And so we remain committed and optimistic about what Asia Pacific can bring. There’s a lot of investment across many different countries, even beyond China that we know that we can participate. We’ve got a substantial presence in the region. We’ve got a good team. And we’re confident that we can continue to grow that part of the business.
Sabrina Abrams: And then as a follow-up, I think you guys talked about this at your Investor Day a lot too, but thinking about footprint consolidation. When you look at your portfolio and you think about what facilities you want to consolidate, are there particular product lines that you’re interested in over others and how do you sort of approach the process of deciding like to consolidate facilities here and there?
Scott Rowe: It really falls under the operational excellence program. And as we continue to make improvements, when we’re driving that productivity and eliminating waste within the facility, we’re naturally generating extra capacity at that site. And so as we expand that capacity across the whole network, different things become available to us. And so I’d say, every year, we’re going to look at doing one or two, some small, some larger, consolidation to make sure that we’re leveraging the scale that we have in driving higher production within our roof line and sites. And so that’s something we look at every single year. We’re in the process of reviewing a couple of new activities at this point right now. And I’d just say, I would expect us to continue that in the years to come.
And then when we think about the portfolio side and I answered this in the previous question, but we’ll look at each of our portfolio — each of our product grouping with a more portfolio optimization mindset. And as we make those decisions that could potentially accelerate some of the facility consolidation as well.
Operator: [Operator Instructions] We’ll go next to Joe Giordano with TD Cowen.
Joe Giordano: We kind of touched on this earlier on the portfolio question. But can you talk to where you are now on cryo pumps as it would relate to nuclear and hydrogen applications? I know there seems to be a bit of a landgrab going on with competitors for those types of technologies and yourselves have done so, too. So maybe you can just touch on where you are over there?
Scott Rowe: So we’ve got two cryogenic pump applications that we’re working on. One was something that we announced — what was that a year ago with Chart, where we bought their IP and we’re now producing a hydrogen cryogenic pump. And that’s for the hydrogen dispensing. So think about like the ability to take from a storage tank or a fueling center and providing dispensing into vehicles or marine assets or things like that. We’re getting orders for that, that product is commercialized, we’re pretty excited about the opportunities there and we’re looking for ways to put that pump into other cryogenic applications in like the production of hydrogen or in the transportation of hydrogen. And so we’re pretty excited about that. And then the other cryogenic applications for pumps is in the LNG side.
And so that’s something that we haven’t talked too much about it but we’re doing internal new product development on that. We’ve got a substantial and ongoing initiative there and we expect to be fully commercialized by the end of this year. And so the focus right now is to get this through the technical evaluations to finish the R&D project and to validate the prototypes. And then once that happens, we’ve got a pretty nice lineup of cryogenic pumping technology that can be used on the LNG side and the hydrogen side.
Joe Giordano: And then one for Amy. Do we feel comfortable here — and I guess there’ll be some volatility, but is 30% for gross margins at a consolidated level kind of like a floor now?
Amy Schwetz: I think we feel very confident about building from where we’re at today. And so I think we’re working towards an exit rate that’s actually above where we’re at today. And really driving a fair amount of that improvement in operating margins that we’re working towards in terms of the 2027 targets through the gross margin level. So yes, confidence at 30.
Operator: Our next question comes from Saree Boroditsky with Jefferies.
Unidentified Analyst: This is James on for Saree. I kind of wanted to go back on the book-to-bill, like your commentary on being over 1 for total company in 2024. So can you kind of talk about how you’re thinking about the bookings and book-to-bill at the segment level?
Scott Rowe: I’d just say, in general, back to the comments before, we’ve got really good visibility. And so that aftermarket and MRO run rate continues and we see that both on the FPD side and the FCD side. And so we see that nice base of aftermarket and MRO work continuing to progress throughout the year. And then from a project outlook, again, that funnel is up 10% year-on-year. We’ve got the $150 million awards coming in April, that will be on the pump side but there’s substantial project bookings in the valve side as well. And so they’re not as large or maybe as big as what we talk about in the pump side but they’re meaningful projects. And we saw a really healthy book-to-bill in FCD to start the year and we clearly expect FCD to be above 1 throughout the full year of 2024, and then same thing on the pump side as well.
And so I’d say today, we have more confidence than we did to start the year that we do — that we’ll have a full year book-to-bill of greater than 1.0 to finish 2024.
Unidentified Analyst: And I just wanted to kind of go back on the like large OE projects. I know that you guys are being more selective in terms of the margin, but I believe those still come in at lower margin compared to like the other projects. And you also noted kind of good feasibility in the large project in the product channels. So kind of how are you thinking about the margin impact from the large OE project kind of going forward?
Amy Schwetz: So I’d start by saying kind of doubling down on the point I made earlier, which is that OE was a large component of our revenue growth in the first quarter, and we were able to do so in a very profitable way. So we’re getting more confident in — that the margins and backlog are strong and improving as we had indicated throughout 2023. So really, the key is right now to continue to focus on growing the OE business at those expanded margins, while at the same time, making sure that we’re looking after the aftermarket components, aftermarket bookings at $575 million this quarter, nice growth there. So as long as we continue to keep a balanced growth profile between OE and aftermarket, focus on our operational excellence journey, I think we’re going to continue to be able to expand our margins while we win that project work.
Operator: And ladies and gentlemen, with no other questions holding, that will conclude today’s first quarter earnings conference. We thank you for your participation. You may disconnect at this time.
