CB&I Reports Second-Quarter 2016 Financial Results

86% Increase in Net Cash from Operating Activities Versus Year-Ago Quarter

News provided by

CB&I

Jul 27, 2016, 04:15 ET

THE WOODLANDS, Texas, July 27, 2016 /PRNewswire/ -- CB&I (NYSE: CBI) today reported net income of $123.8 million, or $1.17 per diluted share, for the second quarter of 2016, as compared to $169.5 million, or $1.55 per diluted share for the second quarter of 2015. On an adjusted basis, net income for the second quarter of 2015 was $125.7 million, or $1.15 per diluted share.

Revenues for the second quarter of 2016 were $2.7 billion, as compared to $3.2 billion in the second quarter of 2015, or $2.6 billion on an adjusted basis.

Net cash provided by operating activities during the second quarter of 2016 increased by 86 percent, to $177 million, as compared to $95 million of net cash provided by operating activities in the second quarter of 2015.

At the end of the second quarter of 2016, the company's total debt was $2.3 billion, down 10 percent from the end of 2015.

New awards for the second quarter of 2016 totaled $1.8 billion, as compared to $2.8 billion for the second quarter of 2015, or $2.3 billion on an adjusted basis. The company's backlog at the end of the second quarter of 2016 was $19.6 billion.

"Our sound performance for the second quarter was highlighted by impressive cash flow, solid earnings, reduced debt and continued progress in lowering our effective tax rate," said Philip K. Asherman, CB&I's President and Chief Executive Officer. "We also resumed our stock repurchase program earlier this month and to date have purchased approximately 3.6 million shares, and we will continue to be active in the market until we reach our $200 million limit.

"Despite ongoing market uncertainty delaying the timing of final investment decisions, we were encouraged to see a meaningful rebound in new awards in our Technology operating group, which is often a leading indicator for subsequent EPC awards," said Mr. Asherman.

Although CB&I's unique business model and backlog position the company well for the long term, energy customers continue to defer the timing of new projects. As a result, the company is lowering its 2016 guidance as follows:

Revenue:  $10.6 - $11.0 billion

Earnings Per Diluted Share:  $4.70 - $5.00

Earnings Conference Call
CB&I will host a webcast on July 27 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 a leading provider of technology and infrastructure for the energy industry. With over 125 years of experience and the expertise of more than 40,000 employees, CB&I provides reliable solutions to our customers around the world 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, 2015, 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.

Non-GAAP Financial Measures

To supplement CB&I's consolidated financial statements, which are prepared and presented in accordance with U.S. generally accepted accounting principles (GAAP), this press release and the accompanying tables contain certain non-GAAP financial measures, including: adjusted revenue, adjusted income from operations, adjusted net income attributable to CB&I, adjusted net income attributable to CB&I per share (diluted), and adjusted operating cash flows. These non-GAAP financial measures exclude the results of CB&I's nuclear operations and non-cash charges related to the disposition of such operations. These non-GAAP financial measures are presented to enhance investors' understanding of the results of CB&I's core business operations. CB&I considers these non-GAAP financial measures to be useful measures of the operating performance of the company, because they contain adjustments for unusual events or factors that do not directly affect what management considers to be CB&I's core operating performance, and are used by the company's management for that purpose. Management also believes that these non-GAAP financial measures allow for a better evaluation of the company's performance by facilitating a meaningful comparison of the company's core operating results in a given period to those in prior and future periods.  In addition, investors often use similar measures to evaluate the operating performance of a company.

Non-GAAP financial measures are presented for supplemental informational purposes only to aid an understanding of the company's operating results. The presentation of these non-GAAP financial measures and key metrics is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and may be different from non-GAAP financial measures presented by other companies. For more information on these non-GAAP financial measures and key metrics, please see the tables captioned "Non-GAAP Supplemental Adjusted Financial Data", "Non-GAAP Supplemental Adjusted Segment Information" and "Reconciliation of Non-GAAP Supplemental Adjusted Segment Information to GAAP Information" which are included at the end of this release.

Chicago Bridge & Iron Company N.V.

Segment Information

(in thousands)













Three Months Ended June 30,

Six Months Ended June 30,


2016

2015

2016

2015

















NEW AWARDS (1)


% of


% of


% of


% of



Total


Total


Total


Total

Engineering & Construction

$

963,391

55%

$

1,305,951

46%

$

1,286,809

44%

$

2,515,358

43%

Fabrication Services

252,978

14%

844,715

30%

626,667

21%

1,772,089

30%

Technology

107,769

6%

81,087

3%

191,389

6%

158,109

3%

Capital Services

434,701

25%

612,763

21%

851,373

29%

1,430,143

24%

Total

$

1,758,839


$

2,844,516


$

2,956,238


$

5,875,699


















REVENUE


% of


% of


% of


% of



Total


Total


Total


Total

Engineering & Construction

$

1,543,126

57%

$

1,916,122

60%

$

3,059,454

57%

$

3,734,708

59%

Fabrication Services

526,624

20%

611,330

19%

1,044,200

20%

1,249,139

20%

Technology

64,512

2%

92,975

3%

129,074

2%

192,336

3%

Capital Services

561,353

21%

586,686

18%

1,130,620

21%

1,156,675

18%

Total

$

2,695,615


$

3,207,113


$

5,363,348


$

6,332,858


















INCOME FROM OPERATIONS


% of


% of


% of


% of



Revenue


Revenue


Revenue


Revenue

Engineering & Construction

$

95,638

6.2%

$

176,467

9.2%

$

207,558

6.8%

$

312,885

8.4%

Fabrication Services

66,853

12.7%

55,937

9.2%

105,102

10.1%

108,336

8.7%

Technology

23,127

35.8%

36,741

39.5%

49,408

38.3%

84,765

44.1%

Capital Services

16,515

2.9%

14,962

2.6%

28,005

2.5%

24,919

2.2%

Total

$

202,133

7.5%

$

284,107

8.9%

$

390,073

7.3%

$

530,905

8.4%

















BACKLOG (2)

June 30, 2016

% of Total

December 31, 2015

% of Total

Engineering & Construction

$

11,159,593

57%

$

12,892,804

57%

Fabrication Services

2,606,646

13%

3,107,500

14%

Technology

977,125

5%

963,058

4%

Capital Services

4,892,596

25%

5,680,577

25%

Total

$

19,635,960





$

22,643,939





(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)   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.

Consolidated Statements of Operations

(in thousands, except per share data)









Three Months

Six Months


Ended June 30,

Ended June 30,


2016

2015

2016

2015









Revenue

$

2,695,615

$

3,207,113

$

5,363,348

$

6,332,858

Cost of revenue

2,401,089

2,823,990

4,781,217

5,579,564

Gross profit

294,526

383,123

582,131

753,294

% of Revenue

10.9%

11.9%

10.9%

11.9%









Selling and administrative expense

82,731

85,153

175,328

194,254

% of Revenue

3.1%

2.7%

3.3%

3.1%









Intangibles amortization

10,494

14,942

21,771

30,594

Equity earnings

(1,985)

(394)

(5,975)

(4,596)

Other operating expense (income), net

1,153

(685)

934

2,137

Income from operations

202,133

284,107

390,073

530,905

% of Revenue

7.5%

8.9%

7.3%

8.4%









Interest expense

(26,073)

(21,114)

(51,971)

(43,400)

Interest income

3,059

2,184

5,548

4,232

Income before taxes

179,119

265,177

343,650

491,737









Income tax expense

(46,571)

(79,289)

(91,140)

(149,100)

Net income

132,548

185,888

252,510

342,637









Less: Net income attributable to noncontrolling interests

(8,709)

(16,373)

(21,746)

(40,894)

Net income attributable to CB&I

$

123,839

$

169,515

$

230,764

$

301,743









Net income attributable to CB&I per share:







Basic

$

1.18

$

1.56

$

2.20

$

2.78

Diluted

$

1.17

$

1.55

$

2.18

$

2.76









Weighted average shares outstanding:







Basic

105,298

108,700

105,051

108,450

Diluted

106,091

109,533

105,925

109,386









Cash dividends on shares:







Amount

$

7,372

$

7,610

$

14,731

$

15,207

Per share

$

0.07

$

0.07

$

0.14

$

0.14

Chicago Bridge & Iron Company N.V.

Condensed Consolidated Balance Sheets

(in thousands)







June 30,

December 31,


2016

2015

ASSETS








Current assets

$

3,649,294

$

3,367,299

Equity investments

149,043

136,845

Property and equipment, net

587,059

604,043

Goodwill and other intangibles, net

4,101,555

4,122,455

Other non-current assets

895,547

961,418

Total assets

$

9,382,498

$

9,192,060





LIABILITIES AND SHAREHOLDERS' EQUITY








Current maturities of long-term debt and other borrowings, net

$

863,270

$

800,871

Other current liabilities

4,272,183

4,056,077

Long-term debt, net

1,474,498

1,791,832

Other non-current liabilities

382,584

379,690





Shareholders' equity

2,389,963

2,163,590

Total liabilities and shareholders' equity

$

9,382,498

$

9,192,060


Condensed Consolidated Statements of Cash Flows and Other Financial Data

(in thousands)





Six Months


Ended June 30,


2016

2015

CASH FLOWS








Cash flows from operating activities

$

319,264

$

(194,704)

Cash flows from investing activities

(115,668)

(189,644)

Cash flows from financing activities

(137,736)

422,223

Effect of exchange rate changes on cash and cash equivalents

(13,169)

(34,110)

Increase in cash and cash equivalents

52,691

3,765

Cash and cash equivalents, beginning of the year

550,221

351,323

Cash and cash equivalents, end of the period

$

602,912

$

355,088





OTHER FINANCIAL DATA








Increase in receivables, net

$

(113,662)

$

(20,291)

Change in contracts in progress, net

87,405

(626,450)

Decrease (increase) in inventory

15,334

(6,089)

Decrease in accounts payable

(53,637)

(77,798)

Change in contract capital

$

(64,560)

$

(730,628)





Depreciation and amortization

$

62,853

$

86,699

Capital expenditures

$

25,276

$

33,717

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Adjusted Financial Data

(amounts adjusted to exclude the results of our nuclear operations and non-cash charges related to the disposition of our nuclear operations)

(in thousands, except per share data)











Three Months Ended March 31, 2015 (1)


As Reported

Disposition
Charges

Removal of
Divested
Business

Excluding
Divested
Business









Revenue

$

3,125,745

$

—

$

(488,259)

$

2,637,486

Income from operations

$

246,798

$

—

$

(45,600)

$

201,198

Net income attributable to CB&I

$

132,228

$

—

$

(27,816)

$

104,412

Net income attributable to CB&I per share (diluted) (2)

$

1.21

$

—

$

(0.25)

$

0.96

New Awards

$

3,031,183

$

—

$

(5,206)

$

3,025,977

Backlog

$

29,934,182

$

—

$

(8,193,792)

$

21,740,390

Operating Cash Flows

$

(289,871)

$

—

$

303,600

$

13,729



Three Months Ended June 30, 2015 (1)


As Reported

Disposition
Charges

Removal of
Divested
Business

Excluding
Divested
Business









Revenue

$

3,207,113

$

—

$

(564,327)

$

2,642,786

Income from operations

$

284,107

$

—

$

(71,800)

$

212,307

Net income attributable to CB&I

$

169,515

$

—

$

(43,798)

$

125,717

Net income attributable to CB&I per share (diluted) (2)

$

1.55

$

—

$

(0.40)

$

1.15

New Awards

$

2,844,516

$

—

$

(574,719)

$

2,269,797

Backlog

$

29,432,933

$

—

$

(8,204,184)

$

21,228,749

Operating Cash Flows

$

95,167

$

—

$

271,200

$

366,367



Three Months Ended September 30, 2015 (1)


As Reported

Disposition
Charges

Removal of
Divested
Business

Excluding
Divested
Business









Revenue

$

3,321,682

$

—

$

(502,922)

$

2,818,760

(Loss) income from operations

$

(889,962)

$

1,160,480

$

(45,715)

$

224,803

Net (loss) income attributable to CB&I

$

(740,433)

$

904,230

$

(27,886)

$

135,911

Net (loss) income attributable to CB&I per share (diluted) (3)

$

(7.02)

$

8.56

$

(0.26)

$

1.28

New Awards

$

4,000,302

$

—

$

(84,289)

$

3,916,013

Backlog

$

29,928,616

$

—

$

(7,785,551)

$

22,143,065

Operating Cash Flows

$

21,282

$

—

$

305,685

$

326,967



Three Months Ended December 31, 2015 (1)


As Reported

Disposition
Charges

Removal of
Divested
Business

Excluding
Divested
Business









Revenue

$

3,274,964

$

—

$

(505,659)

$

2,769,305

(Loss) income from operations

$

(66,060)

$

345,371

$

(52,035)

$

227,276

Net (loss) income attributable to CB&I

$

(65,725)

$

230,910

$

(31,741)

$

133,444

Net (loss) income attributable to CB&I per share (diluted) (3)

$

(0.63)

$

2.19

$

(0.30)

$

1.26

New Awards

$

3,262,497

$

—

$

(8,151)

$

3,254,346

Backlog

$

22,643,939

$

—

$

—

$

22,643,939

Operating Cash Flows

$

117,208

$

—

$

252,865

$

370,073



Twelve Months Ended December 31, 2015 (1)


As Reported

Disposition
Charges

Removal of
Divested
Business

Excluding
Divested
Business









Revenue

$

12,929,504

$

—

$

(2,061,167)

$

10,868,337

(Loss) income from operations

$

(425,117)

$

1,505,851

$

(215,150)

$

865,584

Net (loss) income attributable to CB&I

$

(504,415)

$

1,135,140

$

(131,241)

$

499,484

Net (loss) income attributable to CB&I per share (diluted) (3)

$

(4.72)

$

10.58

$

(1.22)

$

4.64

New Awards

$

13,138,498

$

—

$

(672,365)

$

12,466,133

Backlog

$

22,643,939

$

—

$

—

$

22,643,939

Operating Cash Flows

$

(56,214)

$

—

$

1,133,350

$

1,077,136



(1)  

The summary unaudited adjusted financial information presented in the tables above is for illustrative purposes only and is based on assumptions and estimates considered appropriate by CB&I management; however, it is not necessarily indicative of what CB&I's consolidated financial position or results of operations actually would have been assuming the transaction was completed on January 1, 2015, and does not purport to represent CB&I's consolidated financial position or results of operations for future periods. The above should be read together with the historical financial statements, including the related notes thereto, included in CB&I's Annual Report on Form 10-K for the year ended December 31, 2015, and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015, June 30, 2015, and September 30, 2015.


(2)

The unadjusted and adjusted per share amounts for the three months ended March 31, 2015, and June 30, 2015, are based upon diluted weighted average shares of 109,261 and 109,533, respectively.


(3)  

The unadjusted per share amounts for the three months ended September 30, 2015, and December 31, 2015, and twelve months ended December 31, 2015, are based upon diluted weighted average shares that are equivalent to our basic weighted average shares of 105,454, 104,763 and 106,766, respectively, due to the net loss for the periods, and the adjusted per share amounts are based upon diluted weighted average shares of 106,322,105,926 and 107,719, respectively.

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Adjusted Segment Information

(amounts adjusted to exclude the results of our nuclear operations and non-cash charges related to the disposition of our nuclear operations)

(in thousands)























Three Months Ended

Twelve Months Ended


March 31, 2015 (1)

June 30, 2015 (1)

September 30, 2015 (1)

December 31, 2015 (1)

December 31, 2015 (1)





















NEW AWARDS


% of


% of


% of


% of


% of



Total


Total


Total


Total


Total

Engineering & Construction

$

1,204,201

40%

$

731,232

32%

$

2,323,546

60%

$

1,778,520

55%

$

6,037,499

48%

Fabrication Services

927,374

31%

844,715

37%

840,658

21%

493,816

15%

3,106,563

25%

Technology

77,022

2%

81,087

4%

97,539

2%

321,892

10%

577,540

5%

Capital Services

817,380

27%

612,763

27%

654,270

17%

660,118

20%

2,744,531

22%

Total

$

3,025,977


$

2,269,797


$

3,916,013


$

3,254,346


$

12,466,133






















REVENUE


% of


% of


% of


% of


% of



Total


Total


Total


Total


Total

Engineering & Construction

$

1,330,327

50%

$

1,351,795

51%

$

1,443,504

51%

$

1,510,891

55%

$

5,636,517

52%

Fabrication Services

637,809

24%

611,330

23%

640,201

23%

553,350

20%

2,442,690

22%

Technology

99,361

4%

92,975

4%

118,269

4%

88,494

3%

399,099

4%

Capital Services

569,989

22%

586,686

22%

616,786

22%

616,570

22%

2,390,031

22%

Total

$

2,637,486


$

2,642,786


$

2,818,760


$

2,769,305


$

10,868,337






















INCOME FROM OPERATIONS


% of


% of


% of


% of


% of



Revenue


Revenue


Revenue


Revenue


Revenue

Engineering & Construction

$

90,818

6.8%

$

104,667

7.7%

$

107,411

7.4%

$

112,484

7.4%

$

415,380

7.4%

Fabrication Services

52,399

8.2%

55,937

9.2%

61,408

9.6%

55,523

10.0%

225,267

9.2%

Technology

48,024

48.3%

36,741

39.5%

31,911

27.0%

34,201

38.6%

150,877

37.8%

Capital Services

9,957

1.7%

14,962

2.6%

24,073

3.9%

25,068

4.1%

74,060

3.1%

Total

$

201,198

7.6%

$

212,307

8.0%

$

224,803

8.0%

$

227,276

8.2%

$

865,584

8.0%





















(1)   The summary unaudited adjusted financial information reflects the removal of the results of our nuclear power construction business sold on December 31, 2015, and reflects the removal of the related disposition charges incurred as a result of the sale, as quantified below. The information presented in the tables above is for illustrative purposes only. The exclusion of our nuclear power construction business and the $1,160,480 and $345,371 of charges related to the disposition of our nuclear operations for the three months ended September 30, 2015, and December 31, 2015, respectively, are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. See "Reconciliation of Non-GAAP Supplemental Adjusted Segment Information to GAAP Information" table.

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Supplemental Adjusted Segment Information to GAAP Information

(in thousands)

























Three Months Ended

Twelve Months Ended



March 31, 2015

June 30, 2015

September 30, 2015

December 31, 2015

December 31, 2015

NEW AWARDS







































Engineering & Construction



















Excluding Nuclear Operations

$

1,204,201


$

731,232


$

2,323,546


$

1,778,520


$

6,037,499

Nuclear Operations

5,206


574,719


84,289


8,151


672,365

Total

$

1,209,407


$

1,305,951


$

2,407,835


$

1,786,671


$

6,709,864























CB&I




















Excluding Nuclear Operations

$

3,025,977


$

2,269,797


$

3,916,013


$

3,254,346


$

12,466,133

Nuclear Operations

5,206


574,719


84,289


8,151


672,365

Total

$

3,031,183


$

2,844,516


$

4,000,302


$

3,262,497


$

13,138,498























REVENUE







































Engineering & Construction



















Excluding Nuclear Operations

$

1,330,327


$

1,351,795


$

1,443,504


$

1,510,891


$

5,636,517

Nuclear Operations

488,259


564,327


502,922


505,659


2,061,167

Total

$

1,818,586


$

1,916,122


$

1,946,426


$

2,016,550


$

7,697,684























CB&I




















Excluding Nuclear Operations

$

2,637,486


$

2,642,786


$

2,818,760


$

2,769,305


$

10,868,337

Nuclear Operations

488,259


564,327


502,922


505,659


2,061,167

Total

$

3,125,745


$

3,207,113


$

3,321,682


$

3,274,964


$

12,929,504























INCOME (LOSS) FROM OPERATIONS


% of


% of


% of


% of


% of



Revenue


Revenue


Revenue


Revenue


Revenue

Engineering & Construction



















Excluding Nuclear Operations

$

90,818

6.8%

$

104,667

7.7%

$

107,411

7.4%

$

112,484

7.4%

$

415,380

7.4%

Nuclear Operations

45,600


71,800


(1,114,765)


(293,336)


(1,290,701)

Total

$

136,418

7.5%

$

176,467

9.2%

$

(1,007,354)

(51.8)%

$

(180,852)

(9.0)%

$

(875,321)

(11.4)%






















CB&I




















Excluding Nuclear Operations

$

201,198

7.6%

$

212,307

8.0%

$

224,803

8.0%

$

227,276

8.2%

$

865,584

8.0%

Nuclear Operations

45,600


71,800


(1,114,765)


(293,336)


(1,290,701)

Total

$

246,798

7.9%

$

284,107

8.9%

$

(889,962)

(26.8)%

$

(66,060)

(2.0)%

$

(425,117)

(3.3)%

Investors: Scott Lamb, +1 832 513 1068, [email protected]
Media: Gentry Brann, +1 832 513 1031, [email protected]

Logo - http://photos.prnewswire.com/prnh/20130430/DA04155LOGO

SOURCE CB&I

Related Links

http://www.cbi.com

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