- Backlog Increased by 66% and EPS Increased by $0.56 a Share -
HONG KONG, May 15 /PRNewswire-FirstCall/ -- KHD Humboldt Wedag
International Ltd. ("KHD") (NASDAQ:KHDH) today announced results
for the first quarter ended March 31, 2007. All figures are in US
dollars and earnings per share amounts are on a diluted basis. We
are reporting our financial statements on the basis of
reclassifying our prior financial service business as discontinued
operations for the first quarters of 2006 and 2005. For the first
three months ended March 31, 2007, KHD reported revenues from
continuing operations of $109.6 million, and income from continuing
operations of $11.2 million, or $0.75 per share. By comparison,
2006's revenues were $61.9 million for the same operations, with
income from continuing operations of $2.0 million, or $0.13 per
share. For 2005, revenues were $50.6 million for the same
operations, with income from continuing operations of $3.7 million,
or $0.36 per share. The number of shares issued and outstanding as
at March 31, 2007 was 14,733,191 and the weighted average number of
shares for the three months ended March 31, 2007 was 14,927,631 on
a diluted basis. The difference is primarily due to stock options
granted to our operating employees in 2006. 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. For comparative purposes, the
following amounts for order intake and backlog were translated
directly from Euros to US dollars at 1.3196. Order intake for the
quarter ended March 31, 2007 was $151.1 million, an increase of 42
percent over the first quarter of 2006 and an increase of 70
percent over the first quarter of 2005; 48 percent of the first
quarter order intake came from the emerging regions of Asia, Russia
and Eastern Europe. Order backlog as of March 31, 2007 was $650.2
million, up 66 percent over the first quarter of 2006 and an
increase of 126 percent over the corresponding period of 2005. Our
corporate tax expense for reporting purposes was $5.3 million. This
number primarily reflected the net draw-down of our deferred tax
assets. The US Dollar declined against the Euro during the first
quarter of 2007 by approximately 8 percent over the first quarter
of 2006. Margins increased substantially; the increase in profit
margin is associated with the higher profits from certain completed
projects, a decrease in the purchased equipment component of the
revenues and an increase, on a percentage basis, in the higher
margins proprietary technology component of our revenues. These
margins should not be viewed as sustainable for the future. Other
valuable indicators of sustainability are the nature and size of
our projects. We minimize our risk profile and focus on higher
margins when we limit our scope of supply to proprietary products.
Our backlog of $650.2 million is spread over 100 active projects
with a typical order size of approximately $13 million. This
demonstrates that KHD's scope of supply to customers is generally
limited to our proprietary equipment, with minimal pass-throughs
that carry much smaller margins. Our guidance on revenues and
earnings before taxes for the full year 2007 which we gave in our
April 2, 2007 news release has not changed. For the year 2007, we
expect revenues to increase to $623 million and earnings before
taxes for the year of $61 million. CEO Jim Busche commented, "Our
order intake and order backlog at the end of the first quarter of
2007 were up 42 percent and 66 percent respectively over the same
period for 2006. These are strong indicators of the growth in
demand along with the locations and size of the projects
themselves." Chairman Michael Smith commented, "At the end of the
first quarter of 2007, we had $242.5 million in cash and short-term
securities, $449.3 million in current assets, and shareholders'
equity of $277.7 million. We encourage our shareholders to read the
entire Form 6K report for a greater understanding of our company,
which is available on our website." Mr. Smith commented further,
"In March 2007, we announced that we had entered into an Agreement
with Sasamat Capital Corporation providing for our acquisition of
all their outstanding common shares. Since this announcement, we
have applied to the Supreme Court of British Columbia, Canada to
obtain an interim order providing for the calling and holding of a
special meeting of the shareholders of Sasamat. Our application was
approved by the Court on April 20, 2007 and the special meeting
will be held on May 22, 2007. Additionally the distribution of our
real estate assets to our shareholders is proceeding on schedule. "
Today at 10:00am EDT (7:00am PDT), a conference call will be held
to review the Company's 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 ID # 16408503. 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, coal and minerals
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. 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.
Joseph Allen (investors) 1 (212) 691-8087 or Len Hall (media) 1
(949) 474-4300 Rene Randall KHD Humboldt Wedag International Ltd. 1
(604) 683-8286 KHD HUMBOLDT WEDAG INTERNATIONAL LTD. CONSOLIDATED
BALANCE SHEETS March 31, 2007 and December 31, 2006 (unaudited)
(amounts in U.S. dollars; in thousands) ASSETS 2007 2006 Current
assets Cash and cash equivalents $195,218 $204,678 Securities
47,313 4,111 Restricted cash 9,628 16,180 Accounts receivable,
trade 46,434 68,432 Other receivables 18,803 33,901 Inventories
97,271 88,127 Contract deposits, prepaid and other 33,827 24,069
Future income tax assets 768 763 449,262 440,261 Non-current assets
Restricted cash 7,550 0 Securities 497 555 Receivables 0 8,878 Real
estate held for sale 48,513 47,894 Property, plant and equipment
3,371 2,993 Resource property 28,746 29,037 Equity method
investments 484 500 Future income tax assets 33,719 33,826
Investment in preferred shares of a former subsidiary 78,815 77,976
201,695 201,659 $650,957 $641,920 KHD HUMBOLDT WEDAG INTERNATIONAL
LTD. CONSOLIDATED BALANCE SHEETS (con't) March 31, 2007 and
December 31, 2006 (unaudited) (amounts in U.S. dollars; in
thousands) 2007 2006 LIABILITIES Current liabilities Accounts
payable and accrued expenses $236,844 $242,574 Notes payable 416
542 Long-term debt, current portion 4,658 4,596 Pension
liabilities, current portion 1,686 1,664 Provision for warranty
costs, current portion 23,404 21,868 267,008 271,244 Long-term
liabilities Long-term debt, less current portion 13,931 13,772
Pension liabilities, less current portion 28,940 28,559 Provision
for warranty costs, less current portion 7,181 7,247 Deferred
credit, future income tax assets 15,384 15,539 Future income tax
liability 12,959 9,180 Other long-term liabilities 2,700 625 81,095
74,922 Total liabilities 348,103 346,166 Minority interests 25,189
22,466 SHAREHOLDERS' EQUITY Common stock 108,595 108,595 Treasury
stock (74,456) (64,383) Contributed surplus 2,529 2,131 Retained
earnings 187,910 176,742 Accumulated other comprehensive income
53,087 50,203 277,665 273,288 $650,957 $641,920 KHD HUMBOLDT WEDAG
INTERNATIONAL LTD. CONSOLIDATED STATEMENTS OF INCOME For the Three
Months Ended March 31, 2007, 2006 and 2005 (unaudited) (amounts in
U.S. dollars; in thousands, except per share data) 2007 2006 2005
Revenues $109,585 $61,943 $50,572 Cost of revenues 87,353 52,967
42,808 Gross profit 22,232 8,976 7,764 Other operating income
Resource property 1,554 1,061 998 Real estate property 1,145 1,021
3,066 2,699 2,082 4,064 General and administrative expense (9,556)
(7,311) (8,234) Stock-based compensation - general and
administrative (398) 0 0 Operating income 14,977 3,747 3,594
Interest income 2,960 710 460 Interest expense (890) (905) (1,014)
Other income (expenses), net 1,453 625 (205) Income before income
taxes from continuing operations 18,500 4,177 2,835 Recovery of
(provision for) income taxes (5,252) (1,660) 1,856 Income before
minority interests 13,248 2,517 4,691 Minority interests (2,080)
(550) (966) Income from continuing operations 11,168 1,967 3,725
Income from discontinued operations, net of tax 0 858 1,151 Net
income $11,168 $2,825 $4,876 Basic earnings per share from
continuing operations 0.76 $0.13 $0.27 from discontinued operations
0 0.06 0.08 $0.76 $0.19 $0.35 Diluted earnings per share from
continuing operations $0.75 $0.13 $0.27 from discontinued
operations 0 0.06 0.08 $0.75 $0.19 $0.35 Weighted average shares
outstanding - basic 14,733,191 14,665,346 13,577,146 Weighted
average shares outstanding - diluted 14,927,631 14,665,346
13,722,491 KHD HUMBOLDT WEDAG INTERNATIONAL LTD. FINANCIAL SUMMARY
As of March 31, 2007 (unaudited) (amounts in U.S. dollars; in
thousands, except per share data and ratios) Cash and cash
equivalents $195,218 Short-term securities 47,313 Working capital
182,254 Total assets 650,957 Shareholders' equity 277,665 Book
value per share 18.85 Current ratio 1.683 Long-term debt to equity
ratio 0.05 DATASOURCE: KHD Humboldt Wedag International Ltd.
CONTACT: Investors, Joseph Allen, +1-212-691-8087, , or Media, Len
Hall, +1-949-474-4300, , both of Allen & Caron Inc., for KHD
Humboldt Wedag International Ltd.; or Rene Randall of KHD Humboldt
Wedag International Ltd., +1-604-683-8286, Web site:
http://www.khdhumboldt.com/
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