Q3 2024 LiqTech International Inc Earnings Call
Good day and welcome to the Lyft Pink International reports third quarter fiscal year 'twenty 'twenty four financial results conference call.
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Please note. This event is being recorded I would now like to turn the conference over to Robert Blum with light. Some partners. Please go ahead.
Robert Blum: Alright, Thank you very much Debbie good morning, everyone and thank you for joining us on the conference call as the operator mentioned to discuss Lectec International's third quarter 2024 financial results and this is for the period ending September 30th 2020 for joining us on today's call from the company are is Fei Chen Chief Executive Officer.
Robert Blum: And Philip price, the company's interim Chief Financial Officer.
Speaker Change: Before I turn it over to management, let me remind listeners that there will be an open Q&A session at the end of the call as the operator indicated if you are dialed into the traditional teleconference line. Please press Star then one to ask a question.
Speaker Change: If you are listening through the webcast portal and we'd like to ask a question you can submit your questions through the ask a question feature in the webcast player and we'll do our best to get to as many questions as possible.
Speaker Change: Before we begin with prepared remarks, we submit for the record. The following statement. The conference. This conference call may contain forward looking statements. Although the forward looking statements reflect the good faith and judgment of management forward looking statements are inherently subject to known and unknown risks and uncertainties that may cause actual results to be materially different from those discussed during the <unk>.
Speaker Change: <unk> called the company, therefore urges all listeners to carefully review and consider the various disclosures made in the reports filed with Securities and Exchange Commission, including risk factors that attempt to advise interested parties of the risks that may affect our business financial condition operations and cash flows if one or more of these risks or uncertainties materialize or if the.
Speaker Change: The underlying assumptions prove incorrect the company's actual results may vary materially from those expected or projected the company. Therefore encourages all listeners not to place undue reliance on these forward looking statements, which pertain only as of this date and the date of the release and conference call. The company assumes no obligation to update.
Any forward looking statements to reflect any events or circumstances that may arise. After the date of this release and conference call.
Speaker Change: Now I'd like to turn the call over to Fei Chen CEO of Lectec International Weil. Please proceed.
Fei Chen: Thank you Robert and good day to everyone on the call.
Fei Chen: Let's jump right to the key topic during the quarter, which left the delay of Alot Com Marsha produced water treatment projects in the North America, which was expected to be delivered in the third quarter, but that's now in the late.
Fei Chen: Following the decision by the customer to change the physical location of the installation.
This unit by states to contribute about $1 5 million in revenue to our third quarter results.
Fei Chen: This is clearly disappointing and significantly impact our quarterly results.
What's the Nittany, our customer has finalized their location after inflation, which has moved from the southeast United States to Canada, we used the United States to be delivered in 2025 and the wheel here to be a key driver to our future growth I will touch more on this in just a moment.
Fei Chen: So that's the Nic do site after quota that's now turned to a few of the puts it teams.
Fei Chen: We have more systems today, and the various phases of testing and piloting than at any time any point in our history. We have for produced water treatment pilot units, but oil and gas industry operation in the field at the moment.
Fei Chen: One with the visa direct in the U S, which was shipped in quarter, one and upgraded satisfactorily at the customer side in the past 12 months.
Fei Chen: One with Nissan, which was completed in quarter two for the Middle East.
Fei Chen: One last one after what's leading integrated energy companies for produced water treatment in the U S, which was huge in quarter three and a legacy system in the middle East, which has now been operational for more than three years.
Fei Chen: That's just the sense of reset back pilot is what led to the commercial odor. We originally was set to see this quarter as the customer clearly recognized the value in our solutions.
Fei Chen: The pilot unit immediate used will be installed and upgraded in January 2025, and one of the leading producers of the energy and chemicals in the region.
Fei Chen: Pilot units will produce provide us unique opportunity to showcase the superior value proposition of our containerized U S filtration system. This with bluestem, our technology in the immediate east region.
Okay.
Fei Chen: Yeah.
Speaker Change: The pilot unit with win after woods, leading integrated energy companies for produced water treatment in the U S is presently under commissioning we expect that the pilot testing will lead to a commercial project with this partner in 2025.
Speaker Change: Yeah, Oh, Yeah, and I guess recently, we have placed a pilot unit with a U S petrochemical company for Michael Plastics, Remover, which was shipped in quarter three.
Speaker Change: We also completed a test with the many unit focused lithium brine production pre treatment in the U S, which was successful and has led to the next step of pilot units older which is set to deliver this months.
Speaker Change: We also recently completed a factory taste of water treatment unit. So when did you do you have your engine highlighting so that's in fact true yourselves.
Speaker Change: Beating us to address seeps based on when did you do a few engines. We think this could lead to commercial sales of our water treatment units plus E T. Our system in 2025.
Speaker Change: They seemed to last a year or so we have also shopped unions in key end markets, including a unit, but M. E. T recovery for an offshore project, you mean turanian pilot unit phosphoric acid purification in China through Silicon <unk> feature.
Speaker Change: Multiple marine scrubber units in China through a yoyo a wastewater treatment system for the major processing industry in Denmark.
Speaker Change: And we have shot more than 24 crews system units, our the past 20 months.
Speaker Change: Well, we have always said the timing of large systems would be much slower and it will not be linear we feel good about the progress made in the last few quarters to put ourselves in a position to drive further adoption in a multitude of market segment.
Speaker Change: Yeah.
Speaker Change: Coming back to one of our key end markets marine water treatment to assist in building out our adoption.
Speaker Change: <unk> announced the establishment of a Jones winter with Deere tree, Jim Shaw Industrial Technology Research Institute to expand our presence in China, a T C building market, which has an approximate 80% Max here did.
Did you mean, we have been named Nantong Theater, a big tick Green Energy Technology Company limited and will be located in London, Heinemann Jiangsu Province.
Speaker Change: We have been the majority owner of Geely, where theater it will be a minority owner country building facilities and the local support along with initial operational and commercial funding.
He actually is a technology and research institutes in Jiangsu Province, we used the aim of promoting innovation and technology commercialization through partnership and the John investment.
Speaker Change: She actually less established 10 years ago and has built up extensive collaborations with industry universities and research institutes in the U S Europe, Australia, Canada, and China. She actually has focused on a wide variety of areas, including clean Tech.
Speaker Change: No.
Speaker Change: This daily we're making it possible for us to hire sales force in China too.
Speaker Change: Have access.
Speaker Change: To networks and the customers to provide local service and spare parts surplus in the medium long term. This year, we will provide the possibility for us to localize the system assembly to reach cost price reduction.
Speaker Change: Yeah.
As most of you know the marine shipping industry is moving towards cleaner few applications with the majority of new vessels being equipped with dual fuel engine, which you could request reliable water treatment for the exhaust gas recirculation systems or easier for perspective. According to.
Speaker Change: Carson C P intelligence and the CP Indian companies publish the data.
Speaker Change: In 2024 through 2027, 400, new vicious Oh older with Edr solutions planted in addition to retrofit applications, which are increasing for LNG powered vessel.
Speaker Change: I am pleased to have finalized this daily and look forward to what it can do to help expand our market presence in China.
Speaker Change: Transitioning to another key market for us swimming pools during the quarter, we delivered two swimming pool systems, one by poor court in Maryland, and one by up should I E spend this is certainly below our expected.
Speaker Change: We expect these quarterly guidance and an area of increased focus for the team we work intensively in building up more distribution partnerships into new geographic territories.
One area, we touched on last quarter that we believe will help is the risk of it.
Speaker Change: S. P certificate certification for our system in the U S. For those that are not aware, we are able to sell our commission commercial swimming pool solutions in the U S. As we work through this approval process. We used a certification now in hand, we have been in conversations with.
Speaker Change: With numerous potential partners that will help drive adoption in the U S. Based to go to have new collaborations in place by the end of the year.
Speaker Change: Transitioning to other parts of our established market, starting with the T X and the ceramic membranes D. P F and ceramic membrane sales during quarter three was about one 1 million compared to one six meeting in the year ago third quarter. This is below.
Speaker Change: Our expectations, largely reflecting what we believe to be a temporary market conditions with and the customers are waiting potential interest rate cut.
Unfortunately year to date sales continue to remain above last year's labor showing the continued strong market demand.
Speaker Change: Clearly, we are behind where we want to be at this point due to the delay of the large commercial oil and gas odor and other delays, which has impacted us ramping up sales quickly quicker as.
Speaker Change: As we look to the first quarter of 2024, we expect revenue to be between three three and $4 3 million, which would be above the most recent southern culture and compared to $3 9 million in the year ago first quarter, but again, our expectation was to be above.
This delivers exiting 2024.
Speaker Change: As a result, we implemented a cost reduction plan aimed at lowering our break even target measured on an adjusted EBITDA basis to a quarterly revenue run rate of approximately $5 5 million remember our previous breakeven.
Speaker Change: Target was six five to 7 million.
Speaker Change: These cost cuts will be across the board and includes it includes a 10% reduction in head count a 10% reduction in base salaries for senior management in 2025% to 50% reduction in cash compensation for the board of directors in 2000.
Speaker Change: 25, as well as other cost saving initiatives.
Speaker Change: Okay.
Speaker Change: Positively we ended the quarter with a solid balance sheet, holding our pro forma cash balance of more than 313 million as.
As a reminder, in September and subsequently in November we closed on a private placement of 10 million with existing institutional investors. We thank them for their strong conviction with respect to our company our management team and our future opportunities.
Yes.
It is our commitment to not have to raise additional capital and bring this business to profitability as soon as possible.
Despite the late owners with a large number of <unk>.
Speaker Change: Women's in place and the large older set to be delivered next year copper with cost reduction initiatives I mentioned I continue to believe that we are in a strong position to achieve these stated goal.
Phillips: With that said lets me tend to coat, our two phillipe to review the financial results in more detail Phillips.
Speaker Change: Yeah.
Speaker Change: Okay.
Thanks, Perry and good morning, everyone.
Speaker Change: Now, let me briefly comment on the financial highlights for the quarter.
Speaker Change: Revenue came in at $2 5 million compared to $5 1 million in the same quarter last year, representing a decrease of 51%.
Speaker Change: Broken down by vertical sales, whereas follows.
Speaker Change: System sales and related services of <unk> 7 million compared to two 6 million in the same period last year.
Speaker Change: Pearce and ceramic membrane sales of $1 1 million compared to $1.6 million in the same period last year.
Speaker Change: Finally, plastics revenues of <unk> 7 million equivalent with Q3 last year.
Speaker Change: As Barry mentioned, we had a large one five minute system to be delivered in Q3 of this year, which has been delayed to next year.
Speaker Change: The number of pool systems delivered this quarter fell short of our expectations.
Speaker Change: We also experienced a slowdown in our TPS and ceramic membrane business, which we believe is driven by a temporary market conditions as end customers are waiting on potential interest rate cuts.
Speaker Change: Looking ahead for the fourth quarter of 2024, we expect revenue to be in the range of $3 3 million and $4 3 million compared to $3 9 million in the fourth quarter of last year.
Speaker Change: For the full year this guidance translates to unexpected revenue range of $14 5 million and 55 million.
Speaker Change: Yeah.
Speaker Change: Turning to gross margins the reduced revenue base for the quarter bits were a negative gross loss of $2 2 million compared to a positive gross margin of <unk> 9 million in the same quarter last year.
Speaker Change: Mr Crime underscores the impact of lower than expected revenue on our margin performance as fixed production costs were spread over a smaller revenue base, putting additional pressure on profitability.
Speaker Change: Yeah.
Speaker Change: As we still have overhead and other fixed costs not enough sleeping a so one of the key metrics. We look at to highlight the progress being made is all contribution margin.
Speaker Change: During the quarter when you back out the fixed cost or contribution margin ended at approximately 43, 1% compared to $43. Two in the same quarter reported last year.
Speaker Change: Turning to Opex.
Speaker Change: Total operating expenses for the quarter were $2 4 million down from $2 6 million in Q3 of last year.
Speaker Change: In particular selling expenses decreased $2 4 million, mainly from a reduction in executive officers, but we also saw savings from reduced travel costs lower investor relations expenses and a decrease in expenses related to external sales consultancy services.
Speaker Change: G&A increased <unk> 2 million attributable to the addition of new positions in supply chain and project management as well as increased legal expenses and insurance costs.
Speaker Change: As we have emphasized in recent quarters, we remain focused on running a lean business by monitoring costs and carefully evaluating our spend to protect our financial objectives.
Speaker Change: Concluding on the P&L net loss for the quarter was $2 8 million compared to $1 4 million for the comparable period of 2023.
As Fay mentioned, we have implemented a cost reduction plan to lower our breakeven target measured on an adjusted EBITDA basis to a quarterly revenue run rate of approximately $5 5 million. This is a significant improvement from our previous target of $6 five to seven points of women.
Speaker Change: Yeah.
Speaker Change: These cost cost will be comprehensive, including a 10% reduction in head count a 10% reduction in base salaries for senior management in 'twenty to 'twenty, 5% to 50% reduction in cash compensation for the board of directors in 2025, along with other cost saving initiatives.
Speaker Change: Yeah.
Speaker Change: Finally, let me briefly comment on our cash flow and balance sheet before summarizing and had an impact on what you see.
Speaker Change: We ended the quarter with $4 5 million in cash a decrease of $1 million from the second quarter, primarily due to cash used in operating activities, partly offset by proceeds from issuing common stock.
Speaker Change: During the quarter Sam.
We completed the second tranche of the private placement earlier announced adding an incremental 8 million in proceeds, bringing our pro forma cash balance to $13 3 million.
Speaker Change: To summarize balancing Castro, it's a critical API for us as we work to safeguard cash reserves joint both strategic and financial flexibility.
Our cost reduction efforts, including targeted head count and salary cuts are central to building a leaner operation that aligns with our long term goals.
Speaker Change: And for your continued support and now back over to you. Please.
Speaker Change: Thank you Felipe.
Speaker Change: In closing we had a culture of US is funding due to the delayed delivery, we have more systems today and the virus phases of testing and piloting than at any point in our history.
Speaker Change: We have incredible technology and can be applied across a number of different applications and it is imperative.
Speaker Change: To further develop the various partnerships to put ourselves in a position to not be so dependent on one or two odors each quarter.
Speaker Change: Fortunately, we have a strong balance sheet, but I want to make it clear that we are not taking our elevated cash position for granted we have put in place initiatives to reduce our expenses, we are driving revenue growth.
Speaker Change: With that operator, we would be happy to take any questions.
Speaker Change: Yeah.
Speaker Change: We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Speaker Change: If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker Change: If at any time. Your question has been addressed and you would like to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Speaker Change: The first question comes from Rob Brown with Lake Street Capital markets. Please go ahead.
Rob Brown: Hi, good morning.
Speaker Change: I just wanted to get a little more color on the delay in shipping to the oil and gas market. I know you said 25, any any sense on when that will be shipped and I guess some color on that.
On the change in taking that unit.
Speaker Change: What's your view on.
Is that the way the ultimate kind of pilot effort.
And the ability to get follow on orders or timing and follow on orders.
Rob Brown: Thank you Rob.
And I think in our press release, you have read we actually retain at them.
Rob Brown: Expect is coming the first of half of 2025.
Okay, Great and then I guess, what was the sort of reasoning for the further delay it could get shifted to the location, but was that yeah, because when they see up to a new location and.
Rob Brown: The water you know in the different size their defense, but they do not need to run or the testing of our system. Because it has been demonstrated very robust and you know, it's really kind of handled defend the water stream, but then they have some wasn't a tool crazy steps before our treatment they are there.
Rob Brown: We'd like to do some are running a testing before they and put us in place. So that's the last one recently delayed the process.
Rob Brown: Yeah.
Speaker Change: Okay, Great and then on the with him Brian project that you had could you give us a sense of how big that market is or what a typical system size is in that market.
Speaker Change: Uh huh.
Speaker Change: Sort of what you see there.
Speaker Change: I mean, we lately I'm very very happy to see the result is still kind of in sync. So the customer very fast the older and the pilot unit. So so the Max size is a huge and just for this customer alone in one side will be.
Speaker Change: Yes.
Speaker Change: More than you know there's more that much of it we have never nobody it used to be like a doubled sites or even five times the size what we'd normally expect so it's a it's very big but then come in steps I don't think they would come together at once but it will coming stepwise.
Speaker Change: So it's a it's a very very huge potential market and it feels like it's at $10. Our technology has a very very unique performance and they are very excited about that so they also have a patented Ah I changed technology is very unique so I would like to watch.
Speaker Change: You know the sites of sharing more information with all of you win them. When the pilots are finished because.
Speaker Change: It is.
Speaker Change: Mostly here, but the market is much bigger isn't much bigger than what we normally expected.
Speaker Change: Okay. Thank you I'll turn it over.
Speaker Change: The next question is from Lucas Ward Ward with Ascendant capital markets. Please go ahead.
Lucas Ward: Oh, Hello team good afternoon.
Speaker Change: Hi, Thanks for taking the question.
So.
Speaker Change: So yeah I wanted to.
Speaker Change: Drill down a little bit more on the order pipeline like.
I am interested in like how you track. It do you do you have like a dollar figure for what your backlog is or you know your three month backlog or your six month backlog or are you simply tracking individual pilot projects.
Speaker Change: Which ultimately hopefully lead to commercial orders.
Speaker Change: So that depends on the business areas. So we have a recurring business, where we have order pipelines with dollar marks for all of the all of the potential orders, but as I also mentioned, we have all the business areas with a with Laura Sue Cyprus, where we follow each step for for the pilot.
Speaker Change: Beginning with.
Speaker Change: Testings at the customer sites and that should turn into a pilot orders and the panel orders should turn into commercial sized all of us.
Speaker Change: So with the first it depends on the business areas.
Speaker Change: Okay cool. So it's it's seems like it's lumpier than I thought like if one order is one and a half million, let's say like can you give us an idea of the size of let's say well first of all if you do do you book revenues at the test phase or not because.
Speaker Change: Because it sounds like you're booking them at the pilot phase.
Speaker Change: Yes.
Speaker Change: But that depends on the arrangement with the customers, but with the recent pilots we've.
Speaker Change: We've announced its ease up in AR as a direct sale to the customer all as a rental so the customer wins, our pilots and then we provide a service engineering for them. We do the testing is together with the customer.
Speaker Change: And that gives us.
Okay cool, so, let's say, let's say a system as a million dollars. The commercial part how much with the pilot be is that like 100000 like whats the difference in scale from pilot to commercial.
Speaker Change: I mean, it's obviously if you've rented it's different.
Speaker Change: If they buy it.
Speaker Change: If you buy it it depends on the end market is it's not.
Speaker Change: It's not we're not able to say, but if we winded it depends on how long time the customer was 200, obviously, so it really depends on the end market and what we have offered track record within that end market.
Speaker Change: And then come back to the price compared to the pilot is they come Murcia pilot plan. It depends though depends on the capacity because that you know the cost and the sales price depends on you know the treatment capacity.
So it's a it's not the one number is really kind of depends on the.
Speaker Change: Set the project so it can be varied.
Speaker Change: Okay.
If we if we look at some of these newer markets like oil and gas a produced water or potentially lithium brine extraction is it fair to say that the system value is going up a lot relative to.
Speaker Change: Let's say marine scrubbers, or your previous bread and butter swimming pools, obviously, it would be definitely yeah, theyre going up very much so yeah.
Speaker Change: Okay.
Speaker Change: With respect to the lithium project it says in the press release that.
Speaker Change: That your U S membrane filtration can actually enhance the downstream ion exchange, which I'm not sure what that means but it sounds like if you you're becoming part of the production process as opposed to just cleaning.
Speaker Change: No the.
Speaker Change: You know the water that maybe is produced as a result.
Is that new and yeah, that's kind of position.
Speaker Change: Yeah, Yeah, you're totally correct, we are going to be a part of their production process.
Speaker Change: In that in the lithium brine.
Speaker Change: Print production, so they're using the islands changed that means they have a specie material you know as I change materially so really kind of.
Speaker Change: And have a chemical reactions to it with the lithium ion to cover that and towards the start of may tools, they need to use and in order to do this very efficiently. They do need to have from the war typing pretreat showing this way I'll need the lithium ion we react on the media otherwise they fishing.
Speaker Change: She will be reduced so we are ready to help them to increase their efficiency capture each of them and so it is totally right. Lucas we are in the production process.
Okay, cool and with respect to micro plastic removal is this a new market for licked Tech.
Speaker Change: It's I mean this is very very good question. It is a new we actually had a development project in 2023 are found by the Danish government and a JD is doing the testing of micro plastic remover from industry wastewater and we were very surprised to see the good work.
Speaker Change: Results, we got in that development project. So we use that data in hand, we start to have the communication. We used this U S petrochemical companies because we realized they have a challenge with the micro plastic in their wastewater and they got very excited about our results and our technology.
Speaker Change: So we are very fast to get them the pilot older and right now we actually come back thing they pilot at the customer sites in U S.
Mhm Okay.
Speaker Change: Thanks, Fay Okay last question when D. G. Dual fuel engines is this a new market I mean, what's the significance of that relative to your.
Standard Marine scrubber opportunity.
This is a new application. So I would say, yes. This is a new market because the standard and traditional marine scrubber market. It's really they could be a good story and control I think they knew they trade to watch out before they can't discharge into the Ocean and this one is really the engine has to treat.
Speaker Change: You know to be treated though that the gas from existing guests from the engine has to be clean and trade. It in order to have the combustion efficiency off their engine. So this is not a regulatory control is really the requirement for the engine. So that's why it's a it's much more interesting because in this way they they have to choose efficiency.
Speaker Change: Efficient technology, not only buy the cheapest you know not chosen the cheaper. So that's why we think we have a unique position here and also the demand the water treatment.
Speaker Change: The solution has to be continue operating when the Indians running and that makes it many of the cheap and then you know other competitive technology cannot really performed in this application and we know our solution is able to run continuously 24 hours and I mean it varies.
Speaker Change: You are in a very short time for that for the cleaning and this is also a unit of our solution. So it's a very interesting new application area of us definitely.
Speaker Change: Okay, great. Thank you Faye Philippine Robert.
Luca: Thank you Luca.
Luca: Okay.
Luca: Hi.
Luca: Again, if you have a question. Please press Star then one.
Okay.
Debbie This is Robert here I guess, while we wait to see if there are additional questions submitted a live here I've got a few webcast submitted questions again, if you're listening on the webcast I would like to submit a question you can type it in the the they ask a question box, there Fay and and fill up there is one.
Component I think of the lithium brine question that you did not already get asked and it was how long do you expect the pilot to be for the Brian customer do you have any estimates on the timeline for the pilot.
Speaker Change: And I expect they will be there until the next an extra couple of months there'll be there.
Speaker Change: Next few months it'll take okay.
Speaker Change:
Speaker Change: Next question here is can you talk about some of the reasons for the challenges within the pool system. This year is there any one particular reason there.
Speaker Change: Yeah.
Speaker Change: I mean from the macro perspective older older customers and partners are.
Speaker Change: Very very interesting in our technology. So we have a very very good to technology was a very strong value proposition and unfortunately, we had a serious management VP for sales and also as you see it.
Speaker Change: It was pushing for the pool system did not perform well and that actually cost you know ourselves really going down in a pool system side. So we have made the correct actions we have changed the VP for sales and those who we have hired a new sales person. So they are now in the whole speed and intensity.
Speaker Change: To catch up what had been left and they know it.
Speaker Change: And that's Oh, and we are really building up new distribution partnerships and those will be a follow up closely with our existing distributors and I really believe in 2025, you're going to see they picked up a new sales team, we'd be much more efficient and really.
Speaker Change: And professional compared with the old one so it's a purely our internal recent nothing about the market and the customer.
Speaker Change: Okay, Great again, I'll, just remind everyone star one to ask a question on the alive dial in or you can type in your question through the webcast feature there as well looks like I might have one additional question here and it's relating to the JV in China for the Marine scrubber cause.
Speaker Change: Can you just expand on that a little bit further what are some of the main goals and some of the you know the various processes that yourself and the partners will be undertaking.
Speaker Change: Yeah, it's it's a joint venture vis a vis the state owned at least Technology Research Institute, Dr Tree in Jiangsu and Jiangsu provinces.
Speaker Change: Just next to Shanghai, So majority of the China's keeping and field industry actually have you seen that region actually dates the location because of the mental there is there's a deep sea a what a high bar and that's why there's a lot keeps building industry executives in that place.
Speaker Change: And we are going to washed through this partners and they actually have a marine sector has been very strong and.
Speaker Change: Stakeholder relationship network that would be very good trust and they actually invest also in this joint venture and Oh Geez, you know looking at hiring the people in China locally and those who feel that for spare parts and service in the local and in the short term and long term.
Speaker Change: So look at the localization of our system Assembly.
Speaker Change: And.
It's really really crucial we have to have the people underground in China No wonder the following up on those M. C building, that's free and the design Institute really to get us close to them and that's really will make as you know very strong presence in China and makes it happen. It's I really think the hips.
Our marine scrubbers for the an easier solution to be sold in China.
Speaker Change: Okay, Great I I hope those are answered the questions. There from the webcast I am not showing any additional questions here through the lifeline, So Fay and Philip I will turn it back over to you for any closing remarks.
Yeah.
Speaker Change: Yeah.
Speaker Change: Thank you very much for being with US today, we look forward to communicating with you again. Thank you.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Speaker Change: Okay.