Chart Industries has reported results for the third quarter ended 30 September 2006.
According to CEO Sam Thomas Chart\\$quot;s 2006 third quarter sales increased 35 per cent over the corresponding quarter in 2005, reflecting strong sales for energy and chemicals and distribution and storage business segments.
"Net income for the third quarter 2006 was $6.9m, or $0.34 per diluted share, based on 20.4 million weighted average shares outstanding, compared with $7.2m, or $1.28 per diluted share, based on 5.6 million weighted average shares outstanding in the third quarter of 2005. After giving effect to the shares issued in the company's initial public offering, net income per diluted share would have been $0.27 on a pro forma basis for the quarter.
"While backlog at 30 September 2006 declined by six per cent compared with backlog at 30 June 2006, it was up by over 30 per cent compared with backlog at 30 September 2005," Thomas further stated. "Orders in the third quarter of 2006 totalled $127m, compared with $150 million in the second quarter of 2006 and $127m in the third quarter of 2005. The decline in backlog for the quarter, compared to the second quarter of 2006, was attributable to a delay in large orders in our energy and chemicals business. While the order flow for this business is sometimes difficult to forecast on a quarterly basis, we continue to be optimistic about its future growth.
"Our gross profit was higher by $9m, or 31 per cent, primarily driven by higher sales volume. "Our gross profit margin for the 2006 third quarter was favourably impacted by continued improvements in both our distribution and storage and biomedical segments, but overall our gross margin was down about one percentage point to 28 per cent, compared with the third quarter of 2005. While our energy and chemicals gross margin improved in the third quarter over the second quarter of this year, it was still below the normal margin levels for this business and the third quarter of 2005, as a result of the two difficult field installation projects reported on last quarter that have carried over into this quarter. We believe good progress is being made on these projects and the costs to complete are consistent with our expectations. While we do expect reimbursement in the future for certain costs incurred for these projects, we will not recognize the related income until the reimbursements are reasonably assured."