8-K
CHART INDUSTRIES INC (GTLS)
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): February 24, 2022
____________________________________
CHART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
_____________________________________
| Delaware | 001-11442 | 34-1712937 |
|---|---|---|
| (State of other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
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
3055 Torrington Drive, Ball Ground, Georgia 30107
(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):
| ☐ | 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:
| 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 |
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 February 24, 2022, Chart Industries, Inc. (the “Company”) issued a news release announcing the Company’s financial results for the fourth quarter and fiscal year ended December 31, 2021, as well as supplemental information for the fourth quarter and fiscal year ended December 31, 2021. 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 generally accepted accounting principles (“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.
| Exhibit No. | Description |
|---|---|
| 99.1 | Chart Industries, Inc. News Release, dated February 24, 2022, announcing the Company's 2021 fourth quarter and fiscal year results. |
| 99.2 | Chart Industries, Inc. Supplemental Information for 2021 fourth quarter and fiscal year results. |
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.
| Chart Industries, Inc. | |
|---|---|
| Date: February 24, 2022 | |
| By: /s/ Jillian C. Evanko <br>Jillian C. Evanko<br>President and Chief Executive Officer |
3
Document
Exhibit 99.1
Chart Industries Reports 2021 Fourth Quarter and Full Year Results
Atlanta, Georgia – February 24, 2022 - Chart Industries, Inc. (NYSE: GTLS) today reported results for the fourth quarter and full year ended December 31, 2021 as well as reiterating our 2022 outlook. Further details can be found in the supplemental presentation published in the investor relations section of our website.
•Fourth quarter and full-year 2021 orders of $460.9 million and $1,676.1 million were both historical records contributing to December 31, 2021 record backlog of $1,190.1 million
•Specialty Products fourth quarter 2021 orders of $182.3 million included $85.4 million of hydrogen-related orders, contributing to full year Specialty Products orders of $648.6 million, a 132.3% increase over the full year 2020
•Record fourth quarter sales of $378.9 million contributed to record full-year 2021 sales of $1,317.7 million (an increase from full year 2020 of 11.9%; 20.2% excluding Big LNG in both periods) and sequentially increased 15.4% compared to the third quarter 2021
•Fourth quarter 2021 reported non-diluted earnings per share (“EPS”) of $0.34; adjusted non-diluted EPS of $0.73 excluding Mark-to-Market (“MTM”) and gains from investment activity contributing to full year 2021 reported non-diluted EPS of $1.66 and historical record full year adjusted non-diluted EPS of $2.84
•Completed the immediately accretive acquisition of Earthly Labs, our small-scale carbon capture technology for use in agriculture, food & beverage applications
•Reiterating our 2022 full-year revenue outlook (excluding Big LNG) of $1.70 billion to $1.85 billion and 2022 full-year adjusted non-diluted EPS guidance of $5.25 to $6.50 (excluding Big LNG) reflecting customer optimism and execution confidence
Summary:
Our fourth quarter 2021 was our highest order quarter ($460.9 million) in our history (with or without Big LNG) resulting in record full year orders ($1,676.1 million) and December 31, 2021 record ending backlog of $1,190.1 million. We continue to see broad-based demand across our product categories and geographies, reflected in three out of the four quarters of 2021 setting new historical order records. The addition of 99 new customers in the fourth quarter 2021 brought the full year 2021 total new customers to 402, with 37% in EMEA & India, 29% in North America, 24% in China and 10% in rest of the world. Additionally, broad-based demand is reflected in our 70 orders in the fourth quarter 2021 that were each above $1 million (which we call “mega orders”), resulting in 226 of these individual mega orders for the full year 2021. Strong order activity has continued, with January 2022 being our highest January order month in our history. Yesterday, we received a second limited notice to proceed from Baker Hughes on Venture Global Plaquemines Phase 1 work, which is an additional order for $9 million.
Additionally, the fourth quarter and full year 2021 were our highest sales quarter and year in our history ($378.9 million and $1,317.7 million, respectively) despite the supply chain, logistics, inflation and labor challenges well-documented economy-wide. Fourth quarter sales increased 21.3% when compared to the fourth quarter 2020 (an increase of 32.0% when excluding Big LNG revenue which was $25.4 million in the fourth quarter 2020).
Fourth quarter 2021 reported non-diluted EPS of $0.34 included one-time items related to acquisition deal-related costs, integration costs, costs of refinancing our revolving credit facility, startup costs at new facilities in our footprint (organic) as well as benefits from the mark-to-market and gain on our investments. When excluding these items, fourth quarter 2021 adjusted non-diluted EPS was $0.73, contributing to our full year 2021 reported non-diluted EPS of $1.66 and record high adjusted non-diluted full year 2021 of $2.84.
The fourth quarter 2021 was consistent with our expectations of reported operating income as a percent of sales of 5.4% and adjusted operating income as a percent of sales of 8.7% as pricing and surcharge actions gradually catch up to pre-price increase backlog shipping. Additionally, we were able to accelerate shipments on more of our pre-pricing backlog in the fourth quarter 2021, which further supports our expectation that gross margin as a percent of sales should return to approximately 30% during the second half of 2022. Price actions and cost reduction activities continued throughout the fourth quarter 2021 and into 2022. Since July 1, 2021, we have implemented four distinct overall price increases as well as two surcharges (specifics can be found in the supplemental presentation on slides 8 and 9). In addition, in the fourth quarter 2021 we eliminated free freight on volume purchases, began charging storage fees and increased our surcharge that was initially put in place in the middle of the third quarter 2021 from 10% to 15%. This surcharge will remain in place until we see meaningful tempering of material costs in our three primary raw materials - carbon steel, stainless steel and aluminum. The fourth quarter 2021 was in line with our outlook that material would become more available and that costs would not materially increase or decline in the period. Based on recent indicators, we expect the global supply chain to gradually improve throughout 2022.
Consistent with our expectations, we generated cash from operating activities of $20 million in the fourth quarter 2021. When adjusted for one-time impacts, adjusted free cash flow was $34 million (including adjustments and net of capital expenditures of $16 million, which included our decision to accelerate our capacity expansion progress in our SriCity, India facility, Tulsa flex manufacturing location and robotics). This reflects our seasonality of the fourth quarter of the year typically being the highest free cash flow quarter within any given year as well as the beginning of our intention to reduce the safety stock in inventory that had been strategically built throughout 2021.
Record orders of $460.9 million in the fourth quarter contributed to record December 31, 2021 backlog of $1,190.1 million, representing continued broad-based demand.
Record fourth quarter 2021 orders of $460.9 million was a 31.6% sequential order increase over the third quarter of 2021. There were no Big LNG orders booked in full in the fourth quarter 2021 or anytime throughout the year; we received engineering release on two of the U.S. Gulf Coast Big LNG projects that we expect to move to Final Investment Decision (“FID”) in 2022, at which time the full orders would be booked. Additionally, in December 2021, demonstrating that liquefaction demand continues to increase, we booked over $120 million of orders related to four liquefier awards with four different customers – two utility-scale LNG projects in the United States, one small-scale bioLNG project for a European customer, and one hydrogen liquefaction plant in a new geography.
Each of our end market applications within the Specialty Products segment had full year 2021 order growth above 15% compared to 2020, and total Specialty Products full year orders of $648.6 million were a 132.3% increase over 2020. Fourth quarter 2021 Specialty Products orders of $182.3 million included hydrogen and helium orders of $85.4 million, including a 15 ton per day hydrogen liquefier and 19 hydrogen trailers with five of these sold for use in South Korea. For the full year 2021, we received orders for 62 hydrogen trailers, compared to a prior record of 26 ordered in 2020. This activity contributed to full year hydrogen and helium orders of $282.1 million, a record year and a 640% increase over the full year of 2020.
Continuing on the trend of trailers, for the full year 2021 we sold a total of 594 trailers, a 64.5% increase over the full year of 2020 (361 trailers). Additionally, orders for fueling stations set new records both in the fourth quarter 2021 as well as the full year, with 48 stations sold in the fourth quarter 2021 and 92 sold in the year, an increase of 29.6% over the full year of 2020. These trends continued into the first quarter 2022, with 13 additional stations booked between January 1, 2022 and February 15, 2022 as well as 109 additional trailer orders booked in that same period.
Food & beverage full year 2021 orders were 49.2% higher than the full year 2020, and fourth quarter 2021 food & beverage sales hit record highs. We anticipate continuing record order levels in food & beverage in 2022, with ongoing restaurant footprint growth and specific projects such as our national account, Chick-Fil-A, doing refurbishment work to upgrade over 100 stores with our tanks, beginning this month. We expect additional cannabis growth resulting from continued market acceptance of cannabis and the movement to larger grow houses. Fourth quarter 2021 cannabis orders were a record.
“We expect broad-based demand for our products to continue throughout 2022, and when coupled with the anticipated Big LNG cycle kicking off in early 2022, we expect meaningful growth for our business,” stated Jill Evanko, Chart’s President and CEO. “Coupling that growth in our higher margin businesses with our pricing and cost reduction activities results in a clear path to our targeted margins in the second half 2022 even when considering the inflationary environment in which we are operating. We continue to aggressively manage cost and supply
chain pressures through permanent and temporary pricing actions and have over 150 cost reduction, productivity, automation and capacity projects in flight.”
Record fourth quarter 2021 sales of $378.9 million contributed to record full year 2021 sales of $1,317.7 million.
Fourth quarter 2021 sales of $378.9 million were driven by record sales in both Cryo Tank Solutions and Specialty Products. Cryo Tank’s record sales were the result of records in all three of the Cryo Tank’s product categories (storage equipment, mobile equipment and engineered tanks & systems) while Specialty Products had record sales for the quarter in hydrogen, cannabis, water treatment and food & beverage. As a reminder, the fourth quarter 2020 included approximately $25.4 million of Venture Global Calcasieu Pass sales while the third and fourth quarter 2021 had no associated Big LNG revenue. Full year 2021 sales were $1,317.7 million. Excluding sales from the Big LNG project in the respective periods, revenue increased over 20% when compared to full year 2020.
Continued progress on pricing and cost actions support 2022 margin outlook.
Supply chain challenges, inflationary impacts and team members out with COVID-19 continued to be challenges in the fourth quarter 2021. We continued to take further pricing and cost reduction actions within the quarter to progress faster against our lagging cost to price backlog. We implemented two additional price increases in the fourth quarter 2021 and increased our temporary surcharges which are expected to cover our additional costs on new orders. Specifics include:
a.We had anticipated material cost plateauing in the fourth quarter 2021 and beginning to decline as we head into the first half of 2022; our view remains consistent with that perspective. Within the quarter and as compared to the end of the third quarter 2021, carbon steel material costs decreased more than 10%, aluminum was essentially flat, while stainless steel increased ~7%. Pricing increases met or exceeded cost increases for new orders in backlog in the quarter.
b.Logistic costs, including availability of drivers and trucks remained a challenge. In response, we are favoring local sourcing versus over-the-sea vendors, as well as being flexible in delivering our own gas for our shops when force majeures are put into effect (which initially ended in early October 2021 but began again in the Southern United States from our gas supplier the first week of January 2022 and remains in place today). While additional logistics costs had a net negative margin impact of $1.4 million in the fourth quarter 2021, generally we did not miss shipments as the result of the logistics situation, and we expect negative variance to diminish in the first quarter 2022 as the result of eliminating free freight for volume purchases.
c.During the fourth quarter 2021, we had 1.7% of our U.S. production labor out with COVID-19 (2.4% in the month of December 2021) yet it did not meaningfully impact our
sales in the fourth quarter 2021. Eight of our global manufacturing sites had 100% on-time delivery in the fourth quarter 2021.
In addition to pricing actions, we continue our organic cost reduction activities including expanding robotic welding, streamlining components on specific bills of material, in house painting for transports and skids for water treatment, and standardizing on a pre-made chassis for mobile units (specific project examples and savings can be found in the supplemental presentation on slide 10). These productivity projects in addition to our sourcing and back-office actions total anticipated annualized savings of $28.9 million, with such savings anticipated to be staggered throughout 2022.
Big LNG projects progress toward FID in 2022, small-scale LNG activity is very active and LNG infrastructure demand continues to grow; all with a constructive backdrop for oil & gas spending.
This is the first time in our history where Big LNG prospects, small-scale LNG commercial pipeline and LNG infrastructure demand are all increasing at the same time, resulting from the supply/demand intersection as well as increasing public sector support for and acceptance of LNG.
While the third quarter 2021 provided confidence in progress toward FID for at least three of the Big LNG projects, the fourth quarter 2021 activity on these projects further accelerated with strong global pricing and long-term fundamentals supporting these North American infrastructure projects. Not only were we actively involved in the start-up processes at Venture Global’s Calcasieu Pass location, we also were issued another patent for our IPSMR® process technology, covering the process system itself and have been awarded numerous foreign patents in the IPSMR® technology field. Additionally, IPSMR® and IPSMR+® have been qualified by another major international energy company, TotalEnergies.
a.We continue to expect Venture Global Plaquemines Phase 1 (10 million tonnes per annum (“MTPA”)), which we anticipate will include approximately $136 million of Chart content to proceed to FID in the first half of 2022. In the fourth quarter 2021, we received a $1 million first release on engineering work (Limited Notice to Proceed, “LNTP”) on this project and yesterday we received a second engineering release on the project of $9 million.
a.Cheniere, whose Corpus Christi Stage 3 Project we anticipate will include approximately $375 million of Chart content also released us on engineering work in December 2021, and we anticipate a full notice to proceed in 2022.
a.Tellurian Driftwood Project Phase 1 (11 MTPA), which we anticipate will include over $350 million of Chart content (none of which is in our backlog) continues to progress toward their intent to proceed to construction in early 2022.
We were awarded approximately $80 million of orders for three small and utility-scale LNG liquefaction projects with three different customers the last week of 2021, contributing to our total of seven liquefier orders (three LNG and four hydrogen/helium) in the full-year 2021, the most liquefiers booked in our history. And we believe this is just the beginning of the small-scale trend; our commercial pipeline of small, utility-scale and regas potential projects totals over $1.5 billion (with over 200 potential projects at various stages of progress), and we anticipate there will be at least one of these orders booked in the first half of 2022. And not to be forgotten, the third pillar of our LNG offering, LNG infrastructure, continues to show growth, evidenced by record orders and sales in the full year 2021 for both LNG fueling stations and LNG over-the-road vehicle tanks.
We continue to invest organically and inorganically for capacity, automation, manufacturing optimization as well as in our ESG solutions for the “Nexus of Clean” – clean power, clean water, clean food and clean industrials.
There continues to be public and private sector support, focus and investment in sustainable solutions. In the fourth quarter 2021, we closed on the acquisition of Earthly Labs, which is the world leader in installations of small-scale carbon capture. Earthly Labs booked our first winery install at Trefethen Winery, our first distillery (Big Storm Distillery), our first New Zealand installation and our first United Kingdom customer Hempworth Brewery. We expect the Canadian and UK markets to meaningfully grow for small-scale carbon capture, addressing the shortage of CO2 in these markets.
Clean water is also a growth area. Our ChartWater™ platform, consisting of AdEdge and BlueInGreen process technologies with Chart equipment, posted record orders, backlog & sales in both the fourth quarter 2021 as well as the full year of 2021. Yesterday we were awarded our first water project in India. The project is over $6 million of our scope and is funded and awarded under the Water Supply Scheme by the Drinking Water and Sanitation Division Garhwa, Jharkhand.
We continue to make organic capacity, productivity and automation investments, details of which can be found on slide 11 in the supplemental presentation. We anticipate spending approximately $50 million to $55 million in capital expenditures in 2022, driven by investments to replicate production lines in strategic locations, continuing to implement additional automation across our factories and expanding manufacturing capacity in India, Germany and the United States.
Throughout 2021, we strategically decided to increase our on-hand inventory balance as the result of increases in material costs and the frequently discussed availability challenges of materials. This decision resulted in lower than typical free cash flow in 2021. We are pleased with this decision as we were and are able to meet our customers’ demand requirements. While we will continue to carry higher than typical inventory levels in 2022 to meet the broad-based demand in an ongoing difficult supply chain environment, we anticipate that free cash flow for 2022 will reflect the tempering of these challenges as the year progresses as well as the timing of sales from backlog.
2022 Outlook Reconfirmed.
Considering our record order year in 2021, record order quarter in the fourth quarter 2021 and record backlog as of December 31, 2021, as well as visibility to our strongest ever commercial pipeline of potential work, we reinforce our anticipated 2022 full year sales outlook range of $1.70 billion to $1.85 billion. This outlook does not include any additional or new Big LNG projects (although orders are expected in the first half of 2022); it does include the engineering work which began for two Big LNG projects. Note that the timing of our first quarter 2022 sales are seasonally in line with a typical Chart year, where the first quarter is the lowest of the year given the Chinese New Year, customer capital spend behavior (the first quarter is typically sequentially lower than the prior fourth quarter) and high COVID-19 absences in the first five weeks of 2022. Sales are expected to sequentially increase throughout the year. Details on our 2022 sales outlook can be found in the supplemental presentation on slides 23 and 24. Associated adjusted non-diluted EPS is expected to be in the range of $5.25 to $6.50 on approximately 35.6 million weighted shares outstanding and assuming a 19% effective tax rate. We anticipate the first half of 2022 will include a margin drag from historical levels from the ongoing macro challenges but increasingly be offset as the year progresses by the positive impact from actions we have taken to date.
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 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, 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 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 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 as a percent of sales, adjusted earnings per non-diluted share, adjusted selling, general and administrative expenses, net income attributable to Chart Industries, Inc. adjusted, and 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 "Fourth Quarter and FY 2021 Earnings Per Share," “Fourth Quarter and Full Year 2021 Segment Information” “Fourth Quarter and Full 2021 Free Cash Flow”, and “Fourth Quarter and Full Year 2021 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 2022 full year earnings outlook, the Company is not able to provide a reconciliation of the adjusted earnings per non-diluted share 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 will discuss its fourth quarter and full year 2021 financial results on a conference call on Thursday, February 24, 2022 at 9:30 a.m. ET. Participants may join the conference call by dialing (877) 312-9395 in the U.S. or (970) 315-0456 from outside the
U.S., entering conference ID 6268015. Please log-in or dial-in at least five minutes prior to the start time.
A taped replay of the conference call will be archived on the Company’s website, www.chartindustries.com. You may also listen to a recorded replay of the conference call by dialing (855) 859-2056 in the U.S. or (404) 537-3406 outside the U.S. and entering Conference ID 6268015. The replay will be available beginning 12:30 p.m. ET, Thursday, February 24, 2022 until 12:30 p.m. ET, Thursday, March 3, 2022.
About Chart Industries, Inc.
Chart Industries, Inc. is a leading independent global manufacturer of highly engineered equipment servicing multiple applications in the Energy and Industrial Gas markets. Our unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and repair. Being at the forefront of the clean energy transition, Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas and CO2 Capture amongst other applications. We are committed to excellence in environmental, social and corporate governance (ESG) issues both for our company as well as our customers. With over 25 global manufacturing locations from the United States to China, Australia, India, Europe and South America, we maintain accountability and transparency to our team members, suppliers, customers and communities. To learn more, visit www.Chartindustries.com.
For more information, click here:
http://ir.chartindustries.com/
Investor Relations Contact:
| Wade Suki, CFA |
|---|
| Director of Investor Relations |
| 832-524-7489 |
| wade.suki@chartindustries.com |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(Dollars and shares in millions, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Sales | $ | 378.9 | $ | 312.4 | $ | 1,317.7 | $ | 1,177.1 |
| Cost of sales | 296.7 | 224.5 | 993.5 | 845.0 | ||||
| Gross profit | 82.2 | 87.9 | 324.2 | 332.1 | ||||
| Selling, general, and administrative expenses | 51.4 | 41.0 | 196.8 | 178.2 | ||||
| Amortization expense | 10.4 | 8.4 | 38.9 | 45.7 | ||||
| Asset impairments (1) | — | 16.0 | — | 16.0 | ||||
| Operating expenses | 61.8 | 65.4 | 235.7 | 239.9 | ||||
| Operating income (1) - (6) | 20.4 | 22.5 | 88.5 | 92.2 | ||||
| Interest expense (income), net | 3.3 | (3.5) | 10.7 | 17.7 | ||||
| Financing costs amortization | 4.8 | 1.1 | 8.3 | 4.3 | ||||
| Unrealized gain on investment in equity securities | (2.0) | (16.3) | (3.2) | (13.1) | ||||
| Realized gain on investment in equity securities | (2.6) | — | (2.6) | — | ||||
| Foreign currency loss | 1.2 | 0.1 | 0.9 | 0.9 | ||||
| Gain on bargain purchase | — | (5.0) | — | (5.0) | ||||
| Other expense, net | (0.1) | 2.2 | 0.3 | 2.2 | ||||
| Income from continuing operations before income taxes and equity in earnings of unconsolidated affiliates, net | 15.8 | 43.9 | 74.1 | 85.2 | ||||
| Income tax expense | 3.6 | 6.0 | 13.5 | 14.9 | ||||
| Income from continuing operations before equity in earnings of unconsolidated affiliates, net | 12.2 | 37.9 | 60.6 | 70.3 | ||||
| Equity in earnings of unconsolidated affiliates, net | 0.2 | — | 0.3 | — | ||||
| Income from continuing operations | 12.4 | 37.9 | 60.9 | 70.3 | ||||
| Income from discontinued operations, net of tax (7) | — | 220.3 | — | 239.2 | ||||
| Net income | 12.4 | 258.2 | 60.9 | 309.5 | ||||
| Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | 0.3 | 0.4 | 1.8 | 1.4 | ||||
| Net income attributable to Chart Industries, Inc. | $ | 12.1 | $ | 257.8 | $ | 59.1 | $ | 308.1 |
| CHART INDUSTRIES, INC. AND SUBSIDIARIES<br><br>CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) — (Continued)<br><br>(Dollars and shares in millions, except per share amounts) | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Net income attributable to Chart Industries, Inc. | ||||||||
| Income from continuing operations | $ | 12.1 | $ | 37.5 | $ | 59.1 | $ | 68.9 |
| Income from discontinued operations, net of tax | — | 220.3 | — | 239.2 | ||||
| Net income attributable to Chart Industries, Inc. | $ | 12.1 | $ | 257.8 | $ | 59.1 | $ | 308.1 |
| Basic earnings per common share attributable to Chart Industries, Inc. | ||||||||
| Income from continuing operations | $ | 0.34 | $ | 1.06 | $ | 1.66 | $ | 1.95 |
| Income from discontinued operations | — | 6.23 | — | 6.76 | ||||
| Net income attributable to Chart Industries, Inc. | $ | 0.34 | $ | 7.29 | $ | 1.66 | $ | 8.71 |
| Diluted earnings per common share attributable to Chart Industries, Inc. | ||||||||
| Income from continuing operations | $ | 0.29 | $ | 0.97 | $ | 1.44 | $ | 1.89 |
| Income from discontinued operations | — | 5.72 | — | 6.56 | ||||
| Net income attributable to Chart Industries, Inc. | $ | 0.29 | $ | 6.69 | $ | 1.44 | $ | 8.45 |
| Weighted-average number of common shares outstanding: | ||||||||
| Basic | 35.65 | 35.34 | 35.61 | 35.38 | ||||
| Diluted (8) (9) | 41.57 | 38.55 | 41.11 | 36.45 |
_______________
(1)Includes $16.0 impairment of our trademarks and trade names indefinite-lived intangible assets related to the AXC business in our Heat Transfer Systems segment for the year ended December 31, 2020.
(2)Includes depreciation expense of:
•$10.4 and $10.1 for the quarter ended December 31, 2021 and 2020, respectively, and
•$41.7 and $38.8 for the year ended December 31, 2021 and 2020, respectively.
(3)Includes restructuring costs of:
•$0.6 and $0.9 for the quarter ended December 31, 2021 and 2020, respectively, and
•$3.5 and $13.6 for the year ended December 31, 2021 and 2020, respectively.
(4)Includes transaction-related costs of $2.5 for the year ended December 31, 2021, which were mainly related to the Earthly Labs Inc., Cryogenic Gas Technologies, Inc., L.A. Turbine and AdEdge Holdings, LLC acquisitions.
(5)Includes transaction-related costs of $2.6 for the years ended December 31, 2020, which were mainly related to the Sustainable Energy Solutions, Inc., BlueInGreen, LLC and Alabama Trailers acquisitions.
(6)In conjunction with the amendment of our credit facilities, we recognized charges of $4.1 in unamortized debt issuance cost write offs associated with previous credit facilities and new debt issuance costs, which are classified as financing costs amortization in our consolidated income statement for the year ended December 31, 2021.
(7)Includes gain on sale of our cryobiological products business of $224.2, net of taxes of $25.2, for both the quarter and year ended December 31, 2020.
(8)Includes an additional 5.56 and 5.17 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the fourth quarter and full year 2021, 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 2.94 and 2.76 for the fourth quarter and full year 2021, respectively.
(9)Includes an additional 2.84 and 0.81 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the fourth quarter and full year 2020, respectively. The associated hedge, which helps offset this dilution, cannot be taken into account under U.S. GAAP. If the hedge could have been considered, it would have reduced the additional shares by 1.72 and 0.53 for the fourth quarter and full year ended 2020, respectively.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Net Cash Provided By (Used In) Operating Activities (1) (2) (3) | $ | 20.4 | $ | 60.2 | $ | (21.3) | $ | 172.7 |
| Investing Activities | ||||||||
| Proceeds from sale of businesses | — | 317.5 | — | 317.5 | ||||
| Acquisition of businesses, net of cash acquired | (36.0) | (51.9) | (205.1) | (51.9) | ||||
| Investments | (0.7) | (50.8) | (103.9) | (50.8) | ||||
| Capital expenditures (4) (5) | (16.2) | (10.6) | (52.7) | (37.9) | ||||
| Proceeds from sale of assets | — | — | — | 7.9 | ||||
| Government grants | 0.1 | 0.2 | 0.5 | 0.2 | ||||
| Net Cash (Used In) Provided By Investing Activities | (52.8) | 204.4 | (361.2) | 185.0 | ||||
| Financing Activities | ||||||||
| Borrowings on revolving credit facilities | 717.0 | 120.5 | 1,361.1 | 215.0 | ||||
| Repayments on revolving credit facilities | (552.0) | (56.0) | (873.6) | (223.1) | ||||
| Borrowings on term loan | — | — | — | — | ||||
| Repayments on term loan | (103.1) | (335.7) | (103.1) | (344.1) | ||||
| Payments for debt issuance costs | (3.0) | — | (3.0) | (1.0) | ||||
| Proceeds from exercise of stock options | (0.1) | 6.8 | 6.9 | 11.0 | ||||
| Common stock repurchases from share-based compensation plans | (3.2) | (0.2) | (6.4) | (1.9) | ||||
| Common stock repurchases (6) | — | — | — | (19.3) | ||||
| Net Cash Provided By (Used In) Financing Activities | 55.6 | (264.6) | 381.9 | (363.4) | ||||
| Effect of exchange rate changes on cash | (3.8) | 4.4 | (3.1) | 11.8 | ||||
| Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | 19.4 | 4.4 | (3.7) | 6.1 | ||||
| Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (7) | 103.0 | 121.7 | 126.1 | 120.0 | ||||
| CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (7) | $ | 122.4 | $ | 126.1 | $ | 122.4 | $ | 126.1 |
_______________
(1)Includes gain on sale of our cryobiological products business of $249.4 for the year ended December 31, 2020.
(2)Includes depreciation expense for continuing operations of $10.4 and $10.1 for the quarter ended December 31, 2021 and 2020, respectively and $41.7 and $38.8 for the years ended December 31, 2021 and 2020, respectively.
(3)Includes depreciation expense for discontinued operations of $0.7 for the year ended December 31, 2020.
(4)Includes capital expenditures for continuing operations of $16.2 and $10.6 for the quarter ended December 31, 2021 and 2020, respectively and $52.7 and $37.5 for the years ended December 31, 2021 and 2020, respectively.
(5)Includes capital expenditures for discontinued operations of $0.4 for the year ended December 31, 2020.
(6)Includes $19.3 in shares repurchased through our share repurchase program for the year ended December 31, 2020.
(7)Includes restricted cash and restricted cash equivalents of $0.2 for the quarter and year ended December 31, 2021 and $1.0 for the quarter and year ended December 31, 2020.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
| December 31, | ||||
|---|---|---|---|---|
| 2021 | 2020 | |||
| ASSETS | ||||
| Cash and cash equivalents | $ | 122.2 | $ | 125.1 |
| Accounts receivable, net | 236.3 | 200.8 | ||
| Inventories, net | 321.5 | 248.4 | ||
| Other current assets | 173.5 | 128.7 | ||
| Property, plant, and equipment, net | 416.0 | 414.5 | ||
| Goodwill | 994.6 | 865.9 | ||
| Identifiable intangible assets, net | 556.1 | 493.1 | ||
| Equity method investments | 99.6 | 5.3 | ||
| Investments in equity securities | 77.8 | 73.6 | ||
| Other assets | 46.2 | 15.1 | ||
| TOTAL ASSETS | $ | 3,043.8 | $ | 2,570.5 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | $ | 693.9 | $ | 634.8 |
| Long-term debt | 600.8 | 221.6 | ||
| Other long-term liabilities | 123.9 | 134.8 | ||
| Equity | 1,625.2 | 1,579.3 | ||
| TOTAL LIABILITIES AND EQUITY | $ | 3,043.8 | $ | 2,570.5 |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
OPERATING SEGMENTS (UNAUDITED)
(Dollars in millions)
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||||||
| Sales | ||||||||||||
| Cryo Tank Solutions | $ | 133.5 | $ | 110.5 | $ | 447.4 | $ | 415.8 | ||||
| Heat Transfer Systems | 71.9 | 78.9 | 262.7 | 369.8 | ||||||||
| Specialty Products | 131.9 | 85.1 | 432.9 | 242.6 | ||||||||
| Repair, Service & Leasing | 44.7 | 41.0 | 187.0 | 158.3 | ||||||||
| Intersegment eliminations | (3.1) | (3.1) | (12.3) | (9.4) | ||||||||
| Consolidated | $ | 378.9 | $ | 312.4 | $ | 1,317.7 | $ | 1,177.1 | ||||
| Gross Profit | ||||||||||||
| Cryo Tank Solutions | $ | 22.5 | $ | 24.0 | $ | 93.5 | $ | 99.5 | ||||
| Heat Transfer Systems | 6.4 | 19.5 | 35.6 | 93.7 | ||||||||
| Specialty Products | 39.9 | 26.5 | 145.5 | 84.3 | ||||||||
| Repair, Service & Leasing | 13.4 | 17.9 | 49.6 | 54.6 | ||||||||
| Consolidated | $ | 82.2 | $ | 87.9 | $ | 324.2 | $ | 332.1 | ||||
| Gross Profit Margin | ||||||||||||
| Cryo Tank Solutions | 16.9 | % | 21.7 | % | 20.9 | % | 23.9 | % | ||||
| Heat Transfer Systems | 8.9 | % | 24.7 | % | 13.6 | % | 25.3 | % | ||||
| Specialty Products | 30.3 | % | 31.1 | % | 33.6 | % | 34.7 | % | ||||
| Repair, Service & Leasing | 30.0 | % | 43.7 | % | 26.5 | % | 34.5 | % | ||||
| Consolidated | 21.7 | % | 28.1 | % | 24.6 | % | 28.2 | % | ||||
| Operating Income (Loss) | ||||||||||||
| Cryo Tank Solutions | $ | 10.9 | $ | 11.2 | $ | 52.9 | $ | 52.5 | ||||
| Heat Transfer Systems | (5.8) | (9.9) | (12.3) | 11.2 | ||||||||
| Specialty Products | 26.4 | 19.9 | 94.1 | 60.7 | ||||||||
| Repair, Service & Leasing | 7.2 | 12.1 | 23.3 | 30.3 | ||||||||
| Corporate | (18.3) | (10.8) | (69.5) | (62.5) | ||||||||
| Consolidated (1) (2) (3) (4) (5)(6) | $ | 20.4 | $ | 22.5 | $ | 88.5 | $ | 92.2 | ||||
| Operating Margin | ||||||||||||
| Cryo Tank Solutions | 8.2 | % | 10.1 | % | 11.8 | % | 12.6 | % | ||||
| Heat Transfer Systems | (8.1) | % | (12.5) | % | (4.7) | % | 3.0 | % | ||||
| Specialty Products | 20.0 | % | 23.4 | % | 21.7 | % | 25.0 | % | ||||
| Repair, Service & Leasing | 16.1 | % | 29.5 | % | 12.5 | % | 19.1 | % | ||||
| Consolidated | 5.4 | % | 7.2 | % | 6.7 | % | 7.8 | % |
(1)Restructuring costs (credits) for the quarter ended:
•December 31, 2021 were $0.6 ($0.5 – Heat Transfer Systems and $0.1 – Repair, Service & Leasing).
•December 31, 2020 were $0.9 ($0.1 Cryo Tank Solutions, $0.6 Heat Transfer Systems, $0.3 – Specialty Products and $(0.1) - Corporate).
(2)Restructuring costs for the year ended:
•December 31, 2021 were $3.5 ($0.3 – Cryo Tank Solutions, $1.7 – Heat Transfer Systems and $1.5 – Repair, Service & Leasing).
•December 31, 2020 were $13.6 ($2.7 Cryo Tank Solutions, $7.4 Heat Transfer Systems, $0.7 – Specialty Products, $0.2 – Repair, Service & Leasing and $2.6 – Corporate).
(3)Includes $16.0 impairment of our trademarks and trade names indefinite-lived intangible assets related to the AXC business in our Heat Transfer Systems segment for the year ended December 31, 2020.
(4)Includes acquisition-related contingent consideration adjustments of $(1.2) and $1.1 for the quarter and year ended December 31, 2021, respectively.
(5)Includes a $2.6 gain on sale of a facility in China for the year ended December 31, 2020 recorded within our Cryo Tank Solutions segment.
(6)Includes transaction related costs of $2.5 for the year ended December 31, 2021 and $2.6 for the year ended December 31, 2020, in Corporate related to recent acquisitions.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
ORDERS AND BACKLOG (UNAUDITED)
(Dollars in millions)
| Three Months Ended | Year Ended December 31, | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | September 30, 2021 | 2021 | 2020 | |||||||||||||
| Orders | ||||||||||||||||
| Cryo Tank Solutions | $ | 117.2 | $ | 133.3 | $ | 555.4 | $ | 417.5 | ||||||||
| Heat Transfer Systems (1) | 117.5 | 41.1 | 312.0 | 331.1 | ||||||||||||
| Specialty Products | 182.3 | 131.3 | 648.6 | 279.2 | ||||||||||||
| Repair, Service & Leasing | 45.9 | 52.9 | 180.6 | 196.8 | ||||||||||||
| Intersegment eliminations | (2.0) | (8.4) | (20.5) | (14.5) | ||||||||||||
| Consolidated | $ | 460.9 | $ | 350.2 | $ | 1,676.1 | $ | 1,210.1 | As of | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||
| December 31,<br>2021 | September 30,<br>2021 | December 31,<br>2020 | ||||||||||||||
| Backlog | ||||||||||||||||
| Cryo Tank Solutions | $ | 346.8 | $ | 345.3 | $ | 222.6 | ||||||||||
| Heat Transfer Systems (1) (2) | 370.4 | 335.1 | 329.2 | |||||||||||||
| Specialty Products | 438.2 | 381.2 | 199.7 | |||||||||||||
| Repair, Service & Leasing | 56.5 | 54.4 | 63.1 | |||||||||||||
| Intersegment eliminations | (21.8) | (13.8) | (4.6) | |||||||||||||
| Consolidated | $ | 1,190.1 | $ | 1,102.2 | $ | 810.0 |
_______________
(1)Included in 2020 Heat Transfer Systems segment orders was a $70 million order for a downstream project (100% air cooled heat exchangers).
(2)Included in Heat Transfer Systems segment backlog for all periods presented is approximately $40.0 related to the previously announced Magnolia LNG order where production release is delayed. In general, similar projects previously put on hold in the market are beginning to move ahead as the clean energy infrastructure build out ramps up.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS PER BASIC SHARE TO ADJUSTED EARNINGS PER NON-DILUTED SHARE ATTRIBUTABLE TO CHART INDUSTRIES, INC. – CONTINUING OPERATIONS (UNAUDITED)
(Dollars in millions, except per share amounts)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Basic earnings per common share attributable to Chart Industries, Inc. – continuing operations (U.S. GAAP) | $ | 0.34 | $ | 1.06 | $ | 1.66 | $ | 1.95 |
| Restructuring related costs (1) | 0.21 | 0.04 | 0.60 | 0.52 | ||||
| Deal related and integration costs (2) | 0.17 | — | 0.47 | 0.07 | ||||
| Start-up costs (organic) (3) | 0.08 | — | 0.25 | — | ||||
| Debt refinance costs (4) | 0.12 | — | 0.12 | — | ||||
| Air-X-Changers trade name impairment (5) | — | 0.45 | — | 0.45 | ||||
| Gains on purchase or sale (6) | (0.07) | (0.14) | (0.07) | (0.21) | ||||
| Investment equities mark-to-market (7) | (0.06) | (0.49) | (0.12) | (0.37) | ||||
| Other one-time items (8) | 0.01 | 0.02 | 0.14 | 0.10 | ||||
| Tax effects | (0.07) | (0.03) | (0.21) | (0.14) | ||||
| Adjusted non-diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations (non-GAAP) | $ | 0.73 | $ | 0.91 | $ | 2.84 | $ | 2.37 |
_______________
(1)Restructuring related costs:
•During the quarter and year ended December 31, 2021 of $7.4 and $17.6, respectively, were comprised of relocation and facility start-up costs and departmental restructuring, including headcount reductions.
•During the quarter and year ended December 31, 2020 of $0.9 and $13.6, respectively, were comprised of restructuring costs, that primarily related to facility consolidations in our Heat Transfer Systems segment, as well as departmental restructuring, including headcount reductions.
(2)Deal related and integration costs during the quarter and year ended December 31, 2021 of $6.2 and $16.9, respectively, were comprised of integration costs related to our recent acquisitions of Cryogenic Gas Technologies, Inc., L.A. Turbine, AdEdge Holdings, LLC, Earthly Labs Inc. as well as integration costs from 2020 acquisitions including Alabama Trailers, BlueInGreen, LLC and Sustainable Energy Solutions, Inc. Deal related and integration costs during the quarter and year ended December 31, 2021 also include acquisition related contingent consideration, income taxes and interest expense related to previous divestitures. Deal related and integration costs for the year ended December 31, 2020 includes a $2.6 gain on sale of a facility in China.
(3)Start-up costs (organic) during the quarter and year ended December 31, 2021 of $2.8 and $8.9, respectively, were comprised of Richburg, South Carolina repair facility start-up costs, Tulsa, Oklahoma product line start-up costs and incremental costs related to our flex manufacturing facility in Tulsa, Oklahoma.
(4)Includes debt refinance costs during the quarter and year ended December 31, 2021 of $4.1 related to the refinance of our credit facilities during the fourth quarter of 2021.
(5)Includes $16.0 impairment of our trademarks and trade names indefinite-lived intangible assets related to the AXC business in our Heat Transfer Systems segment for the year ended December 31, 2020.
(6)Includes a $2.6 gain from the remeasurement of our initial 15% investment in Earthly Labs Inc. for the quarter and year ended December 31, 2021. Includes a $5.0 gain on bargain purchase related the Alabama Trailers acquisition for the quarter and year ended December 31, 2020.
(7)Includes mark-to-market fair value adjustments of our investments in equity securities related to McPhy (Euronext Paris: MCPHY – ISIN; FR0011742329) and Stabilis Energy, Inc. (NasdaqCM: SLNG) for the quarters and years ended December 31, 2021 and 2020. The year ended December 31, 2021 also includes a $20.7 mark-to-market adjustment upon remeasurement of the initial HTEC Hydrogen Technology & Energy Corporation investment.
(8)For the quarter and year ended December 31, 2021, other one-time costs include Covid-19 related costs, which include labor disruption, freight, sourcing and safety costs directly related to manufacture and fulfillment of critical care products. Other one-time costs for the quarter and year ended December 31, 2021 also include costs related to commercial and legal settlements and storm damage. For the quarter and year ended December 31, 2020, other one-time costs include Covid-19 related costs, which include freight, transition tax, and accelerated tax impacts related to a China facility closure.
_______________
Adjusted non-diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to earnings per share in accordance with U.S. GAAP. Management believes that adjusted non-diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations 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
RECONCILIATION OF NET INCOME ATTRIBUTABLE TO CHART INDUSTRIES, INC. TO NET INCOME ATTRIBUTABLE TO CHART INDUSTRIES, INC., ADJUSTED (UNAUDITED)
(Dollars in millions)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Net income attributable to Chart Industries, Inc. (U.S. GAAP) | $ | 12.1 | $ | 257.8 | $ | 59.1 | $ | 308.1 |
| Income attributable to noncontrolling interests, net of taxes (U.S. GAAP) | 0.3 | 0.4 | 1.8 | 1.4 | ||||
| Net income (U.S. GAAP) | 12.4 | 258.2 | 60.9 | 309.5 | ||||
| Financing costs amortization | 4.8 | 1.1 | 8.3 | 4.3 | ||||
| Unrealized foreign currency transaction loss (gain) | 4.7 | 5.4 | (1.1) | 2.3 | ||||
| Employee share-based compensation expense | 3.1 | 1.8 | 11.2 | 8.9 | ||||
| Realized gain on investment of equity securities | (2.6) | — | (2.6) | — | ||||
| Unrealized (gain) loss on investment in equity securities | (2.0) | (16.3) | (3.2) | (13.1) | ||||
| Equity in earnings of unconsolidated affiliates, net | (0.2) | — | (0.3) | — | ||||
| Gain on sale of business | — | (249.4) | — | (249.4) | ||||
| Asset impairments | — | 16.0 | — | 16.0 | ||||
| Gain on bargain purchase | — | (5.0) | — | (5.0) | ||||
| Interest accretion of convertible notes discount | — | 2.1 | — | 8.0 | ||||
| Deferred income tax (benefit) expense | (7.9) | 1.0 | (7.9) | 1.0 | ||||
| Other non-cash operating activities | (7.3) | 4.6 | (4.8) | 1.5 | ||||
| Net income adjusted (non-GAAP) | $ | 5.0 | $ | 19.5 | $ | 60.5 | $ | 84.0 |
_______________
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. Management believes that net income adjusted, 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.
RECONCILIATION OF NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO FREE CASH FLOW (UNAUDITED)
(Dollars in millions)
| Three Months Ended December 31, | Year Ended December 31, | |||||||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |||||
| Net cash provided by (used in) operating activities from continuing operations | $ | 20.4 | $ | 60.2 | $ | (21.3) | $ | 172.7 |
| Capital expenditures | (16.2) | (10.6) | (52.7) | (37.9) | ||||
| Free cash flow (non-GAAP) | $ | 4.2 | $ | 49.6 | $ | (74.0) | $ | 134.8 |
_______________
Free cash flow is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to net cash provided by 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 GROSS PROFIT TO ADJUSTED GROSS PROFIT; SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES; AND OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) (UNAUDITED)
(Dollars in millions)
| Year Ended December 31, 2021 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 447.4 | $ | 262.7 | $ | 432.9 | $ | 187.0 | $ | (12.3) | $ | — | $ | 1,317.7 | |||||||
| Gross profit as reported (U.S. GAAP) | 93.5 | 35.6 | 145.5 | 49.6 | — | — | 324.2 | ||||||||||||||
| Restructuring, transaction-related and other one-time costs | 7.9 | 13.0 | 6.4 | 6.9 | — | — | 34.2 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 101.4 | $ | 48.6 | $ | 151.9 | $ | 56.5 | $ | — | $ | — | $ | 358.4 | |||||||
| Adjusted gross profit margin (non-GAAP) | 22.7 | % | 18.5 | % | 35.1 | % | 30.2 | % | — | % | — | % | 27.2 | % | |||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 38.1 | $ | 28.1 | $ | 43.3 | $ | 17.8 | $ | — | $ | 69.5 | $ | 196.8 | |||||||
| Restructuring, transaction-related and other one-time costs | (0.6) | (0.8) | (2.6) | (0.1) | — | (7.1) | (11.2) | ||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 37.5 | $ | 27.3 | $ | 40.7 | $ | 17.7 | $ | — | $ | 62.4 | $ | 185.6 | |||||||
| Operating income (loss) as reported (U.S. GAAP) | $ | 52.9 | $ | (12.3) | $ | 94.1 | $ | 23.3 | $ | — | $ | (69.5) | 88.5 | ||||||||
| Restructuring, transaction-related and other one-time costs | $ | 8.5 | $ | 13.8 | $ | 9.0 | $ | 7.0 | $ | — | $ | 7.1 | 45.4 | ||||||||
| Adjusted operating income (loss) (non-GAAP) | $ | 61.4 | $ | 1.5 | $ | 103.1 | $ | 30.3 | $ | — | $ | (62.4) | $ | 133.9 | |||||||
| Adjusted operating margin (non-GAAP) | 13.7 | % | 0.6 | % | 23.8 | % | 16.2 | % | — | % | — | % | 10.2 | % |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF GROSS PROFIT TO ADJUSTED GROSS PROFIT; SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES; AND OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) (UNAUDITED) (CONTINUED)
(Dollars in millions)
| Three Months Ended December 31, 2021 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 133.5 | $ | 71.9 | $ | 131.9 | $ | 44.7 | $ | (3.1) | $ | — | $ | 378.9 | |||||||
| Gross profit as reported (U.S. GAAP) | 22.5 | 6.4 | 39.9 | 13.4 | — | — | 82.2 | ||||||||||||||
| Restructuring, transaction-related and other one-time costs | 2.7 | 3.6 | 1.2 | 2.1 | — | — | 9.6 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 25.2 | $ | 10.0 | $ | 41.1 | $ | 15.5 | $ | — | $ | — | $ | 91.8 | |||||||
| Adjusted gross profit margin (non-GAAP) | 18.9 | % | 13.9 | % | 31.2 | % | 34.7 | % | — | % | — | % | 24.2 | % | |||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 11.0 | $ | 7.2 | $ | 10.8 | $ | 4.1 | $ | — | $ | 18.3 | $ | 51.4 | |||||||
| Restructuring, transaction-related and other one-time costs | (0.2) | (0.6) | (0.2) | — | — | (1.8) | (2.8) | ||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 10.8 | $ | 6.6 | $ | 10.6 | $ | 4.1 | $ | — | $ | 16.5 | $ | 48.6 | |||||||
| Operating income (loss) as reported (U.S. GAAP) | $ | 10.9 | $ | (5.8) | $ | 26.4 | $ | 7.2 | $ | — | $ | (18.3) | 20.4 | ||||||||
| Restructuring, transaction-related and other one-time costs | $ | 2.9 | $ | 4.2 | $ | 1.4 | $ | 2.1 | $ | — | $ | 1.8 | 12.4 | ||||||||
| Adjusted operating income (loss) (non-GAAP) | $ | 13.8 | $ | (1.6) | $ | 27.8 | $ | 9.3 | $ | — | $ | (16.5) | $ | 32.8 | |||||||
| Adjusted operating margin (non-GAAP) | 10.3 | % | (2.2) | % | 21.1 | % | 20.8 | % | — | % | — | % | 8.7 | % |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (UNAUDITED) (CONTINUED)
(Dollars in millions)
| Year Ended December 31, 2020 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 415.8 | $ | 369.8 | $ | 242.6 | $ | 158.3 | $ | (9.4) | $ | — | $ | 1,177.1 | |||||||
| Gross profit as reported (U.S. GAAP) | 99.5 | 93.7 | 84.3 | 54.6 | — | — | $ | 332.1 | |||||||||||||
| Restructuring, transaction-related and other one-time costs | 1.0 | 5.0 | 2.0 | 2.2 | — | — | 10.2 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 100.5 | $ | 98.7 | $ | 86.3 | $ | 56.8 | $ | — | $ | — | $ | 342.3 | |||||||
| Adjusted gross profit margin (non-GAAP) | 24.2 | % | 26.7 | % | 35.6 | % | 35.9 | % | — | % | — | % | 29.1 | % | |||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 41.7 | $ | 36.6 | $ | 22.2 | $ | 15.3 | $ | — | $ | 62.4 | $ | 178.2 | |||||||
| Restructuring, transaction-related and other one-time costs | 0.8 | (2.8) | (0.9) | (1.3) | — | (4.9) | (9.1) | ||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 42.5 | $ | 33.8 | $ | 21.3 | $ | 14.0 | $ | — | $ | 57.5 | $ | 169.1 |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (UNAUDITED) (CONTINUED)
(Dollars in millions)
| Three Months Ended December 31, 2020 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 110.5 | $ | 78.9 | $ | 85.1 | $ | 41.0 | $ | (3.1) | $ | — | $ | 312.4 | |||||||
| Gross profit as reported (U.S. GAAP) | 24.0 | 19.5 | 26.5 | 17.9 | — | — | $ | 87.9 | |||||||||||||
| Restructuring, transaction-related and other one-time costs | 0.7 | 0.7 | — | 0.5 | — | — | 1.9 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 24.7 | $ | 20.2 | $ | 26.5 | $ | 18.4 | $ | — | $ | — | $ | 89.8 | |||||||
| Adjusted gross profit margin (non-GAAP) | 22.4 | % | 25.6 | % | 31.1 | % | 44.9 | % | — | % | — | % | 28.7 | % | |||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 11.6 | $ | 8.2 | $ | 6.4 | $ | 4.1 | $ | — | $ | 10.7 | $ | 41.0 | |||||||
| Restructuring, transaction-related and other one-time costs | (0.1) | (0.2) | — | — | — | 0.1 | (0.2) | ||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 11.5 | $ | 8.0 | $ | 6.4 | $ | 4.1 | $ | — | $ | 10.8 | $ | 40.8 |
_______________
Adjusted gross profit, adjusted gross profit margin and adjusted selling, general and administrative expenses are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to gross profit, gross profit margin and selling, general and administrative expenses in accordance with U.S. GAAP. Management believes that adjusted gross profit, adjusted gross profit margin and adjusted selling, general and administrative expenses facilitate useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculations of these non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
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a2022-02x24_gtlsq42021ea
Chart Industries FOURTH QUARTER AND FULL YEAR 2021 EARNINGS CALL Exhibit 99.2
Forward-Looking Statements CERTAIN STATEMENTS MADE IN THIS PRESENTATION ARE FORW ARD -LOOKING STATEMENTS W ITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGAT ION REFORM ACT OF 1995. FORW ARD-LOOKING STATEMENTS INCLUDE STATEMEN TS CONCERNING THE COMPANY’S BUSINESS PLANS, INCLUDING STATEMENTS REGARDING COMPLETED DIVESTITURES, ACQUISITIONS AND INVESTMENTS, COST SYNERGIES AND EFFICIENCY SAVINGS, OBJECTIVES, FUTURE ORDERS , REVENUES, MARGINS, EARNINGS OR PERFORMANCE, LIQUIDITY AND CASH F LOW , CAPITAL EXPENDITURES, SUPPLY CHAIN CHALLENGES, BUSINESS TRE NDS, CLEAN ENERGY MARKET OPPORTUNITIES INCLUDING ADDRESSABLE MARKETS, GOVERNMENTAL INITIATIVES, INCLUDING EXECUTIVE ORDERS AND OTHER INFORMATION THAT IS NOT HISTORICAL IN NATURE. FORW ARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY TERMINOLOGY SUCH AS "MAY," "W ILL, " "SHOULD," "COULD," "EXPECTS," "ANTICIPATES," "BELIEVES," "PROJEC TS," "FORECASTS," “OUTLOOK,” “GUIDANCE,” "CONTINUE," “TARGET,” O R THE NEGATIVE OF SUCH TERMS OR COMPARABLE TERMINOLOGY. FORW ARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION OR IN OTHER STATEMENTS MADE BY THE COMPANY ARE MADE BASED ON MANAGEMENT'S EXPECTATIONS AND BELIEFS CONCERNING FUTURE EVENTS I MPACTING THE COMPANY AND ARE SUBJECT TO UNCERTAINTIES AND FACTOR S RELATING TO THE COMPANY'S OPERATIONS AND BUSINESS ENVIRONMENT, A LL OF W HICH ARE DIFFICULT TO PREDICT AND MANY OF W HICH ARE BEYON D THE COMPANY'S CONTROL, THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE MATTERS EXPRESSED OR IMPLIED BY FORW ARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE THE COMPAN Y’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORW ARD-LOOKING STATEMENTS INCLUDE: THE COMPANY’S ABILITY TO SUCCESSFULLY INTEGRATE RECENT ACQUISITIONS AND ACHIEVE THE ANTICIP ATED REVENUE, EARNINGS, ACCRETION AND OTHER BENEFITS FROM THESE ACQUI SITIONS; SLOW ER THAN ANTICIPATED GROW TH AND MARKET ACCEPTANCE OF NEW CLEAN ENERGY PRODUCT OFFERINGS; INABILITY TO ACHIEVE EXPECTE D PRICE INCREASES OR CONTINUED SUPPLY CHAIN CHALLENGES INCLUDING VOLATILITY IN RAW MATERIALS COST AND SUPPLY; RISKS RELATING TO T HE OUTBREAK AND CONTINUED UNCERTAINTY ASSOCIATED W ITH THE CORONAVIRUS (COVID-19) AND THE OTHER FACTORS DISCUSSED IN ITEM 1 A (RISK FACTORS) IN THE COMPANY’S MOST RECENT ANNUAL REPORT ON F ORM 10-K AND QUARTERLY REPORTS ON FORM 10-Q FILED W ITH THE SEC, W HICH SHOULD BE REVIEW ED CAREFULLY. THE COMPANY UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORW ARD -LOOKING STATEMENT. THIS PRESENTATION CONTAINS FOURTH QUARTER AND FULL YEAR 2021 NON-GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED NON-DILUTED EPS, “NET INCOME, ADJUSTED”, FREE CASH FLOW , ADJUSTED FREE CASH FLOW , EBITDA, ADJUSTED EBITDA, ADJUSTED GROSS PROFIT, ADJUSTED GROSS PROFIT MARGIN, ADJUSTED OPERATING INCOME, AND ADJUSTED OPERATING MARGIN. FOR ADDITIONAL INFORMATION REGARDING THE COMPANY'S USE OF NON- GAAP FINANCIAL INFORMATION, AS W ELL AS RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES CALCULATED AND PRESENTED IN ACCORDANCE W ITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES ("GAAP") , PLEASE SEE THE RECONCILIATION SLIDES TITLED “FOURTH QUARTER AND FULL YEAR 2021 EARNINGS PER SHARE” AND “FOURTH QUARTER AND FULL YEAR 2021 FREE CASH FLOW ” 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 “ADJUSTED GROSS PROFIT” AND “ADJUSTED OPERATING INCOME ” RECONCIL IATIONS, AS W ELL AS A RECONCILIATION AND ADDITIONAL DETAILS ON ADJUSTED NON-DILUTED EPS. W ITH RESPECT TO THE COMPANY’S 2021 AND 2022 FULL YEAR EARNINGS OUTLOOK, THE COMPANY IS NOT ABLE TO PROVIDE A RECONCIL IATION OF THE ADJUSTED EARNINGS PER DILUTED SHARE, 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 MANUFACTURER OF HIGHLY ENGINEERED EQUIPMENT SERVICING MULTIPLE APPLICATIONS IN THE ENERGY AND INDUSTRIAL GAS MARKETS. OUR UNIQUE PRODUCT PORTFOLIO IS USED IN EVERY PHASE OF THE LIQUID GAS SUPPLY CHAIN, INCLUDING UPFRONT ENGINEERING, SERVICE AND REPAIR. BEING AT THE FOREFRONT OF THE CLEAN ENERGY TRANSITION, CHART IS A LEADING PROVIDER OF TECHNOLOGY, EQUIPMENT AND SERVICES RELATED TO LIQUEFIED NATURAL GAS, HYDROGEN, BIOGAS AND CO2 CAPTURE AMONGST OTHER APPLICATIONS. WE ARE COMMITTED TO EXCELLENCE IN ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE (ESG) ISSUES BOTH FOR OUR COMPANY AS W ELL AS OUR CUSTOMERS. W ITH OVER 25 GLOBAL LOCATIONS FROM THE UNITED STATES TO ASIA, AUSTRALIA, INDIA, EUROPE AND SOUTH AMERICA, W E MAINTAIN ACCOUNTABILITY AND TRANSPARENCY TO OUR TEAM MEMBERS, SUPPLIERS, CUSTOMERS AND COMMUNITIES. TO LEARN MORE, VISIT WWW.CHARTINDUSTRIES.COM. © 2022 Chart Industries, Inc. Confidential and Proprietary 2
© 2022 Chart Industries, Inc. Confidential and Proprietary 3 Fourth Quarter and Full Year 2021 Summary (1) Q4 and FY2020 included $25 and $98 million respectively, and FY21 included $20 million for Venture Global’s Calcasieu Pass project; when excluding BigLNG, the second figures are the change from Q4 and FY 2020 to Q4 and FY 2021. (2) Adjusted Non-Diluted EPS (a non-GAAP measure) is as reported on a historical basis. Please see reconciliation tables in accompanying earnings release for a reconciliation to the relevant GAAP measure. $ millions, except per share amounts Q4 2021 Q3 2021 Q4 2020 FY21 FY20 Consolidated Orders 460.9 350.2 417.0 1,676.1 1,210.1 % Change 32% 11% 39% Backlog 1,190.1 1,102.2 810.0 1,190.1 810.0 % Change 8% 47% 47% Sales 378.9 328.3 312.4 1,317.7 1,177.1 % Change (1) 15% 21% / 32% 12% / 20% Basic Earnings per Share (EPS) $0.34 $0.42 $1.06 $1.66 $1.95 Adjusted Non-Diluted EPS (2) $0.73 $0.55 $0.91 $2.84 $2.37 Green box denotes historical record
© 2022 Chart Industries, Inc. Confidential and Proprietary 4 Q4 and Full Year 2021 Record Orders, Sales, Backlog Q4 2021 (Quarterly Records) Orders Sales Specialty Products Y Hydrogen & Helium Y Y Water Treatment Y Y Food & Beverage Y HLNG Vehicle Tanks Cannabis Y Other Cryo Tank Solutions Y Mobile Equipment Y Storage Equipment Y Engineered Tanks & Systems Y Heat Transfer Systems Repair, Service, Leasing Leasing EMEA & India repair, service Y North America repair, service Y Total Chart Industries Y Y 2021 (Full Year Records) Orders Sales Backlog (12/31) Specialty Products Y Y Y Hydrogen & Helium Y Y Y Water Treatment Y Y Y CCUS Y Y Y HLNG Vehicle Tanks Y Y Cannabis Y Y Y Other Y Y Y Cryo Tank Solutions Y Y Y Mobile Equipment Y Y Y Storage Equipment Y Y Y Engineered Tanks & Systems Y Y Heat Transfer Systems Repair, Service, Leasing Y Leasing Y EMEA & India, repair, service Y Y North America repair, service Y Total Chart Industries Y Y Y
Sales & Operating Margin Trends © 2022 Chart Industries, Inc. Confidential and Proprietary 5 (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. We did not addback for adjusted operating income the following impacts, which we estimate totaled ~$16.78 million in the fourth quarter: • Specific material cost increases • Additional logistics and freight costs • COVID impacts on efficiency and labor sharing • Inefficiencies from Force Majeure from gas supplier • Higher transport costs • Supplier expedite costs to meet delivery requirements • Additional team member retention actions taken 13.1%
Q4 2021 Addback Specifics by Category © 2022 Chart Industries, Inc. Confidential and Proprietary 6 As previously indicated on the third quarter 2021 earnings call, we anticipate addback amounts to reduce in 2H 2022 given timing of acquisition integrations, inflight capacity startup expenses, as well as not anticipating any further banking/financing changes Category What is included in this? 1 Restructuring & Severance • Severance costs for position eliminations • Xinye, China facility relocation • Corporate HQ move from Cryoport facility • Tulsa, OK ACHX consolidation to Beasley, TX • Restructuring certain repair activities in Houston, TX 2 Debt Refinancing Costs • Write off of amortization of prior bank fees resulting from refinancing of revolving credit facility in October 2021 3 Deal-related & integration costs • Costs related to pre-closing / diligence of acquisitions • Integration costs (year 1 only) • Legal costs related to the one specific pre-closing liability from cryobiological divestiture • Does not include any addback from deal amortization 4 Organic startup costs • Startup of greenfield at Richburg, SC • Startup costs related to Tulsa, OK flex mfg • Training costs on new product lines 5 One-Time Gains • Gain on purchase of Earthly Labs from previous minority investment 6 Mark-to-market of investments net of FX • MTM of investments in McPhy and Stabilis net of FX impacts 7 Other Costs • Legal / settlement
© 2022 Chart Industries, Inc. Confidential and Proprietary 7 Fourth Quarter and Full Year 2021 Earnings Per Share (1) Tax effect reflects adjustment at normalized periodic rates (2) Adjusted Non-Diluted EPS (a non-GAAP measure) is as reported on a historical basis. EPS adjustment reconciliation table is provided in accompanying press release financial tables. $ millions, except per share amounts Q4 2021 Q4 2020 Change v. PY FY 2021 FY 2020 Change v. PY Continuing Operations Net income from continuing operations $12.1 $37.5 ($25.4) $59.1 $68.9 ($9.8) Reported Basic EPS $0.34 $1.06 ($0.72) $1.66 $1.95 ($0.29) 1 Restructuring related costs 0.21 0.04 0.17 0.60 0.52 0.08 2 Deal related and integration costs 0.17 - 0.17 0.47 0.07 0.40 3 Start-up costs (organic) 0.08 - 0.08 0.25 - 0.25 4 Debt refinance costs 0.12 - 0.12 0.12 - 0.12 5 Air-X-Changers tradename impairment - 0.45 (0.45) - 0.45 (0.45) 6 Gains on purchase or sale (0.07) (0.14) 0.07 (0.07) (0.21) 0.14 7 Investment equities mark-to-market (0.06) (0.49) 0.43 (0.12) (0.37) 0.25 8 Other one-time items 0.01 0.02 (0.01) 0.14 0.10 0.04 9 Tax effects (1) (0.07) (0.03) (0.04) (0.21) (0.14) (0.07) Adjusted Non-Diluted EPS (2) $0.73 $0.91 ($0.18) $2.84 $2.37 $0.47 Green box denotes historical record
Year-Over-Year Material Cost Change & Chart Pricing © 2022 Chart Industries, Inc. Confidential and Proprietary 8 Carbon Steel • Trending downward for past 2 months • Actively depleting safety stock Stainless Steel • Futures indicate this will begin trending downward • Will begin depleting safety stock Aluminum • Trending up • Have already locked in months of safety stock Standard product pricing (4 increases since July 1, 2021) Long-term agreement pricing mechanisms in contracts Project based specific material pricing with shorter bid validity timing Three Main Raw Material Inputs & Cost Change from 1/31/2021 to 1/31/2022 Three Main Pricing Approaches
© 2022 Chart Industries, Inc. Confidential and Proprietary 9 Structural Pricing Actions 2020 Chart Industries Investor Day 9 First Half 2021 Q3 2021 Q4 2021 1H ‘22 F 2H ‘22 F 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 1/1/2021 to 6/30/2021: • Aluminum +22% • Carbon steel +41% • Stainless steel +21% Price Changes: • July 1, 2021: Global IG LTA and standard price increases (PERMANENT) • August 1, 2021: Key IG EMEA Customers price increases (PERMANENT) • September 1, 2021: Surcharge on non-LTA or projects with material cost updates (TEMPORARY) • Throughout Q3: Project bids updated for material cost changes with shorter bid validity (PERMANENT) Price Changes: • Q1 2021: IG Majors pricing mechanism is adjusted quarterly or semi-annually • Tiered distributor pricing for IG independents in place Price Changes: • October 2021: Additional base price increase into effect for all new orders (PERMANENT) • Implemented rolling IG major LTA mechanism more frequently (TEMPORARY) • Specific additional material passthrough of backlog (ONE- TIME) • Implemented storage fees at repair sites (PERMANENT) • Eliminated free freight on volume purchases (PERMANENT) • Increased surcharge % (TEMP) Cost & Availability • Anticipate main material categories costs tempering in 1H 2022 • Expect port and freight challenges to continue to mitigate in Q1 and Q2 2022 Price Changes: • January 1, 2022: Rolling IG Major index adjusted price updates • January 1, 2022: HLNG vehicle tank customer specific price increase effective • February 18, 2022: distributors and direct accounts price increases in CTS and specialty products • Q1 2022: select China price increases Change in Material Costs from 9/30/2021 to 12/31/2021: • Aluminum +0.5% increase • Carbon steel (13%) decrease • Stainless steel +7% increase Green text are changes to this slide since our Q3 2021 earnings call presentation
Estimate of Organic Cost Out Actions, Excluding Pricing 10 Item Description (of select project examples) Category Annualized Est. Savings ($ millions) 1 LTA, synergy, volume supply chain savings Sourcing 8.5 2 Operations cost negotiation projects Sourcing 5.0 3 Further utilization of Hyderabad, India COE for backoffice Backoffice / Engineering 2.4 4 Elimination of free freight on volume orders Commercial 2.0 5 Teddy and Ball Ground, GA specific changes in components Operational (efficiency) 1.7 6 Indirect services Sourcing 1.0 7 Utilization of pre-made chassis on mobile production Operational (efficiency) 0.5 8 3D-Bending on annular space piping at GOFA trailers Operational (Automation) 0.3 9 BlueInGreen SL100, SL200, SL300 skids to in-house mfg Operational (efficiency) 0.2 10 Robotic welding of outer heads & handling rings at GA Operational (Automation) 0.2 11 Teddy trailer in-house paint booth Operational (efficiency) 0.2 12 Nozzle weld robotics and SAW weld on headers -Beasley, TX Operational (Automation) 0.2 13 Other Operational 6.7 14 Total $28.9 Operational annualized savings estimate = $10.0 million Sourcing annualized savings estimate = $14.5 million $28.9 million Back Office annualized savings estimate = $2.4 million Commercial (not price) annualized savings estimate = $2.0 million © 2022 Chart Industries, Inc. Confidential and Proprietary
Estimate of Organic Capacity & Automation Capex 11 # Description Category Done? 2021 Act 2022 Fcst 2023 Fcst 1 Maintenance Capital Maintenance $24.3 $22.0 $24.0 2 Tulsa BAHX Furnace Line Capacity 4.2 7.0 7.0 3 GOFA Germany Trailer Production Expansion Capacity/Automation 0.1 7.6 3.2 4 SriCity, India Production Expansion D&S Capacity 1.9 5.5 0.0 5 Leasing Fleet Expansion Growth 8.4 3.0 5.0 6 Robotics and Augmented Reality Implementation Capacity/Productivity 3.0 2.0 5.0 7 Theodore, AL Production Expansion (IG, ORCA, CO2) Capacity/Automation 0.0 2.6 2.8 8 Product line moves from MN to Alabama (Permas) Productivity 0.3 2.6 0.4 9 CryoDiffusion VIP Manufacturing Line Implementation Capacity/Productivity 0.0 0.5 0.0 10 Tulsa Flex Manufacturing Startup Capacity/Productivity 2.7 1.3 0.0 11 Richburg, SC Greenfield Startup Capacity Yes 6.0 0.0 0.0 12 Corporate HQ move (from Cryoport building) Mandatory Yes 1.8 0.0 0.0 13 Chart Total $52.7 $54.1 $47.4 © 2022 Chart Industries, Inc. Confidential and Proprietary
© 2022 Chart Industries, Inc. Confidential and Proprietary 12 Fourth Quarter and Full Year 2021 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 Income (U.S. GAAP) is provided in accompanying press release financial tables. (2) “Free Cash Flow” and “Adjusted Free Cash Flow” are not measures 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. The Company believes this figure is of interest to investors and facilitates useful period-to period comparisons of the Company’s operating results. (3) Inventory for strategic build is based upon actual safety stock as well as cost increases which are equivalent to approximately 15% (safety stock) and 17% (inflation) increases respectively (from December 2020) $ millions, except per share amounts Consolidated Q4 2021 Q4 2020 Change v. PY FY 2021 FY 2020 Change v. PY Net income, adjusted (1) $5 $20 ($15) $61 $84 ($24) Depreciation and amortization 21 18 3 81 85 (4) Accounts receivable 1 (38) 39 (31) (10) (21) Inventory 17 (6) 23 (78) (35) (43) Unbilled contract revenues and other assets 3 (5) 8 (71) (5) (66) Accounts payable and other liabilities (12) 78 (90) (10) 63 (73) Customer advances and billings in excess of contract revenue (15) (7) (8) 28 (9) 37 Net Cash Provided By Operating Activities $20 $60 ($40) ($21) $173 ($194) Capital expenditures (16) (10) (6) (53) (38) (15) Free Cash Flow (2) $4 $50 ($46) ($74) $135 ($209) Adjustments Divestiture related tax payments - - 21 - 21 Earthly Labs Acquisition 2 - 2 2 - 2 Non-recurring costs 13 (3) 16 46 17 29 Add back inventory for strategic build (3) 15 - 15 77 - 77 Adjusted Free Cash Flow (2) $34 $47 ($13) $72 $152 ($80) Capex $M Leasing fleet $2.3 SriCity expansion 1.9 Tulsa Flex 1.0 Robotics 0.7 Automation -China 0.4 Total accelerated 6.3 We were able to accelerate certain capex into Q4 to provide more growth & capacity faster in 2022, including:
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 • BAHX • ACHX • Bulk & Microbulk • Fans • Transports • Valves / Vaporizers • Expanders • Liquefiers • Cold Boxes Clean Water • Water& Wastewater Treatment • Desalination • Bulk tanks • Dissolution equipment • Vaporizers • Cryo-lease Clean Food, Beverages & Agriculture • Small-Scale Carbon Capture • Clean Beverages • Microbulk tanks • Dosers • Vaporizers • Transports Clean Industrials • Post Combustion Carbon Capture • Hydrogen/He • Heat exchangers • Storage tanks • Vaporizers • VIP/VJP • Transports • Liquefiers • Cold Boxes • Expanders © 2022 Chart Industries, Inc. Confidential and Proprietary 13
© 2022 Chart Industries, Inc. Confidential and Proprietary 14 Q4 and FY2021 FOAKs and New Customers First of a Kinds (FOAKs) in Q4: 22 First of a Kinds (FOAKs) in 2021: 79 Water BioLNG Cannabis Space New Customers in Q4: 99 New Customers in 2021: 402 HLNG Beverage Hydrogen Marine / Hydrogen First full-scale system to use novel media for PFAS treatment IPSMR® LNG plant in Germany that will be used to liquefy natural gas containing a significant bio component N2 doser for Cannabis drinks Mobile LN2 unit First HLNG fuel tanks for Blue Energy Motors in India Liquid hydrogen trailers for the Korean market Marine Liquid Hydrogen pre- Feed study for cruise ship propulsion
Rich Cavagnaro Co-Founder AdEdge Greg Gilles Co-Founder AdEdge Amy George Founder & CEO Earthly Labs Larry Baxter Co-Founder SES Andy Baxter Co-Founder SES Danny Mascari CEO L.A. Turbine Rick Hessinger Founder & CEO Cryo Technologies Founders’ Innovation Team 15
Inorganic Examples of Immediate Impacts to Chart Spotlighting our most recent two acquisitions © 2022 Chart Industries, Inc. Confidential and Proprietary 16 AdEdge adding Treatment-as-a- Service to their PFAS offering, landing a $600k PFAS TaaS contract in January 2022 AdEdge utilizing Chart’s flex manufacturing facility in Tulsa, OK and our RSL 24 hour service capabilities to win a $1.4 million Reverse Osmosis contract in Texas in January 2022 Earthly Labs selling larger Elm units and partnering with Chart’s RSL Cryo-Lease group to offer leasing option; leads at final stages Earthly Labs selling Chart nitrogen dosers to brewery customers (expanding the offering to existing and new customers) Earthly Labs being requested by brewery customers for BIG and AdEdge water treatment for existing brewery locations AdEdge talented operations resource proactively joins Chart’s Emerging Leaders program
Founders’ Commercially Ready Example Linking the Nexus of Clean © 2022 Chart Industries, Inc. Confidential and Proprietary 17 Ultrapure water for green hydrogen generation
© 2022 Chart Industries, Inc. Confidential and Proprietary 18 Specialty Products: Hydrogen– a Record Year in 2021 H2 Orders $M Q1 2020 $4.2 Q2 2020 1.2 Q3 2020 9.2 Q4 2020 23.5 Q1 2021 71.2 Q2 2021 81.9 Q3 2021 43.6 Q4 2021 85.4 • Q4 2021 Hydrogen orders of $85.4 million brings full year 2021 hydrogen and helium related orders to $282.1 million • Orders received for first liquid hydrogen trailers for use in South Korea • Booked a hydrogen liquefier order in Q4 2021 with a new customer in a new geography • Record orders of 62 trailers more than double previous order record (26 in 2020) • Currently quoting on equipment and/or hydrogen projects at various stages with 364 different customers & potential customers • Building commercial opportunities organically and with our partners • Anchor investor in the FiveT Hydrogen Fund which closed in Q4 2021 • Executed MOU with Howden to develop standardized, integrated hydrogen solutions • Announced MOU for joint venture with Hylium in S. Korea • Supported Forze (University of Delft) with development of ‘Forze IX” hydrogen racing car • Delivering NOW! • Record GTLS hydrogen orders, backlog, sales, gross profit and operating income in Q4 2021 and for the full year 2021 • Public & private sectors continue to support hydrogen development • EU’s transport commissioner expects 60,000 hydrogen trucks on European roads by 2030 (17% of new trucks in 2030 expected to run on hydrogen) Record hydrogen and helium related orders of $282.1 million, surpassing prior record of $38.1 million by 640%
• Developing long-term hydrogen plan as part of energy strategy • Limited current / near- term commercialization • Government support • Large industrial gas investment in the region • Group Code is lengthy process • Gaseous still predominant yet traditional GH2 users are contemplating liquid investment • Plenty of bus / train development underway • Beginning to move to networks / scaling of infrastructure • State level activity is still extremely varied • Development of hydrogen hubs Hydrogen is Both Regional and Global United States EMEA India China • Seeing collaboration between renewables and CCUS • Early days of small, pilot projects that are not interlinked South & Central America • In country partnerships are crucial • Regional certifications are important • Market is a natural for liquid hydrogen • Investment ramping very quickly South Korea • Long haul trucking is a priority • Will need to be thoughtful on locations of production sites Australia • Growing trend toward liquid hydrogen • National hydrogen strategy supports investment • Provinces / locations drive behavior Canada © 2022 Chart Industries, Inc. Confidential and Proprietary 19
Cryo Tank Solutions: China Setting Records © 2022 Chart Industries, Inc. Confidential and Proprietary 20 Chart China Set Numerous Records in 2021; Expected to Exceed Them in 2022 2021 Records Recent China Policy Supports Chart Growth • Full year 2021 orders • Full year 2021 sales • Full year operating income • Full year operating income % of sales • Q4 2021 gross margin as a percent of sales • Q4 2021 operating income as a percent of sales • China standardized and expanded ISO manufacturing line supported total Chart ISO record sales • National Cleaner Production Implementation Plan promotes clean and low-carbon reforms, implement carbon reduction projects such as green hydrogen refining and accelerate the demonstration of cleaner production technologies in hydrogen (11/9/2021) • Development of multimodal transport promoting the integration of various modes of transport while promoting energy conservation, emission and carbon reduction (1/17/2022) • Development of modern comprehensive transportation system including carrying out the construction of LNG filling stations along three specific lines and canals plus accelerating the construction of nat gas pipelines (01/18/2022)
Repair, Service, Leasing: Leasing Continues to Grow © 2022 Chart Industries, Inc. Confidential and Proprietary 21 2019 2020 2021 Leasing Revenue Number of Assets In Fleet Number of Customers with Active Leases $1.1 million $1.6 million $48.9 million 58 118 137 Fleet Assets + Underway Additions to Fleet 58 118 204 23 33 72 $19.1 million of this lease revenue is reflected in Specialty Products segment, the remainder is in RSL
© 2022 Chart Industries, Inc. Confidential and Proprietary 22 Heat Transfer Systems: Bullish on 2022 LNG Over 120 opportunities in our commercial pipeline for Big LNG, regas and small-scale LNG, totaling over $2.2 billion Big LNG LNG infrastructureSmall-scale, BioLNG, Regas • Over $800 million of potential Big LNG orders in 2022 • Global movement toward modular approach expanding process opportunities on additional Big LNG projects • Additional IOC qualification of IPSMR® and IPSMR®+ received in Q4 2021 • Additional patent for IPSMR® received in Q4 2021 • Full year 2021 record HLNG vehicle tank orders and sales • Full year and fourth quarter 2021 record fueling station orders • Record full year India orders, many of which are for LNG infrastructure • Global growth expected in LNG infrastructure in 2022 with ongoing public support • Over $1.5 billion of commercial opportunities at various stages Project Type Number in pipeline $ in pipeline ($M) Regas + 140 $423 Biogas liquefiers 13 165 ssLNG N.AM 22 369 ssLNG S.AM 10 174 ssLNG EU 7 135 ssLNG Africa 2 21 ssLNG ROW 11 215
© 2022 Chart Industries, Inc. Confidential and Proprietary 23 Full Year 2022 Outlook, Excluding BigLNG Revenue $1.7 billion to $1.85 billion Excluding any additional Big LNG revenue Non-Diluted Adjusted EPS $5.25 to $6.50 Assumes 19% ETR and 35.6M shares outstanding Capital Expenditures Approximately $50 to $55 million # Revenue Build for 2022, Excluding Big LNG $M 1 Current Backlog for 2022 Shipments $951 2 Book & ship within same year (1) 630 – 760 3 1H 2022 liquefaction orders (revenue recognition in 2022) (regardless of molecule) 40 – 50 4 Full year of Richburg SC Repair Location, L.A. Turbine, AdEdge, Earthly Labs 80 – 90 5 2022 Estimate, excluding any Big LNG (rounded) 1,700-1,850 Backlog $M 12/31/2021 1H ’22 2H ’22 Specialty $197 $158 CTS 227 107 HTS 115 105 RSL 33 11 Chart 571 380 (1) estimate based on our existing commercial pipeline with 40% probability expected to close between now and 6/30/2022 at 40% to 50% win rate, excluding specific projects in row 3 and 4 on this table Adjusted Free Cash Flow Approximately $175 to $225 million
Historical and Expected 2022 Sales Trend by Quarter 24 • First quarter of each year continues to be our lowest quarter of the year resulting from traditional timing of capital spend of customers and Chinese New Year • Our historical revenue timing has been stronger second and third quarters with comparatively weaker first and fourth quarters. In 2021, we experienced steadily increasing revenues quarter by quarter through the year, and we expect that trend to occur again in 2022; in particular given the timing of revenue recognition related to the four liquefaction orders booked the last week of December 2021 • This slide is not intended to convey specific quarterly guidance and we do not intend to provide quarterly guidance information on a quarterly basis © 2022 Chart Industries, Inc. Confidential and Proprietary
Registration for GTLS Investor Day, May 5, 2022 25 • Date: May 5, 2022: 7:30am eastern to 11:30am eastern • Location: NYSE (NY, NY) • Register: https://investorday.chartindustries.com © 2022 Chart Industries, Inc. Confidential and Proprietary
Appendix 26
© 2022 Chart Industries, Inc. Confidential and Proprietary 27 Fourth Quarter and Full Year 2021 Adjusted EBITDA (1) “EBITDA” and “Adjusted EBITDA” are not measures of financial performance under U.S. GAAP and should not be considered as an a lternative to net income 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 our internal performance. $ millions, except per share amounts Consolidated Q4 2021 Q4 2020 Change v. PY FY 2021 FY 2020 Change v. PY Net income from continuing operations $12.4 $37.9 ($25.5) $60.9 $70.3 ($9.4) Income tax expense, net 3.6 6.0 (2.4) 13.5 15.0 (1.5) Interest expense, net 3.3 (3.5) 6.8 10.7 17.7 (7.0) Depreciation and amortization 20.8 18.3 2.5 80.6 85.2 (4.6) EBITDA (1) $40.1 $58.7 ($18.6) $165.7 $188.2 ($22.5) Non-recurring costs 14.8 (4.3) 19.1 46.3 19.6 26.7 Share-based compensation 3.1 1.8 1.3 11.2 8.6 2.6 Adjusted EBITDA (1) $58.0 $56.2 $1.8 $223.2 $216.4 $6.8
Segment Information Sales ($M, except %) Q4 ‘21 % Chg PQ % Chg PY FY 2021 % Chg PY Specialty Products 131.9 12.8% 55.0% 432.9 78.4% Cryo Tank Solutions 133.5 19.0% 20.8% 447.4 7.6% Repair, Service, Leasing 44.7 -3.5% 9.0% 187.0 18.1% Heat Transfer Systems 71.9 27.5% -8.9% 262.7 -29.0% Reported Op Income ($M, except %) Q4 ‘21 % Chg PQ % Chg PY FY 2021 % Chg PY Specialty Products 26.4 0.0% 32.7% 94.1 55.0% Cryo Tank Solutions 10.9 -16.2% -2.7% 52.9 0.8% Repair, Service, Leasing 7.2 227.3% -40.5% 23.3 -23.1% Heat Transfer Systems -5.8 -41.4% -43.4% -12.3 -209.8% Adjusted Op Income ($M, except %) Q4 ‘21 % Chg PQ % Chg PY FY 2021 % Chg PY Specialty Products 27.8 -5.1% 40.2% 103.1 62.1% Cryo Tank Solutions 13.8 -14.7% 15.8% 61.4 16.5% Repair, Service, Leasing 9.3 50.0% -26.2% 30.3 -10.4% Heat Transfer Systems -1.6 -83.3% -118.1% 1.5 -95.7% Adjusted Op Margin ($M, except %) Q4 ’21 Bps Chg PQ Bps Chg PY FY 2021 Bps Chg PY Specialty Products 21.1% -400 bps -220 bps 23.8% 730 bps Cryo Tank Solutions 10.3% -410 bps -40 bps 13.7% 100 bps Repair, Service, Leasing 20.8% 740 bps -1000 bps 16.2% -520 bps Heat Transfer Systems -2.2% 1200 bps -1090 bps 0.6% -900 bps Heat Transfer Systems (excl Big LNG project) -2.2% 1160 bps 1090 bps -3.9% 100 bps Green box denotes historical record (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. © 2022 Chart Industries, Inc. Confidential and Proprietary 28
2H 2021 Challenges & Actions (1/4) 29 # Challenge Specific Impact Examples Actions Taken Risk Level as of 9/30/2021 (as presented at Q3 2021 earnings call) Risk Level as of 12/31/2021 1 Material Cost As of 9/30/2021 as presented on Q3 2021 earnings call • Increases in key raw material costs since 6/30/2021 • Aluminum +18% • Carbon steel +24% • Stainless steel +12% • YTD increases in key raw material costs (since 1/1/2021): • Aluminum +40% • Carbon steel +65% • Stainless steel +33% As of 12/31/2021: Change in Material Costs from 9/30/2021 to 12/31/2021: • Aluminum +0.5% increase • Carbon steel (13%) decrease • Stainless steel +7% increase As of 9/30/2021 as presented on Q3 2021 earnings call • Price increases in effect July 1, 2021; specific EMEA IG price increases 8/1/2021 • Surcharges on new orders (9/1/21 fwd) • Secured stock, locked in price earlier in year • Organic cost out actions in operations • Standard T&C’s updated allowing cost change based on metal market change for quotes • Outstanding project bids updated with current costs for validity • Additional price increase effective 10/20/2021 Additional actions taken in Q4 2021 – refer to slide 6 of this presentation Expecting to continually monitor and react to this through Q2 2022: • Regionally dependent • Material specific Improving availability of material; continue to anticipate that we will operate at these higher costs through 1H 2022 (view is in line with what was said on Q3 2021 earnings call regarding timing. © 2022 Chart Industries, Inc. Confidential and Proprietary 29
2H 2021 Challenges & Actions (2/4) 30 # Challenge Specific Impact Examples Actions Taken Risk Level as of 9/30/2021 (as presented at Q3 2021 earnings call) Risk Level as of 12/31/2021 2 Supply Chain Disruption As of 9/30/2021 as presented on Q3 2021 earnings call; reiterating as of 12/31/2021 • Trucks, drivers, materials, components are not available • Long lead times (improving at 12/31/2021) • Surge in ports congestion Worldwide shortage of shipping containers & increased costs for ocean freight (container cost +34% from end of Q2 2021 to end of Q3 2021) As of 12/31/2021: • Availability of containers and trucks is improving. • Container cost -13% from end of Q3 2021 to end of Q4 2021. As of 9/30/2021 as presented on Q3 2021 earnings call; reiterating as of 12/31/2021 plus additional bolded actions: • Increase to surcharge • Storage fees for onsite storing of tanks and trailers • Eliminated program of free freight on volume shipments • Established alternative and localized suppliers • Where able, locking in access to material through 1H 2022 • Securing safety stock Mixed, some specific improvements, some continuance; optionality around localization of manufacturing and supply Improving somewhat from Q3 2021 perspective given the availability of transport as well as Q1 2022 will be our first full quarter where we are able to close the gap between cost of shipping and billing in full for that cost. 3 Force Majeure on Delivery of Gas to Industrial Customer Facilities As of 9/30/2021 as presented on Q3 2021 earnings call: • Force Majeure issued for manufacturing customers (non-oxygen critical customers) from August 11th until October 7th • Reduced weekly allocations of gas by 80% in some cases, resulting in production shutdowns As of 1/11/2022: FM put back in place for Georgia, USA facility by supplier of gas, same actions taken As of 9/30/2021 as presented on Q3 2021 earnings call; reiterating as of 12/31/2021: • In-house trailering of gas for production in Southeast USA • Hired certified driver and trucked our own gas to keep shops running (minimal disruption, but additional cost) Force Majeure ended 10/7/2021 Force Majeure put back in place in Georgia, USA in early January 2022 and is still currently in place. We have responded by utilizing our own trailer again and there has been no disruption to our production to date. 30
2H 2021 Challenges & Actions (3/4) # Challenge Specific Impact Examples Actions Taken Risk Level as of 9/30/2021 Risk Level as of 12/31/2021 4 Labor Availability & Cost including COVID-19 resurgence As of 9/30/2021 as presented on Q3 2021 earnings call: • From August 1 to September 30, average of 3.7% of production workforce in U.S. shops was out with COVID by week • September 2021 was our second highest month of cases since beginning of COVID • Hired 372 people in Q3 2021 • More incentives put in place to attract talent; increase in wages YTD 2021 for welders As of 12/31/2021: • Average 1.71% of US workforce out in Q4 2021 due t COVID • Further team member retention actions taken As of 9/30/2021 as presented on Q3 2021 earnings call: • Contract labor and multiple shifts • Leveraging flexible manufacturing • Welders / machinists temporarily reassigned to other facility locations (which can drive inefficiencies) • Internal Chart welding school • Outsource specific steps in process As of 12/31/2021: • Reiterating actions in Q3 2021 remain in place plus further team member retention actions taken Labor Needs Substantially Addressed Labor Needs continue to be addressed and limited turnover in our shops © 2022 Chart Industries, Inc. Confidential and Proprietary 31
2H 2021 Challenges & Actions (4/4) # Challenge Specific Impact Examples Actions Taken Risk Level as of 9/30/2021 as presented on Q3 2021 earnings call Risk Level as of 12/31/2021 5 Weather Impacts As of 9/30/2021 as presented on Q3 2021 earnings call: • China typhoons disrupted shipping (end of July 2021) / flooding has constrained coal mines, in turn further impacting supply chain • U.S Hurricane Ida added further supply chain, labor, part availability and customer receipt challenges As of 9/30/2021 as presented on Q3 2021 earnings call: • Capacity/ flex manufacturing • More than one Chart location that can make each product • Self-site repairs Did not have Q4 2021 disruptions Improved Did not have Q4 2021 weather disruptions 6 China As of 9/30/2021 as presented on Q3 2021 earnings call: • New government enforcement of energy controls by region began September 16, 2021 • China’s Ningbo Port shut for 2 weeks in August 2021 As of 12/31/2021: No government energy restrictions • As of 9/30/2021 as presented on Q3 2021 earnings call: • Currently, our China operations will have power supply as either “five normal, two restricted” or “four normal, three restricted” which allows us to hit our Q4 forecast if that remains in place • Alternating when shifts are complete and remote work for office These actions continued into the first half of Q4 2021 and restrictions were lifted by end of November 2021 Ongoing, with mitigation steps in place Improved with no further electricity lockdowns/ restrictions at the current time © 2022 Chart Industries, Inc. Confidential and Proprietary 32