CHART INDUSTRIES, INC. (NASDAQ:GTLS) Files An 8-K Other EventsItem 8.01Other Events.
As disclosed in the Company’s Quarterly Report on Form 10-Q for the first quarter ended March 31, 2018 (“1st Quarter 10-Q”), the Company recently received several customer inquiries regarding the performance of certain cryobiological tanks (in the BioMedical segment) manufactured at our New Prague, Minnesota facility. As disclosed in the 1st Quarter 10-Q filed on April 19, 2018, the initial and very preliminary investigation determined that certain tanks manufactured at the facility during a limited certain period might need to be repaired or replaced and that, as of such filing, the Company was not able to identify the scope of the product lines subject to potential repair or replacement, what portion of any such product lines might be impacted or reasonably estimate the size of any additional warranty reserve related to these products, which in total were believed to be less than$5.0 millionin sales.
During the period of April 19-22, 2018, the Company continued its investigation of the scope and condition of the cryobiological tanks manufactured during this limited period and subsequently concluded that substantially all of the universe of products previously identified should be replaced. As such, on April 23, 2018, the Company issued a recall notice for the impacted product lines. The Company currently anticipates taking an additional warranty reserve expense of approximately $3.75 million during the second fiscal quarter ending June 30, 2018. This estimated warranty reserve expense is subject to adjustment to the extent additional developments arise in connection with this matter.The Company’s recently issued financial guidance for fiscal 2018 is not expected to be impacted by these additional warranty reserves.
About CHART INDUSTRIES, INC. (NASDAQ:GTLS)
Chart Industries, Inc. (Chart) is a diversified manufacturer of engineered equipment for the industrial gas, energy, and biomedical industries. The Company’s equipment and engineered systems are used for low-temperature and cryogenic applications. It operates through three segments, including Energy & Chemicals (E&C), Distribution & Storage (D&S), and BioMedical. The Company’s products include vacuum insulated containment vessels, heat exchangers, cold boxes, other cryogenic components and equipment for respiratory therapy. The Company’s E&C and D&S segment’s manufacture products used primarily in energy-related and industrial applications, such as the separation, liquefaction, distribution and storage of hydrocarbon and industrial gases. The Company, through its BioMedical segment, supplies cryogenic and other equipment used in respiratory healthcare and life sciences, including biological research and animal breeding.
