Chart(US:GTLS)2025-07-29 12:23Second Quarter 2025 Financial Results Overview Executive Summary and Key Highlights Chart Industries reported strong second quarter 2025 results, with significant order growth driven by broad-based demand across end markets and an increasing focus on systems, solutions, and aftermarket services Sales also increased, and the company achieved its fifth consecutive quarter of gross margin above 33.0% Adjusted operating income margin was 21.1%, and adjusted diluted EPS grew by 18.8% Free cash flow saw a substantial increase - Orders of $1.50 billion grew 28.6% year-over-year, demonstrating continued strength in end markets, more systems and solutions sales, and increasing aftermarket, service, and repair attachment345 - July 2025 continued broad-based order momentum, including a five-year framework agreement with a South African utility, additional space exploration orders, and marine bookings The commercial pipeline not yet in backlog reached over $24 billion, the highest ever6 Second Quarter 2025 Key Financial Highlights (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :---------------------------------- | :---------- | :---------- | :--------- | | Orders | $1.50 billion | $1.17 billion | 28.6% | | Sales | $1.08 billion | $1.04 billion | 4.0% | | Gross profit as % of sales | 33.6% | 33.8% | -20 bps | | Adjusted operating income margin | 21.1% | 21.7% | -60 bps | | Adjusted diluted EPS | $2.59 | $2.18 | 18.8% | | Free Cash Flow (FCF) | $124.0 million | $88.0 million | 40.9% | Segment Performance Analysis Cryo Tank Solutions (CTS) The Cryo Tank Solutions segment experienced a slight decrease in orders and sales year-over-year but showed sequential growth in sales and backlog Adjusted operating income margin significantly improved, reflecting operational and mix enhancements Cryo Tank Solutions (CTS) Q2 2025 Performance (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | | Orders | $157.0 million | $159.0 million | -1.3% | | Sales | $155.9 million | $165.5 million | -5.8% | | Adjusted Operating Income Margin | 18.2% | 11.2% | +700 bps | - June 2025 was the strongest CTS order month year-to-date, and sales grew 1.8% sequentially from Q1 2025, marking the second consecutive sequential increase in orders and backlog11 Heat Transfer Systems (HTS) The Heat Transfer Systems segment saw modest order growth without Big LNG orders, while sales increased significantly, driven by strong LNG sales and data center backlog conversion Adjusted operating income margin expanded due to productivity and project mix Heat Transfer Systems (HTS) Q2 2025 Performance (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | | Orders | $271.2 million | $269.6 million | 0.6% | | Sales | $295.3 million | $236.7 million | 24.8% | | Adjusted Operating Income Margin | 25.2% | 20.4% | +480 bps | - LNG sales within HTS grew 37.6% year-over-year, contributing to the overall sales increase and reflecting continued backlog conversion713 Specialty Products Specialty Products achieved substantial order growth, with sales also increasing across diverse end markets However, the adjusted operating income margin decreased due to a less favorable end-market sales mix Specialty Products Q2 2025 Performance (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | | Orders | $663.3 million | $423.7 million | 56.5% | | Sales | $292.9 million | $277.6 million | 5.5% | | Adjusted Operating Income Margin | 17.2% | 22.1% | -490 bps | - Meaningful order increases were observed in hydrogen/helium, nuclear, food & beverage, and marine end markets Sales growth was driven by increases in hydrogen/helium, nuclear, carbon capture, mining, space exploration, marine, chemicals, and infrastructure14 Repair, Service and Leasing (RSL) The RSL segment demonstrated strong order growth across all business lines and regions, with increased long-term service and framework agreements Sales declined year-over-year due to a high-margin emergency service repair project in the prior year, which also impacted the adjusted operating income margin Repair, Service and Leasing (RSL) Q2 2025 Performance (YoY Comparison) | Metric | Q2 2025 | Q2 2024 | Change (%) | | :-------------------------------- | :---------- | :---------- | :--------- | | Orders | $406.1 million | $312.4 million | 30.0% | | Sales | $338.2 million | $360.5 million | -6.2% | | Adjusted Operating Income Margin | 34.2% | 38.8% | -460 bps | - New long-term service and framework agreements increased by 8.1% compared to December 31, 2024, with expanding dollar scope The second quarter 2025 also saw the highest number of assets connected to Digital Uptime in the company's history, with year-to-date connections growing 10.3%15 Corporate Developments and Outlook 2025 Guidance Withdrawal Chart Industries has withdrawn its 2025 financial guidance and canceled its previously announced second quarter 2025 earnings call due to the proposed acquisition by Baker Hughes, which was announced concurrently with the earnings release - Chart Industries is withdrawing its 2025 guidance and canceling its Q2 2025 earnings call due to the proposed acquisition by Baker Hughes16 Additional Information Forward-Looking Statements This section outlines the nature of forward-looking statements within the press release, emphasizing that they are based on management's expectations and beliefs but are subject to various uncertainties and factors that could cause actual results to differ materially Key risks include integration of acquisitions, market acceptance of new products, supply chain challenges, geopolitical conflicts, and risks related to the proposed acquisition by Baker Hughes - Forward-looking statements are subject to uncertainties and factors beyond the Company's control, including risks related to integrating acquisitions, market growth, supply chain, geopolitical events, and the completion of the proposed acquisition by Baker Hughes171819 Use of Non-GAAP Financial Information The company utilizes non-GAAP financial measures such as adjusted net income, adjusted operating income, adjusted EPS, and EBITDA/adjusted EBITDA to provide investors with useful period-to-period comparisons and for internal performance evaluation Reconciliations to GAAP measures are provided, though certain forward-looking non-GAAP measures cannot be reconciled due to unpredictability - Non-GAAP financial measures (e.g., adjusted net income, adjusted operating income, adjusted EPS, EBITDA, adjusted EBITDA) are used to facilitate useful period-to-period comparisons and evaluate internal performance202122 About Chart Industries, Inc. Chart Industries, Inc. is a global leader in designing, engineering, and manufacturing process technologies and equipment for gas and liquid molecule handling, focusing on clean power, water, food, and industrials The company offers a broad portfolio across the liquid gas supply chain, including LNG, hydrogen, biogas, and CO2 capture, with a commitment to ESG and a global manufacturing and service presence - Chart Industries is a global leader in process technologies and equipment for gas and liquid molecule handling, serving the Nexus of Clean™ markets (clean power, water, food, industrials)23 - The company's portfolio covers the entire liquid gas supply chain, including LNG, hydrogen, biogas, and CO2 capture, supported by 65 global manufacturing locations and over 50 service centers23 Unaudited Consolidated Financial Statements Consolidated Statements of Income The consolidated statements of income present the company's financial performance for the three and six months ended June 30, 2025, compared to the same periods in 2024, showing increases in sales, gross profit, operating income, and net income attributable to Chart Industries, Inc. Consolidated Statements of Income (Three Months Ended June 30) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Sales | $1,082.3 | $1,040.3 | | Cost of sales | $718.8 | $688.7 | | Gross profit | $363.5 | $351.6 | | Operating income | $169.5 | $167.8 | | Net income attributable to Chart Industries, Inc. | $76.1 | $58.6 | | Diluted earnings per common share | $1.53 | $1.10 | Consolidated Statements of Cash Flows The consolidated statements of cash flows detail the cash generated and used by operating, investing, and financing activities for the three and six months ended June 30, 2025, showing a significant increase in net cash provided by operating activities year-over-year for the quarter Consolidated Statements of Cash Flows (Three Months Ended June 30) | Activity | Q2 2025 (Millions) | Q2 2024 (Millions) | | :-------------------------------------- | :----------------- | :----------------- | | Net Cash Provided By Operating Activities | $145.9 | $116.1 | | Net Cash Used In Investing Activities | $(23.9) | $(43.8) | | Net Cash (Used In) Provided By Financing Activities | $(83.4) | $(17.0) | Consolidated Balance Sheets The consolidated balance sheets provide a snapshot of the company's assets, liabilities, and equity as of June 30, 2025, compared to December 31, 2024, indicating growth in total assets and shareholders' equity Consolidated Balance Sheets (As of Date) | Account | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------------- | :----------------------- | :--------------------------- | | Total Current Assets | $2,786.3 | $2,465.4 | | Total Assets | $9,719.0 | $9,123.9 | | Total Current Liabilities | $1,800.8 | $1,789.8 | | Total Liabilities | $6,205.1 | $6,128.7 | | Total Chart Industries, Inc. Shareholders' Equity | $3,352.2 | $2,828.8 | | Total Equity | $3,513.9 | $2,995.2 | Operating Segments Financial Data This section provides a detailed breakdown of sales, gross profit, and operating income, along with their respective margins, for each of the four operating segments for the three and six months ended June 30, 2025, and 2024 Operating Segments Sales (Three Months Ended June 30) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------ | :----------------- | :----------------- | | Cryo Tank Solutions | $155.9 | $165.5 | | Heat Transfer Systems | $295.3 | $236.7 | | Specialty Products | $292.9 | $277.6 | | Repair, Service & Leasing | $338.2 | $360.5 | | Consolidated | $1,082.3 | $1,040.3 | Operating Segments Gross Profit Margin (Three Months Ended June 30) | Segment | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | Cryo Tank Solutions | 27.5% | 20.2% | | Heat Transfer Systems | 30.2% | 25.7% | | Specialty Products | 27.6% | 29.1% | | Repair, Service & Leasing | 44.6% | 49.0% | | Consolidated | 33.6% | 33.8% | Operating Segments Operating Margin (Three Months Ended June 30) | Segment | Q2 2025 | Q2 2024 | | :------------------------ | :------ | :------ | | Cryo Tank Solutions | 16.5% | 9.7% | | Heat Transfer Systems | 24.7% | 19.1% | | Specialty Products | 14.7% | 19.8% | | Repair, Service & Leasing | 23.3% | 27.2% | | Consolidated | 15.7% | 16.1% | Orders and Backlog This section presents the orders booked during the second quarter of 2025 and the total backlog as of June 30, 2025, broken down by operating segment, showing significant growth in consolidated orders and backlog year-over-year Orders by Segment (Three Months Ended June 30) | Segment | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------ | :----------------- | :----------------- | | Cryo Tank Solutions | $157.0 | $159.0 | | Heat Transfer Systems | $271.2 | $269.6 | | Specialty Products | $663.3 | $423.7 | | Repair, Service & Leasing | $406.1 | $312.4 | | Consolidated | $1,497.6 | $1,164.7 | Backlog by Segment (As of June 30) | Segment | June 30, 2025 (Millions) | June 30, 2024 (Millions) | | :------------------------ | :----------------------- | :----------------------- | | Cryo Tank Solutions | $317.6 | $358.2 | | Heat Transfer Systems | $2,013.5 | $1,709.7 | | Specialty Products | $2,403.6 | $1,806.4 | | Repair, Service & Leasing | $801.8 | $562.7 | | Consolidated | $5,536.5 | $4,426.0 | Non-GAAP Financial Measures Reconciliations Free Cash Flow Reconciliation This section provides a reconciliation of net cash provided by operating activities from continuing operations to free cash flow, a non-GAAP measure, for the three and six months ended June 30, 2025, and 2024, highlighting a significant increase in free cash flow for the quarter Free Cash Flow (Three Months Ended June 30) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Net cash provided by operating activities from continuing operations | $147.9 | $116.1 | | Capital expenditures | $(23.9) | $(28.1) | | Free cash flow (non-GAAP) | $124.0 | $88.0 | Adjusted Earnings and EPS Reconciliation This reconciliation details the adjustments made to GAAP income from continuing operations and diluted EPS to arrive at adjusted earnings and adjusted diluted EPS for the second quarter of 2025 and 2024, accounting for items like deal-related costs, step-up amortization, and restructuring expenses Adjusted Earnings and Diluted EPS (Three Months Ended June 30) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Income from continuing operations attributable to Chart (U.S. GAAP) | $69.3 | $52.0 | | Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) | $117.0 | $98.6 | | Reported income from continuing operations attributable to Chart (U.S. GAAP) Diluted EPS | $1.53 | $1.10 | | Adjusted earnings attributable to Chart Industries, Inc. (non-GAAP) Diluted EPS | $2.59 | $2.18 | Adjusted Operating Income Reconciliation This section reconciles reported GAAP operating income to adjusted operating income for each segment and on a consolidated basis for the second quarter of 2025 and 2024, adjusting for restructuring, deal-related costs, step-up amortization, and other non-recurring items Consolidated Adjusted Operating Income and Margin (Three Months Ended June 30) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Operating income (loss) as reported (U.S. GAAP) | $169.5 | $167.8 | | Adjusted operating income (loss) (non GAAP) | $228.1 | $225.7 | | Operating margin | 15.7% | 16.1% | | Adjusted operating margin (non-GAAP) | 21.1% | 21.7% | EBITDA and Adjusted EBITDA Reconciliation This reconciliation converts net income from continuing operations to EBITDA and adjusted EBITDA for the second quarter of 2025 and 2024, incorporating adjustments for non-recurring costs, share-based compensation, and unrealized losses to provide a clearer view of operational profitability EBITDA and Adjusted EBITDA (Three Months Ended June 30) | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | | :------------------------------------------ | :----------------- | :----------------- | | Net income from continuing operations | $79.9 | $63.1 | | EBITDA (non-GAAP) | $245.1 | $229.6 | | Adjusted EBITDA (non-GAAP) | $267.3 | $257.3 |