x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
34-1712937
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
¨
|
|
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Page
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Item 1.
|
Financial Statements
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
|
(Unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
105,775
|
|
|
$
|
256,861
|
|
Accounts receivable, less allowances of $4,402 and $2,360
|
181,170
|
|
|
131,904
|
|
||
Inventories, net
|
204,779
|
|
|
149,822
|
|
||
Unbilled contract revenue
|
25,462
|
|
|
25,247
|
|
||
Prepaid expenses
|
13,403
|
|
|
7,088
|
|
||
Deferred income taxes
|
29,323
|
|
|
14,004
|
|
||
Other current assets
|
11,959
|
|
|
12,703
|
|
||
Total Current Assets
|
571,871
|
|
|
597,629
|
|
||
Property, plant and equipment, net
|
158,672
|
|
|
137,301
|
|
||
Goodwill
|
387,242
|
|
|
288,770
|
|
||
Identifiable intangible assets, net
|
194,631
|
|
|
140,553
|
|
||
Other assets, net
|
10,820
|
|
|
10,222
|
|
||
TOTAL ASSETS
|
$
|
1,323,236
|
|
|
$
|
1,174,475
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
85,416
|
|
|
$
|
84,297
|
|
Customer advances and billings in excess of contract revenue
|
106,438
|
|
|
102,996
|
|
||
Accrued salaries, wages and benefits
|
27,228
|
|
|
29,108
|
|
||
Current portion of warranty reserve
|
20,187
|
|
|
13,181
|
|
||
Short-term debt
|
23,157
|
|
|
4,758
|
|
||
Current portion of long-term debt
|
3,750
|
|
|
6,500
|
|
||
Other current liabilities
|
28,170
|
|
|
24,653
|
|
||
Total Current Liabilities
|
294,346
|
|
|
265,493
|
|
||
Long-term debt
|
250,640
|
|
|
223,224
|
|
||
Long-term deferred tax liability, net
|
68,425
|
|
|
43,945
|
|
||
Accrued pension liabilities
|
13,841
|
|
|
15,905
|
|
||
Other long-term liabilities
|
17,002
|
|
|
12,357
|
|
||
Equity
|
|
|
|
||||
Chart Industries’ shareholders’ equity:
|
|
|
|
||||
Common stock, par value $.01 per share – 150,000,000 shares authorized, 30,000,390 and 29,612,684 shares issued and outstanding at September 30, 2012 and December 31, 2011, respectively
|
300
|
|
|
296
|
|
||
Additional paid-in capital
|
345,707
|
|
|
333,034
|
|
||
Retained earnings
|
325,251
|
|
|
274,716
|
|
||
Accumulated other comprehensive income
|
4,357
|
|
|
2,993
|
|
||
Total Chart Industries, Inc. shareholders’ equity
|
675,615
|
|
|
611,039
|
|
||
Noncontrolling interest
|
3,367
|
|
|
2,512
|
|
||
Total equity
|
678,982
|
|
|
613,551
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
1,323,236
|
|
|
$
|
1,174,475
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Sales
|
$
|
254,249
|
|
|
$
|
211,311
|
|
|
$
|
710,294
|
|
|
$
|
574,950
|
|
Cost of sales
|
176,237
|
|
|
144,680
|
|
|
490,596
|
|
|
393,503
|
|
||||
Gross profit
|
78,012
|
|
|
66,631
|
|
|
219,698
|
|
|
181,447
|
|
||||
Selling, general and administrative expenses
|
42,170
|
|
|
34,127
|
|
|
117,522
|
|
|
105,326
|
|
||||
Amortization expense
|
3,810
|
|
|
3,342
|
|
|
10,130
|
|
|
9,947
|
|
||||
Impairment of intangible assets
|
—
|
|
|
—
|
|
|
3,070
|
|
|
—
|
|
||||
Loss on disposal of assets
|
—
|
|
|
119
|
|
|
—
|
|
|
1,335
|
|
||||
|
45,980
|
|
|
37,588
|
|
|
130,722
|
|
|
116,608
|
|
||||
Operating income
|
32,032
|
|
|
29,043
|
|
|
88,976
|
|
|
64,839
|
|
||||
Other expenses (income):
|
|
|
|
|
|
|
|
||||||||
Interest expense, net
|
4,006
|
|
|
6,361
|
|
|
11,657
|
|
|
14,358
|
|
||||
Financing costs amortization
|
326
|
|
|
445
|
|
|
1,203
|
|
|
1,094
|
|
||||
Foreign currency losses (gains)
|
461
|
|
|
(2,390
|
)
|
|
1,879
|
|
|
(2,533
|
)
|
||||
|
4,793
|
|
|
4,416
|
|
|
14,739
|
|
|
12,919
|
|
||||
Income before income taxes
|
27,239
|
|
|
24,627
|
|
|
74,237
|
|
|
51,920
|
|
||||
Income tax expense
|
8,354
|
|
|
7,122
|
|
|
23,064
|
|
|
15,992
|
|
||||
Net income
|
18,885
|
|
|
17,505
|
|
|
51,173
|
|
|
35,928
|
|
||||
Noncontrolling interest, net of tax
|
369
|
|
|
(35
|
)
|
|
638
|
|
|
267
|
|
||||
Net income attributable to Chart Industries, Inc.
|
$
|
18,516
|
|
|
$
|
17,540
|
|
|
$
|
50,535
|
|
|
$
|
35,661
|
|
Net income attributable to Chart Industries, Inc. per common share – basic
|
$
|
0.62
|
|
|
$
|
0.60
|
|
|
$
|
1.70
|
|
|
$
|
1.23
|
|
Net income attributable to Chart Industries, Inc. per common share – diluted
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
$
|
1.68
|
|
|
$
|
1.19
|
|
Weighted average number of common shares outstanding – basic
|
29,839
|
|
|
29,288
|
|
|
29,743
|
|
|
29,088
|
|
||||
Weighted average number of common shares outstanding – diluted
|
30,243
|
|
|
29,966
|
|
|
30,168
|
|
|
29,871
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income, net of tax
|
$
|
21,428
|
|
|
$
|
6,459
|
|
|
$
|
52,537
|
|
|
$
|
32,292
|
|
Less: Comprehensive income (loss) attributable to noncontrolling interest, net of tax
|
369
|
|
|
(35
|
)
|
|
638
|
|
|
267
|
|
||||
Comprehensive income attributable to Chart Industries, Inc., net of tax
|
$
|
21,059
|
|
|
$
|
6,494
|
|
|
$
|
51,899
|
|
|
$
|
32,025
|
|
|
Nine Months Ended September 30,
|
||||||
|
2012
|
|
2011
|
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
51,173
|
|
|
$
|
35,928
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
22,771
|
|
|
20,410
|
|
||
Interest accretion of convertible notes discount
|
6,764
|
|
|
1,421
|
|
||
Employee share-based compensation expense
|
5,711
|
|
|
4,208
|
|
||
Financing costs amortization
|
1,203
|
|
|
1,094
|
|
||
Foreign currency losses (gains)
|
3,095
|
|
|
(1,559
|
)
|
||
Loss on disposal of assets
|
—
|
|
|
1,335
|
|
||
Impairment of intangible assets
|
3,070
|
|
|
—
|
|
||
Reversal of contingent consideration liability
|
(4,620
|
)
|
|
—
|
|
||
Other non-cash operating activities
|
(609
|
)
|
|
(1,826
|
)
|
||
(Decrease) increase in cash resulting from changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(28,417
|
)
|
|
(23,358
|
)
|
||
Inventory
|
(22,594
|
)
|
|
(21,283
|
)
|
||
Unbilled contract revenues and other current assets
|
(3,882
|
)
|
|
(10,244
|
)
|
||
Accounts payable and other current liabilities
|
(18,134
|
)
|
|
6,312
|
|
||
Customer advances and billings in excess of contract revenue
|
(1,058
|
)
|
|
24,605
|
|
||
Net Cash Provided By Operating Activities
|
14,473
|
|
|
37,043
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Capital expenditures
|
(28,951
|
)
|
|
(15,161
|
)
|
||
Proceeds from sale of assets
|
2,040
|
|
|
—
|
|
||
Acquisition of businesses, net of cash acquired
|
(182,450
|
)
|
|
(37,680
|
)
|
||
Other investing activities
|
(359
|
)
|
|
388
|
|
||
Net Cash Used In Investing Activities
|
(209,720
|
)
|
|
(52,453
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds from long-term debt
|
21,375
|
|
|
—
|
|
||
Borrowings on revolving credit facilities
|
18,387
|
|
|
—
|
|
||
Principal payments on long-term debt
|
(3,500
|
)
|
|
(4,875
|
)
|
||
Proceeds from issuance of convertible notes
|
—
|
|
|
250,000
|
|
||
Proceeds from issuance of warrants
|
—
|
|
|
48,848
|
|
||
Payment for call options related to convertible notes
|
—
|
|
|
(66,486
|
)
|
||
Payment of deferred financing costs
|
(1,445
|
)
|
|
(7,340
|
)
|
||
Proceeds from exercise of options
|
3,324
|
|
|
5,101
|
|
||
Tax benefit from exercise of stock options
|
7,934
|
|
|
6,984
|
|
||
Payment of contingent consideration
|
(1,300
|
)
|
|
(1,300
|
)
|
||
Common stock repurchases
|
(4,537
|
)
|
|
(1,090
|
)
|
||
Net Cash Provided By Financing Activities
|
40,238
|
|
|
229,842
|
|
||
Effect of exchange rate changes on cash
|
3,923
|
|
|
2,501
|
|
||
Net (decrease) increase in cash and cash equivalents
|
(151,086
|
)
|
|
216,933
|
|
||
Cash and cash equivalents at beginning of period
|
256,861
|
|
|
165,112
|
|
||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
105,775
|
|
|
$
|
382,045
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Raw materials and supplies
|
$
|
84,686
|
|
|
$
|
64,832
|
|
Work in process
|
46,719
|
|
|
36,045
|
|
||
Finished goods
|
73,374
|
|
|
48,945
|
|
||
|
$
|
204,779
|
|
|
$
|
149,822
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Beginning balance
|
$
|
11,248
|
|
|
$
|
12,849
|
|
|
$
|
13,181
|
|
|
$
|
13,372
|
|
Warranty expense
|
2,741
|
|
|
1,631
|
|
|
6,343
|
|
|
5,233
|
|
||||
Warranty usage
|
(3,722
|
)
|
|
(1,949
|
)
|
|
(9,257
|
)
|
|
(6,074
|
)
|
||||
Acquired warranty reserves
|
18,779
|
|
|
817
|
|
|
18,779
|
|
|
817
|
|
||||
Ending balance
|
$
|
29,046
|
|
|
$
|
13,348
|
|
|
$
|
29,046
|
|
|
$
|
13,348
|
|
|
|
|
September 30, 2012
|
|
December 31, 2011
|
||||||||||||
|
Estimated
Useful Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
||||||||
Finite-lived assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Unpatented technology
|
9 years
|
|
$
|
41,461
|
|
|
$
|
(10,305
|
)
|
|
$
|
18,113
|
|
|
$
|
(9,024
|
)
|
Patents
|
10 years
|
|
8,980
|
|
|
(6,914
|
)
|
|
9,080
|
|
|
(5,434
|
)
|
||||
Product names
|
14 years
|
|
9,281
|
|
|
(2,261
|
)
|
|
5,638
|
|
|
(1,818
|
)
|
||||
Customer relations
|
13 years
|
|
165,192
|
|
|
(56,018
|
)
|
|
130,488
|
|
|
(48,840
|
)
|
||||
|
|
|
$
|
224,914
|
|
|
$
|
(75,498
|
)
|
|
$
|
163,319
|
|
|
$
|
(65,116
|
)
|
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
||||||||
Trademarks and trade names
|
|
|
$
|
45,215
|
|
|
|
|
$
|
39,280
|
|
|
|
||||
In-process research and development
|
|
|
—
|
|
|
|
|
3,070
|
|
|
|
||||||
|
|
|
$
|
45,215
|
|
|
|
|
$
|
42,350
|
|
|
|
Balance as of January 1, 2012
|
$
|
288,770
|
|
Foreign currency adjustments
|
(177
|
)
|
|
Acquisition of AirSep Corporation
|
98,649
|
|
|
Balance as of September 30, 2012
|
$
|
387,242
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Principal balance of liability component
|
$
|
250,000
|
|
|
$
|
250,000
|
|
Unamortized discount
|
(68,735
|
)
|
|
(75,526
|
)
|
||
Carrying amount of liability component
|
$
|
181,265
|
|
|
$
|
174,474
|
|
Equity component, net of deferred taxes
|
$
|
75,826
|
|
|
$
|
75,502
|
|
|
Three Months Ended September 30, 2012
|
||||||||||||||||||
|
Energy &
Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of July 1, 2012
|
$
|
—
|
|
|
$
|
6
|
|
|
$
|
225
|
|
|
$
|
—
|
|
|
$
|
231
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
359
|
|
|
—
|
|
|
359
|
|
|||||
Cash payments and other
|
—
|
|
|
(4
|
)
|
|
(329
|
)
|
|
—
|
|
|
(333
|
)
|
|||||
Balance as of September 30, 2012
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
257
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||
|
Energy &
Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of January 1, 2012
|
$
|
—
|
|
|
$
|
115
|
|
|
$
|
998
|
|
|
$
|
—
|
|
|
$
|
1,113
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
390
|
|
|
—
|
|
|
390
|
|
|||||
Cash payments and other
|
—
|
|
|
(113
|
)
|
|
(1,133
|
)
|
|
—
|
|
|
(1,246
|
)
|
|||||
Balance as of September 30, 2012
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
255
|
|
|
$
|
—
|
|
|
$
|
257
|
|
|
Three Months Ended September 30, 2011
|
||||||||||||||||||
|
Energy &
Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of July 1, 2011
|
$
|
—
|
|
|
$
|
157
|
|
|
$
|
1,966
|
|
|
$
|
—
|
|
|
$
|
2,123
|
|
Restructuring charges
|
—
|
|
|
—
|
|
|
1,068
|
|
|
—
|
|
|
1,068
|
|
|||||
Cash payments and other
|
—
|
|
|
(43
|
)
|
|
(1,352
|
)
|
|
—
|
|
|
(1,395
|
)
|
|||||
Balance as of September 30, 2011
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
1,682
|
|
|
$
|
—
|
|
|
$
|
1,796
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||
|
Energy &
Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Balance as of January 1, 2011
|
$
|
103
|
|
|
$
|
388
|
|
|
$
|
2,088
|
|
|
$
|
—
|
|
|
$
|
2,579
|
|
Restructuring charges
|
—
|
|
|
26
|
|
|
4,528
|
|
|
437
|
|
|
4,991
|
|
|||||
Loss on disposal of assets
|
—
|
|
|
—
|
|
|
(1,216
|
)
|
|
—
|
|
|
(1,216
|
)
|
|||||
Cash payments and other
|
(103
|
)
|
|
(300
|
)
|
|
(3,718
|
)
|
|
(437
|
)
|
|
(4,558
|
)
|
|||||
Balance as of September 30, 2011
|
$
|
—
|
|
|
$
|
114
|
|
|
$
|
1,682
|
|
|
$
|
—
|
|
|
$
|
1,796
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Net income attributable to Chart Industries, Inc.
|
$
|
18,516
|
|
|
$
|
17,540
|
|
|
$
|
50,535
|
|
|
$
|
35,661
|
|
Net income attributable to Chart Industries, Inc. per common share – basic
|
$
|
0.62
|
|
|
$
|
0.60
|
|
|
$
|
1.70
|
|
|
$
|
1.23
|
|
Net income attributable to Chart Industries, Inc. per common share – diluted
|
$
|
0.61
|
|
|
$
|
0.59
|
|
|
$
|
1.68
|
|
|
$
|
1.19
|
|
Weighted average number of common shares outstanding – basic
|
29,839
|
|
|
29,288
|
|
|
29,743
|
|
|
29,088
|
|
||||
Dilutive effect of share-based awards
|
391
|
|
|
678
|
|
|
412
|
|
|
783
|
|
||||
Dilutive effect of convertible debt
|
13
|
|
|
—
|
|
|
13
|
|
|
—
|
|
||||
Weighted average number of common shares outstanding – diluted
|
30,243
|
|
|
29,966
|
|
|
30,168
|
|
|
29,871
|
|
|
Three Months Ended September 30, 2012
|
||||||||||
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive income
|
||||||
Balance as of July 1, 2012
|
$
|
10,969
|
|
|
$
|
(9,155
|
)
|
|
$
|
1,814
|
|
Other comprehensive income, net of tax
|
2,299
|
|
|
244
|
|
|
2,543
|
|
|||
Balance as of September 30, 2012
|
$
|
13,268
|
|
|
$
|
(8,911
|
)
|
|
$
|
4,357
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive income
|
||||||
Balance as of January 1, 2012
|
$
|
12,635
|
|
|
$
|
(9,642
|
)
|
|
$
|
2,993
|
|
Other comprehensive income, net of tax
|
633
|
|
|
731
|
|
|
1,364
|
|
|||
Balance as of September 30, 2012
|
$
|
13,268
|
|
|
$
|
(8,911
|
)
|
|
$
|
4,357
|
|
|
Three Months Ended September 30, 2011
|
||||||||||
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive income (loss)
|
||||||
Balance as of July 1, 2011
|
$
|
22,166
|
|
|
$
|
(4,945
|
)
|
|
$
|
17,221
|
|
Other comprehensive income (loss), net of tax
|
(11,137
|
)
|
|
91
|
|
|
(11,046
|
)
|
|||
Balance as of September 30, 2011
|
$
|
11,029
|
|
|
$
|
(4,854
|
)
|
|
$
|
6,175
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||
|
Foreign currency translation adjustments
|
|
Pension liability adjustments, net of taxes
|
|
Accumulated other comprehensive income (loss)
|
||||||
Balance as of January 1, 2011
|
$
|
14,938
|
|
|
$
|
(5,127
|
)
|
|
$
|
9,811
|
|
Other comprehensive income (loss), net of tax
|
(3,909
|
)
|
|
273
|
|
|
(3,636
|
)
|
|||
Balance as of September 30, 2011
|
$
|
11,029
|
|
|
$
|
(4,854
|
)
|
|
$
|
6,175
|
|
Net assets acquired:
|
|
||
Accounts receivable, net
|
$
|
24,280
|
|
Inventories, net
|
32,058
|
|
|
Prepaid expenses
|
586
|
|
|
Other current assets
|
3,837
|
|
|
Property, plant and equipment
|
5,370
|
|
|
Other assets
|
976
|
|
|
Accounts payable
|
(11,031
|
)
|
|
Customer advances and billings in excess of contract revenue
|
(4,782
|
)
|
|
Accrued salaries, wages and benefits
|
(1,837
|
)
|
|
Other current liabilities
|
(288
|
)
|
|
Current portion of warranty reserve
|
(9,920
|
)
|
|
Other long-term liabilities
|
(11,359
|
)
|
|
Net tangible assets acquired
|
27,890
|
|
|
Deferred income tax assets
|
13,051
|
|
|
Goodwill
|
98,649
|
|
|
Identifiable intangible assets
|
67,700
|
|
|
Long-term deferred tax liability
|
(24,840
|
)
|
|
Net assets acquired
|
$
|
182,450
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Interest cost
|
$
|
552
|
|
|
$
|
603
|
|
|
$
|
1,656
|
|
|
$
|
1,809
|
|
Expected return on plan assets
|
(662
|
)
|
|
(644
|
)
|
|
(1,986
|
)
|
|
(1,932
|
)
|
||||
Amortization of net loss
|
244
|
|
|
91
|
|
|
731
|
|
|
273
|
|
||||
Total pension expense
|
$
|
134
|
|
|
$
|
50
|
|
|
$
|
401
|
|
|
$
|
150
|
|
|
Three Months Ended September 30, 2012
|
||||||||||||||||||
|
Energy
& Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Sales
|
$
|
82,968
|
|
|
$
|
117,752
|
|
|
$
|
53,529
|
|
|
$
|
—
|
|
|
$
|
254,249
|
|
Operating income (loss)
|
17,057
|
|
|
19,948
|
|
|
7,051
|
|
|
(12,024
|
)
|
|
32,032
|
|
|
Nine Months Ended September 30, 2012
|
||||||||||||||||||
|
Energy
& Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Sales
|
$
|
228,921
|
|
|
$
|
336,278
|
|
|
$
|
145,095
|
|
|
$
|
—
|
|
|
$
|
710,294
|
|
Operating income (loss)
|
44,785
|
|
|
54,447
|
|
|
25,498
|
|
|
(35,754
|
)
|
|
88,976
|
|
|
Three Months Ended September 30, 2011
|
||||||||||||||||||
|
Energy
& Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Sales
|
$
|
57,777
|
|
|
$
|
100,911
|
|
|
$
|
52,623
|
|
|
$
|
—
|
|
|
$
|
211,311
|
|
Operating income (loss)
|
12,584
|
|
|
16,109
|
|
|
8,548
|
|
|
(8,198
|
)
|
|
29,043
|
|
|
Nine Months Ended September 30, 2011
|
||||||||||||||||||
|
Energy
& Chemicals
|
|
Distribution
& Storage
|
|
BioMedical
|
|
Corporate
|
|
Total
|
||||||||||
Sales
|
$
|
149,414
|
|
|
$
|
275,966
|
|
|
$
|
149,570
|
|
|
$
|
—
|
|
|
$
|
574,950
|
|
Operating income (loss)
|
21,941
|
|
|
44,731
|
|
|
24,218
|
|
|
(26,051
|
)
|
|
64,839
|
|
|
September 30,
2012 |
|
December 31,
2011 |
||||
Assets:
|
|
|
|
||||
Energy & Chemicals
|
$
|
237,381
|
|
|
$
|
203,067
|
|
Distribution & Storage
|
580,284
|
|
|
556,688
|
|
||
BioMedical
|
456,384
|
|
|
226,729
|
|
||
Corporate
|
49,187
|
|
|
187,991
|
|
||
Total Assets
|
$
|
1,323,236
|
|
|
$
|
1,174,475
|
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2012
|
|
2011
|
|
2012
|
|
2011
|
||||||||
Sales
|
|
|
|
|
|
|
|
||||||||
Energy & Chemicals
|
$
|
82,968
|
|
|
$
|
57,777
|
|
|
$
|
228,921
|
|
|
$
|
149,414
|
|
Distribution & Storage
|
117,752
|
|
|
100,911
|
|
|
336,278
|
|
|
275,966
|
|
||||
BioMedical
|
53,529
|
|
|
52,623
|
|
|
145,095
|
|
|
149,570
|
|
||||
Total
|
$
|
254,249
|
|
|
$
|
211,311
|
|
|
$
|
710,294
|
|
|
$
|
574,950
|
|
Gross Profit
|
|
|
|
|
|
|
|
||||||||
Energy & Chemicals
|
$
|
24,255
|
|
|
$
|
19,121
|
|
|
$
|
69,264
|
|
|
$
|
45,180
|
|
Distribution & Storage
|
35,678
|
|
|
28,455
|
|
|
95,968
|
|
|
78,898
|
|
||||
BioMedical
|
18,079
|
|
|
19,055
|
|
|
54,466
|
|
|
57,369
|
|
||||
Total
|
$
|
78,012
|
|
|
$
|
66,631
|
|
|
$
|
219,698
|
|
|
$
|
181,447
|
|
Gross Profit Margin
|
|
|
|
|
|
|
|
||||||||
Energy & Chemicals
|
29.2
|
%
|
|
33.1
|
%
|
|
30.3
|
%
|
|
30.2
|
%
|
||||
Distribution & Storage
|
30.3
|
%
|
|
28.2
|
%
|
|
28.5
|
%
|
|
28.6
|
%
|
||||
BioMedical
|
33.8
|
%
|
|
36.2
|
%
|
|
37.5
|
%
|
|
38.4
|
%
|
||||
Total
|
30.7
|
%
|
|
31.5
|
%
|
|
30.9
|
%
|
|
31.6
|
%
|
||||
Operating Income (Loss)
|
|
|
|
|
|
|
|
||||||||
Energy & Chemicals
|
$
|
17,057
|
|
|
$
|
12,584
|
|
|
$
|
44,785
|
|
|
$
|
21,941
|
|
Distribution & Storage
|
19,948
|
|
|
16,109
|
|
|
54,447
|
|
|
44,731
|
|
||||
BioMedical
|
7,051
|
|
|
8,548
|
|
|
25,498
|
|
|
24,218
|
|
||||
Corporate
|
(12,024
|
)
|
|
(8,198
|
)
|
|
(35,754
|
)
|
|
(26,051
|
)
|
||||
Total
|
$
|
32,032
|
|
|
$
|
29,043
|
|
|
$
|
88,976
|
|
|
$
|
64,839
|
|
|
Three Months Ended
|
||||||
|
September 30,
2012 |
|
June 30,
2012 |
||||
Orders
|
|
|
|
||||
Energy & Chemicals
|
$
|
56,435
|
|
|
$
|
58,119
|
|
Distribution & Storage
|
120,388
|
|
|
121,376
|
|
||
BioMedical
|
56,598
|
|
|
48,459
|
|
||
Total
|
$
|
233,421
|
|
|
$
|
227,954
|
|
Backlog
|
|
|
|
||||
Energy & Chemicals
|
$
|
397,741
|
|
|
$
|
424,005
|
|
Distribution & Storage
|
214,377
|
|
|
211,963
|
|
||
BioMedical
|
27,708
|
|
|
12,173
|
|
||
Total
|
$
|
639,826
|
|
|
$
|
648,141
|
|
•
|
the cyclicality of the markets which we serve and the vulnerability of those markets to economic downturns;
|
•
|
the loss of, or a significant reduction or delay in purchases by our largest customers;
|
•
|
the fluctuations in energy prices;
|
•
|
governmental energy policies could change, or expected changes could fail to materialize;
|
•
|
the potential for negative developments in the natural gas industry related to hydraulic fracturing;
|
•
|
competition in our markets;
|
•
|
economic downturns and deteriorating financial conditions;
|
•
|
our ability to manage our fixed-price contract exposure;
|
•
|
our reliance on the availability of key supplies and services;
|
•
|
degradation of our backlog as a result of modification or termination of orders;
|
•
|
our ability to successfully manage our planned operational expansions;
|
•
|
changes in government health care regulations and reimbursement policies;
|
•
|
general economic, political, business and market risks associated with our global operations including the instability in North Africa and the Middle East and any expansion thereof;
|
•
|
our ability to successfully acquire or integrate companies that provide complementary products or technologies, including the successful integration of the AirSep acquisition;
|
•
|
fluctuations in foreign currency exchange rates and interest rates;
|
•
|
financial distress of third parties;
|
•
|
the loss of key employees;
|
•
|
the pricing and availability of raw materials;
|
•
|
our ability to control our costs while maintaining customer relationships and core business resources;
|
•
|
litigation and disputes involving us, including the extent of product liability, warranty, contract, employment and environmental claims asserted against us;
|
•
|
United States Food and Drug Administration and comparable foreign regulation of our products;
|
•
|
the impairment of our goodwill or other intangible assets;
|
•
|
the cost of compliance with environmental, health and safety laws and responding to potential liabilities under these laws;
|
•
|
labor costs and disputes and the deterioration of our relations with our employees;
|
•
|
additional liabilities related to taxes;
|
•
|
the underfunded status of our pension plan;
|
•
|
our ability to continue our technical innovation in our product lines;
|
•
|
our ability to protect our intellectual property and know-how;
|
•
|
claims that our products or processes infringe intellectual property rights of others;
|
•
|
disruptions in our operations due to severe weather;
|
•
|
potential violations of the Foreign Corrupt Practices Act;
|
•
|
increased government regulation;
|
•
|
regulations governing the export of our products and other regulations applicable to us as a supplier of products to the U.S. government;
|
•
|
technological security threats and our reliance on information systems;
|
•
|
risks associated with our indebtedness, leverage, debt service and liquidity;
|
•
|
potential dilution to existing holders of our common stock as a result of the conversion of our convertible debt;
|
•
|
fluctuations in the price of our stock; 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
|
a.)
|
None.
|
b.)
|
None.
|
c.)
|
During the third quarter of 2012, we repurchase
d 650 shares of common stock to satisfy tax withholding obligations relating to the vesting or payment of equity awards for an aggregate purchase price of approximately $46,000. The total number of shares repurchased represents the net shares issu
ed to satisfy tax withholding. All such repurchased shares were subsequently retired during the three months ended September 30, 2012.
|
|
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 |
||||||
July 1 – 31, 2012
|
124
|
|
|
$
|
67.95
|
|
|
—
|
|
|
$
|
—
|
|
August 1 – 31, 2012
|
526
|
|
|
71.00
|
|
|
—
|
|
|
—
|
|
||
September 1 – 30, 2012
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||
Total
|
650
|
|
|
$
|
70.42
|
|
|
—
|
|
|
$
|
—
|
|
Item 6.
|
Exhibits
|
2.1
|
Agreement and Plan of Merger, dated as of July 23, 2012 by and among Chart Inc., Bison Corp., AirSep Corporation, Joseph L. Priest, as Representative, for purposes of Section 4.10 only, Joseph L. Priest and Ravinder K. Bansal, and for purposes of Section 9.14 only, Chart Industries, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on 8-K filed with the SEC on July 23, 2012 (File No. 001-11442)).*
|
2.2
|
Amendment No. 1 to Agreement and Plan of Merger, dated as of August 30, 2012 by and among Chart Inc., Bison Corp., AirSep Corporation, Joseph L. Priest, as Representative, for purposes of Section 4.10 only, Joseph L. Priest and Ravinder K. Bansal, and for purposes of Section 9.14 only, Chart Industries, Inc. (x)
|
10.1
|
Amendment No. 1 to the Chart Industries, Inc. Amended and Restated 2009 Omnibus Equity Plan. (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
|
The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2012, formatted in XBRL: (i) Condensed Consolidated Statements of Income and Comprehensive Income, (ii) Condensed Consolidated Balance Sheets, (iii) Condensed Consolidated Statements of Cash Flow, (iv) the Notes to Condensed Consolidated Financial Statements. **
|
Chart Industries, Inc.
|
(Registrant)
|
Date:
|
November 1, 2012
|
By:
|
/s/ Michael F. Biehl
|
|
|
|
Michael F. Biehl
|
|
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
|
(Principal Financial Officer)
|
|
|
|
(Duly Authorized Officer)
|
1.
|
Definitions
. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the Agreement. References to Sections in this Amendment refer to such Sections of the Agreement.
|
2.
|
Amendment
. The Agreement is hereby amended as follows:
|
a.
|
Section 1.2(a)(3) is hereby amended and restated in its entirety as follows:
|
b.
|
The lead-in to Section 1.2(a)(5) is hereby amended and restated in its entirety as follows:
|
c.
|
Section 1.2(a)(5)(ii) is hereby amended and restated in its entirety as follows:
|
d.
|
Section 1.2(a)(6) is hereby amended and restated in its entirety as follows:
|
e.
|
Section 1.2(a)(14) is hereby amended and restated in its entirety as follows:
|
f.
|
The last two sentences of Section 2.21(a) are hereby amended and restated in their entirety as follows:
|
g.
|
The last sentence of Section 4.13 is hereby amended and restated in its entirety as follows:
|
h.
|
Section 6.2(d) is hereby amended and restated in its entirety as follows:
|
i.
|
Section 9.1 is hereby amended by deleting the definition of Closing Balance Sheet.
|
j.
|
Section 9.1 is hereby further amended to amend and restate the definition of
“Closing Net Working Capital”
as follows:
|
k.
|
Section 2.4(b) of the Disclosure Schedule is hereby amended by deleting item 2 therein.
|
3.
|
Binding Effect
. Except to the extent expressly provided herein, the Agreement shall remain in full force and effect in accordance with its terms.
|
4.
|
Counterparts
. This Amendment may be executed in any number of counterparts, and by the different parties hereto in separate counterparts, each of which when executed will be deemed to be an original but all of which taken together will constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopy or by electronic delivery in Adobe Portable Document Format or other electronic format based on common standards will be effective as delivery of a manually executed counterpart of this Amendment.
|
5.
|
Miscellaneous
. This Amendment shall be deemed to be a Related Agreement under the Agreement. Each of the parties hereto represents and warrants with respect to itself that (i) it has the power and authority to execute, deliver and perform its obligations under this Amendment, (ii) the execution, delivery and performance of this Amendment has been duly authorized by all requisite corporate action on the part of it, (iii) this Amendment has been duly executed and delivered by such party and, assuming due authorization, execution and delivery by the other parties hereto, represents the legal, valid and binding obligation of such party enforceable against it in accordance with its terms, subject to the effect of the General Enforceability Exceptions. Article 9 of the Agreement is incorporated herein by reference and, to the extent applicable, shall govern the terms of this Amendment.
|
AIRSEP CORPORATION
|
|
CHART INC.
|
|
|
|
/s/ Ravinder K. Bansal
|
|
/s/ Michael F. Biehl
|
Name: Ravinder K. Bansal
|
|
Name: Michael F. Biehl
|
Title: Chairman & CEO
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
|
JOSEPH L. PRIEST
|
|
|
solely in its capacity as the Representative under Section 8.9
|
|
BISON CORP.
|
|
|
|
/s/ Joseph L. Priest
|
|
/s/ Michael F. Biehl
|
Name: Joseph L. Priest
|
|
Name: Michael F. Biehl
|
Title:
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
|
|
|
Solely as to Section 4.10:
|
|
Solely as to Section 9.14:
|
|
|
CHART INDUSTRIES, INC.
|
|
|
|
/s/ Joseph L. Priest
|
|
/s/ Michael F. Biehl
|
JOSEPH L. PRIEST
|
|
Name: Michael F. Biehl
|
|
|
Title: Executive Vice President, Chief Financial Officer and Treasurer
|
/s/ Ravinder K. Bansal
|
|
|
RAVINDER K. BANSAL
|
|
|
1.
|
Section 2.2 of the Plan is hereby deleted in its entirety and replaced with the following:
|
2.
|
Capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in the Plan.
|
3.
|
Except as otherwise modified in this Amendment, the Plan shall remain in full force and effect. In the event of a conflict between the terms of this Amendment and the Plan, the terms of this Amendment shall control.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
/s/ Samuel F. Thomas
|
|
Samuel F. Thomas
|
|
Chairman of the Board, Chief Executive Officer and President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Chart Industries, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
/s/ Michael F. Biehl
|
|
Michael F. Biehl
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|
(a)
|
The Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2012
(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
|
(b)
|
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.
|
|
/s/ Samuel F. Thomas
|
|
Samuel F. Thomas
|
|
Chairman of the Board, Chief Executive Officer and President
|
(a)
|
The Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2012
(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
|
(b)
|
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.
|
|
/s/ Michael F. Biehl
|
|
Michael F. Biehl
|
|
Executive Vice President, Chief Financial Officer and Treasurer
|