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KHD Humboldt Wedag International Ltd. Reports 49% Increase in Net Income for 2007

03/31/2008

Backlog at $919 Million; New Strategic Initiatives for Expansion

HONG KONG, March 31 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag International Ltd. (NYSE: KHD) today announced results for 2007, when revenues from continuing operations increased 44 percent to $580.4 million vs $404.3 million in 2006, and income from continuing operations increased 49 percent to $51.0 million or $1.68 per share, compared to $34.2 million or $1.12 per share for 2006. Return on sales increased to 8.8 percent from 8.4 percent in 2006. The Company also announced it would expand its scope in the supply of cement in Eastern Europe and Russia, and that it plans to distribute securities worth approximately $92 million to its shareholders. All financial reports treat the spun-off real estate and financial services operations as discontinued operations, and are reported in US dollars.

CEO Jim Busche commented, "2007 closed with record sales and order intake, and we entered 2008 with a record backlog. Most importantly, the contracts in our backlog are dominated by projects in the world's emerging economies. We believe that order intake, which was $884 million in 2007, and order backlog, which stood at $919 million at the end of 2007, are the most accurate indicators of the strength of our core business."

"This year will be our first full year as an industrial plant engineering and equipment supply company," he added. "Our focus in 2008 will be to set the foundation for growth in our traditional markets of cement, coal and minerals processing and to expand our horizons beyond these traditional markets to adjacent industries for sustaining our track record of increasing shareholder value."

During 2007, the Company listed on the New York Stock Exchange, split its stock 2:1, and announced the distribution of its real estate assets to the shareholders as it transferred its non-core real estate interests to SWA Reit and Investments Ltd ("SWA") as of September 25, 2007. Austrian depositary certificates representing the common shares of SWA were distributed to the shareholders of KHD on a one-for-one basis. On the distribution date the fair and book value of net assets transferred to SWA was $56.3 million. For the year ended December 31, 2007 the loss from these discontinued operations amounted to $9.4 million or $0.31 per share.

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 and backlog were translated directly from Euros to US dollars at 1.4603, the exchange rate as of December 31, 2007.

Order intake for the year ended December 31, 2007 was $883.8 million, an increase of 19% over 2006 and up 84% over 2005; 34% of the 2007 order intake came from the Middle East, 29% from the emerging Asia/Pacific region, 21% from Russia and Eastern Europe, 9% from Europe and 6% from the Americas.

Order backlog as of December 31, 2007 was $919.4 million, up 38% over December 31, 2006 and an increase of 135% over 2005; 33% of the backlog going into 2008 is associated with projects in the Middle East, 29% in the emerging Asia/Pacific region, 24% in Russia and Eastern Europe, 6% in Europe and 6% in the Americas. As of the date of this release the order backlog exceeds $ 1 billion.

Subsequent to the issuance of our Form 6-K for the nine months ended September 30, 2007, we identified certain accounting errors that impacted the previously filed quarterly financial statements as of March 31, June 30 and September 30, 2007. These errors, which had no effect on the year-end results, were caused by changes in the consolidation process resulting in incorrect elimination of certain intercompany transactions and the implementation of a new software system in a subsidiary. The required adjustments in thousands of US Dollars through the nine months ended September 30, 2007 are summarized as follows:

                                  As Reported      Restated       Adjustment
            Revenues                       $418,825        $416,893        $1,932
            Cost of revenues               $357,968        $356,809        $1,159
            Gross profit                    $60,857         $60,084          $773
            Income from continuing
            operations                     $38,639         $38,126          $513
            

Mr. Busche commented, "Our backlog and order intake continue to grow, and we ended the year with $370 million in cash and securities. Our latest innovative grinding and cooling technologies are also gaining further acceptance by the cement production industry."

He added, "To sustain our growth and decrease our dependence on providing equipment to cement producers, we have recently focused on strategic technology partnerships to broaden both our scope of supply to existing industry customers and also to expand applications and introduce our technologies to a larger sphere of industries. While we will continue this effort, we have chosen to launch another diversification strategy that we believe to be an attractive and effective use of our cash and resources.

"Our approach is to combine our extensive knowledge of cement plants and our dominant position in the emerging markets of Russia and the CIS to form partnerships to build, own and operate (BOO) cement plants."

As Mr. Busche described it, the KHD BOO (for "Build, Own and Operate") intends on partnering with experienced and well-established local entities that will become active majority shareholders in a series of ventures. These partners will use their local knowledge and contacts to identify the most attractive opportunities. KHD, in addition to being a passive minority equity partner, will design, fabricate, erect, commission and operate these cement plants. Investment banks will arrange and assist in structuring and arranging debt financing. We anticipate that we will have the opportunity to generate earnings on the engineering and equipment supply, as well as on plant operations and on the downstream sale of the commodity. KHD believes that the revenue stream from production would be constant and predictable.

He said, "In the past few months we have explored the market for interest in this concept and are currently negotiating with a number of potential partners. In our November investor conference call we committed to provide a plan for our free cash by the end of the first quarter 2008. We have just described how we plan to deploy free cash, in the BOO operations.

"Additionally, as committed in November, we are pleased to announce that we intend to distribute to our shareholders the value associated with the preferred shares of Mass Financial Corp ("Mass"). As part of this distribution, the preferred shares, through a series of transactions, will be exchanged for common shares of Mass. The value of the preferred shares at December 31, 2007 was approximately $92 million. The value of the distribution will be determined by certain tax requirements and an evaluation will be conducted to determine a fair ratio for the exchange of the preferred shares for the common shares. Upon completion those shareholders that prefer cash may sell the shares and those that prefer equity may hold the shares."

This year we are issuing annual guidance on what we consider two key indicators: (1) order intake, which we believe to be an accurate measure of the progress and quality of sustainable growth, and (2) earnings per share as it is the traditional measure used by our shareholders and analysts. For 2008, we expect order intake to increase to $1.1 billion and we project that our diluted earnings per share will be in the range of $2.05 - $2.15. Order intake and earnings per share are not evenly spread among all quarters and therefore this guidance is for 2008 as a full year. It should be noted that this guidance does not include the benefits of the planned business expansion and diversification programs.

Foreign exchange currency rates have a material effect on our business performance in two ways. As much of our business is transacted in currencies other than the US dollar a weakening US dollar increases both our revenues and costs. In addition we hold US dollar cash deposits in certain of our subsidiaries outside the US. A weakening US dollar results in unrealized foreign exchange losses on these cash deposits. In preparing our forecast we used currency assumptions at exchange rates similar to those prevailing at year-end.

The forecast (guidance) information and other statements in this release are forward-looking and are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially. See the section entitled "Disclaimer for Forward Looking Information" at the end of this release for a description of those risks and uncertainties.

Today at 10:00am EDT (7:00am PDT), a conference call will be held to review the KHD results; this call will be broadcast live over the Internet at www.khdhumboldt.com or 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 # 88252142. 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 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 and include, without limitation, the following: (1) that the Company will distribute securities worth $92 million to its shareholders by distributing common shares of Mass; (2) that the Company will form partnerships to build, own and operate (BOO) cement plants; (3) that these BOO plants will generate revenue and such revenue will be constant and predictable; (4) that order intake will increase to $1.1 billion; and (5) that earnings per share for 2008 will be in the range of $2.05 to $2.15. 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 including management's current expectations, estimates and assumptions about certain projects and the markets the Company operates in. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others: (1) that the Company will have sufficient paid-up capital and that Mass will have sufficient exempt surplus to effect the distribution of the common shares of Mass in a tax efficient manner; (2) that the Company's shareholders approve the distribution of the common shares of Mass; (3) that the Company obtains all necessary regulatory approvals required for the distribution of the common shares of Mass; (4) that the Company identifies appropriate partners to facilitate the build, own and operate partnerships; (5) that the Company obtains the necessary regulatory approvals and/or the financing necessary to build and operate such cement plants; (6) a downturn in general economic conditions in Asia, Europe, the United States and internationally, (7) a decreased demand for the Company's products, (8) a decrease in the demand for cement, minerals and related products, (9) the number of competitors with competitively priced products and services, (10) product development or other initiatives by the Company's competitors, (11) shifts in industry capacity, (12) fluctuations in foreign exchange and interest rates, (13) fluctuations in availability and cost of raw materials or energy, (14) delays in the start of projects included in our forecasts, (15) delays in the implementation of projects included in our forecasts and disputes regarding the performance of our services, (16) the uncertainty of government regulation and politics in Asia, Russia, Eastern Europe, the Middle East and other markets, (17) potential negative financial impact from regulatory investigations, claims, lawsuits and other legal proceedings and challenges, and (18) 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 20-F 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 International Ltd.
            1 (212) 691-8087                    1 (604) 683-8286 ex 224
            joe@allencaron.com                  randall.r@khd.de
            or
            Brian Kennedy (media)
            1 (212) 691-8087
            brian@allencaron.com
            -FINANCIAL TABLES FOLLOW-
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED BALANCE SHEETS
            December 31, 2007 and 2006
            (U.S. Dollars in Thousands)
            ASSETS
            2007           2006
            Current assets
            Cash and cash equivalents                     $354,397       $204,530
            Securities                                      15,510          4,111
            Restricted cash                                 24,116         16,180
            Accounts receivable, trade                      62,074         67,157
            Other receivables                               18,585         33,351
            Inventories                                    124,980         85,799
            Contract deposits, prepaid and other            33,775         24,069
            Future income tax assets                           825            763
            Current assets of discontinued operations            0          4,301
            634,262        440,261
            Non-current assets
            Securities                                           0             64
            Receivables                                          0          8,878
            Property, plant and equipment                    2,957          2,936
            Interest in resource property                   32,865         29,037
            Equity method investments                          654            500
            Future income tax assets                        24,658         27,724
            Investment in preferred shares of former
            subsidiaries                                   91,960         77,976
            Other non-current assets                         1,955              0
            Non-current assets of discontinued operations        0         54,544
            155,049        201,659
            $789,311       $641,920
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED BALANCE SHEETS  (con't)
            December 31, 2007 and 2006
            (U.S. Dollars in Thousands)
            LIABILITIES
            2007           2006
            Current liabilities
            Accounts payable and accrued expenses           $147,869       $129,668
            Long-term debt, current portion                        0          4,596
            Progress billing above costs and estimated
            earnings on uncompleted contracts               184,830         92,518
            Advance payments received from customers           9,190          8,878
            Income tax liabilities                            20,658         11,088
            Accrued pension liabilities, current portion       2,205          1,664
            Provision for warranty costs, current portion     31,503         21,868
            Current liabilities of discontinued operations         0            964
            396,255        271,244
            Long-term liabilities
            Long-term debt, less current portion              13,920         10,725
            Accrued pension liabilities, less current
            portion                                          30,981         28,559
            Provision for warranty costs, less current
            portion                                          11,799          7,247
            Deferred credit, future income tax assets         15,712         15,539
            Future income tax liability                        2,593          9,180
            Other long-term liabilities                        4,931            625
            Long-term liabilities of discontinued operations       0          3,047
            79,936         74,922
            Total liabilities                              476,191        346,166
            MINORITY INTERESTS                                   5,926         22,466
            SHAREHOLDERS' EQUITY
            Common stock                                     138,359        108,595
            Treasury stock                                   (93,793)       (64,383)
            Contributed surplus                                4,319          2,131
            Retained earnings                                162,633        176,742
            Accumulated other comprehensive income            95,676         50,203
            307,194        273,288
            $789,311       $641,920
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            CONSOLIDATED STATEMENTS OF INCOME
            For the Years Ended December 31, 2007 and 2006
            (U.S. Dollars in Thousands, Except per Share Data)
            2007           2006
            Revenues                                        $580,391       $404,324
            Cost of revenues                                 494,432        338,495
            Gross profit                                      85,959         65,829
            Income from interest in resource property         18,132          6,660
            General and administrative expense               (46,700)       (29,802)
            Stock-based compensation                          (4,381)        (2,132)
            Operating income                                  53,010         40,555
            Interest income                                   13,155          5,044
            Interest expense                                  (2,668)        (2,238)
            Other income, net                                  2,308          7,763
            Income before taxes from continuing operations    65,805         51,124
            Provision for income tax:
            Income taxes                                    (8,278)        (9,658)
            Resource property revenue taxes                 (4,161)          (644)
            (12,439)       (10,302)
            Income before minority interests, continuing
            operations                                       53,366         40,822
            Minority interests                                (2,386)        (6,670)
            Income from continuing operations                 50,980         34,152
            Loss from discontinued operations, net of tax     (9,351)        (2,874)
            Extraordinary gain, net of tax                       513              0
            Net income                                       $42,142        $31,278
            Basic earnings (loss) per share
            continuing operations                            $1.71          $1.13
            discontinued operations                          (0.31)         (0.10)
            extraordinary gain                                0.02              0
            $1.42          $1.03
            Diluted earnings (loss) per share
            continuing operations                            $1.68          $1.12
            discontinued operations                          (0.31)         (0.09)
            extraordinary gain                                0.02              0
            $1.39          $1.03
            Weighted average shares outstanding - basic   29,895,468     30,162,412
            Weighted average shares outstanding - diluted 30,402,130     30,415,452
            KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
            FINANCIAL SUMMARY
            As of December 31, 2007
            (U.S. Dollars in Thousands, Except per Share Data and Ratios)
            Cash and cash equivalents       $354,397
            Short-term securities             15,510
            Restricted cash                   24,116
            Working capital                  238,007
            Total assets                     789,311
            Shareholders' equity             307,194
            Book value per share               10.16
            Current ratio                      1.601
            Long-term debt to equity ratio     0.045
            

SOURCE KHD Humboldt Wedag International Ltd.

CONTACT: Joseph Allen (investors), joe@allencaron.com, or Brian Kennedy
(media), brian@allencaron.com, both of Allen & Caron Inc., +1-212-691-8087,
for KHD Humboldt Wedag International Ltd.; or Rene Randall of KHD Humboldt
Wedag International Ltd., +1-604-683-8286, ext. 224, randall.r@khd.de/
/Web site: http://www.khdhumboldt.com /
(KHD)

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