• | Orders of $286.2 million included record order levels for LNG fueling stations, lasers and hydrogen, contributing to record backlog of $755.6 million. |
• | Received full and final notice to proceed (“FNTP”) on Venture Global’s Calcasieu Pass Project, as well as an additional $6.6 million order for air cooled heat exchangers on the project. |
• | Reported gross margin as a percent of sales of 28.3%, an increase of 150 basis points over the second quarter of 2019 (+250 bps on an adjusted basis). |
• | SG&A as a percent of sales of 16.1% has improved each quarter of 2019, and on a normalized basis is 13.5% of sales, reflecting lower required SG&A through our integration activities. |
• | Reported EPS of $0.51 increased from $0.41 in the second quarter of 2019. Adjusted EPS of $0.77, a 13.2% increase over the second quarter of 2019 adjusted EPS, reflects our broad-based execution of our order pipeline and margin expansion activities. |
• | Completed the acquisition of the Air-X-Changers (“AXC”) business on July 1, 2019 and identified target cost synergies totaling $29 million to be achieved within the first 12 months of ownership. |
• | Projected 2020 total revenue growth of 21% to 24% (15% organic including Calcasieu Pass), and expected 2020 adjusted EPS in the base business of $4.75 to $5.25. |
• | Expectation of $1.0 billion of additional big LNG orders in 2020. |
• | Market Growth: We expect blended market growth of 1% to 2%, with D&S markets averaging 3% growth and base E&C markets experiencing negative to flat trends in 2020. The E&C markets of natural gas processing and air cooler upstream are expected to decline in 2020, partially offset by single digit growth in downstream, refining/processing and petrochemical markets. |
• | Base Outlook: Our total revenue growth is expected to be 21% to 24%, with 13% to 15% organic growth including Calcasieu Pass (7% to 9% organic excluding Calcasieu Pass). This results in expected base revenue between $1,615 and $1,680 million. The drivers above normal market growth include the already booked Calcasieu Pass, delivering on the Bechtel air cooled heat exchanger order, specialty markets growing over 10%, and increasing LNG infrastructure activity. We expect full year adjusted earnings per diluted share to be in the range of $4.75 to $5.25 per share, on approximately 35.8 million weighted average shares outstanding. This excludes any restructuring costs and transaction-related costs, and as such is a non-GAAP measure. |
• | Upside Outlook: The upside outlook assumes booking additional big LNG orders based on current operator timelines for FID. Specifically, the upside outlook assumes we receive formal notice to proceed (“FNTP”) on Driftwood by the end of Q2 2020, and FNTP on Plaquemines and Cheniere Corpus Stage 3 also in 2020. In this scenario, revenue would be expected to be in the range of $1,720 million to $1,790 million, and associated adjusted earnings per diluted share to be in the range of $5.45 to $6.15, on approximately 35.8 million weighted average shares outstanding. This excludes any restructuring costs and transaction-related costs, or any dilution associated with our convertible notes, and as such is a non-GAAP measure. |
• | Tax Rate: We anticipate our 2020 effective tax rate to be 21%. |
• | Capital Expenditures: Capital expenditures are expected to be in the range of $35 million to $40 million, including investment in expanding our India manufacturing capabilities and completing the LNG vehicle tank line in Italy. |
Jillian Evanko |
Chief Executive Officer |
630-418-9403 |
jillian.evanko@chartindustries.com |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | September 30, 2019 | September 30, 2018 | |||||||||||||||
Sales (1) | $ | 357.8 | $ | 272.2 | $ | 309.6 | $ | 956.7 | $ | 794.2 | |||||||||
Cost of sales | 256.6 | 189.9 | 226.8 | 705.6 | 572.2 | ||||||||||||||
Gross profit | 101.2 | 82.3 | 82.8 | 251.1 | 222.0 | ||||||||||||||
Selling, general, and administrative expenses | 57.5 | 45.8 | 50.2 | 163.0 | 140.5 | ||||||||||||||
Amortization expense | 13.8 | 5.0 | 7.3 | 28.3 | 15.7 | ||||||||||||||
Operating expenses | 71.3 | 50.8 | 57.5 | 191.3 | 156.2 | ||||||||||||||
Operating income (1) (2) (3) (4) (5) | 29.9 | 31.5 | 25.3 | 59.8 | 65.8 | ||||||||||||||
Interest expense, net | 7.8 | 5.3 | 5.4 | 18.5 | 17.9 | ||||||||||||||
Other (income) expense, net | (3.0 | ) | — | 0.4 | (2.3 | ) | 0.8 | ||||||||||||
Income from continuing operations before income taxes | 25.1 | 26.2 | 19.5 | 43.6 | 47.1 | ||||||||||||||
Income tax expense | 6.4 | 4.2 | 4.9 | 9.3 | 9.7 | ||||||||||||||
Net income from continuing operations | 18.7 | 22.0 | 14.6 | 34.3 | 37.4 | ||||||||||||||
Income from discontinued operations, net of taxes | — | 0.7 | — | — | 4.7 | ||||||||||||||
Net income | 18.7 | 22.7 | 14.6 | 34.3 | 42.1 | ||||||||||||||
Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | — | 0.5 | 0.2 | 0.3 | 1.8 | ||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | 18.7 | $ | 22.2 | $ | 14.4 | $ | 34.0 | $ | 40.3 | |||||||||
Income from continuing operations | $ | 18.7 | $ | 21.5 | $ | 14.4 | $ | 34.0 | $ | 35.6 | |||||||||
Income from discontinued operations, net of taxes | — | 0.7 | — | — | 4.7 | ||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | 18.7 | $ | 22.2 | $ | 14.4 | $ | 34.0 | $ | 40.3 | |||||||||
Basic earnings per common share attributable to Chart Industries, Inc. | |||||||||||||||||||
Income from continuing operations | $ | 0.52 | $ | 0.70 | $ | 0.44 | $ | 1.02 | $ | 1.15 | |||||||||
Income from discontinued operations | — | 0.02 | — | — | 0.15 | ||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | 0.52 | $ | 0.72 | $ | 0.44 | $ | 1.02 | $ | 1.30 | |||||||||
Diluted earnings per common share attributable to Chart Industries, Inc. | |||||||||||||||||||
Income from continuing operations | $ | 0.51 | $ | 0.65 | $ | 0.41 | $ | 0.97 | $ | 1.11 | |||||||||
Income from discontinued operations | — | 0.02 | — | — | 0.14 | ||||||||||||||
Net income attributable to Chart Industries, Inc. | $ | 0.51 | $ | 0.67 | $ | 0.41 | $ | 0.97 | $ | 1.25 | |||||||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||
Basic | 35.76 | 31.03 | 32.47 | 33.28 | 30.97 | ||||||||||||||
Diluted (6) | 36.73 | 32.95 | 34.72 | 35.05 | 32.14 |
(1) | Includes sales and operating income for VRV, included in the E&C Cryogenics and D&S East segment results since the acquisition date, November 15, 2018 and sales and operating income for AXC, included in E&C FinFans segment results since the acquisition date, July 1, 2019, as follows: |
• | Sales were $86.0 (E&C Cryogenics: $13.5, E&C FinFans: $60.1, D&S East: $12.4) for the three months ended September 30, 2019 and $28.9 (E&C Cryogenics: $12.9, D&S East: $16.0) for the three months ended June 30, 2019. |
• | Operating income (loss) was $5.0 (E&C Cryogenics: $2.6, E&C FinFans: $2.6, D&S East: $(0.2)) for the three months ended September 30, 2019 and $(1.1) (E&C Cryogenics: $(2.8), D&S East: $1.7) for the three months ended June 30, 2019. |
(2) | Includes depreciation expense of: |
• | $10.3, $7.2, and $8.7 for the three months ended September 30, 2019, September 30, 2018, and June 30, 2019, respectively, and |
• | $27.8 and $21.2 for the nine months ended September 30, 2019 and 2018, respectively. |
(3) | Includes restructuring costs of: |
• | $1.5, $2.0, and $4.4 for the three months ended September 30, 2019, September 30, 2018, and June 30, 2019, respectively, and |
• | $13.3 and $3.5 for the nine months ended September 30, 2019 and 2018, respectively. |
• | $4.3, $2.0 and $1.8 for the three months ended September 30, 2019 and 2018 and June 30, 2019, respectively, and |
• | $7.0 and $4.1 for the nine months ended September 30, 2019 and 2018, respectively. |
(5) | Includes $0.8 related to AXC integration activities during the third quarter of 2019, and $0.6 and $1.8 related to VRV integration activities for the three and nine months ended September 30, 2019, respectively. |
(6) | Includes an additional 0.59 and 1.33 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three and nine months ended September 30, 2019 , respectively. 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 0.59 and 1.04 for the three and nine months ended September 30, 2019, respectively. |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | September 30, 2019 | September 30, 2018 | |||||||||||||||
Net Cash Provided By Operating Activities | $ | 55.7 | $ | 21.0 | $ | 32.8 | $ | 55.3 | $ | 63.6 | |||||||||
Investing Activities | |||||||||||||||||||
Acquisition of businesses, net of cash acquired | (599.7 | ) | — | (1.4 | ) | (603.9 | ) | (12.5 | ) | ||||||||||
Capital expenditures | (11.6 | ) | (8.2 | ) | (9.2 | ) | (26.7 | ) | (26.4 | ) | |||||||||
Investments (1) | (3.3 | ) | — | — | (3.3 | ) | — | ||||||||||||
Government grants | 0.7 | 0.1 | — | 0.5 | 0.8 | ||||||||||||||
Net Cash Used In Investing Activities | (613.9 | ) | (8.1 | ) | (10.6 | ) | (633.4 | ) | (38.1 | ) | |||||||||
Financing Activities | |||||||||||||||||||
Borrowings on revolving credit facilities | 150.6 | 123.3 | 33.2 | 202.6 | 188.3 | ||||||||||||||
Repayments on revolving credit facilities | (92.9 | ) | (68.5 | ) | (264.3 | ) | (384.2 | ) | (123.3 | ) | |||||||||
Repurchase of convertible notes | — | (57.1 | ) | — | — | (57.1 | ) | ||||||||||||
Borrowings on term loan | 450.0 | — | — | 450.0 | — | ||||||||||||||
Repayments on term loan | — | — | — | — | (3.0 | ) | |||||||||||||
Payments for debt issuance costs (1) | (10.9 | ) | — | (2.7 | ) | (13.6 | ) | (0.2 | ) | ||||||||||
Proceeds from exercise of stock options | 0.2 | 3.6 | 0.9 | 9.4 | 5.4 | ||||||||||||||
Common stock repurchases | — | (0.1 | ) | (0.1 | ) | (2.8 | ) | (2.4 | ) | ||||||||||
Payments for equity issuance costs | (0.6 | ) | — | (8.9 | ) | (9.5 | ) | — | |||||||||||
Issuance of shares | — | — | 295.8 | 295.8 | |||||||||||||||
Other | (0.1 | ) | — | (0.4 | ) | (0.5 | ) | (0.4 | ) | ||||||||||
Net Cash Provided By Financing Activities | 496.3 | 1.2 | 53.5 | 547.2 | 7.3 | ||||||||||||||
DISCONTINUED OPERATIONS | |||||||||||||||||||
Cash (Used In) Provided By Operating Activities | — | (2.6 | ) | — | — | 1.5 | |||||||||||||
Cash Provided By (Used In) Investing Activities | — | 0.1 | — | — | (0.8 | ) | |||||||||||||
Cash Used In Discontinued Operations | — | (2.5 | ) | — | — | 0.7 | |||||||||||||
Effect of exchange rate changes on cash | (5.9 | ) | (2.9 | ) | 0.9 | (6.5 | ) | (6.7 | ) | ||||||||||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents | (67.8 | ) | 8.7 | 76.6 | (37.4 | ) | 26.8 | ||||||||||||
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (2) | 149.5 | 149.5 | 72.9 | 119.1 | 131.4 | ||||||||||||||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD | $ | 81.7 | $ | 158.2 | $ | 149.5 | $ | 81.7 | $ | 158.2 |
(1) | Non-cash investing activities of $7.0 related to the conversion of a note receivable into an investment in Stabilis equity securities during the nine months ended September 30, 2019. |
• | $1.0 in other assets at September 30, 2019, September 30, 2018 and June 30, 2019, respectively. |
September 30, 2019 | December 31, 2018 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 80.7 | $ | 118.1 | |||
Accounts receivable, net | 224.5 | 194.8 | |||||
Inventories, net | 234.9 | 233.1 | |||||
Other current assets | 143.8 | 115.7 | |||||
Property, plant, and equipment, net | 398.9 | 361.1 | |||||
Goodwill | 798.0 | 520.7 | |||||
Identifiable intangible assets, net | 577.8 | 330.4 | |||||
Investments | 15.9 | 2.8 | |||||
Other assets | 23.3 | 21.0 | |||||
TOTAL ASSETS | $ | 2,497.8 | $ | 1,897.7 | |||
LIABILITIES AND EQUITY | |||||||
Current liabilities | $ | 374.4 | $ | 366.6 | |||
Long-term debt | 792.5 | 533.2 | |||||
Other long-term liabilities | 127.8 | 108.9 | |||||
Equity | 1,203.1 | 889.0 | |||||
TOTAL LIABILITIES AND EQUITY | $ | 2,497.8 | $ | 1,897.7 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | September 30, 2019 | September 30, 2018 | |||||||||||||||
Sales | |||||||||||||||||||
E&C Cryogenics | $ | 48.9 | $ | 35.6 | $ | 47.3 | $ | 131.3 | $ | 98.6 | |||||||||
E&C FinFans | 128.6 | 62.5 | 72.9 | 272.0 | 190.2 | ||||||||||||||
D&S West | 114.9 | 119.0 | 113.5 | 344.8 | 337.2 | ||||||||||||||
D&S East | 70.4 | 56.8 | 77.7 | 216.8 | 174.3 | ||||||||||||||
Intersegment eliminations | (5.0 | ) | (1.7 | ) | (1.8 | ) | (8.2 | ) | (6.1 | ) | |||||||||
Consolidated (1) | $ | 357.8 | $ | 272.2 | $ | 309.6 | $ | 956.7 | $ | 794.2 | |||||||||
Gross Profit | |||||||||||||||||||
E&C Cryogenics | $ | 7.9 | $ | 12.1 | $ | 10.3 | $ | 18.3 | $ | 22.0 | |||||||||
E&C FinFans | 39.8 | 14.8 | 20.3 | 79.4 | 45.6 | ||||||||||||||
D&S West | 38.1 | 44.7 | 41.7 | 119.2 | 119.0 | ||||||||||||||
D&S East | 16.3 | 11.2 | 11.3 | 36.7 | 37.1 | ||||||||||||||
Intersegment eliminations | (0.9 | ) | (0.5 | ) | (0.8 | ) | (2.5 | ) | (1.7 | ) | |||||||||
Consolidated | $ | 101.2 | $ | 82.3 | $ | 82.8 | $ | 251.1 | $ | 222.0 | |||||||||
Gross Profit Margin | |||||||||||||||||||
E&C Cryogenics | 16.2 | % | 34.0 | % | 21.8 | % | 13.9 | % | 22.3 | % | |||||||||
E&C FinFans | 30.9 | % | 23.7 | % | 27.8 | % | 29.2 | % | 24.0 | % | |||||||||
D&S West | 33.2 | % | 37.6 | % | 36.7 | % | 34.6 | % | 35.3 | % | |||||||||
D&S East | 23.2 | % | 19.7 | % | 14.5 | % | 16.9 | % | 21.3 | % | |||||||||
Consolidated | 28.3 | % | 30.2 | % | 26.7 | % | 26.2 | % | 28.0 | % | |||||||||
Operating Income (Loss) | |||||||||||||||||||
E&C Cryogenics | $ | 3.6 | $ | 6.4 | $ | — | $ | (7.1 | ) | $ | 2.9 | ||||||||
E&C FinFans | 16.2 | 5.7 | 10.3 | 36.0 | 17.9 | ||||||||||||||
D&S West | 24.9 | 31.9 | 27.8 | 77.7 | 77.7 | ||||||||||||||
D&S East | 7.1 | 3.3 | 2.1 | 7.1 | 13.5 | ||||||||||||||
Corporate | (21.0 | ) | (15.3 | ) | (14.1 | ) | (51.4 | ) | (44.5 | ) | |||||||||
Intersegment eliminations | (0.9 | ) | (0.5 | ) | (0.8 | ) | (2.5 | ) | (1.7 | ) | |||||||||
Consolidated (1) (2) (3) (4) | $ | 29.9 | $ | 31.5 | $ | 25.3 | $ | 59.8 | $ | 65.8 | |||||||||
Operating Margin (Loss) | |||||||||||||||||||
E&C Cryogenics | 7.4 | % | 18.0 | % | — | % | (5.4 | )% | 2.9 | % | |||||||||
E&C FinFans | 12.6 | % | 9.1 | % | 14.1 | % | 13.2 | % | 9.4 | % | |||||||||
D&S West | 21.7 | % | 26.8 | % | 24.5 | % | 22.5 | % | 23.0 | % | |||||||||
D&S East | 10.1 | % | 5.8 | % | 2.7 | % | 3.3 | % | 7.7 | % | |||||||||
Consolidated | 8.4 | % | 11.6 | % | 8.2 | % | 6.3 | % | 8.3 | % |
(1) | Includes sales and operating income for VRV, included in the E&C Cryogenics and D&S East segment results since the acquisition date, November 15, 2018 and sales and operating income for AXC, included in E&C FinFans segment results since the acquisition date, July 1, 2019, as follows: |
• | Sales were $86.0 (E&C Cryogenics: $13.5, E&C FinFans: $60.1, D&S East: $12.4) and $28.9 (E&C Cryogenics: $12.9, D&S East: $16.0) for the three months ended September 30, 2019 and for the three months ended June 30, 2019, respectively. |
• | Sales were $137.1 (E&C Cryogenics: $35.0, E&C FinFans: $60.1, D&S East: $42.0 ) for the nine months ended September 30, 2019 . |
• | Operating income (loss) was $5.0 (E&C Cryogenics: $2.6, E&C FinFans: $2.6, D&S East: $(0.2)) and $(1.1) (E&C Cryogenics: $(2.8), D&S East: $1.7) for the three months ended September 30, 2019 and for the three months ended June 30, 2019, respectively. |
• | Operating (loss) income was $(4.2) (E&C Cryogenics: $(3.0), E&C FinFans: $2.6, D&S East: $(3.8)) for the nine months ended September 30, 2019 . |
(2) | Restructuring costs for the three months ended: |
• | September 30, 2019 were $1.5 ($0.2 – E&C Cryogenics, $0.6 - E&C FinFans, $0.4 – D&S West, $0.3 – D&S East, and $0.0 – Corporate). |
• | September 30, 2018 were $2.0 ($0.1 – E&C FinFans, $0.1 – D&S East, and $1.8 – Corporate). |
• | June 30, 2019 were $4.4 ($(1.1) – E&C Cryogenics, $0.1 – D&S West, and $5.4 - D&S East). |
(3) | Includes transaction-related costs of: |
• | $4.3, $2.0 and $1.8 for the three months ended September 30, 2019 and 2018 and June 30, 2019, respectively, and |
• | $7.0 and $4.1 for the nine months ended September 30, 2019 and 2018, respectively. |
(4) | Includes $0.8 related to AXC integration activities during the third quarter of 2019 (E&C FinFans: $0.7, Corporate: $0.1), and $0.6 (D&S East: $0.2, Corporate: $0.4) and $1.8 (D&S East: $0.2, Corporate: $1.6) related to VRV integration activities for the three and nine months ended September 30, 2019, respectively. |
Three Months Ended | |||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | |||||||||
Orders | |||||||||||
E&C Cryogenics(1) (4) | $ | 35.1 | $ | 23.5 | $ | 49.6 | |||||
E&C FinFans (2) | 63.0 | 61.4 | 77.8 | ||||||||
D&S West | 111.6 | 103.3 | 115.8 | ||||||||
D&S East (3) | 76.5 | 75.6 | 78.8 | ||||||||
Consolidated | $ | 286.2 | $ | 263.8 | $ | 322.0 |
As of | |||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | |||||||||
Backlog | |||||||||||
E&C Cryogenics(1) (4) (5) | $ | 288.3 | $ | 94.9 | $ | 301.9 | |||||
E&C FinFans (2) | 136.4 | 131.1 | 117.4 | ||||||||
D&S West | 127.1 | 130.7 | 130.1 | ||||||||
D&S East (3) | 203.8 | 144.8 | 203.4 | ||||||||
Consolidated | $ | 755.6 | $ | 501.5 | $ | 752.8 |
(1) | E&C Cryogenics orders include $10.8 and $15.4 in orders related to VRV for the three months ended September 30, 2019 and June 30, 2019, respectively. E&C Cryogenics backlog as of September 30, 2019 and June 30, 2019 includes $43.4 and $46.2 related to VRV, respectively. |
(2) | E&C FinFans orders include $23.6 in orders related to AXC for the three months ended September 30, 2019. E&C FinFans backlog as of September 30, 2019 includes $47.7 related to AXC. |
(3) | D&S East orders include $12.5 and $12.4 in orders related to VRV for the three months ended September 30, 2019 and June 30, 2019, respectively. D&S East backlog as of September 30, 2019 and June 30, 2019 includes $38.3 and $39.6 related to VRV, respectively. |
(4) | E&C Cryogenics orders and backlog for the three months ended March 31, 2019 include a $135 million order for the cold box and brazed aluminum heat exchanger equipment content on Venture Global’s Calcasieu Pass liquefied natural gas (LNG) export terminal project. |
(5) | Included in the E&C Cryogenics backlog for all periods presented is approximately $40 million related to the previously announced Magnolia LNG order. |
Three Months Ended | |||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | |||||||||
Earnings per diluted share as reported (U.S. GAAP) – Continuing Operations | $ | 0.51 | $ | 0.65 | $ | 0.41 | |||||
Restructuring, transaction-related and other costs (1) | 0.17 | 0.07 | 0.19 | ||||||||
Commercial and legal settlements | 0.05 | — | — | ||||||||
Integration and step up costs (2) | 0.03 | — | 0.02 | ||||||||
Dilution impact of convertible notes (3) | 0.01 | 0.02 | 0.02 | ||||||||
Accelerated tax impacts related to China facility closure (4) | — | — | 0.04 | ||||||||
Adjusted earnings per diluted share (non-GAAP) – Continuing Operations | $ | 0.77 | $ | 0.74 | $ | 0.68 |
Three Months Ended | |||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | |||||||||
Earnings per diluted share as reported (U.S. GAAP) – Discontinued Operations | $ | — | $ | 0.02 | $ | — | |||||
Adjusted earnings per diluted share as reported (U.S. GAAP) –Discontinued Operations | $ | — | $ | 0.02 | $ | — |
Three Months Ended | |||||||||||
September 30, 2019 | September 30, 2018 | June 30, 2019 | |||||||||
Earnings per diluted share as reported (U.S. GAAP) – Consolidated | $ | 0.51 | $ | 0.67 | $ | 0.41 | |||||
Restructuring, transaction-related and other costs (1) | 0.17 | 0.07 | 0.19 | ||||||||
Commercial and legal settlements | 0.05 | — | — | ||||||||
Integration and step up costs (2) | 0.03 | — | 0.02 | ||||||||
Dilution impact of convertible notes (3) | 0.01 | 0.02 | 0.02 | ||||||||
Accelerated tax impacts related to China facility closure (4) | — | — | 0.04 | ||||||||
Adjusted earnings per diluted share (non-GAAP) – Consolidated | $ | 0.77 | $ | 0.76 | $ | 0.68 |
(1) | During the third quarter of 2019, we recorded $1.5 in restructuring costs that primarily related to facility consolidation in our E&C FinFans segment, as well as departmental restructuring, including headcount reductions. During the third quarter of 2019, we also incurred $4.3 in transaction-related costs and $1.6 in other one-time costs that primarily related to the departure and election of certain officers of the Company. During the first half of 2019, we recorded $11.8 of restructuring costs primarily related to the consolidation of certain of our facilities and streamlining commercial activities within our Lifecycle business in our previous E&C segment and geographic realignment of manufacturing capacity in D&S East. |
(2) | Includes $1.7 in expense recognized in cost of sales related to inventory step-up for the first half of 2019. We also incurred $0.8 related to AXC integration activities during the third quarter of 2019, and $0.6 and $1.8 related to VRV integration activities in the three and nine months ended September 30, 2019, respectively. |
(3) | Includes an additional 0.59 and 1.33 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three and nine months ended September 30, 2019, respectively. The associated hedge, which helps offset this dilution, cannot be taken into account under U.S. GAAP. If the hedge could have been considered, it would have reduced the additional shares by 0.59 and 1.04 for the three and nine months ended September 30, 2019, respectively. |
(4) | Includes $1.7 related to the accelerated tax impacts of closing a China facility. |