Q2 2020 Willdan Group Inc Earnings Call
Please standby one word begins.
Hello, everyone.
Well down group's second quarter 2020 Conference call. Today's conference is being recorded this time like <unk>.
Oh, Gosh, Vice President Investor Relations. Please go ahead Sir.
Thank you sorry.
No one wants groups second quarter earnings call.
Joining our call today.
Sure I was born Chief Executive Officer.
Steve Mcclaren, Chief Financial Officer, and like <unk> <unk> Willdan group.
The call today.
Earnings release, which was we issued after market close today.
You May find me every studies and the will down industry works you to 2020 that accompanies todays call Investor section.
Dan Morefield prepared remarks, well open the call up to your question.
Statements made in the course of today's conference call.
Sure not merely historical are forward looking statements in the meeting of the private Securities Litigation Reform Act.
Oh 1995.
Forward looking statements involve certain risks and uncertainties.
Importantly, the company's future results.
Differ materially what goes in any such forward looking statements.
Factors that could cause actual results to differ materially and others factors or this isn't part of dark meat company. That's you see reports.
Good.
It's too.
Okay. So the year ended December 27, 29 gene.
Subsequent quarterly reports on form 10-Q.
The company cautions investors not place undue reliance on the forward looking statements made during the course of this conference call.
Well, thanks, Ruth disclaims any obligation.
And does not undertake update or revise any forward looking statements made today.
In addition to capital well they also provide non-GAAP financial measures.
We believe that happens industry's ability to analyze the business trends standpoint.
Our non-GAAP measures include nothing about doing.
Adjusted he yes.
Adjusted EBITDA.
We believe that revenue allows for improved measure it was about new derived from the work performed by our employees.
Adjusted <unk>, yes, and adjusted EBITDA.
I don't measure of operating performance, which removes the impact of certain expense items.
Operating results.
GAAP reconciliations for all of these non-GAAP measures are included as young as you already answered needs to be issued today.
With that I'll now turn the call what are the Stacy provide financial details will be followed by Tom will provide a dozen update.
I'm, sorry, I'm, calling I see activity and really just doesn't work.
Before we go to access.
[laughter].
They sell.
Okay, great free cash of our business and provide financial details on the second quarter, including our income statement and then that's our balance sheet.
Thank you pandemic and efforts to limit spread negatively impacted our business during the three in six months ended July 3rd 2020, but overall our performance was better than we expected our last quarterly call on May seven.
In California, New York State, which we have historically to write a majority of our revenue mandatory shutdown orders were issued in March in California Phase three openings beginning may 2020 and were subsequently curtailed in July 2020, as a result, three survey research is appropriate and 18 cases.
In New York say three openings began in June 2020.
Total contract revenue for the second quarter of 2020 decreased 20% to $83.5 million from $104.4 billion for the second quarter 2018.
Decrease was driven primarily due to decreased contract revenue from our direct installed for small business program and our energy segment combined decreased revenue from our engineering and consulting segment, partially offset by increased and contract revenue generated from government projects in our energy segment.
Incremental contract revenues from acquisitions, the on site Energy Corporation, and energy and environmental economic also known as <unk> three.
Net revenue to find its contract revenue my subcontractors services and other direct costs was $43.2 million a decrease of 7.7% from $46.8 million every year ago corridor.
Because the energy segment net revenues decreased by 10.2%, which would give us a decrease contract revenue, partially offset by increases in revenue from government projects and the contribution of our recent acquisition.
The engineering consulting segment net revenues decreased 1.8%, which was due to the decrease in contractor everything.
Direct cost of contract revenue or $54 million and second quarter 2020, it decreased 26.3% from $73.2 million in the same period last year.
Decrease was primarily due to decrease contract revenue from our direct install for small business programs in our energy segment.
Partially offset by an increase in contract revenue generated from government projects in our energy segment.
Combined with additional direct cost of contract revenue related to our acquisition of on site and eatery.
Our direct cost of contract revenues were 65% Archibald contract revenue in the second quarter down from 71% in the first quarter 2020, and John from 70% and the same period the prior year.
Differently than each period, primarily reflects changes in the mix of work and the degree to which subcontractors are utilized.
Total general and administrative expenses second quarter $33.4 million.
Parents $28.4 billion for the prior year period.
The increase was due to $2.1 million amortization and $2 million increased stock based compensation.
Additionally, we incurred $600000 of severance costs in the second quarter.
The increased personnel and facility expenses related to our acquisition was offset by other cost reductions taken by the company in the quarter.
In response to the Tobin 19, Canada. The company has taken and we'll continue to take temporary precautionary measures intended to help minimize the risk of Copel nice teams with employee.
Putting requiring the majority of its employees work remotely.
Pending not essential travel and restricting in first and work related meetings.
We generated an operating loss of $3.8 million for second quarter 2020, compared to operating income of $2.8 million and the second quarter of 2018.
Adjusted EBITDA was $7.2 million for the second quarter 2020, compared with $7.6 million for the second quarter 2019.
Adjusted EBITDA as a percent of net revenue was 16.7% for the second quarter 2020, compared with 16.2% for the second quarter 2019 I.
I would like to point out that contract revenue was down 20% due to covert suspension, but adjusted EBITDA in the quarter was only down 5% from the prior year period, we did a good job controlling costs in the quarter.
We incurred $1.3 million and net interest expense in the second quarter 2020, compared to $1.2 million in the same period last year.
Despite higher death borrowings under our credit facility to fund our recent acquisitions onsite any three our borrowing rate reduced approximately 200 basis points versus a year ago period due to reductions in the one month LIBOR, resulting in nearly flat interest expense.
For the three months ended July 30, 2020, we recorded the income tax benefit of point $1 million, which was flat versus the same period last year.
We had a net loss in the second quarter of 20 $25 million or 43 cents per diluted share compared with net income of $1.6 million or 14 cents per diluted share in the same period last year.
On an adjusted basis, our net income was $2 million or 17 cents per diluted share.
No significant adjustments from our GAAP net income or stock based compensation and intangible amortization, which are both non cash items.
Turning to the balance sheet and cash flow from operations.
We entered 2020 with a heavy emphasis on cash collection, particularly from some of our large utility customers. These efforts are very successful during the first half in 2020 during the second quarter, we generated $12.8 million in cash flow from operation an increase of 536% from the same period last year.
For the six month ended July 30, 2020 cash provided by operations was $29.2 million compared to $12.5 million same period, you're now.
On May six 2020, we finalized an amendment with our lending group that we feel provides enough financial covenant question during the second quarter a 2021.
Amendment temporarily changes the interest rate for borrowings under the company's credit facility provides additional flexibility within our debt covenants and makes other temporary modification.
As of July three 2020, we had $118.5 million outstanding on our credit facility, we have no borrowings under our revolving credit facility was $50 million available.
Our net debt to adjusted EBITDA trailing 12 month leverage ratio as measured by the service of our credit facility was three times.
We estimate interest expense of approximately $6 million for the year. The company anticipate burling additional amounts under its existing credit facility. During the second half of fiscal year 2020 to support an expectation of growth and the accompanying need for working capital as a result of the heating and cooling making restriction.
I'd now like to turn the call over to Tom to provide an update including Kobin 19 activities and related business outlook for the company.
Hi, Stacey and good afternoon, everyone.
During our call that that's Miller will provide an update on how we're managing the company during this pandemic.
Highlight our second quarter activities.
Business development.
Early to mid March 20, Twond and about 40% of our business slowed okay into a halt was 40% primarily our utility attractive salt business, where we assist utilities customers across the nation with energy efficiency.
We interface failure with commercial industrial multifamily and public sector customers conducting sales energy audits installation and construction inspections.
This customer interface January wrapper fall as utilities.
Cities, and say lockdown sarepta spread it over time.
Fortunately, 60% of our work was demonstrated by walk though.
And our employees were able to work from home.
It also noted that most of our state and local work was identified as essential.
As a company overall, we're faced with a difficult situation.
We had to match.
Cost with a declining revenue environment.
It is like an all hands on back maybe.
Sure. Thank you, but we took a hit.
The company.
That's dedicated employees.
Customers responded quickly and professionally.
Reduce costs, we have furloughs.
Nearly 350 layoffs.
We do salaries for all indirect labor up to 75%.
But it does work hours or exceed suspended suspension of moral one k. match fund and all discretionary spending was stopped.
The company took all appropriate actions to whether that effect.
Corporate banking financial impact.
We also took measures to ensure the health and safety of our employees.
The Catholic Health, we kept the health benefits in place for all types of what else. We expected. This cold weather environment would last 60 to 90 days basically all of the second quarter.
In addition to revenue cost challenges.
We're anticipating central cash out.
We did not know power customers with function to recover 19.
Put in massive effort on cash collections.
Our pleasant surprise in both the first and second quarter.
Cash collections ever.
Toys and customers really came through.
We generated as Stacy said 29.2 million on cash flow from operations in the first half of the year a company record.
Of course fashion is always important but we were servicing approximately 120 million and that we have bank covenants that may have been exceeded.
Hi, Thanks, we amended our credit agreement provided increased flexibility under our debt covenants for the second quarter 2021.
As a company, we're proud to say that our cost reductions and cash management as result of and no covenant.
Revenue exceeded from our pre amended credit agreement as of today.
To that here today.
Contracts in.
Los Angeles Department of water power.
While business.
Restated.
We started excuse me.
That's all small businesses and LNG ballet DWP territory are still on lockdown.
We're getting some relief.
DWP because they are shifting the focus to Los Angeles Unified School district in order to get energy efficiency as these facilities, where they're close.
All right.
2020 goal 70 million.
We have delivered over 40% of fiscal year to date, driven by strikes and the schools.
We expect this trend the schools to increase as year goes up.
I would like to point out that no contracts have been canceled and no budgets reduced.
In all cases, the workers on they delayed.
Fortunately or unfortunately.
Our customers want us to stuff 12 months award.
Seven months of operation in 2020.
This is a good problem, but it will be challenging theres still colbert uncertainty and our ability to ramp as quickly as also answer.
New York City opened for for our type of business on July 1st.
Our comments 2020 goal was goal was 90 million kilowatt hours.
We have delivered 37 million kilowatt hours year to date.
Separately kilowatt hours have been delivered in the month of July.
The remaining 53 million kilowatt hours has to be delivered in the next five months.
Got it with.
Interest facility at the 99 kilowatt annual goal, we will try this year, but there is understanding by the utilities as the savings not achieved in 2000 client will be pushed into 2021.
We are not get fully ramped up at least the city's open customers are signing up.
Incentives have increased by 25%.
Contractors are right faster because all previous customers, who said no conducted a better deal after coal.
Also I know Youre clean program will encourage use of heat pumps.
Incentives are high.
Summers reduced energy use by 60% to 70% utility so more electricity.
Produces greenhouse gas emissions.
And New York State utilities have increased their incentive for their customers, thus, reducing the payback.
Sales are strong and we're expecting a rapid startup.
In summary, we are back to work.
We're also actively engaged in legislation that would provide energy efficiency stimulus to small business utility programs across the country.
We expect this legislation by fall 2020, this would be a big helped to the country's small businesses and their covered recovery.
Call, but has not impacted business development to our surprise.
Utilities and municipalities are actively conducted procurement.
Our engineering segment has remained strong during this quarter and the opportunity pipeline is growing.
California energy efficient energy efficiency programs are on schedule.
Active negotiations with all four I'll use the only public information at this time as a partial thus of awards by few Judy.
On this list, we pursued two programs industrial and public.
Were awarded the public sector 10 million over three years.
We were not to come but either program. So we have picked up new market share.
We expect more public information and the next next 60 days startup of these contracts is expected in the first quarter of 2021.
On behalf of our board of Directors management and shareholders, we would like to thank our employees and customers.
Further resiliency during this pandemic.
We have performed well during the second quarter, and we expect performance to improve in the second half.
That we can take the question.
Well thank you.
That's the question you may signal us pressing star one on your telephone keypad.
So using speakerphone. Please midstream your assumption is turned off to license for return equipment, Michigan styling to ask a question.
Please permit.
Well take our first question on Moshe Katri with Wedbush.
Hey, Thanks, guys and.
Congrats on a strong execution in a tough environment.
I just wanted to start just to go back to sell the commentary I think.
The press release indicates that right now roughly about 20% of the business is still impacted by the walk down.
I think you mentioned L.A. DWP can you get some more color in terms of worth else are we still saying some of these issues beyond la DWP and I have a couple of follow up thanks.
Let's start with as of today LNG WG as you're only closed.
Utility contract as Lloyd partially closed as I said.
They're doing their work at schools, rather than small businesses.
We're waiting for them to open up small businesses and La territory.
Other than that all other utility contracts across the nation or open and and right. So.
With regards to the 20% I'd say that was part of your question motion.
That's correct.
Mike would you like picked apart.
We're in suffer road, so we'd have to sure threat traffic.
Sure Tom.
The utility contracts are ramping up at this point, so our estimate of 20%.
Represents that impact getting back up to speed on a run rate basis as we saw prior to code. So to give you a couple of examples Duke power for instance throughout seven states in the Midwest.
While the contract is open lot of small business customers that we approach are not so we may have signed up a project before then.
The.
The way the implementations that project until their business reopens. So that's happening singles in general have been very strong, but actually getting access to the business sites.
You know is certainly factored into that 20% or delay. So those are the types of things that we're actually seeing right now.
Okay. That's helpful. And then obviously you've been adjusting your your better aligning your cost base to some of the pressures you're seeing in revenues. So I guess, if we look at at the other way how quickly do you think you could ramp in terms of hiring and bring it back some of those people that are furloughs.
To be able to execute one things kind of open up.
Okay.
I think we brought as quite Marsha and buy ahead or more current number.
350, Furloughed I'd say, we're right around 50 are still furloughed you have a more recent number Mike.
No that's my number.
Okay.
We're in different locations. So we can look at each other so.
Okay, sorry, basically it back.
Has been very good but go ahead.
Okay, well, that's that's great that's that I, just there's always a concern once we start aligning costs.
Let's take starts to ramp, but it seems that you've been ramping back up pretty quickly and then you mentioned, California the for public utilities.
Oh, we still going.
With that the actual schedule on accrual basis in terms of the percentages of the work that needs to be outsourced number there was a whole schedule, that's still going wrong or that's been kind of change or updated.
It's still going on.
There are still on schedule, it's just a matter of whatever becomes public sort of the world.
So.
What we know.
Versus what's been published or two different things I told you what some others.
We have active negotiations with all four of the Iowa.
And so that's.
Yeah.
Machines at.
We can't really say anything or to other public school.
And then can we look at the you know at the second half let's.
Try to go through our model what can you.
I mean, obviously, what what what should we think about what we're modeling or Q3 in Q4 numbers on the income statement.
Well I just want to take that.
I would look for increased revenue in Q3.
[music].
Hi, I'm looking for margins, which haven't fully recovered yet.
To you know maybe improved slightly from where they are and that's just an EBITDA as a percent of that revenue.
It's about 16.7% this quarter should be little higher next quarter.
And then Q4, which is a little more of a wildcard revenues typically come down in the fourth quarter. They may not happen this year.
It may be more flat Q3 to four we just don't know.
Pins on the pace of reopening and margin should say nine fourth quarter.
Okay do you need more color in bottom, but can we can.
Oh sure Yep Yep I didn't follow up question any color on where we are on and the integrated analytics to sell for business in terms of the pipeline.
Ah ones for the quarter, how does the second half looked like et cetera.
Doing great Mike.
All right off the balance so we'd have a couple of small wins in the second what do we have not had any more.
The two pipeline look stupid.
We've had one project and I know of that has been delayed from this year into next year, because oh, good spending so that was war.
Hopefully they will probably have a pretty good year this year.
The pipeline really matures typically in Q3 in Q4, and we're seeing that again this year. So we're doing a number of demos and we're actually in negotiations on a couple of pricing. So what's your deployments to will start up late this year. So I think it looks pretty good motion.
Alright, great thanks sort of color.
I think in anyone's, Taiwan accounting question or comment on moved to Craig Irwin with Roth Capital partners.
Hi, good evening and thanks for taking my question.
So.
We can look beyond the the immediate contracting opportunity in California.
And look at the opportunity for 2021 2022 as far as so.
You contract negotiations.
How do you feel utility to prepared Ah.
For the entire process I mean are we going to be reinventing the wheel again the way we did for this process. So I guess.
Largely held up by the commission at this point.
Or will be the processes and procedures developed over the last two years.
It's something that it gives us a smooth pass the progress.
Well I can't really answer for the utilities, but.
Early indications are and new Jersey that theres, a little bit of confusion.
And.
We hope this written about the other states that we're tracking.
Our asking some very good question.
That we feel our favorable so what we do.
That's all I can say on that so its state by state.
And.
Nothing could be worse in California.
Just to that.
I should say I Shouldnt say no to cover sounder isn't listening.
But it's that's great but five years.
Oh, just saying it if it is simply insane. What's the commission was right you know fundamental utilities are not motivated to eliminate the use of there there are they crop right, which is not what they do of course, there can squandered money.
I, probably shouldn't say quite like that that they make the utilities crunch, but it's true.
Can you your execution. This quarter was obviously much better than we are anyone else expected. So congratulations I know you all in the executive team took large pay pets and really.
Participated in the [noise].
The downsizing that was done to deliver a good quarter, but that's it maintains a loyalty of your employees.
[music].
He was there specific set of hurdles or goals or.
Milestones that you wouldn't look cat for reinstating compensation levels of employees working at different levels in the organization and down you know can you tell us what the visibility into this something you think happens maybe by by next year.
Sure.
And you know is there a defined policy by the board.
[noise] I'll have Mike handle that one is a closer to where we are across all the operations the reinstatement.
<unk>.
[laughter] as a general comment Craig.
Hey has been restored to pre Tobin levels with limited exception and diluted exceptions are businesses.
It did she will be impacted by token for one reason or governor <unk>, that's not much of our business.
In General play has just been restored here in the last I think we the too.
Oh, one k. He is a discretionary since we will look at in Q3, most part is not the story.
This well is board expenditures to the board met two days ago and elected to systems, they're paid for this quarter and no no reinvestigate that next quarter. So that's it for instance for returning to normal slow down.
Thank you for that.
Our next question is on the corporate opportunity right. So onsite brought you a different type of sort of industrial.
Customer that you can you could show, but some of the next several years.
With this current environment, you know one would expect to see.
Activity on on the corporate side could potentially increase greatly given the motivation to save money and you know that's what you guys do you.
How people that gives the energy costs.
And provide them equipment upgrades that are you know.
Sustainable long term for those returns.
Are you seeing much of an uptick or the.
Industrial customers that yet.
Pursuing through onsite and some of these other [noise].
Pieces the organization.
What should we think about that as an opportunity as we exit that size calendar here and look at 2021.
Right.
[noise], you're right crudes in your thesis and this is brand new information. So we're watching it closely but it does appear that industrial customer orders are.
Increasing their spending with us significantly and I'll go to one of our largest customers eightseventy.
We're going to do as much work as we possibly can pretty TMC, they've just to be honest as they've opened again. She said how much can you give zones worse this year.
That's partially being driven by corporate sustainability goals.
Partially being driven by apart.
Relative to other players in the industry, who forming very well in that area for industrial customers and you're right I think there is overwhelming.
Focus on cost management, which energies and significant in good and that's driving that market. So we're ramping up significantly in the industrial sector.
Great and then last question that by me.
The traditional engineering side of the business it seems to be paying in.
A little bit better than.
The unemployment numbers would suggest right.
40 million unemployed.
Is it is a very scary number and you know I definitely feel for.
All of the families impacted.
But it seems that your core customer base is continuing to spend money.
On a very similar trajectory.
You know I guess, there's optimism in there that they told there's no real soon so you know I shared that optimism.
Can you maybe describe for us let's see what the conversations are these days with your your engineering consulting customers. You know do you feel that that that revenue stayed flattish that they're up over the next you know number courts.
Great all indications at this point is.
So our supply.
They're not impacted the flat or maybe even improved.
[music].
We're primarily focused in California.
And.
There's no indication from the city.
Or development, the everything is going wrong, and we're usually the first and all.
Because we're out there.
During the permanent part for the city.
But.
We thought we would say that by now.
The city dog indicates that anything wrong.
So.
It's kind of.
I wouldn't say, we could go too much past two or three quarters.
But predicting the recession, but.
Right now we haven't seen anything.
It's but that's really going to here do you think that's because little down at the track record of giving local governments a much broader access to technical services and you're an engineering capabilities for far less than they would spend you developed its a which in turn.
<unk>.
It's a way for towns to shared resources indirectly through will then and Ah just get the best talent to solve their problems. This is that really what this is or is that.
Isn't just a local government kind of [laughter] till they do board and watching the news.
I think they have turned or will that a lot you know to supplement their staff.
Uh huh.
A lot of their staff couldn't get in the field and couldn't do things and they turn it will then.
So [noise].
And and construction have slowed down so.
That's about all I can say at this point.
Excellent.
A question I want to ask gets about I ate.
Within the last nine months you added a number salespeople in there I guess I should say a few salespeople in that.
And then we went into sort of this notes like cold Xone, we've all been dealing with.
Can you share with us what the pipeline looks like I has the conversations continue to mature do you feel that beach new sales employees are are able to fully show their value to the company and participate and deal cap trips in this current environment and do we.
Still have hoped it that's potentially a large contributor to bottom line over the next couple of years.
Go ahead Mike.
So I don't scrub it this way Craig we have opened up.
At least two new sales channels for our products and technology.
Brent New sales channels, we didnt have.
Getting a year now the first one is to work with decrease consulting services.
And <unk> <unk> front lawn, where these types of technologies are needed with customers and there's a good communication and regular exchange of information between each <unk> that's worked out well.
Yeah.
The sales cycle while.
Not some news channel for us working.
And the second in those working with the rest of the E business, we have some new technologies, which I won't where you were on this call, but new exciting technologies, we believe no one else in the world plans right now.
And we intend to launch this to the world and optimize energy efficiency in ways that have never been done before.
And we're starting to talk about that with our customers.
One point I'd like to give you a demo actually and this is Brent talked to that unless it's a new still small rite aid technology.
And that is something that we also hope will bear fruit, we're just starting but will bear fruit over the next 12 to 24 months.
That's how I described.
Excellent well.
Thank you for taking my questions and I should say congratulations to the whole little damn team for execute on a very difficult environment take it really takes a team pulling together.
You guys have done a great job.
Thanks like right.
Next we'll move to Marc Riddick with Sidoti.
Hi, good evening gentlemen.
What do we could talk a little bit him and forgive me Oh I'm, sorry, I missed this I wasn't sure if I I heard this but that's why it's such a little bit on.
Oh, yes, given the long term acquisition or goals of the Columbia is what I think it's such a little bit about maybe what you've seen our goals to you know a attractive targets going forward, and maybe whether or not but what's the pipeline how different the but when you look today versus.
Maybe six months ago, a pretty told that it so wanting to be sort of just give a general overview as to what that opportunity set looks like to use albertsons, maybe what it looked like going into the yet.
Well rather than go ahead, Mike It's just it's just easier.
All right, Tom and I was just talking about the sport.
We have not pipeline or whatever who don't pipeline of targets for coated and.
We've suspended all activity on those but some of those that's come back to us and say, Oh, even where they weren't sure that they wanted to join children they've come back in the indicated that they now want to enter into you know those types of discussions with US we will do that cautiously and slowly over the next.
Quarter or too so don't look for any transaction certainly in Q3, maybe not in Q4 I don't know.
But the pipeline has gotten better.
Because recessionary pressures and concerns about the economy.
In addition.
No one else is doing any acquisitions, so none of our target or.
Companies that we were engaged in discussions with.
I have sold during this period of time, so I think it certainly looks better and I hope that pricing looks better when we get back to acquisitions.
<unk>.
That's why do you have to sense.
Certainly encouraging come a long term perspective, and that's kind of where I was going up. So you know what you'd like you do Bobby I didn't hear what I was kind of thinking about you know from that's definitely that certainly is encouraging from a longer term perspective. I was also wondering from the sense of what what it looks like from from your vantage point it needs to be.
The desirability all of those particular targets.
The priorities and up maybe what types of a targets you're looking at or what types of verticals that are most attractive to you you get the sense. If that has changed very much given what we've seen a year to date at how that maybe has shifted or how should we think about or or is it pretty similar to two where things were beginning to didier.
Tom why don't you address how the industry's changing and now he is becoming more integrated.
Integrated solution to the utilities one.
[noise] I think we've talked about a little bit.
Historically, there just generated and match whatever load was out there kind of like.
Rebuilt highways.
What do you continue to build highways to match whatever traffics out there.
It was a traffic jam our solution has been more highway.
What they're trying to do going forward is set at just more and more generation or trying to get to control on the low.
Trivia is the users electricity and manage that so.
That's about a shade.
There was a primary thing that has to happen.
We have to use the least amount of energy and use it.
And the balance between generation and low.
So what happens that's that as you can.
Optimize that.
And he can start to use renewables the storage.
And then you can start to reduce your carbon footprint.
And that is where everyone is headed.
And that is right right in the middle of.
Where we're headed.
So he has reduced today, it's just like a first step.
All the thing that threeg or I ER.
Our engineering people do all are based on the total solution.
Countries has it.
And that's what I referred to as a integrated approach.
The answer your question Mike.
<unk>.
But that's certainly helpful.
But I appreciate it thank you.
Okay that does conclude a question answer session. At this time will tend to come back over to our speakers for any final or additional comments.
Yes. Thank you all today for participating to appreciate your day, a shareholder will that and we'll see an export.
That does conclude a conference call for today, everyone. Thank you all for your participation you may now disconnect.
Hmm.
Hmm.
Oh.
Oh.
[noise] Oh.
[music].
Oh.
[music].
Oh.
Hmm.
[music].