- New order intake of $113.0 million in the third quarter - NEW
YORK, Nov. 16 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag
International Ltd. (NYSE:KHD) today announced results for the third
quarter and nine months ended September 30, 2009. All dollar
figures are in U.S. dollars. For the three months ended September
30, 2009, KHD reported revenues of $148.2 million with a net income
of $7.5 million, or $ 0.25 per share on a diluted basis, which
included restructuring charges. This compares to revenues in the
third quarter of 2008 of $193.6 million and net income for that
period of $30.8 million, or $1.01 per share on a diluted basis. Our
margins, excluding special charges, for the third quarter of 2009
were 17 percent as compared to 19 percent in the third quarter of
2008. For the nine months ended September 30, 2009, KHD reported
revenues of $366.2 million with a net income of $1.2 million, or
$0.04 per share on a diluted basis. This compares to revenues in
the first nine months of 2008 of $474.7 million and net income for
that period of $57.9 million, or $1.89 per share on a diluted
basis. Our margins were 19 percent for both the first nine months
of 2009 and 2008. KHD's balance sheet remains strong. As of
September 30, 2009, our cash and cash equivalents increased to
$407.4 million (as compared to $356.8 at the end of the second
quarter); working capital was $312.2 million; and shareholders'
equity was $279.8 million (as compared to $257.9 million at the end
of the second quarter). KHD's current ratio was 1.79 and its
long-term debt-to-equity ratio was 0.04. CEO Jouni Salo commented,
"We are pleased to report that the third quarter showed signs of
improvement both in order intake and in operating income as
compared to the second quarter. The sale of the coal and minerals
customer group and the Cologne workshop in early October allows us
to focus on our core competencies and significantly reduces the
fixed-cost base of our business. In connection with the sale, we
retained the rights to our proprietary roller press technologies
and capabilities which are an important part of our service
business. This is a significant step in moving towards becoming a
customer-focused service company providing environmentally friendly
technologies. "It has also been a year since we began to see the
impact of the dramatic slowdown in our main cement market and
started to develop our restructuring plans. We are making good
progress with the implementation of our new operating structure and
now have a clear direction for KHD to create a business that is
sustainable over the longer term." For comparative purposes, all of
the following amounts for order intake and backlog were translated
directly from Euros to US dollars at 1.46, the exchange rate
prevailing on September 30, 2009. 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. Order intake for the quarter ended September 30,
2009, was $113.0 million, an increase of 39 percent from 2008. Of
this total, 31 percent came from Russia and Eastern Europe, 25
percent came from Asia, 18 percent came from the Middle East, 15
percent came from Europe and 11 percent came from Africa. Of the
third quarter 2009 order intake, $76.8 million came from cement and
$36.2 million from coal and minerals. CEO Jouni Salo continued, "We
are also pleased to note that cement order intake was more than
three times the level of the second quarter of 2009 and 19 percent
higher than the cement order intake in the third quarter of 2008."
Order backlog as of September 30, 2009 was $626.3 million, a
decrease of 41 percent from September 30, 2008. Of this, $542.7
million is associated with cement projects, which will primarily
comprise our order backlog going forward. CFO Alan Hartslief added,
"At December 31, 2008, we classified $159.2 million of the
contracts in our order backlog as 'at risk'. During the third
quarter of 2009, after critical analysis of these contracts and
continued negotiations with the respective customers we determined
that contracts aggregating $95.8 million would not be proceeding
and such contracts were removed from our order backlog at September
30, 2009. The remainder of contracts previously identified as at
risk are now considered to be normal contracts and remain in our
order backlog. "In addition, as a result of the divestment of our
Cologne workshop, we now expect that our previously estimated
restructuring costs of $30.0 million will be reduced by
approximately $18.0 million for this phase of restructuring. While
this is presently the only phase of the restructuring program that
is contemplated, future market conditions may necessitate our
undertaking additional restructuring initiatives." Mr. Salo
concluded, "There are some indications that we may expect to see
some gradual improvement in market conditions. Furthermore, we have
not seen any significant new project cancellations. Our customers
remain cautious on capital expenditure plans, but in general we
have seen some improvement in confidence over the past few months.
However, this does not mean that we believe that we will return to
the extremely buoyant market conditions of recent periods in the
short to medium term. "We continue to see good levels of enquiries
from emerging regions such as India, North Africa and the Middle
East. While we remain cautiously optimistic about market recovery
and we believe that order intake is the best measure of this, we
remain realistic in our expectations that 2010 and 2011 will
continue to be difficult years for sales volumes. Since the fourth
quarter of 2008, KHD's focus has been, and remains, on preserving
cash and positioning the company to capitalize on a recovery. "Our
restructuring programs are progressing well. We have a significant
net cash position and this means we have the financial strength to
complete our restructuring plans and take advantage of any
opportunities that may emerge as global economies recover. We also
intend to invest in developing technology to differentiate
ourselves from our competitors. "This has been a very difficult
year for our shareholders, our employees and our customers.
Initially the changed environment was unsettling. However, with a
solid plan in place and measurable progress on its implementation,
we are working to meet the challenges of enhancing shareholder
value through helping our customers produce cement and process
minerals in a much more energy efficient and environmentally
friendly manner." Shareholders are encouraged to read the entire
Form 6-K, which has been filed with the SEC, for a greater
understanding of KHD. The Form 6-K is also available on the
Company's website. Today at 10:00 a.m. EST (7:00 a.m. PST), a
conference call will be held to review the Company's results. This
call, with a powerpoint presentation prepared for the call, will be
broadcast live over the Internet at http://www.khdhumboldt.com/ or
http://www.earnings.com/. For those wishing to access the
presentation, we suggest logging in a bit early to be safe. An
online archive will be available immediately following the call and
will continue for seven days or to listen to the audio replay by
phone, dial: 1 (888) 286 8010 using conference ID number: 43188967.
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 industry, and specializes in
the cement and mineral processing industries. To obtain further
information on the Company, 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. The worldwide macroeconomic
downturn has resulted in the prolonging or cancellation of some of
some of our customers' projects and may negatively affect our
customers' ability to make timely payment to us. Further, it may
result in a further decrease in the demand for our products or
services. Any of these may have a material adverse effect on our
operating results and financial condition. Forward-looking
statements consist of statements that are not purely historical,
including any statements regarding beliefs, plans, expectations or
intentions regarding the future. 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, the global economic environment, interest
rates, exchange rates and our ability to attract and retain
customers and to manage our assets and operating costs, may prove
to be incorrect. A number of risks and uncertainties could cause
our actual results to differ materially from those expressed or
implied by the forward-looking statements, including: (1) a
continued downturn in general economic conditions in Asia, Europe,
Russia, Eastern Europe, the Middle East, the United States and
internationally including, the continued worldwide economic
downturn resulting from the effects of the sub-prime lending and
general credit market crises, volatile energy costs, decreased
consumer confidence and other factors, (2)continuing decreased
demand for our products, including the renegotiation, delay and/or
cancellation of projects by our customers and the reduction in the
number of project opportunities, (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 our 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, (13) the timing and extent of our restructuring program
and the restructuring charges to be incurred in connection
therewith, and (14) other factors beyond our control. Additional
information about these and other assumptions, risks and
uncertainties are set out in the "Risk Factors" section in our Form
6-K filed with the Securities and Exchange Commission and the
"Risks and Uncertainties" section in 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. 1 (604) 683-8286 ex 224 or
Brian Kennedy (media) 1 (212) 691-8087 - UNAUDITED INTERIM
FINANCIAL TABLES FOLLOW - KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
CONSOLIDATED BALANCE SHEETS September 30, 2009 and December 31,
2008 (Unaudited) (U.S. Dollars in Thousands) ASSETS 2009 2008 ----
---- Current Assets Cash and cash equivalents $407,423 $409,087
Securities 6,034 2,987 Restricted cash 27,135 32,008 Accounts
receivable, trade 77,904 62,760 Other receivables 22,864 28,313
Inventories 78,112 110,161 Contract deposits, prepaid and other
55,610 58,694 Future income tax assets 6,238 7,679 Assets held for
sale 26,600 - ------ --- 707,920 711,689 Non-current Assets Notes
receivables 12,214 - Property, plant and equipment 1,738 2,489
Interest in resource property 26,975 24,861 Equity method
investments 43 325 Future income tax assets 14,099 6,339 Investment
in preferred shares of former subsidiaries - 19,125 Other
non-current assets 872 830 Assets held for sale 302 - --- ---
56,243 53,969 ------ ------ $764,163 $765,658 ======== ======== KHD
HUMBOLDT WEDAG INTERNATIONAL LTD. CONSOLIDATED BALANCE SHEETS
(cont'd) September 30, 2009 and December 31, 2008 (Unaudited) (U.S.
Dollars in Thousands) LIABILITIES 2009 2008 ---- ---- Current
Liabilities Accounts payable and accrued expenses $138,484 $178,582
Progress billing above costs and estimated earnings on uncompleted
contracts 148,964 171,843 Advance payments received from customers
13,033 11,331 Income tax liabilities 8,671 9,112 Deferred credit,
future income tax assets 2,676 4,212 Accrued pension liabilities,
current portion 2,119 2,158 Provision for warranty costs, current
portion 27,294 30,856 Provision for restructuring costs 10,404 -
Provision for supplier commitments on terminated customer contracts
22,546 23,729 Liabilities related to assets held for sale 21,574 -
------ --- 395,765 431,823 Long-term Liabilities Long-term debt,
less current portion 11,891 11,313 Accrued pension liabilities,
less current portion 29,652 29,209 Provision for warranty costs,
less current portion 16,208 7,524 Deferred credit, future income
tax assets 4,389 4,176 Future income tax liability 12,092 7,646
Other long-term liabilities 6,809 8,344 Liabilities related to
assets held for sale 2,404 - ----- --- 83,445 68,212 ------ ------
Total liabilities 479,210 500,035 MINORITY INTERESTS 5,177 3,709
SHAREHOLDERS' EQUITY Common stock, without par value 143,826
143,826 Treasury stock (96,157) (93,793) Contributed surplus 7,413
7,623 Retained earnings 156,907 155,681 Accumulated other
comprehensive income 67,787 48,577 ------ ------ 279,776 261,914
------- ------- $764,163 $765,658 ======== ======== KHD HUMBOLDT
WEDAG INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF INCOME For the
Three Months Ended September 30, 2009 and 2008 (Unaudited) (U.S.
Dollars in Thousands, Except per Share Data) 2009 2008 ---- ----
Revenues $148,233 $193,596 Cost of revenues 122,433 157,022
Reduction in loss on terminated customer contracts (2,127) -
Restructuring costs, reversal of write-down of inventories (1,121)
- ------- --- Gross profit 29,048 36,574 Income from interest in
resource property 4,630 9,460 Selling, general and administrative
expense (17,950) (12,820) Stock-based compensation - selling,
general and administrative (206) (1,281) Restructuring costs
(4,063) - ------- --- Operating income 11,459 31,933 Interest
income 2,014 5,720 Interest expense (610) (819) Foreign currency
transaction (losses), gains net (1,413) 7,652 Share of loss of
equity method investee (257) 9 Other income (expense), net 1,973
(2,219) ----- ------- Income before income taxes and minority
interests 13,166 42,276 Provision for income taxes: Income taxes
(4,110) (9,044) Resource property revenue taxes (1,052) (2,013)
------- ------- (5,162) (11,057) ------- -------- Income before
minority interests 8,004 31,219 Minority interests (529) (415)
----- ----- Net income $7,475 $30,804 ====== ======= Basic earning
per share $0.25 $1.01 ----- ===== Diluted earnings per share $0.25
$1.01 ===== ===== Weighted average of common shares outstanding -
basic 30,259,911 30,514,255 - diluted 30,259,911 30,649,899 KHD
HUMBOLDT WEDAG INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF INCOME
For the Nine Months Ended September 30, 2009 and 2008 (Unaudited)
(U.S. Dollars in Thousands, Except per Share Data) 2009 2008 ----
---- Revenues $366,208 $474,672 Cost of revenues 296,160 384,559
Reduction in loss on terminated customer contracts (76) - ---- ---
Gross profit 70,124 90,113 Income from interest in resource
property 8,552 23,654 Selling, general and administrative expense
(55,467) (39,735) Stock-based compensation recovery (expense)
selling general and administrative 210 (3,407) Restructuring costs
(10,836) - -------- --- Operating income 12,583 70,625 Interest
income 5,962 16,595 Interest expense (2,024) (1,780) Foreign
currency transaction losses, net (733) (1,369) Share of loss of
equity method investee (278) (40) Loss on settlement of investment
in preferred shares of former subsidiaries (9,538) - Other income
(expense), net 3,038 (5,181) ----- ------- Income before income
taxes and minority interests 9,010 78,850 Provision for income
taxes: Income taxes (5,374) (15,150) Resource property revenue
taxes (1,941) (5,104) ------- ------- (7,315) (20,254) -------
-------- Income before minority interests 1,695 58,596 Minority
interests (469) (691) ----- ----- Net income $1,226 $57,905 ======
======= Basic earning per share $0.04 $1.91 ----- ===== Diluted
earnings per share $0.04 $1.89 ===== ===== Weighted average of
common shares outstanding - basic 30,385,985 30,360,179 - diluted
30,385,985 30,628,990 KHD HUMBOLDT WEDAG INTERNATIONAL LTD.
FINANCIAL SUMMARY As of September 30, 2009 (Unaudited) (U.S.
Dollars in Thousands, Except per Share Data and Ratios) Cash and
cash equivalents $407,423 Securities 6,034 Restricted cash 27,135
Working capital 312,155 Total assets 764,163 Shareholders' equity
279,776 Book value per share 9.25 Current ratio 1.79 Long-term debt
to equity ratio 0.04 DATASOURCE: KHD Humboldt Wedag International
Ltd. CONTACT: Investors, Joseph Allen, , or Media, Brian Kennedy, ,
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, Web Site:
http://www.khdhumboldt.com/
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