Chart Industries Reports 77% Increase in Net Income for 1998's First Quarter.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)--April 27, 1998--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 record financial results for its first quarter ended March 31, 1998. A strong operating performance boosted sales 32 percent and led to a 77 percent increase in net income over the first quarter of 1997. Earnings per share 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 were $0.48. Sales for the first quarter of 1998 rose 32.2 percent to $56.1 million from $42.4 million for the corresponding quarter in 1997. Record net income of $7.9 million, or $0.48 per share, for the first quarter of 1998 increased 77.2 percent from $4.5 million, or $0.30 per share, for the 1997 first quarter. Commenting on Chart's 1998 first-quarter 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 CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , said, "We are pleased with the Company's exceptional operating performance. Our robust 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. and continued gains in productivity enabled us to match our quarterly sales record, which was set in the fourth quarter of 1997. A very favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. product mix also led us to record margins and profits." "Our strategies continue to produce solid results. We are well positioned to experience continued profitable growth as a result of internal initiatives and positive contributions from Cryenco and our most recent acquisition, Chart Marston Mar·ston , John 1575?-1634. English playwright whose works include The Malcontent and The Dutch Courtezan (both 1604). , Ltd." 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 basis): -0-
Three Months ended March 31,
1998 1997 % Change
Sales $56,104 $42,440 32.2
Gross profit 20,364 12,168 67.4
Net income 7,942 4,481 77.2
Net income per share assuming dilution 0.48 0.30 60.0
CONSOLIDATED FIRST QUARTER 1998 FINANCIAL RESULTS Sales for the three-month period ended March 31, 1998 were $56.1 million versus $42.4 million for the comparable 1997 period, an increase of $13.7 million, or 32.2 percent. The addition of Cryenco, acquired on July July: see month. 31, 1997, contributed $6.8 million in industrial gas equipment sales to the first quarter. Sales to 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 increased $8.9 million in a year-over-year comparison and accounted for 31.2 percent of total sales compared with 20.2 percent last year. Gross profit for the three-month period ended March 31, 1998 was $20.4 million versus $12.2 million for the comparable period in 1997, an improvement of $8.2 million, or 67.4 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 1998 first quarter was 36.3 percent compared to 33.7 percent and 28.7 percent in Chart's 1997 fourth and first quarters, respectively. The shift in the sales mix sales mix See product mix. to the higher margin hydrocarbon processing equipment, combined with better productivity, led to the increased gross profit margin. Selling, general and administrative (SG&A) expense for the three-month period ended March 31, 1998 was $8.1 million, an increase of $2.8 million over the first quarter of 1997. SG&A expense in Chart's 1998 first quarter included $900,000 for the addition of Cryenco, increased commission expenses driven by higher margin hydrocarbon processing equipment sales and increased incentive related expenses. As a percentage of sales, SG&A expense increased to 14.5 percent for the 1998 first quarter from 12.7 percent for the first quarter of 1997, also as a result of increased commission and incentive related expenses which are more directly tied to increasing profitability. Cash provided by operations for the 1998 first quarter was $7.9 million compared with $3.5 million in 1997's first quarter. The Company's 1998 first quarter cash flow continued to reflect the current earnings plus depreciation and amortization. In March 1998, the Company purchased previously leased land and buildings at the Cryenco facility for $3.5 million. With the 1997 fourth-quarter completion of the plant expansion for the heat exchanger 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. product line, capital expenditures in the first quarter of 1998 declined to $1.3 million from $2.1 million for the same period in 1997. On March 27, 1998, the Company completed its acquisition of the Industrial Heat Exchanger (IHE IHE Integrating the Healthcare Enterprise IHE Institutions of Higher Education IHE International Institute for Infrastructural, Hydraulic and Environmental Engineering (historical acronym only, replaced by: IHE Delft, the Foundation) ) division of IMI IMI International Masonry Institute (Washington, DC) IMI Israel Military Industries IMI Institute of the Motor Industry IMI International Market Insight IMI Imposto Municipal Sobre Imóveis (Portugal) Marston Limited, a wholly-owned subsidiary of IMI plc IMI plc (LSE: IMI), formerly Imperial Metal Industries, is a British based engineering company headquartered in Birmingham. It is listed on the London Stock Exchange and is a constituent of the FTSE 250 Index. . IHE primarily manufactures brazed aluminum heat exchangers for industrial cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. applications. Under the terms of the agreement, the Company formed a wholly-owned subsidiary in the U.K., Chart Marston Limited, which acquired the assets of IHE for 21 million pounds (approximately U.S. $35.3 million). The Company borrowed 11 million pounds (approximately U.S. $18.5 million) on its $45 million multi-currency credit facility to complete the acquisition. The allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as of the purchase price included in the March 31, 1998 condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated balance sheet consolidated balance sheet A balance sheet in which assets and liabilities of a parent company and its controlled subsidiaries are combined, thereby presenting balance sheet items for the parent and its subsidiaries as if they were a single firm. is preliminary and is based on IHE's valuations as of that date. Operating results for Chart Marston will be included in the Company's financial statements commencing April 1, 1998. The investment of excess cash subsequently used for the Chart Marston acquisition generated net interest income for the 1998 first quarter of $190,000 versus $8,000 for the prior year's first quarter. As of March 31, 1998, the Company had borrowings of $18.4 million on its $45 million credit facility. The Company was in compliance with all covenants related to this facility at March 31, 1998. The Company forecasts 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 Chart's consolidated firm order backlog at March 31, 1998 was $144.0 million, an increase of $16.5 million from $127.5 million at December December: see month. 31, 1997. Orders for the 1998 first quarter totaled $46.7 million, compared with $31.7 million for the 1997 first quarter. Chart Marston added $25.9 million to the backlog at March 31, 1998. Industrial gas equipment backlog at March 31, 1998 was $75.9 million, up from $59.5 million at the close of the 1997 fourth quarter. First quarter orders increased $8.8 million in a year-over-year comparison to $27.0 million in 1998 from $18.2 million in 1997, primarily due to the $7.1 million addition of Cryenco. Chart Marston added $16.6 million to industrial gas equipment backlog at March 31, 1998. While this segment of Chart's business has experienced some softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. in inquiries and customer forecasts, order levels remain high. Hydrocarbon processing equipment backlog stood at $53.0 million at March 31, 1998, compared with $49.9 million at December 31, 1997. Orders for the 1998 first quarter increased $8.4 million to $11.5 million from $3.1 million for the same quarter last year on the strength of orders for brazed aluminum heat exchangers. This market remains very strong. The ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. , LNG LNG (liquefied natural gas): see under natural gas. and natural gas processing Natural gas processing plants, or fractionators, are used to purify the raw natural gas extracted from underground gas fields and brought up to the surface by gas wells. The processed natural gas, used as fuel by residential, commercial and industial consumers, is almost pure segments, in particular, have a number of projects in quotation QUOTATION, practice. The allegation of some authority or case, or passage of some law, in support of a position which it is desired to establish. 2. Quotations when properly made, assist the reader, but when misplaced, they are inconvenient. . Special products backlog totaled $15.2 million at March 31, 1998, down from $18.1 million at the 1997 year-end. The LIGO LIGO Laser Interferometer Gravitational-Wave Observatory (CIT & MIT) LIGO Long Island Geocaching Organization (Bellport, New York) project, which will be completed in 1998, accounted for $6.3 million of backlog at the end of the 1998 first quarter. Orders declined $2.1 million in a year-over-year comparison to $8.3 million for the 1998 first quarter from $10.4 million for last year's first quarter. The market for vacuum equipment remains active, with both domestic and international demand for satellite testing chambers running particularly strong. 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 industrial process equipment primarily for low-temperature and cryogenic applications. The Company also manufactures other industrial equipment such as structural pipe supports, 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 and high-vacuum systems. 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, 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, England. For more information on Chart Industries, Inc., via the internet, visit our home page at Chart-Industries.com or the Corporate News on the Net page at http://www.businesswire.com/cnn/cti.htm or via fax through our News on Demand Service at (800) 311-7462. Due to the recent change in the corporate headquarters area code from 216 to 440, many callers have experienced problems in reaching the Company by phone and fax. The problem is a result of the caller's phone service not recognizing the new area code and exchange. If you are still experiencing problems, please have your phone service provider check whether your system recognizes the new area code and exchange. (See attached financial tables) -0-
CHART INDUSTRIES, INC. AND SUBSIDIARIES
MARKET INFORMATION
FOR 1998'S FIRST QUARTER
Three months ended March 31, 1998
Percent Gross Percent Gross
Sales of Profit of Profit
($000) Total ($000) Total Margin
____________________________________________
Industrial Gas $27,236 48.5% $9,006 44.2% 33.1%
Hydrocarbon Processing 17,526 31.3% 7,490 36.8% 42.7%
Special Products 11,342 20.2% 3,868 19.0% 34.1%
_______ ______ _______ ______ _____
$56,104 100.0% $20,364 100.0% 36.3%
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands)
March 31, December 31,
1998 1997
______________________
ASSETS
Current Assets
Cash and cash equivalents $5,926 $22,095
Accounts receivable 41,498 31,636
Inventories 28,514 25,617
Other current assets 5,555 5,501
______________________
Total Current Assets 81,493 84,849
Property, plant & equipment, net 40,074 27,241
Goodwill, net 40,050 15,698
Other intangible assets, net 1,142 1,131
______________________
TOTAL ASSETS $162,759 $128,919
______________________
______________________
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $11,185 $8,911
Customer advances 16,872 13,710
Billings in excess of
contract revenue 1,741 3,030
Accrued expenses and other
liabilities 26,628 21,514
Current portion of long-term debt 562 558
______________________
Total Current Liabilities $56,988 $47,723
Long-term debt 22,487 4,195
Deferred income taxes 544 544
Shareholders' Equity 82,740 76,457
______________________
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $162,759 $128,919
______________________
______________________
The balance sheet at December 31, 1997 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended
March 31,
1998 1997
______________________
Sales $56,104 $42,440
Cost of products sold 35,740 30,272
______________________
Gross profit 20,364 12,168
Selling, general &
administrative expenses 8,145 5,386
______________________
Operating income 12,219 6,782
Interest income, net 190 8
______________________
Income before income taxes 12,409 6,790
Income taxes 4,467 2,309
______________________
Net income $7,942 $4,481
______________________
______________________
Net income per common share $0.49 $0.31
______________________
______________________
Net income per common share -
assuming dilution $0.48 $0.30
______________________
______________________
Shares used in per share calculations 16,148 14,654
Shares used in per share calculations -
assuming dilution 16,416 14,967
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Three Months Ended
March 31,
__________________
1998 1997
__________________
OPERATING ACTIVITIES
Net income $7,942 $4,481
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,297 679
Contribution of stock to employee benefit
plans 577 188
Increase (decrease) in cash resulting from
changes in operating assets and liabilities
net of effects of businesses acquired:
Accounts receivable (228) (417)
Inventory and other current assets (191) 1,475
Accounts payable and accrued liabilities 701 (221)
Billings in excess of contract revenue
and customer advances (2,183) (2,695)
___________________
Net Cash Provided By Operating Activities 7,915 3,490
INVESTING ACTIVITIES
Capital expenditures (1,332) (2,120)
Acquisition of Marston (35,324)
Acquisition of Cryenco land and building (3,500)
Other investing activities 12 39
___________________
Net Cash Used In Investing Activities (40,144) (2,081)
FINANCING ACTIVITIES
Borrowings on credit facility 18,471 2,750
Repayments on credit facility (1,500)
Repayments of long-term debt (101) (97)
Treasury stock and stock option transactions (1,098) (5,490)
Dividends paid to shareholders (1,212) (891)
___________________
Net Cash Provided By (Used In) Financing
Activities 16,060 (5,228)
___________________
Net decrease in cash and cash equivalents (16,169) (3,819)
Cash and cash equivalents at beginning of
period 22,095 9,408
___________________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $5,926 $5,589
___________________
___________________
CONTACT: Chart Industries, Inc. Don A. Baines, 888/794-7608 |
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