Chart Industries, Inc. · NYSE:GTLS
Chart Industries — Q2 2022 Earnings Presentation
44 slides from Chart Industries's earnings presentation, Jul 29, 2022
Slide 1: Second Quarter 2022 Earnings Call
N Y S E : G T L S 1 Jill Evanko CEO Presented by Joe Brinkman CFO Second Quarter 2022 Earnings Call Exhibit 99.2
Slide 2: Forward-Looking Statements
Forward-Looking Statements © 2022 Chart Industries, Inc. Confidential and Proprietary 2 CERTAIN STATEMENTS MADE IN THIS PRESENTATION ARE FORW ARD-LOOKING STATEMENTS W ITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORW ARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING
Slide 3: Q2 2022: Continuing to Set Historical GTLS Records
© 2022 Chart Industries, Inc. Confidential and Proprietary 3 Q2 2022: Continuing to Set Historical GTLS Records Q2 2022 notable items: • Record orders of $887.8 million • Record backlog of $1.953 billion • Record sales of $404.8 million • Record reported and adjusted gross margin of $94.8 million an
Slide 4: Another Consecutive Record Order & Backlog Quarter
© 2022 Chart Industries, Inc. Confidential and Proprietary 4 Another Consecutive Record Order & Backlog Quarter # Orders Q1 2022 Q2 2022 1H 2022 Rev Rec Timing 1 Venture Global (BKR) Plaquemines Phase 1 FNTP $135.5 135.5 2022-2024 2 Venture Global (BKR) Plaquemines Phase 2 (second 6 boxes out of 18
Slide 5: Average Orders Per Quarter, ex Big LNG (2016-YTD 2022)
© 2022 Chart Industries, Inc. Confidential and Proprietary 5 Average Orders Per Quarter, ex Big LNG (2016-YTD 2022) $177.0 $215.0 $265.0 $296.0 $302.2 $419.0 $497.9 2016 2017 2018 2019 2020 2021 2022 Big LNG Orders, not shown on column graph Year $ millions 2018 2.9 2019 133.9 2020 1.1 2021 2.9 2022
Slide 6: July 2022: Start to Q3 Orders – Demand Continues
© 2022 Chart Industries, Inc. Confidential and Proprietary 6 July 2022: Start to Q3 Orders – Demand Continues Specific Order Wins Include: 1. 21 Railcar order, totaling over $12 million 2. ISO Container Letter of Intent, totaling over $10 million 3. 11 railcar order commitment, totaling over $6.5 mi
Slide 7: Second Quarter 2022 Summary
© 2022 Chart Industries, Inc. Confidential and Proprietary 7 Second Quarter 2022 Summary $ millions, except per share amounts Q2 2022 Q1 2022 Q2 2021Consolidated Orders 887.8 636.8 447.9 % Change 39% 98% Backlog 1,953.3 1,477.0 1,083.9 % Change 32% 80% Sales 404.8 354.1 322.0 % Change (1) 14.3% / 11
Slide 8: Beginning to See Input Material Cost Relief
© 2022 Chart Industries, Inc. Confidential and Proprietary 8 Beginning to See Input Material Cost Relief
Slide 9: 2022 Year-to-Date Pricing and Surcharge Actions
© 2022 Chart Industries, Inc. Confidential and Proprietary 9 2022 Year-to-Date Pricing and Surcharge Actions As of July 29, 2022 Price Changes: • January 1, 2022: • Rolling IG Major index adjusted price updates • All standard price lists had pricing adjustment • HLNG vehicle tank customer specific p
Slide 10: GTLS Global Freight
© 2022 Chart Industries, Inc. Confidential and Proprietary 10 GTLS Global Freight The second quarter 2022 was our second quarter where cost of freight was covered by freight charges to customers
Slide 11: Organic Automation & Productivity Activities
© 2022 Chart Industries, Inc. Confidential and Proprietary 11 Organic Automation & Productivity Activities Decin, Czech Republic Robotic Welding of Bulk Tank Legs Ornago, Italy Automatic Grinding for all Vessels Ball Ground, Georgia (USA) Robotic Weld Cell for Beverage Changzhou, China Double Gun We
Slide 12: Sales & Operating Margin Trends
© 2022 Chart Industries, Inc. Confidential and Proprietary 12 Sales & Operating Margin Trends $289 $322 $328 $379 $354 $405 10.0% 8.0% 4.2% 5.4% 5.7% 7.3% 12.0% 11.8% 8.7% 8.7% 8.6% 9.9% 0.0% 5.0% 10.0% 15.0% $200 $250 $300 $350 $400 $450 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Sales ($M) Op Margin % Ad
Slide 13: Addback Items by Category (Q4 2021/Q1 2022)
Category Q4 2021 Addback Items Net of Tax Q4 2021 $M Q1 2022 Addback Items Net of Tax Q1 2022 $M 1 Restructuring and Severance • Severance costs • Xinye, China facility relocation • Corp HQ move from Cryoport facility • Tulsa ACHX consolidation to Texas • Restructuring certain repair activities 6.0
Slide 14: Addback Specifics by Category (Q1 2022/Q2 2022)
© 2022 Chart Industries, Inc. Confidential and Proprietary 14 Addback Specifics by Category (Q1 2022/Q2 2022) Category Q1 2022 Addback Items Net of Tax Q1 2022 $M Q2 2022 Addback Items Net of Tax Q2 2022 $M 1 Restructuring and Severance • Severance costs • Tulsa ACHX consolidation to Texas • Lery, F
Slide 15: Second Quarter 2022 Earnings Per Share
© 2022 Chart Industries, Inc. Confidential and Proprietary 15 Second Quarter 2022 Earnings Per Share (1) Tax effect reflects adjustment at normalized periodic rates (2) Adjusted Basic EPS and Normalized Basic EPS (both non-GAAP measures) are as reported on a historical basis. EPS adjustment reconcil
Slide 16: Organic Capital Expenditures
© 2022 Chart Industries, Inc. Confidential and Proprietary 16 Organic Capital Expenditures Description Category Complete? 2022 Fcst 2023 Fcst 2024 Fcst 2025 Fcst Maintenance Capital Maintenance $20.0 $24.0 $24.0 $24.0 Tulsa BAHX Furnace Line Capacity 9.0 7.0 0.0 0.0 GOFA Germany Trailer Production E
Slide 17: Brazed Aluminum Heat Exchanger Line, Tulsa, Oklahoma
• Furnace delivery August 2022 • Planned start of validation core in November 2022 • Training of new staff in process Brazed Aluminum Heat Exchanger Line Tulsa, Oklahoma, USA © 2022 Chart Industries, Inc. Confidential and Proprietary 17
Slide 18: Trailer Facility Expansion, Goch, Germany
18 • The new building will be 200m (twice length of existing building) • Groundbreaking ceremony occurred in June 2022 in conjunction with celebrating 60 years of GOFA business • Construction to be completed by mid-2023 • Production start at the end of Q3 2023 • New RSL workshop in operation by end
Slide 19: Supersize and Bulk Tank Expansion, Theodore, Alabama
19 • Economic Incentives Meeting with Al. Chamber of Commerce • Design build contractors underway • Completed high level equipment budget • Completed second draft of production line layout • Potential to expand to adjacent or nearby land for storage / further expansion Supersize and Bulk Tank Expans
Slide 20: Increasing Demand for Extra Large Super Jumbo & Supersized Tanks
Increasing Demand for Extra Large Super Jumbo & Supersized Tanks: • Space Exploration • LNG • Biogas • Maritime ship fueling • Marine transport on bunker barges • Air separation © 2022 Chart Industries, Inc. Confidential and Proprietary 20 In Q2 2022, three more jumbo cryogenic tanks were sent from
Slide 21: Segment Sales and Operating Margin Information
© 2022 Chart Industries, Inc. Confidential and Proprietary 21 Segment Sales and Operating Margin Information (1) Adjusted Operating Margin % is a non-GAAP measure. Please see reconciliation table at the end of the accompanying earnings release for a reconciliation to the relevant GAAP measure. Sales
Slide 22: Segment Sales and Gross Margin Information
© 2022 Chart Industries, Inc. Confidential and Proprietary 22 Segment Sales and Gross Margin Information (1) Adjusted Gross Margin % is a non-GAAP measure. Please see reconciliation table at the end of the accompanying earnings release for a reconciliation to the relevant GAAP measure. Sales ($M, ex
Slide 23: Full Solutions Platforms Across the Nexus of Clean
© 2022 Chart Industries, Inc. Confidential and Proprietary 23 Full Solutions Platforms Across the Nexus of Clean Clean End Market Solution GTLS Process Technologies (Owned in Full) GTLS Process Technologies Through Minority Ownership GTLS Equipment Clean Power • Hydrogen • Helium • LNG • Biogas • BA
Slide 24: Specialty Products
© 2022 Chart Industries, Inc. Confidential and Proprietary 24 Specialty Products Average Orders Per Quarter Q2 2022: • Record orders and backlog even taking into account the very low HLNG vehicle tank YTD orders • 18 orders greater than $1 million each, with 8 orders greater than $5 million each • B
Slide 25: Heat Transfer Systems
© 2022 Chart Industries, Inc. Confidential and Proprietary 25 Heat Transfer Systems Average Orders Per Quarter Q2 2022: • Seeing increasing activity in intrastate trunkline compression projects, renewable diesel fuel and sustainable aviation fuel work expected to move from FEED stages to procurement
Slide 26: Increasing LNG Opportunities for GTLS – The Numbers
© 2022 Chart Industries, Inc. Confidential and Proprietary 26 Increasing LNG Opportunities for GTLS – The Numbers Pre Feb 24, 2022 GTLS April 29, 2022 GTLS July 29, 2022 GTLS BigLNG (greater than 5 MTPA) 1 • Number of reasonably possible projects to move to order stage in next 3 years 10 22 24 (excl
Slide 27: Chart's Regas Capabilities Increasing in Demand
© 2022 Chart Industries, Inc. Confidential and Proprietary 27 Chart’s Regas Capabilities Increasing in Demand • 15,000 gallons • Two vertical ambient air vaporizers • Peak flow 21,000 SCFH • A process skid and LNG offload module • Unmanned/remote operation • Typically refueled by Orca • 1m3 to 10m3
Slide 28: LNG Retrofit, Replacement and Refurbishment Increasing
© 2022 Chart Industries, Inc. Confidential and Proprietary 28 LNG Retrofit, Replacement and Refurbishment Increasing Multiple jobs completed or underway year-to-date, such as: Removal and install of fans and motors BAHX repair with multiple deployments Repair, retrofit, replacement activitie
Slide 29: Welcome to our Newest Inorganic Additions
© 2022 Chart Industries, Inc. Confidential and Proprietary 29 Welcome to our Newest Inorganic Additions • Acquired for approximately $20 million • May 31, 2022 acquisition date • Immediately accretive • Vacuum insulated cold box, pressure vessel capabilities in particular for hydrogen, helium, ssLNG
Slide 30: Repair, Service & Leasing
Děčín, Czech Republic Burago, Italy Goch, Germany Monheim, Germany Gablingen, Germany Léry, France Q2 2022: • Signed 66 new leases with customers in the second quarter 2022, as compared to 36 in Q2 2021. • The Parts, Repair, Service (“PRS”) business within RSL posted record net sales, gross profit $
Slide 31: Cryo Tank Solutions
© 2022 Chart Industries, Inc. Confidential and Proprietary 31 Cryo Tank Solutions Average Orders Per Quarter Q2 2022: • Storage equipment and engineered tanks & systems both had record sales • Seeing increasing demand in China for storage tanks • Record production of tanks in our SriCity, India faci
Slide 32: ISO Containers: Benefits all Four Segments
© 2022 Chart Industries, Inc. Confidential and Proprietary 32 ISO Containers: Benefits all Four Segments 产品标准：IMDG, ADR, RID, UIC, ASME, TC, DOT, GB 45ft 40ft NFE40ft China 20ft America 40ft 40ft Europe Certificated by BV 10ft 20ft
Slide 33: Full Year 2022 Outlook
© 2022 Chart Industries, Inc. Confidential and Proprietary 33 Full Year 2022 Outlook Revenue $1.725 billion to $1.80 billion Non-Diluted Adj. EPS $5.20 to $5.60 Assumes 20% ETR and 35.86M shares outstanding Capital Expenditures Approximately $55 to $60 million Adjusted Free Cash Flow Approximately $
Slide 34: Thank You to All of Our Interns!
© 2022 Chart Industries, Inc. Confidential and Proprietary 34 Thank You to All of Our Interns! Baylor Univ.Technical Univ. LiberecTexas A&M Univ.Viterbo Univ.Georgia Tech Ohio State Univ. Georgia TechGeorgia Tech William Parth Evan Joseph Jacob Victor Abram Kirk Mariam Edward Trevor Texas A&M Univ.
Slide 35: Appendix
Appendix 35
Slide 36: Second Quarter 2022 Adjustments
© 2022 Chart Industries, Inc. Confidential and Proprietary 36 Second Quarter 2022 Adjustments (1) “Adjustments” and “Q2 2022, Adjusted” 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 beli
Slide 37: Second Quarter 2022 Free Cash Flow
© 2022 Chart Industries, Inc. Confidential and Proprietary 37 Second Quarter 2022 Free Cash Flow (1) “Net income, adjusted” 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. Reconciliation to Net Incom
Slide 38: Second Quarter 2022 Free Cash Flow
© 2022 Chart Industries, Inc. Confidential and Proprietary 38 Second Quarter 2022 Free Cash Flow (1) “Net income, adjusted” 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. Reconciliation to Net Incom
Slide 39: Second Quarter 2022 Adjusted EBITDA
© 2022 Chart Industries, Inc. Confidential and Proprietary 39 Second Quarter 2022 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 believe
Slide 40: Second Quarter 2022 Adjusted EBITDA
© 2022 Chart Industries, Inc. Confidential and Proprietary 40 Second Quarter 2022 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 believe
Slide 41: Sales & Gross Margin Trends
© 2022 Chart Industries, Inc. Confidential and Proprietary 41 Sales & Gross Margin Trends $289 $322 $328 $379 $354 $405 29.1% 25.8% 22.8% 21.7% 23.6% 23.4% 29.9% 29.0% 26.5% 24.2% 26.1% 25.3% 15.0% 20.0% 25.0% 30.0% 35.0% $200 $250 $300 $350 $400 $450 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Sales ($M) G
Slide 42: 2021 Pricing Actions
© 2022 Chart Industries, Inc. Confidential and Proprietary 42 2021 Pricing Actions (As shown on Q4 2021 earnings call) second Half 2021 Q3 2021 Q4 2021 Increase in Material Costs from 6/30/2021 to 9/30/2021: • Aluminum +18% • Carbon steel +24% • Stainless steel +12% Increase in Material Costs from 1
Slide 43: 2021, 2022 Challenges, Actions & Progress (1/2)
© 2022 Chart Industries, Inc. Confidential and Proprietary 43 2021, 2022 Challenges, Actions & Progress (1/2) # Challenge Risk Level as of 12/31/2021 (as described on Q4 2021 earnings call) Risk Level as of 3/31/2022 Risk Level as of 4/29/2022 Risk Level as of 7/29/2022 Ongoing actions 1 Material Co
Slide 44: 2021, 2022 Challenges, Actions & Progress (2/2)
© 2022 Chart Industries, Inc. Confidential and Proprietary 44 2021, 2022 Challenges, Actions & Progress (2/2) # Challenge Risk Level as of 12/31/2021 (as described on Q4 2021 earnings call) Risk Level as of 3/31/2022 Risk Level as of 4/29/2022 Risk Level as of 07/29/2022 Actions Taken / In Progress