Chart Industries Inc Q2 FY2020 Earnings Call

Good morning, and welcome to the Chart Industries, Inc. 2020 Second 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. 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, July 30, 2020. 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 in fact 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 statement. I would now like to turn the conference call over to Jill Evanko, Chart Industries' CEO.

Thank you, Joel. Good morning, everyone and thank you for joining us today to go through our second quarter 2020 results and business update. Joining me today is Scott Merkle, our Chief Accounting Officer. We will share recent order trends, what we are seeing globally in our new normal, including a dramatic increase in interest from governments and private industry in the transition to clean energy, and finally, provide 2020 full-year guidance as we walk through our supplemental presentation released this morning. As you can see on Slide 3, our strategy is unchanged and the long-term fundamentals in our end markets are stronger than ever, in particular, around the global movement to renewable fuels, which includes equipment, process, and solutions from both our Energy and Chemicals business as well as our Distribution and Storage segments. We are seeing a heightened demand for our upfront engineering of these solutions and through recent cost-out actions, are well positioned for profitable growth. Let's use Slide 4 to level set on where our existing products and solutions play in this clean energy transition. I have said on numerous occasions that the destination will not rely on one specific fuel, rather, it will be a hybrid solution of all the fuel sources and storage you see on the left-hand side of Slide 4. Our existing engineering and products are able to be used in all of the blue applications or letters A through J for those of you who are color blind. LNG is the most mature of these future power generation tools from a cost and infrastructure perspective. Others are gaining steam at a very rapid pace. There are many forecasts regarding renewables' share of fueling source in the coming decades. One thing they all agree on is that it will be a significant portion of the total power generation in the coming 20 years. On the right-hand side of Slide 4, you can see one example from BP that by 2040, gas and renewables are expected to comprise nearly 50% of the total. You will hear today how our products are being utilized to facilitate this transition. COVID-19 sparked an emphasis on health and clean energy transformation, accelerating efforts and incenting governments to think through investments in renewable energy sources and storage including hydrogen, carbon capture, gas, LNG, CNG, solar, and wind. As the Prime Minister of Norway stated, the crisis we are now in hasn't made the need for transformation smaller, it has increased it. The Norwegian government will spend nearly $400 million on investments to make its economy greener. Governments have been responding on a massive scale with stimulus packages, many of which are targeted to kick-starting or further progressing this transition and to achieve their climate targets. Slide 5 shows countries that have targets of being carbon-neutral or 100% renewable power by 2050 or sooner. These countries are just a subset of the 86 countries that have set a specific climate goal. 68 of them have announced actions in 2020 on how they plan to achieve those goals and to date, there has been over $9 trillion of stimulus measures related to the transition to clean energy and we'll discuss some of these when we chat about the hydrogen boom in a few moments. This is not just about stimulus packages and climate commitments, but actions that drive behavior, including recent laws passed in late Q2. The German toll exemption extension of three years for natural gas vehicles will benefit us in our LNG infrastructure products ranging from LNG tanks for over-the-road trucks to LNG fueling stations, both of which had historical record order months and quarters in June and the second quarter respectively. The United States LNG infrastructure buildout got a boost on June 19th when regulations were finalized to allow for the rail shipment of LNG. We are well positioned with our Gas By Rail product offering and expect that this progress will enhance the transport of LNG in the States and support small-scale projects. The Indian government announced further measures during June to raise the share of gas in their energy mix with a target to increase to 15% by 2030. India's tax rates on both diesel and petrol were increased twice in the second quarter and city gas networks were open to all entities, not just government-approved ones to build infrastructure. Also, in June, Minister Pradhan and the Petroleum and Natural Gas Regulatory Board announced that a new pipeline tariff policy would be unveiled to rationalize gas prices and a gas trading exchange was established. We continue to make progress on the first virtual pipeline in India under our MOU with ExxonMobil India LNG and IOCL including receiving third-party approval from Lloyd's and design approval from PESO for the Chart ISO containers that are being built at our Sri City, India location. And certainly not finally, but my last example today, on June 25th, California passed the Advanced Clean Trucks rule, which requires heavy-duty pick-up trucks to be zero-emission vehicles. This rule will be phased in and supports one of the sure-fire winners in this transition, hydrogen. In the past three to six months, we have seen a significant increase in quoting and order activity for hydrogen. On Slide 6, you can see our product and solution offering for hydrogen, which spans station fueling, storage, refining, and power generation. One of our customers, Plug Power, a leading provider of hydrogen engines and fueling solutions enabling e-mobility completed the acquisitions of United Hydrogen Group and Giner in June. These acquisitions enhance Plug Power's position in the hydrogen industry with capabilities and generation, liquefaction, and distribution. The photo on the bottom right of Slide 6 is from the United Hydrogen location and shows one of our larger tanks. As one of our colleagues at Plug Power said, the Chart 60,000-gallon tank photo-bombed our acquisition announcement photo. So why is hydrogen so in vogue? Hydrogen is an excellent clean energy store for long durations and large energy needs. The net-zero carbon emissions targets you just heard across dozens of countries as well as in private industry are almost impossible to achieve without hydrogen. Certain processes are difficult or expensive to electrify due to requirements for high heat or chemical reactants. Hydrogen can be produced from zero-carbon electricity and used by industry as a thermal fuel. 10 countries in the EU announced plans just this past quarter to invest in hydrogen as part of their overall green energy planning. A few worth noting: the EU launched the European Clean Hydrogen Alliance, which serves as a springboard for kick-starting the industrialization of hydrogen technologies; Australia announced a $300 million fund for hydrogen and there are over $3 billion of hydrogen projects competing for funding and the United States Department of Energy announced plans to invest up to $100 million in two new DOE consortia to advance hydrogen and fuel cell technology R&D. While not as mature as LNG in the evolution of cost and infrastructure, the increased scale and global nature of hydrogen is ramping up far faster than LNG did previously and has expanded to nearly every geography around the globe, which in turn, increases infrastructure and connectivity similar to the LNG infrastructure build-out. For example, the South Korean government will secure enough hydrogen to power 50,000 hydrogen vehicles this year. Hydrogen fuel cell trains are expected to be a key part of Italy's transportation systems and I could go on and on with these examples. For Chart specifically, we are working on hydrogen projects and equipment for China, Europe, India, and the United States. These projects include and certainly are not limited to the following: a first of a kind for a new liquid hydrogen trailer design for which we have received a $1.3 million order in the second quarter; Another first of a kind for liquid hydrogen and LOX pump skid for a space launch application, and multiple new marine liquid hydrogen projects and partnerships are being discussed primarily for shipboard power generation or propulsion applications. These build upon our first quarter announcement of a study with a major cruise line and follows similar applications Chart currently provides using LNG. We're currently working with eight different customers under non-disclosure agreements for hydrogen applications compared to being under four for hydrogen at the end of Q1. We also have multiple internal R&D work underway, which we are not sharing for competitive purposes, but I can share that we have included in our second half 2020 forecast the hiring of eight additional hydrogen engineers. We will also be building a hydrogen test facility at our Minnesota location. The test facility will greatly enhance industry knowledge regarding safe procedures for the design of equipment and handling of hydrogen, which can be applied at fueling stations, transfill storage depots, and other hydrogen plants. Our facility will also be used to test new hydrogen-related products designed and manufactured by Chart. Testing at the new facility is anticipated to begin in the fall of this year. Another hot renewable is biogas and biomethane and we're seeing this gain traction in Europe as it is also a beneficiary of stimulus packages and pro-renewable regulations. Slide 7 shows how our equipment from both D&S and E&C including air coolers can be used in this application, in many cases, as a full turnkey solution from CO2 removal to liquefaction to tanks installation and transport. Currently, we are working with customers on 10 potential biogas plants across Europe and see significant growth potential in these embryonic applications as scale is achieved and plant sizes are optimized. Currently, plant sizes range from 10 tons per day to 165 tons per day. Our quoting pipeline for these applications is above $40 million and realistically, we see a few plants moving forward to order stage end of year 2020. We booked an order with Bright Biomethane in Q2 for one of our tanks, which will be installed at a biogas production site. Hydrogen and biogas, biomethane are part of our overall specialty markets as are food and beverage, cannabis, space, lasers, wastewater and HLNG. You can see some of our specialty market customers on Slide 8. Each of these customers placed an order with us in the second quarter along with many more that we are unable to share publicly. The second quarter 2020 specialty market orders were 39% above the second quarter of 2019 and year-to-date, specialty market orders are 18.4% above the first six months of 2019. Year-to-date, every specialty market except space has had an increase in orders with cannabis up 69%, wastewater 29%, and hydrogen 25% and we just in early July, received a $700,000 order from the Indian Space Research Organization. Water treatment has been a sleeper surprise market for us and we are expecting a high level of related order activity in the third quarter. There are over 10 different municipalities currently looking at water treatment equipment with us in the month of July. As we continue to expand our presence from an application market and geographic perspective, we see new customers who are becoming more familiar with the Chart name. In the second quarter, we booked orders with 132 new customers, bringing our year-to-date new customer total to 260; six of these are specialty market related and include over 50% outside of the United States. As we have said on numerous occasions, our products support our customers in achieving their ESG targets with one example shown on Slide 9. This example from the second quarter was the installation of our doser phase separator VIP tank and inspection system at Cargill's high-speed production line for vegetable oil in Brazil. This packaging line uses lightweight 15 gram PET or plastic bottles operating at 36,000 bottles per hour. This is one of Cargill's measures to reduce their carbon footprint by using less plastic. Perhaps most striking about this ESG example is the annual amount of plastic that will be saved in bottles from the four Cargill filling operations taking this initiative on. That's 1.6 million pounds or close to the equivalent weight of 24 adult humpback whales or 160 elephants. Moving to Slide 10, there is quite a bit to talk about regarding backlog and order activity both from how Q2 played out month-by-month in particular in June as well as the areas of strengthening demand. Let me start with medical oxygen COVID-related demand. The safety and health of our employees is our number one priority. Throughout the COVID crisis, our team members have stepped up to every challenge across every one of our global locations and as a result of the focus on additional social distancing, remote working where applicable, and other protocols, we have been able to continue to manufacture multiple day shutdown at any location in the second quarter. Overall, medical oxygen-related orders generally for use with COVID patients increased 24% in the second quarter of 2020 compared to the first quarter. We saw a peak medical oxygen order month in April with related orders tapering to more typical levels in late May and June. In early July, orders have begun to tick back up for these applications due to round two of COVID hotspots in the United States and Latin America. We are fully prepared for any additional increase in demand and this will not disrupt our other operations. Total Chart orders for the second quarter were $267.6 million with $125 million in the month of June. While down 12% sequentially from the first quarter and 17% down compared to the second quarter of 2019, the June rebound was significant and we expect to see continued recovery in the second half of the year. Backlog of $697 million includes $72 million for Venture Global's Calcasieu Pass project as shown on Slide 10. The top row of Slide 10 shows Q2 2020 compared to Q2 2019 and the bottom row shows Q2 2020 compared to Q1 2020. I would point out the increases in backlog for E&C Cryo excluding big LNG were up 3% versus the first quarter and up 10% compared to last year. It's worth noting that both D&S businesses backlog when using either comparison have demonstrated resiliency through this global pandemic including D&S's record backlog of $157 million at the end of the second quarter. After a slow start to Q2 for HLNG vehicle tanks due to the shutdown of our two major customers' production in Europe resulting from COVID, they both reopened earlier than we had originally anticipated. Additionally, one of our customers is responding quickly to the extension of the toll exemption for natural gas vehicles in Germany. We received a significant 18-month commitment of tanks and shipped our first HLNG tank from our new Italian production line on July 6. June was a record order month in excess of $20 million for orders for HLNG vehicle tanks. In the East, we booked 22 LNG fueling station orders in the second quarter, the highest quarter of fueling stations in our history. This brings our first half 2020 orders for fueling stations to 36 compared to the first half of 2019's 23 station orders. While big LNG projects are pushed to the right by 12 to 18 months, we continue to be bullish on a few of the projects moving ahead to FID in 2021 in particular given that supply and demand will be tightening in the coming years driven by lack of new LNG terminals coming online as well as from the expected growth in LNG global infrastructure and trade. We continue to execute on our deliveries of the equipment for Venture Global Calcasieu Pass project for which the first liquefaction with our cold boxes occurred this quarter. The pictures on Slide 11 show the magnitude of the scale of these boxes. We recognized $23.8 million of revenue in the second quarter related to that project and expect similar revenue levels for that project in Q3 and Q4 2020 as well as Q1 2021. It is our view that Venture Global's Plaquemines project will move forward within the next 12 months in particular with FERC's June 15th approval of their request to proceed with limited site preparation. We also believe that Cheniere's Corpus Christi Stage 3 project and Tellurian's Driftwood Phase 1 project will FID in 2021. The total Chart content of these three projects, first phase only work, meaning, what would be booked at FID in 2021 is expected to be north of $500 million and this does not include the other opportunities we have in big LNG such as international projects, Jordan Cove, Magnolia LNG, and Pointe LNG and while we remain positive on certain big LNG projects moving forward to FID in the next 12 to 18 months, we also are taking advantage of the strong pipeline of small-scale facility activity, primarily for power generation. In the second quarter, we booked a $13.3 million order for a small-scale utility project in the United States. In our quoting pipeline for small-scale projects, there are 48 that have had various stages of activity so far in 2020. These 48 total $775 million of potential orders for Chart content and are geographically broad-based with 15 in the United States, 12 in Europe, five in both Canada and Mexico, four in both Africa and South America, and three in Asia. As mentioned earlier, LNG by rail is a facilitator and potential accelerator of small-scale LNG in the U.S. LNG by rail adds another solution for transporting natural gas into regions within the states that lack sufficient pipeline capacity and need peak shaving solutions. As a reminder, in Q4 2019, we received a $21 million LNG by rail order for a customer in Mexico, which shows the ongoing adoption of the small-scale model. To conclude the discussion on order activity, in the first quarter, we told you about 15 first-of-a-kind orders received, underscoring the amount of engineering work that is happening to impact the clean energy transition. This trend continued in the second quarter with 24 first-of-a-kind orders ranging from an order for dosing tanks in aluminum cans, the two hydrogen examples given earlier, the first liquid nitrogen dosing for cannabis in containers in Pennsylvania, and three new process studies for innovative LNG concepts. Slide 12 shows the demand trends we are seeing in D&S as we head into Q3. The bold italicized font indicates the changes from what we were seeing in April when we talked to you last. The changes in this segment have been substantially positive. I already touched on the order records for HLNG vehicle tanks and LNG fueling stations. Heightened demand for both is expected to continue well into 2021. Additionally, food and beverage recovered ahead of expectations in the month of June with the month beverage tank unit orders being the highest since February. Customers such as Chipotle and Yum Brands have reiterated their 2020 plans for new builds. Overall, industrial gas inclusive of specialty markets has had a strong start to July. The majority of our customers' quoting and order activity in the first few weeks of July has been at or above June levels. Critical care demand for COVID-related oxygen has moved into the consistent category, as I described previously, and finally, China and India each have softened for different reasons. First, India short-term orders have been impacted by the country's shutdown. While we are able to continue to manufacture, some customers have not been able to. We continue to see medium and long-term demand for our LNG products in that region and out of the gate in July in India, we booked the $700,000 space order I mentioned as well as a $1.7 million order for trailers. In China, the second quarter sales of $30.4 million were the highest since Q4 2014 and operating income as a percent of sales was 7.2%, the highest since 2013. China orders are trending to more consistent levels as we head into the third quarter from heightened levels in the second quarter. As you can see on Slide 13, we have not seen any meaningful change in the areas of demand in our E&C businesses over the past two months. Repair work and Sumitomo related work have been helping offset some of the softness in nat gas processing. You may recall that at the end of Q1 2020, one of our four global brazed aluminum heat exchanger competitors had their Japanese certification permanently revoked. As a result of this revocation, year-to-date, we have received $9.1 million of orders from customers that would have previously used this competitor's equipment with the majority of this in the second quarter. We view this as a long-term opportunity to continue to expand our brazed into industrial gas applications globally. June was the highest order month of the second quarter for FinFans. Within the FinFans segment, fans continued to perform as expected. Demand for air-cooled heat exchangers is weak although quoting activity has not softened dramatically. We are seeing opportunities on the process side for air coolers related to petrochem and LNG projects. Additionally, both midstream and upstream customers are working on international projects much more so right now than in North America. For example, we are quoting air coolers for Indian, Middle Eastern, and Southeast Asian re-gas, biogas, and compression work, which we think will be the new trend for many of our customers in these markets. One key element to our strategy has been to expand our long-term agreements to more customers, to include parts, repair and service in the agreements, and target longer durations. Historically, we had few long-term agreements in place and none had a repair and service component. As you can see on Slide 14, in the second quarter, we executed agreements with meaningful industrial gas customers such as Matheson and Praxair. We have added an extensive parts repair and service agreement with a major customer and in June, we completed our first-ever service agreement in Europe with Gasum for parts service, remote monitoring, and calibration for all Gasum's LNG/LCNG stations supplied by Chart to the Nordic countries. Our long-term agreements now touch a broader set of products and are leveraging our medium-term target of over 20% of total revenue in aftermarket repair and service. Our aftermarket repair and service revenue for the second quarter is over 13.5% of our total revenue. This is an increase from both the first quarter of 2020 which was 13% and from the full year of 2019, which was 12.2%. In 2019, no individual quarter was more than 12.8% of aftermarket repair and service. I'm going to turn it over to Merkle. Sorry, I was on a roll there.

Year-to-date through June 2020, we have taken out a projected $61.2 million of cost across the business units, which is a reduction of 25% of our workforce since the beginning of the year. The breakdown of savings and costs by segment is shown on Slide 15. Approximately 62% is from cost of goods sold and 38% from SG&A, which is consistent across the segments, well, corporate SG&A. In early July, we executed on a further reduction in force in the midstream and upstream air cooler business within FinFans to size the business to the weak demand. This equates to $3 million of anticipated annualized savings. Also in the third quarter, we expect additional restructuring charges related to consolidating our Tulsa, Oklahoma air cooler facility into our Beasley, Texas location at which we own 260 acres of land. Annualized cost savings resulting from the reduction of this rooftop is expected to be $12 million and we expect the project to be completed in approximately nine months. We will maintain a small office location in Tulsa for the engineering and sales teams and we are pleased to share that we have been able to offer all of our remaining Tulsa-based team members the opportunity to relocate to Beasley, Texas. There is a more detailed slide in the appendix and table in the press release that provides specific information by segment on cost reductions. Sales of $310.4 million for the quarter resulted in reported earnings per diluted share of $0.57 as shown on Slide 16. Adjusted EPS was $0.63. Severance costs of $4.3 million were associated with our second quarter reductions in force. On row one of the tables, you see the impact of an $0.18 add back for restructuring and transaction related costs. This was partially offset by the completion of the sale of our former Chinese manufacturing location in the second quarter, resulting in a gain on sale of $2.6 million or $0.07 of EPS as shown on row two. On row five, we reduced adjusted EPS for the benefit of our mark-to-market on our minority investments of $0.02 and the tax effect of these adjustments on row six. Our year-to-date EPS of $1.19 is a 12.3% increase year-over-year 2019. This reflects partial savings from our cost out action and as Jill commented previously, we expect gross margin as a percent of sales to expand throughout the remainder of 2020. Second quarter gross margin as a percent of sales was 29.8% on a GAAP basis and when adjusted for severance was 30.3%, a 210 basis point improvement over the normalized second quarter of 2019. Normalized SG&A of $43 million in the second quarter was in line with our expectations and while there are puts and takes, we expect this to continue in the $43 million to $44 million range for the remaining two quarters of 2020. As shown on Slide 17, we had $54.8 million in net cash provided by operating activities during the second quarter, which equates to $44 million of operational free cash flow after spending $11 million of CapEx. Working capital management continues to drive positive cash generation and flipping to Slide 18, you can see our continued improvement of collections from data from our JD Edwards locations. In addition to DSO of 40 days, we also have 25% of our supply base that have accepted our extended payment terms. As a result of a strong quarter, our net leverage ratio is now 2.97, down from 3.12 at the end of the first quarter.

At this point, we have enough visibility to provide 2020 full-year guidance shown on Slide 19. Full-year sales are expected to be $1.3 billion to $1.4 billion and includes $46 million of Venture Global's Calcasieu Pass revenue in the second half of the year. We anticipate full-year diluted adjusted earnings per share to be in the range of $3.00 to $3.50 on 35.3 million weighted average shares outstanding. Our assumed effective tax rate is 19%. Our capital expenditure guidance has increased to $30 million to $35 million from our prior guide of $25 million to $30 million. The increase is driven by our decision to proceed with the parts, repair and service greenfield site in the Eastern United States as a result of the positive reception to our long-term agreements with our industrial gas customer base. The yard will be tank ready by the end of the third quarter and the greenfield building is expected to take approximately nine months to complete. The total cost of this project is $7 million and we have included $5 million of it in this 2020 CapEx guidance. Additionally, there was approximately $3.5 million of CapEx required for our building expansion to house air-cooled heat exchanger product lines that will be consolidated into our Texas facility. We have included half of this in our second half 2020 guidance. With that, I'll now turn it over to Joelle to open it up for questions.

Thank you. Our first question comes from James West with Evercore ISI. Your line is now open.

Hey, good morning, Jill. Merkle.

Hey, James.

Good morning.

Jill, regarding the aftermarket, we have increased aftermarket revenues to 20% of the total, up from the original guidance of 17% a couple of years ago, which is a nice 300 basis point increase. What's the strategy for achieving this? Are there changes in the way contracts or orders are being structured now? Is there an incentive for the sales force? What insights do you have that make you confident we can achieve this? It seems there is a significant improvement in margins overall.

The primary movement for us on the parts, repair and service side has been this additional increase in the long-term agreements that we have and we really had zero commitment on the PRS side in any of the long-term agreements that existed previously and without going into specifics on which agreements have what in some of these, we do have a go-forward volume commitment and in some cases, durations of these agreements are five years versus previously two years plus one. So that is a big piece of this movement from the 13.5% where we are today to over 20%. We also, to your comment, we have changed some incentives with our sales force and there's a lot of activity that's been generated from multiple different customers in different regions. We've implemented various different repair service and refurbishment products. So previously, we didn't do many repairs on our air-cooled products and we're seeing a lot of activity around that given some of the decrement in the market fundamentals for original equipment and so that's benefiting us as well. And certainly to the last part of your question, margins are better across the board on both the D&S side as well E&C side for these types of products.

Got it. Okay, thanks, Jill. I have a follow-up question. Hydrogen is currently gaining a lot of attention. You have the equipment, products, and services to target this market. I have a two-part question. First, what percentage of normalized earnings do you think hydrogen could represent? Second, do you need to make any adjustments to your product offerings to effectively capture this market compared to your traditional LNG products?

In the current environment, hydrogen is a small piece of our total earnings per share, but that's certainly gaining a lot of momentum as described by some of the order activity and the NDAs that we're under in this particular space. We're very well positioned with our current products and solutions and I think the biggest differentiator for us in hydrogen is our upfront engineering capabilities. So we're able to do first of a kind projects that other companies aren't able to say, okay, I have this piece of equipment, but I'm able to offer solution and the design of what that could look like and then we'll figure out how we fill in the supply chain around it. But to be very specific, there are some areas that we are developing internally. Certainly, there is not a lot of hydrogen businesses for sale out there. There is a few, but many of these are early stage startups. So we really feel like organic development given our engineering capability is going to be the primary way we get additional capability and I'll be completely transparent, a liquid hydrogen pump is going to be a huge differentiator for us and that's the number one priority that our engineering team is working on in this space. We're also working on some liquid storage, which will help for a longer haul transportation in both Class A trucking as well as passenger vehicles.

Got it. Thanks, Jill.

Thanks, James. Appreciate it.

Thank you. Our next question comes from Martin Malloy with Johnson Rice. Your line is now open.

Good morning. Congratulations on the quarter.

Thanks, Marty.

I wanted to follow up on the hydrogen area and ask if you could identify a few of those product categories that will be the most impactful to Chart over the next 12 to 18 months. Also, regarding liquefaction, does that involve brazed aluminum heat exchangers, and are you working on a technology process similar to the IPSMR?

So the most impactful in the short-term are going to be the transportation as well as the fueling areas and that really goes to what you hear about almost daily in the news of the development of fueling stations as well as some of these various different transportation and trucking companies that are looking for hydrogen vehicles as a longer haul solution. So we're well positioned with the customers on the fueling station as well as the transportation side of things. Overall, I'm not going to answer the second part of your question because there's some competitive dynamics there that I don't want to give away on the liquefaction, but the short answer is yes. The longer answer would put us into more competitive dynamics that we have a very strong head start on.