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): July 22, 2021
____________________________________
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.) |
3055 Torrington Drive, Ball Ground, Georgia 30107
(Address of principal executive offices) (ZIP Code)
Registrant’s telephone number, including area code: (770) 721-8800
NOT APPLICABLE
(Former name or former address, if changed since last report)
_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | 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 July 22, 2021, Chart Industries, Inc. (the “Company”) issued a news release announcing the Company’s financial results for the second quarter ended June 30, 2021, as well as supplemental information for the second quarter ended June 30, 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.
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: July 22, 2021 | |
| By: /s/ Jillian C. Evanko <br>Jillian C. Evanko<br><br>Chief Executive Officer and President |
3
Document
Exhibit 99.1
Chart Industries Reports 2021 Second Quarter Results
Atlanta, Georgia – July 22, 2021 - Chart Industries, Inc. (NYSE: GTLS) today reported results for the second quarter ended June 30, 2021. Further details can be found in the supplemental presentation included with this release. All figures in this release and supplemental presentation represent our continuing
operations in our external reportable segments of Cryogenic Tank Solutions (“CTS”), Heat Transfer Systems (“HTS”), Specialty Products (“Specialty”) and Repair, Service & Leasing (“RSL”). Highlights include:
•Third consecutive quarter of record orders ($447.9 million), contributing to record backlog of $1,083.9 million and including orders with 133 new customers and 16 first-of-a-kind (“FOAK”) applications
•Sales of $322.0 million were an increase of 11.6% over the first quarter 2021 and an increase of 11.2% compared to the second quarter of 2020; excluding Venture Global Calcasieu Pass Big LNG, sales increased 15.6% compared to the first quarter 2021 and 19.2% compared to the second quarter of 2020
•Reported diluted earnings per share (“EPS”) of $0.16 and adjusted non-diluted EPS of $0.80 (excluding mark-to-market for strategic equity investments)
•Repair, Service & Leasing and Specialty Products comprised 50.0% of our total net sales, the highest quarter in our history (and compared to 41.1% in the first quarter of 2021 and 34.1% for the full year 2020)
•Completed acquisition of L.A. Turbine (specialty turboexpanders on July 1, 2021) and investments in Earthly Labs (small-scale carbon capture) and Cryomotive (compressed cold hydrogen)
•Increase to full year 2021 guidance of revenue of $1.38 billion to $1.43 billion (increase from prior outlook of $1.36 billion to $1.41 billion) and associated non-diluted adjusted EPS of $3.80 to $4.25 (increase from the prior 2021 outlook of $3.65 to $4.15)
•Given record backlog with visibility to 2022, releasing 2022 revenue outlook of $1.60 billion to $1.70 billion
•Sharing 2030 Total Addressable Market (“TAM”) for Specialty Products of $36.5 billion
Three consecutive quarters of record orders set the stage for significant growth ahead both in the second half of 2021 and full year 2022.
Second quarter 2021 orders of $447.9 million was the highest in our history, and the third quarter in a row that we have set a new historical order record. Orders increased sequentially 7.4% when compared to the first quarter of 2021 (our prior historical record high) and 83.2% compared to the second quarter of 2020. Demand for Chart products and technologies
continues to be broad based and is flowing through to sales and earnings, as evidenced by records in the following categories:
| $ millions | Orders | Backlog | Sales |
|---|---|---|---|
| Specialty Products | ● | ● | ● |
| Hydrogen / Helium | ● | ● | ● |
| Water Treatment | ● | ● | ● |
| HLNG Vehicle | ● | ||
| Food & Beverage | ● | ● | ● |
| CCUS | |||
| Space | |||
| Other | ● | ● | |
| Repair, Service, Leasing | ● | ||
| Cryo-Lease | ● | ||
| PRS | ● | ||
| Cryo Tank Solutions | ● | ● | |
| Storage Equipment | ● | ● | |
| Eng Systems | ● | ||
| Mobiles | ● | ● | |
| Heat Transfer Systems | |||
| CHART TOTAL | ● | ● | |
| CHART TOTAL $ | $447.9 | $1,083.9 | $322.0 |
Record orders resulted in our third consecutive record backlog quarter ($1,083.9 million), and this is a record with or without Big LNG. Second quarter 2021 ending backlog does not include any additional or new Big LNG as our final Venture Global Calcasieu Pass shipments were completed in June 2021 on-time and in budget. Backlog includes the following significant and meaningful orders and activities in the second quarter 2021 (just to name a few, as the list goes on!):
•Hydrogen ($81.9 million) including one helium liquefaction plant for a company in Russia as well as 22 liquid hydrogen trailers.
•Booked 16 first-of-a-kind orders, including the first LNG road tankers to be operated in South Africa and a SDOX water treatment system for a brewery for odor control.
•133 new customers placed orders, 63% of whom are outside of North America.
•60 orders booked that individually were greater than $1 million.
•Strong industrial gas orders which is an indicator of our customers’ confidence in 2022.
•Booked more trailer orders in the first half of 2021 than in the full year of 2020.
•Record order and sales activity in EMEA and India.
•China continued its streak of records, including record orders as well as shipping the largest bulk tank in our Chart China history.
•Record water treatment orders of $7.3 million, with 70% of these orders having both Chart and BlueInGreen content.
•Record HLNG vehicle tank orders including the largest LNG bus order in our history.
•And while we have not seen significant order pickup in the Heat Transfer segment, we received full notice to proceed on the New Fortress Energy FastLNG project. Additionally, we have seen a considerable change from midstream and upstream inquiry levels. Specifically, inquiry levels for midstream and upstream equipment increased 30% from April 2021 to June 2021. More meaningful is that our conversion rate from inquiry to firm fixed order has changed to a 70% conversion rate in June and July 2021 compared to ~30% six months ago.
“We expect this broad-based demand for our molecule agnostic products and solutions to continue with both public and private sector funding and decision making moving toward practical and cleaner energy activities,” stated Jill Evanko, Chart’s CEO and President. “The progress has continued this past week, with the Department of Energy’s “Long Duration Storage Shot”, the European Commissions’ “Fit for 55” package and associated Carbon Border Adjustment Mechanism all contributing significant momentum toward the nexus of clean energy, clean water, clean food and clean industrials that we expect to explode (pun intended) this decade.”
As the result of the exponentially growing specialty markets, we are providing a 2030 total addressable market estimate for our Specialty Products of $36.5 billion, based on market information, our existing product and technology portfolio, and bottoms up estimates from our commercial team and our customers’ outlooks.
Continuing to leverage our strategic inorganic and organic investments for growth and productivity.
In the second quarter 2021, we continued to add to our full solution offering through inorganic investments and acquisitions, completing minority investments in the following companies, all of which add further growth potential to our specialty markets:
•Cryomotive, a leading green-tech mobility startup in Germany developing a disruptive clean hydrogen storage and refueling technology platform focused on compressed cold hydrogen and cryogenic high-pressure storage. Cryomotive’s proprietary CcH2 CRYOGAS technology aims to decarbonize long-haul commercial vehicles while keeping the range and fueling times similar to diesel powered vehicles and reaching parity in costs of ownership before 2030.
•Earthly Labs is the leading provider of small-scale carbon capture systems offering an affordable, small footprint technology platform called “CiCi ®” to capture, recycle, reuse, track and sell CO2. Earthly Labs' solution is unique in the carbon capture space, offering quick installation, fast payback, and a cloud-based software solution enabling real-time CO2 capture insights. Earthly Labs uses Chart cryogenic CO2 storage tanks, vaporizers and regulators as a standard part of its offering to customers which will be further expanded in conjunction with the commercial MOU signed by the parties in connection with Chart’s investment.
In addition to these investments, on July 1, 2021, we closed on the $80 million acquisition of L.A. Turbine, a global leader in turboexpander design, engineering, manufacturing, assembly and testing process for new and aftermarket equipment, with significant in-house engineering expertise. LAT’s capabilities are a natural fit and deliver a competitive point of differentiation for Chart. There is a very unique expander required for hydrogen and helium liquefaction which is difficult to obtain in the market due to a limited number of companies like LAT that are capable of designing and producing it. Within the first 24 hours of owning L.A. Turbine, we had already received numerous customer reach outs to connect on providing these expanders, and in the first weeks have booked approximately $2 million in new orders.
Also, we officially opened our repair, service & leasing site in strategically located Richburg, SC, a location that our industrial gas customers have been requesting. We have already received numerous customer tanks onsite, another step to our over target of 20% of Chart revenue being in the repair, service & leasing segment within the next two years. RSL was 17% of our total revenue in the second quarter of 2021 driven in part by an increase in leasing revenue (263% increase versus Q1 2021) and in part by the fact that we now have 80 customers with repair & service agreements globally, including 40 outside of North America.
Our organic R&D activities are already paying off, as we sold our first liquid hydrogen ISO container recently (July 2021 order) to a customer in Turkey. Additionally, we now have our Liquid Hydrogen Onboard Vehicle Tank (“HLH2 onboard tank”) commercially available and we are excited to partner with Hyzon Motors with whom we will offer an ultra-heavy-duty truck with a range of 1,000 miles, powered by liquid hydrogen. The start to our third quarter 2021 hydrogen order activity has continued to be strong, and we are excited to be at the point of completion of another one of our differentiators – regional certifications, including having the Chinese group code for liquid hydrogen storage tanks (which is by invitation only and takes approximately 18 months to receive from the governing authorities).
Strong orders are resulting in increasing sales, and actions have been taken to address material cost and supply headwinds.
Sales of $322.0 million were an increase of 11.6% over the first quarter 2021 and 11.2% when compared to the second quarter of 2020. The second quarter of 2021 had $5.4 million of Venture Global (“VG”) Calcasieu Pass revenue whereas the first quarter of 2021 had $14.7 million and second quarter of 2020 had $23.8 million of associated VG revenue. We expect total sales of each subsequent quarter in the second half of 2021 to be sequentially higher than the prior quarter.
Reported gross margin as a percent of sales of 25.8% reflected one-time restructuring and start-up costs. These one-time costs were primarily related to start-up activities in our manufacturing locations where we are adding capacity (Teddy Trailer & Tanks in Alabama, USA and air coolers in Beasley, Texas, USA), opening greenfield facilities (Richburg, South Carolina, USA) or
creating flexible manufacturing (Tulsa, Oklahoma, USA). When normalized for those, gross margin as a percent of sales was 29.0%, and we expect that sequentially between now and year-end, gross margin as a percent of sales will increase. RSL had a sequential negative swing in gross margin as a percent of sales, driven by less quick turn field service projects and specific product mix. Specialty, CTS and HTS gross margin as a percent of sales were in line with expectations and CTS will receive second half benefit from price increases put into effect on July 1, 2021.
Frequently discussed topics are the increase in material and labor costs across all industries. We were not immune to the material cost increases. We have taken many steps to ensure that going forward, we have enough inventory on hand to meet our customers’ lead-times and delivery schedules while protecting margins. The actions taken include the following:
•Effective July 1, 2021, we implemented a broad price increase for most of our products, ranging between 8% and 12%. Therefore, we expect our margins will be better in the second half of 2021 than the second quarter of 2021.
•In our global long-term agreements as well as with our customers in EMEA and India, this material cost escalation is passed through to our customers in the form of a material surcharge. This standard surcharge formula in our LTAs are typically three months delayed from the impact of the material cost change itself.
•During the second quarter of 2021, we made the conscious decision to add inventory for the remainder of the 2021 year to ensure we could meet delivery schedules given the material shortages and supply chain issues globally. We have also contracted our key materials through the end of 2021, mitigating potential concerns of lack of supply availability, especially as mills globally are seeing unprecedented demand and head into the summer season which is typically their maintenance time of year. This strategic decision resulted in negative net cash provided by operating activities from continuing operations of $37 million and a corresponding negative free cash flow (“FCF”) of $31 million for the quarter (adjusted for a tax payment associated with the divestiture of our cryobiological business), driven by our $29 million investment in inventory ($65 million investment in inventory year-to-date 2021) to meet demand amidst challenging market supply conditions. We expect inventory levels to decline in the second half of 2021 in connection with anticipated high product demand, as well as generating FCF from the receipt of key milestone payments related to backlog projects of the Russian helium liquefier, two 15 ton per day hydrogen liquefaction projects and New Fortress Energy’s FastLNG. As of June 30, 2021, we had $198 million of cash on hand and a net leverage ratio of 2.41 which included second quarter 2021 tax payments of $41.9 million.
•Over 95% of our supply base has more than one (in many cases, multiple) vendor sources, which has allowed us to continue to be on-time with our deliveries.
Even considering the material cost headwinds we faced, our adjusted non-diluted earnings per share was $0.80 for the second quarter 2021 (excluding the negative impact of our mark-to-
market on our minority investments and adjusted for the one-time start-up costs described above and transaction related costs for our inorganic deal activity (L.A. Turbine, Cryomotive and Earthly Labs)). On a year-to-date basis, through the first half of 2021, our adjusted non-diluted EPS increased 88% when compared to the first half of 2020, and adjusted diluted EPS increased 76% compared to that same period.
Don’t forget about LNG.
LNG infrastructure activity is very active. When we think of our LNG business, we think of it in three categories; (1) Big LNG export projects, (2) small-scale and utility-scale LNG and (3) LNG infrastructure. First, while Big LNG is not included in our 2021 guidance or 2022 outlook, considerable second quarter 2021 activity on FERC approved mid-scale projects including Venture Global Plaquemines, Cheniere CCL Stage Three and Tellurian’s Driftwood Phase 1 provide additional confidence to these moving forward to Final Investment Decision (“FID”) in the first half of 2022. Second, numerous additional small-scale LNG project have entered our commercial pipeline in the second quarter 2021, and we expect that 2022 to 2025 will be record setting for multiple of these projects to move ahead globally, driven in part by more market and government acceptance of LNG. New Fortress Energy’s FastLNG project progressed to full notice to proceed within the second quarter of 2021. Finally, widespread & strong demand for LNG vehicle tanks, fueling stations and trailers has continued throughout the first half of 2021. There were record orders in the second quarter of 2021 for HLNG vehicle tanks including the largest LNG bus order in our history.
Increasing full year 2021 guidance, including reiterating that each quarter in 2021 is expected to be better than the prior quarter.
Full year 2021 sales are expected to be approximately $1.380 billion to $1.430 billion, inclusive of $21 million of Venture Global’s Calcasieu Pass revenue (none remaining to ship) as well as expected 2021 revenue from the 2021 acquisitions of Cryo Technologies and L.A. Turbine and actual order activity resulting from our inorganic minority investments. This is an increase over the prior full year 2021 sales guidance of $1.36 billion to $1.41 billion, resulting from the strong first half 2021 order book, including specific hydrogen and helium liquefaction projects. There is no additional Big LNG revenue included in our outlook although we strongly believe that there is the opportunity for up to four Big LNG projects with our equipment and/or IPSMR® to move to Final Investment Decision (“FID”) in the first half of 2022. As we have indicated previously, there are many moving pieces that contribute to a range, and we have provided two different analyses on our revenue range in the supplemental presentation on slides 22 and 23 (the prior walk is included in the appendix of the presentation on slide 29). This year, we expect the second half of 2021 to be considerably higher than the first half of 2021 based on the lead-time of our backlog, in particular associated 2021 revenue related to projects such as the two 15 ton per day hydrogen liquefaction plants, the Russian helium liquefiers and New Fortress Energy’s FastLNG project. More specifically, we expect each quarter to sequentially increase over the prior quarter this year, as you have seen in the first half. Additionally, we have conservatively built our second
half 2021 forecast for HTS, although we believe there will be continued heightened replacement activity with plants running at higher capacity factors with changing capture and rejection modes which could result in drop-in projects that are at or above $10 million in size and scope.
We anticipate full year non-diluted adjusted earnings per share to be approximately $3.80 to $4.25 on 35.5 million weighted average shares outstanding, up from our previous estimate of $3.65 to $4.15 per share. Our assumed effective tax rate is 18% for the full year 2021. Our expected capital expenditure outlook is unchanged from our prior guidance is unchanged and expected to be in the $40 million to $50 million range, driven by organic investments in our high growth areas inclusive of expanding product capabilities in our Teddy Trailer and Tank facility, completion of our repair and service facility in South Carolina, USA, new product development for hydrogen and continued targeted lease fleet expansion.
2022 is Set to Be a Record Year. Our First Look.
Given our record backlog as of June 30, 2021, as well as visibility to anticipated broad-based demand, we are sharing our first look for revenue for 2022. Our 2022 sales outlook is expected to be in the range of $1.60 billion to $1.70 billion, and does not include any additional or new Big LNG projects, although we bullishly expect between one and four of these Big LNG projects that already have FERC approval to move to FID in the first half of 2022. Details on our 2022 sales outlook can be found in the supplemental presentation on slide 25.
FORWARD-LOOKING STATEMENTS
Certain statements made in this presentation 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, material cost and pricing increases, business trends, clean energy market opportunities, 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 presentation 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 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 presentation contains non-GAAP financial information, including adjusted gross margin as a percent of sales, adjusted earnings per diluted and non-diluted share, net income attributable to Chart Industries, Inc. adjusted, and free cash flow. 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 "Second Quarter and YTD 2021 Earnings Per Share," and “Second Quarter and YTD 2021 Free Cash Flow” 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 2021 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 second quarter 2021 financial results on a conference call on Thursday, July 22, 2021 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 2482633. 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 2482633. The replay will be available beginning 12:30 p.m. ET, Thursday, July 22, 2021 until 12:30 p.m. ET, Thursday, July 29, 2021.
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 locations from the United States to Asia, 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 | Six Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | March 31, 2021 | June 30, 2021 | June 30, 2020 | ||||||
| Sales | $ | 322.0 | $ | 289.5 | $ | 288.5 | $ | 610.5 | $ | 591.4 |
| Cost of sales | 238.8 | 206.2 | 204.6 | 443.4 | 425.8 | |||||
| Gross profit | 83.2 | 83.3 | 83.9 | 167.1 | 165.6 | |||||
| Selling, general, and administrative expenses | 48.0 | 43.5 | 46.2 | 94.2 | 96.0 | |||||
| Amortization expense | 9.6 | 14.0 | 8.8 | 18.4 | 28.0 | |||||
| Operating expenses | 57.6 | 57.5 | 55.0 | 112.6 | 124.0 | |||||
| Operating income (1) (2) (3) (4) (5) | 25.6 | 25.8 | 28.9 | 54.5 | 41.6 | |||||
| Interest expense, net | 2.2 | 7.6 | 2.0 | 4.2 | 14.8 | |||||
| Unrealized loss (gain) on investments in equity securities | 12.5 | (1.0) | (3.3) | 9.2 | 3.8 | |||||
| Financing costs amortization | 1.1 | 1.1 | 1.2 | 2.3 | 2.1 | |||||
| Foreign currency loss (gain) and other | 1.7 | 1.2 | (0.2) | 1.5 | 1.5 | |||||
| Income from continuing operations before income taxes | 8.1 | 16.9 | 29.2 | 37.3 | 19.4 | |||||
| Income tax expense | 1.3 | 2.2 | 3.1 | 4.4 | 2.6 | |||||
| Net income from continuing operations (6) | 6.8 | 14.7 | 26.1 | 32.9 | 16.8 | |||||
| Income from discontinued operations, net of tax | — | 6.3 | — | — | 12.7 | |||||
| Net income | 6.8 | 21.0 | 26.1 | 32.9 | 29.5 | |||||
| Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | 0.3 | 0.9 | 0.5 | 0.8 | 0.9 | |||||
| Net income attributable to Chart Industries, Inc. | $ | 6.5 | $ | 20.1 | $ | 25.6 | $ | 32.1 | $ | 28.6 |
| Net income attributable to Chart Industries, Inc. | ||||||||||
| Income from continuing operations | $ | 6.5 | $ | 13.8 | $ | 25.6 | $ | 32.1 | $ | 15.9 |
| Income from discontinued operations, net of tax | — | 6.3 | — | — | 12.7 | |||||
| Net income attributable to Chart Industries, Inc. | $ | 6.5 | $ | 20.1 | $ | 25.6 | $ | 32.1 | $ | 28.6 |
| Basic earnings per common share attributable to Chart Industries, Inc.: | ||||||||||
| Income from continuing operations | $ | 0.18 | $ | 0.39 | $ | 0.72 | $ | 0.90 | $ | 0.45 |
| Income from discontinued operations | — | 0.18 | — | — | 0.36 | |||||
| Net income attributable to Chart Industries, Inc. | $ | 0.18 | $ | 0.57 | $ | 0.72 | $ | 0.90 | $ | 0.81 |
| Diluted earnings per common share attributable to Chart Industries, Inc. | ||||||||||
| Income from continuing operations (7) (8) | $ | 0.16 | $ | 0.39 | $ | 0.63 | $ | 0.79 | $ | 0.45 |
| Income from discontinued operations | — | 0.18 | — | — | 0.35 | |||||
| Net income attributable to Chart Industries, Inc. | $ | 0.16 | $ | 0.57 | $ | 0.63 | $ | 0.79 | $ | 0.80 |
| Weighted-average number of common shares outstanding: | ||||||||||
| Basic | 35.61 | 35.18 | 35.55 | 35.58 | 35.48 | |||||
| Diluted | 40.81 | 35.31 | 40.62 | 40.72 | 35.66 |
_______________
(1)Includes depreciation expense of:
•$10.2, $9.3 and $10.7 for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021, respectively, and
•$20.9 and $18.9 for the six months ended June 30, 2021 and 2020, respectively.
(2)Includes restructuring costs of:
•$0.3, $5.6, and $0.7 for the three months ended June 30, 2021, June 30, 2020 and March 31, 2021, respectively, and
•$1.0 and $10.8 for the six months ended June 30, 2021 and 2020, respectively.
(3)Includes acquisition-related contingent consideration adjustments of:
•$1.2 and $0.8 in our Specialty Products segment for the three months ended June 30, 2021 and March 31, 2021, respectively, and
•$2.0 in our Specialty Products segment for the six months ended June 30, 2021.
(4)Includes a $2.6 gain on sale of a facility in China for the three and six months ended June 30, 2020.
(5)Includes transaction-related costs of $0.8 and $1.8 for the three and six months ended June 30, 2021, respectively, related to the acquisitions of Cryogenic Gas Technologies, Inc., Sustainable Energy Solutions, Inc., BlueInGreen, LLC and Alabama Trailers and the July 1, 2021 acquisition of L.A. Turbine.
(6)Includes $1.3 in income taxes and interest expense related to previous divestitures for the three and six months ended June 30, 2021.
(7)Includes an additional 4.89 and 4.82 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three and six months ended June 30, 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 2.64 and 2.61 for the three and six months ended June 30, 2021, respectively.
(8)Includes an additional 4.74 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three months ended March 31, 2021. The associated hedge, which helps offset this dilution, cannot be taken into account under U.S. GAAP. If the hedge could have been considered, it would have reduced the additional shares by 2.57 for the three months ended March 31, 2021.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
| Three Months Ended | Six Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | March 31, 2021 | June 30, 2021 | June 30, 2020 | ||||||
| Net Cash (Used In) Provided By Operating Activities | $ | (36.6) | $ | 54.8 | $ | 8.3 | $ | (28.3) | $ | 80.3 |
| Investing Activities | ||||||||||
| Acquisition of businesses, net of cash acquired | — | — | (55.0) | (55.0) | — | |||||
| Investments | (12.9) | — | (40.0) | (52.9) | — | |||||
| Capital expenditures | (15.2) | (10.7) | (11.5) | (26.7) | (21.0) | |||||
| Proceeds from sale of assets | — | 0.8 | — | — | 0.8 | |||||
| Government grants | 0.1 | (0.1) | 0.2 | 0.3 | — | |||||
| Net Cash Used In Investing Activities | (28.0) | (10.0) | (106.3) | (134.3) | (20.2) | |||||
| Financing Activities | ||||||||||
| Borrowings on revolving credit facilities | 236.4 | 29.0 | 187.7 | 424.1 | 93.5 | |||||
| Repayments on revolving credit facilities | (90.0) | (36.7) | (102.5) | (192.5) | (121.4) | |||||
| Repayments on term loan | — | (2.8) | — | — | (5.6) | |||||
| Payments for debt issuance costs | — | (1.9) | — | — | (1.9) | |||||
| Proceeds from exercise of stock options | 1.0 | 0.6 | 5.6 | 6.6 | 2.6 | |||||
| Common stock repurchases from share-based compensation plans | (0.2) | — | (3.0) | (3.2) | (1.7) | |||||
| Common stock repurchases (1) | — | — | — | — | (19.3) | |||||
| Net Cash Provided By (Used In) Financing Activities | 147.2 | (11.8) | 87.8 | 235.0 | (53.8) | |||||
| Effect of exchange rate changes on cash | 0.3 | 0.2 | — | 0.3 | (2.8) | |||||
| Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents | 82.9 | 33.2 | (10.2) | 72.7 | 3.5 | |||||
| Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (2) | 115.9 | 90.3 | 126.1 | 126.1 | 120.0 | |||||
| CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (2) | $ | 198.8 | $ | 123.5 | $ | 115.9 | $ | 198.8 | $ | 123.5 |
_______________
(1)Includes $19.3 in shares repurchased through our share repurchase program.
(2)Includes restricted cash and restricted cash equivalents of $1.0 for all periods presented.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
| June 30,<br>2021 | December 31,<br>2020 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Cash and cash equivalents | $ | 197.8 | $ | 125.1 |
| Accounts receivable, net | 220.0 | 200.8 | ||
| Inventories, net | 310.1 | 248.4 | ||
| Other current assets | 147.4 | 128.7 | ||
| Property, plant, and equipment, net | 414.0 | 414.5 | ||
| Goodwill | 896.1 | 865.9 | ||
| Identifiable intangible assets, net | 491.0 | 493.1 | ||
| Investments | 121.4 | 78.9 | ||
| Other assets | 32.2 | 15.1 | ||
| TOTAL ASSETS | $ | 2,830.0 | $ | 2,570.5 |
| LIABILITIES AND EQUITY | ||||
| Current liabilities | $ | 675.8 | $ | 634.8 |
| Long-term debt | 450.6 | 221.6 | ||
| Other long-term liabilities | 119.8 | 134.8 | ||
| Equity | 1,583.8 | 1,579.3 | ||
| TOTAL LIABILITIES AND EQUITY | $ | 2,830.0 | $ | 2,570.5 |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
OPERATING SEGMENTS (UNAUDITED)
(Dollars in millions)
| Three Months Ended | Six Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | March 31, 2021 | June 30, 2021 | June 30, 2020 | |||||||||||
| Sales | |||||||||||||||
| Cryo Tank Solutions | $ | 97.8 | $ | 105.3 | $ | 103.9 | $ | 201.7 | $ | 203.3 | |||||
| Heat Transfer Systems | 65.2 | 97.3 | 69.2 | 134.4 | 210.2 | ||||||||||
| Specialty Products | 106.8 | 48.6 | 77.3 | 184.1 | 101.5 | ||||||||||
| Repair, Service & Leasing | 54.6 | 40.1 | 41.4 | 96.0 | 80.8 | ||||||||||
| Intersegment eliminations | (2.4) | (1.8) | (3.3) | (5.7) | (4.4) | ||||||||||
| Consolidated | $ | 322.0 | $ | 289.5 | $ | 288.5 | $ | 610.5 | $ | 591.4 | |||||
| Gross Profit | |||||||||||||||
| Cryo Tank Solutions | $ | 23.2 | $ | 25.8 | $ | 25.2 | $ | 48.4 | $ | 49.9 | |||||
| Heat Transfer Systems | 11.2 | 26.8 | 15.8 | 27.0 | 52.9 | ||||||||||
| Specialty Products | 36.7 | 17.0 | 28.2 | 64.9 | 37.3 | ||||||||||
| Repair, Service & Leasing | 12.1 | 13.7 | 14.7 | 26.8 | 25.5 | ||||||||||
| Consolidated | $ | 83.2 | $ | 83.3 | $ | 83.9 | $ | 167.1 | $ | 165.6 | |||||
| Gross Profit Margin | |||||||||||||||
| Cryo Tank Solutions | 23.7 | % | 24.5 | % | 24.3 | % | 24.0 | % | 24.5 | % | |||||
| Heat Transfer Systems | 17.2 | % | 27.5 | % | 22.8 | % | 20.1 | % | 25.2 | % | |||||
| Specialty Products | 34.4 | % | 35.0 | % | 36.5 | % | 35.3 | % | 36.7 | % | |||||
| Repair, Service & Leasing | 22.2 | % | 34.2 | % | 35.5 | % | 27.9 | % | 31.6 | % | |||||
| Consolidated | 25.8 | % | 28.8 | % | 29.1 | % | 27.4 | % | 28.0 | % | |||||
| Operating Income (Loss) | |||||||||||||||
| Cryo Tank Solutions | $ | 13.4 | $ | 15.9 | $ | 15.6 | $ | 29.0 | $ | 27.5 | |||||
| Heat Transfer Systems | (0.5) | 7.2 | 3.9 | 3.4 | 12.7 | ||||||||||
| Specialty Products | 23.4 | 11.7 | 17.9 | 41.3 | 25.5 | ||||||||||
| Repair, Service & Leasing | 5.6 | 7.6 | 8.3 | 13.9 | 12.2 | ||||||||||
| Corporate | (16.3) | (16.6) | (16.8) | (33.1) | (36.3) | ||||||||||
| Consolidated (1) (2) (3) (4) (5) | $ | 25.6 | $ | 25.8 | $ | 28.9 | $ | 54.5 | $ | 41.6 | |||||
| Operating Margin (Loss) | |||||||||||||||
| Cryo Tank Solutions | 13.7 | % | 15.1 | % | 15.0 | % | 14.4 | % | 13.5 | % | |||||
| Heat Transfer Systems | (0.8) | % | 7.4 | % | 5.6 | % | 2.5 | % | 6.0 | % | |||||
| Specialty Products | 21.9 | % | 24.1 | % | 23.2 | % | 22.4 | % | 25.1 | % | |||||
| Repair, Service & Leasing | 10.3 | % | 19.0 | % | 20.0 | % | 14.5 | % | 15.1 | % | |||||
| Consolidated | 8.0 | % | 8.9 | % | 10.0 | % | 8.9 | % | 7.0 | % |
_______________
(1)Restructuring costs for the three months ended:
•June 30, 2021 were $0.3 ($0.3 - Heat Transfer Systems).
•June 30, 2020 were $5.6 ($1.1 - Cryo Tank Solutions, $2.9 - Heat Transfer Systems and $1.6 - Corporate).
•March 31, 2021 were $0.7 ($0.3 - Cryo Tank Solutions and $0.4 and Heat Transfer Systems).
(2)Restructuring costs for the six months ended:
•June 30, 2021 were $1.0 ($0.3 - Cryo Tank Solutions and $0.7 - Heat Transfer Systems).
•June 30, 2020 were $10.8 ($2.9 - Cryo Tank Solutions, $5.7 - Heat Transfer Systems and $2.2 - Corporate).
(3)Includes acquisition-related contingent consideration adjustments of:
•$1.2 and $0.8 in our Specialty Products segment for the three months ended June 30, 2021 and March 31, 2021, respectively, and
•$2.0 in our Specialty Products segment for the six months ended June 30, 2021.
(4)Includes a $2.6 gain on sale of a facility in China in our Cryo Tank Solutions segment for the three and six months ended June 30, 2020.
(5)Includes transaction-related costs of $0.8 and $1.8 for the three and six months ended June 30, 2021, respectively, in Corporate related to the acquisitions of Cryogenic Gas Technologies, Inc., Sustainable Energy Solutions, Inc., BlueInGreen, LLC and Alabama Trailers and the July 1, 2021 acquisition of L.A. Turbine.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
ORDERS AND BACKLOG (UNAUDITED)
(Dollars in millions)
| Three Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30,<br>2021 | June 30,<br>2020 | March 31,<br>2021 | ||||||||||||
| Orders | ||||||||||||||
| Cryo Tank Solutions | $ | 175.3 | $ | 85.5 | $ | 129.5 | ||||||||
| Heat Transfer Systems | 48.4 | 55.4 | 104.9 | |||||||||||
| Specialty Products | 190.6 | 64.4 | 144.5 | |||||||||||
| Repair, Service & Leasing | 41.4 | 41.4 | 40.5 | |||||||||||
| Intersegment eliminations | (7.8) | (2.2) | (2.2) | |||||||||||
| Consolidated | $ | 447.9 | $ | 244.5 | $ | 417.2 | As of | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||
| June 30,<br>2021 | June 30,<br>2020 | March 31,<br>2021 | ||||||||||||
| Backlog | ||||||||||||||
| Cryo Tank Solutions | $ | 327.1 | $ | 209.8 | $ | 245.8 | ||||||||
| Heat Transfer Systems (1) | 345.1 | 296.1 | 361.4 | |||||||||||
| Specialty Products | 374.0 | 145.8 | 270.5 | |||||||||||
| Repair, Service & Leasing | 44.3 | 37.4 | 57.4 | |||||||||||
| Intersegment eliminations | (6.6) | (2.4) | (1.0) | |||||||||||
| Consolidated | $ | 1,083.9 | $ | 686.7 | $ | 934.1 |
_______________
(1)Heat Transfer Systems segment backlog as of June 30, 2021, June 30, 2020 and March 31, 2021 was inclusive of $0.8, $72.0 and $6.4 of backlog remaining on Calcasieu Pass, respectively. Also included in Heat Transfer Systems segment backlog for all periods presented is approximately $40.0 million related to the previously announced Magnolia LNG order where production release is delayed. As we previously reported, 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 (UNAUDITED)
(Dollars in millions, except per share amounts)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | June 30, 2019 | ||||
| Basic earnings per common share attributable to Chart Industries, Inc. – continuing operations (U.S. GAAP) | $ | 0.18 | $ | 0.39 | $ | 0.19 |
| Restructuring, transaction-related and other costs (1) | 0.31 | 0.18 | 0.24 | |||
| Accelerated tax impacts related to China facility closure | — | — | 0.05 | |||
| Gain on sale of a facility in China (2) | — | (0.07) | — | |||
| Other one-time costs (3) | 0.10 | — | — | |||
| Tax effects | (0.07) | (0.03) | (0.02) | |||
| Adjusted non-diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations (non-GAAP) | $ | 0.52 | $ | 0.47 | $ | 0.46 |
| Mark-to-market adjustments to investments in equity securities (4) | 0.35 | (0.02) | — | |||
| Tax effects | (0.07) | — | — | |||
| Adjusted non-diluted earnings per common share, excluding strategic investments, attributable to Chart Industries, Inc. – continuing operations (non-GAAP) | $ | 0.80 | $ | 0.45 | $ | 0.46 |
RECONCILIATION OF EARNINGS PER DILUTED SHARE TO ADJUSTED EARNINGS PER DILUTED SHARE (UNAUDITED)
(Dollars in millions, except per share amounts)
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | June 30, 2019 | ||||
| Diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations (U.S. GAAP) | $ | 0.16 | $ | 0.39 | $ | 0.18 |
| Restructuring, transaction-related and other costs (1) | 0.27 | 0.18 | 0.22 | |||
| Accelerated tax impacts related to China facility closure | — | — | 0.05 | |||
| Gain on sale of a facility in China (2) | — | (0.07) | — | |||
| Other one-time costs (3) | 0.09 | — | — | |||
| Dilution impact of convertible notes (5) (6) | 0.03 | — | 0.02 | |||
| Tax effects | (0.06) | (0.03) | (0.02) | |||
| Adjusted diluted earnings per common share attributable to Chart Industries, Inc. – continuing operations (non-GAAP) | $ | 0.49 | $ | 0.47 | $ | 0.45 |
| Mark-to-market adjustments to investments in equity securities (4) | $ | 0.33 | $ | (0.02) | $ | — |
| Tax effects | (0.06) | — | — | |||
| Adjusted diluted earnings per common share, excluding strategic investments, attributable to Chart Industries, Inc. – continuing operations (non-GAAP) | $ | 0.76 | $ | 0.45 | $ | 0.45 |
______________
(1)Restructuring, transaction-related and other costs were as follows:
•$6.2 in relocation and facility start-up costs attributable to relocation of our air cooled heat exchangers product lines from our Tulsa, Oklahoma facility to our Beasley, Texas facility and product line start up costs in our existing Tulsa, Oklahoma facility and $0.8 in integration and start up costs for our Alabama Trailers facility for the three months ended June 30, 2021.
•$0.8 in transaction-related costs related to the acquisitions of Cryogenic Gas Technologies, Inc., Sustainable Energy Solutions, Inc., BlueInGreen, LLC and Alabama Trailers and the July 1, 2021 acquisition of L.A. Turbine for the three months ended June 30, 2021.
•$1.3 in income taxes and interest expense related to previous divestitures for the three months ended June 30, 2021.
•$1.2 in acquisition-related contingent consideration charges to net income for the three months ended June 30, 2021.
•$0.5 in other various non-restructuring costs for the three months ended June 30, 2021.
•$0.3 for the three months ended June 30, 2021 in restructuring costs, primarily related to headcount reductions. Restructuring costs incurred in the three months ended June 30, 2020 of $5.6 were primarily related to headcount reductions, in order to manage through a downturn in our Heat Transfer Systems segment and smaller reductions in our other segments and corporate in order to reduce redundant work.
•For the three months ended June 30, 2019, we recorded $4.4 of restructuring costs primarily related to the closure of a facility in our Cryo Tank Solutions segment, as well as departmental restructuring including headcount reductions. We also incurred $2.4 in transaction-related and other one-time costs during the three months ended June 30, 2019.
(2)Includes a $2.6 gain on sale of a facility in China in our Cryo Tank Solutions segment for the three months ended June 30, 2020.
(3)Other one-time costs include commercial and legal settlements, and Covid-19 related costs, which include freight, sourcing and safety costs directly related to manufacture and fulfillment of critical care products.
(4)Includes mark-to-market fair value adjustments of our investments in equity securities related to Stabilis and McPhy for the three months ended June 30, 2021 and mark-to-market fair value adjustments of our investment in equity securities related to Stabilis for the three months ended June 30, 2020.
(5)Includes an additional 4.89 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three months ended June 30, 2021. The associated hedge, which helps offset this dilution, cannot be taken into account under U.S. GAAP. If the hedge could have been considered, it would have reduced the additional shares by 2.64 for the three months ended June 30, 2021.
(6)Includes an additional 1.81 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three months ended June 30, 2019. 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 1.25 for the three months ended June 30, 2019.
Adjusted earnings per diluted and non-diluted share are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to earnings per share in accordance with U.S. GAAP. Management believes that adjusted earnings per share facilitates useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of these non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
CHART INDUSTRIES, INC. AND 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 | Six Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||
| Net income attributable to Chart Industries, Inc., (U.S. GAAP) | $ | 6.5 | $ | 20.1 | $ | 32.1 | $ | 28.6 |
| Income attributable to noncontrolling interests, net of taxes (U.S. GAAP) | 0.3 | 0.9 | 0.8 | 0.9 | ||||
| Net income (U.S. GAAP) | 6.8 | 21.0 | 32.9 | 29.5 | ||||
| Interest accretion of convertible notes discount | — | 2.0 | — | 3.9 | ||||
| Employee share-based compensation expense | 2.4 | 2.0 | 5.8 | 4.9 | ||||
| Financing costs amortization | 1.1 | 1.1 | 2.3 | 2.1 | ||||
| Unrealized foreign currency transaction loss (gain) | 1.7 | (1.1) | (2.9) | (1.1) | ||||
| Unrealized loss (gain) on investment in equity securities | 12.5 | (1.0) | 9.2 | 3.8 | ||||
| Other non-cash operating activities | (0.2) | 0.3 | 1.7 | 3.5 | ||||
| Net income, adjusted (non-GAAP) | $ | 24.3 | $ | 24.3 | $ | 49.0 | $ | 46.6 |
_______________
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 | Six Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|
| June 30, 2021 | June 30, 2020 | June 30, 2021 | June 30, 2020 | |||||
| Net cash (used in) provided by operating activities from continuing operations | $ | (36.6) | $ | 54.8 | $ | (28.3) | $ | 80.3 |
| Capital expenditures | (15.2) | (10.7) | (26.7) | (21.0) | ||||
| Free cash flow (non-GAAP) | (51.8) | 44.1 | (55.0) | 59.3 | ||||
| Payments for income taxes related to a divestiture (1) | 20.5 | — | 24.9 | — | ||||
| Free cash flow, adjusted for payments for income taxes related to a divestiture (non-GAAP) | $ | (31.3) | $ | 44.1 | $ | (30.1) | $ | 59.3 |
______________
(1)Includes payments for income taxes related to the gain recognized on the cryobiological products divestiture.
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 from continuing operations 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
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT AND SELLING, GENERAL AND ADMINISTRATIVE EXPENSES TO ADJUSTED SELLING, GENERAL AND ADMINISTRATIVE EXPENSES (UNAUDITED)
(Dollars in millions)
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||||||||||||||||||||||||||
| Sales | $ | 97.8 | $ | 65.2 | $ | 106.8 | $ | 54.6 | $ | (2.4) | $ | — | $ | 322.0 | |||||||||||||||||||||||||||||||
| Gross profit as reported (U.S. GAAP) | 23.2 | 11.2 | 36.7 | 12.1 | — | — | 83.2 | ||||||||||||||||||||||||||||||||||||||
| Restructuring, transaction-related and other one-time costs | 2.1 | 5.7 | 1.7 | 0.8 | — | — | 10.3 | ||||||||||||||||||||||||||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 25.3 | $ | 16.9 | $ | 38.4 | $ | 12.9 | $ | — | $ | — | $ | 93.5 | |||||||||||||||||||||||||||||||
| Adjusted gross profit margin (non-GAAP) | 25.9 | % | 25.9 | % | 36.0 | % | 23.6 | % | — | % | — | % | 29.0 | % | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 9.1 | $ | 6.6 | $ | 11.6 | $ | 4.4 | $ | — | $ | 16.3 | $ | 48.0 | |||||||||||||||||||||||||||||||
| Restructuring, transaction-related and other one-time costs | (0.1) | — | (1.2) | — | — | (1.5) | (2.8) | ||||||||||||||||||||||||||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 9.0 | $ | 6.6 | $ | 10.4 | $ | 4.4 | $ | — | $ | 14.8 | $ | 45.2 | Three Months Ended June 30, 2020 | ||||||||||||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||||||||||||||||||||
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||||||||||||||||||||||||||
| Sales | $ | 105.3 | $ | 97.3 | $ | 48.6 | $ | 40.1 | $ | (1.8) | $ | — | $ | 289.5 | |||||||||||||||||||||||||||||||
| Gross profit as reported (U.S. GAAP) | 25.8 | 26.8 | 17.0 | 13.7 | — | — | 83.3 | ||||||||||||||||||||||||||||||||||||||
| Restructuring, transaction-related and other one-time costs | 0.2 | 1.0 | 0.1 | 0.5 | — | — | 1.8 | ||||||||||||||||||||||||||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 26.0 | $ | 27.8 | $ | 17.1 | $ | 14.2 | $ | — | $ | — | $ | 85.1 | |||||||||||||||||||||||||||||||
| Adjusted gross profit margin (non-GAAP) | 24.7 | % | 28.6 | % | 35.2 | % | 35.4 | % | — | % | — | % | 29.4 | % | |||||||||||||||||||||||||||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 8.5 | $ | 10.0 | $ | 4.9 | $ | 3.5 | $ | — | $ | 16.6 | $ | 43.5 | |||||||||||||||||||||||||||||||
| Restructuring, transaction-related and other one-time costs | 1.8 | 0 | (1.4) | (0.2) | (0.6) | — | (1.8) | (2.2) | |||||||||||||||||||||||||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 10.3 | $ | 8.6 | $ | 4.7 | $ | 2.9 | $ | — | $ | 14.8 | $ | 41.3 |
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 March 31, 2021 | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 103.9 | $ | 69.2 | $ | 77.3 | $ | 41.4 | $ | (3.3) | $ | — | $ | 288.5 | |||||||
| Gross profit as reported (U.S. GAAP) | 25.2 | 15.8 | 28.2 | $ | 14.7 | — | — | 83.9 | |||||||||||||
| Restructuring, transaction-related and other one-time costs | — | 1.4 | 0.8 | 0.1 | — | — | 2.3 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 25.2 | $ | 17.2 | $ | 29.0 | $ | 14.8 | $ | — | $ | — | $ | 86.2 | |||||||
| Adjusted gross profit margin (non-GAAP) | 24.3 | % | 24.9 | % | 37.5 | % | 35.7 | % | — | % | — | % | 29.9 | % | |||||||
| Selling, general and administrative expenses as reported (U.S. GAAP) | $ | 8.9 | $ | 7.0 | $ | 9.1 | $ | 4.4 | $ | — | $ | 16.8 | $ | 46.2 | |||||||
| Restructuring, transaction-related and other one-time costs | (0.2) | (0.1) | (0.9) | — | — | (1.9) | (3.1) | ||||||||||||||
| Adjusted selling, general and administrative expenses (non-GAAP) | $ | 8.7 | $ | 6.9 | $ | 8.2 | $ | 4.4 | $ | — | $ | 14.9 | $ | 43.1 | |||||||
| Three Months Ended June 30, 2019 | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Cryo Tank Solutions | Heat Transfer Systems | Specialty Products | Repair, Service & Leasing | Intersegment Eliminations | Corporate | Consolidated | |||||||||||||||
| Sales | $ | 102.9 | $ | 93.6 | $ | 50.7 | $ | 40.7 | $ | (0.8) | $ | — | $ | 287.1 | |||||||
| Gross profit as reported (U.S. GAAP) | 20.2 | 17.1 | 17.2 | $ | 17.2 | — | — | 71.7 | |||||||||||||
| Restructuring, transaction-related and other one-time costs | 5.6 | 0.4 | — | (1.6) | — | — | 4.4 | ||||||||||||||
| Adjusted gross profit (non-GAAP) | $ | 25.8 | $ | 17.5 | $ | 17.2 | $ | 15.6 | $ | — | $ | — | $ | 76.1 | |||||||
| Adjusted gross profit margin (non-GAAP) | 25.1 | % | 18.7 | % | 33.9 | % | 38.3 | % | — | % | — | % | 26.5 | % |
_______________
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.
21
a2021-07x22_gtlsq22021ea
Chart Industries SECOND QUARTER 2021 RESULTS 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 LITIGATION REFORM ACT OF 1995. FORW ARD-LOOKING STATEMENTS INCLUDE STATEMENTS 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 FLOW , CAPITAL EXPENDITURES, BUSINESS TRENDS, CLEAN ENERGY MARKET OPPORTUNITIES, 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," "PROJECTS," "FORECASTS," “OUTLOOK,” “GUIDANCE,” "CONTINUE," “TARGET,” OR 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 IMPACTING THE COMPANY AND ARE SUBJECT TO UNCERTAINTIES AND FACTORS RELATING TO THE COMPANY'S OPERATIONS AND BUSINESS ENVIRONMENT, ALL OF W HICH ARE DIFFICULT TO PREDICT AND MANY OF W HICH ARE BEYOND 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 COMPANY’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 ANTICIPATED REVENUE, EARNINGS, ACCRETION AND OTHER BENEFITS FROM THESE ACQUISITIONS; SLOW ER THAN ANTICIPATED GROW TH AND MARKET ACCEPTANCE OF NEW CLEAN ENERGY PRODUCT OFFERINGS; INABILITY TO ACHIEVE EXPECTED PRICE INCREASES OR CONTINUED VOLATILITY IN RAW MATERIALS COST AND SUPPLY; RISKS RELATING TO THE OUTBREAK AND CONTINUED UNCERTAINTY ASSOCIATED W ITH 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 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 SECOND QUARTER AND YEAR-TO-DATE NON-GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED BASIC AND DILUTED EPS, ADJUSTED FREE CASH FLOW , AND ADJUSTED GROSS 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 “SECOND QUARTER AND YTD 2021 EARNINGS PER SHARE”, “SECOND QUARTER AND YTD 2021 FREE CASH FLOW ” AND “ADJUSTED GROSS PROFIT RECONCILIATION” INCLUDED IN, OR IN THE APPENDIX AT THE END OF, THIS PRESENTATION. W ITH RESPECT TO THE COMPANY’S 2021 FULL YEAR EARNINGS OUTLOOK, THE COMPANY IS NOT ABLE TO PROVIDE A RECONCILIATION OF THE ADJUSTED EARNINGS PER DILUTED SHARE AND ADJUSTED FREE CASH FLOW BECAUSE CERTAIN ITEMS MAY HAVE NOT YET OCCURRED OR ARE OUT OF THE COMPANY’S CONTROL AND/OR CANNOT BE REASONABLY PREDICTED. 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. W E 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. © 2021 Chart Industries, Inc. Confidential and Proprietary 2
Setting the Stage… Expecting Significant Growth This Decade 3
Multiple Macro Tailwinds Creating a “Perfect Storm” in the “Roaring 2020s” 4© 2021 Chart Industries, Inc. Confidential and Proprietary Increasing Global Activity Clean Energy Transition Government Support LNG is Active • Restaurant and travel very active = food & bev activity + CO2 equipment, dosers • Oil prices $60+ = “legacy” oil and gas applications • Supply chain shortages = increased manufacturing = more industrial gas usage • Retrofitting needs across industries are in high demand • British Columbia H2 strategy & Canadian $1.5 billion clean fuel funding announced • U.S. DOE $52.5 million to accelerate clean hydrogen technologies • Greece 44B euros in green investments • India government supporting green hydrogen plan • These are only a few examples from the past month… the list goes on… Benefitting • All industries involved – steel, hotels, transportation, power, retail, etc. • Private sector funding development and pilot / large scale projects • Over $500 billion of hydrogen project investments have been announced in 1 yr • CCUS, water, hydrogen, biogas projects are happening globally • CTS • HTS • RSL • Specialty • RSL • Specialty • RSL • CTS • HTS • Specialty • RSL • HTS Benefitting Benefitting Benefitting • Significant increase in gas demand globally • Spot prices also driving long-term agreement behavior • 2022-2023 supply/demand needs require additional terminal builds
Chart Records Set in Q2 2021 Include: 5 © 2021 Chart Industries, Inc. Confidential and Proprietary $millions Orders Backlog Sales Specialty Products Hydrogen/Helium Water Treatment HLNG Vehicle Food & Beverage CCUS Space Other Repair, Service, Leasing Cryo-Lease PRS Cryo Tank Solutions Storage Equipment Eng Systems Mobiles Heat Transfer System CHART TOTAL CHART TOTAL $ $447.9 $1,083.9 $322.0
Specialty Near-Term and 2030 Addressable Markets © 2021 Chart Industries, Inc. Confidential and Proprietary 6 # Specialty Area Near-Term TAM ($M) 2030 TAM ($M) Source of GTLS TAM in 2030 1 Hydrogen & Helium $2,950 $24,000 • Per new Hydrogen Council report on increasing investment rate and our current market share applied 2 Carbon Capture 850 5,600 • Assumes 30 small commercial 200tpd systems, 30 large industrial systems 2000tpd, 10 large utility systems, small-scale CICI® and utilization/DAC 3 Over-the-Road Trucking 750 2,000 • Based on HLNG adoption for OTR trucking at 10% in India and Europe, 1% Japan and 0.1% in U.S. + associated fueling stations • This TAM equates to 46,100 LNG trucks 4 Water 700 2,300 • Penetration in and growth in odor control (10%), disinfection (12%), pH adjustment (25%) and aeration (15%) 5 Food & Beverage 500 1,000 • European adoption, replacement systems due to age, increased conversion to microbulk CO2 + market growth = 11% CAGR 6 Cannabis 250 550 • Federal legalization & FDA approvals for CBD in F&B • Assumes a 15.8% CAGR in this period in growhouses, extraction and packaging 7 Space 200 400 • Increased space exploration (both government and private sector) • Ease of access to broader population for space exploration 8 Lasers 200 400 • Increased industrial applications globally 9 Molecules By Rail 200 250 • Limited expansion of the molecules by rail market with the exception of hydrogen expectations which would be included in the H2/He 10 CHART TOTAL $6,600 $36,500 *See appendix slide 30 for product and technology descriptions that GTLS offers in each specialty market
© 2021 Chart Industries, Inc. Confidential and Proprietary 7 Chart’s Strategic Acquisitions and Investments 2020 Development Agreement for LH2 automotive Completed master supply agreement Acquisition of cryogenic and H2 trailer business and former microbulk business 30M Euro investment with commercial MOU Acquisition of water treatment business Investment in Canadian H2 integrator Acquisition of SES, carbon capture technology 2018 / 2019 Divestiture of cryobio product line to Cryoport for $320M cash 2018: Acquires VRV 2018: Acquires Skaff Cryogenics 2018: Completes BAHX capacity expansion in La Crosse, WI 2018: Divestiture of oxygen concentrator business 2019: Acquisition of Air-X-Changers 2021 Acquisition of Cryo Technologies for $55 million cash (Feb 16, 2021) Joint development MOU February 10, 2021 $15M Investment and commercial MOU Completed Feb 2, 2021 Investment of $25 million for 5% ownership and commercial MOU (March 31, 2021) Intend to be Cornerstone, early investor in forthcoming Five T Hydrogen Fund (50 million Euro investment over coming years) Commercial and development MOU (no investment) for control systems and instrumentation in our modular solutions Minority investment of 6.5M euros and commercial agreement (May 19, 2021) Minority investment of $5 million for 15% ownership and commercial MOU (June 3, 2021) Acquisition of L.A. Turbine for $80 million cash (July 1, 2021)
Past 12 Months’ Inorganic Deals # Company Name Spec Market Acquisition or Minority? Date Closed Update 1 McPhy Hydrogen Minority 10/14/2020 • Working on multiple commercialized large-scale plant opportunities together • Access to Hynamics, French utility, French government 2 Worthington Cryo trailers Hydrogen/IG Acquisition 10/15/2020 • Record trailers ordered and in backlog • Q2 2021 LH2 trailer orders of $26.1M 3 BlueInGreen Water Acquisition 11/3/2020 • Record water orders with both Chart and BIG together in Q2 (YTD $10.2M compared to full year 2020 of $11.9M and full year 2019 of $4.6M) 4 HTEC Hydrogen Minority 12/16/2020 • 3 projects in Canada + 1 in California together • $20M+ in government funding 5 SES CCUS Acquisition 12/23/2020 • Working with 111 CCUS customers/potential customers relating to 31 projects 6 Svante CCUS Minority 2/2/2021 • Received $25M Ottawa investment • Joint dev for large scale plants with Chart/SES 7 Cryo Technologies Hydrogen/Helium Acquisition 2/16/2021 • Over $110 million of projects ordered since acquisition 8 Transform Materials Hydrogen/Acetylene Minority 3/31/2021 • Expect 3 plant orders before end of Q1 2022 9 Cryomotive Hydrogen Minority 5/19/2021 • R&D stage 10 Earthly Labs CCUS Minority 6/3/2021 • YTD have sold ~$175k to Earthly 11 L.A. Turbine Clean Energy/IG Acquisition 7/1/2021 • Numerous order inquiries in first two weeks of ownership 8
Q2 2021 Results 9
$ millions, except per share amounts Second Quarter 2021 Summary Record order quarter (third consecutive record order quarter) including one helium liquefaction project resulting in record backlog (third consecutive quarter of record backlog) Sales in line with consensus and as anticipated based on Q1 2021 backlog timing of shipments Reported and adjusted gross margin as a percent of sales was impacted by raw material cost changes; ~8%-12% price increase in effect as of July 1, 2021 Reported and adjusted non-diluted EPS was in line with our expectations Second Quarter 2021 Comments (1) Q2 2021 and Q2 2020 included $5 and $24 million respectively for Venture Global’s Calcasieu Pass project; when excluding BigLNG, the second figures are the change from Q2 2020 to Q2 2021 (2) Excludes the mark-to-market impact of strategic equity investments. © 2021 Chart Industries, Inc. Confidential and Proprietary 10 $ millions, except per share amounts Q2 2021 Q2 2020 Q2 2019 Consolidated Orders 447.9 244.5 298.4 % Change 83% 50% Backlog 1,083.9 686.7 742.8 % Change 58% 46% Sales 322.0 289.5 287.1 % Change (1) 11% / 19% 12% Reported GM % 25.8% 28.8% / 27.7% 25.0% Change (1) -300 bps / -190 bps +80 bps Adjusted GM% 29.0% 29.4% / 28.4% 26.5% % Change (1) -40 bps / + 60 bps +250 bps Reported diluted EPS $0.16 $0.39 $0.18 % Change -59% -11% Adjusted diluted EPS (2) $0.76 $0.45 $0.45 % Change 69% 69% Reported non-diluted EPS $0.18 $0.39 $0.19 % Change -54% -5% Adjusted non-diluted EPS (2) $0.80 $0.45 $0.46 % Change 78% 74%
© 2021 Chart Industries, Inc. Confidential and Proprietary 11 Material Cost Impact to Chart: • Secured raw material through end of 2021 via contract, which impacted Q2 2021 inventory levels and free cash flow • Given inventory build in Q2 2021 and second half 2021 anticipated shipment levels, expect inventory levels to decline in both Q3 and Q4 2021 • Q2 2021 costs of materials were impacted, although our agreements allow for surcharge of material escalation which is typically ~3 months delayed for pass through • Price increase went into effect July 1, 2021 averaging ~8% to 12% depending on product category Global Supply Situation • Stainless steel supply cannot meet high demand, in particular in the U.S. where 2 key mills have had direct negative impacts on their availability • Carbon steel is primarily produced in China and China is keeping most capacity for China • Aluminum price staying at near all- time high levels • Already stressed mills are heading into typical summer maintenance season Market Price Changes Since January 2021 on Chart’s 3 biggest areas of material spend: Stainless +21% Carbon Steel +41% Aluminum +22%
12 Specialty Products © 2021 Chart Industries, Inc. Confidential and Proprietary 36.5% 34.4% Q1 FY21 Q2 FY21 35.0% 34.4% Q2 FY20 Q2 FY21 $77.3 $106.8 Q1 FY21 Q2 FY21 $48.6 $106.8 Q2 FY20 Q2 FY21 $144.5 $190.6 Q1 FY21 Q2 FY21 $64.4 $190.6 Q2 FY20 Q2 FY21 +196.0% +31.9% +119.8% +38.2% -60 bps -210 bps Orders Sales Gross Margin Adjusted Gross Margin 35.2% 36.0% Q2 FY20 Q2 FY21 37.5% 36.0% Q1 FY21 Q2 FY21 +80 bps -150 bps Q2 2021 Compared to Q2 2020 • Backlog up $228.2 million driven by hydrogen (+$169.0M), Food & Beverage and Other • 30 hydrogen trailers in backlog as of 6/30/2021 (historical record trailers built in any given year was 9) Q2 2021 Compared to Q1 2021 • Beverage tank orders increased 12% over Q1 2021 with June beverage tank orders the highest month since January 2020 • HLNG vehicle tank demand continues as we are seeing broad based acceptance of LNG vehicles, including Q2 2021 orders for various LNG buses • Booked Russian helium liquefaction project for over $40 million in Q2 2021
© 2021 Chart Industries, Inc. Confidential and Proprietary 13 Our Hydrogen Progress 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 (1) TAM = Total Addressable Market for Chart existing process and equipment Current TAM GTLS TAM $2.65 Billion • 136 Fueling stations 1 + multiple equipment • 100 hydrogen transports 43 LH2 + 9 GH2 • 25 hydrogen/He liquefiers 3 • 260 storage tanks 69 (+1 July MTD) • 2 Marine Fuel 2 • Space launch tanks 1 • Onboard LH2 tanks 0 (two agreements signed) • 10-15 Transform plants 0 (3-5 expected <12 months) • Cryomotive CcH2 R&D Stage Not included in TAM • Hydrogen pumps • LH2 ISO Containers 1 (July MTD) GTLS Booked in 15 months = $191M • Hydrogen record orders, backlog and sales in Q2 2021 (third consecutive quarter of record historical levels) • Received first liquid hydrogen ISO container (LH2 ISO) order in July 2021 • Introducing commercially available liquid hydrogen onboard vehicle tank (LH2 onboard tank) in August 2021 • Hydrogen test facility actively running in Minnesota with onsite hydrogen filled • Liquid hydrogen pump development and testing on track • Executed joint development agreement with Hyzon Motors for heavy-duty long-haul trucking • Added L.A. Turbine specialty expanders to our portfolio via acquisition (July 1, 2021)
14 Repair, Service & Leasing © 2021 Chart Industries, Inc. Confidential and Proprietary 35.5% 22.2% Q1 FY21 Q2 FY21 34.2% 22.2% Q2 FY20 Q2 FY21 $40.1 $54.6 Q2 FY20 Q2 FY21 $40.5 $41.4 Q1 FY21 Q2 FY21 $41.4 $41.4 Q2 FY20 Q2 FY21 +36.2% -1200 bps -1330 bps Orders Sales Gross Margin +2.2% $41.4 $54.6 Q1 FY21 Q2 FY21 +31.9% Adjusted Gross Margin 35.4% 23.6% Q2 FY20 Q2 FY21 35.7% 23.6% Q1 FY21 Q2 FY21 -1180 bps -1210 bps Q2 2021 Compared to Q2 2020 and Q1 2021 (explanations apply to both): • Sales increased 36% compared to Q2 2020 driven by increase in leasing business • Gross margin as a percent of sales impacted by less quick turn work and less field service work in Q2 2021 • Opened new Richburg, SC (USA) repair and service location in June 2021 • Have 80 customers on repair and service agreements globally, 50% outside of North America
RSL Targeting 20%+ of Chart Revenue Q2 2021 RSL was 17% of Chart’s Total Revenue 15© 2021 Chart Industries, Inc. Confidential and Proprietary Geographic Footprint European RSL Capabilities RSL LTAs with key customers Portfolio additions with higher % aftermarket Expanded Leasing Fleet Remote Monitoring Actions Taken: 2018-2019 2020 2021 YTD • Acquired Skaff (New Hampshire) • Acquired VCT Vogel (Germany) • Addition of major industrial gas customers repair and service to LTAs (80!) • Invested ~$5M into standard mobile and micro-bulk lease fleet • Opened Richburg, SC Greenfield repair & service facility • Expanded IOT capabilities with investment in Earthly Labs • Introduced virtual engineers for station/cryogenic equipment monitoring • Acquired BlueInGreen with Treatment as a Service (TaaS) offering • Acquired L.A. Turbine • New customers on agreements including preventive maintenance in EU • Offered leasing option for the first time in EU • Investing another ~$5M into leasing fleet per customers requests • Added field service technicians across the United States • Expanded on-site service & maintenance into 5 more countries (Italy, France, Czech Republic, Slovakia, Belgium)
16 Cryo Tank Solutions © 2021 Chart Industries, Inc. Confidential and Proprietary $129.5 $175.3 Q1 FY21 Q2 FY21 $85.5 $175.3 Q2 FY20 Q2 FY21 24.3% 23.7% Q1 FY21 Q2 FY21 24.5% 23.7% Q2 FY20 Q2 FY21 $103.9 $97.8 Q1 FY21 Q2 FY21 $105.3 $97.8 Q2 FY20 Q2 FY21 +105.0% -7.1% -5.9% -80 bps -60 bps Orders Sales Gross Margin +35.4% 24.7% 25.9% Q2 FY20 Q2 FY21 24.3% 25.9% Q1 FY21 Q2 FY21 Adjusted Gross Margin +120 bps +160 bps Q2 2021 Compared to Q2 2020: • Record order intake for EMEA & India of $56 million is a 129% improvement when compared to Q2 2020 • Market consumption of bulk tanks continues to be strong with shipments over 200 tanks each quarter in the first half Q2 2021 Compared to Q1 2021: • Record order intake for EMEA & India of $56 million is a 38% improvement when compared to Q1 2021 • Normalized gross margin as a percent of sales of 25.9% is a historical record for CTS Other • Global price increase for most CTS products went into effect July 1, 2021, so we anticipate that some of the Q2 2021 order activity was in advance of the price increases
Products Within Cryo Tank Solutions are Leading Indicators © 2021 Chart Industries, Inc. Confidential and Proprietary 17 Record in Q2 2021 indicated by green check mark Broad Category Subcategory Orders Standard Tanks Jumbo Pressure Vessels Large Pressure Vessels Standard Tanks VTC/HTC Tanks Packaged Gas Dewars Stationary liquid cylinders Transportable liquid cylinders Misc. Engineered Systems Engineered Systems Engineered Tanks 2nd highest Vacuum Jacketed Pipe Vaporizers Dispensers Mobile Equipment Railcars ISO Containers 2nd highest Rigid tankers & swap bodies Semi trailer/trailers • Built Chart China’s largest bulk tank in history • Record medical oxygen equipment orders • Booked 338 trailers YTD 6/30/2021 compared to 335 FY 2020 and 355 FY 2019 • Second highest sales quarter in history for ISO Containers
18 Heat Transfer Systems 22.8% 17.2% Q1 FY21 Q2 FY21 27.5% 17.2% Q2 FY20 Q2 FY21 $69.2 $65.2 Q1 FY21 Q2 FY21 $97.3 $65.2 Q2 FY20 Q2 FY21 $104.9 $48.4 Q1 FY21 Q2 FY21 $55.4 $48.4 Q2 FY20 Q2 FY21 Gross Margin -12.6% -53.9% -1030 bps -560 bps Orders -33.0% -5.8% Sales 28.6% 25.9% Q2 FY20 Q2 FY21 24.9% 25.9% Q1 FY21 Q2 FY21 Adjusted Gross Margin -270 bps +100 bps Q2 2021 Compared to Q2 2020: • Q2 2021 Venture Global Calcasieu Pass revenue of ~$5 million compared to Q2 2020 of ~$24 million • Replacement activity high with plants running at higher capacity factors with changing capture & rejection modes Q2 2021 Compared to Q1 2021: • Q2 2021 Venture Global Calcasieu Pass revenue of ~$5 million compared to Q1 2021 of ~$15 million • Q1 2021 orders included NFE FastLNG • Increasing movement from inquiry (budget quotations) to converting to firm fixed purchase orders in midstream and upstream projects • Quoting activity has increased 30% from April to June Other • If HTS products are used in Specialty or RSL applications, Specialty and RSL will get credit for them in the external reporting © 2021 Chart Industries, Inc. Confidential and Proprietary
© 2021 Chart Industries, Inc. Confidential and Proprietary 19 Do Not Forget About LNG # Project Description Potential Content ($M) Status 1 Eagle Jacksonville 500 gpd liquefier $36 LOI in hand but order not yet booked 2 NEC 250 gpd liquefier $22 LOI in hand but order not yet booked 3 EU Client 10 TPD Biogas liquefier $4 4 Gasum 3 individual LBG (bio) $4.8 each 5 Confidential 1 MTPA liquefier $30 6 SW USA Utility 280k storage/regas $2.2 7 S. Africa 300 TPD $30 8 USA Confidential 1 MTPA liquefier $44 9 Africa Confidential 1.8 MTPA liquefier $27 10 Philippines 3.5M storage $10 11 S. Africa 4800m3 LNG import to FSRU Barge Complex $125 • BigLNG and ssLNG Commercial Pipeline is very active • Considerable Q2 2021 activity in FERC approved mid- scale projects including Venture Global Plaquemines, Cheniere CCL Stage Three and Tellurian’s Driftwood Phase 1 • Widespread & strong demand for LNG vehicle tanks, fueling stations and trailers which is supported by more market and government acceptance of LNG • HLNG vehicle tank activity is strong, with record orders in Q2 2021 including largest LNG bus order in our history • No new BigLNG projects are included in our 2021 guidance or 2022 outlook • Small-scale LNG projects that are not yet booked are not included in our 2021 guidance Small-scale LNG pipeline is growing. None of the below in current backlog.
© 2021 Chart Industries, Inc. Confidential and Proprietary 20 Second Quarter and YTD 2021 Earnings Per Share (1) On a diluted earnings per share basis: Restructuring costs of $0.02 and $0.01 in Q1 and Q2 2021 respectively; Acquisition and divestiture related costs of $0.03 and $0.05 in Q1 and Q2 2021 respectively; acquisition earnout of $0.02 and $0.03 in Q1 and Q2 2021 respectively; integration and other rightsizing costs of $0.02 and $0.03 in Q1 and Q2 2021 respectively; facility relocation costs of $0.01 and $0.15 in Q1 2021 and Q2 2021 respectively. (2) On a diluted earnings per share basis: COVID-19 related costs of $0.03 Q1 2020; Commercial and legal settlements of $0.02 in Q1 2020 and $0.02 and $0.04 in Q1 and Q2 2021 respectively, gain on sale of a building in China of ($0.07) in Q2 2020, and new facility startup costs of $0.02 and $0.04 in Q1 and Q2 2021 respectively. (3) Tax effect reflects adjustment at normalized periodic rates. (4) Stabilis equity investment mark-to-market in 2020; Stabilis and McPhy equity investments mark-to-market in 2021, tax affected at normalized periodic rates. (5) Adjusted Diluted EPS and Adjusted Non-diluted EPS (non-GAAP measures) are as reported on a historical basis. $ millions, except per share amounts Q2 2021 Q2 2020 Change v. PY YTD 2021 YTD 2020 Change v. PY Continuing Operations Net income from continuing operations $6.5 $13.8 ($7.3) $32.1 $15.9 $16.2 Reported Basic EPS $0.18 $0.39 ($0.21) $0.90 $0.45 $0.45 1 Restructuring and transaction-related costs (1) 0.31 0.18 0.13 0.42 0.38 0.04 2 Other one-time items (2) 0.10 (0.07) 0.17 0.13 (0.02) 0.15 3 Tax effects (3) (0.07) (0.03) (0.04) (0.10) (0.09) (0.01) Adjusted Non-diluted EPS (5) $0.52 $0.47 $0.05 $1.35 $0.72 $0.63 4 Investment equities mark-to-market (4) 0.35 (0.02) 0.37 0.26 0.13 0.13 5 Tax effect (3) (0.07) - (0.07) (0.05) (0.02) (0.03) Adjusted Non-diluted EPS, excluding strategic equity investment (5) $0.80 $0.45 $0.35 $1.56 $0.83 $0.73 Reported Diluted EPS $0.16 $0.39 ($0.23) $0.79 $0.45 $0.34 1 Restructuring and transaction-related costs (1) 0.27 0.18 0.09 0.37 0.38 (0.01) 2 Other one-time items (2) 0.09 (0.07) 0.16 0.12 (0.02) 0.14 3 Tax effects (3) (0.06) (0.03) (0.03) (0.09) (0.09) - 4 Dilution impact of convertible notes 0.03 - 0.03 0.08 - 0.08 5 Investment equities mark-to-market, tax affected (3,4) 0.27 (0.02) 0.29 0.19 0.11 0.08 Adjusted Diluted EPS, excluding strategic equity investment (5) $0.76 $0.45 $0.31 $1.46 $0.83 $0.63
2021 & 2022 Outlooks 21
© 2021 Chart Industries, Inc. Confidential and Proprietary 22 2021 Full Year Sales Outlook (1H to 2H) to Low End (A) Acquisition impact = L.A. Turbine; Specific projects are not called out due to confidentiality purposes but do not include additional ssLNG projects that are not yet booked (B) Acquisition impact is the Cryo Technologies order for the Russian helium liquefaction project; specific 2H revenue relates to Plug Power hydrogen liquefaction Note: Totals may not foot due to rounding A B 1H 2021 Sales Actual % Growth 1H to 2H 2H 2021 Sales Forecast VG Calcasieu Pass YOY Change Specific Projects with 2H expected revenue (2) Acquisition Impacts 2021 FY Estimate 2020 Sales Actual FY% growth at low end of range Heat Transfer Systems 134 24% 167 (77) 70 10 304 370 -18% Heat exchangers/cold boxes/systems 72 30% 93 (77) 70 10 168 220 -23% ACHX/Fans/Expanders 72 15% 83 155 152 2% Eliminations (10) 0% (10) (19) (2) 1193% Cryo Tank Solutions 202 23% 248 - - - 450 416 8% Storage equipment 124 10% 136 260 223 17% Engineered systems 37 35% 50 87 90 -3% Mobile Equipment 59 35% 80 140 108 29% Eliminations (19) 0% (19) (37) (5) 704% Specialty Products 184 10% 202 - 37 25 448 242 85% Hydrogen & Helium 31 5% 33 37 25 125 22 465% HLNG 72 -28% 52 124 74 67% Food & Beverage 25 35% 34 59 39 52% Other 56 50% 84 140 107 31% Repair, Service, Leasing 96 1% 97 - - - 193 158 22% Repair, Service, Leasing 49 0% 49 97 90 8% ACHX and Fans Aftermarket 49 2% 50 100 69 43% Eliminations (2) 0% (2) (4) (1) 280% Corporate Eliminations (6) 70% (10) - - (15) (9) 71% Total Chart 610 15% 704 (77) 107 35 1,380 1,177 17%
© 2021 Chart Industries, Inc. Confidential and Proprietary 23 2021 Revenue FY Outlook (Current Vs. Prior to Low End of Guidance Range) As of Q1 2021 As of Q2 2021 Prior 2021 Full Year Sales Outlook 2021 FY Estimate Change Heat Transfer Systems 380 304 (76) Heat exchangers/cold boxes/systems 206 168 (37) ACHX/Fans 176 155 (21) Eliminations (2) (19) (18) Cryo Tank Solutions 443 450 6 Storage equipment 240 260 20 Engineered systems 96 87 (9) Mobile Equipment 112 140 28 Eliminations (5) (37) (32) Specialty Products 373 448 76 Hydrogen & Helium 99 125 26 HLNG 100 124 24 Food & Beverage 43 59 16 Other 131 140 9 Repair, Service, Leasing 179 193 14 Repair, Service, Leasing 104 97 (6) ACHX and Fans Aftermarket 76 100 23 Eliminations (1) (4) (3) Corporate Eliminations (15) (15) (0) Total Chart 1,360 1,380 20 Note: Totals may not foot due to rounding
Full Year 2021 Guidance (Continuing Operations) 24© 2021 Chart Industries, Inc. Confidential and Proprietary Prior Guidance Current Guidance Revenue $1.36 to $1.41B Includes $21M of Calcasieu Pass Includes $30M from CT Non-Diluted Adjusted EPS $3.65 to $4.15 Assumes 18% ETR & 35.5M shares outstanding Capital Expenditures $40M to $50M Adjusted Free Cash Flow $200M to $220M Revenue $1.380 to $1.430B Non-Diluted Adjusted EPS $3.80 to $4.25 Assumes 18% ETR and 35.5M shares outstanding Capital Expenditures $40M to $50M (YTD 6/30/21 spend of $27M) Adjusted Free Cash Flow Approximately $150M
© 2021 Chart Industries, Inc. Confidential and Proprietary 25 Strong Backlog Already Sets 2022 Up Well # Segment Total Backlog 2H 2021 in Backlog 2022 + in Backlog Not in Backlog But With High Probability Comment 1 Total GTLS 1,083.9 624.0 459.9 2 Potential timing shifts from backlog to 2023 0 – (100) 3 2H 2021 orders that will ship in 2022 and typical (non-specific project) book & ship in same year 850 – 1,000 4 ssLNG projects with LOIs but not yet booked until NTP (Eagle Jacksonville, NEC, 1 Confidential) 65 5 Winning ~30% of projects in current comml pipeline that are each greater than $10M and have a +40% probability of moving ahead in this timeframe (ex BigLNG and ex H2 liquefaction) 110 6 Subset of the 25 hydrogen liquefaction projects currently being quoted for 2022 (assume 3 plants) 75 – 115 7 Full year of L.A. Turbine 40 – 50 8 2022 Estimate $1,600-$1,700 9 BigLNG Upside (VG, Cheniere, Tellurian) 2022 Revenue Portion if Booked by June 30, 2022 $175 – $250 Not included 10 Increased manufacturing capacity at Teddy, Tulsa, India and Valencia TBD Not included
And Finally…Another Step in our ESG Journey © 2021 Chart Industries, Inc. Confidential and Proprietary 26
Appendix 27
© 2021 Chart Industries, Inc. Confidential and Proprietary 28 Second Quarter and YTD 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” is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to net cash provided by (used in) operating activities in accordance with U.S. GAAP. The Company believes this figure is of interest to investors and facilitates useful period-to period comparisons of the Company’s operating results. $ millions, except per share amounts Consolidated Q2 2021 Q2 2020 Change v. PY YTD 2021 YTD 2020 Change v. PY Net income, adjusted (1) $24 $24 - $49 $47 $2 Depreciation and amortization 20 24 (4) 39 47 (8) Accounts receivable (33) 11 (44) (19) 18 (37) Inventory (29) (13) (16) (65) (29) (36) Unbilled contract revenues and other assets (30) 5 (35) (37) 13 (50) Accounts payable and other liabilities (8) (5) (3) (4) (22) 18 Customer advances and billings in excess of contract revenue 19 9 10 9 6 3 Net Cash Provided By Operating Activities ($37) $55 ($92) ($28) $80 ($108) Capital expenditures (15) (11) (4) (27) (21) (6) Free Cash Flow (2) ($52) $44 ($96) ($55) $59 ($114) Pro-forma adjustments Divestiture related tax payments 21 21 25 - 25 Pro-Forma Free Cash Flow (2) ($31) $44 ($75) ($30) $59 ($89)
Prior 2020 Actual Sales to 2021 Sales (to Low End of Range) 29 (A) VG Calcasieu Pass ~$98 million in 2020, $21 million in 2021 full year outlook (B) Includes FastLNG 2021 revenue portion and 2021 petrochemical project currently in backlog as well as one additional small-scale LNG project expected to be booked in Q2 2021 (C) A portion of the $70 million ACHX order that was booked in Q4 2020 should begin to ship in Q4 2021 (D) Reflects the Q1 2021 Plug Power liquefier orders (2021 revenue portion) and additional equipment orders received in Q1 2021 that will ship in 2H 2021 (E) Increase of HLNG 2021 sales resulting from continued high demand in Q1 2021 (F) Addition of Cryo Technologies (acquisition closed February 16, 2021) (G) Incremental BlueInGreen revenue in 2021 (H) Increase in intercompany eliminations due to HLNG and ISO container increases (I) Amounts may not reconcile due to rounding. A, B C D, F E G H © 2021 Chart Industries, Inc. Confidential and Proprietary 2020 Sales Actual % Growth Est. 2021 Specific Projects (1) Specific Projects (2) Acquisition Impacts 2021 Sales at low end of range % growth at low end of range Heat Transfer Systems 370 3% 381 (77) 77 - 380 3% Heat exchangers/cold boxes/systems 220 3% 226 (77) 57 206 -6% ACHX/Fans 152 3% 156 20 176 16% Eliminations (2) 0% (2) (2) 0% Cryo Tank Solutions 416 7% 443 - - - 443 7% Storage equipment 223 8% 240 240 8% Engineered systems 90 7% 96 96 7% Mobile Equipment 108 4% 112 112 3% Eliminations (5) 0% (5) (5) 0% Specialty Products 242 25% 303 - 32 38 373 54% Hydrogen & Helium 22 70% 38 32 30 99 347% HLNG 74 35% 100 100 35% Food & Beverage 39 10% 43 43 10% Other 107 15% 123 8 131 22% Repair, Service, Leasing 158 13% 179 - - - 179 13% Repair, Service, Leasing 90 15% 104 104 15% ACHX and Fans Aftermarket 69 10% 76 76 10% Eliminations (1) 0% (1) (1) 0% Corporate Eliminations (9) 70% (15) - - (15) 70% Total Chart 1,177 10% 1,291 (77) 108 38 1,360 16%
Our Specialty Markets Near-Term Addressable Market Size ($6.6B) 700M 750M 2,650M Space Cryogenic liquid propellants are used as fuel for rocket propulsion Drivers of Size Opportunity Proliferation of private space travel industry Industrial Lasers High purity liquid nitrogen (gas assist) provides a faster cut and superior edge, free of impurities Drivers of Size Opportunity Uptime requirements in manufacturing Reducing steps in production Cannabis Liquid CO2 storage and supply / delivery systems Used in grow houses, CBD oil extraction and packaging Drivers of Size Opportunity Legalization of cannabis Regulatory approval for CBD. Food & Beverage Food preservation equipment Nitrogen dosing equipment Drivers of Size Opportunity Nitro-beverage changeover Water Treatment Improving water quality and wastewater reuse utilize liquid oxygen and CO2 in purification process Drivers of Size Opportunity Regulation on water treatment Population growth Over The Road Trucking LNG as alternative fuel to diesel for heavy duty vehicles (lower emissions, engine noise, etc.) Drivers of Size Opportunity Regulations Hydrogen H2 vehicle fueling stations, transport equipment and liquefaction storage at H2 production sites H2 storage and mobility equipment BAHX for H2 liquefaction H2 liquefaction CcH2 equipment Drivers of Size Opportunity Buildout of hydrogen fueling infrastructure Development of “green hydrogen” industry Government stimulus packages Brand name fast followers 500M 250M 200M 200M 200M Molecules By Rail Gas by rail tender cars approved for use Drivers of Size Opportunity Legalization of LNG by train in the U.S. Expected growth in EU 850M Carbon & Direct Air Capture Air cooled heat exchangers Storage tanks BAHX and cold boxes Drivers of Size Opportunity Carbon emissions reduction targets CO2 supply shortage 300M Helium Liquefaction Helium Liquefaction Storage ISO Containers Transport Drivers of Size Opportunity • Differentiated process • Helium consistently in high demand • Russia vast natural resources 30© 2021 Chart Industries, Inc. Confidential and Proprietary
Adjusted Gross Profit Reconciliation © 2021 Chart Industries, Inc. Confidential and Proprietary 31 $ millions Cryo Tank Solutions Heat Transfer Systems Specialty Products Repair, Service & Leasing Intersegment Eliminations Corporate Consolidated Sales $97.8 $65.2 $106.8 $54.6 ($2.4) - $322.0 Gross Profit as reported (U.S. GAAP) 23.2 11.2 36.7 12.1 - - 83.2 Restructuring, transaction-related and other one-time costs 2.1 5.7 1.7 0.8 - - 10.3 Adjusted Gross profit (non-GAAP) $25.3 $16.9 $38.4 $12.9 - - $93.5 Adjusted gross profit margin (non-GAAP) 25.9% 25.9% 36.0% 23.6% 0.0% 0.0% 29.0% $ millions Cryo Tank Solutions Heat Transfer Systems Specialty Products Repair, Service & Leasing Intersegment Eliminations Corporate Consolidated Sales $105.3 $97.3 $48.6 $40.1 ($1.8) - $289.5 Gross Profit as reported (U.S. GAAP) 25.8 26.8 17.0 13.7 - - 83.3 Restructuring, transaction-related and other one-time costs 0.2 1.0 0.1 0.5 - - 1.8 Adjusted Gross profit (non-GAAP) $26.0 $27.8 $17.1 $14.2 - - $85.1 Adjusted gross profit margin (non-GAAP) 24.7% 28.6% 35.2% 35.4% 0.0% 0.0% 29.4% $ millions Cryo Tank Solutions Heat Transfer Systems Specialty Products Repair, Service & Leasing Intersegment Eliminations Corporate Consolidated Sales $102.9 $93.6 $50.7 $40.7 ($0.8) - $287.1 Gross Profit as reported (U.S. GAAP) 20.2 17.1 17.2 17.2 - - 71.7 Restructuring, transaction-related and other one-time costs 5.6 0.4 - (1.6) - - 4.4 Adjusted Gross profit (non-GAAP) $25.8 $17.5 $17.2 $15.6 - - $76.1 Adjusted gross profit margin (non-GAAP) 25.1% 18.7% 33.9% 38.3% 0.0% 0.0% 26.5% Three Months Ended June 30, 2019 Three Months Ended June 30, 2021 Three Months Ended June 30, 2020