Q1 2021 Enviva Partners LP Earnings Call
Call for questions.
During the course of our remarks and subsequent Q&A session, we will be making forward looking statements, which are subject to a variety of risks.
Information concerning the risks and uncertainties that could cause our actual results to differ materially from those in our forward looking statements can be found in our earnings release as well as in our other SEC filings.
We assume no obligation to update any forward looking statements to reflect new or changed events or circumstances.
In addition to presenting our financial results in accordance with GAAP. We will also be discussing adjusted EBITDA and certain other non-GAAP financial measures pertaining to completed fiscal periods as well as our forecast.
Information concerning the reconciliations of these non-GAAP measures to their most directly comparable GAAP measures and other relevant disclosures are included in our earnings release.
I'd now like to turn the call over to John.
Thank you Jake.
Good morning, everyone and thanks for joining us today.
Of the nation, we're just coming off of week celebrating sustainability.
Punctuated by the 50 <unk> anniversary of Earth day.
Tomorrow is Arbor day.
A worldwide celebration of the importance of trees.
And six years ago this very morning.
<unk> of <unk> Partners LP began trading on the New York Stock Exchange.
That's quite a confluence of events.
When we launched the company for you.
You could have imagined the importance the sustainable biomass business, we set out to build would ultimately have on the global and urgent effort to fight climate change by helping countries around the world.
Once the now include the United States.
To achieve their goals of reducing greenhouse gas emissions.
As of recent headlines of remind us.
Healthy growing for US remain one of the most critical tools in the fight to mitigate climate change.
The markets, we helped create for low value wood are a key reason why for us continue to grow.
The facts are impressive.
As our track and trace data detail of the thousands of trucks from which we have purchased wood.
Just over 30% of the harvested volume went through in vivo.
While the remaining almost 70% when through other participants in the forest product sector.
<unk> saw mills and furniture manufacturers.
We make it a contractual condition for landowners to replant following any harvest were in veeva purchases fiber.
USDA Forest inventory data will tell you that in the time since we began operations. We have seen an increase in force inventory of more than 300 million tons of trees in our own catchment area.
And that's after deducting the 21 million tons of wood pellets, we have produced and all of the other force products produced from this renewable resource during the same time.
That data should make every one of our stakeholders proud to be of part of the job, we're doing displacing coal growing more trees and fighting climate change.
Given that profound positive impact it's no surprise the demand for our products continues to grow and our business along with it.
This past quarter was no different.
And what is typically our seasonally soft period, we sold over $1 1 million metric tons of wood pellets.
Our second highest quarterly deliveries in our history and.
And we generated $46 3 million and adjusted EBITDA.
The 59% increase over the same period last year.
And we did so with the consistency and reliability you have come to expect from Us Keith.
Keeping our people healthy our operations running and our customer deliveries uninterrupted.
Despite the continuing backdrop of the coronavirus pandemic.
Based on our solid start to 2021 and the performance we are forecasting for the remainder of the year the <unk>.
<unk> declared a distribution of <unk> 78, and one half cents per unit for the first quarter.
A 15% increase over the distribution paid for the same quarter of last year.
This represents our 20 <unk> consecutive distribution increase since our IPO.
We also reaffirmed our full year 2021 guidance <unk>.
Including an adjusted EBITDA range of $230 million to $250 million.
And distributions of at least $3 17 per unit for full year 2021.
Before accounting for the benefit of any future dropdown transactions or third party acquisitions.
We were able to drive these improvements in operating and financial performance by executing against the key pillars of our growth you've heard us describe the.
These include organic growth and productivity increases within our fully contracted assets.
Capacity expansions at our north Hampton in Southampton plants.
And increased production from our recently acquired Greenwood and way across plants.
Compared to this time last year, we have increased the partnership's production capacity by close to 40%.
And that number is expected to continue to grow as we complete these efforts and implement the multi plant expansions, we announced during our conference call last quarter.
Growth in our production capacity and volume is underpinned by the partnership's revenue backlog, which now totals $14 5 billion.
With the weighted average remaining contract term of 12 eight years.
When combined with additional contracts held of our sponsor, including the new contract with the major Japanese utility we announced yesterday.
The total weighted average remaining term and revenue backlog would increase to approximately 14 years and $20 billion respectively.
Part of that incremental backlog is earmarked for the sponsors lucedale plant in Pascagoula terminal.
Construction of these facilities is expected to be complete around the middle of the year.
With powerful net zero commitments made by governments around the world. There is no shortage of new markets of new commercial opportunities ahead for the partnership.
I will spend some time later in the call outlining our growing customer contract pipeline.
And the underlying actions being taken by governments and industry in key jurisdictions true.
Progress of the substantial de carbonization of initiatives required to meet their binding emissions reduction targets.
But now I'd like to turn it over to Shai to share more detail on our Q1 results and financial highlights.
Thank you John and good morning, everyone.
As John mentioned, we reported solid results for the first quarter of 2021.
During the quarter, our business benefited from incremental production and sales related to acquisitions and operational improvement executed in 2020.
Typically we experience higher seasonality during the first quarter <unk> as compared to subsequent quarters is.
Colder and weather winter, where the modestly increases cost of procurement and production of Dublin.
Nonetheless, the partnership achieved financial results substantially in line with management's expectations.
In terms of net revenue for the first quarter of 2021, we generated 241 million.
Which represents an increase of close to 18% as compared to 200 for 5 million.
For the corresponding quarter of 2020.
The significant increase the net revenue is the result of incremental product sales and of $9 9 million increase in other revenue.
Included in other revenue for the first quarter of 2021 were $16 5 million in payments to the partnership for adjusting deliveries under the take or pay offtake contract, which otherwise would have been included in product sales.
The adjusted gross margin per metric ton was $42 73 for.
For the first quarter of 'twenty, one, which represents an increase of close to 29% as compared to 30 true.
<unk> 15 per day.
Metric ton for the cones blending period of 2020.
The increase in adjusted gross margin per metric ton was primarily attributable to higher pricing due to customer contract mix.
Net loss for the first quarter of 2021 was $1 5 million.
<unk> to net income of $7 6 million for the first quarter of 2020.
Adjusted net income was $7 4 million for the first quarter of 2021 as compared to adjusted net income of $9 1 million.
For the corresponding quarter in 2020.
As John highlighted the partnership generated for the first quarter of 2021, adjusted EBITDA of $46 3 million.
And the increase of 59% from the first quarter of 2020.
The significant increase in adjusted EBITDA was driven primarily by higher sales volume and higher pricing.
Partially offset by cost of goods sold associated with the increased seasonality I mentioned.
Distributable cash flow prior to any distributions attributable to incentive distribution rights was $30 4 million.
Which represent over 60% increase from the corresponding quarter in 2020.
And result in the first quarter of 2021 distribution coverage ratio of <unk> seven times.
At the end of the first quarter, we had liquidity of approximately 187 million.
Which included the cash on hand, and availability under our previous $350 million revolving credit facility.
As many of you have seen we announced an amendment to this credit facility last week, where we increased the revolver to 525 million.
And extended the maturity until April 2026.
We also achieved the low cost of capital shaving 25 basis point of the Boeing right.
We view the amendment credit facility is the strongest selection of the increased scale diversification and tremendous market opportunities ahead of the point of visa.
Our increased revolver not only provides the partnership with added flexibility for financing future growth projects, but also in the end of accretion metrics of upcoming opportunities.
We now have of low cost of Boeing on the larger scale.
And as we have indicated before we expect to have the opportunity to acquire fully contracted asset of <unk>, such as Lucedale plant and the Pascagoula terminal.
And vivek commitment to conservatively managing its balance sheet is unchanged. We continue to expect to fund dropdown acquisition and merger expansion using 50% equity and 50% debt.
We also continue to target the conservative leverage ratio of three five times to full time and the distribution coverage ratio of one two times on the forward looking annual basis.
Pivoting now to all the 2021 guidance as John touched on the partnership reaffirms its full year 2021 guidance, which does not account for contribution from any potential acquisition.
As we have said in the past seasonality customer mix and timing of shipments can impact results and causes the variances from quarter to quarter we.
We expect the shape of our adjusted EBITDA for the year to look similar to 2019 and 2020 with second quarter results being similar to those of first quarter and the second half of 2021 being materially higher than the first of our.
Additionally, we expect fourth quarter results to be a significant step up from the third quarter.
Our confidence in achieving our guidance. This year is underpinned in part by the benefit we expect to realize the amount of mid Atlantic expansion.
For 2021, we are focusing to achieve $20 million out of the $30 million annual adjusted EBITDA run rate, we expect from the mid Atlantic expansion weighted heavily to the back half of the year.
Additionally, with respect to just the need contracts, we acquired as part of the Waycross in Greenland acquisition in 2020, we expect delivery to commence the steel related to 250000 metric tons per year.
This is projected to provide <unk> to our second half results as compared to the for ourselves.
We are also excited about the new England planned capacity expansion from 500000 metric tons of failure to 600000 metric tons per day.
Which is on schedule for completion by the end of the year.
Finally, we are making good progress with the multi plant expansion, we announced last quarter.
On the basis of total investment amount of 50 million.
We believe we will generate an additional $20 million.
The annual run rate adjusted the EBITDA is these projects are completed and fully ramped by the end of 2022.
Overtime as our top line continues to increase we expect our operating cost position to decline as we achieve incremental economies of scale, we do know asset and continually implement process and cost improvements.
This cycle should continue to provide global margin expansion year over year and add to the strong financial platform we operate today.
Now I would like to turn it back to John.
Thanks Shai.
The tremendous growth in our business continues to be driven by the commitment and significant progress made by regulators policymakers utilities and power generators around the globe to phase out coal limit the impact of climate change and cut greenhouse gas emissions to achieve net zero by 2050.
As you may have seen last week.
The EU Commission released its taxonomy.
Which is the centerpiece of the Eu's sustainable investment strategy.
And one of the key mechanisms used to implement and finance of the European Green deal.
The new taxonomy recognizes bioenergy used for power and heat alongside other renewables like wind and solar is making a substantial contribution to climate change mitigation.
Underscoring the indispensable role of biomass in the EU energy transition.
The United Kingdom has long been a leader in using biomass to phase out coal usage and recently published its new industrial de carbonization strategy.
Blueprint for delivering the world's first low carbon industrial sector.
The report makes it clear that the UK government foresees, an important role for biomass and the de carbonization of industry.
Especially when combined with carbon capture and storage.
The concept called backs is.
Is increasingly perceived as one of the most critical tools and the effort to achieve net zero.
Since it is one of the only technologies capable of delivering energy with negative greenhouse gas emissions at scale and available today.
One of them Veeva, the UK based customers Drax.
<unk>, an independent analysis, which concluded that without backs of Drax the energy system would incur additional costs of around $4 5 billion pounds to achieve the UK government's goals due to having to employ other more difficult and costly solutions.
Similarly for stead and.
In view of his largest customer in Denmark.
He is working with Microsoft and acre carbon capture to.
To explore ways to support the development of carbon capture and storage at <unk> biomass fired combined heat and power plants in Denmark.
The Danish economic Council expects backs to play a significant role in achieving the country's target of the 70% of greenhouse gas emissions reduction by 2030.
And considers the technology critical to a cost competitive energy transition.
In the Netherlands, the primary focus of Dutch energy policy is also of the reduction of greenhouse gas emissions.
And the country is one of the first in the EU to announce plans to eliminate natural gas from its energy mix.
The current government coalition is committed to a 49% reduction in greenhouse gas emissions by 2030 <unk>.
Surpassing the existing EU target.
Biomass is already of the largest source of renewable energy in the Netherlands, and then visa is advancing multiple contract discussions with new customers under.
Under agreements, which could extend to 12 years or longer.
Which would further expand the delivery of our products into the Dutch power and heating markets.
As an update on Germany.
Following last year's formal adoption of the coal exit law.
Regulations for long term financial support for electricity and heat conversions from fossil fuels to biomass are expected to be announced mid year as part of the government's priority initiatives.
We expect that when complete these will pave the way for in view of the finalized commercial discussions already underway with the number of major German utilities and heat and power generators.
Utilities of long been the prime consumers of biomass in Europe, but the global industrial sector is becoming an emerging market for any of them.
Our steel mills cement factories and chemical plants are.
By evaluating large scale coal to biomass switching.
As we highlighted in our press release and.
And we've of recently delivered test volumes to a large industrial conglomerate in Europe to pilot biomass as a replacement for metallurgical coal and its steelmaking operations.
Favorable policy tailwind in Japan continue to support further investment in this growing market.
For instance, the Japanese ministry of economy trade and industry or messy.
Is working to revise the strategic energy plan by mid 2021.
The ruling Liberal Democratic parties renewable energy caucus has commented that the share of renewable power in its 2030 energy mix should increase from a range of 22% of 24% under the current plan to at least 45%.
This effort complements <unk> focus on phasing out inefficient coal fired plants by 2030.
Increasing the use of biomass is one of the most cost effective ways for generators to increased thermal efficiency and extend plant lives.
That should be good for business in the country, where we are the largest and leading supplier of sustainably sourced biomass.
Finally.
Last week president by the new committed to achieve a 50% reduction in greenhouse gas emissions in the United States by 2030.
With an emphasis on American workers in the industry of tackling the climate crisis.
This new target contemplates expanding carbon capture and industrial processes for cleaner steel and cement.
And enhancing carbon things like our force.
As I described earlier on the call the <unk>.
<unk> backlog of the partnership and the sponsor now totals approximately $20 billion.
With a weighted average contract maturity of about 14 years.
And while part of that revenue backlog will be served by the sponsors lucedale plant and the Pascagoula terminal.
Our sponsor also continues to progress the development of a fully contracted plant in <unk>, Alabama.
With respect of this development our sponsor of recently acquired of facility adjacent to the site and is currently reengineering of its existing infrastructure to reduced planned total capital cost and potentially expand the initial phase of construction to more than 1 million metric tons per year.
For making the facility the largest plant in the world.
Further our sponsor recently advanced society of controls and bond, Mississippi to the next phase in its development.
This plant would be designed to produce between 750000 and more than 1 million metric tons per year.
With the tremendous growth we have achieved coupled with what we see ahead.
We will continue to ensure that our wood pellets remains sustainably produced from force, whose inventories have and continue to grow over time.
And Venus practices and internal standards are designed to meet or exceed the established international safeguards and regulations promulgated under Red Sue.
And reinforced by the recent report issued in January by the EU Joint Research Center.
Which emphasizes among other things the <unk>.
<unk> of long term production capacity of the forest.
Our track and trace system, and our leading responsible sourcing policy.
US with the tools, we need to set public transparent goals regarding how we manage measure and improve our activities.
We are also subject ourselves to stringent third party annual audits to ensure that our operations continue to be certified under independent globally recognized sustainability standards like FSC.
FC.
Phi and SPP.
For that and you may have seen the goals. We just released for our 2021 implementation plans under our RSP.
And our report on the progress, we're making with our partnership with the long length of alliance protecting and restoring long leaf pine for US one of the most biodiverse ecosystems in North America.
Consistent with our mission to displace coal grow more trees and fight climate change.
Our sponsor are also making progress towards our goal of becoming net zero in greenhouse gas emissions from our own operations by 2030.
I Hope you saw our partnership with <unk> on our joint development of a low carbon bulk carrier and our signing of the CCAR go charter promoting de carbonization and international shipping.
We expect to announce additional important actions during the course of this year, specifically targeting additions to our renewable energy usage at our production sites.
Reduction in offsets of the emissions within the assets we operate.
So in closing.
The tailwind for our business are robust.
The World continues to want less carbon more quickly and more cost effectively.
This quarter again demonstrates the power of the fully contracted business model, we have built to serve those markets.
Delivering solid results and significantly increase financial performance over the same period last year.
And continuing our uninterrupted track record of stable quarterly per unit distributions that reliably increase over time.
For those who have heard me say for the now six years since our IPO.
You know I'm fond of saying that we are just getting started.
I am privileged to say that this is still very much of the case.
And we look forward to sharing our progress our growth and the opportunities ahead as we connect again soon.
Thank you for listening.
Operator can you. Please open the line for questions.
We will now begin the question and answer session to ask the question with Star then one on your Touchtone phone.
So the speaker phone please pickup your handset before pressing the keys.
So withdraw your question. Please press Star then two.
At this time of a pause momentarily to assemble our roster.
Our first question today will come fall.
Hubbell.
<unk> channel with Raymond James Please go ahead.
Thanks for taking the questions. Let me start off by asking about demand in your core markets U K, Denmark, Belgium.
All three countries were in lockdown at least partially for all of Q1 the rate.
In summary, opening taking place in kind of April may timeframe.
How much did the.
Hi.
Business closures.
Packed.
Electricity demand and ultimately usage of pallets.
Great Great to hear you and thank you very much for the question as we have frankly been very privileged to report to during the broader pandemic, which unfortunately continues to resist in many parts of the world.
We haven't seen any interruptions in demands.
Our customers themselves are of course.
Core Baseload power and heat suppliers in these markets and demand continues.
Adjusted just the pace.
All of our production capacity is contracted under long term take or pay obligations and we continue to be in a position to report the during the life of the Companys existence of all the way back below the 111 years. Now every single customer is taken every single delivery and we continue to see that progressing so very little of observable.
Dislocation in any of our markets due to due to the coronavirus pandemic and of course, our own operations continue uninterrupted as well.
Maybe I'll ask the same question in relation to your brand new marketing in Japan as of.
Just last week about a quarter of Japan, including Tokyo and Osaka.
Are in Lockdown, the you innovation that having any impact on your own.
What kind of initial year of sales into the Japanese market.
No not at all.
The proud to report some of our first vessels under long term contracts.
Getting out of our ports through the canal.
Of course very different experience than the folks on the zoo is.
We're very very pleased with with what we've been able to deliver consistent reliable ratable deliveries from our southeast production into Japan, and we don't expect any dislocation there either.
Okay, and then lastly.
Let me touch on.
Your Biz Dev activities in the press release, you highlighted Poland any sort of a focal point for kind of incremental supply contract in Europe.
White, Poland and.
How quickly perhaps can we expect to see an announcement.
Well for Bill, Thank you and I would add to Poland in terms of the markets that we think are emerging and attractive.
Frankly, frankly any of it.
The of the industrialized and nations of the World that are committed to.
Broad scale reduction of greenhouse gas emissions and so naturally as a member of the EU, Poland being the largest per catheter user of coal very very important market. The.
Pressure of.
Certainly the EU ongoing expectations about net zero by 2050.
Make the large installed coal hard coal fired power fleet in Poland, very very attractive the have been of biomass user historically, they've made some very important commitments to the de carbonization of migrating not only of the large scale coal assets that do some co firing today, increasing those rates, but also as you may have heard us talk about in the past.
The.
The 100 or so of municipal combined heat and power assets that are all coal fire today are really focused on converting those away from coal in favor of biomass.
G that market certainly in the into the broader EU market I would certainly add obviously the continued growth that we see in Japan, and Taiwan as well how long of similar a similar island.
To Japan of importance imports resources of heavy utilization of coal with few natural de carbonization opportunity and so we're excited about the opportunity to see development of that market as well.
I appreciate that and responses. Thank you.
Thanks for Bell.
Our next question will come from Marshall Carver with Heikkinen Energy Advisors. Please go ahead.
Yes regarding the distribution coverage.
Can you talk about wanting the one two times coverage over time striving for that you've had such large distribution growth.
<unk>.
At least the amount of model and given the guidance we have the.
A bit below the later this year that longer term want to target.
How comfortable are you being below that for any <unk>.
A link to the time and what's the sort of the flexibility around that I know you have.
Likely additional dropdowns coming down the road, which could get you back up but what are your what are your thoughts about that and how should we think about the one two times target.
Over time.
The Montreal. Thank you for the question.
When we're looking at the one and two times on a forward looking annual basis.
We.
Just like when we talked about the last quarter about the earnings with the talks about that we will like over one two times when we looked at the.
The results for a full year over the over the distributions the entirety of that kind of a model and we do expect when we're looking at the coverage and when the board make a decision of the distribution of the board is looking at the.
Hey.
The forecast predictions for the year, so looking for debt on a fully annual basis as John mentioned earlier.
John.
As of December price for <unk>, and we do expect feel like that.
The whole fits in.
The distributable cash flow for 2022, we will cover the distribution for 2021 by one two times.
Alright, thank you.
Thank you.
Our next question will come from Elvira Scotto with RBC capital markets. Please go ahead.
Hi.
Good morning, everyone.
So with respect to apps.
What sort of cost savings can you sponsor achieved by utilizing the existing infrastructure as you noted in the press release and in your prepared comments.
Alright, Thanks for the question and always good to hear from you.
The.
The absolute facility and anytime we have the opportunity to leverage the assets of a large fully integrated wood products manufacturing facility again, we have a large integrated woodyard.
Lots of infrastructure I think we're still trying to figure out exactly how far that runway goes but we're really pleased about that opportunity in our corp. Dev team did a really fantastic job there the.
The what this will look a lot like us frankly the success. We had early on in our development of the of Hausky facility, which was built on on the infrastructure of the former large saw milling operation and so that had a great capital investment profile and we're pretty excited about what we can achieve from from the.
Our facility in apps and what that does is again it gives us the opportunity to really consider.
Increasing the initial development size for them 750000 metric tons of year to more than 1 million tons of year in and it will make it the largest plant in the world, which some of it can also be brought up.
That's helpful. Thank you and then.
As your EBITDA continues to grow.
And then you're going to see.
The good back half growth.
At what point do you think that.
And the by EPA will consider debt.
Thanks.
Its own projects at the EBITDA level versus at the at the sponsor level.
Okay.
Again, another great question, I think youre, starting to see US do some of that today, certainly with with the benefit of the successful North Hampton and Southampton expansions, our very very pleased with the capital deployment and the investment multiples that we're able to do internally as.
As well as the multi plant expansions that were now underway with again, where we expect to invest a total of $50 million for for the benefit of about an incremental $20 million in.
The adjusted EBITDA on a run rate basis and of course of the expansion underway at our Greenwood asset, which is on track and will be complete by the end of this year too.
So we're trying to be very mindful of the.
Certainly the installation.
We've been able to achieve for the partnership from development risk, but when there are well defined projects with high return multiples you can count on us continuing to take advantage of those.
That's great. That's helpful. Thank you Mike.
Question, one again related to the sponsor.
What do you think.
No.
The sponsor or EBITDA adjusted <unk> and then what is the.
Sponsors kind of longer term plan for EPS.
So great questions and of course, I can't speak for the sponsor itself, but it did go through a broad recapitalization last year.
Sure.
The.
The outstanding membership units of the in vivo holdings entity, which head of the time been held within the.
Riverstone Carlyle.
For renewable and alternative energy fund to all of those outstanding membership interest were acquired by of a group of investors as we noted in the press release last year led by Goldman Sachs Mubadala in BTG Pactual.
That of course is now a single purpose fund continuation of vehicle and.
So that was done explicitly to continue to fund the long term growth and realize.
And helped the company ultimately invest in all of the new infrastructure plant and terminal infrastructure that are required to meet the growing base of demand that we spent a bit of time again talking about on our call today.
So the growth profile is quite remarkable ahead of the.
Part of the sponsor of course also added.
The green term loan.
Earlier in this year further reducing its cost of capital and enabling long term investments into.
Into each of those assets as you may recall that initial a recapitalization last year with the fund continuation of vehicle also included about $300 million.
In standby equity that remains on the call.
So the the sponsor continues to be very very focused and very tightly aligned with creating.
Obviously, the fully contracted assets that are ultimately available made available to the partnership for highly accretive acquisitions of dropdown transactions like we have been successful in undertaking for the six years since our IPO and we don't expect that trend to in any way.
Ameliorate.
Great. Thanks, and then sorry, just the very last question because it's in your press release.
Got it and just out of Kim share.
Yesterday with the.
The second of the comment.
In the U S. Given president of items comments, so what do you see as the.
Potential opportunity for EMEA in the U S.
It's a great question of IRA and what I'd say is as I think our perspective on the U S market continues to evolve on the <unk>.
The us has never been a focus of <unk>.
Our core business development activities.
What we have seen though is of course with the transition to the by the administration in one of their first steps reentering of the Paris climate change of course that of course provides some important <unk> and Brent frankly brings the U S right back in line with months of with much of the lift with much of the broader.
Worldwide commitments of reducing greenhouse gas emissions and one of the most important pieces of that and what I heard of interest income of the remarks. It was really their focus on carbon capture and sequestration and so the ability to think about biomass energy and carbon capture of sequestration that the <unk> concept that we've talked about in our release as well as.
As where people are spending a lot of time around the world really trying to figure out the best way to do it drax or said being two of our customers kind of leading that to the extent that that continues to be an area of focus in the U S. I do think that create incremental opportunities anything that would have been in our business plan prior to that again everything we manufacture today, we manufacture.
Here in the southeast U S and we export it around the world and we're really proud to be of heart of what both the frankly many of the administrations over the last decade of focused on in terms of leveraging U S industry and use capital to solve for the worldwide climate change were up with an important part of that today to the extent that some of that.
The develops here in the U S. Just a really nice uplift to everything else we would of forecast.
Sure.
Great. Thank you and the great catch the thanks a lot. Thanks.
Of our.
Hey, John that you'd like to ask the question today of the Star then one Star then one to ask the question.
Our next question will come from plenty of pouch with Barclays. Please go ahead.
Good morning, and congrats on another successful quarter, just one quick question.
In terms of plant expansions and particularly the multi plant expansion with the $50 million investment I know last quarter you highlight the trial that was expansion of our gleaned from that from the Waycross acquisition, but just curious are you seeing any incremental opportunity there to continue on that that.
That expansion technique across perhaps any of your other plants or in other words is there any other low hanging fruit to grab there in terms of the plant expansion.
It'd be great to talk to you and absolutely we are pretty excited about that.
We do see follow on opportunities as we as we look to complete the multi plant expansions. The underlying approach that we're taking we do think of that theres opportunities to continue the roll that out to the rest of the fleet and so we're kind of just taken an appropriate bite sizes.
As we have some of those plans more concretely illustrated that we can give an appropriate guide we will absolutely do so.
Great. Thank you.
And then some gentlemen, this will conclude our question and answer session I would like to turn the conference back over to John Keppler for any closing remarks.
Well I want to thank everybody for joining us today.
Before I close the line I would be absolutely remiss without formerly extending an offer and a very warm welcome to Kate Walsh, whose voice you heard at the beginning of the call.
Who recently joined US as our VP of Investor Relations I suspect many of you actually already know her from her career at Enlink midstream and we're pretty lucky to have her.
We love talking about this business and that's certainly true for Kate as well and I would encourage you to add cash to your contacts and feel free to reach out to her as questions or comments about our business and our progress come to mind.
In the meantime of course, you can count on us and frankly, the entire in view of the team continuing.
Continuing to work hard every single day to stably safely and reliably continue to displace coal grow more trees and fight climate change.
We look forward to talking again soon and thanks for joining us.
Stay healthy and have a great day.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.