Chart Industries, Inc. (GTLS) Q2 2012 Earnings Report, Transcript and Summary

Good morning. And welcome to the Chart Industries Incorporated 2012 Second Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. As a reminder, today’s call is being recorded. You should have already received the company’s earnings release that was issued earlier this morning. If you have not received the release, you may access it by visiting the chart’s website at www.chartindustries.com. A telephone replay of today’s broadcast will be available following the conclusion of the call until Friday, August 17. The replay information is contained in the company’s earnings release. Before we begin, the company would like to remind you that statements made during this call that are not historical in fact are forward looking statements. Forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from those expressed or implied in the forward-looking statement. For further information about important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, please refer to the information regarding forward-looking statements and risk factors included in the company’s earnings release, the latest filings with the SEC. These filings are available through the Investor Relations section of the company’s website or through the SEC website, www.sec.gov. The company undertakes no obligation to update publicly or revise any forward-looking statement. I would now like to turn the conference over to Mr. Michael Biehl, Chart Industries’ Executive Vice President, CFO, and Treasurer. You may begin your conference.

Thank you, Marine. Good morning, everyone. I would like to thank all of you for joining us today. I will begin by giving you a brief overview of our second quarter results then Sam Thomas, our Chairman, President, and CEO, provide highlights from the second quarter and comments on current market and order trends we see in each of our business segments. I will finish up then by commenting on our outlook for the remainder of 2012. Reported net income for the second quarter of 2012 of 17.9 million or $0.59 per diluted share, second quarter earnings would’ve been $0.57 per diluted share excluding $1.1 million favorable earn-out adjustments related to prior acquisitions, partially offset by a non-cash impairment charges and the write-off of deferred financing fees associated with the credit facility amendment. Due to higher forecasted costs and a delayed biomedical product launch of prior acquisition, earn-out liability was reversed, as it was determined that the reported gross profit targets would no longer be met. This provided a net $4.4 million benefit in the quarter, reflecting the net impact of our quarterly assessment of all of our prior acquisition announced. In addition, we also took in impairment charge for the elimination of in process research and development intangible assets, established at the opening balance sheet, related to this prior acquisition. As a result, an impairment charge of 3.1 million was taken out of these assets in the quarter. The current quarter’s performance compares to the second quarter of 2011 net income of $10.6 million or $0.35 per diluted share. Second quarter 2011 earnings would have been $0.41 per share excluding 2.8 million of restructuring costs associated with acquisitions. I’d also like to point out that currency losses were 1.8 million during the quarter or $0.04 per diluted share excluding…

Thank you, Michael and good morning everyone. We are very pleased to announce another quarterly sales record despite economic uncertainty and persistent weakness in Europe, but continues to be a leader. Our success thus far confirms our ability to take advantage of the strong underlying long-term demand for LNG equipment. Our ability to capture significant orders earlier this year has provided us with a sizable backlog of work. This quarter mark an acceleration in our plans to ramp up capacity higher and train additional employees. We are committed to executing on our current order backlog so that we have the opportunity to meet our customers’ expanding future needs. For the second quarter of 2012, orders were 228 million down nominally compared with first quarter of 2012 adjusted orders of 230 million. As you recall, the first quarter included approximately 155 million from two significant orders for our E&C business. Both of which are related to large scale baseload LNG projects. Excluding the large contract awards, our base business has been very solid over the last several quarters. Our EMC business continues to make great progress on large projects. We also saw strong LNG order intake once again in our D&S business, especially in Asia. We expect announced another plan expansion project during the quarter at our New Prague, Minnesota operation, which I will comment more on later. Finally biomedical orders rebounded in the second quarter from a particularly soft first quarter. As Michael pointed out, we announced the AirSep acquisition last week. We’re very pleased to join with AirSep, a leader in oxygen generating operating systems for medical and industrial applications. We expect it will add 130 million in annual revenues and be accretive to earnings beginning this year after acquisition related costs. We will bring AirSep into our biomedical…

Thanks, Sam. As we expected, our sales and profits continue to grow to record levels, however, this growth doesn’t come without making appropriate capital and manpower investments. We will continue to accelerate our capacity expansions and we expect some higher than normal cost to persist to the remainder of 2012 as a result. Based on our current backlog and order expectations, we are reaffirming our 2012 sales guidance in the range of 950 million to 1 billion. However, we are tightening the previous range of our earnings guidance, primarily due to the softening of activity in the industrial gas and biomedical respiratory, particularly in Europe. Full year earnings per share for 2012 are now expected to be in the range of 260 to 280 per diluted share of approximately 31 million weighted average shares outstanding. Our sales and earning outline does not reflect the pending acquisition of AirSep but will be updated after we close this transaction. We still expect the full year effective tax rate in the 32% range. And now like to open up for questions Marine. Please provide instructions to the participants to be able to ask questions.

Thank you. We will now begin the question-and-answer session. (Operator Instructions) The first question is from Jeff Spittel, Global Hunter Securities. Please go ahead. Jeff Spittel – Global Hunter Securities: Thanks. Good morning, Sam and Michael.

Good morning, Jeff. Jeff Spittel – Global Hunter Securities: I was wondering I guess if you could explain things with a little bit more in terms of where you are today in terms of capacity utilization and how quickly things come online in E&C and D&S in terms of expansions here in the back half of the year?

Sure. With respect to E&C, our physical planned additions currently are complete. We are considering going into 2013 expansion of our Brazed Aluminum Heat Exchanger Capacity. In terms of ramping up, we have made good progress in hiring and training welders and engineers to meet the current order backlog and interim orders. And so it’s a matter of effectively executing that ramp up is accelerating for us so it looks fairly positive through the rest of the year and going into next year. With respect to the expansions in Distribution and Storage for LNG equipment, again, other than the most recently announced capacity addition, the previous capacity addition are well in hand with physical plant completed and very much in the phase of the ramp up being involved with training new employees particularly welders. That’s also progressing well and we expect to make accelerating progress through the rest of the year. So that’s in good position and we expect to be able to bring lead times down going forward. We do have spare capacity, as I mentioned earlier in Europe which we are utilizing to serve North American applications, and the softness in biomedical liquid oxygen for respiratory and our packaged gas is also giving us an opportunity to redeploy some of those assets and are particularly skilled people, to working on the parts of our business which are particularly strong at the moment. Jeff Spittel – Global Hunter Securities: Very helpful. And switching over to transportation related opportunity as it pertains to LNG. It sounds like things are continuing to grow both in Asia and the U.S. at a pretty robust clip. Can you give us a general order of magnitude on, maybe not just sort of back of the year, but kind of long-term expectations in terms of how large can this opportunity grow from an order standpoint over the next year or two in your opinion?

We’ll spend some time in China. In China they are moving into really the execution phase, where our customers are saying we have lots of LNG available. We need to figure out ways to accelerate the pace of implementation. And it’s not something that’s going to coming in the future, it’s happening now. So we’re seeing orders ramp up in line with our capacity coming up. In terms of the size, the upside opportunity seems to continue to grow. The Chinese seem more committed than ever to utilizing LNG transportation to both address their growing energy needs and also to address their significant air pollution issues. So I think that when we see with China and Asia is the opportunity remains, as we’ve said previously, but perhaps airing into the upside, its challenging to quantify that outside, but its less likely to be a 10% upside and more likely to be in order of magnitude upside over a five to six year period. Jeff Spittel – Global Hunter Securities: I appreciate it. Very exciting stuff.

And in terms of North America, I was concerned actually, as I saw oil prices softening whether that would dampen enthusiasm. But what we’ve seen is that – we’re seeing larger global players showing serious interest and building out LNG infrastructure and with making more deals with existing fuel station operators. So that the plans are intact and seemingly robust for continued growth as we’ve previously indicated previously. Jeff Spittel – Global Hunter Securities: Great color. Thanks, guys.

The next question is from Eric Stine, Craig-Hallum. Please go ahead. Eric Stine – Craig-Hallum: Hi, Sam hi, Michael. Thanks for taking the questions.

Good morning. Eric Stine – Craig-Hallum: Just speaking of the expansions I know that the coal box facilities or capabilities there had been of a bottleneck. You have addressed that I mean is the heat exchanger is that the area that you see us potentially being one as you get into ‘13 and then if you can just comment on your ability to handle quick turn business?

Yes. We did see as a result of order intake in the first and second quarter our lead times for heat exchangers extend and we’re seeing continued order prospects in our backlog not just for LNG, natural gas and petrochemical applications. But also increasing increase for some larger scale air separation opportunities mostly outside the U.S. although some U.S.-based. So that has us looking very closely at expansion of brazed aluminum capacity. With respect to the coal box capacity we are heavily loaded there and we will continue to look at that based on the timing of large LNG projects. But at the moment we haven’t made any decisions to add further to physical plants. Although we still have capability to expand our capacity by adding people. Eric Stine – Craig-Hallum: Okay. That’s helpful. Maybe just turning to the margins, first in D&S can you just provide a little color kind of breakdown how much was mix, how much Europe and how much expansion related I’m just trying to get how we should think about that going forward here for the remainder of ‘12?

In D&S impact of the year compared to the prior quarter kind of from a translations viewpoint which we don’t – doesn’t show up in the financials, was about 2.9 million lower in sales and about half a million in profit related to the yearend. So the balance of that would be related to mix but also ramp up the costs related to the ramp up and also higher production costs in China too. We had a similar impact for translation in Biomed, but more significant because as I said the U.S., it’s manufactured in the U.S., but a lot of is sold in Europe. So there’s about 1.6 million reduction of sales compared to the prior year quarter and about 1.6 million hit to margins lower margins showing up. And that’s outside of the 1.8 million which is really transaction, currency transaction cost. So when you combine the two, it equates about $0.09 a share in the quarter. Eric Stine – Craig-Hallum: Okay. With then within D&S I mean provided the euro that there is some stability there in the exchange rate, expect a little bit of an uptick for the remainder of the year?

While more on the LNG side. Eric Stine – Craig-Hallum: Right

I mean, we’re watching, as Sam pointed out, we’re watching the industrial gas side especially on the packaged gas side. But we see increasing opportunity really on the LNG side (inaudible) margins but they should still, as we go through the years overall should average in the, from a gross margin standpoint, in the high 20s. Eric Stine – Craig-Hallum: Okay. Last one for me, just AirSep, just curious what this acquisition does to your share for the concentrator. And then just a little bit about the growth potential for the onsite air separation units? Thank you a lot.

In terms of the acquisition of AirSep, we have a very minor position in concentrators currently. Basically just the business we gain from the 12 to 16-pound portables that we acquired from as a result of the SeQual acquisition. So it moves us from being a non-entity in concentrators to being a significant player. Most important for us, in the respiratory therapy market, there is a definite move away from liquid oxygen or a delivery mode – we have to deliver the liquid oxygen to non-delivery mode which the concentrator has. And what that gives us is the capability to offer a full package to home healthcare providers or to individuals as they progress through various stages of the disease. And so we think that gives us the capability to grow this business over time as a result of having that comprehensive package. And forgive me, I got so wind up in that, that I forgot the rest of your question. Eric Stine – Craig-Hallum: It’s just how you see the growth potential for the onsite air separation units?

Yes. For onsite industrial applications, again as transportation costs continue to go up, and also as we have growth of industrial activity in previously underdeveloped economies, where you don’t have the ability to deliver oxygen either as high pressure cylinders or liquid, on site generation is very attractive. Again, it is a relatively small segment of the total industrial gas business and it has tended to be a fairly fragmented business with suppliers both amongst the industrial gas producers directly and a number of relatively small companies distributed worldwide. We think that the business has growth prospects above that of the industrial gas industry perhaps to ex to the industrial gas industry growth and is well suited to Chart’s capabilities. Eric Stine – Craig-Hallum: Okay. Thanks a lot.

Our next question is from Rob Brown of Lake Street. Please go ahead. Rob Brown – Lake Street: Good morning.

Good morning, Rob. Rob Brown – Lake Street: I wanted to get your thoughts on the Energy and Chemical business. The backlog is at its highest point ever, or in history certainly. Wanted to get your view on how you see orders coming in going forward? What geographies do you see them coming in? And sort of what’s the timing of more larger orders out there? Thank you.

I think that the most attractive prospects for Energy and Chemical currently are petrochemical applications, particularly in the U.S. and China and that’s for either ethylene plants or propylene plants or propane dehydrogenation plants. Number one, and secondly, mid scale and small scale LNG coal boxes. Again, China, probably at ahead of the list. U.S. second, but then the rest of the world following up because there are opportunities Rest of Asia, Africa and South America. In terms of large orders, there are several baseload LNG prospects out there. Most prominent among them (inaudible) for the U.S., but there are questions that for those very large projects of what the project timing is? And whether we have the capacity to meet the customer’s needs on that. So I don’t expect Chart to be booking a large scale baseload LNG project in the next six months. Rob Brown – Lake Street: Okay. Okay. Good. And it sounds like your capacity is starting to fill up. How do you sort of see the margin profile moving over the next two quarters? Get in the low 30s or back to historical levels or how should we expect that?

I think that as you see industry capacity more fully utilized that you’ll see margins continue to improve. There will be ups and downs in that. Or what, I think, we are – we ramped up our margins consistent with previous business cycles. One thing that’s absent in this business expansion for E&C compared to the last cycle in the 2005/2008 timeframe is that you don’t have the rapid run-up of aluminum and stainless steel prices that we saw in that. So the upside potential compared to the last night maybe a bit muted. Rob Brown – Lake Street: Okay. Thank you.

The next question is from Chase Jacobson, William Blair. Please go ahead Sir. Chase Jacobson – William Blair: Hi. Good morning.

Good morning. Chase Jacobson – William Blair: I’ve got a question on the guidance. So when I look at the guidance, I guess to get to the midpoint it assumes pretty robust margin expansion. The way I look at it is about 40% incremental operating margin in the second half compared to about 21%, 22% in the first half. Other than just the pickup in volume, can you give us any color on what some of the other drivers there are given the ongoing mixed headwinds as well as the higher SG&A? Are there any incentive fees or cost recoveries on the E&C projects or any other acquisitions or not that we should know about?

There are no assumptions of acquisition earnouts or E&C projects to adjustments. I’m not saying that neither of those can happen. But the basis of our guidance going forward is that as we ramp up our capability and go up the learning curve in terms of new employee – new employees becoming more capable in their jobs and executing more effectively. We do expect margins to continue to improve. However, we have swallowed a lot of new work and we ramped up facilities quickly in order to meet customer demand. Our operating efficiency has not been as good as we would like it to be, and we are very focused on executing that. The margin we have in backlog is also superior to what had it has been. But that is the basis for that forecast. Chase Jacobson – William Blair: Okay. That’s helpful. And then my second question is a longer term question as it relates to the competitive environment in some of the key markets. Obviously, China is very strong position in for natural gas vehicle equipment and for heat exchangers. We have seen some of the larger competitors talk about either new product lines or expansions in some of the key markets that you complete in. So I know that these are new and that they are not going to change your position in the near term and changer your order rates in the near term, but when you start looking at it to the middle of next year, how do you look at the competitive environment changing? Any color on that would be really helpful. Thanks.

I think that we would be naïve not to be a bit paranoid because any time you have an attractive growth market capable competitors are going to come in. Having said that, I still feel confident that as a company Chart is very focused on these opportunities that we have our very best people putting all of their efforts into not only meeting existing customer demand, but continuing to make product improvements, so that we can maintain a strong position we have had. I remain very confident that we can continue to do that. Chase Jacobson – William Blair: Okay. Thanks a lot.

Our next question is from Greg McKinley, Dougherty. Please go ahead. Greg McKinley – Dougherty: Yes. Thank you. I’m wondering if you guys could talk a little bit about, has any of the changes in the industrial gas market impacted your customers ability to accept your price increases there? Since other competitors were doing the same so maybe that’s not an issue but I was wondering if you could talk on that. And then how should we expect margins to behave in D&S as that backlog starts working through the P&L later this year.

Okay. The price increases have been minimal, largely, because of the stable pricing for the key commodities particularly stainless steel. So there hasn’t been enormous price pressure. We have had an interesting for six months in the industrial gas business because in the first quarter, we had very strong and optimistic purchasing across the world in industrial gas particularly in bulk tanks and packaged gas. In the second quarter, we saw a pullback particularly in packaged gas, again, worldwide. I think that our view going forward is that there were some anomalies in both the first and second quarter and demand for packaged gas will be at sort of the average rate we had for the first six months. In other words, not quite the optimism we had in the first quarter but not quite the pessimism we had in the second quarter. In terms of bulk tanks, the demand has been relatively stable and relatively strong. I’d say that overall, the margin backlog is slightly better than it was a quarter ago for Distribution and Storage and except for the fact that packaged gas tends to have slightly higher gross margins than the bulk tanks, things should be stable or improving slightly. Greg McKinley – Dougherty: Okay. Thank you. And then, if we look back at your LNG business within D&S, I think a year ago on a trailing 12 month basis, maybe LNG was sort of a mid single digit percentage of your D&S segment sales. I don’t know if you can give us any update or quantify where stands at today even in terms of revenues or backlog mix and we know it’s a lot bigger, but I am just curious, how much bigger?

I could give you a directionally correct number, but not the size because I don’t have it in front of me but I would estimate that 2012 would amount to something like 20% of sales and 35% of order intake. Greg McKinley – Dougherty: Okay.

So it’s a number that has grown significantly and we expect to continue to grow significantly. Greg McKinley – Dougherty: Great. And then, as it relates to the AirSep acquisition so it sounds to me like you think they are sort of on-site air separation market is a two extra relative to industrial gas. Is there also sort of synergy opportunities that you see beyond just the higher growth market there for Chuck to take advantage of maybe in terms of your customer base, I’m just wondering is there something outside of just the higher growth market that you felt Chuck could bring to the table to AirSep that it would not have otherwise had the opportunity to execute on?

It broadens our product portfolio so that we can bring more solutions whether it’s to our traditional industrial gas producer distributor base or to growing end used customers. Greg McKinley – Dougherty: Okay. Okay. Thank you. And then just last question. CapEx, can you just refresh my memory on what your view is for that this year please?

Right. We expect to be somewhere in the 50 million range for the year. That would be pretty aggressive spending over the second half to get there, so I’m not quite sure costs it could be 40 million to 50 million but that’s still overestimating it because of the expansion projects that we have in progress. It is easy to say what we have approved; it’s difficult to forecast the actual cash flow. Greg McKinley – Dougherty: Yes. Okay. All right, thank you.

You’re next question is from Jagadish Iyer of Piper Jaffray. Please go ahead. Jagadish Iyer – Piper Jaffray: Yeah thanks. A couple of questions Sam and Michael. So first on the biomedical segment, you had a pretty nice pop in the second quarter. When you talk about the weakness in Europe do you see basically a precipitous drop in the order flow in the biomedical segment in the second half versus the first half?

No. We don’t. I think that the forecast through the year improving order intake particularly in the third quarter what we’re seeing is that that what we’re calling into question is how much growth we’ll have as opposed to saying it is a precipitous drop. Jagadish Iyer – Piper Jaffray: Okay. I was just thinking because you sell about 45% there so that was the thing. And was there any reason for a big uptick in your operating margins in the biomedical segment in the second quarter?

I’m not sure, I understand. Jagadish Iyer – Piper Jaffray: Yeah it goes up from 10.9% to 24.2%. Am I missing something here?

Compared to first quarter? Jagadish Iyer – Piper Jaffray: Yes. Yes the first quarter.

That include the... Jagadish Iyer – Piper Jaffray: Maybe I can call back and get clarifications on. But I think the more important, Sam, you had talked about was the – you’re building off these tanks. You talked about 15,000 to 18,000 gallons. So I was just trying to find out what kind of capacity numbers should we be thinking about for whole new factory, now that it’s done. What kind of numbers are we going to think about? Is there some way of quantifying that please?

Yeah. First, going back to previous question about the BioMed bump, I think that’s primarily the earn-out adjustment that... Jagadish Iyer – Piper Jaffray: Okay.

Michael referenced. Jagadish Iyer – Piper Jaffray: Okay.

In terms of total capacity, it effectively doubles our ability to make tanks in this 15,000 to 20,000-gallon size range and also gives us significantly improved capability. So for our bulk tank business in total, combined with the earlier capacity that we’ve put in for LNG mobile equipment applications, it effectively, at a minimum, doubles our capacity and gives us the physical plan to grow it to roughly three times what it had been. Jagadish Iyer – Piper Jaffray: Yeah, yeah. And the last question for my site is that you had a big tranche of orders in the first quarter on the LNG side. And is there – how should we think about it, is there a digestion period? And then, you could probably see the next set of, now, potential orders coming up, either later this year or possibly 2013? Any kind of – any thoughts on that? Thank you.

Well, the – within Distribution & Storage the LNG transportation equipment has been a progressive growth story and we can – we expect it to be a continued progressive growth story. With respect to energy and chemicals with the large LNG baseload facility coal boxes, that was where we saw the big – the 155 million of orders in the first quarter and I don’t expect us to receive orders for large baseload units in the remainder of this year or certainly for another six months. At that time, we would have reasonable lead times and capacity to handle additional orders as we move out the timescale. But as you know, large baseload LNG projects are difficult to call on timing. But we expect there to be baseload projects going forward over the next five years and a significant number of them. And we expect to be participants in those orders. Jagadish Iyer – Piper Jaffray: Yeah. Just a quick clarification, Sam, thanks for that. But should we think about this order that you had on the E&C around 58 million to 60 million, in that range, would be the base orders that we think that progressively that you will see on the second half? I’m just trying want to see the minimum threshold orders for the E&C.

Yes, that’s a reasonable assumption. Jagadish Iyer – Piper Jaffray: Okay. Thank you.

Our next question is from Martin Malloy of Johnson. Please go ahead. Martin Malloy – Johnson: Good morning.

Good morning. Martin Malloy – Johnson: Could you talk a little bit about the pace of orders for your E&C equipments like gas processing plants in North America and then also maybe an update in terms of your outlook for new orders for petrochem and chemical North America and the timing?

Yes. The pace of orders our natural gas processing has continued at the rate seen in the fourth quarter and first quarter of this year. And frankly anticipated or I anticipate seeing them come down in the second half of the year simply based upon the softening of natural gas liquids pricing perhaps dampening the level of drilling activity. We have not seen that yet and our customers in natural gas processing have suggested to me that it’s a wrong assumption on my part. I guess we’ll see. I’ve become more cautious that the natural gas processing market will see a hiatus in terms of orders for us, either late fourth quarter and going into 2013. None of our customers have – has said that they think my assumption is correct. And it simply a matter I believe we need – we’re going to need to some completion of ethylene plant expansions or other ethane-based chemical to drive demand. In terms of petrochemical demand, in North America, there are a number of announced ethylene expansion projects. I haven’t seen anything that would indicate that those companies that have made those announcements have any pullback from that. It seems to be a – the economic seem to be attractive for continuing to expand U.S. petrochemical capacity particularly for ethylene and propylene. We’re also seeing a number of projects in the planning phases in China for propylene or for PDH plants. Martin Malloy – Johnson: And the timing of potential awards for charge in terms of petrochemical plants, fractionation capacity expansions are those next year event?

I think the opportunities this year as well, but the timing is difficult to call. Martin Malloy – Johnson: Thank you.

Your next question is from Bill Priebe, Geneva Cap Management. Please go ahead Bill Priebe – Geneva Cap Management: Thanks Michael. Real quick, I’ve been a little surprised by what the pace of news items and commitments for the interstate trucking market, Clean Energy under Boone Pickens, as well as, I guess, Shell with Ranger and Pilot. Just give us your general thoughts on how you see this evolving, say, over the next four to six years.

I think that it will continue to grow. As we attend industry conferences and speak to both the individuals you’ve mentioned or companies you’ve mentioned as well as truck fleet operators, the level of interest shown by fleet operators in converting at least part of their fleet to natural gas from diesel continues to accelerate. The credibility is growing. And as infrastructure builds out, I think, it will be a – it will lend greater credibility and a willingness for this growth to continue. We see that in our work with both the engine and truck OEs who are moving forward with programs to broaden the selection of both engines and trucks that are available for natural gas. So I think what we have is a commitment by both large E&P companies who have the natural gas molecules to make the investment to put in the infrastructure. They’re moving forward with fuel station operators to have sufficient stations available to make this interstate transportation a reality. And there seems to be good focus on rolling out that equipment on the highest density routes first. So I see very nice growth prospects being for the geometric growth as compared to the linear growth over the next four to five years. Bill Priebe – Geneva Cap Management: Thank you.

As there are no further questions, I will now turn the call back over to Sam Thomas for any concluding remarks.

Thank you. Our strategy, business plan and our optimism for the future remain intact. We’ve set ambitious growth goals at Chart and remain confident and committed to achieving those objectives. The current softening of global economic activity and uncertainty does not change that strategy. It does reaffirm the need to serve our customers, focus on operational excellence and be discipline with a strong balance sheet. I am confident that we’ve created a solid, but flexible, platform that will continue to be strong and prosper throughout the business cycle. Thank you for participating on the call today.

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.