Chart industries has reported a net loss of $3.3m for the Q4 of 2016. The adjusted earnings broke even, excluding $4.7m of restructuring, including severance related costs recorded in the quarter.
The net income for 2016 was $28.2m which includes the insurance settlement recorded in the Q3.
Chart reported that the net loss for the year 2015 was $203.0m which includes the impact of non-cash impairment charges, facility shutdown and severance costs in the prior year.
Chart’s Net sales for the Q4 of 2016 were $214.4m compared to $260.8m in the comparable period the year before. The company’s Gross profit for the Q4 of 2016 was $57.1m (26.6% of sales) versus $72.8m (27.9% of sales), in the comparable quarter of 2015.
Net sales for the year 2016 were $859.2m compared to $1bn in the comparable period the year prior. Gross profit for 2016 was $266.4m (31.0% of sales) compared to $288.5m (27.7% of sales) in the full year 2015.
Sam Thomas, Chart’s Chairman and CEO, stated, “Our strong brand, diversified product offering, and diligent management of working capital and capital expenditures led to record operating cash flow of $171m during 2016 despite continued challenges in our energy markets. Our strong cash flow generation and significant liquidity will continue to allow us to deploy capital for acquisitions, such as Hetsco, which was announced in early January. The addition of Hetsco expands the capabilities of our Energy & Chemicals (E&C) Lifecycle business and gets us to market faster.”
“As we enter 2017, we continue to streamline our operations with the consolidation of our BioMedical respiratory business and relocation of our corporate headquarters in our Canton, GA location. In addition, we are consolidating three of our facilities in China into the newly built greenfield facility in Changzhou, China. These organisational changes will occur during 2017 and will help leverage resources across our businesses and position us for further productivity improvements with expected annualised savings of $10m,” Thomas continued.
The company’s Backlog on 31st December 2016 was $342.6m, down 10.9% compared to a backlog of $384.4m on the 30th September 2016. Backlog for the year is down 8.5% from the 31st December 2015 at a level of $374.6m.
Orders received in the Q4 of 2016 totaled $184.0m, down 8.6%. This was due to a $9m order for an LNG terminal in Gibraltar in Chart’s Distribution & Storage (D&S) segment in the Q3.
Orders during 2016 totaled $854.8m and were down 8.6%, primarily due to weak energy markets impacting Chart’s E&C segment.
Selling, general and administrative (SG&A) expenses for the Q4 of 2016 were $52.0m compared to $53.9m in the prior year quarter.
The current quarter included approximately $5.0m of reserves recorded in China and acquisition related costs associated with the Hetsco acquisition. In addition, the current quarter included $3.8m of severance and other one-time restructuring costs due to facility consolidation efforts. The prior year quarter also included $3.5m in severance related costs. SG&A as a percent of sales was 24.3% compared with 20.7% in the prior year quarter.
Net interest expense was $4.8m for the Q4 of 2016, which included $3.2m of non-cash accretion expense associated with the Company’s Convertible Notes. Net cash interest was $1.6m.
The company’s Income tax expense was $0.9m in the Q4 of 2016. The annual effective tax rate is 35.7% which is higher than expected primarily due to current and accumulated operating losses in China for which no tax benefit is recorded.
Cash and short-term investments were $282.0m on the 31st December 2016, which compares with $123.7m on the 31st of December 2015.
The Company had no borrowings on its $450m senior secured credit facility, only outstanding letters of credit, which left $412.8m of available liquidity on the 31st December 2016.
Based on Chart’s current backlog and order expectations, net sales for 2017 are expected to be in a range of $875m to $925m and adjusted earnings per diluted share are expected to be in a range of $0.60 to $1.00 per share with earnings weighted more to the second half of the year. This is based on approximately 31.1m weighted average shares outstanding.