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| 8-K - 8-K - CHART INDUSTRIES INC | d408221d8k.htm |
 CHART INDUSTRIES,
INC.
Exhibit 99.1
INVESTOR
PRESENTATION
2012
SEPTEMBER |
 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;
including the ability to successfully integrate AirSep’s business and achieve anticipated
revenue, earnings and accretion related to AirSep; 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
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 4,600
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
21%
U.S.
42%
Americas
(Non-US)
7%
RoW
9%
Europe
21%
LTM June 2012 Sales by Segment
Energy
48%
BioMedical
22%
General
Industrial
30%
LTM June 2012 Sales by Region
LTM June 2012 Sales by End-User
Energy &
Chemicals
29%
Distribution
& Storage
49%
BioMedical
22%
2 |
 GTLS: GAS TO LIQUID SYSTEMS
Energy & Chemicals (E&C) Segment Overview
Heat Exchanger
Cold Box
Production
Brazed Aluminium
Heat Exchangers
45%
Cold Boxes and
LNG VIP
29%
LTM June 2012 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)
3%
Middle East &
RoW
27%
Asia
25%
U.S.
44%
Europe
1%
3
Air Cooled Heat
Exchangers
26% |
 GTLS:
GAS
TO
LIQUID
SYSTEMS
Distribution
&
Storage
(D&S)
Segment
Overview
LTM
June
2012
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
34%
Packaged Gas
Systems
26%
VIP, Systems
and Components
9%
Parts, Repair and On-
Site Service
9%
Beverage Liquid
CO Systems
6%
LNG Terminals
and Vehicle Fuel
Systems 16%
Americas
(Non-US)
10%
RoW
2%
Asia
22%
U.S.
44%
Europe
22%
4
2 |
 GTLS: GAS TO LIQUID SYSTEMS
BioMedical Segment Overview
LTM
June
2012
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
51%
Biological
Storage
Systems
33%
Selected
Products
Americas
(Non-US)
4%
U.S.
37%
Europe
46%
Asia
12%
RoW
1%
5
Non-LOX
Respiratory
Therapy Systems
16% |
 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, Minnesota, New Prague/Owatonna and New York, Buffalo
(D&S and BioMedical)
Wisconsin,
La
Crosse,
Louisiana,
New
Iberia
and
Oklahoma,
Tulsa
(E&C)
Expansion of facilities in China, Louisiana and Minnesota is 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 |
 GTLS: GAS TO LIQUID SYSTEMS
Growth
Opportunities
7
E&C
•Global base load LNG
projects
•
Growth in natural gas
processing
•
Emerging market
opportunities
D&S
•Global LNG opportunity
•
Strong relationships with
Industrial Gas customers
•
Demand for Industrial Gas
projected to increase 8%
per year
BioMedical
•Aging demographics
•
Product expansion
•
Increasing biological
research |
 GTLS: GAS TO LIQUID SYSTEMS
Global Appetite For Energy
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
|
 GTLS: GAS TO LIQUID SYSTEMS
Natural Gas Expected To Grow Globally
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 |
 GTLS: GAS TO LIQUID SYSTEMS
LNG Value Chain Opportunities
10
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 |
 GTLS: GAS TO LIQUID SYSTEMS
LNG Storage, Transportation & Delivery
11 |
 GTLS: GAS TO LIQUID SYSTEMS
LNG Fueling
12 |
 GTLS: GAS TO LIQUID SYSTEMS
Strong Track Record of Successful Execution
¹Included in 2005 are non-recurring costs of $26.5 million for the
acquisition of Chart Industries by First Reserve
During last growth cycle Company leveraged its flexible
manufacturing platform resulting in operating income
growth that outpaced sales
Flexible cost structure and good execution allowed for
aggressive response to economic downturn resulting in
higher operating income level than last cycle low point
13
Similar or higher growth, leveraged by
acquisitions, expected to occur again during the
current growth cycle
The return of large contract orders and the
improvement in base order levels have
confirmed a new growth cycle
1
0
50
100
150
200
250
300
350
400
450
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Large Contract Orders
Base Orders
0
20
40
60
80
100
120
140
160
0
100
200
300
400
500
600
700
800
900
1000
2004
2005
2006
2007
2008
2009
2010
2011
LTM
Jun
2012
Sales
Operating Income
Last Growth
Cycle CAGR
(2004-2008)
Sales 25%
Oper. Inc. 38% |
 GTLS: GAS TO LIQUID SYSTEMS
Historical
Orders
and
Backlog
Quarter-end Backlog ($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
Q2
2012
Q2
2012 |
 GTLS: GAS TO LIQUID SYSTEMS
AirSep
Acquisition
15
Closed acquisition of AirSep Corporation in August 2012 for
$170 million in cash and $10 million payoff of debt
Extends Chart’s BioMedical product offerings and distribution
network
Adds approximately $130 million in annual revenues and will
be accretive to earnings after acquisition related costs
Represents an attractive and stable complement to Chart’s
large and rapidly growing energy business |
 GTLS: GAS TO LIQUID SYSTEMS
Summary
of
Investment
Highlights
16
Chart continues to represent a unique investment opportunity to capitalize on global
energy
demand,
growth
in
natural
gas
and
LNG
use,
and
a
growing
biomedical business
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
Very Stable Business Model
Attractive industry with long-term
customer relationships
Solid platform with worldwide
presence and leading industry
positions in all segments
Strong Balance Sheet
Strong organic earnings should
provide substantial free cash flow
and liquidity
Permit continued accretive organic
and inorganic growth
Flexible / Low Cost Capital Structure
7 yr. $250 million convertible notes
-
2% cash interest cost
Increased senior credit facility,
which includes $300 million
revolving credit facility, adding
significant liquidity |