Attached files
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| 8-K - 8-K - CHART INDUSTRIES INC | d344116d8k.htm |
 Exhibit 99.1 |
 Disclosure
Forward-Looking
Statements:
This
presentation
includes
“forward-looking
statements”
within
the
meaning
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
The
use
of
words
such
as
“may”,
“might”,
“should”,
“will”,
“expect”,
“plan”,
“anticipate”,
“believe”,
“estimate”,
“project”,
“forecast”,
“outlook”,
“intend”,
“future”,
“potential”
or
“continue”,
and
other
similar
expressions
are
intended
to
identify
forward-looking
statements.
All
of
these
forward-looking
statements
are
based
on
estimates
and
assumptions
by
our
management
as
of
the
date
of
this
presentation
that,
although
we
believe
to
be
reasonable,
are
inherently
uncertain.
Forward-looking
statements
involve
risks
and
uncertainties
that
could
cause
the
Company’s
actual
results
or
circumstances
to
differ
materially
from
those
expressed
or
implied
by
forward-looking
statements.
These
risks
and
uncertainties
include,
among
others,
the
following:
the
cyclicality
of
the
markets
that
the
Company
serves;
a
delay,
significant
reduction
in
or
loss
of
purchases
by
large
customers;
fluctuations
in
energy
prices;
changes
in
government
energy
policy
or
failure
of
expected
changes
in
policy
to
materialize;
the
potential
for
negative
developments
in
the
natural
gas
industry
related
to
hydraulic
fracturing;
competition;
economic
downturns
and
deteriorating
financial
conditions;
our
ability
to
manage
our
fixed-price
contract
exposure;
our
reliance
on
key
suppliers
and
potential
supplier
failures
or
defects;
the
modification
or
cancellation
of
orders
in
our
backlog;
the
Company’s
ability
to
successfully
manage
its
costs
and
growth,
including
its
ability
to
successfully
manage
operational
expansions
and
the
challenges
associated
with
efforts
to
acquire
and
integrate
new
product
lines
or
businesses;
changes
in
government
healthcare
regulations
and
reimbursement
policies;
general
economic,
political,
business
and
market
risks
associated
with
the
Company’s
global
operations
and
transactions;
fluctuations
in
foreign
currency
exchange
and
interest
rates;
the
financial
distress
of
third
parties;
the
loss
of
key
employees
and
deterioration
of
employee
or
labor
relations;
the
pricing
and
availability
of
raw
materials;
the
regulation
of
our
products
by
the
U.S.
Food
&
Drug
Administration
and
other
governmental
authorities;
potential
future
impairment
of
the
Company’s
significant
goodwill
and
other
intangibles;
the
cost
of
compliance
with
environmental,
health
and
safety
laws;
additional
liabilities
related
to
taxes;
the
impact
of
severe
weather;
litigation
and
disputes
involving
the
Company,
including
product
liability,
contract,
warranty,
employment
and
environmental
claims;
technological
security
threats;
risks
associated
with
our
indebtedness,
leverage,
debt
service
and
liquidity;
and
volatility
and
fluctuations
in
the
price
of
the
Company’s
stock.
For
a
discussion
of
these
and
additional
risks
that
could
cause
actual
results
to
differ
from
those
described
in
the
forward-looking
statements,
see
disclosure
under
Item
1A.
“Risk
Factors”
in
the
Company’s
most
recent
Annual
Report
on
Form
10-K
and
other
recent
filings
with
the
Securities
and
Exchange
Commission,
which
should
be
reviewed
carefully.
Please
consider
the
Company’s
forward-looking
statements
in
light
of
these
risks.
Any
forward-looking
statement
speaks
only
as
of
its
date.
We
undertake
no
obligation
to
publicly
update
or
revise
any
forward-looking
statement,
whether
as
a
result
of
new
information,
future
events
or
otherwise,
except
as
required
by
law.
1 |
 GTLS: GAS TO LIQUID
SYSTEMS Technology
leader
that
provides
high-end
equipment
to
the
energy
industry,
which
is
the largest end-user of Chart’s products
One of the leading suppliers in all primary markets served
Global footprint for our operations on four continents with approximately 3,800
employees
Worldwide earnings with approximately 60% of sales derived from outside the
U.S. Company Overview
Chart Industries is a leading provider of highly engineered cryogenic equipment
for the hydrocarbon, industrial gas, and biomedical markets
Asia
19%
U.S.
42%
Americas
(Non-US)
9%
RoW
6%
Europe
24%
2011 Sales by Segment
Energy
48%
BioMedical
25%
General
Industrial
27%
2011 Sales by Region
2011 Sales by End-User
Energy &
Chemicals
26%
Distribution
& Storage
49%
BioMedical
25%
2 |
 GTLS: GAS TO LIQUID SYSTEMS
Energy & Chemicals (E&C) Segment Overview
Heat Exchanger
Cold Box
Production
Brazed Aluminium
Heat Exchangers
44%
Cold Boxes and
LNG VIP
23%
2011 Sales by Product / Region
Highlights
Technology
leader
–
providing
heat
exchangers
and
cold
boxes critical to LNG, Olefin petrochemicals, natural gas
processing and industrial gas markets
–
Separation, liquefaction and purification of hydrocarbon and
industrial gases
Market
leader
–
leading
industry
positions
worldwide
Manufacturing
leader
–
one
of
three
global
suppliers
of
mission-critical LNG and LNG liquefaction equipment
Selected Products
Americas
(Non-US)
11%
Middle East &
RoW
18%
Asia
23%
U.S.
47%
Europe
1%
3
Air Cooled Heat
Exchangers
33% |
 GTLS: GAS TO LIQUID
SYSTEMS Distribution & Storage (D&S) Segment Overview
2011 Sales by Product / Region
Highlights
Balanced
customer
base
–
46%
of
segment
sales
derived
from products used in energy applications
Strategic
footprint
–
manufacturing
located
near
growing
end
markets and lower-cost countries
–
Positioned to capitalize on strong expected growth in Asia and
North America
–
Continued investment in key global manufacturing facilities
Bulk
MicroBulk
Distribution
Storage
Selected Products
Satellite LNG
Storage
Bulk Storage
Systems
36%
Packaged Gas
Systems
28%
VIP, Systems
and Components
9%
Parts, Repair and On-
Site Service
9%
Beverage Liquid
CO
2
Systems
6%
LNG Terminals
and Vehicle Fuel
Systems 12%
Americas
(Non-US)
10%
RoW
3%
Asia
21%
U.S.
42%
Europe
24%
4 |
 GTLS: GAS TO LIQUID SYSTEMS
BioMedical Segment Overview
2011 Sales by Product / Region
Highlights
Strong
growth
–
increase
in
oxygen
respiratory
therapy
and
biomedical research, led by international markets, expected
Robust end markets include:
–
Home healthcare and nursing homes
–
Hospitals and long-term care
–
Biomedical and pharmaceutical research
–
Animal breeding
Portable Oxygen
Lab Storage
Stainless Steel Freezer
End-Use Consumption
Liquid Oxygen
(LOX) Therapy
Systems
52%
Biological
Storage
Systems
30%
Selected Products
Americas
(Non-US)
5%
U.S.
38%
Europe
46%
Asia
10%
RoW
1%
5
Non-LOX
Respiratory
Therapy Systems
18% |
 GTLS: GAS TO LIQUID
SYSTEMS Global Manufacturing and Distribution Platform
Operating
leverage
provides
the
flexibility
to
expand
and
reduce
capacity
as
needed
Major manufacturing locations include:
China,
Changzhou (D&S and E&C) and Chengdu (BioMedical)
Czech
Republic,
Decin
(D&S)
Georgia,
Canton and Minnesota,
New Prague/Owatonna (D&S and BioMedical) Wisconsin, La
Crosse,
Louisiana,
New
Iberia
and
Oklahoma,
Tulsa
(E&C)
Expansion of facilities in China, Louisiana and Minnesota are currently in process
Manufacturing facilities are strategically located in lower-cost countries
and near centers of demand
Asia-Pacific
North America
6
Corporate
Energy & Chemicals
Distribution & Storage
BioMedical
Europe |
 Growth
Opportunities 7
•Global base load LNG
projects
•
Growth in natural gas
processing
•
Emerging market
opportunities
•Global LNG opportunity
•
Strong relationships with
Industrial Gas customers
•
Demand for Industrial Gas
projected to increase 8%
per year
•Aging demographics
•
Product expansion
•
Increasing biological
research
BioMedical
GTLS: GAS TO LIQUID SYSTEMS
D&S
E&C |
 GTLS: GAS TO LIQUID
SYSTEMS Natural
gas
expansion
–
Natural
gas
demand
is
expected
to
continue
to
grow
at
a
pace
faster
than
coal
and oil, and will be heavily weighted towards emerging economies, which is expected to drive demand
for Chart’s products
LNG
growth
leader
–
The
natural
gas
industry
is
expected
to
invest
approximately
$720
billion
in
LNG
facilities from 2009 to 2035, with LNG reaching 25% of world demand in 2035 (Source:
International Energy Agency –
World Energy Outlook 2011, Golden Age of Gas Scenario)
Natural Gas Expected To Grow Globally
8
Source:
ExxonMobil
–
The
Outlook
for
Energy,
A
View
to
2040 |
 GTLS: GAS TO LIQUID
SYSTEMS Increasing
natural
gas
penetration
as
a
viable
energy
source
and
transportation
fuel
due
to
its
high
energy density, lower costs, cleaner emissions profile, and plentiful supply due to improved drilling
technologies (e.g. shale gas). U.S. trucking is converting a portion of its fleets to natural
gas. Recent announcements in domestic LNG infrastructure by major natural gas producers and
equipment providers, as well as recent order intake have validated expectations
China’s
twelfth
5-year
plan
(2011
-
2015)
mandates
an
increase
in
gas
use
as
a
percentage
of
energy
consumption from less than 4% to over 8%
Dramatic increase in imported LNG in China is in process and is expected to continue, with
significant investment in infrastructure, including LNG transportation and storage equipment.
According to the China Industrial Gas Association, China will complete the construction of 17
LNG terminals during the twelfth 5-year period with capacity of 65 million tons per year
Lack
of
pipeline
infrastructure
in
China
requires
“virtual
pipeline”
with
LNG
Chart provides a broad offering of products and solutions for the full LNG value chain: LNG
liquefiers, transportation
equipment,
terminal
storage
equipment
and
vehicle
tanks
for
both
on-road
and
off-road
heavy duty vehicles and marine applications
LNG Value Chain Opportunities
9 |
 GTLS: GAS TO LIQUID
SYSTEMS Strong Track Record of Successful Execution
¹Included in 2005 are non-recurring costs of $26.5 million for the
acquisition of Chart Industries by First Reserve
During last growth cycle Company leveraged its flexible
manufacturing platform resulting in operating income
growth that outpaced sales
Flexible cost structure and good execution allowed for
aggressive response to economic downturn resulting in
higher operating income level than last cycle low point
10
Similar or higher growth, leveraged by
acquisitions, expected to occur again during the
current growth cycle
The return of large contract orders and the
improvement in base order levels have
confirmed a new growth cycle
1
0
20
40
60
80
100
120
140
160
0
100
200
300
400
500
600
700
800
900
2004
2005
2006
2007
2008
2009
2010
2011
LTM
2012
Sales
Operating Income
Last Growth
Cycle CAGR
(2004-2008)
Sales 25%
Oper. Inc. 38%
Large Contract Orders
Base Orders
0
50
100
150
200
250
300
350
400
450
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012 |
 GTLS: GAS TO LIQUID
SYSTEMS Historical Orders and Backlog
Quarter-end Backlog ($MM)
11
Quarterly Orders ($MM)
0
100
200
300
400
500
600
700
Q3
2009
Q1
2009
Q2
2009
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q4
2009
Q1
2010
Q2
2010
E&C
D&S
BioMed
0
100
200
300
400
500
600
700
Q1
2012
Q4
2011
Q3
2011
Q2
2011
Q1
2011
Q4
2010
Q3
2010
Q2
2010
Q1
2010
Q4
2009
Q3
2009
Q2
2009
Q1
2009
D&S
E&C
BioMed |
 GTLS: GAS TO LIQUID
SYSTEMS Outlook for 2012
12
Based on a substantial order backlog, solid financial resources,
and an attractive
portfolio of product solutions, we expect another solid year in 2012.
We believe energy investments, especially in natural gas applications, are
at an early-stage of a multi-year growth cycle.
We anticipate continued growth in demand for our products as evidenced
by record orders of $385 million in first quarter 2012. Quarterly order
records were set at both E&C and D&S led by LNG opportunities.
We have stepped up our investment in capacity to capture and execute on
these opportunities, and our expansion plans are progressing as
expected. Based on first quarter performance, record backlog and strong
order trends, we reaffirmed our 2012 sales and earnings expectations. Sales
for 2012 are expected to be in a range of $950 million to $1 billion. Full
year earnings per diluted share are expected to be in a range of $2.60 to
$2.90 per share. |
 GTLS: GAS TO LIQUID
SYSTEMS Very
Stable
Business
Model
•
Attractive industry with long-term
customer relationships
•
Solid platform with worldwide
presence and leading industry
positions in all segments
Summary of Investment Highlights
13
Strong
Balance
Sheet
•
Strong organic earnings should
provide substantial free cash flow
and liquidity
•
Permit continued accretive organic
and inorganic growth
Positioned
for
Significant
Growth
•
Exploit LNG and NG growth
•
Opportunities with global
infrastructure build-out
•
New product development and
innovation
•
Expanded new business and
inorganic pipeline
Chart continues to represent a unique investment opportunity to capitalize on global
energy demand, growth in natural gas use, and biomedical opportunities
Flexible
/
Low
Cost
Capital
Structure
•
7 yr. $250 million convertible
notes -
2% cash interest cost
•
Recently increased senior credit
facility to $375 million, from $200
million, which adds liquidity and
significantly improves ability to grow |