Attached files
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| 8-K - 8-K - CHART INDUSTRIES INC | d358799d8k.htm |
 Exhibit 99.1 |
 Disclosure
1
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. |
 GTLS: GAS TO LIQUID SYSTEMS
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
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 |
 GTLS: GAS TO LIQUID SYSTEMS
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%
Energy & Chemicals (E&C) Segment Overview
Heat Exchanger
Cold Box
Production |
 GTLS: GAS TO LIQUID SYSTEMS
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
Distribution & Storage (D&S) Segment Overview |
 GTLS: GAS TO LIQUID SYSTEMS
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%
BioMedical Segment Overview |
 GTLS: GAS TO LIQUID SYSTEMS
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
Corporate
Energy & Chemicals
Distribution & Storage
BioMedical
Asia-Pacific
North America
Europe
6
Global Manufacturing and Distribution Platform |
 GTLS: GAS TO LIQUID SYSTEMS
BioMedical
•
Aging demographics
•
Product expansion
•
Increasing biological
research
7
D&S
•
Global LNG opportunity
•
Strong relationships with
Industrial Gas customers
•
Demand for Industrial Gas
projected to increase 8%
per year
E&C
•
Global base load LNG
projects
•
Growth in natural gas
processing
•
Emerging market
opportunities
Growth Opportunities |
 GTLS: GAS TO LIQUID SYSTEMS
8
Source:
ExxonMobil
2012
–
The
Outlook
for
Energy,
A
View
to
2040
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
Global Appetite For Energy |
 GTLS: GAS TO LIQUID SYSTEMS
9
Source: ExxonMobil 2012 –
The Outlook for Energy, A View to 2040
Efforts to reduce emissions will help
gas become the world’s #2 fuel
overtaking coal
Many applications are suited to natural
gas hence it can displace oil, coal and
LPG
By 2040 it is estimated that 15% of
global gas demand will be met by LNG
Shale gas and coal mine methane are
examples of unconventional gas
production that is forecast to account
for 30% of total gas production by
2040
Natural Gas Expected To Grow Globally |
 GTLS: GAS TO LIQUID SYSTEMS
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
10
LNG Value Chain Opportunities |
 GTLS: GAS TO LIQUID SYSTEMS
11
LNG Storage, Transportation & Delivery |
 GTLS: GAS TO LIQUID SYSTEMS
12
LNG Fueling |
 GTLS: GAS TO LIQUID SYSTEMS
¹Included in 2005 are non-recurring costs of $26.5 million for the
acquisition of Chart Industries by First Reserve
During last growth cycle Company leveraged its flexible
manufacturing platform resulting in operating income
growth that outpaced sales
Flexible cost structure and good execution allowed for
aggressive response to economic downturn resulting in
higher operating income level than last cycle low point
13
Similar or higher growth, leveraged by
acquisitions, expected to occur again during the
current growth cycle
The return of large contract orders and the
improvement in base order levels have
confirmed a new growth cycle
1
0
20
40
60
80
100
120
140
160
0
100
200
300
400
500
600
700
800
900
2004
2005
2006
2007
2008
2009
2010
2011
LTM
2012
Sales
Operating Income
Last Growth
Cycle CAGR
(2004-2008)
Sales 25%
Oper. Inc. 38%
0
50
100
150
200
250
300
350
400
450
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Large Contract Orders
Base Orders
Strong Track Record of Successful Execution |
 GTLS: GAS TO LIQUID SYSTEMS
Quarter-end Backlog ($MM)
14
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
Historical Orders and Backlog |
 GTLS: GAS TO LIQUID SYSTEMS
15
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. Outlook for 2012
Based on a substantial order backlog, solid financial resources, and an attractive portfolio of
product solutions, we expect another solid year in 2012. |
 GTLS: GAS TO LIQUID SYSTEMS
16
Chart continues to represent a unique investment opportunity to capitalize on global
energy demand, growth in natural gas use, and biomedical opportunities
Exploit LNG and NG growth
Opportunities with global
infrastructure build-out
New product development and
innovation
Expanded new business and
inorganic pipeline
Attractive industry with long-term
customer relationships
Solid platform with worldwide
presence and leading industry
positions in all segments
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
Strong organic earnings should
provide substantial free cash flow and
liquidity
Permit continued accretive organic
and inorganic growth
Positioned
for
Significant
Growth
Strong
Balance
Sheet
Very
Stable
Business
Model
Flexible
/
Low
Cost
Capital
Structure
Summary of Investment Highlights |