Chart Industries, Inc. Announces $250 Million Share Repurchase Authorization

Rhea-AI Summary

Chart Industries (NYSE: GTLS) has announced a $250 million share repurchase program authorized by its Board of Directors. The company can execute the buyback through various means, including open market transactions, block purchases, and privately negotiated transactions, in compliance with federal securities laws.

However, Chart emphasizes that no share repurchases or material cash acquisitions will occur until the company's net leverage falls below 2.5, unless necessitated by a significant market event. As of September 30, 2024, the company's net leverage ratio was 3.04. Chart expects to reduce its debt to $3 billion by the end of 2025, focusing on debt reduction, shareholder value, and capital deployment for growth.

Positive

• Authorization of $250 million share repurchase program
• Clear debt reduction target of $3 billion by end of 2025
• Disciplined financial approach with leverage ratio threshold of 2.5 for buyback execution

Negative

• High current net leverage ratio of 3.04
• Share repurchase program conditional on leverage reduction
• No immediate execution of buyback due to leverage constraints

Insights

Financial Analyst

The $250 million share repurchase authorization signals a strategic approach to capital allocation, though immediate execution is constrained by the current 3.04x net leverage ratio. The company's commitment to debt reduction before initiating buybacks demonstrates financial discipline, with a target leverage threshold of 2.5x. The projected debt reduction to $3 billion by 2025 suggests a methodical deleveraging strategy. This authorization provides flexibility for opportunistic share repurchases during market dislocations while maintaining focus on debt paydown. The dual strategy of debt reduction and shareholder returns, coupled with capital deployment for growth, indicates a balanced approach to capital management. However, investors should note that actual buybacks remain contingent on achieving leverage targets.

Market Research Analyst

The timing of this authorization is strategic, providing Chart Industries with optionality in capital deployment while setting clear parameters around execution. With a market cap of $8.2 billion, the $250 million authorization represents approximately 3% of shares outstanding, a meaningful but measured amount. The company's emphasis on deleveraging before share repurchases reflects a conservative approach that should resonate well with institutional investors. The announcement also demonstrates management's confidence in future cash flow generation and operational performance. While the immediate impact may be due to leverage constraints, this authorization establishes a framework for shareholder returns once financial targets are met.

ATLANTA, Dec. 11, 2024 (GLOBE NEWSWIRE) -- Chart Industries, Inc. (NYSE: GTLS) (“Chart”), a global leader in clean energy and industrial gas solutions, today announced that its Board of Directors has authorized a share repurchase program of up to $250.0 million of its common stock. Under the stock repurchase program, Chart may purchase shares of its common stock through various means, including open market transactions, block purchases, privately negotiated transactions or otherwise in accordance with applicable federal securities laws, including Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The program may be modified, discontinued or suspended at any time without prior notice.

We reiterate our financial policy of no share repurchases or material cash acquisitions until we are below 2.5 net leverage, or there is a meaningful market event that would necessitate us using it. As of September 30, 2024 our net leverage ratio (per bank covenant) was 3.04.

Chart’s CEO Jill Evanko commented: “This stock buyback authorization reflects our confidence in our business going forward. We anticipate that we will be at $3 billion of debt by the end of 2025, and look ahead at various opportunities to return value to shareholders, continue to pay down debt, and deploy capital for productivity and growth opportunities.”

Forward-Looking Statements

Certain statements made in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning the Company’s business plans, including statements regarding completed acquisitions, liquidity and cash flow, debt levels and leverage, and other information that is not historical in nature. Forward-looking statements may be identified by terminology such as “may,” “will,” “should,” “could,” “expects,” “anticipates,” “believes,” “projects,” “forecasts,” “outlook,” “guidance,” “continue,” “target,” or the negative of such terms or comparable terminology.

Forward-looking statements contained in this press release or in other statements made by the Company are made based on management's expectations and beliefs concerning future events impacting the Company and are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the Company's control, that could cause the Company's actual results to differ materially from those matters expressed or implied by forward-looking statements. Factors that could cause the Company’s actual results to differ materially from those described in the forward-looking statements include the factors discussed in Item 1A (Risk Factors) in the Company’s most recent Annual Report on Form 10-K filed with the SEC, which should be reviewed carefully. The Company undertakes no obligation to update or revise any forward-looking statement.

About Chart Industries
Chart Industries, Inc. is a global leader in the design, engineering, and manufacturing of process technologies and equipment for gas and liquid molecule handling for the Nexus of Clean™ - clean power, clean water, clean food, and clean industrials, regardless of molecule. The company’s unique product and solution portfolio across stationary and rotating equipment is used in every phase of the liquid gas supply chain, including engineering, service and repair and from installation to preventive maintenance and digital monitoring. Chart is a leading provider of technology, equipment and services related to liquefied natural gas, hydrogen, biogas, and CO2 capture amongst other applications. Chart is committed to excellence in environmental, social, and corporate governance (ESG) issues both for its company as well as its customers. With 64 global manufacturing locations and over 50 service centers from the United States to Asia, Australia, India, Europe, and South America, the company maintains accountability and transparency to its team members, suppliers, customers, and communities. To learn more, visit www.chartindustries.com.

Investor Contact:
John Walsh
SVP, Investor and Government Relations
770-721-8899
john.walsh@chartindustries.com

This press release was published by a CLEAR® Verified individual.

FAQ

How much is Chart Industries' (GTLS) share repurchase authorization worth?

Chart Industries has authorized a share repurchase program worth $250 million of its common stock.

What is Chart Industries' (GTLS) current net leverage ratio as of September 2024?

Chart Industries' net leverage ratio was 3.04 as of September 30, 2024.

When will Chart Industries (GTLS) begin its share repurchase program?

Chart Industries will begin the share repurchase program only when its net leverage ratio falls below 2.5, unless there is a meaningful market event necessitating earlier action.

What is Chart Industries' (GTLS) debt reduction target for 2025?

Chart Industries aims to reduce its debt to $3 billion by the end of 2025.

What methods can Chart Industries (GTLS) use for its share repurchase program?

Chart Industries can execute the share repurchase through open market transactions, block purchases, and privately negotiated transactions, in compliance with federal securities laws.