Chart Industries, Inc. (GTLS) Cash Flow Statement

The massive negative working capital change of -$322.9M in 2026Q1, as reported, suggests that cash conversion is heavily influenced by project timing and contract asset build-up, rather than underlying profitability. The positive OCF/NI ratios in quarters like 2024Q4 (3.54x) and 2025Q2 (1.92x) indicate that operating cash flow often exceeds net income, but the reversal in 2026Q1 highlights the volatility inherent in percentage-of-completion accounting. Investors should monitor the trajectory of unbilled receivables and contract assets, as these may signal aggressive revenue recognition that could reverse in future periods.

The FCF trajectory shows a clear deterioration in the most recent quarter, with the negative FCF margin of -30.8% in 2026Q1 contrasting sharply with the positive margins seen in 2024Q4 and 2025Q2. This volatility appears to be driven by working capital swings rather than capex, as capex has remained relatively stable at around 2% of revenue. The reported net income of -$17.1M in 2026Q1, combined with the large negative FCF, suggests that the company is consuming cash at a time when earnings are already weak, which may indicate that the business is not yet generating sustainable cash flows.

The relatively low capex intensity, with CapEx/Revenue ranging from 1.7% to 4.8%, indicates that the company's asset base is not being expanded aggressively, which may be a deliberate strategy to conserve cash given the high leverage. However, this could also imply that the company is underinvesting in maintenance or growth, potentially leading to future capacity constraints. The depreciation and amortization expense of roughly $70M per quarter, as reported, is significantly higher than capex, suggesting that the company's existing assets are being depreciated faster than they are being replaced, which may indicate that the reported earnings are overstated relative to cash reinvestment needs.

The extreme swings in working capital, particularly the negative $322.9M in 2026Q1, suggest that the company is experiencing significant timing differences between revenue recognition and cash collection, likely due to the long-cycle nature of its projects. The positive working capital contributions in 2025Q3 and 2024Q4 indicate that the company can generate substantial cash when projects reach billing milestones, but the negative swings in other quarters highlight the lumpiness of cash flows. This pattern suggests that the company's cash conversion cycle is highly dependent on the timing of large project milestones, which may make it difficult for investors to predict quarterly cash flows.

The consistent dividend payment of $6.8M per quarter, as reported, suggests a commitment to returning capital to shareholders, but the small buyback activity and the significant cash outflows for acquisitions indicate that the company is using its cash to integrate Howden and reduce debt. The $182.9M acquisition outflow in 2023Q4, as reported, reflects the Howden deal, and the $29.1M outflow in 2026Q1 may indicate additional acquisition-related payments. Given the high leverage and thin net margin, investors should monitor whether the company can generate sufficient free cash flow to service its debt while continuing to invest in growth.

The cumulative operating cash flow of $676.1M versus net income of $291.5M, as per the data, suggests that the company has been converting earnings into cash at a high rate, likely due to the timing of working capital and non-cash charges. However, the most recent quarter shows a significant negative operating cash flow, which may indicate that the company is now facing a cash crunch as it pays for past project costs. This divergence between cumulative earnings and cash flow warrants further investigation, as it may indicate that the company's earnings quality is deteriorating or that it is facing a working capital squeeze.