Q4 2019 Earnings Call
Good day, ladies and gentlemen, thank you for standing by welcome to the Merit Ameresco Inc. fourth quarter and for your 2019 earnings Conference call. At this time, all participants are in listen only mode.
They don't forget the question answer session and instructions will follow at that time.
This call is being recorded.
I'll now turn the conference a few host Ms. Li look Dillon, Vice President marketing and communications is doing you may begin.
Thank you Valerie and good afternoon, everyone. We appreciate you joining us for today's call joining me here, our George Sakellaris, Amerescos, Chairman, President and Chief Executive Officer during the whole senior Vice President and Chief Financial Officer, and Mark Chip Block I.
Then and Chief Accounting Officer.
Turning to Carl call over to George I would like to make a brief statement regarding forward looking remark.
This call contains forward looking information regarding future events and the future financial performance of the company. We caution you that such statements are predictions based on managements current expectations or beliefs.
Actual results may differ materially as a result of risks and uncertainties that pertain to our business.
We refer you to the company's press release issued this afternoon and to our FCC filings. These documents disgust important factors that could cause actual results to differ materially from those contained in the company's projections or forward looking statements.
We assume no obligation to revise any forward looking statements based on today's call.
In addition, we will be referring to non-GAAP financial measures during the call. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles.
GAAP to non-GAAP reconciliation as well as an explanation behind the use of non-GAAP financial measures is available in our press release and in the appendix slides, which can be downloaded from our website.
I will now turn the call over to George George Thank you Leila and good afternoon, everyone.
Before we discuss our results I would like to quickly address recent rumors regardless, even epicentral se a little that noticeable.
Well, we did not get to pick on that specific market.
We can all these days up we are not guarantee engaged in any sales process and that we are aggressively pursuing our business plan as an independent company.
And with that no older vessels.
And what does go into 2019 with record results across several key metrics.
Importantly, we just started this year with a broad technical capabilities that backlog to produce another year or strong performance.
During the fourth quarter, our team did an outstanding job.
We leveraged the strength.
We business unit to Delever in all facets.
We grew our total backlog by 15% to $2.3 billion in our emphasis in development.
80% to record levels.
We convert the great numbers Magid awards, the contracts as expected and we actually good isn't an hour constructed backlog, which enables us to realize record revenue.
We now look forward.
With great visibility and excitement as we take advantage of the game changing industry advancements.
Economics of advanced technologies have dramatically pool.
Yeah.
No. It gets driver for renewable energy and energy efficiency combined heating power micro grids and energy storage project.
Over the last decade, the cost of these advanced technologies have dropped significantly.
They can manning installations and upgrades economical for an old customers.
Well just have declined and the price of solar power tends to get most of the attention.
Oh, the technology to get Belsen see him a significant drop in calls and increase in performance.
What are your sons.
Hi says for daily deal I didn't have dropped by over 90% into lost the gate lead you to tremendous growth markets adoption.
Municipalities.
You have taken advantage of these technology to retrofit their stuff like that.
I might ask recently replaced over 800000 legacy Street lights with high efficiency L. you did seem to see your your Phoenix.
The city will say well the $3.5 million per year for lower electricity costs. In addition to substantial operation and maintenance savings.
The cost of many of these advanced technologies.
Moving LTPS solar battery storage Microgrid since G.H.B. Fuller junior default driving more and more attractive economics, what our custom misinformed.
As we looked at your future.
It's clear that the trend is moving towards the low carbon free environment and away from forsell fuels.
We usually report from Bloomberg showed up.
These energy purchases by corporations through power purchase agreements are setting records. These purchases increased by any rescue 44% in 2019.
The report nodes corporations are facing increasing pressure from stop shelf August two two carbonized, an energy consumption and diversified energy sources as exemplified by recent releases from Delta Airlines microphone and Blackrock.
And my guess is well positioned to take advantage of this trend.
As we work closely with our customers providing them with best in class advanced technology solution that meets their unique needs.
Furthermore, we are able to give them drew financial flexibility.
It can all just solutions themselves or we can retain ownership.
We support both models.
Oh, Boardex independence and broke technical expertise.
Combined with financial flexibility.
Important differentiators for them or at school it gets increasingly complex marketplace.
We're also seeing into growing demand for resiliency.
Yeah, Hi profile grid shutdowns experience in California demonstrates a negative economic impacts.
Great great instability and power supply interruptions.
Yeah, Chris is live we are seeing utilities municipalities hospitals higher education incorporation group, we implemented so Louis shows that will enable them to rapidly evolving from these ever increasing wide spread interruptions.
The military has proven to be Newport them early adopter of innovative technologists provides an on site for energy storage at a micro grid controls for and that energy security and resiliency.
There are many basis around the country left are incorporated this solutions into their infrastructure.
Good example is our recently announced project the forces Naval shipyard get already made.
As part of this project.
And more ESCO will add new 7.5 megawatts combined heat and power plant.
And installing one megawatt battery storage system to expand the micro grid system from the shipyard.
And my school will also provide to punish or maintenance services.
We're kinda live delivering simpler solutions to other federal customers across the country.
There is a report from navigate research.
Estimates that the global market for microbiome grades is expected to grow into 28% annual growth rate through the end of this decade.
Our energy assets business was also very active this quarter with a number of new awards, including five additional renewable natural gas opportunities representing a total of approximately 25 megawatts.
Our robust asset development pipeline will allow us to more than doubled our mega once you're not progression in the coming to use.
This will significantly increase our base of recurring revenues earnings and cash flows.
Well 2019 was impacted by lower RIN prices.
We're pleased to see a sharp price to be bolland already in this first quarter.
As such we have taken advantage of the positive will increase our hedging activity for our 2020 <unk> production.
Renewable natural gas continues to experience a significant increase in demand is organisations depend dependent on natural gas look it's incorporated this green gas into their mix.
Well it sounds what does your sector is taking the lead in recent years, we are seeing any particular interest from the natural gas utility industry and institutions with many already announced plans to increase purchases renewable natural gas as part of their overall fuel diesel fuel supply.
We believe this increases the men will allow us to find good offtake partners for our green gas under long term contracts, that's giving us better long term visibility into the cash flows from this project.
At the end of 2019 thought the less efficient development reached 321 megawatts.
Our assets.
Your development to continue to grow at a healthy rate.
In addition.
No pressure maintenance backlog grew at an impressive don't get 2% to $1.1 billion.
Further strengthening our future recurring revenue base.
As a key enabler of the low carbon future.
We look forward to disclose in more he asked you related there either football customers and our investors.
We are proud to report that's in 2019 alone and Myrisk was renewable energy assets and customer projects delivered a carbon offset equivalent to over 11 million metric tons and see what too.
Pieces are traveling to the carbon absorbed by almost 15 million acres or forests in one yeah.
We are entering 2000 thought D was outstanding long term visibility excite didn't market opportunities and a great competitive position and platform and do terminal resources in place to benefit from this fast growing market.
2020 should again be it a year of records for revenue at my desk, which I will now turn the call over to Doron to review the financials border.
Thank you George and good afternoon, everyone as I review, the company's fourth quarter in full year 2019 financial highlights I ask that you. Please refer to our press release and supplemental slides for more complete financial information.
The investments we've made to build our advanced technology capabilities are beginning to pay off.
We had record growth in project and own in backlog as well as another solid quarter of increasing our assets in development.
Our smart energy solutions project backlog at quarter end was $2.3 billion.
Comprised of 1.1 billion in contracted backlog and 1.2 billion in awarded projects with $290 million of New awards won during the quarter.
Notably our contracted backlog of 1.1 billion grew 52% year over year to a new record high adding to our clear visibility for 2020 and beyond.
Our assets in development reached a record 321 megawatts at the end of the year, representing 80% year over year growth.
We added a net 34 megawatts in Q4, including a number of new RMG opportunities in a large comprehensive microgrid project in the see an eye sector, which we look forward to talking about more in the future.
These new additions reflect our ability to capture market share in the growing green gas and Microgrid markets through Ammar ESCO asset ownership.
Fourth quarter revenue of 307 million reflected very strong growth as we converted the large federal government contracts in our awarded backlog into contracted backlog.
Full year revenues increased 10% to 866.9 million from 787.1 million last year, driven by strength in the projects business.
Our annual results were negatively impacted by a decline in RIN prices, reducing gross profit net income and EBITDA by approximately $7 million.
4.3 million of which directly impacted Q4 however.
Since year end, we have proactively taking advantage of the recent rebounded RIN prices by hedging more of our expected production.
We believe this strategy will decrease the impact written volatility on our 2020 results.
Offsetting the RIN pricing impact was the retroactive extension of the 179 de tax deduction that increased fourth quarter and full year net income.
This benefit was recognized fully in Q4 2019.
And included 4.2 million or nine cents a share for projects completed in 2018, and 3.3 million or seven cents per share for projects completed in 2019.
The 179 de benefit will continue through the end of 2020.
Now, let me provide some color on our financial expectations.
2020 should be another year of solid revenue and earnings growth supported by our strong backlog Emre ASCO expects 2020 total revenue to be in the range of $910 million to $980 million, representing 9% year on year growth at the midpoint.
We are forecasting adjusted EBITDA to be between $102 million to $112 million, representing 17.5% growth at the midpoint.
Non-GAAP EPS is expected to be in the range of 86 cents to 96 cents.
We anticipate gross margin will be in the range of 18.5% to 19.5% due to a greater mix lower margin projects in our contracted backlog that will be executed during the year.
Interest and other expense will grow to approximately $17 million to $19 million as we continue to finance additional company owned assets.
We expect an effective tax rate of approximately 8% to 12% for the year as the company continues to benefit from the extension of the 179 D tax deduction.
This guidance excludes the impact of any non controlling interest activity and any additional charges relating to the company's restructuring activities as well as any related tax impact.
Now I'd like to turn the call back over to George for closing comments. Thank Darren.
Here are full points I would like leave with you.
First.
Market continued conditions are strong and Ameresco continues to gain recognition for our flexible and great value propositions.
Second.
We expect to have a strong 2020.
Thanks dollar substantial constructed project backlog and our fast growing asset development pipeline.
Third.
The investments as we have made it technology people and platforms should benefit more ESCO and its shareholders in 2020 and beyond and fourth.
We believe that we are easy early stages of this indices growth as we continue to drive towards omission.
Sustainable low double future.
We look forward to seen many of you at our upcoming Investor conferences, and we've had no Valerie we would.
Now I'd like to open the call it two questions.
Thank you asked a question either press star one on your telephone to withdraw. Your question you May press the pound King. Please standby will become public you any roster.
Our first question comes from Chris Van Horn of B. Riley FBR. Your line is okay.
Good afternoon, Thanks for taking my call.
But that's going on Chris Thanks, Chris.
So I just wanted to talk about the guidance for a minute you could you give us a sense of of the puts and takes on that on the revenue range is it mainly due to timing of awards or are there other macro macro factors that you might be thinking about there.
Yeah, I think my take is store and.
As it's probably more about timing of converting awards to contracts that it is about.
No actually getting awards.
When I look at that range.
As.
You know we've done a good.
Position, regardless to how much revenue, we expect to come from.
Actually give contracts and how much is coming from awarded contracts a blend to convert.
But we feel pretty good with a range that we have given.
I don't know lists okay. Okay got it thanks.
And then you know you mentioned in your and your comment around the outlook.
That growth gross gross profit will grow at a higher rate, but that margin might be somewhat affected by mix anything specific to call out there on on on the mix side.
Yeah.
As you would point what has happened in.
The business is shifting a little better and we get more what I would call. The design build projects and a good example might be a couple of customers who are designed into plans assets that we will own and operate the until.
Regarding the present and they say no we will.
All of those essence for you with design develop them and built in for us and the margin or those particular projects of course, the risks substantially lower I'm not a similar to the margins as we get some of that perform this contract and we have several.
What I call legacy some of the street lighting jobs that we have and some of the design build jobs that we have a for the federal government.
That they are considerably lower margins and some of them. They have to hear time horizon to get implemented but one of the good.
And that which wasn't it's we've built and that's it for a particular customer or to stick licensed job for the particulars on municipality, well get a pretty good trailing the pressure maintenance contracts associated with those particular clients and they give us pretty good margin on the line and contract. In addition tool that many of these clients.
Our customers.
Many repeat business associated with them, so even though that the on the top line, we might see the gross profit margin.
Dropping a little better but.
What is a quick the or the profit point of view they contribute inclusive.
Considerably so.
It's a good it's a good thing at the end of the day.
Yep, Okay got it last for me.
SGN a you know was flat from a dollar perspective on really good strong growth in revenues. There is that just based on the operational controls you haven't place or is there anything else that we should be thinking about there.
No. It's the operational controlled we given plays we always cognizant of the Frac one of the things in a growing company and especially.
Based on the fact that last year, we had to.
Invest about $5 million.
All packs and what I call the People's than a platform in order to be able to competing for this had a competitive market. They invest acknowledge your market that's on the other hand.
We have done a good job for may be fine tuning the organization little bit and.
Make the additions where we need them at this a production is where they're not as effective.
Okay.
Got it thanks, so much for the time and congrats on the quarter.
Thank you thanks, Chris.
Thank you. Our next question comes Noah Kaye of Oppenheimer. Your line is open.
Okay. Thanks, very much a couple of questions to run through here first what were the megawatts equivalent placed in service in 2019.
[noise] license.
Play out and so many megawatts.
Eric.
20 and 36.
34, yeah.
34 buckets or what do you.
Okay, and what are you assuming for 2020.
About 50.
And well likes to point, there we were little bit disappointments on a the installation for what we placed in service a four megawatts this year.
And you might know most of our assets, we will plan and placed in service they were in Massachusetts, and Rhode Island, and some there with New York, but especially in a much assistant Rhode Island, we hit a substantial delays because of the cluster studies I think utilities, they have to do and that set us back I will say six to me.
Nine months of about 20 megawatts of installation and actually some other producers would impact if any shifts that time in at a later today.
Okay, and then you added 25 megawatts, the RMG pipeline and development. So can you tell us or remind us.
When do you see the 66 megawatts coming online and when will those projects reach full ramp.
The general schedule for years.
Yeah.
We have given some.
Color before.
Mccallion Road, there would be at the end of this year otherwise.
Starting some late in the fourth quarter.
Then we have two more.
Keller and a forward that they will become in that.
Close to the end of next year then it right now we plan. We hope is that we will have three for the year. After that that's the plan we've built into the organization to be able to get launched two and then three of this planes in service and wed like to point out to on a.
Regarding on the Green gas.
Development, it's an area that we put the law emphasis because of what's happening in other markets. Besides the transportation sector.
And we hope you that by the out of this year would be able to position.
We will have executed some long term contract.
Some of the good credit worthy entities and that will give us better visibility as far as revenues earnings and cash flow associated with this project.
Okay and that interesting thanks, George for anticipating my next question. So you know you noted and kind of leave their bins were $7 million drag at 19, what RIN price are you assuming in 2020 guidance.
We don't disclose that number but I will say you in that more than 50% we hedged in the marketplace right now I think it's 50 to 54 and we continue to find opportunities.
Pretty much though.
We put those guys is the last couple of months and it does not take a great scientists to figure out what this crisis era and I think Thats you will find as we go out on the the neighborhood of whatever the number that's right.
Well, maybe to <unk> RIN prices because of the court rulings have doubled in the last couple of months.
So you said you didn't or your hedges on after prices doubled.
We we put the there has just after the increase.
Okay.
Very good very good. So so you no longer terms here, if I listen to your previous answer your indicating that there is potential they get long term off takers for for some of these projects.
How close do you feel you are to signing some of those contracts is that a 2020 type announcement you expect.
I would comment on it most likely towards the end of the year.
We get going back and forth and.
Some of them, they're large institutions or something utilities and they take time.
Button.
I will say this much though that.
We have a lot less interest.
Okay. We got them and then we've got I guess the prices as we'd like to it enough for the long term many of them that.
Are they trying to get something you have contracts.
[laughter].
20 year contracts with it.
Well, we had a couple of people that they're looking to put up yet, but it doesn't mean, we're going again.
Okay, just one quick one on the project side.
Congratulations on the massive increase and contracted backlog I mean this is.
Obviously by far and away the because number you're not going into a year.
[music].
Just want to understand as you look at what's in that backlog as far as mix due the mix headwinds that you are calling out for 2020 do do those continue or.
In 2021 based top of the mix of what you what you booked in the contracted backlog or.
As you look out a little bit farther beyond 2020 is the margin profile look a little bit better how should we think about that.
I will say this much that you know the headwinds as we forecasted 2000 phoneme has a lot to do of course with a mix of the broadening and the fact that the other thing on these projects that.
People have to realize is that many of them. They are two or three year projects and new supposed to be a construction. However, having said that in 2000, Tony you want and further down the road. We've seen that the margin is gradually was sub becoming though and the other thing that 2000 thorny that deterrent personnel, but let's say you got.
40 megawatts fill a smaller plans of adjusted May differ by six to nine months.
If we got them completed this past year. They will contribute if you go back to our analysis.
One of them many of you bid up or a megawatt.
We would have another ER.
A $5 million of EBITDA coming in at this year so.
<unk>.
Very good thank your for taking the questions.
Because local fixing.
Our next question comes from Craig Irwin Roth Capital Partners Your line.
Good evening and thanks for taking my questions.
I can George when we.
The different disclosures over the course the year for EBITDA fine line of business.
I know the mass is not perfect, but it walks into a number.
The fourth quarter for the.
For the Atlas business, it's actually more than $20 million more than 70% of the EBITDA.
In the quarter off the assets business and.
Materially higher than any any number you've had in history.
Can you maybe describe for us things that we're driving strengths in the on ship business in the fourth quarter, where there any specific items that you were able to monetize and you know how does this progress sequentially going into Twentytwenty and.
Should we expect to build incrementally on this in the fourth quarter of 2020, as we continue to commission new projects.
Yeah, we.
As we give said during the past 30 organically and could we won't do we don't want to over Levered, our balance sheet and if you look at our backlog and you say or George you got you guys have please on the Tony one megawatts of essence June development, a good chunk of that we will be monetized that's especially.
When do we find the rates.
Or the cap rates that people have been underwrites, especially solar projects during the fourth Florida.
We did monetized.
Not lump sum projects, which have been confection, rather than take built on the floor on balance sheet, we sold them.
And you will see us continue to do that periodically we do it in the fast.
And he will be part of our business and even this year. We have we now plan, but most likely though we will not wait till the last for the fourth quarter to do that and we plenty to do it throughout the year.
Okay actually how can they adopt it you, but thinking about the contribution from the asses what do you look at it from.
The whole company on a on a year and that's why we drive into recurring revenues we.
For the year up to 68%.
What do you come down I know one of them and assets.
It varies from Craig very very strong.
Craig Craig let me jump in one one quick thing if you're looking at the supplemental slides just to note that we did.
Nick a slight adjustment the way, we're allocating our corporate opex for us another point, creating those Dona charts. This time. So just note the difference in the in the footnote on that slide.
We kind of took a look back at that and decided that it would be more appropriate for us to allocate this on the full year based on the percentage contribution of revenue those varying.
Lines of business.
As opposed to give 'em, where it was excluded.
Okay I'll just do you understood as your Azure analyzing this it's worth while taking a look at the comparison of those two footnote okay. Okay.
Thank you for that so then.
Can we talk about the on the projects that are likely to start contributing in 2020 than than the new projects that you'll be building. This year that you should commission before the end of the year what are the specific geographies and.
You know should we expect above or below trend.
Start up and then intermediate term profitability on these projects I'm based on geography or other operating.
Parameters like it's a landfill gas plant or wastewater transplant or maybe something else we get.
We have launched plan that will become in on this year, you're talking about the.
Renewable natural gas plants, and that's the the Mccarty road plan and that will not contribute and your revenue or EBITDA.
This year.
We plan to see that plan coming late in the fourth quarter.
And if I want to vetting man and the.
Let's say the Christmas holidays, and so on its off we're just trying to do but when.
You want to see much in deferred until the first quota.
So.
And.
And the other two plants now that we will come in 2021 right now they are scheduled before.
Contributing laid.
I will say, the third and fourth quarter and primarily the fourth quarter 2021.
Okay, and then given the geography as in California that you qualify port both.
RIN generation and the low carbon fuel standard.
The tipping typical in profitability.
The plants the two plans the forward than Kayla that they already know, California, yes.
The other one is the Mci erodes that's in Texas.
We trying too long to get it there and we think we might be able to do it but.
Right now I wouldn't I plan on it.
Okay last question, if I may you know reading the details of the Canadian.
Sorry, Darren I think you want to say something.
Yes, or no go ahead.
No go ahead.
Reading the details of the Canadian clean fuel standard and once expected to come out a this summer.
[music].
Many people are interpreting what's been said.
Let's say that basically.
Customers can start thinking carbon credits for compliance in the future off Green gas projects, starting you know probably the end of June this year.
Uh-huh seems like there's theres about to be a flood of.
Green gas projects now in Canada, you know and we'll have two significant markets not just California, and the other Lcs markets, but the Canadian l. shaped much markets coming on as well.
Can you maybe talk about the on the breadth of your capability to handle incremental projects.
No you mentioned your balance sheet as a constraining factor, but you know would you maybe take on another five projects. It if you could find credible projects with with really attractive economics that could generate attractive returns over the next few years.
Yes, yes, yes, we can the only thing that and that's why in the past.
I did not go very aggressively on this business, even though I think we.
Have the capabilities better capabilities than anybody else into business, because we all the way we give.
Develop on project designed and built them operate them and maintain where many others. They they buy other People's project.
The thing that's just help me back in the past executive what's happened to US this last quarter.
Being able to have that gold reasonable long term contracts. You know 10, you have contracts and so on and even though when you make sacrifices take lower price are the ones, we might get when the open markets before rings, It will give us better leverage or less project and better return better predictability and better return on equity.
The other day.
Many of these projects we have right now we have 50% equity 50% that so even though they from via an 11 point of view they look great.
The they put more spring on though your balance sheet.
So, but we have the capabilities. Then we are building up I said, we're going to go to three projects one a late 2022.
And if we put together the projects we could build out to the sooner. The other thing I went up questions you correct and everybody else wonderful, it's [laughter] I've I've been licenses you know maybe.
And permitting various plan.
And that the kinds of we haven't California have very very difficult to site.
What does it.
Transmission line that you have to interconnect into the main pipeline or local permits you know this plan. That's it that's the biggest bottlenecks that we have right though.
And that's why the time in Oh, we have cautious when the timing of this up projects. It's a.
Yes difficult due to permit.
I will say that not much other than the other hadn't once you get them up and running that great desperate for that.
One last question I should ask on the on the life call. Your your contracted backlog 1.1 billion I think was almost $290 million higher.
And your last record I think.
I just under 820 million.
HM.
You did you did increase you did increase your guidance about sort of where we and street. We're looking for for this year, but that that that magnitude of strengths in the contracted backlog.
I know suggests that you're looking at contracted backlog as maybe longer in duration.
And what you've seen in contracted backlog looking back over the last minute cool is good.
You get the name is longer than wed.
Yes, you hit the nail on ahead they are longer durations.
And the other thing that you have one so the longer duration contracts you know they could not have as much flexibility to accelerate revenues to so on and they are financed with over three year terms. The payment schedule is over the year terms for two or whatever the case my view of 30 months. So you built according to the to the schedule the its.
Those plants, but then again, it's great great visibility.
And we lever the company by taking some other design build opportunities where there might be with existing side with the federal government I've been a and.
You heard about the grade, but stuff is job that we did at New York, but the portfolio. If this is a great client robust we're doing some mechanism we will own the about five of their facilities and so and so it's a good opportunity.
Congratulations on the on strong progress again, another great quarter. Thanks for taking my question is very very <unk>. Thank you. Thank you Chris.
Thank you I gave like down the question. Please press Star then one when you touched on telecom.
Our next question comes from painful Antonov.
Raymond James Your line is open.
Thanks for taking my question dice good to get on your call a first time.
First about the bank, we're getting there.
Our first about the quarterly progression.
This past year was unusually backend loaded more than a third of your full year revenue came in Q4 do you anticipate 2020 being equally backend weighted.
I will say.
Nor as much but there will be back end weighted as far as a third of the fourth quarter in Oh, My God knows the schedule. This project much better than I do I think that's just generally that's typical I mean, I think 29 team with a little bit more unusual just given some of that the large federal projects that we contracted a year, but I think John.
Yes next year would be a little bit more normal compared to previous years, but but generally with just given a construction schedules and seasonality is generally heavier in the backup.
Yeah, Yeah, Yeah. Good point then.
We had almost $35 million or close to it of what we've called investments in development at once told US confident were executed immediately that goes into revenue and ER.
Not this year.
And if you're that backlog.
It was developed for the last two or three years and it was you.
Imperative that.
Those contracts get executed by the end of the here because of the idea I do have expiration date the census data.
And I'm glad to say that each and every one of those contracts did get executed.
Understood, Let me ask a more kind of high level conceptual question, you were seeing more and more.
Private sector companies large fortune 500 enterprises setting these low carbon or even zero carbon targets and historically your business has been more oriented towards the public or the nonprofit sack or are you seeing actual apply.
It's been business from these U.S.G. driven.
Corporate de carbonization initiatives.
Yes, very very much show a man, we have talked before Kaiser Permanente an equity.
Just about every major frankly about clients now.
And the and we're doing a design built so we can pivot.
We're doing a considerable amount of work right now what I would call for the see a nice sector.
Marilyn.
Solar plants, or a combined heat and power and micro grids resiliency issues at their face, but the he asked you issue. That's what I mentioned that on my remarks is becoming to drive them and it's a driver because economics of all of these advanced technology.
We have come down and this projects.
A pencil out for that particular customers.
During the Melissa.
No.
And what I would say is that the scene I customers are starting to look at the cost of carbon as they evaluate these projects and taking that into account when considering the cost it's a different calculus than your traditional SPC calculation.
But they are moving forward with it and I'd say the U.S. Yoo motivation is definitely there for all of these enterprise contracts that we've gotten on the on the solar side with.
Nationwide coverage.
We've got.
Mentioned in the comments.
We've got a micro grid coming in the in the see an eye sector, that's going to be at asset on the balance sheet.
That that's a very exciting exciting move so it's definitely habit.
Sure.
Thank you very much.
Thank you.
Thank you. Thank you.
I'm showing no further questions at this time, ladies and gentlemen. This does conclude today's conference. Thank you participating you may all disconnect.
Thank you everybody.
[music].