Gevo Inc (GEVO) 2021 Q1 法說會逐字稿

Hello and welcome to Gevo's First Quarter 2021 Earnings Conference Call. My name is Towanda and I will be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded. I would now like to turn the conference over to Geoffrey Williams, Gevo's Vice President, General Counsel and Secretary. Please go ahead, Mr. Williams.

Good afternoon, everyone and thank you for joining Gevo's first quarter 2021 Earnings Conference Call. I would like to start today by introducing the participants from the company. With us today is Patrick Gruber, Gevo's Chief Executive Officer; and Carolyn Romero, Gevo's Chief Accounting Officer. Earlier today, we issued a press release that outlines the topics we plan to discuss.

A copy of this press release is available on our website at www.gevo.com. I would like to remind our listeners that this conference call is open to the media and that we are providing a simultaneous webcast of this call to the public. A replay of today's call will be available on Gevo's website. On the call today and on this webcast, you will hear discussions of certain non-GAAP financial measures.

Non-GAAP financial measures should not be considered in isolation from or as a substitute for financial information presented in accordance with GAAP. Reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures are contained in the press release distributed today, which is available and posted on our website. We will also make certain forward-looking statements about events and circumstances that have not yet occurred, including, but not limited to, projections about Gevo's operating activities, the remainder of 2021 and beyond. These forward-looking statements are based on management's current beliefs, expectations, and assumptions and are subject to significant risks and uncertainties, including those disclosed in Gevo's Form 10-K for the year ended December 31, 2020, which was filed with the U.S. Securities and Exchange Commission, and in subsequent reports and other filings made with the SEC by Gevo, including Gevo's quarterly reports on Form 10-Q.

Investors are cautioned not to place undue reliance on any such forward-looking statements. Such forward-looking statements speak only as of today's date and Gevo disclaims any obligation to update information contained in these forward-looking statements, whether as a result of new information, future events or otherwise. On today's call, Pat will begin with a discussion of Gevo's business developments, Carolyn will then review Gevo's financial results for the first quarter of 2021.

And following that presentation, we will open up the call for questions. I'll now turn the call over to Pat.

Thanks, Geoff. While we're on track to accomplish our goals for this year. The engineering of Net-Zero 1 is on track. The debt solution with Citi to finance Net-Zero 1 is actually ahead of schedule. We still have a lot of work to do, but so far, the Net-Zero 1 project is looking very good.

We broke ground on our RNG project, which will come online next year. This project is targeting production of 355,000 million BTUs per year and should generate free cash flow for Gevo of approximately $9 million to $16 million on an annualized basis beginning in late 2022. Tim Cesarek, our Chief Commercial Officer has managed to increase our customer contract pipeline by several fold. We now are discussing and negotiating upwards of $10 billion take or pay offtake agreements on a revenue basis.

Recall that for each 45 million gallons of contracted product sales, which is the current approximate design capacity of our Net-Zero plants to some of the anticipated product sales revenue during the expected take or pay contract terms of 6 to 7 years should be about $1.5 billion. It's real money, real business. So we're able to ink some or all of the contracts in our pipeline. You would mean several more additional plants would be needed to be built. These take-or-pay contracts are non-trivial to obtain because they require the customer to back it with their balance sheet or some other credit support method. We expect to announce the customers and volumes, when we can after the contracts are signed. I think it is likely that we could have more than one Net-Zero plant being built at the same time in the coming years.

Based on our current modeling assumptions, we believe that the EBITDA for a Net-Zero plant should be more than $100 million per year once operating. We believe that subsequent Net-Zero plants would likewise model out to be in that same range. As we get more plants booked with take or pay contracts, it will be interesting to see how strategic investors and Wall Street viewers.

We would hope that the increased visibility into more potential cash flow streams would result in better recognition of value for Gevo and its shareholders. Now with strategic investors, it's a slightly different perspective. As the tangible demand in the form of take-or-pays becomes bigger, then, it becomes even more undeniable as to the potential for our business. The more take or pay contracts lead the more Net-Zero plants will lead, the more attractive we should become to strategic investors.

Next, I want to address questions from several investors about one of our proposals in our definitive proxy statement for our annual meeting of shareholders to be held on June 9, 2021. The questions are specifically on proposal number 4, which is an amendment to our amended and restated Certificate of the corporation to increase the total number of authorized shares of common stock. This is also seems to have created confusion for some stockholders, namely a reaction that this proposal means that there would be immediate dilution, the current stockholders. Proposal number 4 is asking stockholders to approve an amendment to the company's certificate of the corporation to increase the number of authorized shares of common stock from 250 million to 500 million.

This increase doesn't mean we are issuing these new shares immediately. I want to be clear that we are not asking shareholders to approve it offering at common stock at this time, it's not what we're doing here. It's important to remember that Gevo has used most of its existing authorized shares of common stock over the years. The Board of Directors believes, it is in the best interest of the company to increase the number of authorized shares of common stock in order to give us greater flexibility in considering and planning for future potential business needs, including but not limited to potential strategic transactions, strategic partnerships, business combinations, of course financing, the construction of accretive production facilities as well as other general corporate transactions.

Now, I will turn the call over to Carolyn, who will take us through the financials. Carolyn?

Thank you, Pat. Gevo reported revenue in the first quarter of 2021 of $0.1 million as compared to $3.8 million in the same period in 2020. During the first quarter of 2021, there were no hydrocarbon revenue compared with $0.1 million in the same period in 2020.

Hydrocarbon sales decreased because of lower production volumes at the South Hampton Resources, Inc facility in Silsbee, Texas. During the first quarter of 2021, no revenue was derived at delivering facility from ethanol sales and related products compared with $3.7 million during the same period in 2020. As a result of unfavorable commodity environment during the 3 months ended March 31, 2020, we terminated our production of ethanol and distiller grains, which resulted in no sales with the current period. Cost of goods sold was $2.0 million in the first quarter of 2021 versus $8.1 million in the same period in 2020. Cost of goods sold included approximately $0.9 million associated with the maintenance of Luverne facility and approximately $1.1 million in depreciation expense.

Gross loss was $1.9 million for the first quarter of 2021 versus $4.3 million for the first quarter of 2020. Research and development expense increased by $0.8 million during the first quarter of 2021 compared with the same period in 2020, due primarily to an increase in personnel and consulting expenses. Selling, general and administrative expense increased by $1.2 million during the first quarter of 2021 compared with the same period in 2020, due primarily to an increase in personnel and consulting expenses. Preliminary stage project cost increased by $2.6 million during the 3 months ended March 31, 2021 compared with the same period in 2020, due primarily to increased consulting and research and development expenses related to our R&D and Net-Zero projects. Within total operating expenses for the first quarter of 2021, we reported approximately $0.8 million of non-cash stock-based compensation. For the first quarter of 2021, we reported a loss from operations of $9.9 million compared to $8.0 million for the same period in 2020.

In the first quarter of 2021, cash EBITDA loss, a non-GAAP measure that is calculated by adding back depreciation and non-cash stock-based compensation to GAAP loss from operations was $7.8 million compared with $6.2 million in the same quarter of 2020. There is no interest expense for the 3 months ended March 31, 2021, a decrease of $0.5 million as compared to the same period in 2020, due to the conversion of all of our 12% convertible senior notes due 2020-2021 to common stock during 2020.

For the first quarter of 2021, we reported a net loss of $10.1 million or a loss of $0.05 per share on a weighted average shares outstanding of 183,566,524. This compares to a loss of $9.3 million in the first quarter of 2020 or a loss of $0.64 per share based on a weighted average shares outstanding of 14,472,798. In the first quarter 2021, Gevo recognized net non-cash loss totaling $0.1 million due to changes in the fair value of certain of our financial instruments, such as warrants and embedded derivatives. Adding back these non-cash losses resulted in a non-GAAP adjusted net loss of $10.0 million in the first quarter of 2021, while non-GAAP adjusted net loss per share of $0.05.

This compares to a non-GAAP adjusted net loss of $8.5 million in the first quarter of 2020 or a non-GAAP adjusted net loss per share of $0.59.now I will turn the call back over to Pat to wrap things up.

Thanks, Carolyn. So then, overall, things are on track and looking good. We have the catalysts that are coming up between the offtake agreements and such. I'm pretty pleased with where we are. Let's open up this call for questions. Operator?

(Operator Instructions) Our first question comes from the line of Amit Dayal with H.C. Wainwright.

Pat, did you say that you are pursuing $10 billion worth of offtake agreements. Could you say?

We're more than pursuing them, that's what's being worked on and actively negotiated in various forms, that's a three-fold increase. This is a game-changing kind of a thing for us, considering where we had been and what we're doing. People are figuring out that we have a solution here. So it's going to be exciting. And we're going to be in a position of having to supply product from multiple plants that wants to doing good thing. We did a greenfield cookie cutter plant and are designing it the way we're doing it, we got, okay. It was foresight lucky, we did good and my people did really good job. So it's kind of excitement space we're in. I just, as always, I never know when we're going to get the darn agreements done. Some of these are really big deals and with not that many customers. And so they'll take time and but we're stacking them up in multiple Net-Zero plants, it's pretty exciting.

Are these agreements with, are these potential agreements with the airlines or with players in sort of in middle of the value chain, like who are these agreements being negotiated with?

I think it would be fair to say, I can't comment on the stuff like that. We are sworn to secrecy about these things. I know, we get this question I never want to tell us who is it early, we can't do that. Now there and but I will say this, it's a mix of those. So if you just asked me about, it's a mix.

And then, I guess I'll ask you obligatory feedstock related question. As you are getting visibility into the size of these opportunities, how are you thinking about managing feedstock requirements, etcetera?

Well, what's interesting is because these carbohydrates of feedstock, these are incredibly abundant. So for example, the corn supply here in the U.S. is what 14.2 billion bushels a year ago and it's increasing. And we use the carbohydrate portion we separate out the protein. The 1 billion gallon also require several percent of corn supply and of course that's really not an accurate count, because we're separating, its closer to an accurate number. We're separating out all the protein that goes with it. So it's a -- there is more than a feedstock availability, especially when ethanol, while it's been a little bit of a comeback, but the ethanol supply has gone down a bit.

So we're in pretty good shape in terms of feedstock and that puts us at a comparative advantage compared to some of the other feedstocks that are out there for renewables. Of course, around the world, it's not corn. In Germany, we would work, where something else and in India it's definitely molasses and things like that. So and I think in South America, as we get going, you'll see us work with molasses and other products. So carbohydrates are a great feedstock because there's so ubiquitous in such large amounts especially compared when one is looking at oilseeds or one of those other things.

So just to -- so these net zero plans don't essentially have to be in the U.S., they could be in other geographies?

Sure, they can. It's a concept. So what we're doing is building plants and building in the renewable energy infrastructure that goes with them. Because of the way we process things, we have the ability to take and put like a water treatment plant. We put that water treatment plant to make biogas, use that to do the thermal demand for the plant displacing the fossil based natural gas.

Of course we want renewable electricity. Electricity is the thing that causes in between electricity and natural gas. That is the thing that causes the bulk of our footprint. This is true of all energy. When we're trying to drive the footprint down on greenhouse gases, it is about electricity. It just seems to be lost on the world at large and the same thing is true with the natural gas, it's fossil-based both of them.

Electricity 60% fossil-based in this country and around the world it's about the same. So there is an enormous amount of work to do. So we think of it as every time we do a Net-Zero plant, we'll done something about renewable energy. And in fact, our company is in fact a developer of renewable natural gas, that's a fact. We're a co-developer of wind, we did a project last year. We're going to do another round our Net-Zero plant. And we're going to continue to be active in the renewable energy. And it's a different mentality about what needs to be done to solve these greenhouse gas problems and make money while we do it.

The green bonds for the RNG that you issued, is that allowing you to pay a lower interest rate versus regular bond I guess?

Hey, Lynn. Are you on the line Lynn? There is an interest rate and I thought we published it. It's been, it's public stuff, so it's there.

I'll check that and I'll look at that. No problem here. I guess my other question was around how much we need to factor in with respect to the interest burden related to this, but I can look that up also. But you said if there is the is payments on this will begin in 2Q '21, right?

Yes. So what will happen is yes. So yes. And what we'll do is, you have to immediately do is call Lynn and talk to him and find out more color on it. And the thing that I'm paying attention to is I want this plant built and again complete by the end of the year. I want it operational in the first quarter of next year, so that we can get all of our qualifications done to get stuff certified. So you could start generating cash, get that done. I want the money in the door by the end of, well, though in the third, fourth quarter next year whenever that timing works out and I want the cash coming in the door. And when we're talking about $9 million to $16 million of cash, that might sound small to people, but then, that's like real money, we want it and that's after the debt service and all the rest, so that's, I want it.

So Pat, what's the delta, what accounts for the delta between the $9 million to $16 million in that range, like, what could be the difference between new coming in at $9 million or $16 million?

What you have to go through California and get certified as to what exactly the pathway is and they look at your dairies and they'll judge them in some way. And we're trying to be conservative. So in the worst case scenario, we say it's $9 million. We think it's more or like $16 million. And so we're just giving ourselves a range, so we can hit something that's reasonable. But you got to go through this. Whenever you got to go through the certification process, which is normal, you got to get their blessings to say, yes, that's legit. It depends on how they're looking at things at that time.

And because it's in future world, we just say. okay. We plan on $9 million, hoping at $16 million, as the cash flow. On the revenue side, what that means on the revenue side is, it's just like $23 million to $28 million revenue.

So this will get narrowed down once you get the certification et cetera basically?

That's it. While we would know, we would know then. We will know. If they do what they have done in the past, it's the high side.

And I guess my last question was around what the expected cash levels would be as you exit 2021? I don't know if Lynn is online, but I can follow up with him, if he's not available.

Yes, I follow up, it may be that we have some long lead-time items. I think we've talked about that once before, where we may have to put money down a long lead equipment for Net-Zero plants, that might be no tie up 20 million bucks or something, but I don't know. We have to ask him exactly and we'll have to sort through that as we get further along. Lynn, you are here?

Yes, I'm sorry. I was dropped, so back. What was the question?

The question was what do you, where do you expect to be with your cash position as you exit 2021 ballpark?

Yes. About $490 million.

Okay. Now look, everybody, everybody that is a big error by around it. It depends upon if we do long lead equipment and pay for them or not, don't write that one in stone, okay. And so it depends upon what we do.

Yes. The question as I understood there was expectation and expectation to me is based on the development cost that we incur as we develop Net 01. Yes, it does depend on a lot of things, especially around long lead equipment deposits to advance the construction schedule. That's the big uncertainties. So there is an error bar around that, but that's a point estimate.

Yes, there you go.

Just one last one. I guess the amendment Scandinavian Airlines Pat was this related to volume or pricing or something else?

Volume. It was volume, they came back for more. And I think we'll see more of that in the future from others.

Our next question comes from the line of Shawn Severson with Water Tower Research.

Pat, I'm trying to understand, when we talk about $10 billion. I mean when we're all these this pipeline want to start. I mean it's in like by some of them say they've been want to start taking delivery in 2027 or 2030 or are you talking about basically the fast as you could build plants in feedstock I mean parallel to facilitate?

It's the -- sure nobody now it's in the game of wanting it sooner, faster and all the rest and it is about gasoline, chocolate and jet fuel, both. And we can do them fast enough. So we got to go through the cycle, we've underpinned things down. And then, the Net-Zero 2 plant I think is it will be, it will be done in overlapping with Net-Zero 1 is the hypothesis, Net-Zero 3 could be done exactly at the same time potentially. So it depends upon when we get the contracts done, it's going to get interesting. And then, we got to think about how to do even bigger chunks all at once, because it's that kind of a pipeline. And so it's getting to be interesting, people want the stuff fast. So next year, one is expected to come online in first part of 2024. Yes, I think it'd be interesting to see, could we push it and get the Net-Zero 2 online in 2024 as well, and the Net-Zero 3 maybe, this is how we're thinking about it and why we're going to such detailed work and get it right on this engineering is so we can cookie cut these things to make them work with certainty.

Are you seeing any interest or inclination in that in that pipeline? Were they want you to work with the strategic or are you basically operating fine on your own obviously signing that will take agreements you're operating fine on your own. But I was trying to understand if there's a nuance there that they're saying, hey, we want the big partners in this or just the mentality of these customers?

No, they're like they get it is that -- we're interesting and unique as a company, because we do development of our own renewable energy, we've learned how to do it. We are the experts in the fermentation chemistry side of things. We've run these big processes in our past lives, everybody knows that.

So everyone bets us. And they look at it and they go, well, you guys know how to do stuff, we don't know how to do. So our people interested in investing. Yes, there's -- there'll be time, so we can take project investment in or there's people who have been approaching us around corporate investments as well. And it's just we got to figure out the right timing. And so it's going to get interesting. But as far as execution goes, no, that's easy, not easy, it's -- we know how to do that in the engineering firms that we work with and there's lots of them that we're working with, it's a big group of them, they are pretty good at this stuff too. And my folks are really good project managers and leaders. And so you've got to remember, we've been here and done this before in our past lives.

And so this isn't like a new rodeo for us, but no people look at us generally go guide, you guys are self-sufficient. The other thing that you got to remember and then everyone should remember, and this is a fundamentally different about us than most other companies. Most other companies make some kind of a soup as a product that has to get refined and so they need the refinery, we don't. We make it deliberately the jet fuel and the acting. And we can change if we want to make more stuff for gasoline, we can do that. And without changing anything in the plant to change the conditions. Also I want to make more jet fuel. We were -- so in that sense, we're like a chemical plant, this is a fundamental difference. And it is important when you think about how this marketplace can unfold. We've got a competitive advantage, I believe.

I want to another question about kind of the pipeline, how diverse is that? I know it's kind of nuance that you said, there are some large ones in there, but just how diverse is that is that group and for modeling purposes should we assume that most of these, the plants, the offtake agreements have similar economics.

Yes, the way we think of it as every Net-Zero plan of 45 million gallons generates EBITDA stream of plus $100 million, that's how we think of it internally. And it would have the -- I am doing math, you have to do the math to figure out there were costs for life of the contract, 6 to 7 years or 6.5 years, $1.5 billion of revenue across the life of the contracts provided by 45 million gallons is $5 and whatever it is $0.10 to $0.15 a gallon.

And so what I mean there is a big variations in these contracts I guess what I asked. So when we look at, when we signed-up contracts and starting to fill up we should think a very similar economics, use the same economics for all of them.

Yes, we do. Yes, okay.

And we find -- and we found a sweet spot on pricing, where it works for everybody and it works well, keeps the customers incentivized to work with us, because they get some of the green value, it's interesting.

Just to clarify the diversity in that pipeline?

Yes, the diversity of the pipeline. So what do you mean by diversity how like you may give me some?

Is this is the 30 or 3 that are in there, final set of these smaller all going to come out?

There is probably of the $10 billion, I think it's like I'm going to call it 15 to 20.

(Operator Instructions) Our next question comes from the line of Craig Irwin with ROTH Capital Partners.

So Pat, I understand the enthusiasm of your customers out there. Jet fuel is the one fuel that really has the least environmental compliance of all the liquid fuels. Its high sulfur, high emissions, high particulates. And really one of the best opportunities for environmental remediation with clean fuels, can you maybe talk a little bit about what you're seeing as one of the leaders in this industry on the regulatory front, I think many of the customers out there attracting today in anticipation of regulatory action. What do you see possibilities on the horizon that could bring the rest of the industry along with the thought leaders that have already signed up as your customers?

Yes. So I think what will happen. There's several things. You're exactly right. Jet fuel needs work, they can't get to there. The industry can't get to the goals without having sustainable aviation fuel available and there's a couple of things that are happening. One is that the industry itself is pushing to go up from the 50% blends to the 100% and that's going to take a mixture of stuff. People like us we could go make more through all the components as well.

But there's lots of guys who can do that. I think mixing and matching is probably the right thing. The key is to drive to low carbon. The lower the carbon, the better, how you count carbons matters up ton and you got to do it in a fair basis and otherwise you start doing really people to do rude behaviors. So there's a bunch of things like that that are being cooked. And then, the important ones are around there some bills proposed like for blenders tax credits that would give like a $50 a gallon for jet fuel produced in the states and that would help the economics. The airline industry itself does not want to pay a premium for these fuels. They know they have to buy them. The model that we have for selling fuels allows them the share in the environmental benefits. So we are quite as dependent upon this, as people were just why we get some of these contracts and maybe others don't. Remember, we're get -- I want to take or pay basis a real take-or-pay basis and that makes us a slightly different than most. So then just economics or it's something that's going to be a little bit of a wiggle as you know, as production comes online and today really everything is based on forecasts. But can you maybe talk us through just the basic process that you see when you talk to regulators? Traditionally for example carb starts which production today and looks at what you can achieve versus that baseline. So if you start off with, I don't know, whatever it is 600 PPM. I'm probably off of sulfur in jet fuel. And you can bring that down to 500 PPM by mixing in 20%, clean fuels that that move down in the baseline is where the economic value is uncovered. And that's a much bigger move down in Socks emissions and we're going to get and almost any other investment out there, environmentally.

I mean, are these things that are factoring into just sort of regulatory considerations out there. And some of the potential economic compliance values that will impact that's -- the credit values as we look out on the horizon, because I assume there will be credits at some point for the compliance value of these fields.

Yes, that's a releasing point. So what Craig was asking about is that there's going to be the NOCs and stocks in the particular big deals. The software problem is something that is hard to deal with. And it comes in -- it's inherent with the petroleum-based products, you're right, we can eliminate that. And it's a clear cut and we can avoid it, we don't have it. And so this is a good thing. And likewise with particulates, we can get rid of those and those are usually aromatic compounds.

You're right, they're valued. What would -- the way that what I think is going to happen is, we're going to see more regulation upon those things, in fact even as part of the Clean Air Act and I know you know this already is that's already there, which just hasn't been implemented yet. We'll do administrations start to push that stuff, probably should. And we can delaying it for how many years a decade already. They should clampdown that was benefit guys like us. And we normally don't talk about those benefits. Now that said, one of the way that we priced our product just that we do an index like to jet fuel or gasoline on some of these and like a premium gasoline and then we get paid our premium. On top of that, just for its technical properties, which in part are related to its lack up articulate, lack of sulfur. So in our pricing models, we're starting to see value for that already, which is pretty darn interesting because it's way early on. So it's our customers' problem, they see it, it's coming, Adam, and they're trying to figure out what to do.

And then, congratulations on the progress on Net-Zero 1. I know we're really in a capital phase now and a lot of this is going to be, the value is going to be realized as production comes online. What would you say, we can look at today for best indicators of economics of production of that plant. When it comes online, it's difficult to compare a tenant scale up. But is there anything else out there and sort of the broader universe of industrial built that maybe we can look at and say, this has been done before and we understand if not?

Yes, you bet. There's, the last time a plant of the scale that was done. That was a non-ethanol fermentation. That did a combination of hygienically modified used on a new fermentation system? And then, had make it work right to do chemistry was back when we did PLA plastics at cordial. So that we do make near to use. The fermentation plant was giant, in fact at the time it was the world's biggest fermentation plant. The team I have at Gevo, we're the leaders of that, they did it, there's guys, they're still with me at Gevo. This helps us and that there is like the lessons we learned about what works, what doesn't with the problems, with the pitfalls, this is now as you can get any other place, because you got to know how to do this stuff at large scale and the subtleties that go with it.

Well, my group has been there and done it before. That gives me enormous comfort and you know Chris Ryan, my Chief Operating Officer. He led that, my run proctor, my head engineer. He's the guy who built those plants. And so we have them here. And they've been working with that ever sense and that's been on our mind in the lessons we've learned. And so it is a -- and this Net-Zero plant that we're talking is on the order of that kind of a plant that we did back in the day at Cargill, and it will be a little bit smaller than one of the giant ethanol plants.

Well, congratulations on the progress. Look forward to tracking things going forward.

I'm not showing any further questions. I would now like to turn the call back over to Pat for closing remarks.

We have made great progress. It's -- I wish I could tell you all the details that I know, you'd get really, really excited. And I just can't and it will be fun unfold them and it takes patience for me too. I want to see more of these investors these contract, these contracts with customers done. I want to see the -- they're exciting and more than one Net-Zero plant, that's a nice problem to have. And it will also be interesting to see as that volume stacks up and take-or-pay contract, it really does end the debate about what will people pay for this and are they interested really if you're sitting on the sidelines watching. So it's, you should see the impact on others around us and what happens.

And then, the engineering, we keep plugging along and we'll get it done. It takes a enormous quantity of work. We're doing something unusual here, integrating renewable energy, quadrigal energy island into our plant, because remember, we got to do the optimization of the wind. We're going to be making hydrogen. We have the debate about how much hygiene should we make. And because, we think that's the very best way to store some energy from the excess wind we'll have. There is a question, should we sell the stuff? We get a lot of things to sort out about how to conduct the integration. They got, the technology itself is solid and worked out. So with that, thanks for joining us. Everybody have a good evening.

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.