Good morning and welcome to the Chart Industries, Inc. 2017 Second Quarter Conference Call. At this time all lines have been placed on mute to prevent any background noise. After the speakers' 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 Chart's website at www.chartindustries.com. A telephone replay of today's broadcast will be available following the conclusion of the call until Thursday, August 3rd. 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 statements. For further information about the 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 and latest filings with the SEC. These filings are available through the Investor Relations section of the Company's website or through the SEC's website, www.sec.gov. The Company undertakes no obligation to update publicly or revise any forward-looking statements. I would now like to turn the conference over to Jill Evanko, Chart Industries' CFO. You may begin your conference.

Thank you Charlotte, good morning everyone, thank you for joining us today. I will begin by giving you a brief overview of our second quarter results, outlook for 2017 and supplemental information regarding the Hudson products transaction for which we signed a definitive agreement to acquire on June 30th 2017 and expect to close in the third quarter following regulatory approval clearance. Then, Bill Johnson President and CEO will provide further comments on the Hudson deal as well as our current market and order trends across our three segments. Net income for the second quarter of 2017 was $2.8 million or $0.09 per diluted share. Second quarter 2017 earnings would have been $0.21 per diluted share excluding $5 million restructuring and $1 million of acquisition related costs. This compares with a net loss of $2.9 million or negative $0.09 per diluted share for the first quarter of 2017 or $0.01 per diluted share on a comparable adjusted basis. Second quarter 2016 net income was $21.2 million or $0.68 per diluted share. The second quarter of 2016 included several short lead time replacement equipment sales and contract expiration fees related to projects in the Energy & Chemical segment that totaled $31 million in gross profit. Sales for the second quarter of 2017 increased to $238.2 million from $204.1 million in the first quarter of the year with sequential increases in all three segments. Distribution & Storage sales increased over 21% sequentially with 58% growth in Asia an indicator that China is beginning to return to growth. BioMedical sales increased 19% over the first quarter of 2017 driven by 16% growth in respiratory and 24% growth in cryobiological products. Our gross profit for the second quarter of 2017 was $63.2 million or 26.5% of sales, which was unfavorably impacted by $2 million…

Thank you Jill and good morning everyone. We have included a supplemental presentation regarding the Hudson Products transaction on our web page under Investor Relations. The following commentary references that presentation. Page 1 of the presentation summarizes the key aspects of the transaction and financial information. Full-year 2017 projections for the Hudson business are estimated at 205 million in revenue and just over 20% in EBITDA margins on a standalone basis. Going forward we see meaningful cost synergies that exceed $7 million of run rate savings that can be executed within the first 18 months of our ownership. The deal is expected to be EPS accretive in 2018 inclusive of acquisition accounting and cost to achieve synergies. We will purchase the business for $410 million on a cash free, debt free basis. The funding for the deal will come from our U.S. dollar cash on hand and approximately $250 million from our existing revolver. After funding this deal we have remaining liquidity and continue to assess our deal pipeline for bolt on acquisition opportunities in targeted spaces. Moving to Slide 2 of the supplemental deck. Hudson is highly synergistic to Chart, specifically the addition of Hudson's [Confimco] (Ph) fans business coupled with nearly 40% aftermarket split provides an offset to our traditional E&C, LNG cyclicality. The addition of Hudson expands our end-market mix and see on Slide 3 of the deck diversifies the E&C end-market mix from our current industrial gas, natural gas and LNG spaces to include power generation, refining, HVAC and petrochemical. Through this acquisition we are building upon our strategic area of focus and we also are pleased with the additional opportunity and large LNG project content that Hudson brings. Now turning back to our three business segment trends. During the second quarter, our Energy & Chemicals…

[Operator Instructions]. Our first question comes from the line of Martin Malloy from Johnson Rice. Your line is now open.

Good morning. I was wondering maybe you could talk a little bit more about the Hudson acquisition in terms of maybe some of the revenue synergies we should think about and maybe if you could also touch on the aftermarket, how stable is that business for Hudson or is it growing?

Sure. We talked a little bit about the cost synergies, but there are revenue synergies with the Hudson deal as well. Hudson has had a history of in the LNG space of supplying export terminals to export facilities. So as that business comes back, there will be opportunities for us there on the revenue side. On the aftermarket, the stability of it, I think it’s about…

It’s very stable.

It’s about 40% of their sales has been pretty consistent through the time periods that we have looked at.

Okay. Thank you. And then on the mid scale LNG opportunities you know compared to a few years ago with the technology that you have now, it seems like your scope has really changed in that area. Can you talk maybe a little bit more about the scope that you are able to sell into some of these mid scale LNG opportunities along the Gulf Coast?

Sure, so we have the Brazed Aluminum Heat Exchangers, the coal boxes, and we've had that capability. The addition of Hudson brings Brazed Aluminum Heat Exchangers in particular in the petrochemical space and refining space that we haven't had in the past. We continue to have our whole D&S suite of products, storage products, vacuum insulated piping, trucks for moving the LNG storage. So yes, I would say we are much broader than we were a few years ago.

Okay. Thank you.

Sure.

Thank you. Our next question comes from the line of Eric Stine from Craig-Hallum. Your line is now open.

Hi Bill, hi Jill. I was wondering if you could take it in the order as a little bit in your prepared remarks. You mentioned the one large project, but it seems like it’s pretty broad based, I mean is it anything you can provide about 3Q whether the trends that you saw in the second quarter whether those have sustained in the third quarter. And then maybe you touched on the natural gas processing that it's basically gone from zero and now I believe you said you have received 11 orders to-date maybe just what your view is of 2018 for that business.

Sure, so I'll take the second question first, we look at the natural gas processing plant equipment orders as kind of a normal year being between 15 to 20 plants and we anticipate that we will see that level continue for the next two to three years. so our thinking for 2018 is in that 15 to 20 plant level, for our equipment. If you look at the order trends, on your first question you are correct, we are seeing broad based order improvement and quotation activity improvement on the E&C side. The significant systems order that we referenced was just over $15 million for perspective, across the business the start to the third quarter has continued to see the sequential increases over the last couple of months.

Got it. Okay, thank for that. And then maybe just turning to industrial gas, I mean I know you have talked about it, and something you have been watching in terms of consolidation and what impact that might have on your orders. I mean were ways into it, is it something where you feel like - is there a point where you can kind of sound the all clear on that or should we still view that as it’s kind of still wait and see as that process plays out.

Yes, I think it's still kind of a wait and see for us. We do see little bits and pieces of things happening, but I think it's going to be more slow and kind of spread out over a quarters. so I'm not even sure how that there will be a big change, I think it's just going to be small, incremental adjustments throughout the quarter as these guys look at their inventory levels.

Okay, got it. maybe just last one from me, just turning to Hudson, I guess I would love to hear feedback you have gotten from some of your existing customers on this and then also I mean I know you are working towards close. Is there anything that you have been doing or tend to do in advance of that so you kind of get your broad running or is this something you just need to close and then you get things started from there?

Yes, we are in the middle of - we've filings in and there is very limited things you can do during this period. So I mean certainly we are preparing on our side in the integration and our integration teams. But in terms of working with Hudson, we are in a pretty much close period. So we have to wait for the regulators to get back to us.

Got it. Okay, thank you.

Thank you. Our next question comes from the line of Rob Brown from Lake Street Capital. Your line is now open.

Good morning. Maybe just give us some further color in China. you have noted a couple of periods where that’s increased in terms of the activity level there and how stable is that, how is the visibility there and maybe what is driving it?

Yes, so, I think we saw China kind of relax the price of LNG to diesel and that has driven the heavy-duty truck business and market for LNG, heavy-duty truck is up. And we have certainly seen that through started in probably March, April time period and it’s continue to progress. And so once you get to the trucks and the vehicle tank - LNG tanks in the trucks, then you have to have the fueling stations. And we are starting to see more and more of that type of activity. And it’s continuing on through the end of the third quarter, but it is China after all so.

And we anticipate sequential growth on the order and sales side after the next few quarters in China.

Okay, good. And then coming back to E&C business, you talked a little bit about the LNG plant ordering cycle, I guess what is your thinking on when order flow could start there and sort of the visibility in the overall E&C backlog. I guess how would you characterize it at this point?

Yes, we all know we have Magnolia in the backlog right and that’s moved a little bit into 2018, 2019 time period and I would say the same with all these projects. I think they have moved out a little bit further than maybe another six to 12 months from what we were thinking. But it all really depends Rob on the supply and demand. And when that happens, when those two things are going to cross they will back it up and start getting in the new capacity and lined up.

Okay, great. Thanks, I’ll turn it over.

Thank you. Our next question comes from the line of Matthew Trusz from Gabelli & Company. Your line is now open.

Thank you. Good morning. Bill, Jill, would you say that your overall business confidence in sense of the industrial world has improved, stayed the same or gotten worse compared what you were thinking at the end of the first quarter? And if it’s changed, why?

I would say that our businesses have improved. We certainly seen the order rate uptick and sequentially it’s improving. So I would say that from that perspective, we are optimistic and it’s certainly China coming through in the second quarter the way they did was a very, very positive surprise and nice thing to have happened. So I would say those two things, we see continued strength in industrial gas, the market and then the natural gas processing plants had been a big contributor to the performance this year. So I would say those are the three areas that I would say are improving.

Thank you. And then if we turn to BioMed, the 16% growth in the respiratory business seems pretty significant. Can you provide some color on how that's trending in the U.S. versus internationally, and do you have any update on progress driving commercial changes in the U.S. side?

Yes so in the U.S. the respiratory is growing, so if you looked the first quarter from a sequential growth standpoint you would have seen the respiratory sequential growth for the fourth quarter in being mostly in Europe and Asia and the second quarter sequential growth was mainly in U.S. and Europe. So we are seeing that the trend move toward the U.S. increases and we think that that’s certainly the result of some of the efforts that we've done ourselves to penetrate the U.S. market, working on our direct-to-consumer channel for the respiratory products in the U.S. So we anticipate that that will continue going forward.

Thank you.

Thank you. Our next question will be coming from the line of Nick Chen from Alembic Global, your line is now open.

Hey, thanks for taking our question this morning. Just digging a little bit deeper into the China question. Can you give us any sort of breakdown into what percentage of backlog currently is from China.

I don't know if we have that number at our hand here.

Okay, moving on then. On the chemical side are you guys seeing any sort of activity in the ethylene world, I mean what's your outlook there.

Yes, I mean we certainly are seeing activity in quotes for orders and we are pretty optimistic that the chemical world will have more business in the second half and continue to see improvement in the petrochemical space.

Okay, great.

Nick, just under $50 million of our backlog is China.

That's great, thank you, that's really helpful. I'll jump back into the queue now.

Thank you. [Operator Instructions] our next question comes from the line of Jeff Osborne from Cowen & Company. Your line is now open.

Yes, good morning, just a couple of questions on my end. I was wondering if you could give us update on the - you touched on Magnolia but can you just give us a update on where we are with Venture Global and Driftwood, some of the other projects that you mentioned in the past.

Yes, I mean, Driftwood it's in for approval right now, think they are anticipating getting that done in the first quarter of next year some time. You can read the press release, it’s just like we can in terms of - they are aggressively trying to get off take for that project and I would say you know Venture Global's in the same kind of category, they are trying to get the off take agreements.

Got it, and your conservations with them, are people getting more creative and having some success in that process or no?

I think it’s still a pretty tough market for them with the spot price of LNG and the capacity coming on, but they certainly are getting creative. We will see how successful they are.

Perfect. Just another real quick one. So you have sudden strength in China. Are you hearing of any discussions of possibly having a PetroChina framework agreement similar to what was in place a few years ago or is this more of just continued spot orders that you expect?

Yes, I think it’s just more spot orders that we are seeing.

Got it. And then maybe for Jill, is there a way you can quantify what the OpEx savings is with the Wuxi consolidation that we should be thinking about in the second half of the year?

Yes, the Wuxi savings is about $1.5 million.

On an annualized basis or just for the second half?

That’s an annualized and keep in mind that when we say the China restructuring there is the Wuxi piece which is an E&C and then there is the D&S facility consolidation as well. So if you add the D&S piece in there on a run rate basis, total China is four.

So there 2.5 half in D&S and 1.5 in E&C?

You got it.

Right.

Okay. And then the last one. You touched on trucking globally LNG, can you just give us any comments for U.S., Europe I think you hit China enough?

Yes, we talk about that I would say Europe is also an area of strength and Europe has been pretty strong for the last couple of years and it continues on. I would say that hasn’t taken a pause at all. Yes the U.S. is still lagging of course.

Great. Thank you.

Sure.

Thank you. And at this time, I’m not showing any further questions. I would like to turn the call back to Bill Johnson for any closing remarks.

We are pleased with our second quarter and first half of the year results and the improving order activity. Our full-year outlook is supported by the quarter’s growth in orders and revenue across all business units and the progress on our restructuring activities for margin expansion. Additional profitable growth from the strategic use of our balance sheet to acquire Hudson, coupled with strong cost synergies in the deal will extend Chart’s value chain and be accretive in 2018. We continue to improve productivity across Chart in both operations and administration and provide a better customer experience while maintaining scalability. Thank you everyone for listening today. Good bye.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.