Attached files
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| 8-K - 8-K - CHART INDUSTRIES INC | d312086d8k.htm |
 Exhibit 99.1
INVESTOR
PRESENTATION
MARCH 2012 |
 Disclosure
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; the potential
for
negative
developments
in
the
natural
gas
industry
related
to
hydraulic
fracturing;
competition;
economic
downturns
and deteriorating
financial conditions; 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; 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; 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
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;
technological security threats; risks associated with our indebtedness, leverage, debt service and liquidity; 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. 1 |
 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 3,800 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
19%
U.S.
42%
Americas
(Non-US)
9%
RoW
6%
Europe
24%
2011 Sales by Segment
Energy
49%
BioMedical
25%
General
Industrial
26%
2011 Sales by Region
2011 Sales by End-User
Energy &
Chemicals
26%
Distribution
& Storage
49%
BioMedical
25%
2 |
 GTLS: GAS TO LIQUID
SYSTEMS Energy
&
Chemicals
(E&C)
Segment
Overview
Production
Brazed Aluminium
Heat Exchangers
44%
Cold Boxes and
LNG VIP
23%
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
industry
positions
worldwide
Manufacturing
leader
–
one
of
three
global
suppliers
of
mission-critical LNG and LNG liquefaction equipment
Selected Products
Americas
(Non-US)
11%
Middle East &
RoW
18%
Asia
23%
U.S.
47%
Europe
1%
3
Air Cooled Heat
Exchangers
33%
Cold
Box
Heat
Exchanger |
 GTLS: GAS TO LIQUID
SYSTEMS Distribution & Storage (D&S) Segment Overview
2011 Sales by Product / Region
Highlights
Balanced
customer
base
–
46%
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
North America
–
Continued investment in key global manufacturing facilities
Bulk
MicroBulk
Distribution
Storage
Selected Products
Satellite
LNG
Storage
Bulk Storage
Systems
36%
Packaged Gas
Systems
28%
VIP, Systems
and Components
9%
Parts, Repair and On-
Site Service
9%
Beverage Liquid
CO
2
Systems
6%
LNG Terminals
and Vehicle Fuel
Systems 12%
Americas
(Non-US)
10%
RoW
3%
Asia
21%
U.S.
42%
Europe
24%
4 |
 GTLS: GAS TO LIQUID
SYSTEMS BioMedical Segment Overview
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
End-Use Consumption
Liquid Oxygen
(LOX) Therapy
Systems
52%
Biological
Storage
Systems
30%
Selected Products
Americas
(Non-US)
5%
U.S.
38%
Europe
46%
Asia
10%
RoW
1%
5
Non-LOX
Respiratory
Therapy Systems
18%
Portable
Oxygen
Stainless
Steel
Freezer
Lab
Storage |
 GTLS: GAS TO LIQUID
SYSTEMS Global Manufacturing and Distribution Platform
Operating
leverage
provides
the
flexibility
to
expand
and
reduce
capacity
as
needed
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, Louisiana and Minnesota 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
6
Europe |
 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
–
The
Outlook for Energy, A View to 2040 |
 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 is converting a portion of its fleets to natural
gas. Recent announcements in domestic LNG infrastructure by major natural gas producers and
equipment providers, as well as recent order intake have validated expectations
China’s
twelfth
5-year
plan
(2011
-
2015)
mandates
an
increase
in
gas
use
as
a
percentage
of
energy
consumption from less than 4% to over 8%
Dramatic increase in imported LNG in China is in process and is expected to continue, with
significant 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 Strong Track Record of Successful Execution
Last Growth
Cycle CAGR
(2004-2008)
Sales 25%
Oper. Inc. 38%
¹Included in 2005 are non-recurring costs of $26.5 million for the
acquisition of Chart Industries by First Reserve
During last growth cycle Company leveraged its flexible
manufacturing platform resulting in operating income
growth that outpaced sales
Flexible cost structure and good execution allowed for
aggressive response to economic downturn resulting in
higher operating income level than last cycle low point
10
Similar or higher growth, leveraged by
acquisitions, expected to occur again during the
current growth cycle
The return of large contract orders and the
improvement in base order levels have
confirmed the recovery in the growth cycle
1
0
50
100
150
200
250
300
350
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Large Contract Orders
Base Orders
0
20
40
60
80
100
120
140
160
0
100
200
300
400
500
600
700
800
900
2004
2005
2006
2007
2008
2009
2010
2011
Sales
Operating Income |
 GTLS: GAS TO LIQUID
SYSTEMS Historical Orders and Year-end Backlog
11
Year-end Backlog ($MM)
Annual Orders ($MM) |
 GTLS: GAS TO LIQUID
SYSTEMS Outlook for 2012
12
Based
on
a
substantial
order
backlog,
solid
financial
resources,
and
an
attractive
portfolio of product solutions, we expect another solid year in 2012.
We believe energy investments, especially in natural gas applications, are at
an early-stage of a multi-year growth cycle.
We
anticipate
continued
growth
in
demand
for
our
products
and
we
have
stepped up our investment in capacity to capture and execute on these
opportunities.
Order
strength
in
first
quarter
2012
continues
at
an
exceptional
rate
for LNG
opportunities. Between E&C and D&S, we have booked over $190 million in
new LNG orders during January and February 2012.
Sales for 2012 are expected to be in a range of $950 million to $1 billion.
Including continuing costs related to the ramp-up of the Company’s
infrastructure,
diluted
earnings
per
share
are
expected
to
be
in
a
range
of
$2.60 to $2.90 per share, based on approximately 31 million shares
outstanding. |
 Summary of Investment
Highlights 13
Chart continues to represent a unique investment opportunity to capitalize on global
energy demand, growth in natural gas use, and biomedical opportunities
Exploit LNG and NG growth
Opportunities with global
infrastructure build-out
New product development and
innovation
Expanded new business and
inorganic pipeline
Strong
organic
earnings
should
provide substantial free cash flow
and liquidity
Permit
continued
accretive
organic
and inorganic growth
Attractive industry with long-term
customer relationships
Solid platform with worldwide
presence and leading industry
positions in all segments
7 yr. $250 million convertible notes
-
2% cash interest cost
Actively considering financing
opportunities with a view toward
cost efficiency and financial
flexibility
Strong Balance Sheet
Positioned for Significant Growth
Flexible / Low Cost Capital Structure
Very Stable Business Model |