Chart Industries will continue with “aggressive cost reduction actions” which includes the planned shutdown of the Owatonna, Minnesota, facility.
That was the key message to emerge when the company announced its First Quarter results.
Chart, like many other companies announcing their financial results, experienced the negative affect on finances due to foreign currency loss.
Net income for the first quarter of 2015 was $5.2m, which is a reduction of 56.6% when compared with net income of $12m, for the first quarter of 2014.
In addition, foreign currency loss was $3.1m for the first quarter of 2015, as the strength of the U.S. dollar had a significant negative impact on Chart’s European operations. Foreign currency loss was $0.1m in the first quarter of 2014.
Net sales for the first quarter of 2015 decreased 8% to $245.1m from $266.2m in the comparable period a year ago. Gross profit for the first quarter of 2015 was $72.5m, or 29.6% of sales, versus $77.5m, or 29.1% of sales, in the comparable quarter of 2014.
“We demonstrated solid execution across many of our businesses in the first quarter, despite energy and currency headwinds,” stated Sam Thomas, Chart’s Chairman, President and Chief Executive Officer.
“We are continuing to pursue aggressive cost reduction initiatives we announced last quarter, including the planned closure of our Distribution & Storage (“D&S”) LNG equipment manufacturing facility in Owatonna due to slowing LNG infrastructure build-out in North America.”
“As we move through 2015 we will continue to focus both on solid operational execution and pursuit of our long-term strategic growth initiatives including acquisitions.”
Thomas continued, “Despite the short-term challenges we are facing in our business, we remain confident in the long-term fundamental drivers of our growth, including rising industrial production and an increased demand for energy globally.”
“We are particularly encouraged by the interest and quoting activity we continue to see for North American LNG export projects from customers who share our long-term view of oil and natural gas pricing, including potential opportunities with Venture Global LNG and Parallax Energy for whom we are currently executing advance engineering for multi-train export facilities.”
Based on first quarter results, current order backlog, and business expectations for the remainder of 2015, Chart is reiterating 2015 guidance with sales expected to be in the range of $1.05bn to $1.2bn. Chart also expects approximately $3m of additional pre-tax restructuring costs in the second quarter as it closes and vacates operations at the Owatonna facility.