NYSE: CBI 28.83
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Volume: 1,418,600
March 24, 2017

Investors

CB&I Reports 2016 Fourth Quarter and Full-Year Financial Results

02/28/2017

Strong Operating Cash Flow for Quarter and Full Year

 

THE WOODLANDS, Texas, Feb. 28, 2017 /PRNewswire/ -- CB&I (NYSE: CBI) today reported financial results for the fourth quarter and full year 2016.

For the fourth quarter, adjusted net income was $85.6 million, or $0.85 per diluted share. Adjusted operating income was $34.6 million, or 1.4 percent of revenue. Revenue was $2.5 billion, and new awards were $1.4 billion. Net cash provided by operating activities and advance payments from unconsolidated joint ventures totaled $168.4 million for the quarter.

For the year, adjusted net income was $438.1 million, or $4.23 per diluted share. Adjusted operating income was $658.2 million, or 6.2 percent of revenue. Revenue was $10.7 billion. Net cash provided by operating activities and advance payments from unconsolidated joint ventures totaled $801.5 million. New awards were $7.1 billion, resulting in a backlog of $18.5 billion at the end of 2016.

"The fourth quarter was impacted by charges for material increases in cost-to-complete estimates in our Engineering & Construction and Fabrication Services operating groups," said Philip K. Asherman, CB&I's President and Chief Executive Officer. "Despite this result, operating cash flow was extremely strong both in the quarter and for the year. In addition, upon financial close we will allocate the entire proceeds from the recently announced divestiture of our Capital Services business to reducing debt consistent with our stated objective of optimizing the balance sheet for future growth. I'm optimistic that stability in commodity prices and continuing development of major capital programs, particularly in North America and the Middle East, will result in resumption of substantial backlog growth by mid-year of 2017."

CB&I announced guidance for 2017 as follows:

  • Revenue:  $9.5 billion - $10.5 billion
  • Earnings Per Share (diluted): $4.00 - $4.60

The following tables include a reconciliation of GAAP financial results to adjusted financial results for the fourth quarter and full year 2016, which exclude a non-cash goodwill impairment charge for the company's Capital Services business and a non-cash charge relating to a reserve for the deferred purchase price consideration associated with the 2015 sale of the company's nuclear operations. Adjusted results for 2015 exclude the results of the nuclear power construction business, which was sold on December 31, 2015, as well as the related disposition charges incurred as a result of the sale.

Earnings Conference Call
CB&I will host a webcast on February 28 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, 2016, 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 Segment Information," "Reconciliation of Non-GAAP Supplemental Adjusted Financial Data" and "Non-GAAP Supplemental Adjusted Financial Data" which are included at the end of this release.

Investors: Scott Lamb, +1 832 513 1068, Scott.Lamb@CBI.com  
Media: Gentry Brann, +1 832 513 1031, Gentry.Brann@CBI.com  

 

Chicago Bridge & Iron Company N.V.

Non-GAAP Supplemental Adjusted Segment Information

(amounts adjusted to exclude non-cash charges related to goodwill impairment, loss on net assets sold and intangible assets
impairment, and the results of our former nuclear operations) (1)

(in thousands)














Three Months Ended December 31,


Twelve Months Ended December 31,



2016


2015


2016


2015


















NEW AWARDS




% of




% of




% of




% of




Total




Total




Total




Total

Engineering & Construction


$

325,636



24%


$

1,778,520



55%


$

3,104,874



44%


$

6,037,499



48%

Fabrication Services


421,588



30%


493,816



15%


1,273,971



18%


3,106,563



25%

Technology


168,672



12%


321,892



10%


479,409



7%


577,540



5%

Capital Services


475,600



34%


660,118



20%


2,205,903



31%


2,744,531



22%

Total


$

1,391,496





$

3,254,346





$

7,064,157





$

12,466,133





















REVENUE




% of




% of




% of




% of




Total




Total




Total




Total

Engineering & Construction


$

1,385,885



55%


$

1,510,891



55%


$

6,105,488



57%


$

5,636,517



52%

Fabrication Services


553,338



22%


553,350



20%


2,110,310



20%


2,442,690



22%

Technology


64,863



2%


88,494



3%


284,424



3%


399,099



4%

Capital Services


535,947



21%


616,570



22%


2,179,336



20%


2,390,031



22%

Total


$

2,540,033





$

2,769,305





$

10,679,558





$

10,868,337





















INCOME (LOSS) FROM OPERATIONS




% of




% of




% of




% of




Revenue




Revenue




Revenue




Revenue

Engineering & Construction


$

(34,652)



(2.5)%


$

112,484



7.4%


$

306,852



5.0%


$

415,380



7.4%

Fabrication Services


22,415



4.1%


55,523



10.0%


183,141



8.7%


225,267



9.2%

Technology


28,575



44.1%


34,201



38.6%


105,293



37.0%


150,877



37.8%

Capital Services


18,297



3.4%


25,068



4.1%


62,944



2.9%


74,060



3.1%

Total


$

34,635



1.4%


$

227,276



8.2%


$

658,230



6.2%


$

865,584



8.0%


















(1) 

The three and twelve months ended December 31, 2016, exclude a $655,000 goodwill impairment charge within our Capital Services operating group and a $148,148 charge within our Engineering & Construction operating group resulting from the establishment of a reserve for a receivable balance associated with the deferred transaction consideration (the "Transaction Receivable") recorded in connection with the sale of our former nuclear operations on December 31, 2015. The three and twelve months ended December 31, 2015, exclude the results of our former nuclear operations and charges of $345,371 and $1,505,851, respectively, within our Engineering & Construction operating group related to the disposition of the nuclear operations. The exclusion of these items are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. See "Reconciliation of Non-GAAP Supplemental Adjusted Financial Data" table.

 

 

Chicago Bridge & Iron Company N.V.

Segment Information

(in thousands)














Three Months Ended December 31,


Twelve Months Ended December 31,



2016


2015


2016


2015


















NEW AWARDS (1)




% of




% of




% of




% of




Total




Total




Total




Total

Engineering & Construction


$

325,636



24%


$

1,786,671



55%


$

3,104,874



44%


$

6,709,864



51%

Fabrication Services


421,588



30%


493,816



15%


1,273,971



18%


3,106,563



24%

Technology


168,672



12%


321,892



10%


479,409



7%


577,540



4%

Capital Services


475,600



34%


660,118



20%


2,205,903



31%


2,744,531



21%

Total


$

1,391,496





$

3,262,497





$

7,064,157





$

13,138,498





















REVENUE




% of




% of




% of




% of




Total




Total




Total




Total

Engineering & Construction


$

1,385,885



55%


$

2,016,550



61%


$

6,105,488



57%


$

7,697,684



60%

Fabrication Services


553,338



22%


553,350



17%


2,110,310



20%


2,442,690



19%

Technology


64,863



2%


88,494



3%


284,424



3%


399,099



3%

Capital Services


535,947



21%


616,570



19%


2,179,336



20%


2,390,031



18%

Total


$

2,540,033





$

3,274,964





$

10,679,558





$

12,929,504





















(LOSS) INCOME FROM OPERATIONS




% of




% of




% of




% of




Revenue




Revenue




Revenue




Revenue

Engineering & Construction (2)


$

(182,800)



(13.2)%


$

(180,852)



(9.0)%


$

158,704



2.6%


$

(875,321)



(11.4)%

Fabrication Services


22,415



4.1%


55,523



10.0%


183,141



8.7%


225,267



9.2%

Technology


28,575



44.1%


34,201



38.6%


105,293



37.0%


150,877



37.8%

Capital Services (3)


(636,703)



(118.8)%


25,068



4.1%


(592,056)



(27.2)%


74,060



3.1%

Total


$

(768,513)



(30.3)%


$

(66,060)



(2.0)%


$

(144,918)



(1.4)%


$

(425,117)



(3.3)%


















BACKLOG (1)


December 31, 2016


% of Total


December 31, 2015


% of Total

Engineering & Construction


$

9,916,948



54%


$

12,892,804



57%

Fabrication Services


2,114,550



11%


3,107,500



14%

Technology


1,025,723



6%


963,058



4%

Capital Services


5,398,012



29%


5,680,577



25%

Total


$

18,455,233







$

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.  Backlog includes the value of new awards until work is performed and revenue is recognized or until cancellation. Backlog may fluctuate with currency movements.



(2)

The three and twelve months ended December 31, 2016, include a $148,148 charge related to the establishment of a reserve for the Transaction Receivable associated with the sale of our former nuclear operations on December 31, 2015. Additionally, the three and twelve months ended December 31, 2015, include charges of $345,371 and $1,505,851, respectively, related to the disposition of the nuclear operations.


(3)

The three and twelve months ended December 31, 2016, include a $655,000 goodwill impairment charge.

 

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Supplemental Adjusted Financial Data

(amounts adjusted to exclude non-cash charges related to goodwill impairment and loss on net assets sold)

(in thousands, except per share data)












Three Months Ended December 31, 2016 (1)



As Reported


Goodwill
Impairment


Transaction
Receivable
Reserve


Excluding
Charges










Engineering & Construction









Loss from operations


$

(182,800)



$



$

148,148



$

(34,652)











Capital Services









(Loss) income from operations


$

(636,703)



$

655,000



$



$

18,297











CB&I Consolidated









(Loss) income from operations


$

(768,513)



$

655,000



$

148,148



$

34,635


Net (loss) income attributable to CB&I


$

(665,693)



$

655,000



$

96,296



$

85,603


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


$

(6.65)



$

6.55



$

0.95



$

0.85







Twelve Months Ended December 31, 2016 (1)



As Reported


Goodwill
Impairment


Transaction
Receivable
Reserve


Excluding
Charges










Engineering & Construction









Income from operations


$

158,704



$



$

148,148



$

306,852











Capital Services









(Loss) income from operations


$

(592,056)



$

655,000



$



$

62,944











CB&I Consolidated









(Loss) income from operations


$

(144,918)



$

655,000



$

148,148



$

658,230


Net (loss) income attributable to CB&I


$

(313,169)



$

655,000



$

96,296



$

438,127


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


$

(3.05)



$

6.35



$

0.93



$

4.23



(1)

The summary unaudited adjusted financial information for both the three and twelve months ended December 31, 2016, reflects the removal of a goodwill impairment charge within our Capital Services operating group and a charge within our Engineering & Construction operating group resulting from the establishment of a reserve for the Transaction Receivable associated with the sale of our former nuclear operations on December 31, 2015. The exclusion of these items are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. The summary unaudited adjusted financial information is for illustrative purposes only. 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, 2016.



(2)

The unadjusted per share amounts for the three and twelve months ended December 31, 2016, are based upon diluted weighted average shares that are equivalent to our basic weighted average shares of 100,090 and 102,811, respectively, due to the net loss for the periods, and the adjusted per share amounts are based upon diluted weighted average shares of 100,991 and 103,662, respectively.

 

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Supplemental Adjusted Financial Data

(amounts adjusted to exclude non-cash charges related to goodwill impairment, loss on net assets sold and intangible assets impairment, and
the results of our former nuclear operations)

(in thousands, except per share data)












Three Months Ended December 31, 2015 (1)



As Reported


Disposition
Charges


Removal of
Divested
Business


Excluding
Divested
Business










Engineering & Construction









Revenue


$

2,016,550



$



$

(505,659)



$

1,510,891


(Loss) income from operations


$

(180,852)



$

345,371



$

(52,035)



$

112,484


New Awards


$

1,786,671



$



$

(8,151)



$

1,778,520











CB&I Consolidated









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) (2)


$

(0.63)



$

2.19



$

(0.30)



$

1.26


New Awards


$

3,262,497



$



$

(8,151)



$

3,254,346


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










Engineering & Construction









Revenue


$

7,697,684



$



$

(2,061,167)



$

5,636,517


(Loss) income from operations


$

(875,321)



$

1,505,851



$

(215,150)



$

415,380


New Awards


$

6,709,864



$



$

(672,365)



$

6,037,499











CB&I Consolidated









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) (2)


$

(4.72)



$

10.58



$

(1.22)



$

4.64


New Awards


$

13,138,498



$



$

(672,365)



$

12,466,133


Operating Cash Flows


$

(56,214)



$



$

1,133,350



$

1,077,136



(1)

The summary unaudited adjusted financial information for the three and twelve months ended December 31, 2015, reflects the removal of the results of our former nuclear operations sold on December 31, 2015, and reflects the removal of the related disposition charges, within our Engineering & Construction operating group. The exclusion of these items are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. The summary unaudited adjusted financial information is for illustrative purposes only. The removal of the results of the former nuclear operations 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.



(2)

The unadjusted per share amounts for the three and twelve months ended December 31, 2015, are based upon diluted weighted average shares that are equivalent to our basic weighted average shares of 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 105,926 and 107,719, respectively.

 

 

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,



2016


2015


2016


2015










Revenue


$

2,540,033



$

3,274,964



$

10,679,558



$

12,929,504


Cost of revenue


2,422,676



2,893,659



9,653,502



11,417,188


Gross profit


117,357



381,305



1,026,056



1,512,316


% of Revenue


4.6

%


11.6

%


9.6

%


11.7

%










Selling and administrative expense


86,732



99,101



349,874



387,027


% of Revenue


3.4

%


3.0

%


3.3

%


3.0

%










Intangibles amortization


10,183



12,083



42,439



57,625


Equity earnings


(15,457)



(9,939)



(26,826)



(15,689)


Goodwill impairment


655,000





655,000



453,100


Loss on net assets sold and intangible assets impairment


148,148



345,371



148,148



1,052,751


Other operating expense, net


1,264



749



2,339



2,619


Loss from operations


(768,513)



(66,060)



(144,918)



(425,117)


% of Revenue


(30.3)

%


(2.0)

%


(1.4)

%


(3.3)

%










Interest expense


(26,945)



(25,935)



(105,349)



(94,360)


Interest income


4,848



1,995



13,004



8,285


Loss before taxes


(790,610)



(90,000)



(237,263)



(511,192)











Income tax benefit (expense)


129,858



42,956



(2,560)



81,231


Net loss


(660,752)



(47,044)



(239,823)



(429,961)











Less: Net income attributable to noncontrolling interests


(4,941)



(18,681)



(73,346)



(74,454)


Net loss attributable to CB&I


$

(665,693)



$

(65,725)



$

(313,169)



$

(504,415)











Net loss attributable to CB&I per share:









Basic


$

(6.65)



$

(0.63)



$

(3.05)



$

(4.72)


Diluted


$

(6.65)



$

(0.63)



$

(3.05)



$

(4.72)











Weighted average shares outstanding:









Basic


100,090



104,763



102,811



106,766


Diluted


100,090



104,763



102,811



106,766











Cash dividends on shares:









Amount


$

7,007



$

7,307



$

28,733



$

29,847


Per share


$

0.07



$

0.07



$

0.28



$

0.28







Non-GAAP Supplemental Adjusted Financial Data

(amounts adjusted to exclude non-cash charges related to goodwill impairment, loss on net assets sold and intangible assets
impairment, and the results of our former nuclear operations) (1)
















Adjusted income from operations


$

34,635



$

227,276



$

658,230



$

865,584


Adjusted % of Revenue


1.4

%


8.2

%


6.2

%


8.0

%
















Adjusted net income attributable to CB&I


$

85,603



$

133,444



$

438,127



$

499,484


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


$

0.85



$

1.26



$

4.23



$

4.64

















(1)

The three and twelve months ended December 31, 2016, exclude a $655,000 goodwill impairment charge and a $148,148 ($96,296 after tax) charge resulting from the establishment of a reserve for the Transaction Receivable associated with the sale of our former nuclear operations on December 31, 2015. The three and twelve months ended December 31, 2015, exclude $52,035 and $215,150, respectively ($31,741 and $131,241 after tax, respectively) of income related to our former nuclear operations and charges of $345,371 and $1,505,851, respectively ($230,910 and $1,135,140 after tax, respectively) related to the disposition of the nuclear operations. The exclusion of these items are non-GAAP financial measures, which we believe provides users a better indication of our operating performance. See "Reconciliation of Non-GAAP Supplemental Adjusted Financial Data" table.

 

Chicago Bridge & Iron Company N.V.

Condensed Consolidated Balance Sheets

(in thousands)








December 31,


December 31,



2016


2015

ASSETS










Current assets


$

2,541,752



$

3,367,299


Equity investments


175,277



136,845


Property and equipment, net


565,690



604,043


Goodwill and other intangibles, net


3,411,259



4,122,455


Other non-current assets


1,145,442



961,418


Total assets


$

7,839,420



$

9,192,060







LIABILITIES AND SHAREHOLDERS' EQUITY










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


$

911,410



$

800,871


Other current liabilities


3,624,839



4,056,077


Long-term debt, net


1,287,923



1,791,832


Other non-current liabilities


453,911



379,690







Shareholders' equity


1,561,337



2,163,590


Total liabilities and shareholders' equity


$

7,839,420



$

9,192,060



Condensed Consolidated Statements of Cash Flows and Other Financial Data

(in thousands)






Twelve Months



Ended December 31,



2016


2015

CASH FLOWS










Cash flows from operating activities


$

654,458



$

(56,214)


Cash flows from investing activities


(169,289)



(381,676)


Cash flows from financing activities


(482,170)



697,404


Effect of exchange rate changes on cash and cash equivalents


(48,064)



(60,616)


(Decrease) increase in cash and cash equivalents


(45,065)



198,898


Cash and cash equivalents, beginning of the year


550,221



351,323


Cash and cash equivalents, end of the year


$

505,156



$

550,221







OTHER FINANCIAL DATA










Decrease (increase) in receivables, net


$

603,558



$

(213,508)


Change in contracts in progress, net


(360,486)



(939,608)


Decrease (increase) in inventory


95,528



(6,091)


(Decrease) increase in accounts payable


(56,501)



105,856


Change in contract capital


$

282,099



$

(1,053,351)







Depreciation and amortization


$

122,522



$

161,135


Capital expenditures


$

52,462



$

78,852


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/cbi-reports-2016-fourth-quarter-and-full-year-financial-results-300415180.html

SOURCE CB&I

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