Chart Industries Swings to Loss Amid Baker Hughes Merger Costs

Ticker: GTLS · Form: 10-Q · Filed: 2025-10-29T00:00:00.000Z

Sentiment: neutral

Topics: MergersAndAcquisitions, EnergyTransition, IndustrialGas, LNG, Hydrogen, Q3Earnings, ShareholderValue

Related Tickers: GTLS, BKR

TL;DR

**GTLS is getting acquired by Baker Hughes for $210/share, so the recent loss from merger termination fees is irrelevant; it's a done deal.**

AI Summary

Chart Industries Inc. reported a significant net loss of $135.4 million for the three months ended September 30, 2025, a stark contrast to the net income of $72.7 million in the prior-year period. For the nine months ended September 30, 2025, the company posted a net loss of $3.2 million, down from a net income of $150.2 million in the same period of 2024. Sales increased to $1,100.6 million for the quarter, up from $1,062.5 million year-over-year, and to $3,184.4 million for the nine months, up from $3,053.5 million. A key factor in the quarterly loss was a $266.0 million termination fee expense related to the Flowserve merger agreement. Operating loss for the quarter was $88.5 million, compared to an operating income of $178.5 million in Q3 2024. The company's strategic outlook is dominated by the proposed merger with Baker Hughes Company, approved by Chart's board on July 28, 2025, and by stockholders on October 6, 2025, where each share of Chart Common Stock will be converted into the right to receive $210.00 in cash. Cash and cash equivalents increased to $399.2 million as of September 30, 2025, from $308.6 million at December 31, 2024, partly due to a $258.0 million termination fee paid by Baker Hughes Company.

Why It Matters

This filing is critical for investors as Chart Industries is undergoing a significant acquisition by Baker Hughes Company for $210.00 per share, which will fundamentally change its market position and competitive landscape. The substantial net loss of $135.4 million for the quarter, driven by a $266.0 million termination fee, highlights the financial implications of such strategic shifts. For employees, the merger means integration into a larger entity, potentially impacting roles and corporate culture. Customers may see changes in product offerings and service delivery as the combined entity leverages synergies. The broader market will observe how this consolidation impacts the clean energy and industrial gas sectors, especially given Chart's leadership in LNG, hydrogen, and CO2 capture technologies.

Risk Assessment

Risk Level: low — The risk level is low because the proposed merger with Baker Hughes Company, where Chart shareholders will receive $210.00 per share in cash, has already been approved by Chart's board on July 28, 2025, and by stockholders on October 6, 2025. This significantly de-risks the investment for current shareholders, as the cash consideration is fixed and the primary remaining risk is regulatory approval, which is typically a lower hurdle post-stockholder approval.

Analyst Insight

Investors holding GTLS shares should evaluate the $210.00 per share cash offer from Baker Hughes Company against their investment goals. Given the fixed cash consideration and stockholder approval, the primary decision is whether to hold shares until the merger closes to receive the cash or sell now to realize gains, factoring in any potential arbitrage spread and time value of money.

Financial Highlights

debt To Equity
1.91
revenue
$1,100.6M
operating Margin
-8.04%
total Assets
$9,789.8M
total Debt
$3,649.3M
net Income
-$135.4M
eps
N/A
gross Margin
34.1%
cash Position
$399.2M
revenue Growth
+3.6%

Revenue Breakdown

SegmentRevenueGrowth
Total Sales$1,100.6M+3.6%
Total Sales$3,184.4M+4.3%

Key Numbers

Key Players & Entities

FAQ

What caused Chart Industries' net loss in Q3 2025?

Chart Industries reported a net loss of $135.4 million for the three months ended September 30, 2025, primarily due to a $266.0 million termination fee expense related to the previously proposed merger with Flowserve, which was superseded by the Baker Hughes offer.

What is the status of the Baker Hughes acquisition of Chart Industries?

The proposed merger between Chart Industries and Baker Hughes Company was unanimously approved by Chart's board of directors on July 28, 2025, and by Chart's stockholders on October 6, 2025. Each share of Chart Common Stock will be converted into the right to receive $210.00 in cash.

How did Chart Industries' sales perform in the third quarter of 2025?

Chart Industries' sales increased to $1,100.6 million for the three months ended September 30, 2025, up from $1,062.5 million in the same period of 2024, demonstrating continued revenue growth despite the net loss.

What is the impact of the Baker Hughes termination fee on Chart Industries' cash position?

The termination fee of $258.0 million paid by Baker Hughes Company significantly contributed to Chart Industries' cash and cash equivalents increasing to $399.2 million as of September 30, 2025, from $308.6 million at December 31, 2024.

What are the key financial changes for Chart Industries in the first nine months of 2025?

For the nine months ended September 30, 2025, Chart Industries recorded a net loss of $3.2 million, a significant decline from the net income of $150.2 million in the prior-year period. Sales, however, increased to $3,184.4 million from $3,053.5 million.

How will Chart Industries' equity awards be treated in the Baker Hughes merger?

Equity awards will be converted into cash payments. Options with an exercise price less than $210.00 will be cashed out for the difference, restricted stock units will receive the $210.00 Merger Consideration, and performance stock units will vest pro-rata based on performance and be cashed out at $210.00 per vested share.

What is Chart Industries' core business focus?

Chart Industries is a global leader in designing, engineering, and manufacturing process technologies and equipment for gas and liquid molecule handling, focusing on clean power, clean water, clean food, and clean industrials, including liquefied natural gas, hydrogen, biogas, and CO2 capture.

What is the total equity of Chart Industries as of September 30, 2025?

As of September 30, 2025, the total equity attributable to Chart Industries, Inc. shareholders was $3,202.1 million, an increase from $2,828.8 million at December 31, 2024.

What are the primary risks for Chart Industries investors given the merger?

With the merger approved by stockholders, the primary remaining risks for Chart Industries investors are the completion of regulatory approvals and any unforeseen events that could delay or prevent the closing of the transaction, although these are generally considered lower risks post-stockholder approval.

How has Chart Industries' long-term debt changed?

Chart Industries' long-term debt remained relatively stable, increasing slightly to $3,649.3 million as of September 30, 2025, from $3,640.7 million at December 31, 2024.

Risk Factors

Industry Context

Chart Industries operates in the industrial gas equipment and services sector, a market characterized by significant capital intensity and long-term customer relationships. Key trends include the growing demand for clean energy solutions, such as hydrogen and carbon capture, and the ongoing consolidation within the industry. Competition comes from both large diversified industrial companies and specialized equipment manufacturers.

Regulatory Implications

The company's operations are subject to various environmental, health, and safety regulations. Compliance with these regulations is critical to avoid penalties and operational disruptions. Furthermore, the significant merger activity, including the proposed Baker Hughes transaction, may attract antitrust scrutiny and require regulatory approvals.

What Investors Should Do

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Key Dates

Glossary

Unbilled contract revenue
Revenue earned for work performed on long-term contracts but not yet billed to the customer. It represents a significant component of working capital. (A substantial increase in unbilled contract revenue ($1,017.3M) suggests potential cash flow timing differences or project execution stages.)
Accumulated other comprehensive income (loss)
Includes unrealized gains and losses on certain investments, foreign currency translation adjustments, and pension adjustments that are not included in net income. (A significant swing from a loss of ($155.1M) at year-end 2024 to a gain of $239.9M at September 30, 2025, indicates substantial changes in these non-operating items.)
Noncontrolling interests
Represents the portion of equity in a subsidiary that is not owned by the parent company. (The stable amount of $166.1M suggests consistent ownership stakes in subsidiaries, not significantly impacted by recent events.)
Termination fee expense
A cost incurred when a contract or agreement is terminated, often stipulated in the original terms. (The $266.0M expense in Q3 2025 is a direct result of the terminated Flowserve merger, significantly impacting the quarter's net loss.)
Goodwill
An intangible asset that arises when one company acquires another for a price greater than the fair market value of its net assets. (The high balance of $3,060.8M indicates significant past acquisitions, carrying potential impairment risks.)
Identifiable intangible assets, net
Intangible assets that can be separately identified and measured, such as patents, trademarks, and customer lists, net of amortization. (A large balance of $2,555.5M, similar to goodwill, reflects the value attributed to acquired intangible assets.)
Customer advances and billings in excess of contract revenue
Represents payments received from customers for goods or services not yet delivered or rendered, or amounts billed that exceed the recognized revenue. (A decrease from $362.2M to $339.3M may indicate progress in fulfilling contracts or changes in customer payment terms.)
Operating (loss) income
Profit or loss from a company's core business operations before interest and taxes. (The shift to an operating loss of ($88.5M) in Q3 2025 from an income of $178.5M in Q3 2024 is a critical indicator of operational performance decline.)

Year-Over-Year Comparison

Compared to the prior year, Chart Industries has seen a notable shift in profitability, with Q3 2025 reporting a significant net loss of $135.4 million versus a net income of $72.7 million in Q3 2024. While sales have shown modest growth, increasing by 3.6% to $1,100.6 million, operating performance has deteriorated, resulting in an operating loss of $88.5 million compared to an operating income of $178.5 million. New risks have emerged, primarily related to the substantial $266.0 million termination fee expense from a previously agreed-upon merger, alongside the ongoing strategic focus on the approved Baker Hughes acquisition.

Filing Stats: 4,998 words · 20 min read · ~17 pages · Grade level 7 · Accepted 2025-10-29 16:03:56

Key Financial Figures

Filing Documents

Financial Information

Part I. Financial Information

Financial Statements

Item 1. Financial Statements Page Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Operations and Comprehensive ( Loss) Income 4 Condensed Consolidated Statements of Cash Flows 6 Condensed Consolidated Statements of Equity 8 Notes to the Unaudited Condensed Consolidated Financial Statements 11

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 34

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 50

Controls and Procedures

Item 4. Controls and Procedures 50

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 51

Risk Factors

Item 1A. Risk Factors 51

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 52

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 52

Other Information

Item 5. Other Information 52

Exhibits

Item 6. Exhibits 53

Signatures

Signatures 54 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements CHART INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Dollars in millions, except per share amounts) September 30, 2025 December 31, 2024 ASSETS Current Assets Cash and cash equivalents $ 399.2 $ 308.6 Accounts receivable, net 725.7 752.3 Inventories, net 514.2 490.5 Unbilled contract revenue 1,017.3 735.1 Prepaid expenses 130.4 108.6 Other current assets 72.2 70.3 Total Current Assets 2,859.0 2,465.4 Property, plant, and equipment, net 917.8 864.2 Goodwill 3,060.8 2,899.9 Identifiable intangible assets, net 2,555.5 2,540.6 Other assets 396.7 353.8 TOTAL ASSETS $ 9,789.8 $ 9,123.9 LIABILITIES AND EQUITY Current Liabilities Accounts payable $ 1,202.4 $ 1,058.9 Customer advances and billings in excess of contract revenue 339.3 362.2 Accrued interest 67.3 110.4 Termination fee paid by Baker Hughes Company 258.0 — Other current liabilities 171.2 258.3 Total Current Liabilities 2,038.2 1,789.8 Long-term debt 3,649.3 3,640.7 Deferred tax liabilities 542.5 544.9 Other long-term liabilities 191.6 153.3 Total Liabilities 6,421.6 6,128.7 Equity Preferred stock, par value $ 0.01 per share, $ 1,000 aggregate liquidation preference — 10,000,000 shares authorized, 402,500 shares issued and outstanding at both September 30, 2025 and December 31, 2024 — — Common stock, par value $ 0.01 per share — 150,000,000 shares authorized, 45,712,072 and 45,657,062 shares issued at September 30, 2025 and December 31, 2024, respectively 0.5 0.5 Additional paid-in capital 1,900.8 1,889.3 Treasury stock; 760,782 shares at both September 30, 2025 and December 31, 2024 ( 19.3 ) ( 19.3 ) Retained earnings 1,080.2 1,113.4 Accumulated other comprehensive income (loss) 239.9 ( 155.1 ) Total Chart Industries, Inc. Shareholders' Equity 3,202.1 2,828.8 Noncontrolling interests 166.1 166.4 Total Equity 3,368.2 2,995.2 TOTAL LIABILITIES AND EQUITY $ 9,789.8 $ 9,123.9 See accompanying notes to

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