Chart(US:GTLS)2024-08-02 20:59Financial Performance - Consolidated sales for the three months ended June 30, 2024, were $1,040.3 million, a 14.5% increase from $908.1 million in the same period of 2023[156]. - Consolidated gross profit margin improved to 33.8% for the three months ended June 30, 2024, compared to 30.9% in the same quarter of 2023[156]. - Operating income for Q2 2024 was $167.8 million, a significant increase of $72.1 million, or 75.3%, compared to $95.7 million in Q2 2023[162]. - Net income attributable to Chart Industries, Inc. from continuing operations for Q2 2024 was $58.8 million, compared to $6.6 million in Q2 2023[171]. - Gross profit for Q2 2024 was $351.6 million, an increase of $71.0 million, or 25.3%, compared to Q2 2023, with a gross profit margin of 33.8%, up 290 basis points from the prior year[164]. - Consolidated sales for the first six months of 2024 increased by $551.4 million, reaching $1,991.0 million, a growth of 38.3% compared to the same period in 2023[178]. - Gross profit for the first six months of 2024 rose by $224.0 million or 52.1%, with a gross profit margin of 32.8%, up from 29.9% in the prior year[178]. - Net income attributable to Chart Industries, Inc. for the first six months of 2024 was $72.3 million, compared to a net loss of $(9.3) million in the same period of 2023[184]. Segment Performance - Consolidated orders totaled $1,164.7 million for the three months ended June 30, 2024, compared to $1,063.1 million in the same period of 2023, driven by the Specialty Products segment[156]. - The company’s Cryo Tank Solutions segment reported a gross profit of $33.4 million for the three months ended June 30, 2024, a 16.0% increase from the previous year[159]. - The Specialty Products segment saw a gross profit increase of 32.5% to $80.8 million for the same period[159]. - Specialty Products segment sales increased by $151.2 million to $514.1 million, a 41.7% increase, driven by the inclusion of the acquired Howden business[197]. - Repair, Service & Leasing segment sales increased by $244.3 million to $661.5 million, a 58.6% increase, primarily due to the Howden Acquisition[202]. - Heat Transfer Systems segment sales increased by $86.8 million to $490.3 million, representing a 21.5% increase year-over-year[194]. - For the first six months of 2024, Cryo Tank Solutions sales increased by $49.0 million to $325.2 million, a 17.7% increase compared to the same period in 2023[188]. Cost and Expenses - Consolidated SG&A expenses decreased by $4.5 million, or 3.2%, in Q2 2024 compared to the same quarter in 2023[164]. - SG&A expenses increased by $44.1 million or 18.9% in the first half of 2024, primarily due to the inclusion of Howden SG&A expenses[179]. - Interest expense, net for Q2 2024 was $84.3 million, a slight increase of $0.4 million compared to $83.9 million in Q2 2023[167]. - The company reported an increase in amortization expense to $47.6 million for Q2 2024, up from $44.2 million in Q2 2023[165]. - Corporate SG&A expenses increased by $7.2 million in Q2 2024 compared to Q2 2023, driven by increased IT spending and integration activities[204]. Environmental and Safety Performance - The company reduced greenhouse gas emissions intensity by 27% in 2023 compared to 2022, achieving its 50% reduction goal by 2030 seven years ahead of schedule[150]. - The total recordable incident rate (TRIR) was 0.42 as of June 30, 2024, marking the lowest in the company's history[149]. - The company produced approximately 65 million tons of LNG in 2023, contributing to the replacement of coal-fired power generation[152]. Backlog and Orders - Total backlog reached a record $4,426.0 million as of June 30, 2024, up from $3,964.9 million a year earlier, and $4,331.1 million as of March 31, 2024[156]. - Specialty Products segment orders for the three months ended June 30, 2024, were $423.7 million, a significant increase from $293.2 million for the same period in 2023[214]. - Heat Transfer Systems segment backlog at June 30, 2024, totaled $1,709.7 million, compared to $1,708.9 million as of June 30, 2023[213]. - Repair, Service & Leasing segment orders for the three months ended June 30, 2024, were $312.4 million, down from $319.7 million for the same period in 2023[215]. Cash Flow and Financing - Cash provided by operating activities decreased to $21.0 million for the six months ended June 30, 2024, down $38.5 million from $59.5 million for the same period in 2023, primarily due to higher interest payments[207]. - Cash, cash equivalents, and restricted cash totaled $250.6 million at June 30, 2024, an increase of $49.5 million from December 31, 2023[206]. - Cash used in investing activities was $95.6 million for the six months ended June 30, 2024, compared to $4,397.8 million for the same period in 2023, which included the Howden Acquisition[207]. - Cash provided by financing activities was $126.9 million for the six months ended June 30, 2024, compared to $1,933.4 million for the same period in 2023[208]. Interest Rate and Currency Risk - The company has a primary interest rate risk exposure from floating rate pricing mechanisms in its senior secured revolving credit facility due April 2029 and term loans due March 2030, with a potential additional annual expense of approximately $2.5 million if interest rates increase by 100 basis points on the revolving credit facility and $16.3 million on the term loans[222][224]. - As of June 30, 2024, the company has $247.5 million in borrowings outstanding under the senior secured revolving credit facility and $1,631.0 million under term loans[222][224]. - During Q2 2024, the U.S. dollar weakened by 4% against the South African Rand and strengthened by 1% against the euro, with no notable movement against other currencies[224]. - A hypothetical 10% strengthening of the U.S. dollar would not materially affect the company's financial statements[224]. - The company has EUR 78.0 million in EUR Revolver Borrowings, with an additional unrealized foreign currency gain of approximately $0.8 million on a pre-tax basis if the U.S. dollar strengthens by 100 basis points against the euro[225]. - The company enters into foreign currency contracts to mitigate foreign currency risk, with a hypothetical 10% weakening of the U.S. dollar not materially affecting outstanding foreign exchange forward contracts[227]. - The company has structured a protective call option to limit foreign exchange losses to approximately $11.4 million on a pre-tax basis[227]. - The company has entered into convertible note hedge transactions related to 4.41 million shares of its common stock, aimed at reducing potential dilution upon future conversion of the 2024 Notes[228]. - The strike price for the warrant transactions related to the 2024 Notes is initially set at $71.775 per share, which may have a dilutive effect if the stock price exceeds this level[229].