• Net Cash from Operating Activities: $200.7 million in Q3 2024.

• Free Cash Flow: $174.6 million after $26 million of CapEx spend.

• Net Leverage Ratio: 3.04 as of September 30, 2024.

• Orders: Increased 5.4% compared to Q3 2023, totaling $1.17 billion.

• Sales: $1.06 billion, a 22.4% increase compared to Q3 2023.

• Gross Margin: 34.1%, an increase of 350 basis points.

• Adjusted Operating Income: $235.9 million, with an adjusted operating margin of 22.2%.

• Adjusted EBITDA: $260.7 million, representing 24.5% of sales.

• Adjusted EPS: $2.18, impacted by foreign exchange and tax rate changes.

• Year-to-Date Sales Increase: 19.6% compared to the same period in 2023.

• Segment Sales Growth: All segments reported sales growth year-to-date through September 30.

• HTS Orders: $424.7 million, a 151% increase compared to Q3 2023.

• CTS Sales: $162.5 million, a 4.6% increase compared to Q3 2023.

• Specialty Products Sales: $283 million, a 25.9% increase compared to Q3 2023.

• RSL Sales: $360.5 million, a 36% increase compared to Q3 2023.

• 2024 Sales Outlook: $4.2 billion to $4.3 billion.

• 2024 Adjusted EBITDA Outlook: $1.015 billion to $1.045 billion.

• 2024 Adjusted Diluted EPS Outlook: Approximately $9.

• 2025 Sales Outlook: $4.65 billion to $4.85 billion.

• 2025 Adjusted EBITDA Outlook: $1.175 billion to $1.225 billion.

• 2025 Adjusted Diluted EPS Outlook: $12 to $13.

• Warning! GuruFocus has detected 5 Warning Signs with GTLS.

Release Date: November 01, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Chart Industries Inc (NYSE:GTLS) reported a significant increase in sales, with a 22.4% rise compared to Q3 2023, reaching $1.06 billion.

• The company achieved a record adjusted EBITDA of $260.7 million, representing 24.5% of sales.

• Chart Industries Inc (NYSE:GTLS) successfully reduced its net leverage ratio to 3.04, showing progress towards its target range of 2 to 2.5.

• The company surpassed its original year three target of $250 million in annualized cost synergies, achieving this ahead of schedule.

• Strong backlog coverage for 2025, with 61% of the 9/30 backlog scheduled to convert in the next 12 months, providing confidence in future revenue streams.

Negative Points

• The company faced a negative EPS impact of $0.15 due to foreign exchange fluctuations and an unexpected tax rate increase.

• Orders for the Cryo Tank Solutions segment decreased by 17.5% compared to Q3 2023, primarily due to a lack of repeat large orders.

• Specialty products orders decreased by approximately 49% compared to Q3 2023, attributed to timing issues with larger hydrogen-related orders.

• The company experienced operational inefficiencies and startup challenges at its new Teddy 2 facility, impacting specialty product margins.

• There is a structural concern in the China industrial gas market, which could affect future demand in that region.