Exhibit 99.1
CB&I Reports Improved Second Quarter Earnings and
New Business; Earnings Exceed Expectations;
Company Raises Guidance on 2005 New Business
THE WOODLANDS, Texas--(BUSINESS WIRE)--July 27, 2005--CB&I
(NYSE:CBI) today reported net income of $21.1 million or $0.21 per
diluted share for the second quarter ended June 30, 2005, compared
with $4.9 million or $0.05 per diluted share for the comparable period
in 2004. Net income for the first half of 2005 increased to $36.9
million or $0.37 per diluted share, compared with $19.5 million or
$0.20 per diluted share for the first six months of 2004.
For the quarter ended June 30, 2005, new business increased 38% to
$550 million, compared with $398 million in the second quarter of
2004. Contract awards during the quarter included the previously
announced LNG import terminal in China, refinery sulfur processing
projects in the U.S. and storage projects in the Middle East. New
business taken for the first half of 2005 was $2.0 billion, compared
with $746 million for the same period last year. For the first half of
2005, new business taken outside North America amounted to 60% of the
total. Backlog at June 30, 2005, stood at $3.1 billion, compared with
$1.5 billion at the end of the year-earlier period.
"It is gratifying to report that CB&I earnings grew substantially
in the second quarter," said Gerald M. Glenn, CB&I's Chairman,
President and CEO. "With new business taken of $2.0 billion for the
first half, and solid prospects for the balance of the year, we now
expect full-year 2005 new business taken to reach at least $3.0
billion, up about 30% from our previous guidance of $2.2-$2.4
billion."
Revenue for the second quarter of 2005 increased 32% to $549.3
million from $415.4 million in the second quarter of 2004. The Company
experienced revenue growth in each of its geographic segments. In the
North America segment, revenue increased 47% due mainly to higher
backlog going into the year and a larger volume of process-related
work. Revenue in the Europe, Africa and Middle East (EAME) segment
increased 8% primarily as a result of the continued ramp-up of LNG
work in the U.K., while revenue in the Asia Pacific (AP) segment grew
20%, due mainly to higher volume in Australia. Revenue in the Central
and South America segment increased 8%. For the first six months of
2005, revenue grew 20% to $1.0 billion, compared with $858.9 million
for the first half of 2004.
Income from operations in the second quarter of 2005 was $33.5
million, compared with $5.5 million in the second quarter of 2004.
Operating income grew as a result of higher volume and a lack of
significant project cost provisions that affected the year-earlier
period. The increase in operating income in the North America and EAME
segments was due primarily to higher volume and the lack of project
cost provisions, while operating income grew in the AP segment as a
result of higher volume and project cost savings in Australia.
CB&I had $138.3 million of cash in excess of debt at June 30,
2005. The Company had cash and cash equivalents of $220.9 million at
the end of the second quarter of 2005, compared with $116.9 million at
the end of the second quarter of 2004. Capital expenditures for the
second quarter were $8.5 million, compared with $4.8 million for the
year-earlier period. Capital expenditures for the first six months of
2005 were $14.2 million, compared with $7.6 million in 2004. During
the quarter, the Company used $4.0 million of cash to repurchase
191,500 shares of its common stock.
"The record backlog we carried into 2005 and our strong new
business performance so far this year has provided CB&I with
substantial momentum for future growth," Glenn added. "As we implement
our strategy to expand our capabilities to deliver complex EPC
projects anywhere in the world, we believe our markets will continue
to broaden. We expect growing demand in these markets, combined with
solid project execution, will 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; changes in the costs or
availability of or delivery schedule for components, materials and
labor; increased competition; fluctuating revenues resulting from a
number of factors, including the cyclical nature of the individual
markets in which the Company's customers operate; lower than expected
activity in the hydrocarbon industry -- including but not limited to
LNG and clean fuels projects -- 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; a downturn in the economy in
general; political and economic conditions including, but not limited
to, war, conflict or civil or economic unrest in countries in which we
operate; 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 Form
10-K filed with the SEC for the year ended December 31, 2004. 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 one of the world's leading engineering, procurement and
construction (EPC) companies, specializing in lump-sum turnkey
projects for customers that produce, process, store and distribute the
world's natural resources. With more than 60 locations and
approximately 10,000 employees throughout the world, CB&I capitalizes
on its global expertise and local knowledge to safely and reliably
deliver projects virtually anywhere. Information about CB&I is
available at www.CBI.com.
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,
2005 2004 2005 2004
Revenue $549,322 $415,373 $1,028,105 $ 858,926
Cost of revenue 488,762 385,808 916,682 782,598
Selling and
administrative
expenses 28,262 23,616 53,779 47,463
% of Revenue 5.1% 5.7% 5.2% 5.5%
Intangibles
amortization 386 519 772 1,025
Other operating
income, net (1,631) (97) (1,733) (120)
------- ------- --------- ---------
Income from
operations 33,543 5,527 58,605 27,960
% of Revenue 6.1% 1.3% 5.7% 3.3%
Interest expense (2,681) (1,734) (4,913) (3,460)
Interest income 1,439 243 2,804 449
------- ------- --------- ---------
Income before
taxes and
minority interest 32,301 4,036 56,496 24,949
Income tax expense (10,256) (1,292) (18,361) (7,984)
------- ------- --------- ---------
Income before
minority interest 22,045 2,744 38,135 16,965
Minority interest in
(income) loss (934) 2,200 (1,274) 2,583
------- ------- --------- ---------
Net income $ 21,111 $ 4,944 $ 36,861 $ 19,548
======= ======= ========= =========
Net income per share
Basic $ 0.22 $ 0.05 $ 0.38 $ 0.21
Diluted $ 0.21 $ 0.05 $ 0.37 $ 0.20
Weighted average shares
outstanding
Basic 97,582 95,132 97,347 94,588
Diluted 99,894 98,982 99,932 98,806
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
SEGMENT INFORMATION
(in thousands)
Three Months Ended
June 30, June 30,
2005 2004
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 309,296 56% $ 332,969 83%
Europe/Africa/Middle East 80,032 15% 35,310 9%
Asia Pacific 123,965 22% 14,349 4%
Central & South America 37,189 7% 15,654 4%
------- -------
Total $ 550,482 $ 398,282
======= =======
REVENUE % of % of
Total Total
North America $ 357,342 65% $ 242,752 59%
Europe/Africa/Middle East 121,540 22% 112,236 27%
Asia Pacific 51,390 9% 42,694 10%
Central & South America 19,050 4% 17,691 4%
------- -------
Total $ 549,322 $ 415,373
======= =======
INCOME/(LOSS) FROM % of % of
OPERATIONS Revenue Revenue
North America $ 24,390 6.8% $ 10,155 4.2%
Europe/Africa/Middle East 4,755 3.9% (8,150) (7.3%)
Asia Pacific 2,381 4.6% 870 2.0%
Central & South America 2,017 10.6% 2,652 15.0%
------- -------
Total $ 33,543 6.1% $ 5,527 1.3%
======= =======
Six Months Ended
June 30, June 30,
2005 2004
NEW BUSINESS TAKEN(a) % of % of
Total Total
North America $ 779,523 40% $ 500,441 66%
Europe/Africa/Middle East 917,495 47% 132,549 18%
Asia Pacific 194,742 10% 79,364 11%
Central & South America 65,086 3% 33,660 5%
--------- ---------
Total $1,956,846 $ 746,014
========= =========
REVENUE % of % of
Total Total
North America $ 660,546 64% $ 499,802 58%
Europe/Africa/Middle East 242,087 24% 218,148 25%
Asia Pacific 89,126 9% 101,332 12%
Central & South America 36,346 3% 39,644 5%
--------- ---------
Total $1,028,105 $ 858,926
========= =========
INCOME/(LOSS) FROM % of % of
OPERATIONS Revenue Revenue
North America $ 46,275 7.0% $ 24,855 5.0%
Europe/Africa/Middle East 5,442 2.2% (4,699) (2.2%)
Asia Pacific 4,319 4.8% 2,550 2.5%
Central & South America 2,569 7.1% 5,254 13.3%
--------- ---------
Total $ 58,605 5.7% $ 27,960 3.3%
========= =========
(a) New business taken represents the value of new project commitments
received by the Company during a given period. These commitments
are included in backlog until work is performed and revenue is
recognized or until cancellation. Backlog may also fluctuate with
currency movements.
CHICAGO BRIDGE & IRON COMPANY N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, Dec. 31,
2005 2004
ASSETS
Current assets $ 795,140 $ 685,279
Property and equipment, net 124,431 119,474
Goodwill and other intangibles, net 260,067 262,732
Other non-current assets 40,202 35,233
--------- ---------
Total assets $1,219,840 $1,102,718
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities $ 557,658 $ 481,190
Long-term debt 50,000 50,000
Other non-current liabilities 108,797 102,290
Shareholders' equity 503,385 469,238
--------- ---------
Total liabilities
and shareholders' equity $1,219,840 $1,102,718
========= =========
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,
2005 2004
CASH FLOWS
Cash flows from operating activities $ 3,370 $ 7,013
Cash flows from investing activities (12,031) (8,883)
Cash flows from financing activities (6,813) 5,891
------- -------
(Decrease)/increase in cash and
cash equivalents (15,474) 4,021
Cash and cash equivalents,
beginning of the year 236,390 112,918
------- -------
Cash and cash equivalents,
end of the period $ 220,916 $ 116,939
======= =======
OTHER FINANCIAL DATA
Depreciation and amortization expense $ 9,854 $ 10,814
Capital expenditures $ 14,196 $ 7,554
Increase in receivables, net $ (64,891) $ (45,368)
Decrease in contracts in progress,
net 6,201 35,513
(Increase)/decrease in non-current
contract retentions (1,377) 2,738
Increase/(decrease) in accounts
payable 13,041 (15,353)
------- -------
Change $ (47,026) $ (22,470)
======= =======
CONTACT: CB&I, The Woodlands
Media: Bruce Steimle, 832-513-1111
or
Analysts: Marty Spake, 832-513-1245