Good morning, and welcome to the CECO Environmental Conference Call. [Operator instructions] Please also note this event is being recorded. I'd like to turn the conference call over to Matt Eckl, Chief Financial Officer of CECO Environmental. Please go ahead.

Thank you for joining us on the CECO Environmental fourth quarter 2018 conference call. On the call today is Dennis Sadlowski, Chief Executive Officer, and myself, Matt Eckl, Chief Financial Officer. Before we begin, I'd like to note that we have provided a presentation to help guide our discussion. The call will be webcast along with our earnings presentation on our website at cecoenviro.com. The presentation material can be accessed through the Investor Relations section of the website. I'd also like to caution investors regarding forward-looking statements. Any statements made in today's presentation that are not based on historical facts are forward-looking statements. Such statements are based on certain estimates and expectations and are subject to a number of risks and uncertainties. Actual future results may vary materially from those expressed or implied by the forward-looking statements. We encourage you to read the risks described in our SEC filings on Form 10-K for the year ended December 31, 2018. Except to the extent required by applicable securities laws, we undertake no obligation to update or publicly revise any of the forward-looking statements that we'll make here today, whether as a result of new information, future events, or otherwise. Today's presentation will also include references to certain non-GAAP financial measures. We have reconciled the comparable GAAP and non-GAAP numbers in today's press release as well as the supplemental tables in the back of the slide deck. And now I'll turn the call over to Dennis.

Good morning. And welcome as well for me to our fourth quarter and full year earnings update. I'll begin today by highlighting our stellar fourth quarter results, along with some key successes from what was very impressive, 2018 for CECO. I'll follow that with some comments around our end markets outlook. Matt will then provide a discussion of the financial details for Q4 and 2018. And I'll wrap up with a quick review and summary of why we remain excited about the progress and outlook at CECO Environmental before opening up the call for any questions that you might have. Jumping right into Slide 3, I'll begin by reminding you all that late in 2017 we updated our commitment to market leadership in industrial air quality, and fluid handling and our approach to organic growth with our 4-3-3 operating strategy. At that time we announced the wide range of commitments and initiatives to fundamentally transform the focus of and the way CECO does business and place a premium on organic growth. A strategy was designed to drive our value proposition of enabling industrial companies to grow with clean, safe, and more efficient solutions that protect our shared environment. As you're all aware, any strategy and operating plan is only as good as its execution. And I'm pleased to say that our team's execution wasn't just good, it was outstanding. But the definitive proof point being CECO achieved 20% year-over-year increase in organic orders growth for the ongoing business units in 2018, compared to 2017. In short, we were clear about our intensions, we took decisive actions and delivered results. And while we take great satisfaction in that performance, I assure you that we're decidedly not satisfied as we're striving to reach our full potential in delivering top tier returns for…

Thanks Dennis. Like Dennis, I'm very pleased with and proud of our excellent fourth quarter results, as well as the impressive performance for the full 2018 calendar year. Momentum is continuing across the organization as we strive to deliver consistent top tier returns. Starting on Slide 9, it's clear that with the exception of orders, our fourth quarter results were excellent and further proof of the capability of our organization. Starting with our singular soft point, fourth quarter orders were lower than our expectations. We expected orders to come in below Q3, but to be more on par with Q4 of 2017. The refinery market and Industrial Solutions performance both contributed to the shortfall as a few project awards drifted into 2019 or disappointingly into the hands of our competitors. Despite Q4 orders results, we feel good about an improved first half and feel confident about our 2019 outlook. All other results in Q4 were exceptional. Organic revenues grew 44% as both energy and fluid handling grew year-over-year and gross margins were down year-over-year as our original equipment business grew as a larger percentage of sales. We posted $8.4 million of non-GAAP operating income in the quarter, which is up 141% year-over-year and 30% sequentially. This is evidence of our increased operating leverage, which I'll touch on in a later slide. EBITDA margins also expanded by four points year-over-year to 10.6% as our volume grew on lower SG&A. Lastly, non-GAAP diluted earnings per share was up $0.13 year-over-year on volume and restructuring savings. Turning to Slide 10, it's clear that 2018 represents a big improvement across the Board and CECO’s financial performance. Organic orders totaled $359 million, representing a substantial 20% increase year-over-year. Drivers of this performance include our Emtrol-Buell cyclones bouncing back significantly in 2018, strong market share gains…

Thanks Matt. Turning to slide 17, I want to quickly recap our 2018 progress and performance before opening up the call for your questions. For CECO, 2018 was the year of excellent progress and strong results. We entered 2018 with a comprehensive strategy to transform the way we do business and we follow through with stellar execution throughout the organization. Our portfolio and in turn our focus was significantly sharpened with the divestiture of Keystone, Strobic and Zhongli business units. Our efforts are now centered on gaining share in three compelling end-markets and investing in three growth platforms. Removing complexity and driving simplification throughout the organization was a big undertaking that's still underway. We reorganized the segment reporting to the market and began reducing legal entities, ERPs and bank accounts. Our increased agility, efficiency and resiliency allow us to be more aggressive in pursuing market opportunities and responding to customer needs. We placed the premium on our organic growth and that meant a commitment to reinvest in the company. While all of those efforts will continue to gain traction during 2019 they've already helped us to consistently improve our performance throughout 2018. We had an impressive performance scoreboard last year with organic orders up 20% and organic backlog increasing 21% in 2018. Our adjusted EBITDA was down slightly year-over-year, primarily due to divestitures but was up 56% during the second half of 2018 in comparison to the same period in 2017. And through divestitures and strong cash flows we’ve reduced our debt by 35%. As Matt just mentioned, we also made a commitment to our investors with aggressive mid-term targets. CECO’s improved balance sheet means we're in a much better position to seize opportunities in the marketplace for further industry consolidation. In short, we're in a better position to be masters of our success. There's no doubt in my mind that we're hitting on our stride with plenty of opportunity and capability to outperform our end-market and deliver top tier returns for our investors. And now we'd like to welcome your questions. Operator?

We will now begin the question-and-answer session. [Operator Instructions] The first question will come from Carter Driscoll of B. Riley FBR.

Hi Good morning Dennis. Good morning, Matt. Congratulations on a very strong year.

Thanks Carter.

First question, so obviously power gen has been in a multi-year downtrend, just wanted if could maybe push a little further in terms of what you're seeing obviously one of the big three, GE publicly talking about massive restructuring in their power gen business. Can you talk about, maybe the effect of larger scale renewable projects in terms of taking share or competing versus natural gas had to have and then just the outlook in terms of the size of the turbine market you think might come back first versus if you could kind of parse that segment. And just overall give a few more comments about where it was such a big part of your business in 2017, why you feel comfortable it might be bottoming?

Yes, sure. I'll just offer a few data points because you're right, the power gen end-market for new gigawatts in particular really it has come down hard and stayed down for awhile. It has affected the big three OEM significantly, including GE as you mentioned, they were all a very large customer of ours in 2016. In 2016 that’s diminished some with the downturn in new business. Our team in the meantime has focused on our brownfield, a lot of upgrades, a lot of service contracts and really had an outstanding year of picking up share in that part of the world. And right now we see that the bigger guys actually with quite a bit of project activity starting to boil, things that they're chasing, they've been working on for a while, that we think could start to turn around. So my comments about seeing a bottoming are related also to activity that we have with all of them in the pipeline looking ahead.

And just a fruit of that in terms of the brownfield opportunities, obviously probably a bit more of a competitive segment, but leveraging your installed base seems to be a big opportunities, anyway you could think about quantifying what the Brownfield opportunity is at a high level?

We've tried to put a hard metric on that, but it's been a little more challenging because what we've been able to accomplish in mining both our install base and then other times changing-out competitors equipment, it's largely dictated by the operational need on that particular site. So if they're looking to ramp up and down their power, in response to things like renewable and things like that, that can drive higher requirements for emissions where we get called in to do some upgrades. If they're trying to drive more efficiency or more power out of a particular power island, that will bring reasons for us to come in and then there are just things where there is wear out or other activity that we can serve its install base. I'm trying to put that into a predictive analytic, it’s pretty difficult, but there is a large install base of gas turbine power production in North America and throughout the world that we are still getting some good opportunities on.

Is it fair to assume like one of your earlier comments, your prepared remarks about just regular sales calls provides an advantage because of that large install base that you have? Is that fair comment?

Yes, absolutely. One of that big wins that I spoke about a few quarters ago, what was as a result of being onsite and doing some new product upgrades, our guys were asked to come in and consult on a bunch of turbines that had some problems on their emissions equipment from competitor and we managed to not only turn that into some engineering support, but they actually decided to tear out the competitors equipment completely and we came in behind that and put all new Peerless SCR equipment in and out of the site and that really enhanced the production, allowed them to continue to drive high levels of power out of the site. And the owner actually then sold the entire power plant in the coming months, its good win for all of us.

Excellent. Shifting gears a little bit, can you talk about how do you think about reinvestment? Obviously you now have filled the Chief Technology Officer position, I imagine they're going to see a greater pipeline of new introduct, new product introductions but how do you think about what you could? You're trying to build internally versus potentially through consolidation, is your consolidation strategy more geared towards kind of share gains or product acquisition or bolstering a specific geography or some combination there, I am trying to get kind of the build versus buy decision when it comes to that and obviously the debt reduction you've done, you've certainly better financial position to eventually be a consolidator again?

Yes, so I think, first thing I'd like to say is we're down the path at successfully transforming how we do business and one of those things is to reinvest. And one of those areas to reinvest is innovation. Last year in 2018, we spent more time in the area of portfolio management, for example on divesting of business areas that don't fit our vision for the future of the company. At the same time the leadership team and the Board have also discussed quite a few opportunities to enhance the portfolio better, fully serve our customer base. And this is where that can be accomplished be innovation, strategic M&A, or at times a combination of both. So we do have few green shoots on what we're doing, it's early in the development, but bringing that focus, bringing the customer dialogue, I think, is going to help us continue with the long-term growth targets that we have set for ourselves, which is to outgrow the market like two times.

Maybe just the last one from me before I pass along, so obviously one disappointment in the quarter was the orders in 4Q, maybe in particular, is there a way you think you could quantify the political disruption versus kind of the normal course of business in terms of lengthening decisions to pursue particular projects? Was it kind of 50-50, 20-80, just trying to get a sense relative to what your expectations were 4Q orders that were impacted by factors outside of your control?

Yes, so we did expect fourth quarter closings to be down a bit and the pipeline would have suggested that at the outset of the quarter, but 73 million was below our expectations. And if you recall, we had a host of uncertainties going on in the quarter the capital markets dropped 20%, oil prices went from $70 to $40 a barrel, U.S. Government shutdown and trade tensions. So there's a lot of things that were causing people to want to rethink one or two more times some of their work. So, we were thinking we would be closer to last year’s orders number and probably the shortfall was 50% push outs and delays and maybe 50% projects that were lost. But our pipeline looks pretty good right now, we're pretty happy with what we're seeing, there's a lot of activity, still a lot of work to do to secure it. But our markets are essentially large and generally healthy. So we're pleased in spite of that myth in the fourth quarter where we're pleased at what we're seeing going on in the market.

Appreciate you taking all questions. I’ll get back in queue gentlemen. Thank you.

Thanks Carter.

Thanks Carter.

The next question will come from Amit Dayal of H.C. Wainwright. Please go ahead.

Thank you. Good morning Dennis, Matt.

Hi, Amit.

In the context of the lower backlog in the fourth quarter relative to the third quarter, how should we expect revenues to play out on a quarterly basis in 2019? And maybe a follow-up to that is, are you seeing better backlog activity in the first quarter of 2019 relative to the fourth quarter of 2018?

We are seeing a strong and healthy pipeline. I would say that as we think about revenue we'll even to 2019.

And should we be looking at favorable year-over-year comps on a quarterly basis or does that play out in a stronger fashion in the future quarters in the year?

Yes year-over-year we feel very confident about the first half of the year – the first half. And we feel very confident about 2019, but your comp versus 2018 first half are pretty low. So that's why we feel a little bit more comfortable about the year-over-year comparison there Amit.

Thank you so much for that. Your cash flow was very impressive. Your days on hand has gone down to the 50s from 70s previously. I know there is probably going to be some fluctuations, but is this sort of a new trend has there been anything done to keep this steady state, or should we expect some variations in cash flow and working capital management?

Yes, so this quarter’s strong performance is due primarily to some – AR collections that we talked about in that Q3 earnings call. In a project business, you got to be tight on project billings and collections. And we've introduced some new metrics that shown really early wins by the team and that helps to drive a fantastic Q4. But looking back over the history of CECO with a project-oriented business, our free cash flow is lumpy. That's our goal, is over time to be consistent in that. But that means we have to keep growing and we have to be tight. And I like to think about it on a TTM basis. Why? Because it smooths out over time. We'll have some bad quarters like Q3, we’ll have some great quarters like Q4, but all in all a great business model tight or asset light nature.

Understood, just one last one from me in terms of sort of growing the aftermarkets business are there any concrete milestones or plan of execution that we should be looking for, or are you just going with the four three, three effort to maybe grow that business a little bit more this year?

Well with respect to aftermarket, we have close to $5 billion install base of CECO products and related, probably larger slice at times when we can service some of the competitive product out in the market and we've done so. Our goal is to maintain that, to make that a part of our recurring revenue. We have dedicated sales individuals and service individuals throughout the company where we've made investments throughout the past year. The number right now is about 30% of revenue roughly within the way that we look at aftermarket today. We think that’s reasonably healthy mix as we drive for new OE as well that creates new aftermarket that creates new opportunities. And we're also building more wraparound opportunities on some of the equipment successes. Our full solution-oriented projects with multiproduct or even some support and startup within our contracts. So aftermarket is important. It's an area we've invested in over the last several years, it's one that continues to get focused. And we're pretty pleased with the ongoing results.

Thank you, Denis. That's all I have. I’ll get back in queue.

Thanks Amit.

Thanks Amit.

The next question will come from Sean Hannan with Needham and Company.

Good morning Sean.

Yes, thanks. Good morning folks. Want to see if I could go back to bookings again here and try to understand this a little bit better. So I think there are a few comments that we’re in there. And I'm not sure if I fully understand the delta and where we stand right now. So one thing I heard was that there's some viewpoints of there being a temporary nature, which I think is logically understandable given the factors Dennis you'd explained for Q4. And I think we’ve seen that with some other companies as well. So given that now that we've got two months on record here in 2019, is the cadence of bookings coming back? I understand some of those that may have pushed, may have now rolled on and you've been able to take those orders, but is the cadence actually picking up? So that's the first part of the bookings. The second is on the competitive front, it sounds like you lost some and that that was a factor of partly why you missed where you had expected your bookings to come through. Why did we lose any more color that you can provide there would be helpful.

Yes, so first I think yes you heard correctly, the bookings were below what we expected and were planning to deliver. And yes a lot of that was market and things where when the world becomes even more uncertain, people are concerned on their capital projects, it's one more round, let me see one more month of results in my business before I pull the trigger to make some of those investments. And we saw some of that. And as I mentioned, maybe 50% of what we were expecting to do in the quarter was just rolled forward and still in the project activity and therefore our pipeline remains very healthy in the outlook, I would say, suggest that we still have a large and healthy growing end markets for the most part. We don't – we have competitors in most of our fields. You can imagine the power gen area has been particularly challenging in the last year and a half and the like, with the downturn and the like and so that remains the case. And so we do a great amount on significant work of assessing anything that is lost because if we put the effort to go after it to work with the customer, we'd like to think what are the best source and do quite a bit of work. So we have an understanding, enroll those learnings into future opportunities, into future bids, into future set up throughout. It’s disappointing anytime when we lose an important order. But we work really hard to never lose a customer even when we lose an order.

Okay. I think I'm going to have to see if I can follow up offline.

Hey Sean, if I give some numbers that might help. So year-over-year Q4 2017 organic was 85 million of orders, we had 73 million organic in Q4 of this quarter so that's a Delta of 12 of what Dennis was saying. So six of that 50-50, six of it was delayed six if it was likely lost.

Yes, I get it. And that's the history of Q4. I'm trying to figure out why did we lose on the competitive front because it seemed like there was a surprise factor there versus what you were expecting. So I'm not sure if I heard an answer around that. And then number two, here we are in 2019 I don't understand where the cadence of orders are. We viewed it as a temporary hurdle in the fourth quarter and here we are now and it's March in 2019, has the cadence, the pace of ordering, actually been coming back that temporary factor now behind? I'm not sure if I heard anything around that. If we don't want to get into it, we can take it offline and I can move on to another question.

Well, I will just describe what we're seeing today. As you know we don't give formal guidance on unaware, with precision because the lumpy nature sometimes of our end-market and our end-market projects, but we're seeing a very healthy overall pipeline meaning projects that are moving into the direction to close at a reasonable clip. So we're optimistic that will continue out into the quarter and into the year. I don't see any signs of the market slowing, if anything, maybe slow our growth, but we have big, healthy and growing markets for the most part and with few green shoots in new gigawatt type activity in power gen that should also be a plus.

Okay. That's helpful. And so I'm going to switch gears now to product development. I'm really encouraged to hear that there is a stepped up focus here, clearly validates where a lot of the portfolio kind of reconfiguration has gotten too in the efforts you've taken, where specifically in your portfolio our incremental dollars and resource allocation are focused among your segments. How should we think about how you're putting your time into this and dollar is attributed?

Yes. So in the area of innovation and product development, we have incremental resources deployed in all three of the segments. I don't know if that was your question in the area of fluid handling and specialty pumps, some of the areas where we've gotten actual market releases on some new products that are getting good uptake with customers, our dual seal RTA pump or large flow RA pump. These are kind of line extensions that have real benefit to customers and are starting to get some traction in the market, I think you heard and know that we appointed a CTO for the company, we've also added a Head of Product Development in our industrial segment to enhance and bring some focus there. And in the energy segment where we have a lot of long cycle equipment that also can be designed to enhance our aftermarket, the number of ideas being worked as well. So it's really across the board, both with redeployed resources as we've been able to squeeze out of more admin into more areas that we think will drive long-term growth.

Sean, I have some numbers to that, $3 million in CapEx mostly in production, related equipment for the pumps business and roughly $2 million tied to sales and innovation investments around product management, business development, customer service, marketing and brand awareness.

Well, that's very helpful. Great, it looks you folks have been exceptionally diligent and very focused, congratulations. Thanks so much for addressing the questions here.

All right, thanks Sean.

Thanks Sean.

The next question will come from Gerry Sweeney with Roth Capital.

Hey. Good morning, Matt and Dennis, thanks for taking my call.

Hey, good morning Gerry.

Just a couple of quick questions, I'll be brief. The pump business I think saw some pretty good growth in the quarter you mentioned and before you've discussed reinvesting in that business, drawing down lead times, et cetera. Is that growth that you saw in the quarter a direct result of some of those investments and is there an opportunity for that pump business maybe to see a little bit – I don't know catch up growth is the word or maybe continue on the trend that we saw in the quarter.

Yes. So the truth is we're getting some of that growth ahead of and I think I mentioned that 90 days ago as well, kind of a head of really being able to put in a lot of the benefits from capital that has been allocated and both on the front-end and in the system side and into the production environment as we modernize some of the operations within our plants. And so we're still early on getting the benefit of that and that's why we're optimistic, that is we do we will be even more aggressive in the market, trying to gain share and use those niche product lines that we have that are very focused on key applications where there's a lot of activity right now.

Okay. And just expand on the pump side for a second, it just got great margin. So I always like to pay attention to it. You mentioned some innovation on the pumps in there is it just the first real innovation you've seen or actually performed on the pump side is some time or is this anything worth noting on that front?

Well, I think in a number of areas, there's been innovation in some of the portfolio ahead of maybe ahead of CECO acquisition and the like. And so some of these are a part of the strategy to really think and drive organic growth and the Greenfield as I mentioned, earliest on our shortest cycle product line that makes perfect sense. The guys are doing a good job. We've upgraded our engineering leadership there as well and not just on pumps but on our fluid handling business and in some of our specialty filtration line as well, but there were some ideas that are out working with customers, trying to bring back the input so that we can standardize on some really good ideas that the team has that customers seem to like and turn the corner around in commercializing some of those.

Got it. And then, Matt just may be a little bit more of a question for you. Obviously you talked about leverage. Now we're seeing now on the EBITDA margins et cetera, you also talked about removing some of the complexity in the company. Looking at SG&A maybe as percentage of sales is there an opportunity for this to drop or should we look at or is there a – should we look at it as steady, just how should we look at that on a go forward basis?

Yes. SG&A reported, excluding stock comp and depreciation down $2 million year-over-year. I would say SG&A as a percentage of sales continues to shrink because of the operating leverage. We're taking all the savings from the ERP reduction, the bank account reductions, et cetera, and feeding that right into sales and marketing and making those investments. The net is a savings of $2 million year-over-year though, Gerry but we do want to continue to make investments in sales and marketing.

Got it. And then finally, I think I know the answer, but it may be helpful in the call, cash in the $40 million range. How much cash do you need on the balance sheet to actually run the company? And there's some of that cash may be I don't want to say stranded overseas, but maybe just getting overseas over, outside the U.S., what could it be, should it be just from your perspective?

Yes. We have a really strong revolver and we have roughly $23 million outside the U.S. today, of which 25% to 50% is eligible for repatriation. So to run the business across the globe, I really only need, let's say, somewhere in the range of $15 million globally depending upon where that cash is. Obviously with the new jobs and tax act, it helps to remove a barrier to moving cash into the U.S. so repatriation has been a lot easier and, we were able to do it around $15 million. Gerry.

Got it. I appreciate it. Thanks. And catch up soon.

Thanks Gerry.

The next question comes from Tom Radionov of Corre Partners.

Hey guys, thank you for taking my questions. I quickly wanted to go back to the question on orders and bookings. And the reason for that is obviously your business, if I kind of look at it historical pattern here, your revenue trends typically mirror your booking trends, your order trends with – so it maybe to three quarter lag. So it's a pretty good indicator, which I think is why some of the previous questions were focusing on this item. So I guess my basic question is as follows: if I look at the history of this business over the past number of years, I have not seen so many other quarters where there was a seven in front of that number on a quarterly basis. So should we expect on a go forward basis then that maybe this is a bit of a sort of the new normal or is the number likely to be in the 80s, 90s. I know it's difficult for you to get super specific, but in the past three or four quarters you were basically doing anywhere from 80 to 90, or I'm sorry, from, from 90 to a 100. So this is a pretty meaningful step-down. So any sort of incremental color you can provide there will be super helpful.

So let me just open with a couple of things and, and Matt, maybe will add. I'll say again that we have very large and healthy end markets. We have a good pipeline in front of us. And so there's a lot of reasons for us to be optimistic about the outlook. Our long-term targets that we've committed to or to try and outgrow the market, two times what we're seeing in market growth. And we have estimated that to be market growth an aggregate across all of our segments maybe be around GDP or around the industrial growth area. And so we still think that that is the right way to think about it, starting with new orders. And so there's a lot activity there. And so while there is a lag through our POC accounting for a number of our longer cycle businesses, from orders to revenue, we do see a good bit of activity in the market and do see the team executing well on that activity.

Tom, I'll add some numbers to that. So you can go back in time in our presentation and see our orders per quarter split out. And I would say that – I wouldn't say that 70 is the new normal. You can back out the divestitures from the path, as well and we've been in 70. What I point out is that to Dennis’ comments, there's what I call the top of the funnel. So there's a couple of jobs that come in and out of the top of the funnel that can range anywhere from $3 million to $7 million can happen a year push out by given a quarter. So this is – we feel right now very optimistic about 2019 and the first half especially. So I wouldn't say it's the new normal.

Okay, I appreciate the color. And the quick follow-up question around M&A. Curious as you think about the various segments. Where are your priorities in terms of beefing up your business via M&A? And also from a balance sheet perspective, what sort of leverage targets are you willing to entertain in the context of maybe looking to either use some of the cash on the balance sheet or raise incremental debt for M&A?

Yes, so when we think about anything inorganic there, we first off think about how do we better provide good solutions within the target markets that we’re competing and how do we become a better supplier for our end customers, for other new customers in related space, whether they are in North America or other parts of the world. And so it's where innovation, or is that external target and the like, which is the better path for us, for our shareholders, that's where we look at it and how we think about it. And there's a number of areas that we still have very large markets that we compete in product lines that we think can add to the portfolio better impact customers and long-term improve. We have, as I mentioned, updated the criteria and we like and think we would like businesses that have a growth orientation, that have positive end market drivers, that have strong EBITDA margins and cash flows and are asset light. And in the same context of our long-term organic targets that we put forward. Matt, did you want to add something to that?

I would just add that, our current credit facility is tied to the 2015 Peerless acquisition and so as I mentioned in the prepared remarks we'll be looking to refinance that here in 2019 ahead of it coming current, reason being is we'd like to take advantage of the lower interest rates, the better pricing and obviously increased borrowing capacity and better let's call it negative covenants associated with M&A.

And just a very quick follow up question on this. So as you think about M&A, again, in that hypothetical scenario, are you thinking about tuck-ins or could there be actually something that is more transformative in nature?

Right now I would say that there's nothing immediate or the like on the plate. If there was it probably wouldn't be able to speak on it anyway. And we look at the world again and against that backdrop of how do we help our customers in air quality and fluid handling, be more efficient producers and be good stewards of safety and the environment, that's what they're asking for us and that's where we would think of extending the portfolio.

Okay. Thank you again.

Yes.

Thanks Tom.

The next question will come from Tate Sullivan with Maxim Group.

Hey, thank you Dennis. Hey good morning Matt, sorry for keeping it little longer. Just real quickly on the free cash flow quarter and thanks for those comments on what you are doing to credit facility to Matt, but then just can you talk more and sorry if I missed it earlier on refinery order cadence and I mean I don't think your comments about timing was some of that timing up related to refining orders? Are we talking more natural gas or can you get more context for how that can come back?

Yes, so our end-market refinery that is outlined within our – on page seven, about 15% of the total company revenues in the past year. That's a segment where our customers are strong, they're investing and we see a good, outlook for both the medium and longer term. Nothing but you know good output. We are a high share player in the product lines that we participate in that segment. And so we do tend to go with the market. It can be a little lumpy and in this case, the comments that Matt made and then I made, yes, they contributed to the lumpiness if I am right. The activity is good. Most of our customers are reporting good financial numbers don't have any reason to believe that anything but a solid market outlook there as well.

And then just real quickly, we'll to finish up the blend of international versus U.S. opportunities and refining. Is it half and half or can you give a general scale?

Yes, I don't know if I would be able to give you a precise number now, but our business there is very global. I went back and looked at a five, six year history and in some years it's 90% North America and the following year it's 10% North America just based on the demand and we participate around the world with nearly every customer and are on the specification refineries in every part of the world and every part of the country. We're prepared to continue to do that. We had great success with balanced globally last year with the strong orders results that the team generated. Don't see any reason that's going to change.

Okay, great. Thank you for that detail and to have a good rest of the day.

Got it. Thanks Tate.

This concludes the question and answer session.

Okay. Well thank you all for joining us and appreciate the questions. I think I'll just close by again saying that, I think we're making great progress at successfully transforming how we do business at CECO Environmental. We're very pleased with the big improvements and financial performance both in Q4 as well as all of 2018. Outlook, we have large end-markets, they're generally healthy and we're making good progress towards our three year financial target. So thank you all for joining the call and we look forward to meeting with you again next time.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines, have a great day.