Good morning and welcome to the Chart Industries, Inc Carbon Capture Growth Conference Call. All lines have been placed on mute to prevent background noise. After the speaker's 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 June 11, 2021. 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 latest SEC filings. The company undertakes no obligation to update publicly or revise any forward-looking statement. I would now like to turn the conference over to Jill Evanko, Chart Industries CEO. Thanks, Lara. Good morning, everyone. Thanks for joining us again. This is going to be a brief overview of our newest investment in commercial MOU with Earthly Labs, and we'll start on slide three. We closed on the $5 million investment for 15% ownership of the company late yesterday and further built on our existing relationship as the supplier of tanks for Earthly Labs' unique small-scale carbon capture solution. On slide four, you can see some of the many food and beverage customers that we at Chart serve with our CO2 equipment. This is just a subset of our food and beverage-related customers, which we approximate that we sold our equipment to over 5,000 customer locations last year. And what do Wagner Family Wines, Night Shift Brewing, Coppola Wines, Tiger Shark, Great South Bay Brewing all have in common? The three things shown on the right-hand side of the page, they are existing Chart customers for either CO2 or dosing equipment, they need CO2 to produce or preserve their product, and they emit CO2 when they're making their product. So here's a problem that we can definitely solve. Why not help our customers reuse their own CO2 where they can have easy access to what they otherwise would need to purchase and address their ESG targets, which are very prominent, in particular, in sustainable wineries and craft breweries? Well, it seems easy, but it isn't. These players need a small footprint, regulatory-required 99.9% pure CO2, something that can be installed in days, not months or years, fits in a very small space on-site, is affordable, and has a reasonable energy draw as power is key at smaller breweries. So please meet CiCi. Shown on slide five, CiCi is Earthly Labs' small-scale carbon capture unit, which is about the size of a refrigerator and can be installed in less than a week on-site. The most commercialized current unit is the CiCi Model Oak, which sells for approximately $100,000 total all-in. A fun story. Why is CiCi named CiCi? So obviously, carbon capture is CiCi. But the fun part of the alias of small-scale carbon capture is that all brewery personnel tend to name their equipment. As CiCi began being rolled out commercially, the Earthly Labs team noticed that it would be named differently at each location. So instead of Frank, Joe, Bob, or some other name, why not make CiCi a common name in the industry for this unit? CiCi has worked with Chart equipment since its inception with Earthly Labs, including Chart cryogenic CO2 storage tanks, vaporizers, and regulators as a standard part of its offering to customers. The commercial MOU signed by our parties in connection with our investment provides a framework to formalize the relationship and accelerate Earthly Labs' high demand into even higher order and revenue growth. Earthly Labs' market-driven solution is unique in the carbon capture space, as you can see from meeting beverage-grade CO2 purity, cost-effectiveness, ease of and quick installation, and fast payback. Another key differentiator and something we intend to build on with Earthly Labs is their cloud-based software solution, enabling real-time CO2 capture insights and ongoing value for the owners and operators. Their IoT platform delivers at-a-glance monitoring on your phone or other device for oxygen levels, pressures, temperatures, CO2 capture volume, and alerts or maintenance notices. Additionally, customers can use this data to gather reporting information that can be used toward receiving benefits of government carbon credit programs. We intend to leverage this IoT platform broader across Chart products and offer this carbon credit opportunity to more of our customers. You can see CiCi on the left-hand side of slide six and Chart's Carbo-Max and VaporMan in the middle, which comprise the three major components of the solution. The next couple of slides, seven and eight, show examples of CiCi on-site at actual customers. Slide seven is Buoy Beer, which utilizes the CiCi Oak in its Oregon brewery. I would point to the middle photo where you can see the size of the unit and how it fits in smaller, more snug spots within a facility. Slide eight is a great example of the way the nexus of the clean revolution is working together. In this case, the state of Colorado did a pilot with Denver Beer Company where the CO2 captured was used in a nearby cannabis grow facility. The result of the pilot was that the plants responded better to natural CO2, resulting in a 2% higher yield. This investment further builds upon our cryogenic carbon and direct air capture offering and solutions. We have a full solution option now at all scales for our customers, inclusive of the process technology itself or an à la carte menu for them to choose from. By offering various purities and cost-effective solutions or engineering a specific design, we are able to address what our customer wants most for their individual carbon capture needs. You've heard me talk about part of our strategy in investments and acquisitions is ensuring a strong leader and associated team. Earthly Labs is no exception. I would point out that in addition to being a patent holder and a very successful entrepreneur, founder and CEO Amy George, and I share a passion for sustainability commitment to advance economic, environmental, and social performance goals, as well as to diversity in our respective industries while offering leading products and solutions. As a fellow female CEO, I'm excited to work with Amy to offer our customers, whether a small business or a multinational, solutions to reduce or eliminate their carbon footprint and waste. As I mentioned previously, those in the craft brewing, winery, and botanical businesses are very conscious of leaving the Earth a better place. On slide 11, you can see some of the new adopters of CiCi. Denver Beer cannabis example that I talked about earlier is shown in the upper right-hand side of the slide. Another example is Proof Brewing, the first craft brewery in Florida that implemented the Earthly Labs solution. They're capturing more than 100,000 pounds of waste CO2, which is the equivalent of 1,500 trees' worth of CO2. Much of this work has been recognized, whether in AB InBev's 100+ Accelerators, where in 2018, Earthly Labs was 21st out of over 300 global entries, or in the spotlights received by Forbes, The Washington Post, and CNN over the past two years. And we are certain that this is just the beginning of how this solution will take hold. Many people have a higher addressable market for carbon and direct air capture than the $800 million that was shown on slide 12. And we don't disagree. It's purely the time horizon we're discussing that makes our TAM not as high as others. But we do expect it to continue to grow as the decade unfolds, in particular as Amy, her team, and our entire Chart team shares the mission to avoid 40 billion tons of CO2 emissions by 2030, with carbon capture expected to provide at least 13% of this reduction. So let's start with the fact that we're continuing to find ways to offer innovative solutions and expand our share of the market pie. Our investment today increased our TAM by $200 million, driven by the existing market adoption, Earthly Labs' commercial pipeline of opportunities, which is over $45 million, and our expected commercial pull-through to existing Chart food, beverage, and botanical customers that I talked about at the opening. With just about 9,000 breweries in the United States and approximately 20,000 globally, in addition to 11,000 wineries in the U.S., you can calculate that this is a very realistic potential addressable market. You can also see the evolution and specifics around our carbon capture market on slide 13, starting before we owned Sustainable Energy Solutions, or SES, where we included our existing equipment offering. In and of itself, the air-cooled heat exchanger offering we have comprises between 20% and 50% of the equipment cost at any CCUS facility. So while that was a meaningful market potential on its own, adding the process itself opened up a significantly greater market potential and also allows us to bid on full projects. Couple that with our investment in Svante in February, and we're finding ways to partner the best of each offering for the lowest CapEx and OpEx with the proper purity for industrial energy, various different applications. Now we're adding another affordable scale solution that expands and penetrates Chart's carbon capture in the nexus of clean power, water, food, and industrials. And to wrap it up before Q&A, slide 14 is one of many that you're familiar with, our strategy circle. You can read how Earthly Labs builds upon our strategy at Chart in each of the gray boxes around letters A through E. I've highlighted a few that are very near-term leverage points for us, furthering our high-growth segment of repair service and leasing with annual maintenance subscriptions and IoT monitoring through Earthly Labs as we leverage their IoT capabilities beyond just CiCi. The link between having the information to support our customers as they report on their ESG or sustainability scorecards, as well as helping them seek out carbon credits, is very meaningful. And the margin profile of the business is well above our average Chart gross margin as a percent of sales, and at the high end or above our two highest margin segments. And I would be remiss if I didn't point out that the boxes coupled with our strategy wheel were substantially thought about by Amy and her team. These are truly believed in between our two companies. Hard to be better aligned than that. So Lara, let's please open it up for Q&A. Absolutely. Thank you, ma'am. At this time, just to remind everyone, in order to ask a question, you can press star on the number one on your telephone keypad. Again, that's star on the number one on your telephone keypad. If you would like to withdraw your question, you can press the pound key. Your first question will come from the line of Connor Lynagh from Morgan Stanley. Your line is now live. Go ahead, please. Yeah, thanks. Just sort of a higher-level one to start here. One of the questions we've been getting on your strategies as far as these MOUs and investments versus acquisitions go is what dictates when you do what? So could you maybe discuss why you went the minority investment route here and how that sort of comes about versus some of the more just MOU or full-scale acquisitions that you've done historically? Sure. So first and foremost, if somebody's not ready to sell their full company, you can't really get there on a full acquisition. But in this particular scenario, we do these investments and acquisitions through our industry contacts. So we're very familiar with the companies, and this one came about the same way, and there are no bankers involved in these. So we're very familiar with the go-to-market strategies of each other's companies. And in the case of Earthly Labs, we certainly are very interested in owning it outright, and we'll be working with Amy and her team to try to make that happen in the future. So with that said, this was a good starting point. We felt like this was a good and realistic valuation in connection with having some of the minority position. There's also ways to continue to help grow the business, and that's through our manufacturing capabilities. And we also, in this particular case, find this to be a really unique solution with no competitors at this particular size, scale, and purity. So that's a very unique position to have ownership in. Whereas in the cases of partnering without minority investment, either the company doesn't need the investment at that point in time, or there's multiple other parties that are involved, and that's not something that we typically like to get involved in where there could be competition that also has portions of the business, or we're able to accomplish that together without wanting to particularly have a piece of the pie going forward. So ultimately, in many cases of the investments versus a full acquisition, it's where the business is in terms of their maturity and growth and how they want to approach the market, whether from an entrepreneurial perspective and then eventually in the structures. We tend to have a right of first refusal on purchasing additional shares. Got it. That's helpful, so I'm just looking at the TAM slide here, and basically, I'm wondering if you could just illuminate a little bit what the sort of size of a typical project looks like from a Chart content perspective, and maybe if we're looking at this list of brewery, winery, agriculture, residential, how big, respectively, do you see the opportunities of those specific end markets? Yes, and one of the things that we really like about this particular solution is my comments around the affordability and the speed with which it can be installed. You're talking about really different ends of the spectrum when you're talking about an energy or a large industrial application, which you'd see more on the SES and the Svante side than solving for very specific smaller-scale applications. So that was something that we had been working on ourselves, and we found Earthly Labs to be already in the market and not something that we could have done very quickly organically. In terms of the size, I commented that the CiCi Model Oak that's in the market is $100,000 all in, and the majority of that dollar amount is Chart equipment and will continue to be Chart equipment even more so with the commercial MOU. So we see a lot of this scaling very quickly, in particular as Amy and her team have more access to build the units, and that's one of the capabilities that we bring in our respective shops. On the higher-end side, meaning the higher-size side, if you're talking about, regardless of whether it's Svante or SES technology, in a 10 ton-30 ton per day facility, which is really, in the land of energy and large industrials, pretty small, so a demonstration-size project, the technology itself is going to be somewhere between $10 million and $25 million, and then the Chart equipment content will be somewhere between $5 million and $8 million on that size. And then you can pretty easily scale it up. If you're talking about, in these larger cement-style carbon capture facilities, you're talking about over 1,000 ton per day type of sizes. And in that case, our process and equipment content is upward of $75 million-$125 million in those sizes. So we've been real conservative in terms of the addressable market because we view those larger-scale projects as beyond year three. They do take a little bit longer. So if you were kind of equivocating or equivalent, I don't know whatever the word is, making them equivalent to a larger-scale or a mid-scale LNG project, in terms of how long they take to construct, that would be a similar comparison. And that's why you don't see any significant amount related to that in our near-term addressable market. Got it. Helpful as always. Thank you. Thanks, Connor. Thank you. Your next question will come from the line of Iain McPherson from Simmons. Your line is now live. Go ahead, please. Thanks. Good morning, Jill. Hey, Iain. You talk about the capital infusion going towards expanding, innovating Earthly Labs to capture 20 x the CO2 from larger facilities. Can you speak to how that expansion, in terms of project size, feeds into how much money the company is earning today vis-à-vis the projection and the TAM, and sort of what that bridge looks like from the current customer base to what larger installations look like in the year or years ahead? For sure. So this is a really uniquely positioned offering in that the competition likes to be at a significantly larger level. So some of the larger breweries, the name brand breweries that you would be familiar with, they have a solution that's similar to this, but that particular offering doesn't go lower than 500,000 bbl. So this is really a sub-500,000 bbl type of market approach. And currently, it's 200,000 units or less is where the commercial units, which are dozens and dozens, are already out installed in the market. So as you kind of get a little bit larger, you're now talking about the price going from $100,000- $1 million type of movement when you're getting much higher in the global winery market or the energy agriculture market, and you're really in that 200,000 units- 500,000 units if you're talking about beverage. And I would say on that side of things, the development is pretty near-term. They're talking about being able to kind of roll this out in the next 18 months or so in that size and scale. What we see around the profitability is current gross margin as a percent of sales on the individual units run about 45%-50% for Earthly. And what we see is, as you get more and more volume and certainly as it scales to the higher end, the higher-priced units and the larger units, you're capturing more margin. And a lot of that margin also comes from the efficiencies around the manufacturing that either their outsourced current provider will continue to provide or we will provide in-house. So definitely, margin comes with a little bit of volume and also just simply math on the larger units having higher purchase price. Okay. That's helpful. Thanks. And then I also just wanted to ask, is the plan for this business North American-focused, or does it go globally into Europe? I'm just thinking in terms of in Europe, where maybe more ubiquitous carbon pricing might come sooner than later, that would be an accelerant for this business relative to North America. So just thoughts on the near and medium-term geographic strategy for food and beverage. Yeah. No, it's totally global. And that's one of the things that Amy and her team have needed the support on is literally, we sat down a few weeks ago and we were talking about, "What are we going to do once the investment's done? How are we going to go from here?" And she's like, "I get these calls every day from around the world saying, 'Hey, I want your solution.'" So we're going to be a key enabler in getting the solution outside of North America. They're already well underway in Canada, so outside of the U.S. In the acceleration of the current CO2 capture markets, Earthly Labs is already in discussion with indoor agriculture folks that are doing botanicals, cannabis on off-taking and extraction, dry ice, so recycling CO2 lost back into the dry ice applications. But the most global market, and to your point, is around the beverage side of things. And global wineries, multiples already under NDAs, and the CO2 marketplace, as you commented, in particular in Europe, is very, very interested in getting the CC. And that's also through companies like AB InBev that are global. So there's a great opportunity. And you guys have heard me say this over the last few years where why I love food and beverage is because you have this global, numerous locations. It's not just, "Okay, we do it once, and we put it in one plant, and we're done." Many, many companies have just hundreds and hundreds, if not thousands, of sites around the world. And that's a very, very near-term opportunity for Earthly. Yeah. Super. Thanks, Jill. Thank you. Thank you, sir. Your next question will come from the line of Rob Brown from Lake Street Capital. Your line is now live. Go ahead, please. Hi, Jill. Good morning. Good morning, Rob. On the CO2 TAM, it keeps expanding. Is there kind of a size you think you can get that to in terms of TAM, or maybe is it too not visible at this point? Yeah. I mean, you're saying what could $800 million be, say, in year 7 to 10, or how much of the $800 million do we think we're going to get? Really, kind of how big could that $800 million be? Could that grow to? What do you think? Oh, yeah. That's a very loaded question because I think it can be significantly larger than what we have shown on the page here, and it really returns to, I don't see how any of these 2030 carbon emission reduction targets that private industry and public sector, but really more so the private industry, get accomplished without carbon capture being part of that solution, and whether it's at the small scale, because this is more of the customers themselves have a sustainability mindset in craft brewing and winery, but you're really talking about this addressable market becomes huge when you start getting the international oil companies addressing their existing assets, the industrials going this way. So yeah, I would easily size this thing in the billions for us within the decade as this rolls out. And you've heard me, Rob, comment before that I've said this is about a year behind kind of how hydrogen ramped up in terms of going from this hype to reality in terms of the order book. And we're really seeing the same behavior and activity from customers around carbon capture. They are looking for more kind of plug-and-play answers and standard designs easier than them figuring it out on their own. And that's something that, between Svante, SES, and now with the smaller-scale solution, we're able to now offer, which wasn't something that we had before December. So I'm very excited about it, and I certainly expect that I'll be increasing this number over the next few years. Okay. Great. Thank you. And then I just want to clarify the sales channel for Earthly Labs. You're saying in North America, do they sell direct? And I guess, how does the Chart relationship change that? Yeah, so Earthly Labs currently sells direct to the breweries and wineries and distilleries, and Chart's relationship really expands the access to these types of customers, so we sell both direct and through the distribution channel, and what our intent is to do is to get our direct sales folks up to speed and have this as an offering when they're out with the thousands of customers that we have on this side of things, and also be capable of having that sold through the distribution channel as well, so it's really a broader and more global and higher volume touch points for Earthly than they had before. Great. Thank you. Turn it over. Thanks, Rob. Thank you. Your next question will come from the line of Eric Stine from Craig-Hallum. Your line is now live. Go ahead, please. Hi, Jill. Hey, Eric. Morning. Good morning. So maybe just sticking with the TAM, I know the one area where on slide 13 you're not including it is combination facilities, water treatment, and carbon capture. I would think that that is potentially a pretty large opportunity. Is that something where you would potentially some other things like what you're doing today to get into that, or is that what is limiting you from that part of the market at this point? And how large could that be? Yeah. So we don't have any limitations on that in terms of our offering or our process. And the cool part is we have that water side as well through BlueInG reen in addition to the carbon capture side. The only reason that we haven't included it in the TAM is because we haven't seen commercially anybody doing it and looking at doing it. There's people that are kind of looking at it in hypothetical land, but because this is our near-term addressable market, meaning kind of three years-four years, that's why we didn't include it here. I think it's a huge potential. And actually, the interesting part is most of the people talking about this are industrials that are treating their water. And so they're looking at water treatment in their facilities. Even in commercial retail, you get a series of stores that they now own their own water treatment systems, and they're responsible for water because that's part of their ESG. So through that relationship, we expect to be able to kind of offer this combination. Again, the only reason it's not in here is because I haven't seen something that says, "Oh, here is customer A, and we're close to potentially booking an order." Whereas on everything else on this page that's included, we have real customers in the pipeline that are having real conversations. We're at pricing points, and we're out in the field with these customers. So those are real opportunities, whereas this one, I think, is just a little bit further down the road. Yep. Got it. Thank you. We'll stay tuned on that one. And so this is a little bit away from Earthly, but it does stick to the carbon capture theme. I noticed that one of your partners, Venture Global, has been making a lot of noise about getting into carbon capture. And I'm just curious, given you have a close relationship with that company, what type of opportunity might that be for you if that's something that you're willing to talk about? Yeah. No, great question. And we're very excited that they're going to include that at Calcasieu and Plaquemines. And as you know, Eric, that Mike and Bob, the founders of Venture Global, are very private, hence why they're not publicly traded. So I don't tend to like to speak on their behalf, and we're under pretty strict confidentiality, but I can tell you that we are talking to them about that. Okay. I guess I'll leave it there then. Thanks a lot. Thanks. Thanks, Eric. Thank you. Again, at this time, just to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad. Your next question will come from the line of Craig Shere from Tuohy Brothers. Your line is now live. Go ahead, please. Morning, Jill. Hey, Craig. A little over a couple of weeks ago, I'd asked if a 50%-55% specialty product revenue CAGR through 2024 was realistic. You said a sustained 40%-50% CAGR was plausible. What would it take for you to translate your ongoing TAM updates into a more tangible specialty markets revenue CAGR in the mid-decade? At this point, it's about continuing to book orders and execute against that. The pipeline is there. I would say I was talking to somebody yesterday, and I said, "This looks like this is setting itself up for the next few years to be the perfect storm," as I said, where you still have a lot of folks in the market that are addressing current power energy needs with whether it's traditional oil and gas or LNG. You've seen the Tellurian announcements this week all the way through to everybody that is looking at going to more cleaner solutions. So you have the here and the now happening, returning to us, and then at the same time, the growth in these other cleaner applications. And I said, "The perfect storm." And this individual I was talking to said, "Well, I've heard this is going to be the roaring 20s." So that's kind of how we're thinking about it. And we opportunistically are looking for these types of further penetration of our process and our equipment, like you see here with the Earthly Labs deal. And super excited to have this solution to be able to offer. I mean, Craig, you've heard me say, "I mean, why is no one solving for I emit CO2 in a brewery or in food and beverage application, and I need it to make my product?" And to me, these are just really easy, and having something that's really affordable is just great to have into our portfolio and our arsenal of offerings. So I don't specifically see anything in particular that we need to go get to be able to accomplish those CAGRs that you're referring to. And you'll hear us as the year goes on, as we start to talk about next year, you'll hear us get a lot firmer around the growth rates just based on the first five months of the year order book and how strong it is. It's the strongest it's been, certainly since in my four years at Chart. Great. Thank you. And also on your expanding clean tech and investment portfolio, I mean, it's clearly the envy of the most successful venture capital firms ever. You mentioned the prospect of buying in the rest of Earthly Labs. Is that a prospect for some of your other minority investments? And to the degree it's not, do you see ultimate monetization opportunities as these minority clean tech investments reach execution milestones over the next two years- three years? Yeah. No, that's a great question. And there's certainly a couple that we have minority investments in that we're keen to have full ownership on. And it's really just based on where the boards of the investments are, as well as where the company is in terms of its evolution of what they feel like they can do, continue to do on their own versus being part of a larger enterprise like Chart. So there's a couple in the mix that certainly those conversations are ongoing, and it comes down to continuing from our perspective to get the right valuations and also whether we can continue to accomplish what we want from commercial penetration of our products and our processes without having to own them, or whether we could really make one plus one equal five. On the other side, the monetization is very interesting, and that's a very interesting discussion. I think that you'll see a variety of different ways that these investments get monetized over the coming decade. And from our perspective, the investments we make, we really look at being long holders because the reason we do it isn't about thinking of it as a VC firm, but rather thinking of it as returning to our P&L through the orders that Chart equipment gets. But suffice it to say that we are also pragmatic and realistic about it, that a lot of these are burgeoning companies that are going to have a liquidity event, and there's ways that that can happen. Some of them I would expect will go IPO. Some of them I would expect that we have a shot later at full ownership, and others have structures where we get minimum returns over the course of time. And then you had asked me, I think, on the last call or a couple of calls ago, is there the chance that you think about the business as the pieces and parts are worth more than the whole thing together? And that's something that you think about, but at this point, we see more value in continuing to just take advantage of this revolutionary growth that is happening in the clean markets. Great. And last question. You mentioned the roaring 20s, the perfect storm. Seems your legacy oil and gas and tech chem services into next year could be hitting their stride again. You could be getting cash from investments over the next two, three, four years. Large-scale LNG could kick in again. Your small-scale LNG and storage and distribution services and products continues to have growth in transportation and power and everything. And then we've got the whole specialty markets we've been talking about, and it's all higher margin. So I guess my question is, you're not going to be able to consume all this free cash flow with $5 million, $10 million, $15 million investments, and there may be a point at which those even stop. What are you going to do with all the money? My answer today is I want to actually have all the cash generated that we forecast will be in that case. And once we have that and have accomplished that, then we'll certainly address that in a variety of ways. We do have multiple different scenario plans around what that could look like, and there's nothing that is off the table with respect to how we might give shareholders returns on that cash in different ways than we've done historically. I won't get into specifics around that. Right now, our job is to prove that out and earn that cash and make that cash, and also coupling with that, really take advantage of this phenomenal growth that's on the horizon and in the market. So that's what we're executing against right now. But certainly, shareholder return is top of mind for management and the board. Great. Thank you. Thanks, Craig. Thank you. And again, at this time, just to remind everyone, if you do have a question, you can press star then the number one on your telephone keypad. I believe that would be for our last question. Again, thank you everyone for participating. This concludes today's conference. You may now disconnect. Stay safe and have a lovely day.