EX-99.1 3 dex991.txt PRESS RELEASE, DATED APRIL 1, 2003. EXHIBIT 99.1 [CHART INDUSTRIES, INC. LETTERHEAD] For Immediate Release CHART INDUSTRIES REPORTS FOURTH-QUARTER 2002 FINANCIAL RESULTS AND CONTINUING NEGOTIATIONS WITH SENIOR LENDERS CLEVELAND, OH - April 1, 2003 - Chart Industries, Inc. (NYSE:CTI) today reported financial results for its fourth quarter and year ended December 31, 2002. Sales for the fourth quarter of 2002 were $75.2 million, up two percent from $73.6 million for the corresponding quarter of 2001. The net loss was $127.0 million, or $5.01 per diluted share, for the fourth quarter of 2002 compared with a net loss of $4.0 million, or $0.16 per diluted share, for the fourth quarter of 2001. The 2002 fourth quarter loss resulted from significant goodwill impairment, employee separation and plant closure cost and income tax charges during the period. Orders in the fourth quarter of 2002 totaled $66.3 million, compared with $87.8 million in the third quarter of 2002 and $80.3 million in the fourth quarter of 2001. Sales for 2002 decreased to $296.3 million from $328.0 million for 2001. The net loss for 2002 was $130.8 million, or $5.22 per diluted share, compared with a net loss of $5.2 million, or $0.21 per diluted share, for 2001. The Company is in default under its senior debt outstanding under its Credit Facility and Incremental Credit Facility (the "Senior Debt"), and has been in negotiations with its senior lenders to amend the terms of the Senior Debt, obtain waivers of the Company's defaults and reduce its leverage by restructuring the Senior Debt. These negotiations continue and may result in an exchange of a portion of the Senior Debt for a substantial equity ownership position in the Company and substantial dilution of current shareholders' ownership interests in the Company. There can be no assurance that the Company will be able to consummate such a restructuring transaction, otherwise renegotiate its Senior Debt outstanding or obtain waivers of defaults under its Senior Debt. If the Company is unable to successfully restructure its Senior Debt, the Company may be required to pursue other restructuring alternatives. As a result of the Company's defaults under its Senior Debt, the Company is required to classify its $256.9 million of Senior Debt as a current liability on its consolidated balance sheet. This results in a working capital deficiency, and the Company's independent accountants will issue a "going concern" qualification to their opinion on the Company's financial statements for the year ended December 31, 2002. Commenting on the status of the Senior Debt restructuring negotiations, Arthur S. Holmes, Chairman and Chief Executive Officer said, "During the first quarter of 2003, a substantial percentage of the Company's debt was sold by the original lenders to new investors. These changes in the composition of the senior lender group have complicated our debt restructuring negotiations and have contributed to delays in the process. I am hopeful that the Company will be able to reach a timely agreement with the lenders that will satisfy all constituents." During the fourth quarter of 2002, the Company recorded a non-cash impairment charge of $92.4 million for the write-off of non-deductible goodwill related to its Distribution and Storage segment. The Company also recorded $10.4 million of employee separation and plant closure costs in the fourth quarter of 2002, primarily related to the previously announced closure of its heat exchanger manufacturing facility in the U.K. Additionally, as a result of the Company's performance and its cumulative tax loss position, the Company recorded a non-cash income tax charge of $32.6 million to increase the Company's valuation allowance for net deferred tax assets. These charges resulted in an increase in net loss of $131.3 million, or $5.18 per diluted share, in the fourth quarter of 2002. These charges compare with $0.6 million of employee separation and plant closure costs recorded in the fourth quarter of 2001, which resulted in an increase in net loss of $0.4 million, or $0.02 per diluted share, in the fourth quarter of 2001. For the full year 2002, the Company recorded the previously mentioned $92.4 million goodwill impairment charge and $32.6 million income tax valuation allowance charge, $13.9 million of employee separation and plant closure costs and a $1.4 million gain related to the sale of a product line. The net effect of these items resulted in an increase in 2002 net loss of $132.5 million, or $5.28 per diluted share. These items compare with $2.4 million of employee separation and plant closure costs and a $0.5 million gain related to the sale of a product line recorded in 2001. The net effect of these items resulted in an increase in 2001 net loss of $1.1 million, or $0.05 per diluted share. Effective January 1, 2002, the Company adopted the non-amortization provisions of Statement of Financial Accounting Standards ("SFAS") No. 142 "Goodwill and Other Intangible Assets." If such provisions had been in effect for 2001, the Company would have had a net loss in the fourth quarter of 2001 of $2.7 million, or $0.11 per diluted share, and net income for the 2001 full year of $0.1 million, or $0.00 per diluted share. 2 In accordance with the Company's previously announced organizational changes, effective October 1, 2002, the Company is now reporting segment financial performance as follows: Energy and Chemicals ("E&C") - Includes Chart's Process Systems, Heat Exchangers, NexGen Fueling and Greenville Tube business units. Distribution & Storage ("D&S") - Includes Chart's cryogenic containment products, which span the entire spectrum of the industrial gas market from small customers requiring cryogenic packaged gases to users requiring custom-engineered cryogenic storage systems. Biomedical - Includes Chart's cryo-biological, medical, telemetry and other home healthcare product lines, its aluminum container product line, which serves agricultural markets, and a variety of other end-use applications. Commenting on Chart's results for the fourth quarter and full year of 2002, Mr. Holmes said, "The substantial non-cash charges to write off goodwill and fully reserve net deferred tax assets have obviously dwarfed the Company's operating performance in the period. The significant costs related to the consolidation of our manufacturing facilities also contributed to the masking of our operating performance. Finally, the Company recorded a significant charge to increase environmental reserves to provide for long-term remediation of the Company's identified and estimated environmental liabilities. On an operating basis, the fourth quarter of 2002 was actually quite close to planned results, before accounting for all of these significant period charges." Mr. Holmes commented on the Company's sales, stating, "Following a weak first-quarter start, our 2002 sales stabilized at approximately $75 million per quarter, or approximately $300 million annually. This sales level is down almost 10 percent from 2001. Sales in the E&C segment were relatively flat year-over-year but are showing signs of increased recovery going forward based upon strong hydrocarbon processing activity. Our D&S segment took a significant hit in sales this year, dropping 25 percent from 2001 levels, reflecting the economic slowdown in the industrial sectors of North America and Europe. The Biomedical segment demonstrated a 17 percent increase in sales during 2002 over 2001 primarily fueled by strong demand for our MRI products." Mr. Holmes further commented on orders for Chart's three business segments, stating, "Our E&C segment enjoyed a much stronger year for order intake, posting an increase in orders of 31 percent over 2001. Our E&C businesses continue to actively bid many natural gas, ethylene and other large hydrocarbon projects worldwide. The healthy order intake has provided a more robust backlog for this business going into 2003. However, the industrial gas market continued to experience 3 depressed demand awaiting the recovery of this sector. Recently, there has been some evidence of improved industrial gas demand in Asia. Following the shutdown of our U.K. heat exchanger operation, we expect improved profitability for the E&C segment." "2002 orders in the D&S segment decreased substantially compared with 2001, caused by the economic slowdown and reductions in capital spending. A bright spot is our packaged gas products. New products serving the beverage market are demonstrating increasing demand and our efforts to convert industrial gas end-users to liquid supply are succeeding. In addition, the restructuring efforts commenced in 2002 are beginning to produce lower costs and improved profitability for D&S products, partially offsetting downward price pressures from the weak industrial markets. LNG receiving and distribution activity in Europe also is creating strong demand for D&S products." "Biomedical products experienced increased demand in 2002, with orders up 11 percent over 2001. Although the product mix is changing, we expect continued strong growth for this segment in 2003." Mr. Holmes concluded, "The completion of our planned manufacturing consolidations and operational restructuring activities in the first half of 2003 should position the Company for improved operating performance. Our goal is to conclude our debt restructuring in a way that will provide for our long-term capital needs and remove the aura of uncertainty that has characterized our financial situation in 2002." Financial highlights are as follows (all figures are in thousands of dollars except per-share amounts, which are based on average shares outstanding on a diluted basis):
Three months ended December 31, 2002 2001 % Change -------- -------- -------- Sales $ 75,171 $ 73,566 2.2% Gross profit 19,795 16,581 19.4% Net loss (126,969) (3,969) N/M Net loss per share - assuming dilution (5.01) (0.16) N/M Year ended December 31, 2002 2001 % Change -------- -------- -------- Sales $296,284 $327,990 (9.7)% Gross profit 76,297 86,361 (11.7)% Net loss (130,785) (5,158) N/M Net loss per share - assuming dilution (5.22) (0.21) N/M
N/M -- (Not meaningful) 4 Consistent with previously announced plans, the Company's Wolverhampton, U.K. manufacturing facility, operated by Chart Heat Exchangers Limited ("CHEL"), has been closed and all future heat exchanger manufacturing will be conducted by the Company's LaCrosse, Wisconsin facility. On March 28, 2003, CHEL filed for a voluntary administration under the U.K. Insolvency Act 1986. CHEL's application for voluntary administration was approved on April 1, 2003 and an administrator has been appointed. CHEL's net pension plan obligations have increased significantly, primarily due to a decline in plan asset values and interest rates, resulting in a plan deficit. Based on the Company's present financial condition, it has determined not to advance funds at this time to CHEL in amounts necessary to fund CHEL's obligations. CHEL does not have the necessary funds to enable it to fund its net pension plan deficit, pay remaining severance due to former employees or pay other creditors. As previously announced, the Company was notified in the fourth quarter of 2002 by the New York Stock Exchange ("NYSE") that its common stock was below the NYSE's criteria for continued listing because the average closing price of its stock over a consecutive 30-day trading period before notification was less than $1.00. At December 31, 2002, the Company has a shareholders' deficit of $81.6 million, which is below the NYSE's continued listing criteria pertaining to shareholders' equity, which requires a minimum of $50.0 million shareholders' equity given Chart's recent market capitalization. Under NYSE guidelines, the Company must cure the $1.00 trading price requirement by the time of its 2003 annual shareholders' meeting if the Company is pursuing a cure that requires shareholder approval, and the NYSE may in certain cases allow more time to cure the shareholders' equity standard. The Company is considering implementing several measures which may cure these deficiencies, but can give no assurance that it will obtain NYSE approval to remain listed or ultimately be able to maintain NYSE standards. If the Company is unable to obtain NYSE approval to remain listed or unable ultimately to achieve compliance with NYSE continued listing standards, the NYSE will delist the Company's common stock. In such a case, the Company currently plans to seek an alternative trading venue for its common stock. FOURTH-QUARTER 2002 FINANCIAL RESULTS Sales for the fourth quarter of 2002 were $75.2 million versus $73.6 million for the fourth quarter of 2001, an increase of $1.6 million, or 2.2 percent. E&C segment sales increased 31 percent to $25.3 million in the fourth quarter of 2002, from sales of $19.2 million in the fourth quarter of 2001. The 5 Company commenced production on the heat exchangers and cold boxes for a significant Bechtel LNG facility order adding $2.3 million in sales to the fourth quarter of 2002. General improvements in the hydrocarbon processing market of the E&C segment contributed to the additional increase in sales. D&S segment sales decreased 14 percent, with fourth-quarter 2002 sales of $34.0 million, compared with $39.5 million for the same quarter in 2001. A $4.9 million decline in the worldwide standard tank business, where the Company's customers continue to delay capital spending, primarily accounted for this decrease. Biomedical segment sales increased seven percent to $15.9 million in the fourth quarter of 2002, compared with sales of $14.9 million in the fourth quarter of 2001. This increase was primarily attributable to MRI product sales, which were up $0.7 million between the two quarters. Gross profit for the fourth quarter of 2002 was $19.8 million versus $16.6 million for the fourth quarter of 2002, an increase of $3.2 million, or 19.4 percent. Gross margin for the fourth quarter of 2002 was 26.3 percent versus 22.5 percent for the fourth quarter of 2001. Gross profit in the E&C segment was reduced by $0.6 million in the fourth quarter of 2002 for the non-cash write-off of inventory resulting from the Wolverhampton, U.K. facility closure. In the fourth quarter of 2001, the Company recorded a non-cash inventory valuation charge of $1.9 million included in cost of sales for the write-down to fair value of inventory related to a product line that was sold by the Company. Significant improvement in the E&C segment gross margin, led by improved pricing and higher volume, was offset by under-absorption of manufacturing facility fixed costs driven by low production volumes in the D&S segment. Selling, general and administrative ("SG&A") expense was $22.9 million for the fourth quarter of 2002 compared with $15.5 million in the fourth quarter of 2001. As a percentage of sales, SG&A expense was 30.4 percent for the fourth quarter of 2002 versus 21.1 percent for the fourth quarter of 2001. In the fourth quarter of 2002, the Company recorded a $4.7 million charge to increase its reserve for potential environmental remediation activities based upon the results of a recently completed Phase II environmental review in connection with a business the Company is considering selling. This charge makes up 6.2 percent of the overall SG&A expense as a percentage of sales in the fourth quarter of 2002. The Company also recorded $1.2 million of SG&A expense in the fourth quarter of 2002 for fees paid to professional advisors related to the Company's efforts to restructure its senior debt, versus $0.3 million expensed in the fourth quarter of 2001. Finally, the Company 6 experienced higher medical, workers compensation and insurance costs in the fourth quarter of 2002 as compared to the fourth quarter of 2001. The Company recorded $1.2 million and $5.0 million of goodwill amortization in the fourth quarter and full year of 2001, respectively. Due to the Company's adoption of SFAS No. 142 on January 1, 2002, the Company is no longer recording goodwill amortization. The Company performed its annual impairment test of goodwill as of October 1, 2002 using valuation techniques appropriate under SFAS No. 142. These tests resulted in the fair value of the Company's D&S reporting unit being less than its carrying value including goodwill, which caused the Company to advance to step two of SFAS No. 142 and engage a valuation specialist to provide valuations of the D&S reporting unit's tangible fixed assets and identifiable intangible assets. Although those procedures confirmed the value of the reporting unit's tangible assets exceeded their carrying value, goodwill of the D&S reporting unit was determined to be impaired. As a result, in the fourth quarter of 2002 the Company recorded a non-cash impairment charge of $92.4 million, or $3.64 per diluted share, to write-off non-deductible goodwill. This non-cash charge was due to the combination of a reduction in the overall estimated enterprise value of the Company, attributable to Chart's leverage situation and recent financial performance, and a reduction in the specific estimated value of the D&S reporting unit, caused by the worldwide slowdown experienced by the manufacturing sectors of the industrialized world, reductions in capital expenditures in the consolidating global industrial gas industry, and a lowering of expectations for future performance of this segment for these same reasons. During the fourth quarter of 2002, the Company recorded $10.4 million of employee separation and plant closure costs primarily related to the previously announced closure of its Wolverhampton, U.K. heat exchanger manufacturing facility. These Wolverhampton charges included $2.9 million of actuarially determined pension expense based upon the curtailment of the U.K. pension plan, $2.9 million of severance and other employee related benefits and $2.3 million of non-cash charges to write-down assets held for sale to their estimated fair value and to write-off acquisition costs. Additional employee separation and plant closure costs recorded in the fourth quarter of 2002 related to increasing reserves for payments on leased facilities that the Company has exited, but has been unable to sublet in the current economy. The Company recorded $0.6 million of employee separation and plant closure costs in the fourth quarter of 2001 primarily related to final steps in the closure of certain cryogenic services business facilities. 7 Net interest expense for the fourth quarter of 2002 was $4.5 million versus $4.1 million for the fourth quarter of 2001. The Company recorded $0.8 million of derivative contracts valuation expense in the fourth quarter of 2002, compared with $0.4 million in the fourth quarter of 2001, primarily related to a further decline in the forward interest rate yield curve. The Company's one remaining interest rate collar covering $29.8 million of the Senior Debt outstanding at December 31, 2002 expires in March 2006. As of December 31, 2002, the Company had borrowings of $256.9 million on its Senior Debt and was in default due to violations of the financial covenants of the Credit Facility. Income tax expense of $14.9 million in the fourth quarter of 2002 includes a tax benefit on the Company's operating loss offset by a $32.6 million income tax charge to increase the Company's valuation allowance for its net deferred tax assets, resulting from the Company's performance, its cumulative tax loss position, and management's assessment that it is more likely than not that the net deferred tax assets will not be realized. Although these net deferred tax assets have been fully reserved, they are still available to be utilized by the Company to offset income taxes payable should the Company generate sufficient taxable income in the future. As a result of the foregoing, the Company reported a net loss for the fourth quarter of 2002 of $127.0 million, or $5.01 per diluted share, versus a net loss of $4.0 million, or $0.16 per diluted share, for the fourth quarter of 2001. The Company's operations provided $8.9 million of cash in 2002 compared with $13.3 million in 2001. The Company's 2002 operating cash flow was primarily generated by an income tax refund of $9.3 million received in the third quarter of 2002 due to the new tax law allowing for a five-year carry-back of net operating losses. Capital expenditures in 2002 were $3.0 million compared with $8.1 million in 2001. The Company limited its capital expenditures in 2002 to a maintenance level in order to conserve cash. The Company presently does not have any large capital projects in process and anticipates capital expenditures to average less than $1.0 million per quarter in 2003. Pursuant to the Company's Credit Agreement, the Company was required to issue to its senior lenders warrants at December 31, 2002 to purchase, in the aggregate, 773,133 shares of Chart common stock at an exercise price of $0.75 per share. These warrants have been valued at $0.4 million and will be amortized to financing costs amortization expense over the remaining term of the Company's Credit Agreement, which expires in March 2006. In addition, the interest rate on the Company's Senior Debt increased by 25 basis points beginning January 1, 2003. 8 FOURTH-QUARTER 2002 ORDERS AND BACKLOG Chart's consolidated orders for the fourth quarter of 2002 totaled $66.3 million, compared with orders of $87.8 million for the third quarter of 2002. Chart's consolidated firm order backlog at December 31, 2002 was $69.3 million, compared with $78.3 million at September 30, 2002. E&C orders for the fourth quarter of 2002 totaled $16.4 million, compared with $38.8 million in the third quarter of 2002. The decrease in orders in the fourth quarter of 2002 is attributable to the inclusion in the third quarter of 2002 of significant orders from Bechtel for heat exchangers and cold boxes to equip a large LNG facility. E&C backlog at December 31, 2002 was $44.2 million, down 17 percent from the September 30, 2002 backlog of $53.1 million, but a strong 36 percent increase over the $32.5 million in backlog at the start of 2002. D&S orders for the fourth quarter of 2002 totaled $33.6 million, compared with $30.2 million for the third quarter of 2002, primarily as a result of improved orders for industrial and beverage packaged gas systems. Biomedical orders for the fourth quarter of 2002 totaled $16.3 million, compared with $18.8 million for the third quarter of 2002. A weak European market for liquid oxygen systems was the primary cause of this fourth-quarter decline in orders. General This release contains forward-looking statements that are subject to certain risks and uncertainties which could cause actual results to differ materially from those expressed or implied by such statements or could reduce the liquidity of the Company's common stock. Such risks and uncertainties include, but are not limited to, continued slowness in Chart's major markets, the impact of competition, the timing and effectiveness of operational changes and restructuring initiatives intended to increase efficiency and productivity and reduce operating costs, the ability of Chart to satisfy covenants and make required payments under its credit facilities and the response of Chart's lenders to Chart's inability to do so, the success of Chart in restructuring its debt arrangements, obtaining additional sources of capital and selling certain assets and the ultimate terms and conditions of such transactions, the Company's ability to satisfy the NYSE's continued listing requirements and remain listed on the NYSE, changes in worldwide economical and political conditions, the threat of terrorism and the impact of responses to that threat, the war in Iraq and foreign currency fluctuations 9 that may affect worldwide results of operations. The Company does not assume any obligation to update any of these forward-looking statements. Chart Industries, Inc. is a leading global supplier of standard and custom-engineered products and systems serving a wide variety of low-temperature and cryogenic applications. Headquartered in Cleveland, Ohio, Chart has domestic operations located in 11 states and international operations located in Australia, China, the Czech Republic, Germany and the United Kingdom. For more information on Chart Industries, Inc. visit the Company's web site at www.chart-ind.com. Contact: Michael F. Biehl, Chief Financial Officer, 440-753-1490 10 CHART INDUSTRIES, INC. QUARTERLY SEGMENT INFORMATION (UNAUDITED) LAST FIVE-QUARTER TREND (1) (Dollars in thousands)
2001 2002 ---------------------- -------------------------------------------------------------- Fourth Full First Second Third Fourth Full Quarter Year Quarter Quarter Quarter Quarter Year --------- --------- --------- --------- --------- ---------- --------- Sales Energy & Chemicals $ 19,240 $ 90,203 $ 20,107 $ 26,655 $ 21,062 $ 25,254 $93,078 Distribution & Storage 39,472 179,830 32,227 35,184 34,167 33,971 135,549 Biomedical 14,854 57,957 15,374 17,341 18,996 15,946 67,657 --------- --------- --------- --------- --------- ---------- --------- Total $ 73,566 $ 327,990 $ 67,708 $ 79,180 $ 74,225 $ 75,171 $ 296,284 ========= ========= ========= ========= ========= ========== ========= Gross Profit Energy & Chemicals $ 3,911 $ 20,336 $ 5,592 $ 6,515 $ 7,526 $ 5,679 $ 25,312 Distribution & Storage 9,218 45,112 6,622 7,563 7,868 8,557 30,610 Biomedical 3,452 20,913 4,545 6,513 3,758 5,559 20,375 --------- --------- --------- --------- --------- ---------- --------- Total $ 16,581 $ 86,361 $ 16,759 $ 20,591 $ 19,152 $ 19,795 $ 76,297 ========= ========= ========= ========= ========= ========== ========= Gross Profit Margin Energy & Chemicals 26.3% 22.5% 36.4% 37.6% 39.6% 35.6% 27.2% Distribution & Storage 23.4% 25.1% 20.5% 21.5% 23.0% 25.2% 22.6% Biomedical 17.9% 36.1% 22.6% 24.4% 17.8% 22.0% 30.1% Total 22.5% 26.3% 24.8% 26.0% 25.8% 26.3% 25.8% Orders Energy & Chemicals $ 31,114 $ 85,091 $ 31,310 $ 25,030 $ 38,750 $ 16,355 $ 111,445 Distribution & Storage 32,676 167,061 30,240 35,009 30,195 33,639 129,083 Biomedical 16,475 59,536 13,909 17,190 18,839 16,327 66,265 --------- --------- --------- --------- --------- ---------- --------- Total $ 80,265 $ 311,688 $ 75,459 $ 77,229 $ 87,784 $ 66,321 $ 306,793 ========= ========= ========= ========= ========= ========== ========= Backlog Energy & Chemicals $ 32,479 $ 42,902 $ 38,109 $ 53,141 $ 44,239 Distribution & Storage 28,042 28,553 28,342 23,626 23,311 Biomedical 4,291 2,382 2,355 1,532 1,790 --------- --------- --------- --------- ---------- Total $ 64,812 $ 73,837 $ 68,806 $ 78,299 $ 69,340 ========= ========= ========= ========= ==========
(1) Segment information for all periods presented has been restated to conform to the Company's current business segments. 11 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Dollars in thousands)
December 31, -------------------------------------- 2002 2001 ------------ ----------- (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 7,225 $ 11,801 Accounts receivable, net 44,732 45,427 Inventories, net 51,914 56,490 Other current assets 27,588 26,062 ------------ ----------- Total Current Assets 131,459 139,780 Property, plant and equipment, net 56,889 62,070 Goodwill 77,232 168,282 Other assets, net 13,714 38,848 ------------ ----------- TOTAL ASSETS $ 279,294 $ 408,980 ============ =========== LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY Current Liabilities Accounts payable $ 23,084 $ 25,634 Customer advances and billings in excess of contract revenue 10,037 9,290 Accrued expenses and other current liabilities 38,262 35,617 Current portion of long-term debt 262,739 12,963 ------------ ----------- Total Current Liabilities 334,122 83,504 Long-term debt 1,161 259,120 Other long-term liabilities 25,628 17,016 Shareholders' (Deficit) Equity (81,617) 49,340 ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY $ 279,294 $ 408,980 ============ ===========
12 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars and shares in thousands, except per share amounts)
Three Months Ended Year Ended December 31, December 31, ------------------------- ------------------------- 2002 2001 2002 2001 --------- --------- --------- --------- (Unaudited) (Unaudited) Sales $ 75,171 $ 73,566 $ 296,284 $ 327,990 Cost of sales 55,376 56,985 219,987 241,629 --------- --------- --------- --------- Gross profit 19,795 16,581 76,297 86,361 Selling, general and administrative expense 22,888 15,496 68,001 58,561 Goodwill impairment charge 92,379 92,379 Goodwill amortization expense 1,239 5,017 Employee separation and plant closure costs 10,404 638 13,887 2,375 Equity loss (income) in joint venture 13 (146) (369) (525) --------- --------- --------- --------- 125,684 17,227 173,898 65,428 --------- --------- --------- --------- Operating (loss) income (105,889) (646) (97,601) 20,933 Other (expense) income, net (6,174) (4,250) (21,996) (25,494) --------- --------- --------- --------- Loss before income taxes, minority interest and cumulative effect of change in accounting principle (112,063) (4,896) (119,597) (4,561) Income tax expense (benefit) 14,878 (942) 11,136 398 --------- --------- --------- --------- Loss before minority interest and cumulative effect of change in accounting principle (126,941) (3,954) (130,733) (4,959) Minority interest, net of taxes (28) (15) (52) (111) --------- --------- --------- --------- Loss before cumulative effect of change in accounting principle (126,969) (3,969) (130,785) (5,070) Cumulative effect of change in accounting principle, net of taxes (88) --------- --------- --------- --------- Net loss $(126,969) $ (3,969) $(130,785) $ (5,158) ========= ========= ========= ========= Net loss per common share - basic and assuming dilution: Loss before cumulative effect of change in accounting principle $ (5.01) $ (0.16) $ (5.22) $ (0.21) Cumulative effect of change in accounting principle, net of taxes 0.00 --------- --------- --------- --------- Net loss per common share - basic and assuming dilution $ (5.01) $ (0.16) $ (5.22) $ (0.21) ========= ========= ========= ========= Shares used in per share calculations - basic and assuming dilution 25,358 24,736 25,073 24,573 ========= ========= ========= =========
13 CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands)
Years ended December 31, ------------------------ 2002 2001 ----------- ---------- (Unaudited) OPERATING ACTIVITIES Net loss $(130,785) $ (5,158) Adjustments to reconcile net loss to net cash provided by operating activities: Cumulative effect of change in accounting principle 88 Financing costs amortization 3,159 1,475 Financing costs expensed 4,911 261 Employee separation and plant closure costs 3,858 1,403 Gain on sale of assets (1,420) (538) Goodwill impairment charge 92,379 Depreciation and amortization 11,709 16,712 Other non-cash operating activities 12,195 821 Increase (decrease) in cash resulting from changes in operating assets and liabilities: Accounts receivable 2,178 7,207 Inventory and other current assets 293 13,268 Accounts payable and other current liabilities 974 (27,027) Income tax refund 9,258 Customer advances and billings in excess of contract revenue 181 4,761 --------- --------- Net Cash Provided By Operating Activities 8,890 13,273 INVESTING ACTIVITIES Capital expenditures (3,028) (8,145) Proceeds from sale of assets 2,300 2,365 Dividends received from joint venture 492 Other investing activities 1,352 (714) --------- --------- Net Cash Provided By (Used In) Investing Activities 1,116 (6,494) FINANCING ACTIVITIES Borrowings on revolving credit facilities 46,354 106,740 Repayments on revolving credit facilities (48,634) (89,945) Principal payments on long-term debt (6,657) (15,313) Other financing activities (6,927) (978) --------- --------- Net Cash (Used In) Provided By Financing Activities (15,864) 504 --------- --------- Net (decrease) increase in cash and cash equivalents (5,858) 7,283 Effect of exchange rate changes on cash 1,282 (403) Cash and cash equivalents at beginning of year 11,801 4,921 --------- --------- CASH AND CASH EQUIVALENTS AT END OF YEAR $ 7,225 $ 11,801 ========= =========
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