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CB&I Reports Second Quarter 2012 Results

CB&I (NYSE: CBI) today reported net income of $72.3 million, or $0.74 per diluted share, for the second quarter of 2012, compared with $61.9 million, or $0.62 per diluted share, in the second quarter of 2011. Revenue for the quarter was $1.3 billion versus $1.1 billion in the comparable period. New awards totaled $1.8 billion compared with $1.2 billion, increasing the company’s backlog to over $10.0 billion.

During the quarter, the company returned $23.4 million to shareholders, which included $18.6 million of stock repurchases and $4.8 million through quarterly cash dividends. Cash and cash equivalents as of June 30 were $552.8 million.

“I am extremely pleased to report that each of our business sectors, Lummus Technology, Project Engineering and Construction and Steel Plate Structures had a very strong quarter, leading to record levels of backlog and net income for our company,” said Philip K. Asherman, President and CEO. “Our market momentum, operational execution and financial performance have been trending as expected, providing us with greater visibility and confidence into the full year. As a result we are adjusting our 2012 full-year guidance.”

CB&I’s updated guidance for 2012 is:

 
New Awards:       $5.5 - $7.0 billion
Revenue: $5.4 - $5.6 billion
Earnings per Share: $2.85 - $3.05
 

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 is available at www.CBI.com Investor Relations.

About CB&I

CB&I (NYSE: CBI) engineers and constructs some of the world’s largest energy infrastructure projects. With premier process technology, proven EPC expertise, and unrivaled storage tank experience, CB&I executes projects from concept to completion. Safely. Reliably. Globally. For more information, visit www.CBI.com.

Forward-Looking Statement

This 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, 2011, 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,
2012 2011 2012 2011
 
Revenue $ 1,299,529 $ 1,085,705 $ 2,500,796 $ 2,039,976
 
Cost of revenue 1,140,644 945,612 2,188,647 1,763,167
       
Gross profit 158,885 140,093 312,149 276,809
% of Revenue 12.2 % 12.9 % 12.5 % 13.6 %
Selling and administrative expense 52,392 48,475 115,624 106,140
% of Revenue 4.0 % 4.5 % 4.6 % 5.2 %
Intangibles amortization 6,037 6,372 12,129 12,664
Other operating expense (income), net 1,327 54 1,262 (844 )
Equity earnings (4,010 ) (3,204 ) (5,810 ) (4,550 )
       
Income from operations 103,139 88,396 188,944 163,399
% of Revenue 7.9 % 8.1 % 7.6 % 8.0 %
Interest expense (2,831 ) (3,538 ) (4,943 ) (6,595 )
Interest income 2,288 1,743 4,475 3,115
       
Income before taxes 102,596 86,601 188,476 159,919
 
Income tax expense (29,752 ) (24,898 ) (54,658 ) (46,652 )
       
Net income 72,844 61,703 133,818 113,267
 
Less: Net (income) loss attributable to noncontrolling interests   (524 )   191     (2,011 )   (867 )
 
Net income attributable to CB&I $ 72,320   $ 61,894   $ 131,807   $ 112,400  
 
Net income attributable to CB&I per share:
Basic $ 0.75 $ 0.63 $ 1.36 $ 1.14
Diluted $ 0.74 $ 0.62 $ 1.34 $ 1.12
 
Weighted average shares outstanding:
Basic 96,401 98,449 96,829 98,494
Diluted 97,632 100,163 98,442 100,503
 
Cash dividends on shares:
Amount $ 4,832 $ 4,930 $ 9,717 $ 9,920
Per Share $ 0.05 $ 0.05 $ 0.10 $ 0.10

 
CHICAGO BRIDGE & IRON COMPANY N.V. SEGMENT INFORMATION (in thousands)
                   
Three Months Ended June 30, Six Months Ended June 30,
2012 2011 2012 2011
 
% of % of % of % of
NEW AWARDS* Total Total Total Total
Steel Plate Structures $ 725,725 40 % $ 370,541 31 % $ 1,136,648 32 % $ 662,085 30 %
Project Engineering and Construction 792,543 43 % 767,388 63 % 1,947,938 55 % 1,354,091 61 %
Lummus Technology   311,493 17 %   77,660 6 %   440,536 13 %   210,976 9 %
Total $ 1,829,761 $ 1,215,589 $ 3,525,122 $ 2,227,152
 
 
% of % of % of % of
REVENUE Total Total Total Total
Steel Plate Structures $ 499,530 38 % $ 456,357 42 % $ 919,461 37 % $ 825,065 41 %
Project Engineering and Construction 711,349 55 % 541,647 50 % 1,392,632 56 % 1,006,217 49 %
Lummus Technology   88,650 7 %   87,701 8 %   188,703 7 %   208,694 10 %
Total $ 1,299,529 $ 1,085,705 $ 2,500,796 $ 2,039,976
 
 
% of % of % of % of
INCOME FROM OPERATIONS Revenue Revenue Revenue Revenue
Steel Plate Structures $ 48,421 9.7 % $ 47,489 10.4 % $ 86,717 9.4 % $ 84,413 10.2 %
Project Engineering and Construction 32,620 4.6 % 24,476 4.5 % 57,530 4.1 % 39,491 3.9 %
Lummus Technology   22,098 24.9 %   16,431 18.7 %   44,697 23.7 %   39,495 18.9 %
Total $ 103,139 7.9 % $ 88,396 8.1 % $ 188,944 7.6 % $ 163,399 8.0 %
 
* New awards represents the value of new project commitments received by the Company during a given period.

     
CHICAGO BRIDGE & IRON COMPANY N.V. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
 
June 30, December 31,
2012 2011
ASSETS
 
Current assets $ 1,649,855 $ 1,661,321
Equity investments 85,515 95,687
Property and equipment, net 274,120 262,003
Goodwill and other intangibles, net 1,093,572 1,114,512
Other non-current assets 145,285 158,460
   
Total assets $ 3,248,347 $ 3,291,983
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 
Current maturity of long-term debt $ 40,000 $ 40,000
Other current liabilities 1,630,128 1,703,424
Other non-current liabilities 333,828 352,129
 
Shareholders' equity 1,244,391 1,196,430
   
Total liabilities and shareholders' equity $ 3,248,347 $ 3,291,983

     
CHICAGO BRIDGE & IRON COMPANY N.V. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS AND OTHER FINANCIAL DATA (in thousands)
 
Six Months
Ended June 30,
2012 2011
CASH FLOWS
 
Cash flows from operating activities $ 28,794 $ (34,443 )
Cash flows from investing activities (33,050 ) (13,262 )
Cash flows from financing activities (111,813 ) (83,737 )
Effect of exchange rate changes on cash and cash equivalents (2,914 ) 25,582
   
Decrease in cash and cash equivalents (118,983 ) (105,860 )
Cash and cash equivalents, beginning of the year   671,811     481,738  
Cash and cash equivalents, end of the period $ 552,828   $ 375,878  
 
OTHER FINANCIAL DATA
 
Increase in receivables, net $ (127,796 ) $ (216,547 )
Change in contracts in progress, net

(66,746

) (19,596 )
Increase in accounts payable   33,159     87,101  
Change in contract capital $

(161,383

) $ (149,042 )
 
Depreciation and amortization $ 33,403 $ 34,545
Capital expenditures $ 34,187 $ 15,763
 
Backlog * $ 10,014,147 $ 7,257,390
 
* 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.




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