USA: Chart Industries Income Climbs

Chart Industries said that its net income for the second quarter of 2012 was $17.9 million, compared with $10.6 million for the second quarter of 2011.

Net sales for the second quarter of 2012 increased 20% to a record $239.9 million from $200.7 million in the comparable period a year ago. Gross profit for the second quarter of 2012 was $74.1 million, or 30.9% of sales, versus $62.3 million, or 31.1% of sales, in the comparable quarter of 2011.

“We are very excited about the pending AirSep acquisition, which strengthens our BioMedical Group’s oxygen concentrator business and our gas processing business overall, providing a growth platform for on-site air separation gas generation,” stated Sam Thomas, Chart’s Chairman, President and Chief Executive Officer. “The acquisition also represents an attractive and stable complement to our large and rapidly growing energy business.”

Mr. Thomas continued, “In addition, during the quarter we announced our fourth major plant expansion project in response to continued strong LNG demand. This latest expansion will address large tank manufacturing capacity at our New Prague, Minnesota facility. We are committed to meeting our customers’ growth needs, as order rates for LNG tanks, combined with ongoing demand for large industrial tanks, have out-stripped current capacity.”

Backlog at June 30, 2012 was $648.1 million, down 1.7% from the record March 31, 2012 backlog of $659.3 million. Orders for the second quarter of 2012 were $228.0 million compared with record first quarter 2012 orders of $385.1 million. The first quarter of 2012 included two large Australian LNG-related orders for approximately $155 million. Excluding those two large awards, second quarter 2012 orders were down 1% sequentially compared to first quarter 2012 on weak European demand and softer industrial Packaged Gas demand, mostly offset by strong LNG infrastructure orders.

Selling, general and administrative (“G&A) expenses for the second quarter of 2012 decreased $1.6 million compared with the same period in 2011 to $34.7 million, or 14.5% of sales, which was down as a percentage of sales from 18.1% in the prior year quarter. The second quarter 2012 SG&A included $4.4 million in favorable net earn-out adjustments associated with prior acquisitions. Earn-out targets for one acquisition are not expected to be met and the liability was reversed. This was partially offset by higher stock compensation and employee-related costs as we continue to expand our resources to capture LNG-related growth opportunities.

Interest expense was $3.7 million for the second quarter of 2012, which included $2.3 million of non-cash accretion expense associated with the Company’s Convertible Notes. Therefore, cash interest was $1.4 million.

Income tax expense was $8.9 million for the second quarter of 2012 and represented an effective tax rate of 33.0%, which was the same as the tax rate in the prior year quarter. The increase from the first quarter 2012 tax rate is largely due to the increased mix of domestic earnings.

Cash and short-term investments were $254.7 million at June 30, 2012, approximately $12 million higher than balances at March 31, 2012. The AirSep acquisition is expected to close during the third quarter and will largely be funded from available U.S. cash.

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LNG World News Staff, August 02, 2012