CHART INDUSTRIES INC Management's Discussion and Analysis of Financial Condition and Results of Operations (form 10-Q) | MarketScreener

2022-07-31 12:31:16 By : Mr. Raphael Zeng

•At the end of June 2022, we had our lowest 12-month rolling TRIR in Chart's history.

•Our Global ESG Committee has five sub-committees focused on energy management, zero waste, electrification, renewable energy and water management.

•We have recently entered into a sustainability-linked banking agreement with covenants tied to our Green House Gas ("GHG") emission reductions' actual performance.

•We have set a target to reduce our carbon intensity 30% by 2030 and have specific initiatives in place to help us meet this goal. In 2021, we made progress towards achieving our target by reducing GHG Intensity by almost 14% year-over-year.

•We hold quarterly reviews on ESG with our Board of Directors.

•We link our executives and their direct reports short-term incentive payout (25% of the strategic and operational goals) to a metric driven, percentage-reduction ESG metric, and have done this for two years.

•We have an employee relief fund for our own team members that need assistance.

•Our team members raised over $30,000 in 2021 and $25,000 in 2022 to support women through Dress For Success.

•In 2021, we received the following ESG-oriented recognition:

•World LNG Award for Energy Transition 2021 Finalist

•Gastech 2021 Emission Reduction Champion - Organization of the Year Award Winner

•Gastech 2021 Organisation Championing Diversity & Inclusion Finalist

•Gastech 2021 Engineering Partnership of the Year Finalist

•S&P Global Platts Energy Awards Excellence in LNG Finalist (2021)

•S&P Global Platts Energy Awards Corporate Social Responsibility (Diversified) Award Finalist (2021)

Consolidated Results for the Three Months Ended June 30, 2022 and 2021, and March 31, 2022

(1)Restructuring costs for the three months ended:

•June 30, 2022 were $0.2 ($0.1 - Cryo Tank Solutions, $0.1 - Specialty Products).

•June 30, 2021 were $0.3 in our Heat Transfer Systems segment.

•March 31, 2022 were $0.1 in our Heat Transfer Systems segment.

(2)Acquisition-related contingent consideration adjustments in our Specialty Products segment for the three months ended:

•June 30, 2022 were a decrease in fair value of $0.2.

•June 30, 2021 were an increase in fair value of $1.2.

•March 31, 2022 were a decrease in fair value of $0.8.

(3)Includes deal-related and integration costs of $5.1 and $4.2 for the three months ended June 30, 2022 and March 31, 2022, respectively.

Results of Operations for the Three Months Ended June 30, 2022 and 2021, and March 31, 2022

Interest Expense, Net and Financing Costs Amortization

Unrealized Loss On Investments In Equity Securities

Net Income Attributable to Chart Industries, Inc.

Consolidated Results for the six months ended June 30, 2022 and 2021

The following table includes key metrics used to evaluate our business and measure our performance and represents selected financial data for our operating segments for the six months ended June 30, 2022 and 2021 (dollars in millions):

(1)Restructuring costs for the six months ended:

•June 30, 2022 were $0.3 ($0.1 - Cryo Tank Solutions, $0.1 - Heat Transfer Systems and $0.1 - Specialty Products).

•June 30, 2021 were $1.0 ($0.3 - Cryo Tank Solutions and $0.7 - Heat Transfer Systems).

(3)Includes deal-related and integration costs of $9.3 for the six months ended June 30, 2022.

Results of Operations for the Six Months Ended June 30, 2022 and 2021

Interest Expense, Net and Financing Costs Amortization

Unrealized Loss On Investments In Equity Securities

For the six months ended June 30, 2022, foreign currency gain was $0.1 million and for the six months ended June 30, 2021 foreign currency loss was $0.9 million.

Net Income Attributable to Chart Industries, Inc.

As a result of the foregoing, net income attributable to Chart Industries, Inc. for the six months ended June 30, 2022 and 2021 was $23.2 million and $32.1 million, respectively.

Repair, Service & Leasing - Results of Operations for the Three Months Ended June 30, 2022 and 2021

Repair, Service & Leasing - Results of Operations for the Six Months Ended June 30, 2022 and 2021

For the first six months of 2022, Repair, Service & Leasing segment sales increased by $8.7 million as compared to the same period in 2021. This increase was mainly driven by favorable sales in our aftermarket air cooled heat exchangers, parts, repairs, and services, aftermarket L.A. Turbine and aftermarket fans, partially offset by a decrease in our leasing business.

Debt Instruments and Related Covenants

Our debt instruments and related covenants are described in Note 8, "Debt and Credit Arrangements" to our unaudited condensed consolidated financial statements included under Item 1, "Financial Statements" in this report.

Sources and Uses of Cash

The tables below represent orders received and backlog by segment for the periods indicated (dollars in millions):

Application of Critical Accounting Policies

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