gtls-202405030000892553false00008925532024-05-032024-05-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________________________________
FORM 8-K
_____________________________________
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 3, 2024
____________________________________
CHART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
_____________________________________
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Delaware | 001-11442 | 34-1712937 |
(State of other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| | |
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2200 Airport Industrial Drive, Suite 100, Ball Ground, Georgia 30107
(Address of principal executive offices) (ZIP Code)
Registrant’s telephone number, including area code: (770) 721-8800
NOT APPLICABLE
(Former name or former address, if changed since last report)
_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, par value $0.01 | | GTLS | | New York Stock Exchange |
| Depositary shares, each representing 1/20th interest in a share of 6.75% Series B Mandatory Convertible Preferred Stock, par value $0.01 | | GTLS.PRB | | New York Stock Exchange |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On May 3, 2024, Chart Industries, Inc. (the “Company”) issued a news release announcing the Company’s financial results for the first quarter ended March 31, 2024, as well as supplemental information for the first quarter ended March 31, 2024. A copy of the news release is furnished with this Current Report on Form 8-K as Exhibit 99.1, and a copy of the supplemental information is furnished with this Current Report on Form 8-K as Exhibit 99.2. All information in the news release and the supplemental information is furnished and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liability of that Section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporated it by reference.
The news release and supplemental information furnished with this Current Report on Form 8-K include measures of which exclude certain items required to be presented under generally accepted accounting principles (“GAAP”). These measures are not recognized under GAAP and are referred to as “non-GAAP financial measures” in Regulation G under the Exchange Act. The Company believes these 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. The non-GAAP measures are reconciled to the most directly comparable GAAP measure in tables at the end of the news release and in the supplemental information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. | Description |
| 99.1 | |
| 99.2 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Chart Industries, Inc. |
Date: May 3, 2024 |
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| By: /s/ Jillian C. Evanko
Jillian C. Evanko President and Chief Executive Officer |
Exhibit 99.1
Chart Industries Reports First Quarter 2024 Financial Results
ATLANTA, – May 3, 2024 - Chart Industries, Inc. (NYSE: GTLS) (“Chart”) today reported results for the first quarter ended March 31, 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, unless noted otherwise.
First quarter 2024 highlights compared to first quarter 2023, pro forma:
•Orders, backlog, sales, reported and adjusted gross margin, reported and adjusted operating margin, reported and adjusted EBITDA and associated EBITDA margin were all the highest in any first quarter in our history
•Orders of $1.12 billion, an increase of 4.3% which contributed to record backlog of $4.33 billion
•Sales of $950.7 million, an increase of 17.4%; pro forma organic growth of 18.3% net of a foreign exchange headwind of (0.9%)
•Reported gross margin of 31.8%, an increase of 260 basis points (“bps”)
•Reported operating income of $112.9 million or $171.3 million when adjusted for unusual items, resulting in 18.0% adjusted operating margin, a 620 bps increase
•Adjusted EBITDA of $212.2 million or 22.3% of sales, an increase of 550 bps
•Reported diluted earnings per share (“EPS”) of $0.14; adjusted diluted EPS of $1.49 with a higher effective tax rate in the first quarter 2024 than expected for the full year 2024
•Reported net cash from operating activities of negative $89.6 million less capital expenditures of $46.1 million resulted in negative $135.7 million of free cash flow (FCF), as anticipated due to specific first quarter cash outflows as discussed on our fourth quarter earnings call
•Reiterate 2024 guidance and medium-term outlook metrics
Summary
“With numerous first quarter records, including adjusted operating income and operating margin of 18.0%, reflecting the benefits of our synergy program, full-solution offering and 14% sales growth in aftermarket, we are reiterating our full year outlook,” stated Jill Evanko, Chart’s CEO and President. “We started the second quarter of 2024 with strong cash collections, and the timing of progress payments in the year supports our progress to our target net leverage ratio range of 2.0 to 2.5”.
End market and Chart-specific demand is very strong, including record first quarter 2024 ending backlog of $4.33 billion, and a growing commercial pipeline totaling our highest ever, over $22 billion. First quarter 2024 orders of $1.12 billion included strong Repair, Service and Leasing (“RSL”) orders of $333.9 million, the highest in our pro forma history and an above seasonal increase of 10.5% when compared to the first quarter 2023. The first quarter 2024 was stronger than typical in demand driven by strength in our European industrial gas end market, 41 new customers, 21 first-of-a-kind orders and 136 orders each greater than $1 million. This demand is continuing as we start the second quarter of 2024.
Macro tailwinds both from the public and private sectors continue in our favor, which we categorize four ways: (1) global energy transition and access, (2) clean water scarcity, (3) population and economic growth combined with urbanization and aging infrastructure and (4) artificial intelligence, inclusive of data center, battery, and energy intensity. Recent tailwinds include the United States EPA rules for water (PFAS), and energy infrastructure buildout.
LNG activity continues, regardless of the U.S. LNG Pause. We received orders for 51 LNG trailers in China in the first quarter 2024; this compares to 25 for the full year 2023 and 15 for the full year 2022. HLNG vehicle tank orders were over $10 million in the first quarter 2024, the first time in nine quarters, and that trend continued in April 2024. We announced our liquefaction equipment was chosen for the Cedar LNG project.
Hydrogen activity is broadening geographically with a liquefaction win in the United States with Element Resources, our first hydrogen project in Portugal (compression), our largest compressor order ever for a green industrial application in Europe, and a new partnership with GasLog for large-scale hydrogen for marine and logistics applications. We are also excited to announce our partnership with Energy Observer to explore and support its projects currently under development. These include a 160 meter multipurpose feeder-type cargo ship powered by liquid hydrogen and the associated onshore infrastructure.
First quarter 2024 marked our highest ever order quarter for CCUS. We executed an agreement to support Graymont’s decarbonization efforts with our SES cryogenic carbon capture (“CCC”) technology and received an associated engineering order from them. We also had our first Earthly Labs small-scale carbon capture Digital Uptime installation at Real Ale Brewing.
The demand for energy is growing in part driven by artificial intelligence, infrastructure for data centers, and the increasing need for batteries, cooling, and energy storage. We see increases in our commercial pipeline specific to efficiency and safety for critical minerals and electrification mining, backup power for data centers and monitoring. For example, our large mine cooling and ventilation project opportunity commercial pipeline is at an all-time high.
First quarter 2024 sales of $950.7 million was the highest first quarter sales in our history (pro forma), with growth of 17.4% compared to the first quarter 2023, and without the foreign exchange headwind was 18.3%. All four segments’ sales increased year-over-year, with Heat Transfer Systems (“HTS”) increasing 33.9% compared to the first quarter 2023. Sequentially compared to the fourth quarter 2023, sales were down approximately 6%, with slightly better than typical sequential seasonality (as we had anticipated).
Reported gross margin of 31.8% was our second highest in pro forma history (second only to fourth quarter 2023, which had mix benefits on large projects and higher volume) and marks our best six-month margin performance in history. Worth noting is that the first quarter of any given year is typically our lowest gross margin quarter of the year. This strong gross margin for the first quarter 2024 contributed to reported operating income of $112.9 million and $171.3 million when adjusted for one-time and unusual items, resulting in 18.0% adjusted operating margin, a 620 bps increase when compared to the first quarter 2023. Both gross profit margin and operating margin are beginning to reflect the benefits of our synergies and Chart Business Excellence (“CBE”) program. This is the highest adjusted operating margin in any first quarter in our history, and contributed to our adjusted EBITDA of $212.2 million, or 22.3%.
First quarter 2024 Segment Results (as compared to the first quarter 2023, pro forma continuing operations unless noted otherwise):
Cryo Tank Solutions (“CTS”): First quarter 2024 CTS orders of $159.3 million decreased 4.5% when compared to the first quarter 2023, driven by a large rail car order in the first quarter 2023 and increased 1.4% sequentially to the fourth quarter 2023, with continuing pickup in demand in EMEA industrial gas. First quarter 2024 sales of $159.7 million increased 13.2% when compared to the first quarter 2023. CTS book-to-bill of 1.0X reflects the increasing demand in the industrial gas end market, specifically with a pickup in Europe as well as renewed long-term agreements with key customers. Reported gross profit margin of 20.5% decreased 10 bps compared to the first quarter 2023.
Heat Transfer Systems (“HTS”): First quarter 2024 HTS orders of $237.3 million decreased 29.8% when compared to the first quarter 2023 primarily driven by large project bookings in the prior periods. March 31, 2024 HTS backlog of $1.69 billion does not include the IPSMR® BigLNG award from an international oil company that we expect to book in early 2025. First quarter 2024 HTS sales of $253.6 million increased 33.9% when compared to the first quarter 2023 and had associated reported gross profit margin of 27.6%, a 160 bps increase versus the year ago period.
Specialty Products: First quarter 2024 Specialty Products orders of $391.3 million increased 39.2% when compared to the first quarter 2023. First quarter 2024 sales of $236.5 million increased 5.5% when compared to the first quarter 2023 and sequentially increased 10.2% when compared to the fourth quarter 2023, driven by timing of project revenue and the start of Teddy2 pre-production. Reported gross profit margin of 24.9% decreased 780 bps when
compared to the first quarter 2023 and 370 bps when compared to the fourth quarter 2023, due to project mix and a first-of-a-kind project in the first quarter 2024. As previously shared, we forecast Specialty Products sales mix to be a tailwind in 2024 relative to 2023.
Repair, Service and Leasing (“RSL”): First quarter 2024 RSL orders were a record of $333.9 million and increased 10.5% and 3.3% when compared to the first quarter 2023 and the fourth quarter 2023 (our prior record), respectively. First quarter 2024 sales of $301.0 million, increased 13.9% when compared to the first quarter 2023. Reported record RSL gross profit margin of 46.7% increased 1,450 basis points when compared to the first quarter 2023. Gross profit as a percent of sales in RSL has been above 43% each quarter with full Howden ownership in the period. Also, we won 22 Digital Uptime projects in the first quarter 2024, the most in any quarter since we acquired Howden.
Reiterating our target net leverage ratio of 2.0X to 2.5X
First quarter 2024 reported net cash from operating activities of negative $89.6 million less capital expenditures of $46.1 million resulted in negative $135.7 million of free cash flow (FCF); as previously shared on our fourth quarter 2023 earnings call, the first quarter cash outflows included specific items that will not repeat in the second quarter 2024. These included additional capital expenditures related to the completion of our Theodore, Alabama (“Teddy2”) jumbo cryogenic tank facility (approximately $24 million), payments to divestiture-related advisors (approximately $8.1 million), bonus payments (approximately $34.3 million plus associated taxes), senior notes interest payment (approximately $79 million), annual insurance premiums ($16.6 million), and one-time tax payments (approximately $15.3 million).
Our March 31, 2024 net leverage ratio was 3.43X and in-line with our expected progress toward our anticipated net leverage ratio range of high 2.0X’s by mid-2024 as well as our target net leverage ratio range of 2.0X to 2.5X.
Second quarter 2024 cash generation has started strong across the company. Notably, April saw the collection of several milestone payments related to larger projects, with more to come throughout the quarter, as the timing of over $125 million of milestone payments are scheduled for May and June 2024 for our top four projects. Additionally, we have executed a trend of inventory reduction, with the first quarter 2024 our lowest inventory balance in a year, which is expected to continue through 2024.
We continue to take opportunistic steps to optimize our balance sheet, including the completion of our amendment and extension of our revolving credit facility (“RCF”), which resulted in a three-year maturity extension to April 2029 and favorable term changes.
2024 Outlook
Based on our first quarter 2024 results being in-line with our internal expectations and continued strong demand, we reiterate our outlook. We continue to anticipate our full year 2024 sales to be in a range of $4.7 to $5.0 billion with forecasted full year 2024 adjusted EBITDA in the range of $1.175 to $1.30 billion. Reported free cash flow (FCF) guidance of $575 million to $625 million is defined as operating cash flow less capital expenditures. Our anticipated 2024 full year adjusted EPS range is $12.00 to $14.00. This range is based on an effective tax rate of approximately 20% and a diluted share count of approximately 47 to 48 million.
Medium Term Outlook
We reiterate our medium-term outlook based on continued secular market trends driving demand, our shift to higher aftermarket and full-solution project mix, continued synergies, and Chart Business Excellence (CBE) activities. This includes:
•Mid-teens organic revenue growth through 2026
•Reported gross profit margin of mid-30%’s in 2026
•Adjusted diluted EPS growth CAGR of mid-40%’s
•95 to 100% Free Cash Flow Conversion
•Return on invested capital (“ROIC”) of mid-teens
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, 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 gross profit and adjusted gross profit margin, adjusted net income, adjusted operating income (loss), and adjusted operating margin, adjusted earnings per diluted share, net income attributable to Chart Industries, Inc. adjusted, free cash flow and EBITDA and adjusted EBITDA. 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 and the slides titled "First Quarter 2024 Adjusted EPS" and “First Quarter 2024 Adjusted EBITDA” included in the supplemental slides accompanying this 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 full year earnings and medium term outlooks, the Company is not able to provide a reconciliation of the adjusted EBITDA or adjusted free cash flow because certain items may have not yet occurred or are out of the Company’s control and/or cannot be reasonably predicted.
CONFERENCE CALL
As previously announced, the Company has scheduled a conference call for Friday, May 3, 2024 at 8:30 a.m. ET to discuss its first 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) 888 259 6580
Toll North America and other locations: (+1) 416 764 8624
Conference ID: 93992252
A live webcast and replay, as well as presentation slides, will be available on the Company’s investor relations website through the following link: Q1 2024 Webcast Registration. A telephone replay of the conference call can be accessed approximately two hours following the end of the call at 1-877-674-7070 with passcode 992252 through May 31, 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 Walsh
VP, Investor Relations
1-770-721-8899
john.walsh@chartindustries.com
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars and shares in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| March 31, 2024 | | March 31, 2023 | | December 31, 2023 | | | | |
| Sales | $ | 950.7 | | | $ | 531.5 | | | $ | 1,015.0 | | | | | |
| Cost of sales | 648.4 | | | 382.2 | | | 680.7 | | | | | |
| Gross profit | 302.3 | | | 149.3 | | | 334.3 | | | | | |
| Selling, general and administrative expenses | 141.5 | | | 92.9 | | | 129.9 | | | | | |
| Amortization expense | 47.9 | | | 21.8 | | | 48.4 | | | | | |
| | | | | | | | | |
| Operating expenses | 189.4 | | | 114.7 | | | 178.3 | | | | | |
Operating income (1) – (4) | 112.9 | | | 34.6 | | | 156.0 | | | | | |
| Acquisition related finance fees | — | | | 26.1 | | | — | | | | | |
| Interest expense, net | 83.8 | | | 28.3 | | | 86.4 | | | | | |
| | | | | | | | | |
| Loss on extinguishment of debt | — | | | — | | | 7.8 | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Other expense, net | 3.2 | | | 1.7 | | | 3.3 | | | | | |
| Income (loss) from continuing operations before income taxes and equity in (loss) income of unconsolidated affiliates, net | 25.9 | | | (21.5) | | | 58.5 | | | | | |
| Income tax expense (benefit) | 8.8 | | | (6.7) | | | 7.2 | | | | | |
| Income (loss) from continuing operations before equity in (loss) income of unconsolidated affiliates, net | 17.1 | | | (14.8) | | | 51.3 | | | | | |
| Equity in (loss) income of unconsolidated affiliates, net | (0.3) | | | (0.4) | | | 0.1 | | | | | |
| Net income (loss) from continuing operations | 16.8 | | | (15.2) | | | 51.4 | | | | | |
| (Loss) income from discontinued operations, net of tax | (2.2) | | | 0.9 | | | 2.0 | | | | | |
| Net income (loss) | 14.6 | | | (14.3) | | | 53.4 | | | | | |
| Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | 3.3 | | | 0.7 | | | 3.6 | | | | | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 11.3 | | | $ | (15.0) | | | $ | 49.8 | | | | | |
| | | | | | | | | |
| Amounts attributable to Chart common stockholders | | | | | | | | | |
| Income (loss) from continuing operations | $ | 13.5 | | | $ | (15.9) | | | $ | 47.8 | | | | | |
| Less: Mandatory convertible preferred stock dividend requirement | 6.8 | | | 6.8 | | | 6.8 | | | | | |
| Income (loss) from continuing operations attributable to Chart | 6.7 | | | (22.7) | | | 41.0 | | | | | |
| (Loss) income from discontinued operations, net of tax | (2.2) | | | 0.9 | | | 2.0 | | | | | |
| Net income (loss) attributable to Chart common shareholders | $ | 4.5 | | | $ | (21.8) | | | $ | 43.0 | | | | | |
| | | | | | | | | |
| Basic earnings per common share attributable to Chart Industries, Inc. | | | | | | | | | |
| Income (loss) from continuing operations | $ | 0.16 | | | $ | (0.54) | | | $ | 0.98 | | | | | |
| (Loss) income from discontinued operations | (0.05) | | | 0.02 | | | 0.04 | | | | | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 0.11 | | | $ | (0.52) | | | $ | 1.02 | | | | | |
| Diluted earnings per common share attributable to Chart Industries, Inc. | | | | | | | | | |
| Income (loss) from continuing operations | $ | 0.14 | | | $ | (0.54) | | | $ | 0.88 | | | | | |
| (Loss) income from discontinued operations | (0.04) | | | 0.02 | | | 0.04 | | | | | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 0.10 | | | $ | (0.52) | | | $ | 0.92 | | | | | |
| | | | | | | | | |
| Weighted-average number of common shares outstanding: | | | | | | | | | |
| Basic | 42.03 | | | 41.94 | | | 41.99 | | | | | |
Diluted (5) | 46.73 | | | 41.94 | | | 46.74 | | | | | |
_______________
(1)Includes depreciation expense of $18.0, $11.5 and $19.5 for the three months ended March 31, 2024, March 31, 2023 and December 31, 2023, respectively.
(2)Includes restructuring costs of $5.1, $1.6, and $2.3 for the three months ended March 31, 2024, March 31, 2023 and December 31, 2023, respectively.
(3)Includes acquisition-related contingent consideration charges (credits) in our Specialty Products segment of $0.1 and $(7.4) for the three months ended December 31, 2023 and March 31, 2023, respectively.
(4)Includes deal-related and integration costs of $6.5, $81.7 and $8.9 for the three months ended March 31, 2024, March 31, 2023 and December 31, 2023, respectively.
(5)Includes an additional 4.53 and 4.56 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three months ended March 31, 2024 and December 31, 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 2.48 and 2.49 for the three months ended March 31, 2024 and December 31, 2023, respectively.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 31, 2024 | | March 31, 2023 | | December 31, 2023 | | | | |
| Operating Activities | | | | | | | | | |
| Net income (loss) | $ | 14.6 | | | $ | (14.3) | | | $ | 53.4 | | | | | |
| Less: (Loss) income from discontinued operations, net of tax | (2.2) | | | 0.9 | | | 2.0 | | | | | |
| Net income (loss) from continuing operations | 16.8 | | | (15.2) | | | 51.4 | | | | | |
| Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | | |
| Bridge loan facility fees | — | | | 26.1 | | | — | | | | | |
| Depreciation and amortization | 65.9 | | | 33.3 | | | 67.9 | | | | | |
| Employee share-based compensation expense | 6.0 | | | 4.0 | | | 3.4 | | | | | |
| Financing costs amortization | 4.7 | | | 2.8 | | | 5.2 | | | | | |
| | | | | | | | | |
| Unrealized foreign currency transaction (gain) loss | (13.5) | | | 1.7 | | | (4.2) | | | | | |
| Unrealized loss on investments in equity securities | 1.7 | | | 2.0 | | | 2.6 | | | | | |
| Equity in loss of unconsolidated affiliates | 0.3 | | | 0.5 | | | (0.3) | | | | | |
| Deferred income tax benefit | — | | | — | | | (79.3) | | | | | |
| Loss on sale of business | 7.8 | | | — | | | — | | | | | |
| Other non-cash operating activities | 1.8 | | | 0.1 | | | 0.8 | | | | | |
| Changes in assets and liabilities, net of acquisitions: | | | | | | | | | |
| Accounts receivable | (51.0) | | | (6.6) | | | (14.6) | | | | | |
| Inventories | (4.1) | | | 10.4 | | | 18.2 | | | | | |
| Unbilled contract revenues and other assets | (133.8) | | | (59.2) | | | (37.7) | | | | | |
| Accounts payable and other liabilities | (9.5) | | | 31.9 | | | 194.2 | | | | | |
| Customer advances and billings in excess of contract revenue | 17.3 | | | 6.8 | | | (77.3) | | | | | |
| Net Cash (Used In) Provided By Continuing Operating Activities | (89.6) | | | 38.6 | | | 130.3 | | | | | |
| Net Cash Used In Discontinued Operating Activities | (5.5) | | | (70.7) | | | — | | | | | |
| Net Cash (Used In) Provided By Operating Activities | (95.1) | | | (32.1) | | | 130.3 | | | | | |
| Investing Activities | | | | | | | | | |
| Acquisition of businesses, net of cash acquired | — | | | (4,339.8) | | | — | | | | | |
| Proceeds from sale of business | — | | | — | | | 182.9 | | | | | |
| Capital expenditures | (46.1) | | | (31.4) | | | (20.2) | | | | | |
| Investments | (6.0) | | | (2.1) | | | (2.8) | | | | | |
| Cash received from settlement of cross-currency swap agreement | — | | | — | | | — | | | | | |
| Proceeds from sale of assets | 0.9 | | | 0.1 | | | 5.0 | | | | | |
| Other investing activities | (0.6) | | | (0.6) | | | (0.1) | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Net Cash (Used In) Provided By Investing Activities | (51.8) | | | (4,373.8) | | | 164.8 | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 31, 2024 | | March 31, 2023 | | December 31, 2023 | | | | |
| Financing Activities | | | | | | | | | |
| Borrowings on credit facilities | 634.2 | | | 634.8 | | | 560.8 | | | | | |
| Repayments on credit facilities | (479.3) | | | (45.0) | | | (666.9) | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Borrowings on term loan | — | | | 1,497.2 | | | 0.1 | | | | | |
| Repayments on term loan | — | | | — | | | (150.1) | | | | | |
| Payments for debt issuance costs | (1.5) | | | (121.5) | | | (2.7) | | | | | |
| Payment of contingent consideration | — | | | — | | | — | | | | | |
| Proceeds from issuance of common stock, net | — | | | 11.7 | | | — | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Proceeds from exercise of stock options | 0.3 | | | 0.1 | | | 0.1 | | | | | |
| Common stock repurchases from share-based compensation plans | (3.0) | | | (2.6) | | | — | | | | | |
| | | | | | | | | |
| Dividend distribution to noncontrolling interests | — | | | — | | | — | | | | | |
| Dividends paid on mandatory convertible preferred stock | (6.8) | | | (6.9) | | | (6.8) | | | | | |
| Net Cash Provided By (Used In) Financing Activities | 143.9 | | | 1,967.8 | | | (265.5) | | | | | |
| Effect of exchange rate changes on cash and cash equivalents | (2.6) | | | 2.2 | | | 6.6 | | | | | |
| Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents including cash classified within current assets held for sale | (5.6) | | | (2,435.9) | | | 36.2 | | | | | |
| Less: net decrease in cash classified within current assets held for sale | — | | | — | | | 5.0 | | | | | |
| Net (decrease) increase in cash, cash equivalents, restricted cash and restricted cash equivalents | (5.6) | | | (2,435.9) | | | 41.2 | | | | | |
| Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (1) | 201.1 | | | 2,605.3 | | | 159.9 | | | | | |
| CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (1) | $ | 195.5 | | | $ | 169.4 | | | $ | 201.1 | | | | | |
_______________
(1)Includes restricted cash and restricted cash equivalents of $3.6, $2.5, $12.8 and $1,941.7 as of March 31, 2024, March 31, 2023, December 31, 2023 and December 31, 2022, respectively.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | |
| March 31,
2024 | | December 31,
2023 |
| ASSETS | | | |
| Current Assets | | | |
| Cash and cash equivalents | $ | 191.9 | | | $ | 188.3 | |
| Accounts receivable, less allowances of $5.5 and $5.9, respectively | 799.6 | | | 758.9 | |
| Inventories, net | 572.3 | | | 576.3 | |
| Unbilled contract revenue | 553.6 | | | 481.7 | |
| Prepaid expenses | 121.0 | | | 74.9 | |
| Other current assets | 132.9 | | | 134.3 | |
| Total Current Assets | 2,371.3 | | | 2,214.4 | |
| Property, plant, and equipment, net | 850.3 | | | 837.6 | |
| Goodwill | 2,948.8 | | | 2,906.8 | |
| Identifiable intangible assets, net | 2,711.3 | | | 2,791.9 | |
| Equity method investments | 106.7 | | | 109.9 | |
| Investments in equity securities | 95.3 | | | 91.2 | |
| Other assets | 164.2 | | | 150.6 | |
| TOTAL ASSETS | $ | 9,247.9 | | | $ | 9,102.4 | |
| | | |
| LIABILITIES AND EQUITY | | | |
| Current Liabilities | | | |
| Accounts payable | $ | 868.8 | | | $ | 811.0 | |
| Customer advances and billings in excess of contract revenue | 389.8 | | | 376.6 | |
| Accrued salaries, wages, and benefits | 67.1 | | | 81.5 | |
| Accrued interest | 53.3 | | | 92.5 | |
| Accrued income taxes | 52.6 | | | 60.0 | |
| Current portion of warranty reserve | 31.1 | | | 29.4 | |
| | | |
| Current portion of long-term debt | 259.9 | | | 258.5 | |
| Operating lease liabilities, current | 18.9 | | | 18.5 | |
| Other current liabilities | 152.2 | | | 138.2 | |
| Total Current Liabilities | 1,893.7 | | | 1,866.2 | |
| Long-term debt | 3,731.8 | | | 3,576.4 | |
| Long-term deferred tax liabilities | 573.1 | | | 568.2 | |
| Accrued pension liabilities | 6.7 | | | 6.7 | |
| Operating lease liabilities, non-current | 52.1 | | | 50.7 | |
| Other long-term liabilities | 96.2 | | | 95.2 | |
| Total Liabilities | 6,353.6 | | | 6,163.4 | |
| | | | | | | | | | | |
| March 31,
2024 | | December 31,
2023 |
| 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 March 31, 2024 and December 31, 2023 | — | | | — | |
| Common stock, par value $0.01 per share — 150,000,000 shares authorized, 42,799,791 and 42,754,241 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively | 0.4 | | | 0.4 | |
| Additional paid-in capital | 1,875.8 | | | 1,872.5 | |
| Treasury stock; 760,782 shares at both March 31, 2024 and December 31, 2023 | (19.3) | | | (19.3) | |
| Retained earnings | 926.5 | | | 922.1 | |
| Accumulated other comprehensive (loss) income | (44.9) | | | 10.8 | |
| Total Chart Industries, Inc. Shareholders’ Equity | 2,738.5 | | | 2,786.5 | |
| Noncontrolling interests | 155.8 | | | 152.5 | |
| Total Equity | 2,894.3 | | | 2,939.0 | |
| TOTAL LIABILITIES AND EQUITY | $ | 9,247.9 | | | $ | 9,102.4 | |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
OPERATING SEGMENTS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 31, 2024 | | March 31, 2023 | | December 31, 2023 | | | | |
| Sales | | | | | | | | | |
| Cryo Tank Solutions | $ | 159.7 | | | $ | 123.5 | | | $ | 205.6 | | | | | |
| Heat Transfer Systems | 253.6 | | | 167.5 | | | 255.2 | | | | | |
| Specialty Products | 236.5 | | | 126.2 | | | 217.0 | | | | | |
| Repair, Service & Leasing | 301.0 | | | 118.5 | | | 340.7 | | | | | |
| Intersegment eliminations | (0.1) | | | (4.2) | | | (3.5) | | | | | |
| Consolidated | $ | 950.7 | | | $ | 531.5 | | | $ | 1,015.0 | | | | | |
| Gross Profit (Loss) | | | | | | | | | |
| Cryo Tank Solutions | $ | 32.8 | | | $ | 21.5 | | | $ | 46.5 | | | | | |
| Heat Transfer Systems | 70.1 | | | 41.3 | | | 76.7 | | | | | |
| Specialty Products | 58.9 | | | 35.9 | | | 62.5 | | | | | |
| Repair, Service & Leasing | 140.5 | | | 50.6 | | | 148.6 | | | | | |
| Consolidated | $ | 302.3 | | | $ | 149.3 | | | $ | 334.3 | | | | | |
| Gross Profit (Loss) Margin | | | | | | | | | |
| Cryo Tank Solutions | 20.5 | % | | 17.4 | % | | 22.6 | % | | | | |
| Heat Transfer Systems | 27.6 | % | | 24.7 | % | | 30.1 | % | | | | |
| Specialty Products | 24.9 | % | | 28.4 | % | | 28.8 | % | | | | |
| Repair, Service & Leasing | 46.7 | % | | 42.7 | % | | 43.6 | % | | | | |
| Consolidated | 31.8 | % | | 28.1 | % | | 32.9 | % | | | | |
Operating Income (Loss) | | | | | | | | | |
| Cryo Tank Solutions | $ | 14.0 | | | $ | 4.3 | | | $ | 22.6 | | | | | |
| Heat Transfer Systems | 51.2 | | | 27.3 | | | 55.3 | | | | | |
| Specialty Products | 25.1 | | | 21.8 | | | 35.1 | | | | | |
| Repair, Service & Leasing | 65.1 | | | 33.1 | | | 82.3 | | | | | |
| Corporate | (42.5) | | | (51.9) | | | (39.3) | | | | | |
Consolidated (1) – (3) | $ | 112.9 | | | $ | 34.6 | | | $ | 156.0 | | | | | |
| Operating Margin | | | | | | | | | |
| Cryo Tank Solutions | 8.8 | % | | 3.5 | % | | 11.0 | % | | | | |
| Heat Transfer Systems | 20.2 | % | | 16.3 | % | | 21.7 | % | | | | |
| Specialty Products | 10.6 | % | | 17.3 | % | | 16.2 | % | | | | |
| Repair, Service & Leasing | 21.6 | % | | 27.9 | % | | 24.2 | % | | | | |
| Consolidated | 11.9 | % | | 6.5 | % | | 15.4 | % | | | | |
_______________
(1)Restructuring costs (credits) for the three months ended:
•March 31, 2024 were $5.1 ($2.3 - Repair, Service & Leasing, $1.3 - Specialty Products, $0.6 - Cryo Tank Solutions, $0.5 - Heat Transfer Systems and $0.4 - Corporate, ).
•March 31, 2023 were $1.6 ($0.8 - Repair, Service & Leasing and $0.8 - Cryo Tank Solutions).
•December 31, 2023 were $2.3 ($1.6 - Repair, Service & Leasing, $0.9 - Specialty Products, $0.4 - Cryo Tank Solutions, $0.2 - Heat Transfer Systems and $(0.8) - Corporate).
(2)Acquisition-related contingent consideration adjustments in our Specialty Products segment for the three months ended:
•March 31, 2023 were a decrease in fair value of $7.4.
•December 31, 2023 were an increase in fair value of $0.1.
(3)Deal-related and integration costs for the three months ended:
•March 31, 2024 were $6.5.
•March 31, 2023 were $81.7.
•December 31, 2023 were $8.9.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
ORDERS AND BACKLOG (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | |
| Three Months Ended |
| March 31,
2024 | | March 31,
2023 | | December 31,
2023 |
| Orders | | | | | |
| Cryo Tank Solutions | $ | 159.3 | | | $ | 140.6 | | | $ | 157.6 | |
| Heat Transfer Systems | 237.3 | | | 311.2 | | | 324.7 | |
| Specialty Products | 391.3 | | | 179.5 | | | 399.8 | |
| Repair, Service & Leasing | 333.9 | | | 121.5 | | | 328.4 | |
| Intersegment eliminations | (0.2) | | | (12.1) | | | (1.4) | |
| Consolidated | $ | 1,121.6 | | | $ | 740.7 | | | $ | 1,209.1 | |
| | | | | | | | | | | | | | | | | |
| As of |
| March 31,
2024 | | March 31,
2023 | | December 31,
2023 |
| Backlog | | | | | |
| Cryo Tank Solutions | $ | 367.5 | | | $ | 473.2 | | | $ | 361.9 | |
| Heat Transfer Systems | 1,685.9 | | | 1,590.1 | | | 1,716.5 | |
| Specialty Products | 1,678.2 | | | 1,316.0 | | | 1,631.1 | |
| Repair, Service & Leasing | 611.3 | | | 524.3 | | | 587.9 | |
| Intersegment eliminations | (11.8) | | | (45.3) | | | (18.6) | |
| Consolidated | $ | 4,331.1 | | | $ | 3,858.3 | | | $ | 4,278.8 | |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHART INDUSTRIES, INC.–
CONTINUING OPERATIONS TO ADJUSTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO CHART INDUSTRIES, INC. (UNAUDITED)
(Dollars in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | |
| Q1 2024 Diluted EPS | | | | Q1 2023 Diluted EPS | | Q4 2023 Diluted EPS | | |
| Amounts attributable to Chart common stockholders | | | | | | | | | |
| Income (loss) from continuing operations | $ | 13.5 | | | | | $ | (15.9) | | | $ | 47.8 | | | |
| Less: Mandatory convertible preferred stock dividend requirement | 6.8 | | | | | 6.8 | | | 6.8 | | | |
| Reported income (loss) from continuing operations attributable to Chart (U.S. GAAP) | 6.7 | | | | | (22.7) | | | 41.0 | | | |
| Earnings (loss) per common share attributable to Chart Industries, Inc. – continuing operations | $ | 0.14 | | | | | $ | (0.54) | | | $ | 0.88 | | | |
Effect of common stock equivalents on reported loss per common share attributable to Chart Industries, Inc. – continuing operations (1) | — | | | | | 0.05 | | | — | | | |
Unrealized loss on investments in equity securities and loss from strategic equity method investments and related foreign currency impact (2) | 0.09 | | | | | 0.06 | | | 0.06 | | | |
| Debt and financing costs | — | | | | | 1.29 | | | — | | | |
| Mandatory convertible preferred stock dividend | 0.15 | | | | | 0.15 | | | 0.14 | | | |
Deal related and integration costs (3) | 0.31 | | | | | 0.55 | | | 0.21 | | | |
| Howden amortization | 1.00 | | | | | 0.25 | | | 0.99 | | | |
| Startup costs – organic | — | | | | | 0.03 | | | — | | | |
Restructuring & related costs (4) | 0.11 | | | | | 0.03 | | | 0.05 | | | |
| Loss on extinguishment of debt | — | | | | | — | | | 0.16 | | | |
| Other one-time items | — | | | | | 0.01 | | | — | | | |
| Tax effects | (0.31) | | | | | (0.50) | | | (0.24) | | | |
| Adjusted earnings per common share attributable to Chart Industries, Inc. (non-GAAP) | $ | 1.49 | | | | | $ | 1.38 | | | $ | 2.25 | | | |
| Share Count | 46.73 | | | | | 46.47 | | | 46.74 | | | |
_____________
(1) Reported diluted loss per common share for Q1 2023 is based on 41.94 average common shares outstanding. This adjustment is necessary to reflect Q1 2023 adjusted earnings per share on a fully diluted basis.
(2) Includes the mark-to-market of our inorganic investments in McPhy, Stabilis and certain of our minority investments.
(3) Includes third party support fees.
(4) Includes restructuring-related costs of $5.1, $1.6 and $2.3 for the three months ended March 31, 2024, March 31, 2023 and December 31, 2023, respectively.
_____________
Adjusted earnings per common share attributable to Chart Industries, Inc. is not a measure of financial performance under U.S. generally accepted accounting principles (“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. 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.
RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES TO FREE CASH FLOW (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 31,
2024 | | March 31,
2023 | | December 31,
2023 | | | | |
| Net cash (used in) provided by operating activities from continuing operations | $ | (89.6) | | | $ | 38.6 | | | $ | 130.3 | | | | | |
| Capital expenditures | (46.1) | | | (31.4) | | | (20.2) | | | | | |
| Free cash flow (non-GAAP) | (135.7) | | | 7.2 | | | 110.1 | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | |
| | March 31,
2024 | | March 31,
2023 | | December 31,
2023 | | | | |
| Net cash used in operating activities from discontinued operations | $ | (5.5) | | | $ | (70.7) | | | $ | — | | | | | |
| Capital expenditures | — | | | — | | | — | | | | | |
| Free cash flow (non-GAAP) | $ | (5.5) | | | $ | (70.7) | | | $ | — | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
_______________
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 SUBSIDIARIES
RECONCILIATIONS OF SALES TO PRO FORMA SALES, GROSS PROFIT TO PRO FORMA AND ADJUSTED GROSS PROFIT AND OPERATING INCOME (LOSS) TO ADJUSTED AND PRO FORMA OPERATING INCOME (LOSS) (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2024 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Sales | $ | 159.7 | | | $ | 253.6 | | | $ | 236.5 | | | $ | 301.0 | | | $ | (0.1) | | | $ | — | | | $ | 950.7 | |
| Gross profit as reported (U.S. GAAP) | $ | 32.8 | | | $ | 70.1 | | | $ | 58.9 | | | $ | 140.5 | | | $ | — | | | $ | — | | | $ | 302.3 | |
| Restructuring, transaction-related and other one-time costs | 1.0 | | | 0.4 | | | 2.2 | | | 4.7 | | | — | | | — | | | 8.3 | |
| | | | | | | | | | | | | |
| Adjusted gross profit (non-GAAP) | $ | 33.8 | | | $ | 70.5 | | | $ | 61.1 | | | $ | 145.2 | | | $ | — | | | $ | — | | | $ | 310.6 | |
| Adjusted gross profit margin (non-GAAP) | 21.2 | % | | 27.8 | % | | 25.8 | % | | 48.2 | % | | — | % | | — | % | | 32.7 | % |
| | | | | | | | | | | | | |
| Operating income (loss) as reported (U.S. GAAP) | $ | 14.0 | | | $ | 51.2 | | | $ | 25.1 | | | $ | 65.1 | | | $ | — | | | $ | (42.5) | | | 112.9 | |
| Restructuring, transaction-related and other one-time costs | 2.8 | | | 1.7 | | | 6.3 | | | 40.6 | | | — | | | 7.0 | | | 58.4 | |
| Adjusted operating income (loss) (non-GAAP) | $ | 16.8 | | | $ | 52.9 | | | $ | 31.4 | | | $ | 105.7 | | | $ | — | | | $ | (35.5) | | | $ | 171.3 | |
| Adjusted operating margin (non-GAAP) | 10.5 | % | | 20.9 | % | | 13.3 | % | | 35.1 | % | | — | % | | — | % | | 18.0 | % |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF SALES TO PRO FORMA SALES, GROSS PROFIT TO PRO FORMA AND ADJUSTED GROSS PROFIT AND OPERATING INCOME (LOSS) TO ADJUSTED AND PRO FORMA OPERATING INCOME (LOSS) (UNAUDITED) (CONTINUED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended March 31, 2023 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Sales | $ | 123.5 | | | $ | 167.5 | | | $ | 126.2 | | | $ | 118.5 | | | $ | (4.2) | | | $ | — | | | $ | 531.5 | |
| Howden standalone sales, net of Roots, American Fan, Cofimco and Cryo Diffusion divestiture impacts | 17.6 | | | 21.9 | | | 98.0 | | | 145.7 | | | (4.6) | | | — | | | 278.6 | |
| Pro forma sales | $ | 141.1 | | | $ | 189.4 | | | $ | 224.2 | | | $ | 264.2 | | | $ | (8.8) | | | $ | — | | | $ | 810.1 | |
| Gross profit as reported (U.S. GAAP) | $ | 21.5 | | | $ | 41.3 | | | $ | 35.9 | | | $ | 50.6 | | | $ | — | | | $ | — | | | $ | 149.3 | |
| Howden standalone gross profits, net of Roots, American Fan, Cofimco and Cryo Diffusion divestiture impacts | 7.6 | | | 7.9 | | | 37.5 | | | 34.4 | | | — | | | — | | | 87.4 | |
| Pro forma gross profit | 29.1 | | | 49.2 | | | 73.4 | | | 85.0 | | | — | | | — | | | 236.7 | |
| Pro forma gross profit margin | 20.6 | % | | 26.0 | % | | 32.7 | % | | 32.2 | % | | — | % | | — | % | | 29.2 | % |
| Restructuring related, deal-related, integration and other one time costs | 0.4 | | | 1.0 | | | 0.7 | | | — | | | — | | | — | | | 2.1 | |
| | | | | | | | | | | | | |
| Adjusted gross profit (non-GAAP) | $ | 29.5 | | | $ | 50.2 | | | $ | 74.1 | | | $ | 85.0 | | | $ | — | | | $ | — | | | $ | 238.8 | |
| Adjusted gross profit margin (non-GAAP) | 20.9 | % | | 26.5 | % | | 33.1 | % | | 32.2 | % | | — | % | | — | % | | 29.5 | % |
| | | | | | | | | | | | | |
| Operating income (loss) as reported (U.S. GAAP) | $ | 4.3 | | | $ | 27.3 | | | $ | 21.8 | | | $ | 33.1 | | | $ | — | | | $ | (51.9) | | | 34.6 | |
| Restructuring related, deal-related, integration and other one time costs | 0.4 | | | 1.1 | | | (4.9) | | | 11.6 | | | — | | | 28.1 | | | 36.3 | |
| Adjusted operating income (loss) (non-GAAP) | $ | 4.7 | | | $ | 28.4 | | | $ | 16.9 | | | $ | 44.7 | | | $ | — | | | $ | (23.8) | | | $ | 70.9 | |
| Adjusted operating margin (non-GAAP) | 3.8 | % | | 17.0 | % | | 13.4 | % | | 37.7 | % | | — | % | | — | % | | 13.3 | % |
| Howden standalone operating income, net of Roots, American Fan, Cofimco and Cryo Diffusion divestiture impacts | | | | | | | | | | | | | 24.9 | |
| Pro forma adjusted operating income (non-GAAP) | | | | | | | | | | | | | $ | 95.8 | |
| Pro forma adjusted operating margin (non-GAAP) | | | | | | | | | | | | | 11.8 | % |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF SALES TO PRO FORMA SALES, GROSS PROFIT TO PRO FORMA AND ADJUSTED GROSS PROFIT AND OPERATING INCOME (LOSS) TO ADJUSTED AND PRO FORMA OPERATING INCOME (LOSS) (UNAUDITED) (CONTINUED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended December 31, 2023 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Sales | $ | 205.6 | | | $ | 255.2 | | | $ | 217.0 | | | $ | 340.7 | | | $ | (3.5) | | | $ | — | | | $ | 1,015.0 | |
| Roots, American Fan, Cofimco and Cryo Diffusion divestiture impacts | (1.4) | | | (2.4) | | | (2.4) | | | (3.6) | | | — | | | — | | | (9.8) | |
| Pro forma sales | $ | 204.2 | | | $ | 252.8 | | | $ | 214.6 | | | $ | 337.1 | | | $ | (3.5) | | | $ | — | | | $ | 1,005.2 | |
| Gross profit as reported (U.S. GAAP) | $ | 46.5 | | | $ | 76.7 | | | $ | 62.5 | | | $ | 148.6 | | | $ | — | | | $ | — | | | $ | 334.3 | |
| Roots, American Fan, Cofimco and Cryo Diffusion divestiture impacts | (0.9) | | | (0.8) | | | (1.1) | | | (3.1) | | | — | | | — | | | (5.9) | |
| Pro forma gross profit | 45.6 | | | 75.9 | | | 61.4 | | | 145.5 | | | — | | | — | | | 328.4 | |
| Pro forma gross profit margin | 22.3 | % | | 30.0 | % | | 28.6 | % | | 43.2 | % | | — | % | | — | % | | 32.7 | % |
| Restructuring, transaction-related and other one-time costs | 0.9 | | | 0.3 | | | 2.5 | | | 4.3 | | | — | | | — | | | 8.0 | |
| Adjusted gross profit (non-GAAP) | $ | 46.5 | | | $ | 76.2 | | | $ | 63.9 | | | $ | 149.8 | | | $ | — | | | $ | — | | | $ | 336.4 | |
| Adjusted gross profit margin (non-GAAP) | 22.8 | % | | 30.1 | % | | 29.8 | % | | 44.4 | % | | — | % | | — | % | | 33.5 | % |
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| Operating income (loss) as reported (U.S. GAAP) | $ | 22.6 | | | $ | 55.3 | | | $ | 35.1 | | | $ | 82.3 | | | $ | — | | | $ | (39.3) | | | 156.0 | |
| Restructuring, transaction-related and other one-time costs | 2.4 | | | 1.3 | | | 6.4 | | | 39.9 | | | — | | | 7.4 | | | 57.4 | |
| Adjusted operating income (loss) (non-GAAP) | $ | 25.0 | | | $ | 56.6 | | | $ | 41.5 | | | $ | 122.2 | | | $ | — | | | $ | (31.9) | | | $ | 213.4 | |
| Adjusted operating margin (non-GAAP) | 12.2 | % | | 22.2 | % | | 19.1 | % | | 35.9 | % | | — | % | | — | % | | 21.0 | % |
_______________
Adjusted gross profit and adjusted operating income (loss) are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to gross profit and operating income (loss) in accordance with U.S. GAAP. Management believes that adjusted gross profit and adjusted operating income (loss) 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 SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (UNAUDITED)
(Dollars in millions)
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| | Three Months Ended | | |
| | March 31,
2024 | | March 31,
2023 | | December 31,
2023 | | | | |
| Net income (loss) from continuing operations | $ | 16.8 | | | $ | (15.2) | | | $ | 51.4 | | | | | |
| Income tax expense (benefit) | 8.8 | | | (6.7) | | | 7.2 | | | | | |
| Interest expense, net | 83.8 | | | 28.3 | | | 86.4 | | | | | |
| Acquisition related finance fees | — | | | 26.1 | | | — | | | | | |
| Loss on extinguishment of debt | — | | | — | | | 7.8 | | | | | |
| Depreciation and amortization | 65.9 | | | 33.3 | | | 67.9 | | | | | |
| EBITDA (non-GAAP) | 175.3 | | | 65.8 | | | 220.7 | | | | | |
Non-recurring costs (1) | 26.6 | | | 26.0 | | | 14.2 | | | | | |
| Employee share-based compensation expense | 6.0 | | | 4.0 | | | 3.4 | | | | | |
| Unrealized loss on investments in equity securities and loss from strategic equity method investments and related foreign currency impact | 4.3 | | | 2.0 | | | 2.6 | | | | | |
| Howden foreign currency hedge | — | | | 2.8 | | | — | | | | | |
| Adjusted EBITDA (non-GAAP) | $ | 212.2 | | | $ | 100.6 | | | $ | 240.9 | | | | | |
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_______________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 (loss) 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.
(1) Q4 2023 includes an adjustment to non-recurring costs to exclude the impacts of the American Fan, Cofimco and Cryo Diffusion divestitures.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
PRO FORMA ORDERS, SALES, GROSS MARGIN AND ADJUSTED EBITDA (UNAUDITED)
(Dollars in millions)
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| Orders | | | | | | | | | | | | | | | | | | | | | |
| Chart Industries, continuing operations | | | | | | | | | | | $ | 740.7 | | | $ | 1,063.1 | | | $ | 1,127.3 | | | $ | 1,209.1 | | | $ | 4,140.2 | | | $ | 1,121.6 | |
| Howden standalone (excluding Roots) | | | | | | | | | | | 355.0 | | | — | | | — | | | — | | | 355.0 | | | — | |
| Chart Industries, continuing operations pro forma | | | | | | | | | | | 1,095.7 | | | 1,063.1 | | | 1,127.3 | | | 1,209.1 | | | 4,495.2 | | | 1,121.6 | |
| Less: American Fan, Cofimco, Cryo Diffusion impact | | | | | | | | | | | (20.1) | | | (23.9) | | | (20.0) | | | (8.8) | | | (72.8) | | | — | |
| Chart Industries, continuing operations pro forma to exclude 2022 additional divestitures | | | | | | | | | | | $ | 1,075.6 | | | $ | 1,039.2 | | | $ | 1,107.3 | | | $ | 1,200.3 | | | $ | 4,422.4 | | | $ | 1,121.6 | |
| First quarter orders % change | | | | | | | | | | | | | | | | | | | | | 4.3 | % |
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| | | | | | | | | | | | Q1 2023 | | Q2 2023 | | Q3 2023 | | Q4 2023 | | FY 2023 | | Q1 2024 |
| Sales | | | | | | | | | | | | | | | | | | | | | |
| Chart Industries, continuing operations | | | | | | | | | | | $ | 531.5 | | | $ | 908.1 | | | $ | 897.9 | | | $ | 1,015.0 | | | $ | 3,352.5 | | | $ | 950.7 | |
| Howden standalone (excluding Roots) | | | | | | | | | | | 305.2 | | | — | | | — | | | — | | | 305.2 | | | — | |
| Chart Industries, continuing operations pro forma | | | | | | | | | | | 836.7 | | | 908.1 | | | 897.9 | | | 1,015.0 | | | 3,657.7 | | | 950.7 | |
| Less: American Fan, Cofimco, Cryo Diffusion impact | | | | | | | | | | | (26.6) | | | (32.5) | | | (30.0) | | | (9.9) | | | (99.0) | | | — | |
| Chart Industries, continuing operations pro forma to exclude 2022 additional divestitures | | | | | | | | | | | $ | 810.1 | | | $ | 875.6 | | | $ | 867.9 | | | $ | 1,005.1 | | | $ | 3,558.7 | | | $ | 950.7 | |
| First quarter sales % change | | | | | | | | | | | | | | | | | | | | | 17.4 | % |
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CHART INDUSTRIES, INC. AND SUBSIDIARIES
PRO FORMA ORDERS, SALES, GROSS MARGIN AND ADJUSTED EBITDA - Continued (UNAUDITED)
(Dollars in millions)
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| | | | | | | | | | | | Q1 2023 | | Q2 2023 | | Q3 2023 | | Q4 2023 | | FY 2023 | | Q1 2024 |
Gross Margin (1) | | | | | | | | | | | | | | | | | | | | | |
| Chart Industries, continuing operations | | | | | | | | | | | $ | 149.3 | | | $ | 280.6 | | | $ | 276.2 | | | $ | 334.3 | | | $ | 1,040.4 | | | $ | 302.3 | |
| Howden standalone (excluding Roots) | | | | | | | | | | | 94.2 | | | — | | | — | | | — | | | 94.2 | | | — | |
| Chart Industries, continuing operations pro forma | | | | | | | | | | | 243.5 | | | 280.6 | | | 276.2 | | | 334.3 | | | 1,134.6 | | | 302.3 | |
| Gross margin as a % of sales | | | | | | | | | | | 29.1 | % | | 30.9 | % | | 30.8 | % | | 32.9 | % | | 31.0 | % | | 31.8 | % |
| Less: American Fan, Cofimco, Cryo Diffusion impact | | | | | | | | | | | (6.8) | | | (11.5) | | | (10.3) | | | (5.9) | | | (34.5) | | | — | |
| Chart Industries, continuing operations pro forma to exclude 2022 additional divestitures | | | | | | | | | | | $ | 236.7 | | | $ | 269.1 | | | $ | 265.9 | | | $ | 328.4 | | | $ | 1,100.1 | | | $ | 302.3 | |
| Gross margin as a % of sales | | | | | | | | | | | 29.2 | % | | 30.7 | % | | 30.6 | % | | 32.7 | % | | 30.9 | % | | 31.8 | % |
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| | | | | | | | | | | | Q1 2023 | | Q2 2023 | | Q3 2023 | | Q4 2023 | | FY 2023 | | Q1 2024 |
Adjusted EBITDA (1) | | | | | | | | | | | | | | | | | | | | | |
| Chart Industries, continuing operations | | | | | | | | | | | $ | 100.6 | | | $ | 195.3 | | | $ | 195.0 | | | $ | 240.9 | | | $ | 731.8 | | | $ | 212.2 | |
| Howden standalone (excluding Roots) | | | | | | | | | | | 38.7 | | | — | | | — | | | — | | | 38.7 | | | — | |
| Chart Industries, continuing operations pro forma | | | | | | | | | | | 139.3 | | | 195.3 | | | 195.0 | | | 240.9 | | | 770.5 | | | 212.2 | |
| Adjusted EBITDA as a % of sales | | | | | | | | | | | 16.6 | % | | 21.5 | % | | 21.7 | % | | 23.7 | % | | 21.1 | % | | 22.3 | % |
| Less: American Fan, Cofimco, Cryo Diffusion impact | | | | | | | | | | | (3.4) | | | (7.8) | | | (7.9) | | | (2.2) | | | (21.3) | | | — | |
| Chart Industries, continuing operations pro forma to exclude 2022 additional divestitures | | | | | | | | | | | $ | 135.9 | | | $ | 187.5 | | | $ | 187.1 | | | $ | 238.7 | | | $ | 749.2 | | | $ | 212.2 | |
| Adjusted EBITDA as a % of sales | | | | | | | | | | | 16.8 | % | | 21.4 | % | | 21.6 | % | | 23.7 | % | | 21.0 | % | | 22.3 | % |
_______________(1)Q4 2023 includes an adjustment to non-recurring costs to exclude the impacts of the American Fan, Cofimco and Cryo Diffusion divestitures.
exhibit992
© 2024 Chart Industries, Inc. Confidential and Proprietary First Quarter 2024 Earnings Call May 3, 2024
© 2024 Chart Industries, Inc. Confidential and Proprietary 2 Forward Looking Statements (1/2) CERTAIN STATEMENTS MADE IN THIS INVESTOR PRESENTATION ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING CHART’S BUSINESS PLANS, INCLUDING STATEMENTS REGARDING OBJECTIVES, FUTURE ORDERS, REVENUES, MARGINS, EARNINGS, PERFORMANCE OR OUTLOOK, BUSINESS OR INDUSTRY TRENDS 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,” “INDICATORS”, “OUTLOOK,” “GUIDANCE,” “CONTINUE,” “TARGET,” OR THE NEGATIVE OF SUCH TERMS OR COMPARABLE TERMINOLOGY. FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION OR IN OTHER STATEMENTS MADE BY CHART ARE MADE BASED ON MANAGEMENT’S EXPECTATIONS AND BELIEFS CONCERNING FUTURE EVENTS IMPACTING CHART AND ARE SUBJECT TO UNCERTAINTIES AND FACTORS RELATING TO CHART’S OPERATIONS AND BUSINESS ENVIRONMENT, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND CHART’S CONTROL, THAT COULD CAUSE CHART’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE MATTERS EXPRESSED OR IMPLIED BY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE CHART’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE: CHART MAY BE UNABLE TO ACHIEVE THE ANTICIPATED BENEFITS OF RECENT ACQUISITIONS, INCLUDING THE ACQUISITION OF HOWDEN (THE “ACQUISITION”) (INCLUDING WITH RESPECT TO ESTIMATED FUTURE COST AND COMMERCIAL SYNERGIES); REVENUES FOLLOWING THE ACQUISITION MAY BE LOWER THAN EXPECTED; OPERATING COSTS, CUSTOMER LOSSES, AND BUSINESS DISRUPTION (INCLUDING, WITHOUT LIMITATION, DIFFICULTIES IN MAINTAINING RELATIONSHIPS WITH EMPLOYEES, CUSTOMERS AND SUPPLIERS) RESULTING FROM THE ACQUISITION MAY BE GREATER THAN EXPECTED; 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 REGIONAL CONFLICTS AND UNREST, INCLUDING THE RECENT UNREST 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 CHART’S MOST RECENT ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC, WHICH SHOULD BE REVIEWED CAREFULLY. CHART UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD- LOOKING STATEMENT.
© 2024 Chart Industries, Inc. Confidential and Proprietary 3 Forward Looking Statements (2/2) THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED NON-DILUTED EPS, NORMALIZED BASIC EPS, “NET INCOME, ADJUSTED”, FREE CASH FLOW, ADJUSTED FREE CASH FLOW, EBITDA, ADJUSTED EBITDA, ADJUSTED OPERATING INCOME, ADJUSTED OPERATING MARGIN, AND ADJUSTED GROSS MARGIN. 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 SLIDES TITLED “FIRST QUARTER 2024 ADJUSTED EPS,” “FIRST QUARTER 2024 ADJUSTED EBITDA”, FIRST QUARTER 2024 NET INCOME AND EBITDA BRIDGE, INCLUDED IN, OR IN THE APPENDIX AT THE END OF, THIS PRESENTATION. PLEASE SEE THE RECONCILIATION TABLE AT THE END OF THE ACCOMPANYING EARNINGS RELEASE FOR THE “FIRST QUARTER ADJUSTED GROSS MARGIN,” “ADJUSTED GROSS PROFIT” AND “ADJUSTED OPERATING INCOME” RECONCILIATIONS, AS WELL AS A RECONCILIATION AND ADDITIONAL DETAILS ON ADJUSTED NON-DILUTED EPS AND FREE CASH FLOW. WITH RESPECT TO THE COMPANY’S 2024 FULL YEAR EARNINGS OUTLOOK. THE COMPANY IS NOT ABLE TO PROVIDE A RECONCILIATION OF THE ADJUSTED EBITDA AND FREE CASH FLOW OUTLOOKS BECAUSE CERTAIN ITEMS MAY HAVE NOT YET OCCURRED OR ARE OUT OF THE COMPANY’S CONTROL AND/OR CANNOT BE REASONABLY PREDICTED. 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 HANDING 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 OVER 48 GLOBAL MANUFACTURING LOCATIONS AND 41 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.
© 2024 Chart Industries, Inc. Confidential and Proprietary 4 Agenda Q1 2024 Results Key Drivers 2024 Outlook Medium Term Outlook
© 2024 Chart Industries, Inc. Confidential and Proprietary 5 First Quarter 2024 Key Messages All metrics are on a pro forma combined continuing operations basis (1) Achieved multiple first quarter financial record results • Orders, backlog, sales, reported and adjusted gross margin, reported and adjusted operating margin, reported and adjusted EBITDA and associated EBITDA margin were all the highest in any first quarter in our history • Pro forma organic orders and sales growth of 4.9% and 18.3% year-over-year, respectively • Reported gross margin of 31.8%, a 260 basis point increase compared to the first quarter 2023, and continued consistency of gross margin above 30% each quarter since we closed on the acquisition of Howden • Adjusted operating income of $171.3 million, or 18.0%, contributing to adjusted EBITDA of $212.2 million, or 22.3% Demand remains robust across end markets • Record backlog of $4.3 billion is up 10% compared to first quarter 2023 • Orders have been above $1 billion each of the past six quarters • Consistently above 1.0 on book-to-bill each quarter, with Q1 2024 book-to-bill of 1.18 • Global hydrogen demand broadening, with a liquefaction win (USA), our first hydrogen project in Portugal (compression), our largest compressor order ever for a green industrial application (EU), and a new partnership with GasLog for large-scale hydrogen for marine/logistics applications • LNG orders continue, including content on Cedar LNG, Q1 orders for LNG trailers in China were more than 2X total orders for entire 2022 or 2023, and highest HLNG vehicle tank order quarter since 2021 (over $10 million in Q1’24) Q1 2024 net leverage ratio of 3.43X reflects cash seasonality; on track to target net leverage ratio of 2.0 to 2.5X • Reiterate financial policy and target net leverage ratio of 2.0X to 2.5X 2024 financial guidance is reiterated 1. Pro forma “PF” includes full year Howden, excluding Roots , American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix to the accompanying earnings release.
© 2024 Chart Industries, Inc. Confidential and Proprietary 6 First Quarter 2024 Key Metrics $ millions, except per share amounts Q1 2024 Q1 2023 PF(2) ChangeContinuing Operations 1 Total Orders $1,121.6 $1,075.6 +4.3% 2 Book to Bill (Total) 1.18 1.33 3 Backlog $4.3B $3.9B +10% 4 Total Sales $950.7 $810.1 +17.4% 5 Reported Gross Profit Margin% 31.8% 29.2% +260 bps 6 Adjusted Gross Profit Margin % (1) 32.7% 29.5% +320 bps 7 Reported Operating Margin% 11.9% - - 8 Adjusted Operating Margin % (1) 18.0% 11.8% +620bps 9 Reported EBITDA (1) $175.3 $101.1 73.4% 10 Reported EBITDA % of Sales (1) 18.4% 12.5% +590 bps 11 Adjusted EBITDA (1) $212.2 $135.9 +56.1% 12 Adjusted EBITDA % of Sales (1) 22.3% 16.8% +550 bps 13 n/a Reported Diluted EPS $0.14 - - 14 n/a Adjusted Diluted EPS (1) $1.49 - - 15 n/a Adjusted Free Cash Flow (1) ($135.7) - - Indicates record for any first quarter in history 1. Adjusted gross margin, adjusted operating margin, EBITDA, Adjusted EBITDA, Adjusted Free Cash Flow, and Adjusted EPS are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of EBITDA and Adjusted EBITDA) or cash flow from operations (in the case of Adjusted Free Cash Flow) in accordance with U.S. GAAP. A reconciliation table for these measures is provided in the appendix under “First Quarter 2024 Adjusted EBITDA” and in the tables accompanying the earnings release. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix to the accompanying earnings release. Reported and adjusted EPS in Q1 2024 reflect a higher tax rate which is not anticipated for the full year Reported GPM >30% since full Howden ownership in qtr Adj. EBITDA margin >21.5% since full Howden ownership in qtr
© 2024 Chart Industries, Inc. Confidential and Proprietary 7 Q1 2024 Balance Sheet & Cash Q1 2024 / Q2 QTD 2024 Accomplishments: • Opportunistic RCF amendment resulting in 3-year maturity extension and favorable term changes • Received full ratings upgrade from S&P and moved to positive outlook by Moody’s Ref Cash Item Amounts in Q1 ‘24 ($M) Will it repeat in any other 2024 quarter? A Senior notes interest payment (semi-annual) 79.0 Q3 2024 B Term loan B (TLB)/ Revolving credit facility (RCF) interest payment 41.3 Each quarter, lower C Bonus 34.3 NO D Teddy2 capex cash spend 24.0 ~$12M in Q2’24 for Teddy2 E Insurance premiums 16.6 NO F Specific tax payments in Germany/UK 15.3 NO G Divestiture banker fee payment 8.1 NO A-G Impact to Q1 cash flow $218.6 Q1’24 cash items not repeating in Q2’241 $165.3 1Includes A,C,E,F,G, $12M lower Teddy 2 Financial Policy Reiterated: • Until we are within our target net leverage ratio range of 2.0 to 2.5X, we will not do any additional material cash acquisitions or share repurchases
© 2024 Chart Industries, Inc. Confidential and Proprietary 8 Second Quarter 2024 Free Cash Flow Drivers $ millions Q1 Q2 Forecast Free Cash Flow (Operating cash less capex) (1) ($135.7) ~$175 1. Free Cash Flow is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP. Management believes that Free Cash Flow facilitates a useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. Key Drivers of Free Cash Flow: • Project payments of $125+ million across top 4 projects expected in Q2 2024 • Higher sequential earnings • Lower and final sequential capital expenditures related to Theodore Alabama 2 (“Teddy2”) • No $79 million semi-annual cash interest (Q1 and Q3 2024) • Non-repeat of timing related items in Q1 2024 (e.g., bonus, insurance, tax) • Sequential improvement in working capital Specific Q2 2024 Cash Outflows (non-operating): • Divestiture-related working capital settlements $9.2 million • Minority investments $8.5 million • RCF amendment fees $3.7 million
© 2024 Chart Industries, Inc. Confidential and Proprietary 9 Pro Forma Segment Results $ millions Orders Sales Reported Gross Profit Margin Commentary Q1 24 Q1 23 PF Q1 24 Q1 23 PF Q1 24 Q1 23 PF Cryo Tank Solutions $159.3 $166.8 $159.7 $141.1 20.5% 20.6% • Orders impacted by timing of rail car customers • Sales driven by broad based demand, recovery in Europe, and renewed long-term agreements with key customers • Margin performance driven by lower volume (3.9%) Organic +13.6% Organic (10bps) Heat Transfer Systems $237.3 $338.0 $253.6 $189.4 27.6% 26.0% • Order impacted by the timing of LNG projects • Sales driven by systems, BAHX, traditional energy • Margin performance driven by delivery of more full-solution projects from backlog (29.8%) Organic +34.6% Organic +160bps Specialty Products $391.3 $281.0 $236.5 $224.2 24.9% 32.7% • Order driven by hydrogen, HLNG vehicle, and CCUS customers • Sales increase driven by hydrogen & helium project execution, HLNG vehicle tanks, and Teddy2 pre-production • Margin performance driven by project mix and first-of-a-kind project +40.5% Organic +6.7% Organic (780bps) Repair, Service & Leasing $333.9 $302.1 $301.0 $264.2 46.7% 32.2% • Order strength anticipated to continue in 2024 and beyond • Sales driven by strong aftermarket in Americas, LTSAs, continued strength in service and spares, brownfield LNG retrofit activity partially offset by lower life cycle services • Margin performance driven by operational excellence, service on 3rd party equipment +11.1% Organic +14.9% Organic 1,450bps 1. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix to the accompanying earnings release.
© 2024 Chart Industries, Inc. Confidential and Proprietary 10 Pro Forma Last Twelve Months (LTM) Metrics 2022 2023 Q1 24 LTM 2022 2023 Q1 24 LTM 27.8% 31.0% 31.6% Q1 23 Q4 23 Q1 24 2022 2023 Q1 24 LTM 2022 2023 Q1 24 LTM 16.3% 21.0% 22.3% Q1 23 Q4 23 Q1 24 4.08X 3.35X 3.43X 1. 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 in accordance with U.S. GAAP. Management believes that EBITDA and Adjusted EBITDA facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. Additional information regarding the pro forma results are included in the appendix to the accompanying earnings release. 2. Information regarding pro forma LTM results are included in the appendix to the accompanying earnings release. ~$4.6B ~$3.3B ~$3.6B ~$3.7B ~$3.3B ~$3.6B ~$3.7B ~$3.3B ~$3.6B ~$3.7B ~$3.9B ~$4.3B ~$4.33B Pro forma Reported Orders Pro forma Sales PF Reported Gross Profit Margin PF Adjusted EBITDA Margin PF Backlog Leverage (Net Debt to Bank EBITDA) ~$4.4B ~$4.5B
© 2024 Chart Industries, Inc. Confidential and Proprietary 11 Agenda Q1 2024 Results Key Drivers 2024 Outlook Medium Term Outlook
© 2024 Chart Industries, Inc. Confidential and Proprietary Broad Macro Tailwinds Positively Impacting Chart Industries 12 REF Macro Drivers (Not All Inclusive) Specific Tailwinds How Chart Plays A Global Energy Transition and Access • Energy security, energy access, and energy/grid stability • Demand for, and government support for decarbonization • Equipment and process technology for the production, distribution & storage and end use of a molecule (i.e., LNG, H2) • Efficient equipment and services enabling emissions reduction across multiple industrial processes (e.g., metals, cement) B Clean Water Scarcity • More stringent regulatory environment; i.e., U.S. EPA regulations (April 2024) • Africa, Middle East & Asia facing water scarcity, investment in treatment plants and desalination • Full solution water treatment offering across multiple containments including arsenic and PFAS. • Systems for environmental remediation • Compression • Systems for water remineralization C Artificial Intelligence, inclusive of data center, battery, energy intensity • Electrification • Growth in demand for global computing power • Customer demand for decarbonization • Efficiency and safety solution for mining of critical minerals and electrification metals • Backup power for data center • Full solution carbon capture offering from high to low capture purity D Population and Economic Growth Combined with Urbanization and Aging Infrastructure • Rising middle class • Global regulatory environment • Modernization requires a molecule economy • Decarbonization of mobility (e.g., rail, truck, marine) • Supply and demand side equipment and technology for the molecule economy
13 Hydrogen for Heavy Duty Transport 1. Source: Energy Observer Chart is Helping to Broaden the Use of Hydrogen for Mobility Application • Liquid Hydrogen (LH2) • Increased Marine/Maritime capabilities with Teddy2 facility • Full solution offering across the value chain from infrastructure to onboard equipment • Chart supports other heavy duty transport applications including ships, planes, trains, truck, and mining & construction equipment Energy Observer 2 by EO Concept Energy Observer 2 by EO Concept • Energy Observer 2, a liquid hydrogen cargo ship, ambition is to be the lowest-carbon cargo ship in the world • Regulations such as FUEL-EU Maritime and the RED III directive are driving the adoption of near-zero emission fuels • The aim is to build an integrated hydrogen ecosystem, reducing the overall cost of liquid hydrogen and promoting its use in maritime transport Teddy 2 Ribbon Cutting Chart’s Offering Across the Value Chain © 2024 Chart Industries, Inc. Confidential and Proprietary
14 Chart’s Water Treatment Offering Regulatory Update • In April, the Environmental Protection Agency (EPA) issued its first-ever, national, legally enforceable drinking water standard for PFAS ChartWater • ChartWater has deployed over 1,000 systems treating a variety of contaminants in drinking water, including PFAS, and are well positioned to support communities and municipalities to address the new rules • Case study of Ramsey, NJ: Link to Ramsey, NJ video presentation • ChartWater also offers contaminant removal including PFAS, arsenic, iron, manganese, and radionuclide, aerobic biological processes, pH adjustment, ozonation, desalination, odor control, and aeration The ChartWater Advantage © 2024 Chart Industries, Inc. Confidential and Proprietary
© 2024 Chart Industries, Inc. Confidential and Proprietary 15 Sustainable Aftermarket Model New Equipment and project revenue feeds… …Aftermarket, Service, Repair, and Retrofit Aftermarket and service revenue opportunity is a multiple of OE revenue Readiness to Serve Installed Base Mgt & Campaigning Intelligent AFM (iAFM) Processes Customer Attachment Deep Domain Expertise Full Solution Offering Innovation and R&D Certifications Driving Sustainable and Accretive Growth >50 service centers >24,000 customer sites; > 3,300 with multiple product types >2,000 assets under Service Agreements >6,000 new build adds to installed base per year
© 2024 Chart Industries, Inc. Confidential and Proprietary 16 Supply Chain Input Costs Source: LME (Aluminum), MEPS (Carbon and Stainless Steel), Freightos US – Carbon Steel – Hot Rolled Coil US – Stainless Steel 304 – Hot Rolled Coil LME Aluminum Global Container Freight Index 3Y (USD)
© 2024 Chart Industries, Inc. Confidential and Proprietary 17 Agenda Q1 2024 Results Key Drivers 2024 Outlook Medium Term Outlook
© 2024 Chart Industries, Inc. Confidential and Proprietary Chart Industries 2024 Outlook 18 Guidance Metrics as of May 3, 2024 1. EBITDA, Adjusted EBITDA, and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP (as is the case with EBITDA and adjusted EBITDA) and cashflows from operations in accordance with U.S. GAAP (as is the case with free cash flow). Management believes that EBITDA, Adjusted EBITDA, and Free Cash Flow facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. 2. Adjusted diluted EPS is a non-GAAP measure and should not be considered as an alternative to diluted EPS in accordance with U.S. GAAP. Guidance Comments Revenue $4.7B to $5.0B • Total sales revenue growth of 32% to 40% vs. pro forma 2023 • FX impact estimated to be approximately flat vs pro forma 2023 • 63% of YE23 backlog is expected to ship in 2024 Adjusted EBITDA(1) $1.175B to $1.30B • Benefits from volume leverage • Benefit from cost synergies • Benefits from higher full solutions mix Free Cash Flow(1) $575M to $625M • Capital expenditures $115 million to $125 million • FCF to adjusted net income conversion ratio of 95% to 100% Adjusted Earnings per Share(2) $12.00 to $14.00 • Excludes the full year impact of Howden depreciation & amortization related to acquired intangibles and PPE step-up • Effective tax rate of approximately 20% • Diluted share count of 47 million to 48 million
19 • Record backlog as of 3/31/2024; above historical forward backlog coverage ratio for 2024 as well as more full solution project backlog than historical • Reported gross margin above 30% each quarter with full quarterly ownership of Howden, continued in Q1 2024 • “Teddy2” started operations in early April 2024, on schedule • Achieved year-one cost and year-three commercial synergy targets before completion of year-one Howden ownership period • Potential for additional LNG and other H1 2024 project wins not included in guidance • Year two cost and commercial synergy achievement well-underway against targets • Industrial gas majors demand expected to be stable in 2024, typically low-to-mid-single digits • Limited backlog that we anticipate could or would shift because of interest rates • Traditional energy is anticipated to be higher in 2024 than 2023; historically has been a more cyclical portion of our portfolio • Raw materials input costs changes (covering with price) • Additional new customers each quarter expanding global breadth of backlog • LNG over the road vehicle demand • Timing of U.S. announcements and clarifications for IRA/IRS, LNG Pause • Geopolitical uncertainty potentially delaying or accelerating announcements for certain clean projects (e.g., US LNG pause) • Highly-engineered components longer deliveries and lead-times (suppliers) • Projects timelines change by three to six months • Organic capacity and productivity capital additions come online later than anticipated and/or are not optimized until 2H 2024 • Red Sea and other impacts to freight, shipping, and supply chain • Foreign currency movements Positives Neutrals Watch Items 2024 Considerations © 2024 Chart Industries, Inc. Confidential and Proprietary
© 2024 Chart Industries, Inc. Confidential and Proprietary 20 Agenda Q1 2024 Results Key Drivers 2024 Outlook Medium Term Outlook
© 2024 Chart Industries, Inc. Confidential and Proprietary 21 Return on Invested Capital 3-Year Average 2024 Forecast Medium-Term Target • Step up in Chart’s Return on Invested Capital (ROIC) Driven by: • Shift to lower capital Aftermarket business • Capital expenditures representing 2.0-2.5% of revenue • Higher mix of full solution revenue • Continued focus on ROIC as it is a component of the company’s Long-Term Incentive (LTI) program • Achievement of targeted 2.0-2.5X net leverage ratio • Synergy realization Low- Teens 1. ROIC = Adjusted net operating profit * (1- tax rate) / (total debt + total equity) Mid- Teens 7.6%
© 2024 Chart Industries, Inc. Confidential and Proprietary 22 Medium-Term Financial Growth Formula Secular Growth Trends Energy Security Energy Access Sustainability Decarbonization Digitization Organic Sales Growth Mid-Teens CAGR1 Full Solution Offering Private and Public Spending Aftermarket, Service & Repair Global Regulatory Environment Operating Profit Margin Expansion 30-35% Leverage2 1 Does not include Big LNG not in backlog as of 9/30/2023; does not include any benefit from M&A 2 based on gross profit margin target of mid-30% Full Solution and Aftermarket Mix Cost Synergies Disciplined price/cost Productivity actions Deleveraging 2.0-2.5X Net Leverage Target Adjusted EPS Growth Mid-40% CAGR1 Free Cash Flow Conversion X X 95-100% Priorities High ROI Capex M&A Additional Board considerations
Appendix 23© 2024 Chart Industries, Inc. Confidential and Proprietary
© 2024 Chart Industries, Inc. Confidential and Proprietary 24 Full Year 2024 Key Assumptions for Frameworks Interest Expense and Deferred Financing Fees ~$315 million Tax rate ~20% Depreciation & Amortization (“D&A”) ~$270 million Adjusted Depreciation & Amortization(1) ~$110 million Stock compensation expense ~$18 million Non-controlling interest ~$12 million Diluted share count 47 million to 48 million 1. Adjusted Depreciation & Amortization excludes Howden D&A related to acquired intangibles and PPE step-up.
© 2024 Chart Industries, Inc. Confidential and Proprietary 25 Chart’s End Market Opportunity Pipeline End Market Chart Standalone June 30, 2022 Combined Chart December 31, 2023 Current Quarter March 31, 2024 Trend Big LNG • $5.35 billion • 24 projects • 3 int'l projects for potential IPSMR® • $8.5 billion (Feb 2024 = $8.6 billion) • 29 projects (Feb 2024 = 30 projects) • 10 int'l projects (Feb 2024 = 15 int'l projects) for potential IPSMR® • 1 int'l project selected IPSMR® technology (PO not yet booked) • $8.76 billion (increase driven by project upsizing) • 30 projects • 15 int'l projects for potential IPSMR® • 1 int'l project selected IPSMR® technology (PO not yet booked) ssLNG/FLNG • 276 potential projects in commercial pipeline • 461 potential projects in commercial pipeline • 461 potential projects in commercial pipeline Hydrogen • 512 customers & potential customers • 1,309 customers & potential customers (Feb 2024 = 1,357) • 1,409 customers & potential customers Carbon Capture • 301 customers & potential customers • $1.3 billion of approximate value of top 30 opportunities in CCUS commercial pipeline • 955 customers & potential customers (Feb 2024 = 1,026) • $3.35 billion of approximate value of top 30 opportunities in CCUS commercial pipeline • 1,056 customers & potential customers $3.35 billion of approximate value of top 30 opportunities in CCUS commercial pipeline Water Treatment • 560 customers & potential customers • 901 customers & potential customers • 977 customers & potential customers Commercial opportunity pipeline of over $22 billion
© 2024 Chart Industries, Inc. Confidential and Proprietary 26 First Quarter 2024 Net Income & EBITDA Bridge $ millions, except per share amounts Q1 2024, Reported (GAAP) Adjustments Q1 2024, Adjusted (Non-GAAP)Continuing Operations Sales $950.7 - $950.7 Cost of sales $648.4 ($8.3) $640.1 Gross profit $302.3 $8.3 $310.6 Selling, general, and administrative expenses $141.5 ($11.7) $129.8 Amortization expense $47.9 ($38.4) $9.5 Operating expenses $189.4 ($50.1) $139.3 Operating income $112.9 $58.4 $171.3 Interest expense, net $83.8 - $83.8 Other expense, net $3.2 ($11.6) ($8.4) Income before income taxes and equity in (loss) earnings of unconsolidated affiliates, net $25.9 $70.0 $95.9 Income tax expense $8.8 $14.4 $23.2 Income before equity in (loss) earnings of unconsolidated affiliates, net $17.1 $55.6 $72.7 Equity in (loss) earnings of unconsolidated affiliates, net ($0.3) $0.5 $0.2 Net income $16.8 $56.1 $72.9 Less: Income attributable to noncontrolling interests, net of taxes $3.3 - $3.3 Net income attributable to Chart Industries, Inc. $13.5 $56.1 $69.6 Net income $16.8 $56.1 $72.9 Interest Expense, net & Financing costs amortization $83.8 - $83.8 Income tax expense $8.8 $14.4 $23.2 Depreciation & Amortization $65.9 ($39.6) $26.3 Share - Based Compensation - $6.0 $6.0 EBITDA (Non-GAAP) $175.3 $36.9 $212.2
© 2024 Chart Industries, Inc. Confidential and Proprietary 27 Q1 2024 Addback Detail Main Category Detailed Description Q1 2024 gross amount (+ added to / (-) reduced income) Impact to Operating Income 1 Mark-to-Market of inorganic investments & Strategic Equity Method Investments • McPhy MTM • Stabilis MTM • Minority investments, other (Cryomotive, Hylium and HTEC) 4.3 No, net income only 2 Howden deal, other divestitures, integration, restructuring and related expense • Integration costs • Third party support fees • Cost to achieve synergies • Net working capital settlements on divestitures 19.5 Yes, operating and net income 3 Amortization/ Depreciation • Howden Q1 amortization • Inventory and PPE Step-up 46.7 Yes, operating and net income 4 Tax effect on all above adjustments • Tax effect on gross adjustments as shown above (14.4) No, net income only
© 2024 Chart Industries, Inc. Confidential and Proprietary 28 First Quarter 2024 Adjusted EPS 1. Tax effect reflects adjustment at normalized periodic rates. 2. Adjusted EPS is a non-GAAP measure and is reported on a historical basis. EPS adjustment reconciliation table is provided in accompanying press release financial tables. $ millions, except per share amounts Q1 2024 Diluted EPS Continuing Operations Net income attributable to Chart Industries, Inc. $13.5 Less: Mandatory convertible preferred stock dividend 6.8 Income from continuing operations attributable to Chart $6.7 Reported EPS $0.14 1 Investment equities and strategic equity method investments 0.09 2 Mandatory convertible preferred stock dividend 0.15 3 Deal related and integration costs 0.31 4 Howden amortization 1.00 5 Restructuring & related costs 0.11 6 Tax effects (1) (0.31) Adjusted EPS (2) $1.49 Share Count (millions) 46.73
© 2024 Chart Industries, Inc. Confidential and Proprietary 29 First Quarter 2024 Adjusted EBITDA 1. 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 in accordance with U.S. GAAP. Management believes that EBITDA and Adjusted EBITDA facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. 2. Non-recurring costs are primarily driven by Howden integration related activities. $ millions Consolidated Q1 2024 Net sales 950.7 Net income from continuing operations $16.8 Income tax expense, net 8.8 Interest expense, net 83.8 Depreciation and amortization 65.9 EBITDA (1) $175.3 Non-recurring costs 26.6 Employee share-based compensation 6.0 Unrealized loss on investments in equity securities and loss from strategic equity method investments and related Fx impacts 4.3 Adjusted EBITDA (1) $212.2 Adjusted EBITDA % of Sales 22.3%
© 2024 Chart Industries, Inc. Confidential and Proprietary 30 Net Leverage Ratio Debt Covenant: Net Debt / LTM Bank EBITDA(1) Q1'23 Q2'23 Q3'23 Q4'23 Q1'24 Net Leverage (bank EBITDA) Net Leverage (covenant ceiling) 1. EBITDA is a non-GAAP measure and should not be consulted as an alternative to net income in accordance with U.S. GAAP. 2. Debt covenant leverage ceiling steps down from 6.0x to 5.0x starting April 1, 2024; steps down from 5.0x to 4.5x on April 1, 2025. 4.08X 6.0X 6.0X 6.0X 6.0X 6.0X 3.35X3.59X3.86X 3.43X