Chart Industries (GTLS) Reports Record Q1 Growth

Chart Industries, Inc. (NYSE: GTLS) has reported its first-quarter financial results for 2024, showing significant growth compared to the same period in 2023. The company's orders, backlog, sales, reported and adjusted gross margin, reported and adjusted operating margin, reported and adjusted EBITDA, and associated EBITDA margin were all the highest in any first quarter in its history.

In the first quarter of 2024, Chart Industries received orders totaling $1.12 billion, representing an increase of 4.3% over the same period in 2023. This contributed to a record backlog of $4.33 billion. Sales for the first quarter of 2024 amounted to $950.7 million, marking a substantial increase of 17.4% compared to the first quarter of 2023.

The reported gross margin for the first quarter of 2024 was 31.8%, a 260 basis point increase over the same period in 2023. Additionally, the reported operating income was $112.9 million, or $171.3 million when adjusted for unusual items, resulting in an 18.0% adjusted operating margin, which reflects a 620 basis point increase over the first quarter of 2023.

Adjusted EBITDA for the first quarter of 2024 amounted to $212.2 million, or 22.3% of sales, marking an increase of 550 basis points over the same period in 2023. The reported diluted earnings per share (EPS) for the first quarter of 2024 were $0.14, while the adjusted diluted EPS stood at $1.49.

Chart Industries also reported a record net cash flow from operating activities of negative $89.6 million, less capital expenditures of $46.1 million, resulting in negative $135.7 million of free cash flow, as anticipated due to specific first-quarter cash outflows.

The company reiterated its 2024 guidance and medium-term outlook, with CEO and President Jill Evanko stating, "With numerous first quarter records, including adjusted operating income and operating margin of 18.0%, reflecting the benefits of our synergy program, full-solution offering, and 14% sales growth in aftermarket, we are reiterating our full year outlook."

End market and Chart-specific demand remain strong, with record first quarter 2024 ending backlog and a growing commercial pipeline totaling over $22 billion. The company's macro tailwinds continue to be favorable, including global energy transition and access, clean water scarcity, population and economic growth combined with urbanization and aging infrastructure, and artificial intelligence.

In terms of specific segments, Chart Industries reported that all four segments' sales increased year-over-year, with heat transfer systems (HTS) experiencing a 33.9% increase compared to the first quarter of 2023. The company's repair, service, and leasing (RSL) segment also saw record orders of $333.9 million, representing an increase of 10.5% over the first quarter of 2023.

Looking ahead, Chart Industries anticipates its full-year 2024 sales to be in the range of $4.7 to $5.0 billion, with forecasted full-year 2024 adjusted EBITDA in the range of $1.175 to $1.30 billion. The company also provided a medium-term outlook, including mid-teens organic revenue growth through 2026 and an adjusted diluted EPS growth compound annual growth rate (CAGR) of mid-40%.

The market has reacted to these announcements by moving the company's shares 7.4% to a price of $155.67. For more information, read the company's full 8-K submission here.

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