Distribution & Storage ("D&S") segment sales increased 22.5% to $128.7 million for the first quarter of 2013 compared with $105.1 million for the same quarter in the prior year. The increase was led by substantial growth in sales of LNG equipment. D&S gross profit margin was 28.4% in the quarter compared with 28% a year ago. Gross margins improved due to product mix and higher volume.

BioMedical segment sales increased 51.8% to $64.1 million for the first quarter of 2013 compared with $42.2 million for the same quarter in the prior year. This increase is due to the AirSep acquisition that was completed during the third quarter of 2012, partially offset by continued weakness in the European market and the delay in the Medicare competitive bidding process in the U.S. BioMedical gross profit margin decreased to 34.4% in the quarter compared with 38.9% for the same period in 2012. Lower respiratory volume and product mix contributed to the decline.

OUTLOOK

Order and shipment trends are progressing as expected in 2013, with significant growth in LNG and petro-chemical opportunities, including related inquiries. We are reiterating our 2013 guidance with sales expected to be in the range of $1.2 to $1.3 billion. Full year earnings per share for 2013 are still expected to be in the range of $2.90 to $3.30 per diluted share, on approximately 30.5 million weighted average shares outstanding. Included in our 2013 earnings estimates are approximately $0.10 per diluted share for acquisition related restructuring charges associated with the AirSep acquisition. Excluding these charges, earnings are expected to be in a range of $3.00 to $3.40 per share.

Our weighted average shares projection excludes any potential future dilution impact associated with the Company's Convertible Notes and related derivative securities, which is driven by the Company's average stock price and would, if applicable, result in additional shares being included in weighted average shares outstanding. Upon conversion, our hedge on the Convertible Notes protects against dilution up to $84.96 per share, but until conversion occurs, the hedge is considered anti-dilutive under Generally Accepted Accounting Principles and cannot be factored when computing earnings per share.  

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