Chart Industries Reports 24% Increase in 1998 Net Income.MAYFIELD HEIGHTS Mayfield Heights, city (1990 pop. 19,847), Cuyahoga co., NE Ohio, a suburb of Cleveland; inc. 1925. It is primarily residential. , Ohio--(BUSINESS WIRE)--Feb. 8, 1999--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 financial results for the three months and year ended December December: see month. 31, 1998. For the fourth consecutive year, annual sales and net income amounts rose to record levels. Sales for the fourth quarter of 1998 increased 4.2 percent to a quarterly record of $58.5 million from $56.1 million for the corresponding quarter in 1997. Fourth-quarter net income decreased 17.4 percent to $6.3 million, or $.26 per share, from $7.7 million, or $.31 per share, in the fourth quarter of 1997. Sales for the full year rose 19.3 percent to $229.4 million from $192.2 million for 1997. Net income for 1998 was $28.2 million, or $1.16 per share, up 24.7 percent from $22.6 million, or $.99 per share, earned in 1997. Commenting on Chart's financial results, Arthur Arthur, king of Britain: see Arthurian legend. Arthur king and hero of Scotland, Wales, and England. [Arthurian Legend: Parrinder, 28] See : Heroism S. Holmes, Chairman and Chief Executive Officer, said, "1998 was an excellent year for Chart Industries, with the Company achieving new records for sales, net income and earnings per share. I am very pleased with the improvements our operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon have made in throughput The speed with which a computer processes data. It is a combination of internal processing speed, peripheral speeds (I/O) and the efficiency of the operating system and other system software all working together. 1. and productivity. Also, our acquisition of Chart Marston Mar·ston , John 1575?-1634. English playwright whose works include The Malcontent and The Dutch Courtezan (both 1604). , completed in March, made a positive contribution to these record results." "Order intake intake /in·take/ (in-tak´) the substances, or the quantities thereof, taken in and utilized by the body. intake, n the substance or quantities thereof taken in and used by the body. during the 1998 fourth quarter improved over the prior quarter," added Mr. Holmes. "We are very encouraged although bookings continued below current sales levels." "Our baseload equipment business (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), the largest of our three business segments, continues to experience market conditions consistent with those in evidence throughout 1998. New construction in the industrial gas market is very slow worldwide. The hydrocarbon hydrocarbon (hī'drōkär`bən), any organic compound composed solely of the elements hydrogen and carbon. The hydrocarbons differ both in the total number of carbon and hydrogen atoms in their molecules and in the proportion of hydrogen processing equipment market remains active but very sluggish in order releases. This climate produces a particularly competitive arena and demands very competitive pricing. However, we are winning most key jobs we chase." "Our distribution and storage business (cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. tanks, mobiles, and components) grew 36 percent in sales in 1998. This business is mostly domestic and largely serves the user side of the industrial gas business. Although uneven quarter to quarter, the distribution and storage business is active and pricing remains stable." Mr. Holmes concluded, "We are encouraged with our product, market and financial positioning as well as our strategic direction. We continue to focus on profitable growth through acquisition and expansion of our core business. We are aggressively pursuing and evaluating new products and businesses for addition to the Chart portfolio." Financial highlights are as follows (all figures are in thousands of dollars except per-share amounts, which are based on average shares outstanding on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis): -0-
Three months ended December 31,
1998 1997 % Change
------- ------- --------
Sales $58,466 $56,112 4.2
Gross profit 18,624 18,937 (1.7)
Net income 6,321 7,654 (17.4)
Net income per share
- assuming dilution .26 .31 (16.1)
Twelve months ended December 31,
1998 1997 % Change
------- ------- --------
Sales $229,423 $192,249 19.3
Gross profit 77,657 61,240 26.8
Net income 28,215 22,627 24.7
Net income per share
- assuming dilution 1.16 .99 17.2
CONSOLIDATED con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: FOURTH QUARTER 1998 FINANCIAL RESULTS Sales for the fourth quarter of 1998 were $58.5 million versus $56.1 million for the fourth quarter of 1997, an increase of $2.4 million, or 4.2 percent. The addition of Chart Marston, acquired on March 27, 1998, contributed $6.9 million in incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. sales to the fourth quarter of 1998. Sales for the fourth quarter of 1998 also overcame the absence of LIGO LIGO Laser Interferometer Gravitational-Wave Observatory (CIT & MIT) LIGO Long Island Geocaching Organization (Bellport, New York) sales, which were $5.0 million in the fourth quarter of 1997. All delivery, installation and acceptance tests for this successful project are complete. Gross profit for the fourth quarter of 1998 was $18.6 million versus $18.9 million for the fourth quarter of 1997, down 1.7 percent. 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 fourth quarter of 1998 was 31.9 percent versus 33.7 percent for the corresponding quarter last year. Gross profit for the 1998 fourth quarter reflects baseload equipment sales for orders received in the first half of 1998 when the Asian economic situation, softness in the industrial gas market, and a strong U.S. dollar compared to the Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. began to adversely affect prices and order volume. Selling, general and administrative (SG&A) expense for the fourth quarter of 1998 was $8.8 million versus $7.1 million for the fourth quarter of 1997. Chart Marston added $1.3 million in incremental SG&A expense to the fourth quarter of 1998 compared with the fourth quarter of 1997. As a percentage of sales, SG&A expense was 15.1 percent for the fourth quarter of 1998. SG&A expense for 1998 was 14.6 percent versus 13.6 percent for 1997. Net interest expense for the fourth quarter of 1998 was $155,000 versus net interest income of $26,000 for the fourth quarter of 1997. Interest expense for the fourth quarter of 1998 was primarily related to borrowings made to help finance the Chart Marston acquisition. At December 31, 1998, the Company had outstanding borrowings of $7.2 million on its $45 million credit facility and was in compliance with all related covenants. As a result of the foregoing, the Company reported net income for the fourth quarter of 1998 of $6.3 million, or $.26 per share, versus $7.7 million, or $.31 per share, for the fourth quarter of 1997. Cash provided by operations during the fourth quarter of 1998 was $9.5 million compared with $11.1 million in the fourth quarter of 1997. The Company's 1998 fourth quarter cash flow continued to reflect current earnings and depreciation and amortization as working capital needs were relatively steady and did not significantly impact cash flow. Capital expenditures for the fourth quarter of 1998 were $2.4 million compared to $1.5 million for the corresponding period in 1997. During the fourth quarter of 1998, the Company paid $1.7 million to acquire 244,800 shares of its Common Stock. Under the Common Stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. program announced in 1996, the Company has the ability to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. approximately 449,000 additional shares. The Company expects 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 and available borrowings to fund principal and interest payments, dividends and capital expenditures. 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. Chart's consolidated firm order backlog at December 31, 1998, was $96.1 million compared to $107.3 million at September September: see month. 30, 1998. Orders for the fourth quarter of 1998 totaled $47.3 million, compared with orders of $30.4 million for the third quarter of 1998. Baseload equipment backlog at December 31, 1998, was $63.7 million, down from $71.3 million at September 30, 1998. Orders for the fourth quarter of 1998 totaled $24.6 million, compared with $11.4 million for the third quarter of 1998. Chart Marston contributed $6.9 million in 1998 fourth quarter orders, winning hydrocarbon processing jobs (natural gas and ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. ) in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). , a market area previously difficult to reach
for Chart.Distribution and Storage equipment backlog at December 31, 1998, was $25.2 million, down from $26.5 million at September 30, 1998. Orders for the fourth quarter of 1998 were $15.7 million versus $12.6 million for the third quarter of 1998. Special products backlog at December 31, 1998, totaled $7.3 million, down from $9.6 million at September 30, 1998. Orders for the fourth quarter of 1998 totaled $6.9 million compared with $6.5 million for the third quarter of 1998. The LIGO project was successfully completed in 1998 and accounts for only minimal backlog as of December 31, 1998. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, unanticipated slowdowns in the Company's major markets, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, and worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. Chart Industries, Inc., manufactures standard and custom-built cus·tom-built adj. Built according to the specifications of the buyer. custom-built or -made Adjective made according to the specifications of an individual customer Noun industrial process equipment primarily for low-temperature and cryogenic applications. Headquartered in Mayfield Heights, Ohio Mayfield Heights is a city in Cuyahoga County, Ohio, United States. The population was 19,386 at the 2000 census. Mayfield Heights was originally part of Mayfield Township. Geography Mayfield Heights is located at (41. , Chart has domestic operations located in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. , California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). , Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. , Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. , Massachusetts Massachusetts (măsəch`sĭts), most populous of the New England states of the NE United States. , New Hampshire, Ohio New Hampshire is an unincorporated community located in central Goshen Township, Auglaize County, Ohio, United States.Located between Wapakoneta and Lakeview at the intersection of U.S. , Pennsylvania Pennsylvania (pĕnsəlvā`nyə), one of the Middle Atlantic states of the United States. It is bordered by New Jersey, across the Delaware River (E), Delaware (SE), Maryland (S), West Virginia (SW), Ohio (W), and Lake Erie and New York and Wisconsin Wisconsin, state, United States Wisconsin (wĭskŏn`sən, –sĭn), upper midwestern state of the United States. It is bounded by Lake Superior and the Upper Peninsula of Michigan, from which it is divided by the Menominee and a European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operation located in Wolverhampton Wolverhampton (w l`vərhămp'tən), city (1991 pop. 263,501) and metropolitan district, W central England, in the Black Country. , England England, the largest and most populous portion of the United Kingdom of Great Britain and Northern Ireland (1991 pop. 46,382,050), 50,334 sq mi (130,365 sq km). It is bounded by Wales and the Irish Sea on the west and Scotland on the north. .For more information on Chart Industries, Inc., via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , visit our home page at HYPERLINK A predefined linkage between one object and another. See hypertext. hyperlink - anchor http://chart-ind.com or the Corporate News on the Net page at HYPERLINK http://www.businesswire.com/cnn/cti.htm or via fax through our News on Demand Service at (800) 311-7462. -0-
CHART INDUSTRIES, INC. AND SUBSIDIARIES
SEGMENT INFORMATION FOR THE
FOURTH QUARTER AND TWELVE MONTHS OF 1998
Three months ended December 31, 1998
Sales Gross Profit
Gross
Percent Percent Profit
($000) of Total ($000) of Total Margin
---------------- --------------- ------
Baseload $32,187 55.0% $11,221 60.3% 34.9%
Distribution and
Storage 17,009 29.1% 4,339 23.3% 25.5%
Special Products 9,270 15.9% 3,064 16.4% 33.1%
------- ----- ------- -----
$58,466 100.0% $18,624 100.0% 31.9%
Twelve months ended December 31, 1998
Sales Gross Profit
Gross
Percent Percent Profit
($000) of Total ($000) of Total Margin
----------------- --------------- ------
Baseload $124,609 54.3% $47,273 60.9% 37.9%
Distribution and
Storage 64,078 27.9% 17,275 22.2% 27.0%
Special Products 40,736 17.8% 13,109 16.9% 32.2%
-------- ----- ------- -----
$229,423 100.0% $77,657 100.0% 33.8%
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in thousands)
December 31,
1998 1997
------------------------
ASSETS
Current Assets
Cash and cash equivalents $2,169 $22,095
Accounts receivable 37,336 31,636
Inventories, net 29,803 25,617
Other current assets 6,803 5,501
------------------------
Total Current Assets 76,111 84,849
Property, plant & equipment, net 40,536 27,241
Goodwill, net 31,568 15,698
Other assets, net 9,990 1,131
------------------------
TOTAL ASSETS $158,205 $128,919
------------------------
------------------------
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $11,540 $8,878
Customer advances 13,011 13,710
Billings in excess of contract revenue 2,194 3,030
Other current liabilities 25,783 21,832
Current portion of long-term debt 431 405
------------------------
Total Current Liabilities 52,959 47,855
Revolving credit facility 7,250
Other long-term debt 3,644 4,063
Deferred income taxes 1,198 544
Shareholders' Equity 93,154 76,457
------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $158,205 $128,919
------------------------
------------------------
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
------------------- -------------------
Sales $58,466 $56,112 $229,423 $192,249
Cost of products sold 39,842 37,175 151,766 131,009
------------------- -------------------
Gross Profit 18,624 18,937 77,657 61,240
Selling, general &
administrative expense 8,846 7,138 33,502 26,206
------------------- -------------------
Operating income 9,778 11,799 44,155 35,034
Interest (income)/
expense - net 155 (26) 901 350
------------------- -------------------
Income before income taxes 9,623 11,825 43,254 34,684
Income taxes 3,302 4,171 15,039 12,057
------------------- -------------------
Net income $6,321 $7,654 $28,215 $22,627
------------------- -------------------
------------------- -------------------
Net income per common share $0.27 $0.32 $1.17 $1.01
------------------- -------------------
------------------- -------------------
Net income per common share
- assuming dilution $0.26 $0.31 $1.16 $0.99
------------------- -------------------
------------------- -------------------
Shares used in per share
calculations 23,771 24,067 24,084 22,336
Shares used in per share
calculations
- assuming dilution 23,965 24,683 24,426 22,860
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
------------------- --------------------
OPERATING ACTIVITIES
Net income $6,321 $7,654 $28,215 $22,627
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and amortization 2,239 1,147 7,026 3,511
Contribution of treasury
stock to 401K plans 244 176 1,045 666
Deferred income taxes 943 (817) 943 (817)
Increase (decrease) in cash
resulting from changes
in operating assets and
liabilities:
Accounts receivable 1,149 1,244 3,807 (323)
Inventory and other
current assets (526) (3,082) (2,895) 126
Accounts payable and
accrued liabilities 2,482 5,216 (1,666) 4,325
Billings in excess of
contract revenue and
customer advances (3,400) (425) (5,541) (7,402)
------------------- -------------------
Net Cash Provided By
Operating Activities 9,452 11,113 30,934 22,713
INVESTING ACTIVITIES
Capital expenditures (2,431) (1,479) (10,006) (7,140)
Acquisition of Chart Marston (35,324)
Acquisition of Cryenco (20,128)
Other investing activities 794 (44) 60 195
------------------- -------------------
Net Cash Used In
Investing Activities (1,637) (1,523) (45,270) (27,073)
FINANCING ACTIVITIES
Repayments on credit facility
and long-term debt (20,665) (25,199) (36,762) (55,585)
Borrowings on credit facility 15,873 2,750 43,594 48,000
Treasury stock and stock
option transactions (1,734) 183 (7,495) (5,176)
Proceeds of stock offering 33,666 33,666
Dividends/distributions
paid to shareholders (1,191) (1,214) (4,821) (3,858)
------------------- -------------------
Net Cash Used In
Financing Activities (7,717) 10,186 (5,484) 17,047
------------------- -------------------
Net increase (decrease)
in cash and cash equivalents 98 19,776 (19,820) 12,687
Effect of exchange rate changes
on cash 75 (106)
Cash and cash equivalents
at beginning of period 1,996 2,319 22,095 9,408
------------------- -------------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $2,169 $22,095 $2,169 $22,095
------------------- -------------------
------------------- -------------------
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