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Sep 30, 2023
Chart Q3 2023 Earnings Report
Chart Industries reported record third quarter financial results, completed the divestiture of American Fan, and exceeded year-one commercial synergy targets.
Key Takeaways
Chart Industries reported a strong third quarter with record backlog, orders, operating income, and EBITDA margin. The company exceeded its year-one commercial synergy target related to the Howden acquisition and is on track to meet or exceed its cost synergy target. Sales increased by 9.8% compared to the third quarter of 2022.
Record backlog of $4.1 billion, up 4.4% compared to the second quarter of 2023.
Record orders of $1.13 billion, growing 6.0% compared to the second quarter of 2023.
Achieved $297.9 million in commercial synergies related to the Howden acquisition, exceeding the year-one target.
Sales of $897.9 million, an increase of 9.8% compared to the third quarter of 2022.
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Forward Guidance
Chart Industries updated its full year 2023 sales guidance to $3.45 billion to $3.50 billion and adjusted EBITDA 2023 range of $745 million to $760 million. Increased adjusted FCF full year 2023 outlook to $335 million to $350 million. Our full year 2023 adjusted EPS range is $6.05 to $6.25
Positive Outlook
- Updating full year 2023 sales forecast to approximately $3.45 billion to $3.50 billion.
- Full year adjusted EBITDA is anticipated to be in the range of $745 million to $760 million
- Expect to see a sequential step up in adjusted free cash flow in the fourth quarter 2023, resulting in a full year 2023 outlook for adjusted free cash flow of $335 million to $350 million
- Expected full year 2023 adjusted EPS is in the range of $6.05 to $6.25.
- 2024 adjusted EBITDA forecast of approximately $1.3 billion remains unchanged.
Challenges Ahead
- Removal of sales associated with American Fan, Cryo Diffusion, and Cofimco due to the accelerated closing.
- Expectation of the timing of the delayed revenue recognition moving into 2024 primarily from supply chain delivery timing.
- Divested a total of approximately $225 million of annualized revenue
- Revenue shift from the third quarter 2023 to fourth quarter 2023 or early 2024 due to supply chain delivery timing related to our percent of completion revenue recognition, customer design changes, and RSL field service outage revenue timing
- Updating our full year 2023 sales guidance to $3.45 billion to $3.50 billion (prior outlook of $3.66 billion to $3.80 billion)