ATLANTA, July 19, 2018 (GLOBE NEWSWIRE) -- Chart Industries, Inc. (NASDAQ:GTLS), a leading diversified global
manufacturer of highly engineered equipment for the industrial gas, energy and biomedical industries, today reported results for
the second quarter ended June 30, 2018. Highlights include:
- Orders of $360.3 million, a 12% sequential increase over the first quarter of 2018 and Chart’s sixth consecutive
quarter of sequential growth. Orders increased 43% over the second quarter of 2017, with 6% organic growth.
- Booked $28 million order for Hudson Products (Energy & Chemicals) air cooled heat exchangers for a large LNG
project.
- Sales of $319.9 million, a sequential increase of 14% over the first quarter of 2018, and 34% over the second quarter
of 2017, with 14% organic growth.
- Reported EPS of $0.38 and adjusted EPS of $0.55, reflecting margin leverage resulting from completed restructuring
actions and continued order and sales strength.
- Increased full year revenue and EPS guidance range to $1.20 billion to $1.25 billion and $1.85 to $2.05 per diluted
share, respectively.
Net income for the second quarter of 2018 was $12.3 million or $0.38 per diluted share. Second quarter
2018 earnings would have been $0.55 per diluted share excluding $1.4 million of transaction-related and restructuring costs, $3.75
million of costs associated with the cryobiological aluminum tank recall, and $1.4 million of net severance costs associated with
the departure of the former Chief Executive Officer. This is a $0.32 adjusted EPS increase over the first quarter of 2018,
and compares to net income for the second quarter of 2017 of $2.8 million, or $0.09 per diluted share. Second quarter 2017
earnings would have been $0.21 per diluted share excluding $5.0 million of restructuring and $1.0 million of transaction-related
costs. Further details on the second quarter results and adjustments can be found in the attached exhibit to this press
release.
The second quarter of 2018 was our sixth consecutive quarter of sequential order growth, with 12% growth over
the first quarter of 2018, and sequential growth in orders in all of our three segments. Orders increased 43%, or $107.7
million ($15.5 million excluding Hudson Products) above the second quarter of 2017. Included in our second quarter of 2018
orders was a $28 million order in our Energy & Chemicals (E&C) segment for our Hudson Products air cooled heat exchangers on a
large LNG project, as well as a $13 million order for equipment for a natural gas liquids fractionation project. A portion of
these orders will ship in 2018 and the remainder are expected to ship in 2019. Additionally, we received a $12 million order
in Distribution & Storage (D&S) for liquid hydrogen storage vessels to be used in the private space industry for launch
operations. Approximately 50% of this order will be recognized in 2018 revenue. Orders in the United States, Europe and
Asia increased sequentially and year over year, with Asian orders up 28% over the first quarter of 2018 and 18% over the second
quarter of 2017. Strength in Asian orders was driven by packaged gas applications as well as respiratory and cryobiological
product lines. LNG vehicle fueling demand continued to increase, and industrial CO2 activity is driving increased volumes of
Bulk and MicroBulk product in the United States for our D&S segment, while natural gas processing in our E&C segment
continued to be strong (up 9.8% sequentially over the first quarter of 2018 and up 47.2% from the second quarter of 2017).
Sales of $319.9 million for the second quarter of 2018 increased 14% over the first quarter of 2018. All
three segments’ sales increased over the first quarter of 2018 by at least 12%. Compared to the second quarter of 2017, sales
increased 34%, or 14% organically. The year-over-year increase in revenue was driven by E&C increases in demand for
equipment for both natural gas processing and industrial gas applications, D&S packaged gas volume, LNG vehicle tanks and
increases in parts, repair and aftermarket as well as the release of the new portable oxygen concentrator in our BioMedical
segment.
Gross profit for the second quarter of 2018 was $84.5 million, or 26.4% of sales, compared to the first
quarter’s gross profit as a percent of sales of 27.6% of sales. The sequential decrease in gross margin as a percent of sales
was driven by the $3.75 million of costs associated with the cryobiological aluminum tank recall for a 12-week period earlier this
year. Excluding the recall costs, gross margin as a percent of sales would have been sequentially higher than the first
quarter of 2018.
Selling, general and administrative ("SG&A") expenses for the second quarter of 2018 were $55.3 million,
inclusive of $0.8 million of transaction-related costs, $0.6 million of restructuring costs, and net costs of $1.4 million related
to the departure of the previous CEO. SG&A expenses for the first quarter of 2018 were $54.1 million, inclusive of $1.3
million of transaction-related costs, and $0.6 million of restructuring costs.
“Our second quarter results reflect the past three quarters’ order strength. With the strength in packaged
gas, order activity in Asia, and European LNG vehicle tank and trailer demand, combined with our right-sized cost structure, we
expect to see the second half of 2018 at higher sales and earnings levels than the first half of the year,” said Jill Evanko,
Chart’s President and CEO. “The $28 million Hudson order received in the second quarter for a large LNG project is exciting
for our Energy & Chemicals segment, as it further demonstrates the strategic value of the combination of Hudson and Chart.”
As we announced at the end of the first quarter of 2018, we are conducting a strategic review of the
oxygen-related product lines within our BioMedical segment, including an evaluation of a possible divestiture of the
businesses. We are excluding from the review those portions of the BioMedical segment that utilize and align with our
cryogenic technological expertise (Cryobiological). The asset group does not meet the criteria to be held for sale, and
therefore continues to be accounted and reported for as assets to be held and used. There can be no assurance that this
evaluation will result in any transaction being announced or consummated. The Company will not disclose further developments
during this process until our Board of Directors has approved a specific action or we have determined that further disclosure is
appropriate.
SEGMENT HIGHLIGHTS
Second quarter 2018 orders in E&C were $122.5 million, inclusive of $92.2 million from Hudson Products, and
sequentially an increase of 30.7% compared to the first quarter of 2018. This is the fifth quarter in a row with E&C
order levels above $60 million. The natural gas market continues to be strong, and air cooled heat exchanger orders reflect
project specific work that Hudson won in the quarter. E&C segment sales of $100.8 million ($53.3 million excluding
Hudson) were up 12% compared to the first quarter of 2018 and up organically 33.0% versus the second quarter of 2017. E&C
gross margin of $21.3 million, or 21.1% of sales, is an increase over the second quarter of 2017 gross margin of $5.4 million, or
13.3% gross margin as a percent of sales. The improvement is driven by the addition of Hudson as well as the increased demand
for natural gas and industrial gas equipment.
D&S orders of $174.0 million were the highest since the third quarter of 2013, and the sixth consecutive
quarter of sequential order growth. Six consecutive quarters of sequential growth is the longest sustained order trend since
2002 for the segment. D&S sales increased $21.3 million to $157.4 million compared to the first quarter of 2018, and
increased $19.8 million compared to the second quarter of 2017. Sequential and year-over-year increases are driven by
strength in United States packaged gas, and European standard tanks and trailers. Gross margin as a percent of sales of 28.3%
increased from 27.6% in the first quarter of 2018 and 25.7% in the second quarter of 2017, reflecting strong volume, improved cost
structure, and activity in Europe, in particular LNG trailer strength.
Second quarter BioMedical orders of $63.8 million increased sequentially over the first quarter of 2018 by
11.9%, driven by a 29% increase in respiratory orders. The successful launch of our new portable oxygen concentrator in the
first quarter drove the second quarter order increase. Second quarter BioMedical sales of $62.0 million increased from the
first quarter of 2018 sales of $54.7 million driven by strength in both oxygen-related and cryobiological products. Given
order levels, similar levels of revenue are expected in the second half of the year, which is different than the fourth quarter
seasonal decline historically found in the segment. BioMedical gross margin as a percent of sales of 30.0% in the second
quarter of 2018 is a decrease from the 36.9% gross margin as a percent of sales in the first quarter of 2018. The driver of
the decrease in gross margin was the $3.75 million of recall related expense, and mix in the respiratory product line.
OUTLOOK
Our full year 2018 guidance includes the impact from the revenue recognition accounting standard change which
was adopted effective January 1, 2018, and which we expect to be immaterial on a full year basis. Sales guidance is expected
to be in the range of $1.20 billion to $1.25 billion for the full year of 2018 compared to prior sales guidance of $1.15 to $1.20
billion. We expect full year adjusted earnings per diluted share (non-GAAP) to be in the range of $1.85 to $2.05 per share,
on approximately 32.0 million weighted average shares outstanding. Our prior full year adjusted earnings per diluted share
guidance was $1.75 to $2.00. This excludes any restructuring costs and transaction-related costs, and assumes continued
ownership of all assets for the entire calendar year, and as such is a non-GAAP measure. We expect our effective tax rate,
inclusive of benefits from the Tax Cuts and Jobs Act, to be approximately 27%, which is unchanged from our prior guidance. In
the second quarter of 2018, our effective tax rate was 27.6%, bringing the year to date rate to 27.3%. We continue to expect
our capital expenditures for 2018 will be in the range of $35 million to $45 million.
FORWARD-LOOKING STATEMENTS
Certain statements made in this news release are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company's plans,
objectives, future orders, revenues, margins, earnings or performance, liquidity and cash flow, capital expenditures, business
trends, and other information that is not historical in nature. Forward-looking statements may be identified by terminology
such as "may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," “outlook,” “guidance,”
"continue," or the negative of such terms or comparable terminology.
Forward-looking statements contained in this news release or in other statements made by the Company are made
based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and
factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are
beyond the Company's control, that could cause the Company's actual results to differ materially from those matters expressed or
implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those
described in the forward-looking statements include those found in Item 1A (Risk Factors) in the Company’s most recent Annual
Report on Form 10-K filed with the SEC, which should be reviewed carefully, as well as risks and uncertainties related to the
integration of the Hudson business with the Company’s, and risks and uncertainties associated with the strategic review process
underway with respect to the BioMedical segment, and the results of such process, including any possible divestiture or
transaction, and the uncertainty whether any such possible transaction is completed, and if so, the terms, structure and timing of
any such transaction. The Company undertakes no obligation to update or revise any forward-looking statement.
Chart is a leading diversified global manufacturer of highly engineered equipment for the industrial gas,
energy, and biomedical industries. The majority of Chart's products are used throughout the liquid gas supply chain for
purification, liquefaction, distribution, storage and end-use applications, a large portion of which are energy-related.
Chart has domestic operations located across the United States and an international presence in Asia, Australia, Europe and Latin
America. For more information, visit: http://www.chartindustries.com.
USE OF NON-GAAP FINANCIAL INFORMATION
To supplement the unaudited condensed consolidated financial statements presented in accordance with U.S. GAAP
in this news release, certain non-GAAP financial measures as defined by the SEC rules are used. The Company believes these
non-GAAP measures are of interest to investors and facilitate useful period-to-period comparisons of the Company’s financial
results, and this information is used by the Company in evaluating internal performance. See the pages at the end of this
news release for the reconciliations of adjusted earnings per diluted share, net earnings, adjusted, and free cash flow, the
non-GAAP measures included in this release.
With respect to the Company's full year earnings outlook, the Company is not able to provide a reconciliation of
the adjusted earnings per diluted share because certain items may have not yet occurred or are out of the Company's control and /
or cannot be reasonably predicted.
CONFERENCE CALL
As previously announced, the Company will discuss its second quarter 2018 results on a conference call on
Thursday, July 19, 2018 at 9:30 a.m. ET. Participants may join the conference call by dialing (877) 312-9395 in the U.S. or
(970) 315-0456 from outside the U.S. Please log-in or dial-in at least five minutes prior to the start time.
A taped replay of the conference call will be archived on the Company’s website, www.chartindustries.com, approximately one hour after the call concludes. You may also listen to a recorded
replay of the conference call by dialing (855) 859-2056 in the U.S. or (404) 537-3406 outside the U.S. and entering Conference ID
4188552. The telephone replay will be available beginning 1:30 p.m. ET, Thursday, July 19, 2018 until 1:30 p.m. ET, Thursday, July
26, 2018.
For more information, click here:
http://ir.chartindustries.com/
See URL below for a link to our Supplemental Information for our 2018 Second Quarter Results:
http://resource.globenewswire.com/Resource/Download/b5fab288-a6c8-43ad-8e30-af3fbfcffae4
Contact:
Jillian Evanko |
Chief Executive Officer and Chief Financial Officer |
770-721-7739 |
jillian.evanko@chartindustries.com |
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED) |
(Dollars and shares in millions, except per
share amounts) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2018 |
|
June 30, 2017 |
|
March 31, 2018 |
|
June 30, 2018 |
|
June 30, 2017 |
Sales (1) |
$ |
319.9 |
|
|
$ |
238.2 |
|
|
$ |
279.7 |
|
|
$ |
599.6 |
|
|
$ |
442.3 |
|
Cost of sales |
235.4 |
|
|
175.0 |
|
|
202.6 |
|
|
438.0 |
|
|
323.4 |
|
Gross profit |
84.5 |
|
|
63.2 |
|
|
77.1 |
|
|
161.6 |
|
|
118.9 |
|
Selling, general, and administrative expenses |
55.3 |
|
|
50.2 |
|
|
54.1 |
|
|
109.4 |
|
|
102.6 |
|
Amortization expense |
5.7 |
|
|
3.1 |
|
|
6.1 |
|
|
11.8 |
|
|
6.1 |
|
Operating expenses |
61.0 |
|
|
53.3 |
|
|
60.2 |
|
|
121.2 |
|
|
108.7 |
|
Operating income (1) (2) (3) (4) (5) (6) |
23.5 |
|
|
9.9 |
|
|
16.9 |
|
|
40.4 |
|
|
10.2 |
|
Other expenses: |
|
|
|
|
|
|
|
|
|
Interest expense, net |
6.2 |
|
|
3.8 |
|
|
6.4 |
|
|
12.6 |
|
|
8.2 |
|
Financing costs amortization |
0.4 |
|
|
0.4 |
|
|
0.3 |
|
|
0.7 |
|
|
0.7 |
|
Foreign currency (gain) loss |
(1.2 |
) |
|
0.2 |
|
|
1.6 |
|
|
0.4 |
|
|
0.5 |
|
Other expenses, net |
5.4 |
|
|
4.4 |
|
|
8.3 |
|
|
13.7 |
|
|
9.4 |
|
Income before income taxes |
18.1 |
|
|
5.5 |
|
|
8.6 |
|
|
26.7 |
|
|
0.8 |
|
Income tax expense |
5.0 |
|
|
2.2 |
|
|
2.3 |
|
|
7.3 |
|
|
0.4 |
|
Net income |
13.1 |
|
|
3.3 |
|
|
6.3 |
|
|
19.4 |
|
|
0.4 |
|
Less: Income attributable to noncontrolling interests, net of taxes |
0.8 |
|
|
0.5 |
|
|
0.5 |
|
|
1.3 |
|
|
0.5 |
|
Net income (loss) attributable to Chart Industries, Inc. |
$ |
12.3 |
|
|
$ |
2.8 |
|
|
$ |
5.8 |
|
|
$ |
18.1 |
|
|
$ |
(0.1 |
) |
Net income (loss) attributable to Chart Industries, Inc. per common share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.40 |
|
|
$ |
0.09 |
|
|
$ |
0.19 |
|
|
$ |
0.59 |
|
|
$ |
— |
|
Diluted |
$ |
0.38 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
|
$ |
0.57 |
|
|
$ |
— |
|
Weighted average number of common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
30.95 |
|
|
30.73 |
|
|
30.91 |
|
|
30.93 |
|
|
30.71 |
|
Diluted (7) |
32.08 |
|
|
31.28 |
|
|
31.66 |
|
|
31.74 |
|
|
30.71 |
|
_______________
(1) Hudson, included in the E&C segment results since the acquisition date, September 20, 2017, added net sales
and operating income of:
- $47.5 and $6.1 for the three months ended June 30, 2018, respectively, $43.3 and $4.2 for the three months ended
March 31, 2018, respectively, and
- $90.8 and $10.3 for the six months ended June 30, 2018, respectively.
(2) Includes depreciation expense of:
- $7.5, $6.2, and $7.6 for the three months ended June 30, 2018, June 30, 2017, and March 31, 2018,
respectively, and
- $15.1 and $12.4 for the six months ended June 30, 2018 and 2017, respectively.
(3) Includes restructuring costs of:
- $0.6, $5.0, and $0.9 for the three months ended June 30, 2018, June 30, 2017, and March 31, 2018,
respectively, and
- $1.5 and $9.6 for the six months ended June 30, 2018 and 2017, respectively.
(4) Includes an expense of $3.8 recorded to cost of sales related to the estimated costs of the
aluminum cryobiological tank recall for the three and six months ended June 30, 2018.
(5) Includes transaction-related costs of:
- $0.8, $1.0, and $1.3 for the three months ended June 30, 2018, June 30, 2017, and March 31, 2018,
respectively, and
- $2.1 and $1.1 for the six months ended June 30, 2018 and 2017, respectively.
(6) Includes net severance costs of $1.4 related to the departure of our former CEO on June 11,
2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation
forfeitures for the three and six months ended June 30, 2018.
(7) Includes an additional 0.29 shares related to the convertible notes due 2024 in our diluted
earnings per share calculation for the three months ended June 30, 2018. The associated hedge, which helps offset this
dilution, cannot be taken into account under U.S. generally accepted accounting principles (“GAAP”). If the hedge could have
been considered, it would have reduced the additional shares by 0.29 for the three months ended June 30, 2018.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (UNAUDITED) |
(Dollars in millions)
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2018 |
|
June 30, 2017 |
|
March 31, 2018 |
|
June 30, 2018 |
|
June 30, 2017 |
Net Cash Provided By (Used In) Operating Activities |
$ |
23.7 |
|
|
$ |
(4.1 |
) |
|
$ |
23.0 |
|
|
$ |
46.7 |
|
|
$ |
(2.9 |
) |
Investing Activities |
|
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
— |
|
|
— |
|
|
(12.5 |
) |
|
(12.5 |
) |
|
(23.2 |
) |
Capital expenditures |
(12.5 |
) |
|
(8.3 |
) |
|
(6.6 |
) |
|
(19.1 |
) |
|
(16.7 |
) |
Proceeds from sale of assets |
— |
|
|
0.7 |
|
|
— |
|
|
— |
|
|
0.7 |
|
Government grants |
0.6 |
|
|
0.1 |
|
|
0.1 |
|
|
0.7 |
|
|
0.3 |
|
Net Cash Used In Investing Activities |
(11.9 |
) |
|
(7.5 |
) |
|
(19.0 |
) |
|
(30.9 |
) |
|
(38.9 |
) |
Financing Activities |
|
|
|
|
|
|
|
|
|
Borrowings on revolving credit facilities |
27.0 |
|
|
— |
|
|
38.0 |
|
|
65.0 |
|
|
2.2 |
|
Repayments on revolving credit facilities |
(28.0 |
) |
|
(1.5 |
) |
|
(26.8 |
) |
|
(54.8 |
) |
|
(5.1 |
) |
Repayments on term loan |
(3.0 |
) |
|
— |
|
|
— |
|
|
(3.0 |
) |
|
— |
|
Payments for debt issuance costs |
— |
|
|
— |
|
|
(0.2 |
) |
|
(0.2 |
) |
|
— |
|
Proceeds from exercise of stock options |
0.6 |
|
|
0.9 |
|
|
1.2 |
|
|
1.8 |
|
|
0.9 |
|
Common stock repurchases |
(0.1 |
) |
|
— |
|
|
(2.2 |
) |
|
(2.3 |
) |
|
(1.8 |
) |
Dividend distribution to noncontrolling interest |
(0.4 |
) |
|
— |
|
|
— |
|
|
(0.4 |
) |
|
— |
|
Net Cash (Used In) Provided By Financing
Activities |
(3.9 |
) |
|
(0.6 |
) |
|
10.0 |
|
|
6.1 |
|
|
(3.8 |
) |
Effect of exchange rate changes on cash |
(7.7 |
) |
|
2.9 |
|
|
3.9 |
|
|
(3.8 |
) |
|
3.6 |
|
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted
cash equivalents |
0.2 |
|
|
(9.3 |
) |
|
17.9 |
|
|
18.1 |
|
|
(42.0 |
) |
Cash, cash equivalents, restricted cash, and restricted cash equivalents
at beginning of period (1) |
149.3 |
|
|
250.2 |
|
|
131.4 |
|
|
131.4 |
|
|
282.9 |
|
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT
END OF PERIOD (1) |
$ |
149.5 |
|
|
$ |
240.9 |
|
|
$ |
149.3 |
|
|
$ |
149.5 |
|
|
$ |
240.9 |
|
|
_______________
(1) Includes restricted cash and restricted cash equivalents as follows:
- $1.0 in other assets at June 30, 2018,
- $6.5 ($5.5 in other current assets and $1.0 in other assets) at March 31, 2018,
- $8.7 ($7.7 in other current assets and $1.0 in other assets) at December 31, 2017, and
- $6.4 ($5.4 in other current assets and $1.0 in other assets) at June 30, 2017.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(Dollars in millions)
|
|
|
June 30,
2018 |
|
December 31,
2017 |
|
(Unaudited) |
|
|
ASSETS |
|
|
|
Cash and cash equivalents |
$ |
148.5 |
|
|
$ |
122.6 |
|
Accounts receivable, net |
204.4 |
|
|
222.7 |
|
Inventories, net |
233.5 |
|
|
208.9 |
|
Other current assets |
74.6 |
|
|
79.8 |
|
Property, plant, and equipment, net |
304.0 |
|
|
297.6 |
|
Goodwill |
472.0 |
|
|
468.8 |
|
Identifiable intangible assets, net |
291.0 |
|
|
302.5 |
|
Other assets |
21.3 |
|
|
21.8 |
|
TOTAL ASSETS |
$ |
1,749.3 |
|
|
$ |
1,724.7 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities |
$ |
393.0 |
|
|
$ |
387.6 |
|
Long-term debt |
443.9 |
|
|
439.2 |
|
Other long-term liabilities |
92.3 |
|
|
92.7 |
|
Equity |
820.1 |
|
|
805.2 |
|
TOTAL LIABILITIES AND EQUITY |
$ |
1,749.3 |
|
|
$ |
1,724.7 |
|
|
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
OPERATING SEGMENTS (UNAUDITED) |
(Dollars in millions)
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, 2018 |
|
June 30, 2017 |
|
March 31, 2018 |
|
June 30, 2018 |
|
June 30, 2017 |
Sales |
|
|
|
|
|
|
|
|
|
Energy & Chemicals (1) |
$ |
100.8 |
|
|
$ |
40.0 |
|
|
$ |
89.9 |
|
|
$ |
190.7 |
|
|
$ |
79.9 |
|
Distribution & Storage |
157.4 |
|
|
137.6 |
|
|
136.1 |
|
|
293.5 |
|
|
250.8 |
|
BioMedical |
62.0 |
|
|
60.6 |
|
|
54.7 |
|
|
116.7 |
|
|
111.6 |
|
Intersegment eliminations |
(0.3 |
) |
|
— |
|
|
(1.0 |
) |
|
(1.3 |
) |
|
— |
|
Total |
$ |
319.9 |
|
|
$ |
238.2 |
|
|
$ |
279.7 |
|
|
$ |
599.6 |
|
|
$ |
442.3 |
|
Gross Profit |
|
|
|
|
|
|
|
|
|
Energy & Chemicals |
$ |
21.3 |
|
|
$ |
5.4 |
|
|
$ |
19.4 |
|
|
$ |
40.7 |
|
|
$ |
13.8 |
|
Distribution & Storage |
44.6 |
|
|
35.3 |
|
|
37.5 |
|
|
82.1 |
|
|
65.9 |
|
BioMedical |
18.6 |
|
|
22.5 |
|
|
20.2 |
|
|
38.8 |
|
|
39.2 |
|
Total |
$ |
84.5 |
|
|
$ |
63.2 |
|
|
$ |
77.1 |
|
|
$ |
161.6 |
|
|
$ |
118.9 |
|
Gross Profit Margin |
|
|
|
|
|
|
|
|
|
Energy & Chemicals |
21.1 |
% |
|
13.3 |
% |
|
21.6 |
% |
|
21.3 |
% |
|
17.2 |
% |
Distribution & Storage |
28.3 |
% |
|
25.7 |
% |
|
27.6 |
% |
|
28.0 |
% |
|
26.3 |
% |
BioMedical |
30.0 |
% |
|
37.2 |
% |
|
36.9 |
% |
|
33.2 |
% |
|
35.2 |
% |
Total |
26.4 |
% |
|
26.5 |
% |
|
27.6 |
% |
|
27.0 |
% |
|
26.9 |
% |
Operating Income (Loss) (2) (3) |
|
|
|
|
|
|
|
|
|
Energy & Chemicals (1) |
$ |
5.9 |
|
|
$ |
(2.5 |
) |
|
$ |
2.8 |
|
|
$ |
8.7 |
|
|
$ |
(2.7 |
) |
Distribution & Storage |
24.8 |
|
|
16.6 |
|
|
18.1 |
|
|
42.9 |
|
|
28.2 |
|
BioMedical (4) |
8.5 |
|
|
9.8 |
|
|
9.5 |
|
|
18.0 |
|
|
14.8 |
|
Corporate (5) (6) |
(15.7 |
) |
|
(14.0 |
) |
|
(13.5 |
) |
|
(29.2 |
) |
|
(30.1 |
) |
Total |
$ |
23.5 |
|
|
$ |
9.9 |
|
|
$ |
16.9 |
|
|
$ |
40.4 |
|
|
$ |
10.2 |
|
Operating Margin (Loss) |
|
|
|
|
|
|
|
|
|
Energy & Chemicals |
5.9 |
% |
|
(6.4 |
)% |
|
3.1 |
% |
|
4.6 |
% |
|
(3.4 |
)% |
Distribution & Storage |
15.8 |
% |
|
12.1 |
% |
|
13.3 |
% |
|
14.6 |
% |
|
11.2 |
% |
BioMedical |
13.7 |
% |
|
16.2 |
% |
|
17.4 |
% |
|
15.4 |
% |
|
13.3 |
% |
Total |
7.3 |
% |
|
4.2 |
% |
|
6.0 |
% |
|
6.7 |
% |
|
2.3 |
% |
_______________
(1) Hudson, included in the E&C segment results since the acquisition date, September 20,
2017, added net sales and operating income of:
- $47.5 and $6.1 for the three months ended June 30, 2018, respectively, $43.3 and $4.2 for the three months ended March 31,
2018, respectively, and
- $90.8 and $10.3 for the six months ended June 30, 2018, respectively.
(2) Restructuring costs for the three months ended:
- June 30, 2018 were $0.6 ($0.2 - E&C, $0.3 - D&S, and $0.1 - Corporate).
- June 30, 2017 were $5.0 ($1.6 - E&C, $0.3 - D&S, $1.4 - BioMedical, and $1.7 - Corporate)
- March 31, 2018 were $0.9 ($0.2 - E&C, $0.2 - D&S, and $0.5 - Corporate)
(3) Restructuring costs for the six months ended:
- June 30, 2018 were $1.5 ($0.4 - E&C, $0.5 - D&S, and $0.6 - Corporate)
- June 30, 2017 were $9.6 ($2.1 - E&C, $0.4 - D&S, $4.0 - BioMedical, and $3.1 - Corporate)
(4) Includes an expense of $3.8 recorded to cost of sales related to the estimated costs of the
aluminum cryobiological tank recall for the three and six months ended June 30, 2018.
(5) Includes transaction-related costs of:
- $0.8, $1.0, and $1.3 for the three months ended June 30, 2018, June 30, 2017, and March 31, 2018,
respectively, and
- $2.1 and $1.1 for the six months ended June 30, 2018 and 2017, respectively.
(6) Includes net severance costs of $1.4 related to the departure of our former CEO on June 11,
2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related share-based compensation
forfeitures for the three and six months ended June 30, 2018.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
ORDERS AND BACKLOG (UNAUDITED) |
(Dollars in millions)
|
|
|
Three Months Ended |
|
June 30,
2018 |
|
June 30,
2017 |
|
March 31,
2018 |
Orders |
|
|
|
|
|
Energy & Chemicals (1) |
$ |
122.5 |
|
|
$ |
64.6 |
|
|
$ |
93.7 |
|
Distribution & Storage |
174.0 |
|
|
134.1 |
|
|
170.4 |
|
BioMedical |
63.8 |
|
|
53.9 |
|
|
57.0 |
|
Total |
$ |
360.3 |
|
|
$ |
252.6 |
|
|
$ |
321.1 |
|
|
As of |
|
June 30,
2018 |
|
June 30,
2017 |
|
March 31,
2018 |
Backlog |
|
|
|
|
|
Energy & Chemicals (2) (3) |
$ |
238.6 |
|
|
$ |
122.8 |
|
|
$ |
213.3 |
|
Distribution & Storage |
261.3 |
|
|
225.0 |
|
|
250.3 |
|
BioMedical |
27.5 |
|
|
19.4 |
|
|
25.8 |
|
Total |
$ |
527.4 |
|
|
$ |
367.2 |
|
|
$ |
489.4 |
|
_______________
(1) E&C orders includes $92.2 and $37.0 in orders related to Hudson for the three months
ended June 30, 2018 and March 31, 2018, respectively. Included in our second quarter of 2018 orders was a $28
million order for our Hudson Products air cooled heat exchangers on a large LNG project, as well as a $13 million order for
equipment for a natural gas liquids fractionation project. These orders will ship partially in 2018 and the remainder in
2019.
(2) E&C backlog as of June 30, 2018 and March 31, 2018 includes $104.3 and $59.8 related to
Hudson, respectively.
(3) Included in the E&C backlog as of June 30, 2018, June 30, 2017, and
March 31, 2018 is approximately $40 million related to the previously announced Magnolia LNG order.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF EARNINGS PER DILUTED SHARE
TO ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED) |
(Dollars in millions, except per share
amounts)
|
|
|
Three Months Ended |
|
June 30, 2018 |
|
June 30, 2017 |
|
March 31, 2018 |
Earnings per diluted share as reported (U.S. GAAP) |
$ |
0.38 |
|
|
$ |
0.09 |
|
|
$ |
0.18 |
|
Aluminum cryobiological tank recall reserve expense (1) |
0.09 |
|
|
— |
|
|
— |
|
Restructuring and transaction-related costs |
0.04 |
|
|
0.12 |
|
|
0.05 |
|
CEO departure net costs (2) |
0.03 |
|
|
— |
|
|
— |
|
Dilution impact of convertible notes |
0.01 |
|
|
— |
|
|
— |
|
Adjusted earnings per diluted share (non-GAAP) |
$ |
0.55 |
|
|
$ |
0.21 |
|
|
$ |
0.23 |
|
_______________
(1) During the three months ended June 30, 2018, we recorded an expense of $3.8 to cost of sales
related to the estimated costs of the aluminum cryobiological tank recall.
(2) During the three months ended June 30, 2018, we recorded net severance costs of $1.4 related to the departure
of our former CEO on June 11, 2018, which includes $3.2 in payroll severance costs partially offset by a $1.8 credit due to related
share-based compensation forfeitures.
Adjusted earnings per diluted share is not a measure of financial performance under U.S. GAAP and should not be
considered as an alternative to earnings per share in accordance with U.S. GAAP. Management believes that adjusted earnings
per share facilitates useful period-to-period comparisons of our financial results and this information is used by us in evaluating
internal performance. Our calculation of this non-GAAP measure may not be comparable to the calculations of similarly titled
measures reported by other companies.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIES |
RECONCILIATION OF NET INCOME TO NET EARNINGS,
ADJUSTED (UNAUDITED) |
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income as reported (U.S. GAAP) |
$ |
13.1 |
|
|
$ |
3.3 |
|
|
$ |
19.4 |
|
|
$ |
0.4 |
|
Interest accretion of convertible notes discount |
2.5 |
|
|
3.3 |
|
|
5.0 |
|
|
6.6 |
|
Employee share-based compensation expense |
0.2 |
|
|
1.7 |
|
|
3.4 |
|
|
8.0 |
|
Financing costs amortization |
0.4 |
|
|
0.4 |
|
|
0.7 |
|
|
0.7 |
|
Unrealized foreign currency transaction (gain) loss |
(0.4 |
) |
|
— |
|
|
(0.8 |
) |
|
0.2 |
|
Other non-cash operating activities |
(0.3 |
) |
|
(0.9 |
) |
|
— |
|
|
(0.3 |
) |
Net earnings, adjusted (non-GAAP) |
$ |
15.5 |
|
|
$ |
7.8 |
|
|
$ |
27.7 |
|
|
$ |
15.6 |
|
_______________
Net earnings, adjusted is not a measure of financial performance under U.S. GAAP and should not be considered as
an alternative to net income in accordance with U.S. GAAP. Management believes that net earnings, adjusted facilitates useful
period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance.
Our calculation of this non-GAAP measure may not be comparable to the calculations of similarly titled measures reported by other
companies.
|
RECONCILIATION OF NET CASH PROVIDED BY (USED
IN) OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED) |
(Dollars in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, |
|
Six Months Ended June
30, |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net Cash Provided By (Used In) Operating Activities |
23.7 |
|
|
(4.1 |
) |
|
46.7 |
|
|
(2.9 |
) |
Capital expenditures |
(12.5 |
) |
|
(8.3 |
) |
|
(19.1 |
) |
|
(16.7 |
) |
Free cash flow (non-GAAP) |
$ |
11.2 |
|
|
$ |
(12.4 |
) |
|
$ |
27.6 |
|
|
$ |
(19.6 |
) |
_______________
Free cash flow is not a measure of financial performance under U.S. GAAP and should not be considered as an
alternative to net cash provided by (used in) operating activities in accordance with U.S. GAAP. Management believes that
free cash flow facilitates useful period-to-period comparisons of our financial results and this information is used by us in
evaluating internal performance. Our calculation of this non-GAAP measure may not be comparable to the calculations of
similarly titled measures reported by other companies.
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