Chart Industries, Inc. (NYSE: GTLS) today reported results for the
third quarter ended September 30, 2024. Results shown are from
continuing operations. When referring to any comparative period,
all metrics are pro forma for continuing operations of the combined
business of Chart and Howden (pro forma excludes the following
businesses that were divested in 2023: Roots, American Fan, Cofimco
and Cryo Diffusion). The Howden acquisition closed on March 17,
2023.
Third quarter 2024 highlights compared
to third quarter 2023, pro forma:
- Orders of $1.17 billion, an increase of 5.4%
- Sales of $1.06 billion, an increase of 22.4%
- Reported gross margin of 34.1%, an increase of 350 basis points
(“bps”)
- Reported operating income of $178.5 million (16.8% of sales) or
$235.9 million when adjusted for unusual items primarily related to
the Howden integration and headcount restructuring, resulting in
22.2% adjusted operating margin, an increase of 450 bps
- Reported EBITDA of $248.4 million (23.4% of sales) increased
53.9%
- Adjusted EBITDA of $260.7 million (24.5% of sales) when
adjusting for the items described above was an increase of
39.3%
- Reported diluted earnings per share (“EPS”) of $1.34; adjusted
diluted EPS of $2.18 which would have been $2.48 when considering
negative $9.3 million of foreign exchange impact ($0.15 negative
EPS impact net of tax) and a higher than originally anticipated tax
rate driven by geographic mix ($0.15 negative EPS impact)
- Reported net cash from operating activities of $200.7 million
less capital expenditures of $26.1 million resulted in $174.6
million of free cash flow (“FCF”); reiterate our anticipated
approximately $400 million full year 2024 FCF outlook
“We generated $174.6 million of free cash flow
in the third quarter 2024 which was used for the reduction of our
net debt and contributed to the decrease in our net leverage ratio
to 3.04 as of September 30, 2024,” stated Jill Evanko, Chart’s CEO
and President. “Continued demand across the majority of our end
markets, our segments’ strong operational performance, the benefits
of continued double-digit growth in our aftermarket business and
earlier than anticipated cost synergy achievement resulted in
record reported gross profit margin of 34.1% and record adjusted
operating margin of 22.2%.”
Summary of third quarter
2024.
Third quarter 2024 sales of $1.06 billion
increased 22.4% (an increase of 22.6% when considering foreign
exchange headwind of (0.2%)) compared to the third quarter 2023.
Each segment’s sales increased when compared with the third quarter
2023.
Orders of $1.17 billion, increased 5.4% compared
to the third quarter 2023. Third quarter 2024 demand was strong in
Heat Transfer Systems (“HTS”) and Repair, Service and Leasing
(“RSL”). HTS demand was driven by LNG and other energy-related
orders for brazed aluminum and air-cooled heat exchangers. LNG is
driving demand through the value chain with multiple Chart
applications, including a large order for compressors in upstream
gas processes in Qatar, multiple marine orders for EGR blowers, and
continued pickup in HLNG vehicle tanks. The demand in RSL was
underpinned by new long-term service and framework agreements. RSL
book-to-bill in the third quarter 2024 was 1.05.
To date, our cost synergies from the Howden
acquisition have exceeded $250 million which was our original
year-three (2026) target. Those earlier than anticipated cost
synergies were a contributor to our reported gross margin of 34.1%,
dropping through to reported operating income of $178.5 million, or
16.8%. When adjusted for one-time items described above, adjusted
operating margin was 22.2%, an increase of 450 bps when compared to
the third quarter 2023 and 50 bps higher than the second quarter
2024. All four segments had an increase in their third quarter 2024
gross profit margin as well as their operating margin and adjusted
operating margin when compared to the third quarter 2023.
EBITDA of $248.4 million was $260.7 million when
adjusted for the one-time costs related to restructuring and Howden
integration as well as the offsetting gains in the quarter on our
minority investments. Adjusted EBITDA of $260.7 million included a
foreign exchange negative headwind of $9.3 million in the third
quarter 2024; excluding the foreign exchange impact, adjusted
EBITDA would have been $270.0 million. Adjusted EBITDA margin of
24.5% grew 290 bps compared to the third quarter 2023.
LNG, hydrogen, data center, and carbon
capture (“CCUS”) demand for our equipment and technology is
growing.
Our IPSMR® process technology for modular LNG
liquefaction and our associated proprietary equipment continues to
gain traction, with dozens of technical validations approved for
its use in current and potential future projects, including the
following:
- ExxonMobil – on behalf of
Mozambique Rovuma Venture (MRV), operator of the Area 4 concession
in northern Mozambique’s Rovuma Basin – recently announced its
strategic decision to select our IPSMR® liquefaction technology and
proprietary equipment for the Rovuma LNG project at the Afungi
peninsula. The Rovuma LNG Project will produce, liquefy and market
natural gas from reservoirs of the Area 4 block of the offshore
Rovuma Basin and includes the construction of 12 modules of 1.5 MTA
each, with a total LNG capacity of 18 MTPA, as well as associated
onshore facilities. The selection of Chart IPSMR® for the 12
liquefaction modules is expected to help enable increased project
competitiveness, improved reliability and lower GHG emissions. This
project content is not yet in backlog, although early engineering
work has been booked.
- The sale of Tellurian to Woodside
Energy was completed on October 8, 2024. The Woodside Louisiana LNG
(formerly the Driftwood project) will utilize our IPSMR® process
technology and associated equipment. The project content is not yet
in backlog; we received a small engineering release in October
2024.
- Viability Gap Plc., N Gas Tanzania
Ltd., and Tanzania Petroleum Development Corporation have chosen to
partner with Chart Industries to utilize our IPSMR® process and
associated equipment for their small-scale LNG project in Tanzania,
which is anticipated to commence after the finalization of the FEED
(Front-End Engineering Design) phase. This project is not yet in
backlog.
Additionally, in the third quarter 2024 and
October 2024, we have executed the following hydrogen-related
agreements, which do not yet have any content in our backlog:
- We have partnered with Renergy
Group Partners LLC (“Renergy”), a renewable energy and
infrastructure solutions provider, on Renergy’s green hydrogen
plant in Egypt, which is anticipated to produce 450,000 tons of
hydrogen per year. As part of this partnership, Chart will provide
Renergy with hydrogen liquefaction, storage, and compression
equipment. Final investment decision (FID) is expected in first
quarter 2026, and the first phase of the 160,000MT liquid green
hydrogen per year project is expected to be operational in
2030.
- We executed a Memorandum of
Understanding (“MOU”) with a developer of hydrogen production
projects in Europe for a 30 ton per day hydrogen liquefier and
associated ISO containers. Total anticipated Chart project content
is anticipated to be approximately $85 million. The project is
expected to FID in 2025.
- We executed a Collaboration
Agreement to work with PETROJET, Egypt’s largest state-owned
construction company, to advance hydrogen projects across
Egypt.
- We signed a MOU with the Region
Bretagne, BrestPort, Bretagne Development Innovation and EO Concept
as part of their European projects to convert their fleet of ships
to use LH2 and to develop a port energy hub for the supply of
renewable fuels. Chart will bring its expertise for the development
of a 10 ton per day (“TPD”) hydrogen liquefaction and refueling at
the Port of Brest.
We are seeing increasing scope and size for our
CCUS offering, including providing our liquid oxygen bulk storage
tanks to the “Catch4Climate” (CI4C) project, an oxyfuel technology
carbon capture project led by four European cement
manufacturers.
In October 2024, we received another data center
air-cooler order and we were awarded a hydrogen liquefaction
project with our partner, indigenous owned Salish Elements out of
Vancouver, British Columbia (“BC”) for the first phase of their BC
Hydrogen Highway project.
Third quarter 2024 segment results (as
compared to the third quarter 2023, pro forma continuing operations
unless noted otherwise).
Cryo Tank Solutions
(“CTS”): Third quarter 2024 CTS orders of $126.2
million decreased 17.5% when compared to the third quarter 2023,
primarily driven by the third quarter 2023 having had one order for
$19.2 million for railcars. In the third quarter 2024, we saw
slowing demand in China, which is primarily reflected in CTS. Third
quarter 2024 sales of $162.5 million increased 4.6% when compared
to the third quarter 2023. Reported gross profit margin of 25.0%
increased 280 bps compared to the third quarter 2023.
Heat Transfer Systems: Third
quarter 2024 HTS orders of $424.7 million increased 151.0% when
compared to the third quarter 2023 driven by multiple LNG and
traditional energy equipment awards. Third quarter 2024 HTS sales
of $256.2 million were a record and grew 12.5% compared to the
third quarter 2023 and had associated reported gross profit margin
of 29.8%, a 340 bps increase compared to the third quarter 2023,
driven by project mix.
Specialty Products: Third
quarter 2024 Specialty Products orders of $237.8 million decreased
48.9% when compared to the third quarter 2023 as the third quarter
of 2023 included larger hydrogen liquefaction orders whereas third
quarter 2024 did not. We received one hydrogen liquefaction award
in October, and we anticipate at least one additional hydrogen
liquefaction project award in the fourth quarter 2024.
Additionally, we anticipate one large mining project award in the
fourth quarter 2024. Third quarter 2024 Specialty Products sales of
$283.3 million were record for the segment and increased 25.9% when
compared to the third quarter 2023 driven primarily by increasing
throughput and hydrogen projects progressing. Reported gross profit
margin of 26.3% increased 60 basis points when compared to the
third quarter 2023 yet decreased sequentially from 29.1% when
compared to the second quarter 2024. The sequential decrease was
due to third quarter 2024 specific expenses incurred at our newly
opened Theodore facility (“Teddy2”) related to a supplier’s
machinery startup challenges and associated inefficiencies on
specific space-related projects.
Repair, Service and Leasing:
Third quarter 2024 RSL orders of $377.9 million increased 16.5%
when compared to the third quarter 2023. Third quarter 2024 sales
of $360.5 million increased 36.1%. RSL orders and sales growth were
driven by service, repair, and spares in addition to a large
aftermarket sale of equipment. Reported RSL gross profit margin of
47.4% was driven by the execution of continued synergies as well as
positive mix.
FCF of $174.6 million in the third
quarter resulted in net leverage ratio of 3.04; reiterate our net
leverage ratio target of 2.0 to 2.5
Third quarter 2024 reported net cash from
operating activities of $200.7 million less capital expenditures of
$26.1 million resulted in $174.6 million of FCF. Our September 30,
2024 net leverage ratio was 3.04.
We anticipate our 2017 seven-year convertible
notes to settle at maturity in November 2024 by paying the
principal in cash (approximately $258.7 million) and delivery of
shares for the anticipated settlement of the premium. This is
already included in our share count in our guidance.
Additional cash-generating and debt paydown
activities are currently underway and are anticipated to be
completed in the coming few months. These include but are not
limited to property sales, the potential of a small product line
divestiture and the repatriation of foreign cash.
2024 Outlook.
Our current full year 2024 sales outlook is
approximately $4.20 billion to $4.30 billion, an increase of 18.0%
to 20.5% when compared with full year 2023, proforma. We anticipate
full year 2024 adjusted EBITDA of approximately $1.015 billion to
$1.045 billion, approximately 24.2% to 24.3% EBITDA margin. Our
anticipated full year 2024 adjusted diluted EPS is expected to be
approximately $9.00 based on a tax rate of approximately 22% and a
diluted share count of approximately 46.5 million shares for the
full year 2024. FCF is anticipated to be approximately $400
million. The changes to our 2024 outlook are primarily due to
timing of larger orders and their associated revenue recognition
(timing and mix), foreign exchange impact, tax rate change, and
share count change.
2025 Outlook.
Our 2025 sales are anticipated to be in the
range of $4.65 billion to $4.85 billion with associated adjusted
EBITDA between $1.175 billion and $1.225 billion. Our anticipated
full year 2024 adjusted diluted EPS is $12.00 to $13.00 inclusive
of a tax rate of approximately 22%. Additionally, we anticipate
ending 2025 with approximately $3 billion of net debt, based on
full year 2025 free cash flow generation of approximately $550 to
$600 million. We look forward to sharing additional bridges and
details on our 2025 outlook at our Capital Markets Day on November
12, 2024 from 9am to 11am eastern time.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release
are forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forward-looking
statements include statements concerning the Company’s business
plans, including statements regarding completed acquisitions,
divestitures, and investments, cost and commercial synergies and
efficiency savings, objectives, future orders, revenues, margins,
segment sales mix, earnings or performance, liquidity and cash
flow, repayment or settlement of maturing debt, inventory levels,
capital expenditures, supply chain challenges, inflationary
pressures including material cost and pricing increases, business
trends, clean energy market opportunities including addressable
markets, and governmental initiatives, including executive orders
and other information that is not historical in nature.
Forward-looking statements may be identified by terminology such as
"may," "will," "should," "could," "expects," "anticipates,"
"believes," "projects," "forecasts," “outlook,” “guidance,”
"continue," “target,” or the negative of such terms or comparable
terminology.
Forward-looking statements contained in this
press release or in other statements made by the Company are made
based on management's expectations and beliefs concerning future
events impacting the Company and are subject to uncertainties and
factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of
which are beyond the Company's control, that could cause the
Company's actual results to differ materially from those matters
expressed or implied by forward-looking statements. Factors that
could cause the Company’s actual results to differ materially from
those described in the forward-looking statements include: the
Company’s ability to successfully integrate the Howden acquisition
and other recent acquisitions and achieve the anticipated revenue,
earnings, accretion and other benefits from these acquisitions;
slower than anticipated growth and market acceptance of new clean
energy product offerings; inability to achieve expected pricing
increases or continued supply chain challenges including volatility
in raw materials and supply; risks relating to the outbreak and
continued uncertainty associated with the coronavirus (COVID-19)
and regional conflicts and unrest, including the recent turmoil in
the Middle East and the conflict between Russia and Ukraine
including potential energy shortages in Europe and elsewhere; and
the other factors discussed in Item 1A (Risk Factors) in the
Company’s most recent Annual Report on Form 10-K filed with the
SEC, which should be reviewed carefully. The Company undertakes no
obligation to update or revise any forward-looking statement.
USE OF NON-GAAP FINANCIAL INFORMATION
This press release contains non-GAAP financial
information, including adjusted operating income, adjusted earnings
per diluted share, net income attributable to Chart Industries,
Inc. adjusted, free cash flow and EBITDA and adjusted EBITDA. The
release also contains various pro forma measures (including pro
forma orders, sales, gross profit, adjusted EBITDA, operating
income and adjusted operating income), to reflect the following
businesses that were divested in 2023: Roots, American Fan, Cofimco
and Cryo Diffusion. For additional information regarding the
Company's use of non-GAAP financial information, as well as
reconciliations of non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in
accordance with accounting principles generally accepted in the
United States ("GAAP"), please see the reconciliation pages at the
end of this news release.
The Company believes these non-GAAP measures are
of interest to investors and facilitate useful period-to-period
comparisons of the Company’s financial results, and this
information is used by the Company in evaluating internal
performance. With respect to the Company’s 2024 and 2025 full year
earnings outlook, the Company is not able to provide a
reconciliation of the adjusted EBITDA, FCF or adjusted EPS because
certain items may have not yet occurred or are out of the Company’s
control and/or cannot be reasonably predicted.
CONFERENCE CALLAs previously announced, the Company has
scheduled a conference call for Friday, November 1, 2024 at 8:30
a.m. ET to discuss its third quarter 2024 financial results.
Participants wishing to join the live Q&A session must dial-in
with the following information:
PARTICIPANT INFORMATION:Toll-Free – North America: (+1) 800 549
8228Toll North America and other locations: (+1) 289 819
1520Conference ID: 35817
A live webcast and replay, as well as presentation slides, will
be available on the Company’s investor relations website through
the following link: Q3 2024 Webcast Registration. A telephone
replay of the conference call can be accessed approximately two
hours following the end of the call at 1-888-660-6264 with passcode
35817 through December 1, 2024.
About Chart Industries,
Inc.
Chart Industries, Inc. is a leading independent
global leader in the design, engineering, and manufacturing of
process technologies and equipment for gas and liquid molecule
handling for the Nexus of Clean™ - clean power, clean water, clean
food, and clean industrials, regardless of molecule. The company’s
unique product and solution portfolio across stationary and
rotating equipment is used in every phase of the liquid gas supply
chain, including engineering, service and repair from installation
to preventive maintenance and digital monitoring. Chart is a
leading provider of technology, equipment and services related to
liquefied natural gas, hydrogen, biogas and CO2 capture amongst
other applications. Chart is committed to excellence in
environmental, social and corporate governance (ESG) issues both
for its company as well as its customers. With 64 global
manufacturing locations and over 50 service centers from the United
States to Asia, Australia, India, Europe and South America, the
company maintains accountability and transparency to its team
members, suppliers, customers and communities. To learn more, visit
www.chartindustries.com
For more information, click here:
http://ir.chartindustries.com/
Chart Industries Investor Relations
Contact:
John WalshSVP, Investor and Government
Relations1-770-721-8899john.walsh@chartindustries.com
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (UNAUDITED)(Dollars and shares in
millions, except per share amounts) |
| |
Three Months Ended |
Nine Months Ended |
| |
September 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
|
Sales |
$ |
1,062.5 |
|
|
$ |
897.9 |
|
|
$ |
3,053.5 |
|
|
$ |
2,337.5 |
|
| Cost of sales |
|
699.9 |
|
|
|
621.7 |
|
|
|
2,037.0 |
|
|
|
1,631.4 |
|
| Gross profit |
|
362.6 |
|
|
|
276.2 |
|
|
|
1,016.5 |
|
|
|
706.1 |
|
| Selling, general and
administrative expenses |
|
135.7 |
|
|
|
122.8 |
|
|
|
413.4 |
|
|
|
356.4 |
|
| Amortization expense |
|
48.4 |
|
|
|
49.0 |
|
|
|
143.9 |
|
|
|
115.0 |
|
|
Operating expenses |
|
184.1 |
|
|
|
171.8 |
|
|
|
557.3 |
|
|
|
471.4 |
|
| Operating income |
|
178.5 |
|
|
|
104.4 |
|
|
|
459.2 |
|
|
|
234.7 |
|
|
Acquisition related finance fees |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.1 |
|
|
Interest expense, net |
|
80.6 |
|
|
|
90.5 |
|
|
|
248.7 |
|
|
|
202.7 |
|
|
Other (income) expense, net |
|
(2.6 |
) |
|
|
3.4 |
|
|
|
4.2 |
|
|
|
6.4 |
|
| Income (loss) from continuing
operations before income taxes and equity in (loss) income of
unconsolidated affiliates, net |
|
100.5 |
|
|
|
10.5 |
|
|
|
206.3 |
|
|
|
(0.5 |
) |
| Income tax expense
(benefit) |
|
26.6 |
|
|
|
0.1 |
|
|
|
50.9 |
|
|
|
(4.2 |
) |
| Income from continuing
operations before equity in (loss) income of unconsolidated
affiliates, net |
|
73.9 |
|
|
|
10.4 |
|
|
|
155.4 |
|
|
|
3.7 |
|
|
Equity in (loss) income of unconsolidated affiliates, net |
|
(0.8 |
) |
|
|
1.3 |
|
|
|
(2.4 |
) |
|
|
2.4 |
|
| Net income from continuing
operations |
|
73.1 |
|
|
|
11.7 |
|
|
|
153.0 |
|
|
|
6.1 |
|
| Loss from discontinued
operations, net of tax |
|
(0.4 |
) |
|
|
(6.0 |
) |
|
|
(2.8 |
) |
|
|
(2.6 |
) |
| Net income |
|
72.7 |
|
|
|
5.7 |
|
|
|
150.2 |
|
|
|
3.5 |
|
| Less: Income attributable to
noncontrolling interests of continuing operations, net of
taxes |
|
3.7 |
|
|
|
2.3 |
|
|
|
11.3 |
|
|
|
6.0 |
|
| Net income (loss) attributable
to Chart Industries, Inc. |
$ |
69.0 |
|
|
$ |
3.4 |
|
|
$ |
138.9 |
|
|
$ |
(2.5 |
) |
| |
|
|
|
|
|
|
|
| Amounts attributable
to Chart common stockholders |
|
|
|
|
|
|
|
| Income from continuing
operations |
$ |
69.4 |
|
|
$ |
9.4 |
|
|
$ |
141.7 |
|
|
$ |
0.1 |
|
|
Less: Mandatory convertible preferred stock dividend
requirement |
|
6.8 |
|
|
|
6.8 |
|
|
|
20.4 |
|
|
|
20.5 |
|
| Income (loss) from continuing
operations attributable to Chart |
|
62.6 |
|
|
|
2.6 |
|
|
|
121.3 |
|
|
|
(20.4 |
) |
| Loss from discontinued
operations, net of tax |
|
(0.4 |
) |
|
|
(6.0 |
) |
|
|
(2.8 |
) |
|
|
(2.6 |
) |
| Net income (loss) attributable
to Chart common shareholders |
$ |
62.2 |
|
|
$ |
(3.4 |
) |
|
$ |
118.5 |
|
|
$ |
(23.0 |
) |
| |
|
|
|
|
|
|
|
| Basic earnings per
common share attributable to Chart Industries, Inc. |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
1.49 |
|
|
$ |
0.06 |
|
|
$ |
2.89 |
|
|
$ |
(0.49 |
) |
|
Loss from discontinued operations |
|
(0.01 |
) |
|
|
(0.14 |
) |
|
|
(0.07 |
) |
|
|
(0.06 |
) |
| Net income (loss) attributable
to Chart Industries, Inc. |
$ |
1.48 |
|
|
$ |
(0.08 |
) |
|
$ |
2.82 |
|
|
$ |
(0.55 |
) |
| Diluted earnings per
common share attributable to Chart Industries, Inc. |
|
|
|
|
|
|
|
|
Income (loss) from continuing operations |
$ |
1.34 |
|
|
$ |
0.05 |
|
|
$ |
2.59 |
|
|
$ |
(0.49 |
) |
|
(Loss) income from discontinued operations |
|
(0.01 |
) |
|
|
(0.12 |
) |
|
|
(0.06 |
) |
|
|
(0.06 |
) |
| Net income (loss) attributable
to Chart Industries, Inc. |
$ |
1.33 |
|
|
$ |
(0.07 |
) |
|
$ |
2.53 |
|
|
$ |
(0.55 |
) |
| |
|
|
|
|
|
|
|
| Weighted-average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
42.05 |
|
|
|
41.98 |
|
|
|
42.04 |
|
|
|
41.96 |
|
|
Diluted(1) (2) |
|
46.67 |
|
|
|
47.61 |
|
|
|
46.89 |
|
|
|
41.96 |
|
_______________
(1) Includes an additional 4.43 and 5.39
shares related to the convertible notes due 2024 and associated
warrants in our diluted earnings per share calculation for the
three months ended September 30, 2024 and 2023, respectively. The
associated hedge, which helps offset this dilution, cannot be taken
into account under U.S. generally accepted accounting principles
(“GAAP”). If the hedge could have been considered, it would have
reduced the additional shares by 2.43 and 2.86 for the three months
ended September 30, 2024 and 2023, respectively.(2) Includes
an additional 4.66 shares related to the convertible notes due 2024
and associated warrants in our diluted earnings per share
calculation for the nine months ended September 30, 2024. The
associated hedge, which helps offset this dilution, cannot be taken
into account under U.S. GAAP. If the hedge could have been
considered, it would have reduced the additional shares by 2.54 for
the nine months ended September 30, 2024.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (UNAUDITED)(Dollars in
millions) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
| Operating
Activities |
|
|
|
|
|
|
|
|
Net income |
$ |
72.7 |
|
|
$ |
5.7 |
|
|
$ |
150.2 |
|
|
$ |
3.5 |
|
|
Less: Loss from discontinued operations, net of tax |
|
(0.4 |
) |
|
|
(6.0 |
) |
|
|
(2.8 |
) |
|
|
(2.6 |
) |
|
Net income from continuing operations |
|
73.1 |
|
|
|
11.7 |
|
|
|
153.0 |
|
|
|
6.1 |
|
|
Adjustments to reconcile net income to net cash provided by (used
in) operating activities: |
|
|
|
|
|
|
|
|
Bridge loan facility fees |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
26.1 |
|
|
Depreciation and amortization |
|
68.1 |
|
|
|
67.0 |
|
|
|
200.0 |
|
|
|
163.2 |
|
|
Employee share-based compensation expense |
|
4.2 |
|
|
|
2.6 |
|
|
|
14.3 |
|
|
|
9.2 |
|
|
Financing costs amortization |
|
4.8 |
|
|
|
4.8 |
|
|
|
14.2 |
|
|
|
12.0 |
|
|
Unrealized foreign currency transaction loss (gain) |
|
8.6 |
|
|
|
1.3 |
|
|
|
(5.1 |
) |
|
|
0.4 |
|
|
Unrealized (gain) loss on investments in equity securities |
|
(12.8 |
) |
|
|
5.2 |
|
|
|
(10.8 |
) |
|
|
11.8 |
|
|
Equity in loss (income) of unconsolidated affiliates |
|
0.8 |
|
|
|
(1.2 |
) |
|
|
2.4 |
|
|
|
(2.4 |
) |
|
Loss on sale of business |
|
— |
|
|
|
— |
|
|
|
7.8 |
|
|
|
— |
|
|
Other non-cash operating activities |
|
2.0 |
|
|
|
(6.3 |
) |
|
|
3.0 |
|
|
|
(4.9 |
) |
|
Changes in assets and liabilities, net of acquisitions: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
(45.2 |
) |
|
|
(1.7 |
) |
|
|
(45.0 |
) |
|
|
(61.9 |
) |
|
Inventories |
|
19.4 |
|
|
|
7.6 |
|
|
|
24.4 |
|
|
|
2.6 |
|
|
Unbilled contract revenue |
|
(9.5 |
) |
|
|
(50.6 |
) |
|
|
(195.7 |
) |
|
|
(133.4 |
) |
|
Prepaid expenses and other current assets |
|
26.6 |
|
|
|
21.6 |
|
|
|
(16.4 |
) |
|
|
34.0 |
|
|
Accounts payable and other current liabilities |
|
67.2 |
|
|
|
(42.9 |
) |
|
|
109.6 |
|
|
|
86.2 |
|
|
Customer advances and billings in excess of contract revenue |
|
(19.3 |
) |
|
|
(15.5 |
) |
|
|
(13.3 |
) |
|
|
19.1 |
|
|
Long-term assets and liabilities |
|
12.7 |
|
|
|
(32.9 |
) |
|
|
(15.2 |
) |
|
|
(62.0 |
) |
|
Net Cash Provided By (Used In) Continuing Operating
Activities |
|
200.7 |
|
|
|
(29.3 |
) |
|
|
227.2 |
|
|
|
106.1 |
|
|
Net Cash (Used In) Provided By Discontinued Operating
Activities |
|
(0.1 |
) |
|
|
6.7 |
|
|
|
(5.6 |
) |
|
|
(69.2 |
) |
|
Net Cash Provided By (Used In) Operating
Activities |
|
200.6 |
|
|
|
(22.6 |
) |
|
|
221.6 |
|
|
|
36.9 |
|
| Investing
Activities |
|
|
|
|
|
|
|
|
Acquisition of businesses, net of cash acquired |
|
— |
|
|
|
17.5 |
|
|
|
— |
|
|
|
(4,322.3 |
) |
|
Proceeds from sale of business |
|
— |
|
|
|
291.9 |
|
|
|
(6.1 |
) |
|
|
291.9 |
|
|
Capital expenditures |
|
(26.1 |
) |
|
|
(63.1 |
) |
|
|
(100.3 |
) |
|
|
(115.4 |
) |
|
Investments |
|
— |
|
|
|
(6.2 |
) |
|
|
(13.1 |
) |
|
|
(8.8 |
) |
|
Other investing activities |
|
0.1 |
|
|
|
3.3 |
|
|
|
0.4 |
|
|
|
2.3 |
|
|
Net Cash (Used In) Provided By Continuing Investing
Activities |
|
(26.0 |
) |
|
|
243.4 |
|
|
|
(119.1 |
) |
|
|
(4,152.3 |
) |
|
Net Cash Used In Discontinued Investing
Activities |
|
— |
|
|
|
(0.5 |
) |
|
|
(2.5 |
) |
|
|
(2.6 |
) |
|
Net Cash (Used In) Provided By Investing
Activities |
|
(26.0 |
) |
|
|
242.9 |
|
|
|
(121.6 |
) |
|
|
(4,154.9 |
) |
| Financing
Activities |
|
|
|
|
|
|
|
|
Borrowings on credit facilities |
|
801.9 |
|
|
|
611.5 |
|
|
|
2,286.7 |
|
|
|
1,334.3 |
|
|
Repayments on credit facilities |
|
(910.2 |
) |
|
|
(849.5 |
) |
|
|
(2,246.5 |
) |
|
|
(1,234.3 |
) |
|
Borrowings on term loan |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,747.2 |
|
|
Repayments on term loan |
|
— |
|
|
|
(4.4 |
) |
|
|
— |
|
|
|
(8.2 |
) |
|
Payments for debt issuance costs |
|
(4.8 |
) |
|
|
(0.1 |
) |
|
|
(10.1 |
) |
|
|
(133.5 |
) |
|
Payment of contingent consideration |
|
— |
|
|
|
(2.7 |
) |
|
|
— |
|
|
|
(4.4 |
) |
|
Proceeds from issuance of common stock, net |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
11.7 |
|
|
Proceeds from exercise of stock options |
|
— |
|
|
|
0.7 |
|
|
|
0.4 |
|
|
|
0.9 |
|
|
Common stock repurchases from share-based compensation plans |
|
(0.2 |
) |
|
|
(0.3 |
) |
|
|
(3.3 |
) |
|
|
(3.0 |
) |
|
Dividend distribution to noncontrolling interests |
|
— |
|
|
|
(3.8 |
) |
|
|
— |
|
|
|
(12.2 |
) |
|
Dividends paid on mandatory convertible preferred stock |
|
(6.8 |
) |
|
|
(6.8 |
) |
|
|
(20.4 |
) |
|
|
(20.5 |
) |
|
Net Cash (Used In) Provided By Financing
Activities |
|
(120.1 |
) |
|
|
(255.4 |
) |
|
|
6.8 |
|
|
|
1,678.0 |
|
| Effect of exchange rate
changes on cash and cash equivalents |
|
7.4 |
|
|
|
(2.3 |
) |
|
|
4.6 |
|
|
|
(0.4 |
) |
| Net (decrease) increase in
cash, cash equivalents, restricted cash, and restricted cash
equivalents including cash classified within current assets held
for sale |
|
61.9 |
|
|
|
(37.4 |
) |
|
|
111.4 |
|
|
|
(2,440.4 |
) |
| Less: net increase in cash
classified within current assets held for sale |
|
— |
|
|
|
(5.0 |
) |
|
|
— |
|
|
|
(5.0 |
) |
| Net increase (decrease) in
cash, cash equivalents, restricted cash and restricted cash
equivalents |
|
61.9 |
|
|
|
(42.4 |
) |
|
|
111.4 |
|
|
|
(2,445.4 |
) |
| Cash, cash equivalents,
restricted cash, and restricted cash equivalents at beginning of
period(1) |
|
250.6 |
|
|
|
202.3 |
|
|
|
201.1 |
|
|
|
2,605.3 |
|
| CASH, CASH
EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT
END OF PERIOD(1) |
$ |
312.5 |
|
|
$ |
159.9 |
|
|
$ |
312.5 |
|
|
$ |
159.9 |
|
_______________
(1) Includes restricted cash and restricted
cash equivalents of $2.3, $12.8, $3.2 and $1,941.7 as of
September 30, 2024, September 30, 2023, June 30,
2024 and December 31, 2022, respectively.
|
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)(Dollars in millions) |
| |
September 30,2024 |
|
December 31,2023 |
|
ASSETS |
|
|
|
| Current
Assets |
|
|
|
|
Cash and cash equivalents |
$ |
310.2 |
|
|
$ |
188.3 |
|
|
Accounts receivable, less allowances of $5.2 and $5.9,
respectively |
|
805.6 |
|
|
|
758.9 |
|
|
Inventories, net |
|
539.4 |
|
|
|
576.3 |
|
|
Unbilled contract revenue |
|
680.2 |
|
|
|
481.7 |
|
|
Prepaid expenses |
|
98.8 |
|
|
|
74.9 |
|
|
Other current assets |
|
114.1 |
|
|
|
134.3 |
|
| Total Current
Assets |
|
2,548.3 |
|
|
|
2,214.4 |
|
| Property, plant, and
equipment, net |
|
888.8 |
|
|
|
837.6 |
|
| Goodwill |
|
2,987.7 |
|
|
|
2,906.8 |
|
| Identifiable intangible
assets, net |
|
2,660.4 |
|
|
|
2,791.9 |
|
| Equity method investments |
|
103.9 |
|
|
|
109.9 |
|
| Investments in equity
securities |
|
116.2 |
|
|
|
91.2 |
|
| Other assets |
|
193.1 |
|
|
|
150.6 |
|
| TOTAL
ASSETS |
$ |
9,498.4 |
|
|
$ |
9,102.4 |
|
| |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
| Current
Liabilities |
|
|
|
|
Accounts payable |
$ |
1,010.1 |
|
|
$ |
811.0 |
|
|
Customer advances and billings in excess of contract revenue |
|
366.0 |
|
|
|
376.6 |
|
|
Accrued salaries, wages, and benefits |
|
66.0 |
|
|
|
81.5 |
|
|
Accrued interest |
|
74.4 |
|
|
|
92.5 |
|
|
Accrued income taxes |
|
54.4 |
|
|
|
60.0 |
|
|
Current portion of warranty reserve |
|
17.5 |
|
|
|
29.4 |
|
|
Current portion of long-term debt |
|
260.7 |
|
|
|
258.5 |
|
|
Operating lease liabilities, current |
|
20.4 |
|
|
|
18.5 |
|
|
Other current liabilities |
|
132.9 |
|
|
|
138.2 |
|
| Total Current
Liabilities |
|
2,002.4 |
|
|
|
1,866.2 |
|
| Long-term debt |
|
3,623.9 |
|
|
|
3,576.4 |
|
| Deferred tax liabilities |
|
571.8 |
|
|
|
568.2 |
|
| Accrued pension
liabilities |
|
7.1 |
|
|
|
6.7 |
|
| Operating lease liabilities,
non-current |
|
61.7 |
|
|
|
50.7 |
|
| Other long-term
liabilities |
|
96.1 |
|
|
|
95.2 |
|
| Total
Liabilities |
|
6,363.0 |
|
|
|
6,163.4 |
|
| Equity |
|
|
|
|
Preferred stock, par value $0.01 per share, $1,000 aggregate
liquidation preference — 10,000,000 shares authorized, 402,500
shares issued and outstanding at both September 30, 2024 and
December 31, 2023 |
|
— |
|
|
|
— |
|
|
Common stock, par value $0.01 per share — 150,000,000 shares
authorized, 42,809,385 and 42,754,241 shares issued and outstanding
at September 30, 2024 and December 31, 2023,
respectively |
|
0.4 |
|
|
|
0.4 |
|
|
Additional paid-in capital |
|
1,883.6 |
|
|
|
1,872.5 |
|
|
Treasury stock; 760,782 shares at both September 30, 2024 and
December 31, 2023 |
|
(19.3 |
) |
|
|
(19.3 |
) |
|
Retained earnings |
|
1,040.6 |
|
|
|
922.1 |
|
|
Accumulated other comprehensive income |
|
65.9 |
|
|
|
10.8 |
|
|
Total Chart Industries, Inc. Shareholders’ Equity |
|
2,971.2 |
|
|
|
2,786.5 |
|
|
Noncontrolling interests |
|
164.2 |
|
|
|
152.5 |
|
|
Total Equity |
|
3,135.4 |
|
|
|
2,939.0 |
|
| TOTAL LIABILITIES AND
EQUITY |
$ |
9,498.4 |
|
|
$ |
9,102.4 |
|
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESOPERATING SEGMENTS
(UNAUDITED)(Dollars in millions) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
| Sales |
|
|
|
|
|
|
|
|
Cryo Tank Solutions |
$ |
162.5 |
|
|
$ |
159.0 |
|
|
$ |
487.7 |
|
|
$ |
435.2 |
|
| Heat Transfer Systems |
|
256.2 |
|
|
|
232.5 |
|
|
|
746.5 |
|
|
|
636.0 |
|
| Specialty Products |
|
283.3 |
|
|
|
240.0 |
|
|
|
797.4 |
|
|
|
602.9 |
|
| Repair, Service &
Leasing |
|
360.5 |
|
|
|
271.3 |
|
|
|
1,022.0 |
|
|
|
688.5 |
|
| Intersegment eliminations |
|
— |
|
|
|
(4.9 |
) |
|
|
(0.1 |
) |
|
|
(25.1 |
) |
|
Consolidated |
$ |
1,062.5 |
|
|
$ |
897.9 |
|
|
$ |
3,053.5 |
|
|
$ |
2,337.5 |
|
| Gross
Profit |
|
|
|
|
|
|
|
| Cryo Tank Solutions |
$ |
40.7 |
|
|
$ |
35.2 |
|
|
$ |
106.9 |
|
|
$ |
85.5 |
|
| Heat Transfer Systems |
|
76.4 |
|
|
|
61.5 |
|
|
|
207.3 |
|
|
|
170.1 |
|
| Specialty Products |
|
74.6 |
|
|
|
62.0 |
|
|
|
214.3 |
|
|
|
158.9 |
|
| Repair, Service &
Leasing |
|
170.9 |
|
|
|
117.5 |
|
|
|
488.0 |
|
|
|
291.6 |
|
|
Consolidated |
$ |
362.6 |
|
|
$ |
276.2 |
|
|
$ |
1,016.5 |
|
|
$ |
706.1 |
|
| Gross Profit
Margin |
|
|
|
|
|
|
|
| Cryo Tank Solutions |
|
25.0 |
% |
|
|
22.1 |
% |
|
|
21.9 |
% |
|
|
19.6 |
% |
| Heat Transfer Systems |
|
29.8 |
% |
|
|
26.5 |
% |
|
|
27.8 |
% |
|
|
26.7 |
% |
| Specialty Products |
|
26.3 |
% |
|
|
25.8 |
% |
|
|
26.9 |
% |
|
|
26.4 |
% |
| Repair, Service &
Leasing |
|
47.4 |
% |
|
|
43.3 |
% |
|
|
47.7 |
% |
|
|
42.4 |
% |
|
Consolidated |
|
34.1 |
% |
|
|
30.8 |
% |
|
|
33.3 |
% |
|
|
30.2 |
% |
| Operating Income
(Loss) |
|
|
|
|
|
|
|
| Cryo Tank Solutions |
$ |
23.5 |
|
|
$ |
17.1 |
|
|
$ |
53.5 |
|
|
$ |
31.9 |
|
| Heat Transfer Systems |
|
61.3 |
|
|
|
43.4 |
|
|
|
157.6 |
|
|
|
120.5 |
|
| Specialty Products |
|
41.9 |
|
|
|
33.7 |
|
|
|
122.0 |
|
|
|
84.6 |
|
| Repair, Service &
Leasing |
|
102.0 |
|
|
|
42.3 |
|
|
|
265.1 |
|
|
|
121.0 |
|
| Corporate |
|
(50.2 |
) |
|
|
(32.1 |
) |
|
|
(139.0 |
) |
|
|
(123.3 |
) |
|
Consolidated |
$ |
178.5 |
|
|
$ |
104.4 |
|
|
$ |
459.2 |
|
|
$ |
234.7 |
|
| Operating
Margin |
|
|
|
|
|
|
|
| Cryo Tank Solutions |
|
14.5 |
% |
|
|
10.8 |
% |
|
|
11.0 |
% |
|
|
7.3 |
% |
| Heat Transfer Systems |
|
23.9 |
% |
|
|
18.7 |
% |
|
|
21.1 |
% |
|
|
18.9 |
% |
| Specialty Products |
|
14.8 |
% |
|
|
14.0 |
% |
|
|
15.3 |
% |
|
|
14.0 |
% |
| Repair, Service &
Leasing |
|
28.3 |
% |
|
|
15.6 |
% |
|
|
25.9 |
% |
|
|
17.6 |
% |
|
Consolidated |
|
16.8 |
% |
|
|
11.6 |
% |
|
|
15.0 |
% |
|
|
10.0 |
% |
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESORDERS AND BACKLOG
(UNAUDITED)(Dollars in millions) |
| |
Three Months Ended |
| |
September 30,2024 |
|
September 30,2023 |
| Orders |
|
|
|
|
Cryo Tank Solutions |
$ |
126.2 |
|
$ |
155.6 |
|
| Heat Transfer Systems |
|
424.7 |
|
|
176.1 |
|
| Specialty Products |
|
237.8 |
|
|
469.1 |
|
| Repair, Service &
Leasing |
|
377.9 |
|
|
331.2 |
|
| Intersegment eliminations |
|
0.9 |
|
|
(4.7 |
) |
|
Consolidated |
$ |
1,167.5 |
|
$ |
1,127.3 |
|
| |
As of |
| |
September 30,2024 |
|
September 30,2023 |
| Backlog |
|
|
|
|
Cryo Tank Solutions |
$ |
316.5 |
|
|
$ |
449.4 |
|
| Heat Transfer Systems |
|
1,878.0 |
|
|
|
1,657.5 |
|
| Specialty Products |
|
1,755.3 |
|
|
|
1,460.7 |
|
| Repair, Service &
Leasing |
|
593.4 |
|
|
|
609.7 |
|
| Intersegment eliminations |
|
(7.9 |
) |
|
|
(36.6 |
) |
|
Consolidated |
$ |
4,535.3 |
|
|
$ |
4,140.7 |
|
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF EARNINGS (LOSS) AND
EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CHART INDUSTRIES,
INC. – CONTINUING OPERATIONS TO ADJUSTED EARNINGS (LOSS) AND
ADJUSTED EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CHART
INDUSTRIES, INC. - CONTINUING
OPERATIONS(UNAUDITED)(Dollars in
millions, except per share amounts) |
| |
Q3 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
YTD September 2024 |
| Amounts attributable
to Chart common stockholders |
|
|
|
|
|
|
|
|
|
|
Net income attributable to Chart Industries, Inc. |
$ |
3.4 |
|
|
$ |
11.3 |
|
|
$ |
58.6 |
|
|
$ |
69.0 |
|
|
$ |
138.9 |
|
| Less: Loss from discontinued
operations, net of tax |
|
(6.0 |
) |
|
|
(2.2 |
) |
|
|
(0.2 |
) |
|
|
(0.4 |
) |
|
|
(2.8 |
) |
| Income from continuing
operations |
|
9.4 |
|
|
|
13.5 |
|
|
|
58.8 |
|
|
|
69.4 |
|
|
|
141.7 |
|
| Less: Mandatory convertible
preferred stock dividend requirement |
|
6.8 |
|
|
|
6.8 |
|
|
|
6.8 |
|
|
|
6.8 |
|
|
|
20.4 |
|
| Income from continuing
operations attributable to Chart (U.S. GAAP) |
|
2.6 |
|
|
|
6.7 |
|
|
|
52.0 |
|
|
|
62.6 |
|
|
|
121.3 |
|
|
Unrealized loss (gain) on investments in equity securities and loss
from strategic equity method investments(1) |
|
5.1 |
|
|
|
4.3 |
|
|
|
2.4 |
|
|
|
(11.0 |
) |
|
|
(4.3 |
) |
|
Deal related and integration costs(3) |
|
5.9 |
|
|
|
14.3 |
|
|
|
7.4 |
|
|
|
8.2 |
|
|
|
29.9 |
|
|
Howden amortization |
|
47.6 |
|
|
|
46.6 |
|
|
|
46.9 |
|
|
|
46.3 |
|
|
|
139.8 |
|
|
Restructuring & related costs |
|
4.7 |
|
|
|
5.1 |
|
|
|
4.3 |
|
|
|
1.7 |
|
|
|
11.1 |
|
|
Other one-time items(2) |
|
— |
|
|
|
— |
|
|
|
2.0 |
|
|
|
3.9 |
|
|
|
5.9 |
|
|
Tax effects |
|
(11.8 |
) |
|
|
(14.4 |
) |
|
|
(11.8 |
) |
|
|
(9.8 |
) |
|
|
(36.0 |
) |
| Adjusted earnings
attributable to Chart Industries, Inc. (non-GAAP) |
$ |
54.1 |
|
|
$ |
62.6 |
|
|
$ |
103.2 |
|
|
$ |
101.9 |
|
|
$ |
267.7 |
|
| |
Q3 2023 Diluted EPS |
|
Q1 2024 Diluted EPS |
|
Q2 2024 Diluted EPS |
|
Q3 2024 Diluted EPS |
|
YTD September 2024 Diluted EPS |
|
Reported income from continuing operations attributable to Chart
(U.S. GAAP) |
$ |
0.05 |
|
|
$ |
0.14 |
|
|
$ |
1.10 |
|
|
$ |
1.34 |
|
|
$ |
2.59 |
|
|
Unrealized loss (gain) on investments in equity securities and loss
from strategic equity method investments(1) |
|
0.11 |
|
|
|
0.09 |
|
|
|
0.05 |
|
|
|
(0.24 |
) |
|
|
(0.09 |
) |
|
Deal related and integration costs(3) |
|
0.12 |
|
|
|
0.31 |
|
|
|
0.15 |
|
|
|
0.18 |
|
|
|
0.64 |
|
|
Howden amortization |
|
1.00 |
|
|
|
1.00 |
|
|
|
1.00 |
|
|
|
0.99 |
|
|
|
2.98 |
|
|
Restructuring & related costs |
|
0.10 |
|
|
|
0.11 |
|
|
|
0.09 |
|
|
|
0.04 |
|
|
|
0.24 |
|
|
Other one-time items(2) |
|
|
|
— |
|
|
|
0.04 |
|
|
|
0.08 |
|
|
|
0.12 |
|
|
Tax effects |
|
(0.25 |
) |
|
|
(0.31 |
) |
|
|
(0.25 |
) |
|
|
(0.21 |
) |
|
|
(0.77 |
) |
| Adjusted earnings
attributable to Chart Industries, Inc. (non-GAAP) |
$ |
1.13 |
|
|
$ |
1.34 |
|
|
$ |
2.18 |
|
|
$ |
2.18 |
|
|
$ |
5.71 |
|
| Share count |
|
47.61 |
|
|
|
46.73 |
|
|
|
47.25 |
|
|
|
46.67 |
|
|
|
46.89 |
|
_______________
(1) Includes the mark-to-market of our
inorganic investments in Avina, McPhy, Stabilis and certain of our
minority investments as well as losses from strategic equity method
investments.(2) Other includes administrative costs related to
certain equity investments, asset impairments and associated
insurance recoveries, non-repeating legal costs and a one-time
adjustment related to a 2022 settlement adjusted for in the second
quarter of 2024.(3) Deal related and integration costs
primarily includes costs associated with integrating Howden and
impacts from the 2023 divestitures
_______________
Adjusted earnings per common share attributable
to Chart Industries, Inc. is not a measure of financial performance
under U.S. GAAP and should not be considered as an alternative to
earnings per share in accordance with U.S. GAAP. Management
believes that adjusted earnings per common share attributable to
Chart Industries, Inc. facilitates useful period-to-period
comparisons of our financial results and this information is used
by us in evaluating internal performance. Our calculation of these
non-GAAP measures may not be comparable to the calculations of
similarly titled measures reported by other companies. Prior to the
second quarter of 2024, the impacts of the mandatory convertible
preferred stock dividend were excluded from adjusted earnings per
common share attributable to Chart Industries, Inc. (non-GAAP). The
impacts are now included in adjusted earnings per common share
attributable to Chart Industries, Inc. (non-GAAP) and historical
periods have been restated to reflect the change in treatment.
|
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING
ACTIVITIES FROM CONTINUING OPERATIONS TO FREE CASH FLOW FROM
CONTINUING OPERATIONS AND RECONCILIATION OF NET CASH USED IN
OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS TO FREE CASH FLOW
FROM DISCONTINUED OPERATIONS (UNAUDITED)(Dollars
in millions) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
|
Net cash provided by (used in) operating activities from continuing
operations |
$ |
200.7 |
|
|
$ |
(29.3 |
) |
|
$ |
227.2 |
|
|
$ |
106.1 |
|
|
Capital expenditures |
|
(26.1 |
) |
|
|
(63.1 |
) |
|
|
(100.3 |
) |
|
|
(115.4 |
) |
| Free cash flow from
continuing operations (non-GAAP) |
$ |
174.6 |
|
|
$ |
(92.4 |
) |
|
$ |
126.9 |
|
|
$ |
(9.3 |
) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
|
Net cash (used in) provided by operating activities from
discontinued operations |
$ |
(0.1 |
) |
|
$ |
6.7 |
|
$ |
(5.6 |
) |
|
$ |
(69.2 |
) |
|
Capital expenditures |
|
— |
|
|
|
— |
|
|
— |
|
|
|
(2.6 |
) |
| Free cash flow from
discontinued operations (non-GAAP) |
$ |
(0.1 |
) |
|
$ |
6.7 |
|
$ |
(5.6 |
) |
|
$ |
(71.8 |
) |
_______________
Free cash flow is not a measure of financial
performance under U.S. GAAP and should not be considered as an
alternative to net cash provided by (used in) operating activities
in accordance with U.S. GAAP. Management believes that free cash
flow facilitates useful period-to-period comparisons of our
financial results and this information is used by us in evaluating
internal performance. Our calculation of this non-GAAP measure may
not be comparable to the calculations of similarly titled measures
reported by other companies.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATIONS OF OPERATING INCOME
(LOSS) TO ADJUSTED OPERATING INCOME (LOSS)
(UNAUDITED)(Dollars in millions) |
| |
Three Months Ended September 30, 2024 |
| |
Cryo Tank Solutions |
|
Heat Transfer Systems |
|
Specialty Products |
|
Repair, Service & Leasing |
|
Intersegment Eliminations |
|
Corporate |
|
Consolidated |
|
Sales |
$ |
162.5 |
|
|
$ |
256.2 |
|
|
$ |
283.3 |
|
|
$ |
360.5 |
|
|
$ |
— |
|
$ |
— |
|
|
$ |
1,062.5 |
|
| Operating income
(loss) as reported (U.S. GAAP) |
$ |
23.5 |
|
|
$ |
61.3 |
|
|
$ |
41.9 |
|
|
$ |
102.0 |
|
|
$ |
— |
|
$ |
(50.2 |
) |
|
|
178.5 |
|
| Operating
margin |
|
14.5 |
% |
|
|
23.9 |
% |
|
|
14.8 |
% |
|
|
28.3 |
% |
|
|
|
|
|
|
16.8 |
% |
|
Restructuring & related costs |
$ |
0.3 |
|
|
$ |
0.2 |
|
|
$ |
0.3 |
|
|
$ |
0.7 |
|
|
$ |
— |
|
$ |
0.2 |
|
|
$ |
1.7 |
|
|
Deal related & integration costs(2) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.3 |
|
|
|
— |
|
|
7.9 |
|
|
|
8.2 |
|
|
Step-up amortization |
|
2.1 |
|
|
|
1.1 |
|
|
|
4.8 |
|
|
|
38.4 |
|
|
|
— |
|
|
(0.1 |
) |
|
|
46.3 |
|
|
Other(1) |
|
0.4 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
(0.1 |
) |
|
|
— |
|
|
0.6 |
|
|
|
1.2 |
|
| Adjusted operating
income (loss) (non-GAAP) |
$ |
26.3 |
|
|
$ |
62.7 |
|
|
$ |
47.2 |
|
|
$ |
141.3 |
|
|
$ |
— |
|
$ |
(41.6 |
) |
|
$ |
235.9 |
|
| Adjusted operating
margin (non-GAAP) |
|
16.2 |
% |
|
|
24.5 |
% |
|
|
16.7 |
% |
|
|
39.2 |
% |
|
|
|
|
|
|
22.2 |
% |
______________
(1) Other includes administrative costs
related to certain equity investments, asset impairments and
associated insurance recoveries and non-repeating legal
costs.(2) Deal related and integration costs primarily
includes costs associated with integrating Howden and impacts from
the 2023 divestitures
| |
Three Months Ended September 30, 2023 |
| |
Cryo Tank Solutions |
|
Heat Transfer Systems |
|
Specialty Products |
|
Repair, Service & Leasing |
|
Intersegment Eliminations |
|
Corporate |
|
Consolidated |
|
Sales |
$ |
159.0 |
|
|
$ |
232.5 |
|
|
$ |
240.0 |
|
|
$ |
271.3 |
|
|
$ |
(4.9 |
) |
|
$ |
— |
|
|
$ |
897.9 |
|
| Operating income
(loss) as reported (U.S. GAAP) |
$ |
17.1 |
|
|
$ |
43.4 |
|
|
$ |
33.7 |
|
|
$ |
42.3 |
|
|
$ |
— |
|
|
$ |
(32.1 |
) |
|
$ |
104.4 |
|
| Operating
margin |
|
10.8 |
% |
|
|
18.7 |
% |
|
|
14.0 |
% |
|
|
15.6 |
% |
|
|
|
|
|
|
11.6 |
% |
|
Restructuring & related costs |
$ |
0.1 |
|
|
$ |
0.5 |
|
|
$ |
0.4 |
|
|
$ |
0.9 |
|
|
$ |
— |
|
|
$ |
2.3 |
|
|
$ |
4.2 |
|
|
Deal related & integration costs(1) |
|
0.4 |
|
|
|
0.5 |
|
|
|
0.5 |
|
|
|
— |
|
|
|
— |
|
|
|
3.8 |
|
|
|
5.2 |
|
|
Step-up amortization |
|
2.5 |
|
|
|
1.3 |
|
|
|
5.0 |
|
|
|
38.8 |
|
|
|
— |
|
|
|
— |
|
|
|
47.6 |
|
| Adjusted operating
income (loss) (non-GAAP) |
$ |
20.1 |
|
|
$ |
45.7 |
|
|
$ |
39.6 |
|
|
$ |
82.0 |
|
|
$ |
— |
|
|
$ |
(26.0 |
) |
|
$ |
161.4 |
|
| Adjusted operating
margin (non-GAAP) |
|
12.6 |
% |
|
|
19.7 |
% |
|
|
16.5 |
% |
|
|
30.2 |
% |
|
|
|
|
|
|
18.0 |
% |
(1) Deal related and integration costs primarily
includes costs associated with integrating Howden and impacts from
the 2023 divestitures
_______________
Adjusted operating income (loss) is not a
measure of financial performance under U.S. GAAP and should not be
considered as an alternative to operating income (loss) in
accordance with U.S. GAAP. Management believes that adjusted
operating income (loss) facilitates useful period-to-period
comparisons of our financial results and this information is used
by us in evaluating internal performance. Our calculation of these
non-GAAP measures may not be comparable to the calculations of
similarly titled measures reported by other companies.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF OPERATING SEGMENT
ORDERS TO PRO FORMA ORDERS, SALES TO PRO FORMA SALES AND GROSS
PROFIT TO PRO FORMA GROSS PROFIT
(UNAUDITED)(Dollars in millions) |
| |
Three Months Ended September 30, 2023 |
| |
Cryo Tank Solutions |
|
Heat Transfer Systems |
|
Specialty Products |
|
Repair, Service & Leasing |
|
Intersegment Eliminations |
|
Corporate |
|
Consolidated |
|
Orders |
$ |
155.6 |
|
|
$ |
176.1 |
|
|
$ |
469.1 |
|
|
$ |
331.2 |
|
|
$ |
(4.7 |
) |
|
$ |
— |
|
$ |
1,127.3 |
|
| Less: Orders from businesses
divested in the fourth quarter 2023 |
|
2.7 |
|
|
|
6.9 |
|
|
|
3.6 |
|
|
|
6.8 |
|
|
|
— |
|
|
|
— |
|
|
20.0 |
|
| Pro forma orders
(non-GAAP) |
$ |
152.9 |
|
|
$ |
169.2 |
|
|
$ |
465.5 |
|
|
$ |
324.4 |
|
|
$ |
(4.7 |
) |
|
$ |
— |
|
$ |
1,107.3 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales |
$ |
159.0 |
|
|
$ |
232.5 |
|
|
$ |
240.0 |
|
|
$ |
271.3 |
|
|
$ |
(4.9 |
) |
|
$ |
— |
|
$ |
897.9 |
|
| Less: Sales from businesses
divested in the fourth quarter 2023 |
|
3.7 |
|
|
|
4.7 |
|
|
|
15.0 |
|
|
|
6.5 |
|
|
|
0.1 |
|
|
|
— |
|
|
30.0 |
|
| Pro forma sales
(non-GAAP) |
$ |
155.3 |
|
|
$ |
227.8 |
|
|
$ |
225.0 |
|
|
$ |
264.8 |
|
|
$ |
(5.0 |
) |
|
$ |
— |
|
$ |
867.9 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Gross
Profit |
$ |
35.2 |
|
|
$ |
61.5 |
|
|
$ |
62.0 |
|
|
$ |
117.5 |
|
|
$ |
— |
|
|
$ |
— |
|
$ |
276.2 |
|
| Gross Profit
Margin |
|
22.1 |
% |
|
|
26.5 |
% |
|
|
25.8 |
% |
|
|
43.3 |
% |
|
|
— |
% |
|
|
|
|
30.8 |
% |
| Less: Gross profit from
businesses divested in the fourth quarter 2023 |
|
0.7 |
|
|
|
1.3 |
|
|
|
4.1 |
|
|
|
4.1 |
|
|
|
0.1 |
|
|
|
— |
|
|
10.3 |
|
| Pro forma gross profit
(non-GAAP) |
$ |
34.5 |
|
|
$ |
60.2 |
|
|
$ |
57.9 |
|
|
$ |
113.4 |
|
|
$ |
(0.1 |
) |
|
$ |
— |
|
$ |
265.9 |
|
| Pro forma gross profit
margin (non-GAAP) |
|
22.2 |
% |
|
|
26.4 |
% |
|
|
25.7 |
% |
|
|
42.8 |
% |
|
|
2.0 |
% |
|
|
|
|
30.6 |
% |
_______________
Businesses divested in the fourth quarter of
2023 include American Fan, Cofimco and Cryo Diffusion. Pro forma
orders, pro forma sales, pro forma gross profit and pro forma gross
profit margin are not measures of financial performance under U.S.
GAAP and should not be considered as an alternative to orders,
sales, gross profit and gross profit margin in accordance with U.S.
GAAP. Management believes that pro forma orders, pro forma sales,
pro forma gross profit and pro forma gross profit margin facilitate
useful period-to-period comparisons of our financial results and
this information is used by us in evaluating internal performance.
Our calculation of these non-GAAP measures may not be comparable to
the calculations of similarly titled measures reported by other
companies.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF NET INCOME FROM
CONTINUING OPERATIONS TO EBITDA AND ADJUSTED EBITDA
(UNAUDITED)(Dollars in millions) |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
|
Net income from continuing operations |
$ |
73.1 |
|
|
$ |
11.7 |
|
$ |
153.0 |
|
|
$ |
6.1 |
|
|
Income tax expense (benefit) |
|
26.6 |
|
|
|
0.1 |
|
|
50.9 |
|
|
|
(4.2 |
) |
|
Interest expense, net |
|
80.6 |
|
|
|
90.5 |
|
|
248.7 |
|
|
|
202.7 |
|
|
Acquisition related finance fees |
|
— |
|
|
|
— |
|
|
— |
|
|
|
26.1 |
|
|
Loss on extinguishment of debt |
|
— |
|
|
|
— |
|
|
0.7 |
|
|
|
— |
|
|
Depreciation and amortization |
|
68.1 |
|
|
|
67.0 |
|
|
200.0 |
|
|
|
163.2 |
|
| EBITDA
(non-GAAP) |
|
248.4 |
|
|
|
169.3 |
|
|
653.3 |
|
|
|
393.9 |
|
|
Non-recurring costs: |
|
|
|
|
|
|
|
|
Deal related & integration costs(3) |
|
8.2 |
|
|
|
5.9 |
|
|
29.9 |
|
|
|
39.4 |
|
|
Restructuring & related costs |
|
1.7 |
|
|
|
4.2 |
|
|
11.1 |
|
|
|
11.2 |
|
|
Amortization of step-up value of inventory |
|
6.4 |
|
|
|
7.3 |
|
|
21.0 |
|
|
|
18.2 |
|
|
Other one-time items(2) |
|
2.8 |
|
|
|
0.6 |
|
|
4.9 |
|
|
|
4.5 |
|
|
Employee share-based compensation expense |
|
4.2 |
|
|
|
2.6 |
|
|
14.3 |
|
|
|
9.2 |
|
|
Unrealized (gain) loss on investments in equity securities and loss
from strategic equity method investments(1) |
|
(11.0 |
) |
|
|
5.1 |
|
|
(4.3 |
) |
|
|
11.7 |
|
|
Howden FX Hedge |
|
— |
|
|
|
— |
|
|
— |
|
|
|
2.8 |
|
| Adjusted EBITDA
(non-GAAP) |
$ |
260.7 |
|
|
$ |
195.0 |
|
$ |
730.2 |
|
|
$ |
490.9 |
|
_______________
(1) Includes the mark-to-market of our
inorganic investments in Avina, McPhy, Stabilis and certain of our
minority investments as well as losses from strategic equity method
investments.(2) Other includes administrative costs related to
certain equity investments, asset impairments and associated
insurance recoveries, non-repeating legal costs and a one-time
adjustment related to a 2022 settlement adjusted for in the second
quarter of 2024.(3) Deal related and integration costs
primarily includes costs associated with integrating Howden and
impacts from the 2023 divestitures.
_______________
The reconciliation from net income from
continuing operations to EBITDA (non-GAAP) includes acquisition
related finance fees and loss on extinguishment of debt. EBITDA and
adjusted EBITDA are not measures of financial performance under
U.S. GAAP and should not be considered as an alternative to net
income from continuing operations in accordance with U.S. GAAP.
Management believes that EBITDA and adjusted EBITDA facilitate
useful period-to-period comparisons of our financial results and
this information is used by us in evaluating internal performance.
Our calculation of these non-GAAP measures may not be comparable to
the calculations of similarly titled measures reported by other
companies.
|
CHART INDUSTRIES, INC. AND
SUBSIDIARIESRECONCILIATION OF ORDERS TO PRO FORMA
ORDERS, SALES TO PRO FORMA SALES, GROSS PROFIT TO PRO FORMA GROSS
PROFIT, ADJUSTED EBITDA TO PRO FORMA ADJUSTED EBITDA, AND OPERATING
INCOME TO PRO FORMA ADJUSTED OPERATING INCOME
(UNAUDITED)(Dollars in millions) |
| |
Three Months EndedSeptember 30, 2023 |
|
Orders |
$ |
1,127.3 |
|
|
Less: Orders from businesses divested in the fourth quarter
2023 |
|
20.0 |
|
|
Pro forma orders (non-GAAP) |
$ |
1,107.3 |
|
| |
|
|
Sales |
$ |
897.9 |
|
|
Less: Sales from businesses divested in the fourth quarter
2023 |
|
30.0 |
|
|
Pro forma sales (non-GAAP) |
$ |
867.9 |
|
| |
|
|
Gross profit |
$ |
276.2 |
|
|
Less: Gross profit from businesses divested in the fourth quarter
2023 |
|
10.3 |
|
|
Pro forma gross profit (non-GAAP) |
$ |
265.9 |
|
|
Pro forma gross profit margin (non-GAAP) |
|
30.6 |
% |
| |
|
| EBITDA
(non-GAAP) |
$ |
169.3 |
|
|
Less: Adjusted EBITDA from businesses divested in the fourth
quarter 2023 |
|
7.9 |
|
|
Pro forma EBITDA (non-GAAP) |
$ |
161.4 |
|
|
Non-recurring costs: |
|
|
Deal related & integration costs(2) |
|
5.9 |
|
|
Restructuring & related costs |
|
4.2 |
|
|
Amortization of step-up value of inventory |
|
7.3 |
|
|
Other one-time items |
|
0.6 |
|
|
Employee share-based compensation expense |
|
2.6 |
|
|
Unrealized (gain) loss on investments in equity securities and loss
from strategic equity method investments(1) |
|
5.1 |
|
|
Pro forma adjusted EBITDA (non-GAAP) |
$ |
187.1 |
|
|
Pro forma adjusted EBITDA margin (non-GAAP) |
|
21.6 |
% |
| |
|
|
Operating income |
$ |
104.4 |
|
|
Less: Operating income from businesses divested in the fourth
quarter 2023 |
|
7.4 |
|
|
Pro forma operating income (non-GAAP) |
$ |
97.0 |
|
|
Pro forma operating income margin (non-GAAP) |
|
11.2 |
% |
|
Restructuring related, deal-related, integration and other one time
costs |
$ |
57.0 |
|
|
Pro forma adjusted operating income
(non-GAAP) |
$ |
154.0 |
|
|
Pro forma adjusted operating income margin
(non-GAAP) |
|
17.7 |
% |
(1) Includes the mark-to-market of our
inorganic investments in Avina, McPhy, Stabilis and certain of our
minority investments as well as losses from strategic equity method
investments.(2) Deal related and integration costs primarily
includes costs associated with integrating Howden and impacts from
the 2023 divestitures.
_______________
Businesses divested in the fourth quarter of
2023 include American Fan, Cofimco and Cryo Diffusion. Pro forma
orders, pro forma sales, pro forma gross profit, adjusted EBITDA,
pro forma adjusted EBITDA, pro forma operating income and pro forma
adjusted operating income are not measures of financial performance
under U.S. GAAP and should not be considered as an alternative to
sales and net income from continuing operations in accordance with
U.S. GAAP. Management believes that pro forma orders, pro forma
sales, pro forma gross profit, adjusted EBITDA, pro forma adjusted
EBITDA, pro forma operating income and pro forma adjusted operating
income facilitate useful period-to-period comparisons of our
financial results and this information is used by us in evaluating
internal performance. Our calculation of these non-GAAP measures
may not be comparable to the calculations of similarly titled
measures reported by other companies.
This press release was published by a CLEAR® Verified
individual.
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