Chart Industries announces record financial results for 1996 third quarter and year-to-date.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, 1996-- STRING OF CONSECUTIVE QUARTERS WITH HIGHER NET PROFITS GROWS TO NINE 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 announced record financial results for the third quarter and nine months that ended September September: see month. 30, 1996. The Company continues to benefit from strong demand for its engineered products as well as from improvements in the efficiency of its operations. For the third quarter of 1996, sales increased 42.1 percent to a quarterly record of $38 million from $26.7 million for the same period last year. Quarterly income also rose to a new high of $3.8 million, or $.38 per share, up sharply from $2.1 million, or $.20 per share, reported in the third quarter of 1995. Commenting on Chart's 1996 third 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 Chief Executive Officer, said, "In general, we are very pleased with our operating performance. We have mobilized our resources to effectively boost production rates as evidenced by our record financial results this quarter. "Demand for our products remains strong in the air separation market and continues to grow in 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 market. During the quarter, the Company's 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. increased modestly to a record $125.5 million at September 30, 1996. Bookings 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. were Chart's highest ever, at $19.4 million, and should provide adequate backlog in both the air separation and hydrocarbon processing markets to maintain the current level of 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. well into 1997. "We continue to increase factory throughput to meet the growing demand for Chart's products. In spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite record third quarter sales, our backlog rose on new orders of $39.1 million. We continue to make investments in capacity and productivity improvements and expect that lead times for Chart's products will stabilize stabilize See peg. and begin to shrink shrink Vox populi noun A psychiatrist . The large LIGO LIGO Laser Interferometer Gravitational-Wave Observatory (CIT & MIT) LIGO Long Island Geocaching Organization (Bellport, New York) project is proceeding on schedule. We plan to recognize more sales completion Sales completion In the context of project financing, the state in which the project has reached physical completion and has delivered product or generated revenues in satisfaction of a sales completion test. in 1996 and beyond, offsetting backlog growth from our core products." In conclusion, Mr. Holmes added, "As we look ahead to the remainder of 1996 and into 1997, we expect to continue current levels of sales and profitability." For the first nine months of 1996, sales rose to a record $103.3 million from $81.5 million for the first nine months of 1995. Net income also reached a new high for the reporting period at $10.6 million, or $1.04 per share, up from $4.5 million, or $.45 per share, for the first nine months of 1995. Financial highlights are as follows (all figures are in thousands of dollars except per share amounts): -0-
Three months ended September 30,
1996 1995 % Change
Sales $37,970 $26,730 42.1
Gross profit 11,277 7,266 55.2
Net income 3,813 2,057 85.4
Net income per share .38 .20 90.0
Nine months ended September 30,
1996 1995 % Change
Sales $103,309 $81,461 26.8
Gross profit 31,078 21,741 42.9
Net income 10,570 4,485 135.7
Net income per share 1.04 .45 131.1
CONSOLIDATED THIRD QUARTER 1996 FINANCIAL RESULTS Sales for the three-month period ended September 30, 1996, were $38 million versus $26.7 million for the comparable 1995 period, an increase of $11.2 million, or 42.1 percent. Sales growth was primarily driven by a $10.1 million increase in sales of brazed aluminum heat exchangers, 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 and coldbox assemblies to the air separation equipment market. Compared with the second quarter of 1996, sales for the third quarter of 1996 rose $7.4 million, or 24 percent, also as a result of increased activity in the air separation market. Gross profit for the three-month period ended September 30, 1996, was $11.3 million versus $7.3 million for the comparable period in 1995, an improvement of $4 million, or 55.2 percent, reflecting increased sales of the Company's products, particularly brazed aluminum heat exchangers, cryogenic tanks, cold boxes, and LIGO progress. 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. of 29.7 percent represents a 2.5 percentage point improvement over the same quarter in 1995, and is the second best quarterly performance in the Company's history, falling slightly below the record 32 percent reported for the 1996 second quarter. Improved productivity, good product mix, favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. and increased LIGO contributions contributed to the strong gross margin performance and offset start-up Start-up The earliest stage of a new business venture. investments at Chart Coastal and cost problems on several new product programs. As a percentage of sales, selling, general and administrative (SG&A) expense was consistent at 14 percent for the third quarter of 1996 versus 14.1 percent and 14.3 percent, for the third quarter of 1995 and the second quarter of 1996, respectively. SG&A expense for the three-month period ended September 30, 1996, was $5.3 million, approximately $1.6 million higher than in the third quarter of 1995. Compared with the second quarter of 1996, SG&A expense for the 1996 third quarter increased $900,000 as a result of a special project to increase throughput at ALTEC ALTEC Algorithms for Future Technologies ALTEC All Technical (original name for Altec Lansing) and an increase in bonus and profit sharing profit sharing, arrangement by which employees receive, in addition to their wages, a share of the net profits of a business. The purpose is to give them an incentive to increase their output through enhanced morale, less wasteful use of materials, better care of expense. Net interest expense for the three-month period ended September 30, 1996, was $133,000 versus $529,000 and $181,000, for the third quarter of 1995 and the second quarter of 1996, respectively. Benefiting from strong cash flow in the first half of 1996, the Company reduced its debt level, and as a result interest charges declined in year-over-year and consecutive quarterly comparisons. Chart obtained a $5 million IRB IRB See: Industrial Revenue Bond for plant expansion in 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 during the 1996 third quarter; however, this had little impact on net interest as the funds are held in an interest-bearing Adj. 1. interest-bearing - of financial obligations on which interest is paid escrow escrow Instrument, such as a deed, money, or property, that constitutes evidence of obligations between two or more parties and is held by a third party. It is delivered by the third party only upon fulfillment of some condition. account until expenditures are incurred. The 1996 third-quarter effective tax rate of 34.5 percent reflects the favorable tax structure of the Company. The Company expects an on-going Adj. 1. on-going - currently happening; "an ongoing economic crisis" ongoing current - occurring in or belonging to the present time; "current events"; "the current topic"; "current negotiations"; "current psychoanalytic theories"; "the ship's current position" effective tax rate between 34 and 36 percent into 1997. Chart reported net income for the three-month period ended September 30, 1996, of $3.8 million, or $.38 per share, versus $2.1 million, or $.20 per share, for the third quarter of 1995, and $3.5 million, or $.35 per share, for the second quarter of 1996. For the ninth consecutive quarter, Chart reported improved profitability. Chart's nine-month net income of $10.6 million, or $1.04 per share, surpasses the Company's best annual performance and represents an increase of $6.1 million, or 135.7 percent, over the same period of 1995. Cash used by operations during the three-month period ended September 30, 1996, was $552,000 compared to $1 million provided by operations in 1995's third quarter. The Company's 1996 third-quarter cash flow reflects current earnings being completely offset by an increase in accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . The Company expects increased cash flow in the fourth quarter as the receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed , which built up from record third quarter sales, are collected. During the first nine months of 1996, cash flow provided by operations was $19.2 million, an improvement of $17.2 million over 1995's same period figure of $2 million. The large cash flow in 1996 is due roughly half to earnings improvement and half to improved customer advances and progress payments which resulted as business conditions improved and as strategic initiatives to reduce working capital took effect. Capital expenditures for the third quarter of 1996 were $1.3 million compared to $750,000 for the same period in 1995. The majority of these 1996 expenditures relate to the plant expansion at ALTEC and the purchase of equipment for Chart Coastal Fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. as it nears expected operating levels. 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 interest payments, dividends, capital expenditures, and the repayment of scheduled maturities of debt from the IRB in Wisconsin. As of September 30, 1996, the Company's borrowings on its $25 million credit facility totaled $4 million, an increase of $2 million since June June: see month. 30, 1996. The Company was in compliance with all covenants related to this facility as of September 30, 1996. Backlog Chart's consolidated firm order backlog at September 30, 1996, was $125.5 million versus $124.4 million at June 30, 1996. The Company's backlog at the end of the 1996 third quarter was the highest in Chart's history, despite record sales during this same quarter. Air separation equipment bookings continued at strong levels, with orders totaling $18.3 million for the 1996 third quarter. The strong order level virtually offset the record sales of $19.4 million, accounting for the relatively steady backlog of $44.7 million at September 30, 1996. Hydrocarbon processing equipment backlog stood at $37.7 million on September 30, 1996, an increase of $3.8 million over June 30, 1996, levels. New orders during the quarter totaled $11 million against sales of $6.9 million. The largest orders in this sector were for heat exchangers supporting natural gas and LNG LNG (liquefied natural gas): see under natural gas. processing. Cryogenic and high vacuum equipment backlog was $41.2 million at September 30, 1996. This represents a slight decrease from the previous quarter as work continued on LIGO, but was partially offset by slightly higher order volume. Specialty products backlog totaled $2 million at September 30, 1996, a decrease from $2.6 million at June 30, 1996, reflecting larger shipments for pipe hangers hangers used for hanging x-ray films to dry. There is a clip type, with a clip at each corner, and a channel type in which the film sits in channels in the sides of the frame. and supports. 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. 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 vacuum system Urology A mechanical system used to facilitate and maintain an erection; an erection erector. Cf Penile implant. . Headquartered in Eastlake, Ohio Eastlake is a city in Lake County, Ohio, United States. The population was 20,255 at the 2000 census. Eastlake is the site where FirstEnergy's Eastlake Generating Station shutdown at 1:31pm EDT on August 14, 2003, eventually leading to the infamous 2003 North America , Chart has 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). , 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. (See attached financial tables) -0-
CHART INDUSTRIES, INC. AND SUBSIDIARIES
MARKET INFORMATION (UNAUDITED)
FOR 1996'S THIRD QUARTER
Three Months Ended September 30, 1996
Sales Gross Profit
Percent Percent Gross
of of Profit
($000) Total ($000) Total Margin
Air Separation $19,399 51.1% $5,431 48.2% 28.0%
Hydrocarbon Processing 6,865 18.1% 2,746 24.3% 40.0%
Cryogenic & High Vacuum 5,638 14.8% 991 8.8% 17.6%
Specialty Products 6,068 16.0% 2,109 18.7% 34.8%
$37,970 100.0% $11,277 100.0% 29.7%
Nine Months Ended September 30, 1996
Sales Gross Profit
Percent Percent Gross
of of Profit
($000) Total ($000) Total Margin
Air Separation $45,014 43.6% $13,778 44.3% 30.6%
Hydrocarbon Processing 20,614 20.0% 6,745 21.7% 32.7%
Cryogenic & High Vacuum 15,758 15.2% 2,375 7.7% 15.1%
Specialty Products 21,923 21.2% 8,180 26.3% 37.3%
$103,309 100.0% $31,078 100.0% 30.1%
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except per share amounts)
September 30, December 31,
1996 1995
ASSETS
Current Assets
Cash and cash equivalents $4,679 $229
Accounts receivable 26,509 26,614
Inventories 23,395 20,871
Other current assets 1,811 1,738
Total Current Assets 56,394 49,452
Property, plant & equipment, net 16,460 11,734
Other assets, net 3,049 3,511
TOTAL ASSETS $75,903 $64,697
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $6,868 $7,764
Customer advances 10,172 7,408
Billings in excess of costs plus
estimated earnings 11,510 6,027
Accrued expenses and other
liabilities 11,718 10,492
Current portion of long-term debt 390 2,007
Total Current Liabilities $40,658 $33,698
Long-term debt 8,536 12,566
Shareholders' Equity
Preferred stock 1,000,000 shares
authorized, none issued or
outstanding
Common stock, par value $.01 per
share - 30,000,000 shares authorized,
10,177,699 and 10,094,594 shares
issued at September 30, 1996, and
December 31, 1995, respectively 102 101
Additional paid-in capital 17,717 17,024
Retained earnings 10,897 2,294
Treasury stock, at cost, 222,952 and
163,158 shares at September 30, 1996,
and December 31, 1995, respectively (2,007) (986)
26,709 18,433
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $75,903 $64,697
The balance sheet at December 31, 1995 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.
-0-
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
Sales $37,970 $26,730 $103,309 $81,461
Cost of products sold 26,693 19,464 72,231 59,720
Gross profit 11,277 7,266 31,078 21,741
Selling, general &
administrative expense 5,326 3,765 14,616 13,399
Operating income 5,951 3,501 16,462 8,342
Interest expense, net 133 529 551 1,453
Income before income taxes 5,818 2,972 15,911 6,889
Income taxes 2,005 915 5,341 2,404
Net income $3,813 $2,057 $10,570 $4,485
Net income per common share $0.38 $0.20 $1.04 $0.45
Shares used in per share
calculations 10,143 10,098 10,124 10,057
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
Three Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES
Net income $3,813 $2,057
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 717 735
Contribution of treasury stock to 401K plans 148 112
Deferred income taxes (110) 256
Increase (decrease) in cash resulting from
changes in operating assets and liabilities:
Accounts receivable (6,642) (7,351)
Inventory and other current assets 1,366 2,072
Accounts payable and accrued liabilities (590) (486)
Billings in excess of costs plus estimated
earnings and customer advances 746 3,652
Net Cash Provided By (Used In) Operating Activities (552) 1,047
INVESTING ACTIVITIES
Capital expenditures (1,286) (750)
Purchase of land and building at PSI
Other investing activities 8 (307)
Net Cash Used In Investing Activities (1,278) (1,057)
FINANCING ACTIVITIES
Borrowings under Industrial Revenue Bond 5,000
Repayments of long-term debt (94) (339)
Repayments on credit facility (11,500) (8,000)
Borrowings on credit facility 13,500 9,500
Treasury stock and employee stock option activity (265) (197)
Dividends/distributions paid to shareholders (701) (696)
Net Cash Used In (Provided By) Financing
Activities 5,940 268
Net increase (decrease) in cash and cash equivalents 4,110 258
Cash and cash equivalents at beginning of period 569 395
CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,679 $653
Nine Months Ended
September 30,
1996 1995
OPERATING ACTIVITIES
Net income $10,570 $4,485
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization 2,139 2,072
Contribution of treasury stock to 401K plans 453 189
Deferred income taxes (220) (199)
Increase (decrease) in cash resulting from
changes in operating assets and liabilities:
Accounts receivable 105 (6,818)
Inventory and other current assets (2,597) (2,564)
Accounts payable and accrued liabilities 550 2,664
Billings in excess of costs plus estimated
earnings and customer advances 8,247 2,209
Net Cash Provided By (Used In) Operating
Activities 19,247 2,038
INVESTING ACTIVITIES
Capital expenditures (2,895) (1,676)
Purchase of land and building at PSI (3,578)
Other investing activities 70 (99)
Net Cash Used In Investing Activities (6,403) (1,775)
FINANCING ACTIVITIES
Borrowings under Industrial Revenue Bond 5,000
Repayments of long-term debt (3,147) (1,015)
Repayments on credit facility (35,500) (25,000)
Borrowings on credit facility 28,000 28,500
Treasury stock and employee stock options activity (647) (211)
Dividends/distributions paid to shareholders (2,100) (2,090)
Net Cash Used In (Provided By) Financing
Activities (8,394) 184
Net increase (decrease) in cash and cash equivalents 4,450 447
Cash and cash equivalents at beginning of period 229 206
CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,679 $653
CONTACT: Chart Industries, Inc., Eastlake Don A. Baines Baines is a surname, and may refer to
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