USA: Chart Net Income Climbs

Chart Industries said its net income for the second quarter of 2013 was $20.0 million compared with net income of $17.9 million for the second quarter of 2012.

Second quarter 2013 earnings would have been $0.77 per diluted share excluding $4.8 million, or $0.11 per diluted share, of costs recorded in the quarter largely associated with the AirSep acquisition and flood damage in Europe, as well as a $0.02 per diluted share impact associated with Chart’s Convertible Notes given Chart’s stock price performance.

The Notes have a dilutive effect on earnings per share when the average market price of the Company’s common stock exceeds the Notes’ conversion price of $69.03. Upon conversion, our hedge on the Notes protects against dilution up to $84.96 per share, but until conversion occurs, the hedge is considered anti-dilutive under Generally Accepted Accounting Principles (GAAP) and cannot be taken into account when computing earnings per share. Chart’s average common stock price was $87.43 in the second quarter, resulting in the inclusion of an additional 864,168 shares related to the Notes in the diluted earnings per share calculation for the quarter. If the hedge had been able to be considered under GAAP it would have reduced the additional shares by 754,886.

Second quarter 2012 earnings would have been $0.57 per share excluding $1.1 million, or $0.02 per diluted share, of net favorable earn-out adjustments partially offset by impairment charges and the write-off of deferred financing fees associated with the credit facility amendment in the prior year quarter.

Net sales for the second quarter of 2013 increased 24% to $298.3 million from $239.9 million in the comparable period a year ago. Gross profit for the second quarter of 2013 was $89.8 million, or 30.1% of sales, versus $74.1 million, or 30.9% of sales, in the comparable quarter of 2012.

“LNG and petrochemical opportunities around the globe are driving our business. LNG growth in China continues to lead the record quarterly orders in our Distribution and Storage (“D&S”) business, with LNG related orders in both North America and Europe also contributing to the strong performance and record backlog,” stated Sam Thomas, Chart’s Chairman, President and Chief Executive Officer. “Orders in our Energy and Chemicals (“E&C”) business included equipment for an ethylene plant and the Noble Energy award announced today for an LNG production plant using Chart’s standard LNG plant design for small-scale liquefaction, which continues to highlight the opportunities we see in natural gas.”

Mr. Thomas continued, “The latest award for LNG equipment from PetroChina announced today is in excess of $50 million and will be included in third quarter 2013 orders and backlog. This is the third major award from PetroChina in the last several quarters and recognizes Chart as a leading international supplier due to our quality and product capabilities. We remain encouraged by LNG opportunities in all our markets.”

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LNG World News Staff, July 31, 2013