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| 8-K - 8-K - CHART INDUSTRIES INC | aprilinvestorpresentation8.htm |
© 2018 Chart Industries, Inc. Confidential and Proprietary
Chart Industries, Inc.
Investor Presentation
© 2018 Chart Industries, Inc. Confidential and Proprietary 2
Forward-Looking Statements
Certain statements made in this presentation are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning Chart Industries’ plans, objectives, future orders, revenues, margins, tax rates and tax planning,
earnings or performance, liquidity and cash flow, capital expenditures, business 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," “outlook,”
“guidance,” "continue," or the negative of such terms or comparable terminology.
Forward-looking statements contained in this presentation or in other statements made by the Company are made based on management's expectations and
beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and business
environment, all of which are difficult to predict and many of which are beyond the Company's control, that could cause the Company's actual results to differ
materially from those matters expressed or implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially
from those described in the forward-looking statements include those found 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, as well as risks and uncertainties related to the integration of the Hudson and VCT Vogel
businesses with the Company’s, and risks and uncertainties associated with the strategic review process underway with respect to the BioMedical segment, and
the results of such process, including any possible divestiture or transaction, and the uncertainty whether any such possible transaction is completed, and if so,
the terms, structure and timing of any such transaction. The Company undertakes no obligation to update or revise any forward-looking statement.
Chart Industries is a leading diversified global manufacturer of highly engineered equipment for the industrial gas, energy, and biomedical industries. The
majority of Chart Industries' products are used throughout the liquid gas supply chain for purification, liquefaction, distribution, storage and end-use
applications, a large portion of which are energy-related. Chart Industries has domestic operations located across the United States and an international presence
in Asia, Australia, Europe and Latin America. For more information, visit: http://www.chartindustries.com.
© 2018 Chart Industries, Inc. Confidential and Proprietary 3
Healthcare
Chart is a leading diversified global manufacturer of highly-engineered equipment, packaged
solutions and value-add services for the energy, industrial gas and biomedical industries
Technology leader providing premium equipment to energy and industrial liquid gas
supply chain end markets
A leading supplier in all primary markets served
Global footprint for our operations on four continents with approximately 4,400
employees
Balanced expansion in the US and International markets
FY 2017 Sales by Segment
BioMed
22%
Energy &
Chemicals
23%
Distribution &
Storage
55%
FY 2017 Sales by Segment Pro Forma Hudson*
BioMed
20%
Energy, &
Chemicals
32%
Distribution &
Storage
48%
* Assumes Hudson Acquisition occurred as of 1 January 2017
Company Overview
© 2018 Chart Industries, Inc. Confidential and Proprietary 4
Supplier of Brazed Aluminum
Heat Exchangers (BAHX), Air
Cooled Heat Exchangers
(ACHX) and Cold Boxes
Provider of integrated
systems and aftermarket
services for gas processing,
LNG and petrochemical
applications
Technology leader
Complete portfolio of
cryogenic distribution and
storage equipment
Leading innovator in
cryogenic packaged gas and
MicroBulk systems
Over 20 years of experience
in LNG applications
Leading Supplier of Mission Critical Equipment
End-to-end provider of
respiratory therapy
equipment
Set the standard for storage
of biological materials at low
temperatures
Reliable, high quality
solutions for environmental
market applications
BioMed Distribution & Storage Energy & Chemicals
A B C
© 2018 Chart Industries, Inc. Confidential and Proprietary 5
23%
of Total Chart Sales
$211M
Backlog at 12/31/17
20%
Gross Margin
BioMed
Broad End-Market Exposure
Distribution & Storage Energy & Chemicals
Sales
b
y
Indust
ry
*
H
ig
h
li
g
h
ts
10%
35%
55%
5%
8%
7%
22%
58%
Healthcare
Life
Sciences
Environ-
mental
Manufacturing/
Fabrication
LNG
Food/
Beverage
Electronics
Healthcare
Natural Gas
Processing/
Petrochemical
10%
13%
68%
9%
Industrial
Gas
LNG
$226M $223M $540M
22%
of Total Chart Sales
$23M
Backlog at 12/31/17
36%
Gross Margin
55%
of Total Chart Sales
$228M
Backlog at 12/31/17
27%
Gross Margin
Sales
b
y
G
e
o
g
ra
p
h
y
*
75%
41%
49% 53%
4%
30%
26% 22%
9% 17%
19% 16%
4% 2%
8% 12% 6% 7%
E&C BioMed D&S Total
$226M $223M $540M $989M
United States
Asia
Europe
Middle East
Rest of World
A B C
FY 2017
FY 2017 Highlights
FY 2017
* FY 2017 as per SEC filings
HVAC, power
and refining
© 2018 Chart Industries, Inc. Confidential and Proprietary 6
Hudson Transaction Broadens Offering
Adds highly-complementary Fans business
Strengthens aftermarket presence
Consistent with core strategy to enhance Air
Cooled Heat Exchanger (ACHX) business
Expected to be accretive to growth, margins and
EPS
Significant cost synergies
Efficient use of Chart’s strong balance sheet
position
Product Split*
OEM
63%
End Market Split* Aftermarket Split*
Aftermarket
37% Fans
38%
ACHEs
62%
Industrial /
Other /
HVAC
23%
Chemical
6%
LNG
22%
Power
10%
Oil & Gas
19%
Refining
20%
Key
Products
Chart Product Offerings
End Market Mix
Axial Flow Fans ACHEs Brazed Aluminum
Heat Exchangers
Integrated
Process
Systems
Natural Gas Industrial Gas LNG
Power HVAC Refining
Oil & Gas Petrochemical
Expands Industrial Gas Offerings
Maximizes LNG Opportunity
Denotes Chart
offering pre-
acquisition
* Hudson stand-alone
© 2018 Chart Industries, Inc. Confidential and Proprietary 7
Full Year 2017 Financial Results
$859
$989
FY 2016 FY 2017
Sales & Revenue
($USD Million)
$989
Earnings Per Share
$0.89
Adjusted
Earnings per Share1
$0.96
$0.91 $0.89
FY 2016 FY 2017
$0.65
1, 3
$0.96
$0.52
2
FY 2016 FY 2017
Full Year Highlights
• Sales increase of 15% over
2016, with 5% organic
growth
• Adjustments Full Year 2017
• Restructuring and
acquisition related costs
• China litigation award
• Refinancing debt
extinguishment costs
• Tax reform benefits
• Adjustments Full Year 2016
• Restructuring and
acquisition related costs
• Asset impairments
• Flood insurance
settlement
1. Adjusted earnings per share is a non-GAAP measure, see reconciliation to the comparable GAAP measure on page 9
2. 2017 excludes restructuring and acquisition costs, China litigation award, debt extinguishment and impact from U.S. tax reform. 2016 excludes asset impairments, flood insurance
settlement, and restructuring and acquisition costs.
3. 2016 includes Q3 AirSep insurance settlement of $15.9M, or $0.52 of EPS.
4. 2016 includes ~$38.7 million of benefit from E&C short lead-time replacement sales and contract expiration fees in 2016 which equates to ~$0.84 per share in 2016, as compared to ~$0.12
per share of short-lead time replacement equipment sales in 2017.
$1.17
© 2018 Chart Industries, Inc. Confidential and Proprietary 8
We are conducting a strategic review of the oxygen-related product lines within our
Biomedical segment, including an evaluation of a possible divestiture of the
businesses. We are excluding from the review those portions of the BioMedical
segment that utilize and align with our cryogenic technological expertise
(Cryobiological). The asset group does not meet the criteria to be held for sale, and
therefore continues to be accounted and reported for as assets to be held and used.
There can be no assurance that this evaluation will result in any transaction being
announced or consummated. The Company will not disclose further developments
during this process until our Board of Directors has approved a specific action or we
have determined that further disclosure is appropriate.
BioMedical Strategic Review
© 2018 Chart Industries, Inc. Confidential and Proprietary 9
First Quarter 2018 Financial Results
$204
$280
Q1 2017 Q1 2018
Sales & Revenue
($USD Million)
$280
Earnings Per Share
$0.18
Adjusted
Earnings Per Share1
$0.23
($0.09)
$0.18
Q1 2017 Q1 2018
Q1 Highlights
• Sales increase of 37% over
the first quarter of 2017, 16%
excluding Hudson Products
• Reported earnings per
diluted share increased
$0.27 compared to the first
quarter 2017, and adjusted
EPS grew $0.22 in the same
comparative period
• Orders of $321.1 million
compared to $209.7 million in
the first quarter of 2017, and
increased 35% organically
1. Adjusted earnings per share is a non-GAAP measure, see reconciliation to the comparable GAAP measure on page 4.
$0.01
$0.23
Q1 2017 Q1 2018
© 2018 Chart Industries, Inc. Confidential and Proprietary 10
10
Adjusted EPS
$ millions Q1 2017 Q1 2018 Change V. PY
(Q1)
Net Income (Loss) ($2.91) $5.76 $8.67
EPS (1) ($0.09) $0.18 $0.27
Restructuring Costs 0.10 0.02 (0.08)
BioMedical Strategic Review Costs 0.03 0.03
Adjusted EPS (2,3) $0.01 $0.23 $0.22
FX Impact 0.00 0.04 0.04
Normalized Adjusted EPS on a
Comparable Basis (3,4)
$0.01 $0.27 $0.26
(1) On January 1, 2018, we adopted ASC 606 which resulted in a timing related EPS impact of $0.04 in Q1 2018.
(2) Adjusted EPS (a non-GAAP measure) is as reported on a historical basis.
(3) Tax effected adjustments are at normalized statutory quarterly rates.
(4) “Normalized Adjusted EPS on a Comparable Basis” is not recognized under generally accepted accounting principles (“GAAP”) and is
referred to as a “non-GAAP financial measure” in Regulation G under the Exchange Act. The Company believes this figure is of interest to
investors and facilitates useful period-to-period comparisons of the Company’s operating results.
© 2018 Chart Industries, Inc. Confidential and Proprietary 11
11
2018 Guidance
FY 2018 Guidance1
Sales
$1.15B - $1.20B
5-7% organic growth
Adjusted EPS
$1.75 - $2.00
Inclusive of ~$0.15 of impact from U.S. tax reform
Assumes 27% full year tax rate
Capital Expenditures
$35M - $45M
Inclusive of ~$11M for finalization of La Crosse, WI capacity expansion
1. The Company’s guidance assumes continued ownership of all assets for the entire calendar year.
© 2018 Chart Industries, Inc. Confidential and Proprietary 12
Profitable Growth Focus
Continue facility consolidation efforts to create further operating
efficiencies and leverage support functions across the business
Focus on operational excellence and strategic goals for long-
term growth when market returns
Invest in additional capacity at our brazed aluminum heat
exchanger facility and LNG vehicle tank line expansion in
Georgia
Pursue acquisition targets in our core technologies and
adjacencies
© 2018 Chart Industries, Inc. Confidential and Proprietary
www.ChartIndustries.com
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