Chart Industries, Inc. (NYSE:GTLS) Q3 2023 Earnings Call Transcript

Chart Industries, Inc. (NYSE:GTLS) Q3 2023 Earnings Call Transcript October 27, 2023

Operator: Good morning and welcome to Chart Industries, Inc. 2023 Third Quarter Results 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 release and supplemental presentation were 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 Friday, November 24, 2023. The replay information is contained in the company’s press release. Before we begin, the company would like to remind you that statements made during this call that are not historical facts are 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. The company undertakes no obligation to update publicly or revise any forward-looking statements. I would now like to turn the conference call over to Jill Evanko, Chart Industries’ President and CEO. Please go ahead.

Jill Evanko: Thank you, Sylvie. Good morning, everyone, and thank you for joining Joe Brinkman, our CFO, and me to walk through our record third quarter 2023 results starting on Slide 5 of the supplemental deck. We are very pleased with our team’s positive momentum on integration progress, financial results, deleveraging, and delivering on the broad-based demand that we saw continue through the third quarter. One very positive accomplishment that I want to start with is that we have achieved approximately $500 million of cash proceeds from a subset of the originally defined divestiture perimeter with the signing and closing yesterday of the sale of our American Fans business to Arcline for $111 million in an all-cash deal with multiples in-line with prior Chart transactions.

In addition, we expect approximately $80 million next Tuesday from the earlier than expected Cofimco sale closing and also expect to close the $4.25 million Cryo Diffusion sale next week. We have one additional business that was considered in the original asset sale perimeter that has not been sold, and we are evaluating whether we will proceed with the divestiture or keep the business within our portfolio. We also generated net cash from operating activities from continuing operations of $104.4 million and $142.2 million when adjusted for M&A transaction fees and cash costs. Combined with our margin strength, we are at 3.59 net leverage ratio which was pro forma for the announced divestitures of 3.47. We reiterate our expectation to achieve our target net leverage range of 2.5 to 2.9 by the middle of 2024.

With respect to margin strength, since the close of the Howden acquisition on March 17th, we have performed above 30% on reported and over 31.5% on adjusted gross margins and expect to continue to be at or above this level going forward. In the third quarter, we posted record operating income, EBITDA, EBITDA margin, and adjusted EBITDA margin. Adjusted EBITDA margin of 21.7% grew 440 basis points compared to the pro forma third quarter 2022 on top line sales growth of approximately 10%. The team has made incredible strides in achieving our year one cost and commercial synergies. We have already surpassed our year one commercial synergy target by double, only seven months post acquisition with $297.9 million of synergy orders booked across hydrogen, LNG, carbon capture, and multiple other end markets.

To date, we have achieved $135.6 million of cost synergies and are on track to hit or exceed our year one target of $175 million. The commercial synergy wins were one of many contributors to our record orders, excluding big LNG. We did not book any big LNGs in the third quarter and still had $1.13 billion of orders, resulting in record backlog of $4.14 billion. We have included Slide 6 and 7 to show our continued achievement of our targets on time or early, and the material on these slides will be discussed throughout today. Moving to Slide 9, the third quarter and year-to-date 2023 figures we present are results from continuing operations. This excludes the Roots results for our entire ownership period as Roots was moved to discontinued operations previously and the divestiture closed on August 18th.

The following are included in continuing operations for the third quarter and Q3 year-to-date, but are not included in our 2023 or 2024 forward-looking outlooks. Cofimco fans, which is anticipated to close next Tuesday on October 31st. For the third quarter and year-to-date, Cofimco is treated as an asset held for sale. Yesterday, we divested American Fans, as I said previously, and effective then, the business is no longer part of Chart, and we expect to close on the sale of Cryo Diffusion next week, the business is also not in our outlooks. Throughout today, we will reference 2022 comparison periods. All references are pro forma for the combined business of Chart and Howden. We will not refer always to pro forma each time we reference 2022.

Slide 10 shows both a sequential comparison of the third quarter to second quarter 2023 as well as versus third quarter 2022. Starting compared to third quarter 2022, orders excluding big LNG grew 1.5% against the strong comparison. Meaningful margin expansion has occurred with reported gross margin expanding 240 basis points, reported EBITDA dollars up 35%, and reported EBITDA margin up 350 basis points. Sequentially, compared to the second quarter 2023, we had significant growth above 30% in non-big LNG orders, as well as growth in total orders of 6%, even when considering the approximately $200 million big LNG order booked in Q2. Additionally, gross operating and EBITDA margins all were consistent with or above the second quarter, with new records set in Q3 for both reported and adjusted EBITDA margins in the combined business.

Third quarter 2023 record reported operating income of $104.4 million increased 9% compared to the second quarter of 2023. And when adjusted for one-time costs primarily associated with the Howden integration and deal, both adjusted operating income of $161.4 million and adjusted operating margin of 18% were records. Additionally, operating margin increased in three of the four segments sequentially when compared with the second quarter 2023, and when excluding big LNG, all four segments. Third quarter 2023 sales of $897.9 million grew about 10% when compared to the third quarter of 2022, and included record sales for CTS and Specialty Products. During the third quarter, we saw revenue push out to future periods related to customer project design and schedule changes, supply chain delayed deliveries impacting percent of completion revenue recognition and timing within our RSL book and chip business.

While a smaller impact, we also prioritized certain customer schedules within our facilities that created timing changes between projects and backlog. Third quarter revenue would have been above $1 billion absent these timing impacts. Based on current order and market trends, we are confident in realizing this revenue, which is still in our backlog, during the fourth quarter in 2024. As a reminder, historically, order cancellation rates have been significantly below 1%, and since the Howden acquisition, we have only had 0.19% of backlog canceled. Slides 11 and 12 showed the continued trend of increasing both gross and EBITDA margin as I’ve already touched on. Since closing the Howden acquisition, we have consistently been at or above 30% on reported gross margin and 17.5% and 21.5% for reported and adjusted EBITDA.

Our freight and material input costs have tempered significantly compared to the past three years, as you can see on Slide 13. Carbon steel is back to 2020 levels. Stainless steel is off its peak and behaving fairly consistently, while aluminum is more available, similar to 2021 cost levels, and has declined since the beginning of this year. We expect input costs to further normalize, although we continue to see late deliveries and longer than lead times from our suppliers. Whenever costs increase, be that material, labor, or other including across the past few years, we respond quickly with price increases to protect our margins and profitability. As costs declines, our margins are anticipated to reflect improvement from these price increases.

We also anticipate a tailwind in 2024 as we continue to execute on supply chain synergies. Slides 14 through 16 add some more detail around our third quarter results. I’m going to start on Slide 14. Safety is our number one priority. Our total recordable incident rate decreased again this quarter, ending at 0.52 and achieving our lowest lost time incident rate in our history. I’d like to thank our team for 70% of our sites being accident free for more than one year, and all of our European sites being accident free in the month of September. Strong progress in our certification industry leadership position was also made in Q3, and we’ll discuss a few of these in a moment. Turning to Slide 15, repairs service and leasing, which comprises over 30% of our annual revenue, is performing exceptionally strong year-to-date.

Third quarter 2023 book-to-bill for RSL was 1.22. RSL orders increased more than 20% when compared to third quarter 2022. Year-to-date Q3, RSL orders increased 15.7% when compared to that same period in 2022, and RSL sales increased 15.5% for the same period comparison. Third quarter 2023 RSL backlog is at a record $609.7 million, an increase of more than 35% compared to the third quarter 2022. We love that we’re seeing tangible commercialization of Howden’s Digital Uptime offering to the Chart legacy business, including applying uptime to 51 LNG refueling stations from Chart legacy customers across 15 different customers. Additionally, the team is working on bringing uptime to regas stations, heat exchangers, turbo expanders, and Earthly Labs in the near-term.

Uptime brings reduced risk and liability to our customers, cost savings, VLS downtime and less FEED at site. Given the many macro and geopolitical factors happening in the world today, we are sharing some insights on our regions on Slide 16. EBITDA margin is fairly consistent across all of our regions, with some variability between quarters. Our Americas and Europe regions are two largest, and each is seeing double digit growth across many of the financial metrics. Our Middle East and Africa region continues to deliver stellar quarterly and year-to-date results. Many have asked us about our presence in the Middle East considering the current war situation. We have 35 people physically located full time in the UAE and historically the Middle East, excluding Africa has done between about $35 million and $50 million per year in sales.

We have not seen any disruptions to the business so far in this region. Our APAC and India region delivered record – bookings in the third quarter and continues with excellent cash conversion. We see this region as a heavy hitter ahead on synergy orders, especially in countries where hydrogen and other clean energy solutions are becoming more and more prominent, such as Australia, Japan and Korea, for which Howden brought us a much stronger presence. And finally, our China region has performed at or above forecast each quarter this year in all metrics. Not only have we been able to repatriate $35 million of cash from China to the U.S. this year-to-date, we are seeing demand increasing in the region. For China, we anticipate a stronger second half of 2023 versus first half and also approximately 20% or higher orders in 2024.

Slide 17 shows the strength in the order book and strength in base Heat Transfer Systems demand outside of Big LNG with a 72% plus increase in non Big LNG orders when compared to the second quarter 2023. On the upper right hand side of Slide 17, you can see some key wins from Q3, including another Chart water win in India and an order from Techouse AS for the supply of a steam turbine generating set for a new project for the Statfjord C, one of three integrated platforms operated by Equinor ASA. We had our highest ever quarter for individual orders, each greater than $1 million, booked in the third quarter with 139 of these and expect to be above 100 in future quarters. Slide 18 shows specific momentum gaining end markets that we serve with a complete solution set.

Each continues to increase in terms of commercial pipeline for us. This is driven by both continued traditional energy investment as well as the breadth of climate policies and increasing funding systems for renewables projects, including the EU Renewable Energy Directive. The energy transition also drives demand for clean metals and mining, and as a result, we have seen increasing demand for our fans and our VentSim products. We will discuss LNG and hydrogen in the coming slides, so let me touch on water treatment and carbon capture here. Not only were orders for both end markets in Q3, the highest order quarter in our combined history, both are experiencing macro tailwinds. For example, the global PFAS water treatment market is projected to reach $546 billion by 2030, a market well served by our water treatment technology.

We booked water orders with 15 new customers in the third quarter, including one for treating trace amounts of TNT in wastewater. Our carbon capture bookings are getting larger in size, indicating more movement to larger scale, as well as progress to actual build versus just engineering studies. To demonstrate our expectation for continued increasing demand across the entire business, you can see the takeaway on Slide 18 that we have over $20.3 billion of potential orders in our commercial pipeline, including over $1.3 billion that are potential synergy orders, an increase from $800 million of potential synergy awards in May. Note that our total commercial pipeline of opportunity that could close between now and year end 2023 or in the next two months, is $5.94 billion.

Slide 19 shows the way we serve the LNG market. We are bullish on all four of these aspects of LNG, including Big LNG for both macro and chart specific reasons. Multiple LNG projects are underway, and we believe there is now consensus around the thought that the energy crisis is not over, as there continues to be geopolitical unrest returning high visibility to energy security and energy access. Let’s go left to right on Slide 19, starting with Big LNG. The takeaway is that we anticipate Big LNG orders and revenue each year for the foreseeable future. This is driven by expected LNG sanctioning, expanded sizes of projects, and the movement to modular midscale for international projects, many of which have already qualified our IPSMR process technology.

We’re very excited to share. in Q3, we had our IPSMR technology selected for an international Big LNG modular project for which we anticipate booking a full order in late 2024 or 2025 with engineering work already underway. There are multiple other Big LNG projects in our pipeline as you saw on the previous slide. To the right of Big LNG on the slide is a small and floating category which has grown significantly over the past 18 months and continues to do so, especially in Southeast Asia and Africa where we have dozens of imminent opportunities. Just last week we were awarded a FEED study for ChemTech for a 0.4 Mtpa plant expected to move to full order in 2024. In LNG infrastructure category, ISO containers, LNG fueling stations and regas have been very consistent.

The one aspect of LNG infrastructure that has been depressed the past two years is LNG over-the-road vehicle tanks. We are finally seeing some rebound in demand for these tanks with our highest order quarter for this product since the first quarter of 2022. Also remember that the LNG over-the-road vehicle tanks were the jumping off point for our unique liquid hydrogen onboard tank that has gained early and often traction so far. And finally, a growing category for our equipment and solutions is the retrofit service and repair for existing LNG facilities driven by operators desiring optimization of output from existing capital, reducing downtime, and in some cases, necessity of a retrofit to keep the facility running. We currently have three nitrogen rejection unit FEED studies underway for customers that are dealing with high nitrogen content natural gas which can create challenges in liquefaction output and consumption of LNG.

We have an extremely differentiated solution to handle this. So, moving to Slide 20, this shows the U.S. Department of Energy’s announced selection of seven regional hydrogen hubs in which we are a partner in the high velocity hub. More importantly though, for our future demand is that each of the seven hubs is not a single project in a single location, but rather each will be a collection of projects across the hydrogen value chain. We have been in discussion with many of the projects that will now potentially be downselected by the regional hub partners, and we anticipate multiple orders across the hubs in the coming years. This federal funding is expected to also catalyze many private sector investments in hydrogen and is estimated to be over $40 billion of that private sector investment spend.

Both gaseous and liquid hydrogen demand is expanding globally across various geographies. So this isn’t just a U.S. story, as you can see on the lower right hand map on Slide 21. Not only has hydrogen and helium been our number one end market for synergy orders, the third quarter was also record order quarters for this market. We continued to be a leader in global certifications and first related to hydrogen, including delivering KGS certified liquid hydrogen trailers, the first that will deliver liquid hydrogen in South Korea. There are other first shown on the left hand side of Slide 21. So I have already shared the strong third quarter synergy achievements at the outset of the call, which are repeated on Slide 23. We also have more cost synergy potential ahead not only with renewals on the calendar year end cycle, but also optimizing the use of our Mexico facilities, legal entity consolidations, tax reductions, and executing on additional identified insourcing opportunities.

Slide 24 shows four commercial synergy wins from the third quarter generated from both Chart and Howden legacy customers as well as new customers. These are the result of the breadth of Howden’s field service footprint and resources, shared capabilities for insourcing internal testing, thus accelerating lead times and therefore getting synergy orders, full solutions with all mission critical manufacturing in house and strong relationships with key customers in multiple end markets that both Chart legacy and Howden legacy bring to the table. Commercial and cost synergies are very tangible, but what is less so tangible is the one Chart culture that our global team members have embodied together to achieve these results. Slide 25 shows some examples of this, including a QR code app that the team came up with that we used to submit new synergy ideas.

Another great example was our teams working together to improve our 2023 EcoVadis Sustainability Ratings from bronze to silver for certain European sites. I have spent time already on our robust aftermarket service and repair capabilities. Slide 26 shows that there are still a significant amount of synergies available to us, which are accelerating as we close 2023 and head into 2024 and support continued double digit plus growth in the RSL segment. I want to just share one example of this, and this is just in the last day or so, we received about a €0.5 million order from customer Wego. You may recall me talking about Wego early on as an early synergy in the RSL segment, where we were able to take Chart legacy fueling stations and get a long-term service agreement with this customer as a result of Howden’s UK field service folks.

This order this week is the second station that’s going to be installed by the Howden UK team. And in a meeting with this customer this week, they were really, positively impressed by the performance of the service team in the UK. And in turn we were able to book this additional order, which, by the way, is not included in the $297.9 million of commercial synergies that we reported today. We shared our progress on net leverage ratio so far at 3.59, forward expectations, and now we reiterate our financial policy as shown on Slide 28. Our third quarter 2023 ending liquidity level of $700 million covers all material 2024 debt service needs even before our fourth quarter expected cash generation and divestiture cash proceeds in the fourth quarter.

It’s also worth noting that we have no major debt due until 2030. Now I am turning it over to Brinkman, who has been extremely instrumental in our deleveraging as well as our synergy execution.

Joe Brinkman: We continue to undertake actions to generate more cash for debt pay down and optimize our balance sheet, including repatriating over $25 million of cash in the third quarter, favorable re-pricing of our Term Loan B, and closing on the sale of our South Africa facility for $2.2 million. We anticipate closing the sale of two other properties in the fourth quarter. On Slide 30, you can see additional details of our Theodore, Alabama jumbo tank and rail expansion. This is a high ROI project for us, and the additional capacity is needed to deliver on the $115 million of orders already in backlog for this facility. We accelerated our capital spend timing to take advantage of market opportunities that arose primarily in the space exploration, rail and marine markets where multiple blue chip customers needed deliveries as early as possible in 2024.

We were able to work with our building contractors to accelerate the pouring of the very thick concrete floor, which holds tanks up to 1 million pounds and expedite the arrival and erection of the building steel. You can also see on Slide 30 where the site was as of June 30 and the incredible progress as of this week. Also, the steel workers remain on site and we expect to have all of the building columns complete by Sunday. We originally had a multi-phase CapEx optionality on this project, which was to be determined based on future demand. Given the early railcar demand and backlog, we also decided to accelerate what was originally Phase 2 scope with the site’s rail spur addition and revamp. We now expect occupancy and the beginning of operations earlier than it originally anticipated, pulling forward this related capital expenditure spend was instrumental in securing the $58 million of third quarter 2023 orders booked specifically for this facility.

On Slide 31, the table walks from U.S. GAAP reported statement of cash flows, cash from operations, which includes both continuing and discontinued operations as well as assets held for sale movements to our adjusted free cash flow from continuing operations of $84.8 million, which is the metric we are using for guidance. We are also showing normalized free cash flow on this table to reflect the Teddy 2 accelerated capital spend and not repeating stub interest payment, which when adjusted was $128.8 million. It should be noted that we also had one key customer with $25 million accounts receivable due in September that is now expected to be a tailwind for us for fourth quarter cash. Slides 33 and 34 cover our guidance metrics. We are updating our full year 2023 sales forecast to approximately $3.45 billion to $3.5 billion.

This is driven by the earlier than expected divestiture completions for American Fan, Cofimco and Cryo Diffusion, which is a positive and third quarter 2023 revenue timing discussed earlier. All of our divestitures in 2024 represent annualized revenue of approximately $225 million at EBITDA multiples in line with prior Chart transactions. We are updating our full year adjusted EBITDA guidance to reflect the lower revenue in 2023, which has now moved into 2024 due to supply chain and customer delivery timing. We expect to see a nice sequential step up in free cash flow in the fourth quarter 2023. Our cash available for debt pay down now reflects the $111 million from the American Fan’s divestiture, as well as the updated free cash flow guidance and higher CapEx spending in Q3.

While there is some modestly lower interest expense flowing through our guidance in Q4, we will not see most of the benefit until 2024. Which brings us to the next slide, Slide 34 and our 2024 outlook, our EBITDA forecast of approximately $1.3 billion remains unchanged since November 2022, despite the divestitures done in 2023, which are being offset by continued strong order growth and commercial and cost synergy wins. As you can see here, we are initiating a 2024 revenue outlook of approximately $5.1 billion, which is supported by our record Q3 2023 backlog of $4.1 billion and strong commercial synergies still expected to be announced in the fourth quarter and early 2024. Remember, as the company shifts to more of a solution provider that extends our orders to sales conversion cycle.

We anticipate free cash flow. We are removing the word adjusted for 2024 in the range of $575 million to $625 million. We are also guiding 2024 adjusted EPS to $14 plus. Additional details are on the slides. We look forward to seeing you at our November 28 Investor Day, where we will provide three-year forward outlook as well as a longer-term view on our markets. And now, Sylvie, please open up for Q&A.

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Q&A Session

Operator: Thank you. [Operator Instructions] And your first question will be from Ben Nolan at Stifel. Please go ahead.

Ben Nolan: Great. Thanks. Hey, Jill, and Joe.

Jill Evanko: Hey, Ben.

Joe Brinkman: Hey, Ben.

Ben Nolan: So I – first of all, the orders are strong. The guidance is really strong. The backdrop though, in this environment with higher interest rates, it feels a little less certain than maybe it has in the past. In fact, I know, Jill, you would know that one of your competitors, or at least a fraction of their businesses competitive years, was out sort of saying there’s just too much uncertainty to have much confidence looking into next year. You don’t seem to be reflecting that at all, and certainly, it’s not in your orders. So the question here is, sorry, that was a longwinded start, but the question here is, could you maybe talk through, maybe segment by segment, what your line of sight is for next year? And maybe by those segments, what portion of the business is economically sensitive and then what portion of it you think is maybe not?

Jill Evanko: All right. Thanks, Ben, for the question and the tee up. And before I answer your question directly, thank you for recognizing the strength in the order book and the outlook ahead. So that leads me to our view in our confidence level, our very high confidence level in these figures, in this outlook, in particular, given our record backlog, record orders ex-Big LNG, which I think is extremely important, right? It’s the shift in the dynamic of the business away from that heavy reliance on one or two orders coming in and this broad base demand where we have multiple end markets that we serve, which, by the way, we don’t have to change our manufacturing lines to serve, right? We can use the brazed aluminum heat exchangers, whether that’s in Big LNG, whether that’s in hydrogen liquefaction or helium liquefaction, in some cases carbon capture.

So the list could go on. And you’re really familiar with that. But that broad based nature of our backlog, the visibility that we have to where those projects are in terms of progression is one of the shifts that Joe talked about in his remarks thereof moving toward that solution provider gives us more visibility into that backlog. I’d also say specifically of more than 65% of our backlog for that covers – 65% of our 2024 covered by backlog. I think that’s an important metric, right? We talk about also the ability for us to move schedules around and to be able to adapt, how we serve our customers is another key element to how we deliver on that backlog. And we did mention as well in our outlook that it does include commercial synergies.

And I mean heck, I think you commented on it in your early look report. We delivered 100% more of our year one synergies commercially in the first seven months of our ownership of Howden. I mean, that shows the combination and that full solution offering coming into our backlog. All right. So let me talk about the segments, because you’ll really get into the question about what’s sensitive and where we see those sensitivities both from a positive and potential watch out perspective. Let’s start with CTS. CTS is our shortest cycle – shortest booking ship cycle. This is heavily industrial gas majors business, and you can get the industrial gas majors outlooks. But what we’re hearing from a forecast perspective is kind of in line to what it always is generally and historically, which is in that like kind of mid-single digit growth.

When you look backwards at CTS, it’s fairly insensitive in terms of being dramatically lower or dramatically higher. Within CTS, I would point out that the EU and China regions serve the CTS segment. And in the remarks, I commented that we expect China orders year-over-year to be 20% or more higher than 2023. As we didn’t see really a slowdown per se in those two regions in that market, but we’re seeing some pickup in activity. So CTS, I think, is fairly insensitive, and we have a very good line of sight to the next 12 months from those key customers. In the HTS segment, so a big LNG, we have good backlog for the coming couple of years on the big LNG front, we do expect to book another big LNG order around year-end-ish. And we have good line of sight to more for the coming years inclusive of that IPSMR win, that international win that we can’t name, but we have the technology and we haven’t yet booked the order.

But even without that, we see plenty of commercial pipeline, not only for other LNG, including retrofits. But I’d like to hammer home that point on traditional energy, oil and gas. Again, the beauty is we serve traditional energy and clean energy end markets with the same manufacturing lines and we have seen traditional energy pick up. I think the metric that we showed was 72% in order increases x big LNG from last quarter sequentially. All right. Specialty. I think the specialty is interesting, because specialty is kind of where I think the comments, as you referred to one of our competitors, or at least small part of the business being competitor, the comments there probably would ring into the specialty segment if you were to try to pick out one of the segments here.

But one thing I would say, if I know who you’re talking about, one thing I would say that I fully agree with is waiting on the government to fund something is not a good strategy. And that’s absolutely not where we are with our specialty end markets. These are, as Joe called them, blue chip customers. And we’re talking in specialty. These are, in some cases, the IGs that I talked about in CTS, EPCs. These are large companies that are making these investments and we’re the beneficiary of them. With that said, I do think the government hubs and fundings can be a catalyst for more. But that’s not what our basis of our outlook is built on. It’s built on the projects that we have in backlog and what we think is real, real in the commercial pipeline.

In terms of the rest of specialty, right, this is also global. It’s not a U.S. only commentary, right? So take hydrogen, it’s industrial gas, it’s mobility, it’s utility storage. And we’re seeing a lot of pragmatic projects coming into the backlog versus the dreamers. And then lastly, in RSL, I want to end with RSL. I purposely amending with RSL, because RSL – think back, one of the key elements of our strategy over the last five years and really amped up with the Howden acquisition was having a higher percent of our revenue in aftermarket service repair and for exactly the idea that we’re going to continue to grow double digit through a cycle. And this gives us a lot of resiliency and confidence in being able to do so. And yes, the other thing I would say, is you heard me talk on the amount of opportunity and pie and RSL that we don’t even touch today.

We don’t even have a lot of our chart legacy products that we serve outside of the United States. And there’s just opportunity without having to have the actual end markets themselves grow dramatically for us to gain share and have this continue to grow double-digit. So all in all, I think, our confidence is high for different reasons perhaps than someone else’s confidence may be a little bit less.

Ben Nolan: All right, that was extremely thorough. I appreciate it. Thanks, Jill.

Jill Evanko: Thanks, Ben. I appreciate the question.

Operator: Next question will be from Martin Malloy at Johnson Rice. Please go ahead.

Martin Malloy: Good morning.

Jill Evanko: Hi, Marty.

Martin Malloy: Hi. I want to ask a question about the hydrogen outlook and some of the graphs, do you have on 21. I was wondering if maybe you could help us with thinking through the scope of potential awards to chart for, say, a 10 ton per day hydrogen production liquefaction plant coming online. Assuming that the hydrogen is going to be used for transportation or stationary power, when you think about all the storage and transportation and use equipment that you might sell.

Jill Evanko: Yes. Thanks, Marty, for the question and appreciate you looking into the detail that we have put out in the deck. So let me touch on a few things on that Slide 21. In that upper right hand graph, there’s a lot to digest here. The first thing being that we are continuing to see more and more commercialization in hydrogen. The second being that the three facets of the hydrogen value chain production, storage and transport and then end use, you can see for the last couple of years, the primary – our primary customer spend was in production and storage and transport. And now if you look at that last category, we’re starting to see an increase in orders for end use, whether that’s mobile re-fuelers that could be fueling stations, things like that.