CB&I Reports Strong 2014 Second Quarter Results
PR Newswire
THE WOODLANDS, Texas, July 24, 2014
THE WOODLANDS, Texas, July 24, 2014 /PRNewswire/ -- CB&I (NYSE: CBI) today reported adjusted net income for the second quarter of $148.3 million, or $1.36 per diluted share, excluding integration related costs of $5.9 million, or $0.05 per diluted share. Second quarter U.S. GAAP net income was $142.4 million, or $1.31 per diluted share. Revenue for the second quarter was $3.3 billion, up from $2.9 billion in the comparable prior year period. Second quarter new awards totaled $4.2 billion, which resulted in a backlog of $31.5 billion.
"I am pleased to report CB&I had another strong quarter - strategically, operationally and financially," said Philip K. Asherman, President and Chief Executive Officer. "Our unique business model which provides our clients a more complete supply chain solution allowed us to maximize our competitive position within the global energy infrastructure market. New awards through the first half of the year totaled over $10 billion, resulting in a record backlog of nearly $32 billion. Our employees working on our global projects and in shops, labs and engineering offices performed more than 42 million work hours in the quarter and with one of the best safety records in our industry. We continued to advance major project key milestones at levels that delivered growth in revenue and income from operations. Revenue was up 16 percent from the second quarter 2013 and adjusted income from operations was $270 million, up 38 percent from the comparable period last year."
"We remain confident in our ability to deliver revenue and earnings growth consistent with our expectations for 2014 and convert new awards activity into long-term earnings growth," continued Asherman.
Noteworthy awards in the quarter included a combined-cycle gas turbine power station in the U.S.; technology license and FEED scope for a world-scale ethane cracker in the U.S. and a refinery in Russia; significant maintenance, modification and construction awards for U.S. nuclear power units; long-term maintenance and operations at multiple chemicals facilities throughout the U.S.; storage spheres for a grassroots refinery in Saudi Arabia; storage for an ammonia plant expansion in the U.S.; delayed coking, hydrocracking, crude and vacuum heaters in Oman; operations and services work for the U.S. EPA; as well as numerous strategic technology, environmental and pipe fabrication awards around the world.
Earnings Conference Call
CB&I will host a webcast on July 24 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.
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, ---------------------- ---------------------- 2014 2013 2014 2013 Revenue $3,294,379 $2,850,791 $6,222,511 $5,102,220 Cost of revenue 2,913,204 2,553,700 5,539,934 4,558,985 ---------- ---------- ---------- ---------- Gross profit 381,175 297,091 682,577 543,235 % of Revenue 11.6% 10.4% 11.0% 10.6% Selling and administrative expense 98,031 92,897 217,198 186,865 % of Revenue 3.0% 3.3% 3.5% 3.7% Intangibles amortization 16,822 16,083 33,056 25,271 Equity earnings (3,165) (5,918) (7,330) (10,403) Other operating income, net (261) (1,367) (645) (1,664) Acquisition and integration related costs 9,537 9,964 17,604 71,220 ---------- ---------- ---------- ---------- Income from operations 260,211 185,432 422,694 271,946 % of Revenue 7.9% 6.5% 6.8% 5.3% Interest expense (21,675) (20,757) (40,562) (43,503) Interest income 1,477 1,998 3,537 3,869 ---------- ---------- ---------- ---------- Income before taxes 240,013 166,673 385,669 232,312 Income tax expense (72,947) (46,973) (115,857) (69,740) ---------- ---------- ---------- ---------- Net income 167,066 119,700 269,812 162,572 Less: Net income attributable to noncontrolling interests (24,662) (13,657) (38,457) (22,921) Net income attributable to CB&I $ 142,404 $ 106,043 $ 231,355 $ 139,651 --------- --------- --------- --------- Net income attributable to CB&I per share: Basic $ 1.32 $ 0.99 $ 2.14 $ 1.34 Diluted $ 1.31 $ 0.98 $ 2.12 $ 1.32 Weighted average shares outstanding: Basic 108,096 107,056 107,888 104,444 Diluted 109,110 108,392 109,058 105,963 Cash dividends on shares: Amount $ 7,567 $ 5,363 $ 15,126 $ 10,708 Per share $ 0.07 $ 0.05 $ 0.14 $ 0.10 Non-GAAP Supplemental Information (amounts adjusted to exclude Shaw acquisition and integration related costs) (1) Adjusted income from operations $ 269,748 $ 195,396 $ 440,298 $ 343,166 Adjusted % of Revenue 8.2% 6.9% 7.1% 6.7% Adjusted net income attributable to CB&I $ 148,317 $ 112,321 $ 242,754 $ 197,177 Adjusted net income attributable to CB&I per share (diluted) $ 1.36 $ 1.04 $ 2.23 $ 1.86 (1) The exclusion of Shaw acquisition and 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, 2014 2013 2014 2013 ------------------- ------------------- -------------------- ------------------- % of % of % of % of NEW AWARDS (1) Total Total Total Total Engineering, Construction and Maintenance (2) $3,206,764 76% $1,722,966 68% $ 8,131,083 81% $2,723,416 61% Fabrication Services 387,340 9% 493,431 20% 881,314 9% 1,201,137 27% Technology 329,445 8% 107,394 4% 429,646 4% 260,142 6% Environmental Solutions (2) 279,528 7% 189,996 8% 558,523 6% 275,041 6% Total $4,203,077 $2,513,787 $10,000,566 $4,459,736
REVENUE Total Total Total Total Engineering, Construction and Maintenance (2) $2,290,844 70% $1,796,804 63% $ 4,259,555 69% $3,296,580 65% Fabrication Services 641,204 19% 675,471 24% 1,271,612 20% 1,170,519 23% Technology 155,478 5% 161,300 6% 299,554 5% 312,782 6% Environmental Solutions (2) 206,853 6% 217,216 7% 391,790 6% 322,339 6% Total $3,294,379 $2,850,791 $ 6,222,511 $5,102,220 ========= ========= ========== ========= % of % of % of % of INCOME FROM OPERATIONS Revenue Revenue Revenue Revenue Engineering, Construction and Maintenance (2) $ 144,169 6.3% $ 86,725 4.8% $ 232,947 5.5% $ 153,258 4.6% Fabrication Services 70,714 11.0% 66,895 9.9% 111,127 8.7% 111,919 9.6% Technology 44,795 28.8% 36,364 22.5% 85,966 28.7% 71,906 23.0% Environmental Solutions (2) 10,070 4.9% 5,412 2.5% 10,258 2.6% 6,083 1.9% Total operating groups $ 269,748 8.2% $ 195,396 6.9% $ 440,298 7.1% $ 343,166 6.7% --------- --------- ---------- --------- Acquisition and integration related costs (9,537) (9,964) (17,604) (71,220) Total $ 260,211 7.9% $ 185,432 6.5% $ 422,694 6.8% $ 271,946 5.3% ========= ========= ========== ========= (1) New awards represents the value of new project commitments received by the Company during a given period. (2) The 2013 results for a large engineering, procurement and construction project in the U.S. that was previously reported within our Environmental Solutions (formerly Government Solutions) operating group has been reclassified to our Engineering, Construction and Maintenance operating group to conform to its classification in 2014, reflecting the present management oversight for the project. Chicago Bridge & Iron Company N.V. Condensed Consolidated Balance Sheets (in thousands) June 30, December 31, 2014 2013 --------------- ------------------- ASSETS Current assets $ 3,540,378 $ 3,389,565 Equity investments 93,807 101,754 Property and equipment, net 785,874 788,797 Goodwill and other intangibles, net 4,818,271 4,854,191 Other non-current assets 233,897 255,286 ------------------- Total assets $ 9,472,227 $ 9,389,593 =========== =============== LIABILITIES AND SHAREHOLDERS' EQUITY Current maturities of long-term debt and other borrowings $ 709,266 $ 215,000 Other current liabilities 3,985,119 4,582,624 Long-term debt 1,575,000 1,625,000 Other non-current liabilities 449,176 459,531 Shareholders' equity 2,753,666 2,507,438 Total liabilities and shareholders' equity $ 9,472,227 $ 9,389,593 =========== =============== Chicago Bridge & Iron Company N.V. Condensed Consolidated Statements of Cash Flows and Other Financial Data (in thousands) Six Months Ended June 30, -------------------------------------- 2014 2013 --------------- ------------------- CASH FLOWS Cash flows from operating activities $ (374,363) $ (300,742) Cash flows from investing activities (49,148) (1,826,975) Cash flows from financing activities 357,283 1,939,717 Effect of exchange rate changes on cash and cash equivalents 20,039 (28,786) Decrease in cash and cash equivalents (46,189) (216,786) Cash and cash equivalents, beginning of the year 420,502 643,395 Cash and cash equivalents, end of the period $ 374,313 $ 426,609 =========== =============== OTHER FINANCIAL DATA Increase in receivables, net $ (121,013) $ (205,458) Change in contracts in progress, net (797,126) (221,071) Decrease (increase) in inventory 10,897 (13,709) Increase (decrease) in accounts payable 95,955 (97,355) Change in contract capital $ (811,287) $ (537,593) =========== =============== Depreciation and amortization $ 89,870 $ 79,170 Capital expenditures $ 58,179 $ 40,867 June 30, 2014 December 31, 2013 --------------- --------------------- Backlog (1) $ 31,540,467 $ 27,794,212 (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 2013 2014 2013 -------- -------- -------- -------- Adjusted income from operations Income from operations $260,211 $185,432 $422,694 $271,946 Acquisition and integration related costs 9,537 9,964 17,604 71,220 -------- -------- -------- -------- Adjusted income from operations $269,748 $195,396 $440,298 $343,166 Adjusted % of Revenue 8.2% 6.9% 7.1% 6.7% Adjusted net income attributable to CB&I Net income attributable to CB&I $142,404 $106,043 $231,355 $139,651 Acquisition and integration related costs, net of tax (1) 5,913 6,278 11,399 57,526 -------- -------- -------- -------- Adjusted net income attributable to CB&I $148,317 $112,321 $242,754 $197,177 Adjusted net income attributable to CB&I per share Net income attributable to CB&I $ 1.31 $ 0.98 $ 2.12 $ 1.32 Acquisition and integration related costs, net of tax (1) 0.05 0.06 0.11 0.54 -------- -------- -------- -------- Adjusted net income attributable to CB&I $ 1.36 $ 1.04 $ 2.23 $ 1.86 (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 amounts for the three and six month periods are based upon diluted weighted average shares of 109,110 and 109,058, respectively. The three and six month periods ended June 30, 2013 include $9,964 and $71,220, respectively, of acquisition and integration related costs, and the six month period ended June 30, 2013 includes $10,517 of acquisition related pre-closing financing costs and one-time financial commitments (both included in interest expense and recorded in Q1 2013). These costs total $9,964 and $81,737, less the tax impact of $3,686 and $24,211, respectively. The per share amounts for the three and six month periods are based upon diluted weighted average shares of 108,392 and 105,963, respectively.
SOURCE CB&I
/Web site: cbi.com
About CB&I
CB&I (NYSE:CBI) is the most complete energy infrastructure focused company in the world and a major provider of government services. With 125 years of experience and the expertise of approximately 55,000 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.
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