-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, U/4vCsOkUrxypfVCPG+9blwOQoxd1tpCTtB0NBUXjJ1qDQbRadLgXLnxrYeh8n9b GBgWgLgu/tGX/N2MaB3++w== 0001047469-99-007374.txt : 19990226 0001047469-99-007374.hdr.sgml : 19990226 ACCESSION NUMBER: 0001047469-99-007374 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990225 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990225 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHART INDUSTRIES INC CENTRAL INDEX KEY: 0000892553 STANDARD INDUSTRIAL CLASSIFICATION: FABRICATED PLATE WORK (BOILER SHOPS) [3443] IRS NUMBER: 341712937 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11442 FILM NUMBER: 99550153 BUSINESS ADDRESS: STREET 1: 5885 LANDERBROOK DRIVE STREET 2: SUITE 150 CITY: MAYFIELD HEIGHTS STATE: OH ZIP: 44124 BUSINESS PHONE: 4407531490 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------- FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 25, 1999 Chart Industries, Inc. ------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 1-11442 34-1712937 - ------------------ -------------- -------------------- (State or other (Commission (I.R.S. Employer jurisdiction of File Number) Identification No.) incorporation) 5885 Landerbrook Drive, Suite 150, Cleveland, Ohio 44124 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Registrant's telephone number, including area code: (440) 753-1490 --------------------------- Item 5. OTHER EVENTS. Chart Industries, Inc. (the "Company") issued a News Release on February 8, 1999, a copy of which, along with certain other financial information, is filed as Exhibit 99. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. 99 News Release dated February 8, 1999, from the Company; Company quarterly segment information for the year ended December 31, 1998. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. CHART INDUSTRIES, INC. Date: February 25, 1999 By: /s/ Thomas F. McKee ----------------------------------------- Thomas F. McKee Secretary 3 EXHIBIT INDEX
Exhibit Description of Exhibit - ------- ---------------------- 99 News Release dated February 8, 1999, from the Company; Company quarterly segment information for the year ended December 31, 1998.
E-1 EX-99 2 EXHIBIT 99 EXHIBIT 99 [CHART INDUSTRIES LETTERHEAD] FOR IMMEDIATE RELEASE Contact: Don A. Baines, Chief Financial Officer Chart Industries, Inc. (440) 753-0005 CHART INDUSTRIES REPORTS 24% INCREASE IN 1998 NET INCOME Mayfield Heights, Ohio - February 8, 1999 - Chart Industries, Inc. (NYSE:CTI) today reported financial results for the three months and year ended December 31, 1998. For the fourth consecutive year, annual sales and net income amounts rose to record levels. Sales for the fourth quarter of 1998 increased 4.2 percent to a quarterly record of $58.5 million from $56.1 million for the corresponding quarter in 1997. Fourth-quarter net income decreased 17.4 percent to $6.3 million, or $.26 per share, from $7.7 million, or $.31 per share, in the fourth quarter of 1997. Sales for the full year rose 19.3 percent to $229.4 million from $192.2 million for 1997. Net income for 1998 was $28.2 million, or $1.16 per share, up 24.7 percent from $22.6 million, or $.99 per share, earned in 1997. Commenting on Chart's financial results, Arthur S. Holmes, Chairman and Chief Executive Officer, said, "1998 was an excellent year for Chart Industries, with the Company achieving new records for sales, net income and earnings per share. I am very pleased with the improvements our operating units have made in throughput and productivity. Also, our acquisition of Chart Marston, completed in March, made a positive contribution to these record results." "Order intake during the 1998 fourth quarter improved over the prior quarter," added Mr. Holmes. "We are very encouraged although bookings continued below current sales levels." "Our baseload equipment business (brazed aluminum heat exchangers and cold boxes), the largest of our three business segments, continues to experience market conditions consistent with those in evidence throughout 1998. New construction in the industrial gas market is very slow worldwide. The hydrocarbon processing equipment market remains active but very sluggish in order releases. This climate produces a particularly competitive arena and demands very competitive pricing. However, we are winning most key jobs we chase." "Our distribution and storage business (cryogenic tanks, mobiles, and components) grew 36% in sales in 1998. This business is mostly domestic and largely serves the user side of the industrial gas business. Although uneven quarter to quarter, the distribution and storage business is active and pricing remains stable." Mr. Holmes concluded, "We are encouraged with our product, market and financial positioning as well as our strategic direction. We continue to focus on profitable growth through acquisition and expansion of our core business. We are aggressively pursuing and evaluating new products and businesses for addition to the Chart portfolio." 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, 1998 1997 % Change ---- ---- -------- Sales $58,466 $56,112 4.2 Gross profit 18,624 18,937 (1.7) Net income 6,321 7,654 (17.4) Net income per share - assuming dilution .26 .31 (16.1)
Twelve Months Ended December 31, 1998 1997 % Change ---- ---- -------- Sales $229,423 $192,249 19.3 Gross profit 77,657 61,240 26.8 Net income 28,215 22,627 24.7 Net income per share - assuming dilution 1.16 .99 17.2
CONSOLIDATED FOURTH QUARTER 1998 FINANCIAL RESULTS Sales for the fourth quarter of 1998 were $58.5 million versus $56.1 million for the fourth quarter of 1997, an increase of $2.4 million, or 4.2 percent. The addition of Chart Marston, acquired on March 27, 1998, contributed $6.9 million in incremental sales to the fourth quarter of 1998. Sales for the fourth quarter of 1998 also overcame the absence of LIGO sales, which were $5.0 million in the fourth quarter of 1997. All delivery, installation and acceptance tests for this successful project are complete. Gross profit for the fourth quarter of 1998 was $18.6 million versus $18.9 million for the fourth quarter of 1997, down 1.7 percent. Gross profit margin for the fourth quarter of 1998 was 31.9 percent versus 33.7 percent for the corresponding quarter last year. Gross profit for the 1998 fourth quarter reflects baseload equipment sales for orders received in the first half of 1998 when the Asian economic situation, softness in the industrial gas market, and a strong U.S. dollar compared to the Japanese yen began to adversely affect prices and order volume. Selling, general and administrative (SG&A) expense for the fourth quarter of 1998 was $8.8 million versus $7.1 million for the fourth quarter of 1997. Chart Marston added $1.3 million in incremental SG&A expense to the fourth quarter of 1998 compared with the fourth quarter of 1997. As a percentage of sales, SG&A expense was 15.1 percent for the fourth quarter of 1998. SG&A expense for 1998 was 14.6 percent versus 13.6 percent for 1997. Net interest expense for the fourth quarter of 1998 was $155,000 versus net interest income of $26,000 for the fourth quarter of 1997. Interest expense for the fourth quarter of 1998 was primarily related to borrowings made to help finance the Chart Marston acquisition. At December 31, 1998, the Company had outstanding borrowings of $7.2 million on its $45 million credit facility and was in compliance with all related covenants. As a result of the foregoing, the Company reported net income for the fourth quarter of 1998 of $6.3 million, or $.26 per share, versus $7.7 million, or $.31 per share, for the fourth quarter of 1997. Cash provided by operations during the fourth quarter of 1998 was $9.5 million compared with $11.1 million in the fourth quarter of 1997. The Company's 1998 fourth quarter cash flow continued to reflect current earnings and depreciation and amortization as working capital needs were relatively steady and did not significantly impact cash flow. Capital expenditures for the fourth quarter of 1998 were $2.4 million compared to $1.5 million for the corresponding period in 1997. During the fourth quarter of 1998, the Company paid $1.7 million to acquire 244,800 shares of its Common Stock. Under the Common Stock repurchase program announced in 1996, the Company has the ability to repurchase approximately 449,000 additional shares. The Company expects sufficient cash flow from operations and available borrowings to fund principal and interest payments, dividends and capital expenditures. BACKLOG Chart's consolidated firm order backlog at December 31, 1998, was $96.1 million compared to $107.3 million at September 30, 1998. Orders for the fourth quarter of 1998 totaled $47.3 million, compared with orders of $30.4 million for the third quarter of 1998. Baseload equipment backlog at December 31, 1998, was $63.7 million, down from $71.3 million at September 30, 1998. Orders for the fourth quarter of 1998 totaled $24.6 million, compared with $11.4 million for the third quarter of 1998. Chart Marston contributed $6.9 million in 1998 fourth quarter orders, winning hydrocarbon processing jobs (natural gas and ethylene) in Europe, a market area previously difficult to reach for Chart. Distribution and Storage equipment backlog at December 31, 1998, was $25.2 million, down from $26.5 million at September 30, 1998. Orders for the fourth quarter of 1998 were $15.7 million versus $12.6 million for the third quarter of 1998. Special products backlog at December 31, 1998 totaled $7.3 million, down from $9.6 million at September 30, 1998. Orders for the fourth quarter of 1998 totaled $6.9 million compared with $6.5 million for the third quarter of 1998. The LIGO project was successfully completed in 1998 and accounts for only minimal backlog as of December 31, 1998. This release contains forward-looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Such risks and uncertainties include, but are not limited to, unanticipated slowdowns in the Company's major markets, the impact of competition, the effectiveness of operational changes expected to increase efficiency and productivity, and worldwide economic and political conditions and foreign currency fluctuations that may affect worldwide results of operations. Chart Industries, Inc., manufactures standard and custom-built industrial process equipment primarily for low-temperature and cryogenic applications. Headquartered in Cleveland, Ohio, Chart has domestic operations located in Arkansas, California, Colorado, Louisiana, Massachusetts, New Hampshire, Ohio, Pennsylvania and Wisconsin and a European operation located in Wolverhampton, England. For more information on Chart Industries, Inc., via the Internet, visit our home page at HYPERLINK http://chart-ind.com or the Corporate News on the Net page at HYPERLINK http://www.businesswire.com/cnn/cti.htm or via fax through our News on Demand Service at (800) 311-7462. CHART INDUSTRIES, INC. AND SUBSIDIARIES SEGMENT INFORMATION FOR THE FOURTH QUARTER AND TWELVE MONTHS OF 1998
Three Months Ended December 31, 1998 Sales Gross Profit Gross Percent Percent Profit ($000) of Total ($000) of Total Margin ------------------ ------------------- ------- Baseload $32,187 55.0% $11,221 60.3% 34.9% Distribution and Storage 17,009 29.1% 4,339 23.3% 25.5% Special Products 9,270 15.9% 3,064 16.4% 33.1% ------- ------ ------- ------ $58,466 100.0% $18,624 100.0% 31.9%
Twelve Months Ended December 31, 1998 Sales Gross Profit Gross Percent Percent Profit ($000) of Total ($000) of Total Margin ------------------ ------------------- ------- Baseload $124,609 54.3% $47,273 60.9% 37.9% Distribution and Storage 64,078 27.9% 17,275 22.2% 27.0% Special Products 40,736 17.8% 13,109 16.9% 32.2% -------- ------ ------- ------ $229,423 100.0% $77,657 100.0% 33.8%
CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (DOLLARS IN THOUSANDS)
December 31, 1998 1997 ---------------------- ASSETS Current Assets Cash and cash equivalents $2,169 $22,095 Accounts receivable 37,336 31,636 Inventories, net 29,803 25,617 Other current assets 6,803 5,501 ----------------------- Total Current Assets 76,111 84,849 Property, plant & equipment, net 40,536 27,241 Goodwill, net 31,568 15,698 Other assets, net 9,990 1,131 ----------------------- TOTAL ASSETS $158,205 $128,919 ----------------------- ----------------------- LIABILITIES & SHAREHOLDERS' EQUITY Current Liabilities Accounts payable $11,540 $8,878 Customer advances 13,011 13,710 Billings in excess of contract revenue 2,194 3,030 Other current liabilities 25,783 21,832 Current portion of long-term debt 431 405 ----------------------- Total Current Liabilities 52,959 47,855 Revolving credit facility 7,250 Other long-term debt 3,644 4,063 Deferred income taxes 1,198 544 Shareholders' Equity 93,154 76,457 ----------------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $158,205 $128,919 ----------------------- -----------------------
CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Three Months Ended Twelve Months Ended December 31, December 31, ----------------------------- ----------------------------- 1998 1997 1998 1997 ----------------------------- ----------------------------- Sales $58,466 $56,112 $229,423 $192,249 Cost of products sold 39,842 37,175 151,766 131,009 ----------------------------- ----------------------------- Gross profit 18,624 18,937 77,657 61,240 Selling, general & administrative expense 8,846 7,138 33,502 26,206 ----------------------------- ----------------------------- Operating income 9,778 11,799 44,155 35,034 Interest (income)/expense - net 155 (26) 901 350 ----------------------------- ----------------------------- Income before income taxes 9,623 11,825 43,254 34,684 Income taxes 3,302 4,171 15,039 12,057 ----------------------------- ----------------------------- Net income $6,321 $7,654 $28,215 $22,627 ----------------------------- ----------------------------- ----------------------------- ----------------------------- Net income per common share $0.27 $0.32 $1.17 $1.01 ----------------------------- ----------------------------- ----------------------------- ----------------------------- Net income per common share - assuming dilution $0.26 $0.31 $1.16 $0.99 ----------------------------- ----------------------------- ----------------------------- ----------------------------- Shares used in per share calculations 23,771 24,067 24,084 22,336 Shares used in per share calculations - assuming dilution 23,965 24,683 24,426 22,860
CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (DOLLARS IN THOUSANDS)
Three Months Ended Twelve Months Ended December 31, December 31, ----------------------------- ----------------------------- 1998 1997 1998 1997 ----------------------------- ----------------------------- OPERATING ACTIVITIES Net income $6,321 $7,654 $28,215 $22,627 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 2,239 1,147 7,026 3,511 Contribution of stock to employee benefit plans 244 176 1,045 666 Deferred income taxes 943 (817) 943 (817) Increase (decrease) in cash resulting from changes in operating assets and liabilities: Accounts receivable 1,149 1,244 3,807 (323) Inventory and other current assets (526) (3,082) (2,895) 126 Accounts payable and other current liabilities 2,482 5,216 (1,666) 4,325 Billings in excess of contract revenue and customer advances (3,400) (425) (5,541) (7,402) ----------------------------- ----------------------------- Net Cash Provided By Operating Activities 9,452 11,113 30,934 22,713 INVESTING ACTIVITIES Capital expenditures (2,431) (1,479) (10,006) (7,140) Acquisition of Chart Marston (35,324) Acquisition of Cryenco (20,128) Other investing activities 794 (44) 60 195 ----------------------------- ----------------------------- Net Cash Used In Investing Activities (1,637) (1,523) (45,270) (27,073) FINANCING ACTIVITIES Repayments on credit facility and long-term debt (20,665) (25,199) (36,762) (55,585) Borrowings on credit facility 15,873 2,750 43,594 48,000 Treasury stock and stock option transactions (1,734) 183 (7,495) (5,176) Proceeds of stock offering 33,666 33,666 Dividends paid to shareholders (1,191) (1,214) (4,821) (3,858) ----------------------------- ----------------------------- Net Cash Used In Financing Activities (7,717) 10,186 (5,484) 17,047 ----------------------------- ----------------------------- Net increase (decrease) in cash and cash equivalents 98 19,776 (19,820) 12,687 Effect of exchange rate changes on cash 75 (106) Cash and cash equivalents at beginning of period 1,996 2,319 22,095 9,408 ----------------------------- ----------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,169 $22,095 $2,169 $22,095 ----------------------------- ----------------------------- ----------------------------- -----------------------------
CHART INDUSTRIES, INC. AND SUBSIDIARIES QUARTERLY SEGMENT INFORMATION* FOR THE YEAR ENDED DECEMBER 31, 1998
YEAR ENDED DECEMBER 31, 1998 ---------------------------------------------------------------------- FIRST SECOND THIRD FOURTH QUARTER QUARTER QUARTER QUARTER TOTAL ----------- ------------- ------------ ------------ ------------ (DOLLARS IN THOUSANDS) SALES Process Systems & Equipment $28,313 $30,335 $33,774 $32,187 $124,609 Distribution, Storage & Applications Equipment 16,754 16,346 13,969 17,009 64,078 Special Products 11,037 10,349 10,080 9,270 40,736 ----------- ------------- ------------ ------------ ------------ Total $56,104 $57,030 $57,823 $58,466 $229,423 ----------- ------------- ------------ ------------ ------------ ----------- ------------- ------------ ------------ ------------ GROSS PROFIT Process Systems & Equipment $11,712 $11,407 $12,933 $11,221 $47,273 Distribution, Storage & Applications Equipment 5,293 4,557 3,086 4,339 17,275 Special Products 3,555 3,448 3,042 3,064 13,109 ----------- ------------- ------------ ------------ ------------ Total $20,560 $19,412 $19,061 $18,624 $77,657 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ GROSS PROFIT MARGIN Process Systems & Equipment 41.4% 37.6% 38.3% 34.9% 37.9% Distribution, Storage & Applications Equipment 31.6% 27.9% 22.1% 25.5% 27.0% Special Products 32.2% 33.3% 30.2% 33.1% 32.2% Total 36.6% 34.0% 33.0% 31.9% 33.8% ORDERS Process Systems & Equipment $24,740 $21,716 $11,352 $24,596 $82,404 Distribution, Storage & Applications Equipment 14,241 17,323 12,556 15,716 59,836 Special Products 7,732 8,729 6,493 6,941 29,895 ------------ ------------ ------------ ------------ ------------ Total $46,713 $47,768 $30,401 $47,253 $172,135 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ BACKLOG Process Systems & Equipment $49,402 $ 93,701 $ 71,279 $63,688 Distribution, Storage & Applications Equipment 26,890 27,867 26,454 25,161 Special Products 14,810 13,190 9,603 7,274 ------------ ------------ ------------ ------------ Total $91,102 $134,758 $107,336 $96,123 ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
* Since the issuance of the February 8, 1999 press release, the Company has redesignated two of its segments as follows in order to better describe their operating businesses: Process Systems and Equipment (formerly Baseload Equipment) and Distribution, Storage and Applications Equipment (formerly Distribution and Storage Equipment). -----END PRIVACY-ENHANCED MESSAGE-----