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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