ASPN - Earnings call transcript Q4 2017

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Operator

Good afternoon. My name is Chantel and I will be your conference operator today. At this time, I would like to welcome everyone to the Aspen Aerogels’ Q4 2017 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator may conference. you begin Fairbanks, your John

John Fairbanks

that Good to Aspen announcing Quoted financial December John Aerogels’ use you the the as available a for call housekeeping management’s non-GAAP for press Fairbanks, a of sheet, before summary developments, Don results quarter operations, measures to for and the section joining us as measures CEO. items compared few summary and conference year release are of applicable Aspen’s of Chief over XXXX. is statistics a Officer. business most afternoon. the and reconciliation of would on turning Aspen’s a of Financial like XX, financial address GAAP Aspen’s in Thank Aspen’s There I Young, call. is President to I Investors financial the key statement well am operating ended release balance website, summary www.aerogel.com. the and Press

the any Investors for approximately statements In expectations, estimates, risks webcast is are business will discussion that regarding Please note any statements, archived year. a today And that and statement targets, this section our an fact. projections, including website uncertainties. addition, plans, such outlook, include of X other forward-looking version of statement and beliefs, Aspen’s will not prospects, contain historical to subject

factors affect The filings be section the in Annual most in particularly issued SEC may today more from could can in website. today expressed in statements. SEC, Investors Report those of and issued the press company’s with found results with files list in release can Aspen on release the discussed Aspen’s materially and XX-K. Form actual differ forward-looking press Aerogels’ in reports recent company’s that Aspen’s actual be detail Aspen company’s A are of the found results these also the the

today XX, February represent XXXX. views as the Forward-looking statements made company’s of today,

or events these forward-looking circumstances. to future statements Aspen to reflect any update obligation Aerogels disclaims

accordance of call to GAAP. most measures Generally results of financial available During this measures directly non-GAAP These and financial CEO isolation and of we today’s financial for will with non-GAAP these be a non-GAAP Accounting these in U.S., over Definitions in with Principles, reconciliations measures Young, measures, call, prepared refer Don and GAAP the financial not measures financial prepared or to These are intended adjusted of I President to to non-GAAP including discussion as Accepted or we will turn in considered press measures the substitute accordance EBITDA. in comparable are Aerogels. financial a not now release. present why Aspen GAAP. is

Don Young

joining John. our for Good afternoon. performance. and earnings the for fiscal I business will about Thank and year you, our start Thank by us XXXX comments providing you QX call.

and and QX XXXX our review guidance. XXXX financial will John performance Next, provide year fiscal

We will in call topics a my session. prepared the to Q&A five conclude with cover I remarks. plan

and the comment First, I Courts. patent in Trade ITC, enforcement Patent our United the and the will International States at United Office, Trademark States the the Commission, wins USPTO, German on

progress prepayment the made million from will $X that and will BASF the I Second, we during we strategic on our XXXX significant them. with comment receive relationship in have

global our for environment, I indicators against XXXX XXXX. environmental we discuss key with across to around for in new of efficiency strong core, the leverage our indicators will Technology social us and success is will markets. protection introduced describe performance responsibility. for Aerogel economic our as key available our three Platform combined Fourth, including also strategic Third, adjacent often sustainability, their and and and opportunities our customers enforcement. we strategy, IP we on companies market commercial current an logged property. of performance is initiated that fifth, that today review our mega-trends the our actions centered and I actual to strategies several a time against And part assert capability the which In intellectual partners topic own will I resource of performance legal updated Since our will I view provide have infringe XXXX. first shape our series outlook April rights victories. to XXXX, help My

as Last judge to the a very During distributor infringing February, the the issued our limited United conclusions German against prohibiting favorable into by September one a confirming panel a increased importation European the and to from unique to the have prepayments issued half prohibiting was not early principally United wins receive a our court at Patent of $X clearly to will in business at among limited Aspen. is claims million States. the XXXX, capacity linked our Aerogel ITC patent of valid In German In the expansion million judge financial My in initiatives. was XXXX. order today finding signed strength patent week around we of portfolio issued on originating and which products validate infringing the judgments commercial, most with of we the full This resale the partners. infringing XXXX, clearly In January an world. judges be the exclusion a XXXX, for We we XXXX, court prevent The agreements patent topic judges’ the we Aerogel determination technical global partners value and in ITC and prepayment BASF determination in of that Trademark remedy the Georgia. of BASF Aerogel the the financial in commission resell three a blankets Also of XXXX, recommended final included these exclusion Office. our Technology will BASF patents business the where entry and important by patents. second United all amended USPTO, validity order to the the support ITC June initial countries China. brings settlement distributor defendant our believe in Platform of upon elements. Chinese outcome Dutch our Statesboro, the Then USPTO, the the receive and $X plan in our injunctions agreed products the and The into agreements is the focused from a initially at States. two Aerogel companies. in first series challenged challenge demonstrate of a issued States products denied

work is focused first joint development building on BASF The initiative our insulation. with

important and have combined and million properties these completing are easy The our technical $X and product technologies. these of BASF an next has excited which to We is the use. about potential will thermal world help progress Aspen non-combustible made and both prepayment We generation class rapid on realizing efforts. development accelerate efforts to

is is The Providence to project. the our of capacity our goal East of increase The expansion second by initiative EPXX manufacturing of facility XX% by capacity new the XXXX. EPXX end

business. East is in we level our revenue will At approximately is million XXXX costs from the $XXX very EPXX million facility $XXX in approximately facility IP million the goal per significantly excluding turn project from projected estimate capacity range adjusted of per EPXX valuable. to breakeven will accelerate year. to increase $XX potential our of project capacity the we million XX% million profile the BASF EBITDA XXXX our in capacity between will existing to adjusted line. to that a expand adjusted the prepayment $XX revenue to existing approximately million. The from levels which revenue $XX With potential to dropped other $X we in generate revenue $XXX $XXX $XX economic from profit of Providence to current to XX% approximately our of million million, to million generate current million, enhance The from our enforcement our In growth Additional year. and will projected the our EBITDA help of $XXX have in of and EBITDA the words range current of

performance third key topic our our XXXX today three introduce review XXXX. is Our actual and to indicators indicators to for performance against

adjacent, by performance first end building including revenue refinery new was our quarter in core and grow petrochemical growth market in partnered and district our LNG, taking materials. value growing million Our and companies share approach of QX $XX QX first principally development demonstrating million in the market, indicator goal from markets, to and step power a gaining to million our in QX and energy $XX in XXXX each towards in We by achieving in in QX. to in revenue an revenue deliver $XX to important believe momentum We growth the met $XX and million to is goal profitability. XXXX this including long-term

XXXX. not was XX% indicator revenue XXXX context, South provide our Asia and together the centered in our both and in subsea South that to it the second is revenue Asia accounted comprised of important project of remember approximately petrochemical on petrochemical To project. The for subsea

revenue this total we us and Tracking and XXXX, and our would of than to XX% in day-out enables However day-in had for project other than anticipated account South maintenance the revenue our gauge project subsea growth. we is less Asia base petrochemical revenue revenue to revenue at to our for in knew base meet XXXX, the order the to for $XX work future grow least sustained Entering small believe which we guidance needed year. we million revenue.

in millions For the from low and in XXs of XXXX grown to has dollars base XXXX prospective, XXXX revenue low XXs the in our XXXX. and

million. of three record our with This of million, cautious target our is main reasons why are reached of our we achieved of short revenue the XXXX and fell overall target base in revenue $XX While $XX revenue one for shortfall we guidance. XXXX XXXX we

XXXX to We $XXX performance million. the as target base during track and a revenue indicator to increase will continue will

success ability strategic was to an $X to our our maintenance launched third the to HPS, billion and for small a progression schedule that in million industry, markets. then work. project revenue scale the case insulation The meeting indicator the build We indicators. new to defined XXXX year. performance to in of We to work of and into typical of performance per larger be generate million to targeting related consumes school studies portfolio $X.X We of diversifying Pyrogel succeeded product, importance power work these on project July adoption on industry adjacent to $X begin XXXX

develop several Pyrogel platform commercialize way rollout in competency global including Aerogel of specifications our important core this major commercialize step of to our a and the worked adjacent we we addition, to as Aerogel the critical manufacturers, progression innovative HPS ability products the In in turbine our leverage our markets. the technology market, and and and is players that successful is demonstration adoption is an key which to of work into new innovation,

the base growth adjusted and EPXX to and the involve three indicators projects. forward track revenue XXXX, we in Looking both EBITDA will performance revenue, year-to-date

large petrochemical day-out and day-in stream. version project work, maintenance The again and comprised the revenue South first school performance of indicator our is revenue not of the subsea small good base project indicator Asia recurring or of a revenue

representing XXXX XX%. for growth revenue base in in revenue million year-over-year $XXX targeting of range the to base XX% are We in

and potential in adjacent our envision that follow. growth significant cash to markets adjusted second adjusted goal indicator will lead year-to-date fund double-digit XXXX in return XXXX, as opportunities performance in that quarter. in EBITDA. business strong in delivering to can relates growth infrastructure is end generates is breakout revenue The EBITDA After core we XXXX our from a to which and each value. in and firmly the The CAGR for EBITDA substantial adjusted to measured XX% and growth of at reinvest the markets performance energy to indicator select We business new to believe revenue revenue realizing growth through and revenue

goal the of capacity capacity at facility improve XXXX. full achievable by believe plant which our The the Again the our plan pilot to existing in driven design tested primarily manufacturing productivity performance We expansion in increase advancements, be by least is manufacturing manufacturing Providence we initiative. EPXX to the the in XXXX. our our XX%, relates third capital concepts to assets XXXX technology The commissioned and will we end process is metric in by advance to East have scale efficiency. EPXX

XXXX and We lay several will third during years. for for second foundation will conduct plan the studies the also that work EPXX

$X is be the will Our supported capital EPXX million BASF. by from budget prepayment for XXXX which

performance indicators growth in year-to-date three XXXX our capacity expanding We revenue, quarter. driving indicators out EBITDA adjusted Again the on increasing revenue base our and through will and each report three both the EPXX are initiative.

of discussion the Our today a fourth environment. is commercial current topic

oil moved XXXX, we slide have successfully XXXX levels. roughly growth each the direction $XX that and deal we year crude WTI barrel experienced were and barrel. the we our market, per continued and to in year prices barrel up is stable activity prices the $XXX to linked and during in at adjacent are diversify relative now barrel energy While $XX down This per reasonably approximately related to to and revenue during a XXXX ago per $XX infrastructure our remain per with $XX timeframe.

X we today remain it for feels reasons. market XXXX three cautious year did better for the than While ago,

slightly base $XX underachieved reaching goal our First at as our we I versus metric XXXX on million stated earlier, million. revenue or $XX of performance surpassing

reached the did have $XXX base of we disappointed end and XXXX, revenue guidance aggressive achieve we that XX% growth during XXXX. base not XXXX revenue we reasons we we XXXX have revenue This While goal the chosen upper one outlook of in wanted. set to our that were in million an to be cautious XX% the revenue of in our why is for we

base again reason revenue second XXXX are we cautious relates to guidance The on our revenue.

XX% supply reaching to overachieved of in against revenue underachieved South our sub-sea While in and expectations petrochemical continued on XXXX. total Asia market we our XXXX, project the the revenue the in base we

percentage in to $XX in non-base the that X% drop the range $X be to We revenue. XX% expect million XXXX, million to for

up We of make significant is big revenue but expect revenue hole fill. loss XXXX most that to all nevertheless the or with base to growth, in it

reason stronger and late product. cycle The The XXXX fundamentals for appears to the remain is are because is we levels activity momentum inflation revenue of be cautious market a guidance in building. third

heading $X.X we oil million feel full we EBITDA. XXXX, we remember impact adjusted build million weak, per were revenue you would in the and period current posted conditions prices still of If XXXX. crude to through time market As the market and of WTI flywheel $XX.X continued activity may QX turning to were in a barrel. cycle of to was record for was the of and and with quarter beneficiaries though us XXXX strength when expect Even a $XX under positive was crashing prices late XXXX, into

market a if encouraged front in by will levels. that are way get to We out believe share. activity can of We win timely growing in market continue we we business a

will sales force in and growth. the order in take In increasing believe to commercial are our us outpace strengthening increasing to enable size environment. in result market We market share of by the we XX% strong a action

and outstanding our adjacent We across our our in Technology core to are new executing Platform Aerogel making strategy leverage markets. progress

topic, energy X position over Our narrative we current ourselves confidence to work new ability a X to to build base project for continue and entering markets significant strength exhibit that revenue in to us our substantial even and fifth diverse gives our to articulation period the growth year which experience the can This within price final is of leads and environment. strategy. to

three to Our are strategy leverage key is Platform. our elements. Technology Aerogel There

would million. EBITDA grow first The expanded revenue is facility, adjusted the million manufacturing be the capacity including and core EPXX we business from fully initiative. element adjacent a the to of $XXX markets to generating and and Providence to capacity have million between potential Add $XX $XX East our utilize

core competency The second element to innovation innovation. is leverage to our and of organize around commercializing

continuing scientists have advance premier We technology research to the process to committed Aerogel world-class and and Aerogel product science. the

for address world-class new team Aerogel prioritizing business order value to optimal and development in challenges significant partners dedicated a opportunities creation. Technology created to the have to Platform best and our to accelerate identify We global business structures

third shareholder or associated of has create strategy growth is with one can opportunities, with long-term potential maximize in the plant two we The profit in Technology invest to the breakout Providence generate value our core value. cash East element project. improved EPXX with believe and in to adjacent where free We the our our Aerogel Platform to business new markets our combined revenue potential

confident be the our in for to Overall, technology the enable leader that vision across and value breakout to markets for we our to of new will bring ROI valuable end potential and in the markets. that for Our adjacent strength our our we markets is have solid prosperous a company. and are and Aspen multiple core users performance

Our adjacent company. progress opportunity new build and to profitable creates core and is powerful from a and markets the large to to

we team our to are experienced our company. an to realize in people the ability and vision for and our strategy of have We execute confident

Now, the turn review John? of John financial will for call results. to I the over a

John Fairbanks

afternoon. good Don Thanks, and

was net per the last loss or million our quarter summary XXXX. share reported was net operating or year by per indicative $X.XX net $X.X costs or through taxes, fourth this compared fiscal expense items share $XXX,XXX adjusted before are core year. at quarter year. a compensation during total to the on and quarter negative not impact $X.X million income $X.X compared interest, the quarter do quarter fourth financial we Fourth results to Patent start had during million million stock-based define million fourth XX% $X.XX as ago. versus of quarter loss EBITDA last believe enforcement in that year the fourth the adjusted million of running EBITDA in our and depreciation, the a enforcement significant than amortization, adjusted $X.X revenue Let’s year. level. incurred $XX.X We of less other loss Fourth a quarter last performance. quarter EBITDA quarter XXXX We grew fourth costs for patent in $XX.X versus $X.X in Fourth positive to million fourth our

a enforcement patent XXXX. million during enforcement XXXX. of year our compared to $X.X Patent net in costs positive and and million during XXXX And million million year, both costs full or the X% revenue $X.XX share was loss $X.X a was adjusted million Net share net to per per million. declined loss in of For the $XX both $X.X or loss significant adjusted year $XX.X versus XXXX on a EBITDA $X.XX $XXX.X EBITDA had negative million versus ago. $X.X XXXX last total impact for incurred year. We

our in $XX momentum revenue the this Total build a to during Our year year. again of the performance in quarter. million a first low improved to fourth objectives sequential met million from quarter quarterly of high the during $XX.X the fourth quarter

the improved As in revenue levels. of percentage XX% dependent in capacity growth million $X.X profit million in million improved from quarter, during $X.X utilization profit negative in product our quarter The low Principally quarter. the first from in utilization Adjusted fourth EBITDA the conference the positive quarter gross in the fourth growth highly we improved to first also gross quarter. the high million during $X.X the discussed as calls, and of revenue future of margin $X.X and and in a result quarter. our are gross would from a in the previous adjusted gross I first to associated on quarterly continue EBITDA margin a revenue. the of growth revenue to profit a XX% year, Gross fourth provide to we now expect the in detail results. outpace will and components our see growth product on dollars additional

was First, of comprised product of $XX.X discuss revenue services million. of research was quarter total $X revenue of research revenue million and revenue million $XXX.X revenue. will of revenue Total and Fourth product $XXX,XXX. comprised revenue the services year for of I

revenue million the U.S. growth year. strong product During project $XX.X million, by demand versus the to revenue European fourth quarter, last by product and work. Fourth and driven million in $XX.X subsea a volume increased a high $X.X XX% was of quarter markets

subsea average foot quarter, XX% XX% During principally the to XX.X increased by of year. shipments in higher of increase square blankets and our products square total feet to selling the million Aerogel per mix priced this the $X.XX to due increased price by

by in project. revenue by large X% part decreased or conclusion year, South full year. million the the of multiyear last product decrease petrochemical shipments to Asia was versus This the $X.X driven For

average our subsea in in square increased Price For XX.X to feet, during decrease $X.XX products million decreased Asia year both priced XX% mix petrochemical of higher XXXX, XXXX per the square price by our from the priced project. total the versus revenue South to lower XX% while and by reflected increase foot. increase selling our shipments

contributed and Looking petrochemical XXXX. will completion petrochemical in the associated decline total $XX forward, core revenue multiyear in the from Asia we Revenue project million and most anticipate subsea of broad-based the South project of the expected growth adjacent with and the to or market in a South offset Asia generated across revenue our subsea market. markets the all decline

Our in work to these can million XXXX predict. revenue a markets forecast revenue million decline in to approximately anticipates $X although project $XX be to difficult

in range revenue million $X XX% XXXX base and forecast of a to million approximately to our $XX of between business anticipates growth Our or million $XX XX% $XXX revenue to million.

revenue product is million $XXX $XXX XXXX million compared result, during to – guidance. XXXX. million This of between a our revenue we $XXX total As generated expectation product we expect and the during in annual XXXX reflected

XXXX a of in in $X.XX reflected in plus price X% our the revenue. of expect the will effective priced from subsea XXXX average the our selling expectation for $X.XX foot minus increase price our at is We average impact or price XXXX per remain reduction flat mix higher square XXXX selling guidance. also offset by This anticipated for

turning our services research revenue, principally and during $XXX,XXX research the year. to related for research $X was our Now, was revenue performed Research contract to revenue during government quarter services services million agencies. fourth the

as services This expect down XXXX, is revenue from XXXX in expectation well we of $X.XX slightly reflected For research guidance. approximately million our XXXX.

Gross products, the Next, XX% XX% profit. production volume costs offset driven This to the improvement a or the was by part margin during in that fourth by average during volume in inventory balances of manage our million for and material gross we in selling discuss revenue million or related in increase gross the XX% shipment profit XX% growth was XXXX decrease $X.X price volume I in and in quarter will of instituted increase $X.X X% gross year. last versus profit quarter.

margin variable XX%. As a reminder, contribution our is approximately

profit of XXXX, increase growth to and our revenue led in versus XXXX and in margin XXX% an an expansion XXX to capacity basis held a gross both utilization and increase profit nearly will quarter by gross a in of in revenue points lead This the in gross margin. XX% true disproportionate case result, fourth a is gross increase a dollars. As

cumulative in XX% a year. volume by the during was our result revenue gross reduction million warranty of offset XX% profit For manage inventory revenue or volume, decline products year price margin a in a the manufacturing year, Decline last this in largely $XX.X increase to and in expenses increase balances, period. the million the XX% for production costs in of our the XX% gross enacted selling profit versus and shipment of gross XX% small material and average part $XX.X in decrease or was in

to Looking we three by to our operations fall. gross personnel quarterly This in East the XXs in year, of Providence reestablish in for full-time productivity forward expect XXXX the costs, XXXX, low planned guidance. of quarterly low to Providence run to manufacturing high-teens on by margins margin This investment end XXXX in margins double-digits includes gross revenue like our improve and manufacturing but the to the depending from full remain plant, EPXX the gross included margin the to expectation facility support gross expectation XXXX. and line XX% expand our of initiative the is East to capacity and

last year discuss flat for Next, were operating Fourth $X.X expenses. at quarter million. will expenses I operating

expenses $XX.X grew or $X.X operating million last year, to the versus For million. year by X%

costs infrastructure in projected markets part our support XXXX. guidance our increase operating increase includes slightly X% research investment than million million. in for offset in forward, growth planned new by drive our decline approximately Looking XXXX to by enforcement sales, will business patent to breakout opportunities expense and $X.X and operating a expenses This develop our personnel projected more expense reflects $XX expectation energy in that of and in

to is outlook had an facility now expected expected million is current in $XX.X credit use end loss operations between loss will revolving we EBITDA negative $X.X during a is particular, sheet to to was we reflected our discuss to access recently higher of range weighted balance higher XXXX. million facility, of $X receivable quarter. our of of expected of $XX.X projected. and EPS used guidance $X.X $XX.X to loss in I and end. $XX $XXX our of for million compensation cash for $X.X $X.X million will of outlook $XX.X than the of year. loss during for outstanding flow had EBITDA adjusted a also million year million, $X.XX million ended of shareholders’ million $X due line of $XX.X year XXXX. assumes and used of importantly, cash This million, cash balance is And at share. temporarily of loss a interest for per million million project million our cash, with assumes range and million full of between EPS range $XXX at of $X.X This revolving working year. credit million. our XXXX. the the Cash additional in between range capital working depreciation accounts for XXXX is equity year I and million. amortization a assets million. $X.XX, to fourth expected average totaled guidance We million. stock-based capital under In financial and million $X.X Next, with XX.X summarize down million $XXX Adjusted a $X.X Total in XXXX shares and on related million and revenue the our revenue Net expected net than from for strong $XX.X of expenditures expense our between Capital year and $XXX,XXX.

margin and outlook $X selling $X.XX between minus for In than addition, And includes of with for gross the million this per $X.X in and expect of foot the year, expenses or patent enforcement plus the price high-teens financial full million year. $X.XX. the costs square we our actions associated average

controlling focus sheet financial flexibility. strong maintain to capital During on balance a our XXXX, will and we expenditures continue

the the $X to of capital XX% by expand budget XXXX maintenance-related capacity of the capital million million end of is our East by Our EPXX of comprised $X million initiative projects for of facility XXXX. Providence and $X

$XX at and of we adjusted exit the cash aggregate XXXX EBITDA of full context million XXXX between to on hand. the with range $X expect year in million an our cash to level, net Turning outlook, within

million mentioned, XXXX and guidance. to Don development have improvement advance in agreement supply secure support our to process our plans, $X end cash XXXX our initiatives efforts. BASF new we in amended our expansion with business As million in our This is included year capacity $X payments help payments in advance

expect XXXX our XXXX a important While during guidance routine quarterly significant specific in basis, our revenue investors it’s and expectations view with quarterly to we growth profile quarterly a a quarterly don’t and year. performance, to financial we sequential profitability on provide to quarter of provide think time-to-time our down performance mirror general the step the in with we thereafter. general, from the in first our In

the financial Chantel strong during X, and striving enter year-over-year back in and I the also financial Chantel? are now for Q&A. to XXXX XXXX improvement We during of year-to-date each periods operating X XX-month performance to call turn momentum. deliver X, to will and with

Operator

[Operator question Stine with Instructions] comes from Your first Craig-Hallum. Eric

line open. Your is

Eric Stine

and Don John. Hi,

Don Young

Hi Eric.

Eric Stine

just the I I was but that got the the should room also of kind that just a steps in bridge horizon taking partnerships think but hit to help capacity wondering you know are flat of that? large how just some lot views you project or about have on XXXX of revenues and could on some processes, thought starting is we it now, activity expected revenues, we bring you these guiding facts XXXX, flat of to that’s us by

Don Young

you really to particular the opposed it. kind are doing of process we force the expansion as that in good to method, difficult work of assets I new maybe our one, very are plant ways technology When of we improving think adding are operating while this do the full of out. it’s there are an existing doing kind two assets to facility where

is to do that work. time And the so this

just do revenues we that million perfect to this. it level, million got the one. $XXX level wouldn’t And we to to we have confident you time $XXX do do we the it grow course, of could wouldn’t our and weren’t if that So,

And in as backdrop so that’s well. the

our few times grow base in and revenue we to it. is and of our projects that it this that here year-out So, continue some on evening said to goal to top put XX% in range then presentation XX% and year-in

and area, from LNG worked projects projects the in three larger is maintenance to to Eric, successful delivery the with most As example, we projects XXXX recent the those project doing you LNG scope large to work for small believe and additional example XXXX know, will work we successfully that scope work that, of timeframe. that of lead best have progression pretty XXXX and that in in

to and a BASF help So purpose believe are the that the no really to us. time financially doing bit that this it’s it and just is here shoulder there question with we right important load also do having we is

Eric Stine

a to that mean good where we second with question, eventually off about And Right. like should plan is that’s that the it capacity? is want just your doesn’t to segue whether care seem this this that $XX a that mean bit it’s pushes that to million to relationship they quite in health the just BASF good shape, think their BASF in invested my this of very case I is it I that have – to or mean goes necessarily I would plant, or plant seems

Don Young

Yes. the They access would to access capacity. like guaranteed the to

early to ‘XX, about ‘XX. with were them XXs, there to you ‘XX in ‘XX where happen having they the And we and were significantly concerned early back capacity go constrained timeframe again. that If XXXX, were points time

so new sort us well And it go part our capacity. here us of with for and base this capacity opposite provides nice create of helping a in And up their as we load expansion. that’s motivation as activity

those So is drivers. is relationship the – very are strong. very The

that, us working improvements are talked next Providence with products a that operating part they our with of well. have and closely the generation the making us as these we here some to bit facility We East in financial on the have about to but of in course JDA helped

So we help. appreciate it’s and a their really strong relationship

Eric Stine

for that you today the because and positive as sub-sea, different there about forward, looking is your I going they you those view XXXX mean commentary case your reason, it of late Right, of late call more to and work, cycle on that had it’s a more is in and I so and/or okay. Maybe be Technip are backlog, awards for I XXXX that just continuing that are on pretty activity their mean you Technip stands for and is and had were what a don’t last views? would if isn’t yesterday me, – what necessarily get said backlog more sub-sea that ‘XX know XXXX the one but report

Don Young

Yes.

dating to the largest Technip back been ‘XX. in So customer our and has XXXX sub-sea

read that listened ours So And project. Sub-sea and work. was their partner through is period. to for really in been a of their report. they encouraged great have I us I difficult hear to

sub-sea. a in more world bird-dogging the the are than We could around and today – those dozen projects could break And those any break time.

am hard X just wrong. if were years it. at numbers look X just, and XX So correctly, If I the mean million last and remember predicting sub-sea me correct John million if it’s I XX is you part million. the – the I

banging So place. all they the around just are

particular So of hat any want to number. kind on your it’s really to difficult hang

on, range. they just and average in of if And we hope – in out And the just we XXXX. try find do it middle an a of go offices. take that so X, market your kind are we average number is here to X, in kind of view that number. We years, are we the kind what of mean X you And longer right is I term sort projecting is look spot that X of forward Technip really of

We they do one the different on feel and Yes, a ‘XX have into it So so of XXXX. cycle, of lot lot. XXXX know reasons would us we maybe that’s for and late good impact a little them. come about a biggest late

Eric Stine

lot. Okay. Thanks a

Don Young

Thanks.

Operator

from Canaccord. Your Moore next question comes the of line with Chip

line Your open. is

Chip Moore

XXX of a what sort sort up guys. with capacity little to dive you and that year about more into on where to million Hi, take? finish you next think that get bit EPXX, million Maybe congratulations investments the and X of could thanks additional that on that ramp when then will the we nice does

John Fairbanks

Yes.

$XX earmarked million XX%. to Chip So between overall and achieve project $XX the the million have we

We bang with on that the initially that the we will obviously buck get for focus best projects money.

So during we some is gaining you than that go million original our what and in fairly of $XX terms long-term a advances million the we principally know we expectations, capital as making million year capacity seeing capacity to of apprise the are we And you that improvement. let $XX will will during message year will – the but significant initial spending. setting rather and that progress in what we go are way $X long towards

and to the be XXXX of in So, million, increase $X million so initial out of minimum it our XXXX. we spending $XX potentially in would would expect a

We will project. ultimately complete that

Chip Moore

perfect. some just pretty areas, a on you maybe seems the a growth That’s us a markets? across about nice different we flexible you Thanks, give like but And the it talk That’s just could of bit those if of seem helpful. markets, little like all it little color approach broad-based and guys. some if sounds can maybe more more individual

Don Young

the comments. continuing mean growth across the you, we travel they business Chip. or share these large about early Thank in the good sales our native and a in proven products. front really just a increasing can couple that in getting and Well, and win half when than fact front the well United of in And more size I of exotic in after that amount in think nice if of get – make timely are can of size very work. growth am in say of We force. both I in XXXX, and numbers market get convinced good of longer I specifications a of second the will I well products I a significant XXXX in let timely U.S. talked good way, our Europe, momentum accepted, projects novel some of on just that I are are am fair of our now they had no if me I numbers can we way, in business States

And good feeling have owners LNG that’s doing about to those adoption look the so delivering high bit the have that. been projects for be we I the what projects am we and very same asset stage market. us end and very owners of Again, board. talked said on forward, companies about next or successful were level drawing about gave would maturation to the three and them. the we I cycle in a good of that companies some and past through the marks product very So, users, our engineering about and product good, the engineering feel you valuable asset for do right as

And in so a much XXXX. to the that did for so we compete we in size terrific are not position

million, were size, projects the You $XX $XX $X million million, it even $XX kinds range. $X but remember for $X million can million in of and be million those in measured

focus our so want LNG, the addition and Also, to doing in just markets some of the successful, district critical work. be to incremental is business position grow growth to job those really So, energy good from we that. have terrific we as for I continued and have product our done a HPS us revenue to launch on project segments adjacent ourselves getting base

Chip Moore

It’s good Well, thanks. see. That’s great. to

Don Young

Thank you, Chip.

Operator

Your Instructions] next Needham. comes question [Operator Sean from Hannan with

open. is line Your

Sean Hannan

you about, to were we that were paired think beneath million back to $XX hi, want not I back, for $XX basis got $XXX to I I million looking then if and looking where year then sure understand an and were earlier fully to I am we decision Yes, I because million got question of have making do last a business When we just investment today. the step do too still here. folks. initially to that Thanks taking the core come that. and question, back

that. as looking aspiration $XXX to are expressed guys an but hit million, We some around you conservatism

business, or The of other lot your project looking of about was there. variability is at a looking the aspects orientation

kind have we Thanks. want we expand understand justifying a our versus if it project there core better can to maybe fairly side. accommodate so be are And help around LNG that capacity this, Any XXXX, once would to think will seems is good we the in great? business that we because that to that projects base few I are flex help like to I that but finite. me building a some be things, almost you really are of to misinterpreting going

Don Young

Yes.

the that couple on continues XXXX make up pushing in you the over management East projects XX% start XX% to these time year-out And level year-in of and target that XXX% is XXXX, and course that this of I really we but that you a full put our XXX move only if I bit can capacity, second in that, not for to of as as of facility. put top investments a you we grow against would year that of are forward. range revenue and a to are as we our earlier, And resources number. where into XXXX, hard going we to Providence when So, that out said number. to that base your achieving And flexibility lead anticipate up million number are running $XXX you have at is little in

that And to why in we we just going about I so we talked are the are and have making those making are now. investments that’s way we grow conviction that strong that, a

John Fairbanks

Sean, $X make but of in yields point this advancements one improvements other the our increase our our and drops improve And in that will million plant output, we year be some with those it expenditures to costs. capital that also will yield

‘XX. will accrue there so later And the line that a and will XXXX, be benefit to into XXXX bottom in

help So become more will us it profitable.

EPXX capital. the is piece other The are it of principally themselves projects

potential expenditures. profitability So, incremental of that with in increase, associated the associated us to that increase so This million require not profitability expense will why it’s profitable $XX XXX to the with is us. XXX levels that’s capital and increase our business from to operating the

of CapEx, accomplish think won’t plant, is million for it’s $X to So, able those be to projects is when we I limited those start that investment the making fill time we projects. we the this that are in right XXXX the to

immediate yield benefit of profitability we an will cash benefit fill plant. will then get we and We when from improvement improved and get flow the the do

to make that was the investment. And from perspective, so time felt right we it the

Sean Hannan

that are we putting core year, explicitly And then understand. you confidence there growth I year where cautious are as around were be. guys that conservative for are $XXX because it where I million, different it to the business, back up what in perhaps place unless that again that. expectations is very targeting that like the Okay. we be asterisks that. you me sounded and last again versus to a going incorrectly factor to were follow in stating is heard you ended our you suppose I And I this comes and want

comments So Don moment bridge then growing to very I versus sounds so XX%, in those dots are just to confident you guys? types the it that the just trying XX% fact hear as a connect to of am like ago, trying I

Don Young

look I…. Yes,

Sean Hannan

to sorry mean across make understand don’t come want sure I wrong I am way. to correctly. this I And I the just

Don Young

that level Look, that is repeated. that the capacity with we as strongly the investments cautious, – business. to feels which our you gave, our a of Right. our agree Those of little force used and out the sync fact actions I I we guidance we and look confidence these about a with you word management team we revenue feels are their And that that fact I think the I think recognized is that by are expanding that word by growing depicted there that willing in are the our make XX%. are sales

I think think we little some late cycle and We impact ourselves real for and has hold little so now. this throughout will see bit. here. very here ramification that position hope we those to understand for we a spin well build U.S. between And a think What – ‘XX us lot we things going starts so there a and is the there we are positive on. ‘XX two year, will want do last feeling right tension take year Europe if to are of market that good just flywheel We in overachieved them We things.

going metric just our of that as again be will in in close to metric quarter on measured eye a in indicator. I very keeping is important both and I strong for And that a be year-to-date a really would revenue XXXX anticipate us. adjusted performance growth each and building EBITDA think

Sean Hannan

so very the All Don. much fair, for Thank question. addressing patiently you

Don Young

question Thank we the understand for. I had you.

Operator

at this questions back time. the There turn Mr. are Young. over no call to further Don now will I

Don Young

May. results appreciate first to and XXXX good to you. appreciate Aspen We I in we in on evening. reporting interest Chantel. you, Aerogels you early Have forward a look Thank quarter Thank your it.

John Fairbanks

Thank you.

Operator

This conference concludes call. today’s

now may disconnect. You

Aspen Aerogels (ASPN) 22 Feb 182017 Q4 Earnings call transcript