Q4 2024 Plug Power Inc Earnings Call
Greetings and welcome to the plug power fourth quarter 2024 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. Please press star zero on your telephone keypad as a reminder, this conference is being recorded.
Speaker Change: It is now my pleasure to introduce Teal Hoyos, Vice President marketing and communications. Thank you you may begin.
Speaker Change: Thank you.
Welcome to the 2020 for fourth quarter and year end earnings call. This call will include forward looking statements. These forward looking statements contain projections of our future results of operations or our financial position or other forward looking information we.
Speaker Change: We intend these forward looking statements to be covered by the steep safe harbor provisions for forward looking statements.
Speaker Change: And in section 27, a of the Securities Act of 1933 and section 21 E of the Securities Exchange Act of $19 34.
Speaker Change: We believe that it is important to communicate our future expectations to investors. However, investors are cautioned not to unduly rely on forward looking statements.
Speaker Change: Such statements should not be read or understood as a guarantee of future performance or results.
Speaker Change: Such statements are subject to risks and uncertainties that could cause actual results results or performance to differ materially from those discussed as a result of various factors.
Speaker Change: <unk>, but not limited to risks and uncertainties discussed under item one a risk factors in our annual report on Form 10-K for the fiscal year ending December 31, 2024, as well as other reports we file from time to time with the SEC.
Speaker Change: These forward looking statements speak only as of the date in which the statements are made and we do not undertake or intend to update any forward looking statements. After this call or as a result of new information.
Speaker Change: At this point I would like to turn the call over to plug Power's CEO Andy Marsh.
Andy Marsh: Good morning, and thank you for joining our fourth quarter conference call.
Andy Marsh: Last night, we announced a significant structural change to streamline our cost base through project quantum leap.
Andy Marsh: Over the coming months, we will be reducing staff refining our product focus and consolidating facilities.
Andy Marsh: These measures are targeted to generate annualized cost savings of $150 million to $200 million.
Andy Marsh: These decisions are not easy, but they were necessary.
Andy Marsh: Slower than anticipated development into hydrogen market has been influenced by multiple factors.
Andy Marsh: <unk> the pace of policy implementation global energy and security driven by geopolitical conflicts the higher cost of project execution.
Andy Marsh: And pass over enthusiasm in this sector.
Andy Marsh: However, we remain confident that hydrogen will play a critical role in the future energy mix with many experts projecting who will eventually contribute 10% to 20% of the world's energy suppliers.
Andy Marsh: The projects that will progress the fastest or those with a clear value proposition strong policy support and a well integrated value chain.
Andy Marsh: As we assess our business is our primary focus moving forward will be on three key areas material handling electric <unk> and hydrogen generation to support material handling.
Andy Marsh: They align best with these attributes.
Andy Marsh: In material handling, we deliver a compelling value proposition by helping customers move goods more efficiently.
Andy Marsh: But benefits from three revenue streams in this business Prada.
Andy Marsh: Products services and hydrogen.
Andy Marsh: In 2024, we have made significant improvements improving margins for service and hydrogen.
Andy Marsh: Spanning them by approximately $120 million compared to 2023.
Andy Marsh: Excluding the impact of customer warrant charges.
Andy Marsh: Product margins, however are tied to sales and factory utilization.
Andy Marsh: Last year sales grew slower as we worked through price renegotiations with major customers in the transition from PPA to direct sales.
Andy Marsh: That process is now complete and we expect increased deployments this year from both existing and new customers, which will improve our facility utilization and drive positive gross margin.
Andy Marsh: Additionally, hydrogen margins will continue improving with the launch of our new joint venture facility in Louisiana. This month.
Andy Marsh: While services on track to reach profitability by year's end.
Andy Marsh: Hydrogen production costs are a critical driver of both.
Andy Marsh: With our profitability in the broader market development for fuel cells.
Andy Marsh: By the end of this month bug will have 39 tonnes per day of capacity, while customer demand stands at approximately 55 tonnes per day.
Andy Marsh: The Doe approval for a limestone plant in Texas, a project, creating jobs and a deeply conservative district with secured in January.
Andy Marsh: <unk> already have the necessary equipment to cover our equity investment in project and are finalizing the discussions with an external investors to complete the funding structure.
Andy Marsh: Given the change in administration, we now anticipate a later start in 2025 with project completion expected 18 to 24 months from the start date.
Andy Marsh: Importantly, we do not plan to contribute additional plug equity to complete the project and anticipate retaining 70% to 80% ownership stake once operation.
Andy Marsh: Our electrolyze our business is essential to both our near term and long term growth.
Andy Marsh: The primary applications involve replacing great hydrogen in sectors like refining green ammonia and methanol production.
Andy Marsh: Global demand remains strong and we expect significant growth in both sales and bookings this year.
Andy Marsh: Notably, we're executing large scale projects, including the 100 megawatt deployment with gap.
Here's why Ctrip and this is really important here is why I see tremendous potential in this market for club.
Speaker Change: Unlike some hydrogen fuel cell market.
Speaker Change: Faced challenges across the value chain such as infrastructure.
Speaker Change: Fueling and financing hurdles for on road vehicles.
Speaker Change: Replacement of great hydrogen with green hydrogen is a much simpler transition.
Speaker Change: Customers can play green hydrogen to existing processes without major operational changes, which accelerates deployment speeds up time markets.
Speaker Change: And you deliver immediate benefits.
Speaker Change: As we move forward from this restructuring and market adjustments plug will prioritize material handling.
Speaker Change: Hydrogen production supporting material handling electrolyze your sales alongside profitable cash generative ready assets well established markets.
Speaker Change: The program is not tied to profitability or cash generation slope will not pursue the program in the near or long term.
Speaker Change: With that I'd like to turn the call over to Sanjay to review our Q4 results followed by Paul who will provide insights into our financial outlook.
Sanjay: Thank you Andy and good morning, everyone 2024, it was a year of.
Sanjay: The recalibration for plug it included some successes and some challenges on a positive front fourth quarter of 2024 marked another quarter of meaningful reduction in cash burn.
Sanjay: Gross margin expansion and another step change in growth of hydro electric lines of business cash burn for the quarter was down year over 70% year over year and gross profit improved year over year. When you exclude the noncash charges of customer warranty and inventory adjustment. It is important to highlight that this margin expansion was accomplished despite lower <unk>.
Sanjay: Year over year now in terms of challenges market growth as Andy touched on it has been slower than anticipated reported revenue for Q4 'twenty came in at $191 million and full year revenue of $629 million. We are disappointed with this continuous lubricious revenue despite significant improvement in sales of the Electrolyze It business.
Sanjay: We believe it is important to highlight a few key items that negatively impacted revenue in the quarter and for the full year 2024.
Sanjay: As we highlighted in our press release issued last night, our application business revenue was impacted by a higher than usual warrant charge of $22 7 million and we had another $8 million revenue got pushed out related to a specific customer program in our material handling business and our cryogenic tank and trailer business, we actually made a strategic decision.
Sanjay: To shift multiple mobile refuelled product to a customer in class eight truck space, given their financial position, which negatively impacted revenue by about $16 million in the quarter. In addition, we also had some production delays on few key product line in our cryogenic business that at hand.
Impact of about $12 million of revenue in the quarter.
Sanjay: We confirm this production impact has been already mitigated and will show up as revenue in the first half of 2025, despite delivering almost six fold revenue growth in the fourth quarter of 2024 versus fourth quarter of 2023 hour Electrolyze of business in the fourth quarter was negatively impacted by multiple factors.
Sanjay: Which represented revenue impact us as much as $68 million.
Sanjay: We expect some of this revenue to materialize in Q1 of 2025 majority of if this is related to customer delays site readiness with some of the projects actually getting pushed to Q2 and Q3 of this year and frankly this revenue fluctuation on a quarterly basis in our opinion reflects the early stage of the industry growth as both supplier.
Sanjay: And customers learn to work together and keep moving projects forward. This factors had a total impact of over $120 million software revenue in Q4 of 2024, just to reiterate we believe some of the Electrolyze opportunity will contribute to revenue in Q1, 25 and majority of the customer push out will be revenue opportunities.
Sanjay: In Q2, and Q3 of this year.
Sanjay: Reduction related delays in our cryogenic business have already been addressed and will contribute to revenue opportunity in the first half of 2025. We also expect the revenue push out from Q4 to 24 in our material handling business to contribute to revenue in Q1 of 2025 based on all of these items that impacted Q4 'twenty four overall.
Sanjay: Seasonality in the first half of our business and overall macro environment. We believe our Q1 'twenty five revenue will be in the range of $125 million to $140 million.
Sanjay: You should expect to see continued gross margin improvement. We believe the year of 2025 is setup to be a year of meaningful bookings in our electrical lines of business as Andy highlighted given the current macro environment, we remain focused on driving cost down expanding margin and reducing our cash burn with that let me turn the call over to Paul to discuss the financial.
Sanjay: <unk> been some more detail.
Paul: Thank you Sanjay.
Andy Marsh: It's Andy address some of the broader market issues and Sanjay talked about revenues and margins for the quarter, Let me jump into a few specific topics.
Paul: As conveyed in our filings yesterday.
Paul: Recorded non cash charges in the quarter of approximately 971 million for asset impairments and bad debt in Opex and approximately $104 million in Cogs for inventory valuation adjustments.
Paul: For multiple factors, including the decision to temporary focus on certain products and markets that are more mid term opportunities and overall market conditions, resulting in slower growth for the industry than anticipated.
Paul: In terms of impairments this relates to property plant and equipment intangible assets non marketable equity investments and assets associated with power purchase agreements and fuel.
Paul: As a result of these impairments that will reduce future amortization and depreciation, including a reduction of $55 million to $60 million in 2025.
Paul: In regard to cash burn.
Paul: We were laser focused on margin and cash flow improvement in 2024, and we saw benefits throughout the year and in particular in Q4 24.
Paul: These actions included targeted price increases labor optimization rooftop consolidations.
Paul: Prudent and production cost and leveraging our hydrogen platform with our new green hydrogen plant in Georgia coming online.
Paul: We expect in 'twenty five to include a full year benefits from these activities undertaken during 2004.
Paul: In addition, we expect initiatives in project quantum leap to provide meaningful incremental improvement in margins and cash flows starting in Q2 of 2025 and building throughout the year.
Paul: These additional measures will be complemented with the strategic efforts such as our new hydrogen Louisiana plant coming online in Q2 2025.
Paul: We continue to be laser focused on driving deposit margins and cash flows in the near term.
Paul: In terms of liquidity. We ended 2024 was more cash on hand than we anticipated with over $200 million in unrestricted cash.
Paul: We recently closed our first ITC transfer sale for the $30 million benefit associated with the liquefy our plant liquefied at our Georgia Green hydrogen plant illustrating opportunities to leverage additional ITC assets.
Paul: We have been effectively unlevered balance sheet and we're currently working with existing partners on various capital solutions. These factors coupled with the focus on improvement in margins and cash flows put us in a strong position to achieve our near and midterm financial goals and fund the company with the most prudent cost efficient capital solutions I'll now.
Andy Marsh: Turn it back over to Andy.
Paul: Yes, I guess opening for Q&A.
Andy Marsh: Yes.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue. You May press star two to remove yourself from the queue for participants using speaker equipment, they may be necessary to pick up your handset before pressing the star keys.
Speaker Change: Please while we poll for your questions.
Speaker Change: Our first question comes from the line of Colin Rusch with Oppenheimer. Please proceed with your questions.
Colin Rusch: Thanks, so much guys.
Speaker Change: Can you talk about.
Speaker Change: The majority of the financing for a number of the projects that youre talking about in that pipeline.
Speaker Change: Corporate clients and oftentimes is key.
Speaker Change: T J P for P. I, just want to get a sense of cash flow supporting all of those products at this point.
Speaker Change: Why don't you take that Sanjay So Colin are you referring to some of the opportunities that arise.
Speaker Change: Yes, yes, exactly when the Elektra lasers is.
Speaker Change: Sure sure so.
Speaker Change: Again, we are looking at two very large project here in the near term one is in Europe, and what is in North America and the project in Europe actually go into final investment decision here by the end of the quarter.
Speaker Change: Look it's a fully funded project backed by a very large financial institution, so financing and the opportunity set of this project should not be a challenge and next project in North America is actually related to.
Speaker Change: Big methanol opportunity again, there was already an offtake for that methanol opportunity. So in light of that column. The biggest thing in this space right is before you get to <unk> you got a secure that offtake really get the financing structure looking a lot like solar and wind from an optic standpoint, both of the projects that we're looking at here in the first half of the year have that attribute so we're really.
Speaker Change: Not concerned from an overall financing standpoint, just want to make sure that we land the projects we have already on the basic engineering design package in this cases and looking forward to moving ahead with the customer.
Speaker Change: Thanks, So much and then on.
Speaker Change: On the material handling side, obviously there was.
Speaker Change: And some of the spending and warehouse automation.
Speaker Change: Yes on the capacity getting digested in the warehouse space can you talk a little bit about what youre seeing from early indications.
Speaker Change: Some green shoots linked in 'twenty four.
Speaker Change: Folks starting to spend again, but any any material change in some of the spending patterns that you guys are seeing with some of those customers.
Speaker Change: I'll give you one indicator cowen.
Speaker Change: Is that.
Speaker Change: One of my largest customers.
Speaker Change: Put down money to be able to qualify under the old 48 to support $200 million worth of business.
Speaker Change: I think that's.
Speaker Change: A strong statement about that.
Speaker Change: Our anticipated growth and expansion.
Speaker Change: We have both.
Speaker Change: What we see and we announced.
Speaker Change: As you May remember in the fourth quarter expansion with BMW in Germany, just to name a few of the larger customers.
Speaker Change: I can tell you that this announcement last night.
Speaker Change: As with our customers.
Speaker Change: <unk> with some of our sales folks who I asked to reach out after market close to let them know what we were planning to do.
Speaker Change: What I heard was.
Speaker Change: We're happy Youre going to take the steps to reach profitability.
Speaker Change: Glad you're focusing our segment and it makes it easier to do business in the future. So.
Speaker Change: These are very very difficult decisions.
Speaker Change: But.
Speaker Change: In the material handling market, we expect that.
This will be well well received.
Speaker Change: I mean, if you take a look back and if you take a look back.
Speaker Change: I was just sitting here thinking about.
Speaker Change: Paul mentioned when you start thinking about the income statement level.
Depreciation was going to reduce $60 million.
Speaker Change: We're reducing our <unk> costs between $1 $50 million to $200 million.
Speaker Change: They are big steps to reaching profitability.
Super helpful guys I appreciate it okay.
Speaker Change: Okay.
Speaker Change: Thank you our next questions come from the line of Craig Irwin with Roth Capital Partners. Please proceed with your questions.
Speaker Change: Thank you for taking my questions.
Speaker Change: So Andy I wanted to ask about the Doe right Youre loan package with the Doe.
Speaker Change: There's a lot of investors out there.
Speaker Change: And.
Speaker Change: Nobody is going to know, but you guys about what's actually being discussed with DIY and what the changes are.
Speaker Change: Can you maybe share with us any content or communications with <unk> over the last few weeks do.
Speaker Change: Do you expect this team to continue to support the loan package the way it was written.
Speaker Change: Are there any changes or updates that you might want to share with us around the loan package.
Speaker Change: It would help investors understand the opportunity.
Craig Irwin: Yes, Craig.
Craig Irwin: There has been discussions with the Doe.
Craig Irwin: And we're pleased at a working level.
Craig Irwin: Individuals we have been dealing with have remained at the Doa.
Craig Irwin: So we're not going through the process of Reeducating the team I.
Craig Irwin: I think thats a big positive.
Craig Irwin: Hi.
Craig Irwin: I know there is lots of noise.
Craig Irwin: But.
Craig Irwin: I can tell you when I became CEO of plug. The first thing I did was step back and try to figure out everything that was going on.
Craig Irwin: We have had.
Craig Irwin: Regular conversations with the Doe.
Craig Irwin: Over the past month.
Craig Irwin: I personally will be spending time with them this week.
Craig Irwin: So for me engagement point of view.
Craig Irwin: And look.
Craig Irwin: We are.
Craig Irwin: We're very very red districts, where in Texas, where we're looking to build this.
Craig Irwin: And I can tell you the local political T <unk>.
Craig Irwin: Political folks.
Craig Irwin: In that region are strong supporters of this and are reaching out to make sure that this loan is executed on.
Craig Irwin: Yes.
Craig Irwin: Executing on the.
Craig Irwin: The deal that we came to.
Look.
Craig Irwin: Obviously things which are associated with <unk>.
Craig Irwin: Our social oriented issues will be downplayed.
Craig Irwin: During the call I had mentioned during the opening statement Craig I mentioned our.
Craig Irwin: Our portion of the equity we already have with equipment.
Craig Irwin: We do have.
Craig Irwin: A few funds who want to play side by side with us.
Craig Irwin: I would expect.
Craig Irwin: That construction of this project.
Craig Irwin: We will most likely happen in the fourth quarter.
Craig Irwin: And that.
Craig Irwin: You can say 18 to 24 months before it's completed.
Craig Irwin: No you Didnt ask this question, but I do want to highlight.
We learned a lot from building, Georgia, how to build a plant.
Craig Irwin: I can tell you the Louisiana.
Craig Irwin: <unk>.
Craig Irwin: It was much much simpler.
Craig Irwin: We we actually learned a lot in.
Craig Irwin: I think the learnings we have as well as the cost reductions will bring new business, who will be really beneficial long term.
Craig Irwin: Okay excellent excellent then.
Craig Irwin: You touched on this in your response and it was it was going to be my second question. So.
Craig Irwin: Outside investors for the Texas project, you've already obviously attracted some pretty pretty.
Craig Irwin: Pretty interesting attention in orders from groups like quarter skew for your Gibson.
Craig Irwin: Gibson Island project.
Speaker Change: Can you maybe frame out for us.
Speaker Change: The character of outside investors that are possible. There I know there is some some global funds that are pretty active in evaluating this opportunity that really want the opportunity to invest some hydrogen but are we looking more at private equity or other institutional investors as probable partners on the Texas project.
Speaker Change: We were looking at and Sanjay and Paul jump in I would define most of the folks looking at or infrastructure funds looking to invest.
Speaker Change: Look we're looking to.
Speaker Change: Invested a new segment.
Speaker Change: Where there is growth potential.
Speaker Change: <unk>.
Speaker Change: We have a process that's going on.
Speaker Change: We've identified two or three folks that we've been talking to and.
Speaker Change: I think that.
Craig Irwin: I think youll be hearing more about it during the coming months and look I think your first question Craig is important to this discussion book piece.
Speaker Change: People want clarity, what's going on with the Doe.
Craig Irwin: And.
Craig Irwin: That's part of the process and making sure that we can close these funds.
Craig Irwin: Close with these funds in a timely fashion.
Speaker Change: Thank you for that Andy and congratulations on the strong progress.
Speaker Change: With your cash usage, its really pretty dramatic the changes must last year, yes.
Craig Irwin: Thank you Craig and we're looking we're going to continue to drive more to make sure.
Craig Irwin: We have a strong financial position.
Craig Irwin: Thank you. Our next question is come from the line of Tommy <unk> Jain with UBS. Please proceed with your questions.
Speaker Change: Hey, guys. Good morning, yes. So how are you looking at data center backup power generation, how do you see pause benefiting from that in 2025.
Speaker Change: To be direct I don't see it as a benefit in 2025.
Speaker Change: Our view is that.
Speaker Change: When it comes to hydrogen one of the biggest challenges to make sure that.
Speaker Change: You can support long duration.
Speaker Change: Outages and that requires a great deal of hydrogen storage on site.
Speaker Change: If we think that.
Speaker Change: Business opportunity is a 'twenty eight 'twenty nine opportunity.
Speaker Change: Really to be successful, we really think you need hydrogen pipelines that you can store hydrogen in.
Speaker Change: And there are some.
Speaker Change: Data centers in Europe that could make sense in the future, but I would not expect revenue from that segment of any size over the next two to three years.
Speaker Change: Got it thank you.
Speaker Change: Okay.
Speaker Change: Thank you. Our next question is coming from the line of Bill Peterson with Jpmorgan. Please proceed with your questions.
Bill Peterson: Yes, hi, good morning.
Speaker Change: Sure Paul.
Speaker Change: I wanted to maybe take applications question more broader than just the high power stationary. So I think at the symposium a few months ago I guess you had thought that.
Speaker Change: Materials handling you should probably go to 2032% to 30% year on year growth.
Speaker Change: And now you are kind of expecting 10% to 20%.
Speaker Change: More broadly I guess over the next few years.
Speaker Change: What is going to drive the applications business isn't going to be materials handling at this stage given your comments around stationary power or at least the high power backup maybe not viable in the next few years and then mobility appears to be started.
Speaker Change: <unk> already challenged as well so what's going to drive the applications business and what's the right way to think about the growth over the next few years.
Bill Peterson: Bill This is a real important question.
Bill Peterson: I kind of touched on in my remarks.
Bill Peterson: But the material handling business.
Bill Peterson: You have peak plug established.
Bill Peterson: Well I'll call it.
Bill Peterson: Micro infrastructure that can support the customers' needs.
Bill Peterson: And so the value chain is clear.
Bill Peterson: You look at markets like on road mobility, and stationery Theres. So many.
Bill Peterson: Other items in the value chain that have to be influent and be successful.
Bill Peterson: For those businesses to grow.
Bill Peterson: Fast over the coming two to three years.
Bill Peterson: So.
Bill Peterson: Zero handling is one that we can look at and say.
Bill Peterson: The pieces are in place.
Bill Peterson: It's also when you may have heard in my comments when I talk about the Electrolyze your market.
Bill Peterson: It's not going to be.
Bill Peterson: Folks who are going to dominate who are looking to drive mobility. It is going to be.
Bill Peterson: People, who are able to put the end product whether hydrogen.
Bill Peterson: Green ammonia or methanol or saf directly into the value change without too much complications.
Bill Peterson: I mean.
Bill Peterson: I sat through a.
Bill Peterson: Now three or four months I sat through a <unk>.
Bill Peterson: Mckinsey presentation in DC, and I sat back and listen to it and said to myself.
Bill Peterson: We had a matrix of how one should think about markets, though they werent talking about hydrogen.
Bill Peterson: Specifically they were talking about the whole renewable world.
Bill Peterson: It really was kind of a clarifier to me.
Bill Peterson: Pat.
Bill Peterson: You need to develop focus on value chain.
Bill Peterson: And look.
Bill Peterson: Our business will grow.
Bill Peterson: As we improve.
Speaker Change: If your customer what's your biggest concern when it comes to plug.
Bill Peterson: You have a business that.
Bill Peterson: Improves the productivity of your operation.
Bill Peterson: You have a company that.
Bill Peterson: We have fixed.
Bill Peterson: The hydrogen issues risks our customers may have.
Bill Peterson: The biggest risk is.
Bill Peterson: How will perform financially.
Bill Peterson: And the steps we've taken today.
Bill Peterson: It will actually help us accelerate growth in the market.
And I can tell you.
Bill Peterson: I do know of some of our large customers.
Bill Peterson: They're looking to.
Bill Peterson: Accelerate their growth growth if our numbers are lower today Bill look.
Bill Peterson: We don't want to over promise, we wanted to make sure we deliver and so we want to set clear expectations.
Bill Peterson: Think we see a healthy market and it's why we are laser focused on material handling and why we're going to be laser focused on electrolyzed.
Eric Stine: Thank you. Our next question comes from the line of Eric Stine with Craig Hallum. Please proceed with your.
Speaker Change: Good morning, everyone.
Speaker Change: Good morning, Eric.
Eric Stine: So.
Speaker Change: So I can appreciate it sounds like not guiding to fiscal 'twenty, five and I know Sanjay you gave Q1, but maybe just some commentary on the year I mean.
Eric Stine: Should we expect this to be your tip.
Eric Stine: A typical mix first half versus second half how do you expect the year to play out sequentially.
Eric Stine: Any details to fill that in would be helpful.
Eric Stine: That's right Eric look I mean, as you as I kind of touched on it.
Eric Stine: So Q1, you have seasonality alright.
Eric Stine: Looking at sort of the macro environment. That's got a lot of puts and takes if you would and there is a benefit however, though some push outs from Q4 into Q1. So when you look at this $125 million to $140 million in sales.
Eric Stine: Typically Q1 has been 10% to 15%, but given some of the pushout you can probably imagine is more like 15% plus in terms of the revenue mix, 15% to 20% so in light of that.
Eric Stine: How you should think about the full year for the company at this point in time and one another thing we just want to make sure that Andy touched touched on it what we have the strongest visibility on is Q1.
Eric Stine: Already obviously sitting here in the month of March we will do the same thing on our report our Q1 earnings to give you the visibility on Q2, we're really focused on obviously driving that topline getting the growth for the company and 25, but the bigger focus you can appreciate hopefully is on reducing cash burn expanding margin and really getting to that EBITDA breakeven territory as soon as we can as a company.
Eric Stine: Yes, no I totally get that but those those details are helpful and then.
Speaker Change: Maybe a good segue just on the cost reductions in your plan here in 2025.
Eric Stine: You gave pretty good detail there I'm just curious.
Eric Stine: How deep you see those is there more room to go if necessary and how do you kind of balance that between as you said I mean, you've got even though now you're going to be more focused.
Eric Stine: Material handling electrolyze hydrogen still have a big growth opportunity. So how do you kind of balance your near term objectives, while still being able to execute on those longer term growth plans.
Eric Stine: Okay. So.
Eric Stine: Craig.
Eric Stine: Yes.
Eric Stine: I do believe that.
Eric Stine: The alert learning shoot receive from deploying projects.
Speaker Change: Actually have large benefits to other markets.
Speaker Change: Nothing makes us better at deploying electrolyzed than the fact that we learned how to build plants ourselves.
Speaker Change: Nothing helps us better.
Speaker Change: Sure market set.
Speaker Change: Evolve in applications like stationery.
Speaker Change: Getting our quality and.
Speaker Change: Of our present fuel cell products better every day.
Speaker Change: So I think that.
Speaker Change: No.
Speaker Change: Some folks.
Speaker Change: I am a power engineer by training and I've.
Speaker Change: I think in lot leg of power engineer about how things scale.
Speaker Change: But.
Speaker Change: When you think about.
Speaker Change: Fuel cells, you are really thinking about probably two or three different power levels of fuel cells.
Speaker Change: What learnings at one level translates to the next.
Speaker Change: So we're look.
Speaker Change: Yes.
Speaker Change: We are making and focusing on activities.
Speaker Change: That will make our financial stronger which in the long run we will really allow us to go into.
Speaker Change: Into these other markets as they become available.
Speaker Change: So I guess that's.
Yes.
Speaker Change: Being successful now.
Speaker Change: We will help us a great deal and being successful in the future.
Speaker Change: That's the decisions we're making.
Got it and maybe I'll just sneak in one more just for the $150 million to $200 million in targeted savings.
Speaker Change: Can you just give kind of the high level mix between cost of goods and opex.
Speaker Change: Okay.
Speaker Change: I would say I'll, let I'll tell you a quick and Paul Correct Me if you disagree I.
Speaker Change: I would probably say that it's almost 50 50 between Cogs and Opex.
Speaker Change: That's a good proxy, yes look.
Speaker Change: We haven't made we're obviously going through the process.
Has to be.
Speaker Change: Yes, respectful for our employees and others.
Speaker Change: Before I kind of say.
Speaker Change: Exactly.
Speaker Change: Okay. Thank you.
Speaker Change: Thank you. Our next question is come from the line of George <unk> with Canaccord Genuity. Please proceed with your questions.
Speaker Change: Hi, good morning, and thank you for taking my questions.
Good morning, George Good morning.
Speaker Change: I'd like to ask.
Speaker Change: Andy about your view.
Speaker Change: View on the policy environment in Washington has clearly quite confusing and just curious as to whether you can share any details on conversations you've had or your.
Speaker Change: Your view as to how the next six or 12 months will look thank you.
Speaker Change: So.
Speaker Change: We'd say.
Speaker Change: Obviously.
Speaker Change: Evolving environment.
Speaker Change: I am going to be spending some time in DC later this week.
Speaker Change: When I look at the history of fuel cells and hydrogen.
Speaker Change: The supporters of it.
Speaker Change: Last time, we had.
Speaker Change: Real major fuel cell only build to support the industry.
Speaker Change: Actually happened under President Trump.
Speaker Change: And.
Speaker Change: And the pure Republican Congress.
Speaker Change: I can tell you last week.
Speaker Change: There was a bill introduced by representative Tenney, who.
Speaker Change: Who she.
Speaker Change: She is a very very red districts supporting fuel cells and it was their second bill that she introduced in this Congress.
Speaker Change: I think that.
Speaker Change: Look I've been pretty clear about the fact that.
Speaker Change: We felt that.
Speaker Change: The previous administration implementation.
Speaker Change: The IRR.
Speaker Change: Especially when it came to hydrogen tax credits.
Speaker Change: Was.
Rather disappointing.
Speaker Change: And we we kind of view the new administration is more business oriented and hydrogen is actually supported.
Speaker Change: Strongly by the oil and gas industry.
Speaker Change: Which.
Speaker Change: Is beneficial.
Speaker Change: I suspect there'll be ups and downs.
Speaker Change: But.
Speaker Change: Look.
Speaker Change: And I think this is real important.
Speaker Change: There is a global market for green ammonia Green methanol.
Speaker Change: There is need for.
Speaker Change: Hydrogen here in the United States for applications like ours.
Speaker Change: That's not going away and this administration.
Speaker Change: Is looking for the U S to be.
Speaker Change: Energy dominant and to be energy dominate you have to meet where the world sees demand and where the world sees new demand and it is in.
Speaker Change: Yes. It is.
Speaker Change: Is in Green ammonia.
Speaker Change: Is in Green methanol.
Speaker Change: And that's not going to change.
Speaker Change: It's really important.
Speaker Change: For U S.
Speaker Change: To make sure that China doesn't dominate these industries long term.
Speaker Change: And I think many many people in the house and the Senate.
Speaker Change: As well as do you understand.
Speaker Change: Bergman.
Speaker Change: I think everybody knows was one of the biggest proponents of the hydrogen hubs.
Speaker Change: I think it just I know this is a long answer, but I think it just needs to settle down.
Speaker Change: Maybe as a follow up I'd love your thoughts also on what's happening in Europe too. Thank you.
Speaker Change: There is.
Speaker Change: If I look at Europe.
Speaker Change: It's one of the reasons I think Sanjay is so positive about the Electrolyze a market.
Speaker Change: So much of what we're working on for example was in the hydrogen hubs hydrogen Valerie in Spain.
Speaker Change: Where there is strong strong support for build outs in deployments.
Speaker Change: No.
Speaker Change: I think that.
Speaker Change: Where youre going to see in <unk>.
Speaker Change: I think youre going to see Germany.
Speaker Change: Changing to support hydrogen deployment.
Obviously the <unk>.
Speaker Change: Geopolitical tensions at the moment.
Speaker Change: Makes things a little tense.
Speaker Change: But look.
Speaker Change: Even long term.
Speaker Change: We have a.
Speaker Change: A.
Speaker Change: Analysts, who helps us in Europe, who was an ambassador to the EU.
Speaker Change: Told us.
Speaker Change: There could be huge huge opportunity for projects and deployments like we do in Ukraine. Once all this is dale.
Speaker Change: Dale.
Speaker Change: So yes.
Speaker Change: Yes.
Speaker Change: I think Europe is.
Speaker Change: Yes.
Speaker Change: Certainly.
Speaker Change: Lots of nuances with Europe.
Speaker Change: But you can look at Spain, and can see what's going on in say.
Hey, this is really good for plug power.
Speaker Change: I think you can say the same about Australia and I think these are market set.
Speaker Change: We're going to be the heart of our electric lives our business and.
Speaker Change: <unk>.
Speaker Change: Look you've heard our announcements in Portugal for example, with gout, what we're doing there with what we're doing with Iberdrola in Spain.
Speaker Change: These are projects that are going in the ground now to support the economy.
Speaker Change: All of them are supported by the government at some level.
Speaker Change: Yes.
Speaker Change: Thank you.
Speaker Change: Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: Our next questions come from the line of Sherif <unk> with BTG. Please proceed with your questions.
Sherif: Hey, good morning, Thanks for taking my questions.
Andy Marsh: Good morning, Andy.
Speaker Change: The Georgia ITC transplant is pretty interesting.
Speaker Change: There are other piecemeal opportunities to pull cash out of existing equipment, either George or elsewhere.
Speaker Change: And is there a reason you recognize the ITC on that particular liquefy rather than the entire plant.
Speaker Change: Yes, Andy wants me to answer that one so this is Paul.
Speaker Change: The short answer on the first part is yes, we have as an example, when we turn on our plant in Louisiana there'll be.
Speaker Change: ITC credit there associated with the.
Speaker Change: Local fire as well.
Speaker Change: We can take and we will share with our joint venture partner there that could be.
Speaker Change: Similar size to what we recognized in Georgia.
Speaker Change: And then we have some.
Speaker Change: Some additional assets that we've deployed last year for <unk>.
Speaker Change: Opportunities that Theres ITC benefits on that.
Speaker Change: Probably in the $15 million to $20 million range that where we're actually working pretty closely right now to closing in the near term on both of those opportunities so that's meaningful and helpful.
Speaker Change: In terms of the cash.
Speaker Change: And then on the answer on Georgia is that there is a decision to make.
Speaker Change: On the balance of plant as to whether you take PTC or ITC.
Speaker Change: We've decided to take the PTC benefits, we recognize those in our results last year.
Speaker Change: We're going to.
Speaker Change: To do that.
Speaker Change: Any plant that we put in place we go through a cash benefit analysis as to is it better to take the ITC or two to do the CTC and it's there's many factors that fall into that.
Speaker Change: And.
But that's the choice that we have so.
Speaker Change: That's where we stand on that.
Speaker Change: For the Georgia plant.
Speaker Change: Thanks, Paul and I realize that was a two parter. So thanks for taking my questions.
Speaker Change: Well.
Speaker Change: Yes.
Speaker Change: Thank you. Our next question is come from the line of Chris <unk> with Wolfe Research. Please proceed with your questions.
Sanjay So: Hey, good morning, Andy Sanjay and Paul good.
Speaker Change: Good morning.
Speaker Change: Sure.
Speaker Change: Andy.
Speaker Change: At your care Theyre just wanted to check are there new conditions that you need to satisfy in order to receive the <unk> loan.
Speaker Change: I'm not sure.
Speaker Change: There's not new conditions.
Speaker Change: The loan was finalized in early January.
Speaker Change: The only thing that we have to do is.
Speaker Change: It's approved.
Speaker Change: The way. It works is the loan itself has been the paper documented approved everything's.
Sure.
Speaker Change: <unk>, the first project, which is Texas.
Speaker Change: Some specific.
Speaker Change: Things that we have to put in place.
Speaker Change: In terms of like direct agreements between the Doe.
Speaker Change: The EPC contractors and example is just one microcosm example, so those are things that we're working on we're really close.
Speaker Change: And they're not necessarily additional conditions.
Speaker Change: That makes it any obstacle is just really unfortunately.
Speaker Change: Parties that work on these things that we're working with have done many other deals with the Doe. So they are used to working with the Doe on these kind of ancillary agreements and so it's more just I would say for lack of better words, the bureaucracy of just putting crossing the Ts and dotting, the i's and putting all those residual components in place.
Speaker Change: Two.
Speaker Change: <unk> kick off Texas as a project.
Speaker Change: That structure.
Great. Thanks, Paul and just for my follow up on that loan how much are you requesting as part of the first draw down and did you sorry, if I missed this early with Exa youre expecting proceeds in Q4 or is that one construction expected to restart.
Speaker Change: So we would.
Speaker Change: I would think that Q4 is my best estimate construction would start Paul maybe you can go through the process of how you pull down cash yes. So the way. It will work is when we when we get the project approved.
Speaker Change: Kick off.
Andy Marsh: The effort, there, which is really get the EPC guy going again, PC contractors going which as Andy said tentatively would be we're thinking would be in the probably in the fourth quarter.
Speaker Change: And the first month, what happens is you.
Speaker Change: You compile all of the anticipated invoices each month that you expect to pay as part of that project and you submit that to the dose and then they advance money against that so that's one.
Speaker Change: We're going to get credit for our.
Speaker Change: Equipment that we've contributed to the project.
Speaker Change: Then they will front money to pay the majority of the bills that we have to pay that to construct that.
Speaker Change: <unk> as we move forward so that's how practically awards.
Chris: I appreciate it. Thank you guys I'll turn it over to Chris.
Chris: Thank you. Our next question comes from the line of Tim Moore with clear Street. Please proceed with your questions.
Tim Moore: Thanks for taking my questions.
Speaker Change: More important good morning.
Speaker Change: What's the point by investors is the positive gross margin inflection point that investors have been.
Speaker Change: Eagerly waiting on you made some really good progress announcing the cost savings plan.
Speaker Change: I think your prior guidance at the symposium was the expectation back then was to maybe slightly positive gross margin exit rate for the year I'm. Just wondering now with the significant cost savings plan is being rapidly implemented.
Speaker Change: Do you think that exit rates still holds or do you think you can pull it off in the third quarter for maybe positive third quarter gross margin.
Speaker Change: Tim our goal is always hopefully trying to do things sooner rather than later, but look given everything in all puts and takes I think it holds in terms of Q4 of 2025 as a good target that we are looking to turn gross margin positive.
Speaker Change: Great sounds great. That's helpful and the other question I had just on a different topic.
Speaker Change: And then maybe can you speak to maybe the liquid hydrogen appetite must sentiment the ease to hubs network rollouts a little bit behind schedule. So just wonder if you can give any color or stories on progress there with some customers in green shoots for.
Speaker Change: The takeaway from your production facilities.
Speaker Change: No.
Speaker Change: Look.
Speaker Change: Yeah.
Speaker Change: I think the hubs.
Speaker Change: Will.
Speaker Change: Develop.
Speaker Change: I never thought the hubs that we felt that fast if you'd looked at the funding for the hubs.
Speaker Change: It was years of study and implementation.
Speaker Change: And.
Speaker Change: Yes.
Speaker Change: That was even under the previous administration.
Speaker Change: We never and I think you've even go back to previous conference calls, we never expected significant near term or even midterm revenue from the hubs.
Speaker Change: I think hubs implementation.
Speaker Change: Would help the hydrogen industry later in this decade, and that's always been our view.
Speaker Change: And.
Speaker Change: They're just.
Speaker Change: I would say this they never really had a very.
Speaker Change: <unk> schedule and.
Speaker Change: I don't see.
Speaker Change: I don't see them.
Speaker Change: Be meaningful to us over the next two to three years.
Speaker Change: But if implemented not only is it a sales opportunity, but really helps to build out the larger hydrogen economy. So we're supportive.
Speaker Change: But.
Speaker Change: Probably we're not stunned that.
Speaker Change: They have not.
Speaker Change: Accelerate as fast.
Speaker Change: As people may have thought but also quite honestly they are accelerating at a pace that the government actually laid out there.
Speaker Change: So that's kind of our thought process there.
Speaker Change: Great. Thanks for that that's it for my questions.
Speaker Change: Alright.
Speaker Change: Thank you. Our next question is come from the line of Samantha Hoh with HSBC. Please proceed with your questions.
Speaker Change: Hey, guys.
Speaker Change: Good morning, Matt.
Speaker Change: Hello, Andy.
Speaker Change: I think you mentioned a few times about the Texas plant.
Speaker Change: That's helpful.
Speaker Change: Awesome.
Speaker Change: And the one thing that's always struck me is how much support the state of Texas has for Houser like television.
Actually it's quite powerful.
Speaker Change: I'll start with a conversation in terms of taxes.
Speaker Change: Yes.
Speaker Change: I don't know.
Speaker Change: Sorry.
Speaker Change: So that they can provide.
Speaker Change: Hi, Tien tsin.
Speaker Change: More competitive since our foundation.
Speaker Change: All the developments there.
Speaker Change: Does kind of pull back on their support.
Speaker Change: I have not.
Speaker Change: I will be meeting with people from the Texas delegation.
Speaker Change: Weak.
Speaker Change: Hi.
Speaker Change: I have not seen anything we do have people in Houston.
Speaker Change: <unk> seen anything to date.
Speaker Change: Where the Texas delegation can help us the most.
Speaker Change: In the Texas government is too.
Speaker Change: Hello.
Speaker Change: Move help move things through quicker.
Speaker Change: Quicker as they learn and I think.
Speaker Change: You see both representatives and senators willing.
Speaker Change: Willing to help in that area.
Speaker Change: Okay.
Speaker Change: The other thing Im kind of curious.
Speaker Change: With like potential monetization of the PTC.
Taylor: Theres still a last question this is Taylor.
Taylor: Listen with that potential.
Taylor: Tax.
Taylor: What sort of conversations are happening behind the scenes.
Taylor: Opportunities potential modest hearthstone once we have greater clarity.
Taylor: No.
Taylor: I guess what are your thoughts in terms of how quickly that could.
Taylor: What kind of milestones should we be looking at.
Taylor: How quickly can handle.
Taylor: Okay.
Taylor: Do you want to take that Paul Yes, So I guess, there's two facets one is practically the way. It works is when you file your tax return.
Taylor: Direct pay associated with that so.
Taylor: Worst case, we filed in October like other corporates with literal calendar years companies.
Taylor: And they paid from that.
Taylor: What we are working with us.
Taylor: Tax equity broker that we used to close the ITC sale in Georgia to see if there are some parties that want to discount that it's only a few months, but it can be meaningful to us to discount and sell it off the good news is we have.
Taylor: Tax opinions from a reputable big.
Taylor: Global tax firm and all of the analysis and things that we need to put that package together and make it a very.
Taylor: <unk>.
Taylor: Opportunity.
Taylor: To sell it off so.
Taylor: And if we when we establish that it makes it easier to do that.
Taylor: For this year.
Taylor: And start taking advantage of this year monetizing this year's as well so it's a work in process.
Taylor: Still new like any new market opportunity. It takes some time to kind of nurtured through it but we're pretty actually encouraged with the interest level in <unk> and how we're postured to try in.
Taylor: Absolutely monetize that.
Taylor: Okay. Thank you.
Speaker Change: Thank you. Our next question is coming from the line of Amit Dayal with H C. Wainwright. Please proceed with your question.
Speaker Change: Thank you and good morning, everyone.
Speaker Change: Good morning.
Speaker Change: Hey, Andy.
Speaker Change: Just.
Speaker Change: Sort of a macro enrolling right now and are you providing guidance.
Speaker Change: Thank you <unk>.
We will continue to 2024 is still valid and can you give us a sense of how that aspect of the execution.
Speaker Change: Okay.
Speaker Change: <unk> changed.
Speaker Change: Do you want to take that Si we're happy to have it. However, you couple a couple of things on this right. So our electrolyze of business in 2025, largely is executing on the existing backlog that really hasnt changed right. We're hopeful that we might even be able to do slightly better than that but it all really comes down to executing on.
Speaker Change: The backlog and just to put this in context I mean <unk>.
Speaker Change: <unk> business grew about 60 more than 60% year over year from 23 to 24, we.
Speaker Change: We wouldn't be surprised if there's a similar growth rate again in 2025.
Speaker Change: Another piece of our business, which is largely a backlog driven as well as our cryogenic tank trailer business, we look that business slow down a bit year over year from 'twenty to 'twenty four largely because of some of the push out some decisions even we made on the mobile refueling space.
Speaker Change: Even the collection situations and things like that so that business I think again, we will grow back up here in 2025 versus 2024 from a revenue standpoint. So short answer to your question. We really don't think there is any risk to that existing backlog, obviously, we're going to want to book more business here for one very important point to highlight here as we talk.
Speaker Change: About potential for a pretty big bookings and the Electrolyze. It business those bookings will really have 26 and beyond not so much 2025, and the size of the project and when they move and things along those lines, but otherwise look we feel pretty good about the existing backlog, it's all about heads down and execute.
Speaker Change: Thank you. So my other question I have already been disconnected.
Speaker Change: Taking my questions. Okay. Thank you.
Speaker Change: Okay. Thanks.
Speaker Change: Thank you. Our next question is come from the line of Amit <unk> with BMO capital markets. Please proceed with your questions.
Speaker Change: Hi, Good morning, just one quick one for me.
Speaker Change: Given kind of your half year to positive gross margins at the end of the year and the cost cutting I was just wondering if you could kind of share with us. What your plans are in terms of kind of relying on some of the facilities do you have for external equity.
Speaker Change: How much is kind of baked into the year for for that thanks.
Speaker Change: So I would just say that we.
Speaker Change: We have not used any of that since mid November.
Speaker Change: Any of those facilities.
Speaker Change: Sure.
Speaker Change: There is a backdrop to support the business if required.
Speaker Change: You have utilized the convertible facility right.
Speaker Change: It looks like two issuances of $22 5 million.
I think the first two months of the year.
Speaker Change: Yes, that's actually just payback.
Speaker Change: Instead of.
Selling stock, we actually executed by providing cash.
Paul: Do you have anything else to comment Paul Yes, no I think just for clarity so the convertible.
Speaker Change: The preferred convertible we did in November.
Paul: There's two elements one is.
Speaker Change: We had some.
Paul: Amortization on that and then.
Paul: Does the stock price at 290 that did convert.
Paul: If it was like 10 million shares.
Andy Marsh: But to Andy's point, we have not used.
Paul: Either of the <unk>.
Paul: The facility or the.
Paul: Recent separate agreement with Northville so.
Paul: We sit in a good position with ending $200 million in cash.
Paul: The year end.
Paul: Things like the ITC help.
Paul: Bringing liquidity, we also get.
Paul: The restricted cash at $50 million a quarter that comes in in March.
Paul: So theres a lot of positive things that are helping us navigate this this fiscal year.
Paul: Thank you.
Speaker Change: Thank you our next questions come from the line of casualty Harrison with Piper Sandler. Please proceed with your questions.
Casualty Harrison: Good morning, and thanks for taking the questions.
Speaker Change: Morning.
Speaker Change: So my first question is on Georgia, you've now had it running for around a year, just curious where run rate utilization is on the project and how long it took to get there and then same question for cost of goods sold I think you guys were thinking about maybe $400 per kilo of production costs, but I'm just curious.
Speaker Change: Actual results.
Speaker Change: Handed relative to those expectations.
Speaker Change: Do you want to take that one Paul.
Paul: Yes, I would say.
Speaker Change: As you ramp and commission the plant obviously the cost per kilogram is higher than we expected.
Speaker Change: As we've gone through the year and really worked out the bugs and figured out how to run that plant more smoothly.
Speaker Change: You get the leverage on it right so.
Speaker Change: I'd say, we're kind of in that $5 ish kilogram range for.
Speaker Change: For the PTC before the PTC Thats right and obviously the PTC is super helpful.
Speaker Change: Sit down to the $2 50 type range exactly so that's kind of where we are sitting at the moment and we expect to take the pool. This year will be really good because we'll get the full year benefit of that whereas last year you only got a portion of that because of the timing of turning on the plant and the periods of time that we were ramping up that facility.
Speaker Change: Got it and sorry, whereas utilization.
Speaker Change: Utilization is we can run to full production so.
Speaker Change: It's just.
Speaker Change: Just based on demand.
Speaker Change: And so we need to run 15 tons a day, we will run 15 tons. A day I think most days are in the 11% to 12 tons per day range.
Speaker Change: Got it helpful. And then my follow up question is just thinking about just for capacity.
Speaker Change: I think you talked about 39 tonnes per day of current capacity current demand I believe at 55.
Speaker Change: We're working on bringing text us online, which is 45, so you'll have.
Speaker Change: Excess capacity once Texas comes online just given all the comments around the slower.
Speaker Change: Market development than you anticipated.
Speaker Change: Just wondering where you are envisioning, sending those excess volumes through thank you.
Speaker Change: Okay.
Speaker Change: Not exactly wanted to provide.
Speaker Change: Information about who we're competing against and where we're looking to provide.
Speaker Change: I would say is we have a strong sales funnel and a strong sales team working those opportunities.
Speaker Change: Yes, there is.
Speaker Change: Big market already for liquid oxygen and.
Speaker Change: We have.
Opportunities with people, who already buy in liquid hydrogen at scale, who are very very interested in buying scale out of Texas and then maybe one more.
Speaker Change: Some of the players have decided they are exiting the green hydrogen space as we bring some of these other plants online and demand for green hydrogen is a long term in nature. So that I think puts us in a pretty good position as Bob just to reiterate as Andy said look we even have some discussion with existing industrial gas customers. This was a swap arrangement. Yes. It's all about if you have a plant in California.
Speaker Change: If you have a demand in the east coast or in the southeast right. Then that's where you end up doing a lot of swaps. So look we work very closely together with many of them and as Andy said, we feel pretty good about demand being very even as we bring our Texas plant online.
Speaker Change: Got it thank you.
Thank you our next questions come from the line of Andrew <unk> with Morgan Stanley. Please proceed with your questions.
Andrew: Great. Thanks for taking the question good morning, guys. Good morning.
Speaker Change: Good morning, Andy maybe just to start out coming back to the loan for a second I think in the press release, you guys cited $400 million of coverage from the Doe loan on $600 million of incremental investment that.
Speaker Change: That implies about two thirds coverage on an advance rate I think you guys had previously talked about 80% advance rates on the Doe loan. So just curious what the Delta is there and if theres been a change in maybe the advance rate assumptions that you are having on that facility.
Speaker Change: Go ahead, Paul Yes, there is no there is no changes.
Speaker Change: Up to 80%.
Speaker Change: The dynamics on each project will vary based on the size of the plant and other factors.
Speaker Change: And we also have some of that is.
Speaker Change: Decent amount of contingency in those assumptions and so obviously with the learnings that we've had in Georgia now, Louisiana, We hope that bill.
Speaker Change: Feel like that we're in pretty good position.
Speaker Change: Don't use all that so.
Speaker Change: That's the I guess the dynamics Andrew in terms of how employees.
Speaker Change: Okay. That's helpful context, and maybe just sticking with Capex for a second.
Speaker Change: $250 million that you've already spent on the project another $600 million that you need to spend gets you to.
Speaker Change: About $850 million all in on a 45 ton per day plant and if I just do that conversion it implies like 19% to $20 million.
Speaker Change: Of Capex per ton per day of production, which I think is actually a little bit higher than in Georgia. So I'm. Just curious can you just maybe walk through some of your assumptions there I guess I would've thought it would be lower than Georgia, just given some of the learnings that you guys have discussed so any color there would be helpful. Thank you.
Speaker Change: Yes.
Speaker Change: Hi.
Speaker Change: Don't know what the math is right.
Speaker Change: But Georgia, Georgia will come in around.
Speaker Change: $800 million.
Speaker Change: With contingency.
Speaker Change: Contingency is probably 10% to 15%.
Speaker Change: So there's built in contingency in that <unk>.
Speaker Change: Texas number so.
Speaker Change: Overall, I think before the contingency it'll come in around $700 million.
Speaker Change: Okay. Thank you.
Speaker Change: Okay. Thanks, Andrew.
Speaker Change: And I think thats it for the day till well. Thank you everyone for joining the call and look.
Speaker Change: No.
Speaker Change: We are making.
Speaker Change: The tough decisions.
Speaker Change: Make sure. This business is successful long term.
Speaker Change: Laser focus on material handling and hydrogen to support it.
Speaker Change: Which will really help us grow the market long term.
Speaker Change: We're laser focused on electric <unk>, and especially those applications.
Speaker Change: <unk> can be deployed rapidly.
Speaker Change: We're making some desktop decisions.
Speaker Change: To cut cost and make sure the company can achieve our EBITDA and gross margin goals.
Thank you everyone for joining I appreciate the time bye now.
Speaker Change: Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.
Speaker Change: The rest of your day.
Speaker Change: [music].