Q1 2024 American Superconductor Corp Earnings Call

Speaker Change: Good day and welcome to the AMSC first quarter fiscal 2024 financial results.

Operator: School 2024, Financial Results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: 2024 Financial Results. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star and then two. Also, please limit yourself to one question and one follow-up. Please note this event is being recorded. I would now like to turn the page.

Speaker Change: All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

Operator: After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star and then two. Also, please limit yourself to one question and one follow-up.

Speaker Change: After today's presentation, there will be an opportunity to ask a question. To ask a question, you may press star, then 1 on a touch-tone phone. To withdraw your question, please press star, and then 2. Also, please limit yourself to one question and one follow-up.

Operator: Please note this event is being recorded.

Nicol Golez: I would now like to turn the conference over to Nicol Golez, Director of Communications at AMSC. Please go ahead.

Speaker Change: Please note this event is being recorded. I would now like to turn the conference over to Nicole Gilles, Director of Communications at AMSC. Please go ahead.

Nicole Golas: Thank you, Dave. Good morning, everyone, and welcome to American Superconductor Corporation's first quarter of fiscal year 2024 earnings conference call. I am Nicole Golas, Director of Communications. With us on today's call are Mr. Daniel McGahn, Chairman, President, and Chief Executive Officer, and Mr. John Kosiba, Senior Vice President, Chief Financial Officer, and Treasurer. American Superconductor issued its earnings release for the first quarter of fiscal year 2024 yesterday after the market closed. For those who have not seen the release, a copy is available on the investors page of the company's website at www.amsc.com.

Nicol Golez: Thank you, Dave.

Nicol Golez: Good morning, everyone, and welcome to American Superconductor Corporation's first quarter of fiscal year 2024 earnings conference call. I am Nicol Golez, Director of Communication.

Nicole Golas: Thank you, Dave. Good morning, everyone, and welcome to American Superconductor Corporation's first quarter of fiscal year 2024 earnings conference call. I am Nicole Golas, Director of Communications.

Nicol Golez: With us on today's call are Mr. Daniel McGahn, Chairman, President, and Chief Executive Officer, and Mr. John Kosiba, Senior Vice President, Chief Financial Officer, and Treasurer. American Superconductor issued an earnings release for the first quarter of fiscal year 2024 yesterday after market closed. For those who have not seen the release, a copy is available on the investor's page of the company's website at www.amsc.com.

Speaker Change: With us on today's call are Mr. Daniel McGahn, Chairman, President, and Chief Executive Officer, and Mr. John Kosiba, Senior Vice President, Chief Financial Officer, and Treasurer.

Speaker Change: American Superconductor issued its earnings release for the first quarter of fiscal year 2024 yesterday after market closed.

Nicole Golas: Before starting the call, I would like to remind you that various remarks management makes about American Superconductor's future expectations, including expectations regarding the company's second quarter of fiscal year 2024 financial performance. Plans and prospects constitute forward-looking statements for the purposes of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements because of various important factors, including those in the risk factors section of American Superconductor's annual report on Form 10-K for the year ended March 31, 2024, which the company filed with the Securities and Exchange Commission on May 29, 2024, and in the company's other reports filed with the SEC.

Speaker Change: For those who have not seen the release, a copy is available in the investors' page of the company's website at www.amsc.com.

Nicol Golez: Before starting the call, I would like to remind you that various remarks management may make about American Superconductor's future expectations, including expectations regarding the company's second quarter of fiscal year 2024 financial performance, lands and prospects, constituted forward-looking statements for the purpose of the safe harbor provision under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements because of various important factors, including those in the red factors section of American Superconductor's annual report on Form 10-K for the year ended March 31, 2024, which the company filed with the Securities and Exchange Commission on May 29, 2024, and the company's other reports filed with the SEC.

Speaker Change: Before starting the call, I would like to remind you that various remarks management may make about American Superconductor's future expectations, including expectations regarding the company's second quarter of fiscal year 2024 financial performance.

Speaker Change: Plans and prospects constitute forward-looking statements for purpose of the safe harbor provision under the Private Securities Litigation Reform Act of 1995.

Speaker Change: Actual results may...

Speaker Change: differ materially from those indicated by such forward-looking statements.

Speaker Change: because of various important factors including those in the risk factors section of American Superconductor's Annual Report on Form 10-K for the year ended March 31st, 2024.

Speaker Change: which the company filed with the Securities and Exchange Commission on May 29, 2024 and the company's other reports filed with the SEC.

Nicol Golez: These forward-looking statements represent management expectations only as of today and should not be rely upon as representing management's views as of any day after today, while the company anticipates that subsequent events and developments may cross the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements.

Nicole Golas: These forward-looking statements represent management's expectations only as of today and should not be relied upon as representing management's views as of any day after today. While the company anticipates that subsequent events and developments may cause its views to change, the company specifically disclaims any obligation to update these forward-looking statements. Also on today's call, management will refer to non-GAAP net income, a non-GAAP financial measure. The company believes non-GAAP net income assists management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance.

Speaker Change: These forward-looking statements represent management's expectations only as of today and should not be relied upon as representing management's views as of any day after today.

Speaker Change: While the company anticipates that subsequent events and developments may cause the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements.

Nicol Golez: Also, on today's call, management will refer to non-GAAP net income, a non-GAAP financial measure. The company believes non-GAAP net income assists management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance. So, reconciliation of GAAP net law, so non-GAAP net income, can be found in the first quarter of fiscal year 2024 earnings press release that the company issued and furnished to the FEC last night on Form 8-K. American Superconductors, press releases, and FEC filings can be accessed from the investor page of its website at www.amst.com.

Speaker Change: Also, on today's call, management will refer to non-GAAP net income, a non-GAAP financial measure.

Speaker Change: The company believes non-GAAP net income assists management and investors in comparing the company's performance.

Speaker Change: across reporting periods on a consistent basis by excluding these non-cash, non-recurring, or other charges that it does not believe are indicative of its core operating performance.

Speaker Change: The reconciliation of gap net loss to non-gap net income can be found in the first quarter of fiscal year 2024 earnings press release that the company issued and furnished to the SEC last night on Form 8K.

Speaker Change: American Superconductor's press releases and SEC filings.

Speaker Change: can be accessed from the investor page of its website at www.amsc.com.

Nicole Golas: The reconciliation of gap net loss to non-gap net income can be found in the first quarter of fiscal year 2024 earnings press release that the company issued and furnished to the SEC last night on Form 8K. American Superconductor's press releases and SEC filings can be accessed from the investor page of its website at www.amsc.com. With that, I will now turn the call over to Chairman, President, and Chief Executive Officer, Mr. Daniel McGahn. Thank you, Kimmel. I just wanted to say thank you to all of our panelists.

Daniel McGahn: With that, I will now turn the call over to Chairman, President, and Chief Executive Officer, Mr. Daniel McGahn. Daniel?

Speaker Change: With that, I will now turn the call over to Chairman, President, and Chief Executive Officer Mr. Daniel McGahn. Daniel? Thanks, Nicole, and good morning, everyone.

Daniel McGahn: Thanks, Nicole, and good morning, everyone. I'll begin today by providing an update on our grid and wind business units, followed by comments on our recent activities. John Kosiba will then provide a detailed review of our financial results for the first fiscal quarter, which ended June 30, 2024, provide guidance for the second fiscal quarter, which will end September 30, 2024, and comment on the acquisition. Following our comments, we'll open up the line to questions from our analysts.

Daniel McGahn: Thanks, Colin.

Daniel McGahn: Good morning, everyone. I'll begin today by providing an update on our grid and wind business units, followed by comments on our recent acquisition.

Daniel McGahn: I'll begin today by providing an update on our grid and wind business units, followed by comments on our recent acquisition.

Daniel McGahn: John Kosiba will then provide a detailed review of our financial results for the first fiscal quarter, which ended June 30, 2024, provide guidance for the second fiscal quarter, which will end September 30, 2024, and comment on the acquisition. Following our comments, we'll open up the line to questions from our analysts. We're off to a very good start with our new fiscal year. The business is thriving, and we delivered yet another remarkable quarter. Our team reported great results for the first quarter of fiscal 2024. Total revenue for the first quarter came in line with our guidance range and grew by more than 30 percent versus the year-ago period.

John Kosiba: John Kosiba will then provide a detailed review of our financial results for the first fiscal quarter, which ended June 30, 2024, provide guidance for the second fiscal quarter, which will end September 30, 2024, and comment on the acquisition.

Daniel McGahn: We're off to a very good start with our new fiscal year. The business is thriving, and we delivered yet another remarkable quarter. Our team reported great results for the first quarter of fiscal 2020. Total revenue for the first quarter came in line with our guidance range and grew by more than 30% versus the year-ago period. Our first quarter revenue of $40 million was driven by strong new energy power system shipments. Our grid revenue for the first quarter of fiscal year 2024 accounted for 80% of AMSE's total revenue and grew over 25% versus the year-ago period.

John Kosiba: Following our comments, we'll open up the line to questions from our analysts.

Speaker Change: We're off to a very good start with our new fiscal year.

John Kosiba: The business is thriving.

Daniel McGahn: The remainder of the revenue came from our wind business, which grew over 75% from a year ago. This is the second quarter in a row that we've been at this $40 million revenue level. We exceeded our average gross margin levels for the quarter through a combination of strong projects and performance in each of our business segments. We ended the first quarter with more than $95 million in cash. We had very strong bookings in the first quarter with both new and existing customers for our product; we announced a record $75 million order of ship protection systems from the Royal Canadian Navy. And new energy power systems came in at about $33 million. Our new energy power systems orders represent strong contributions from utilities, industrials, renewables, semiconductors, and mining.

John Kosiba: and we delivered yet another remarkable quarter.

John Kosiba: Our team reported great results for the first quarter of fiscal 2024.

John Kosiba: Total revenue for the first quarter came in line with our guidance range and grew by more than 30% versus the year-ago period.

Daniel McGahn: Our first quarter revenue of $40 million was driven by strong new energy power systems shipments. Our grid revenue for the first quarter of fiscal year 2024 accounted for 80 percent of AMSC's total revenue and grew over 25 percent versus the year-ago period. The remainder of the revenue came from our wind business, which grew over 75 percent from a year ago. This is the second quarter in a row than we've been at this $40 million revenue level. We exceeded our average gross margin levels for the quarter through a combination of strong projects and performance in each of our business segments.

John Kosiba: Our first quarter revenue of $40 million was driven by strong new energy power system shipments.

John Kosiba: Our grid revenue for the first quarter of fiscal year 2024 accounted for 80% of AMSE's total revenue and grew over 25% versus the year ago period.

John Kosiba: The remainder of the revenue came from our wind business, which grew over 75% from a year ago.

John Kosiba: This is the second quarter in a row that we've been at this $40 million revenue level. We exceeded our average gross margin levels for the quarter through a combination of strong projects and performance in each of our business segments.

Daniel McGahn: We ended the first quarter with more than $95 million in cash. We had very strong bookings in the first quarter with both new and existing customers for our products. We announced a record $75 million order of ship protection systems from the Royal Canadian Navy. Well, new energy power systems came in at about $33 million. Our new energy power systems orders represent strong contributions from utilities, industrials, renewables, seven conductors, and mine. We received our third follow-on order of over $12 million from our wind customer INOX Winds. All told, we generated more than $125 million in new orders in the quarter.

John Kosiba: We ended the first quarter with more than $95 million in cash.

John Kosiba: We had very strong bookings in the first quarter with both new and existing customers for our products.

John Kosiba: We announced a record $75 million order of ship protection systems from the Royal Canadian Navy, while new energy power systems came in at about $33 million.

John Kosiba: Our new energy power systems orders represent strong contributions from utilities, industrials, renewables, semiconductors, and mining.

Daniel McGahn: We received our third follow-on order of over $12 million from our wind customer, InoxWinds. All told, we generated more than $125 million in new orders in the quarter, which is also a recent record.

Daniel McGahn: This is also a recent record. We ended the quarter with a 12-month backlog of $160 million and a total backlog of $250 million. We entered the year at $140 million, 12-month back Rob. These results and achievements represent our ability to deliver business diversification, financial growth, and expanded scale. We are very pleased with these results and encouraged by our orders momentum. Our business appears to be well positioned for the future.

Daniel McGahn: We end the quarter with a 12-month backlog of $160 million and a total backlog of $250 million. We entered the year... at $140 million a year ago. These results and achievements represent our ability to deliver business diversification, financial growth, and expanded scale. We are very pleased with these results and encouraged by our order's momentum. Our business appears to be well-positioned for the future. Now, I'll turn the call over to John Kosiba to review our financial results for the first quarter of fiscal 2024, provide guidance for the second quarter of fiscal 2024, which will end September 30, 2024, and comment on the addition of NWL to the AMSC family. John.

John Kosiba: Now I'll turn the call over to John Kosiba to review our financial results for the first quarter of fiscal 2024, provide guidance for the second quarter of fiscal 2024, which will end this September 30, 2024, and comment on the addition of NWL to the AMSC family. John, thanks, Daniel, and good morning everyone. AMSC generated revenues of $40.3 million for the first quarter of fiscal 2024, compared to $30.3 million in the year-ago quarter. Our grid business unit accounted for 80% of total revenues, while our wind business unit accounted for 20%. Grid business unit revenues increased by 26% in the first quarter versus the year-ago quarter.

John Kosiba: Thanks, Daniel, and good morning, everyone. AMRC generated revenues of $40.3 million for the first quarter of fiscal 2024, compared to $30.3 million in the year-ago quarter. A grid business unit accounted for 80% of total revenues, while a wind business unit accounted for 20%. Grid business unit revenues increased by 26% in the first quarter versus the year-ago quarter. This year-on-year change was led by revenue growth from our new energy policy, when business unit revenues increased by 76% in the first quarter versus the year-ago quarter. This year, OVF change was driven by ECS shipments.

John Kosiba: This year, we have changed, was led by revenue growth from our new energy power systems. Wind business unit revenues increased by 76% in the first quarter versus the year-ago quarter. This year, we have changed; was driven by ECS shipments. Looking at the PNL in more detail, gross margin for the first quarter of fiscal 2024 was 30%. This is up from 21% in the year-ago quarter. Gross margin for the quarter was favorably impacted by the increased revenues. The price increases across our product lines. A favorable product makes, including strong service and spare parts revenue, as well as elevated levels of factory absorption across our product lines.

John Kosiba: Looking at the P&L in more detail, gross margin for the first quarter of fiscal 2024 was 30%, this is up from 21% in the year-ago quarter. Gross margin for the quarter was favorably impacted by the increased revenues and price increases across our product lines. A favorable product mix, including strong service and spare parts revenue, as well as elevated levels of factory absorption across our product line. We experienced this gross margin expansion due to the drive, as I mentioned. This was a perfect culmination of events that yielded these elevated gross margins in Q1.

John Kosiba: We experienced this gross margin expansion due to the drive, as I mentioned. This was a perfect culmination of events that yielded these elevated gross margins in Q1.

John Kosiba: This was a perfect culmination of events that yielded these elevated gross margins in Q1.

John Kosiba: We believe that the actions taken over the last couple of years to expand our gross margins will continue to have a positive impact on our business.

John Kosiba: We believe that the actions taken over the last couple of years to expand our gross margins will continue to have a positive impact on our business. Moving on to operating expenses, R&D and SG&A expenses for the first quarter of fiscal 2024 were $11.2 million compared to $9.7 million in the year-ago quarter. Additionally, approximately 11% of R&D and SG&A expenses in the first quarter of fiscal 2024 were non-cash On that basis, the loss in the first quarter of fiscal 2024 was $2.5 million or $0.07 per share.

John Kosiba: We believe that the actions taken over the last couple of years to expand our gross margins will continue to have a positive impact on our business.

John Kosiba: Moving on to operating expenses. R&D and SG&A expenses for the first quarter of fiscal 2024 were 11.2 million, compared to 9.7 million in the year-ago quarter. Approximately 11% of R&D and SG&A expenses in the first quarter of fiscal 2024 were non-cash. On that loss in the first quarter of fiscal 2024 was 2.5 million, or 7 cents per year. I'd like to mention that included in on that loss for the quarter was a $3.9 million consideration revaluation expense related to the NEPC acquisition, which is a non-cash item. If we exclude the contingent consideration, AMUSC would have generated 1.1 million of net income in the first quarter.

John Kosiba: Moving on to operating expenses, R&D and SG&A expenses for the first quarter of fiscal 2024 were $11.2 million, compared to $9.7 million in the year-ago quarter.

John Kosiba: I'd like to mention that included in our net loss for the quarter was a $3.9 million contingent consideration revaluation expense related to the NEPSI acquisition, which is a non-cash item. If we exclude the contingent consideration, AMC would have generated $1.4 million of net income in the first quarter. This compares to a net loss of $5.4 million, or $0.19 per share, in the year-ago quarter. Our non-GAAP net income for the first quarter of fiscal 2024 was $3 million, or $0.09 per share, compared with a non-GovNet loss of $2.1 million, or $0.08 per share, in the year-ago quarter.

John Kosiba: This compared to a net loss of 5.4 million, or 19 cents per share, in the year-ago quarter. Our non-GAAP net income for the first quarter of fiscal 2024 was $3 million or 9 cents per share, compared with the non-GAAP net loss of $2.1 million or 8 cents per share in the year-ago quarter. Please see our press release issue last night for a reconciliation of gap-to-non-gap results. We ended the first quarter of fiscal 2024 with 95.5 million in cash, cash or co-hunts, and restricted cash. This compares with 92.3 million on March 31, 2024. We generated 3.4 million of operating cash flow in the first quarter of fiscal 2024.

John Kosiba: compared with a non-gap net loss of $2.1 million, or $0.08 per share, in the year-ago quarter.

John Kosiba: Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results. We ended the first quarter of fiscal 2024 with $95.5 million in cash, cash equivalents, and restricted cash. This compares with $92.3 million on March 31st, 2024.

John Kosiba: Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results.

John Kosiba: We ended the first quarter of fiscal 2024 with $95.5 million in cash, cash equivalents, and restricted cash.

John Kosiba: This compares with $92.3 million on March 31, 2024.

John Kosiba: We generated $3.4 million of operating cash flow in the first quarter of fiscal 2024. Now turning on to our financial guidance for the second quarter of fiscal 2024, we expect that our revenues will be in the range of $38 to $42 million. A net loss on that revenue is expected not to exceed $1.7 million, or $0.05 per share. Please note that our net loss guidance assumes no changes in contingent consideration.

John Kosiba: Now turning on to our financial guidance for the second quarter of fiscal 2024. We expect that our revenues will be in the range of 38 to 42 million. On that loss on that revenue is expected not to exceed 1.7 million or 5 cents per share. Please note that our net loss guidance assumes no changes in contingent consideration. We expect our non-GAAP net income to be at least break even before any impact of the acquisition. The company expects operating cash flow in the second quarter of fiscal 2024 to range from break even to positive $2 million.

John Kosiba: Now turning on to our financial guidance for the second quarter of fiscal 2024. We expect that our revenues will be in the range of $38 to $42 million. Our net loss on that revenue is expected not to exceed $1.7 million or 5 cents per share.

John Kosiba: Please note that our Net Loss Guidance assumes no changes in contingent consideration.

John Kosiba: We expect our non-GAAP net income to be at least break-even before any impact of the acquisition. The company expects operating cash flow in the second quarter of fiscal 2024 to range from break-even to positive $2 million. The company's guidance does not include the impact of the recently announced acquisition of NWL. Additionally, this guidance does not contemplate an approximately $8 million milestone payment that is expected to be paid from our Allied Navy in late September or early October.

John Kosiba: We expect our non-GAAP net income to be at least break-even before any impact of the acquisition.

John Kosiba: The company expects operating cash flow in the second quarter of fiscal 2024 to range from break-even to positive $2 million.

John Kosiba: The company's guidance does not include the impact of the recently announced acquisition of NWL. Additionally, this guidance does not contemplate an approximately $8 million milestone payment that is expected to be paid from our Allied Navy in late September or early October. That payment could have a significant favorable impact on our operating cash flow if it is received within the quarter.

John Kosiba: The company's guidance does not include the impact of the recently announced acquisition of NWL.

John Kosiba: That payment could have a significant favorable impact on our operating cash flow if it is received within the quarter. Now, I'd like to take a moment to provide a financial summary of the NWL acquisition. On August 1st, 2024, AMC acquired NWL, a private New Jersey-based company that sells power supplies and transformers to industrial and military customers.

John Kosiba: That payment could have a significant favorable impact on our operating cash flow if it is received within the quarter.

John Kosiba: Now I'd like to take a moment to provide a financial summary of the NWL with acquisition. On August 1, 2024, AMSE acquired NWL, a private New Jersey-based company that sells policies and transformers to industrial and emits military customers. The total consideration paid for the acquisition was approximately $61.4 million. The consideration was comprised of $30 million in cash, $25 million paid at closing, and an additional $5 million to be paid after considering the various adjustments set forth in the stock purchase agreement. The remaining $31.4 million was paid by issuing $1.3 million restricted shares of AMSE common stock to the sellers at closing.

John Kosiba: Now, I'd like to take a moment to provide a financial summary of the NWL acquisition.

John Kosiba: The total consideration paid for the acquisition was approximately $61.4 million. The consideration was comprised of $30 million in cash, $25 million paid at closing, and an additional $5 million to be paid after considering various adjustments set forth in the Stock Purchase Agreement. The remaining $31.4 million was paid by issuing $1.3 million restricted shares of AMC common stock to the sellers at closing. The share price used to calculate the shares paid to the sellers was $24.16, which was the closing price of our stock on the day prior to closing. Summarizing NWL's income statement, NWL has averaged $55 million in revenue over the last three years.

John Kosiba: On August 1st, 2024, AMC acquired NWL, a private New Jersey-based company that sells power supplies and transformers to industrial and military customers.

John Kosiba: The total consideration paid for the acquisition was approximately $61.4 million.

John Kosiba: Their share price used to calculate the shares paid to the sellers was $24.16, which was the closing price of our stock on the day prior to closing. Summarizing NWL's income statement, NWL has averaged $55 million in revenue over the last three years. They've experienced significant growth in their most recent year, with calendar 2023 revenues of $72.3 million. Gross margins for calendar 2023 were 24%, and operating expenses in calendar 2023 were approximately $12 million. The operating margin in calendar 2023 was approximately 11%.

John Kosiba: The share price used to calculate the shares paid to the sellers was $24.16, which was the closing price of our stock on the day prior to closing.

John Kosiba: They've experienced significant growth in their most recent year, with calendar 2023 revenues of $72.3 million. Of course, margins for 2023 were 24%, and operating expenses in 2023 were approximately $12 million. The operating margin in 2023 was approximately 11%.

John Kosiba: They've experienced significant growth in their most recent year with calendar 2023 revenues of $72.3 million.

John Kosiba: Of course, margins for calendar 2023 were 24%, and operating expenses in calendar 2023 were approximately $12 million.

John Kosiba: The operating margin in calendar 2023 was approximately 11%.

John Kosiba: Now moving on to the balance sheet, we acquired the company on a debt-free basis. The acquired balance sheet at closing had approximately $41.2 million in current assets, $28.4 million in fixed assets, and $1.9 million in intangible assets. The fixed assets included two buildings in New Jersey value that are approximately $23 million, which are owned outright. We acquired approximately 12.1 in short-term liabilities, and a $6.5 million diverged tax liability in long-term liabilities.

John Kosiba: Now moving on to the balance sheet, we acquired the company on a debt-free basis. The acquired balance sheet at close-in had approximately $41.2 million in current assets, $28.4 million in fixed assets, and $1.9 million in intangible assets. The fixed assets included two buildings in New Jersey valued at approximately $23 million, which are owned outright. We acquired approximately 12.1% of the short-term liabilities and a $6.5 million deferred tax liability in long-term liabilities. Given the fact that AM&C has substantial loss carry forwards to apply against future profits, we expect that much of that deferred tax liability will not be realized and will be taken as a tax income benefit in the quarters ahead.

John Kosiba: Now moving on to the balance sheet, we acquired the company on a debt-free basis. The acquired balance sheet at close-in had approximately $41.2 million in current assets, $28.4 million in fixed assets, and $1.9 million in intangible assets.

John Kosiba: The fixed assets included two buildings in New Jersey valued at approximately $23 million, which are owned outright.

John Kosiba: Police. Given the fact that AM&C has substantial lost carry forwards to apply against future profit, we expect that much of that deferred tax liability will not be realized and will be taken as a tax income benefit in the quarters ahead. One other point to mention, we acquired a 12-month backlog of approximately 44 million and a total backlog of approximately 51 million. More than half of that total backlog is expected to ship before December 31, 2024. As you can see, we acquired a company that we believe has a solid history of financial performance, a strong balance sheet, and a backlog that demonstrates the current health of their business.

John Kosiba: One other point to mention; we acquired a 12 month backlog of approximately 44 million and a total backlog of approximately 51 million. More than half of that total backlog is expected to ship before December 31st, 2024.

John Kosiba: More than half of that total backlog is expected to shift before December 31st, 2024.

John Kosiba: As you can see, we acquired a company that we believe has a solid history of financial performance, a strong balance sheet, and a backlog that demonstrates the current health of their business. As a result, we are expecting this acquisition to have an immediate positive impact on our financial performance. Looking ahead, we are working through final purchase account and reconciliation. Due to purchasing accounting activities that need to be finalized in Q2 of Fiscal 2024, we are unable to provide any specific guidance regarding the financial impact the acquisition may have on our fiscal 2024 financial results.

John Kosiba: As you can see, we acquired a company that we believe has a solid history of financial performance, a strong balance sheet, and a backlog that demonstrates the current health of their business.

John Kosiba: As a result, we are expecting this acquisition to have an immediate positive impact on our financial performance.

John Kosiba: As a result, we are expecting this acquisition to have an immediate positive impact on our financial performance.

John Kosiba: Looking ahead, we are working through final purchase account and reconciliation. Due to purchasing account and activities that need to be finalized in Q2 of fiscal 2024, we are unable to provide any specific guidance regarding the financial impact the acquisition may have on our fiscal 2024 financial results. With that said, our expectation is that NWL will contribute meaningfully to our consolidated revenue for Q2 Fiscal 2024 and will add to our operating cash flow.

John Kosiba: Looking ahead, we are working through final purchase account and reconciliations.

John Kosiba: With that said, our expectation is that NWL will contribute meaningfully to our consolidated revenue for Q2 fiscal 2024 and will add to our operating cash flow. One last note, we filed an 8-K-A last night with the SEC, which includes pro forma financial information that shows the favorable impact the acquisition would have had on our prior year in the June quarter if the acquisition had occurred as of April 1st, 2023 and April 1st, 2024. Please see the 8-K-A for more information. With that, I'll turn the call back over to Danny. Thanks, John.

John Kosiba: With that said, our expectation is that NWL will contribute meaningfully to our consolidated revenue for Q2 fiscal 2024 and will add to our operating cash flow.

John Kosiba: One last note: we filed an A.K.A. last night with the SEC which includes pro-former financial information that shows the favorable impact the acquisition would have had on our prior year in June quarter if the acquisition had occurred as of April 1, 2023, in April 1, 2024. Please see the A.K.A. for more information.

John Kosiba: One last note, we filed an 8-K-A last night with the SEC, which includes pro forma financial information that shows the favorable impact the acquisition would have had

John Kosiba: on our prior year in June quarter if the acquisition had occurred as of April 1st, 2023 and April 1st, 2024. Please see the 8KA for more information.

Daniel McGahn: With that, I will call back over to Daniel. Thanks, John. We began fiscal year 2024 with strong orders momentum, solid financial results, and we believe to be a powerful addition to our business. A couple of days ago, we announced the acquisition of NWL. Prior to becoming part of the AMSC family, NWL was a privately held company in New Jersey. It has been owned and operated by the same family for two generations for over 50 years. NWL provides power supplies for motor drives for a variety of energy applications, as well as for critical military systems. The acquisition of NWL directly aligns with our strategic priorities to accelerate profitable growth, broaden our product offering, and expand our market reach and market share.

Daniel McGahn: We began fiscal year 2024 with strong order momentum, solid financial results, and what we believe to be a powerful addition to our business. A couple days ago, we announced the acquisition of NWL. Prior to becoming part of the AMSC family, NWL was a privately held company in New Jersey. It has been owned and operated by the same family for two generations for over 50 years.

John Kosiba: Thanks, John .

Speaker Change: We began fiscal year 2024 with strong orders momentum, solid financial results, and what we believe to be a powerful addition to our business.

Daniel McGahn: NWL provides power supplies for motor drives for a variety of energy applications, as well as for critical military systems. The acquisition of NWL directly aligns with our strategic priorities to accelerate profitable growth, broaden our product offering, and expand our market reach and market share. NWL has a history of profitable revenue with a three-year average of approximately $55 million per year. The acquisition of NWL is expected to complement and extend our product offerings in the industrial and military sectors, as we expand our military business.

Speaker Change: The acquisition of NWL directly aligns with our strategic priorities to accelerate profitable growth, broaden our product offering, and expand our market reach and market share.

Daniel McGahn: NWL has a history of profitable revenue with a three-year average of approximately $55 million per year. The acquisition of NWL is expected to complement and extend our product offerings in the industrial and military sectors. As we expand our military business, we believe NWL has the potential of multiplying our military footprint within the Department of Defense, especially the U.S. Navy. We see the possibility that with NWL, we may expedite our Navy expansion from our ship protection systems to ship power systems. Today, we install ship protection systems that help Navy ships stay hidden from our enemy. Together with ship power systems, we can help power ship functions.

Speaker Change: NWL has a history of profitable revenue with a three-year average of approximately $55 million per year.

Speaker Change: The acquisition of NWL is expected to complement and extend our product offerings in the industrial and military sectors.

Daniel McGahn: We believe NWL has the potential to multiply our military footprint within the Department of Defense, especially the U.S. Navy. We see the possibility that with NWL, we may expedite our Navy expansion from our ship protection systems to ship power systems. Today, we install ship protection systems that help Navy ships stay hidden from our enemy threats. Together with ship power systems, we can help power ship function.

Speaker Change: We see the possibility that with NWL we may expedite our Navy expansion from our ship protection systems to ship power systems.

Speaker Change: Today, we install ship protection systems that help Navy ships stay hidden from our enemy threats.

Daniel McGahn: We see NWL as part of the next step from protecting the fleet to powering the fleet. With NWL, we're buying a business that we like that's run by people we like and run in a fashion that we like. It's also a company that we know. NWL was a strategic supplier to NEPC. AMSC looked to also qualify them as a supplier. They are known to solve hard problems for their customers and have an exceptional offering that's typically deployed in hardened industrial and military environments. We have a lot of respect for NWL and what has been built.

Daniel McGahn: We see NWL as part of the next step from protecting the fleet to powering the fleet. With NWL, we're buying a business that we like, that's run by people we like, and run in a fashion that we like. It's also a company that we know because NWL was a strategic supplier to NEPS. AMSC looks to also qualify them as a supplier. They are known to solve hard problems for their customers and have an exceptional offering that's typically deployed in hardened industrial and military environments. We have a lot of respect for NWL and what it has built.

Speaker Change: We see NWL as part of the next step from protecting the fleet to powering the fleet.

Speaker Change: With NWL, we're buying a business that we like, that's run by people we like, and run in a fashion that we like.

Speaker Change: It's also a company that we know.

Speaker Change: AMSC look to also qualify them as a supplier. They are known to solve hard problems for their customers and have an exceptional offering that's typically deployed in hardened industrial and military environments.

Daniel McGahn: Strategically, we made this acquisition with the expectation that it will improve the long-term quality of our revenues and earnings, with further diversification by region, customer, and product. And, most importantly, we believe that the acquisition will accelerate our ability to achieve our goal to reach sustainable profitability. In addition to the expected improvement in the quality of our revenues and earnings, we believe that the acquisition of NWL can further expand our industrial market penetration. NWL will provide immediate access to customers we do not have access to today.

Daniel McGahn: Strategically, we made this acquisition with the expectation that it will improve the long-term quality of our revenues and earnings with further diversification by region, customer, and product. And most importantly, we believe that the acquisition will accelerate our ability to achieve our goal to reach sustainable profitability. In addition to the expected improvement and quality of our revenues and earnings, we believe that the acquisition of NWL can further expand our industrial market penetration. NWL will provide immediate access to customers. We do not have access to today their customer expansion in the industrial side, largely resides in the factory where the customers we serve today are at the substation level.

Speaker Change: We have a lot of respect for NWL and what has been built.

Speaker Change: Strategically, we made this acquisition with the expectation that it will improve the long-term quality of our revenues and earnings.

Speaker Change: with further diversification by region, customer, and product. And most importantly, we believe that the acquisition will accelerate our ability to achieve our goal to reach sustainable profitability.

Speaker Change: In addition to the expected improvement in the quality of our revenues and earnings, we believe that the acquisition of NWL can further expand our industrial market penetration.

Daniel McGahn: Their customer expansion on the industrial side largely resides in the factory, where the customers we serve today are at the substation level. We believe that our strong balance sheet and the addition of NWL position us for continued growth. This move underscores how we continue to focus on building a more predictable and diversified business. To conclude... We believe the business really is in the best position it's ever been in and continues to improve.

Speaker Change: NWL will provide immediate access to customers we do not have access to today. Their customer expansion in the industrial side largely resides in the factory.

Daniel McGahn: We believe that our strong balance sheet and the addition of NWL positions us for continued growth. This move underscores how we continue to focus on building a more predictable and diversified business. To conclude, we believe that this really is in the best position it's ever been in and continues to improve. We generated non-GAAP net income and positive operating cash flow consistently over the past four quarters, and we're guiding free possible fifth quarter. Last quarter, we mentioned the possibility of doubling revenue from our fiscal 2021 levels. Let me remind you, those levels were in the $25 million quarter range.

Speaker Change: Thank you.

Speaker Change: To conclude...

Speaker Change: We believe the business really is in the best position it's ever been in and continues to improve.

Daniel McGahn: We generated non-GAAP net income and positive operating cash flow consistently over the past four quarters, and we're guiding for a possible fifth quarter. Last quarter, we mentioned the possibility of doubling revenue from our fiscal 2021 level. Let me remind you, those levels were in the $25 million a quarter range.

Speaker Change: We generated non-GAAP net income and positive operating cash flow consistently over the past four quarters.

Speaker Change: and we're guiding for a possible fifth quarter.

Speaker Change: Last quarter, we mentioned the possibility of doubling revenue from our fiscal 2021 levels.

Daniel McGahn: Our notion of getting to $50 million a quarter is now certainly possible. At this $50 million quarterly level, we have the potential to generate net income. The addition of NWL, coupled with our strong financial performance, changes the scale of our business and should place us in a strong position for continued diversified growth. We have several tailwinds generated by U.S. policies and momentum in our wind and ship businesses that hopefully will continue to drive our company's growth. During our first quarter, we announced our first Allied Navy contract with the Royal Canadian Navy for our ship protection systems for SPF.

Daniel McGahn: Our notion of getting to $50 million a quarter is now certainly possible. At this $50 million a quarter level, we have the potential to generate net income. The addition of NWL, coupled with our strong financial performance, changes the scale of our business and should place us in a strong position for continued diversified growth. We have several tailwinds generated by U.S. policies and momentum in our wind and ship businesses that, hopefully, will continue to drive our company's growth.

Speaker Change: Let me remind you, those levels were in the $25 million a quarter range. Our notion of getting to $50 million a quarter is now certainly possible. At this $50 million quarterly level, we have the potential to generate net income.

Speaker Change: The addition of NWL coupled with our strong financial performance changes the scale of our business.

Speaker Change: and should place us in a strong position for continued diversified growth. We have several tailwinds generated by U.S. policies and momentum in our wind and ship businesses that hopefully will continue to drive our company's growth.

Daniel McGahn: During our first quarter, we announced our first Allied Navy contract with the Royal Canadian Navy for our Ship Protection Systems, or SPS. Through this multi-year contract, we expect to deliver our proprietary SPS hardware, provide engineering services, integration, and commissioning of the system into multiple Canadian surface combatants. We are diligently working with Irving Shipbuilding, a Canadian shipbuilder that has constructed over 80% of Canada's fleet at sea today, to deliver our first SPS system by 2020.

Speaker Change: During our first quarter, we announced our first Allied Navy contract with the Royal Canadian Navy for our Ship Protection Systems, or SPS.

Daniel McGahn: Through this multi-year contract, we expect to deliver our proprietary SPS hardware, provide engineering services, integration, and commissioning of the system into multiple Canadian service combat. We are diligently working with Curbing Shipbuilding, a Canadian shipbuilder that has constructed over 80% of Canada's fleet at sea today to deliver our first SPS system by 2020. 86. We are grateful to be contracted to provide world-class mine protection to the Canadian Service Combatant platform and its sailors. In addition, we have a total of five SPS contracts for the US Navy San Antonio class, LPD, and are working on our proprietary mine countermeasure or MCM system.

Speaker Change: Through this multi-year contract, we expect to deliver our proprietary SPS hardware, provide engineering services, integration and commissioning of the system into multiple Canadian surface combatants.

Speaker Change: We are diligently working with Irving Shipbuilding, a Canadian shipbuilder that has constructed over 80% of Canada's fleet at sea today, to deliver our first SPS system by 2026.

Daniel McGahn: We are grateful to be contracted to provide world-class mine protection to the Canadian Surface Combatant Platform and its sales. In addition, we have a total of five SPS contracts for the U.S. Navy San Antonio-class LPD and are working on our proprietary mine countermeasure, or MCM. We are designing multiple ship platforms, LPD for the U.S. Navy and CSC for the Royal Canadian Navy. And we hope to add our U.S. Navy ship platform with the addition of the MCM product when it goes into production. We see expanding opportunities, especially in the military

Speaker Change: We are grateful to be contracted to provide world-class mine protection to the Canadian Surface Combatant Platform and its sailors.

Speaker Change: In addition, we have a total of five SPS contracts for the U.S. Navy San Antonio-class LPD and are working on our proprietary Mine Countermeasure, or MCM, system.

Daniel McGahn: We are designed into multiple ship platforms, LPD for the US Navy and CSC for the Royal Canadian Navy. We hope to add our US Navy ship platform with the addition of the MCM product when it goes into production. We see expanding opportunities, especially in the military business. NWL's military progress coupled with AMSCs presents an exciting opportunity to expedite AMSC's Navy expansion from simple protection systems to ship power systems. The two companies together are expected to provide a powerful combination. We are keenly focused on our ability to achieve our goal of sustainable profitability. We are very close.

Speaker Change: We are designed into multiple ship platforms, LPD for the U.S. Navy and CSC for the Royal Canadian Navy. And we hope to add our U.S. Navy ship platform with the addition of the MCM product when it goes into production.

Speaker Change: We see expanding opportunities, especially in the military business.

Daniel McGahn: NWL's military progress coupled with AMSEs presents an exciting opportunity to expedite AMSC's Navy expansion from ship protection systems to ship power systems. The two companies together are expected to provide a powerful combination. We are keenly focused on our ability to achieve our goal of sustainable profitability. We are very close. If you listen to John Kosiba's comments carefully, you may understand that we may already be there. If NWL can continue to contribute in a similar manner as they have most recently demonstrated, then the sustainable part of the goal may be achievable.

Speaker Change: NWL's military progress coupled with AMSEs present an exciting opportunity.

Speaker Change: to expedite AMSC's Navy expansion from ship protection systems to ship power systems.

Speaker Change: The two companies together are expected to provide a powerful combination.

Speaker Change: We are keenly focused on our ability to achieve our goal of sustainable profitability. We are very close. If you listen to John Kosiba's comments carefully, you may understand that we may already be there.

Daniel McGahn: If you listen to John Kosiba's comments carefully, you may understand that we may already be there. If NWL can continue to contribute in a similar manner as they have most recently demonstrated, then the sustainable part of the goal may be achievable. This is truly an exciting time here in AMSC, and time will tell. Our future facing technologies help harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective, and efficient power delivery.

Speaker Change: If NWL can continue to contribute in a similar manner as they have most recently demonstrated, then the sustainable part of the goal may be achievable.

Daniel McGahn: This is truly an exciting time here at AMSC, and time will tell. Our future-facing technologies help harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective, and efficient power delivery. I look forward to reporting to you again following the completion of our second fiscal quarter of 2024. Dave, we'll now take questions from our analysts.

Speaker Change: This is truly an exciting time here at AMSC, and time will tell. Our future-facing technologies help harmonize the world's desire for decarbonization and clean energy with the need for more reliable, effective, and efficient power delivery.

Daniel McGahn: I look forward to reporting to you again following the completion of our second fiscal quarter of 2024.

Speaker Change: I look forward to reporting to you again following the completion of our second fiscal quarter of 2024. Dave, we'll now take questions from our analysts.

Operator: Dave, we'll now take questions from our analysts.

Operator: We will now begin the question and the answer session. To ask you questions, you may press star, then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys.

Operator: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys.

Speaker Change: We will now begin the question and answer session. To ask a question, you may press star, then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys.

Operator: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Also, please limit yourself to one question and one follow-up. Our first question comes from Eric Stine with Craig Hallam. Please go ahead.

Operator: If at any time your question has been addressed and you would like to ask your question, please press star, then two. Also, please limit yourself to one question and one follow-up.

Speaker Change: If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. Also, please limit yourself to one question and one follow-up.

Eric Stein: Our first question comes from Eric Stein with Craig Hallum. Please go ahead.

Speaker Change: Our first question comes from Eric Stine with Craig Hallam. Please go ahead.

Daniel McGahn: Hi, Daniel. Hi, John. Hey, Eric.

Eric Stine: Hey, Eric. Good to hear your voice. Hey, good morning.

Daniel McGahn: Good to hear your voice. Hey, good morning. So on NWL, I can appreciate that you've got to work through some things your near-term in terms of specifics for the outlook. But I'm curious, are you able to just go through some of the trends that are specifically impacting their business? And is there any reason why there would be a change to the momentum in that business, which is clearly above what you provided in the release of that three-year average? Yeah, I think we wanted to have the three-year average to get people to understand kind of the size of the business, how we think of it as we looked at valuing it, trying to understand what we see are the positive parts of the business.

Eric Stein: Hi Daniel, hi John .

Daniel McGahn: So on NWL, I can appreciate that you've got to work through some things here near term in terms of specifics for the outlook. But I'm curious, are you able to just go through some of the trends that are specifically impacting their business? And is there any reason why there would be a change in the momentum of that business, which is clearly above what you provided in the release of that three-year average?

Speaker Change: Hey Eric, good to hear your voice. Hey, good morning. So on NWL, I can appreciate that you've got to work through some things here near term in terms of specifics for the Outlook.

Speaker Change: But I'm curious, are you able to just go through some of the trends that are specifically impacting their business and is there any reason why there would be a change to the to the momentum in that business, which is clearly above what you provided in the release of that three-year average?

Daniel McGahn: Yeah, I think we wanted to have the three-year average to get people to understand kind of the size of the business, how we think of it as we looked at valuing it, trying to understand what we see are the positive parts of the business. But I think you're asking kind of rightfully so.

Daniel McGahn: The most recent performance from NWO is much stronger than that 55 million average. Their business has been growing, and the margins have been improving. They're basically delivering gross margins and operating margins in the range that we've talked about for the entire business. So, it really fits in strategically with what we're doing, and the financials fit in perfectly with everything.

Daniel McGahn: But I think you're asking, kind of rightfully so, the most recent performance from NWL is much stronger than that 55 million average shows. Their business has been growing, and the margins have been improving. They're basically delivering gross margins and operating margins in the range that we've talked about for the entire business. So it really fits in strategically with what we're doing, and the financials fitted perfectly with everything that we've been talking about. about.

Speaker Change: than that $55 million average shows. Their business has been growing, the margins have been improving. They're basically delivering gross margins and operating margins in the range that we've talked about for the entire business. So it really fits in strategically with what we're doing, and the financials fit in perfectly with everything that we've been talking about.

Daniel McGahn: Got it, and then maybe for my follow-up, just on INOX, I know you got the three megawatt order. Can you just remind us what the cadence of recognizing that will be, and is it safe to assume that once through that you would expect more orders, potentially sizable, given the size of INOX's backlog. Yeah, their backlog today stands at the 2.7 gigawatts in total, which is, if you remember, you know, even on past calls, it's more than double where it had been at. Their business is really starting to be positioned to take off, specifically with the order that we have.

Daniel McGahn: Got it. And then maybe for my follow-up, just on Inox, I know you got the three megawatt order. Can you just remind us what the cadence of recognizing that will be? And is it safe to assume that once through that you would expect more orders, potentially sizable given the size of Inox's backlog? Yeah, their backlog today stands at north...

Speaker Change: Got it. And then maybe for my follow-up, just on Inox, I know you got the three-megawatt order. Can you just remind us what the...

Speaker Change: What the cadence of recognizing that will be and is it safe to assume that once through that you would expect more orders potentially sizable given the size of Inox's backlog.

Daniel McGahn: Yeah, their backlog today stands at north of 2.7 gigawatts in total, which is, if you remember, you know, even on past calls, that's more than double where it had been at. Their business is really starting to be positioned to take off, specifically with the order that we have. As we said in the announcement, we expect those products to be shipped this fiscal year.

Speaker Change: Yeah, their backlog today stands at north of 2.7 gigawatts in total, which is, if you remember, you know, even on past calls, that's more than double where it had been at. Their business is really starting to be positioned to take off.

Daniel McGahn: As we said in the announcement, we expect that those products to be shipped this fiscal year. So I think that adds to the de-risking of the projections that we've talked about, you know, for the longer term, for the business this year. So we think INOX is in the great position. We think that position is improving, and we think that they're out selling a great product, which is this new three megawatt wind turbine that they have that comes from us from a technology, from a control system standpoint. So, you know, when I look at this error, when I look at all the things we're hitting on between new energy orders, INOX orders, this huge, huge order from the Navy, you know, we really feel that we're at a very different position than we were even a couple quarters ago.

Speaker Change: specifically with the order that we have.

Speaker Change: As we said in the announcement, we expect that those products to be shipped this fiscal year. So I think that adds to the de-risking of the projections that we've talked about, you know, for the longer term for the business this year.

Daniel McGahn: So I think that adds to the de-risking of the projections that we've talked about for the longer term for the business this year. So we think Inox is in a great position, we think that position is improving, and we think that they are out selling a great product, which is this new three megawatt wind turbine that they have that comes from us from a technology and from a control system standpoint.

Speaker Change: So we think Inox is in a great position, we think that position is improving, and we think that they're out selling a great product, which is this new 3 megawatt wind turbine that they have that comes from us from a technology and from a control system standpoint.

Daniel McGahn: So you know, when I look at this, Eric, when I look at all the things we're hitting on between new energy orders, Inox orders, this huge, huge order from the Navy, you know, we really feel that we're in a very different position than we were even a couple quarters ago. And then add in what we're doing with NWL, which I think it sounds like you understand pretty well. This is a different company again than it was a year ago, and I know we've been saying that each year, but we feel like we're really moving the needle on where this business is going to head.

Speaker Change: You know, when I look at this, Eric, when I look at all the things we're hitting on between new energy orders, INOX orders, this huge, huge order from the Navy.

Daniel McGahn: And then add in what we're doing with NWL, which I think it sounds like you get pretty well. This is a different company again than it was a year ago. And I know we've been saying that each year, but we feel like we're really moving the needle with where this business is going ahead. Got it.

Eric Stein: You know, we really feel that we're in a very different position than we were even a couple quarters ago. And then add in what we're doing with NWL, which I think it sounds like you get pretty well.

Eric Stein: This is a different company again than it was a year ago, and I know we've been saying that each year, but we feel like we're really moving the needle with where this business is going to head.

Daniel McGahn: Thanks.

Colin Rush: The next question comes from Colin Rush with Oppenheimer.

Speaker Change: Got it. Thanks.

Operator: The next question comes from Colin Rusch with Oppenheimer. Please go ahead.

Daniel McGahn: Please go ahead. Thanks so much, guys. Dan, if you look at NWL and look at the customer list that they've got and the synergy that you guys might have, you talk a little bit about how much synergy there is there for you guys, and then we might start to see some of the impact there. And then, if you could speak to the same around some of the supply chain and cost savings you might see. Yeah, I think we can look at the customer base, particularly on the industrial side of the start, where they sell their power supplies and controls. They go into the factory.

Speaker Change: The next question comes from Colin Rusch with Oppenheimer. Please go ahead.

Colin Rusch: Thanks so much, guys. You know, Dan, if you look at NMWL and look at the customer list that they've got and the synergy that you guys might have, can you talk a little bit about how much synergy there is for you guys? And then we might start to see some of the impact there. And then you could speak to the same about some of the supply chain and cost savings that you might have.

Colin Rush: Thanks so much, guys. You know, Dan, if you look at NMWL and look at the customer list that they've got and the synergy that you guys might have, can you talk a little bit about how much synergy there is there for you guys? And then we might start to see some of the impact there. And then if you could speak to the same around some of the supply chain and cost savings that you might see.

Daniel McGahn: Yeah, I think when you look at the customer base, particularly on the industrial side, to start. You know, where they sell their power supplies and controls; they go into the factory.

Speaker Change: Yeah, I think when you look at the customer base, particularly on the industrial side to start, you know, where they sell their power supplies and controls, they go into the factory. So, in an industrial setting...

Daniel McGahn: So, in an industrial setting, it opens up a whole list of additional customers that we simply just don't serve today, because what we're focused on is very large-scale transformative projects, so they're going to change plant equipment and capacity and capability for our customers, and they need substation-level power control equipment. In the case of NWL, they're in the components that go into the factory that run every day, so I think that's going to open up a whole new sales channel for us to think about how we can sell to those types of industrial customers. But you can hear in my voice and in my tenor what I'm really excited about is the military.

Daniel McGahn: So, in an industrial setting, it opens up a whole list of additional customers that we simply just don't serve today. Because what we're focused on is for a very large scale transformative project, so they're going to change plant equipment and capacity and capability for our customers. And they need a substation-level power control equipment. In the case of NWL, they're in the components that go in the factory that run every day. So I think that's going to open up a whole new sales channel for us to think about how we can sell to those types of industrial customers.

Speaker Change: It opens up a whole list of additional customers that we simply just don't serve today, because what we're focused on is for very large-scale transformative projects, so they're going to change plant equipment and capacity and capability for our customers, and they need

Speaker Change: substation-level power control equipment.

Speaker Change: In the case of NWL, they're in the components that go in the factory that run every day. So I think that's going to open up a whole new sales channel for us to think about how we can sell to those types of industrial customers.

Daniel McGahn: But you can hear in my voice, in my tenor, what I'm really excited about is the military. It really transforms our reach into the Department of Defense, specifically with the Navy, allows us to think about not just protecting ships but powering ships. But I think also what should help expedite our ability to get our protection systems on the more ship platforms within the US Navy. So we think the customer part really pulls. I think on the supply chain is you're asking, yeah, I think there's work to be done there, and we can improve the supply chain across the board.

Daniel McGahn: It really transforms our reach into the Department of Defense, specifically with the Navy, allows us to think about not just protecting ships but powering ships, but I think also should help expedite our ability to get our protection systems on more ship platforms within the U.S. Navy. So we think the customer part really pulls. I think on the supply chain, as you're asking, yeah, I think there's work to be done there, and we can improve the supply chain across the board. I think scale in this business matters, and I think scale will help us in the longer term to continue to improve financial performance.

Speaker Change: customers.

Speaker Change: But you can hear in my voice, in my tenor, what I'm really excited about is the military. It really transforms our...

Speaker Change: reaching into the Department of Defense, specifically with the Navy, allows us to think about not just protecting ships, but powering ships.

Speaker Change: But I think also it should help expedite.

Speaker Change: our ability to get our protection systems on the warship platforms within the U.S. Navy.

Speaker Change: So we think the customer part really pulls. I think on the supply chain, as you're asking, yeah, I think there's work to be done there and we can improve the supply chain across the board. I think scale in this business matters, and I think scale will help us in the longer term to continue to improve financial performance as well.

Daniel McGahn: I think scale in this business matters, and I think scale will help us in the longer term to continue to improve financial performance. as well.

Colin Rush: Thanks so much. So, you know, appreciate the color and the time that you need to work through some of the financial considerations. You know, I haven't gone through this a few times now with the platform.

Colin Rusch: Thanks so much. So, you know, I appreciate the call around the time that you need to work through some of the financial considerations. You know, having gone through this a few times now with the platform,

Speaker Change: Thanks so much. So, you know, I appreciate the call around the time that you need to work through some of the financial considerations. You know, having gone through this a few times now,

Daniel McGahn: How long do you think it'll take to fully integrate the operation so that you know, you can have clean, you know, fully realized entities here. This looks like a little bit cleaner story than some of the other acquisitions that you've made in the past. Yeah, the difference here, I think, is the scale. So, you have a real operating business, generating real operating margin that's been able to do that consistently. They have a culture, they have a systems, they have a management team. This is different than the last two acquisitions in that we're adding a piece that's very well built, very well established on a very nice growth trajectory.

Speaker Change: with the platform. How long do you think it'll take to fully integrate the operation so that you, you know, you can have clean, you know, fully realized synergies here? This looks like a little bit cleaner story than some of the other acquisitions that you've, you've made in the past.

Daniel McGahn: Yeah, the difference here, I think, is the scale. So you have a real operating business generating real operating margin that's been able to do that consistently. They have a culture. They have a system. They have a management team. This is different than the last two acquisitions in that we're adding a piece that's very well built, very well established on a very nice growth trajectory. So I think the work, in many ways, is going to be more straightforward, simpler, easier, less risky, and more valuable to us in what we can do together. Our team is super excited about NWL.

Speaker Change: Yeah, the difference here, I think, is the scale. So you have a real operating business generating real operating margin that's been able to do that consistently. They have a culture, they have a system, they have a management team. This is different than the last two acquisitions in that we're adding a piece that's very well built, very well established.

Daniel McGahn: So, I think the work in many ways is going to be more straightforward, simpler, easier, less risky, more valuable to us than what we can do together combined.

Speaker Change: on a very nice growth trajectory. So I think the work in many ways is going to be more straightforward, simpler, easier, less risky.

Daniel McGahn: Our team is super excited about NWL. I feel from the team at NWL, they're super excited about us helping them to go to the next step and the next level, the next chapter in their business. So, I think it really is another transformative event for the company. I think to think about from a financial standpoint, it's going to take a few months, a quarter here, to kind of understand all the accounting, how all that's going to work. It's going to take us probably that a little bit more to really get the difference between a private company and forecasting in a public company.

Speaker Change: More valuable to us and what we can do together combined. Our team is super excited about NWL. I feel from the team at NWL, they're super excited about us helping them to go to the next step and the next level, the next chapter in their business.

Daniel McGahn: I feel from the team at NWL that they're super excited about us helping them to go to the next step and the next level, the next chapter in their business. So I think it really is another transformative event for the company. I think to think about from a financial standpoint, it's going to take a few months, a quarter here to kind of understand all the accounting, how all that's going to work. It's probably going to take us that a little bit more to really get, you know, the difference between a private company and forecasting in a public company is, frankly, different.

Speaker Change: So, I think it really is another transformative event for the company. I think to think about from a financial standpoint, it's going to take a few months, a quarter here to kind of understand.

Speaker Change: All the accounting, how all that's going to work. It's going to take us probably that a little bit more to really get, you know, the difference between a private company and forecasting in a public company is frankly different. Our ability to look at risk and assess risk.

Daniel McGahn: It's frankly different. Our ability to look at risk and assess risk is more hone because we're used to talking to you all and trying to set expectations that we can meet and exceed. I frankly don't know, from their standpoint, how well they're able to do that? You know, time is going to show as we see the months go by. A quarter or two goes by, but from an integrations standpoint, it's not a heavy lift to make this into an operation that's going to really help us in performance. It's going to help us with suppliers, it's going to help us with customers, help us with more market reach.

Daniel McGahn: Our ability to look at risk and assess risk is more honed because we're used to talking to you all and trying to set expectations that we can, you know, meet and exceed. I frankly don't know from their standpoint how well they're able to do that. You know, time is going to show us as the months go by, a quarter or two goes by, but from an integration standpoint, it's not a heavy lift to make this into an operation that's going to really help us in performance, that's going to help us with suppliers, going to help us with customers, help us with more market reach. We really love this acquisition on so many dimensions. It fits so well.

Speaker Change: is more honed because we're used to talking to you all and trying to set expectations that we can, you know, meet and exceed.

Speaker Change: I frankly don't know, from their standpoint, how well they're able to do that. You know, time is going to show as we see the months go by, a quarter or two goes by. But from an integration standpoint, it's not a heavy lift to make this into an operation.

Speaker Change: that's going to really help us in performance, that's going to help us with suppliers, going to help us with customers, help us with more market reach.

Daniel McGahn: We really love this acquisition on so many dimensions. It fits so well. It feels so much like us already and a part of a business that we think is necessary and needs rest and to move things forward with many of the customers that we have today. So we're super jazzed, and we don't see it as a high-risk acquisition. That being said, the devil's always in the tail. We try to understand how to work through that. We've seen the experience that we've had with Nexin and MealTrain. All very positive. It took us a couple quarters to kind of get the beat with them and understand how outwaters are going to come in, how systems are going to work, and all those things.

Daniel McGahn: It feels so much like us already and is a part of the business that we think is necessary and needed for us to move things forward with many of the customers that we have today. So we're super jazzed, and we don't see it as a high-risk acquisition. That being said, you know, the devil's always in the details. We try to understand how to work through that. We've seen the experience that we've had with Nexi and Nealtran, all very positive.

Speaker Change: We really love this acquisition on so many dimensions, it fits so well, it feels so much like us already and a part of a business that we think is necessary and needed for us to move things forward with many of the customers that we have today. So we're super jazzed and we don't see it as a high-risk acquisition.

Speaker Change: We try to understand how to work through that. We've seen the experience that we've had with Napsin and Nealtran.

Daniel McGahn: It took us a couple of quarters to kind of get on their level and understand, you know, how orders are going to come in, how systems are going to work, and all those things. So, you know, I'm hoping as we get to Christmas time or the end of the fiscal year, we won't be talking about NWL anymore.

Speaker Change: all very positive. It took us a couple quarters to kind of get the beat with them and understand, you know, how orders are going to come in, how systems are going to work, and all those things. So, you know, I'm hoping as we, you know, we get to Christmas time at the end of the fiscal year, you know, we're not talking about NWL anymore. We're talking only about AMSC. We're talking about growth trajectory. We're talking about the great markets and the great customers we're serving with wonderful technology.

Daniel McGahn: So I'm hoping as we get to Chris this time at the end of the fiscal year, we're not talking about NWL anymore. We're talking only about AMSC. We're talking about growth trajectory. We're talking about the great markets and the great customers we're serving with wonderful technology.

Operator: We're talking only about AMSC. We're talking about the growth trajectory. We're talking about the great markets and the great customers we're serving with wonderful technology.

Justin Clare: Thanks so much.

Justin Clare: The next question comes from Justin Claire with Roth Capital Partners.

Operator: The next question comes from Justin Clare with Roth Capital Partners.

Speaker Change: Thanks so much.

Speaker Change: The next question comes from Justin Clare with Roth Capital Partners.

Justin Clare: Hi, good morning. Thanks.

Justin Clare: Hi, good morning. Thanks. I just wanted to start here also on NWL.

Justin Clare: Hi, good morning, thanks. So I just wanted to start here also on NWL.

Daniel McGahn: So I just wanted to start here also on NWL. Do you or could you potentially share the mix of their military revenues versus their industrial revenues, or just give us a sense for the relative size of each of those businesses? And then, is it possible to share the gross margin profile for each of those businesses? Is it meaningfully different between them, or are they pretty similar? And then also curious about the NWL.

Daniel McGahn: Could you potentially share the mix of their military revenues versus their industrial revenues, or just give us a sense for the relative size of each of those businesses? And then, is it possible to share the growth margin profile for each of those businesses? Is it meaningfully different between them, or are they pretty similar?

Justin Clare: Do you or could you potentially share the mix of their military revenues versus their industrial revenues or just give us a sense for the...

Speaker Change: Relative size of each of those businesses and then is it possible to share the the gross margin profile for each of those businesses is it

Daniel McGahn: And then also curious on NWL, just how many ship platforms they might be supplying into at this point in time. Yeah, so let me make sure, Justin, I hit all those because you asked a lot of good questions, so I think are important for everybody to understand. So when you look at the percentage of military versus industrial, it kind of depends on period and period if you're looking at backlog versus revenue that's delivered. But, you know, in general, I'd say between 20% and 30% of the business is driven by military. We're indicating that we think that's a major growth engine that can happen for us.

Speaker Change: meaningfully different between them, or are they pretty similar? And then also curious on the NWL, just how many ship platforms they might be supplying into at this point in time.

Daniel McGahn: Yeah, so let me make sure Justin, I hit all those because you asked a lot of good questions that I think are important for everybody to understand. So when you look at the percentage of military versus industrial, it kind of depends on period and period if you're looking at backlog versus revenue that's delivered. But in general, I'd say between 20% and 30% of the business is driven by the military. We are indicating that we think that's a major growth engine that can happen for us.

Speaker Change: Yeah, so let me make sure, Justin, I hit all those, because you asked a lot of good questions that I think are important for everybody to understand.

Speaker Change: So, when you look at the percentage of military versus industrial,

Speaker Change: It kind of depends on period and period if you're looking at backlog versus revenue that's delivered, but...

Speaker Change: You know, in general, I'd say between 20 and 30 percent of the business is driven by military. We're indicating that we think that's a major growth.

Daniel McGahn: I won't say in the next couple of quarters, but certainly in the next couple of years or so, we think that's really a valuable piece of what we're doing. Secondly, from a margin standpoint, when you look at what we've put out there, it fits right in the margin that we're doing this quarter. I mean, it just adds to the great business that we've already built. More of that, which we think is more valuable.

Daniel McGahn: I won't say in the next couple of quarters, but certainly in the next couple of years or so. We think that's really a valuable piece of what we're doing. Secondly, from a margin standpoint, when you look at what we put out there, it fits right in the margin that we're doing this quarter. I mean, it just adds on to the great business that we've already built. More of that, which we think is more valuable, not only to us, but to our customers as well. And then there is a third piece of the question, Justin, that let me make sure I hit.

Speaker Change: engine that can happen for us. I won't say in the next couple quarters, but certainly in the next couple of years or so. We think that's really a valuable piece of what we're doing.

Speaker Change: Secondly, from a margin standpoint, when you look at what we've put out there, it fits right in the margin that we're doing this quarter. I mean, it just adds on to the great business that we've already built. More of that, which we think is more valuable, not only to us, but to our customers as well.

Daniel McGahn: Yeah, I just curious on how many ship platforms in WL is supplying right now. And then just adding on to that, curious on the relative growth that you've seen between the military and the industrial businesses of NWL. Has one been growing meaningfully faster than the other? Recently, just curious on the trends there. Yeah, the answer specifically platforms. I don't want to go to a specific number, but it's multiple. There are platforms that we want to get to where I'm platforms that they want to get to. So all I added to it, all kind of helps overall.

Justin Clare: Yeah, just curious about how many ship platforms NWL is supplying right now, and then just adding on to that, curious about the relative growth that you've seen between the military and the industrial businesses of NWL. Has one been growing meaningfully faster than the other recently? Just curious about the trends there.

Speaker Change: And then there was a third piece of the question, Justin, that let me make sure I hit.

Justin Clare: Yeah, just curious on how many ship platforms NWL is supplying right now, and then just

Daniel McGahn: Yeah, to answer specifically about platforms, I don't want to go to a specific number, but there are multiple. They're on platforms that we want to get to, and we're on platforms that they want to get to.

Speaker Change: Yeah, to answer specifically platforms, I don't want to go to a specific number, but it's multiple. They're on platforms that we want to get to. We're on platforms that they want to get to. So all additive, right? All kind of helps overall.

Daniel McGahn: So all additive, right? All kind of helps overall. Personally, I'll just give you my opinion. I see that the military backlog is strong and growing, and it puts the business in a nice position that that's going to become a critical part of the business overall. That's probably as far as I want to go in giving you color on that.

Daniel McGahn: I see, personally, I'll just give you my opinion. I see that the military backlog is strong, growing, puts the business in a nice position. That that's going to become a critical part of the business overall.

Daniel McGahn: It's probably as far as I want to go and give a new color on that. Okay, okay.

Justin Clare: Okay, okay. And then just one more.

Daniel McGahn: And then just one more. I want to make sure I heard you correctly. Did you say that the 12-month backlog for NWAL was 44 million? And then there's a total backlog of 150.

Daniel McGahn: I want to make sure I heard you correctly. Did you say that the 12-month backlog for NWL was $44 million, and then there's a total backlog of $150 million? So I wanted to check in on that, and then I also wanted to ask about the ability to maybe deliver more than $44 million in the next 12 months based on the timeline of book-to-bill. So maybe, yeah, if you could address that. Thank you.

Daniel McGahn: So I wanted to check in on that. And then just want to ask also about the ability to maybe deliver above the 44 million in the next 12 months based on the timeline of book to bill. So maybe if you could address that, thank you.

Speaker Change: So I wanted to check in on that, and then I just want to ask also about the ability to maybe deliver above the $44 million in the next 12 months.

Daniel McGahn: Yeah, let me talk about the book-to-bill timetable, and John can go through and explain the numbers more specifically. But, you know, they're typically getting orders that are going to deliver three, four months out. For some projects, it might be five, six.

Daniel McGahn: Yeah, let me talk about the book to bill timetable, and John can go through and explain this as the numbers more specifically. But they're typically getting orders that are going to deliver three, four months out for some projects that might be five, six. So this is a quicker turn business than the other parts of our business, which we love. Right, gives us the ability to generate orders today and deliver more revenue in December quarter, more revenue in March quarter, and certainly more revenue for next year. And they have a nice history of being able to bring that order book in and a nice beat.

John Kosiba: So maybe, yeah, if you could address that. Thank you. Yeah, let me talk about book-to-bill timetable, and John can go through and explain the numbers more specifically. But, you know, they're typically getting orders that are going to deliver three, four months out. For some projects, it might be five, six. So this is a quicker-turn business.

Daniel McGahn: So this is a shorter-term business than the other parts of our business, which we love, right? It gives us the ability to generate orders today and deliver more revenue in the December quarter, more revenue in the March quarter, and certainly more revenue for next year. And they have a nice history of being able to bring that order book in at a nice beat, and they've been able to have a growth trajectory overall with their order book, and therefore, it translates into their revenue. So they're in a really, really good position, and we inherit what we think is really a great business.

John Kosiba: than the other parts of our business, which we love, right? It gives us the ability to generate orders today and deliver more revenue in December quarter, more revenue in March quarter, and certainly more revenue for next year.

John Kosiba: And they've been able to have a growth trajectory overall, but their order book, and therefore it translates into their revenue. So they're in a really, really good position. And we and her what we think is really a great backlog that helps bolster where we're going to be the next few quarters here.

Speaker Change: and they have a nice history of being able to bring that order book in at a nice beat and they've been able to have a growth trajectory overall with their order book and therefore it translates into their revenue. So they're in a really, really good position and we inherit what we think is really a great backlog that helps bolster where we're going to be in the next few quarters here.

John Kosiba: Yeah, on the backlog, just make sure you've heard me correctly. It was $44 million and 12 months backlog, $51 million, and total backlog. and I also mentioned that more than half of that $51 million is expected to ship before December 31st, 2024. So that will, by definition, that 12-month backlog is the second half of that period will have book and burn in it. Since a big chunk of the 12-month backlog is being indicated that an expected ship by $12.31. So that's 51; half of it in the next five months. And you subtract that from the 44 that would tell you that there's a substantial amount of book and burn that's expected.

John Kosiba: On the backlog, just to make sure you heard me correctly, it was $44 million in a 12-month backlog, and $51 million in total backlog. And I also mentioned that more than half of that $51 million is expected to ship before December 31st, 2024. So that will, by definition. That 12-month backlog, the second half of that period will have books and burn in it, sent a big chunk of the 12-month backlog, is being indicated that it is expected to ship by 1231.

Speaker Change: On the backlog, I just want to make sure you heard me correctly, it was $44 million in a 12-month backlog, $51 million in total backlog.

John Kosiba: So out of that 51, half of it will be in the next five months, right?

Speaker Change: And I also mentioned that more than half of that $51 million is expected to ship before December 31st, 2024. So that will, by definition,

Speaker Change: That 12-month backlog, the second half of that period will have book-and-burn in it, since a big chunk of the 12-month backlog

Speaker Change: is being indicated that it is expected to shift by 1231.

John Kosiba: and you subtract that from the 44, that would tell you that there's a substantial amount of book and burn that's expected, but eventually, that's what they do.

Speaker Change: So out of that 51, half of it in the next five months. Right. And you subtract that from the 44, that would tell you that there's a substantial amount of book and burn that's expected. But eventually that's what they do. You look at the results that they did for the first half.

John Kosiba: But eventually, that's what they do. Look at the results as they did for the first half. You can see the level that they've been at. And, you know, we believe that that's a level the business can be at and hopefully grow beyond. Okay, got it.

John Kosiba: That's what they do. If you look at the results that they did for the first half, you can see the level that they've been at. We believe that that's the level that the business can be at and, hopefully, grow beyond.

Speaker Change: You can see the level that they've been at and, you know, we believe that that's a level the business can be at and hopefully grow beyond.

Justin Clare: Okay, got it. Appreciate the clarification and thanks for the time.

Operator: Appreciate the clarification, and thanks for the time.

Speaker Change: Okay, got it. Appreciate the the clarification and thanks for the time.

Nicol Golez: This concludes our question and answer session.

Operator: This concludes our question and answer session. I would like to turn the call back over to Mr. Gahan for any closing remarks. Well, I hope you guys...

Nicol Golez: Now I would like to turn the call back over to Mr. Gan for any closing remarks. Well, I hope you guys are excited. I am. This is probably the most excited I've been on any of these calls. And usually you guys always tell me, boy, that was more exciting than the last one. So hopefully you've built the excitement here. We delivered a remarkable beginning to fiscal year 2024. It's really outstanding financial performance. We're at a whole new level of performance when you look at revenue and most margin. Great orders quarter, right? So record $75 million to our ship protection system order transformative for the business.

Speaker Change: This concludes our question and answer session. I would like to turn the call back over to Mr. Gahan for any closing remarks.

Daniel McGahn: Well, I hope you guys hear how excited I am. This was probably the most excited I've been on any of these calls. Usually, you guys always tell me, "Boy, that was more exciting than the last one."

Mr. Gahan: Well I hope you guys hear how excited I am. This is probably the most excited I've been on any of these calls. Usually you guys always tell me, boy that was more exciting than the last one. So hopefully we keep building the excitement here.

Daniel McGahn: So hopefully, we can keep building the excitement. We delivered a remarkable beginning to fiscal year 2024 with really outstanding financial performance. We're at a whole new level of performance when you look at revenue and gross margin. Great orders quarter, right? So this record $75 million ship protection system order is transformative for the business, not only today but for the future for multiple years. And this puts our system on one of our Allied Navy's most significant ship platforms.

Speaker Change: We delivered a remarkable beginning to fiscal year 2024 with really outstanding financial performance. We're on a whole new level of performance when you look at revenue gross margin.

Speaker Change: Great orders quarter, right? So record $75 million ship protection system order, transformative for the business, not only today, but for the future for multiple years.

Daniel McGahn: Not only today, but for the future for multiple years. And this inserts our system into one of our allied navy's most significant ship platforms. We have this strong acquisition, which you can hear we're super excited about. And we believe allows us to reach our goal of sustainable profitability. The business delivered outstanding financial performance with over $3 million of operating cash flow, right? This is something we've done a lot recently. And now the business is at this level. We've expanded gross margins to 30%. You guys have an ask John and I about, well, where can we go?

Speaker Change: And this inserts our system into one of our Allied Navy's most significant ship platforms. We have this strong acquisition, which you can hear we're super excited about, and we believe allows us to reach our goal of sustainable profitability.

Daniel McGahn: We have this strong acquisition, which you can hear we're super excited about, and we believe allows us to reach our goal of sustainable profitability. The business delivered outstanding financial performance with over $3 million of operating cashflow. This is something we've done a lot recently, and now the business is at this level. We've expanded gross margins to 30%. You guys have been asking John and me about, well, where can we go?

Speaker Change: This is something we've done.

Speaker Change: a lot recently, and now the business is at this level.

John Kosiba: We've expanded gross margins to 30%. You guys have been asking John and I about, well, where can we go? How can we get to, right? And this is a level of gross margins that's higher than what we've talked about at this revenue level for sure. And we grew revenue by over 30% when we look at the quarter versus a year ago.

Daniel McGahn: How can we get to, right? And this is a level of gross margins that's higher than what we've talked about at this revenue level, for sure. And we grew revenue by over 30% when we look at the quarter versus a year ago. 127 million in new orders. Mentioned what we did with Canada, but 33 million in new energy power systems orders. So at and above what the trailing average has been.

Daniel McGahn: How can we get to, right? And this is a level of gross margins that is higher than what we've talked about at this revenue level for sure. And we grew revenue by over 30% when we look at the quarter versus a year ago. 127 million in new orders mentioned what we did with Canada, but 33 million in new energy power systems orders. So at the above, what the trailing average has been. So we continue to build that business. And it's our third three megawatt ECS order for Minox win, which that business is going to continue.

John Kosiba: 127 million in new orders. Mentioned what we did with Canada, but 33 million in new energy power systems orders, so at and above what the trailing average has been, so we continue to build that business. And it's our third 3 megawatt ECS order from Inox Wind, which that business is going to continue.

Daniel McGahn: So we continue to build that business, and it's our third three-megawatt ECS order from Inox Wind, which that business is going to... We added NWL, which really changes the scale of our business and should place us in a strong position to continue our path of diversifying our growth, particularly in the industrial and military sectors. And I think, you know, with the base business, we ended the quarter with $160 million in 12-month backlog and $250 million in total backlog. That's without adding NWL.

Daniel McGahn: We added NWL, which is really changes the scale of our business and should place us in a strong position to continue our path of diversifying our growth, particularly in the industrial and military sectors. And I think, you know, in the base business, we ended the quarter with 160 million in 12-month backlog and 250 million in total backlog. That's without adding NWL, and we'll, you know, give us the time you're going to see next call. How do we perform? How is NWL doing? How does it add? We're super excited about where the business has been the past few quarters.

John Kosiba: We added NWL, which really changes the scale of our business and should place us in a strong position to continue our path of diversifying our growth, particularly in the industrial and military sectors.

John Kosiba: And I think, you know, as a base business, we ended the quarter with $160 million in 12-month backlog and $250 million in total backlog. That's without adding NWL and we'll...

Daniel McGahn: And we'll, you know, give us the time you're going to see on the next call, how we perform, how NWL is doing, how it adds. We're super excited about where the business has been the past few quarters and now where it is going to head in the next few quarters with the addition of a strong order book that we have and the addition of the great business of NWL. So I'm very excited to be able to talk to you guys in about a quarter's time about this great business that we've built and the results that we continue to deliver. Thanks, everybody.

Daniel McGahn: And now where the business is going to head in the next few quarters with the addition of a strong order book that we have and the addition of the great business of MWL. So I'm very excited to be able to talk to you guys in about a quarter's time about this great business that we've built and the results that we continue to deliver.

John Kosiba: We're super excited about where the business has been the past few quarters and now where the business is going to head in the next few quarters with the addition of a strong order book that we have and the addition of the great business of MWL. So I'm very excited to be able to talk to you guys.

John Kosiba: in about a quarter's time about this great business that we build and the results that we continue to deliver. Thanks, everybody.

Operator: Thanks, everybody. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. You

Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: Thank you for joining us.