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Chicago Bridge & Iron (CBI) Prelim. Q1 Revenue Tops Views

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April 12, 2018 6:27 AM EDT

CB&I (NYSE: CBI) today announced preliminary financial results for the first quarter of 2018. The company expects to report:

  • Revenue of $1.7 billion to $1.8 billion
  • Income from operations of $100 million to $110 million
  • EBITDA1 of $118 million to $128 million
  • Net income of $37 million to $43 million
  • Fully diluted earnings per share of $0.37 to $0.43
  • New awards of $1.1 billion to $1.2 billion
  • Backlog2 of $10.5 billion to $10.6 billion
  • Net cash used in operating activities of $220 million to $240 million
  • Total debt of $2.5 billion to $2.55 billion

(**Street sees Q1 EPS of $0.35 on revenue of $1.63 billion)

CB&I's preliminary results reflect:

  • Excellent operating performance across the company's portfolio of projects, including the Cameron and Freeport LNG projects and the Calpine combined-cycle natural gas power project, which respectively reached 84%, 82% and 84% completion and incurred no material project charges during the quarter;
  • Restructuring charges of between $4 million and $6 million, or $0.03 to $0.05 per diluted share, related primarily to professional fees incurred in connection with the company's strategic activities; and
  • Excess interest expense of between $20 million and $22 million, or $0.16 to $0.17 per diluted share, associated with higher interest rates versus the year-ago quarter due to previous debt covenant amendments.

The company continues to have a robust prospect list for potential new awards in 2018. In particular, CB&I is experiencing a high level of bid activity and expects customer investment decisions to be made this year on a number of very large projects in LNG, petrochemical and other markets.

1

EBITDA is defined as income from operations plus depreciation and amortization, less net income attributable to noncontrolling interests. See reconciliation of Non-GAAP financial measures to GAAP financial measures below.

2

Backlog includes values associated with our unconsolidated equity method joint ventures. See reconciliation of Non-GAAP financial measures to GAAP financial measures below.

As previously announced, the company will report its financial results for the first quarter of 2018 on April 23, 2018 after the close of the U.S. market. Due to the company's pending combination with McDermott International, Inc., CB&I will not conduct an earnings conference call to discuss these results. CB&I and McDermott remain fully committed to completing their proposed combination during the second quarter of 2018.

Chicago Bridge & Iron Company N.V.

Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures

CB&I reports its financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). This communication also includes Non-GAAP financial measures as defined under the SEC's Regulation G. We included EBITDA as it is widely used by investors for valuation and comparing financial performance with the performance of other companies. Our backlog includes amounts associated with our equity method joint ventures to provide an indication of the total unearned value of our new awards. The following table reconciles Non-GAAP financial measures to comparable GAAP financial measures:

(In millions)

Estimate forThree Months EndedMarch 31, 2018(Unaudited)

Income from Operations

$100 - $110

Depreciation & Amortization

~19

Noncontrolling Interest

~(1)

EBITDA

$118 - $128

(In billions)

Estimate as of

March 31, 2018(Unaudited)

GAAP Backlog

$9.4 - $9.5

Backlog of unconsolidated equity method joint ventures

~1.1

Non-GAAP Backlog

$10.5 - $10.6


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