D.J. Monagle: So, if I were to divide it up into packaging versus paper, I am probably 60-40 printing and writing grades and 40% packaging. But in that printing and writing grades, there is still a fair amount of pull for some of the newer products like NewYield. There are some other ones that we are chatting with the customers about. So, the pipeline, I would say is – if you want to look at it on a technology basis, it’s probably 40% to 50% legacy traditional products and 50% newer innovative products.
Doug Dietrich: That’s a big change – I will just add, that’s a big change from where it was before. I would say if you asked us that question 3 years ago, David, that would probably be 90-10, kind of 90-10 traditional legacy PCC. So, that – moving that towards 60-40, but even 50-50, if you look at the technology, the new technology deployment, is a big shift. And so that’s been part of the strategy. Legacy PCC plants, good business, high cash flow, great returns, but supplanting and meeting customer needs with new technologies like NewYield, with NewYield combined with GCC, these are new things. And these are – and we are meeting those customer needs, as D.J. said, for more sustainable products in packaging and cost savings associated with waste streams. And so that’s what’s driving the shift of our opportunity portfolio to kind of 50-50, and that’s where we see the opportunities driving growth.
David Silver: Okay. Thank you for that. That’s great color. And then one more for me, I am going to go back to the FLUORO-SORB opportunity, and it has been covered here in some detail, I understand. But my understanding is when the EPA was finalizing the regulations for drinking water and setting the limits for PFAS content, there was a bit of a tug-of-war between the four parts per trillion level that they settled on and maybe a higher level that would have been easier, I guess for the drinking – the water plant operators to meet maybe on a smaller budget. Just how would you say the FLUORO-SORB opportunity either grows or shrinks, depending on the limit that is set? In other words, I guess the EPA settled on the four parts per trillion, but I think they also set a goal even more stringent, potentially zero in some cases.
But how would you say the thinking of the potential customers shift toward FLUORO-SORB or some of the other alternatives as the tolerances for PFAS content become tighter and tighter?
Doug Dietrich: Yes, I think – so the four parts per trillion, I should get this right, is really kind of the lowest detectable, it’s a non-detect limit. This is kind of being able to detect below four parts per trillion is almost very difficult. So, I think this is kind of – it borders on basically non-detect. What I will say then is that through our trials and through – of how – the work we are doing with our FLUORO-SORB product. By itself, our FLUORO-SORB is able to get to four parts per trillion or a non-detect on its own. It’s very effective the way it’s designed to be able to deliver results to that level. So, we are confident that with this regulation that municipal water – and they are all different. There is different utilities.
There are different configurations and capital. We are working through all of that right now. But on a new installation or a new physical remediation plant at a municipal water, FLUORO-SORB would be able to take it down to four parts per trillion. So, we may be used in conjunction with other media. We may be retrofitting into existing equipment. There is a whole lot of things that are going on, but we are a very effective product. And I think that will play into the limits that are set. Ultimately, I think if they are on groundwater and wastewater cleanup, it’s applicable in that market as well. So, again, early days, but we have got a good product. But we want to continue to test. We want to continue to work with agencies. We want to continue to work in states.
We want to – we are working with municipal water to ensure that this product is going to meet those needs. But right now, after the past couple of years of trialing, it looks like a really good product.
David Silver: Okay. Great. Thank you very much. I will get back in the queue.
Doug Dietrich: Thanks David.
Operator: [Operator Instructions] We will take our next question from Kyle May with Sidoti & Company.
Kyle May: Hi. Good morning everyone.
Doug Dietrich: Hi Kyle.
Kyle May: A couple of quick ones for me to hopefully round things out. Looking at capital expenditures, they were lower this quarter compared to the last few quarters. Just wondering if we should think about this as a new lower run rate or if this quarter was more of an anomaly?
Erik Aldag: Yes. Thanks Kyle. This is Erik. So, yes, CapEx was a little lower than the run rate, mostly a timing – mostly a function of timing. We are still expecting between $90 million and $100 million of capital expenditures for the full year. So, you will see that ramp up a bit in the coming quarters.
Kyle May: Okay, great. And then also in the Environmental & Infrastructure segment, you noted part of the year-over-year change was the two large remediation projects that were completed last year. Just curious if you could give us an update on your outlook for the opportunity set there.
Doug Dietrich: Yes. Those were large remediation projects last year, big ones, the Gowanus Canal, I think and Lake George, where we were providing some products for that water remediation in those water bodies, also big Superfund sites. And so, we will participate in big projects like that. These are ongoing projects. So, as the next phase comes around, we are likely to participate, continue to participate in them. So, a bit of chunky revenue when you get these big product lines. Those were the two last year. The outlook was pretty – it was a weaker first quarter. Right now, we are hitting the seasonal period for environmental remediation, both from just wastewater remediation, but also lining systems. We have a pretty solid outlook.
I think we said we are going to revert probably back to that normal kind of growth rate for the second quarter and third quarter in this business. The other part, as I mentioned, of this product line is that commercial construction. I think just reiterating that, right now, we are seeing some increase in activity in terms of inquiries, but whether they turn into actual projects later this year into next is a little bit undetermined. But at least there is some increased activity we haven’t seen over the past three quarters, four quarters. So, our outlook for the product line is positive, a little bit of caution, given the consumer or the residential construction, but for the environmental side of it, we got relatively positive two quarters ahead of us.
Kyle May: Okay. That’s great. And last one, I know we have talked a lot about the EPA, but I was hoping if you could maybe just kind of quickly remind us maybe how much of your 5-year outlook includes the FLUORO-SORB opportunity. And then with the actual regulations now somewhat in place, do you think there is potential upside to what you have already baked into your 5-year outlook?
Doug Dietrich: Yes. So, we put in – I think we had a $30 million to $40 million of revenue in the 5-year outlook at 2027. That was a year ago when we – before the regulation was put out. I think we are probably still in that range, could be on the high end of that range. I think there might be upside. I think Kyle, what I will give you is, municipal water customers are going to – by 2027, to have something tested in place, 2 years more after that. So, we are looking out at 2029. I think it will ramp up. It will go slower, then it will start to ramp up. So, I think the opportunity is bigger than that. But I think over the time period in our 5-year plan, that’s what we looked at. If it goes faster and these trials work and our work with EPA accelerates, I think there could be some upside.
But right now, I think we are kind of going to stick to, and we will give you updates as we get through some of these trials this year in that range that we gave you at our Investor Day last year.
Kyle May: Got it. Okay. That’s great. Thank you very much.
Doug Dietrich: Okay. Thanks Kyle.
Operator: We will take our next question from David Silver with C.L. King.
David Silver: Okay. Hi. Thank you. I just had one follow-up. Doug, I was hoping just – you have touched on your business in China at various points during this call, but I was just wondering if you might be able to kind of take a step back or give us a broader perspective. Maybe two things, but just the overall relationship with the Chinese authorities, I mean there is a lot of back and forth on a bunch of different vectors I guess, or whatever, hard for us to judge from a distance. And then, secondly, maybe just to comment on your view of how the recovery or the rebound in overall Chinese economic activity as it relates to maybe your industrial businesses would be very helpful. Thank you.
Doug Dietrich: Yes. I will start with the first question. David, we have good relationships in China. A lot of our business is done in partnership with our customers and joint ventures. These are large employers in the regions, large paper mills. We have been there a long time 24 years, 25 years, we have participated in doing business in China. We are good stewards of – in our mining operations. From an environmental standpoint, we have recently been awarded – we have gotten some awards and recognition up in our plant and kind of close to Inner Mongolia. And so I think we approach China like we approach anywhere else in the world, being good stewards of what we do there, environmentally conscious. And I think that flows through into the relationships we have with the local communities, governments, customers, etcetera.
So, our relationships are strong. And I think that, that helps us through working through new business opportunities in that partnership, having that long-standing relationship and standing in the country. What we are seeing right now is pretty stable. Last year was a – last first quarter was a challenging year, at least in our – in the industrial side of the business, coming through – it seems like a long time ago, but coming through some of the COVID shutdowns through the first quarter. But we saw a stable ramping up, at least in our business, both from a general foundry conditions in terms of demand, but also as we continue to penetrate into the market. There is a lot of room for us to continue to penetrate our green sand bonds into China and also India and into Asia.
So, we will continue to progress there. And that’s what’s feeding a lot of the growth. And so we saw this steady growth and movement throughout the quarters and we are still seeing that steady growth and improvement. Erik mentioned we are seeing – we saw volume growth in China in particular, but Asia in general. In the first quarter, we are going to see that continual general growth. So, from our standpoint, on the industrial side, it’s not booming, but it’s also pretty stable, and we can do a lot of work with that. We are working with customers to save money. We are putting in new blending systems to help with the scrap rates. We are participating in a pretty strong industrial market right now with a large portion of our sales go into kind of compressor housings and big castings that go into refrigeration, and that’s doing really well right now.
So, we have got a really good, stable outlook for China right now. And as D.J. mentioned, we won’t go into it again, but we have got five satellites, three of which are ramping up in the region. And so we have got some good growth ahead of us on the paper and packaging. So, right now, it doesn’t look terrible to us. It looks pretty stable and it looks like stable growth for us ahead through the rest of the year. Long answer, but I want to make sure you got a feel for how we look at China and Asia in general.
David Silver: Very helpful. Much appreciated. That’s it for me. Thank you.
Doug Dietrich: Thanks David.
Operator: At this time, we do not have any further questions. I would like to turn the call back to Mr. Dietrich for any closing remarks.
Doug Dietrich: Thank you, Marie. Appreciate everyone joining today. Hope you have a good weekend and we look forward to talking to you in another three months. Take care.
Operator: This concludes today’s call. Thank you for your participation. You may now disconnect.
