CB&I Reports Strong 2014 Fourth Quarter and Full-Year Results

New Bookings up 33%, Revenue up 17%, and Operating Income up 31% from 2013

News provided by

CB&I

Feb 24, 2015, 04:01 ET

THE WOODLANDS, Texas, Feb. 24, 2015 /PRNewswire/ -- CB&I (NYSE: CBI) today reported financial results for the fourth quarter and full-year 2014. Adjusted net income for 2014 was $568.7 million, or $5.21 per diluted share, excluding integration related costs of $25.1 million net of tax, or $0.23 per diluted share. For the year, GAAP net income was $543.6 million, or $4.98 per diluted share. CB&I's consolidated 2014 revenue was $13.0 billion, up from $11.1 billion, a 17 percent increase from the prior year. New awards for the year totaled $16.3 billion, which resulted in a backlog of $30.4 billion.

For the fourth quarter, CB&I's adjusted net income was $161.3 million, or $1.47 per diluted share, excluding acquisition and integration related costs of $10.9 million net of tax, or $0.10 per diluted share. GAAP net income for the quarter was $150.4 million, or $1.37 per diluted share. Revenue for the fourth quarter was $3.4 billion with new awards of $3.3 billion. Cash from operating activities for the fourth quarter was $613.3 million, resulting in $264.0 million for the year.

"We are pleased to deliver another year of strong safety, operational and financial performance. Our new awards and backlog are at record levels, and our prospect list for 2015 supports our outlook for sustained earnings growth," said Philip K. Asherman, CB&I's President and Chief Executive Officer. "Despite the uncertainty generated by lower oil prices, our customers continue to rely on us to deliver solutions for their major capital projects. Over the last two years we made great progress in reducing costs and generating efficiencies across the organization, and believe our cost discipline coupled with the benefits of our diversified integrated offerings will allow us to maintain our performance and provide solid returns for our shareholders."

New awards of $16.3 billion for the year highlight the breadth and reach of our offerings across our end markets. Awards included strong bookings in the United States such as the engineering and construction of a three train LNG export terminal; two combined cycle gas turbine power projects; an ammonia storage tank; pipe fabrication for a propane dehydrogenation unit; nuclear and petrochemical facility maintenance work; as well as various decommissioning and decontamination, environmental remediation and government services awards. Globally, we booked noteworthy awards for engineering and procurement for a clean fuels project; structural, mechanical and piping construction for an LNG project; construction of petroleum storage tanks; licensing for a grassroots ethylene plant; engineered products for refining, petrochemicals and gas processing facilities; strategic technology licenses; and  numerous additional steel plate storage and fabrication awards.

Commenting on CB&I's outlook for 2015, Mr. Asherman stated, "We project less than 5 percent of our revenue from new bookings could be affected by timing risks associated with lower oil prices. Accordingly, we think it is prudent to marginally adjust our guidance to revenue of $14.4 billion - $15.2 billion and earnings per share of $5.55 - $6.05."

Earnings Conference Call

CB&I will host a webcast on Feb. 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.

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 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

Twelve Months


Ended December 31,

Ended December 31,


2014


2013

2014


2013

















Revenue

$

3,371,686



$

3,000,257

$

12,974,930



$

11,094,527

Cost of revenue

2,981,048



2,661,051

11,508,521



9,895,517

Gross profit

390,638



339,206

1,466,409



1,199,010

% of Revenue

11.6

%


11.3

%

11.3

%


10.8

%

















Selling and administrative expense

95,425



98,921

405,208



379,485

% of Revenue

2.8

%


3.3

%

3.1

%


3.4

%

















Intangibles amortization

16,661



18,429

66,506



61,111

Equity earnings

(11,222)



(7,337)

(25,225)



(23,474)

Other operating (income) expense, net

(1,596)



(493)

(2,373)



1,643

Acquisition and integration related costs

17,518



19,260

39,685



95,737

Income from operations

273,852



210,426

982,608



684,508

% of Revenue

8.1

%


7.0

%

7.6

%


6.2

%

















Interest expense

(21,691)



(21,506)

(83,590)



(87,578)

Interest income

2,403



1,721

8,524



6,930

Income before taxes

254,564



190,641

907,542



603,860

















Income tax (expense) benefit

(72,141)



26,414

(271,417)



(91,270)

Net income

182,423



217,055

636,125



512,590

















Less: Net income attributable to noncontrolling interests

(32,013)



(20,274)

(92,518)



(58,470)

Net income attributable to CB&I

$

150,410



$

196,781

$

543,607



$

454,120

















Net income attributable to CB&I per share:















Basic

$

1.39



$

1.83

$

5.03



$

4.29

Diluted

$

1.37



$

1.80

$

4.98



$

4.23

















Weighted average shares outstanding:















Basic

108,207



107,527

108,047



105,935

Diluted

109,466



109,168

109,122



107,452

















Cash dividends on shares:















Amount

$

7,546



$

5,375

$

30,246



$

21,453

Per share

$

0.07



$

0.05

$

0.28



$

0.20









Non-GAAP Supplemental Information

(amounts adjusted to exclude Shaw acquisition and integration related costs) (1)

















Adjusted income from operations

$

291,370



$

229,686

$

1,022,293



$

780,245

Adjusted % of Revenue

8.6

%


7.7

%

7.9

%


7.0

%

















Adjusted net income attributable to CB&I

$

161,270



$

208,915

$

568,695



$

527,436

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

$

1.47



$

1.91

$

5.21



$

4.91











(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 December 31,

Twelve Months Ended December 31,


2014

2013

2014

2013


























% of



% of



% of



% of

NEW AWARDS (1)



Total



Total



Total



Total

Engineering, Construction and Maintenance (2)

$

2,430,030

74%

$

4,035,993

76%

$

12,322,827

76%

$

8,131,206

66%

Fabrication Services

455,720

14%

799,681

15%

1,816,021

11%

2,681,886

22%

Technology

176,435

5%

233,784

5%

993,569

6%

633,690

5%

Environmental Solutions (2)

226,517

7%

225,590

4%

1,132,856

7%

806,188

7%

Total

$

3,288,702



$

5,295,048



$

16,265,273



$

12,252,970




























% of



% of



% of



% of

REVENUE



Total



Total



Total



Total

Engineering, Construction and Maintenance (2)

$

2,372,085

70%

$

1,961,360

66%

$

9,001,982

69%

$

7,165,739

65%

Fabrication Services

618,532

18%

698,052

23%

2,521,594

19%

2,575,597

23%

Technology

157,984

5%

130,472

4%

602,513

5%

599,195

5%

Environmental Solutions (2)

223,085

7%

210,373

7%

848,841

7%

753,996

7%

Total

$

3,371,686



$

3,000,257



$

12,974,930



$

11,094,527




























% of



% of



% of



% of

INCOME FROM OPERATIONS



Revenue



Revenue



Revenue



Revenue

Engineering, Construction and Maintenance (2)

$

163,152

6.9%

$

110,885

5.7%

$

560,563

6.2%

$

350,525

4.9%

Fabrication Services

66,179

10.7%

75,647

10.8%

234,884

9.3%

259,750

10.1%

Technology

52,494

33.2%

40,125

30.8%

187,385

31.1%

156,835

26.2%

Environmental Solutions (2)

9,545

4.3%

3,029

1.4%

39,461

4.6%

13,135

1.7%

Total operating groups

$

291,370

8.6%

$

229,686

7.7%

$

1,022,293

7.9%

$

780,245

7.0%

Acquisition and integration related costs

(17,518)



(19,260)



(39,685)



(95,737)


Total

$

273,852

8.1%

$

210,426

7.0%

$

982,608

7.6%

$

684,508

6.2%






















(1)

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


(2)

The 2013 results for a large engineering, procurement and construction project in the U.S. that was previously reported within our Environmental Solutions operating group were 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)









December 31,

December 31,


2014

2013

ASSETS












Current assets

$

3,530,459

$

3,389,565

Equity investments

107,984

101,754

Property and equipment, net

771,651

788,797

Goodwill and other intangibles, net

4,751,685

4,854,191

Other non-current assets

219,252

255,286

Total assets

$

9,381,031

$

9,389,593







LIABILITIES AND SHAREHOLDERS' EQUITY












Current maturities of long-term debt and other borrowings

$

270,738

$

215,000

Other current liabilities

4,051,492

4,582,624

Long-term debt

1,564,158

1,625,000

Other non-current liabilities

618,340

459,531







Shareholders' equity

2,876,303

2,507,438

Total liabilities and shareholders' equity

$

9,381,031

$

9,389,593


Chicago Bridge & Iron Company N.V.

Condensed Consolidated Statements of Cash Flows and Other Financial Data

(in thousands)





Twelve Months


Ended December 31,


2014

2013

CASH FLOWS












Cash flows from operating activities

$

264,047

$

(112,836)

Cash flows from investing activities

(182,277)

(1,825,309)

Cash flows from financing activities

(75,523)

1,732,812

Effect of exchange rate changes on cash and cash equivalents

(75,426)

(17,560)

Decrease in cash and cash equivalents

(69,179)

(222,893)

Cash and cash equivalents, beginning of the year

420,502

643,395

Cash and cash equivalents, end of the year

$

351,323

$

420,502







OTHER FINANCIAL DATA












Decrease (increase) in receivables, net

$

78,881

$

(154,143)

Change in contracts in progress, net

(942,689)

(619,336)

Decrease in inventory

16,832

1,504

Increase (decrease) in accounts payable

99,376

(43,491)

Change in contract capital

$

(747,600)

$

(815,466)







Depreciation and amortization

$

181,398

$

180,026

Capital expenditures

$

117,624

$

90,492









December 31, 2014

December 31, 2013

Backlog (1)

$

30,363,269

$

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

Twelve Months


Ended December 31,

Ended December 31,


2014

2013

2014

2013













Adjusted income from operations
























Income from operations

$

273,852

$

210,426

$

982,608

$

684,508

Acquisition and integration related costs

17,518

19,260

39,685

95,737

Adjusted income from operations

$

291,370

$

229,686

$

1,022,293

$

780,245

Adjusted % of Revenue

8.6

%

7.7

%

7.9

%

7.0

%













Adjusted net income attributable to CB&I
























Net income attributable to CB&I

$

150,410

$

196,781

$

543,607

$

454,120

Acquisition and integration related costs, net of tax (1)

10,860

12,134

25,088

73,316

Adjusted net income attributable to CB&I

$

161,270

$

208,915

$

568,695

$

527,436













Adjusted net income attributable to CB&I per share
























Net income attributable to CB&I

$

1.37

$

1.80

$

4.98

$

4.23

Acquisition and integration related costs, net of tax (1)

0.10

0.11

0.23

0.68

Adjusted net income attributable to CB&I

$

1.47

$

1.91

$

5.21

$

4.91










(1)

The three and twelve month periods ended December 31, 2014 include $17,518 and $39,685, respectively, of integration related costs, less the tax impact of $6,658 and $14,597, respectively. The per share amounts for the three and twelve month periods are based upon diluted weighted average shares of 109,466 and 109,122, respectively.



The three and twelve month periods ended December 31, 2013 include $19,260 and $95,737, respectively, of acquisition and integration related costs, and the twelve month period ended December 31, 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 $19,260 and $106,254, less the tax impact of $7,126 and $32,938, respectively. The per share amounts for the three and twelve month periods are based upon diluted weighted average shares of 109,168 and 107,452, respectively.




















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SOURCE CB&I

Related Links

http://www.cbi.com

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