Chart Industries Reports Improvement in 2002 Second-Quarter Results.Business Editors CLEVELAND--(BUSINESS WIRE)--Aug. 5, 2002 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 its second quarter and six months ended June June: see month. 30, 2002. Sales for the second quarter of 2002 were $79.2 million, down seven percent from $84.8 million for the corresponding quarter of 2001. Net income was $359,000, or $0.01 per 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. share, for the second quarter of 2002 compared with a net loss of $424,000, or $0.02 per diluted share, for the second quarter of 2001. Effective January January: see month. 1, 2002, the Company adopted the non-amortization provisions of Statement of Financial Accounting Standards No. 142 "Goodwill and Other Intangible Assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. " (SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 142). If such provisions were in effect for 2001, the Company's second-quarter 2001 net income would have been $944,000, or $0.04 per diluted share. The Company recorded employee separation and plant closure costs of $165,000 in the second quarter of 2002 for the previously announced consolidation of its Denver-East facility, compared with $1.5 million in the second quarter of 2001, which related primarily to the consolidation of tank repair and rehabilitation rehabilitation: see physical therapy. services and the resultant This article is about the resultant of polynomials. For the result of adding two or more vectors, see Parallelogram rule. For the technique in organ building, see Resultant (organ). In mathematics, the resultant of two monic polynomials plant closures. The Company also had a $0.9 million foreign currency loss in the second quarter of 2002 compared with a foreign currency gain of $0.4 million in the second quarter of 2001. In addition, the Company realized a $1.4 million gain on the sale of a product line during the second quarter of 2002. Sales for the first six months of 2002 decreased 16 percent to $146.9 million from $173.8 million for the corresponding period in 2001. For the first half of 2002, the net loss was $3.1 million, or $0.12 per diluted share, compared with a net loss of $19,000, or $0.00 per diluted share, for the first half of 2001. If the non-amortization provisions of SFAS No. 142 were in effect for 2001, the Company's net income would have been $2.6 million, or $0.11 per diluted share, for the first half of 2001. Commenting on Chart's results for the second quarter and first half of 2002, 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, "As expected, our operating performance for the second quarter of 2002 was significantly stronger than the first quarter of 2002. Sales increased 17 percent and gross profit increased 23 percent from the 2002 first-quarter results. Performance by business segment was mixed but generally in line with our earlier forecasts." The strong 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. for the Process Systems and Equipment (PS&E) segment in the previous two quarters provided the basis for increased sales and gross margin contribution in the second quarter of 2002. While 2002 second-quarter orders for this segment were below the previous two quarters, they were actually above planned levels. The PS&E businesses continue to actively bid natural gas, ethylene ethylene (ĕth`əlēn') or ethene (ĕth`ēn), H2C=CH2, a gaseous unsaturated hydrocarbon. It is the simplest alkene. and other large 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 projects around the world. Increasing demand is anticipated for these PS&E products in the second half of 2002. Although up slightly from the first quarter of 2002, the Distribution and Storage (D&S) segment was below plan in orders, sales and gross margin for the second quarter of 2002. Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. reductions by industrial gas customers and the general economic conditions in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and 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). have caused sales and order
softness for bulk tanks, engineered tanks and tank rehabilitation
services. Low factory workload The term workload can refer to a number of different yet related entities. An amount of laborWhile a precise definition of a workload is elusive, a commonly accepted definition is the hypothetical relationship between a group or individual human operator and task demands. created under-absorption of fixed overhead and reduced gross margin. Commenting further, Mr. Holmes stated, "During the second quarter of 2002, we continued to pursue several avenues for reducing the Company's debt load and leverage ratio. Charges of $1.0 million were incurred in the quarter to cover costs related to our pursuit of investor capital and the completion of our plant consolidation studies. These costs increased our selling, general and administrative (SG&A) expenses for the quarter above the levels expected going forward. In addition, we had $851,000 of foreign currency losses, $480,000 of derivative derivative: see calculus. derivative In mathematics, a fundamental concept of differential calculus representing the instantaneous rate of change of a function. contracts valuation expense, and $165,000 of employee separation and plant closure costs during the second quarter of 2002. On the positive side, the Company sold its cryogenic cryogenic /cry·o·gen·ic/ (-jen´ik) producing low temperatures. cry·o·gen·ic adj. 1. Relating to or producing low temperatures. 2. pump line during the second quarter of 2002, resulting in a $1.4 million gain. The net impact of these charges and gain was a $1.1 million pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta charge and represented a reduction of $0.03 per share in Chart's net income of $0.01 per diluted share for the quarter. Without these items, our net income would have been $0.04 per diluted share." Continuing, Mr. Holmes stated, "Looking ahead, I expect the second half of 2002 to show a slight improvement in sales and gross margin contribution compared to the second quarter of 2002. The Company has embarked on an aggressive manufacturing facility reduction plan designed to consolidate Consolidate To combine the assets, liabilities, and other financial items of two or more entities into one. Notes: This term is generally used in the context of consolidated financial statements. excess capacity and reduce overall operating costs operating costs npl → gastos mpl operacionales . The first step of this plan was the closure of the Company's Denver-East facility, which was completed in the second quarter of 2002. The second step in this plan, announced in July July: see month. 2002, includes the closure of the Company's 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 and 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. manufacturing facilities. The expenses of closing these two facilities of approximately $2.6 million will be incurred primarily in the third and fourth quarters of 2002. We anticipate annual savings of over $3 million and a recovery of our one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. costs for the closure of these two facilities in less than one year. Due to debt covenant covenant (kŭv`ənənt), agreement entered into voluntarily by two or more parties to do or refrain from doing certain acts. In the Bible and in theology the covenant is the agreement or engagement of God with man as revealed in the considerations we will soon request bank approval to proceed with the closures of additional facilities that will involve the sale of significant assets. If approved, the implementation of this step of the plan in the second half of 2002 will result in further 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). expenses and will put some negative short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. pressure on sales. The payback Payback The length of time it takes to recover the initial cost of a project, without regard to the time value of money. of our restructuring expenses from operating improvements related to this step is expected to be about one year. We also continue to work with several investor groups regarding a potential significant equity investment in Chart, including one group that is at an advanced stage of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. , and are pursuing the sale of other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. that are non-core in an effort to reduce debt." Mr. Holmes concluded, "I remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our markets will support increased demand for Chart's products in the second half of 2002. If so, we expect improved operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before each quarter as the year progresses. The belt-tightening belt-tight·en·ing n. Increased thrift and frugality; a reduction in spending. and cost reductions both planned and underway will contribute to our improved performance going forward." 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):
Three months ended
June 30,
--------------------
2002 2001 % Change
--------- --------- ---------
Sales $ 79,180 $ 84,797 (6.6)%
Gross profit 20,591 21,531 (4.4)%
Reported net income (loss) $ 359 $ (424) N/M
Add back goodwill and indefinite lived
intangible asset amortization,
net of tax 1,368 N/M
--------------------
Adjusted net income $ 359 $ 944 N/M
====================
Reported net income (loss) per share -
assuming dilution $ 0.01 $ (0.02) N/M
Add back goodwill and indefinite lived
intangible asset amortization,
net of tax 0.06 N/M
--------------------
Adjusted net income per share -
assuming dilution $ 0.01 $ 0.04 N/M
====================
Six months ended
June 30,
--------------------
2002 2001 % Change
--------- --------- ---------
Sales $146,888 $173,829 (15.5)%
Gross profit 37,350 48,600 (23.1)%
Reported net loss $ (3,094) $ (19) N/M
Add back goodwill and indefinite lived
intangible asset amortization,
net of tax 2,663 N/M
--------------------
Adjusted net (loss) income $ (3,094) $ 2,644 N/M
====================
Reported net loss per share -
assuming dilution $ (0.12) $ 0.00 N/M
Add back goodwill and indefinite lived
intangible asset amortization,
net of tax 0.11 N/M
--------------------
Adjusted net (loss) income per share -
assuming dilution $ (0.12) $ 0.11 N/M
====================
N/M -- (Not meaningful)
SECOND-QUARTER 2002 FINANCIAL RESULTS Sales for the second quarter of 2002 were $79.2 million versus $84.8 million for the second quarter of 2001, a decrease of $5.6 million, or 6.6 percent. Primarily driven by a decrease in oil field equipment sales, which were strong in the second quarter of 2001, D&S segment sales in the second quarter of 2002 were down $8.2 million, or 24.1 percent, to $25.9 million. In addition, the sales of standard cryogenic tanks were down because of the continued industry-wide capital spending reduction by the large industrial gas companies. The AT segment was also impacted by the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in industrial gas company spending as it experienced reductions in vacuum-insulated pipe sales and in the sales of systems which incorporate tanks, piping and other components. Partially offsetting this decline was the relative strength of the hydrocarbon-processing markets of the PS&E segment. The PS&E segment had sales of $18.1 million in the second quarter of 2002, an increase of $5.7 million, or 45.5 percent, over the second quarter of 2001. Gross profit for the second quarter of 2002 was $20.6 million versus $21.5 million for the second quarter of 2001, a decrease of $0.9 million, or 4.4 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 second quarter of 2002 was 26.0 percent versus 25.4 percent for the second quarter of 2001. The increase in gross profit margin was largely driven by better sales mix sales mix See product mix. in PS&E and AT, offset by low plant utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be in the D&S segment. SG&A expense for the second quarter of 2002 was $15.0 million versus $14.1 million for the second quarter of 2001. SG&A expense as a percentage of sales was 19.0 percent for the second quarter of 2002 versus 16.6 percent for the second quarter of 2001. Second-quarter 2001 SG&A expense reflected several positive items, including a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. financial settlement with a tenant in Europe and positive experience on medical and workers' compensation workers' compensation, payment by employers for some part of the cost of injuries, or in some cases of occupational diseases, received by employees in the course of their work. claims. SG&A expense in the second quarter of 2002 included $1.0 million of expenses related to the Company's pursuit of investor capital and the completion of plant consolidation studies and unfavorable medical claims experience of $0.5 million. During the second quarter of 2002, the Company recorded $165,000 of employee separation and plant closure costs related to its consolidation of the Denver-East facility. The Company incurred $1.5 million of employee separation and plant closure costs in the second quarter of 2001 related primarily to the Cryogenic Services Division as the Ottawa Ottawa, city, Canada Ottawa (ŏt`əwə), city (1991 pop. 313,987), capital of Canada, SE Ont., at the confluence of the Ottawa and Rideau rivers. Hull, Que. Lake, Michigan Lake, Michigan may refer to a few places in the U.S. state of Michigan:
A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of leasehold improvements Leasehold Improvement Improvements on a leased asset that increase the value of the asset. Notes: A leasehold improvement is classified as an asset that must be depreciated over time. , equipment, and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs. The Company also incurred $745,000 of inventory charges in the second quarter of 2001 related to these sites, which were included in cost of sales for the 2001 period. The Company recorded $1.3 million and $2.5 million of goodwill amortization in the second quarter and first six months of 2001, respectively. Due to the Company's adoption of SFAS No. 142 in the first quarter of 2002, the Company is no longer recording goodwill amortization. During the second quarter of 2002, the Company completed the transitional impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. tests of SFAS No. 142 and determined there were no indicators of impairment for its reporting units with goodwill. As such, the Company will not be required to record a cumulative effect charge as of January 1, 2002 for the adoption of SFAS No. 142. The Company sold its cryogenic pump product line during the second quarter of 2002 and recorded a gain of $1.4 million in other income. Included in other expense in the second quarter of 2002 is $851,000 of foreign currency remeasurement losses, versus $431,000 of foreign currency remeasurement gains in the second quarter of 2001. Net interest expense for the second quarter of 2002 was $4.7 million versus $5.9 million for the second quarter of 2001, reflecting lower rates. The Company recorded $480,000 of derivative contracts valuation expense in the second quarter of 2002, compared with $240,000 in the second quarter of 2001, primarily related to a decline in the forward interest rate yield curve. One of the Company's two interest rate collars expired ex·pire v. ex·pired, ex·pir·ing, ex·pires v.intr. 1. To come to an end; terminate: My membership in the club has expired. 2. and was settled on June 28, 2002. The other collar covering $38.2 million of the debt outstanding at June 30, 2002 is outstanding until March 2006. As of June 30, 2002, the Company had borrowings of $263.5 million on its Credit Facility and was in compliance with all related covenants. Income tax expense of $234,000 for the second quarter of 2002 was recorded based on the Company's estimated annual effective tax rate, which is consistent with the rate used in the first quarter of 2002. The Company's operations provided $385,000 of cash in the first half of 2002 compared with $6.4 million used by operations in the first half of 2001. Operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. improved compared to the prior year due to favorable progress billing terms on long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. project contracts and tighter controls over disbursements for payables Payables Related: Accounts payable . Capital expenditures for the first half of 2002 were $1.9 million compared with $4.0 million in the first half of 2001. The Company presently does not have any large capital projects in process and anticipates approximately the same level of capital expenditures experienced in the second quarter of 2002 for the remaining quarters of this year. Pursuant to the Company's amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. Credit Agreement, the Company was required to issue to its lenders warrants at June 28, 2002 to purchase, in the aggregate, 513,559 shares of Chart Common Stock at an exercise price of $2.425 per share. These warrants have been valued at $0.7 million and will be amortized to financing costs amortization expense over the remaining term of the Company's Credit Agreement, which expires in March 2006. ORDERS AND 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 orders for the second quarter of 2002 totaled $77.2 million, compared with orders of $75.5 million for the first quarter of 2002. Chart's consolidated firm order backlog at June 30, 2002 was $68.8 million, a decrease of $5.0 million from $73.8 million at March 31, 2002. AT orders for the second quarter of 2002 totaled $37.5 million, compared with $33.3 million for the first quarter of 2002. Second-quarter orders were strong in biomedical bi·o·med·i·cal adj. 1. Of or relating to biomedicine. 2. Of, relating to, or involving biological, medical, and physical sciences. products. The backlog in this segment has been adjusted by $3.2 million to reflect the cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of an LNG LNG (liquefied natural gas): see under natural gas. fuel station for the city of Santa Monica, California For other uses, see Santa Monica (disambiguation). Santa Monica is a coastal city in western Los Angeles County, California, USA. Situated on Santa Monica Bay of the Pacific Ocean, it is surrounded by the City of Los Angeles — Pacific Palisades and Brentwood on the north, due to stringent bonding requirements the Company was not willing to undertake. In the D&S segment, orders for the second quarter of 2002 totaled $25.3 million, compared with $22.5 million for the first quarter of 2002. These amounts included the recently announced orders for LNG tanks for several Norwegian Norwegian associated in some way with Norway. Norwegian buhund, Norwegian sheepdog a medium-sized (26-40 lb), spitz-type dog with a short, dense coat in wheaten, black, red or sable, sometimes with black markings on the face, ears LNG terminals Liquefied natural gas is used to transport natural gas over long distances, often by sea. In most cases, LNG terminals are purpose built ports used exclusively to export or import LNG. . PS&E orders for the second quarter of 2002 totaled $14.5 million, compared with $19.7 million in the first quarter of 2002. PS&E backlog at June 30, 2002 was $28.1 million, down from $31.7 million at March 31, 2002. The decrease in backlog is not necessarily indicative of future quarters, as backlog levels in this segment can fluctuate significantly due to the large size of the projects awarded and the variability in timing of order placement. General 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 expressed or implied by such statements. Such risks and uncertainties include, but are not limited to, continued slowdowns in Chart's major markets, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity and reduce operating costs, the ability of Chart to satisfy covenants and make required principal payments or prepayments Prepayments Payments made in excess of scheduled mortgage principal repayments. under its credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities , the success of Chart in obtaining additional sources of capital and selling certain assets and the ultimate terms Terms in Ultimate Frisbee Term Definition Reference Aggro abbr. aggressive. Referring to poor spirited, overly aggressive play by an individual or team. You must specify title = and url = when using . and conditions of such transactions, changes in worldwide economical and political conditions, the threat of terrorism and the impact of responses to that threat, the ability of the Company to pass on increases in raw material prices, 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 Cleveland, Ohio "Cleveland" redirects here. For the Cleveland metropolitan area, see . For other uses, see Cleveland (disambiguation). Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County, the most populous county in the state. , Chart has domestic operations located in 12 states and international operations Internal Operations (I.O., IO or I/O) is a fictional American Intelligence Agency in Wildstorm comics. It was originally called International Operations. I.O. first appeared in WildC.A.T.S. volume 1 #1 (August, 1992) and was created by Brandon Choi and Jim Lee. located in Australia Australia (ôstrāl`yə), smallest continent, between the Indian and Pacific oceans. With the island state of Tasmania to the south, the continent makes up the Commonwealth of Australia, a federal parliamentary state (2005 est. pop. , China, the Czech Republic Czech Republic, Czech Česká Republika (2005 est. pop. 10,241,000), republic, 29,677 sq mi (78,864 sq km), central Europe. It is bordered by Slovakia on the east, Austria on the south, Germany on the west, and Poland on the north. , Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). and the United Kingdom. For more information on Chart Industries, Inc. visit the Company's web site at www.chart-ind.com.
CHART INDUSTRIES, INC.
QUARTERLY SEGMENT INFORMATION (UNAUDITED)
LAST FIVE-QUARTER TREND
2001 2002
------------------------- ----------------
Second Third Fourth First Second
Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
(Dollars in thousands)
Sales
Applied Technologies $38,240 $36,160 $33,967 $30,507 $35,187
Distribution &
Storage Equipment 34,128 32,739 29,027 24,796 25,906
Process Systems &
Equipment 12,429 11,696 10,572 12,405 18,087
------- ------- ------- ------- -------
Total $84,797 $80,595 $73,566 $67,708 $79,180
======= ======= ======= ======= =======
Gross Profit
Applied Technologies $11,900 $13,155 $11,043 $9,711 $11,610
Distribution &
Storage Equipment 8,154 6,823 4,450 4,558 4,873
Process Systems &
Equipment 1,477 1,202 1,088 2,490 4,108
------- ------- ------- ------- -------
Total $21,531 $21,180 $16,581 $16,759 $20,591
======= ======= ======= ======= =======
Gross Profit Margin
Applied Technologies 31.1% 36.4% 32.5% 31.8% 33.0%
Distribution &
Storage Equipment 23.9% 20.8% 15.3% 18.4% 18.8%
Process Systems &
Equipment 11.9% 10.3% 10.3% 20.1% 22.7%
Total 25.4% 26.3% 22.5% 24.8% 26.0%
Orders
Applied Technologies $37,804 $32,817 $38,450 $33,251 $37,508
Distribution &
Storage Equipment 41,779 24,919 22,854 22,493 25,251
Process Systems &
Equipment 7,165 10,305 18,961 19,715 14,470
------- ------- ------- ------- -------
Total $86,748 $68,041 $80,265 $75,459 $77,229
======= ======= ======= ======= =======
Backlog
Applied Technologies $12,925 $9,406 $13,782 $17,171 $16,444
Distribution &
Storage Equipment 43,531 33,692 26,635 24,955 24,256
Process Systems &
Equipment 17,429 16,050 24,395 31,711 28,106
------- ------- ------- ------- -------
Total $73,885 $59,148 $64,812 $73,837 $68,806
======= ======= ======= ======= =======
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except per share amounts)
June 30, December 31,
2002 2001
----------- -----------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 6,656 $ 11,801
Accounts receivable, net 48,184 45,427
Inventories, net 52,780 56,490
Other current assets 31,244 26,062
----------- -----------
Total Current Assets 138,864 139,780
Property, plant and equipment, net 60,972 62,070
Goodwill, net 168,939 168,282
Other assets, net 39,340 38,848
----------- -----------
TOTAL ASSETS $ 408,115 $ 408,980
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 27,985 $ 25,634
Customer advances and billings
in excess of contract revenue 12,535 9,290
Accrued expenses and other liabilities 27,837 35,617
Current portion of long-term debt 34,747 12,963
----------- -----------
Total Current Liabilities 103,104 83,504
Long-term debt 236,445 259,120
Other long-term liabilities 16,647 17,016
Shareholders' Equity
Preferred stock, 1,000,000 shares
authorized, none issued or outstanding
Common stock, par value $.01 per share
- 60,000,000 shares authorized,
25,188,619 and 24,917,187 shares
issued at June 30, 2002 and
December 31, 2001, respectively 252 249
Additional paid-in capital 43,453 42,832
Retained earnings 11,604 14,699
Accumulated other comprehensive loss ( 2,503) ( 7,670)
Treasury stock, at cost, 163,380 and
109,437 shares at June 30, 2002 and
December 31, 2001, respectively ( 887) ( 770)
----------- -----------
51,919 49,340
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 408,115 $ 408,980
=========== ===========
The balance sheet at December 31, 2001 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by accounting principles
generally accepted in the United States for complete financial
statements.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars and shares in thousands, except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2002 2001 2002 2001
--------------------- ---------------------
Sales $ 79,180 $ 84,797 $ 146,888 $ 173,829
Cost of sales 58,589 63,266 109,538 125,229
--------------------- ---------------------
Gross profit 20,591 21,531 37,350 48,600
Selling, general and
administrative expense 15,049 14,118 31,555 32,412
Employee separation and
plant closure costs 165 1,539 1,308 1,539
Equity income in
joint venture ( 170) ( 64) ( 279) ( 283)
--------------------- ---------------------
15,044 15,593 32,584 33,668
--------------------- ---------------------
Operating income 5,547 5,938 4,766 14,932
Other income (expense):
Gain on sale of assets 1,420 1,420
Interest expense, net ( 4,666) ( 5,893) ( 8,755) ( 12,196)
Financing costs
amortization ( 421) ( 375) ( 1,745) ( 743)
Derivative contracts
valuation expense ( 480) ( 240) ( 412) ( 1,062)
Foreign currency
(loss) gain ( 851) 431 ( 662) 18
--------------------- ---------------------
( 4,998) ( 6,077) ( 10,154) ( 13,983)
--------------------- ---------------------
Income (loss) before
income taxes, minority
interest and cumulative
effect of change in
accounting principle 549 ( 139) ( 5,388) 949
Income tax expense (benefit) 234 260 ( 2,295) 834
--------------------- ---------------------
Income (loss) before
minority interest and
cumulative effect of
change in accounting
principle 315 ( 399) ( 3,093) 115
Minority interest,
net of taxes ( 44) 25 1 46
--------------------- ---------------------
Income (loss) before
cumulative effect of
change in accounting
principle 359 ( 424) ( 3,094) 69
Cumulative effect of change
in accounting principle,
net of taxes 88
--------------------- ---------------------
Net income (loss) $ 359 $( 424) $( 3,094) $( 19)
===================== =====================
Net income (loss)
per common share:
Income (loss) before
cumulative effect of
change in accounting
principle $ 0.01 $( 0.02) $( 0.12) $ 0.00
Cumulative effect of
change in accounting
principle 0.00
--------------------- ---------------------
Net income (loss)
per common share $ 0.01 $( 0.02) $( 0.12) $ 0.00
===================== =====================
Net income (loss)
per common share--
assuming dilution:
Income (loss) before
cumulative effect of
change in accounting
principle $ 0.01 $( 0.02) $( 0.12) $ 0.00
Cumulative effect of
change in accounting
principle 0.00
--------------------- ---------------------
Net income (loss)
per common share--
assuming dilution $ 0.01 $( 0.02) $( 0.12) $ 0.00
===================== =====================
Shares used in
per share calculations 24,951 24,534 24,900 24,458
===================== =====================
Shares used in
per share calculations -
assuming dilution 25,041 24,534 24,981 24,633
===================== =====================
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Six Months Ended
June 30,
---------------------
2002 2001
---------- ----------
OPERATING ACTIVITIES
Net loss $( 3,094) $( 19)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Cumulative effect of change
in accounting principle 88
Gain on sale of assets ( 1,420)
Depreciation and amortization 5,630 8,350
Financing costs amortization 1,745 743
Amendment-related professional fees expensed 3,538
Employee separation and plant closure costs 232 1,180
Other non-cash operating activities 1,033 569
Increase (decrease) in cash resulting from
changes in operating assets and liabilities:
Accounts receivable ( 2,304) ( 578)
Inventory and other current assets ( 2) 1,708
Accounts payable and
other current liabilities ( 7,560) ( 17,053)
Customer advances and billings
in excess of contract revenue 2,587 ( 1,414)
---------- ----------
Net Cash Provided By (Used In)
Operating Activities 385 ( 6,426)
INVESTING ACTIVITIES
Capital expenditures ( 1,855) ( 4,030)
Proceeds from sale of assets 2,300
Other investing activities 489 ( 426)
---------- ----------
Net Cash Provided By (Used
In) Investing Activities 934 ( 4,456)
FINANCING ACTIVITIES
Borrowings on revolving credit facilities - net 195 18,779
Principal payments on long-term debt ( 1,586) ( 9,438)
Amendment-related fees paid ( 5,380)
Other financing activities ( 141) ( 43)
---------- ----------
Net Cash (Used In) Provided
By Financing Activities ( 6,912) 9,298
---------- ----------
Net decrease in cash and cash equivalents ( 5,592) ( 1,584)
Effect of exchange rate changes on cash 448 ( 547)
Cash and cash equivalents at beginning of period 11,801 4,921
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,656 $ 2,790
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