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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): November 1, 2024
____________________________________
CHART INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
_____________________________________
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Delaware | 001-11442 | 34-1712937 |
(State of other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
| | |
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2200 Airport Industrial Drive, Suite 100, Ball Ground, Georgia 30107
(Address of principal executive offices) (ZIP Code)
Registrant’s telephone number, including area code: (770) 721-8800
NOT APPLICABLE
(Former name or former address, if changed since last report)
_____________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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| Title of each class | | Trading Symbol(s) | | Name of each exchange on which registered |
| Common Stock, par value $0.01 | | GTLS | | New York Stock Exchange |
| Depositary shares, each representing 1/20th interest in a share of 6.75% Series B Mandatory Convertible Preferred Stock, par value $0.01 | | GTLS.PRB | | New York Stock Exchange |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On November 1, 2024, Chart Industries, Inc. (the “Company”) issued a news release announcing the Company’s financial results for the third quarter ended September 30, 2024, as well as supplemental information for the third quarter ended September 30, 2024. A copy of the news release is furnished with this Current Report on Form 8-K as Exhibit 99.1, and a copy of the supplemental information is furnished with this Current Report on Form 8-K as Exhibit 99.2. All information in the news release and the supplemental information is furnished and shall not be deemed “filed” with the Securities and Exchange Commission for purposes of Section 18 of the Exchange Act, or otherwise be subject to the liability of that Section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent the Company specifically incorporated it by reference.
The news release and supplemental information furnished with this Current Report on Form 8-K include measures of which exclude certain items required to be presented under generally accepted accounting principles (“GAAP”). These measures are not recognized under GAAP and are referred to as “non-GAAP financial measures” in Regulation G under the Exchange Act. The Company believes these measures are of interest to investors and facilitate useful period-to-period comparisons of the Company’s financial results, and this information is used by the Company in evaluating internal performance. The non-GAAP measures are reconciled to the most directly comparable GAAP measure in tables at the end of the news release and in the supplemental information.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit No. | Description |
| 99.1 | |
| 99.2 | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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| Chart Industries, Inc. |
Date: November 1, 2024 |
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| By: /s/ Jillian C. Evanko
Jillian C. Evanko President and Chief Executive Officer |
Exhibit 99.1
Chart Industries Reports Third Quarter 2024 Financial Results
ATLANTA, – November 1, 2024 - Chart Industries, Inc. (NYSE: GTLS) today reported results for the third quarter ended September 30, 2024. Results shown are from continuing operations. When referring to any comparative period, all metrics are pro forma for continuing operations of the combined business of Chart and Howden (pro forma excludes the following businesses that were divested in 2023: Roots, American Fan, Cofimco and Cryo Diffusion). The Howden acquisition closed on March 17, 2023.
Third quarter 2024 highlights compared to third quarter 2023, pro forma:
•Orders of $1.17 billion, an increase of 5.4%
•Sales of $1.06 billion, an increase of 22.4%
•Reported gross margin of 34.1%, an increase of 350 basis points (“bps”)
•Reported operating income of $178.5 million (16.8% of sales) or $235.9 million when adjusted for unusual items primarily related to the Howden integration and headcount restructuring, resulting in 22.2% adjusted operating margin, an increase of 450 bps
•Reported EBITDA of $248.4 million (23.4% of sales) increased 53.9%
•Adjusted EBITDA of $260.7 million (24.5% of sales) when adjusting for the items described above was an increase of 39.3%
•Reported diluted earnings per share (“EPS”) of $1.34; adjusted diluted EPS of $2.18 which would have been $2.48 when considering negative $9.3 million of foreign exchange impact ($0.15 negative EPS impact net of tax) and a higher than originally anticipated tax rate driven by geographic mix ($0.15 negative EPS impact)
•Reported net cash from operating activities of $200.7 million less capital expenditures of $26.1 million resulted in $174.6 million of free cash flow (“FCF”); reiterate our anticipated approximately $400 million full year 2024 FCF outlook
“We generated $174.6 million of free cash flow in the third quarter 2024 which was used for the reduction of our net debt and contributed to the decrease in our net leverage ratio to 3.04 as of September 30, 2024,” stated Jill Evanko, Chart’s CEO and President. “Continued demand across the majority of our end markets, our segments’ strong operational performance, the benefits of continued double-digit growth in our aftermarket business and earlier than anticipated cost synergy achievement resulted in record reported gross profit margin of 34.1% and record adjusted operating margin of 22.2%.”
Summary of third quarter 2024.
Third quarter 2024 sales of $1.06 billion increased 22.4% (an increase of 22.6% when considering foreign exchange headwind of (0.2%)) compared to the third quarter 2023. Each segment’s sales increased when compared with the third quarter 2023.
Orders of $1.17 billion, increased 5.4% compared to the third quarter 2023. Third quarter 2024 demand was strong in Heat Transfer Systems (“HTS”) and Repair, Service and Leasing (“RSL”). HTS demand was driven by LNG and other energy-related orders for brazed aluminum and air-cooled heat exchangers. LNG is driving demand through the value chain with multiple Chart applications, including a large order for compressors in upstream gas processes in Qatar, multiple marine orders for EGR blowers, and continued pickup in HLNG vehicle tanks. The demand in RSL was underpinned by new long-term service and framework agreements. RSL book-to-bill in the third quarter 2024 was 1.05.
To date, our cost synergies from the Howden acquisition have exceeded $250 million which was our original year-three (2026) target. Those earlier than anticipated cost synergies were a contributor to our reported gross margin of 34.1%, dropping through to reported operating income of $178.5 million, or 16.8%. When adjusted for one-time items described above, adjusted operating margin was 22.2%, an increase of 450 bps when compared to the third quarter 2023 and 50 bps higher than the second quarter 2024. All four segments had an increase in their third quarter 2024 gross profit margin as well as their operating margin and adjusted operating margin when compared to the third quarter 2023.
EBITDA of $248.4 million was $260.7 million when adjusted for the one-time costs related to restructuring and Howden integration as well as the offsetting gains in the quarter on our minority investments. Adjusted EBITDA of $260.7 million included a foreign exchange negative headwind of $9.3 million in the third quarter 2024; excluding the foreign exchange impact, adjusted EBITDA would have been $270.0 million. Adjusted EBITDA margin of 24.5% grew 290 bps compared to the third quarter 2023.
LNG, hydrogen, data center, and carbon capture (“CCUS”) demand for our equipment and technology is growing.
Our IPSMR® process technology for modular LNG liquefaction and our associated proprietary equipment continues to gain traction, with dozens of technical validations approved for its use in current and potential future projects, including the following:
•ExxonMobil – on behalf of Mozambique Rovuma Venture (MRV), operator of the Area 4 concession in northern Mozambique’s Rovuma Basin – recently announced its strategic decision to select our IPSMR® liquefaction technology and proprietary equipment for the Rovuma LNG project at the Afungi peninsula. The Rovuma LNG Project will produce, liquefy and market natural gas from reservoirs of the Area 4 block of the offshore Rovuma Basin and includes the construction of 12 modules of 1.5 MTA each, with a total LNG capacity of 18 MTPA, as well as associated onshore facilities. The selection of Chart IPSMR® for the 12 liquefaction modules is expected to help enable increased project
competitiveness, improved reliability and lower GHG emissions. This project content is not yet in backlog, although early engineering work has been booked.
•The sale of Tellurian to Woodside Energy was completed on October 8, 2024. The Woodside Louisiana LNG (formerly the Driftwood project) will utilize our IPSMR® process technology and associated equipment. The project content is not yet in backlog; we received a small engineering release in October 2024.
•Viability Gap Plc., N Gas Tanzania Ltd., and Tanzania Petroleum Development Corporation have chosen to partner with Chart Industries to utilize our IPSMR® process and associated equipment for their small-scale LNG project in Tanzania, which is anticipated to commence after the finalization of the FEED (Front-End Engineering Design) phase. This project is not yet in backlog.
Additionally, in the third quarter 2024 and October 2024, we have executed the following hydrogen-related agreements, which do not yet have any content in our backlog:
•We have partnered with Renergy Group Partners LLC (“Renergy”), a renewable energy and infrastructure solutions provider, on Renergy’s green hydrogen plant in Egypt, which is anticipated to produce 450,000 tons of hydrogen per year. As part of this partnership, Chart will provide Renergy with hydrogen liquefaction, storage, and compression equipment. Final investment decision (FID) is expected in first quarter 2026, and the first phase of the 160,000MT liquid green hydrogen per year project is expected to be operational in 2030.
•We executed a Memorandum of Understanding (“MOU”) with a developer of hydrogen production projects in Europe for a 30 ton per day hydrogen liquefier and associated ISO containers. Total anticipated Chart project content is anticipated to be approximately $85 million. The project is expected to FID in 2025.
•We executed a Collaboration Agreement to work with PETROJET, Egypt’s largest state-owned construction company, to advance hydrogen projects across Egypt.
•We signed a MOU with the Region Bretagne, BrestPort, Bretagne Development Innovation and EO Concept as part of their European projects to convert their fleet of ships to use LH2 and to develop a port energy hub for the supply of renewable fuels. Chart will bring its expertise for the development of a 10 ton per day (“TPD”) hydrogen liquefaction and refueling at the Port of Brest.
We are seeing increasing scope and size for our CCUS offering, including providing our liquid oxygen bulk storage tanks to the “Catch4Climate” (CI4C) project, an oxyfuel technology carbon capture project led by four European cement manufacturers.
In October 2024, we received another data center air-cooler order and we were awarded a hydrogen liquefaction project with our partner, indigenous owned Salish Elements out of Vancouver, British Columbia (“BC”) for the first phase of their BC Hydrogen Highway project.
Third quarter 2024 segment results (as compared to the third quarter 2023, pro forma continuing operations unless noted otherwise).
Cryo Tank Solutions (“CTS”): Third quarter 2024 CTS orders of $126.2 million decreased 17.5% when compared to the third quarter 2023, primarily driven by the third quarter 2023 having had one order for $19.2 million for railcars. In the third quarter 2024, we saw slowing demand in China, which is primarily reflected in CTS. Third quarter 2024 sales of $162.5 million increased 4.6% when compared to the third quarter 2023. Reported gross profit margin of 25.0% increased 280 bps compared to the third quarter 2023.
Heat Transfer Systems: Third quarter 2024 HTS orders of $424.7 million increased 151.0% when compared to the third quarter 2023 driven by multiple LNG and traditional energy equipment awards. Third quarter 2024 HTS sales of $256.2 million were a record and grew 12.5% compared to the third quarter 2023 and had associated reported gross profit margin of 29.8%, a 340 bps increase compared to the third quarter 2023, driven by project mix.
Specialty Products: Third quarter 2024 Specialty Products orders of $237.8 million decreased 48.9% when compared to the third quarter 2023 as the third quarter of 2023 included larger hydrogen liquefaction orders whereas third quarter 2024 did not. We received one hydrogen liquefaction award in October, and we anticipate at least one additional hydrogen liquefaction project award in the fourth quarter 2024. Additionally, we anticipate one large mining project award in the fourth quarter 2024. Third quarter 2024 Specialty Products sales of $283.3 million were record for the segment and increased 25.9% when compared to the third quarter 2023 driven primarily by increasing throughput and hydrogen projects progressing. Reported gross profit margin of 26.3% increased 60 basis points when compared to the third quarter 2023 yet decreased sequentially from 29.1% when compared to the second quarter 2024. The sequential decrease was due to third quarter 2024 specific expenses incurred at our newly opened Theodore facility (“Teddy2”) related to a supplier’s machinery startup challenges and associated inefficiencies on specific space-related projects.
Repair, Service and Leasing: Third quarter 2024 RSL orders of $377.9 million increased 16.5% when compared to the third quarter 2023. Third quarter 2024 sales of $360.5 million increased 36.1%. RSL orders and sales growth were driven by service, repair, and spares in addition to a large aftermarket sale of equipment. Reported RSL gross profit margin of 47.4% was driven by the execution of continued synergies as well as positive mix.
FCF of $174.6 million in the third quarter resulted in net leverage ratio of 3.04; reiterate our net leverage ratio target of 2.0 to 2.5
Third quarter 2024 reported net cash from operating activities of $200.7 million less capital expenditures of $26.1 million resulted in $174.6 million of FCF. Our September 30, 2024 net leverage ratio was 3.04.
We anticipate our 2017 seven-year convertible notes to settle at maturity in November 2024 by paying the principal in cash (approximately $258.7 million) and delivery of shares for the anticipated settlement of the premium. This is already included in our share count in our guidance.
Additional cash-generating and debt paydown activities are currently underway and are anticipated to be completed in the coming few months. These include but are not limited to property sales, the potential of a small product line divestiture and the repatriation of foreign cash.
2024 Outlook.
Our current full year 2024 sales outlook is approximately $4.20 billion to $4.30 billion, an increase of 18.0% to 20.5% when compared with full year 2023, proforma. We anticipate full year 2024 adjusted EBITDA of approximately $1.015 billion to $1.045 billion, approximately 24.2% to 24.3% EBITDA margin. Our anticipated full year 2024 adjusted diluted EPS is expected to be approximately $9.00 based on a tax rate of approximately 22% and a diluted share count of approximately 46.5 million shares for the full year 2024. FCF is anticipated to be approximately $400 million. The changes to our 2024 outlook are primarily due to timing of larger orders and their associated revenue recognition (timing and mix), foreign exchange impact, tax rate change, and share count change.
2025 Outlook.
Our 2025 sales are anticipated to be in the range of $4.65 billion to $4.85 billion with associated adjusted EBITDA between $1.175 billion and $1.225 billion. Our anticipated full year 2024 adjusted diluted EPS is $12.00 to $13.00 inclusive of a tax rate of approximately 22%. Additionally, we anticipate ending 2025 with approximately $3 billion of net debt, based on full year 2025 free cash flow generation of approximately $550 to $600 million. We look forward to sharing additional bridges and details on our 2025 outlook at our Capital Markets Day on November 12, 2024 from 9am to 11am eastern time.
FORWARD-LOOKING STATEMENTS
Certain statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company’s business plans, including statements regarding completed acquisitions, divestitures, and investments, cost and commercial synergies and efficiency savings, objectives, future orders, revenues, margins, segment sales mix, earnings or performance, liquidity and cash flow, repayment or settlement of maturing debt, inventory levels, capital expenditures, supply chain challenges, inflationary pressures including material cost and pricing increases, business trends, clean energy market opportunities including addressable markets, and governmental initiatives, including executive orders and other information that is not historical in nature. Forward-looking statements may be identified by terminology such as
"may," "will," "should," "could," "expects," "anticipates," "believes," "projects," "forecasts," “outlook,” “guidance,” "continue," “target,” or the negative of such terms or comparable terminology.
Forward-looking statements contained in this press release or in other statements made by the Company are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control, that could cause the Company's actual results to differ materially from those matters expressed or implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements include: the Company’s ability to successfully integrate the Howden acquisition and other recent acquisitions and achieve the anticipated revenue, earnings, accretion and other benefits from these acquisitions; slower than anticipated growth and market acceptance of new clean energy product offerings; inability to achieve expected pricing increases or continued supply chain challenges including volatility in raw materials and supply; risks relating to the outbreak and continued uncertainty associated with the coronavirus (COVID-19) and regional conflicts and unrest, including the recent turmoil in the Middle East and the conflict between Russia and Ukraine including potential energy shortages in Europe and elsewhere; and the other factors discussed in Item 1A (Risk Factors) in the Company’s most recent Annual Report on Form 10-K filed with the SEC, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement.
USE OF NON-GAAP FINANCIAL INFORMATION
This press release contains non-GAAP financial information, including adjusted operating income, adjusted earnings per diluted share, net income attributable to Chart Industries, Inc. adjusted, free cash flow and EBITDA and adjusted EBITDA. The release also contains various pro forma measures (including pro forma orders, sales, gross profit, adjusted EBITDA, operating income and adjusted operating income), to reflect the following businesses that were divested in 2023: Roots, American Fan, Cofimco and Cryo Diffusion. 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.
The Company believes these non-GAAP measures are of interest to investors and facilitate useful period-to-period comparisons of the Company’s financial results, and this information is used by the Company in evaluating internal performance. With respect to the Company’s 2024 and 2025 full year earnings outlook, the Company is not able to provide a reconciliation of the adjusted EBITDA, FCF or adjusted EPS because certain items may have not yet occurred or are out of the Company’s control and/or cannot be reasonably predicted.
CONFERENCE CALL
As previously announced, the Company has scheduled a conference call for Friday, November 1, 2024 at 8:30 a.m. ET to discuss its third quarter 2024 financial results. Participants wishing to join the live Q&A session must dial-in with the following information:
PARTICIPANT INFORMATION:
Toll-Free – North America: (+1) 800 549 8228
Toll North America and other locations: (+1) 289 819 1520
Conference ID: 35817
A live webcast and replay, as well as presentation slides, will be available on the Company’s investor relations website through the following link: Q3 2024 Webcast Registration. A telephone replay of the conference call can be accessed approximately two hours following the end of the call at 1-888-660-6264 with passcode 35817 through December 1, 2024.
About Chart Industries, Inc.
Chart Industries, Inc. is a leading independent global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean™ - clean power, clean water, clean food, and clean industrials, regardless of molecule. The company’s unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair from installation to preventive maintenance and digital monitoring. Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas and CO2 capture amongst other applications. Chart is committed to excellence in environmental, social and corporate governance (ESG) issues both for its company as well as its customers. With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe and South America, the company maintains accountability and transparency to its team members, suppliers, customers and communities. To learn more, visit www.chartindustries.com
For more information, click here:
http://ir.chartindustries.com/
Chart Industries Investor Relations Contact:
John Walsh
SVP, Investor and Government Relations
1-770-721-8899
john.walsh@chartindustries.com
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars and shares in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | Nine Months Ended |
| September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| Sales | $ | 1,062.5 | | | $ | 897.9 | | | $ | 3,053.5 | | | $ | 2,337.5 | |
| Cost of sales | 699.9 | | | 621.7 | | | 2,037.0 | | | 1,631.4 | |
| Gross profit | 362.6 | | | 276.2 | | | 1,016.5 | | | 706.1 | |
| Selling, general and administrative expenses | 135.7 | | | 122.8 | | | 413.4 | | | 356.4 | |
| Amortization expense | 48.4 | | | 49.0 | | | 143.9 | | | 115.0 | |
| | | | | | | |
| Operating expenses | 184.1 | | | 171.8 | | | 557.3 | | | 471.4 | |
| Operating income | 178.5 | | | 104.4 | | | 459.2 | | | 234.7 | |
| Acquisition related finance fees | — | | | — | | | — | | | 26.1 | |
| Interest expense, net | 80.6 | | | 90.5 | | | 248.7 | | | 202.7 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Other (income) expense, net | (2.6) | | | 3.4 | | | 4.2 | | | 6.4 | |
| Income (loss) from continuing operations before income taxes and equity in (loss) income of unconsolidated affiliates, net | 100.5 | | | 10.5 | | | 206.3 | | | (0.5) | |
| Income tax expense (benefit) | 26.6 | | | 0.1 | | | 50.9 | | | (4.2) | |
| Income from continuing operations before equity in (loss) income of unconsolidated affiliates, net | 73.9 | | | 10.4 | | | 155.4 | | | 3.7 | |
| Equity in (loss) income of unconsolidated affiliates, net | (0.8) | | | 1.3 | | | (2.4) | | | 2.4 | |
| Net income from continuing operations | 73.1 | | | 11.7 | | | 153.0 | | | 6.1 | |
| Loss from discontinued operations, net of tax | (0.4) | | | (6.0) | | | (2.8) | | | (2.6) | |
| Net income | 72.7 | | | 5.7 | | | 150.2 | | | 3.5 | |
| Less: Income attributable to noncontrolling interests of continuing operations, net of taxes | 3.7 | | | 2.3 | | | 11.3 | | | 6.0 | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 69.0 | | | $ | 3.4 | | | $ | 138.9 | | | $ | (2.5) | |
| | | | | | | |
| Amounts attributable to Chart common stockholders | | | | | | | |
| Income from continuing operations | $ | 69.4 | | | $ | 9.4 | | | $ | 141.7 | | | $ | 0.1 | |
| Less: Mandatory convertible preferred stock dividend requirement | 6.8 | | | 6.8 | | | 20.4 | | | 20.5 | |
| Income (loss) from continuing operations attributable to Chart | 62.6 | | | 2.6 | | | 121.3 | | | (20.4) | |
| Loss from discontinued operations, net of tax | (0.4) | | | (6.0) | | | (2.8) | | | (2.6) | |
| Net income (loss) attributable to Chart common shareholders | $ | 62.2 | | | $ | (3.4) | | | $ | 118.5 | | | $ | (23.0) | |
| | | | | | | |
| Basic earnings per common share attributable to Chart Industries, Inc. | | | | | | | |
| Income (loss) from continuing operations | $ | 1.49 | | | $ | 0.06 | | | $ | 2.89 | | | $ | (0.49) | |
| Loss from discontinued operations | (0.01) | | | (0.14) | | | (0.07) | | | (0.06) | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 1.48 | | | $ | (0.08) | | | $ | 2.82 | | | $ | (0.55) | |
| Diluted earnings per common share attributable to Chart Industries, Inc. | | | | | | | |
| Income (loss) from continuing operations | $ | 1.34 | | | $ | 0.05 | | | $ | 2.59 | | | $ | (0.49) | |
| (Loss) income from discontinued operations | (0.01) | | | (0.12) | | | (0.06) | | | (0.06) | |
| Net income (loss) attributable to Chart Industries, Inc. | $ | 1.33 | | | $ | (0.07) | | | $ | 2.53 | | | $ | (0.55) | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | Nine Months Ended |
| September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| Weighted-average number of common shares outstanding: | | | | | | | |
| Basic | 42.05 | | | 41.98 | | | 42.04 | | | 41.96 | |
Diluted (1) (2) | 46.67 | | | 47.61 | | | 46.89 | | | 41.96 | |
_______________
(1)Includes an additional 4.43 and 5.39 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the three months ended September 30, 2024 and 2023, respectively. The associated hedge, which helps offset this dilution, cannot be taken into account under U.S. generally accepted accounting principles (“GAAP”). If the hedge could have been considered, it would have reduced the additional shares by 2.43 and 2.86 for the three months ended September 30, 2024 and 2023, respectively.
(2)Includes an additional 4.66 shares related to the convertible notes due 2024 and associated warrants in our diluted earnings per share calculation for the nine months ended September 30, 2024. 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 2.54 for the nine months ended September 30, 2024.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| Operating Activities | | | | | | | |
| Net income | $ | 72.7 | | | $ | 5.7 | | | $ | 150.2 | | | $ | 3.5 | |
| Less: Loss from discontinued operations, net of tax | (0.4) | | | (6.0) | | | (2.8) | | | (2.6) | |
| Net income from continuing operations | 73.1 | | | 11.7 | | | 153.0 | | | 6.1 | |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | | | | | | | |
| Bridge loan facility fees | — | | | — | | | — | | | 26.1 | |
| Depreciation and amortization | 68.1 | | | 67.0 | | | 200.0 | | | 163.2 | |
| Employee share-based compensation expense | 4.2 | | | 2.6 | | | 14.3 | | | 9.2 | |
| Financing costs amortization | 4.8 | | | 4.8 | | | 14.2 | | | 12.0 | |
| | | | | | | |
| Unrealized foreign currency transaction loss (gain) | 8.6 | | | 1.3 | | | (5.1) | | | 0.4 | |
| Unrealized (gain) loss on investments in equity securities | (12.8) | | | 5.2 | | | (10.8) | | | 11.8 | |
| Equity in loss (income) of unconsolidated affiliates | 0.8 | | | (1.2) | | | 2.4 | | | (2.4) | |
| | | | | | | |
| Loss on sale of business | — | | | — | | | 7.8 | | | — | |
| Other non-cash operating activities | 2.0 | | | (6.3) | | | 3.0 | | | (4.9) | |
| Changes in assets and liabilities, net of acquisitions: | | | | | | | |
| Accounts receivable | (45.2) | | | (1.7) | | | (45.0) | | | (61.9) | |
| Inventories | 19.4 | | | 7.6 | | | 24.4 | | | 2.6 | |
| Unbilled contract revenue | (9.5) | | | (50.6) | | | (195.7) | | | (133.4) | |
| Prepaid expenses and other current assets | 26.6 | | | 21.6 | | | (16.4) | | | 34.0 | |
| Accounts payable and other current liabilities | 67.2 | | | (42.9) | | | 109.6 | | | 86.2 | |
| Customer advances and billings in excess of contract revenue | (19.3) | | | (15.5) | | | (13.3) | | | 19.1 | |
| Long-term assets and liabilities | 12.7 | | | (32.9) | | | (15.2) | | | (62.0) | |
| Net Cash Provided By (Used In) Continuing Operating Activities | 200.7 | | | (29.3) | | | 227.2 | | | 106.1 | |
| Net Cash (Used In) Provided By Discontinued Operating Activities | (0.1) | | | 6.7 | | | (5.6) | | | (69.2) | |
| Net Cash Provided By (Used In) Operating Activities | 200.6 | | | (22.6) | | | 221.6 | | | 36.9 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| Investing Activities | | | | | | | |
| Acquisition of businesses, net of cash acquired | — | | | 17.5 | | | — | | | (4,322.3) | |
| Proceeds from sale of business | — | | | 291.9 | | | (6.1) | | | 291.9 | |
| Capital expenditures | (26.1) | | | (63.1) | | | (100.3) | | | (115.4) | |
| Investments | — | | | (6.2) | | | (13.1) | | | (8.8) | |
| | | | | | | |
| | | | | | | |
| Other investing activities | 0.1 | | | 3.3 | | | 0.4 | | | 2.3 | |
| Net Cash (Used In) Provided By Continuing Investing Activities | (26.0) | | | 243.4 | | | (119.1) | | | (4,152.3) | |
| Net Cash Used In Discontinued Investing Activities | — | | | (0.5) | | | (2.5) | | | (2.6) | |
| Net Cash (Used In) Provided By Investing Activities | (26.0) | | | 242.9 | | | (121.6) | | | (4,154.9) | |
| Financing Activities | | | | | | | |
| Borrowings on credit facilities | 801.9 | | | 611.5 | | | 2,286.7 | | | 1,334.3 | |
| Repayments on credit facilities | (910.2) | | | (849.5) | | | (2,246.5) | | | (1,234.3) | |
| | | | | | | |
| | | | | | | |
| Borrowings on term loan | — | | | — | | | — | | | 1,747.2 | |
| Repayments on term loan | — | | | (4.4) | | | — | | | (8.2) | |
| Payments for debt issuance costs | (4.8) | | | (0.1) | | | (10.1) | | | (133.5) | |
| Payment of contingent consideration | — | | | (2.7) | | | — | | | (4.4) | |
| Proceeds from issuance of common stock, net | — | | | — | | | — | | | 11.7 | |
| | | | | | | |
| | | | | | | |
| Proceeds from exercise of stock options | — | | | 0.7 | | | 0.4 | | | 0.9 | |
| Common stock repurchases from share-based compensation plans | (0.2) | | | (0.3) | | | (3.3) | | | (3.0) | |
| | | | | | | |
| Dividend distribution to noncontrolling interests | — | | | (3.8) | | | — | | | (12.2) | |
| Dividends paid on mandatory convertible preferred stock | (6.8) | | | (6.8) | | | (20.4) | | | (20.5) | |
| Net Cash (Used In) Provided By Financing Activities | (120.1) | | | (255.4) | | | 6.8 | | | 1,678.0 | |
| Effect of exchange rate changes on cash and cash equivalents | 7.4 | | | (2.3) | | | 4.6 | | | (0.4) | |
| Net (decrease) increase in cash, cash equivalents, restricted cash, and restricted cash equivalents including cash classified within current assets held for sale | 61.9 | | | (37.4) | | | 111.4 | | | (2,440.4) | |
| Less: net increase in cash classified within current assets held for sale | — | | | (5.0) | | | — | | | (5.0) | |
| Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents | 61.9 | | | (42.4) | | | 111.4 | | | (2,445.4) | |
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period (1) | 250.6 | | | 202.3 | | | 201.1 | | | 2,605.3 | |
CASH, CASH EQUIVALENTS, RESTRICTED CASH, AND RESTRICTED CASH EQUIVALENTS AT END OF PERIOD (1) | $ | 312.5 | | | $ | 159.9 | | | $ | 312.5 | | | $ | 159.9 | |
_______________
(1)Includes restricted cash and restricted cash equivalents of $2.3, $12.8, $3.2 and $1,941.7 as of September 30, 2024, September 30, 2023, June 30, 2024 and December 31, 2022, respectively.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | |
| September 30,
2024 | | December 31,
2023 |
| ASSETS | | | |
| Current Assets | | | |
| Cash and cash equivalents | $ | 310.2 | | | $ | 188.3 | |
Accounts receivable, less allowances of $5.2 and $5.9, respectively | 805.6 | | | 758.9 | |
| Inventories, net | 539.4 | | | 576.3 | |
| Unbilled contract revenue | 680.2 | | | 481.7 | |
| Prepaid expenses | 98.8 | | | 74.9 | |
| Other current assets | 114.1 | | | 134.3 | |
| Total Current Assets | 2,548.3 | | | 2,214.4 | |
| Property, plant, and equipment, net | 888.8 | | | 837.6 | |
| Goodwill | 2,987.7 | | | 2,906.8 | |
| Identifiable intangible assets, net | 2,660.4 | | | 2,791.9 | |
| Equity method investments | 103.9 | | | 109.9 | |
| Investments in equity securities | 116.2 | | | 91.2 | |
| Other assets | 193.1 | | | 150.6 | |
| TOTAL ASSETS | $ | 9,498.4 | | | $ | 9,102.4 | |
| | | |
| LIABILITIES AND EQUITY | | | |
| Current Liabilities | | | |
| Accounts payable | $ | 1,010.1 | | | $ | 811.0 | |
| Customer advances and billings in excess of contract revenue | 366.0 | | | 376.6 | |
| Accrued salaries, wages, and benefits | 66.0 | | | 81.5 | |
| Accrued interest | 74.4 | | | 92.5 | |
| Accrued income taxes | 54.4 | | | 60.0 | |
| Current portion of warranty reserve | 17.5 | | | 29.4 | |
| | | |
| Current portion of long-term debt | 260.7 | | | 258.5 | |
| Operating lease liabilities, current | 20.4 | | | 18.5 | |
| Other current liabilities | 132.9 | | | 138.2 | |
| Total Current Liabilities | 2,002.4 | | | 1,866.2 | |
| Long-term debt | 3,623.9 | | | 3,576.4 | |
| Deferred tax liabilities | 571.8 | | | 568.2 | |
| Accrued pension liabilities | 7.1 | | | 6.7 | |
| Operating lease liabilities, non-current | 61.7 | | | 50.7 | |
| Other long-term liabilities | 96.1 | | | 95.2 | |
| Total Liabilities | 6,363.0 | | | 6,163.4 | |
| | | | | | | | | | | |
| September 30,
2024 | | December 31,
2023 |
| Equity | | | |
| Preferred stock, par value $0.01 per share, $1,000 aggregate liquidation preference — 10,000,000 shares authorized, 402,500 shares issued and outstanding at both September 30, 2024 and December 31, 2023 | — | | | — | |
| Common stock, par value $0.01 per share — 150,000,000 shares authorized, 42,809,385 and 42,754,241 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively | 0.4 | | | 0.4 | |
| Additional paid-in capital | 1,883.6 | | | 1,872.5 | |
| Treasury stock; 760,782 shares at both September 30, 2024 and December 31, 2023 | (19.3) | | | (19.3) | |
| Retained earnings | 1,040.6 | | | 922.1 | |
| Accumulated other comprehensive income | 65.9 | | | 10.8 | |
| Total Chart Industries, Inc. Shareholders’ Equity | 2,971.2 | | | 2,786.5 | |
| Noncontrolling interests | 164.2 | | | 152.5 | |
| Total Equity | 3,135.4 | | | 2,939.0 | |
| TOTAL LIABILITIES AND EQUITY | $ | 9,498.4 | | | $ | 9,102.4 | |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
OPERATING SEGMENTS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30, 2024 | | September 30, 2023 | | September 30, 2024 | | September 30, 2023 |
| Sales | | | | | | | |
| Cryo Tank Solutions | $ | 162.5 | | | $ | 159.0 | | | $ | 487.7 | | | $ | 435.2 | |
| Heat Transfer Systems | 256.2 | | | 232.5 | | | 746.5 | | | 636.0 | |
| Specialty Products | 283.3 | | | 240.0 | | | 797.4 | | | 602.9 | |
| Repair, Service & Leasing | 360.5 | | | 271.3 | | | 1,022.0 | | | 688.5 | |
| Intersegment eliminations | — | | | (4.9) | | | (0.1) | | | (25.1) | |
| Consolidated | $ | 1,062.5 | | | $ | 897.9 | | | $ | 3,053.5 | | | $ | 2,337.5 | |
| Gross Profit | | | | | | | |
| Cryo Tank Solutions | $ | 40.7 | | | $ | 35.2 | | | $ | 106.9 | | | $ | 85.5 | |
| Heat Transfer Systems | 76.4 | | | 61.5 | | | 207.3 | | | 170.1 | |
| Specialty Products | 74.6 | | | 62.0 | | | 214.3 | | | 158.9 | |
| Repair, Service & Leasing | 170.9 | | | 117.5 | | | 488.0 | | | 291.6 | |
| Consolidated | $ | 362.6 | | | $ | 276.2 | | | $ | 1,016.5 | | | $ | 706.1 | |
| Gross Profit Margin | | | | | | | |
| Cryo Tank Solutions | 25.0 | % | | 22.1 | % | | 21.9 | % | | 19.6 | % |
| Heat Transfer Systems | 29.8 | % | | 26.5 | % | | 27.8 | % | | 26.7 | % |
| Specialty Products | 26.3 | % | | 25.8 | % | | 26.9 | % | | 26.4 | % |
| Repair, Service & Leasing | 47.4 | % | | 43.3 | % | | 47.7 | % | | 42.4 | % |
| Consolidated | 34.1 | % | | 30.8 | % | | 33.3 | % | | 30.2 | % |
Operating Income (Loss) | | | | | | | |
| Cryo Tank Solutions | $ | 23.5 | | | $ | 17.1 | | | $ | 53.5 | | | $ | 31.9 | |
| Heat Transfer Systems | 61.3 | | | 43.4 | | | 157.6 | | | 120.5 | |
| Specialty Products | 41.9 | | | 33.7 | | | 122.0 | | | 84.6 | |
| Repair, Service & Leasing | 102.0 | | | 42.3 | | | 265.1 | | | 121.0 | |
| Corporate | (50.2) | | | (32.1) | | | (139.0) | | | (123.3) | |
| Consolidated | $ | 178.5 | | | $ | 104.4 | | | $ | 459.2 | | | $ | 234.7 | |
| Operating Margin | | | | | | | |
| Cryo Tank Solutions | 14.5 | % | | 10.8 | % | | 11.0 | % | | 7.3 | % |
| Heat Transfer Systems | 23.9 | % | | 18.7 | % | | 21.1 | % | | 18.9 | % |
| Specialty Products | 14.8 | % | | 14.0 | % | | 15.3 | % | | 14.0 | % |
| Repair, Service & Leasing | 28.3 | % | | 15.6 | % | | 25.9 | % | | 17.6 | % |
| Consolidated | 16.8 | % | | 11.6 | % | | 15.0 | % | | 10.0 | % |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
ORDERS AND BACKLOG (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | |
| Three Months Ended |
| September 30,
2024 | | September 30,
2023 |
| Orders | | | |
| Cryo Tank Solutions | $ | 126.2 | | | $ | 155.6 | |
| Heat Transfer Systems | 424.7 | | | 176.1 | |
| Specialty Products | 237.8 | | | 469.1 | |
| Repair, Service & Leasing | 377.9 | | | 331.2 | |
| Intersegment eliminations | 0.9 | | | (4.7) | |
| Consolidated | $ | 1,167.5 | | | $ | 1,127.3 | |
| | | | | | | | | | | |
| As of |
| September 30,
2024 | | September 30,
2023 |
| Backlog | | | |
| Cryo Tank Solutions | $ | 316.5 | | | $ | 449.4 | |
| Heat Transfer Systems | 1,878.0 | | | 1,657.5 | |
| Specialty Products | 1,755.3 | | | 1,460.7 | |
| Repair, Service & Leasing | 593.4 | | | 609.7 | |
| Intersegment eliminations | (7.9) | | | (36.6) | |
| Consolidated | $ | 4,535.3 | | | $ | 4,140.7 | |
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF EARNINGS (LOSS) AND EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CHART INDUSTRIES, INC. – CONTINUING OPERATIONS TO ADJUSTED EARNINGS (LOSS) AND ADJUSTED EARNINGS (LOSS) PER COMMON SHARE ATTRIBUTABLE TO CHART INDUSTRIES, INC. - CONTINUING OPERATIONS
(UNAUDITED)
(Dollars in millions, except per share amounts)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Q3 2023 | | Q1 2024 | | Q2 2024 | | Q3 2024 | | YTD September 2024 | | |
| Amounts attributable to Chart common stockholders | | | | | | | | | | | |
| Net income attributable to Chart Industries, Inc. | $ | 3.4 | | | $ | 11.3 | | | $ | 58.6 | | | $ | 69.0 | | | $ | 138.9 | | | |
| Less: Loss from discontinued operations, net of tax | (6.0) | | | (2.2) | | | (0.2) | | | (0.4) | | | (2.8) | | | |
| Income from continuing operations | 9.4 | | | 13.5 | | | 58.8 | | | 69.4 | | | 141.7 | | | |
| Less: Mandatory convertible preferred stock dividend requirement | 6.8 | | | 6.8 | | | 6.8 | | | 6.8 | | | 20.4 | | | |
| Income from continuing operations attributable to Chart (U.S. GAAP) | 2.6 | | | 6.7 | | | 52.0 | | | 62.6 | | | 121.3 | | | |
Unrealized loss (gain) on investments in equity securities and loss from strategic equity method investments (1) | 5.1 | | | 4.3 | | | 2.4 | | | (11.0) | | | (4.3) | | | |
Deal related and integration costs (3) | 5.9 | | | 14.3 | | | 7.4 | | | 8.2 | | | 29.9 | | | |
| Howden amortization | 47.6 | | | 46.6 | | | 46.9 | | | 46.3 | | | 139.8 | | | |
| Restructuring & related costs | 4.7 | | | 5.1 | | | 4.3 | | | 1.7 | | | 11.1 | | | |
Other one-time items (2) | — | | | — | | | 2.0 | | | 3.9 | | | 5.9 | | | |
| Tax effects | (11.8) | | | (14.4) | | | (11.8) | | | (9.8) | | | (36.0) | | | |
| Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) | $ | 54.1 | | | $ | 62.6 | | | $ | 103.2 | | | $ | 101.9 | | | $ | 267.7 | | | |
43
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Q3 2023 Diluted EPS | | Q1 2024 Diluted EPS | | Q2 2024 Diluted EPS | | Q3 2024 Diluted EPS | | YTD September 2024 Diluted EPS | | |
| Reported income from continuing operations attributable to Chart (U.S. GAAP) | $ | 0.05 | | | $ | 0.14 | | | $ | 1.10 | | | $ | 1.34 | | | $ | 2.59 | | | |
Unrealized loss (gain) on investments in equity securities and loss from strategic equity method investments (1) | 0.11 | | | 0.09 | | | 0.05 | | | (0.24) | | | (0.09) | | | |
Deal related and integration costs (3) | 0.12 | | | 0.31 | | | 0.15 | | | 0.18 | | | 0.64 | | | |
| Howden amortization | 1.00 | | | 1.00 | | | 1.00 | | | 0.99 | | | 2.98 | | | |
| Restructuring & related costs | 0.10 | | | 0.11 | | | 0.09 | | | 0.04 | | | 0.24 | | | |
Other one-time items (2) | | | — | | | 0.04 | | | 0.08 | | | 0.12 | | | |
| Tax effects | (0.25) | | | (0.31) | | | (0.25) | | | (0.21) | | | (0.77) | | | |
| Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) | $ | 1.13 | | | $ | 1.34 | | | $ | 2.18 | | | $ | 2.18 | | | $ | 5.71 | | | |
| Share count | 47.61 | | 46.73 | | 47.25 | | 46.67 | | 46.89 | | |
_______________
(1)Includes the mark-to-market of our inorganic investments in Avina, McPhy, Stabilis and certain of our minority investments as well as losses from strategic equity method investments.
(2)Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries, non-repeating legal costs and a one-time adjustment related to a 2022 settlement adjusted for in the second quarter of 2024.
(3)Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures
_______________
Adjusted earnings per common share attributable to Chart Industries, Inc. is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to earnings per share in accordance with U.S. GAAP. Management believes that adjusted earnings per common share attributable to Chart Industries, Inc. 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. Prior to the second quarter of 2024, the impacts of the mandatory convertible preferred stock dividend were excluded from adjusted earnings per common share attributable to Chart Industries, Inc. (non-GAAP). The impacts are now included in adjusted earnings per common share attributable to Chart Industries, Inc. (non-GAAP) and historical periods have been restated to reflect the change in treatment.
$RECONCILIATION OF NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS TO FREE CASH FLOW FROM CONTINUING OPERATIONS AND RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS TO FREE CASH FLOW FROM DISCONTINUED OPERATIONS (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30,
2024 | | September 30,
2023 | | September 30,
2024 | | September 30,
2023 |
| Net cash provided by (used in) operating activities from continuing operations | $ | 200.7 | | | $ | (29.3) | | | $ | 227.2 | | | $ | 106.1 | |
| Capital expenditures | (26.1) | | | (63.1) | | | (100.3) | | | (115.4) | |
| Free cash flow from continuing operations (non-GAAP) | $ | 174.6 | | | $ | (92.4) | | | $ | 126.9 | | | $ | (9.3) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30,
2024 | | September 30,
2023 | | September 30,
2024 | | September 30,
2023 |
| Net cash (used in) provided by operating activities from discontinued operations | $ | (0.1) | | | $ | 6.7 | | | $ | (5.6) | | | $ | (69.2) | |
| Capital expenditures | — | | | — | | | — | | | (2.6) | |
| Free cash flow from discontinued operations (non-GAAP) | $ | (0.1) | | | $ | 6.7 | | | $ | (5.6) | | | $ | (71.8) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
_______________
Free cash flow is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to net cash provided by (used in) operating activities in accordance with U.S. GAAP. Management believes that free cash flow facilitates useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of this non-GAAP measure may not be comparable to the calculations of similarly titled measures reported by other companies.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATIONS OF OPERATING INCOME (LOSS) TO ADJUSTED OPERATING INCOME (LOSS) (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2024 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Sales | $ | 162.5 | | | $ | 256.2 | | | $ | 283.3 | | | $ | 360.5 | | | $ | — | | | $ | — | | | $ | 1,062.5 | |
| Operating income (loss) as reported (U.S. GAAP) | $ | 23.5 | | | $ | 61.3 | | | $ | 41.9 | | | $ | 102.0 | | | $ | — | | | $ | (50.2) | | | 178.5 | |
| Operating margin | 14.5 | % | | 23.9 | % | | 14.8 | % | | 28.3 | % | | | | | | 16.8 | % |
| Restructuring & related costs | $ | 0.3 | | | $ | 0.2 | | | $ | 0.3 | | | $ | 0.7 | | | $ | — | | | $ | 0.2 | | | $ | 1.7 | |
Deal related & integration costs (2) | — | | | — | | | — | | | 0.3 | | | — | | | 7.9 | | | 8.2 | |
| Step-up amortization | 2.1 | | | 1.1 | | | 4.8 | | | 38.4 | | | — | | | (0.1) | | | 46.3 | |
Other (1) | 0.4 | | | 0.1 | | | 0.2 | | | (0.1) | | | — | | | 0.6 | | | 1.2 | |
| Adjusted operating income (loss) (non-GAAP) | $ | 26.3 | | | $ | 62.7 | | | $ | 47.2 | | | $ | 141.3 | | | $ | — | | | $ | (41.6) | | | $ | 235.9 | |
| Adjusted operating margin (non-GAAP) | 16.2 | % | | 24.5 | % | | 16.7 | % | | 39.2 | % | | | | | | 22.2 | % |
______________(1)Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries and non-repeating legal costs.
(2)Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Sales | $ | 159.0 | | | $ | 232.5 | | | $ | 240.0 | | | $ | 271.3 | | | $ | (4.9) | | | $ | — | | | $ | 897.9 | |
| Operating income (loss) as reported (U.S. GAAP) | $ | 17.1 | | | $ | 43.4 | | | $ | 33.7 | | | $ | 42.3 | | | $ | — | | | $ | (32.1) | | | $ | 104.4 | |
| Operating margin | 10.8 | % | | 18.7 | % | | 14.0 | % | | 15.6 | % | | | | | | 11.6 | % |
| Restructuring & related costs | $ | 0.1 | | | $ | 0.5 | | | $ | 0.4 | | | $ | 0.9 | | | $ | — | | | $ | 2.3 | | | $ | 4.2 | |
Deal related & integration costs (1) | 0.4 | | | 0.5 | | | 0.5 | | | — | | | — | | | 3.8 | | | 5.2 | |
| Step-up amortization | 2.5 | | | 1.3 | | | 5.0 | | | 38.8 | | | — | | | — | | | 47.6 | |
| Adjusted operating income (loss) (non-GAAP) | $ | 20.1 | | | $ | 45.7 | | | $ | 39.6 | | | $ | 82.0 | | | $ | — | | | $ | (26.0) | | | $ | 161.4 | |
| Adjusted operating margin (non-GAAP) | 12.6 | % | | 19.7 | % | | 16.5 | % | | 30.2 | % | | | | | | 18.0 | % |
(1) Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures
____________
Adjusted operating income (loss) is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to operating income (loss) in accordance with U.S. GAAP. Management believes that adjusted operating income (loss) 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 OPERATING SEGMENT ORDERS TO PRO FORMA ORDERS, SALES TO PRO FORMA SALES AND GROSS PROFIT TO PRO FORMA GROSS PROFIT (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended September 30, 2023 |
| | Cryo Tank Solutions | | Heat Transfer Systems | | Specialty Products | | Repair, Service & Leasing | | Intersegment Eliminations | | Corporate | | Consolidated |
| Orders | $ | 155.6 | | | $ | 176.1 | | | $ | 469.1 | | | $ | 331.2 | | | $ | (4.7) | | | $ | — | | | $ | 1,127.3 | |
| Less: Orders from businesses divested in the fourth quarter 2023 | 2.7 | | | 6.9 | | | 3.6 | | | 6.8 | | | — | | | — | | | 20.0 | |
| Pro forma orders (non-GAAP) | $ | 152.9 | | | $ | 169.2 | | | $ | 465.5 | | | $ | 324.4 | | | $ | (4.7) | | | $ | — | | | $ | 1,107.3 | |
| | | | | | | | | | | | | |
| Sales | $ | 159.0 | | | $ | 232.5 | | | $ | 240.0 | | | $ | 271.3 | | | $ | (4.9) | | | $ | — | | | $ | 897.9 | |
| Less: Sales from businesses divested in the fourth quarter 2023 | 3.7 | | | 4.7 | | | 15.0 | | | 6.5 | | | 0.1 | | | — | | | 30.0 | |
| Pro forma sales (non-GAAP) | $ | 155.3 | | | $ | 227.8 | | | $ | 225.0 | | | $ | 264.8 | | | $ | (5.0) | | | $ | — | | | $ | 867.9 | |
| | | | | | | | | | | | | |
| Gross Profit | $ | 35.2 | | | $ | 61.5 | | | $ | 62.0 | | | $ | 117.5 | | | $ | — | | | $ | — | | | $ | 276.2 | |
| Gross Profit Margin | 22.1 | % | | 26.5 | % | | 25.8 | % | | 43.3 | % | | — | % | | | | 30.8 | % |
| Less: Gross profit from businesses divested in the fourth quarter 2023 | 0.7 | | | 1.3 | | | 4.1 | | | 4.1 | | | 0.1 | | | — | | | 10.3 | |
| Pro forma gross profit (non-GAAP) | $ | 34.5 | | | $ | 60.2 | | | $ | 57.9 | | | $ | 113.4 | | | $ | (0.1) | | | $ | — | | | $ | 265.9 | |
| Pro forma gross profit margin (non-GAAP) | 22.2 | % | | 26.4 | % | | 25.7 | % | | 42.8 | % | | 2.0 | % | | | | 30.6 | % |
_______________
Businesses divested in the fourth quarter of 2023 include American Fan, Cofimco and Cryo Diffusion. Pro forma orders, pro forma sales, pro forma gross profit and pro forma gross profit margin are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to orders, sales, gross profit and gross profit margin in accordance with U.S. GAAP. Management believes that pro forma orders, pro forma sales, pro forma gross profit and pro forma gross profit margin facilitate useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of these non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO EBITDA AND ADJUSTED EBITDA (UNAUDITED)
(Dollars in millions)
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Nine Months Ended |
| | September 30,
2024 | | September 30,
2023 | | September 30,
2024 | | September 30,
2023 |
| Net income from continuing operations | $ | 73.1 | | | $ | 11.7 | | | $ | 153.0 | | | $ | 6.1 | |
| Income tax expense (benefit) | 26.6 | | | 0.1 | | | 50.9 | | | (4.2) | |
| Interest expense, net | 80.6 | | | 90.5 | | | 248.7 | | | 202.7 | |
| Acquisition related finance fees | — | | | — | | | — | | | 26.1 | |
| Loss on extinguishment of debt | — | | | — | | | 0.7 | | | — | |
| Depreciation and amortization | 68.1 | | | 67.0 | | | 200.0 | | | 163.2 | |
| EBITDA (non-GAAP) | 248.4 | | | 169.3 | | | 653.3 | | | 393.9 | |
| Non-recurring costs: | | | | | | | |
Deal related & integration costs (3) | 8.2 | | | 5.9 | | | 29.9 | | | 39.4 | |
| Restructuring & related costs | 1.7 | | | 4.2 | | | 11.1 | | | 11.2 | |
| Amortization of step-up value of inventory | 6.4 | | | 7.3 | | | 21.0 | | | 18.2 | |
Other one-time items (2) | 2.8 | | | 0.6 | | | 4.9 | | | 4.5 | |
| Employee share-based compensation expense | 4.2 | | | 2.6 | | | 14.3 | | | 9.2 | |
Unrealized (gain) loss on investments in equity securities and loss from strategic equity method investments (1) | (11.0) | | | 5.1 | | | (4.3) | | | 11.7 | |
| Howden FX Hedge | — | | | — | | | — | | | 2.8 | |
| Adjusted EBITDA (non-GAAP) | $ | 260.7 | | | $ | 195.0 | | | $ | 730.2 | | | $ | 490.9 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
_______________
(1)Includes the mark-to-market of our inorganic investments in Avina, McPhy, Stabilis and certain of our minority investments as well as losses from strategic equity method investments.
(2)Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries, non-repeating legal costs and a one-time adjustment related to a 2022 settlement adjusted for in the second quarter of 2024.
(3)Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures.
_______________
The reconciliation from net income from continuing operations to EBITDA (non-GAAP) includes acquisition related finance fees and loss on extinguishment of debt. EBITDA and adjusted EBITDA are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income from continuing operations in accordance with U.S. GAAP. Management believes that EBITDA and adjusted EBITDA facilitate useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of these non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
CHART INDUSTRIES, INC. AND SUBSIDIARIES
RECONCILIATION OF ORDERS TO PRO FORMA ORDERS, SALES TO PRO FORMA SALES, GROSS PROFIT TO PRO FORMA GROSS PROFIT, ADJUSTED EBITDA TO PRO FORMA ADJUSTED EBITDA, AND OPERATING INCOME TO PRO FORMA ADJUSTED OPERATING INCOME (UNAUDITED)
(Dollars in millions) | | | | | |
| Three Months Ended September 30, 2023 |
| Orders | $ | 1,127.3 | |
| Less: Orders from businesses divested in the fourth quarter 2023 | 20.0 | |
| Pro forma orders (non-GAAP) | $ | 1,107.3 | |
| |
| Sales | $ | 897.9 | |
| Less: Sales from businesses divested in the fourth quarter 2023 | 30.0 | |
| Pro forma sales (non-GAAP) | $ | 867.9 | |
| |
| Gross profit | $ | 276.2 | |
| Less: Gross profit from businesses divested in the fourth quarter 2023 | 10.3 | |
| Pro forma gross profit (non-GAAP) | $ | 265.9 | |
| Pro forma gross profit margin (non-GAAP) | 30.6 | % |
| |
| EBITDA (non-GAAP) | $ | 169.3 | |
| Less: Adjusted EBITDA from businesses divested in the fourth quarter 2023 | 7.9 | |
| Pro forma EBITDA (non-GAAP) | $ | 161.4 | |
| Non-recurring costs: | |
Deal related & integration costs (2) | 5.9 | |
| Restructuring & related costs | 4.2 | |
| Amortization of step-up value of inventory | 7.3 | |
| Other one-time items | 0.6 | |
| Employee share-based compensation expense | 2.6 | |
Unrealized (gain) loss on investments in equity securities and loss from strategic equity method investments (1) | 5.1 | |
| Pro forma adjusted EBITDA (non-GAAP) | $ | 187.1 | |
| Pro forma adjusted EBITDA margin (non-GAAP) | 21.6 | % |
| |
| Operating income | $ | 104.4 | |
| Less: Operating income from businesses divested in the fourth quarter 2023 | 7.4 | |
| Pro forma operating income (non-GAAP) | $ | 97.0 | |
| Pro forma operating income margin (non-GAAP) | 11.2 | % |
| Restructuring related, deal-related, integration and other one time costs | $ | 57.0 | |
| Pro forma adjusted operating income (non-GAAP) | $ | 154.0 | |
| Pro forma adjusted operating income margin (non-GAAP) | 17.7 | % |
(1)Includes the mark-to-market of our inorganic investments in Avina, McPhy, Stabilis and certain of our minority investments as well as losses from strategic equity method investments.
(2)Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures.
______________
Businesses divested in the fourth quarter of 2023 include American Fan, Cofimco and Cryo Diffusion. Pro forma orders, pro forma sales, pro forma gross profit, adjusted EBITDA, pro forma adjusted EBITDA, pro forma operating income and pro
forma adjusted operating income are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to sales and net income from continuing operations in accordance with U.S. GAAP. Management believes that pro forma orders, pro forma sales, pro forma gross profit, adjusted EBITDA, pro forma adjusted EBITDA, pro forma operating income and pro forma adjusted operating income facilitate useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of these non-GAAP measures may not be comparable to the calculations of similarly titled measures reported by other companies.
© 2024 Chart Industries, Inc. Confidential and Proprietary Third Quarter 2024 Earnings Call November 1, 2024
© 2024 Chart Industries, Inc. Confidential and Proprietary 2 Forward Looking Statements (1/2) CERTAIN STATEMENTS MADE IN THIS INVESTOR PRESENTATION ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. FORWARD-LOOKING STATEMENTS INCLUDE STATEMENTS CONCERNING CHART’S BUSINESS PLANS, INCLUDING STATEMENTS REGARDING OBJECTIVES, FUTURE ORDERS, REVENUES, MARGINS, EARNINGS, PERFORMANCE OR OUTLOOK, BUSINESS OR INDUSTRY TRENDS AND OTHER INFORMATION THAT IS NOT HISTORICAL IN NATURE. FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY TERMINOLOGY SUCH AS “MAY,” “WILL,” “SHOULD,” “COULD,” “EXPECTS,” “ANTICIPATES,” “BELIEVES,” “PROJECTS,” “FORECASTS,” “INDICATORS”, “OUTLOOK,” “GUIDANCE,” “CONTINUE,” “TARGET,” OR THE NEGATIVE OF SUCH TERMS OR COMPARABLE TERMINOLOGY. FORWARD-LOOKING STATEMENTS CONTAINED IN THIS PRESENTATION OR IN OTHER STATEMENTS MADE BY CHART ARE MADE BASED ON MANAGEMENT’S EXPECTATIONS AND BELIEFS CONCERNING FUTURE EVENTS IMPACTING CHART AND ARE SUBJECT TO UNCERTAINTIES AND FACTORS RELATING TO CHART’S OPERATIONS AND BUSINESS ENVIRONMENT, ALL OF WHICH ARE DIFFICULT TO PREDICT AND MANY OF WHICH ARE BEYOND CHART’S CONTROL, THAT COULD CAUSE CHART’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE MATTERS EXPRESSED OR IMPLIED BY FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE CHART’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE DESCRIBED IN THE FORWARD-LOOKING STATEMENTS INCLUDE: CHART MAY BE UNABLE TO ACHIEVE THE ANTICIPATED BENEFITS OF RECENT ACQUISITIONS, INCLUDING THE ACQUISITION OF HOWDEN (THE “ACQUISITION”) (INCLUDING WITH RESPECT TO ESTIMATED FUTURE COST AND COMMERCIAL SYNERGIES); REVENUES FOLLOWING THE ACQUISITION MAY BE LOWER THAN EXPECTED; OPERATING COSTS, CUSTOMER LOSSES, AND BUSINESS DISRUPTION (INCLUDING, WITHOUT LIMITATION, DIFFICULTIES IN MAINTAINING RELATIONSHIPS WITH EMPLOYEES, CUSTOMERS AND SUPPLIERS) RESULTING FROM THE ACQUISITION MAY BE GREATER THAN EXPECTED; SLOWER THAN ANTICIPATED GROWTH AND MARKET ACCEPTANCE OF NEW CLEAN ENERGY PRODUCT OFFERINGS; INABILITY TO ACHIEVE EXPECTED PRICING INCREASES OR CONTINUED SUPPLY CHAIN CHALLENGES INCLUDING VOLATILITY IN RAW MATERIALS AND SUPPLY; RISKS RELATING TO REGIONAL CONFLICTS AND UNREST, INCLUDING THE RECENT UNREST IN THE MIDDLE EAST AND THE CONFLICT BETWEEN RUSSIA AND UKRAINE, INCLUDING POTENTIAL ENERGY SHORTAGES IN EUROPE AND ELSEWHERE AND THE OTHER FACTORS DISCUSSED IN ITEM 1A (RISK FACTORS) IN CHART’S MOST RECENT ANNUAL REPORT ON FORM 10-K FILED WITH THE SEC, WHICH SHOULD BE REVIEWED CAREFULLY. CHART UNDERTAKES NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD- LOOKING STATEMENT.
© 2024 Chart Industries, Inc. Confidential and Proprietary 3 Forward Looking Statements (2/2) THIS PRESENTATION CONTAINS NON-GAAP FINANCIAL INFORMATION, INCLUDING ADJUSTED DILUTED EPS, “NET INCOME, ADJUSTED”, FREE CASH FLOW, EBITDA, ADJUSTED EBITDA, ADJUSTED OPERATING INCOME, AND ADJUSTED OPERATING MARGIN. FOR ADDITIONAL INFORMATION REGARDING THE COMPANY'S USE OF NON-GAAP FINANCIAL INFORMATION, AS WELL AS RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURES TO THE MOST DIRECTLY COMPARABLE FINANCIAL MEASURES CALCULATED AND PRESENTED IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES ("GAAP"), PLEASE SEE THE RECONCILIATION SLIDES TITLED “ADJUSTED DILUTED EPS RECONCILIATION”, “PRO FORMA ADJUSTED DILUTED EPS RECONCILIATION”, “THIRD QUARTER 2024 ADJUSTED EBITDA”, “FREE CASH FLOW AND PRO FORMA FREE CASH FLOW RECONCILATION TABLE”,”SEGMENT PRO FORMA RECONCILATION”, “OPERATING INCOME TO ADJUSTED OPERATING INCOME”, AND “Q3 2023 PRO FORMA ADJUSTED EBITDA AND ADJUSTED OPERATING INCOME”, INCLUDED IN, OR IN THE APPENDIX AT THE END OF, THIS PRESENTATION. WITH RESPECT TO THE COMPANY’S 2024 AND 2025 FULL YEAR EARNINGS OUTLOOK, THE COMPANY IS NOT ABLE TO PROVIDE A RECONCILIATION OF THE ADJUSTED EBITDA, ADJUSTED DILUTED EARNINGS PER SHARE, AND FREE CASH FLOW OUTLOOKS BECAUSE CERTAIN ITEMS MAY HAVE NOT YET OCCURRED OR ARE OUT OF THE COMPANY’S CONTROL AND/OR CANNOT BE REASONABLY PREDICTED. CHART INDUSTRIES, INC. IS A LEADING INDEPENDENT GLOBAL LEADER IN THE DESIGN, ENGINEERING, AND MANUFACTURING OF PROCESS TECHNOLOGIES AND EQUIPMENT FOR GAS AND LIQUID MOLECULE HANDING FOR THE NEXUS OF CLEAN - CLEAN POWER, CLEAN WATER, CLEAN FOOD, AND CLEAN INDUSTRIALS, REGARDLESS OF MOLECULE. THE COMPANY’S UNIQUE PRODUCT AND SOLUTION PORTFOLIO ACROSS STATIONARY AND ROTATING EQUIPMENT IS USED IN EVERY PHASE OF THE LIQUID GAS SUPPLY CHAIN, INCLUDING ENGINEERING, SERVICE AND REPAIR FROM INSTALLATION TO PREVENTIVE MAINTENANCE AND DIGITAL MONITORING. CHART IS A LEADING PROVIDER OF TECHNOLOGY, EQUIPMENT AND SERVICES RELATED TO LIQUEFIED NATURAL GAS, HYDROGEN, BIOGAS AND CO2 CAPTURE AMONGST OTHER APPLICATIONS. CHART IS COMMITTED TO EXCELLENCE IN ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE (ESG) ISSUES BOTH FOR ITS COMPANY AS WELL AS ITS CUSTOMERS. WITH OVER 48 GLOBAL MANUFACTURING LOCATIONS AND 41 SERVICE CENTERS FROM THE UNITED STATES TO ASIA, AUSTRALIA, INDIA, EUROPE AND SOUTH AMERICA, THE COMPANY MAINTAINS ACCOUNTABILITY AND TRANSPARENCY TO ITS TEAM MEMBERS, SUPPLIERS, CUSTOMERS AND COMMUNITIES. TO LEARN MORE, VISIT WWW.CHARTINDUSTRIES.COM.
© 2024 Chart Industries, Inc. Confidential and Proprietary 4 Third Quarter 2024 Key Takeaways 1. Adjusted operating margin, EBITDA, Adjusted EBITDA, and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of EBITDA and Adjusted EBITDA) or cash flow from operations (in the case of Free Cash Flow) in accordance with U.S. GAAP. Reconciliation tables for these measures are provided in the appendix. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. All metrics are pro forma2 y/y versus Q3 2023 unless noted otherwise • Orders of $1.17 billion increased 5.4% • Sales of $1.06 billion increased 22.4% • Reported gross margin of 34.1% increased 350 bps • Adjusted operating income margin (1) of 22.2% increased 450 bps • Adjusted EBITDA (1) of $260.7 million increased 39.3% • Net cash from operating activities of $200.7 million less $26.1 million of capital expenditures resulted in free cash flow ("FCF") of $174.6 million • September 30, 2024 net leverage ratio of 3.04
© 2024 Chart Industries, Inc. Confidential and Proprietary 5 Third Quarter 2024 Key Metrics All metrics are pro forma2 y/y unless noted otherwise 1. Adjusted operating margin, EBITDA, Adjusted EBITDA, EBITDA and Adjusted EBITDA margin, Adjusted Diluted EPS, and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of EBITDA and Adjusted EBITDA) or cash flow from operations (in the case of Free Cash Flow) in accordance with U.S. GAAP. Reconciliation tables for these measures are provided in the appendix. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. $ millions, except per share amounts Q3 2024 Q3 20232 Change Continuing Operations Total Orders $1,167.5 $1,107.3 +5.4% Book to Bill (Total) 1.10 1.28 Total Backlog 4,535.3 4,140.7 +9.5% Sales 1,062.5 867.9 +22.4% Reported Gross Profit Margin % 34.1% 30.6% +350bps Reported Operating Income Margin % 16.8% 11.2% +560bps Adjusted Operating Income Margin % (1) 22.2% 17.7% +450bps Income from Continuing Operations Attributable to Chart 62.6 ($3.0) ++ Reported EBITDA (1) 248.4 161.4 +53.9% Reported EBITDA % of Sales (1) 23.4% 18.6% +480bps Adjusted EBITDA (1) 260.7 187.1 +39.3% Adjusted EBITDA % of Sales (1) 24.5% 21.6% +290bps Reported Diluted EPS $1.34 ($0.06) ++ Adjusted Diluted EPS (1) $2.18 $1.02 113.7% Net Cash From Continuing Operations 200.7 ($35.3) ++ Free Cash Flow (1) 174.6 ($97.8) ++
Third Quarter 2024 Commercial Wins © 2024 Chart Industries, Inc. Confidential and Proprietary 6 Liquid hydrogen solution for a major shipbuilder Siemens Energy air- coolers for multiple energy projects IGAT – part of SIAD GROUP compressor for green hydrogen plant Exhaust gas recirculation for Hyundai Heavy Industries for marine International LNG project core-in-kettles Nuclear spares for public utility company ThyssenKrupp for process fans for a new cement line Axial and jet fan awards by Spark NEL for the North East Link Tunnels
© 2024 Chart Industries, Inc. Confidential and Proprietary 7 Third Quarter 2024 Key Metrics All metrics are pro forma2 y/y unless noted otherwise $868 $1,063 Q3'23 Q3'24 Sales (2) +22% Adjusted Operating Profit(1,2) Adjusted EBITDA(1,2) Three of our segments had record sales Profit growth driven by volume leverage, full solution project mix, and synergy realization Excluding the foreign exchange headwind, would have been $270 million $187 $261 Q3'23 Q3'24 +40% $154 $236 Q3'23 Q3'24 +53% 1. Adjusted operating profit, EBITDA, and Adjusted EBITDA are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of Adjusted EBITDA) in accordance with U.S. GAAP. Reconciliation tables for these measures are provided in the appendix. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix.
© 2024 Chart Industries, Inc. Confidential and Proprietary 8 Third Quarter 2024 Key Metrics All metrics are pro forma2 y/y unless noted otherwise Gross Profit Margin Operating Inc Margin(1) EBITDA Margin(1) All four segments' gross profit margin increased compared to Q3 2023 All four segments' operating margin increased compared to Q3 2023 All four segments' adjusted EBITDA margin increased compared to Q3 2023 1. Adjusted operating income margin, EBITDA and Adjusted EBITDA margin are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of EBITDA and Adjusted EBITDA) in accordance with U.S. GAAP. Reconciliation tables for these measures are provided in the appendix. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. 30.6% 34.1% Q3'23 Q3'24 Reported 11.2% 16.8%17.7% 22.2% Q3'23 Q3'24 Reported Adjusted 18.6% 23.4% 21.6% 24.5% Q3'23 Q3'24 Reported Adjusted
© 2024 Chart Industries, Inc. Confidential and Proprietary 9 Pro Forma Segment Results $ millions Orders (1) Sales (1) Reported Gross Profit Margin Commentary Q3 24 Q3 23 PF Q3 24 Q3 23 PF Q3 24 Q3 23 PF Cryo Tank Solutions $126.2 $152.9 $162.5 $155.3 25.0% 22.2% • Difficult order comparison as Q2 2023 included a large railcar order • Sales driven by global mobile equipment; China is slowing • Margin performance driven by favorable mix (17.5%) +4.6% +280bps Heat Transfer Systems $424.7 $169.2 $256.2 $227.8 29.8% 26.4% • Orders driven by global LNG and traditional energy equipment including additional equipment at brownfield sites • Sales driven by backlog conversion of systems, BAHX, ACHX, and traditional energy equipment • Margin performance driven by delivery of more full-solution projects from backlog, improving throughput and operational efficiency +151.0% +12.5% +340bps Specialty Products $237.8 $465.5 $283.3 $225.0 26.3% 25.7% • Orders impacted by timing of hydrogen and mining projects; certain projects awarded but bookings anticipated in Q4 2024 • Sales increase driven by hydrogen & helium project execution, HLNG vehicle tanks, Space, Carbon Capture, and Water Treatment • Margin performance driven by favorable mix (48.9%) +25.9% +60bps Repair, Service & Leasing $377.9 $324.4 $360.5 $264.8 47.4% 42.8% • Orders were broad based geographically • Sales driven by life cycle services and aftermarket equipment and services • Margin performance driven by operational excellence, service on 3rd party equipment and favorable mix +16.5% +36.1% +460bps 1. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix to the accompanying earnings release.
© 2024 Chart Industries, Inc. Confidential and Proprietary Third Quarter 2024 FCF and Capital Structure Debt Covenant (2): Net Debt / LTM Bank EBITDA(1) 3.59X 3.26X 3.04X Q3'23 Q2'24 Q3'24 1. EBITDA and Free Cash Flow are non-GAAP measures and should not be consulted as an alternative to net income and cash flow from operations in accordance with U.S. GAAP. 2. Debt covenant leverage ceiling steps down from 6.0x to 5.0x starting April 1, 2024; steps down from 5.0x to 4.5x on April 1, 2025. 3. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. • 1% Convertible Notes will run to maturity in November 2024 with cash payment for principal and delivery of shares for anticipated settlement of premium (already contemplated in guidance) • Opportunistically repriced TLB for second time in 9 months in July 2024, resulting in 85bps spread reduction (~$14 million annualized interest savings) • Actively pursuing non-operating cash anticipated to be used for debt repayment through 2025 • Reiterate our financial policy that until we are within out target net leverage ratio range of 2.0-2.5X, we will not do any additional material cash acquisitions or share repurchases 10 Q3 2024 Free Cash Flow(1) Q3 2024 Q3 2023(3) Operating Cash Flow $200.7 ($35.3) Capital Expenditures ($26.1) ($62.5) Free Cash Flow $174.6 ($97.8)
© 2024 Chart Industries, Inc. Confidential and Proprietary Chart Industries 2024 Outlook 11 Guidance Metrics as of November 1, 2024 1. Adjusted EBITDA and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP (as is the case with adjusted EBITDA) and cashflows from operations in accordance with U.S. GAAP (as is the case with free cash flow). Management believes that Adjusted EBITDA and Free Cash Flow facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. 2. Adjusted diluted EPS is a non-GAAP measure and should not be considered as an alternative to diluted EPS in accordance with U.S. GAAP. Updated Full Year Guidance Comments Revenue $4.2 to $4.3 Billion • Backlog conversion • Book & ship led by Repair, Service & Leasing • High-end achieved by specific project releases in November and December 2024 Adjusted EBITDA(1) $1.015 to $1.045 Billion • Strong margin performance anticipate to continue from volume leverage, cost synergies and higher full solutions mix Free Cash Flow(1) Approximately $400 Million • Working capital management • Cash milestone payment timing Adjusted Diluted Earnings per Share(2) Approximately $9.00 • Excludes the full year impact of Howden depreciation & amortization related to acquired intangibles and PPE step-up • Interest and deferred financing expense ~$325 million • Effective tax rate of approximately ~22% • Full Year Diluted share count of ~46.5 million
© 2024 Chart Industries, Inc. Confidential and Proprietary Chart Industries Initial 2025 Outlook 12 Guidance Metrics as of November 1, 2024 1. Adjusted EBITDA, Adjusted Diluted Earnings per share, and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP (as is the case with adjusted EBITDA) and cashflows from operations in accordance with U.S. GAAP (as is the case with free cash flow). Management believes that Adjusted EBITDA, Adjusted Diluted Earnings Per Share, and Free Cash Flow facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. Full Year Guidance Revenue $4.65 to $4.85 Billion Adjusted EBITDA(1) $1.175 to $1.225 Billion Adjusted Diluted Earnings per share(1) $12.00 to $13.00 Free Cash Flow(1) $550 to $600 Million Tax Rate Approximately 22% Details to be provided at our Capital Markets Day on November 12, 2024
November 12, 2024 NYSE, Siebert Hall, New York 9am to 11am eastern time Capital Markets Day For in-person registration, visit: https://capitalmarketsday.chartindustries.com © 2024 Chart Industries, Inc. Confidential and Proprietary 13 Upcoming Event
Appendix 14© 2024 Chart Industries, Inc. Confidential and Proprietary
© 2024 Chart Industries, Inc. Confidential and Proprietary 15 Third Quarter Sequential Metrics All metrics are pro forma2 q/q unless noted otherwise 1. Adjusted operating margin, EBITDA, Adjusted EBITDA, EBITDA and Adjusted EBITDA margin, Adjusted Diluted EPS, and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income (in the case of EBITDA and Adjusted EBITDA) or cash flow from operations (in the case of Free Cash Flow) in accordance with U.S. GAAP. Reconciliation tables for these measures are provided in the appendix. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. $ millions, except per share amounts Q3 2024 Q2 2024 Change Continuing Operations Total Orders $1,167.5 $1,164.7 +0.2% Book to Bill (Total) 1.10 1.12 Total Backlog 4,535.3 4,426.0 +2.5% Sales 1,062.5 1,040.3 +2.1% Reported Gross Profit Margin % 34.1% 33.8% +30bps Reported Operating Income Margin % 16.8% 16.1% +70bps Adjusted Operating Income Margin % (1) 22.2% 21.7% +50bps Income from continuing operations attributable to Chart 62.6 52.0 +20.4% Reported EBITDA (1) 248.4 229.6 +8.2% Reported EBITDA % of Sales (1) 23.4% 22.1% +130bps Adjusted EBITDA (1) 260.7 257.3 +1.3% Adjusted EBITDA % of Sales (1) 24.5% 24.7% (20bps) Reported Diluted EPS $1.34 $1.10 +21.8% Adjusted Diluted EPS (1) $2.18 $2.18 - Net Cash From Continuing Operations 200.7 116.1 +72.9% Free Cash Flow (1) 174.6 88.0 +98.4%
© 2024 Chart Industries, Inc. Confidential and Proprietary Chart Industries Prior 2024 Outlook 16 From August 2, 2024 1. Adjusted EBITDA and Free Cash Flow are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP (as is the case with adjusted EBITDA) and cashflows from operations in accordance with U.S. GAAP (as is the case with free cash flow). Management believes that Adjusted EBITDA and Free Cash Flow facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. 2. Adjusted diluted EPS is a non-GAAP measure and should not be considered as an alternative to diluted EPS in accordance with U.S. GAAP. Prior Full Year Guidance Revenue $4.45 to $4.60 Billion Adjusted EBITDA(1) $1.08 to $1.15 Billion Free Cash Flow(1) $400 to $475 Million Adjusted Diluted Earnings per Share(2) $10.75 to $11.75 Tax Rate 20% to 21%
© 2024 Chart Industries, Inc. Confidential and Proprietary 17 Adjusted Diluted Earnings Reconciliation Q3 2023 Q1 2024 Q2 2024 Q3 2024 YTD September 2024 Amounts attributable to Chart common stockholders Net income attributable to Chart Industries, Inc. $3.4 $11.3 $58.6 $69.0 $138.9 Less: (Loss) income from discontinued operations, net of tax (6.0) (2.2) (0.2) (0.4) (2.8) Income from continuing operations 9.4 13.5 58.8 69.4 141.7 Less: Mandatory convertible preferred stock dividend requirement 6.8 6.8 6.8 6.8 20.4 Income (loss) from continuing operations attributable to Chart (U.S. GAAP) 2.6 6.7 52.0 62.6 121.3 Unrealized loss (gain) on investments in equity securities and loss from strategic equity method investments (1) 5.1 4.3 2.4 (11.0) (4.3) Deal related and integration costs (3) 5.9 14.3 7.4 8.2 29.9 Howden amortization 47.6 46.6 46.9 46.3 139.8 Restructuring & related costs 4.7 5.1 4.3 1.7 11.1 Other one-time items (2) — — 2.0 3.9 5.9 Tax effects (11.8) (14.4) (11.8) (9.8) (36.0) Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) $54.1 $62.6 $103.2 $101.9 $267.7 (1) Includes the mark-to-market of our inorganic investments in Avina, McPhy, Stabilis and certain of our minority investments as well as losses from strategic equity method investments. (2) Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries, non-repeating legal costs and a one-time adjustment related to a 2022 settlement adjusted for in the second quarter of 2024. (3) Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures
© 2024 Chart Industries, Inc. Confidential and Proprietary 18 Adjusted Diluted EPS Reconciliation Table Q3 2023 Diluted EPS Q1 2024 Diluted EPS Q2 2024 Diluted EPS Q3 2024 Diluted EPS YTD September 2024 Diluted EPS Reported income (loss) from continuing operations attributable to Chart (U.S. GAAP) $0.05 $0.14 $1.10 $1.34 $2.59 Unrealized loss (gain) on investments in equity securities and loss from strategic equity method investments (1) 0.11 0.09 0.05 (0.24) (0.09) Deal related and integration costs 0.12 0.31 0.15 0.18 0.64 Howden amortization 1.00 1.00 1.00 0.99 2.98 Restructuring & related costs 0.10 0.11 0.09 0.04 0.24 Other one-time items (2) — 0.04 0.08 0.12 Tax effects (0.25) (0.31) (0.25) (0.21) (0.77) Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) $1.13 $1.34 $2.18 $2.18 $5.71 Share count 47.61 46.73 47.25 46.67 46.89 1. Adjusted Diluted EPS is not a measures of financial performance under U.S. GAAP and should not be considered as an alternative to diluted EPS in accordance with U.S. GAAP.
© 2024 Chart Industries, Inc. Confidential and Proprietary 19 Pro Forma Adjusted Dilute EPS Reconciliation Table $ millions, except per share Q3 2024 Q3 2023 Net income (loss) attributable to Chart Industries, Inc. $69.0 $3.4 Less: (Loss) income from discontinued operations, net of tax (0.4) 6.0 Income from continuing operations 69.4 9.4 Less: Mandatory convertible preferred stock dividend 6.8 6.8 Income (loss) from continuing operations attributable to Chart 62.6 2.6 Less: Net Income from American Fan, Cofimco and Cryo Diffusion (divested in fourth quarter 2023) _ 5.6 Pro forma Income (loss) from continuing operations attributable to Chart 62.6 (3.0) Pro forma earnings (loss) per common share attributable to Chart Industries, Inc. cont. operations 1.34 (0.06) Unrealized (gain)/loss on investments in equity securities and loss from strategic equity method investments (0.24) 0.11 Deal related and integration costs 0.18 0.12 Howden amortization 0.99 1.00 Restructuring & related costs 0.04 0.10 Other one-time items 0.08 - Tax effects (0.21) (0.25) Adjusted earnings per common share attributable to Chart Industries, Inc. (non-GAAP) $2.18 $1.02 Share Count 46.67 47.61 1. Adjusted Diluted EPS is not a measures of financial performance under U.S. GAAP and should not be considered as an alternative to diluted EPS in accordance with U.S. GAAP. 2. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion
© 2024 Chart Industries, Inc. Confidential and Proprietary 20 Third Quarter 2024 Adjusted EBITDA Three Months Ended Nine Months Ended September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023 Net income (loss) from continuing operations $73.1 $11.7 $153.0 $6.1 Income tax expense (benefit) 26.6 0.1 50.9 (4.2) Interest expense, net 80.6 90.5 248.7 202.7 Acquisition related finance fees — — — 26.1 Loss on extinguishment of debt — — 0.7 — Depreciation and amortization 68.1 67.0 200.0 163.2 EBITDA (non-GAAP) 248.4 169.3 653.3 393.9 Non-Recurring costs: Deal related & integration costs (3) 8.2 5.9 29.9 39.4 Restructuring & related costs 1.7 4.2 11.1 11.2 Amortization of step-up value of inventory 6.4 7.3 21.0 18.2 Other one-time items (2) 2.8 0.6 4.9 4.5 Employee share-based compensation expense 4.2 2.6 14.3 9.2 Unrealized loss (gain) on investments in equity securities and loss from strategic equity method investments (1) (11.0) 5.1 (4.2) 11.7 Howden FX Hedge — — — 2.8 Adjusted EBITDA (non-GAAP) $260.7 $195.0 $730.2 $490.9 (1) Includes the mark-to-market of our inorganic investments in Avina, McPhy, Stabilis and certain of our minority investments as well as losses from strategic equity method investments. (2) Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries, non-repeating legal costs and a one-time adjustment related to a 2022 settlement adjusted for in the second quarter of 2024. (3) Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures.
© 2024 Chart Industries, Inc. Confidential and Proprietary 21 Free Cash Flow and Pro Forma1 Free Cash Flow Reconciliation Table 1. Free cash flow is not a measure of financial performance under U.S. GAAP and should not be considered as an alternative to net cash provided by (used in) operating activities in accordance with U.S. GAAP. Management believes that free cash flow facilitates useful period-to-period comparisons of our financial results and this information is used by us in evaluating internal performance. Our calculation of this non-GAAP measure may not be comparable to the calculations of similarly titled measures reported by other companies. $ millions Q3 2024 Q3 2023 Net cash provided by (used in) operating activities from continuing operations $200.7 $(29.3) Operating cash from American Fan, Cofimco and Cryo Diffusion (divested in fourth quarter 2023) - 6.0 Pro-forma operating cash flow 200.7 (35.3) Capital Expenditures (26.1) (62.5) Pro forma Free Cash Flow from continuing operations (non-GAAP) $174.6 $(97.8)
© 2024 Chart Industries, Inc. Confidential and Proprietary 22 Segment Pro Forma1 Reconciliation 1. Pro forma “PF” includes Howden, excluding Roots , and excludes results of American Fan, Cofimco, and Cryo Diffusion. The pro forma results are included in the appendix. Three Months Ended September 30, 2023 Cryo Tank Solutions Heat Transfer Systems Specialty Products Repair, Service & Leasing Intersegment Eliminations Corporate Consolidated Orders $155.6 $176.1 $469.1 $331.2 $(4.7) — $ 1,127.3 Less: Orders from businesses divested in the fourth quarter 2023 2.7 6.9 3.6 6.8 — — 20.0 Pro forma orders (non-GAAP) 152.9 169.2 465.5 324.4 (4.7) — 1,107.3 Sales 159.0 232.5 240.0 271.3 (4.9) — 897.9 Less: Sales from businesses divested in the fourth quarter 2023 3.7 4.7 15.0 6.5 0.1 — 30.0 Pro forma sales (non-GAAP) 155.3 227.8 225.0 264.8 (5.0) — 867.9 Gross Profit 35.2 61.5 62.0 117.5 — — 276.2 Less: Gross profit from businesses divested in the fourth quarter 2023 0.7 1.3 4.1 4.1 0.1 — 10.3 Pro forma gross profit (non-GAAP) $34.5 $60.2 $57.9 $113.4 $(0.1) — $265.9 Pro forma gross profit margin (non-GAAP) 22.2 % 26.4 % 25.7 % 42.8 % 2.0 % — 30.6 %
© 2024 Chart Industries, Inc. Confidential and Proprietary 23 Operating Income to Adjusted Operating Income Three Months Ended September 30, 2024 Cryo Tank Solutions Heat Transfer Systems Specialty Products Repair, Service & Leasing Intersegment Eliminations Corporate Consolidated Sales $162.5 $256.2 $283.3 $360.5 — — $1,062.5 Operating income (loss) as reported (U.S. GAAP) 23.5 61.3 41.9 102.0 — (50.2) 178.5 Operating margin 14.5% 23.9% 14.8% 28.3% 16.8% Restructuring & related costs 0.3 0.2 0.3 0.7 — 0.2 1.7 Deal related & integration costs (2) — — — 0.3 — 7.9 8.2 Step-up amortization 2.1 1.1 4.8 38.4 — (0.1) 46.3 Other (1) 0.4 0.1 0.2 (0.1) — 0.6 1.2 Adjusted operating income (loss) (non-GAAP) $26.3 $62.7 $47.2 $141.3 — ($41.6) $235.9 Adjusted operating margin (non-GAAP) 16.2% 24.5% 16.7% 39.2% 22.2% (1) Other includes administrative costs related to certain equity investments, asset impairments and associated insurance recoveries and non-repeating legal costs. (2) Deal related and integration costs primarily includes costs associated with integrating Howden and impacts from the 2023 divestitures
© 2024 Chart Industries, Inc. Confidential and Proprietary 24 Q3 2023 Pro Forma Adjusted EBITDA & Adjusted Operating Income 1. EBITDA and Adjusted EBITDA, pro forma EBITDA, pro forma adjusted EBITDA, pro forma adjusted EBITDA margin, pro forma operating income, pro forma operating income margin, pro forma adjusted operating income and pro forma adjusted operating income margin are not measures of financial performance under U.S. GAAP and should not be considered as an alternative to net income in accordance with U.S. GAAP (as is the case with EBITDA and adjusted EBITDA) and cashflows from operations in accordance with U.S. GAAP (as is the case with free cash flow). Management believes these non-GAAP measures facilitate useful period-to-period comparisons of financial results and the information is used by us in evaluating our internal performance. EBITDA (non-GAAP) $169.3 Less: Adjusted EBITDA from businesses divested in the fourth quarter 2023 7.9 Pro forma EBITDA (non-GAAP) 161.4 Non-Recurring costs: Deal related & Integration Costs 5.9 Restructuring & related Costs 4.2 Amortization of step up value of inventory 7.3 Other one-time items 0.6 Employee share-based compensation expense 2.6 Unrealized loss on investments in equity securities and loss from strategic equity method investments 5.1 Pro forma adjusted EBITDA (non-GAAP) 187.1 Pro forma adjusted EBITDA margin (non-GAAP) 21.6 % Operating income 104.4 Less: Operating income from businesses divested in the fourth quarter 2023 7.4 Pro forma operating income (non-GAAP) 97.0 Pro forma operating income margin (non-GAAP) 11.2 % Restructuring related, deal-related, integration and other one time costs 57.0 Pro forma adjusted operating income (non-GAAP) $154.0 Pro forma adjusted operating income margin (non-GAAP) 17.7 %
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