Chart Industries, Inc. has reported results for the fourth quarter and year ended Dec. 31, 2015.
Fourth quarter 2015 adjusted earnings were $0.19 per diluted share excluding $258.1 million, or $7.73 per diluted share, of non-cash impairment charges as well as facility shutdown and severance costs recorded in the quarter. The reported net loss for the fourth quarter of 2015 was $230.1 million, or $7.54 per diluted share which includes the impairment charges and other costs noted above. This compares with the fourth quarter of 2014 adjusted earnings of $0.74 per diluted share excluding $3.9 million, or $0.14 per diluted share, of primarily favorable adjustments due to an escrow settlement. Reported net income for the fourth quarter of 2014 was $26.9 million, or $0.88 per diluted share.
For the year, 2015 adjusted earnings were $1.25 per diluted share excluding $265.5 million, or $7.91 per diluted share, of non-cash impairment charges as well as facility shutdown and severance costs. The reported net loss for the year of 2015 was $203.0 million, or $6.66 per diluted share which includes the impairment charges and other costs noted above. This compares with the year 2014 adjusted earnings of $2.63 per diluted share, excluding the impact of acquisition related and facility startup costs and the escrow settlement. Reported net income for the fiscal year 2014 was $81.9 million, or $2.67 per diluted share.
Net sales for the fourth quarter of 2015 were $260.8 million compared to $326.1 million in the comparable period a year ago. Gross profit for the fourth quarter of 2015 was $72.8 million, or 27.9% of sales, versus $96.9 million, or 29.7% of sales, in the comparable quarter of 2014.
Net sales for the year 2015 were $1,040.2 million compared to $1,193.0 million in the comparable period a year ago. Gross profit for 2015 was $288.5 million, or 27.7% of sales, compared to $357.9 million, or 30.0% of sales, in the full year 2014.
“Better than anticipated”
“We delivered better than anticipated results in our Energy and Chemicals (“E&C”) segment during the fourth quarter through solid project execution and higher margin, short lead time projects. Our diversified product offering, including industrial, life science, healthcare, and niche LNG opportunities, continues to deliver strong free cash flow generation despite the challenges we face in the energy markets. We still see prospects in energy, such as the AB Klaipėdos NAFTA award, which will be included in first quarter 2016 orders,” stated Sam Thomas, Chart’s Chairman, President, and Chief Executive Officer.
“As we enter 2016 we continue to streamline our operations with the near term outlook of continued low energy prices and macro-economic headwinds.”
Mr. Thomas continued, “As we enter 2016 we continue to streamline our operations with the near term outlook of continued low energy prices and macro-economic headwinds. Additional actions were taken in the fourth quarter of 2015 and the beginning of 2016 towards further lowering overhead costs, including further facility closures and eliminating a number of senior level management positions. We have now implemented headcount reductions of 21 percent since Dec. 31, 2014. These changes allow us to take advantage of opportunities in the current environment. Our strong balance sheet, significant liquidity, ongoing cost reduction initiatives, and flexible cost structure should enable us to continue to generate strong free cash flow and maintain our capability to capitalize when markets recover and customers see a clear path to renewed investment and growth.”
Orders received in the fourth quarter 2015 totaled $231.2 million and were down 9% sequentially, as the third quarter of 2015 included an LNG project award in excess of $40 million in E&C. Backlog at December 31, 2015 was $374.6 million compared to backlog of $416.6 million at September 30, 2015. Backlog for the year is down 41% from the December 31, 2014 level of $640.1 million due to weak E&C order trends and completion of several projects within E&C during 2015. In addition, backlog was reduced during the year by $150 million for the removal of Distribution & Storage (“D&S”) orders, primarily in China. While D&S customers did not cancel these orders, these orders exceeded the expected time of performance and circumstances suggested that our customers were not likely to take delivery in the future. We believe this is primarily due to the impact of lower oil prices and the continued economic slowdown in China.