Chart Industries Reports 2007 Fourth Quarter and Year-End Results
biz.yahoo.com
Thursday February 28, 6:36 am ET
CLEVELAND, Feb. 28, 2008 (PRIME NEWSWIRE) -- Chart Industries, Inc. (NasdaqGS:GTLS), a leading independent global manufacturer of highly engineered equipment used in the production, storage and end-use of hydrocarbon and industrial gases, today reported results for the fourth quarter and year ended December 31, 2007.
* Fourth quarter net income up 91% on net sales increase of 26%
* 2007 net income up 64% on 24% increase in net sales to
$666 million
* Backlog increases to $475 million based on strong fourth quarter
orders of $233 million
* Company provides positive 2008 outlook
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Net sales for the fourth quarter of 2007 increased 26% to $182.7 million from $144.4 million in the fourth quarter of 2006. For the year, net sales rose 24% to $666.4 million from $537.5 million in 2006. Net income for the fourth quarter of 2007 was $16.4 million, or $0.57 per diluted share, an increase of 91% compared with $8.6 million, or $0.33 per diluted share, in the fourth quarter 2006. For the year, net income was $44.2 million, or $1.61 per diluted share, compared with net income of $26.9 million in 2006.
For 2007, pre-tax income and net income included $7.9 million and $5.7 million, or $0.20 per diluted share, respectively, of non-cash stock-based compensation expense and offering expenses related to the secondary stock offering completed during the second quarter of 2007. The Company's diluted earnings per share, excluding these expenses, was $1.81 per share for 2007.
``We were very pleased with our operating results in the fourth quarter, which was led by our Energy & Chemicals segment,'' stated Sam Thomas, Chart's Chairman, President and Chief Executive Officer. ``We finished the year on a very strong note with fourth quarter orders of $233 million and backlog of $475 million, up 49% compared with the end of 2006. Order quotation activity in our Energy & Chemicals segment has been increasing significantly to reflect the global growth in the industrial gas market and ramp-up of clean coal technologies, including Coal to Liquids ('CTL') and integrated gasification and combined cycle ('IGCC') power projects. Clean coal processes, whether to produce synthesis gas for petrochemical feedstock or power generation, utilize large quantities of oxygen produced by air separation plants that use our equipment.''
Mr. Thomas continued, ``Overall, 2007 was another successful year for Chart as we continue to demonstrate our ability to navigate profitably through continued rapid growth. All of our business segments achieved strong operating performances, reflecting continued robust demand in our markets, most notably the liquefied natural gas ('LNG') and natural gas segments of the hydrocarbon processing market, but also the global industrial gas market, which has been on an upswing.''
Fourth quarter gross profit improved $10.6 million, or 25%, to $53.0 million from $42.4 for 2006. This gross profit improvement was driven primarily by volume increases and favorable project mix in the Company's Energy & Chemicals segment.
Selling, general and administrative (``SG&A'') expenses for the fourth quarter were $23.7 million, or 13% of sales, compared with $18.8 million, or 13% of sales, for the same quarter in 2006. The increase in SG&A expenses was mostly attributable to higher employee-related and infrastructure spending to support business growth, and variable compensation expenses due to improved operating performance.
Net interest expense and financing costs amortization for the fourth quarter was $5.2 million compared with $6.6 million for the same quarter in 2006. This decrease reflects lower long-term debt outstanding as a result of $40.0 million of voluntary principal prepayments in the second quarter of 2007, and greater interest income as a result of a higher cash balance during the fourth quarter of 2007.
Income tax expense was $5.0 million for the fourth quarter of 2007 and represented an effective tax rate of 23.3% compared with $4.2 million for the fourth quarter of 2006, which represented an effective tax rate of 31.8%. The full year effective tax rate for 2007 was 28.2% compared with 32.3% for 2006. This decline in the fourth quarter effective tax rate was primarily due to an increase in foreign investment tax credits, and lower foreign tax and domestic state tax rates.
Cash provided by operating activities for the fourth quarter was $28.3 million compared with $2.9 million for the same quarter of 2006. Cash generated from net income and changes in working capital contributed significantly to this strong operating cash flow performance. Capital expenditures for the fourth quarter were $3.5 million compared with $8.8 million in the fourth quarter of 2006. Capital expenditures for both periods consisted primarily of continued strategic expansions at our primary manufacturing facilities. The fourth quarter of 2007 investing activity also included $2.1 million of proceeds from the sale of the Plaistow, NH facility that was closed in 2004.
SEGMENT HIGHLIGHTS
Energy & Chemicals (``E&C'') segment orders for the fourth quarter were $118.8 million, an increase of 66% compared with $71.5 million for the third quarter of 2007. This growth was driven by a fourth quarter order in excess of $25 million for an ethylene cold box in the Middle East and orders in excess of $20 million for large brazed aluminum heat exchangers for air separation plants in China and Southeast Asia. E&C segment orders for 2007 were a record $408.0 million and year-end backlog was $358.8 million, which represents an increase of 73% compared with the end of 2006. The record orders for 2007 reflect strong global demand across many of E&C's target markets, including LNG, petrochemicals, natural gas processing and industrial gas. E&C segment sales improved by 61% to $84.9 million for the fourth quarter compared with $52.6 million for the same period last year. This increase was primarily due to higher sales volume for large brazed aluminum heat exchangers, cold boxes and process system projects. E&C gross profit margin increased to 27% in the fourth quarter compared with 22% in the same period last year, reflecting a favorable shift in project mix for process systems and a wind-down of the two large installation projects mentioned in prior quarters.
Distribution & Storage (``D&S'') segment sales for the fourth quarter increased slightly to $74.1 million compared with $73.5 million in the 2006 fourth quarter. The improvement reflects volume increases in most product line markets, price increases and foreign currency translation offset largely by lower U.S. bulk storage volume, which was anticipated due to recent consolidations in the industrial gas business. D&S segment gross profit margin was 29% in the fourth quarter compared with 33% last year and reflects higher raw material costs and a product mix change within bulk storage systems.
BioMedical segment sales for the fourth quarter grew by 30% to $23.7 million from $18.3 million in the fourth quarter last year primarily resulting from further penetration of international markets. For the fourth quarter, the gross profit margin increased to 37% from 34% for the same period last year, reflecting higher sales volume and improved manufacturing productivity.
2008 OUTLOOK
Based on current market trends and the strength of backlog, the Company is establishing guidance for 2008 as follows:
* Net sales are expected in a range of $730 million to
$765 million.
* Diluted earnings per share is anticipated in a range of $2.28 to
$2.40 per share based on approximately 29.0 million weighted
average shares outstanding.
Similar to historic trends, the Company expects its 2008 results to be stronger in the last three quarters of the year. |
