Chart Industries, a leading independent global manufacturer of highly engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases, announced results for the third quarter ended September 30, 2012. Highlights include:
- Record sales of $254 million, up 20% over third quarter 2011
- Announces brazed aluminum heat exchanger capacity expansion
- Completes AirSep acquisition
Net income for the third quarter of 2012 was $18.5 million, or $0.61 per diluted share. This compares with $17.5 million, or $0.59 per diluted share, for the third quarter of 2011. Third quarter 2012 earnings would have been $0.66 per diluted share excluding $2.0 million, or $0.05 per diluted share, of BioMedical acquisition-related costs largely associated with the AirSep acquisition. Third quarter 2011 earnings would have been $0.62 per diluted share excluding $1.2 million, or $0.03 per diluted share, of acquisition-related restructuring costs.
Net sales for the third quarter of 2012 increased 20% to a record $254.2 million from $211.3 million in the comparable period a year ago. Gross profit for the third quarter of 2012 was $78.0 million, or 30.7% of sales, versus $66.6 million, or 31.5% of sales, in the comparable quarter of 2011.
“We closed the AirSep acquisition in August and our results include one month of AirSep activity,” stated Sam Thomas, Chart’s Chairman, President and Chief Executive Officer. “This acquisition strengthens our BioMedical oxygen concentrator business and complements the expansion projects currently underway to address capacity constraints within our rapidly growing energy business.”
Mr. Thomas continued, “We are also embarking on an expansion of our production capacity for brazed aluminum heat exchangers (“BAHX”) in response to significant demand for high pressure BAHX. Worldwide demand for BAHX remains strong due to strength in natural gas processing, olefin production, air separation, and LNG applications, and we plan to have this additional capacity on line by 2014 to meet customer expectations.”
Backlog at September 30, 2012 was $639.8 million, down slightly from the June 30, 2012 backlog of $648.1 million. Orders for the third quarter of 2012 were $233.4 million compared with second quarter 2012 orders of $228.0 million. The third quarter of 2012 included $11.6 million in AirSep orders. Excluding AirSep, orders declined slightly due to continued weakness in Europe, which is impacting operations in this region, particularly in our BioMedical respiratory business.
Selling, general and administrative (“SG&A”) expenses for the third quarter of 2012 increased $8.0 million compared with the same period in 2011 to $42.2 million, or 16.6% of sales, which was up as a percentage of sales from 16.2% in the prior year quarter. The increase is largely due to acquisitions, as well as employee-related costs as we continue to expand our resources to capture natural gas related growth opportunities.
Interest expense was $4.0 million for the third quarter of 2012, which included $2.3 million of non-cash accretion expense associated with the Company’s Convertible Notes. Therefore, cash interest was $1.7 million. Interest expense was higher in the prior year quarter by $2.4 million as the Convertible Notes and the now repaid 9-1/8% Senior Subordinated Notes were both outstanding for approximately two months during the third quarter of 2011.
Income tax expense was $8.4 million for the third quarter of 2012 and represented an effective tax rate of 30.7% compared with the effective tax rate of 28.9% in the prior year quarter. The 2012 third quarter effective tax rate was higher due to an increase in domestic earnings, which are taxed at a higher rate than our foreign earnings.
Cash and cash equivalents were $105.8 million at September 30, 2012, approximately $148.9 million lower than balances at June 30, 2012. We used $182.5 million of cash to close the AirSep acquisition in August 2012.
LNG World News Staff, November 01, 2012