Chart Industries has reported results for the second quarter ended 30th June 2017.
Net income for the Q2 of 2017 was $2.8m or $0.09 per diluted share. Q2 2017 earnings would have been $0.21 per diluted share excluding $5.0m of restructuring and $1.0m of acquisition-related costs. This compares with a net loss of $2.9m, for the first quarter of 2017.
Sales for Q2 of 2017 increased to $238.2m from $204.1m in the first quarter of the year, with sequential increases in all three segments. Order activity continues to increase year to date across the three segments, with $252.6m in orders received in the quarter, increasing backlog to $367.2m from $348.6m at the end of the first quarter of 2017.
Gross profit for Q2 of 2017 was $63.2m, or 26.5% of sales, which was unfavorably impacted by $2m of restructuring costs. Gross profit for the Q1 of 2017 was $55.7m, or 27.3% of sales, inclusive of $2.5m of restructuring costs.
Selling, general and administrative (SG&A) expenses for Q2 of 2017 decreased by $2.2m from the first quarter of 2017 to $50.2m, inclusive of $3m of restructuring costs and $0.6m of investment in BioMedical’s direct to consumer channel for oxygen concentrators.
Order activity in energy and chemicals (E&C) was strong, driven by the natural gas and petrochemical markets. Distribution and storage (D&S) sales increased $24.3m to $137.5m compared to the first quarter of 2017, and $7.9m compared to Q2 of 2016. Q2 BioMedical sales increased from the first quarter by $9.7m to $60.7m driven by over 15% growth in both the respiratory and cryobiological product lines.
Bill Johnson, Chart’s CEO and President, stated, “In addition to our strength in orders and bookings across the segments, I am pleased with the progress of our restructuring activities, and the use of our strong balance sheet for both productivity investment and strategic mergers and acquisitions (M&A)”.
He continued, “We are excited about the addition of Hudson to our E&C segment, and expect it to be earnings per share (EPS) accretive in 2018. Not only does Hudson expand our service and repair offering, the exposure to a broader set of end-markets including petrochemical and power generation offsets some of our typical LNG cyclicality. Through the accretive margin profile and the expected $7m of cost synergies, we expect the total E&C margin profile to continue to improve with the addition of Hudson. The approximately 40% aftermarket composition of Hudson revenues complements our growing Lifecycle business, which was expanded earlier this year with the acquisition of Hetsco.”
The Hudson acquisition is expected to close in the third quarter of 2017.
The following guidance does not include the Hudson acquisition. Sales guidance remains unchanged and is expected to be in the range of $875m to $925m. Chart expects full year adjusted earnings per diluted share to be in the range of $0.65 to $0.80 per share, on approximately 31.3m weighted average shares outstanding.