8-K
CHART INDUSTRIES INC (GTLS)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 2, 2021
CHART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-11442 | 34-1712937 |
|---|---|---|
| (State of other jurisdiction of<br> <br>incorporation or organization) | (Commission<br> <br>File Number) | (I.R.S. Employer<br> <br>Identification No.) |
| 3055 Torrington Drive<br> <br>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<br> <br>Symbol(s) | Name of Each Exchange<br> <br>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 7.01 | Regulation FD Disclosure. |
|---|
On February 2, 2021, Chart Industries, Inc. (“Chart”) issued a press release announcing the completion of an investment in Svante Inc. in the amount of $15 million representing under 10% of its capital stock on a fully diluted basis. A copy of Chart’s press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
On February 2, 2021, Chart posted a slide presentation on its investor relations website. A copy of Chart’s presentation is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
All information in the press release and the slide presentation is furnished and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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 of 1933, as amended, or the Exchange Act, except to the extent that Chart specifically incorporates it by reference.
| Item 9.01 | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits. |
| --- | --- |
| Exhibit<br>No. | Description |
| --- | --- |
| 99.1 | Press release issued by Chart, dated February 2, 2021. |
| 99.2 | Investor Presentation posted by Chart, dated February 2, 2021. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Chart Industries, Inc. | ||
|---|---|---|
| Date: February 2, 2021 | ||
| By: | /s/ Jillian C. Evanko | |
| Name: | Jillian C. Evanko | |
| Title: | President and Chief Executive Officer |
EX-99.1
Exhibit 99.1
Chart Industries Invests $15 million in Svante Inc. and Signs Commercial Carbon Capture MOU
Collaboration to focus on liquefaction and cryogenic separation technologies
Vancouver, BC/Atlanta, /GA, February 2, 2021 – Svante Inc. and Chart Industries Inc. (‘’Chart’’) (NYSE: GTLS), a leading global manufacturer of liquefaction and cryogenic equipment for the energy and industrial gas markets, have entered into a binding commercial Memorandum of Understanding (“MOU”). The MOU establishes how the companies will explore commercial opportunities as channel to market preferred partners and collaborate to develop an integrated carbon capture solution using Svante’s rapid adsorption technology and Chart’s cryogenic carbon capture technology to make high-purity CO2 products from industrial flue gas streams. The MOU was executed in conjunction with the completion of Chart’s investment in Svante in the amount of $15 million representing under 10% of its capital stock on a fully diluted basis. The investment was done as part of Svante’s Series D offering which closed today.
‘’Value chain partnerships with leaders like Chart have been an important part of our commercialization strategy and integral to our success marketing world-leading competitive carbon capture solutions,’’ said Claude Letourneau, President & CEO of Svante Inc. “Chart offers a great range of products and services in the CO2 cryogenic separation and liquefaction space complementary to our carbon capture proprietary equipment.”
“Yesterday’s investment in Svante and our recent acquisition of Sustainable Energy Solutions Inc. (SES) further builds partnerships to create a one-stop solution for those looking for integrated technology and equipment for carbon capture and direct air capture, liquefication and transport of CO2,’’ said Jill Evanko, President & CEO of Chart. ‘’Our air-cooled heat exchangers, brazed aluminum heat exchangers, IPSMR^©^ refrigeration/liquefaction system and cryogenic storage/transport equipment are a significant part of the balance-of-plant within carbon capture, utilization and storage (‘’CCUS’’) projects.’’
As a value-added reseller, Svante will be part of the sales channel of Chart OEM business in CO2 products. This will allow both organizations to standardize related process equipment and offer market competitive integrated solutions to streamline the contracting process. The carbon-capture facilities will employ Svante’s solid sorbent technology to capture carbon directly from industrial post-combustion flue gases as a non-intrusive ‘’end-of-the-pipe’’ solution to produce pipeline-grade CO2 for safe transportation and storage. Additionally, there is a significant synergy potential to integrate Chart’s SES Carbon Capture Technology (“CCC”) with Svante’s technology, creating an even more cost competitive solution for obtaining or maintaining the highest purity of CO2 (99.99%).
Chart’s investment furthers access to commercial projects underway and new opportunities in the North American carbon capture market. For example, Chart will benefit from Svante’s technology currently being deployed in the field at pilot plant-scale by industry leaders in the energy and cement manufacturing sectors. The CO2MENT Pilot Plant Project – a partnership between LafargeHolcim and TOTAL S.A. – is operating a 1 tonne per day plant in Richmond, British Columbia, Canada that will re-inject captured CO2 into concrete, while the construction and commissioning of a 30 tonne per day demonstration plant was completed in 2019 at an industrial facility in Lloydminster, Saskatchewan, Canada. A 25 tonne per day demonstration plant is currently under design and construction at Chevron U.S.A. located near Bakersfield, California. It
is Chart’s belief that there will be a hybrid of clean energy molecules, and that carbon capture will absolutely be needed to achieve the carbon neutrality targets that both government and private industry have stated – so we will stay fo”CCUS”ed on carbon capture options as a key part of our cleaner future.
In conjunction with this investment, the commercial trends from Chart’s recent acquisitions of SES, Worthington hydrogen trailers, Worthington microbulk and BlueInGreen’s water treatment technology and our strong fourth quarter 2020 order book (record backlog with or without big LNG), Chart anticipates increasing 2021 guidance on our year-end 2020 earnings call which is scheduled for February 18, 2021 at 9:30am eastern time. Chart’s fourth quarter of 2020 was a very strong free cash flow generating quarter, the second highest in our history, with or without big LNG. December 31, 2020 net leverage ratio was 1.70. December 31, 2020 pro forma net leverage ratio including the $15 million Svante investment is 1.77.
Jill Evanko will further discuss Chart’s investment in Svante on an investor call today, February 2, 2021 at 9:30am eastern time, utilizing the supplemental presentation which is included at the end of this press release. The conference call can be accessed by calling 877-312-9395 from the U.S. or Canada or 970-315-0456 from international locations and entering conference ID 1974344. A replay will be available from February 2, 2021 at 12:30pm eastern until February 9, 2021. The replay can be accessed by dialing 855-859-2056 from the U.S. or Canada or 404-537-3406 from international locations.
About Svante
Svante offers companies in emissions-intensive industries a commercially viable way to capture large-scale CO2 emissions from existing infrastructure, either for safe storage or to be recycled for further industrial use in a closed loop. With the ability to capture CO2 directly from industrial sources at less than half the capital cost of existing solutions, Svante makes industrial-scale carbon capture a reality. Svante’s Board of Directors includes Nobel Laureate and former Secretary of Energy, Steven Chu and CEO of OGCI Climate Investments Pratima Rangarajan. To learn more about Svante’s technology, click here **** or visit Svante’s website. You can also connect with us on LinkedIn or Twitter @svantesolutions.
About Chart Industries
Chart Industries, Inc. is a leading independent global manufacturer of highly engineered equipment servicing multiple applications in the Energy and Industrial Gas markets. Chart’s unique product portfolio is used in every phase of the liquid gas supply chain, including upfront engineering, service and repair. At the forefront of the clean energy transition, Chart is a leading provider of technology, equipment and services related to LNG, hydrogen, biogas and CO2 capture amongst other applications. To learn more, visit www.chartindustries.com.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company’s business plans, including statements regarding pending acquisitions, completed acquisitions, cost synergies and efficiency savings, objectives, future orders, revenues, margins, earnings or performance, liquidity and cash flow, capital expenditures, business trends, governmental initiatives, including executive orders and other information that is not historical in nature. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “continue,” “target,” or the negative of such terms or comparable terminology.
Forward-looking statements contained in this press release or in other statements made by the Company are made based on management’s expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company’s operations and business environment, all of which are difficult to predict and many of which are beyond the Company’s control, that could cause the Company’s actual results to
differ materially from those matters expressed or implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements include: the Company’s ability to successfully integrate recent acquisitions and achieve the anticipated revenue, earnings, accretion and other benefits from these acquisitions; risks relating to the recent 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 and Quarterly Reports on Form 10-Q, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement.
For more information, click here:
http://ir.chartindustries.com/
Investor Relations Contacts:
| Svante | |
|---|---|
| Julia McKenna (Media) | Chart |
| jmckenna@svanteinc.com | Wade Suki |
| +1 (778) 985-5722 | Director of Investor Relations |
| +1 (832) 524-7489 | |
| wade.suki@chartindustries.com |
EX-99.2
Chart’s Expanded Carbon Capture Offering February 2, 2021 Exhibit 99.2
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, cost synergies and efficiency savings, objectives, future orders, revenues, margins, earnings or performance, liquidity and cash flow, capital expenditures, business trends, 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; risks relating to the recent 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 and Quarterly Reports on Form 10-Q, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement. © 2021 Chart Industries, Inc. Confidential and Proprietary
Chart’s Strategic Investment / Partnering Approach 2020 Development Agreement for LH2 automotive Completed master supply agreement Acquisition of cryogenic and H2 trailer 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 Brings access to: (1) customers and commercial projects that could not be accessed without significant organic investment (2) geographies that otherwise could not readily be accessed due to lack of product experience in the region, certification requirements, or government funding and relationships. $15M Investment and commercial MOU in carbon capture integration and technology © 2021 Chart Industries, Inc. Confidential and Proprietary
Interlinkages of Clean Chart Products are Prominent 2020 Chart Industries Investor Day
HOW IS IT CAPTURED? Capture technologies allow the separation of carbon dioxide from gases produced in electricity generation and industrial processes by one of three methods: pre-combustion capture, post-combustion capture and oxyfuel combustion. The captured CO2 is liquefied and pumped to pressure prior to entering the pipeline. Carbon Capture Process WHERE DOES IT GO? Captured CO2 is injected into a storage pipeline to send the CO2 to underground storage reserves. These are typically depleted oil reserves, coal beds, saline aquifers and salt caverns. CO2 is also used in Enhanced Oil Recovery (EOR) as well as fuel manufacturing. If the CO2 is high enough quality, it can also be used in the merchant market for food and beverage purposes. © 2021 Chart Industries, Inc. Confidential and Proprietary
Types of CO2 Applications We Supply Food & Beverage CarboMax tanks for microbrewing and onsite brew pubs Food freezing Convenience stores and national restaurant chains doing national upgrades Concrete Curing PM 6000 HP tanks are perfect for the application Multiple channels Reduces curing time and cost for concrete pouring Vaccine Storage Storage equipment at the front end of supply chain Work with dry ice Utilized in the dry ice mfg equipment, removing us from the chain of liability Cannabis Election resulted in additional states legalizing marijuana COVID driving growth CarboMax 750 works well for CO2 enhanced atmospheric growing Others pH control for swimming pools, fitness centers, etc. Die cooling Dry ice pellets for fire fighting © 2021 Chart Industries, Inc. Confidential and Proprietary
Liquid Air Storage Direct Air Capture Coldbox BAHX Storage Tanks Air Coolers Chart’s Carbon and Direct Air Capture Capabilities Post Combustion CO2 Capture Cryogenic process that delivers high purity liquid CO2 ready for transport and use Amine process using adsorption to deliver gaseous CO2 Direct Air Capture Removal of CO2 directly from the atmosphere Uses air cooled heat exchangers as contactor surface to capture CO2 from air stream Air coolers are the most significant part of these projects Dosers, Pipe Transport Carriers © 2021 Chart Industries, Inc. Confidential and Proprietary
Svante Capture Economics First Generation Technologies Svante Solid Sorbent Average size range of Industrial Plants (ie. Cement, SMR) Net-Zero Pledge CO2 storage $5-10/tonne 45Q Voluntary Consumer Price on Carbon About Svante: Established in 2007 80 employees Headquartered in Vancouver, Canada CEO - Claude Letourneau Focus on building a CO2 marketplace Source: Svante Inc. estimates, IRS, public disclosures © 2021 Chart Industries, Inc. Confidential and Proprietary
Svante Has Low Capex Cost… …Chart and SES Have High Purity and Small Equipment Footprint… Air Coolers Chart’s small footprint for air cooled heat exchangers Svante’s solid sorbent technology is industrial scale, low CAPEX and available today Replacing large chemical solvent towers with a single piece of compact equipment, a 50% reduction in capital costs is achieved compared to first generation approaches Opportunity to integrate Svante technology with SES CCC process in order to produce a pressured, high-purity CO2 product stream at low cost. © 2021 Chart Industries, Inc. Confidential and Proprietary
Significant Intellectual Property in Chart, SES and Investment in Svante Creates Further Differentiation Chart equipment can be used in both Svante and SES carbon capture applications: SMR systems BAHX Cold Boxes Cryogenic tanks VIP Instrumentation Controls 44 SES U.S. issued patents 17 SES U.S. patents pending Additional 20 patents issued internationally Building a CO2 Marketplace Proprietary Equipment & Manufacturing 〉130 patents worldwide 82% of Chart’s products & solutions have intellectual property associated with them © 2021 Chart Industries, Inc. Confidential and Proprietary
Svante Focuses on Three Areas for Industrialization Natural Gas 13 projects with start ups by 2025 6 individual customers Cement & Lime 9 projects with start ups by 2025 5 individual customers SMR Blue Hydrogen 5 projects with start ups by 2025 5 individual customers © 2021 Chart Industries, Inc. Confidential and Proprietary
Expanded CCUS Project Opportunity Set… Now! 30 Ton Per Day Canadian Plant at Husky Energy Operating since 2019 Pipeline of 27 Potential Commercial Projects Three projects targeted to be completed by 2024 Canada 30 ton per day (optimization) California 25 ton per day (commission 2022) Colorado 5,000 TPD (shovel ready end-2023)
Commercial MOU Between Chart and Svante © 2021 Chart Industries, Inc. Confidential and Proprietary Svante Value Added Reseller Relationship with Chart Svante Preferred O&M Supplier Program Joint Development Agreement with Svante, SES and Chart to develop integrated solution to make high purity CO2 product (99%+) Collaboration for Demonstration Projects
Chart’s Strong Earnings and Cash Generation Continues November 30, 2020 December 31, 2020 © 2021 Chart Industries, Inc. Confidential and Proprietary
700M 750M 1100M 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 National and global chains Brand name fast followers 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 HLNG vehicle tanks for onboard heavy-duty trucks HLH2 onboard tanks in development Drivers of Size Opportunity Regulations in EU Reduced engine noise while addressing emission reduction Hydrogen H2 vehicle fueling stations, transport equipment and liquefaction storage at H2 production sites H2 storage and mobility equipment BAHX for H2 liquefaction Drivers of Size Opportunity Buildout of hydrogen fueling infrastructure Development of “green hydrogen” economy 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 rail in the U.S. Expected growth in EU 600M Carbon & Direct Air Capture Air cooled heat exchangers Storage tanks BAHX and cold boxes Drivers of Size Opportunity Carbon emissions reductions targets CO2 supply shortage Chart’s Specialty Markets Keep Growing © 2021 Chart Industries, Inc. Confidential and Proprietary
December 31, 2020 Record GTLS Backlog Fourth quarter and full year 2020 results will be discussed on Chart’s earnings call on February 18, 2021 December 31, 2020 Backlog Record? Total Chart D&S East D&S West E&C Cryo E&C FinFan December 31, 2020 Backlog Record? Total Chart Cryo Tank Solutions Heat Transfer Repair, Service, Leasing Specialty Products December 31, 2020 Backlog Record? Specialty Products Hydrogen HLNG Vehicle Tanks Water Treatment Food & Beverage Former External Reporting Segmentation Current External Reporting Segmentation © 2021 Chart Industries, Inc. Confidential and Proprietary