Chart Industries, Inc. reports results for third quarter 1994 -- announces regular quarterly cash dividend.EASTLAKE Eastlake, city (1990 pop. 21,161), Lake co., NE Ohio, a suburb of Cleveland, on the Chagrin River and Lake Erie; inc. 1949. It has diversified light manufacturing industries. , Ohio--(BUSINESS WIRE)--Nov. 4, 1994--Chart Industries, Inc. (NYSE NYSE See: New York Stock Exchange :CTI (Computer Telephone Integration) Combining data with voice systems in order to enhance telephone services. For example, automatic number identification (ANI) allows a caller's records to be retrieved from the database while the call is routed to the appropriate party. ) today reported lower net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight but higher net income and earnings per share for the third quarter of 1994 when compared to 1993's third quarter. For the nine-month period ended September September: see month. 30, 1994, the Company's sales, net income and earnings per share were down from the same period in 1993. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. results were adversely affected by the sharp decline in sales and operating performance of Chart's Processing Engineering (PEI) business unit, including the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. associated with the planned closure of PEI in Plaistow, New Hampshire Plaistow is a town in Rockingham County, New Hampshire, United States. The population was 7,747 at the 2000 census. The name of the town is pronounced in two ways: "Plass-toe" ("plas" as in plastic and "toe" as in toe , which was taken in the second quarter. As previously announced, Chart's PEI business will continue to operate in Plaistow Plaistow is the name of several places in England, and the USA:
Chart also announced today that the Board of Directors has approved the regular cash dividend on the Company's outstanding shares to be payable at the rate of $0.07 for each share held. This cash dividend will be payable on December December: see month. 12, 1994 to shareholders of record at close of business on December 2, 1994. As previously announced, Chart's Process Systems International, Inc. (PSI) subsidiary completed the acquisition, on October 31, 1994, of certain assets of CVI CVI C (Language) Virtual Instrument CVI Clinical and Vaccine Immunology (journal) CVI Chronic Venous Insufficiency CVI Coastal Vulnerability Index CVI Canaan Valley Institute Incorporated (CVI), a subsidiary of Pitt-Des Moines, Inc. (ASE (Adaptive Server Enterprise) A relational DBMS from Sybase that runs on Windows NT/2000, Linux and a variety of Unix platforms. ASE is a comprehensive and robust data management product with a long history dating back to the late 1980s. : PDM (1) (Product Data Management) An information system used to manage the data for a product as it passes from engineering to manufacturing. The data includes plans, geometric models, CAD drawings, images, NC programs as well as all related project data, notes and ) with operations in Columbus, Ohio Columbus is the capital and the largest city of the American state of Ohio. Named for explorer Christopher Columbus, the city was founded in 1812 at the confluence of the Scioto and Olentangy rivers, and assumed the functions of state capital in 1816. and Costa Mesa, California Costa Mesa is a suburban middle class city in Orange County, California, United States. The population was 108,724 at the 2000 census. Since its incorporation in 1953, the city has grown from a semi-rural farming community of 16,840 to a suburban city with an economy based on . CVI's product lines include vacuum-jacketed piping components and systems, cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. pumps, cryogenic valves, cryopumps, nuclear air filtration filtration: see sewerage; water supply. Filtration The separation of solid particles from a fluidsolids suspension of which they are a part by passage of most of the fluid through a septum or membrane that retains most of the solids systems, LNG LNG (liquefied natural gas): see under natural gas. fueling systems, thermal vacuum systems vacuum system Urology A mechanical system used to facilitate and maintain an erection; an erection erector. Cf Penile implant. and helium helium (hē`lēəm), gaseous chemical element; symbol He; at. no. 2; at. wt. 4.0026; m.p. below −272°C; at 26 atmospheres pressure; b.p. −268.934°C; at 1 atmosphere pressure; density 0. refrigeration/ liquefaction liquefaction, change of a substance from the solid or the gaseous state to the liquid state. Since the different states of matter correspond to different amounts of energy of the molecules making up the substance, energy in the form of heat must either be supplied to systems. Terms of the transaction include payment of approximately $5.7 million in cash and notes for the assets acquired, subject to post-closing adjustments. It is anticipated that the business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets acquired in the transaction will generate approximately $15 million of revenue in 1995. During the third quarter of 1994, Chart and Ivor J. Lee, Inc. (IJL IJL International Journal of Lexicography (Oxford University Press) IJL It's Just Lunch (dating service for professionals) IJL Intel Jpeg Library ), a fabricating company located in Masury, Ohio Masury is a census-designated place (CDP) in Trumbull County, Ohio, United States. The population was 2,618 at the 2000 census. History At 7:00 p.m. on May 31, 1985, Masury was struck by an F-5 tornado as it went through Hubbard into Wheatland, PA. , mutually agreed to terminate joint venture discussions that would have merged the operations of Chart's PEI operation with the operations of IJL. The $3.25 million restructuring charge recorded in the second quarter of 1994 was reassessed in light of the subsequent decision to continue operations at the Plaistow, New Hampshire facility. As a result, $1.1 million of this reserve was reversed in the third quarter of 1994. Financial highlights are as follows (all figures are in thousands of dollars except per share amounts):
Three months ended
September 30,
($ in thousands, except per share amounts)
Percent
1994 1993 Decrease
Sales $18,774 $21,397 12.3%
Gross Profit 3,079 4,288 28.2%
Net Income (Loss) 304 (156) N/A
Earnings (Loss) per share 0.03 (0.02) N/A
Dividends paid per share 0.07 0.07 --
Nine months ended
September 30,
($ in thousands)
Percent
1994 1993 Decrease
Sales $60,059 $65,365 8.1%
Gross Profit 10,095 14,641 31.0%
Net Income (Loss) (1,944) 1,250 N/A
Earnings (Loss) per share (0.19) 0.12 N/A
Dividends paid per share 0.21 0.21 --
Commenting on Chart's 1994 third quarter and year-to-date results, Arthur S. Holmes, Chart's Chairman and Chief Executive Officer, said, "I am encouraged by our operating performance in the third quarter and the improved backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. position which we have achieved. Our decision to continue PEI operations in Plaistow recognizes substantial restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). and cost reductions which are being made at that facility. PEI reached an agreement with the local bargaining unit A bargaining unit in labor relations is a group of employees with a clear and identifiable community of interests who are (under U.S. law) represented by a single labor union in collective bargaining and other dealings with management. permitting meaningful operating concessions going forward. These improvements should have a positive impact on Chart's future performance." "Chart continues to expand its core markets and add additional product lines. Our acquisition of CVI has broadened Chart's position in virtually every market group which we currently serve. CVI brings us new lines to sell, many of which we previously purchased from other sources to use in the systems which we design and manufacture." CONSOLIDATED THIRD QUARTER 1994 FINANCIAL RESULTS Sales for the three-month period ended September 30, 1994 were $18.8 million versus $21.4 million for the comparable 1993 period, a decrease of $2.6 million, or 12.3 percent. Despite strong sales performance in the air separation equipment market, total Chart sales declined due to the continuing low volume of sales in the hydrocarbon processing equipment market resulting in part from the low level of activity in the U.S. natural gas market. Gross profit for the three-month period ended September 30, 1994 was $3.1 million versus $4.3 million for the comparable period in 1993, a decline of $1.2 million, or 28.2 percent. The gross profit margin Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. for the three-month period ended September 30, 1994 declined to 16.4 percent from 20.0 percent in the third quarter period in 1993. A major factor impacting third quarter 1994 gross margin relates to the recording of $950,000 of reserves for certain product warranty and contract performance issues and the partial write-down Write-Down Reducing the book value of an asset because it is overvalued compared to the market value. Notes: This is usually reflected in the company's income statement as an expense, thereby reducing net income. of the SSCL SSCL Social Science Computing Laboratory SSCL Strategies for Success in Construction Lending SSCL Superconducting Supercollider SSCL Space Systems and Controls Lab receivable. Without these, the third quarter 1994 margin would have been 21.5 percent. Selling, general and administrative (SG&A) expense for the three-month period ended September 30, 1994 was $3.4 million compared to $4.3 million during the third quarter of 1993, which included a reserve for Chart's exposure on the Marcotte litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. . This $0.9 million improvement reflects a reduction to 18.3 percent of sales for the current 1994 quarter versus 20.1 percent in the year earlier quarter. Chart and its subsidiaries have emphasized more selective bidding practices and cost reduction programs in 1994 in an effort to control SG&A expenses, and the results have been increasingly positive. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. for the three-month period ended September 30, 1994 was $0.7 million versus breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations in the comparable 1993 period. The $3.25 million restructuring charge taken in the second quarter of 1994 for the closure of the Plaistow facility is being partially reversed to the extent of $1.1 million as a result of the decision to continue PEI's manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. at Plaistow. Without the reversal of a portion of the restructuring charge and the set up of $950,000 of new reserves, the Company would have had an operating profit of $0.6 million. Net interest expense for the three-month period ended September 30, 1994 was $248,000 versus $110,000 in the comparable 1993 period. The increase was attributable to a higher level of borrowings in the 1994 quarter and a higher level of interest rates relative to the prior year quarter. As a result of the foregoing, the Company reported net income for the three-month period ended September 30, 1994 of $304,000 or $.03 per share, versus a net loss of $156,000, or $0.02 per share, in the third quarter of 1993. Cash provided by operations during the three-month period ended September 30, 1994 was $1.75 million compared to $0.1 million provided in the prior year quarter due mainly to the timing of certain accounts payable. During the third quarter of 1993, Chart negotiated a settlement with the Superconducting SuperCollider Noun 1. superconducting supercollider - a collider that operates at very low temperatures collider - an accelerator in which two beams of particles are forced to collide head on Laboratory (SSCL) on its open claims for the work Chart had completed under its SSCL contract. As of September 30, 1994, the Company had received only a small portion of its $0.9 million claim and continues to work with the SSCL to collect these funds. Included in cost of sales is a charge sufficient to cover the Company's estimate of the ultimate outcome. Chart continued to generate sufficient cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses to fund interest payments, dividends and capital expenditures while reducing borrowings under its Credit Agreement. The Company received a waiver The voluntary surrender of a known right; conduct supporting an inference that a particular right has been relinquished. The term waiver is used in many legal contexts. from its banks related to certain covenants which would have been violated vi·o·late tr.v. vi·o·lat·ed, vi·o·lat·ing, vi·o·lates 1. To break or disregard (a law or promise, for example). 2. To assault (a person) sexually. 3. by the acquisition of CVI and the restructuring of PEI's New Hampshire New Hampshire, one of the New England states of the NE United States. It is bordered by Massachusetts (S), Vermont, with the Connecticut R. forming the boundary (W), the Canadian province of Quebec (NW), and Maine and a short strip of the Atlantic Ocean (E). facility. The Company and its banks are currently negotiating a restructured loan agreement and expect closure during the fourth quarter. Chart's backlog currently stands at $48.5 million, an increase of $12.3 million, or 34.1 percent above the $36.1 million level reported for the third quarter of 1993. This third quarter 1994 level represents a $4.0 million improvement over the second quarter 1994 level of $44.4 million. MARKET REVIEW Air Separation Equipment Sales by the Company to the air separation equipment market continued to rebound rebound (rē´bownd), n/v 1. a recovery from illness. n 2. an outbreak of fresh reflex activity after withdrawal of a stimulus rebound adjective during this current quarter with continued strength in brazed aluminum heat exchangers heat exchanger Any of several devices that transfer heat from a hot to a cold fluid. In many engineering applications, one fluid needs to be heated and another cooled, a requirement economically accomplished by a heat exchanger. and cold boxes. PEI's facility operated under conditions of uncertainty throughout much of the quarter until the decision was announced on October 11 to continue operations at Plaistow. As a result, orders and shipments of cryogenic tanks were lower than normal for PEI during the third quarter. Sales to the air separation market during the nine-month period ended September 30, 1994 were $18.7 million, or 31.1 percent of Chart's total sales, compared with $12.8 million, or 19.6 percent, in the comparable 1993 period. Sales in the three-month period ended September 30, 1994 were $6.4 million, approximately $0.1 million higher than in the second quarter of 1994. Current order bookings continue to be strong, with third quarter orders totaling $7.2 million at improved margins. Backlog stands at $15.5 million, an improvement of $0.8 million above the second quarter of 1994. Hydrocarbon Processing Equipment Sales by the Company to the hydrocarbon processing equipment market during the nine-month period ended September 30, 1994 totaled $16.9 million, or 28.1 percent of Chart's sales. Sales in the three- month period ended September 30, 1994 were $3.7 million. Quarterly sales were $1.8 million and $2.4 million lower than sales reported during the second quarter of 1994 and third quarter of 1993, respectively. Sales are down in both brazed aluminum heat exchangers and cold boxes. Also, approximately $1.0 million per quarter of stainless steel stainless steel: see steel. stainless steel Any of a family of alloy steels usually containing 10–30% chromium. The presence of chromium, together with low carbon content, gives remarkable resistance to corrosion and heat. tubing sales has been reclassified to the Power Generation/Other Products market sector; all comparisons reflect this change. Backlog in this market stands at $9.4 million. The increase reflects the $3.4 million of bookings for nine ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. railcars and two LNG road trailers which had been originally planned for the proposed joint venture with Ivor J. Lee, and which will now be manufactured at Plaistow. Current proposal activity is strong for this market sector, with significant order potential for the Company in the next few quarters. Cryogenic and High Vacuum Equipment Sales by the Company to the cryogenic/high vacuum equipment market during the nine-month period ended September 30, 1994 totaled $9.3 million, or 15.5 percent, of Chart's total sales. Sales in the three-month period ended September 30, 1994 were $3.6 million. Quarterly sales were $0.4 million higher and $1.8 million lower than sales reported during the second quarter of 1994 and the third quarter of 1993, respectively. Sales in this area continue to improve with work progressing on several large projects. The decline from the third quarter 1993 largely reflects the absence of SSCL sales which accounted for $1.2 million in that period. The current backlog for sales to the cryogenic/high vacuum equipment market is $15.2 million. Power Generation and Other Products Sales to the power generation/other products market during the nine-month period ended September 30, 1994 totaled $15.2 million, or 25.3 percent of Chart's sales. Sales in the three-month period ended September 30, 1994 were $5.1 million, $0.1 million higher and $1.9 million lower than sales reported during the second quarter of 1994 and third quarter of 1993, respectively. Despite continued strong sales of stainless steel tubing, this market area has seen a decline in sales activity due to the completion of several large pipe hanger and specialty transport contracts in 1993. The receipt of orders for $2.4 million of specialty road trailers for the U.S. Air Force and a $0.9 million order related to a fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: skid for the Los Alamos National Laboratory Los Alamos National Laboratory (LANL) (previously known at various times as Site Y, Los Alamos Laboratory, and Los Alamos Scientific Laboratory) is a United States Department of Energy (DOE) national laboratory, managed and operated by Los Alamos National should benefit this sector. -0-
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share amounts)
September 30, December,
1994 1993
ASSETS
Current Assets
Cash and cash equivalents $453 $704
Accounts receivable 16,533 15,154
Inventories 13,988 14,756
Other current assets 3,451 3,686
Total Current Assets 34,425 34,300
Property, plant & equipment, net 11,435 12,006
Other assets, net 1,958 1,697
TOTAL ASSETS $47,818 $48,003
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $6,263 $4,284
Customer advances 2,957 2,362
Billings in excess of costs plus
estimated earnings 2,919 969
Accrued expenses and other liabilities 7,284 5,028
Credit facility short-term 1,000 1,750
Short-term borrowings 48 60
Total Current Liabilities 20,471 14,453
Credit facility long-term 11,750 13,000
Deferred income taxes 1,002 2,132
Shareholders' Equity
Preferred stock, 1,000 shares
authorized, none issued or outstanding
Common stock, par value $.01 per share -
30,000,000 shares authorized,
10,025,623 shares issued 100 100
Additional paid-in capital 17,703 19,871
Retained earnings (deficit) (2,498) (430)
Treasury stock, at cost, 137,438 and
198,700 shares at September 30, 1994
and December 31, 1993, respectively (710) (1,123)
14,595 18,418
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $47,818 $48,003
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
Sales $18,774 $21,397 $60,059 $65,365
Cost of
products sold 15,695 17,109 49,964 50,724
Gross Profit 3,079 4,288 10,095 14,641
Selling, general
& administrative
expense 3,442 4,294 10,450 12,223
Restructuring
charge (1,100) 2,151
Operating Income
(Loss) 737 (6) (2,506) 2,418
Interest expense -
net 248 110 629 402
Income (Loss)
Before
Income Taxes 489 (116) (3,135) 2,016
Income taxes 185 40 (1,191) 766
Net Income (Loss) $304 ($156) ($1,944) $1,250
Net Income (Loss)
per Common Share $0.03 ($0.02) ($0.19) $0.12
Shares used in
per share
calculations 10,044 9,996 10,028 10,258
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
OPERATING ACTIVITIES
Net income (loss) $304 ($156) ($1,944) $1,250
Adjustments to reconcile
net income (loss) to
net cash provided by
(used in) operating
activities:
Depreciation and
amortization 612 485 1,685 1,754
Restructuring charge (1,778) 1,473
Contribution of treasury
stock to 401K plans 66 250
Deferred income taxes (947) 96 (1,130) 40
Increase (decrease) in
cash resulting from
changes in operating
assets and liabilities:
Accounts receivable (2,930) 289 (1,379) (250)
Inventory and other
current assets (1,202) (1,619) 1,003 (1,535)
Accounts payable and
accrued liabilities 4,679 1,515 2,762 (532)
Billings in excess of
costs plus estimated
earnings and customer
advances 2,946 (501) 2,545 (2,751)
Net Cash Provided By
(Used In) Operating
Activities 1,750 109 5,265 (2,024)
INVESTING ACTIVITIES
Capital expenditures (300) (205) (945) (1,199)
Other investing activities (476) (4) (430) (231)
Net Cash (Used In) Provided
By Investing Activities (776) (209) (1,375) (1,430)
FINANCING ACTIVITIES
Repayments of short-term
borrowings (4) (31) (12) (2,004)
Repayments on credit
facility (7,000) (9,750) (22,750) (28,250)
Borrowings on credit
facility 5,750 11,500 20,750 34,000
Stock options exercised (58)
Purchase of treasury stock (621) (621)
Dividends/distributions
paid to shareholders (693) (700) (2,071) (2,104)
Net Cash Provided By
(Used In) Financing
Activities (1,947) 398 (4,141) 1,021
Net increase (decrease)
in cash and cash equivalents (973) 298 (251) (2,433)
Cash and cash equivalents
at beginning of period 1,426 787 704 3,518
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $453 $1,085 $453 $1,085
CHART INDUSTRIES, INC. AND SUBSIDIARIES
MARKET INFORMATION
FOR 1994'S THIRD QUARTER AND FIRST NINE MONTHS
THREE MONTHS ENDED SEPTEMBER 30, 1994
SALES GROSS PROFIT
_____________ _______________
Gross
Percent Percent Profit
($000) of Total ($000) of Total Margin
_______ ________ ________ ________ ______
AIR SEPARATION $ 6,428 34.2% $ 620 15.4% 9.6%
HYDROCARBON PROCESSING 3,659 19.5% 1,018 25.3% 27.8%
CRYOGENIC & HIGH VACUUM 3,603 19.2% 923 22.9% 25.6%
POWER & OTHER 5,084 27.1% 1,468 36.4% 28.9%
TOTAL $18,774 100.0% $ 4,029 100.0% 21.5%
====== ===== ===== ===== =====
NINE MONTHS ENDED SEPTEMBER 30, 1994
SALES GROSS PROFIT (2)
_____________ _______________
Gross
Percent Percent Profit
($000) of Total ($000) of Total Margin
_______ ________ ________ ________ ______
AIR SEPARATION $18,661 31.1% $ 1,681 15.2% 9.0%
HYDROCARBON PROCESSING 16,884 28.1% 3,624 32.8% 21.5%
CRYOGENIC & HIGH VACUUM 9,298 15.5% 1,862 16.9% 20.0%
POWER & OTHER (1) 15,216 25.3% 3,879 35.1% 25.5%
TOTAL $60,059 100.0% $11,046 100.0% 18.3%
====== ===== ====== ===== =====
(1) All stainless steel tube sales have been reclassified to the
Power & Other market.
(2) Gross profit by market does not include any amounts related to
the $950,000 of reserves.
CONTACT: Chart Industries, Eastlake Don Baines, 216/946-2525 |
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