Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CHART INDUSTRIES INC | d231241d8k.htm |
 CHART INDUSTRIES, INC. CL KING & ASSOCIATES
BEST IDEAS CONFERENCE
September 13, 2011
Exhibit 99.1 |
 Disclosure
1
Forward-Looking Statements: This presentation includes “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act of
1995. The use of words such as “may”, “might”, “should”, “will”,
“expect”, “plan”, “anticipate”, “believe”,
“estimate”, “project”, “forecast”, “outlook”, “intend”, “future”, “potential” or
“continue”, and other similar expressions are intended to identify forward-looking
statements. All of these forward-looking statements are based on estimates and
assumptions by our management as of the date of this presentation that, although we believe to
be reasonable, are inherently uncertain. Forward-looking statements involve risks and
uncertainties that could cause the Company’s actual results or circumstances to differ
materially from those expressed or implied by forward-looking statements. These risks and
uncertainties include, among others, the following: the cyclicality of the markets that the
Company serves; a delay, significant reduction in or loss of purchases by large customers;
fluctuations in energy prices; changes in government energy policy or failure of expected
changes in policy to materialize; uncertainties associated with pending legislative initiatives
for the use of natural gas as a transportation fuel; competition; the negative impacts of
downturns in economic and financial conditions on our business; our ability to manage our fixed-
price contract exposure; our reliance on key suppliers and potential supplier failures or defects;
the modification or cancellation of orders in our backlog; changes in government healthcare
regulations and reimbursement policies; general economic, political, business and market risks
associated with the Company’s global operations and transactions; fluctuations in foreign
currency exchange and interest rates; the Company’s ability to successfully manage its
costs and growth, including its ability to successfully manage operational expansions and the
challenges associated with efforts to acquire and integrate new product lines or businesses; the
financial distress of third parties; the loss of key employees and deterioration of employee or
labor relations; the pricing and availability of raw materials; the regulation of our products by the
U.S. Food & Drug Administration and other governmental authorities; potential future
impairment of the Company’s significant goodwill and other intangibles; the cost of
compliance with environmental, health and safety laws; additional liabilities related to taxes;
the impact of severe weather; litigation and disputes involving the Company, including product
liability, contract, warranty, employment and environmental claims; and volatility
and fluctuations in the price of the Company’s stock. For a discussion of these and additional
risks that could cause actual results to differ from those described in the forward-looking
statements, see disclosure under Item 1A. “Risk Factors” in the Company’s most
recent Annual Report on Form 10-K and other recent filings with the Securities and Exchange
Commission, which should be reviewed carefully. Please consider the Company’s
forward-looking statements in light of these risks. Any forward-looking statement speaks only
as of its date. We undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise, except as
required by law.
|
 GTLS: GAS TO LIQUID SYSTEMS
Technology leader that provides high-end equipment to the energy industry,
which is the largest end-user of Chart’s products
One of the leading suppliers in all primary markets served
Global footprint for our operations on four continents with approximately 3,345
employees Worldwide earnings with approximately 60% of sales derived from
outside the U.S. Company Overview
Chart Industries is a leading provider of highly engineered cryogenic equipment
for the hydrocarbon, industrial gas, and biomedical markets
Asia
21%
U.S.
44%
Americas
(Non-US)
10%
RoW
2%
Europe
23%
LTM
June 2011 Sales by Segment
Energy
47%
BioMedical
27%
General
Industrial
26%
LTM June 2011 Sales by Region
LTM June 2011 Sales by End-User
Energy &
Chemicals
26%
Distribution
& Storage
48%
BioMedical
26%
2 |
 GTLS: GAS TO LIQUID SYSTEMS
Energy & Chemicals (E&C) Segment Overview
Heat Exchanger
Cold Box
Production
Heat
Exchangers
80%
Cold Boxes and
LNG VIP
20%
LTM June 2011 Sales by Product / Region
Highlights
Technology
leader
-
providing
heat
exchangers
and
cold
boxes critical to LNG, Olefin petrochemicals, natural gas
processing and industrial gas markets
–
Separation, liquefaction and purification of hydrocarbon and
industrial gases
Market
leader
–
leading
market
positions
worldwide
Manufacturing
leader
-
one
of
three
global
suppliers
of
mission-critical LNG and LNG liquefaction equipment
Selected Products
Americas
(Non-US)
15%
RoW 4%
Asia
30%
U.S.
49%
Europe
2%
3 |
 GTLS: GAS TO LIQUID SYSTEMS
Distribution & Storage (D&S) Segment Overview
LTM June 2011 Sales by Product / Region
Highlights
Balanced
customer
base
-
45%
of
segment
sales
derived
from products used in energy applications
Strategic
footprint
–
manufacturing
located
near
growing
end
markets and lower-cost countries
–
Positioned to capitalize on strong expected growth in Asia and
Eastern
Europe
(supplemented
by
3
Qtr.
acquisition
in
Germany)
–
Continued investment in key global manufacturing facilities
Bulk
MicroBulk
Distribution
Storage
Selected Products
Satellite LNG
Storage
Bulk Storage
Systems
34%
Packaged Gas
Systems
31%
VIP, Systems
and Components
11%
Parts, Repair and On-
Site Service
11%
Beverage Liquid
CO
Systems
7%
LNG Terminals
and Vehicle Fuel
Systems 6%
Americas
(Non-US)
10%
RoW
2%
Asia
21%
U.S.
45%
Europe
22%
4
2
rd |
 GTLS: GAS TO LIQUID SYSTEMS
BioMedical Segment Overview
LTM June 2011 Sales by Product / Region
Highlights
Strong
growth
-
increase
in
oxygen
respiratory
therapy
and
biomedical research, led by international markets, expected
Robust end markets include:
–
Home healthcare and nursing homes
–
Hospitals and long-term care
–
Biomedical and pharmaceutical research
–
Animal breeding
Portable Oxygen
Lab Storage
Stainless Steel Freezer
End-Use Consumption
Respiratory
Therapy
Systems
67%
Biological
Storage
Systems
33%
Selected Products
Americas
(Non-US)
5%
U.S.
39%
Europe
45%
Asia
10%
RoW
1%
5 |
 GTLS: GAS TO LIQUID SYSTEMS
Global Manufacturing and Distribution Platform
Operating
leverage
provides
the
flexibility
to
expand
and
reduce
capacity
as
needed
with minimal capital expenditures
Major manufacturing locations include:
China,
Changzhou (D&S and E&C) and Chengdu (BioMedical)
Czech
Republic,
Decin
(D&S)
Georgia,
Canton and Minnesota, New Prague (D&S and BioMedical)
Wisconsin,
La
Crosse,
Louisiana,
New
Iberia
and
Oklahoma,
Tulsa
(E&C)
Expansion of facilities in China, Changzhou and Louisiana are currently in
process Manufacturing facilities are strategically located in lower-cost
countries and near centers of demand
Corporate
Energy & Chemicals
Distribution & Storage
BioMedical
Asia-Pacific
North America
Europe
6 |
 GTLS: GAS TO LIQUID SYSTEMS
BioMedical
•Aging demographics
•
Product expansion
•
Increasing biological
research
Growth Opportunities
7
D&S
•Global LNG opportunity
•
Strong relationships with
Industrial Gas customers
•
Demand for Industrial Gas
projected to increase 8%
per year
E&C
•Global base load LNG
projects
•
Growth in natural gas
processing
•
Emerging market
opportunities |
 GTLS: GAS TO LIQUID SYSTEMS
Natural
gas
expansion
-
Natural
gas
demand
is
expected
to
continue
to
grow
at
a
pace
faster
than
coal
and oil, and will be heavily weighted towards emerging economies, which is expected
to drive demand for Chart’s products
LNG
growth
leader
–
The
natural
gas
industry
is
expected
to
invest
approximately
$720
billion
in
LNG
facilities from 2009 to 2035, with LNG reaching 25% of world demand in 2035 (Source: International Energy
Agency –
World Energy Outlook 2011, Golden Age of Gas Scenario)
Natural Gas Expected To Grow Globally
8
Source: ExxonMobil – Outlook for Energy, A View to 2030 |
 GTLS: GAS TO LIQUID SYSTEMS
Increasing
natural
gas
penetration
as
a
viable
energy
source
and
transportation
fuel
due
to
its
high
energy density, lower costs, cleaner emissions profile, and plentiful supply due to
improved drilling technologies
(e.g.
shale
gas).
U.S.
trucking
fleets
beginning
to
convert
to
natural
gas
as
a
fuel.
China’s
twelfth
5-year
plan
(2011
-
2015)
mandates
an
increase
of
gas
as
a
percentage
of
energy
consumption from less than 4% to over 8%
Dramatic
increase
in
imported
LNG
in
China
has
already
begun
and
is
expected
to
accelerate,
with aggressive investment in infrastructure, including LNG transportation and
storage equipment Lack
of
pipeline
infrastructure
in
China
requires
“virtual
pipeline”
with
LNG
Chart provides a broad offering of products and solutions for the full LNG value
chain: LNG liquefiers, transportation
equipment,
terminal
storage
equipment
and
vehicle
tanks
for
both
on-road
and
off-road
heavy duty vehicles and marine applications
LNG Value Chain Opportunities
9 |
 GTLS: GAS TO LIQUID SYSTEMS
Core Competencies
Proprietary Technology
Global Platform
Financial Strength
New Products
New Segments
New Geographies
Current Platforms
E&C
D&S
BioMedical
New Platform
Business Differentiators
Growth Enablers
Value Added Acquisitions
Acquisitions Enhancing Shareholder Value
Continue investment in current platforms
-10 acquisitions since 2005
Actively seeking new business platform
10 |
 GTLS: GAS TO LIQUID SYSTEMS
Strong Track Record of Successful Execution
¹Included in 2005 are non-recurring costs of $26.5 million for the
acquisition of Chart Industries by First Reserve
¹
During last growth cycle Company leveraged its flexible
manufacturing platform resulting in operating income
growth that outpaced sales
Flexible cost structure and good execution allowed for
aggressive response to economic downturn resulting in
higher operating income level than last cycle low point
11
Similar or higher growth, leveraged by
acquisitions, expected to occur again during the
current growth cycle
First half 2011 sales of $363.6 million continue
to ramp up significantly
Last Growth
Cycle CAGR
(2004-2008)
Sales 25%
Oper. Inc. 38%
GTLS: GAS TO LIQUID SYSTEMS |
 GTLS: GAS TO LIQUID SYSTEMS
Historical Orders and Backlog
Backlog
12
Orders |
 GTLS: GAS TO LIQUID SYSTEMS
Very Stable Business Model
•Attractive industry with long-term
customer relationships
•
Solid platform with worldwide
presence and leading market
positions in all segments
Summary of Investment Highlights
13
Strong Balance Sheet
•
Strong organic earnings should provide
substantial free cash flow and liquidity
•
Permit continued accretive organic /
inorganic growth
Positioned for Significant Growth
•Exploit LNG and NG growth
•
Opportunities with global
infrastructure build-out
•
New product development and
innovation
•Expanded new business and
inorganic pipeline
Chart continues to represent a unique investment opportunity to capitalize on global
energy demand, growth in natural gas use, and biomedical opportunities
Flexible / Low Cost Capital Structure
•
7 year, $250 million convertible, hedged
financing with 2% cash interest cost
•
Actively monitor financing opportunities
with a view toward cost efficiency and
financial flexibility |