On August 2, 2024, Chart Industries Inc (GTLS, Financial) released its 8-K filing for the second quarter ended June 30, 2024. Chart Industries, a leading provider of cryogenic equipment and natural gas processing solutions, reported significant financial achievements and challenges in its latest earnings report.
Performance Highlights
Chart Industries Inc (GTLS, Financial) reported all-time record sales, backlog, gross profit, and margins for Q2 2024. The company achieved record sales of $1.04 billion, an 18.8% increase compared to Q2 2023, and a 9.4% sequential increase from Q1 2024. The reported gross margin was 33.8%, up 310 basis points year-over-year.
Orders for the quarter totaled $1.16 billion, marking a 12.1% increase from Q2 2023. Excluding Big LNG orders, the increase was approximately 40%. The company also reported record operating income of $167.8 million and adjusted operating income of $225.7 million, reflecting a 53.1% increase when adjusted for unusual items.
Financial Achievements
Chart Industries Inc (GTLS, Financial) reported a record EBITDA of $229.6 million (22.1% of sales) and adjusted EBITDA of $257.3 million (24.7% of sales), a 37.2% increase year-over-year. The company’s net leverage ratio improved to 3.26, a reduction of 0.82 since the Howden acquisition.
“With record sales growth of 18.8%, record gross margin of 33.8%, record reported operating income, record reported operating margin, record EBITDA, and associated EBITDA margin, we are on the path to our reiterated three-year medium-term targets,” stated Jill Evanko, Chart’s CEO and President.
Income Statement Summary
| Metric | Q2 2024 | Q2 2023 | Q1 2024 |
|---|---|---|---|
| Sales | $1,040.3 million | $908.1 million | $950.7 million |
| Gross Profit | $351.6 million | $280.6 million | $302.3 million |
| Operating Income | $167.8 million | $95.7 million | $112.9 million |
| Net Income | $62.9 million | $12.1 million | $14.6 million |
Balance Sheet and Cash Flow
As of June 30, 2024, Chart Industries Inc (GTLS, Financial) reported total assets of $9.28 billion, up from $9.10 billion at the end of 2023. The company generated $116.1 million in net cash from operating activities, resulting in $88.0 million of free cash flow after capital expenditures of $28.1 million.
Segment Performance
Each segment and region reported growth compared to Q2 2023. The Repair, Service, and Leasing (RSL) segment saw a 26.2% increase in sales, while Specialty Products grew by 20.8%. The Cryo Tank Solutions (CTS) segment reported a 12.4% increase in sales, and Heat Transfer Systems (HTS) saw a 3.4% growth.
Analysis and Outlook
Chart Industries Inc (GTLS, Financial) continues to benefit from strong demand across its end markets and regions. The company’s strategic acquisition of Howden has significantly contributed to its financial performance, with commercial synergies far exceeding initial targets. However, the company faces challenges related to foreign exchange headwinds and the timing of sales recognition for backlog conversion on larger projects.
For the full year 2024, Chart Industries Inc (GTLS, Financial) anticipates sales in the range of $4.45 billion to $4.60 billion, with adjusted EBITDA between $1.08 billion and $1.15 billion. The company expects adjusted EPS to be in the range of $10.75 to $11.75.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Chart Industries Inc for further details.
