CB&I Reports 2015 Second Quarter Results

New Awards and Mozambique LNG Enhance Long-term Backlog Outlook

Jul 23, 2015, 16:01 ET from CB&I

THE WOODLANDS, Texas, July 23, 2015 /PRNewswire/ -- CB&I (NYSE: CBI) today reported the second quarter resulted in strong earnings, improved cash flow and consistent operating performance. Net income for the second quarter was $169.5 million, or $1.55 per diluted share, an increase of 14 percent from adjusted net income for the comparable period in 2014. Revenues were $3.2 billion, including a $240 million negative impact attributable to the translation effect of the strong dollar. Net cash provided by operating activities during the second quarter was $95 million. New awards for the second quarter totaled $2.8 billion, and new awards for the first six months totaled $5.9 billion. Backlog remained fairly constant at nearly $29.4 billion, including an adverse foreign exchange impact of $270 million year to date.

During the quarter, CB&I and its joint venture partners Chiyoda Corporation and Saipem were selected by Anadarko Petroleum Corporation to design and construct process and ancillary infrastructure associated with its LNG development program in Mozambique. CB&I expects to book its share of the initial phase of the project in the fourth quarter.

"We continue to deliver solid performance despite a volatile commodity market and geopolitical issues that create instability in many of the traditional international energy markets," said Philip K. Asherman, CB&I's President and Chief Executive Officer. "The U.S. remains a great opportunity for us particularly in LNG, petrochemicals and fossil power generation markets. East Africa will be a source of solid backlog for many years as Anadarko and other owners develop these tremendous assets. Additionally, we continue to produce significant profitability from not only our insourcing capabilities but also the diverse portfolio of new opportunities in our facilities maintenance, engineered products, steel plate storage, pipe fabrication, technology licensing and catalyst businesses."

Other significant awards for the second quarter include a combined-cycle gas turbine power project in the U.S., multiple maintenance services awards in North and South America, engineered products in Russia and Mexico, scope increases for our large nuclear projects in the U.S., and a variety of technology and fabrication awards globally.

Earnings Conference Call

CB&I will host a webcast on July 23 at 4:00 p.m. Central time (5:00 p.m. Eastern time) to discuss financial and operating results and answer questions from investors. The webcast will be available on the Investor Relations page of www.cbi.com.

About CB&I

CB&I (NYSE: CBI) is the most complete energy infrastructure focused company in the world. With 125 years of experience and the expertise of approximately 54,000 employees, CB&I provides reliable solutions while maintaining a relentless focus on safety and an uncompromising standard of quality. For more information, visit www.cbi.com.

Important Information For Investors And Shareholders

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding CB&I and represents our expectations and beliefs concerning future events. These forward-looking statements are intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties. When considering any statements that are predictive in nature, depend upon or refer to future events or conditions, or use or contain words, terms, phrases or expressions such as "achieve," "forecast," "plan," "propose," "strategy," "envision," "hope," "will," "continue," "potential," "expect," "believe," "anticipate," "project," "estimate," "predict," "intend," "should," "could," "may," "might" or similar forward-looking statements, we refer you to the cautionary statements concerning risk factors and "Forward-Looking Statements" described under "Risk Factors" in Item 1A of our Annual Report filed on Form 10-K filed with the SEC for the year ended December 31, 2014, and any updates to those risk factors or "Forward-Looking Statements" included in our subsequent Quarterly Reports on Form 10-Q filed with the SEC, which cautionary statements are incorporated herein by reference.

Chicago Bridge & Iron Company N.V.

Consolidated Statements of Operations

(in thousands, except per share data)

Three Months

Six Months

Ended June 30,

Ended June 30,

2015

2014

2015

2014

Revenue

$

3,207,113

$

3,294,379

$

6,332,858

$

6,222,511

Cost of revenue

2,823,990

2,913,204

5,579,564

5,539,934

Gross profit

383,123

381,175

753,294

682,577

% of Revenue

11.9

%

11.6

%

11.9

%

11.0

%

Selling and administrative expense

85,153

98,031

194,254

217,198

% of Revenue

2.7

%

3.0

%

3.1

%

3.5

%

Intangibles amortization

14,942

16,822

30,594

33,056

Equity earnings

(394)

(3,165)

(4,596)

(7,330)

Other operating (income) expense, net

(685)

(261)

2,137

(645)

Integration related costs

9,537

17,604

Income from operations

284,107

260,211

530,905

422,694

% of Revenue

8.9

%

7.9

%

8.4

%

6.8

%

Interest expense

(21,114)

(21,675)

(43,400)

(40,562)

Interest income

2,184

1,477

4,232

3,537

Income before taxes

265,177

240,013

491,737

385,669

Income tax expense

(79,289)

(72,947)

(149,100)

(115,857)

Net income

185,888

167,066

342,637

269,812

Less: Net income attributable to noncontrolling interests

(16,373)

(24,662)

(40,894)

(38,457)

Net income attributable to CB&I

$

169,515

$

142,404

$

301,743

$

231,355

Net income attributable to CB&I per share:

Basic

$

1.56

$

1.32

$

2.78

$

2.14

Diluted

$

1.55

$

1.31

$

2.76

$

2.12

Weighted average shares outstanding:

Basic

108,700

108,096

108,450

107,888

Diluted

109,533

109,110

109,386

109,058

Cash dividends on shares:

Amount

$

7,610

$

7,567

$

15,207

$

15,126

Per share

$

0.07

$

0.07

$

0.14

$

0.14

Non-GAAP Supplemental Information

(amounts adjusted to exclude integration related costs) (1)

Adjusted income from operations

$

269,748

$

440,298

Adjusted % of Revenue

8.2

%

7.1

%

Adjusted net income attributable to CB&I

$

148,317

$

242,754

Adjusted net income attributable to CB&I per share (diluted)

$

1.36

$

2.23

(1) The exclusion of integration related costs is a non-GAAP financial measure, which we believe provides users a better indication of our operating performance. See "Reconciliation of Non-GAAP Supplemental Information" table.

 

Chicago Bridge & Iron Company N.V.

Segment Information

(in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

% of

% of

% of

% of

NEW AWARDS (1), (2)

Total

Total

Total

Total

Engineering & Construction

$

1,305,951

46%

$

2,056,812

49%

$

2,515,358

43%

$

6,551,649

66%

Fabrication Services

844,715

30%

564,388

13%

1,772,089

30%

1,081,117

11%

Technology

81,087

3%

152,397

4%

158,109

3%

229,843

2%

Capital Services

612,763

21%

1,429,480

34%

1,430,143

24%

2,137,957

21%

Total

$

2,844,516

$

4,203,077

$

5,875,699

$

10,000,566

% of

% of

% of

% of

REVENUE (2)

Total

Total

Total

Total

Engineering & Construction

$

1,916,122

60%

$

1,939,898

59%

$

3,734,708

59%

$

3,626,079

58%

Fabrication Services

611,330

19%

694,295

21%

1,249,139

20%

1,366,206

22%

Technology

92,975

3%

102,387

3%

192,336

3%

204,960

3%

Capital Services

586,686

18%

557,799

17%

1,156,675

18%

1,025,266

17%

Total

$

3,207,113

$

3,294,379

$

6,332,858

$

6,222,511

INCOME FROM OPERATIONS (2)

% of

% of

% of

% of

Revenue

Revenue

Revenue

Revenue

Engineering & Construction

$

176,467

9.2%

$

132,648

6.8%

$

312,885

8.4%

$

217,284

6.0%

Fabrication Services

55,937

9.2%

78,267

11.3%

108,336

8.7%

125,182

9.2%

Technology

36,741

39.5%

37,242

36.4%

84,765

44.1%

71,911

35.1%

Capital Services

14,962

2.6%

21,591

3.9%

24,919

2.2%

25,921

2.5%

Total operating groups

$

284,107

8.9%

$

269,748

8.2%

$

530,905

8.4%

$

440,298

7.1%

  Integration related costs

(9,537)

(17,604)

Total

$

284,107

8.9%

$

260,211

7.9%

$

530,905

8.4%

$

422,694

6.8%

(1) New awards represent the value of new project commitments received by the Company during a given period, as well as scope growth on existing commitments.

(2) During the three months ended March 31, 2015, we realigned our reportable segments to reflect the present management oversight of our operations. Our maintenance business that was previously reported within our Engineering & Construction operating group (formerly Engineering, Construction & Maintenance) is now reported within our Capital Services operating group (formerly Environmental Solutions), and our engineered products business that was previously reported within our Technology operating group is now reported within our Fabrication Services operating group. Our segment results for the three and six months ended June 30, 2014 were reclassified to reflect the reportable segment realignment.

 

Chicago Bridge & Iron Company N.V.

Condensed Consolidated Balance Sheets

(in thousands)

June 30,

December 31,

2015

2014

ASSETS

Current assets

$

4,477,485

$

3,530,459

Equity investments

132,480

107,984

Property and equipment, net

741,469

771,651

Goodwill and other intangibles, net

4,694,842

4,751,685

Other non-current assets

240,586

219,252

Total assets

$

10,286,862

$

9,381,031

LIABILITIES AND SHAREHOLDERS' EQUITY

Current maturities of long-term debt and other borrowings

$

727,836

$

270,738

Other current liabilities

4,247,719

4,051,492

Long-term debt

1,486,085

1,564,158

Other non-current liabilities

641,832

618,340

Shareholders' equity

3,183,390

2,876,303

Total liabilities and shareholders' equity

$

10,286,862

$

9,381,031

Chicago Bridge & Iron Company N.V.

Condensed Consolidated Statements of Cash Flows and Other Financial Data

(in thousands)

Six Months

Ended June 30,

2015

2014

CASH FLOWS

Cash flows from operating activities

$

(194,704)

$

(374,363)

Cash flows from investing activities

(189,644)

(49,148)

Cash flows from financing activities

422,223

357,283

Effect of exchange rate changes on cash and cash equivalents

(34,110)

20,039

Increase (decrease) in cash and cash equivalents

3,765

(46,189)

Cash and cash equivalents, beginning of the year

351,323

420,502

Cash and cash equivalents, end of the period

$

355,088

$

374,313

OTHER FINANCIAL DATA

Increase in receivables, net

$

(20,291)

$

(121,013)

Change in contracts in progress, net

(626,450)

(797,126)

(Increase) decrease in inventory

(6,089)

10,897

(Decrease) increase in accounts payable

(77,798)

95,955

Change in contract capital

$

(730,628)

$

(811,287)

Depreciation and amortization

$

86,699

$

89,870

Capital expenditures

$

63,717

$

58,179

June 30, 2015

December 31, 2014

Backlog (1)

$

29,432,933

$

30,363,269

(1) Backlog includes the value of new award commitments until work is performed and revenue is recognized or until cancellation. Backlog may also fluctuate with currency movements.

 

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Supplemental Information

(in thousands, except per share data)

Three Months

Six Months

Ended June 30,

Ended June 30,

2014

2014

Adjusted income from operations

Income from operations

$

260,211

$

422,694

    Integration related costs

9,537

17,604

Adjusted income from operations

$

269,748

$

440,298

Adjusted % of Revenue

8.2

%

7.1

%

Adjusted net income attributable to CB&I

Net income attributable to CB&I

$

142,404

$

231,355

Integration related costs, net of tax (1)

5,913

11,399

Adjusted net income attributable to CB&I

$

148,317

$

242,754

Adjusted net income attributable to CB&I per share

Net income attributable to CB&I

$

1.31

$

2.12

Integration related costs, net of tax (1)

0.05

0.11

Adjusted net income attributable to CB&I

$

1.36

$

2.23

(1) The three and six month periods ended June 30, 2014 include $9,537 and $17,604, respectively, of integration related costs, less the tax impact of $3,624 and $6,205, respectively. The per share amount for the three and six month periods are based upon diluted weighted average shares of 109,110 and 109,058, respectively.

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SOURCE CB&I



RELATED LINKS

http://www.cbi.com