Chart Industries, Inc.

Good morning and welcome to the Chart Industries Inc. 2020 first quarter 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 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 this broadcast will be available following the conclusion of the call until Thursday, April 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 the 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 Ivanko, Chart Industries CEO.

Thank you, Sharon. Good morning, everyone, and thank you for joining us today to go through our first quarter 2020 results and business update. Joining me today is Scott Merkle, our Chief Accounting Officer. You'll hear about our recent actions related to the COVID pandemic, the continued breadth of our order book, and an update on our views of 2020 given the uncertainty surrounding COVID-19 as we walk through our supplemental presentation released this morning. As you can see on slide three, our long-term strategy is unchanged even in these uncertain times. But right now, we are responding to the here and now impacts, as well as preparing for continued uncertainty in our markets from the coronavirus. Starting on slide five, first and foremost is the safety of our team members, in particular, given the fact that our businesses are deemed essential. We have as many team members as possible working remotely, yet we continue to have approximately 70% of our workforce that must be in our factories to manufacture critical care products. Therefore, we have taken the following measures which are just a few examples to ensure the team members. Staggered start and end times of shift schedules to reduce interaction. Broken lunches into rotating groups during the shifts. Designated time clocks by department to reduce community touch points. Enhanced personal protective equipment for all employees. Enhanced cleaning in all facilities and have two deep cleaning companies on call nearby each of our manufacturing locations around the world. designed and installed kick plates on doors for opening and closing without using your hands. And finally, we are providing assistance for our team members to stay safe, not just at work. Beginning March 6th, we suspended the employee portion of our Teladoc fees to support those in need of healthcare assistance while also reducing non-critical hospital and doctor's visits. Given our essential status by all governments in the locations where we operate, keeping our employees safe is critical. in particular as we ramped production beginning in March for medical oxygen products to meet increasing demand. We were able to increase production by 50% in our Czech Republic facility, 63% in our Georgia location, and doubled in our Minnesota factory for these products. We did have a total of 40 non-working days across our locations in the first quarter, for which I will share the operational impacts on a coming slide. Additionally, our team did an exceptional job quickly achieving the ability to use dual certifications for U.S. product in Europe when the urgent European demand exceeded localized manufacturing lead times. To receive this authority from the governing certifying bodies is quite an accomplishment, as it typically would take up to six months. As with all companies these days, nonessential travel in the company is on hold. Last year, we averaged $1.1 million of travel and expenses per month and in March we saved just under $1 million from those expenses. While these are temporary savings, they contribute to our bottom line until the world reopens. We are constantly assessing our manpower needs in relation to changing demand and are able to quickly adapt our variable cost structure. Since the beginning of the year, we have reduced our workforce by 13%, over 600 full-time heads. These reductions have been a combination of direct labor and in response to declining order rates, primarily in FinFans, as well as flattening the organization across all segments and corporate. These reductions have resulted in $49 million of annualized cost savings, of which $12.4 million of the savings were from actions taken this week. We saw $2.2 million of savings in Q1 based on the timing of the early reductions and expect $34 million in the remainder of 2020. The largest reduction was in our E&C FinFans segment, for which annualized savings from the year-to-date reductions is $23.6 million. To give you a sense of the magnitude of the go-forward run rate, in December 2019, revenue per person per year in FinFans was $280,000. Coming out of March, that same metric is $450,000 per person per year. These reductions are in addition to chart-wide savings generated by actions taken in 2019 and in addition to integration cost synergies. We will continue to be agile based on market demand and actively and responsibly manage through this crisis. The 2019 savings are reflected in the first quarter 2020 gross margin and SG&A results. First quarter gross margin as a percent of sales increased 350 basis points sequentially over the fourth quarter of 2019 and 530 basis points over Q1 2019. Each segment's gross margin as a percent of sales increased both sequentially and year over year, with the exception of ENC FinFans. SG&A, when normalized for one-time cost, primarily severance, was $49.3 million for the first quarter of 2020 and included $2.9 million of share-based compensation expense, which only is significant each year in the first quarter. We expect SG&A to continue to decrease further in 2020 as a result of the cost reduction activities we've taken year to date. As we publicly stated on March 20th, we quickly worked with our lender group to amend our net leverage ratio bank covenant for what we refer to as just-in-case scenarios. While we did not nor do not anticipate hitting even the prior covenant cap, we felt it was prudent to get ahead of any extreme downside case given the uncertainty of the coronavirus impacts. Flipping to slide six, you can see that we successfully completed the amendment process on April 20th. Previously, the net leverage ratio covenant stepped down to 3.5 times September 30th, 2020. Our new covenant holds at 4.25 times through 2020 and does not step down to 3.5 until the end of 2021. It is also worth pointing out that our pricing grid is unchanged up to our prior covenant level, which we do not expect to exceed. Once above 3.5 times, there is a new pricing tier as shown in the left-hand corner of the slide. Finally, very little of our existing debt matures until 2024, inclusive of our convertible notes, revolver, and term loan. Our current net leverage ratio is 3.1, and our cash on hand is $89 million as of March 31st. Given our balance sheet, the recent covenant amendment, and our cost reduction actions, we do not currently foresee using the CARES Act. As I indicated, charts business has been considered essential manufacturing at every one of our production sites, not just at the seven locations where we manufacture critical care equipment. In the United States, The transportation of medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19 is considered essential, as are all manufacturers, warehouse operators, or distributors of medical gases and manufacturers of energy infrastructure per the Department of Homeland Security. The same exceptions and approvals have been granted in our Indian and European locations, including in one of the hardest-hit COVID countries, Italy. Yet we did have days where we were unable to produce in the first quarter as we either waited for the approval of our essential status or there was a mandatory government shutdown, as was the case in China. We lost a total of 40 production days in the first quarter across our locations, with 26 of those being in our Chinese facilities in late January and early February. We were 100% operational in China as of mid-February. We do not estimate lost revenue from these 40 days, but rather revenue that pushed out of Q1 to later in 2020. The total revenue pushed out of the first quarter because of coronavirus shutdowns was $7.5 million, with $3 million of that in China. So what does critical care products for medical applications really mean with respect to charge production? By way of background on slide 8, medical oxygen supplied to hospitals must meet regulatory standards to be 99.99% pure and medically certified by the FDA in the United States or to European pharmacopoeia standards in Europe. This oxygen is either trucked in liquid form to the hospital that has specialized storage tanks that feed it into the hospital or is compressed into metal cylinders of varying capacities. Our products for these applications range from microbulk storage systems to liquid cylinders to mobile delivery systems to bulk tanks used as the primary source of oxygen in hospitals. Our microbulk storage systems provide liquid oxygen storage for respiratory applications and can be used for the mandatory 24-hour backup supply of liquid oxygen to a hospital's primary bulk tank. Our perma-seal units are pallet-based and can be installed very quickly on any surface, which are perfect for field hospitals. Ideal for pop-up medical facilities are our medical skids as well as our mobile options. Liquid cylinders can be used to remotely fill liquid oxygen systems in home health care and nursing homes, as well as being manifolded together to supply oxygen in a field hospital. Our cryobiological shippers can be used for the storage and transport of biological samples, including viruses, and recently we sold multiple units for the research of a treatment for COVID-19. The CDC has shared that up to 64% of critically ill patients treated for COVID have received high-flow oxygen therapy. In both Europe and the U.S., there are over 45 million cylinders in use, However, only 15% to 20% of these cylinders are currently certified for medical oxygen service. And as mentioned already, not only are our cylinders certified, we receive permission to produce dual-coated products, which can be used in both regions. Products that we manufacture that can be used in medical applications run about 20% of total chart revenue. This was 21% for the full year 2019, with just under 10% of that in the United States, 7.5% in Europe, and slightly above 4% in Asia. Our customers, the industrial and medical gas suppliers, have reported a rise in recent weeks in demand for medical oxygen of three to five-fold in both cylinder and liquid form. In places like Italy and Spain, hospitals saw oxygen consumption reach as much as 10 times normal levels. Turning to slide nine, our known medical oxygen-specific orders increased 34% compared to the first quarter of 2019, and 29% compared to Q4 2019. You can see each region's order increases in the middle of slide nine. As we have entered the second quarter, demand in this area has increased further, in particular in both North and South America, where order levels month to date are higher than the entire first quarter for medical oxygen kits specifically. For example, in the past week, we've received $2.6 million of orders for medical ready ships for one customer that is responding to the COVID situation in Mexico. Through yesterday, April month-to-date orders for these applications are at 39% of the entire first quarter related orders. We expect these types of orders to return to pre-COVID levels later in 2020. We thank our employees who have ramped up production on our critical care products. There's not enough time on this call to share all the stories of lifesaving efforts to expedite products to hospitals, pop-up medical facilities, and other healthcare locations, but you can see some of them highlighted on this slide. Let me share one additional story. On a recent Friday afternoon at 12.15 p.m., the chart commercial team received a call that three main tanks at hospitals in the New York City area failed. While the reason is unknown, there is industry assumption that they overdrew the oxygen system and it shut down supply. By 3 p.m. that same afternoon, we were able to have 20 Duracells on a dedicated truck, which I'm sure you know is an easy to find given the supply chain challenges of late, that arrived on site the very next afternoon. Our operations team stayed all Friday evening to load the truck, and this typically wouldn't be a headline news story. We hope that these 20 units help save 50 to 70 people's lives. For our cryobiological products, the first quarter started slowly, in particular with the shutdown in China. As impacts from COVID-19 began happening in late February and early March, orders dramatically increased, with total first quarter orders of just under $21 million, a 14% increase over the first quarter of 2019. The demand increase is driven both directly and indirectly by COVID. As mentioned, with China reopened, there has been increased activity from biobanks in the region. We have sold our cryo-bio products to many institutions for COVID research. And as elective surgeries are delayed, we have sold freezers to companies that need to store biological inventory for longer periods of time so those valuable assets do not perish. Flipping to slide 10, it makes me proud to share that while we continue to serve our customer needs, our employees have banded together to identify hospitals and health care providers in our local communities to donate personal protective gear from our safety stock. To date, we have donated thousands of N95 industrial masks to hospitals in each community that we live and work in. We thank those working to keep people safe through this crisis. Let's move from the COVID discussion to our medium and long-term fundamentals, market dynamics, and recent demand trends starting on slide 12. We continue to see long-term strength in the fundamentals of our markets, In particular, the transition to clean energy and the needed infrastructure associated with that. Many have asked about whether carbon emissions reductions targets that were so important before this global crisis will exist going forward. From what we hear, this will be even more top of mind coming out of this crisis, ranging from global leaders seeing more need for energy independence given the recent oil price impacts and that there will be a focus on actions that can be achieved by 2030 versus the longer 2050 timeline. Even during the recent shutdown, the Indian Parliament approved an increase in the excise duty on gasoline and diesel, which will help protect their transition to natural gas. Backlog of $733 million is flat to the first quarter of 2019, which included $135 million of venture global CalcSoupass big LNG orders. As of the end of the first quarter of 2020, there was $93 million of CalcSoupass backlog remaining. which is expected to be recognized as revenue fairly evenly over the next four quarters. When removing that, backlog increased 7% year over year, as shown on slide 13. In DNS West, first quarter backlog of $151 million is the highest in the history of the business, up 19% over the first quarter of 2019. DNS East backlog of $221 million is the highest backlog for March 31st for the segment since the first quarter of 2015, which included a significant portion of PetroChina LNG-related backlog. Also worth noting is that we have not had any material cancellations in our backlog to date. We sold to 120 new customers in the first quarter of 2020, of which 84 were outside of North America. This included 23 new customers in India, 26 in Europe, in China, 12 in Southeast Asia, one in Africa, and one in Mexico. Thirty-six of these new customers were obtained in March. To date in April, we have orders from 29 new customers, as well as a $4.7 million order for an industrial plant application in ENC Cryo, a $3.1 million air-cooled heat exchanger retrofit order for a refinery in ENC FinFans, and a $1.5 million order for a space launch application in DNS West. Sales of $321 million is an increase of 11% over the first quarter of 2019 and flat organically. ENC Cryo sales were up nearly 77%, with the inclusion of $22.9 million of venture global CalcSoup Pass revenue. The first quarter of 2019 did not include any CalcSoup Pass revenue. On slides 14 and 15, we'll walk through each segment right to left from weakening to consistent to strengthening demand. These categories we are sharing are based on the last six weeks of information since the pandemic took full hold of the global environment. In distribution storage west, the product line with weakening short-term demand is our HLNG fuel systems, known to you as HLNG vehicle tanks. This product line has two main sole source customers whose operations are located in Europe. These customers' production lines have been closed for the prior month and are expected to reopen in the coming weeks. Order activity with these customers dropped by 75% over the past four weeks, with our current expectation that orders return to normal levels in June. Assuming a three-month period of this level of orders, our annual forecasted revenue in this product line would be reduced by $15 to $20 million in 2020. We reduced our workforce for this line by 50% early in March to adjust to the current demand situation. We've made significant progress on other potential customers' use of our HLNG fuel systems products. Specifically, we expect customers in both India and Russia to move ahead this year with LNG mine haul trucks and two large logistics companies in the U.S. to add to their LNG fleet, one having recently completed a successful pilot program. Also, late breaking news, yesterday we received formal notice that a second significant patent for LNG fuel systems will be granted to us in Europe. This further enhances our leadership position for LNG vehicles in the region. Dosing equipment, space applications, and water treatment orders are consistent. Originally, I would have thought water treatment being primarily with municipalities would have slowed given COVID, but we booked four different municipalities orders in the first quarter and already one in the second quarter. The reason for this is that municipalities are also considered essential business, and they have a budget with a timeline that is lost if not used. Dosing order activity is consistent with the prior quarter, although we have seen a wide swath of new applications being used for our dosers in recent weeks. In particular, we are working with a fuel additive company, which is a new industry using dosers to help change the way they are packaging their product. Just this past week, we sold our first doser for an eyelash enhancement product. In addition to the critical care products for which I've already discussed the increasing demand, specialty markets orders continue at and above our previously forecast levels. Orders in the first quarter of 2020 were up 9% over the fourth quarter of 2019 and up nearly 11% over the first quarter of 2019. Hydrogen, cannabis, food and beverage, and space all show strengthening demand. Our customers associated with fast food and convenience stores are increasing demand for our products, somewhat offset by independent and casual restaurants that are hit by having to shut down. Customers including McDonald's, Yum!, and Chick-fil-A have all confirmed that they will continue with their new build. Q1 food and beverage sales included strong beverage tank sales driven by Speedway convenience stores that had 3,000 stores with new tanks, each with a new telemetrics feature on the content gauges. Many states that have issued shelter-in-place orders to combat COVID-19 continue to include alcohol, wine, beer, and cannabis in the essential category. In today's ever-changing lifestyle, the demand for canned premium wine has also risen. One of our key customers, the Family Coppola Winery, was one of the first to offer premium wine in a can. We supported the Family Coppola Winery in packaging of their wine in cans with our liquid nitrogen dosing systems. Overall, food and beverage orders were up 17% as compared to the fourth quarter of 2019 and 36% compared to the first quarter of 2019. The reason that food and beverage shows on this slide in two categories is that while we have seen the demand described above, in the past week, beverage has been weaker than typical, as we believe we are now seeing the tail of impacts from the casual restaurant shutdowns. Finally, in the U.S. West, aftermarket service and repair demand is increasing. This is a theme that you'll hear throughout all segments, as there is a trend to utilization of existing infrastructure versus new purchases. For DNS West, parts repair and service revenues increased 11%, with operating income up more than 200% over the first quarter of 2019, driven by increased demand from the industrial gas majors and cost reductions taken in the second half of 2019. DNS West aftermarket service and repair, the percent of total sales was 9.8% in the first quarter, up from 8.2% in the fourth quarter of 2019. In both DNS West and East, we are seeing an increasing number of bid requests for regasification terminals. In the first quarter, we booked the first regas station for the Malaysian region. We are also expecting regas orders for military locations in the United States in the third quarter, as well as quoting on 20 regas stations for South America. DNS East is shown on the second row on slide 14. In the first quarter, We booked 14 LNG fueling stations, which is the same level as Q1 2019, and on par with the average per quarter throughout 2019, which was a record year. Additionally, in April, we received verbal commitment from Shell for the supply of seven LNG fueling stations. Our teams are currently working toward a multi-year long-term contract, which will allow for expansion above the first seven stations. In the Middle East and Asia Pacific outside of China region, March 2020 was the second-best order intake month in the last year, second only to December, which was a record. This region had above-average intake in E&C products, with the sale of a cold box for Korea and a brazed aluminum heat exchanger for IOCL India. India had its second-highest order month in the history of the business in March. We have seen softening in trailer demand in recent weeks. This is not surprising as both 2018 and 2019 were record trailer order years for us, but it is happening sooner than we expected in 2020. Any softening in trailer orders would not be expected to impact 2020 revenue as lead times on trailers are 10 plus months. Moving to our energy and chemical segments and starting with cryo, which is shown on the top row of slide 15. Starting on the far right columns, we saw significant demand for natural gas processing plant related equipment in 2017 and 2018 after a few years of none whatsoever. In 2019, this dramatically fell, with three plants for which we received a total of $1.6 million of orders. Our original expectation in 2020 was five to seven plants being ordered, with none in the first half. Given the current oil and gas situation, we would expect very few to none of these types of orders in 2020, which would impact our 2020 revenue by approximately $5 million. Additionally, we do not expect to receive any big LNG new orders in 2020. Yet there are some positives in the sea of LNG morose these days. Our work on Venture Global Kalksu Pass project continues on schedule, and there are no anticipated delays for that project. This project is $100 million of 2020 equipment revenue. Venture Global continued their offtake streak agreement for 1 million ton per annum capacity on their next project, Plaquemines. As a reminder, VG already has final FERC clearance for Plaquemines. and on projects that have not yet FID'd but continue to progress even in these difficult times. DeLorean extended their 2019 term loan to November 2021. On March 19th, FERC approved the Jordan Cove LNG project. If Jordan Cove moves ahead to FID in construction, we would have $60 million of equipment content on that project. Qatar Petroleum stated that they have zero projects being canceled for the development of the north field, including the second phase. We're currently bidding on brazed aluminum and other equipment content for this project. Moving to the middle column labeled Consistent Demand for ENC Cryo, you can see that global petrochemical applications, industrial gas applications, and small-scale LNG demand continues as we have expected even into recent weeks. While some petrochem projects may have slower schedules, they have all confirmed that they plan to move ahead. Specifically, there are three that we expect to still be awarded in 2020, and these range in chart content from $15 to $30 million on average each. In late February, we received an order of $29.5 million to deliver process design and equipment for a U.S. Gulf Coast PDH plant. We expect $13 million of this project to be revenue recognized in 2020, which was included in our original revenue forecast for the year. The air-cooled heat exchangers for this project have not yet been awarded, and we are in the bid for those coolers, which would be in the $5 to $10 million range. We received LOI for process technology and equipment on EGLE's Jacksonville small-scale LNG facility in January. We expect limited notice to proceed on the project to begin engineering work in conjunction with Matrix in the second quarter. Additionally, we continue to see small-scale projects, in particular for power generation and utilities, progress on their original bid timelines. We have 17 terminals in our 2020 bid pipeline that the operators have indicated continue to have a realistic chance to move ahead to order point this year. These 17 projects total over $355 million of potential order content. Even the major international oil companies that have begun this small-scale journey, as evidenced by the letter of cooperation that we signed with ExxonMobil and Indian Oil Corporation in February, are continuing on their global infrastructure build-out using small-scale LNG in many cases. Finally, our lifecycle business is seeing increased demand, in particular in the past few weeks around repair and service opportunities. There is one potential repair and service project that would be $4 million for which we expect a decision to be made in the next month. Additionally, as many of you know, we have four competitors globally for brazed aluminum heat exchangers. One of those competitors had a regional certification permanently revoked late in the first quarter. As a result of this, we have seen an uptick in requests for bids from their customers that are looking for alternative supply of brazed. Moving to ENC FinFans, shown on the bottom of slide 15. FinFans has been our hardest hit segment to date, not just from COVID, but also from the oil and gas situation. While orders in the first quarter were the highest out of the past three quarters, including $23 million in the month of March, we anticipate that this will quickly fall off, in particular, on the air-cooled heat exchanger side of the business, related to our mid and upstream end use. In 2019, approximately $110 million of our total chart revenue related to midstream and upstream applications. To date, some of our mid and upstream customers have publicly announced CapEx spending cuts of over 30%. As I commented during the COVID update, we have taken over 40% of total headcount out of this segment in the first quarter, and with the possibility of 35% year-over-year order and revenue declines in the air cooler side of the segment, we expect that we can maintain profitability at these softening levels. The fans business continues to breeze along, with our Cofimco fan order level the highest in a year. And like DNS West, EMC FinFans has seen an increase in aftermarket service and repair. Service and repair as a percent of sales for this segment was 26.4% in the first quarter, up from 22.5% in Q4 2019. A portion of this increase is attributable to the strength and demand for fans, and a portion is from our customers looking for creative ways to differentiate themselves in the medium and long term. Examples of first-of-a-kind orders for FinFans are shown on slide 16 as part of the total 15 firsts we had in Q1. For example, we completed the first high-specification vertical order for one of the U.S. Department of Energy strategic petroleum reserves for emergency crude oil storage facilities, as well as putting our first vertical fan into field trials with a key customer. Other first-of-a-kind orders are related to our medium- and long-term market fundamentals that I described earlier. These types of orders, in combination with 35 customers ordering over $1 million in the first quarter, demonstrates the varied applications we play in, as well as the global view that the clean energy transition will be as important as ever coming out of the current situation. A few examples. We received an order for a study for liquid hydrogen-propelled marine vessels, including passenger ships. This order came to us in the last week of March, and while you might think that the passenger cruise industry is completely at a standstill, This further reiterates the clean energy transition will continue as we come through the COVID-19 situation. We booked an order for our first biomethane LNG project in Italy. These plants use biogas from farm fields to generate power. The Italian government recently renewed their subsidies for these applications, so we expect this trend to continue. And finally, we are working with a large retail food company that is in the process of transitioning their larger chicken farms from propane to gas for higher efficiencies. Many of these first-of-a-kind orders support our customers in their ESG initiatives and carbon footprint reductions. Slide 17 shows our 2019 figures, and in 2020, our customers are looking to future applications that reduce their carbon footprint while becoming more efficient. I'll now hand it over to Scott to walk through our earnings and free cash flow.

Thanks, Jill. First quarter 2020 reported diluted earnings per share is $0.24, an increase of $0.21 compared to the first quarter of 2019. When adjusted for one-time costs shown on slide 19, adjusted earnings for diluted share is $0.57, a 46% increase over the adjusted first quarter of 2019. Adjustments include severance for the headcount reductions that Jill described, hard costs to expedite materials related to COVID-19 medical essential production, the mark-to-market impacts from our equity investments, which we explained we would be calling out each quarter regardless of the positive or negative impact to that quarter, And finally, integration costs. The only integration costs included are related to air exchangers, which is substantially complete and expected to be fully complete by the end of the second quarter. There are no VRB integration costs included going forward. Our adjusted EPS does not reflect the impact of the 40 days of lost production in the first quarter as Jill described. To reiterate, the total revenue pushed out of the first quarter because of COVID-19 impacts was $7.5 million. with $3 million of that in China. Free cash flow from operating activities and capital expenditures is $15 million for the quarter. This is inclusive of us carrying additional safety stock in our inventory for critical raw material and components that we consciously chose to increase to offset potential supply chain disruptions. As Jill mentioned earlier, we ramped production for our critical care products in various locations. We estimate $13.4 million of additional inventory for these purposes was on hand at the end of the first quarter. The $15 million of free cash flow is before the $19 million of share repurchases completed in early March. Our first quarter DSO of 55 is a 10-day improvement compared to the first quarter of 2019. And this example of our continued working capital management is one element as to why we continue to expect strong cash generation in 2020. Many of you have asked, what's different about the chart business during this down cycle than in the 2014 to 2016 timeframe? On slide 21, you can see the changes to the composition of the portfolio of products we offer, as well as the acquisition and divestiture activities that have resulted in a much more diverse and geographically broad company. A few specifics when comparing today to the former years. We had virtually no aftermarket service and repair revenue. We are now at 13% of total chart revenue, with a roadmap to over 20%. In the prior cycle, we were heavily reliant on one big LNG project. As you have heard us discuss over the past 18 months, we think of the big LNG as icing on the cake and have a line of sight to growth in many of our base businesses across the cycle. We have a much more diversified global footprint, which accesses applications and projects that previously were not able to participate in. A year and a half ago, we sold into 21 countries. We now work on projects and sell into over 70 countries. Even with these changes, there remains a high amount of uncertainty surrounding the potential business impacts from COVID-19. As of today, we have not seen a meaningful impact on total bookings, although a shift from FinPANS to DNS is expected, and certainly the fundamentals of the business remain very much intact. But because of the high level of uncertainty that COVID-19 has created, we are withdrawing our prior 2020 full-year guidance until we have more clarity on the duration and severity of the situation. While we think it's prudent to hold off on issuing new guidance until the situation stabilizes, we can provide the following data points for 2020 as shown on slide 22. Venture Global's Kepa Sioux Pass project remains on schedule with $100 million of expected revenue in our E&C cryogenic segments in 2020. We are seeing a short-term increase in demand in our medical-related products, as described earlier. We continue to expect strong free cash flow generation in the year, have suspended our share buyback program, and continue to prioritize debt paydown. Year-to-date, we have taken cost reductions totaling over $49 million of annualized savings. This is in addition to the $38 million of savings from cost reductions taken in 2019. Our expected effective tax rate remains unchanged at 20%, for the full year 2020. Our capital expenditures are flexible and we will continue to assess the spend as the year progresses. At this time, we anticipate CapEx spend will be in the 25 to $30 million range. We expect the full year diluted weighted average shares outstanding to be 35.45 million based on our March 2020 share buyback of approximately 750,000 shares.