Greetings, and welcome to the Tecogen Fourth Quarter and Fiscal Year Ending Earnings Call. [Operator Instructions]. It is now my pleasure to introduce your host, Ms. Bonnie Brown, CAO and Treasurer. Thank you, Bonnie. You may begin.

Thank you, Sian. Good morning, and thank you all for joining our year-end and fourth quarter 2019 earnings call. On the call with me today are Benjamin Locke, our CEO; and Robert Panora, our President and Chief Operating Officer, who is joining us from the MODEX conference in Atlanta. Please note, this call is being recorded and will be archived on the Investors section of our website for 14 days following the call. A copy of the press release regarding our year-end and fourth quarter earnings is also available in the Investors section of our website. Before we begin, let me briefly cover our safe harbor statement. Various remarks that we may make about the company's future expectations, plans, prospects, constitute forward-looking statements for purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by the forward-looking statements as a result of various important factors, including those discussed in the company's most recent annual report on Form 10-K and annual quarterly reports on Form 10-Q under the caption Risk Factors, which are on file with the SEC and available on the Investors section of our website under the heading SEC Filings. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so. Therefore, you should not rely on any forward-looking statements as representing our views as of any date subsequent to today. During this call, we will refer to certain financial measures not prepared in accordance with generally accepted accounting principles, or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in our earnings press release and in the Investors section of our website. I'll now turn the call over to Ben for a business update.

Thank you, Bonnie. As the agenda on Slide 4 indicates, I'll start with a brief company overview, followed by a top-level review of the company's performance and financial results for the fourth quarter and full year 2019, along with earnings takeaways and strategic achievements. Bonnie will then discuss the financials in more detail, followed by Bob, who will give an overview of our emissions technology development efforts. I will then have some final remarks before we take questions. I'd like to start off by reminding those who may be new to our company about Tecogen's core business model, shown on Slide 5. Heat, power and cooling that is efficient, clean and reliable. Tecogen's clean, reliable distributed generation systems use natural gas, propane, syngas or renewable natural gas efficiently and cleanly as an alternative to using expensive and sometimes unreliable electricity to heat and power buildings and infrastructure. As large buildings strive to reduce operational cost, improve greenhouse gas emissions and become resilient to grid outages, Tecogen's systems are increasingly sought after to meet these goals. We have differentiated ourselves from other on-site generation technologies by virtue of our clean proprietary near-zero emission system, called Ultera; our exclusive microgrid technology; corporate longevity; and comprehensive factory service presence. The InVerde is the only microgrid-enabled CHP system using a permanent magnet generator operating at variable speed with an integrated onboard inverter, key features that are opening new markets for us. Our Tecochill and Tecofrost natural gas chillers have no other equivalent competitors and are increasingly becoming the design basis for many facilities with large cooling or refrigeration needs. Ultimately, our equipment provides a reliable alternative to the electric grid. As concerns mount about electric reliability and cost, our systems provide resiliency to power outage and other grid disruptions. Turning to Slide 6. The…

Thank you, Ben. So Slide 11 contains some of the highlights of our fourth quarter 2019 year-on-year financial results. Total revenue for the quarter was $8.7 million compared to $9.3 million for Q4 2018, a decrease of 6% year-over-year. Product revenue for the quarter was relatively flat year-over-year with revenue from cogeneration sales increasing by 191% and chiller sales decreasing by 48%, showing once again that our product mix can vary from period to period. Service revenue increased by 9%, with long-term maintenance contracts leading with a 10% increase and installation revenue increasing by 7%. Revenue from energy production for the quarter was $690,000, a reduction from the previous year's total by $958,000. This decline is attributable to the sales of certain energy-producing assets and the seasonality of those assets that the company retained versus those sold. Overall gross margin for the fourth quarter of 2019 was 37% compared to 40% for the same period in 2018. While our overall operating expenses, excluding goodwill impairment, decreased by $30,000 or 1%, G&A expenses increased by $39,000 or 1.5%, selling expenses decreased by $141,000 or 18.6% and R&D expenses increased by $72,000 or 23.6% year-over-year as we invest in our technology and our future. Net loss attributable to the company for the quarter was $486,000 compared to income, excluding the goodwill impairment, of $19,000 to the -- for the fourth quarter of 2018. Slide 12 contains some of the highlights of year-end financial -- of the year-end financial results. Revenue for the year was $33.4 million compared to $35.9 million for year-end 2018. This decline in revenue is directly attributable to the sale of energy-producing assets earlier in the year as both product and service revenues increased from 2019 -- 2018 to '19. Product revenue for 2019 was $13 million compared to…

Good morning, and thank you, Bonnie. I hope everybody can hear me okay, let me know if you can't. Let me begin with the forklift truck program, which has had increased activity since our last update. I will get into more detail in a minute, but I want to begin by mentioning that I'm attending the MODEX trade show in Atlanta, which began Monday and concludes today. These photos were taken from the PERC booth at the show, which is featuring the Cat MCFA forklift prototype, partially disassembled to show the Ultera system. Recall that PERC is the Propane Education & Research Council that originally funded our work and represents the domestic propane industry. We recently updated them as to our progress, which they found very encouraging. As a result, I'm pleased to say they're stepping up their commitment to bringing the technology to commercialization, which I'll discuss in a minute. The MODEX show -- trade show is the leading forum for showcasing technology used in warehouse and factory material handling, so you see a lot of conveyor systems and robots for picking parts and so forth. But understandably, forklifts are a main part of the show. In the past 4 days -- 3.5 days really, we have had the opportunity to speak directly to forklift users and competitors and have been interviewed by trade magazines. My takeaway from the show is that indoor air quality is a major concern of most operators. Many users would prefer propane as battery-powered trucks are more expensive, have durability as by the charge in the battery goes, but also require a fair amount of sophisticated management. For me, this feedback was gratifying in that it reinforces the relevancy of our efforts. So moving to Slide 15, I'll start with my prepared remarks. As…

Thanks, Bob. So moving to Slide 14, I wanted to give some more thoughts on our core business outlook for the company and how our products can uniquely meet the goals of good resiliency, greenhouse gas reduction and cost savings. First, we expect continued growth in our product revenue. There are several factors which will drive this growth. First, with natural gas prices at record lows, we are seeing economic opportunities for our equipment in new geographies with attractive economics that we hadn't seen before. Next, we certainly expect additional sales activity in the Toronto area now that we've established a service center there. We are taking advantage of our InVerde e+ technology flexibility to meet the growing demand for DC microgrids, along with incorporating battery storage into the systems. We have brought Tecofrost back as a reliable, cost-effective solution for refrigeration markets previously unaddressable by our Tecochill chillers. And lastly, on product growth, we are improving our ERP controls in all parts of the business, which are expected to lead to improved product margins. With regard to our service segment, we will continue to expand our service center presence as we increase our population of systems in new geographies. We anticipate the next expansion to be in the Mid-Atlantic region, where abundant natural gas creates a compelling economic alternative to the electric utility and weather-related resiliency concerns are acute. Regardless of the timing and location of our next service center expansion, we expect our service segment revenues to continue to grow commensurately with our product sales. Service margins are also expected to improve as we shift away from larger turnkey installation projects to more manageable installations with less construction risk. And lastly, we are taking advantage of improved market conditions for gas cooling within the broader HVAC industry to identify partnerships that will supplement our sales and marketing efforts in the U.S. and internationally. Our partnership with Vilter on the Tecofrost product consists of shared manufacturing, sales and marketing and service. I envision additional partnerships for our chiller products to improve the technology, expand our markets and maintain effective factory service. And the upside of our emissions technology is starting to take shape as we plan next steps for our Ultera emissions with our forklift partner, MCFA, and continue to demonstrate Ultera as a viable, cost-effective way to obtain fuel cell-like emissions on a wide variety of engine platforms, from GM engines to foreign engines, Generac generator engines, Caterpillar engines and more recently with the Mitsubishi engine on the forklift project. The result of our retrofits on these engines is the same, near-zero emissions. I think our record revenues for 2019 are indicative of the strength of Tecogen business, and I am enthusiastic about our prospects for 2020. With that, I'd like to turn it over to the operator for questions.

[Operator Instructions]. Your first question comes from Amit Dayal from H.C. Wainwright.

So with respect to chiller sales, is there seasonality in the fourth quarter? Could you maybe give us a little bit more color on the softness relative to the previous year? And you still continue to expect good things from this product line, any color on what would drive adoption or sales penetration would be helpful.

Sure. Sure. Great question. In the past, Amit, there was a lot of seasonality to our chiller sales. In the first quarter, we typically -- you'd see more activity as people anticipate the upcoming cooling season, but less so these days as we've increased our market penetration into other areas like indoor cultivation, where these things run all year round. I mean they run flat out 12 months a year. And so the seasonality gets taken out a little bit there. Amit, can you still hear me, by the way? I've got...

Yes.

Making sure our line works. Okay, good. So anyways, yes, now the little softness we saw, it could be a number of factors. Certainly, we had tremendous success in 2018. We kind of ran the table with a lot of these indoor cultivation facilities, certainly in Massachusetts. And as you might know, the marijuana industry as a whole has had a setback in 2019. There was a lot of exuberance and overbuilding that happened in 2018, which I was very happy about. But I think where the industry is right now is some of these first players that didn't have long-term operational cost plans in mind and as more competitive forces take place, there's consolidation going on in the industry. A lot of these players are falling off the map financially. They just can't withstand. So I think we're seeing maybe a little bit less chillers because the indoor growing industry is starting to be a little bit more realistic about the projection. But with that said, those ones that are succeeding in this industry, the ones that are still around, are the ones that have long-term operational cost in mind. And they can -- they have our gas chillers, they can keep the electric bills down. So I don't see any softening really in our chiller segment. I mean this -- 2018 had a little bit of softening because of what I just mentioned. But our backlog is still strong. We're still seeing a lot of interest as indoor cultivation expands to other states like New York and New Jersey and other areas in the U.S. So I'm still very bullish on it.

So if the indoor cultivation driven by cannabis expansion, et cetera, were to not perk up or stay where it is, is there any other vertical where you think maybe some of this gap left from the slowdown in the cannabis space may be filled?

Oh, sure. Sure. Absolutely, yes. So as I said, we -- it's not just cannabis, but there is -- we have a -- there's other indoor cultivation facilities that we're part of. High-value crops, we have got some lettuce and cucumbers, and even these organic supplements need to be growing under very controlled conditions. Anywhere there's a crop that has -- that's a high value and has to be grown in a very controlled type of way is a perfect fit for us, and we're seeing increases in that across the board. So -- and that's just for Tecochill. The Tecofrost, there are brand-new market verticals for us. Cold storage, food processing, wineries, many of these industries did not have a place for us, but now they have a place for us because they already have ammonia compressor systems, they already have 4 or 5 of these systems lined up, and we're coming in there with a gas alternative. So these are brand-new verticals for us for the Tecofrost that we're going to slowly start peeling away at. And that's why we're very fortunate to have our partner Vilter, who has good visibility into these new market segments.

Understood. And OpEx for 2020, I know you are trying to keep it conservative. Should we expect similar or even lower OpEx for 2020 relative to 2019?

Yes. Well, our goal is to keep it under control. I don't want to rule out the fact that it could go up because we could expand in a way that requires us to increase our G&A. But certainly, the 2019 level is something that I think we can improve on, given our revenue levels. And as I mentioned, we're finding a lot of efficiencies in our organization across the board from -- everything from our parts ordering, how we order it, our vendors, getting more vendor leverage, payment terms, et cetera. All of those things are going to help drive down our G&A a little bit. So I think we're going to keep chipping away at the G&A. But again, I don't want to rule out a possibility of an expansion of revenue or service otherwise that might require us to increase it.

So 2019 was a little mixed, and I'm now just trying to look at the forecast for 2020. 2019 was a little mixed in terms of year-over-year improvements from a comps perspective. Do you think we could see 2020 comps shape out a little better than 2019?

I think so. I think 2020 is going to be a year that's going to provide you a lot more visibility into what our core successes are. We still have our energy production assets. But importantly, we're focusing on what our competitive advantage is, which is our products differentiation and our service capabilities. Those are the things that are high margin that we're improving on, we're showing growth on, and I think we're going to continue to. The energy production is opportunistic. We could have other opportunities to invest in an energy production asset if the cash flows work out for us. It's not something we're aggressively seeking. It's something that if we come across, it works out. Sometimes we -- oftentimes, I think I've mentioned this in the past, Amit, in the case of a long-term energy program, we'll bring in partners. We've got several financing partners that can be brought to bear if the customer wants a long-term energy-producing contract.

Your next question comes from Craig Irwin from Roth Capital.

This is Andrew [ph] on for Craig. Just a quick question for you guys, just on the microgrid business. We saw the study done, I think it was by US Microgrid, showing that you guys are a top domestic player in the business. So congratulations there.

Thank you.

Just wanted to see if you could some -- add some color on the business and provide any comments on 2020 and just the outlook there.

Sure. Absolutely. I think what we've shown, we're very glad that, that study accurately represented us, is that these microgrids need not be extremely large and complicated projects. Oftentimes, you can get a microgrid enabled thoughtfully with our cogen equipment tied into the building controls and tied into -- again, we have the battery as well, so tying in other DG assets can be done very cost effectively and serve the purposes of the facility. So I think that's why we were so high up in terms of number of sites and lower, of course, in terms of operational capacity because we don't operate 3- or 4-megawatt microgrid systems, we don't operate 1- or 2-, 3- or 4-megawatt microsystems, we operate hundreds of smaller ones. And again, I think that is hopefully showing the industry that -- this -- enabling a facility to be microgrid-capable need not be something that is of tremendous capital outlie. It can be something that can be done cost effectively with a realistic ROI. That's really underpinned by the CHP economics, and the microgrid features are -- kind of come with it. So we're seeing more recognition of that. I think certainly, this DC microgrid -- I learned more about DC microgrids, I should have known from my engineering days, but indeed, they are sought after for resiliency and transmission losses operating on a DC circuit, that's perfect for us. Our InVerde control cabinet, we can go in there and we can pull out the inductors and add on anything else that we need to match up to that DC circuit. We can handle load swings as that -- if that DC circuit has load swings, we can accommodate those load swings. So we can provide a lot more functionality to these DC microgrid systems than what was previously thought. And I'm hopeful that these two projects, with the utility we're working on, will have some success, and I can expand more on that.

That was great. And second question, kind of two parter here on the top line. One, I may have missed it earlier in the call, but do you guys have an organic growth number if you kind of backed out the divestitures that were done earlier in the year? And then secondly, cogeneration sales were really strong in the quarter and on an annual basis. So just any commentary you can provide there kind of moving forward would be greatly appreciated.

Yes. Can you tell me the first part of your question again? I want to make sure I answer it correctly.

Yes. Just backing out the divestitures from last year -- from 2018, is there like an organic growth number you guys provided earlier on the call? I just wanted make sure I didn't miss it.

Yes, I understand. So you want to back out the changes we had in the energy production, which...

Yes.

Made the comparison to 2018 difficult. Yes. Yes. Well, I think certainly, where you're going to see growth, without a doubt, is in the product sales, product revenue and in the service. I mean, again, we had good growth. I mean it's great that our business is growing. There's a lot of businesses that are contracting these days. So we're very happy that our core business is still growing. I think the Tecofrost, the chiller product, is where you're going to see higher than normal growth. The cogen's growth is very good. We had a great year for cogen. You're going to see the cogen go up again this year by virtue of that Toronto sale. But in terms of exact numbers, tough to say. But I will say that you're going to -- where you're going to see the growth is in the product and services, probably not so much in the energy production. I expect that to be somewhat static, although we're still trying to get -- squeeze more out of those assets as we can.

Your next question comes from George Sim, a Private Investor.

There are many moving parts in the EBITDA comparisons quarter-to-quarter as well as year-over-year. And if I understand correctly, you sold roughly 1/2 of the energy production assets. Is that about right?

Yes, that's about right. There's -- how many on a per engine basis, how many on a revenue basis, it's different basis. But you're -- essentially you're right, about half of them.

What are the plans to sell any other of those assets?

No, not currently. The -- when we made the decision to sell those assets, we were very careful. We found the sites that could be -- it was like flipping a house. We found the sites that needed help, we fixed them up and we sold them. And that was very beneficial to us. The sites that are very good earners already and that we can have some improvements on, we're keeping because it's a nice, steady flow of revenues for us quarter-to-quarter. So we don't have any current plans to sell any more of them.

Are you providing service for the ones that you sold as well as the ones -- obviously, the ones you're keeping, yes, but how about for the ones you sold?

Yes, absolutely. It's a very important piece. So just because we're not getting the revenues for those energy-producing assets anymore, we are getting revenues for servicing them. So our service team is servicing all those units. And again, that's the motivation for us to make them perform great as we get more service run hours out of it. And as I mentioned earlier, if we outperform those sites as compared to a baseline, then we share in the upside. So there's still a lot of contribution for those assets that we sold.

Good. That's what I thought, but I just wanted to make sure.

Your next question comes from Joe Vidich from Manalapan Oracle Capital.

Quite the conference call, actually, a lot of great news on the call. And I guess I just wanted to drill down a little bit more and find out when possible certification would come for your emissions products for the propane forklifts. And then part of that is how big is that market, meaning how many propane forklifts are there out there or how many are sold per year?

Yes. Bob, do you want to take a first crack at answering that?

Yes. You had two questions, if I caught you right, is when will the certification come. I can't say for certain, but I think if this May test works out the way we think it would, they would have a clear path to move forward if they want to, and they could do it very quickly, a month or 2 later, that type of time frame. There's not a lot of uncertainty in that, and it's not a terribly expensive proposition. So I would hope that some, that would be my hope. The second part of your question was about the domestic fork truck sales. I think, Ben, you and I were talking about this yesterday. My number is 70,000 trucks and maybe 30,000 propane ones, if I got that right? Ben is that -- do you remember...

Yes, yes. I've got something similar. Factory shipments of ICE engine-driven forklifts, Class 4 or 5, now that's what we're -- that's the forklifts I think most investors are familiar with, are upwards of 90,000 in the U.S. And of course, international number is much higher than that.

Yes. And there's been pretty good international interest too at the show. I got some good feedback there, so it could involve international, but who knows, we'll see.

And I just want to mention one more thing about that. The number I mentioned and that Bob mentioned are, of course, new forklift shipments. Our notion here is that fork truck owners don't have to go and reinvest in an entire new fleet. Our notion here is they can cost effectively retrofit their existing fleet and not have to lay down another $1 million or whatever it is to buy new fork trucks. They can get their fleets in, they can be retrofitted in a cost-effective way to be near-zero emission, and then they get back on their way with their mission accomplished. So it's not just new fork truck sales numbers that I think are driving our business plan here, it's the number of forklifts that are out there and the forklifts that are able to be retrofitted, which is obviously a much, much higher number.

Right. Right. Great, that's what I was thinking also that you'd really be going after the retrofit market, too. So anyway, that's all I got. It sounds actually like things are really coming along.

Thanks, Joe. Glad you could join us.

Your next question comes from Mike Zuk from Oppenheimer.

A follow-up on the retrofit market. What are the opportunities in retrofit outside of forklifts?

Yes. That's a great question. We are obviously making tremendous progress with forklifts because of the support of PERC and the encouragement of MCFA. But it's an engine, and that engine is honestly not much different than an engine that may go into one of these airport -- airplane movers or into one of these lift trucks that you see doing construction outside of a building. There are many, many engines out there that aren't on the road that are candidates for this very same type of retrofit. And again, it's important that the fork truck program be seen as really a proxy for any type of engine program. I mean that Mitsubishi engine could just as well go into a vehicle. And per Bob's point, the goal of getting the engine certified is very important because now any vehicle that engine goes into, whether it be one of the -- again, the fork truck or an airport mover or anything like that, is not going to be certified as a near-zero emission vehicle because the engine's certified. So the answer to your question, Mike, is yes. Absolutely, there's many, many applications for this retrofit opportunity for engines that are not necessarily requiring us to go to the big automobile manufacturers and get involved in the automobile. Now that, of course, would be wonderful. But as I said in the past, I see ourselves accomplishing retrofits with fork trucks. I see us doing our programs with other engines as I mentioned. I can see us going to a bus fleet, a natural gas bus fleet and doing retrofits on that fleet. All of these things can happen without us needing to have any type of complex or maybe idealistic partnership with an automobile manufacturer. We want to be able to do this without having to have such a manufacturing partnership.

And then as a follow-up, what's the status of retrofit in stationary engines? Because there are stationary engines everywhere.

Yes. Yes. As Bob mentioned, we're diligently working away on these big, huge 800-horsepower Caterpillar engines in California to get them retrofit. We've had a few other air quality management districts also ask for -- expressed interest in converting and getting Ultera on their pumping stations. And yes, there are even furthermore stationary engines, there are stationary engines that pump water for agricultural crop irrigation, et cetera. All of those things are applicable to us. Of course, Mike, what we're trying to carefully do is identify the ones that are good enough to move the needle and that we can resource cost effectively, given our company resources here. And I think we've done a pretty good job leveraging our resource with PERC and MCFA to get as far as we have.

What's the driving factor on converting stationary engines? Is that emission controls? Or is the efficiency of the engine?

Bob, do you want to take that one?

Sure. It's emissions controls. We don't impact the efficiency at all. It's people trying to simplify their emissions compliance. So if you have an engine in California and you've got to keep it in compliance, it makes that job a lot easier. That was the original people who retrofitted in that original water district. They were being -- they were failing a lot of their tests every -- they have to test all the time. And when you do that, it involves a lot of paperwork, a lot of what did you do to fix it. So this system sort of got rid of that problem for them, which is what they were really after, the cost savings of compliance. So that's the driving force, Mike.

Are there any other large markets besides California that have stringent emission standards that we could be addressing?

Well, we've had -- Massachusetts is very strict as well, and I think probably a few other states. But the people who have come to us and asked us for -- to work with them have been competitors, so that's the problem. We need to focus on noncompetitive water pumping and that thing, and that really is California market right now.

Appreciate the update. It looks like we're on a roll for 2020.

Thanks, Mike.

Thanks, Mike.

[Operator Instructions]. Your next question comes from Alex Blanton from Clear Harbor.

On that forklift, just to go a little bit further, do you have any kind of a time frame or when you could be seeing meaningful impact in sales and earnings from that project, which looks very promising? But it's hard to look ahead and see when it might hit the bottom line.

Yes. Mike, I mean I'll take a crack at that. Right, believe me, I want to see some payback on my investment, too. But we're getting there. I think it's closer than you might think. I think if we're able to -- we're going to go ahead and get this engine certified later this -- in May, as Bob indicated, what does that...

We're actually just doing a precertification.

Oh, precertification, okay.

It's trial ones, basically, just making it clear.

Sure. Okay. Thanks for that clarification. But anyways, assuming that we get the engine certified at some point this year, the next step is going to be a fleet retrofit. And PERC is helping us to identify a fleet we can work with, it might be an MCFA fleet, it might not be. But certainly, it's in PERC's plan as a next step to start actually doing it and retrofitting a fleet. Now how big a fleet, 10 fork trucks, 15, 20, 50, that -- obviously, whatever type of revenue we might receive from that will depend on how many numbers. It will be a number, though. And that could happen -- I think that could absolutely happen, if not this year or the next that we do it. Now that might be a small bit of revenue, again, depending on the size of the fleet, but what I want to get at, Alex, is after that, that's exactly what we're going to try to replicate, and we're going to look at other fleets and come up with a costing model to develop this, whether we license the technology to a manufacturer or whether we go ahead and contract with the facility to directly do the upgrades, that's going to happen in a very short order, at least that's what I hope, what my plan is going to be. So my hope, Alex, is that you can really start seeing revenue from this Ultera, at least on the fork trucks and if not this year then next.

What is the per unit revenue on a retrofit to you?

Yes. I don't want to talk about that too much, Alex. As you could probably guess, we're being very careful about how will we do this, how would we price it. I don't want to sell it too cheap. I don't want to sell it too expensive. I don't want to give it away. I want to make sure we control it. So exactly how it rolls out and the cost per unit, et cetera, I don't want to get into that detail. But again, I can say absolutely confidently, it's going to be less expensive than buying a new fork truck. It's going to be less expensive than buying 2 new electric fork trucks, right? And it's going to be something cost-effective that someone can actually consider as a capital investment to do this retrofit in a meaningful way with their existing fleet. So sorry, I got you your answer a little bit there, but I just want to be careful because it's so important to us how we roll this out.

Okay. And along the same lines, but in the building market, can you give us an idea of the dollar amount of this 3.25-megawatt order in Toronto? How can we think about that?

Yes. Sorry, Alex. I won't go there. There's like three pieces to the equation, and I'm always going to leave one piece out, so that our competitors can't triangulate our pricing. So I'm very careful when I give out order size and order cost and order complexity to make sure I always leave out just enough information where our competitors can't really triangulate where we are. So I hope you'll understand that.

Oh, well, I didn't think you had any reasonable competitors.

Well, people are always concerned about cost. And as much as -- again, I try to be as careful as possible to not give our competitors any more advantages. I know I have a technical advantage. But sometimes people make mistakes and go first cost all the time. That was a mistake of all these indoor cultivation companies that we did not get behind, they went and installed these air-source split systems, put like 40 or 50 of them on the roof and then expected them to work. And of course, they don't work. And so customers that look for first cost, they're going to do what they're going to do or try as I might. And of course, we try to make our merits on our technology improvements.

These are units that go on top of a building that don't work in...

Well, no, they -- what I mean to say, Alex, is that our -- we sell industrial chillers, water-cooled chilling systems, chilling loops, that are, again, part of industrial processes. A little office building will just throw a little cheap Daikin split air source unit on the roof, just do some comfort cooling. You can't use those little air-source units to do industrial cooling. It's cheap to do it and you may think you can do it, but there are so many complexities, particularly with indoor growing, when you have latent heat and all these heat loads that have to be accounted for. Mistakes will be made, mistakes were made, several of these facilities are regretting it, because they're seeing their enormous electric bills, and they are wishing that they went to a more integrated system like the Tecochill. So again, my overall point is I try my best to make people -- to have people make the right decisions based on technology and operational cost. But there's always going to be people that think they can make do with first cost and ultimately, it catches up to them. I think we're seeing that in the indoor cultivation now, which is good for us.

That's good. One more question. And again, it's numbers related. Can you give us any guidance on sales and earnings for 2020, the end markets?

Yes, not something I would -- yes, yes. No, Alex, not something I typically give out, I don't give out that type of guidance. Our products are up. They're up from last year. They've end up just about every year. Our product sales, our service revenues have certainly been up every year, and I see no reason to expect why that wouldn't continue.

And do you expect to turn the corner in terms of profitability? I mean one of the reasons I think your stock has been weak is that you've been growing, but it's not profitable growth.

Yes. So I will add to that in the most direct way I can, which is, yes. That's my goal in 2020, Alex, is we've got our product revenues. We've got our service revenues. We've got these increasingly good contributions from the energy-producing assets that we still own. We're making improvements on our margins, and all of these things will lead us to profitability if everything comes together in 2020. So absolutely, Alex, we're very close. We took the opportunity at the end of this year to clear a lot of items out of our books. Now that inventory write-down hurt, but we needed to do it. And we're entering 2020 with a nice, clean slate of all those accounting. Weird listings of the transaction are mostly over. And now we can focus on our core business, the product and service growth.

There are no further questions at this time. I would like to turn the floor back over to management for closing comments.

All right. Thank you all again for participating and look forward to talking with you again in our first quarter earnings call.

This concludes today's teleconference. You may now disconnect your lines at this time. Thank you for your participation.