<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from__________________to_______________________
Commission File Number 1-11442
CHART INDUSTRIES, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 34-1712937
- --------------------------------- -----------------------------------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
34799 Curtis Boulevard, Eastlake, Ohio 44095
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (ZIP Code)
Registrant's Telephone Number, Including Area Code: (440) 946-2525
35555 Curtis Boulevard, Eastlake, Ohio 44095
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
At June 30, 1997, there were 14,427,843 outstanding shares of the
Company's Common Stock, $.01 par value per share.
<PAGE> 2
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.
The information required by Rule 10-01 of Regulation S-X is
set forth on pages 3 through 7 of this Report on Form 10-Q.
2
<PAGE> 3
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------------------------------
<S> <C> <C>
ASSETS
Current Assets
Cash and cash equivalents $41 $4,304
Restricted cash $4,597 5,104
Accounts receivable 21,993 25,922
Inventories 19,984 21,727
Other current assets 5,478 3,630
----------------------------------
Total Current Assets 52,093 60,687
Property, plant & equipment, net 20,864 17,882
Other assets, net 2,324 2,627
----------------------------------
TOTAL ASSETS $75,281 $81,196
==================================
LIABILITIES & SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $5,755 $8,582
Customer advances 15,359 12,698
Billings in excess of contract revenue 2,325 11,444
Accrued expenses and other liabilities 13,641 14,955
Current portion of long-term debt 2,896 361
----------------------------------
Total Current Liabilities 39,976 48,040
Long-term debt 4,238 4,469
Deferred income taxes 591 591
Shareholders' Equity
Preferred stock, 1,000,000 shares authorized, none
issued or outstanding
Common stock, par value $.01 per share -
30,000,000 shares authorized, 15,325,800 and 15,304,800 shares
issued at June 30, 1997 and December 31, 1996, respectively 153 102
Additional paid-in capital 18,709 18,118
Retained earnings 21,685 14,321
Treasury stock, at cost, 897,957 and 543,878 shares at
June 30, 1997 and December 31, 1996, respectively (10,071) (4,445)
----------------------------------
30,476 28,096
----------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $75,281 $81,196
==================================
</TABLE>
The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
The accompanying notes are an integral part of these condensed
consolidated financial statements.
3
<PAGE> 4
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------------------------- -------------------------------
<S> <C> <C> <C> <C>
Sales $41,758 $30,612 $84,198 $65,339
Cost of products sold 28,284 20,828 58,556 45,538
------------------------------- -------------------------------
Gross Profit 13,474 9,784 25,642 19,801
Selling, general & administrative expense 6,326 4,383 11,712 9,290
------------------------------- -------------------------------
Operating Income 7,148 5,401 13,930 10,511
Interest expense, net 26 181 18 418
------------------------------- -------------------------------
Income Before Income Taxes 7,122 5,220 13,912 10,093
Income taxes 2,421 1,672 4,730 3,336
------------------------------- -------------------------------
Net Income $4,701 $3,548 $9,182 $6,757
=============================== ===============================
Net Income per Common Share $0.32 $0.23 $0.62 $0.45
=============================== ===============================
Shares used in per share calculations 14,733 15,195 14,846 15,167
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
<PAGE> 5
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
--------------------------
1997 1996
--------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 9,182 $ 6,757
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,364 1,422
Contribution of treasury stock to 401K plans 338 305
Deferred income taxes 0 (110)
Increase (decrease) in cash resulting from changes in
operating assets and liabilities:
Accounts receivable 3,929 6,747
Inventory and other current assets (105) (3,963)
Accounts payable and accrued liabilities (4,141) 1,140
Billings in excess of contract revenue and
customer advances (6,458) 7,501
--------------------------
Net Cash Provided By Operating Activities 4,109 19,799
INVESTING ACTIVITIES
Capital expenditures (4,239) (1,609)
Purchase of land and building at PSI 0 (3,578)
Other investing activities 196 62
--------------------------
Net Cash Used In Investing Activities (4,043) (5,125)
FINANCING ACTIVITIES
Repayments of long-term debt (196) (3,053)
Repayments on credit facility (7,750) (24,000)
Borrowings on credit facility 10,250 14,500
Treasury stock and stock option transactions (5,373) (382)
Dividends/distributions paid to shareholders (1,767) (1,399)
--------------------------
Net Cash Used In Financing Activities (4,836) (14,334)
--------------------------
Net increase (decrease) in cash and cash equivalents (4,770) 340
Cash and cash equivalents at beginning of period 9,408 229
--------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,638 $ 569
==========================
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
CHART INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
June 30, 1997
Note A - Basis of Preparation
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been included. Operating results for the six-month
period ended June 30, 1997 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997. For further information,
refer to the consolidated financial statements and footnotes thereto included
in the Chart Industries, Inc. and Subsidiaries' Annual Report on Form 10-K for
the year ended December 31, 1996.
All share and per-share amounts have been adjusted for a 3-for-2 stock
split which was distributed to shareholders on June 30, 1997.
Note B - Inventories
The components of inventory consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------------------
<S> <C> <C>
Raw materials $ 10,080 $11,507
Work in process 10,220 10,536
Finished goods 25 25
LIFO reserve (341) (341)
----------------------
$ 19,984 $21,727
======================
</TABLE>
Note C - Earnings per Share
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating basic earnings per share,
the dilutive effect of stock options will be excluded. The impact is expected
to result in basic earnings per share for the six-months ended June 30, 1997
and 1996 of $.63 and $.45 per share, respectively. Fully diluted earnings per
share for these quarters should not be materially different than the currently
disclosed earnings per share.
6
<PAGE> 7
Note D - Revenue Recognition
Chart Industries, Inc. ("Chart" or the "Company") uses the percentage
of completion method of accounting for significant contracts. In other
cases, revenue is recognized using the completed contract method. Management
performs a monthly assessment of major significant contracts to determine if
contract costs will exceed contract revenues. For those projects where the
estimated costs exceed estimated revenues, appropriate estimated losses are
recorded. The effects of any change orders are accounted for when agreed to by
Chart's customers.
Note E - Subsequent Event
On July 31, 1997, the Company completed the acquisition of Cryenco
Sciences, Inc. ("Cryenco") (NASD: CSCI). Total consideration for the merger
consisted of $20.7 million for all outstanding common stock, preferred stock,
and common stock warrants.
7
<PAGE> 8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
8
<PAGE> 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
The Annual Meeting of Stockholders of the Company was held on May 1,
1997. The following matters were voted on at the meeting.
1. ELECTION OF DIRECTORS. The nominees were elected as Directors to
serve for three-year terms with the following votes:
Charles S. Holmes
-----------------
For 9,198,615
Against -0-
Abstain 45,322
Lazzaro G. Modigliani
---------------------
For 9,202,057
Against -0-
Abstain 41,880
2. APPROVAL OF THE CHART INDUSTRIES, INC. 1997 STOCK OPTION AND
INCENTIVE PLAN:
For 8,535,916
Against 660,716
Abstain 47,305
3. APPROVAL OF THE CHART INDUSTRIES, INC. 1997 STOCK BONUS PLAN:
For 8,985,208
Against 208,223
Abstain 50,506
For a description of the bases used in tabulating the
above-referenced votes, see the Company's definitive Proxy Statement used in
connection with the Annual Meeting of Stockholders on May 1, 1997.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
See the Exhibit Index on page 11 of this Form 10-Q.
(b) Reports on Form 8-K.
The Company filed a current report on Form 8-K dated May 1,
1997 announcing the proposed acquisition of Cryenco Sciences Inc.
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Chart Industries, Inc.
-------------------------------------------------
(Registrant)
Date: October 3, 1997 /s/Don A. Baines
------------------- -------------------------------------------------
Don A. Baines
Chief Financial Officer and Treasurer
10
<PAGE> 11
EXHIBIT INDEX
Exhibit Number Description of Document
-------------- -----------------------
27 Financial Data Schedule
11
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 4,638
<SECURITIES> 0
<RECEIVABLES> 21,993
<ALLOWANCES> 0
<INVENTORY> 19,984
<CURRENT-ASSETS> 52,093
<PP&E> 20,864
<DEPRECIATION> 0
<TOTAL-ASSETS> 75,281
<CURRENT-LIABILITIES> 39,976
<BONDS> 0
<COMMON> 153
0
0
<OTHER-SE> 30,323
<TOTAL-LIABILITY-AND-EQUITY> 75,281
<SALES> 84,198
<TOTAL-REVENUES> 84,198
<CGS> 58,556
<TOTAL-COSTS> 58,556
<OTHER-EXPENSES> 11,712
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18
<INCOME-PRETAX> 13,912
<INCOME-TAX> 4,730
<INCOME-CONTINUING> 9,182
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,182
<EPS-PRIMARY> .62
<EPS-DILUTED> .62
</TABLE>
