x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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34-1712937
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
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(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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Item 1.
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Financial Statements
|
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March 31,
2017 |
|
December 31,
2016 |
||||
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(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
243,824
|
|
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$
|
281,959
|
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Accounts receivable, less allowances of $9,868 and $10,217
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130,967
|
|
|
142,762
|
|
||
Inventories, net
|
185,275
|
|
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169,683
|
|
||
Unbilled contract revenue
|
34,288
|
|
|
26,736
|
|
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Prepaid expenses
|
19,835
|
|
|
16,762
|
|
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Other current assets
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18,847
|
|
|
15,075
|
|
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Total Current Assets
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633,036
|
|
|
652,977
|
|
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Property, plant, and equipment, net
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254,635
|
|
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251,049
|
|
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Goodwill
|
228,352
|
|
|
217,970
|
|
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Identifiable intangible assets, net
|
99,031
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|
|
93,443
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|
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Other assets
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17,573
|
|
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17,643
|
|
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TOTAL ASSETS
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$
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1,232,627
|
|
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$
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1,233,082
|
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LIABILITIES AND EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
88,872
|
|
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$
|
79,953
|
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Customer advances and billings in excess of contract revenue
|
79,399
|
|
|
74,702
|
|
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Accrued salaries, wages, and benefits
|
27,220
|
|
|
41,746
|
|
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Current portion of warranty reserve
|
13,197
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|
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15,293
|
|
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Short-term debt and current portion of long-term debt
|
5,073
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|
|
6,487
|
|
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Other current liabilities
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38,366
|
|
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43,353
|
|
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Total Current Liabilities
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252,127
|
|
|
261,534
|
|
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Long-term debt
|
237,202
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|
|
233,711
|
|
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Long-term deferred tax liabilities
|
4,290
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|
|
4,241
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|
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Long-term portion of warranty reserve
|
2,728
|
|
|
2,978
|
|
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Accrued pension liabilities
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14,207
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|
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14,362
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|
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Other long-term liabilities
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19,150
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|
|
17,579
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|
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Total Liabilities
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529,704
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|
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534,405
|
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Equity
|
|
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|
||||
Common stock, par value $0.01 per share – 150,000,000 shares authorized, 30,713,540 and 30,613,166 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively
|
307
|
|
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306
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|
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Additional paid-in capital
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400,355
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395,843
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|
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Retained earnings
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333,416
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|
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336,328
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|
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Accumulated other comprehensive loss
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(32,536
|
)
|
|
(35,212
|
)
|
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Total Chart Industries, Inc. Shareholders’ Equity
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701,542
|
|
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697,265
|
|
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Noncontrolling interests
|
1,381
|
|
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1,412
|
|
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Total Equity
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702,923
|
|
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698,677
|
|
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TOTAL LIABILITIES AND EQUITY
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$
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1,232,627
|
|
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$
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1,233,082
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Three Months Ended March 31,
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||||||
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2017
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2016
|
||||
Sales
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$
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204,095
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|
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$
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193,757
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Cost of sales
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148,435
|
|
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141,056
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|
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Gross profit
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55,660
|
|
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52,701
|
|
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Selling, general, and administrative expenses
|
52,427
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|
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49,536
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|
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Amortization expense
|
2,986
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|
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3,128
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|
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Operating expenses
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55,413
|
|
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52,664
|
|
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Operating income
|
247
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|
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37
|
|
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Other expenses:
|
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|
||||
Interest expense, net
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4,378
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4,094
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|
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Financing costs amortization
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321
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321
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|
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Foreign currency loss
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264
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|
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206
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|
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Other expenses, net
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4,963
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|
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4,621
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|
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Loss before income taxes
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(4,716
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)
|
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(4,584
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)
|
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Income tax (benefit) expense
|
(1,764
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)
|
|
88
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|
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Net loss
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(2,952
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)
|
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(4,672
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)
|
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Noncontrolling interests, net of taxes
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(40
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)
|
|
(21
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)
|
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Net loss attributable to Chart Industries, Inc.
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$
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(2,912
|
)
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$
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(4,651
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)
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Net loss attributable to Chart Industries, Inc. per common share:
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|
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|
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Basic
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$
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(0.09
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)
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$
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(0.15
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)
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Diluted
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$
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(0.09
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)
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$
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(0.15
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)
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Weighted-average number of common shares outstanding:
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|
||||
Basic
|
30,698
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30,568
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Diluted
|
30,698
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30,568
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|
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|
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Comprehensive (loss) income, net of taxes
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$
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(267
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)
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$
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1,844
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Less: Comprehensive (loss) income attributable to noncontrolling interests, net of taxes
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(31
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)
|
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3
|
|
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Comprehensive (loss) income attributable to Chart Industries, Inc., net of taxes
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$
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(236
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)
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$
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1,841
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Three Months Ended March 31,
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||||||
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2017
|
|
2016
|
||||
OPERATING ACTIVITIES
|
|
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|
||||
Net loss
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$
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(2,952
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)
|
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$
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(4,672
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)
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Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
9,161
|
|
|
9,479
|
|
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Interest accretion of convertible notes discount
|
3,277
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|
|
3,029
|
|
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Employee share-based compensation expense
|
6,274
|
|
|
5,537
|
|
||
Financing costs amortization
|
321
|
|
|
321
|
|
||
Unrealized foreign currency transaction loss (gain)
|
193
|
|
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(50
|
)
|
||
Other non-cash operating activities
|
606
|
|
|
506
|
|
||
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
16,178
|
|
|
44,126
|
|
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Inventory
|
(20,909
|
)
|
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(3,111
|
)
|
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Unbilled contract revenues and other assets
|
(4,847
|
)
|
|
19,187
|
|
||
Accounts payable and other liabilities
|
(10,530
|
)
|
|
(48,239
|
)
|
||
Customer advances and billings in excess of contract revenue
|
4,428
|
|
|
12,066
|
|
||
Net Cash Provided By Operating Activities
|
1,200
|
|
|
38,179
|
|
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INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(8,386
|
)
|
|
(5,232
|
)
|
||
Government grants
|
145
|
|
|
—
|
|
||
Acquisition of businesses, net of cash acquired
|
(23,162
|
)
|
|
—
|
|
||
Net Cash Used In Investing Activities
|
(31,403
|
)
|
|
(5,232
|
)
|
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FINANCING ACTIVITIES
|
|
|
|
||||
Borrowings on revolving credit facilities
|
2,176
|
|
|
3,820
|
|
||
Repayments on revolving credit facilities
|
(3,627
|
)
|
|
(3,056
|
)
|
||
Proceeds from exercise of options
|
32
|
|
|
12
|
|
||
Excess tax benefit from share-based compensation
|
—
|
|
|
24
|
|
||
Common stock repurchases
|
(1,794
|
)
|
|
(601
|
)
|
||
Net Cash (Used In) Provided By Financing Activities
|
(3,213
|
)
|
|
199
|
|
||
Effect of exchange rate changes on cash
|
727
|
|
|
2,200
|
|
||
Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents
|
(32,689
|
)
|
|
35,346
|
|
||
Cash, cash equivalents, restricted cash, and restricted cash equivalents
at beginning of period |
282,949
|
|
|
123,708
|
|
||
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD
(1)
|
$
|
250,260
|
|
|
$
|
159,054
|
|
(1)
|
Includes restricted cash of
$6,436
(
$5,446
in other current assets and
$990
in other assets) at March 31, 2017 and
$990
(in other assets) at March 31, 2016.
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Raw materials and supplies
|
$
|
74,419
|
|
|
$
|
65,719
|
|
Work in process
|
36,698
|
|
|
31,576
|
|
||
Finished goods
|
74,158
|
|
|
72,388
|
|
||
Total inventories, net
|
$
|
185,275
|
|
|
$
|
169,683
|
|
|
Energy &
Chemicals
|
|
Distribution & Storage
|
|
BioMedical
|
|
Total
|
||||||||
Balance at December 31, 2016
|
$
|
27,873
|
|
|
$
|
165,520
|
|
|
$
|
24,577
|
|
|
$
|
217,970
|
|
Foreign currency translation adjustments and other
|
—
|
|
|
262
|
|
|
—
|
|
|
262
|
|
||||
Goodwill acquired during the year
|
10,120
|
|
|
—
|
|
|
—
|
|
|
10,120
|
|
||||
Balance at March 31, 2017
|
$
|
37,993
|
|
|
$
|
165,782
|
|
|
$
|
24,577
|
|
|
$
|
228,352
|
|
|
|
|
|
|
|
|
|
||||||||
Accumulated goodwill impairment loss
|
$
|
64,603
|
|
|
$
|
—
|
|
|
$
|
131,243
|
|
|
$
|
195,846
|
|
|
March 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Unpatented technology
|
$
|
8,222
|
|
|
$
|
(3,309
|
)
|
|
$
|
8,186
|
|
|
$
|
(3,132
|
)
|
Patents and other
|
1,882
|
|
|
(743
|
)
|
|
1,235
|
|
|
(695
|
)
|
||||
Trademarks and trade names
|
5,280
|
|
|
(2,369
|
)
|
|
4,918
|
|
|
(2,198
|
)
|
||||
Customer relationships
|
126,845
|
|
|
(84,215
|
)
|
|
119,320
|
|
|
(81,614
|
)
|
||||
Land use rights
|
12,719
|
|
|
(929
|
)
|
|
12,650
|
|
|
(860
|
)
|
||||
Total finite-lived intangible assets
|
$
|
154,948
|
|
|
$
|
(91,565
|
)
|
|
$
|
146,309
|
|
|
$
|
(88,499
|
)
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
||||||||
Trademarks and trade names
|
$
|
35,648
|
|
|
—
|
|
|
$
|
35,633
|
|
|
—
|
|
||
Total intangible assets
|
$
|
190,596
|
|
|
$
|
(91,565
|
)
|
|
$
|
181,942
|
|
|
$
|
(88,499
|
)
|
(1)
|
Amounts include the impact of foreign currency translation. Fully amortized amounts are written off.
|
(2)
|
The Company amortizes certain identifiable intangible assets primarily on a straight-line basis over their estimated useful lives, which range from one to 50 years.
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Current
|
$
|
463
|
|
|
$
|
446
|
|
Long-term
|
8,240
|
|
|
8,153
|
|
||
Total government grants
|
$
|
8,703
|
|
|
$
|
8,599
|
|
|
March 31,
2017 |
|
December 31,
2016 |
||||
Convertible notes, due August 2018, effective interest rate of 7.9%
|
$
|
231,392
|
|
|
$
|
228,115
|
|
Foreign facilities
|
11,831
|
|
|
13,208
|
|
||
Total debt
|
243,223
|
|
|
241,323
|
|
||
Unamortized debt issuance costs
|
(948
|
)
|
|
(1,125
|
)
|
||
Total debt, net of unamortized debt issuance costs
|
242,275
|
|
|
240,198
|
|
||
Less: current maturities
|
(5,073
|
)
|
|
(6,487
|
)
|
||
Long-term debt
|
$
|
237,202
|
|
|
$
|
233,711
|
|
Balance at December 31, 2016
|
$
|
18,271
|
|
Warranty expense
|
2,047
|
|
|
Warranty usage
|
(4,393
|
)
|
|
Balance at March 31, 2017
|
$
|
15,925
|
|
Balance at December 31, 2016
|
$
|
1,923
|
|
Increase in fair value of contingent consideration liabilities
|
1
|
|
|
Balance at March 31, 2017
|
$
|
1,924
|
|
|
March 31, 2017
|
||||||||||
|
Total
|
|
Level 2
|
|
Level 3
|
||||||
Foreign currency forward contracts
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
—
|
|
Total financial assets
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
$
|
190
|
|
|
$
|
190
|
|
|
$
|
—
|
|
Contingent consideration liabilities
|
1,924
|
|
|
—
|
|
|
1,924
|
|
|||
Total financial liabilities
|
$
|
2,114
|
|
|
$
|
190
|
|
|
$
|
1,924
|
|
|
December 31, 2016
|
||||||||||
|
Total
|
|
Level 2
|
|
Level 3
|
||||||
Foreign currency forward contracts
|
$
|
39
|
|
|
$
|
39
|
|
|
$
|
—
|
|
Total financial assets
|
$
|
39
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
|
|
|
|
|
||||||
Foreign currency forward contracts
|
$
|
92
|
|
|
$
|
92
|
|
|
$
|
—
|
|
Contingent consideration liabilities
|
1,923
|
|
|
—
|
|
|
1,923
|
|
|||
Total financial liabilities
|
$
|
2,015
|
|
|
$
|
92
|
|
|
$
|
1,923
|
|
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive loss
|
||||||
Balance at December 31, 2016
|
$
|
(24,701
|
)
|
|
$
|
(10,511
|
)
|
|
$
|
(35,212
|
)
|
Other comprehensive income
|
2,474
|
|
|
—
|
|
|
2,474
|
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $108
(1)
|
—
|
|
|
202
|
|
|
202
|
|
|||
Net current-period other comprehensive income, net of taxes
|
2,474
|
|
|
202
|
|
|
2,676
|
|
|||
Balance at March 31, 2017
|
$
|
(22,227
|
)
|
|
$
|
(10,309
|
)
|
|
$
|
(32,536
|
)
|
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive loss
|
||||||
Balance at December 31, 2015
|
$
|
(12,513
|
)
|
|
$
|
(12,391
|
)
|
|
$
|
(24,904
|
)
|
Other comprehensive income
|
6,230
|
|
|
—
|
|
|
6,230
|
|
|||
Amounts reclassified from accumulated other comprehensive loss, net of income taxes of $134
(1)
|
—
|
|
|
250
|
|
|
250
|
|
|||
Net current-period other comprehensive income, net of taxes
|
6,230
|
|
|
250
|
|
|
6,480
|
|
|||
Balance at March 31, 2016
|
$
|
(6,283
|
)
|
|
$
|
(12,141
|
)
|
|
$
|
(18,424
|
)
|
(1)
|
Amounts reclassified from accumulated other comprehensive loss were expensed and included in cost of sales (
$122
and
$151
) and selling, general, and administrative expenses (
$188
and
$233
) for the
three months ended March 31, 2017
and
2016
, respectively, in the condensed consolidated statements of operations and comprehensive (loss) income. The components in accumulated other comprehensive loss are included in the computation of net periodic pension expense as reported in the Employee Benefit Plans note.
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Net loss attributable to Chart Industries, Inc.
|
$
|
(2,912
|
)
|
|
$
|
(4,651
|
)
|
Net loss attributable to Chart Industries, Inc. per common share:
|
|
|
|
||||
Basic
|
$
|
(0.09
|
)
|
|
$
|
(0.15
|
)
|
Diluted
(1)
|
$
|
(0.09
|
)
|
|
$
|
(0.15
|
)
|
|
|
|
|
||||
Weighted average number of common shares outstanding — basic
|
30,698
|
|
|
30,568
|
|
||
Incremental shares issuable upon assumed conversion and exercise of share-based awards
(1)
|
—
|
|
|
—
|
|
||
Weighted average number of common shares outstanding — diluted
|
30,698
|
|
|
30,568
|
|
(1)
|
Zero incremental shares from share-based awards are included in the computation of diluted net loss per share for periods in which a net loss occurs because to do so would be anti-dilutive.
|
|
Three Months Ended March 31,
|
||||
|
2017
|
|
2016
|
||
Share-based awards
|
1,860
|
|
|
1,516
|
|
Warrants
|
3,368
|
|
|
3,368
|
|
Total anti-dilutive securities
|
5,228
|
|
|
4,884
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Interest cost
|
$
|
542
|
|
|
$
|
571
|
|
Expected return on plan assets
|
(698
|
)
|
|
(697
|
)
|
||
Amortization of net loss
|
310
|
|
|
384
|
|
||
Total net periodic pension expense
|
$
|
154
|
|
|
$
|
258
|
|
|
March 31,
2017 |
|
March 31,
2016 |
||||
Severance:
|
|
|
|
||||
Cost of sales
|
$
|
648
|
|
|
$
|
2,361
|
|
Selling, general, and administrative expenses
|
692
|
|
|
1,331
|
|
||
Total severance charges
|
$
|
1,340
|
|
|
$
|
3,692
|
|
Other restructuring:
|
|
|
|
||||
Cost of sales
|
$
|
1,826
|
|
|
$
|
—
|
|
Selling, general, and administrative expenses
|
1,460
|
|
|
281
|
|
||
Total other restructuring charges
|
$
|
3,286
|
|
|
$
|
281
|
|
|
|
|
|
||||
Total restructuring charges
|
$
|
4,626
|
|
|
$
|
3,973
|
|
|
Three Months Ended March 31, 2017
|
||||||||||||||||||
|
Energy & Chemicals
|
|
Distribution & Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of December 31, 2016
|
$
|
127
|
|
|
$
|
2,864
|
|
|
$
|
1,308
|
|
|
$
|
3,025
|
|
|
$
|
7,324
|
|
Restructuring charges
|
426
|
|
|
137
|
|
|
2,604
|
|
|
1,459
|
|
|
4,626
|
|
|||||
Cash payments and other
|
(553
|
)
|
|
(736
|
)
|
|
(2,473
|
)
|
|
(1,553
|
)
|
|
(5,315
|
)
|
|||||
Balance as of March 31, 2017
|
$
|
—
|
|
|
$
|
2,265
|
|
|
$
|
1,439
|
|
|
$
|
2,931
|
|
|
$
|
6,635
|
|
|
Three Months Ended March 31, 2016
|
||||||||||||||||||
|
Energy & Chemicals
|
|
Distribution & Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of December 31, 2015
|
$
|
1,106
|
|
|
$
|
3,446
|
|
|
$
|
430
|
|
|
$
|
850
|
|
|
$
|
5,832
|
|
Restructuring charges
|
292
|
|
|
2,193
|
|
|
484
|
|
|
1,004
|
|
|
3,973
|
|
|||||
Cash payments and other
|
(854
|
)
|
|
(385
|
)
|
|
(440
|
)
|
|
(779
|
)
|
|
(2,458
|
)
|
|||||
Balance as of March 31, 2016
|
$
|
544
|
|
|
$
|
5,254
|
|
|
$
|
474
|
|
|
$
|
1,075
|
|
|
$
|
7,347
|
|
|
Three Months Ended March 31,
|
||||||
|
2017
|
|
2016
|
||||
Sales
|
|
|
|
||||
Energy & Chemicals
|
$
|
39,867
|
|
|
$
|
37,959
|
|
Distribution & Storage
|
113,258
|
|
|
107,497
|
|
||
BioMedical
|
50,970
|
|
|
48,301
|
|
||
Consolidated
|
$
|
204,095
|
|
|
$
|
193,757
|
|
Operating (Loss) Income
|
|
|
|
||||
Energy & Chemicals
|
$
|
(181
|
)
|
|
$
|
(2,198
|
)
|
Distribution & Storage
|
11,593
|
|
|
9,830
|
|
||
BioMedical
|
5,000
|
|
|
6,652
|
|
||
Corporate
|
(16,165
|
)
|
|
(14,247
|
)
|
||
Consolidated
|
$
|
247
|
|
|
$
|
37
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended
|
||||||||||
|
March 31, 2017
|
|
March 31, 2016
|
|
December 31, 2016
|
||||||
Sales
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
39,867
|
|
|
$
|
37,959
|
|
|
$
|
31,384
|
|
Distribution & Storage
|
113,258
|
|
|
107,497
|
|
|
133,394
|
|
|||
BioMedical
|
50,970
|
|
|
48,301
|
|
|
49,594
|
|
|||
Consolidated
|
$
|
204,095
|
|
|
$
|
193,757
|
|
|
$
|
214,372
|
|
Gross Profit
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
8,425
|
|
|
$
|
5,471
|
|
|
$
|
5,756
|
|
Distribution & Storage
|
30,548
|
|
|
29,415
|
|
|
34,220
|
|
|||
BioMedical
|
16,687
|
|
|
17,815
|
|
|
17,122
|
|
|||
Consolidated
|
$
|
55,660
|
|
|
$
|
52,701
|
|
|
$
|
57,098
|
|
Gross Profit Margin
|
|
|
|
|
|
||||||
Energy & Chemicals
|
21.1
|
%
|
|
14.4
|
%
|
|
18.3
|
%
|
|||
Distribution & Storage
|
27.0
|
%
|
|
27.4
|
%
|
|
25.7
|
%
|
|||
BioMedical
|
32.7
|
%
|
|
36.9
|
%
|
|
34.5
|
%
|
|||
Consolidated
|
27.3
|
%
|
|
27.2
|
%
|
|
26.6
|
%
|
|||
SG&A Expenses
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
7,802
|
|
|
$
|
7,065
|
|
|
$
|
6,128
|
|
Distribution & Storage
|
17,758
|
|
|
17,943
|
|
|
20,229
|
|
|||
BioMedical
|
10,817
|
|
|
10,299
|
|
|
12,403
|
|
|||
Corporate
|
16,050
|
|
|
14,229
|
|
|
13,289
|
|
|||
Consolidated
|
$
|
52,427
|
|
|
$
|
49,536
|
|
|
$
|
52,049
|
|
SG&A Expenses (% of Sales)
|
|
|
|
|
|
||||||
Energy & Chemicals
|
19.6
|
%
|
|
18.6
|
%
|
|
19.5
|
%
|
|||
Distribution & Storage
|
15.7
|
%
|
|
16.7
|
%
|
|
15.2
|
%
|
|||
BioMedical
|
21.2
|
%
|
|
21.3
|
%
|
|
25.0
|
%
|
|||
Consolidated
|
25.7
|
%
|
|
25.6
|
%
|
|
24.3
|
%
|
|||
Operating (Loss) Income
(1)
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
(181
|
)
|
|
$
|
(2,198
|
)
|
|
$
|
(883
|
)
|
Distribution & Storage
|
11,593
|
|
|
9,830
|
|
|
12,885
|
|
|||
BioMedical
|
5,000
|
|
|
6,652
|
|
|
3,847
|
|
|||
Corporate
|
(16,165
|
)
|
|
(14,247
|
)
|
|
(13,517
|
)
|
|||
Consolidated
|
$
|
247
|
|
|
$
|
37
|
|
|
$
|
2,332
|
|
Operating Margin
|
|
|
|
|
|
||||||
Energy & Chemicals
|
(0.5
|
)%
|
|
(5.8
|
)%
|
|
(2.8
|
)%
|
|||
Distribution & Storage
|
10.2
|
%
|
|
9.1
|
%
|
|
9.7
|
%
|
|||
BioMedical
|
9.8
|
%
|
|
13.8
|
%
|
|
7.8
|
%
|
|||
Consolidated
|
0.1
|
%
|
|
—
|
%
|
|
1.1
|
%
|
|
Three Months Ended
|
||||||||||
|
March 31,
2017 |
|
March 31,
2016 |
|
December 31,
2016 |
||||||
Orders
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
37,981
|
|
|
$
|
8,774
|
|
|
$
|
20,495
|
|
Distribution & Storage
|
119,968
|
|
|
139,376
|
|
|
114,616
|
|
|||
BioMedical
|
51,744
|
|
|
51,109
|
|
|
48,891
|
|
|||
Total
|
$
|
209,693
|
|
|
$
|
199,259
|
|
|
$
|
184,002
|
|
|
As of
|
||||||||||
|
March 31,
2017 |
|
March 31,
2016 |
|
December 31,
2016 |
||||||
Backlog
|
|
|
|
|
|
||||||
Energy & Chemicals
|
$
|
98,028
|
|
|
$
|
122,648
|
|
|
$
|
99,842
|
|
Distribution & Storage
|
224,978
|
|
|
239,978
|
|
|
218,210
|
|
|||
BioMedical
|
25,550
|
|
|
19,819
|
|
|
24,571
|
|
|||
Total
|
$
|
348,556
|
|
|
$
|
382,445
|
|
|
$
|
342,623
|
|
•
|
the loss of, or a significant reduction or delay in purchases by, our largest customers;
|
•
|
our ability to control our costs and successfully manage our operations;
|
•
|
fluctuations in energy prices;
|
•
|
competition in our markets;
|
•
|
the potential for negative developments in the natural gas industry related to hydraulic fracturing;
|
•
|
the impairment of our goodwill or other intangible assets;
|
•
|
degradation of our backlog as a result of modification or termination of orders;
|
•
|
our ability to successfully acquire or integrate companies that provide complementary products or technologies;
|
•
|
governmental energy policies could change, or expected changes could fail to materialize;
|
•
|
our ability to manage our fixed-price contract exposure;
|
•
|
economic downturns and deteriorating financial conditions;
|
•
|
our reliance on the availability of key supplies and services;
|
•
|
changes in government health care regulations and reimbursement policies;
|
•
|
litigation and disputes involving us, including the extent of product liability, warranty, contract, employment, intellectual property and environmental claims asserted against us;
|
•
|
fluctuations in foreign currency exchange rates and interest rates;
|
•
|
the loss of key employees;
|
•
|
general economic, political, business and market risks associated with our global operations, including collection issues related to receivables in China;
|
•
|
our warranty reserves may not adequately cover our warranty obligations;
|
•
|
technological security threats and our reliance on information systems;
|
•
|
financial distress of third parties;
|
•
|
our ability to protect our intellectual property and know-how;
|
•
|
United States Food and Drug Administration and comparable foreign regulation of our products;
|
•
|
the pricing and availability of raw materials;
|
•
|
claims that our products or processes infringe intellectual property rights of others;
|
•
|
the cost of compliance with environmental, health, and safety laws and responding to potential liabilities under these laws;
|
•
|
additional liabilities related to taxes;
|
•
|
our ability to continue our technical innovation in our product lines;
|
•
|
the underfunded status of our pension plan;
|
•
|
the risk of potential violations of the Foreign Corrupt Practices Act;
|
•
|
increased government regulation;
|
•
|
labor costs and disputes and the deterioration of our relations with our employees;
|
•
|
disruptions in our operations due to severe weather;
|
•
|
regulations governing the export of our products and other regulations applicable to us as a supplier of products to the U.S. government;
|
•
|
fluctuations or adjustments in the Company’s effective tax rate;
|
•
|
risks associated with our indebtedness, leverage and liquidity;
|
•
|
fluctuations in the price of our stock;
|
•
|
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 and/or credit facility to fund any cash settlement related to such conversions; and
|
•
|
other factors described herein.
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4.
|
Controls and Procedures
|
Item 1A.
|
Risk Factors
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
Issuer Purchases of Equity Securities
|
||||||||||||
Period
|
Total
Number of Shares Purchased |
|
Average Price
Paid Per Share |
|
Total Number of
Shares Purchased As Part of Publicly Announced Plans or Programs |
|
Approximate Dollar
Value of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||
January 1 – 31, 2017
|
36,717
|
|
|
$
|
36.37
|
|
|
—
|
|
|
$
|
—
|
|
February 1 – 28, 2017
|
11,278
|
|
|
39.65
|
|
|
—
|
|
|
—
|
|
||
March 1 – 31, 2017
|
305
|
|
|
36.59
|
|
|
—
|
|
|
—
|
|
||
Total
|
48,300
|
|
|
$
|
37.13
|
|
|
—
|
|
|
$
|
—
|
|
Item 6.
|
Exhibits
|
10.1
|
Employment Agreement, dated February 13, 2017, by and between Chart Industries, Inc. and Jillian C. Evanko. * (x)
|
10.2
|
Amendment No. 1, dated December 6, 2016 to the Employment Agreement dated April 15, 2016 by and between Chart Industries, Inc. and Mary C. Cook. * (x)
|
31.1
|
Rule 13a-14(a) Certification of Chief Executive Officer (x)
|
31.2
|
Rule 13a-14(a) Certification of Chief Financial Officer (x)
|
32.1
|
Section 1350 Certification of Chief Executive Officer (xx)
|
32.2
|
Section 1350 Certification of Chief Financial Officer (xx)
|
101.INS
|
XBRL Instance Document (xxx)
|
101.SCH
|
XBRL Taxonomy Extension Schema Document (xxx)
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document (xxx)
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document (xxx)
|
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document (xxx)
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document (xxx)
|
(x)
|
Filed herewith.
|
(xx)
|
Furnished herewith.
|
(xxx)
|
In accordance with Rule 406T of Regulation S-T, the XBRL related information in Exhibit 101 to this Form 10-Q shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be part of any registration statement or other document filed under the Securities Act of 1933 or Securities Exchange Act of 1934, except as shall be expressly set forth by specific reference in such filing.
|
*
|
Management contract or compensatory plan or arrangement.
|
Chart Industries, Inc.
|
(Registrant)
|
Date:
|
April 27, 2017
|
By:
|
/s/ Jillian C. Evanko
|
|
|
|
Jillian C. Evanko
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
(Duly Authorized Officer)
|
CHART INDUSTRIES, INC.
|
|
Jillian C. Evanko
|
("Company")
|
|
("Executive")
|
|
|
|
|
|
|
/S/ GERALD F. VINCI
|
|
/S/ JILLIAN C. EVANKO
|
Gerald F. Vinci
Chief Human Resources Officer |
|
|
1.
|
Section 4A of the Agreement is hereby added and shall read as follows:
|
(a)
|
Cash Bonus
. If Executive remains in the continuous employ of the Company or one of its affiliates from November 1, 2016 until [December 31, 2017] (the “Retention Period”) and does not relocate to a new location outside of the general Bay Village, OH area, then, subject to Section 4A.e below, Executive shall become entitled to receive a retention bonus in an amount equal to 50%
of Executive’s Base Salary as of the end of the Retention Period (or any Base Salary rate that was higher during the Term) (the “Retention Bonus”).
|
(b)
|
Treatment of Equity Awards
. In addition, if Executive becomes entitled to receive the Retention Bonus pursuant to Section 4A.a above then, subject to Section 4A.e below, (i) all outstanding equity awards held by Executive as of the date of Termination of Employment shall become 100% fully vested and exercisable (for any performance-based awards, such awards will vest at 100% of target) and (ii) the Company will extend the exercise period for each stock option held by Executive as of the date of Termination of Employment until the earlier of (A) five (5) years following the date of Termination of Employment or (B) the stock option’s original expiration date.
|
(c)
|
Forfeiture
. Except as provided in Section 4A.d below, if Executive’s employment with the Company terminates prior to the end of the Retention Period, Executive will forfeit any right to the Retention Bonus and the Company shall have no obligation to make any payment with respect to such Retention Bonus. In addition, if Executive relocates to a new location outside of the general Bay Village, OH area prior to the end of the Retention Period, she will forfeit her right to the Retention Bonus.
|
(d)
|
Termination without Cause or for Good Reason
. Notwithstanding any provision herein to the contrary, if, prior to the end of the Retention Period, the Company terminates Executive’s employment without Cause or Executive terminates her employment for Good Reason, then, subject to Section 4A.e below, Executive shall become entitled to receive the Retention Bonus, the vesting of outstanding equity awards and the extended stock option exercise period (or the cash payment in lieu thereof) as provided in Section 4A.b above.
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(e)
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Release Requirement
. Notwithstanding any provision herein to the contrary, Executive’s right to receive the Retention Bonus and receive the treatment for her outstanding equity awards provided for in Section 4A.b above shall be subject to and conditioned upon Executive’s execution and delivery of a general release of claims against the Company and its affiliates in a form reasonably acceptable to the Company (the “Release”) and such Release must become effective and irrevocable no later than sixty (60) days following the end of the Retention Period (or the date of Executive’s Termination of Employment, if earlier).
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(f)
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Payment
. The Retention Bonus, if earned, will be paid to Executive, and the vesting of the equity awards shall occur, as soon as administratively practicable following the date on
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2.
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This Amendment shall only modify the Agreement as set forth herein. All other terms and conditions of the Agreement shall remain in full force and effect.
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3.
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Capitalized terms not otherwise defined herein shall have the meaning ascribed to such terms set forth in the Agreement.
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CHART INDUSTRIES, INC.
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Mary C. Cook
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("Company")
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("Executive")
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Date: March 6, 2017
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/S/ JILLIAN C. EVANKO
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/S/ MARY C. COOK
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Chief Financial Officer
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Chief Accounting Officer and Controller, Finance
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1.
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I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Samuel F. Thomas
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Samuel F. Thomas
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Chairman of the Board and Chief Executive Officer
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1.
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I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Jillian C. Evanko
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Jillian C. Evanko
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Chief Financial Officer
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(a)
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The Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2017
(the “
Form 10-Q
”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(b)
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The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.
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/s/ Samuel F. Thomas
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Samuel F. Thomas
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Chairman of the Board and Chief Executive Officer
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(a)
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The Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2017
(the “
Form 10-Q
”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
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(b)
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The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company as of, and for, the periods presented in the Form 10-Q.
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/s/ Jillian C. Evanko
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Jillian C. Evanko
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Chief Financial Officer
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