EXHIBIT 99.1
NEWS RELEASE
[CHART INDUSTRIES, INC. LETTERHEAD]
Immediate Release
- ------------------
CHART INDUSTRIES REPORTS THIRD-QUARTER ORDERS OF
$115 MILLION AND EARNINGS OF $0.04 PER SHARE
CLEVELAND, OH - October 30, 2000 - Chart Industries, Inc. (NYSE:CTI) today
reported record sales and orders for its third quarter ended September 30, 2000.
Sales for the third quarter were $88.0 million and net income was $1.0 million
or $0.04 per diluted share. Orders in the third quarter totaled $114.7 million,
surpassing the $101.2 million record set in the second quarter of 2000.
Sales for the third quarter of 2000 were $88.0 million, up 4.6 percent from
$84.1 million for the corresponding quarter of 1999. Net income was $1.0
million, or $0.04 per diluted share, for the third quarter of 2000 compared with
a net loss of $8.9 million, or $0.38 per diluted share, for the third quarter of
1999. Net loss before non-recurring charges for the third quarter of 1999 was
$0.2 million, or $0.01 per diluted share.
Sales for the first nine months of 2000 increased 10.5 percent to $235.9
million from $213.4 million for the corresponding period in 1999. For the first
nine months of 2000, net income was $0.9 million, or $0.04 per diluted share,
compared with a net loss of $37.9 million, or $1.60 per diluted share, for the
first nine months of 1999. Net income before non-recurring charges for the first
nine months of 1999 was $3.4 million, or $0.14 per diluted share.
Commenting on Chart's results for the third quarter and first nine months
of 2000, Arthur S. Holmes, Chairman and Chief Executive Officer, said, "I am
pleased with the improvement demonstrated in our third-quarter results. Each of
our business segments produced increased order bookings and sales, bringing our
consolidated orders and sales to new record levels for the quarter. Strong
operating performance in our Applied Technologies (AT) and Distribution &
Storage (D&S) segments, coupled with continued throughput improvement in our
Process Systems & Equipment (PS&E) segment, resulted in improved earnings for
Chart.
"The record order bookings of $115 million were comprised of continued
strong demand for our D&S and AT products in the United States, Europe and Asia,
and improved hydrocarbon processing market activity for our PS&E business. Our
D&S segment experienced a particularly strong surge in demand for oil field
service equipment and other distribution and mobile equipment during the period.
"We are still waiting for the recovery of the industrial gas market for the
PS&E segment. The large order flow pushed Chart's consolidated order backlog at
September 30, 2000 to $113 million, an increase of $25 million from the June 30,
2000 level.
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Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings Of
$0.04 Per Share
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"I am also pleased with the record cash provided by operations of $11.2
million which the Company achieved this quarter. In addition, we were successful
in obtaining an amendment to the Company's existing $300 million bank credit
facility, which was announced on October 12, 2000. This amendment gives us the
financial strength and flexibility to accomplish our plans going forward.
"In summary, I am confident that we are on the road to improved
profitability and cash flow. Our challenge ahead will be to achieve increased
growth and improved operating performance, which we have planned, while
continuing to reduce our large debt balance. To accomplish these goals, we
expect to fund several of our exciting new product initiatives that we have been
developing with outside venture capital so that they can be brought to market
more quickly. We believe these new products can significantly improve sales and
profitability and accelerate shareholder value."
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 September 30,
2000 1999 % Change
---- ---- --------
Sales $88,012 $84,108 4.6
Gross profit 26,951 20,147 33.8
Net income (loss) 1,038 (8,946) N/M
Net income (loss) per share - assuming
dilution 0.04 (0.38) N/M
Net income (loss) before non-recurring charges 1,038 (185) N/M
Net income (loss) before non-recurring charges
per share - assuming dilution 0.04 (0.01) N/M
Nine months ended September 30,
2000 1999 % Change
---- ---- --------
Sales $235,928 $213,422 10.5
Gross profit 70,364 53,339 31.9
Net income (loss) 944 (37,933) N/M
Net income (loss) per share - assuming
dilution 0.04 (1.60) N/M
Net income before non-recurring charges 944 3,402 (72.3)
Net income before non-recurring charges
per share - assuming dilution 0.04 0.14 (71.4)
N/M - (Not meaningful)
THIRD-QUARTER 2000 FINANCIAL RESULTS
Sales for the third quarter of 2000 were $88.0 million versus $84.1 million for
the third quarter of 1999, an increase of $3.9 million, or 4.6 percent. The AT
segment grew 15.1 percent from sales of $30.8 million in the third quarter of
1999 to sales of $35.4 million in the third quarter of 2000. Sales of MRI
equipment were strong, supporting the introduction of General Electric's newest
MRI machine. Sales of Chart's bulk liquid systems, which include environmental
test chambers, liquid injection systems and other liquid supply systems,
improved in the third quarter of 2000. In particular, sales of environmental
test chambers improved as a result of the Company's new strategic marketing
partnership with QualMark, announced on June 8, 2000. The D&S segment showed
additional growth
- MORE -
Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings Of
$0.04 Per Share
CHT-1170-P
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in liquid cylinder sales, especially to Asian markets, with third-quarter 2000
sales of $36.2 million, an increase of 8.2 percent over the third-quarter 1999
sales of $33.4 million. PS&E segment sales were $16.4 million, down from sales
of $19.9 million in the third quarter of 1999, reflecting the extended downturn
in that segment. Recent Bechtel orders have bolstered sales in the third quarter
of 2000 compared to levels experienced in the two previous quarters.
Gross profit for the third quarter of 2000 was $27.0 million versus $20.1
million for the third quarter of 1999, an increase of $6.8 million, or 33.8
percent. Gross profit margin for the third quarter of 2000 was 30.6 percent
versus 24.0 percent for the third quarter of 1999. Increases in gross profit
occurred throughout all segments compared to the third quarter of 1999. Margins
remained strong in the AT segment, where Chart-engineered products support good
pricing from end-users. Additional sales volume in the PS&E segment also helped
bolster margins.
Selling, general and administrative (SG&A) expense for the third quarter of
2000 was $16.2 million, versus $14.4 million for the third quarter of 1999,
representing the higher sales and marketing cost of pursuing end-user markets,
higher sales commissions and increasing medical and other employee benefit
costs. SG&A expense as a percentage of sales was 18.4 percent for the third
quarter of 2000 versus 17.1 percent for the third quarter of 1999.
The Company recorded an $8.8 million charge during the third quarter of
1999 pursuant to its restructuring plan announced in the second quarter of 1999.
The charge included a non-cash charge of $6.8 million for the write-off of
impaired goodwill resulting from the Company's decision to discontinue
production of Cryenco trailers, $1.1 million for lease payments and other costs
related to exiting a leased building used in the Cryenco operations, and $0.8
million for severance and other employee-related costs.
Net interest expense for the third quarter of 2000 was $7.0 million versus
$5.2 million for the third quarter of 1999, reflecting higher rates due to the
Company's higher leverage as well as increases by the Federal Reserve in base
interest rates. As of September 30, 2000, the Company had borrowings of $266.4
million on its Credit Facility and was in compliance with all related covenants.
The Company's increased earnings and efforts at better managing working
capital generated a quarterly record $11.2 million of cash provided by
operations in the third quarter of 2000, which was used primarily to pay down
debt. Cash provided by operations for the first nine months of 2000 was $10.6
million compared with $0.1 million used in operations in the first nine months
of 1999. The Company's cash flow from earnings plus depreciation and
amortization totalled $15.0 million during the first nine months of 2000 and was
partially offset by working capital increases.
- MORE -
Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings Of
$0.04 Per Share
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Capital expenditures for the first nine months of 2000 were $4.0 million
compared with $4.6 million in the first nine months of 1999. The Company
presently does not have any large capital projects in process and anticipates
only nominal capital expenditures for the balance of this year.
ORDERS AND BACKLOG
Chart's consolidated orders for the third quarter of 2000 totaled $114.7
million, compared with orders of $101.2 million for the second quarter of 2000.
Chart's consolidated firm order backlog at September 30, 2000 was $113.4
million, an increase of $24.9 million from $88.6 million at June 30, 2000.
AT orders for the third quarter of 2000 totaled $37.0 million, compared
with $35.6 million for the second quarter of 2000. The third-quarter orders were
strong in MRI cryostats, medical oxygen products in Europe and environmental
test chambers. The continued growth in AT is the result of the Company's growing
focus on end-user markets.
D&S orders for the third quarter of 2000 totaled $45.8 million, compared
with $35.1 million for the second quarter of 2000. In the D&S segment, mobile
equipment orders for use in oil field service showed the effect of current oil
demand, while the demand for packaged gas products such as liquid cylinders
continued to increase both in the United States and in Asia.
PS&E orders for the third quarter of 2000 totaled $31.9 million, compared
with $30.5 million in the second quarter of 2000. Order activity included the
Bechtel ALNG cold boxes and two other large hydrocarbon processing equipment
orders received in July. PS&E backlog at September 30, 2000, was $43.2 million,
up from $27.7 million at June 30, 2000.
GENERAL
This release contains forward-looking statements that are subject to certain
risks and uncertainties that could cause actual results to differ materially
from those expressed or implied by 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, the ability of the Company to
satisfy covenants under its Credit Facility, the ability of the Company to
obtain venture capital financing for new product initiatives, 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 14
states and international operations located in Australia, China, Czech Republic,
England, Germany and Singapore.
For more information on Chart Industries, Inc., visit the Company's home
page web site at www.chart-ind.com.
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Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings Of
$0.04 Per Share
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CHART INDUSTRIES, INC.
QUARTERLY SEGMENT INFORMATION
LAST FIVE-QUARTER TREND
1999 1999 2000 2000 2000
Third Fourth First Second Third
Quarter Quarter Quarter Quarter Quarter
------- ------- ------- ------- -------
(Dollars in Thousands)
Sales
Applied Technologies $30,777 $34,224 $29,518 $ 33,855 $ 35,409
Distribution & Storage Equipment 33,435 31,678 32,208 35,792 36,166
Process Systems & Equipment 19,896 13,613 7,266 9,277 16,437
------- ------- ------- -------- --------
Total $84,108 $79,515 $68,992 $ 78,924 $ 88,012
======= ======= ======= ======== ========
Gross Profit
Applied Technologies $10,593 $13,741 $11,999 $ 13,454 $ 14,391
Distribution & Storage Equipment 7,264 7,444 7,090 8,088 7,890
Process Systems & Equipment 2,290 2,857 671 2,111 4,670
------- ------- ------- -------- --------
Total $20,147 $24,042 $19,760 $ 23,653 $ 26,951
======= ======= ======= ======== ========
Gross Profit Margin
Applied Technologies 34.4% 40.2% 40.6% 39.7% 40.6%
Distribution & Storage Equipment 21.7% 23.5% 22.0% 22.6% 21.8%
Process Systems & Equipment 11.5% 21.0% 9.2% 22.8% 28.4%
Total 24.0% 30.2% 28.6% 30.0% 30.6%
Orders
Applied Technologies $34,171 $34,762 $31,907 $ 35,620 $ 37,010
Distribution & Storage Equipment 33,105 32,383 41,279 35,070 45,769
Process Systems & Equipment 6,759 4,251 7,270 30,472 31,889
------- ------- ------- -------- --------
Total $74,035 $71,396 $80,456 $101,162 $114,668
======= ======= ======= ======== ========
Backlog
Applied Technologies $25,353 $25,891 $27,366 $ 28,767 $ 29,939
Distribution & Storage Equipment 25,667 26,372 34,020 32,057 40,337
Process Systems & Equipment 18,548 8,165 7,403 27,744 43,163
------- ------- ------- -------- --------
Total $69,568 $60,428 $68,789 $ 88,568 $113,439
======= ======= ======= ======== ========
- MORE -
Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings of
$0.04 Per Share
CHT-1170-P
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CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------- -------------------------
2000 1999 2000 1999
---------------------- -------------------------
Sales $88,012 $84,108 $235,928 $213,422
Cost of products sold:
Cost of sales 61,061 63,705 165,564 157,985
Acquired profit in inventory 1,162
Restructuring charge 256 936
---------------------- -------------------------
61,061 63,961 165,564 160,083
Gross profit 26,951 20,147 70,364 53,339
Selling, general & administrative expense 16,161 14,420 44,982 36,342
Goodwill amortization expense 1,284 924 3,654 2,406
Restructuring charge 8,562 11,783
Acquired in-process research and development 410 22,010
---------------------- -------------------------
17,445 24,316 48,636 72,541
Operating income (loss) 9,506 (4,169) 21,728 (19,202)
Other income (expense):
Gain on sale of assets 366
Interest expense - net (7,017) (5,157) (19,700) (9,568)
---------------------- -------------------------
(7,017) (5,157) (19,334) (9,568)
---------------------- -------------------------
Income (loss) before income taxes,
minority interest and extraordinary item 2,489 (9,326) 2,394 (28,770)
Income tax expense (benefit) 1,435 (446) 1,388 1,201
---------------------- -------------------------
Income (loss) before minority interest
and extraordinary item 1,054 (8,880) 1,006 (29,971)
Minority interest, net of taxes (16) (66) (62) (153)
---------------------- -------------------------
Income (loss) before extraordinary item 1,038 (8,946) 944 (30,124)
Extraordinary loss on early extinguishment of debt,
net of taxes of $4,650 (7,809)
---------------------- -------------------------
Net income (loss) $1,038 ($8,946) $944 ($37,933)
====================== =========================
Net income (loss) per common share:
Income (loss) before extraordinary item $0.04 ($0.38) $0.04 ($1.27)
Extraordinary item 0.00 0.00 0.00 (0.33)
---------------------- --------------------------
Net income (loss) per common share $0.04 ($0.38) $0.04 ($1.60)
====================== =========================
Net income (loss) per common share - assuming dilution:
Income (loss) before extraordinary item $0.04 ($0.38) $0.04 ($1.27)
Extraordinary item 0.00 0.00 0.00 (0.33)
---------------------- -------------------------
Net income (loss) per common share - assuming dilution $0.04 ($0.38) $0.04 ($1.60)
====================== =========================
Shares used in per share calculations 24,108 23,738 24,111 23,706
Shares used in per share calculations - assuming dilution 24,403 23,738 24,325 23,706
-MORE-
Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings of
$0.04 Per Share
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CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
September 30, December 31,
2000 1999
-----------------------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 4,582 $ 2,314
Accounts receivable, net 56,284 60,236
Inventories, net 63,361 50,578
Other current assets 32,954 30,222
-------------------------
Total Current Assets 157,181 143,350
Property, plant and equipment, net 67,043 74,757
Goodwill, net 173,362 177,228
Other assets, net 23,220 29,235
-------------------------
TOTAL ASSETS $420,806 $424,570
=========================
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 30,465 $ 25,102
Customer advances 4,375 2,765
Billings in excess of contract revenue 2,467 296
Accrued expenses and other liabilities 44,704 45,764
Current portion of long-term debt 21,826 19,336
-------------------------
Total Current Liabilities 103,837 93,263
Long-term debt 253,793 259,336
Other long-term liabilities 11,541 16,459
Shareholders' Equity 51,635 55,512
-------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $420,806 $424,570
=========================
The balance sheet at December 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
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Chart Industries Reports Third-Quarter Orders of $115 Million and Earnings of
$0.04 Per Share
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CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
Nine Months Ended
September 30,
-----------------------
2000 1999
-----------------------
OPERATING ACTIVITIES
Net income (loss)
Adjustments to reconcile net income (loss) $ 944 ($37,933)
to net cash provided by (used in) operating activities:
Loss on early extinguishment of debt 12,459
Acquired in-process research and development 22,010
Acquired inventory profit 1,162
Restructuring charge 9,790
Gain on sale of assets (366)
Depreciation and amortization 14,044 11,590
(Income) loss from joint venture (52)
Minority interest 147 222
Deferred income taxes (203)
Contribution of stock to employee benefit plans 1,832 776
Increase (decrease) in cash resulting from changes
in operating assets and liabilities:
Accounts receivable 2,752 6,837
Inventory and other current assets (18,828) (3,603)
Accounts payable and other current liabilities 6,317 (12,682)
Billings in excess of contract revenue and
customer advances 3,824 (10,560)
-----------------------
Net Cash Provided By (Used In) Operating Activities 10,614 (135)
INVESTING ACTIVITIES
Capital expenditures (4,038) (4,582)
Acquisition of MVE, net of cash acquired (2,225)
Redemption of MVE preferred stock (74,642)
Acquisition of Northcoast Cryogenics, net of cash acquired (2,185)
Proceeds from sale of assets 900
Other investing activities 163 (686)
-----------------------
Net Cash Used In Investing Activities (2,975) (84,320)
FINANCING ACTIVITIES
Borrowings on revolving credit facilities 86,201 55,250
Repayments on revolving credit facilities (73,836) (48,500)
Borrowings for acquisition of MVE 250,000
Principal payments on long-term debt (14,829) (148,490)
Premiums paid on repurchases of debt (12,459)
Deferred financing costs (7,645)
Treasury stock and stock option transactions 8 (719)
Dividends paid to shareholders (2,370)
-----------------------
Net Cash (Used In) Provided By Financing Activities (2,456) 85,067
-----------------------
Net increase in cash and cash equivalents 5,183 612
Effect of exchange rate changes on cash (2,915) 230
Cash and cash equivalents at beginning of period 2,314 2,169
-----------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,582 $3,011
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