Q1 2020 Earnings Call
Ladies and gentlemen, thank you for standing by bulky to be insane energies first quarter 2020 financial resorts conference call.
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Score now like to hand, the conference Overture speaker today.
<unk>. Thank you and please go ahead Sir.
Good afternoon, and thank you for joining us on today's conference call to discuss and pays energies first quarter 2020 results.
<unk> Thunder on them and phases, President and Chief Executive Officer, Eric brand or as Chief Financial Officer, and Ragu below are cheap products officer. After the market closed today and pays issued a press release announcing the results for its first quarter ended March 31st 2020.
During this conference call and case management will make forward looking statements, including but not limited to statements related to increase the energy is expected future financial performance capabilities launch and availability of our technology and products are performance in sales and operations and our expectations as to be impacted the coded 19.
Endemic piece forward looking statements involved significant risks and uncertainties and pays energies actual results and the timing of events could differ materially from these expectations for a more complete discussion of the risks and uncertainties. Please see the company's annual report on form 10, K. for the year ended December 31st 2019.
Which is on file with the F.C.C. and quarterly report on form tend to for the quarter ended March 31st 2020, which will be filed during the second quarter of 2020.
And feeds energy cautions you not to place any took place any undue reliance on forward looking statements and undertakes no duty or obligation to update any forward looking statements as a result of new information feature that it's for changes in its expectations.
So please note that financial measure she used on this call or expressed on a non got basis, unless otherwise noted and had been adjusted to exclude certain charges. The company has provided a reconciliation of these non gap natural measures to get financial matters in its earnings release posted today, which can also be found it may be investor Relations section, which website now.
To introduce <unk>, President and Chief Executive Officer, then pays energy Audrey.
Good afternoon, and thanks for joining his today to discuss I would first quarter of Twentytwenty financial to touch.
On a few of staying safe and healthy.
We got a good quandary considering the <unk>.
Portrait revenue of $205.5 million and shipped approximately 2 million microphone murders I'm very proud of the fact that global teams did an excellent job navigating the manufacturing and logistics.
In China, you have to cool 19 in order to ensure on time customer dealing with these reached an all time record for gross margin.
Discipline pricing in cost management.
The first squandering at approximately 44 beam and 26.
But for me I would have been flying financial Martin This means.
40% gross margin for being person dominating expenses, 26% operating income on as a percentage of revenue on an ongoing basis.
<unk> I would've thought of getting being flame financial Martin is 35 15 20.
Then we love folk in February the General concern was primarily at all and supply disruptions in China due to cope with 19.
Last time I would have teams went on top of the situation on a daily basis.
The situation very well.
The U.S. and a main strong through early March and distributor's wanted to ensure that they had adequate invented.
Seeing excellent booking you do at that time and when it points to rebound from a seasonally soft Q1.
<unk> since early March this pen best friend of the pandemic worldwide hazardous.
<unk>.
Demand you to cutting Shelton plays restrictions.
Even though solar installations I mean alone is essential pieces in some locations the ability to generate new seems has been duped associated distancing and economic uncertainty I'll give you more color on the regions later than the call.
No talk about how we are sort of you think customers in these things.
I'm very happy that important that our customers.
The customer service personal.
Food one white location.
<unk>.
India in Australia aren't fully supporting evidence daughter's in homeowners white working from home.
The beep and supporting them as all over the systems on clothes Beast I'm, particularly pleased that no one Q1.
Going in North America was 72% <unk>.
Dramatic water wouldn't bother improvement wasn't as many initiate it was the chance retraining old agents matching ought to fan sites do active installers sort of business everything and improving on tones processing systems I would've <unk>.
Caused me time increased slightly do you want to approximately 90 seconds.
Deacon corrective actions such as optimizing customers.
From modern plankton cloud enhancing so.
Chat capabilities to reduce call volumes and <unk> I would wait times to 60 seconds or less.
We had working that Ain't going early on.
<unk> to the enlightened by lab for homeowners as well as installers.
So very pleased with the momentum the n. fees on planes told them the U.S., which now has got many out for the latest products.
Seven B. is easy models available for the field.
I want to spend a couple of minutes on quality.
Excellent probably doesn't 2019, dropping no, but I do seven defects biased toward getting close to 1.05% annually.
Okay.
Connectivity strategy combined with our semiconductor in software to defined architecture, along with deep problem solving methodology.
Making that happen.
Why do we planned to continue these actions aggressively 20 trendy we have started focusing on stone age as well.
Example, I would've quality teams have been intimately involved in the design.
Oh forwarding charts toting system from D. one.
Believe that designing in quality and reliability up front.
Blew over the top line Benton testimony expedient and posted a gross margins due to water ski expensive reduction in the long term.
Let's now turned on her attention to Mexico contract manufacturing facility that continues today my G. for us.
Facility has been deemed essential and does not expedient any significant production disruptions to date.
Manufactured in more than 700000, I.Q. seven Microinverters in Mexico during two one and exit the quartet or do we Cleveland rate of more than 70000 units.
We feel confident in the ability to abuse, all but a million units.
Trendy if justified by product demand.
In touch up on overall inventory management.
It was <unk> do do a funny.
Working very closely with that contract manufacturing partners drop your mind.
It's both in China and Mexico.
Painting type.
<unk> very critical for us, especially in times like this.
But it is important but no we are not compromising one bit.
<unk>.
Securing on all the necessary birds there.
Moving onto the region over to you as an international mix well do one.
M., 16%, respectively, Extorting Safe Harbor revenue.
<unk> <unk>.
<unk> <unk> you one compared to the U.S. that had a slight.
<unk>.
We continue to make solid progress in acquiring new installers in growing nobody U.S. business into one.
As it is we have seen a strong and <unk>.
<unk> daughters by approximately 37%.
The last six months ending March.
<unk> <unk> <unk>, <unk>, <unk> autumn say, N.S.G. and a whole bunch of small and medium size installers.
But all these new in his daughters also planned to offer the story.
<unk>.
We had excited about bringing them on bowls and look forward to wrapping the business with them as covert 19 subsides.
In the U.S., we are hearing industry to poor himself a 30 to 50 per cent drop in residential installations in April.
Some speech like New York in California, odd expedient thing even bigger drops.
<unk> demand disruptions in industry, we had a painting automatism reactions to keep up with channel inventing check.
With the <unk> through in April we are working with closely with installer.
<unk> <unk> that existing invented.
Believe that this.
<unk> activities.
After restrictions <unk> I didn't plays on relaxed.
Short term is painful among certain.
Be a few long term benefits on in season.
Let's talk about the first one.
For example, the San Luis Obispo County in California.
The electronics are meeting for micro in working Bayes BB systems in early April 2020.
We had please the burning department recognize the safety advantages.
<unk>.
<unk>.
Oh that could be adapting to the Kobe 19 challenge by embracing <unk> using those tools. This is going to be a major entertained in the future.
We also believe that the pandemic will bring self sufficiency into the fold in front of the homeowners mind, particularly at on energy storage and we had an a great vision.
Homeowners, especially as at high quality.
Illusions can help them save money during difficult economic times, as well as providing energy security.
Now, let's talk about.
We made nice progress into one more than doubling the revenue from Q. for.
As previously discussed we have put it out feels force in that region, and we get working diligently billions dollars and distributor's one.
Quality in customer service.
We got excited.
The Netherlands pain, Germany, and Belgium.
Also have a couple of easy <unk> that.
Differentiation in fact.
We expect you to stay on still be in line with Q1, despite the pandemic, reflecting the Knight's profit as we are making.
Previously indicated that a goes to the year luster double fields in Europe from the prior year, there's going to be a little bit difficult given the pandemic, but we have not given up on it yeah.
<unk> specific and Latin America demonstrated revenue increases compared to people in Australia.
<unk>.
<unk>.
Point 2 million members that the new landmark customer.
We also introduced a partnership with <unk> expanded Australian solar distribution network.
Gain offended you get is pretty simple focus on the basics like increasing and started a business and training and promoting high quality pay P.C.
We do expect to slow down in this region in due to the pandemic, but without a solid growth initiate is ended talented team in place. We believe we had rather position to grow for the long term.
In Latin America, a few one revenue sharply increased.
<unk>.
But I do seven Microinverters in Puerto Rico, we expect to make a lot more strides region without any charge storage product, which is coming soon.
No no don't the new products.
<unk>.
Engineers that are doing.
Despite the instructions imposed by the Love Downs, Nobody engineers that'd be working very hard to find ways to accelerate development automated testing it forwards and implement that it won't be button.
In the U.S.B.R. incomplete logged on with the exception of very few engineers <unk>.
Business activities on minimum basic operation.
In New Zealand, the government imposed a complete locked down and just a low cost you an opening up offices in the last week of April.
In India, a handful of ingenious.
Get permission from the local authorities.
<unk>.
We acknowledge the effort from all of our employees part of the tremendous dedication drained faith in these times I'm really proud of them.
Nevertheless, the shelter displays ruins implemented in March impacted I would overall.
Activities, such as testing in compliance I put in charge battery storage system.
Deserted me, but unable to should be taught units before the end of the water.
First quarter as we are going to be blind adds up now all testing is complete that'd be expect to start shipping beat that units to install this sharply.
Batting any further in back from Kobe, We do expect to have meaningful revenue in you do from production <unk> systems.
Installer training is critical.
Just a success.
Trained 654 people add on Fremont headquarters into one.
And being able to train more I didn't plays roots, yeah switching over to online training in the coming week.
And after completing all of course work on line Installers <unk>.
Occasion.
Video inspection of that first install by your name fits field application ingenious.
Leave this process adequately ensures the skill verification that require off hours 30 fighting's daughters.
As I mentioned in might eat said, let go to shareholders, new product or the life blood of N. fees.
The I.Q. seven family a product that's put that in a very solid position today.
We have an incredible product line up.
First we had to come and pick the launching I do you wait the good diagnostic microinverter.
Residential rooftops, which will add even more differentiation on top of like you seven.
Second Oh, what a small commercial offering you may be the 600 and fucked be easy Microinverter for two panels, it's coming along well we expect this product provide high quality that picture don't compliance in 90 shouldn't do outstanding C.C. efficiency of 97.5%.
We had adapting the on tumbled in a box product, we announced her daughter 2019 entered as date and expect to introduce it initially for the U.S. followed by India.
This product will be bored to boot.
Capacity at 1.7 kilowatt hour, providing energy security inside the home.
Well as energy on the go for outdoor activities such as camping the battery can be directly from the great order from for a couple of the solar panel depending on whether the the product is used indoors or outdoors.
<unk>, we'll have a trademark characteristics I quality automated gone connectivity and exceptional custom when expedient, we are looking for work introducing the product.
Let me talk about another big initiated we had embarking on digital transformation.
Today, we had engaged digital even thought installed base of more than 1.1 million site through.
Through the enlightened my by desktop applications, putting those in a unique position don't understand our customers energy needs realm.
Similarly, the work very closely with a few thousand installers engage with them.
<unk>.
Training workshops.
Customer visitations and install another newsletters.
The one to be it an incredible expedient for both installers and homeowners by developing a company and did you told black phone.
It is our desire that both existing and new homeowners come onto the platform.
Seamlessly connected to I would have great installer network and have an efficient interaction all the way through installation activation <unk>, which stands for operations and maintenance.
It is I wouldn't be in that's been done right. This platform and sort of as a powerful capitalist accelerating oh, what soda and started seeing.
In order to such a powerful platform, we have planning to create several tool.
<unk>.
The entire installation process a lot more efficient.
Involve building software expertise both.
<unk>.
We expect to make significant progress on the front end 2020.
I'll do that as shocked home uncertainty due to cope with 19, we have tremendous confident industry <unk> business in the long term.
Supply chain, it's flexible in Brazilian aided by a strong contract manufacturing partners, we don't need to focus on operational excellent customer expedient.
We have a very strong balance sheet with additional cash from the recent convertible <unk> and the cash flow generation capability.
Oh, it's strategy is demanding.
Expenses.
Investing in information and creating new products with unmatched value based on a three pillars of differentiation semiconductors, <unk> and somebody we had a pleased with the results of the first quarter, considering covert 19 pandemic.
We extend our deepest sympathy to those impacted by this pandemic.
Violated impossible to know how the crisis is going to on for an hour top most priority is to ensure that the health and safety off our employees customers and partners. We will also do whatever the possibility to ensure uninterrupted supply and support of a high quality products to I would customers and partners with that I have a line things.
Two addict for his review about finances <unk>.
Thanks, Bobby will provide more details we lived in 12 or first quarter of 2020 financial results as well if I were business Oh look for the <unk> 2020.
<unk>.
<unk>.
So be phone Investorrelations section of our website.
Total revenue for the first quarter of 2020 wants to a $5.5 million, including approximately $44.5 million say power more revenue.
For revenue for the first quarter of 2020 degrees to pour sounds sequentially.
These 105.
Year over year.
<unk> first quarter rubbing you'd be Greek seven per cent sequentially and 61 person you know where you're.
We are pleased with these we sold.
Choosing the typical industries you. So now the thing in the first quarter and they supply chain disruption in China phone Kobe 19 button dynamic.
We sheep approximately 643, you may not want to be seen the first quarter of 2020.
Nongaap girls marching for the first quarter of 2020, <unk>, 39.5% compared to 37.3% for the fourth quarter of 2090.
Sequential improvement resulted from all more continuous focus on pricing management and cost reduction.
No operating expenses work $28.5 million for the <unk> 2020, compared to $26.4 million for the fourth quarter of 2090.
<unk> <unk> <unk> by the hiring of self person in Europe, and how your payroll taxes, we needed to equity investing.
I think we become portion of expected operating expenses for 2020 has to be not located to sell some marketing to support what international girls and two research and development for both hardware. So 40, nobody shows us were laughing sponge on.
Numbering expenses worth $36 million for the first quarter of 2020 compared to $33.4 million for the fourth quarter of 2019.
Operating expenses part of the first quarter of 2020, including $6.9 million off his talk based compensation expenses and $546000 for a more precision expenses for acquiring tangible assets.
When I know got basis income from operations was $52.8 million for the first quarter of 2020 record for the company compared to $52.3 million for the fourth quarter of 2019.
I got basis income from operation was $44.7 million for the first quarter of 2020.
We have police, we'd increasing nongaap incorporation a sequential basis.
By the more to see sort of declining driving.
When I don't got basis net income for the first quarter of 2020 was $51.9 million basically unchanged from the fourth quarter of 2019. These <unk> <unk> <unk> 38 cents for the first quarter of 2020 compared to 39 cents for that for.
Quarter of 2090.
<unk> going for the first order of 2020 wall 69 million dollar compared to one handed out 16.7 million bogus part of the fourth quarter of 29.
<unk>, calling the first quarter of 2022 weeks 15.3 million dollar benefit from changes seem fair value.
$11.9 million income tax benefits compared to the prior quarter that included 72.2 million dollar tax benefits for.
<unk> <unk> first talk sauces.
<unk> earnings per share about 50 cent first quarter of 2020 compared to 88 cents for the fourth quarter of 2019.
Got earnings per share for them at first quarter of 2020.
<unk> gain from <unk> derivatives.
<unk> income tax benefits compared to the fourth quarter of 2019, which included have 54 cents noncash benefit from that release Oh.
Alex.
No turning to the bottom sheet.
Even 31 34.6 million dollar Fabienne book 122 any.
Doing approximately 3 million bona fide located two in charge pottery storage product.
<unk> you for 2019, what $32.1 million accounts receivable worked when $95.5 million at the end <unk> compared to 145.4 million dollar at the end looking for 2019.
<unk> to save cardboard <unk> 120, 20, having been pretty fading queue for training 19, <unk> first quarter of 2020.
We actually the first quarter of 20 training, we'd have to catch up on it so.
3.8 million dollar compare to $296.1 million for before quarter of 2019.
By now include some 320 million <unk> <unk> <unk> you March that resulted in net proceeds opening handed on $13 million.
In addition, the purchase of the cold spread to increase the <unk> had an additional net cost of 17.5.
The tax deductibility off the convertible <unk> effectively sits there from net cost over five over to the five year.
Oh gosh, while in the fourth quarter, mostly do use by 34.3 million bonus for employees, we'd hope in Texas, <unk> <unk> <unk> vested in the first quarter of 2020.
<unk> prevented each muscle 938000, sure I'm not going to work the 200 million bought our share repurchase hopefully station that I will discuss you know moment.
<unk> <unk> have been $628.1 million. He stayed over 593.8 million dollar if we didn't know execute on these.
We generated 39.2 million bonusing cash flow from operations and $35.9 million seen adjusted free cash flow for the first quarter of 2020 capital expenditure <unk> 3.4 million buttons for Q1 2020 main between Greece I wear my <unk>.
Mexico I'm in charge binary capacity to support on <unk>.
Now, let's discuss how we're all <unk> quarter of 2020.
<unk> Oh, what revenue for the second quarter, Oh, 2020 to be within that range of $115 million to $130 million.
Turning to margins, we as big gap unknown got gross margin.
Range of 37, 240%, we expect that weren't gap operating expenses to be within a range of 30, 32 35 million dollar, including a couple of approximately 7.5 million dollar 50 made it <unk> based compensation expenses.
We see shouldn't related I'm more Playstation.
We are speaking on gap operating expenses to be within a range of $25.5 million to $27.5 million.
The actual operating expenses pretend central frame and you will be <unk> our target.
<unk>.
But we expect to trend towards these small <unk>.
I would like to spend a few minutes.
<unk>.
Oh, what else horse manufacturing mall results <unk> <unk>. Good fault, we have no material minimum volume <unk>, we don't will come from manufacturers or critical band.
We base like any more per unit when volume decline and we are working we don't want contract when you factor sounds supplier to navigate through these unique circumstances.
Based on the gross margin guidelines for Q. too you should be to hear about these higher cost do not materially affect that one gross margin.
Then he becomes up to us to control upper inexpensive seen the New York Pam.
By restricting new hires <unk> did you can <unk> differing trouble.
Discretionary spending actions.
We have built a talented global theme of employees, we seek to retain.
And are not with using any kids count them. This time.
It is important to know that we are doubling down and I were new products and one to introduce them faster.
We believe these willing castle wouldn't differentiation <unk> emerged even stronger after the global economic.
He gets back to them.
Before turning the go overboard questions I would like to touch on one if I were computer location to start.
On April 21st hour <unk> 200 million, both are so from face energy come and talk to Minimise sure <unk>.
The purchases will be completed from time to finding the supermarket or through its structure for purchase agreement with third parties such purchases are expected to continue through March 2022, unless otherwise expensive or shortened <unk>. These another 212 were too keyed to increase.
Hold their value when management believes they market value Oh deviation materially below the conservatively calculated intrinsic body.
We that I will now open the line for a question.
Thank you.
And as a reminder, ladies and gentlemen to ask a question meet the press star one on your telephone.
Withdraw your question. Please press the pound key.
Please stand boldly composite CUNY roster.
[noise]. Our first question comes from the line of bread.
With Williams trade your line is now.
I had to make question if he could.
About the teens and demand patterns that you've seen.
Across different countries in Europe, and also the different state.
In the U.S. that would be great and then also secondly, maybe.
Have you seen these applied for US and then can you talk about your time, you ever new product to be.
The second half, namely the.
<unk>.
Above the ensemble stores like it.
So with regarding the demand demand situation, let me let me tell you the story in the last earnings caught in February. We you know all of US we're looking forward to a night you too.
And we wouldn't quite totally booked at that time.
And you know then suddenly.
In early March we started seeing the pandemic spreading to the U.S.
So in the last three weeks of March we started seeing.
You know the residential installations go down.
And you know <unk>, particularly we had.
100 per cent lenient at that time, and so we had we were shipping perfectly and yes, we did expedients known in the last three weeks, yet we manage to to.
You May go to numbers, then you know April.
Pandemic spread was a lot more C.B.S.
And you know, particularly obscene <unk> and you know, obviously, California undo to the sheltering plates rules and obviously New York read it is really C.B. and unfortunately at this point in time.
The places where you know the so I. So I already said 30 to 50 per cent.
Drop according to industry reports that receipt.
Installation in some places like Texas.
It's on the side of 30% in some places like you know like what I said, New York Kelly for now, it's even more than 50 per cent.
In floating it's a little bit less on the site.
And then we also find a you know I wouldn't you know obviously I'm like does that were small and medium sized installers that are going to be a lot affected.
So what we are doing you know and phase.
If you see over the midpoint upgrading the same into two that's about $122.55 million.
Guidance for Q. too and we are well booked above that number you know right now, but you know that we know that we have to work with a lot of customers and make sure that we don't.
Overload the channel it's important for US that you know we have you know me support our customers in this time and so we are working with each customer to make sure that <unk>.
<unk> make sure they have the right inventory because we have no interest in stuffing the channel.
And you know then we are looking forward to a great Q3 so.
No we had in the beginning of me you know, California is is unlocked down.
Till the end of me.
Central place till the end of me the other states they there'd be a little bit more aggressive.
<unk>.
Similar to California.
So we expect you know if things things that optimistic we expect to start seeing more activity in towards the end of May and June.
<unk>.
Right now with the visibility we have we thought it important for us to be realistic give you.
The right Guy didn't work without installers.
Should we don't have access inventing the channels. So that we are ready for the Knight's ramp.
Thanks boundaries.
In Europe are different from the U.S. more severe lesson here.
Yeah situation in Europe, Saudi I didn't answer to that goes in the situation in Europe, you know, Italy, we are not immediately so.
You know unfortunately to me as being a lot affected in.
Yeah in Europe, but Fortunately, we have not there.
<unk>.
You know we entered despite depend to make another lenses modestly affected and our Schademann Netherlands has been.
No maybe some 10%.
And what you know we reported out feldstein rehired.
Some people in the Netherlands, we are working on distributor partnerships, we are working <unk> installers, and so photos the Netherlands, I would say, it's a more to share the gain from our remote perspective, because of our efforts and it does have Germany, you know, Germany is affected by <unk>.
Of course, we we don't do much business in Germany.
That's the nice thing about it and we were able to make a modest impact.
I mean into one and we expect to grow that didn't do too Spain is another place where we have started efforts we ever team of.
Three for the people that an excellent team of people, we expect them to start making significant progress for us.
Q to N. beyond that's way you've seen you know Europe.
Although you don't if it by depend to make for us in phase you know be.
We think we will be in line with two one fuck you too.
So that's what that's that's the situation really.
No not really Australia to mostly I think that they have actually you know right Australia's doing a lot better than the U.S., but they do predicted dropping demand unknown number in Australia. It also flat compared to Q1.
The numbers are flat compared to get when in fact, the so if you have to somebody the rest of the word businesses.
Is doing is is doing better than the U.S. and the U.S.
A lot affected yeah by the pandemic basically.
No. It was a question on manufacturing manufacturing is not an issue. So play Jane is not an issue.
I have a lot of options.
We we basically.
No you normally have China, you, we have that Mexico they evolved.
<unk>, we had working with a contract manufacturers to optimize inventory in both places. This is the time, but <unk> caches King and we want to make sure we don't spend money unless we need to at the same time, you're not compromising on out of batteries we have.
<unk> $3 million for battery at the end of March and now it is even more so.
So we we are getting ready for that I'm that in terms of you know manufacturing simply chain.
They wouldn't be fine too.
To another place, meaning yeah, another location, neither in China, not in Mexico and.
And we linens it wouldn't be already but real real be able to start manufacturing microinverters that in the fourth quarter.
Thank you.
And our next question comes from the line of Brian <unk> with Goldman Sachs. Your line is now open.
For taking the questions hope everyone is is doing well instinct safe.
First question I had was a on the inventory you know boundary. It sounds like you don't think inventories of problem right now you're you're pretty mean, you want to keep it that way as well. So can you give us some sense on where inventory levels are and also be times right now in terms of I guess number of weeks.
Then remind us on kind of where the target are healthy ranges are that you typically try to operate within.
Yeah, I mean, <unk>, usually have 30 30 days and like what.
Yeah.
Yeah, you're asking for channel isn't meant to be or <unk>.
Yeah. It sounds like you guys are lean, but the channel would be great. If you have some visibility on the channel I think if you said eight to 10 weeks in the past, but if you could just got a refresh us on that and where you are today.
<unk>.
The question, Saudi yes, so if you're asking about the channel and the possibly have always send eight to 10 week.
Obviously, the break you know the the downward pressure on demand means that the installation didn't happen.
Didn't happen much in April that means when you look at.
<unk> forward looking invented based upon you know locked.
Really happened in April.
You're going to end up with a big number of weeks of Inventergy, but you know if you.
What what we are doing it this time, it's pretty clear right we are.
We have saying okay.
Yes, you guys have stopped installing that's what it is no point for us too.
<unk> more invent reading to the channel and therefore, we will make sure that we work with you and be push out your daughter's into the next quarter and ensure that the channel inventor he's always healthy.
<unk> always healthy then when the demand comes back up.
Then we can you know when the channel deplete submit weekend basically they're fresh.
<unk> back so it's almost like a mass balance you know when the channel depletes I'm in when three weekends ship back some invented into into the channel then.
We are doing it mathematically rehab.
A lot of experience in this in good times in good times, obviously in many is is going to be low in back in bad times. The trick is to see how <unk> Oh, you can preventing mentally from.
You know ballooning up and I you know, it's mathematically done formulaic me done then we what good that installer. So.
You know that's what we'll do.
Okay. That's helpful.
Maybe that's related to that I wanted to understand or one of the comments you made buts or you said bookings yeah, well above the midpoint right now for keep to guide and she said the 122.5 year well above that from a bookings perspective, you know clearly you don't want to overload your customers wouldn't even Tory <unk> is that to suggest you're worried about some of those.
Kings as you're describing them being cancelled or are you seeing a high degree of Kansas right now because it sounds like if we didn't have the <unk> uncertainty maybe with the level of bookings you'd have you'd have you'd be guiding above the targets you're providing today for you to just trying to parse those comments and understand sort of the level of visibility you have versus the level of maybe.
Conservatism, you're baking and just giving all that's going on.
You got it right I mean, yes. We are we are booked quite well, we had a booked a lot more than the midpoint up the guidance but.
Visibility Lord this time.
And the uncertainties height.
And we you know if April about a proxy of things.
We will expect a little bit more cancellation, then and you don't push out on the other hand, if may or June is a lot more positive you'll have a chance to hit <unk>. So we thought we should give you a number.
That takes into account all of these sports index and you know that's way.
I'm, giving you a full visibility.
You know.
You guys know what I know.
Okay. That's great and then maybe just last one I'll pass it on.
Gross margins you guided 36 to 39 for Keyuan, you've just got range. You know now you're getting 37 40 on 40% lower revenues. So you know the the models pretty resilient irrespective of volumes, that's pretty clear, but once volumes do picked up later in the year, coupled with some of the the new products that are ramping.
Yeah. It seems like you'd have some upside to that margin range it'd be curious sort of what's your views are on that you know margins.
In a healthier volume environment kind of if they picked up from here and then just on the flip side of that you also mentioned you've got some of the the long 'til customers. Maybe some of those customers are are yeah more challenged in this kind of environment right now any where he's around bad you know bad accounts and and and you know.
Sort of charges related to that maybe just some context around that if you're seeing that or if you have any anything to suggest that you have the ability to mitigate that okay.
Right, let me up and get it man. So the question on grows modern yes, absolutely we are highly confident.
And.
You know that's where he gave you a guidance and 37, 240%. Despite these things why is that the basic rest and gross margin complacent, some two things rising management and cost management.
Pricing management.
There are many discipline plays and we ever pricing Dean Witter established.
A couple of years ago, and they do a great job optimizing every transaction that extremely important for us and we do value based pricing.
Absolutely surprising is one of the big reasons why are gross margin is read it is the second it's cost management cost management comprises into a lot of tactical visas and a few strategic pieces.
Tactical visas are blocking and tackling in order to do supply chain optimization, you know finding second so says here in bed dropping <unk>, you know negotiation with customers the second b.'s and status.
Romantically designed to supply chain, such that you know and well Microinverters yup reviews in Mexico do not.
Require tattered and we had extending the same tracks the cities in the future ads to number three also tactical Liz.
You saw us doing a lot of expedite two or three quarters ago.
And you know Expediters are no longer required for us because we have solved the problem Oh transistor problem solve the component shortage problem, so that <unk> going to be in the noise. That's that's you know one more thing that and then number food is.
Little bit more strategic B.'s and.
When when it comes to cost reduction we have anything strategy.
In the sake.
We have basically in the digital digital potion and then we also have the analog.
You know integration of the thing we are able to integrate.
And a lot of chips that we use in the microinverter onto the scene and you know even if it means 20 cents.
Cost reduction you know 20 cents might get played by let's say 8 million units a year, that's big deal $1.6 million. So everybody's spent for us.
That we can take out of the micro by integration into the thing.
Extremely critical.
And then in that each in the last few things that how can we you know how can we fundamentally changes architecture to other transformer that is used you know how can we go from 300 components dumped the 50 components you know how can be.
<unk> the microinverter to the phase of an I phone.
Those those are some of the lump them strategic cost reductions that we are thinking about so.
You know to answer your question, we have a very high degree of <unk>, especially when the demand comes back we do have upside in gross margin Nobel have you know <unk> talk about the.
You know, whether we are worried about that.
Yeah. So thank you for the question Brian US you know, we or note three or four I think you'll find means that we just publish we just go somewhere allowance for an awful lot count on you can see that he's very small and the recent that he's very small.
Because most of our business you sort of distribution and we that most of these two girls don't <unk>, they have pretty strong balance sheets.
The out so much there gosh.
Yeah, they soak inventory very well so they put some things that goes into a conversation with things down there about 8.2 cells data from the distributor east no money than try yeah, we'd they have these three windows as well, which they all the critic interface with the new star, but so at this point we don't.
Any issues associated with the payment terms hope you'll pay some of our installers, we actually have a relationship or not <unk> relationship in which all of them right now I'm doing fairly well some of them requested a little bit over an extended payment term, but it for the most park all of them are okay. So are these.
Point I saw the time. These findings we don't see Oh, we don't foresee Asians from collections associated we might receivables at the end of the quarter.
Okay. Thanks, guys.
Thank you.
Thank you.
The next question comes from the line of calling brush with the Oppenheimer. Your line is now.
Thanks.
You know no.
Look at the market for energy storage and your ability to try it costs out.
Obviously.
You just walk through a lot of detail on the.
Market.
How much opportunity is there for you guys are next couple of quarters to support your gross margin sectors as you scale up a little bit on on the margin and then curious about it on a 12 to it came up as well.
Right I mean.
If you look into what I'm charge battery.
The P.D., there <unk> components and they'd be in charge of your battery or the cell battery pack.
Then you have the battery management unit.
The you know being mess.
Then you have a battery controller, which control, which basically communicates to the gateway and then you have the microinverters.
As we dropped the cost of the Microinverters.
That's going to go down.
We do have plans to integrate the battery management unit and the battery controller into one board and we do plan to use anything integrate the T.V., even higher levels of integration.
No then we are left with.
The felt back the beautiful thing about that is we work with so many cell back wonders.
And that vote.
You know if they dropped that cost they're going to pass that cost onto it. So fast that is nice potential voters, you know, especially has to be talked ramping volume that is really you know we can probably get a lot of costs vote. In the first couple of years and then it more you know translates into <unk>.
And it's after that.
Great. Thanks, so much and then looking out a couple of quarters and considering the long tail of of installer. So that our customers for you guys. You know how much visibility you get into their cash flow dynamics and.
The strike that balance sheets, you know, there's a there's an awful lot of small operations and various localities, but how much information.
Can you really gather at this point to looking at that portion of the customer base.
Yeah.
So it appears that for the most park the eastern girls her picking up in patrol some of the generals programs easy way the federal government right. So many of those you both of them actually qualify for both problem. So for some of them you thinking some time to get them you know.
I mean, you stringently completed because of the fact that they don't have a big accounting group to manage I'm too you know, we'd chase the reimbursement, but I don't I don't hear or I have quite a bit over civility and I don't hear any big issues <unk> Moby neighborhood to sustain through their balance sheet.
Through this period for now now.
<unk>. The first 112 problem that he will be these treatment or seen which eventually we'll we'll need to try and you laid out wanting to what he means to us right, but at this point <unk> you know actually to my surprise the smallest on if they do pretty well they some of them. They managed to catch very tightly they don't have an alarm.
<unk>, Oh picks or big infrastructure to support and become hunker down into a smaller operation and then be ready for the come back quite wouldn't need it so I'm actually.
Okay with that.
Alright <unk>.
<unk>.
Thank you.
Next question comes from a <unk> with J.P. Morgan under snow.
Yeah excuse me thanks, very much for taking our questions can you just touch on the on the competitive dynamics.
Yeah any signs that you know some of your your weaker competitors may be looking to to exit the market any evidence that your kind of fortress balance sheets that you've built a is allowing you to to take any market share and that kind of last lays the fall into that are there any.
Any interesting.
Competitors or technologies that are out there that could potentially be struggling during this downturn that you think could be interesting opportunities.
So high described so let's take your first one which is on the competitive competitive dynamics no. We're not shooting Oh funny competitors and this time exiting exiting the market.
We obviously keep track afraid, but we are not getting anything so we expect that to to continue. Your second question was on on any interesting technologies.
It'll be liable for us to look at absolutely and but they mentioned that the one area that we are looking at is a part of our digital transformation technology to look at building out into N. software block from that can significantly blew the customer experience everything from generation from the sale.
All the way through <unk> through installation commissioning operations and maintenance and I think we're going to go that business sport organically and look at a growing it inorganic d. as well.
And yeah, it's absolutely if you're looking at a bunch of different software companies out there that.
Can help us in that endeavor I think in the long run as well we have talked about you know given as ensemble transitions into a more sophisticated energy management system. The the tremendous opportunity to look at companies that are doing some interesting work in in forecasting engines and machine learning and R.E.I.
Type work, managing big data et cetera, so all of those or areas, but we are exploding does.
Tremendous opportunity as we started bringing all of a or new products into the marketplace.
That's it for us thanks very much.
Oh I think your pinkie.
<unk>.
Next question comes from a lot of Jeff Osborne with Conan company, you're honest now.
Yeah great.
A couple of questions in response to Collins question could you breakout roughly speaking the the mix of small customers first larger I would assume at 70 80 per cent smaller through distribution, but I didn't know if he could that's close enough yeah, that's close enough.
Okay.
And then.
In terms of the I know that she just before and passed earnings calls a boundary, but the the battery piece a lot of discussion of costs and.
Certainly L.P. prices have come down I assume it's still an L.P. based battery but.
Or is that still anticipated to be in line with the corporate average you know now that you're approaching 40% or should we be modeling something less than that it's the storage piece ramps up.
Yes, yes, I left the yes in line with 40 Bucks.
Okay good to hear.
And then just given the uncertainty in the market you know how how should we think about share shifts between you and and other competitors are we at a point in time, you know where people are transitioning from door to door in sitting down in the kitchen table to digital sales were where people would want to you know learn new technologies and potentially reply.
It's a a different inverted company with yourselves or or people still you know hunkering down with the status quo I I just didn't know if you're seeing over the past call. It 60 weeks any inbounds as it relates to people wanting to get trained that maybe you hadn't heard of in the past or where a aligned with a competitor.
It's it's still early days, but the nice things we have seen Ah traffic you know the lead have increased a lot. We don't do too much of a business did you delete today, but that is increasing hour traffic to the online store is increasing so that's why you know I I talked about the digital black comment additional platform.
It's not something that we are taking it lightly yet another <unk>. This is going to be really powerful blasphemy right. What does that mean is you got a whole morning, who is coming to you and you gotta need that is coming to you and.
You know how effectively your transfer back to lead to your Installer network, you know and Phase has got an installer next door to go 500 loyal and starters they had amazing partners for us.
They are why we exist so imagine if regenerate.
You know thousands of leads maybe it'll become tens of thousands of leads and maybe it'll become hundreds of thousands of lead sown, but you know, let's talked with thousands of needs.
<unk>.
Loyal Installer network.
We sell the homeowner to make a decision that.
And then we you know.
And then create a platform for the homeowner and installer and then faced interact.
On one platform seem less me.
Then we started to take care of things like you know all the way from appointments setting.
Ah design closure.
Contract closure.
<unk> procurement.
Per meeting.
Planning.
And then you know activation.
When it shows up on our enlightened database and then knowing them after that.
If we can help out installers to digitize all of these and these out I'm talking yeah, I'm talking about small and medium satans daughters, because they are the ones who have manuals system. They use AD hoc doing for everything it'd be really advent D.G.S. for us to introduce this black phone, maybe we have everything in one.
That is <unk>.
And if we do that men and I'm not saying that you know, it's easy to do that but if we do that <unk> <unk> <unk>. If we do that well then we can sell a lot more so a lot and storage solution because as you go as you you know as you can see.
We are going to go from $2000 a home over $10000 Oh.
And and you know with the things we are going to introduce later on for consumption. This he panels.
It's only going to become more <unk>.
And so we we have gone to become.
Much I had a fraction of development idioms and so.
You know once again the concept is if we can make it so easy for the homeowner and in particular for the installer.
The sales of our ensemble base. So let them started solutions are going to shoot them.
That's really what we wanted to do <unk>.
It makes sense just <unk> I was trying to get out with my question.
Not going through your digital store, but you know somebody that has an established sales force or or are you finding that that 500 and stores that are loyal today do do you anticipate that meaningfully growing over the next three to six months.
In a sense of with the uncertainty in the space are you finding that people want to actually <unk> shift vendors or people just sticking with what they know and as they transition from selling door to door sitting face to face with people and moving to online or whatever.
Stimulate demand right I mean.
Look we do have you been in this time, we do have installers.
Installers, you know when you're winning a lot of installers lie.
It's pretty simple is the same thing that I am keep me, yeah, keeping a meeting on which is quality and customer experience.
We do if we do you know.
If we get 2.05%.
You know annually failure rate, which is we are actually very close to that number that's an outstanding number unbeatable number.
And if we demonstrate that continuously which we have for the left in a couple of years seven.
That is a big factor for people to move to us.
And to make so that transition 11, regardless because in tough times like this.
You know that transition I believe <unk>.
You know people do not have time to school screw it on with failures.
They don't so if we can keep or.
N.P.S. promoters code.
About 60, you know this quarter, we did 72, that's enough yeah phenomenal, Florida.
If if we can do that if we can answer the phone in less than 60 seconds.
0.05% annual Effectivity next 10 Doctor batteries.
You know I would I would all in one solar installed it solution.
Going to dominate no question.
Great to hear thank you for the detail.
Thank you and our next question crossing the line <unk> with Ross Capital Partners July and there's no.
You guys makes the questions boundary. While you were just talking about there in terms of the Legion machine sounds like it could be very powerful can you give us a little bit the history on that meaning. We're we're what were you leads asked me being Q1, and where do you think you could end the year at in terms of your Legion leave.
Generation they can pass onto your partners and what kind of close ratios have you experienced I can imagine there are quite high because there are programs like this out there.
It seems like again this could be powerful so want to see what kind of a ramp we could see ahead and then also what kind of capital are you willing to invest here. Some one of your peers you know spends millions of dollars on T.V. ads. For example, I don't expect you guys to to do that but just curious what kind of money you might be putting me on this.
Right. So fill you know that we had a discipline company. We are not going to give you a metrics without without thinking. So you know you gotta be yeah, a little bit more impatient for those <unk>, but.
I'll tell you. This we have 1.1 million.
Sites today, and these I didn't see sites.
And.
Okay I have.
No I have the ability to generate leads by spending a lot of extra money.
On my right hand, and they have.
All the 1.1 million homeowners on my left hand.
What do I choose.
Right Yeah. He ended is obvious.
Those that in face customers and so therefore the.
The low hanging fruit.
It doesn't fit customers.
And we had already working on such a big programs. We do talk about one particular upgrade program that the constant issue press releases on which is the upgrade program for the and phases first and second generation Microinverters.
Transitioning from the M. one nine D.B. is products like you seven and sometimes like you seven B.D.C. model.
Those are examples of programs that you will start seeing more and more from us, but you're absolutely like.
It's a powerful concept.
And if he can do it right you know really being independently.
Great as it relates to Q3 I know visibility.
Uncertainty is high.
But I do believe we've seen an inflection point in terms of sales subtract out there improving weaker week. So things are improving a little bit just curious to see if you guys have seen an improvement.
In two or three like what what kind of visibility in Q3 do you have.
Phillandas find we don't have visibility for good thing.
Got it Okay and one last one here in terms of your guide for Q. to you talked about meaningful stores revenues.
In that cue to guide I don't think you quantify that was wonder if you might be able to quantify two two and then also talk about the cadence of how stores revenues rap in Q3 and four.
We're not going to <unk> I mean, we may have separated out a wee man and you know added colony toward you guys that left your last quarter, but.
<unk> it's too.
You know think about.
A lot a number when he gave you.
We gave you the inventor.
Off stone age product that'd be but.
He gave you that but that number was at the end up much.
That number was $3 million. So you you guys can do the calculation.
And have a.
Based number that's the best number obviously, that's not that is not all of it.
But that will help you to at least you know have some numbers instead of shooting in yet.
Okay, Great. Thanks project Hope has.
Thank you.
And our next question comes from Milan, Eric Stein.
<unk> your money is now.
Hi, everyone. Most questions asked care, but I guess I'll just go with the the so ensemble in a box you know I know that was a big topic at the analysts day in India, just thought process on bringing that to the U.S. now you know.
How you view it competitively in the market and then if you have any thoughts on the overall market opportunity.
Yeah, I think one or the key thing then this is you know.
This destruction happen, we got together and we said what is it because.
What is it but the people are thinking about going I think you realize that since proficiency zielinski, it's top of mind for a lot of people, especially good in the U.S. and so that's why we we decided I'm not long ago that we were gonna first prioritize getting the ensemble than a box product.
Cure we did we do that are competitive analysis, we did our survey out there and really fact that we we have you know phenomenal technology and ensemble that we can leverage to bring a a a competitive product into the marketplace. You know like like a we mentioned you know forefront of it being.
The reliability park, the the only gone connectivity eh.
Finally, the just the the biggest most expedient Spartan which can address both you know <unk> when you inside the home was insufficient department you're inside the home and then you can also it's a mobile device. So it's basically energy on the goal both for but it's for recreational use or foot emergency purposes as.
If if kind of stuff came and we think it's a really complimentary product to the complete ensemble solution that we have waited a P.D. on the new thing in in Big in charge started solution would within power. So I think it's really complimentary solutions for about 1.7 color what hours and I think it plays.
Well with the are set of start ups that we have so the opportunity I think it's going to be very big here in the in the U.S. to begin but we also planned to of course do the India version of the product a subsequent to the U.S. version and then we shared what third available market, it's going to be it's quite quite large.
And it that's something you think of the contributor can be a meaningful contributor and 2021.
Absolutely, yes, that's when we we.
Trying to introduce it in the second offer bits here and it would play a big role in 2021.
Okay. Thanks.
Thank you.
At our next question comes with a line of <unk> with Credit Suisse. Your line is now.
Hi, Thanks for taking a question everyone hope he'll drink fish could you just talk more about the software strategy, how should think about it as a new product or service for the installer, though are sure to think more also <unk> and about so many many opportunities.
And charge a solutions do you see me and many opportunities for the software side dishes.
Yeah. So we.
Mentioned.
<unk> off or or overall strategy. This is the digital transformation piece.
And the key it it's do provide.
Fantastic custom and expedient, and do and and which means starting from that lead all the way through you know through a matching the installer good with with the home on a managing through the process all the way through digital.
You saw that you're seeing some of the chairs moving to that we do that environment as when you see there's a general push towards moving everything into the digital world. So everything we want to provide as a seamless platform and then the platform then continues to extend beyond into the actual operation.
Off the ensemble technology, which is the energy management Peep. So today, we think about it as disparate elements, meaning the front end, which is about.
Sales and procurement and installation and then there is this enlightened piece, which is about ensemble energy management, which is a product related.
I didn't if that whole expedience was completely seamless of course that means there's a lot to do and and a lot of software to be developed.
Until we are going to be very thoughtful about what are the things that we can build in a house ourselves of course, the quote ensemble technology is that there's a significant amount I.P. that and we have built back in house, but then that is the peace around.
Around the around the front end, which I think would've been some and real look for some organic and inorganic.
On the on the on the product side of course, you know there is there is the micro park.
The the the the the battery.
That as we know what we are going to do we know where are all I.P. life.
Pee like in the power management piece, the communication speech the software piece that do things that we are not in the business off is so.
Manufacturing absorb bottles or manufacturing of <unk> so everything.
In the Queen is significant I.P. to be developed particularly around the software part, which is everything software defying power conversion all the way through economic optimization, which is what we refer to s. diversion control that's quote I.P. for us, but I Wonder why did you notice that that whole expedience needs to.
Completely seamless so that is a what we mean by.
Complete digital transformation.
That's all too well thank them not just like one last for me on by trees, well could just remind us which countries you would be buying the batteries from I'm just trying to go ahead of any trade duska as conditions in the country and also like it does a 5% battery.
<unk>, but I end up there that does that still hold I know sort of been pointing to one small number here, but any started doing that would be helpful.
Right so the envelope China.
And we have one sort of snow, even <unk> second half of the yet and then yeah qualified person holds.
<unk>.
Transferring questions.
Thank you.
And our next question comes from the line of Jeffrey Campbell, What's truly brothers as long as now.
[noise] would happen then.
I wonder.
Close how many of the 1.1 million.
Installed in place customers are on legacy Michael that's fine.
<unk>.
Okay, but there's a safe to say that are still fairly sizable amount.
Correct.
You described it there's no platform the number of different ways a sound.
Similar to the approach large dollars or is it correct at least topically.
Correct, because the main point.
<unk>.
Smaller and smaller.
That's right.
And it's kind of falling on that.
<unk> last one positively impact in phase internal operations on someone.
Not really when when you say impact it'd be just I mean impact and in phase operations.
I'm not sure what you what you mean, but well I'm like well I'm paying for example, what it would it make your sales ever more so maybe a yoga more out of less headcount or what it somehow positively impact your.
Provide you maybe with a another source feedback that you're not getting now.
I'm just wondering if there's like feedback right. If it's going to make <unk> toddlers lives a lot better small and medium sized installed it it's going to make the <unk> like a lot better in order to for us to achieve such a seamless expedient, it's gonna take us dying.
It's going to you know we need world class software. So it's going to take his mode people in order in yeah in order to photos to do this and.
Alternately voters we have.
You know to gross margin Uh huh, and we have a nice balance sheets. So we had in the right you know time invest and help or.
<unk> homeowners as well as a small and medium sized into dollars.
And I guess the final point on digital.
One thing I think it's then tossed on that just to confirm it.
If this works the way that you wanted to is it reasonable to think that it's fine to practice.
Installer. So you you may not be working with now could that be.
Okay.
Right Yeah.
That's right.
They're great and just one question on a different subject.
Wandering the like you Ain't day.
So <unk> 19, headaches and just so.
Moving along fairly smoothly and do you sell it starts to really something before quarter.
And then did mention engine because you know if you actually earlier, we are pleased with the progress that would making on I.Q.A.Q.A.D. to the mind you know every one it's a small commercial product 640, what they see it's <unk> basically said it was two panel and other differentiation. There is you know.
Vs leads a trademark and phase high quality.
<unk> down you know implementation.
And essentially very high efficiency product, though yes. It is on drugs.
Right. Thank you.
<unk>.
Ladies and gentlemen, as a reminder, task question, we need to press Star. One are you touch tone telephone and to remove your question. Please press the pound key.
[noise] and our next question comes from a line of <unk> <unk> <unk>.
Motion off with <unk>.
[noise] because he can make question guys. <unk> you you have not been asked the yet about manufacturing I mean, you you mentioned that there is no no. We shoes, Mexico has been under a lock down maybe a a week one but a lock down since the end of March.
I'm curious if there have been any disruptions in terms of labor labor availability or the social distancing requirements at the fab in Mexico.
In fact, it's been declared it doesn't it's in business and so did not not beating but options.
And also like what I said in the in my you know prepared remarks.
Obviously this is a quarter later, we had a mailing list in memory.
Not mode.
So we have carefully balancing then mentally between China in Mexico.
And <unk> the the amount of inventing that we have to but it's quite small.
Okay.
Let me ask one more regulatory question <unk> from the perspective of your customers.
That are postponing installations, and you know you wrap friends, the New York area in particular.
Dad, because of lock towns and and stay at home orders or is it more of a precautionary measure. That's my understanding is most states do not pursue that.
Solar installation odd because it has been considered an essential business.
I think <unk> I mean this is from an information point of view I think just people are cautious about having other other people come and interact with them into a house and I think that's one snow down the second slow down obviously is also in the four meetings like not everybody is like some other.
<unk> that you're seeing get in California like families at this point et cetera.
We've gone completely digital and then the third it element is around permission to operate the P.T.O. witches and then both inspection N.P.T.O.. So I think you're seeing that it's fiction in the system. As a result of just of the of the social distancing animal I think that is the biggest challenge on the same side again.
<unk> kitchen table sales are now are less likely to happen I've not happening and but you are seeing seeing and.
Installer partners adapting to to doing this more <unk>. So yeah, we are going through that expedient thing those processes right now.
Understood. Thank you guys stay safe.
Thank you.
Thank you.
And our next question comes from the line of I'm, a dialogue with H.C. Wainwright Your lawn is now.
Thank you guys flipping request.
You guys.
Indicated that you're being aggressive on product introductions, what are the same thing missing some push out.
Relative to go to market it was like existing products in the pipeline.
Just wanted to understand what the frames Graham for these new project construction wouldn't look like.
<unk> this calendar year or are we talking a little bit more sweater or.
They I mean, the they may on and charges because.
<unk> <unk> from home the engineers.
Essentially do not have not to be working together and.
You know because of that some of engineering activities and the.
Compliance activity.
That'd be me.
And that's that's kind of behind Us now.
Talk them into affected US you know last last February I thought Oh, the other two months back I thought we were going to <unk> in charge by the end of March that didn't happen because of this.
You know regarding the other regarding the other products you know I do plan to introduce the I.Q. week good <unk>.
It might green work to for residential rooftops I do blend in going to use it.
In the second half.
And they do also blamed introduce like you 18, the second half along with on somebody and about those out.
We have a lot of engineering teams and the company.
And the teams you know, obviously that a little bit <unk>, Yeah, you know right now working from home.
But you know hopefully that for them and and.
There'll be a lot better.
And you know despite we still see.
So we are in fact, I'm getting them in second half.
Thank you for that.
Costume for me have you acted on any by back so far.
No.
Thank you.
<unk>.
Ladies and gentlemen that is store one.
Ask a question.
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<unk> and they'll Rahman for closure March.
Alright, Thank you for joining us today and audio to continue in support of interface. We look forward to speaking with you again during our you too.
20 earnings.
Right.
Ladies and gentlemen. This includes today's conference call. Thank you for participating you may now disconnect.
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