Tecogen Inc. (TGEN) Q1 2020 Earnings Report, Transcript and Summary

Greetings, and welcome to the Tecogen First Quarter 2020 Earnings Conference. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ms. Bonnie Brown, Chief Accounting Officer. Thank you. You may now begin.

Thank you, Donna. Good morning, and thank you all for joining our first quarter 2020 earnings call. On the call with me today are Benjamin Locke, our CEO; and Robert Panora, our President and Chief Operating Officer, and Jack Whiting, our General Counsel and Secretary. 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 first 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 and prospects, constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these 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 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. So, as the agenda on slide four indicates, I'll start with the brief Company overview, followed by a summary of the Company's performance and results for the first quarter of 2020. Bonnie will then discuss the financials in a little more detail. And then, I'll provide some overall takeaways from the quarter. Bob will then give an overview of our emissions technology development efforts. And then, I'll conclude talking more about our plans for 2020 in light of the COVID pandemic. We will of course take questions afterwards. I'd like to start off by reminding our investors 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 facilities strive to reduce operational costs, 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 onsite generation technologies by virtue of our clean, proprietary near-zero emission system, called Ultera; our exclusive microgrid technology; our corporate longevity; and our 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, particularly in the current environment, our systems provide resiliency to power outages and other grid disruptions. Turning to slide 6. The first quarter of 2020 saw revenues of $7.9 million, compared to $8.2 million in the first quarter of 2019, a 3% decrease quarter-over-quarter. This decline is due to a few factors including a 40% or $490,000 reduction in energy production revenue, as we sold a portion of the energy production fleet last year. And our product revenues were adversely impacted by the return of three chillers shipped in the fourth quarter of 2019, due to the customer losing financing. Absent the return, the first quarter product revenues were a little over $3.4 million, which would have been a 13% increase quarter-over-quarter. The quarter saw our overall margins come in at 35% versus 36% year-over-year. While I'm not happy with this overall margin number, I am happy to see our profit margins rebound to 39% from 36% previously, and both year-over-year and quarter-over-quarter. The softer overall margins in Q1 of 2020 are mainly attributable to lower margins in our service segment, which is comprised of maintenance services and installation services. In this case, while our maintenance service margins were good for the quarter, our installation services margins were poor due to the initial challenges of construction work at the onset of the COVID pandemic. I'll talk more about our margins in a few minutes. On the expense side, our G&A was slightly higher than the first quarter of 2019, but lower than last quarter, Q4.We expect further reductions in G&A going forward, as we continue to improve many of our business practices. I was happy to see operational cash flows of positive $1.1 million for the first quarter of 2020 as compared to negative cash flows of minus $600,000 in the first quarter of 2019. And as we indicated in our earnings release, we consolidated our intellectual property for the remaining Ultera patents, while abandoning other patent applications, resulting in a onetime non-cash write down of $180,000. The end result was a net loss of $1.2 million for the quarter compared to a loss of $3.3 million in the first quarter of 2019, and an adjusted EBITDA of minus $817,000 as compared to an adjusted EBITDA of $678,000 in Q1, 2019. Please recall, the first quarter of 2019 income and adjusted EBITDA included some onetime accounting treatments of goodwill impairment relating to the selling of certain energy generating assets that previous quarter. So, while the first quarter loss at face value seems discouraging, I think it's very important to emphasize our core business segments did well and did not suffer any precipitous drop-offs in the first quarter. And despite the challenges due to the COVID pandemic, we do not expect any significant disruption in our core business going forward. I'll talk more about our outlook for the rest of 2020 in a few minutes, but first I'd like to turn it over to Bonnie for a little bit more detail on the financials. Bonnie?

Thank you, Ben. Slide 7 contains some highlights of our first quarter 2020 year-on-year financial results. Total revenue for the first quarter of 2020 was $8 million compared to $8.2 million for Q1 2019, a decrease of 3% year-over-year. This decrease is due to the sale of energy producing assets in the first quarter of 2019, which caused our energy production revenue to decrease by $490,000, as well as the large sale return of chillers of $655,000, which directly impacted our product revenues. Despite the sale return, combined product and service revenue still increased by 4%. Product revenues were highlighted by cogeneration sales with an increase of 78% year-over-year with chiller sales decreasing, resulting in an overall decrease of 9% year-over-year in product revenue. Excluding the impact of the sale return of $655,000, our product sales would have been $3.4 million, representing an increase of 13%. Service revenue increased by 14% with long-term maintenance contracts increasing 5% and installation revenue increasing 28%. Overall gross margin for the first quarter of 2020 was 35% compared to 36% for the same period in 2019. Operating expenses excluding goodwill impairment and the gain on sale of assets from the prior year increased by $216,000. The abandonment of the intangible assets of $180,000 accounts for the majority of this increase. Net loss attributable to the Company for the quarter was $1.2 million compared to $3.3 million for the first quarter of 2019. The comparative loss included a $3.7 million goodwill impairment and $1.1 million gain on the sale of energy producing assets. Slide 8 is presented for your reference and shows the reconciliation of non-GAAP adjusted EBITDA for the first quarter of 2020 that’s comparative to the same period in 2019, which has been referenced throughout our presentation, in our earnings release, and as these dynamics used as an important metric. Now, I'll turn the call back to Ben for further discussion.

Thanks, Bonnie. First and most importantly, despite the loss in the quarter, we did not see a significant drop in our core business revenue segments. We shipped $3.4 million of equipment in the quarter but unfortunately had to account for the return of the equipment from the previous quarter. We do not expect any significant decline in shipments in the second quarter, despite the COVID challenges. With regard to energy production, we expected a decrease in revenue compared to the first quarter of 2019, as a result of selling some of the assets to a third party. But, the remaining assets we own did and will continue to produce consistent high margin revenues for the Company going forward. Next, getting back to our service revenues and margins. We continue to see growth in our service revenues every quarter, as almost everything we ship has a corresponding new maintenance service contract. We also continue to provide installation services within our service segment. Although we scaled back these turnkey services in late 2019. Some of the ongoing turnkey installations, particularly in New York, were adversely impacted by the onset of the COVID pandemic in March, resulting in project delays and lower installation margins for the quarter. As workarounds for things like permits, inspections and entry and egress limitations were addressed, we anticipate our installation services margins will improve, though we understand construction activity still has significant limitations as result of the pandemic. With regard to the rest of 2020, we understand that it is an unprecedented time for many businesses and industries due to COVID, and we are adjusting our own plans accordingly. Certainly, many of our sales and marketing activities have been curtailed as virtually every tradeshow and industry event has been canceled or delayed. In response, we have been fast adapting to implement alternative sales and marketing activities such as virtual lunch-and-learns, webinars and online meetings. Fortunately, many of the industries and people our sales and engineering teams interacting with on a daily basis are similarly working from home so we can still conduct business remotely. As such, I am still confident we can be profitable in the coming quarters. We have affirmed our product backlog in light of the pandemic, which I will detail in a moment. We have improved our product margins and our energy production margins and expect improvement on our service margins going forward. The addition of our 11th service center in Toronto is already resulting in new service contracts, as our press release this morning indicates. And our service revenues in Toronto will grow even further as the units we are shipping to Canada become operational, later this year. And importantly, we are conducting all of our business activities with a careful eye on operational cash flows. As investors may have noticed, earlier in this week, we ended our line of credit agreement with Webster Bank. We were very fortunate to have this line of credit to help cash flows in the past two years, but the debt costs and restrictions that came with the line of credit were substantial. We made the decision last week to end the line of credit in order to reduce that cost and eliminate accounting complexities that came with it, and focusing on maximizing our operational cash flows. As the press release indicated, we have sufficient capital to maintain our operations through 2020. As interest rates are at rock bottom, we will keep our options open for a more cost effective line of credit if the opportunity is available to us in the future. Turning to future growth opportunities. While some activity has been delayed due to COVID, we still expect to make progress on these initiatives in 2020. Bob will give a quick update on the forklift program shortly, but essentially we’re delayed until travel restrictions are eased and collaborative work can continue can with Mitsubishi. With regard to our plans to expand our gas cooling segment, we are already working with Vilter-Emerson to jointly market Tecochill, our gas engine refrigeration system and are engaged in discussion with other potential partners to help expand the market for our gas cooling products. I hope to have an update on our partnership plan soon. And lastly, we are identifying new geographies that have favorable market conditions for our equipment. Our expansion in the Florida last year and our recent expansion into Toronto this year is a blueprint for additional expansion to other North American geographies. I expect additional updates on our efforts to establish new markets for our systems in the coming months. Turning to slide 10. Our current backlog stands at $12.7 million as of earlier this week, consisting of a little over $10 million in product and $2.5 million in installation services. It is my expectation that the backlog will continue to grow as hopefully the COVID pandemic subsides and business returns to normal. And lastly, as I’ve said previously, our backlog consists of products and installation revenues, and does not contain our recurring long-term maintenance contract revenues, which is a consistent contributor each quarter. Again, this is very important when considering the expected new revenue contribution from our new Toronto service center later this year. With that, I'd like to turn the call over to Bob who will describe our emissions progress in more detail. And then, we'll take -- and I'll return to the call. Bob.

Good morning and thank you, Ben. As I reported in April and as Ben has referenced, MCFA was planning precertification testing this month at an independent laboratory in Texas, SwRI. Also the Propane Education and Research Council, PERC, the trade commission that funded the work originally had confirmed that they will fund the SwRI effort, which I believe is a very positive development. However, due to the COVID travel restriction, the work has been postponed as the testing required an engineering specialist from Mitsubishi in Japan to be on hand to perform the engine tuning adjustments. As such, we will continue to be on hold with the program waiting for the travel restrictions to be restored from Japan. The second item here is the California Water District with plans to order two 800 horsepower Ultera kits has put the project out to bid with our updated pricing. We expect the order in August. Lastly, we announced in January that our base Ultera patent was granted in the EU. We have registered this patent in 19 countries there including the UK, France and Germany. At the same time, we evaluated our secondary Ultera patent applications that are in process and elected to discontinue some of these. We believe that the legal effort would soon be entering more costly phase, while not really being necessary to protect our Ultera IP. This resulted, as Ben mentioned, in a $180,000 write-off, non-cash write-off. And that concludes my update. And I'll return the discussion back to Ben.

Thanks, Bob. So, moving to slide 12, I want to give some more thoughts on our core business outlook for 2020, and how we expect to continue growth, given the sudden and unprecedented changes in the business climate due to the COVID pandemic. First, in terms of our product sales segment, we are still seeing demand for our products despite the pandemic. While a few projects experienced some delays, for the most part, our backlog of products is expected to ship as planned for the rest of the year. And as the economy hopefully begins to restart in the coming months, I anticipate a renewed focus on energy cost savings and resiliency as driving forces that will create more demand for our products. With natural gas prices at record lows, we're seeing even more favorable economics for our equipment. And we are expanding our sales outreach to new geographies in North America such as Toronto. We are continuing to evaluate new geographical regions for our equipment, following our model of establishing an initial population of equipment, followed by establishment of a service center in the new region, which builds customer confidence and ultimately leads to more sales. And although we had a bit of a drop off in chillers sales in the first quarter, we still see our chillers as one of the best ways to enter new markets, since we have no other comparable competitor. Chillers are also typically specified by engineers and manufacturers representatives and are therefore a much more transactional and predictable in terms of project closing. And through our partnership with Vilter, we are seeing strong interest in our Tecofrost product in industrial refrigeration systems, a new market vertical for us. And of course, as I mentioned previously, we are focusing on maintaining our strong product margins for all of our systems going forward. With regard to our service segment, we have seen quarter-over-quarter growth in our service segment almost every quarter. We believe the expansion of our maintenance services to new geographies will further accelerate growth for the Company, particularly with the expected startup of the cogeneration equipment currently being shipped and installed in Toronto. And I will add that our remote monitoring capabilities, which we call CHP Insight has improved our ability to troubleshoot the service units more efficiently, all with the goal of maximizing unit runtimes and therefore service revenues. We are continuing to scale back on our large turnkey installation projects in favor of selling engineered accessories with our equipment which are designed and configured for ease of installation by a third-party contractor. We are currently winding down some of our larger existing turnkey projects though some are delayed due to the COVID pandemic. Going forward, we plan to continue to shift away from larger turnkey installation projects but still continue with more manageable installations with less construction risk. And lastly, we are eager to resume our Ultera development work with Mitsubishi once travel restrictions are eased and are continued to identify new opportunities for all our Ultera emissions technology. Before I turn the call over to the operator for questions, I wanted to address the question which is perhaps on many investors’ minds, which is our stock price. We are fully aware of the drastic decline in our stock price and feel strongly that the Company is significantly undervalued at our current price. Despite the loss for the quarter, the Company is still in excellent position to succeed going forward, as our business fundamentals are as sound as ever. Product sales are continuing, and we are seeing growth opportunities in new geographies for our products. Our service segment continues to grow each quarter and our new Toronto service center is expected to add significant revenue and margin later this year. Our energy production assets provide annuity type revenues with high margins each quarter and our Ultera emissions offers tremendous upside to the Company as we plan to continue our work with Mitsubishi. We have also made some significant improvements to our business practices, resulting in positive operational cash flows. And our balance sheet is sufficient for us to maintain operations through 2020. We are excited to accomplish the goals I outlined for the rest of the year and hope that our shareholders recognize these achievements and our stock price improves accordingly. With that, I'd like to turn it over to the operator for questions.

[Operator Instructions] Our first question is coming from Amit Dayal of H.C. Wainwright. Please go ahead.

Thank you. Good morning.

Hi, Amit.

Hi, Ben. How are you?

Good. Thank you.

Chillers that were returned, can these be repurposed and shipped out to new customers.

Yes, absolutely. We take the equipment back, and their chillers, and they'll find a home without question.

Got it. Your early April update, you were relatively upbeat and you still are. Between April and now, it's almost like month and a half when we had the prior calls. Are you becoming a bit more conservative with respect to the 2020 outlook from the visibility you have currently, or are you still sort of in the same range of expectations for the year?

Yes. Certainly, the timing of some of the activities that I’d hoped to see in 2020, I'm starting to be a little bit more conservative on from where I was in April. I mean, things are changing fast, as you know. But with that said, I think it's just timing. It's not a question of are they going to happen, it's just when. And so, again, we went through our backlog pretty rigorously and found a few things that slip. But by and large, everything is still going to happen that we expect to happen. It's just the timing of it may be a little bit altered. And then, with regard to our kind of our business practice and our expense side of things, I think we're being real practical about the future and making sure that we are in a good position, staffing, expense wise, and particularly our operating cash flows to be able to go through the year successfully. So, while I maybe sound a little bit more conservative, I actually am very confident about our ability now to make it through the year. We're in good shape. And I know the numbers are difficult to match up to this, but it really wasn't such a bad quarter for us. So, anyways, yes.

Thank you for that color. I mean, given the circumstances and things, the numbers weren't, in my opinion that bad either. How should we think about you organizing your sales efforts going forward? One is the challenge of trying to do all of this virtually. But then, the other challenge is some states are open, some aren't. What is your exposure to states that are open versus states that aren't open?

Sure. I think, we have been able to do our business activities when all the states are closed. And it will improve, of course, as some states open. But, even if all the states were to stay continue to close, I think, again, the community in which we work, particularly the engineering community is all very eager to show that they can continue to work this way. And so, I'm almost seeing an almost extra eagerness of the folks that we talk with on the phone to make business happen, despite the stay-at-home orders. And so, that's my long way of saying that we are watching obviously state by state, how to stay-at-home orders are lifted. But, I am very impressed with our ability of our team and the colleagues that we work with to continue to work even with that stay-at-home order in place.

And then, just maybe one final one for me. On the margin side, I mean, I know there's -- there should be expectations of some level of pressure, but do you think you'll be able to maintain your margins during this period?

Yes, I do. And I mentioned it a little bit in the call. If you recall, Amit, we had a little bit of a hiccup with our product margins in the fourth quarter -- actually in the third quarter that we improved upon in the fourth quarter, and then really kind of hit this quarter. Our product margins are right back up where they ought to be, 39%. I'd like to see them at 40%. But, I think our product margins are absolutely in good shape. Our energy production margins are going to be good. The systems that we inherited of course that we got from ADG and we approved upon are humming along very nicely. A couple of them have had some operational restrictions because of the COVID, but by and large, I think our energy production margins are still going to be strong. The service margins are the ones of course that I addressed in this call. And of course, our maintenance services margin, these are our actual service contracts, are very, very, very good. They have always been good. It's this installation services piece that we've been struggling with. And I think, I'm hoping the worst is done. We still have a couple of lingering construction projects that we're trying to close out. And it's tough to get ConEd inspectors to the building, and everyone's trying to come up with workarounds on the construction side of things. But I think we're going to see that improved as well in the second quarter as we kind of work out some of those things. I think, the entire construction industry really got caught off-guard, well everybody did of course with the pandemic. But, I think we're starting to get final workarounds for some of these construction issues. So, that's a long answer, Amit. But, I think our margins, I'm very confident about our margins going forward.

Our next question is coming from Alex Blanton of Clear Harbor Asset Management. Please go ahead.

I’d just like to point out that -- on this question of construction, the Governor Cuomo has said that as the different regions of New York state open up, the first activities that they are going to allow are manufacturing and construction.

Right. And we're fortunate that the construction projects that are in question here aren't a very, very large portion of our revenue. I mean, it's -- our main thing is our products and our services and those -- and of course our energy production. It's just a couple of these turnkey projects. So, we are following that pretty closely. And I don't expect too much more delays, particularly as the industry starts to open up.

He's basing judgment on two factors. How essential is the activity and how risky is it? So, they've determined that manufacturing and construction has more essential and less risky than going out to restaurants and things like that.

And Alex, just to be clear, it's not so much getting people to work. It's things like getting the city inspector to come and sign off on the permit or it's getting -- it's things like that. It's logistical things sometimes that become the bug, not so much the guy is coming up and the plumber and electrician showing up because as you said, I think there is an allowance for construction to continue, as you just mentioned. But it's sometimes it's little logistical things like getting a permit signed off and therefore we can't show that incremental amount of progress on the job. So, those are little things that we're struggling over. But, as I said I'm feeling good that those are going to work out and it's certainly in the second quarter.

Along those lines of logistics, why is it that this engineer from Mitsubishi in Japan can’t come over here and do his work?

I can't answer for Mitsubishi’s decision. They just said they do not want to travel until the restrictions are -- I'm not even sure if it's a restriction in the company or actual travel restrictions. But, I think they just said they're not traveling and not much they can so to that.

So, you don't know whether it's a company restriction or government restriction.

I didn't question it, Alex. They just said that we're not going to be able to travel until the restrictions are lifted. I assumed it was government, but I don't know that. It could be just the company.

Okay. The time being in there, they could get a dispensation or something for it. But, you said you did not -- and I thought this was perhaps the most important thing you said. You said you do not expect any significant disruption in core business going forward, despite COVID. Why didn't you put the qualifier core in there? How do you define that? And, what are the non-core activities that are not included in that state?

Alex, when I talk about our core business, I generally -- and speaking of again the revenue producing things, I mean, obviously, Ultera produces some revenue. But Ultera is not something that we generally report revenue and expenses against. Ultera is something that kind of has optionality upside to the Company. And so, that’s not saying Ultera is not core, of course, it's very important to our business. But, in my own mind I kind of identify core business as those things that we report on from a revenue stand point each quarter, again, being our product sales, our services and our energy production. And I’m going to put you back into queue because I want to move on to the next questions. But, if you have some more questions, perhaps you can jump back into the queue. Because I just want to make sure that we address -- we allow some of these other folks on the line to ask questions.

Great. Thank you.

Thanks, Alex.

Thanks, Alex.

Thank you. Our next question is coming from Michael Zuk, [ph] a private investor. Please go ahead.

Good morning, Ben and, Bob.

Hi, Mike.

Ben, I want to direct a question towards New York City. Given the financial upheaval in New York City with regard to property, rent, collections and capital spending, do you see any interruption in our ability to obtain contracts to convert existing facilities into a more efficient system that we offer? That's the first part of the question. The second part of the question is, what's the situation with regard to new gas hookups in New York City?

Sure. So, on the first part of the question, New York has been a very prime market for us historically and I think is still going to be. And in my own opinion, Alex, I think there's going to be even more of a need for our systems. I think, the resiliency kind of comes in with these types of activities. So, I think you're going to see people certainly wanting to save money and certainly wanting to be -- have more resiliency. Now, where I do think maybe we'll see a change is the ability of buildings to finance these things. Now, whereas in the past, the majority of owners would choose to buy the equipment and own it, so they can keep all the savings. But I think going forward, you're probably going to see more financing opportunities for buildings to put in these energy-saving and money-saving and resiliency measures at zero cost. Of course, it's the energy production model that we're all very familiar with. I see that coming back. And we're very fortunate that we have a handful of project finance partners that we've worked with previously and that are -- will plan on working with again, so that we can perhaps look at this new opportunity of installing our systems under a project finance deal. I think, that's something you might see more of. A little bit of nuance, part of the answer to that first question too, Mike, is we're starting to outpace New York with some of these new markets. I mean, I think, some people get concerned that New York shuts down means we shut down. And that's not the case at all. We have of course many, many facilities and the projects in New York. But, we're finding traction for our systems. Again, as I said in my prepared remarks, outside of those core markets in Toronto and in the Midwestern United States and certainly in Florida where we established our service center. We’re finding more activities in those areas. So, I don't think investors should get too concerned about specific downturns and just New York as it relates to our business, since I think we've diversified our products and our sales well beyond New York in the past year. Getting to the second half of your question about new gas connections, I think, we're seeing some easement in terms of gas connections. Certainly National Grid and ConEd have reached some type of agreements to allow new gas connections. I don't have any more detail than that about region by region, except to say that we're seeing some of these new permits start to get issued.

And then, one additional follow-up. Can you give us a little bit more color on activities in Florida?

Yes. It's a great opportunity for us in Florida. Not only is gas very inexpensive, but you have the gas utilities down there. And I spend a lot of my time, Mike, talking to the gas utilities because they -- we have a shared goal, to put cooling on gas, to take cooling off of electric and put it on gas. And there are gas companies down there that now understand gas cooling better. We spend a lot of time trying to educate these folks. And therefore now, they have their own teams that can go out and look for opportunities to switch from electric cooling to gas cooling. I think, we're having good success in Florida. You probably saw we shipped a few more chillers down there recently. Certainly, the chillers are real good economics. The cogen maybe will follow. But right now, I think Florida is really a shining star for us in terms of growth. I'm very happy that we established the service center there last year when we did. And so, yes, Florida is -- and it's not just Florida, of course, Alex, it's the surrounding areas that we can reach from that service center that I think is a good opportunity for us.

Well, congratulations. I think that progress is happening, maybe not as quickly as we would have hoped. But, it looks like things are heading in the right direction. And I’m enthusiastic that you'll have a pretty good year.

Great. Thanks, Mike. Always nice to hear from you.

Thank you. At this time, I'd like to turn the floor back over to management for closing comments.

Thank you, operator. Well, I'd like to thank all of you for joining the call. I certainly hope that all of our investors and listeners are safe and relatively secure from this pandemic. We, here at Tecogen, are doing our best and we're very happy that we're all healthy and surviving this, and looking forward hopefully a quick recovery. So, thank you for your time. And I look forward to talking to you on our next earnings call.

Ladies and gentlemen, thank you for your participation. This concludes today's event. You may disconnect your lines or log off the webcast at this time, and have a wonderful day.