William Peterson: Yeah. No, that’s a good additional context. Just how to think about the fourth quarter, you — at the time of the symposium, you took down your numbers through the bottom end. But presumably, the headwinds you talked about with hydrogen is impacting your ability to provide fuel cell systems for the fourth quarter. So I guess, walk us through, if you could, revenue assumptions maybe by product type and how we should think about how the fourth quarter could evolve, given all the puts and takes you talked about with all the issues in hydrogen?
Andrew Marsh: I’ll take that one, Bill, because we spent a lot of time thinking about this. So I think that if you think about as a base of $1.2 billion, where are the risks in the $1.2 billion for the year? Because of hydrogen, — and I think I mentioned earlier in this call, we think there’s a risk of circle $50 million in our traditional business. And we also — when we look at our cryogenics business, which has really been one of the strength this year, and there’s some timing on some deals where we think $50 million could flash and go into the first quarter instead of the fourth quarter, they’re really the two items we’re looking at and really watching closely. I think we’re feeling good about our electrolyzer business.
We feel good about the revenue, all other revenues in our trailer business, our other activities in our cryo business, but that’s really kind of the breakdown we see. So if you think about that, we think 60% of the business when I outlined those numbers are for electrolyzers, for cryogenic equipment and 40% is our traditional material handling business. So that’s kind of the give and take from 1.1 to 1.2 (ph), Bill. Does that answer your question?
William Peterson: Yeah. No, that kind of disguise some of the risks associated with the rest of the year. It sounds like electrolyzer is still — you feel good about that if I can paraphrase.
Andrew Marsh: Yeah. I mean, look, I feel really good about material handling. I just got to make sure that we feel real good about electrolyzers. We feel really good about some of the expansion activities with our cryogenic trailers. We have this liquid refueler, which is for buses and others. It’s really sold, and we can’t make enough of them So we really do feel good about those things. And I have the parts built for material handling. It’s just a question of making sure that we can bring them online in a way that meets our customers’ needs.
William Peterson: Thanks, Andy.
Andrew Marsh: You’re welcome, Bill.
Operator: Thank you. Our next question comes from the line of Chris Dendrinos with RBC Capital Markets. Please proceed with your question.
Christopher Dendrinos: Yeah. Thank you. I guess I just wanted to discuss the hydrogen availability situation. Obviously, the force majeure events are — they’ve been recurring kind of throughout the year. When you think about that business and sort of your suppliers, is there anything you can do, I guess, more that could be done to ensure stable supply? Is there like the ability to have some backup suppliers or anything like that, that you can speak to? Thanks.
Andrew Marsh: Yeah. So Chris, I think what we’re doing, I mentioned three items. There isn’t — there is an additional hydrogen available. I was talking to someone today who told me they couldn’t get any hydrogen. When I — when we look at it though, our plants coming online, help a great deal. Having Tennessee and Georgia that provides us 25 tons of hydrogen. Bring St. Gabriel’s up in the second quarter brings another 15 tons of hydrogen, that’s 40 tons. I met with one of the major — one of the other major hydrogen suppliers in this industry, the President of their Americans operations on Tuesday. We sat down and they’re bringing online at 30 tons by putting SMRs in to replace some waste stream stock that hasn’t been coming.
So I do see that by the end of January, there is additional 55 tons. And just to give you a feel, 55 tons is probably approximately another 20%, 25% of hydrogen availability. Now we’re going to use more hydrogen next year. We are projecting that our hydrogen needs and demands will grow by 40 tons by year’s end. And that’s why Texas is so important to us to bring that online. And that will — we’re working through that one, but that one is really, really will be critical for the second half of next year to make sure that by the late fourth quarter that’s able to produce to support the customers. So the good news, Chris, is that this is not going to be an issue on January 1. we just got to work through the final stages here.
Christopher Dendrinos: Got it. Okay. Understood. And I guess maybe just as a follow-up, maybe on a slightly different topic here. It’s just the equipment sales margin in the quarter, it looks like it was negative. Can you just walk us through the dynamics of what’s going on there? It sounded like it might have been mix related. But I guess, any just additional color on what’s happening in that segment? Thanks.
Andrew Marsh: Paul, do you want to take that one?
Paul Middleton: Sure. So any missions about some of the programs that pushed, scale matters for us. When you think about these manufacturing facilities we have and driving volume leverage, that’s important. So that’s part of the driver. Other part of the driver is some of the costs associated with launching these new programs, especially some of the early pilot programs. I always say it’s hard to make money when you build one of something. But as we start scaling this up to hundreds and in thousands, you really start to drive not just volume leverage but supply chain leverage and you can drive improvements in your manufacturing processes. And so those were really the key drivers this quarter, and we certainly expect that to be meaningfully better in Q4, given the ramp of these equipment sales. And then you’ll see that ramp even more so in 2024.
Christopher Dendrinos: Got it. Thank you.
Andrew Marsh: Paul, I think it’d be fair to say also that $50 million material handling revenue would have flipped it the other way.
Paul Middleton: It certainly would have been super helpful in moving that right direction, Andy, yeah.
Operator: Thank you. Our next question comes from the line of Jordan Levy with Truist Securities. Please proceed with your question.
Jordan Levy: Good afternoon, all and appreciate all the color. Maybe just a high-level kind of strategic sort of question here. If we kind of look out to 2024 and recognizing you’re starting to get in some of your own volumes online. But some of these other issues in the network persist on the supply side. I’m just curious how you think about sort of balancing growth in the materials handling side versus timing of your own plants ramping and whether it makes sense to materials handling down a bit as you kind of bring on your own supply and that sort of thing?
