Stock Info

NYSE:MFCB 13.32 +0.03 +0.23% Volume: 16,311 May 17, 2019

Latest Annual Report

Press Release Details

View all Press Releases

KHD Humboldt Wedag International Ltd. Reports 2007 Third Quarter and Nine-Month Results

11/14/2007

EPS from continuing operations increased by 102% and backlog at record levels

HONG KONG, Nov. 14 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd. ("KHD") (NYSE: KHD) today announced results for the nine months and third quarter ended September 30, 2007. All figures are in US dollars and earnings per share amounts are on a fully diluted basis.

We are reporting our financial statements exclusive of real estate interests and financial services businesses which are accounted for as discontinued operations.

For the nine months ended September 30, 2007, KHD reported revenues from continuing operations of $418.8 million and income from continuing operations of $38.6 million, or $1.27 per share.

The 2007 revenues are an increase of 75 percent over the revenues in the first nine months of 2006, and the 2007 income from continuing operations is an increase of 102 percent over the nine months of 2006 for the same operations.

For the three months ended September 30, 2007, KHD reported revenues from continuing operations of $148.8 million and income from continuing operations of $16.1 million, or $0.52 per share.

The 2007 third quarter revenues are an increase of 54 percent over the third-quarter 2006 revenues and the 2007 third-quarter income from continuing operations is an increase of 63 percent over the third-quarter 2006.

The number of shares issued and outstanding as at September 30, 2007 was 30,181,391. The weighted average number of shares on a diluted basis for the nine months ended September 30, 2007 was 30,511,709.

Order intake is defined as the total value of all orders received during the respective period, while order backlog is defined as the value of orders received but not yet fulfilled. KHD books orders on the basis of firm contracts and receipt of the down payments. For comparative purposes, all the following analyses of amounts for order intake, backlog and revenue were translated directly from Euros to US dollars at 1.4219, the exchange rate as of September 30, 2007.

Order intake for the quarter ended September 30, 2007 was $240 million, an increase of 123 percent over the third quarter of 2006; 40 percent of the third-quarter order intake came from the emerging regions of Asia, Russia and Eastern Europe; 57 percent came from the Middle East and Northern Africa region.

Order intake for the nine months ending September 30, 2007 was $569 million, approximately equal to the same period of 2006; 51 percent of the 2007 order intake came from the emerging regions of Asia, Russia and Eastern Europe.

Order backlog as of September 30, 2007 was a record $762 million and as of the date of this filing the backlog is approaching $925 million.

CEO Jim Busche commented, "Our backlog is at record levels. At the close of this year's third quarter, 86 percent of our backlog is distributed among the world's emerging economic regions with 28 percent in Asia, 27 percent in Russia and Eastern Europe and 31 percent in the Middle East and Northern Africa. These are indicators of the strong results of our strategic initiatives for capitalizing on market trends and enhancing shareholder value. Furthermore, I'd like to make note of the fact that for four of the projects in the backlog, where the customers will be placing their orders for KHD equipment upon successful conclusion of their permitting efforts, only the engineering portion of the project has been included. In these cases the engineering order is generally less than 6 percent of the total order value. Finally, within the past few days KHD has signed contracts with customers in Egypt and India with a value in excess of $175 million. These orders entail KHD proprietary pyro-processing line and a large grinding complex. Consistent with our disclosure and booking policy formal more detailed announcements will be forthcoming."

CFO Alan Hartslief commented, "The revenues and earnings from continuing operations for the nine months ended September 30, 2007 increased by 75 percent and 102 percent respectively over the same period of 2006. For the quarter ended September 30, 2007, our revenues and earnings from continuing operations increased by 54 percent and 63 percent respectively over the same period of 2006. At the end of the nine months of 2007, we had $285 million in cash and short-term securities, $559 million in current assets, and shareholders' equity of $294 million.

Over the past seven quarters KHD has been transitioning from a financial services company to an industrial plant engineering and equipment supply company. Early in the transition process KHD had revenues and earnings generated from its merchant banking businesses as well as its industrial plant equipment business. To enable our shareholders to more clearly understand our core business going forward, KHD focused on reporting earnings before taxes (EBT) from the industrial plant engineering and equipment supply business. As the transition nears completion, revenues and earnings are now generated from our continuing core business. We now focus on earnings per share (EPS) from continuing operations. We believe EPS from continuing operations is a measure of the company's overall performance; in KHD's case that would include our industrial plant engineering and equipment supply business, our iron ore royalty and the effectiveness of our fiscal responsibility with taxation. Regarding the latter, at KHD we consider taxation as an expense like any other warranting proper and effective planning in consideration of the company's fiscal responsibilities to its shareholders and host governments. EPS from continuing operations for the nine months ended September 30 increased by 102 percent and for the three months ended September 30 increased by 63 percent over the same period of the prior year.

Our performance is consistent with the guidance we issued for earnings at the outset of this year. We are now issuing guidance on EPS from continuing operations for the full year 2007, which we anticipate to be in the range of $1.70 to $1.75.

Our transition from a merchant bank to an industrial plant engineering and equipment supply company is nearly complete. In September we announced that the distribution of Austrian Depository Certificates ("ADCs") representing common shares of SWA Reit and Investments Ltd. The record date for the distribution of ADCs was set as September 25, 2007. The common shares of KHD began trading on the NYSE on a post-distribution basis on September 21, 2007. We will continue to work diligently to achieve recognition of this change from the investment community."

Jim Busche concluded, "While the third quarter results demonstrate KHD's continued growth, there are many other, less visible markers of sustained growth. In particular our activities in Russia, Eastern Europe and the Commonwealth of Independent States (CIS) are most encouraging. The level of inquiries for KHD proprietary equipment is strong, particularly due to our advancements in energy and environmentally efficient designs. It is particularly encouraging to find our emerging market customers being driven by "green" aspects of our technology and products. Our Research and Development activities have enabled KHD to become an industry leader in pyro-processes that can accommodate a broad range of alternative fuels thereby decreasing energy costs and environmental emissions. The activity level of our Russian operating companies, including our design institute, continues to expand with the placement of several significant manufacturing orders with Russian fabricators."

Today at 10:00am EST (7:00am PST), a conference call will be held to review the KHD results; this call will be broadcast live over the Internet at http://www.khdhumboldt.com or http://www.earnings.com. An online archive will be available immediately following the call and continue for seven days or to listen to the audio replay by phone, dial 1 (888) 286 8010 using conference pass code # 20230750. International callers should dial 1 (617) 801 6888.

About KHD Humboldt Wedag International Ltd.

KHD Humboldt Wedag International Ltd. owns companies that operate internationally in the industrial plant engineering and equipment supply business, and specializes in the cement, coal and minerals processing industries. To obtain further information on KHD, please visit our website at http://www.khdhumboldt.com

Disclaimer for Forward-Looking Information

Certain statements in this release are forward-looking statements, which reflect the expectations of management regarding the Company's future growth, results of operations, performance and business prospects and opportunities. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in, the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them. These forward-looking statements reflect management's current views and are based on certain assumptions. These assumptions, which include, management's current expectations estimates and assumptions about certain projects and the markets the Company operates in, are expressed or implied by the forward-looking statements, including, but not limited to: (1) a downturn in general economic conditions in Asia, Europe, the United States and internationally, (2) a decreased demand for the Company's products, (3) a decrease in the demand for cement, minerals and related products, (4) the number of competitors with competitively priced products and services, (5) product development or other initiatives by the Company's competitors, (6) shifts in industry capacity, (7) fluctuations in foreign exchange and interest rates, (8) fluctuations in availability and cost of raw materials or energy, (9) delays in the start of projects included in our forecasts, (10) delays in the implementation of projects included in our forecasts and disputes regarding the performance of our services, (11) the uncertainty of government regulation and politics in Asia and the Middle East and other markets, (12) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, and (13) other factors beyond the Company's control. Additional information about these and other assumptions, risks and uncertainties are set out in the "Risks and Uncertainties" section in our Form 6-K filed with the Securities and Exchange Commission and our MD&A filed with Canadian security regulators.

    Contact Information:  Allen & Caron Inc.         Rene Randall
            Joseph Allen (investors)   KHD Humboldt Wedag
            1 (212) 691-8087            International Ltd.
            joe@allencaron.com         1 (604) 683-8286
            or                         randall.r@khd.de
            Len Hall (media)
            1 (949) 474-4300
            len@allencaron.com
            -FINANCIAL TABLES FOLLOW-
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED BALANCE SHEETS
            September 30, 2007 and December 31, 2006
            (unaudited)
            (amounts in U.S. dollars; in thousands)
            ASSETS                                          2007              2006
            Current assets
            Cash and cash equivalents                   $270,883          $204,530
            Securities                                    14,335             4,111
            Restricted cash                               20,813            16,180
            Accounts receivable, trade                    87,927            66,607
            Other receivables                             18,716            33,901
            Inventories                                  106,261            85,799
            Contract deposits, prepaid and other          39,073            24,069
            Future income tax assets                         754               763
            Current assets of discontinued
            operations                                        0             4,301
            558,762           440,261
            Non-current assets
            Securities                                     8,042                67
            Receivables                                        0             8,878
            Property, plant and equipment                  2,385             2,936
            Resource property                             32,937            29,037
            Equity method investments                        426               500
            Future income tax assets                      23,947            27,724
            Investment in preferred shares of a
            former subsidiary                            91,204            77,976
            Non-current assets of discontinued
            operations                                        0            54,541
            158,941           201,659
            $717,703          $641,920
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED BALANCE SHEETS  (con't)
            September 30, 2007 and December 31, 2006
            (unaudited)
            (amounts in U.S. dollars; in thousands)
            LIABILITIES                                     2007              2006
            Current liabilities
            Accounts payable and accrued
            expenses                                   $320,203          $242,152
            Long-term debt, current portion                    0             4,596
            Pension liabilities, current portion           1,793             1,664
            Provision for warranty costs,
            current portion                              26,211            21,868
            Current liabilities of discontinued
            operations                                        0               964
            348,207           271,244
            Long-term liabilities
            Long-term debt, less current portion          11,557            10,725
            Pension liabilities, less current
            portion                                      30,759            28,559
            Provision for warranty costs, less
            current portion                              10,068             7,247
            Deferred credit, future income tax
            assets                                       14,546            15,539
            Future income tax liability                    1,406             9,180
            Other long-term liabilities                    3,319               625
            Long-term liabilities of
            discontinued operations                           0             3,047
            71,655            74,922
            Total liabilities           419,862           346,166
            MINORITY INTERESTS                               3,985            22,466
            SHAREHOLDERS' EQUITY
            Common stock                                 134,102           108,595
            Treasury stock                               (85,629)          (64,383)
            Contributed surplus                            4,072             2,131
            Retained earnings                            151,535           176,742
            Accumulated other comprehensive
            income                                       89,776            50,203
            293,856           273,288
            $717,703          $641,920
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED STATEMENTS OF INCOME
            For Nine Months Ended September 30, 2007 and 2006
            (unaudited)
            (amounts in U.S. dollars; in thousands, except per share data)
            2007             2006
            Revenues                                       $418,825         $239,581
            Cost of revenues                                357,968          201,587
            Gross profit                                     60,857           37,994
            Other operating income, resource
            property                                        12,987            3,244
            General and administrative expense              (31,258)         (19,566)
            Stock-based compensation                         (3,298)          (1,187)
            Operating income                                 39,288           20,485
            Interest income                                   8,058            3,168
            Interest expense                                 (2,071)          (1,602)
            Other income (expenses), net                      1,189            3,534
            Income before taxes from continuing
            operations                                      46,464           25,585
            Provision for income tax:
            Income taxes                                   (2,967)          (1,979)
            Resource property revenue taxes                (2,986)               0
            (5,953)          (1,979)
            Income before minority interests,
            continuing operation                            40,511           23,606
            Minority interests                               (1,872)          (4,523)
            Income from continuing operations                38,639           19,083
            Income from discontinued operations,
            net of tax                                      (7,595)           1,187
            Net income                                      $31,044          $20,270
            Basic earnings (loss) per share
            from continuing operations                   $1.29            $0.63
            from discontinued operations                 (0.25)            0.04
            $1.04            $0.67
            Diluted earnings (loss) per share
            from continuing operations                   $1.27            $0.63
            from discontinued operations                 (0.25)            0.04
            $1.02            $0.67
            Weighted average shares outstanding
            - basic                                     29,834,461       30,102,468
            Weighted average shares outstanding
            - diluted                                   30,511,709       30,389,736
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED STATEMENTS OF INCOME
            For the Three Months Ended September 30, 2007 and 2006
            (unaudited)
            (amounts in U.S. dollars; in thousands, except per share data)
            2007             2006
            Revenues                                       $148,833          $96,770
            Cost of revenues                                132,286           81,326
            Gross profit                                     16,547           15,444
            Other operating income, resource
            property                                         5,811            1,092
            General and administrative expense              (11,006)          (5,581)
            Stock-based compensation                           (843)            (788)
            Operating income                                 10,509           10,167
            Interest income                                   2,728            1,281
            Interest expense                                   (512)            (384)
            Other income (expenses), net                       (602)             993
            Income before taxes from continuing
            operations                                      12,123           12,057
            Recovery of (provision for) income
            taxes:
            Income taxes                                    5,446              (60)
            Resource property revenue tax                  (1,338)               0
            4,108              (60)
            Income before minority interests,
            continuing operations                           16,231           11,997
            Minority interests                                 (174)          (2,125)
            Income from continuing operations                16,057            9,872
            Income from discontinued operations,
            net of tax                                      (7,945)             351
            Net income                                       $8,112          $10,223
            Basic earnings (loss) per share
            from continuing operations                   $0.53            $0.32
            from discontinued operations                 (0.26)            0.01
            $0.27            $0.33
            Diluted earnings (loss) per share
            from continuing operations                   $0.52            $0.32
            from discontinued operations                 (0.26)            0.01
            $0.26            $0.33
            Weighted average shares outstanding
            - basic                                     30,294,782       30,527,826
            Weighted average shares outstanding
            - diluted                                   31,013,973       30,840,414
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            FINANCIAL SUMMARY
            As of September 30, 2007
            (unaudited)
            (amounts in U.S. dollars; in thousands, except per share data and ratios)
            Cash and cash equivalents                               $270,883
            Short-term securities                                     14,335
            Restricted cash                                           20,813
            Working capital                                          210,555
            Total assets                                             717,703
            Shareholders' equity                                     293,856
            Book value per share                                        9.74
            Current ratio                                              1.605
            Long-term debt to equity ratio                             0.039
            

SOURCE KHD Humboldt Wedag International Ltd.

CONTACT: investors, Joseph Allen, +1-212-691-8087, joe@allencaron.com,
or media, Len Hall, +1-949-474-4300, len@allencaron.com,
both of Allen & Caron Inc., for KHD Humboldt Wedag International Ltd.;
or Rene Randall of KHD Humboldt Wedag International Ltd.,
+1-604-683-8286, randall.r@khd.de/
Web site: http://www.khdhumboldt.com
(KHD)

Communicate with management

Receive Email Alerts

Email Address *
Mailing Lists *




 
Enter the code shown above.