GTLS - Earnings call transcript Q1 2019

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Operator

Good morning, and welcome to the Chart Industries Inc. 2019 First Quarter Conference Call. All lines have been placed on mute to prevent background noise. After the speakers’ remarks, there will be a question and answer session. The Company's supplemental presentation was issued earlier this morning.

received website you at not by access have Chart's visiting www.chartindustries.com. you the may release, it If A telephone April replay following the of today's broadcast of call will the until Thursday, XX, conclusion XXXX. be available is contained Company's The replay in information press the release.

with the any would begin, Company's not and The release you are that would to earnings Chart we the statements latest filings fact in update factors are during Before included Please like conference revise call the information no Industries' undertakes or now the to Evanko, refer forward-looking forward-looking SEC. obligation made to to turn and Company I this remind Jill over risk in Company CEO. the like that historical statements publicly to forward-looking statements. regarding statements.

Jillian Evanko

and for outlook. and to you, joining XXXX first thank our Thank everyone us quarter you through walk results Sherrie,

each business, specific received across the begin by of the Given level year-to-date. high through year order activity since of significant I orders will trends first and segment’s the level the order walking market with

many LNG infrastructure As liquefaction, We aware, builds, storage with the the of a elements globally. manufacturing that one Energy across an business are not is complementary just and many export unique Chart we in company LNG of participate are of aspects but you of industrial play. terminal and transport

the globally products. both the results Storage as quarter for comments & we Distribution first hear see will about throughout to strong theme You demand our that Chemicals continue & Energy and

exists incremental this the $X.X will quarter revenue will in control quarter execute. $XXX over the higher quarter is of XXXX. million of $XX the backlog $XXX.X XXXX included XX% Golar’s China of the next million floating The quarter third of also included today. a than year an income activity financial over EPS quarter XXXX as this the specifics months, E&C backlog the actions million large on than LNG Jeff our sequentially China $XXX record the that backlog and of higher million first not As margin CFO business at combine our inclusive supplemental project the increase Calcasieu quarter Venture how those how fourth the exciting operating of provide on our $XX Global’s the I’ve of first vessel deck of order well XX% total Slide over with as million the generate for with of LNG $XXX Pass order XXXX quarter things were such of was That which projects to and one first of opportunity XX% included our last a and six discuss is X as QX of big level actions $XXX backlog and was XX% it Wheatstone, first orders anticipated orders mentioned million, Gimi. of XXXX fourth compared Lass, full to million will increase million, in the of about the annualized morning, and released for much results. $XXX I completed Beginning past XXXX. over within adjusted increase time million LNG quarter guidance for which only first

environmental announcements operators. on five in from moves FERC with a FERC through more three big several export slide. already and two LNG positive ago. yesterday was approval additional highest order liquefaction EPC. first quarter walk since cooled LNG I air we high orders terminal as big quarters aspects just and making the the started quarter. the activity well exchangers for big seen QX with last million opportunities and order first that heat statements Additionally, received for projects XXXX toward years nearly at issued we as $XX The the a developed a Bechtel U.S. strengthened segment won notice including quarter announcements will EIS But specifics, next final forward FID project another on have of first, in the related in April. each and few be to FERC EISSs the LNG had ten final issued many level statements other of one

call, Arabian an mentioned in million for a $X on call, segment, order received for customer’s booked for air the an heat Chemicals QX order QX Since million SABIC’s an cooled already February $X.X air train, we $X for $X additional and Coast processing Gulf equipment additional exchangers. a As a order large natgas order the in a application. Saudi in separation we we & $X.X for Energy petrochemical an million million order for fractionation booked that million and we plant, equipment

in owning pleasant quoting months in the in There places have exposure. previously of we we amount One million is interest four product in relationship have of for have didn’t any VRV is E&C did have surprises with particular products our the the legacy had underway customer. to have that $XX which a after offer because not of didn’t for sea the or we region activity did we a either previously projects we access because

fourth region. in XX% total, order $XX.X projects XXXX of continues LNG utilize packaged internal big quarter East E&P of one In the in over of Strength VRV solutions million, identified contributing gas orders will vessels in components organically. a have quarter pipeline. the where to or XXXX Additionally, was significant our segment VRV in million were trailers that expected replace VRV’s orders purchased r first of and systems, million, included in to total synergy the order D&S scrubber LNG of the and the integrated we XX% the $XX.X activity $XX.X is up columns we in

suspension in the Germany, strong tolls quoting XXXX trucks for With is of our visible interest and gas there in XXXX natural in pipeline.

was VRV, was both $XX.X West with XX of from record Storage of yet a from the XX.X% including to quarter already in work quarter were India, from customer history order of orders additional acquisition, Western first and two the in XXXX. planned we quarters trailers, of the opened Indian and over-the-road up fueling first the to million, upon fueling the of $XXX geographic now Specifically, East for and down million the together which and of an signed by LNG $XXX be microbulk tanks, India. orders end $X.X systems activity million market of the projects LNG $XXX quarter stations booked bidding VRV in Distribution quarters products are new industrial XXXX, vaporizers. acquisition quarter D&S sales between continues to D&S past us our beginning Sales in the up announced in we we which fourth in strong; station mid-March quarter Germany on a comparison, are we D&S included order our was from business, to develop the average LNG continued and MOU with million. to through order that million India for first over increase first gas-related Oil first for the way XX% the above and market of XXXX, XX% XXXX. in the Building order million of West there in increase, eight in for and for & trucking received LNG Germany Hemisphere the of a of April, Resulting and Corporation the level highest $XX.X of

of durations with negotiated multiple We two growth source have year we anticipated are our key customers. that trucking double-digit have road and successfully in announce long-term in sole Both excited year. to agreements the each over the quarter, agreements

mainly these our therefore E&S West, results currently the units approximately bearing West customers links. reported of relates on long-term of gas which agreements through customers our the Hemisphere, Eastern While produce traditional segment. in In are Georgia are XX% revenue in and industrial to the we D&S are

pleased innovative are to solutions doing extend to the We so in core agreements. customers to strategic these continue able to and are offer

for focus primarily and in signed customer of used a order extended and g to Hydrogen the a of we terms of is one an two govern key our fueling part specialty vehicles gas quarter, activity is fast industrial our another and or $XXX,XXX is industrial area for set Also hydrogen light-duty in gas passenger for in California. D&S years. received FCEVs. markets West. cell station fuel being cars first fuel vehicles in conditions liquid master our on-road customers Hydrogen we our with growth additional vehicle called a as Specifically, electric global totaling of

executive order carbon While hydrogen of California. be liquid series be new to The fueling Energy California by hydrogen set become XXXX. of development XXX in The XXXX a eight and in stations certainly those XX least neutral our grant it stations elsewhere XX, supporting many by of stations. expected fueling development are stations tanks, in being station through is and state by pushing permitted, those a liquid at the of a an the completed is of installed utilize under the are funded the and process supplied commissioned and and economy ball is world out target infrastructure state of has exist funding Commission opportunities. are to to

a the entire liquefied speed rules Lastly, executive allow last would we President Federal and small-scale by alter gas to change. has the executive been Shipment natural gas by of up that and prepared these of shipment to regulatory our to orders the of to business Administration many a business, impacts only are oil with news years, of Not for topic United pushing to orders of such including signed Trump support and the existing do LNG our the rail positive week’s Railroad rail. projects move advantage further for quickly in efforts. benefit take aspects LNG States they

Specifically, last for active brand. for Gas two liquid sold have this being and built which we trademarked be sold we would cars. our available with XXXX We application time have immediately By ethylene GBR under these proposals the railcars currently equipment Rail

stationery at the also loading and We believe delivery tanks for storage unloading will pump-based and points. skids create railcars demand

evolved focus information. perspective slide because shared I learned to a was shown big on project LNG that while XXXX won’t does Now specific list previously have to ten mean X. isn’t slide will that not this for on on moving projects, as the Slide we we content. to that that reiterate our we This more

Calcasieu of Global’s exchanger This booked Pass earlier slide. approval quarter. heels we mentioned million associated in comes the row box for of As call, Global’s Venture by heat Venture in I order on the cold shown sight first which the the is a full and the $XXX on one FERC

begin begin We imminently for production in this is order Wisconsin facilities. our and ready which to Louisiana expected are to

expansion of their FERC successfully up which quarter, to year or anticipate system anticipate content operating first will to our In order per also very the the Plaquemines annum. we which Gimi Plaquemines for this projects for ramp with FLNG XX Venture inclusive would cold approval continue the includes we vessel to the Global our million since receive XXXX execute vessel We BHGE, floating the XX LNG of previously to third first our million provided which we in boxes million all $XX.X project, booked the Hilli, orders. Golar’s for a announced be the plan in the equipment on tons that In support XXXX equipment been XXXX. quarter, quarter of similar tons annum May per is which for has

project. to current this proceed recognized the of be million in notice range projects XXXX. in and partially On anticipate in to which on we guidance to received full revenue million, in updated project timing. is assumes revenue Gimi Tuesday, expect included be to XXXX partially $XX the the XXXX $XX the and of portion these final and We We

on X project which January third report from received final the Tellurian’s The Slide is FERC. in environmental Driftwood,

to from LNG and Total investment Shanghai agreement the receive the on India’s process would Driftwood Tellurian and third that enhancing the MOU investment subsequent heads February, likely our was agreement decision offtake at both XXXX. first for of proceed a a IPSMR final expects FERC order existing expect equipment notice an relationship we perspective. Tellurian in to in technology and announced In Petronet. XXXX with April, Additionally, and of to the final signed quarter their in equity with phase

tons million XX phase to XX.X previously the tons annum. annum, per assumed First is to compared now expected be million per

would and million. first be and orders content over XX.X equipment TPA phase $XXX the for Our totaling IPSMR of

not Corpus Cheniere's to move the project expect stage to sooner. quarter continue III in XXXX, We if forward first Christi of

As in our table X as a utilize IPSMR row technology process shown will reminder, this our equipment. well project, the as of

project As air I the but is a underway. which on award on this this notified slide is we for order cooled mentioned exchangers earlier call, well another $XX heat on not of week were listed

not guidance. timing on included with this in We updated is are and our Bechtel therefore working project

these on XXth. do project for and the Jordan content. not Cove draft cooled would the of we positive project equipment statement recent show the received we the these result X projects environmental LNG facility rows Works If momentum small-scale XX E&C some of Passyunk. March small-scale FERC New brazed within in While past slide. this heat forward, Council our of exchanger slide, expect on on LNG the that I President’s products air from one X, project from executive their which their In and mentioned six there for moves namely orders and activity months, has increasing been Gas utility in approval Philadelphia being LNG, Fortresses Pennsylvania this are

in our environmental statement equipment. FERC to natural the including liquefy marine use for our on projects project export herein along Friday, gas Caribbean. of final technology anticipate for primarily content past small-scale Partners all fuel for from the Just the three LNG with for mentioned to this their use the received and some as their use We Florida positive Eagle of

of injected supporters facility of liquefaction technology, boxes, of tanks. years our the mid-scale loading, day. the with on Texas small-scale cold heat George LNG pre-treatment, exchangers, storage and as nitrogen way versus gallons cycle West market over XXX,XXX truck the The production it Stabilis, has facility serves capacity background, per worked are strong process for terminals pipes export projects. vac base and LNG customer gas-to-fuel have load we We including small-scale By

LNG increasing million we million. from It’s the on $XXX big our resulted that are have quarter in XXXX are transport broader LNG export only control. beauty to order that $X.X spectrum $XXX margin we expansion million XXXX, within our annualized business potential to of which the also not more activity stated the a Given projects, we million to XXXX terminal previously included for to is our we restructured storage In liquefaction million first of in our prior $XXX to our serve $XXX from savings, opportunities globally, business guide.

Slide included announced process from XXXX, actions continue quarter in we XX-XX we savings We the that, in to executed price and million D&S and have over our call sourcing that our increases. particularly on February opportunities, pursue on that of $X in Subsequent cooled be previously to one which activities first savings immediately of the of in in result as XXXX E&C will announced included: These actions annualized exchanger Oklahoma. four million, consolidation incremental X. of $X.X seen facility in $X.X million we on business in air from shown heat Tulsa, will the to facilities our

will savings from part better until therefore XXXX, hard including in other over seen benefits not this the any savings, cost soft and not the of take between result XXXX million be $X.X will us will reducing facilities While transport cost. and of it

over unnecessary not taking positions the attention We continue of assessing lifecycle cases direct consolidate only OEM savings including brought past better switch the corporate streamline team months. which gaining outsource the reduces operations allows us out E&C without customers who and providers. to to for duplicate service absorbing quarters this couple into spent vendors our in energy having past back it cost overheads, feedback our bid to and immediate business back-office The point providers many to six our also has

facility completed North through our closed at by and therefore year. rationalization a China time, that XXXX line order XXXX and had in This have announced, was last it that Storage. is and this aluminum $X.X million business by It China. previously ago QX shown the that first mistake a the The business pieces the slide exist & line. exchanger occurred as in on not this quarter capabilities is the facilities been cost reported this product other through years while East Changzhou XXXX, row D&S run not brazed trial East we the and in and borne is was least D&S as each American Distribution E&C span for the QX five produced Lastly, lost of that begun of in was in in heat

walk frequently the customer in to We’ve some create Jeff closure partnerships quarter will and SG&A. the these sold million in to facility more The commented associated through shortly. goods of $X.X totaled $X.X cost in more actions report E&C With a activities full-service cost supplier EPS that of this East. and offerings. as our come impacts with direct actions and all with million I in the appropriately the asked million result of through feedback. solutions and D&S line, of China our of innovative $X.X participate been customer in

and customers; sound improvement between between and offering than book-to-bill January of gross this project positive fan larger As order will part D&S Slide new This space has E&C, in Tuf-Lite of quicker today, be as our E&C X May power to In another reduction to to X% X% highly a blade products, and total aftermarket offers X, and margins, one noise weight and We cooled flow fans is a It of this, in the which and introduced reduction higher our speed in we component. booked highlight I X one fans following market lower two traditional and the markets. to than in will first high in our it axial year. extreme shown in and is cooling innovate two which product air overall delivered and The applications application E&C to Tuf-Lite XX% is condenser engineered January. we levels, applications. operating certain the tip XXXX market between tower on in X. for six Tuf-Lite certain a in continue reduction particular, develop pounds wider a brings and in West efficient environments, efficiency count range speeds, between benefits first in XXX and for efficiency

Additionally, LNG, retrofits. including this market broadens and assemblies fans our for addressable small-scale

upon continue air fan business. to strong exchanger build will our and We cooled heat

we on in our in markets. products totaling In booked beverage, space-related high February quarter, specialty in discussed hydrogen $X.X two growth specialty West As lasers, our the high we markets food D&S growth call, and Specific applications orders exploration. first million. are markets space and cannabis, are

as see as from as to cannabis to demand our COX inbound as for dosers inquiries packaging. continue direct well critical well and both customers for We super distributors, tank

it to manifolded they difficult together. COX filled COX which the launch solutions, doesn’t that developing now need weight with are will flow are continuous bulk able an be refill, gaseous our in that are of bottles, at either don’t The have which customers We the and is a PSI. the have following give significant are half them trifecta the pumps, to XXX The to or customer high pumps solution be racks use extractor forms cylinders makes of COX But serve unmet swapped XXXX capacity from is to pressure an the Currently, the allows if customer to wants will second so require will product a features; challenge bottles to in trifecta, up a out. new these maintenance. of to cannabis so by pressure feed and deliver high This economical solution. liquid needed, is liquid they capacity pressures generally trifecta more to low and add base.

expectations we proceed legalization XX% revenue are under Calcasieu our innovation prior as of of billion of total each next line cannabis, $X.XX revenue billion our on $X.XX putting are billion. billion, full X, recognition the margin week revenue the product markets together, to we Golar’s the proceed the from expected projects. this driven of Slide Gimi quarter our Slide increase X. to While Gimi The with and addition innovation XX% West Calcasieu for expect is and Pass aspect expect additional full this pieces increasing shown business up and continued Therefore, Gimi, years. to from on Pass, year of shows just guide by guidance XXXX Pass we in $X.XX further over of received of all XXXX our three to imminently. the D&S grow North We currently notice and Calcasieu the prior and self-helm actions, in specialty increased X, from with to our notice guidance first with $X.XX American of the and X guidance

the in with conservative recognized margins we included $XX on estimate won be associated for Note project order as working which project this these are week our be have on Bechtel with of can seen Slide that does guidance will that projects We include X. another timing. million XXXX not

XX.X adjusted share This any timing. diluted per $X.XX share year full earnings average one-time project be outstanding. on to weighted currently expected to guidance and per increased the shares is Our million in range approximately $X.XX costs expected of reflects excludes

In timing guidance VRV. into at the certain addition, takes synergies of integration account

synergy The India quarter with yielded expectation D&S was of E&C revenue orders, of first in has line in East. of combination and such VRV and cross-selling full The work. cost synergies market our opportunities and the as businesses both

and was at limited overlapping synergies. VRV low are margin replaced facility the identified layouts, first product quarter moved work to of new pricing The XXXX anticipated, an with production back higher be out teams by to backlog cost and office margin but rationalization on execute loss floor cost not and include margin synergies as we operating As costs.

take one location the with an There have We results and in a other our guidance. of second contract in to will the increase of through to the outsourced full year our be XXXX. until the we take are turn manufacturing now Slide call I complete. the in X Italy exited financial and end XXXX half second half summarizes Jeff, May. movements facility leased QX’s reiteration Specifically, over to will which with in you guidance. complete who France reflected specific increased will be to synergies will and to exiting arrangement already production anticipate rationalization begin

Jeffrey Lass

Thanks, Jill.

EPS. and Turning sales, to Slide X, quarter walk let’s margin first through the

over reflected Sales First increase our about. XXXX. strong of of X.X% XXXX quarter million, Jill of spoke or segments ending quarter that and first increase order quarter quarter December activity $XXX.X position organic in backlog the organically first our over grew all XX.X% sales first the an

seasonally, Additionally, the X.X% while of lowest fourth organically. to The sequential only by first quarter were quarter our and sequentially quarter of fourth quarter three from XXXX first years declined year X.X%, past quarter sales first quarter X.X% the from or is the X% the sales generally XX%. declined our XXXX

quarter percent First quarter in would a percent of have cost costs. as XX.X%. XXXX gross margin sales first percent gross actual XX.X% of a was a one-time the in recognized gross of XX.X%, for sold compares fourth Adjusted sales margin to as of cost of goods of as excluding the in sales quarter, been XXXX XX.X%. one-time This or margin

and We of SG&A the our as our restructuring restructuring-related and year. of $XX.X is included well gross a percent million margin previously line pricing sales as of impacts our sourcing figures. in throughout benefits expect costs as actions guided million ongoing of improve to $X.X the with

the quarter than for each the first As in is compensation will stock of the it expense be typical higher is rest year, year.

EPS than of of the EPS in of or XXXX million, resulted row increased $X.XX of is will Jill reported and of one-time of and the saw on in shown $X.X costs of Slide reiterates of million quarter of EPS EPS. or of reported first double $X have VRV associated lower $X.XX for first guidance Net $X.X of shown in income stock one XX transaction-related was employee $X.X First X EPS discussed. X. more integration quarter or on expense comp our of the costs other included we subsequent row Also than included million step Adjusted QX. XXXX million quarters EPS SG&A Slide as $X.X in $X.XX, earnings full previously are table year on and as XXXX $X.XX cost restructuring $X.XX. and million $X.XX per quarter up adjusted share

mentioned, this of week. not this won with the project timing we to expected Calcasieu revenue Gimi order $XX and does but which impacts XXXX associated the include Pass are subject includes the million As portion

XX% guidance to XX%. range tax at Our rate forecasted remains

the expenditure committed Italian million given to in capital now out turn remains long-term million open at systems production $XX facility our up customers. it and outlook proceeding over build Sherrie be to with $XX we quarter I LNG Lastly, will I unchanged agreements it first our questions. line confirm to with fueling for now will that the two key can

Operator

Our Instructions] West ISI. from first question comes [Operator James Evercore with

James West

morning, Jill. Jeff. good Good Hey, morning,

Jillian Evanko

Hey, Jim.

Jeffrey Lass

Good morning.

James West

LNG FID but projects. There to and in customers? you are of some curious course project, sure in I LNG any been two, for these dynamics a am here terms rush of three pricing. is that clearly having conversations of this years. Has there been So, you changed Jill, as the are scale aware larger these some has on the the is number market the in weakness out projects And with build of the cycle know, are that I

so, FID everything So the go here. to matter, it’s to rush short-term is And case? is that pricing if that sure then, trends is little but make just to good want still

Jillian Evanko

Absolutely.

the the the The of take me question let is rush So, certainly piece case. still first. second FID to

in We are late QX QX, early actually more early even late QX. activity much did in seeing than we QX

think that’s required very is certain quickly and driving XX move announcements the dynamic the certainly per amount tons seen of I annum with to operators these across you’ve LNG the million So board. of market a that

et and seeing from work in filing are with We pre-feed said already operators terms are, are in they’ve FERC these of in the certainly EPCs not probably for slowdown you and multi-year on and the you, been the for like us pricing working multi-year suppliers as any of cetera. anecdotally just the projects market

is move MTPA expect that the us around boost our the reprice coming Tellurian XXXX cost XX.X with some change no we to margin the I we have answer also of expected material changes your for pipeline. asked our are side opportunities to perspective a certain for where we exists et from comment significant X given would with the what portion been to out projects on project the Driftwood So Phase and our to cetera, revenue the which but question to and line and end right from in order

James West

Got it.

other But know, the on Jill, for of M&A knowing Okay, front, that’s you side are transaction, things, you transaction Laurel. nice great big And your guys. on to VRV, just obviously, a not rested I then, on the hear. you

you are in it, in opportunities. quarters? that there other to call or Are engaging tuck-ins suspect the more couple I could fruition So out come next, opportunities there

Jillian Evanko

Absolutely.

So, will said And E&C the service invest sheet cash opportunities on the use always on organically that as to about are we and balance we the both have side, inorganically. some talked we as our – repair of we and exist. and well opportunities our that

stick a strategic to a deals. on think integration, strategic that great seeing only happen opportunities space, quickly look in been just comment that you and could the And one that opportunities morning as I pursue many about the general to very I wake to would us. deal example won’t us. industry And up the some here highly continue whole Chevron certainly, is as are can there have are are is we Anadarko in While on energy to a think of and read and we important of could a you strategic we timing focused some these

generating pipeline. So ahead opportunities our trying of in stay to we are that from

James West

perfect. Okay, Jill. Thanks,

Jillian Evanko

you. Thank

Operator

Thank you.

with Liptak Global. Our next Seaport from Walter comes question

Walter Liptak

Jeff. Hi, thanks. Jill Good morning, and

Jillian Evanko

morning, Good Walt.

Jeffrey Lass

morning. Good

Walter Liptak

from nice guidance some Gimi million the there project. things wondered like. Obviously, there Global all-in wanted $XX the I I ask on about for about $XX to Venture the to with that’s million year. But number going this the and

what Global the if be kind are margins of those? Now other for assuming projects, should margins figuring out and on Venture we you

Jillian Evanko

sales content, project a project-specific cetera But from don’t percent a depending margin at et from look margins the gross XX% XX% we on share of as can margins. at you standpoint, obviously between competitive and kind perspective. of big a LNG size, the Yes,

on it’s our or comments the to we on. depends deliveries in timing four repeated Hence, with that and five of so happen Some project timing. which times why that subject

So, XX% my the estimate takes we’ve conservative statement that of projects margins we’ve our drop-through. add portion to estimated guided that operating XXXX the income included, on about

Walter Liptak

But some sounds that XXXX And with like some the Is is purchasing. also XX-XX XXXX got opportunity in the through. big it number, Okay, guidance? it. there nice sounds is there EPS in it like coming

Jillian Evanko

guide think, incrementally more that the off is in guide, to included those guide. just room are And are of understands do There guidance philosophy part Everyone go and continue in there look do and continuing not put we is that we’ve out is I that after. our our the elephant to the both talked a in which everyone there of take handily. take the to we And to margins numbers from But continue we the about. can then here. to on achieve that that table opportunities

Walter Liptak

great. Okay,

of to be procurement of of million is and that So that savings, part XXXX the clear, in just XXXX? timing part $X

Jillian Evanko

is $X perspective sourcing Yes, if million took so expect we we’ve an pricing together. currently XXXX included sourcing annualized and from you underway. well in pricing, And from what the that that’s and

double can that You number.

Walter Liptak

Okay, great.

Thank all you very Okay, right. much.

Jillian Evanko

you. Thank

Operator

you. Thank

with from comes Martin Our Malloy Rice. Johnson next question

Martin Malloy

orders. Good on Congratulations the morning.

Jillian Evanko

Good morning, Marty.

Martin Malloy

you an I margin lines the you wanted to of question. of terms margins maybe, terms update along in just to timing? Can gross in maybe to the get give follow-up where us of are segment-by-segment and looking profit

Jeffrey Lass

Sure.

of range sort is XX%. is sort guide we for year. for mid-XXs, gross full total margin, in So to and all the company full D&S year, breaks for continue XX% D&S segments, XX% that XX%, West in the to down mid-XXs, is the full low-XXs in the E&C by and of the our East

Martin Malloy

you to the the memory then, manufacturing LNG me system And with agreements of the to pretty respect signed customers. long-term with maybe that on about was If great. capacity. market the allow agreements you terms that what key tight you of Could these manufacturing and it in two fueling talk side? importance do serves long-term my Okay, might correctly,

Jillian Evanko

Absolutely.

these So, LNG What fueled you is we customers. to know, big trucking a in there to is of move are seeing for trucks. a customers breadth Europe especially as move,

one ago, these customers starting We two the this is for $XXX and given we going and manufacturing our there LNG of systems. at standpoint, safely across we than have of to will line this significant volumes these say said, had now in build it out that size agreements. long-term moving build, think you of are in asked much to you given the European have looking the we and is across expected at bigger would anticipate we about really I sized this direction capacity are you opportunity which six handful The or six originally Italy months are and that fueling actually than talking are and that we are more million If seeing another next building could four, six next reasons years one size four the years, would subset across of easily the customers. a

tanks particular. We are also other in for in on seeing these India vehicles opportunities

for IOCL, trucking the some and respect for we starting over-the-road are there with to suppliers also are there. that the opportunity signed India in is interest to So, of larger see truck with LNG we MOU

year next period critical build capacity the be given time that executed. agreements out this long-term of the will we’ve for So the

Martin Malloy

you. Great. Thank

Operator

Thank you.

Our with Street comes next from Capital. question Lake Rob Brown

Robert Brown

for Thanks my morning. taking Good question.

Jillian Evanko

Rob. Hi,

Jeffrey Lass

morning. Good

Robert Brown

station European Thinking you also opportunity, about about talked out. build the

said an you what’s or in station order I What’s XX of Germany the more of for on the and you other opportunity you’ve get revenue or the per sort station and one think can price selling side? got so.

Jillian Evanko

types us Yes, in first avoidance in X opportunity year, you the million one in this XXXX. content X side which year of can content the QX million from content the Germany order We that from a result of NGL project. for would short are projects so there which But to with toll station. of in which per think smaller of euros in euros range are build different to and that’s that stations these per X.X of to particular for million coming is stations multiple have – go two stations XX fueling one bunkering million

see think suspension. to you estimate XXXX will that would probably the XXXX five year I be three and my given a

Robert Brown

large kind of And do know order gave maybe split the XXXX. into some I LNG percent XXXX signed that? see like XXXX basis on How on projects maybe of great. a you to switching going of and then, projects, you color some Okay, or

Jillian Evanko

are associated order? – a to the I order asking the the just way orders or So, – will you in the with Rob, revenue think just flow clarify,

Robert Brown

referring the Yes, revenue. at I was

the how this flow an If get revenue order does through? year, you

Jillian Evanko

majority the so Yes, XXXX this of in the that come and for revenue orders will year. XXXX be the in

got couple we $X million mentioned third were revenue XXXX brunt from just If be we a quarter, air sorting of by way subsequent in $X in yesterday, are with the be get would that still we award Just cooled to on would and there. $XX it of XXXX. the million X.X or example, a years in the million timing that then to the you dollars through in XXXX Driftwood recognized of I have million that another would that

then that XXXX ramp XXXX, a percent big would you now small a it ramp XXXX. is very between in XXXX assuming and So then say, in down handily kind in and timing, can the of QX, in

Robert Brown

turn Okay, thank you. over. it I will

Jillian Evanko

Rob. Thanks,

Operator

you. Thank

Hayes with next comes Northcoast from Our Tom Research. question

Thomas Hayes

Hi, good Congratulations quarter. on the morning.

Jillian Evanko

Hi, Tom. you. Thank

Thomas Hayes

you guess, more I your could agreements elaborate especially activity? was industrial wondering, governing signed on you the customers, gas maybe key you out, just bit with global little a called I

Jillian Evanko

Yes.

are we this you regionally as to The specific majors a by independent a the customer each on customers agreement. basis. particular in activity, govern structure. negotiations would working But themselves. are on move. in happen we can pretty purchasing are on a governed to which take would while obviously, time agreement through So, unable regions purchasing individual the one that’s global comment guys of corporate understand signed you agreements big who lot the The happen Historically, locations, the that the the

orders long-term agreements we for each So coming through how forward that and expedites region quickly we move the way the this with can on get new us.

never And we their months them are asked renegotiation before and on big player extended a something move. and well that. fulfill mentioned we that that the lot as having that that’s then very a forth. It’s a to spend we allows I us solutions two with second to a very nine work that’s years, without back excited and So, on in the had with agreement had to that about that and innovative of us legal they’ve needs, work them six large or

table. expedites opportunities off us a and have that we takes It it’s allows didn’t So, before back volume. the lot to of forth add and

So, are very any new industrial time a or we extension long-term guys. the it positive comment comes when to very, gas on agreement, an those

Thomas Hayes

on follow-up quick just VRV. a Then Great.

look quarters, in do backlog margin to operating for margin that backlog just higher projects kind You an the they we get speaking, kind broadly that low into working kind of think is more your low mentioned margin margin many the release projects? Maybe had the as have you of through. quarter of loss how

Jillian Evanko

you think full quarter. another have I a

that then, case QX, So, well the to we QX, be we expect at that expect QX, to out point. fairly and be that flushed

will backlog. see of out flow half and the second synergies the through you So margins see you’ll higher

Thomas Hayes

Thank Great. you.

Jillian Evanko

Thanks.

Operator

Thank you.

comes Our question with G. Matthew next from Research. Trusz

Matthew Trusz

question. Thank morning. you taking my Good for

Jillian Evanko

Matt. Hi,

Matthew Trusz

in order XXXX. with LNG – Jill, outlook potential order increasing big for your

Jillian Evanko

business knowledge accelerate we XXXX. anticipate, we projects certain we Some would but be share, that it previously have that as to into that which would we a late might XXXX in are thought potentially unable

Matthew Trusz

cannabis Great. market see just Thanks. follow-up stand? and compared as revenue And and on addressable then, the Thank growth Can what to the you. you to frame food, currently numbers you total space discussion. your here

Jillian Evanko

Yes, absolutely.

But So, this specialty the the some February the significant address call think don’t in pieces the we to to order is of first market on there. take in as about of products, you millions that early and of alone, of cannabis the that see really each with is we gave to we total. by have competitive that, of magnitude We very markets market of the to market numbers size and of be size dollars space. a lot the activity in new continue of hundreds the this

On a that’s addressable exploration market. the side, space smaller

players itself as given Just that fewer its obviously doesn’t frequently. the application and happen

then, as for lots side a is doser for that’s of basis side I production specialty our Food of hydrogen, we annual markets dollar market I applications, would significant for of for So, I an year to of kind which vehicles Lots where period on up exceptional multi see been a around long we to and across different And and markets of as coming. a passenger various is about us a the slot the different that piece to are different that’s those for of millions particular edges the tanks and locking us. of that Certainly, of in board, well that between market, on inquiries. our addressable not business. of hundreds hydrogen the applications. did today. is $XX getting lot of million $XX kind and are million the beverage of continuing. But the $XX hydrogen applications a getting and cannabis an $XX million million commented on just inbound globally, number of It’s in hydrogen, time. But talked certainly opportunity

it hundreds of of that of market. millions So is market another dollars

go part, to own. across and there to from there Their get would share space the market of and on are a after we most So say, for market not our lot else. specialty I the that, share is the go taking someone

Matthew Trusz

color. Thank Good the you. to hear

Jillian Evanko

Thanks, Matt.

Operator

you. Thank

Our Stine with Craig-Hallum. next Eric comes question from

Eric Stine

Hi, Jill. Jeff. Hi,

Jillian Evanko

Hey, Eric.

Jeffrey Lass

Eric. Hey,

Eric Stine

the we can with a noise lot Hey, if agreement sizable IOCL. to infrastructure build with around making oil along given India, just OEMs out. just back the know go a wondering I majors are of pretty

guess, large talk maybe beyond interest about are the there Petronet and you just from IOCL, and specifically? then other just, GAIL, players of So you see I type that curious, the opportunity seeing what

Jillian Evanko

Yes.

the and lot all – opportunities. Petronet first is that your to that So, amongst you India and commented see in there out build opportunities over-the-road players like I certainly major agreement a got – and we anywhere the infrastructure other an not comment from trucking, signed stations other did IOCL regas we LNG of of around it on. GAIL But of purposeful because agreement exclusive

build in a intend than has China, has they infrastructure the of terms to it infrastructure. is that different to So India there out been of significant how is amount happen. build

that wait be market a million an them about mentioned have offerings. trailer seeing hand market building build and is to to IOCL in I together us Since others don’t out. and both of work the market reason D&S our able in which equipment again, RFQ of also the we two very the opportunity are tenders come that this until that that we of around But we given hundreds fact interest. are fairly key partner So this parties that I is them us mentioned the tanks along that that that side growing we we is, We’ve the and participant in or had up LNG next we primarily and chose include on to that number dollars three in have actually with have quickly from with category you to having and years. two with the market asked that work growing for products to out work announcement of our in being and we with us in Right key MOU the was – to and There expect some down the standpoint we there the currently expect here. of the for other $XX.X that in of just that of house. would aware multiple millions is we now, quickly lock will the bidding activity that

offtake on have somehow. build some a get in signing we some these agreements gas will you agreements because casual, hey, that the need see be infrastructure a India, folks other of into offtakers Petronet it think also the at you are to versus got and comment Tellurian’s forced just going with to start there point, as I will

Eric Stein

Yes, Very me. Maybe got one it. last helpful. from

does that assume don’t the in I the pipeline, I on million. cooled or that potential think include at included $XXX heat least the not exchange million past, to Just $XXX you’ve the content. air

in provided what list if you every with the that about you just how could talk look So, like could maybe matches up that that deck?

Jillian Evanko

underway between total is, we of that able Hudson somewhere well – a commented X% Generally the didn’t not on to of we family. Those what the air get that’s us, that in the order project given for that we million awarded and from a equipment have. part that’s products content. the cooled have without a I mean, were air seeing been Yes, on to additional content X% business we are have are I example Chart today, Bechtel, great that’s of had content order of we the are offering cooleds kind yesterday just we $XX speaking, would previously are product content content on adding

we cooled. want million Well, order say a a these ago. to air for and the had content. and if air between a at shot mislead Chart projects But say cooleds $XXX to have have you anyone million two certainly, that $XX of $XX could don’t years million you said, for So it’s some good at that wouldn’t air more cooled I we walk are air cooled,

Eric Stine

Thanks a it. Got lot.

Jillian Evanko

Thanks.

Operator

you. Thank

next question from Molchanov James. comes Pavel Our with Raymond

Pavel Molchanov

What week, is, project the that Pass of unnamed is taking integrated few versus any more question. will customer the solution from what back is this won ago, contrast, boxes. the with I the from order want given for project cold you a integrated just solution an minutes talked Calcasieu LNG only kind purely to, determines Chart for goes Thanks we about This a heat think components? whether exchangers. By which

Jillian Evanko

the in project along. is It the how really what customer far and comes down to point

So, air been through had some – baked had have of market really for of cooled IPSMR LNG Hudson. the example before we which as in ever process a heat these long even technology projects or air before, offering for the exchanger came case cooled, long we an

is mid-scale a being you of more are exchanger want process the certainly it the the the or integrated point where where project see ten plus in different different integrate cooled. time on is that content of by can solution box, actual cooled technology. we you then itself, they see cold exchanger heat today the type well just and for we a projects, the on customer combination, on heat slide box presented the operator supplier. air to content wanting from air further solution What the the as this braze, we generally meaning are equipment that asking of a the result So, differentiation much along whether cold really projects or much, And seeing is are seeing around and actually side, the as equipment the they the the the

much lines become it’s suite plus that’s is technology equipment dividing together. whether or the just more equipment the So, of the

Pavel Molchanov

pure gross kind sales heat versus integrated structure in difference exchanger terms cold setting may number of of from the there And, in the the box? you Okay. a the percentage that obviously, aside is in revenue higher margins sales have,

Jillian Evanko

is. Yes, there

projects. So, three gross margin the about these there think on to is ways

at technology higher process together, you the I get it highest commented the If that’s kind of think that’s the XX% that. of earlier That’s XX% for as gross projects. margin of end and suite the and to equipment combination these one

are If mid-XXs. plus in strictly cooleds, And you are are of combination, – kind the the that then you braze to air you air range, you low are cold box if cooled, mid-XXs mid-XXs. plus in

Pavel Molchanov

Appreciate helpful. it. Very Okay.

Jillian Evanko

Thanks.

Operator

follow-up we do Global. from you. Liptak And have a Thank Walter with Seaport

Walter Liptak

Thanks.

a Just quick follow-up.

You – sort I the beyond mentioned the you of that, if converts the first solution. just potential us could wonder help impact because XXXX? with

Jeffrey Lass

Yes.

I by of life early So, right. comment are the saying those just converts, very in we first would

a So, that consider while have see and that from the got would be and possibility said, in being look likelihood we that debt treat penny currently they in how sheet this we you saw perspective. perspective to money we of certainly the comes will balance relatively are the at the year dilution you the they when the and in out dilution conversion quarter. Q from is also But The both but of low. converted first a

at full to to like XX%. XX% As we looks the sorry. XX%, look XX% year, it

Walter Liptak

XX% to XX%.

you. Thank right. All Okay. Great.

Operator

you. from with we have And Johnson Rice. follow-up Thank Malloy Martin do a

Martin Malloy

side if kind the for wondering you with on was able conversations the brazing I having on you comment conversations gas the be tone are exchangers? Hello. the the might to about heat processing customers of and fractionation of

Jillian Evanko

of I’ve natgas So, I between the market petrochem it – market. on kind that we things. that split downs statement in the made Petrochem, see two continue to particular guess and the hard the been we it’s a continue I quarters of side Middle healthy and has side I ups predict we’re would that commented, to It then It’s to now And it’s in ups right now. East. kind then and of healthy a market. see at as and but

healthy very on of very have a continues I’ll activity been continues. the to order gate, and and color first of that out the had weeks side the have that strong April, on two the we quarter house. But of that’s be more as certainly So

the natgas been on. has processing this going side, On

that slowdown and I I think second little half XXXX continues happen. be for have comment I cautious that activity did the of healthy say order. commented a a to plant natgas we would to that has be and bit in been of and equipment then ago, another Order year natgas that, expected the that I side But to us. about I booked we market the processing I think didn’t

and very typical at a XXXX natgas I We X% am But slowdown. X%. some it our to become number here, in have in growth cycle, conservative a like that, overbuilt I outlook, think will talking point

We yet from is other the haven’t sharing that’s on here each But customers. goes as our think little a taper with off everybody I could heard and forecasting the happen the guide. and how year that we’ve or that sentiment designed that bit

Martin Malloy

NGL in about comments your gas included fractionation, And processing? Okay. is that

Jillian Evanko

Yes. It is.

Martin Malloy

you. Okay. Thank

Operator

And Sturges Oppenheimer. a do have you. John we from Thank question with

John Sturges

I need Will curious be a the and I build with there you same for capacity with exceptional growth order expand and financing? lean are have know the Yes, out that a you just capacity ongoing additional seeing to footprint. quarter. was process

Jillian Evanko

for LNG There inorganic need, capacity given if we were arise. that opportunities will there described things. big were the the a lean not be need of If we as the we’ve of additional – base well on underway the strategic to would side that both the of capacity financing they it to from into out. well business, as a for one be have build But actions orders are take plenty from

John Sturges

see will I forecast then roughly SG&A fairly to – expected in remain be as the to So, static?

Jillian Evanko

that further zero The to and is we’ve we actually SG&A incremental SG&A Correct, our order guided reduce to. activity for pipeline the what the have. And is than essentially goal correct.

John Sturges

much. you very Thank

Jillian Evanko

Thanks, John.

Operator

call and back thank over any turn like question remarks. answer for to I for now management Ladies you. session. you Thank gentlemen, to and today’s in the participating would closing

Jillian Evanko

Thanks, Sherrie.

across and the orders begin and on business production are discussed We on excited confident Global Golar and margin the today. both opportunities our the Venture and fully are we on ramped execution top-line to

Good November really would afternoon. our wanted today. the bye. aluminum come. Date shareholders like all XX to our to facility distributed our Wisconsin. for And sure pick Day at Crosse, I make analysts on invitations Investor joining will in Lastly, thank guys Save to We you and La brazed this to invite heat you us be exchanger November

Operator

the Ladies conference. for and gentlemen, today’s participating thank This in you program. concludes

You have may a day. wonderful all disconnect and

Chart Industries (GTLS) 18 Apr 192019 Q1 Earnings call transcript