Question-and-Answer Session
Operator
Thank you, Mr. Clarke. (Operator Instructions). Our first question comes from Byron Pope from Tudor, Pickering, Holt and Co.
Byron Pope - Tudor, Pickering, Holt and Co.
Good morning guys. John I wanted to get your thoughts for the IES segment for the two big and CO2 membrane systems project that you guys have LOIs for. Could you just give us a ballpark for the milestones that we should be looking for and then to try to think through how that will flow through in the income statement over the next couple of years? Again, I am just trying to look for the major milestones as it relates to those two big projects.
John Clarke
Sure. Byron, to be clear, it is one project that right now is supported by two initial LOIs. The first one was to allow us to begin some of the engineering works that was necessary and then the second was to allow us to begin the purchase of some of the long lead items.
As Patrick said, we believed when all is said and done that this project will be somewhere in the $125 million size award which of course will be the largest one that we have ever signed up. If you look at how that revenue is likely to run off assuming that the project is signed up in total by the end of the year, we will expect somewhere around 75% of that amount of money to be run off during 2009 and as we have discussed before, it is sort of a Bell curve where you get the bulk of it in the middle quarters. I guess for 2009, it would be sort of two, three, and four with ramp up in Q1 and finishing it in as we get towards the end of 2009.
Byron Pope - Tudor, Pickering, Holt and Co.
Okay. That is very helpful. And then the second question that relates to the new implied Q4 guidance and it is a big step up versus Q3 and so, could you just help us with the moving pieces from a top line and from a margin perspective and are we going to get a big step up in margin and yet again I am just trying to think through the Q4 deltas as it relates to implied guidance there.
John Clarke
Well, I will let Andy give you some detail to it but the fundamental driver of Q4 is the reality that finally bookings have hit and we will begin to see meaningful run off of revenue associated with the book of business in IES. We have also thought on the previous call that we have had in the bag a large membrane replacement order that we booked in I think, Q1 that we will not deliver until Q4 which of course does not generate a lot of revenues but is a very profitable piece of business for us.
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