Chart(US:GTLS)2023-02-24 18:57Financial Data and Key Metrics Changes - The company reported a record backlog of $2.3 billion at the end of 2022, with approximately 60% of the full year 2023 sales outlook already in backlog, which is higher than in prior years [49][65] - Full-year 2022 sales growth was 22.4%, with a reported non-diluted EPS of $2.21, marking a historical record [69][100] - Adjusted EBITDA for Q4 2022 was $97.5 million, or 22.1% of sales, reflecting operational improvements [119] Business Line Data and Key Metrics Changes - The Repair, Service, and Leasing segment had the largest order month in December 2022, supporting strong sales and margin for the first half of 2023 [82] - In the hydrogen sector, broader geographic penetration was noted, particularly in Korea, China, and Canada, with additional subsegments like utility power generation gaining traction [55] - The company experienced a decline of 85% in over-the-road vehicle tank orders year-over-year, but excluding this, total orders were up 37% [115] Market Data and Key Metrics Changes - The company noted strong demand in carbon capture and storage, driven by various customer expansions, including breweries and wineries [56] - The North American market, including Canada, has been active in hydrogen-related orders, with a significant commercial pipeline expected to accelerate in 2023 [27][26] - The company anticipates additional Big LNG orders in 2023, although none were included in the current outlook [122] Company Strategy and Development Direction - The company reiterated its commitment to reducing carbon intensity by 30% by 2030 and achieving carbon neutrality by 2050, which aligns with its ongoing ESG efforts [5] - The acquisition of Howden is expected to enhance the company's full solution offering, providing access to high-growth specialty end markets driven by sustainability [19][90] - The company is focused on leveraging government funding programs to incentivize partnerships in hydrogen production, transportation, and export projects [85] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2023 sales outlook of $2.1 billion to $2.2 billion, supported by strong visibility and backlog [77] - The company is optimistic about the potential for cost synergies from the Howden acquisition, with a strong opportunity pipeline identified [109][127] - Input costs are expected to remain stable, with improved availability from the supply chain, which is a positive indicator for operational performance [63][92] Other Important Information - The company is pursuing divestitures of two product lines related to the combined business, targeting completion within the next three to six months [91] - The company has signed 465 new leases in 2022, indicating strong demand for its leasing services [107] - The company announced a definitive agreement to acquire Howden, with an anticipated closing date in the first half of 2023 [89] Q&A Session Summary Question: 2023 order outlook and potential fluctuations - Management acknowledged that 2022 was an exceptional year for orders, with expectations to maintain a strong order book in 2023, particularly in small to mid-scale projects [8][11] Question: Confidence in winning market share for large LNG projects - Management expressed optimism about winning new large LNG projects, citing existing customer signals for expansions and new builds [16][33] Question: Reception of the Howden acquisition - Management reported positive reception from existing customers regarding the Howden acquisition, highlighting the unique combination of stationary and rotating equipment [138][140]