Chart Industries, Inc. (NYSE:GTLS) Q4 2022 Earnings Call Transcript

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What that really relates to is when we have a US field service crew that has to go international, the customer helps with the timing around when they want them at the plant for resolution and their corresponding employees and team members who can be there. And these are typically Middle East locations. So, if we get an order for a field service project, it really does depend on when in the quarter that order comes in and when the customer wants the team there. So in this particular case of the timing shift, the order came later in the quarter and then you had the holiday timeframe, and so that shifted out into 2023. That customer has our team deployed, I believe that’s in €“ certainly in the first half of this year. And then the third was a customer that we expected a repair project of meaningful size.

And that customer chose to go with a replacement unit instead of the field service repair. So, again, not lost business if we get a replacement unit order, but that would certainly shift the timing out of the fourth quarter. So that’s the sale timing part of your question. And then, with respect to gross margin and our exit rate from December, first of all, typically in our quarters, the back half of the quarter is heavier on revenue and shipments. I don’t think that’s really a Chart phenomenon. I think that’s probably just a phenomenon in operations as a whole. But we had specific project revenue that was recognized in December that was at higher margins. And we do expect that trend to continue. I want to reiterate what I said in my prepared remarks that our first quarter in basically every year in our history, with the exception of one, is always seasonally our lowest for just metrics as a whole.

We don’t expect anything different if you looked at 2023 and by quarter. But I am confident that, as the year progresses, you’ll see continued margin improvement, and Q1 will be our lowest quarter of the year based on what we see today and how backlog rolls out and where we see FX.

Operator: Thank you. And I’m showing no further questions. I would now like to turn the call back over to Jill Evanko for closing remarks.

Jillian Evanko: Thanks, Justin. And as Joe Brinkman said, I want to take just a moment and thank our One Chart global team members for an incredible 2022, a record fourth quarter and their execution to start 2023 and deliver the commitments that we’ve laid out today. Thank you, Justin.

Operator: This concludes today’s conference call. Thank you for participating. You may now disconnect.

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