Chart Industries Sets New Records in Q4 2024 with Notable Order Wins and Strong Financial Performance
Chart Industries, Inc. has reported another impressive quarter, exceeding expectations in terms of order wins, sales growth, and financial performance.
In a recent conference call, the company's CEO, Jillian Evanko, highlighted the significant progress made in the fourth quarter of 2024, despite some headwinds from foreign exchange, tax rate changes, and interest expense. Notably, Chart received a Phase 1 order for Woodside Louisiana LNG, which is expected to be followed by a Phase 2 award in 2025.
The company also saw an increase in demand for nitrogen rejection units (NRUs) as gas composition in the U.S. Gulf Coast becomes more varied. This trend presents a significant opportunity for Chart, and the company has already received an NRU award from Energy Transfer. The CEO noted that this is a global opportunity for Chart, particularly in the United States, where pipelines have strict limits on nitrogen levels.
In terms of financial performance, Chart generated $281.5 million of net cash from operating activities in Q4 2024 and had free cash flow of $261 million, attributed to a full-year 2024 free cash flow of $388 million. This strong cash generation enabled the company to reduce its year-end 2024 net leverage ratio to 2.8, making further progress towards its target of 2-2.5x.
The company's sales growth was also impressive, with Q4 2024 sales increasing by 10.8% excluding foreign exchange effects, contributing to a full-year organic sales growth of 16.9%. The reported operating income for the quarter was $188.3 million, which was adjusted for unusual items primarily related to integration and restructuring.
Adjusted EBITDA for the quarter stood at $283.6 million or 25.6% of sales, contributing to a full-year adjusted EBITDA of $1.014 billion and an EBITDA margin of 24.4%, which is a year-over-year increase of 330 basis points.
Despite some headwinds from foreign exchange, tax rate changes, and interest expense, Chart's adjusted diluted earnings per share (EPS) for Q4 2024 were $2.66, exceeding internal expectations. However, the company faces challenges in achieving its target of reaching a net leverage ratio of 2-2.5x by 2025.
Chart's strong financial performance and notable order wins have set a positive tone for the future. As the company continues to execute on its strategy, it is poised to capitalize on growing demand for its products and services in the energy sector.
