Chart Industries Inc.
), an engineered equipment manufacturer for industrial gases,
posted strong results for the fourth quarter and full-year 2012.
Chart posted earnings of 80 cents per share, increasing 56.9%
year over year.
The fourth quarter 2012 earnings were adjusted for the AirSep
Corporation acquisition costs, whereas fourth quarter 2011
earnings were adjusted for the refinancing and restructuring
costs. Earnings also surpassed the Zacks Consensus Estimate of 76
cents by 5.3%. Strong segmental sales as well as contribution
from acquisition of AirSep Corp., medical and industrial air
separation equipment manufacturer, helped the increase.
In 2012, earnings per share were reported to be $2.50,
increasing 35.9% year over year.
In the fourth quarter of 2012, total sales were $303.9 million,
up 38.3% from the $219.6 million reported a year ago. Sales also
surpassed the Zacks Consensus Estimate of $278.0 by 9.3%. The
increase in earnings was a result of a rise in sales across the
Energy & Chemicals (E&C) and Distribution & Storage
In 2012, Chart reported sales of $1.0 billion, increasing
27.6% from the revenue of $794.6 million in 2011.
Energy and Chemicals
segment increased 70.4% with sales of $94.8 million, resulting
from higher volumes.
Distribution & Storage
segment increased 21.8% with sales of $139.3 million, also due to
increased volumes. Volume increase was as a result of increased
LNG equipment shipments in the quarter.
segment sales increased 40.6% with sales of $69.8 million,
primarily as a result of the AirSep acquisition as well as lower
volume and mix.
Chart reported total gross profits of $85.5 million, increasing
33.5% over the year-ago quarter. However, gross margin decreased
by 100 basis points year over year to 28.1%, due to lower margins
in the BioMedical segment.
The E&C segment faced a 620 basis points increase in the
gross margin, standing at 31.0%. Also, the D&S segment
experienced a 290 basis points increase due to better volumes,
standing at 29.5%.
However, BioMedical segment's gross margin of 21.5%, pulled
down the total gross margin. The segment faced a tremendous
decline of 1,840 basis points, due to higher restructuring costs
and lower volumes.
Balance Sheet/Cash Flow:
Exiting the fourth quarter 2012, Chart's cash and cash
equivalents were $141.5 million, compared with $105.8 million in
the preceding quarter. Total long-term debt was recorded at
$252.0 million, against $250.6 million in the quarter ending
For the quarter, cash flow from operations was recorded at
$73.2 million, increasing from the $44.6 million recorded in the
year-ago quarter. Capital expenditures were $14.7 million,
against $7.2 million in the fourth quarter of 2011.
Management believes that the huge backlog at the end of 2012 will
translate into higher revenues in the coming fiscal year. It is
also expected that demand for natural gases will increase in
regions such as China and North America in the future. However,
the BioMedical business will continue to face headwinds in the
European markets as well as the US.
Based on these factors, sales for 2013 are expected to be in
the range of $1.2 billion to $1.3 billion, more than the $1.0
billion generated in 2012. Also, earnings per share are expected
to lie between $3.00 and $3.40.
The stock currently holds a Zacks Rank #5 (Strong Sell). Other
stocks worth a look in the industry are
Altra Holdings Inc.
EnPro Industries Inc.
); both holding a Zacks Rank #1 (Strong Buy). Also,
Gardner Denver Inc.
) holds a Zacks Rank #2 (Buy).
ALTRA HOLDINGS (AIMC): Free Stock Analysis
GARDNER DENVER (GDI): Free Stock Analysis
CHART INDUSTRIE (GTLS): Free Stock Analysis
ENPRO INDUS INC (NPO): Free Stock Analysis
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