exceeded
revenues for the quarter. In addition, CB&I continued to perform
profitably, while generating excellent cash flows during the third
quarter," said Gerald M. Glenn, CB&I's Chairman, President and CEO.
"The strong backlog we had going into 2003 is now producing
significant revenue growth as projects are put in place in the field."
Revenues for the third quarter of 2003 grew 56% to $429.1 million
from $275.8 million in the third quarter of 2002. Revenues increased
more than 175% in the Company's Europe, Africa, Middle East (EAME)
segment, due to strong backlog going into the year and the inclusion
of post-acquisition revenues from the John Brown Hydrocarbons Limited
acquisition made on May 30, 2003. Revenues more than doubled in the
Asia Pacific (AP) segment, due primarily to large projects now under
way in China and Australia. Revenues increased in North America, due
mainly to a higher volume of process-related work, but declined
slightly in the Central and South America (CSA) segment as a result of
lower new awards in certain Latin American markets. Revenues for the
first nine months of 2003 increased 39% to $1.14 billion compared with
$819.8 million for the comparable 2002 period.
Gross profit for the three months ended Sept. 30, 2003 increased
35% to $51.5 million or 12.0% of revenues compared with 13.9% of
revenues for the comparable period in 2002. Gross margin performance
was consistent with the Company's business plan but was lower than the
previous year due to the mix and timing of projects being executed in
the period. For the first nine months of 2003, gross profit increased
26% to $140.5 million compared with $111.5 million in the first nine
months of 2002.
Third quarter 2003 income from operations increased 38% to $28.1
million compared with $20.3 million in third quarter 2002. North
American results increased primarily due to the significantly higher
volume of process-related 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. Operating income
declined in the CSA segment due to lower revenues. Third quarter
income from operations benefited from a gain on the sale of real
estate near the Company's Plainfield, Illinois, facility. For the
first nine months of 2003, income from operations increased 31% to
$73.2 million compared with $55.8 million in the year-earlier period.
No exit costs or other special charges were recorded in the third
quarter or first nine months of 2003. In 2002, the Company reported
exit costs of $0.7 million in the third quarter and $3.0 million for
the first nine months. The Company's overall effective tax rate was
higher in the third quarter and nine months as a larger portion of
2003 earnings were generated in the United States.
During the quarter, the Company 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.
CB&I ended the third quarter with cash and cash equivalents of
$95.4 million, compared with $57.4 million at the end of the second
quarter and $86.5 million at Sept. 30, 2002. The Company realized
proceeds in the third quarter of $20.3 million from the sale of
primary shares. Subsequently, the Company used a portion of its cash
during the fourth quarter to buy out the ownership of a minority
interest which had been acquired in a December 2000 transaction.
Capital expenditures in the third quarter of 2003 were $7.2 million
compared with $4.7 million for the year-earlier period. Capital
expenditures for the first nine months of 2003 were $27.6 million
compared with $17.3 million in the comparable 2002 period. CB&I had
cash in excess of debt of $15.0 million at Sept. 30, 2003, compared
with debt in excess of cash of $24.3 million at the end of second
quarter 2003.
"Consistent, profitable growth has been one of our key strategic
aims, and we are pleased with our continued progress," Glenn added.
"For the first time in our recent history, CB&I's current worldwide
employment has surpassed 10,000 people, and we certainly must
acknowledge the contributions of all our employees in helping us to
reach our business goals. As we continue to integrate our most recent
acquisitions, we are confident our customers and shareholders alike
will benefit from the additional skills, experience and breadth of
service that we bring to the marketplace."
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
Prospectus filed on Form 424B3 with the SEC on June 27, 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 exploration, production and refining;
natural gas; water; and the energy sector in general. We offer a
complete package of design, engineering, fabrication, construction and
maintenance services. Our projects include hydrocarbon processing
plants, LNG terminals and peak shaving plants, offshore structures,
pipelines, 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 Nine Months
Ended Sept. 30, Ended Sept. 30,
2003 2002 2003 2002
Revenues $429,123 $275,831 $1,140,741 $ 819,789
Cost of revenues 377,610 237,564 1,000,212 708,294
------- ------- --------- ---------
Gross profit 51,513 38,267 140,529 111,495
% of Revenues 12.0% 13.9% 12.3% 13.6%
Selling and
administrative
expenses 25,050 16,830 68,135 51,652
% of Revenues 5.8% 6.1% 6.0% 6.3%
Intangibles
amortization 650 597 1,937 1,811
Other operating
income, net (2,249) (228) (2,730) (751)
Exit costs - 727 - 3,001
------- ------- --------- ---------
Income from
operations 28,062 20,341 73,187 55,782
% of Revenues 6.5% 7.4% 6.4% 6.8%
Interest expense (1,648) (1,814) (4,893) (5,456)
Interest income 85 360 1,061 1,044
------- ------- --------- ---------
Income before
taxes and
minority interest 26,499 18,887 69,355 51,370
Income tax expense (8,055) (5,289) (20,973) (14,384)
------- ------- --------- ---------
Income before
minority interest 18,444 13,598 48,382 36,986
Minority interest in
income (416) (424) (1,126) (1,160)
------- ------- --------- ---------
Net income $ 18,028 $ 13,174 $ 47,256 $ 35,826
======= ======= ========= =========
Net income per share
Basic $ 0.39 $ 0.30 $ 1.05 $ 0.84
Diluted $ 0.37 $ 0.29 $ 1.00 $ 0.81
Weighted average shares
outstanding
Basic 45,986 44,124 45,001 42,794
Diluted 48,527 45,582 47,219 44,372
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CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
Sept. 30, Sept. 30,
2003 2002
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $305,376 69% $363,194 83%
Europe/Africa/Middle East 77,413 17% 38,029 9%
Asia Pacific 45,241 10% 15,719 4%
Central & South America 16,716 4% 18,541 4%
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Total $444,746 $435,483
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REVENUES % of % of
Total Total
North America $256,222 60% $193,875 70%
Europe/Africa/Middle East 92,771 22% 33,652 12%
Asia Pacific 56,974 13% 23,802 9%
Central & South America 23,156 5% 24,502 9%
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Total $429,123 $275,831
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INCOME FROM OPERATIONS % of % of
Excluding Exit Costs Revenues Revenues
North America $ 21,255 8.3% $ 14,126 7.3%
Europe/Africa/Middle East 2,691 2.9% 1,411 4.2%
Asia Pacific 2,003 3.5% 787 3.3%
Central & South America 2,113 9.1% 4,744 19.4%
------- -------
Total $ 28,062 6.5% $ 21,068 7.6%
======= =======
EXIT COSTS $ - $ 727
======= =======
INCOME FROM OPERATIONS
North America $ 21,255 $ 13,626
Europe/Africa/Middle East 2,691 1,316
Asia Pacific 2,003 715
Central & South America 2,113 4,684
------- -------
Total $ 28,062 $ 20,341
======= =======
Nine Months Ended
Sept. 30, Sept. 30,
2003 2002
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 859,100 66% $ 805,831 63%
Europe/Africa/Middle East 275,630 21% 259,377 21%
Asia Pacific 114,980 9% 112,362 9%
Central & South America 58,354 4% 93,488 7%
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Total $1,308,064 $1,271,058
========= =========
REVENUES % of % of
Total Total
North America $ 699,418 61% $ 590,451 72%
Europe/Africa/Middle East 229,412 20% 89,247 11%
Asia Pacific 149,580 13% 55,573 7%
Central & South America 62,331 6% 84,518 10%
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Total $1,140,741 $ 819,789
========= =========
INCOME FROM OPERATIONS % of % of
Excluding Exit Costs Revenues Revenues
North America $ 50,905 7.3% $ 37,378 6.3%
Europe/Africa/Middle East 8,594 3.7% 2,260 2.5%
Asia Pacific 6,302 4.2% 595 1.1%
Central & South America 7,386 11.8% 18,550 21.9%
------- -------
Total $ 73,187 6.4% $ 58,783 7.2%
======= =======
EXIT COSTS $ - $ 3,001
======= =======
INCOME FROM OPERATIONS
North America $ 50,905 $ 35,332
Europe/Africa/Middle East 8,594 1,811
Asia Pacific 6,302 394
Central & South America 7,386 18,245
------- -------
Total $ 73,187 $ 55,782
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(a) 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)
Sept. 30, Dec. 31,
2003 2002
ASSETS
Current assets $488,243 $382,423
Property and equipment, net 127,146 109,271
Goodwill and other intangibles, net 248,754 191,459
Other non-current assets 44,018 57,283
------- -------
Total assets $908,161 $740,436
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $400,435 $287,070
Long-term debt 75,000 75,000
Other non-current liabilities 78,633 96,219
Shareholders' equity 354,093 282,147
------- -------
Total liabilities
and shareholders' equity $908,161 $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)
Nine Months
Ended Sept. 30,
2003 2002
CASH FLOWS
Cash flows from operating activities $ 49,638 $ 47,745
Cash flows from investing activities (75,545) (28,461)
Cash flows from financing activities 18,752 16,738
------- -------
(Decrease)/increase in cash and cash
equivalents (7,155) 36,022
Cash and cash equivalents,
beginning of the year 102,536 50,478
------- -------
Cash and cash equivalents,
end of the period $ 95,381 $ 86,500
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 15,559 $ 15,045
Capital expenditures 27,586 17,311
Decrease/(increase) in receivables, net 7,784 (7,341)
(Increase)/decrease in contracts in
progress, net (61,090) 17,318
Increase/(decrease) in accounts payable 31,069 (8,243)
------- -------
Change in contract capital $(22,237) $ 1,734
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CONTACT: CB&I, The Woodlands
Media: Bruce Steimle, 832-513-1111
or
Analysts: Marty Spake, 832-513-1245