8-K: Chart Industries Reports 2025 Financials Amid Baker Hughes Merger

Chart Industries discloses its 2025 audited financial results, revealing a significant termination fee expense, as its merger with Baker Hughes Company progresses towards completion.

Summary

• Baker Hughes Company is filing the audited consolidated financial statements of Chart Industries, Inc. for the period ended December 31, 2025, in connection with their pending merger.
• Chart Industries and Baker Hughes Company entered into an Agreement and Plan of Merger on July 28, 2025, for Baker Hughes to acquire Chart for $210.00 per share in cash.
• Chart's stockholders approved the merger on October 6, 2025, with the completion subject to regulatory approvals and other customary conditions.
• Chart terminated a previous merger agreement with Flowserve Corporation on July 28, 2025, incurring a $266.0 million termination fee expense in 2025, of which Baker Hughes paid $258.0 million on Chart's behalf.
• Sales for Chart Industries increased to $4,264.0 million in 2025 from $4,160.3 million in 2024 and $3,352.5 million in 2023.
• Net income attributable to Chart Industries, Inc. significantly decreased to $40.7 million in 2025 from $218.5 million in 2024, largely due to the termination fee.
• Basic earnings per common share fell to $0.30 in 2025 from $4.54 in 2024.
• Operating income for Chart Industries was $358.4 million in 2025, down from $647.5 million in 2024.
• Long-term debt decreased slightly to $3,565.0 million at December 31, 2025, from $3,640.7 million at December 31, 2024.
• Chart's backlog (remaining performance obligations) stood at $5,886.2 million as of December 31, 2025, with approximately 44% expected to be recognized in the next 12 months.
• The Series B Mandatory Convertible Preferred Stock converted in December 2025, resulting in the issuance of 2.84 million common shares.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this filing as moderately positive. While Chart's 2025 standalone financial performance was negatively impacted by a significant termination fee, the underlying business shows revenue growth and a strong backlog. The pending acquisition by Baker Hughes at a fixed cash price provides certainty and a favorable outcome for Chart's shareholders, overshadowing the short-term financial dip.

Positives

• Sales for Chart Industries increased to $4,264.0 million in 2025, up from $4,160.3 million in 2024, demonstrating continued revenue growth.
• The company's backlog, or remaining performance obligations, is strong at $5,886.2 million as of December 31, 2025, indicating future revenue visibility.
• Long-term debt decreased to $3,565.0 million in 2025 from $3,640.7 million in 2024, improving the company's leverage position.
• Cash and cash equivalents increased to $366.0 million at December 31, 2025, from $308.6 million at December 31, 2024.
• The U.S. defined benefit pension plan was fully settled and terminated in 2025, eliminating future obligations for that plan.

Negatives

• Net income attributable to Chart Industries, Inc. significantly decreased to $40.7 million in 2025 from $218.5 million in 2024, primarily due to a $266.0 million termination fee.
• Basic earnings per common share dropped sharply to $0.30 in 2025 from $4.54 in 2024.
• Operating income decreased to $358.4 million in 2025 from $647.5 million in 2024, impacted by the termination fee expense.
• Net cash provided by operating activities decreased to $292.7 million in 2025 from $503.0 million in 2024.

Risks

• The completion of the merger with Baker Hughes is subject to the satisfaction or waiver of certain conditions, including regulatory approvals, which could delay or prevent the merger.
• Failure to obtain required antitrust or foreign investment law approvals could result in Baker Hughes paying Chart a reverse termination fee of $500 million, but would mean the merger does not proceed.
• If the merger agreement is terminated under certain circumstances, Chart may be required to pay Baker Hughes a termination fee of $250 million in cash, plus reimburse Baker Hughes for the $258 million Flowserve Termination Payment.
• The company is subject to various legal claims related to contracts, product liability, taxes, employment, environmental matters, and intellectual property, which could result in material adverse effects.
• Estimates of total costs at completion for long-term contracts recognized over time are subjective, and revisions could impact revenue recognition and profitability.
• Changes in economic or operating conditions impacting estimates and assumptions could result in the impairment of long-lived assets, goodwill, or indefinite-lived intangible assets.
• The company is exposed to foreign currency exchange risk as a result of transactions in currencies other than the functional currency of certain subsidiaries.

Future Outlook

The filing primarily provides historical financial data for Chart Industries in the context of its pending acquisition by Baker Hughes. It notes that approximately 44% of Chart's $5,886.2 million remaining performance obligations (backlog) as of December 31, 2025, are expected to be recognized as revenue over the next 12 months. The company continues to monitor developments related to the OECD's Pillar 2 global minimum corporate tax, but does not expect a material impact on its effective tax rate or financial statements for 2025.

Management Comments

• Chart's board of directors unanimously approved the merger agreement with Baker Hughes after determining it constituted a 'Superior Chart Proposal' under the terms of its prior merger agreement with Flowserve.
• Chart and its directors believe that the allegations in the lawsuits regarding the proxy statement were without merit and that no supplemental disclosures were required or necessary under applicable law, and that the requested disclosures were immaterial.

Industry Context

StockSavvy.ai notes that Chart Industries operates in the critical clean energy and industrial gas sectors, providing specialized equipment and technologies. The acquisition by Baker Hughes, a major player in the energy technology sector, signifies a strategic move to expand its portfolio in these growing markets, particularly in LNG, hydrogen, and carbon capture. This aligns with broader industry trends towards decarbonization and energy transition, where companies are seeking to integrate diverse capabilities to offer comprehensive solutions. Chart's strong backlog suggests robust demand for its specialized products, making it an attractive target for larger entities looking to capitalize on these trends.

Comparison to Industry Standards

• Chart Industries' sales growth to $4,264.0 million in 2025, following the $4.4 billion Howden acquisition in 2023, positions it as a significant player in the specialized energy equipment market. This scale allows for competitive offerings against peers like Linde (LIN) or Air Products and Chemicals (APD) in certain segments, though these are larger, more diversified industrial gas companies.
• The $210.00 per share cash consideration from Baker Hughes represents a premium for Chart shareholders, reflecting the strategic value of Chart's clean energy technologies and market position. This valuation can be compared to recent M&A multiples in the industrial technology and energy transition space, where specialized capabilities often command higher premiums.
• The substantial backlog of $5,886.2 million as of December 31, 2025, with 44% expected within 12 months, indicates strong order book health, comparable to project-based engineering and manufacturing firms in the energy sector, providing revenue visibility that is often a key metric for investors evaluating long-cycle businesses.

Management Changes

Corporate Governance

Legal Proceedings

• Two lawsuits, McDaniels v. Chart Industries, Inc. et al. and Johnson v. Chart Industries, Inc. et al., were filed on September 11, 2025, in the Supreme Court of the State of New York by purported Chart stockholders.
• The complaints alleged that the Definitive Proxy Statement was materially incomplete and misleading under New York law, seeking injunctive relief, damages, and costs.
• Chart also received demand letters from multiple stockholders threatening litigation and/or making other demands relating to the merger.
• On September 25, 2025, Chart filed a Form 8-K with supplemental disclosures, which the attorneys for the stockholders acknowledged mooted the claims in their entirety.
• The lawsuits remain pending for the resolution of a forthcoming mootness fee demand, though Chart maintains none of the supplemental disclosures were material.

Related Party Transactions

• Chart has a 25% interest in Hydrogen Technology & Energy Corporation (HTEC), accounted for under the equity method.
• On April 30, 2025, Chart entered into a Co-Investment Agreement with affiliates of MSD Partners, L.P. (BDT&MSD) regarding HTEC, following BDT&MSD's purchase of ISQ's shares in HTEC.
• The Co-Investment Agreement includes a put option for BDT&MSD to sell HTEC shares to Chart for $323.0 million or $51.20 per share (Base Price, increasing at 11.25% annually after the third anniversary of the Effective Date) under certain conditions.
• The agreement also includes a call option for Chart to purchase up to 85% of HTEC shares from BDT&MSD after the third anniversary, ensuring BDT&MSD realizes the greater of a 12.75% internal rate of return or 1.80x invested capital.
• The fair value of these put and call options was not material as of December 31, 2025.

Stakeholder Impact

• Shareholders of Chart Industries will receive $210.00 in cash per share upon the completion of the merger with Baker Hughes, providing a clear and certain return on their investment.
• Holders of Chart's equity awards (stock options, RSUs, PSUs) will receive cash payments based on the merger consideration and specific vesting terms, ensuring liquidity for their holdings.
• Employees of Chart Industries will become part of Baker Hughes Company, potentially leading to integration efforts and changes in corporate culture or structure.
• The termination of the U.S. defined benefit pension plan in 2025 means that covered employees' pension obligations have been settled, impacting their retirement benefits structure.

Next Steps

• Completion of the merger with Baker Hughes Company, subject to the satisfaction or waiver of remaining conditions, including regulatory approvals.
• Resolution of the mootness fee demand related to the stockholder lawsuits, which will remain pending.

Key Dates

Recommendation

The filing details Chart Industries' 2025 financial performance, which shows a significant decline in net income and EPS due to a one-time termination fee. However, the primary driver for investor sentiment is the pending acquisition by Baker Hughes at a fixed cash price of $210.00 per share. With stockholder approval already secured and the merger progressing, the stock price is likely to trade close to the acquisition price, factoring in the time value of money and any remaining regulatory risk. For existing shareholders, holding until the merger closes is the logical strategy to realize the acquisition value. For new investors, the limited upside to the acquisition price, coupled with the inherent risks of merger completion, suggests a 'hold' rather than a 'buy' recommendation, as the arbitrage opportunity is likely minimal at this stage.

Keywords

Chart Industries, Baker Hughes, Merger, Acquisition, SEC Filing, Financial Statements, 8-K, Energy Equipment, Industrial Gas, LNG, Hydrogen, Carbon Capture, Flowserve, Termination Fee, Audited Financials