Chart Industries Reports 2013 Third Quarter Results

Chart Industries Reports 2013 Third Quarter Results

CLEVELAND, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Chart Industries, Inc.
(Nasdaq: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 third quarter ended September
30, 2013. Highlights include:

  *Sales up 19% from prior year quarter
  *Backlog up 12% sequentially to a record $743.4 million
  *Order activity strong; includes previously announced large awards for
    small scale LNG liquefaction in North America and LNG infrastructure
    build-out in China, and a new award for 20 LNG fueling stations in North
    America
  *Announcement of new manufacturing capacity in China for brazed aluminum
    heat exchanger operations

Net income for the third quarter of 2013 was $24.4 million, or $0.74 per
diluted share. This compares with net income of $18.5 million, or $0.61 per
diluted share, for the third quarter of 2012. Third quarter 2013 earnings
would have been $0.82 per diluted share excluding $1.0 million, or $0.02 per
diluted share, of costs recorded in the quarter largely associated with the
AirSep acquisition, as well as a $0.06 per diluted share impact associated
with Chart's Convertible Notes ("Notes") given Chart's stock price
performance.

Chart's average common stock price was $112.45 in the third quarter, which
exceeded the Notes' conversion price of $69.03 and our warrants' strike price
of $84.96. This resulted in the inclusion of an additional 2,221,680 shares
related to the Notes in the Company's diluted earnings per share calculation
for the quarter. The associated hedge, which helps offset this dilution,
cannot be taken into account under Generally Accepted Accounting Principles
("GAAP"). If the hedge could have been considered, it would have reduced the
additional shares by 1,336,383 resulting in the inclusion of only 885,297
additional shares related to the Notes. Although the Notes remain convertible
at the option of the holders, there have been no conversions to date.

Third quarter 2012 earnings would have been $0.66 per share excluding $2.0
million, or $0.05 per diluted share, of costs largely associated with the
AirSep acquisition, which closed in August 2012.

Net sales for the third quarter of 2013 increased 19% to $301.8 million from
$254.2 million in the comparable period a year ago. Gross profit for the third
quarter of 2013 was $88.6 million, or 29.4% of sales, versus $78.0 million, or
30.7% of sales, in the comparable quarter of 2012.

"Order activity for LNG related equipment remains strong, bolstered by
positive news across the LNG value chain," stated Sam Thomas, Chart's
Chairman, President and Chief Executive Officer. "On the supply side, we are
seeing commitments being made in North America to expand small and mid-scale
LNG liquefaction capacity. We're also seeing progression in the build-out of
LNG fueling infrastructure, as evidenced by the award received this quarter
from a major oil company to build 20 fueling stations. On the end-user side,
we are seeing growing demand for LNG equipment, especially for oilfield and
transportation applications."

Mr. Thomas continued, "We're also excited to announce new heat exchanger
capacity in China, which will help Chart meet global demand for brazed
aluminum heat exchangers, across all industry sectors, and position Chart with
market leading delivery schedules."

Backlog at September 30, 2013 was $743.4 million, a new record, and up 12%
from the June 30, 2013 level of $664.0 million. Orders for the third quarter
of 2013 were $370.1 million compared with $369.7 million for the second
quarter of 2013.

Selling, general and administrative ("SG&A") expenses for the third quarter of
2013 increased $5.7 million compared with the same period in 2012 to $47.9
million, or 15.9% of sales. SG&A expenses in the third quarter of 2012 were
16.6% of sales. The additional costs in the current quarter are primarily due
to the AirSep acquisition, commissions due to the higher sales, and
employee-related costs as we pursue LNG-related growth opportunities.

Net interest expense was $4.1 million for the third quarter of 2013, which
included $2.5 million of non-cash accretion expense associated with the
Company's Notes. Net cash interest was $1.7 million.

Income tax expense was $7.0 million for the third quarter of 2013 and
represented an effective tax rate of 21.9% compared with 30.7% in the prior
year quarter. The rate was lower in the current quarter due to increased
research and development credits and the effect of income earned by certain of
the Company's foreign entities being taxed at lower rates representing a
higher portion of income.

Cash and short-term investments were $151.8 million at September 30, 2013,
compared with $125.8 million at June 30, 2013.

SEGMENT HIGHLIGHTS

Energy and Chemicals ("E&C") segment sales decreased by 3.6% to $80.0 million
for the third quarter of 2013 compared with $83.0 million for the same quarter
in the prior year. E&C gross profit margin was 27.1% compared with 29.2% a
year ago. Large baseload LNG projects, with lower average gross margins,
accounted for a larger share of the sales mix in the current quarter. Margins
were also negatively impacted approximately 1.5% in the quarter due to higher
than anticipated costs on certain projects.

Distribution and Storage ("D&S") segment sales increased 29.8% to $152.9
million for the third quarter of 2013 compared with $117.8 million for the
same quarter in the prior year. The increase was led by growth in sales of LNG
equipment, including sales of on-vehicle LNG fuel tanks in North America,
which ran at record levels in the third quarter of 2013. Additional demand for
tanks from truck manufacturers has materialized, driven by the availability of
new high horsepower natural gas engine options. D&S gross profit margin was
28.1% in the quarter compared with 30.3% a year ago. Gross margins declined
due to year over year global sales and product mix differences.

BioMedical segment sales increased 28.7% to $68.9 million for the third
quarter of 2013 compared with $53.5 million for the same quarter in the prior
year. This increase is due to the AirSep acquisition, partially offset by
continued lower year-over-year respiratory volumes in Europe and in the United
States. BioMedical gross profit margin increased to 34.8% in the quarter
compared with 33.8% for the same period in 2012. Lower AirSep acquisition
related costs in the current quarter and improved mix in respiratory products
contributed to the increase.

OUTLOOK

Based on third quarter results, current order backlog, and business
expectations, the Company is adjusting its previously announced sales guidance
and the range of its earnings guidance. Due to customer schedule changes and
higher than anticipated costs for certain large projects in our E&C segment,
sales and earnings are running lower than previously expected. Nonetheless,
our strong outlook for 2014 and beyond on the use of natural gas, and LNG in
particular, remains very positive.

Sales for 2013 are expected to be in a range of $1.175 to $1.225 billion, and
diluted earnings per share are now expected to be in a range of $2.90 to $3.00
per diluted share, on approximately 30.6 million weighted average shares
outstanding. This excludes the impact of $0.19 per diluted share primarily due
to anticipated AirSep acquisition costs and any dilution impact resulting from
the Notes. This compares with previous sales guidance of $1.2 to $1.3 billion
and earnings guidance of $3.10 to $3.40 per diluted share which excluded $0.15
per diluted share in anticipated AirSep acquisition costs and any dilution
impact resulting from the Notes.

FORWARD-LOOKING STATEMENTS

Certain statements made in this news release are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning the Company's plans,
objectives, future orders, revenues, earnings or performance, liquidity and
cash flow, capital expenditures, business trends, and other information that
is not historical in nature. Forward-looking statements may be identified by
terminology such as "may," "will," "should," "expects," "anticipates,"
"believes," "projects," "forecasts," "outlook," "guidance," "continue," or the
negative of such terms or comparable terminology.

Forward-looking statements contained in this news release or in other
statements made by the Company are made based on management's expectations and
beliefs concerning future events impacting the Company and are subject to
uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are
beyond the Company's control, that could cause the Company's actual results to
differ materially from those matters expressed or implied by forward-looking
statements. These factors and uncertainties include, among others, the
following: the cyclicality of the markets that the Company serves and the
vulnerability of those markets to economic downturns; a delay, significant
reduction in or loss of purchases by large customers; a delay in the
anticipated timing of LNG infrastructure build out or respiratory therapy
demand recovery; fluctuations in energy prices; the potential for negative
developments in the natural gas industry related to hydraulic fracturing;
changes in government energy policy or the failure of expected changes in
policy to materialize; competition; economic downturns and deteriorating
financial conditions; our ability to manage our fixed-price contract exposure;
our ability to successfully manage our planned operational expansions; our
reliance on key suppliers and potential supplier failures or defects; the
modification or cancellation of orders in our backlog; changes in government
healthcare regulations and reimbursement policies; general economic,
political, business and market risks associated with the Company's
international operations and transactions; challenges and uncertainties
associated with efforts to acquire and integrate product lines or businesses;
loss of key employees and deterioration of employee or labor relations;
litigation and disputes involving the Company, including product liability,
contract, warranty, intellectual property, employment and environmental
claims; variability in operating results associated with unanticipated
increases in warranty returns of Company products; fluctuations in foreign
currency exchange and interest rates; financial distress of third parties; the
regulation of our products by the U.S. Food & Drug Administration and other
governmental authorities; the pricing and availability of raw materials;
potential future impairment of the Company's significant goodwill and other
intangibles; the cost of compliance with environmental, health and safety
laws; additional liabilities related to taxes; the impact of severe weather;
potential dilution to existing holders of our common stock as a result of the
conversion of our convertible notes, and the need to utilize our cash balances
or credit facility to fund any cash settlement related to such conversions;
and volatility and fluctuations in the price of the Company's stock.

For a discussion of these and additional factors that could cause actual
results to differ from those described in the forward-looking statements, see
the Company's filings with the Securities and Exchange Commission, including
Item 1A (Risk Factors) in the Company's most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission, which should be reviewed
carefully. The Company undertakes no obligation to update or revise any
forward-looking statement.

Chart is a leading independent global manufacturer of highly engineered
equipment used in the production, storage and end-use of hydrocarbon and
industrial gases. The majority of Chart's products are used throughout the
liquid gas supply chain for purification, liquefaction, distribution, storage
and end-use applications, the largest portion of which are energy-related.
Chart has domestic operations located across the United States and an
international presence in Asia, Australia and Europe. For more information,
visit: http://www.chartindustries.com.

Use of Non-GAAP Financial Information:

To supplement the unaudited condensed consolidated financial statements
presented in accordance with U.S. GAAP in this news release, certain non-GAAP
financial measures as defined by SEC rules are used. The non-GAAP measures
included in this news release have been reconciled to the comparable GAAP
measures within an accompanying table, shown on the last page of this news
release.

As previously announced, the Company will discuss its third quarter 2013
results on a conference call on Thursday, October 31, 2013 at 10:30 a.m. ET.
Participants may join the conference call by dialing (877) 312-9395 in the
U.S. or (970) 315-0456 from outside the U.S. A live webcast presentation will
also be accessible at 10:30 a.m. ET at http://www.chartindustries.com. Please
log-in or dial-in at least five minutes prior to the start time.

A taped replay of the conference call will be archived on the Company's
website, www.chartindustries.com, approximately one hour after the call
concludes. You may also listen to a taped replay of the conference call by
dialing (855) 859-2056 in the U.S. or (404) 537-3406 outside the U.S. and
entering Conference Number 86879895. The telephone replay will be available
beginning 1:30 p.m. ET, Thursday, October 31, 2013 until 11:59 p.m. ET,
Friday, November 8, 2013.

For more information, click here:

http://ir.chartindustries.com/

CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars and shares in thousands, except per share amounts)

                          Three Months Ended        Nine Months Ended
                           September 30,             September 30,
                          2013         2012         2013         2012
Sales                      $ 301,757    $ 254,249    $ 873,671    $ 710,294
Cost of sales              213,112      176,237      615,770      490,596
Gross profit               88,645       78,012       257,901      219,698
Selling, general and       47,934       42,170       147,043      117,522
administrative expenses
Amortization expense       4,825        3,810        14,642       10,130
Impairment of intangible   —            —            —            3,070
assets
Operating expenses         52,759       45,980       161,685      130,722
Operating income ^ (1)     35,886       32,032       96,216       88,976
Other expenses:                                                
Interest expense and
financing costs            4,469        4,332        13,090       12,860
amortization, net
Foreign currency (gain)    (393)        461          44           1,879
loss
Other expenses, net        4,076        4,793        13,134       14,739
Income before income taxes 31,810       27,239       83,082       74,237
Income tax expense         6,963        8,354        21,524       23,064
Net income                 24,847       18,885       61,558       51,173
Noncontrolling interest,   402          369          1,578        638
net of taxes
Net income attributable to $ 24,445     $ 18,516     $ 59,980     $ 50,535
Chart Industries, Inc.
Net income attributable to
Chart Industries, Inc. per                                     
common share:
Basic                      $ 0.81       $ 0.62       $ 1.99       $ 1.70
Diluted                    $ 0.74       $ 0.61       $ 1.90       $ 1.68
Weighted average number of                                     
common shares outstanding:
Basic                      30,275       29,839       30,181       29,743
Diluted ^(2)               32,851       30,243       31,614       30,168

^(1) Includes depreciation expense of $5,456 and $15,602 for the three and
nine months ended September 30, 2013, respectively, and $4,406 and $12,644 for
the three and nine months ended September 30, 2012, respectively.

^(2) Includes an additional 2,222 and 1,081 shares related to the Convertible
Notes in the Company's diluted earnings per share calculation for the quarter
and year-to-date periods ended September 30, 2013, respectively.The
associated hedge, which helps offset this dilution, cannot be taken into
account under GAAP. If the hedge could have been considered, it would have
reduced the additional shares by 1,336 for the quarter and by 850 for the
year-to-date periods ended September 30, 2013.
^


CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)

                                      Three Months Ended  Nine Months Ended
                                       September 30,       September 30,
                                      2013      2012      2013      2012
Net Cash Provided by Operating         $ 9,051   $ 19,398  $ 19,433  $ 14,473
Activities
Investing Activities                                              
Capital expenditures                   (21,583)  (12,149)  (50,809)  (28,951)
Proceeds from sale of assets           64        2,040     64        2,040
Acquisition of business, net of cash   67        (182,450) (2,965)   (182,450)
acquired
Other investing activities             —         (359)     —         (359)
Net Cash Used In Investing Activities  (21,452)  (192,918) (53,710)  (209,720)
Financing Activities                                              
Proceeds from long-term debt           —         —         —         21,375
Borrowings on revolving credit         73,319    18,387    173,550   18,387
facilities
Repayments on revolving credit         (39,771)  —         (136,782) —
facilities
Principal payments on long-term debt   (937)     (937)     (2,813)   (3,500)
Payment of deferred financing costs    —         13        —         (1,445)
Proceeds from exercise of stock        823       1,481     5,285     3,324
options
Excess tax benefit from share-based    1,023     1,579     5,495     7,934
compensation
Payment of contingent consideration    —         (1,300)   —         (1,300)
Common stock repurchases               (76)      (46)      (1,979)   (4,537)
Distribution to noncontrolling         —         —         (1,369)   —
interest
Net Cash Provided By Financing         34,381    19,177    41,387    40,238
Activities
Effect of exchange rate changes on     4,066     5,409     3,220     3,923
cash
Net increase (decrease) in cash and    26,046    (148,934) 10,330    (151,086)
cash equivalents
Cash and cash equivalents at beginning 125,782   254,709   141,498   256,861
of period
Cash And Cash Equivalents At End of    $ 151,828 $ 105,775 $ 151,828 $ 105,775
Period



CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)

                                   September30,         December 31,
                                    2013                  2012
                                   (Unaudited)           
ASSETS                                                   
Cash and cash equivalents           $ 151,828             $ 141,498
Other current assets                513,273               414,926
Property, plant and equipment, net  206,541               169,776
Goodwill                            399,099               398,941
Identifiable intangible assets, net 176,596               189,463
Other assets, net                   13,907                13,237
TOTAL ASSETS                        $ 1,461,244           $ 1,327,841
                                                        
LIABILITIES AND EQUITY                                   
Current liabilities ^(1)            $ 521,388             $ 273,775
Long-term debt                      65,625                252,021
Other long-term liabilities         93,798                102,262
Convertible notes conversion        59,100                —
feature ^(1)
Equity                              721,333               699,783
TOTAL LIABILITIES AND EQUITY        $ 1,461,244           $ 1,327,841

^(1) As a result of meeting one of the events for early conversion as defined
in the Indenture of our $250,000 convertible notes, the $190,900 liability
component was classified as a current liability, and the $59,100 was
classified as temporary equity representing the convertible notes debt
conversion feature in our Condensed Consolidated Balance Sheet as of September
30, 2013.



CHART INDUSTRIES, INC. AND SUBSIDIARIES
OPERATING SEGMENTS (UNAUDITED)
(Dollars in thousands)

                      Three Months Ended          Nine Months Ended September
                       September 30,               30,
                      2013          2012          2013          2012
Sales                                                         
Energy& Chemicals     $ 79,986      $ 82,968      $ 239,563     $ 228,921
Distribution& Storage 152,895       117,752       428,784       336,278
BioMedical             68,876        53,529        205,324       145,095
Total                  $ 301,757     $ 254,249     $ 873,671     $ 710,294
Gross Profit                                                  
Energy& Chemicals     $ 21,698      $ 24,255      $ 65,479      $ 69,264
Distribution& Storage 42,984        35,678        121,341       95,968
BioMedical             23,963        18,079        71,081        54,466
Total                  $ 88,645      $ 78,012      $ 257,901     $ 219,698
Gross Profit Margin                                           
Energy& Chemicals     27.1%         29.2%         27.3%         30.3%
Distribution& Storage 28.1%         30.3%         28.3%         28.5%
BioMedical             34.8%         33.8%         34.6%         37.5%
Total                  29.4%         30.7%         29.5%         30.9%
Operating Income                                              
(Loss)
Energy& Chemicals     $ 14,493      $ 17,057      $ 42,226      $ 44,785
Distribution& Storage 22,337        19,948        65,019        54,447
BioMedical             9,970         7,051         25,475        25,498
Corporate              (10,914)      (12,024)      (36,504)      (35,754)
Total                  $ 35,886      $ 32,032      $ 96,216      $ 88,976

                                      

CHART INDUSTRIES, INC. AND SUBSIDIARIES
ORDERS AND BACKLOG (UNAUDITED)
(Dollars in thousands)

                      Three Months Ended
                      September30, June30,
                       2013          2013
Orders                              
Energy& Chemicals     $ 93,083      $ 77,892
Distribution& Storage 218,990       222,053
BioMedical             58,050        69,746
Total                  $ 370,123     $ 369,691
Backlog                             
Energy& Chemicals     $ 336,154     $ 322,827
Distribution& Storage 380,266       310,459
BioMedical             27,015        30,727
Total                  $ 743,435     $ 664,013



CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF DILUTED EARNINGS PER SHARE TO ADJUSTED EARNINGS PER SHARE
(UNAUDITED)

                                      Three Months Ended September 30,
                                      2013               2012
Earnings per diluted share             $ 0.74             $ 0.61
Inventory write-up to fair value       —                  0.02
Severance/retention                    0.02               0.02
Dilution impact of convertible notes   0.06               —
Other                                  —                  0.01
Adjusted earnings per diluted share    $ 0.82             $ 0.66

CONTACT: Ken Webster
         Vice President, Chief Accounting
         Officer and Controller
         216-626-1216
         ken.webster@chartindustries.com
         or
         Chris Rioux
         Manager of Investor Relations and
         Financial Planning
         216-626-1216
         chris.rioux@chartindustries.com
 
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