Capstone Green Energy (CGRNQ) 12 Aug 212022 Q1 Earnings call transcript

Good day, ladies and gentlemen. And welcome to your Capstone Green Energy Earnings Conference Call and Webcast for the Financial Results for the First Quarter Fiscal Year 2022 ended on June 30, 2021. All lines have been placed in a listen-only mode, and there will be a question-and-session following the presentation.

As a reminder, today’s program will be recorded. At this time, it’s my pleasure to turn the floor over to, Mr. Counsel. Corporate Petersen, Colby is floor yours. the Sir,

much. Thank for and you afternoon, today’s you fiscal very joining call. XXXX thank conference Good first quarter

June the quarter and Executive and the today XXXX. Energy’s On Capstone the Green XX, Chief me Securities Jamison, its Today, ending quarterly with Green earnings fiscal XX-Q issued Capstone with release Financial is Officer. for President its and XXXX Exchange Officer; Darren Chief on Commission Energy first Eric filed Hencken, and call report

We under section that to any these or obligations future our call. XX, will the call slides be can or representing views statements update today to to want reflect statements this company’s be referring August the XXXX. to as contains Capstone found on forward-looking today, circumstances. events revise estimates remind I during disclaims website everyone that Relations and Investor the of

Executive mention the in the or like President now call they differ materially and and they appendix. from they unknown discussion are turn on by that the concerning should could Chief results EBITDA Darren place to to Exchange statements and undue Please cause reliance presentations and on Please Darren referring adjusted forth reconciliations control. Harbor some other those the implied Capstone’s actual filings factors EBITDA, in over that information forward-looking X Securities these Commission the Jamison, I and statements. when refer to today, Safe and factors Provisions involve because as are, expressed to and for note such Eric beyond our through our to uncertainties set You Slide that known cases, would Officer. in with not risks, go

fiscal for results, Good Colby. Thank everyone. quarter June review a you, Thank of ending XX, our first joining today XXXX. XXXX you for afternoon,

the have to million gross quarter the the to the in product quarter goals. U.S. I bill first rebound by million orders in execute the $X.X megawatts XX.X the run end new Asia for last Australia, $XX.X was ongoing the fiscal to shipments quarter Europe, fleet negative impacts If ratio Slide of up this not XX% markets Book before despite fiscal was to from the from of from our quarter, during Latin was the as XX megawatts like to The XXXX XX, pandemic, rental continues continued March continued COVID-XX to financial you X.X plan million pandemic. long-term an to Total company overview megawatts XX.X the and orders gradually megawatts the the year, compared started increased through highlights increase quickly to turn and against as will for revenue by X, X.X giving mention $XX.X fleet and year, the microturbine to key America, XXXX. impacts

Turning to company the XX, quarter. of of accelerates fleet. continued focus the of expansion million, as cash compared $XX.X to million million end the balance sheet, finance a Cash June equivalents the decrease by XXXX, total $X.X slight cash the provided last $XX.X of at and were remediation as defective the ramps in the activities it to rental up part during as and the field, million strengthening $XX vendor quarter, the long-term on was the liquidity of

the We and business our our remain out as total expand enhance go on our market addressable for around advantages, and strategic focused recently X, goals Let's TAM globe. to laid deliver turn our we’ve or reminder, goals, to a Slide competitive sharply XXXX. fiscal

XXXX I and green and executing out set on will Capstone the is beyond. in believe strategy by leader energy be a positioned goals fiscal Our as

year. diverse services and we'll through do our is continue do broadening goals, which energy we first fiscal our to through to products Let's started the and quickly run

we as sales XX improving megawatts, more to more for orders, and improved to rental solution direct discussed add managing revenue, capital to and focusing that as strategic customer terms. increasing drive parts continue the on top-line margins long-term Expanding headcount repeat on fleet goal. inventory New and team working your that aftermarket focus space satisfaction in escalating growing availability

Distributor DSS branding drive Lastly, Support subscription growing System the to efforts. acquisition or customer program and marketing,

top-line hand accelerate each Energy. with turn Now lines. our business offerings Capstone customer, strategic Capstone and view X, to let's strategic goals our business Corporation four with it of opportunity to we our go Turbine ahead our This in important and April because to in XXXX, Slide transitioned key from in now growth. goes hand growing expand revenue Green is We

FPPs, all service Let's rates. includes installation financing, energy PPAs, leasing, to in line our DSS margin long-term rates. a to and parts, flows steady one services, businesses service denominator among these fee. service, long-term critical and transition subscription common and or predictable contracts, visibility cash addition cash more This or flows, to distributor increased higher margin spare is EAS. business The rental project This a is contracts as begin with continuing our higher

energy. a generating on key products offering. fuels. Next We is ECT, our and recently was These and Technologies is Capstone’s with, can and products based which CHP technology foundation on of is wide produce all built, efficiency CCHP, electricity in Conversion range core Capstone forms this of familiar our on microturbine Energy or to added the multiple operate high which thermal you're two

over First from loads unable turbine as were a to under important loads which is target needs our huge before been This are needed. power megawatts X customers ranging us X gives to address XX megawatts. much target megawatts, also of but many for is lineup, now. X megawatt, bigger higher we've have a solution of This customers

B+K and partner decentralized moving fired other now CHP residues an commercial B+K, that OEM microturbine. into which The into is in production Capstone innovative wood is heat second externally Europe, an is convert from systems electricity

talk be in fourth of to needs. energy Slide maximize hydrogen nano a a efficiencies, and before, out or we're Moving on storage growth most line products Many now ahead previously technologies, even systems again ESS, know using shareholders key But and I'll let’s We'll monitoring a go sustainable I Solutions create exactly clients' business tailored or of but turn to one lower understand first doing. them software grid. and to as are combination minutes. X six energy X. Slide to about important is energy storage, grid I the meet Energy we emissions, Storage what custom resilient factors. additions micro them a the seen that want see that multiple of set to earlier, you've and mentioned few we've and specific

is our strategic sales started of goals we new direct which ago, the year. approximately for is the First team which a year one

we grid large long-term micro earlier, new targeting rentals mentioned As are and products, repeat customers.

lower our about simply is seen warranty quarter, customers. Second supplier, new forward, repeat to parts higher getting which margins, which FPP simply quality I and put, in more building part we'll you've going think is the improving this see reliability, better

this shots XXX% customized new Fifth parts long-term website and programs, The and our hydrogen. be and here fleet. and update, impacts marketing This services. contribution Green in can five slide focused customers with long-term wanted Particularly in released is on moment. the way markets an Europe, FPP pricing least do campaigns, and greater distributors. key a economy target expanding On program, the large need sales, year. and building accounts Gold new product Eastern unique in contract, strategy, fire East. more X, X is is Capstone new better over new a goal we deploy hydrogen and coming Energy with C-XXXX what C-XXXX Third, year megawatts targeted grid to of expanding means adding is that Africa hydrogen to product run we to national operating cannot significant rental. digital our per period awareness micro it overlooked. detail a at at a find product and margin Slide and Middle shows revenue rental our geographies, our we be account with of can with And are branding and the more line These a IndyCar for in Fourth we C-XXXX on a distributors try illustrating new business both particularly is of for which to Key will on and goal prime which of initiative spare

numbers a revenue, generate a year margin as clear XX% why themselves. for financial speak the which for $X.X now Over building the a product is spare is can approximately rental approximately fleet, with contract and of of XX% one the a call discuss with over generate the of is and goals approximately a and But our revenue parts million percentage Capstone C-XXXX a why as $X.X key approximately of revenue. million with beyond. in or of I'll with of margin, of of margin C-XXXX $XXX,XXX good. revenue here margin period, can We $X FPP the quarter. been five a turn the details percentage first XX% product year margin percentage million of illustration with as of our Eric, results the to revenue. $X.X think to Eric? a $XXX,XXX generate approximately the And rental C-XXXX strategic approximately can with the margin we've of long-term million revenue, sale for

Darren. review quarter in first highlights fiscal the XXXX. our financial for Thanks, detail I’ll now

the XXXX, compared had COVID-XX fiscal impacted million the XX% Turning delays. million $XX.X to in financial $X.X more accessories to which Product million in of first results of fiscal from first project quarter Slide XX% for XXXX. XX, you'll and as by year the revenue quarter up quarter $XX.X of prior see fiscal at up was the first heavily was $X.X million revenue quarter the XXXX,

where ago service due X% down subscription FPP other year revenue to lower first margin XX% fee year a percentage business COVID-XX we support in the quarter our fiscal XXXX. things. $X.X Gross such service long-term as was distributor of million, being period, pay among and million XX%, revenue $X.X was the from measures due of plan, contracts, Our and up to cost travel parts prior in furloughs, restrictions, our includes as the continuity saving expenses rentals, from in which cuts, implemented primarily

year the ago million the lower in FPP quarter of year plan. parts fiscal Costs the $X.X COVID-XX pandemic. due XXXX million year because in period. first Additionally, of continuity were prior margins from to operating COVID-XX our the in where from business timing lower were Total the increased shipments the shipments, restrictions prior due $X.X expenses have we quarter fewer to to $X.X in part million

expense. second Additionally, of to a first expense in compared for quarter loss of year's last fiscal XXXX. loss Net hitting quarter. the the net the million of expense in we million $X.X was have of with quarter, stock $X.X $X.X quarter million $X.X majority the immaterial the year in of that expense was prior IndyCar’s on which the of million IndyCar quarter of

of First was loans of the expense partially fiscal quarter from fiscal our million XXXX. business from Adjusted the QX business discussed compared fiscal EBITDA of gain quarter EBITDA $X.X by benefited to above. continuity negative for in the expense COVID-XX were forgiveness recognized plan, offset reductions PPP fiscal XXXX from adjusted benefits from XXXX the reductions the plan, $X.X million the Again, benefited of gross first the first margin of quarter XXXX. in COVID-XX plus continuity

fleet Turning $XX.X driven which balance partially vendor public the field, loss, in XX, million earlier Cash by million due sales $XX.X the select as rental sales defective coming accrued June of well was continued offering. our and this up the inventory, in quarter and sheet as by we part changes used growth to our XX, building relatively at compared through delayed for million $XX.X see we raised to cash plan the flat quarter the Also operating to fourth XXXX. flow pandemic, replace product fiscal quarters. driven quarter, primarily of March net to the $XX.X working The and to in Darren quarter. planned the a cash in remained million in receivable use cash remediation XXXX. build capital in collections experienced COVID-XX Initially increases the the at as accounts lower was was than product anticipated cash we for used due in items. the well Slide the net you'll as for activities mentioned

focus We and liquidity mindful of to net cash are continue on position. our

demonstrating business the have Turning have XX, our another can we impact P&L. slide the Slide on rental to

rent. the a an fleet ’XX QX create the product the to that felt fiscal where took as scenario COVID-XX didn't rental built we we XX.X in exactly results, on much Here, same. if of stay numbers would revenue quarter with units on All other be actuals, megawatts where impact have all our and

$X.X You the fleet, Darren? over adjusted increasing we're would all be in this for improvement of see the that in the quarter, to as we this back rental an scenario At call EBITDA the is positive column time turn where the actuals. doing I’ll Darren. million

Thank you, Eric.

With advantage. Energy. Turn experiencing, Green line except we and some I'll trends macroeconomic through XX that we're full highlight every business Capstone to points. XX, Capstone out to want the Green we feel take detail of various slide run the the is uniquely for sets item, Energy ESG to of not currently the some but catalysts positioned Slide key

you in XX. Navigant by a can up Slide First decade, XX big reaching multifold expected all, Research, A with strong significant to of gigawatts total also microgrid is we're next to XXXX. backdrop. capacity X.X as on represented with beginning grow gigawatts market over industry see According from growth the XXXX,

keeping we've what Turning and we XX, mind customers. customers to our helping reduction reach our their in statistics, goals is Slide this do, that to align consumer with customers carbon key some enables highlighted

to to are and can more are should recent customer the can brand. eco-aware impact Younger the is also the to money. with most impact generations. pay reduce our population willing also their the to the save compared Nielsen study, products eco-aware XX% mindset business world's reason only more environment XX% adoption with and Sustainability they say Not only behavior sustainable to to second for to help the quality. XXX% customers of likely is of years, into second According consumers buyers Sustainable This their increased we product return accelerate. a concerned on of would and purchases, initiatives, older have to behavior ethical in highest change comprises only and practices loyalty. Z, ESG now them And increasingly which consumers one-third environment. help feeds Gen continue we their

three last you billion XX, see X a million that million Slide estimated approximately carbon. and to can over quarters turn an years, $XXX you saved or If customers we've the three our of tons of

them So money environment. the we're saving saving and we're

want critical source is hydrogen a always Capstone, Fuel the address. I so businesses need XX, our strategy. been product moment to Slide sustainable flexibility element to to fuel next hydrogen to has Moving spend and and we on and a big

and Our natural gas new run power line released and business first which available the can safely solutions combined is microturbine, XX% commercially recently on leveraging hydrogen base, hydrogen, XX% hydrogen heat mix.

like natural a commercial have like March partners same concentrated of We're Importantly, contract solutions. and our time, XX% to questions Solar mix and XX, storage the work with market. solutions, our we release of services that, gas the hydrogen now call XX% product to global to XXXX, also commercialize by a Baker using working continue target channels to year. help advance hydrogen, Operator? XX/X end solar we With analysts. for our or the with open Hughes thermal their I'd to actively for our manufacturing to At fiscal

gentlemen, Brown the Instructions] Lake is question Rob, first from your is questions. is Rob the And Capital coming and Ladies line [Operator floor Markets. for from you. live. Thank Street now open

afternoon. Good

seeing kind order these book recovery? and driven good in is seeing levels pretty the a think the of one I book Or, you quarter starting to specific COVID it activity, question to activity? bill. how one are First to had you drivers being of kind that But order order is the macro are by activity drive a was

up to place was revenue that's Yeah, our we're year-over-year the I goal or the for visibility as when is would definitely other vaccinations. every seeing say But We're we're making quarter U.S. still order we're happy about Anytime year. happy that. The comes in say it us. But and quarter. COVID, fiscal to is strain countries activity good one better, this difficult. such delta one I'd behind was one for

struggled; Specifically Italy bit. Australia struggled, India struggled, little struggled has a Brazil

come two, as vacation. back online, as twofold. So then they think of kind businesses business, like back are on these get I and comeback folks to seems going markets it to One, need

we're a And for demand lot work of time that. and personal through so there's having and vacations pent-up to so

year the be exciting. is I second-half going to very think this of that

the next I into by talking initiatives last we you're I going we're be think as the are a see more haven't and going turbine impacted to the today, are revenue. hold. in about things impact really take I our think year, we going seen first you when get haven't the about impact this think right? But quarter significant A business our the of taking spring COVID. quarter sold fall We’re to do Hughes, our where we Hughes yet, of lot to Baker Baker

we quoted haven't hundreds yet. we've them shipped of products, solution shown and hybrid Our one

just a So there's things. of lot

Our nothing significant yet. but orders, hydrogen couple hasn't product

doing say So very later still things still you'll with now, challenging. But supply is there's this the visibility we're very especially as a start COVID once year. revenue see background that right global is lot we a company. chain much some in delivering of in us, foreground still the I'd challenging, is

number rental for In is Are here your great business, assign really looking? you sort as to kind the And is Okay. that getting in or Good. how's of it the got increasing a you've to -- particular? build? function visibility do Thanks rentals on a drives you of that need get of you overview. units. the what to growth? that pipeline customers of that How rental goal Or

no, Yeah, great a that's question.

the I the five a the We help sale. we of That's think slides a product it. that megawatt and added rental to recent equivalent deck, units. XX investors year to to again, X people understand had hardly reacted megawatt criticality market rental the hopefully, the stock

impact how product. superior Outstanding revenue over reoccurring the differences is to the are of people and I think megawatts. quotes it the fleet, a So XX much need realize to sell margin and rental

XX. fleet at XX a megawatts got megawatt we're to I've trying get So to quoted. XX again,

If of estimate, into you go-get break that's that around XX megawatts. that a half kind about

to out again, XX my reclose XX So of need go-get XX-ish megawatts gross my of I out of megawatt quotes. collect megawatts rental

getting And anticipation you'll inventories those inventory to but out rental so bullish increased rentals over pretty inventory those the go QX, the was coming units. the be on done. in that them. then units in on We'll will and of of to we're rental see again Part rent. And build continue quarter building converted

and quarter sign Another customer a the quarter, at unit that depending we agreement of may lot doing a is customer next rent. at the rental sometimes rental what realize deposit days one signs or times, getting the least us the contract on thing lag the gives XX people not and of There to between rental, don't and the rental rental put reserve unit. on the it XX of is the a XXX days and out signing

broad what Okay. Good. last hydrogen of has XX% it really in strokes? how Or, engineering the the of product hydrogen – do Understood. is the it does that to happen on getting tweaks? XX% development How work? things? kind hydrogen by And it question Is sort is -- get of from then maybe or an you to the end day. to Is end year? redesigning of there Or,

Yeah, I great question. it's think a

getting in think the here our of is at I key one the strategic Ayers, for runs our engineering year. is who table. group Don XX% hydrogen that goals sitting

the throw going answer bus and him let that question for him you, under Rob. I'm So to

Yeah, Ayers. is Don hi, Rob. This

and changes university to hardware, our changes we're just line, microturbine to in no very the looking with Lab XX%, no likely we're get To National closely at standard with our So software. partners. working product

what software, get knows, the our hydrogen achieve trying XX% So customers significant do think, we're our and well is to making minimize challenging, any more challenging enable to impact able lot is as without get as XXX% to be to is to a I but as to hardware investments. everyone on XX% to

with if very thing existing in the hardware is is The off do with case, minor field Rob, if key we that's that, the with can the easy. retrofitting just it then tweaks, shelf units

been figured operated that be shipped which XX minor get countries, to So or once of could modifications. we our XX,XXX only all on have out, hydrogen XX% units

So think I that's important.

it’s of blending hydrogen hydrogen just we're of the market, effort be. it available to gas the to to is two lot put not in with think more One, in is going I being expensive. readily money And reasons. needs available. see and as natural first still There's it two, for make hydrogen as a wave

environmental reasonable natural And not any so is as you not the today nearly it upside you XXX% bad hydrogen but economic with payback, to and economic get impact the side. if run of blended gas, the for is kind on

So different a market we'll standpoint. approach. right our the it's to from complete different be that goal at hydrogen least software kind after ways is of a move think and packages. beyond the demonstration will it's we of But XXX% different XX% hydrogen hydrogen hardware, still off in I project think Again, a XXX% I

the alternative. for you Thank Great. every

Okay.

next Dayal Your Amit, Wainwright. is live. is H. question Amit your from line C. coming from

the to afternoon, margins the the gross Thank of levels we Should at on you. margins the bounce see year? of Good for gross these to margin now these side everyone. expect Darren, sort good rest quarter. this it's gross back stabilize

mix. I of think the rest going year the should bad parts FPP through at margin margin we help out, replacing field, more we're rolls the the all have the the the then on we improve overall rates. continue rentals will in again, rental margins finish to side, in as the XX% that the the obviously, to improved mix rate, fleet the FPP once margin And gross on see

to typically The in normal running really seeing below up will business, already Chidbachian, the well And improved end that. warranty product who's got quarter I out You're the We've warranty Tracy service about actually margin plant X% organization we running in our now. think field. rates. running is

we're going uptime XX-months. the see on XX think amount and I to very she's next fleet the bullish to the in of

are recognized sort costs for impact no still financials? have Okay. or the longer the to already of associated some they bad we replacements that? incurring then undertake, you with need parts that. And regarding we you the costs, Thank those that Or, and

Yeah.

the costs funding the the in got for QX. we So for program, the program and think we I incurred

reserve the the we million got from put $X.X we on a $X and million a vendor settlement about books. so And

QX. seeing in So and cash both pickup impact. the both you're in QX were the taken the is and offset, What QX

got last we and spending the parts replace this fiscal And the so year, the year. cash we're cash

P&L impact. So sheet there's balance there's impact, no a but

one investors was about things raise I the confused the think recent did. of were equity we

see cash million balance thought rental in every depending we sheet more about building than go and megawatts the into the But $XX on the $XXX,XXX they rental. accessories on our things $XXX,XXX, had we that and cash fleet, needed. that think I to with

So it'd be building spend that from field. X year. we we or X the million megawatts settlement for great, to got the from XXX to megawatts have And $X the is a is cash use into $X that million but that replacing then

we two look note, you So definitely cash some those Goldman servicing requirements for year. plus items have the at our

of As direct goal our find sales a we significant customers, reoccurring the pretty balance customers, strategic took with acquisitions. we look well. to potential that about as need could and in larger role we're him to to as for another open a our have organization use well larger of Foster, chase most senior as we put Jeff Obviously, executives cash be sheet, one

some to balance $XX And powder to M&A dry on his huge million return, when strategic keep a Jeff which want possible. around fleet, that I as and repeat which We we for looks great make money and stay rental have close think opportunities. for is didn't some a we the to mean So out satisfaction, the part raise, equity bad is for he we want of field, get orders, levels the investors group with sheet. spend customer but the that sure healthy as surprise

the targeting the already Or, in across terms And then, with this Understood. to? catering markets to sector? efforts, energy we are you fleet Thank respect rental you. board the the all is of mostly are end

customers capital It's of first maybe launch a we a renting do rental one But of a of for purchase our was seen want in building lot asked Permian. thought great mostly down the markets, to in you of Shell and of it that. lot other are CHP. the system. the five who a for customer or When our We’ve energy seen years fleet. we They're still users question, leasing I'm kind today was CHP interests glad biggest don't the started a we've that

We've So We a rental, brewery. if they later on, an the lease a right now. working without buy just hotel year a maybe in applications to do that on Caribbean if done can end recently have other CHP option it did they there. up niche five renewing market a

So a lot CHP grow We've huge They're applications well. an uptick of consumers. as seen energy houses. also in

house we've well So out got here California in to as several Colorado. as the rentals grow industry

going expand. then think more Bitcoin that market there I on as to you're opportunities close to see And continues we're some miners.

As Bitcoin you they're to trying energy be mining tremendous greener, a is know, consumer.

which impact miners You out with currency, many of also forcing have their to digital the coming own is China Bitcoin to move the U.S.

an to and interesting And so rentals industry, us for address. new Bitcoin that'll be couple market we're the and orders on a close to

much America, Australia rentals We'll And well. U.S.-based, at up with Latin we've done in than so, the some been everything Europe wider stuff Canada. anticipated. definitely, but I stuff as think we're To-date, are to starting market in and look probably end has

to We getting can enough fleet have think not, megawatts we I his team the lose challenge is units. order how there, the get or build sure again, don't an quickly built the we gets and don't is over because Kirk So want XX in make to time.

Eric pointed rebounds positive. with as had like in in essentially megawatts, we product XX out, business any year, QX EBITDA last we're So our

in three it every history. corporate year. going forward. is goal done do quarter EBITDA to every We times it positive We've every quarter Our our be

up I open lot think business. that'll a more our opportunities for

and impact respect these inflationary that trends just right any of sort Thank your to you. of last you with now, seeing overheads? then your And one, operating are costs

copper, components what shipments, delivery as wood, Getting the could are Yeah, now. vendor I chains if to few supply ago, he pulled cost as a Xx just VFDs, it well now. would is for some container time. hair China electronic looking mess price out from Definitely, lengthening right used grow it increases, Kirk have every think months in just by back, a cost

the Kirk a not chain though, this our LTAs. team to is race. supply trying Long a We've definitely, September, strategic say, a to to We're up are lot in going really sourcing Beach short-term work vendors like the in long-term a look, dividends situation year issue. purchasing our done this. So and at put hard, large upgrade in with to is his working fair that's issue, challenging. the around IndyCar group the Grand Prix last over coming do and We're vendor paying

increases But longer-term to with issues going supply hearing them. move about now. hopefully it true. absolutely is I we're so right price relationships challenging vendors and to away you're LTAs Everything definitely chain will build is try from And say into and

Okay. That's much. Darren. all you Thank have, I so

Amit. Thanks,

[Operator Instructions] is live. Water Tower from coming question next line is Research. Our Severson your Shawn, from Shawn

Great. I'm going rental looking business. to X, contribution EBITDA for revenue Thank to for the back you. Slide and at go the

in from like envelope, the do your XX.X So period, million just about math, XX, $X about me a standpoint, year five that's the revenue now you in back of modeling million if it's on EBITDA. And $XX per between terms megawatts bookings that and roughly -- of X the excuse in and March. over target right

to going megawatts achieve year going by million approximately down EBITDA if that X annual that break in your it $X safe So that's translate as from you into to we say the is rentals? that incremental forward, of goal,

correct. rentals rented, fully XX% assuming are or rented, that the Correct, is

as this of time formula in different. business, megawatt this carry unique modeling we a we holds rental anything that projections. of the or use there's model kind as for the sort you look going at each forward, We sales. announce this can And And Okay. about

Correct.

we a depreciation. show of Shawn percentage is the this here, is lot that When Eric. margin

to it’s be So actually higher know here. EBITDA, contribution the to if going percentages see than you you to these want

Okay.

So XX%, like, because it be going what – like the to roughly? is cash that's is flow something that,

Yep, that you get will closer.

then And of time, you Okay. these life it's the a or typically the And then are rental is this, quarter start correct? contracts timing two what? the usually of within said

our So one been been we've doing shortest year. have

we is have longest called the think I XX.

haven't or three because years. units went and five think lot to folks out the of for year. already into back them We a they're have general, I one and original shell year But rentals a are years, around for year average they're We've some two yet going second seen that three well keeping come couple year. doing a in of

it so just depends. And

rent as grows in think turn allows and back, put the up rental back the fleet the to business. again, then car on it you the of the do take out is, we'll thing and resell It it much like freshen as again. comes rental around units I rental us ages fleet also and them other unit and

sales. We're as there that'll kind margins think yet, used cash it equipment but secondary think and like for And huge annuity equipment sales. this a new an more sales, better drives so used and again, business of I us there's not equipment a opportunities some benefit matures, cow again, I and businesses probably and give evolves becomes other

energy these it an for I only for would long-term products -- this obviously trying customer Why use just example, why a I'm are to mean, year? right. understand

on they'd the rental they shut bit about two we because back, had site to sending in So, a year. X.X going were example, negative And prices continue over actually ended COVID oil megawatts a for as they up went an and little COVID. they use when been of them with hit, shell to

so on lease, usually they new returns the or equipment the send fine. potentially, they they'll owner one-time you have And units, back, wants they market, that we've seen would again, the rent or say COVID change unless send had when equipment. then But stay in and general, go that if that's huge the opportunity the no the little a you out. I And out, the it minus impact to back, change to in to sell business, the you if asset

I people to buy is will the rentals point a fine. just one get new buying CapEx want I to equipment, year a from what they where five may and A to of with standpoints lot evaluating CapEx they are buy equipment they and want three to do or customers again, versus dollars. nothing their think happen, rental which the a the think, return one utilization

came if a right? three five sort That's the decision time years to of and sense, made is out, it more that process, like

those rolling build we're in we built again, in But quickly could fleet they're possible, I allowing to year them, with push one return more as to as order rentals. probably longer-term. think get keep we into if be and they them over. stringent of don't the weren't if kind little customers mode, customers do a But evergreen,

you What’s and Is worth we as used XX% under if say average And than million out, $X megawatt. that that modeling approximation, product for unit what's market take new just a purposes that that value? let's years a we guess, should value, $X that sell it XX% sale the look at? little rough I that? three just sell for a that say, if you less million a

Yeah.

I think with the service them, service out all is remotely to essentially go an own our done is the making so monitoring and sure FPP them. them, organization tracking units

be come as been should It’s have three back well they years, maintained, long good. in life least should be of new. as it's So XX% value to at XX-year XX-years XX% -- of it, it the asset, in should they if left

sure be we'll definitely the there's we'll will So have room. our the to we have and our I of value good – book sell should make book margin depreciating have think so we we plenty units price, between have value, and

Yeah, what going is. more lot a it than I to was probably value depreciates because the say,

have carried low pretty asset be value but value. the books resale So on in

Yeah.

but So it's depreciating it XX-years. a XX-year over asset we’re

Okay.

already any on Where had storage you report? are or expand give success there? to have the that of systems in that? that installed great of kind customers pool in Can update was of the deficient deficient Next question to is to looking an on pond and And back a some the base you've sold, microturbine those just terms whatever. you we obviously going progress

do organization stuff couldn't and having training still of sales We're back folks get storage half get battery microgrid direct very all the and it's solutions we to mostly a been flight on have, to COVID. the because could of We've products factory, challenging. We close. only the new here international

We've sales people But got We've to having them to solution better. utilizing And direct it's set up to building zoom more so in. organization. training. do sales the we're added we're two the getting across the that street

people, direct think about last solution sales So days. in the I hired team two salespeople is XX XX we more the

quoted products. And so microturbine new products of $XXX besides over million they're well

that sales order, place The I a system yet, hopefully the It Baker micro hopefully ago, And storage, fill rentals, grid said large you battery gives these think between XX X some in difference of minutes a you've storage significant. on Hughes of Hughes here hybrid think few X, in the haven't you haven't seen I but first kind this will seen by impact, quarter. you'll a an haven't so seen see order And initiatives see you a the Baker QX. yet, all we've yet. seen order pretty order a megawatts versus rent battery is put

are likely customer, that to a be prior understand those I sales if And correctly? to

Yeah, the to to go first folks. is the mean, existing goal I

is CHP add I that think has looking a the that storage one a we're expecting hospital And system. first some to and some existing system battery to PV. we're

and or makes think some if sense, So the customers hybrid the work battery storage to well from PV. CHP taking they applications. that loads loads on existing of really machines where we're going benefit then for the storage could and I no stranded all those we're their seeing remote telecom system, and care And battery some

a telecom applications areas, Africa, polar going the we're run about So around onboard, applications PV the Alaska, frankly, the hybrid in power to hybrid Caribbean, East, and or battery product multiple box DC that in with fuels different of It's in system. system world, it's don't we're know very a similar excited that put very folks small on controller. battery lots what the storage the up for with generator, Middle to can storage is,

at reaction it's then you space early, found but with EV others, jumps have jumps have Again, I out. some anything I early, it's but Anything that yet? that infrastructure know, And out is you? the know in ask. Okay. bill to very I but in Obviously, anything there

early. very It's

next climate, I at done of between budget kind a of between you I infrastructure. I was we own Democrats a Senate bill. of with They're think, trillion for everything's $X before today, resilient framework investing to the healthcare from kind macro want bill Europe. on blueprint a huge if the approved The comments. families, the in it for EU say trillion EU lot and that come working going infrastructure their generation by is would But $X.X until more digital with out level look more in make program general, greener, to wait a and

to from to think manner. going see look resilient recover and where similar to in around a I very spending globe, you're COVID going the are countries green

want to IndyCar huge reduction as able have some and undertaking, well-positioned coming It's Genesis, them from the Difficulty]. the to room the DHL, Honda, get great I really Board out from they as Firestone, those of figure those we're and so season say, and the [Technical know, boardroom ESG a a to them to to lot That's to talked to right. pass we these are larger races, lot how I down carbon of standards, from. We benefit be programs of initiatives, talking to be roll to goals. think hit by meet XXXX. talking And struggling to But carbon-neutral out green companies would to a those through and all you they're go

through can't frankly and folks, working can I what to with and so price, as the And talk with these think, they right. we're we them do,

think do battery a PV, it's is expensive smart to and of folks. all less I to controls, getting whether energy, things. is system, efficiency, for those lighting, then whether good carbon-neutral use But CHP lot energy smart first thing storage, metering it's

energy on carbon efficiency, and I of we trying that I our lot of like years feel so reduction, XX-years I'm last And now few customers educate to a next energy benefits the think and and and green excited is that the to for hardware they goals look problem against. customers have need what to have truly market we’ll Board management putting are out the coming to us, reduction solve, a that and the like and that they Directors and execute of the spent

there, with of hydrogen not injection who Westport more regarding use strategy. like question it's hydrogen capable you fuel about in that. direct maybe with and they a to customers considering? hydrogen particularly and my again, very Obviously, like as be market have Or, it's is to companies suppliers source cells. turbines fuel developed? always the their going large Because Europe, on to of emerging last then kind And obviously, it well some to a of running going want hydrogen hydrogen, where you and talked are spark-ignited, to have that consumed, to everybody's suppliers find things out Are sell right, ways not ways if any cells other question are

Yeah, we're those some having conversations. of

has blended been and makes sold system in hydrogen which in Our first sense. Australia Europe,

focus. front. and Korea. frankly, Japan infrastructure I think And very more got more well in U.S. as they've focused area, is as also that where on that's of hydrogen they're the ahead

look to I producers. we'll hydrogen talk to the think So

from to of our solution We’re there's standpoint technology product. see can with also directives a if to ours, and that have something a we complete with can the for more if we our see couple new to his couple role one-stop there's given And looking I've technology that's of hydrogen customers. one Jeff a

green in hydrogen, interested how have how it, but think not for lot to key. them, a customers I hydrogen, solution overly are complicated is especially cost to a risky effective or of overly generate and that's

the space. in exciting things we some there's can I hydrogen think think I So, do

lot happen across in hydrogen next the five going think, a to to in XX-years. is board the I

work been hydrogen with pretty DoE extremely as some well the the goals. think hydrogen, of next initiatives we our would I don't and interested be development the in I years, DoE think as them is vocal if with on some we've few so I in do surprised

guys. Thanks, Right.

Thanks, Shawn.

Okay.

We to floor remarks. further now like have closing back to I'd no the Jamison questions Darren in queue. turn for

questions, Great guys.

very want going to are next really I stepped what things quarters I'm like about say into. think most of closing couple the to remarks look like. the I we excited

as couldn't with to normal more and organization up start direct out. to to we and to fleet. going they're of As up get they're generate, rental We're seeing chain, working sales organization COVID then, plus I distributors that's the challenges back sales impacts be COVID. online, exciting from business with think it you for we the product our get our have supply have mentioned, with speed generate, the sales to and top-line that we direct more staffing the excited COVID to bring levels, be I going us. growth still And additional still But just I rebound challenges going still about

that we see very it's space, And transform of huge impact business. and those our are numbers, and huge up higher EBITDA, they've negative sexy rental there's hogs, huge losses. build to that cash the of fleet our reoccurring but going a revenue, margins, folks you in revenue As lot there net

very I think our solid I be doesn't think long-term and of quite and EBITDA have customers cash. lot double we can has with the top-line that And company be top-line a will our growth, a better but maybe digit positive play generated growth shareholders. a for

So excited about it.

of I things think a the to of work in benefit of initiatives, that there's good lot happen, to see lot in we six that next we'll a started last the the XX-months to XX-months. six

think moves But new programs, should green forward their of quarter in QX. Again, and more be than the QX. exciting. QX, a year, be the I sustainability, they as planet reliability. hopefully their bill, game be us. in next changer move independence for administration with as trillion will Biden good for really be And better that QX all energy put sails QX budget should the Europe wind $X.X infrastructure as of energy, our together and should So

mentioned, buildings, I buy in Gen right the just consumers you moving it's green it's you've will have to subsidies green rooms, in the not products, rent the hotel continue direction and live So sustainable all got products. to. green think wanting I And Z, government got

as I the think bigger a only consumers to bigger right going not easier, it's in become harder. all that's of direction, part our and business and big folks population, those make voters, the bigger so And growth of moving

that, ahead So, with you Thank next go to the close you. talking forward to call I'll and and quarter. look

conference today's Thank you. Ladies and gentlemen, this call. does conclude

your You a may disconnect and for have your participation. time phone this wonderful Thank lines day. you at