TGEN - Earnings call transcript Q4 2018

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Operator

Greetings, and welcome to the Tecogen Year-End 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Bonnie Brown, CAO, Treasurer and Secretary. may you Bonnie, you, begin. Thank

Bonnie Brown

Good Thank for thank all and our you, year-end Jessie. joining XXXX you morning earnings call.

website. On Benjamin Locke, the our me recorded and today and is achieved this with Operating Panora, on of is be note, Chief our regarding our President our the Robert release of days also section section press in and for Investor being Investor Please call following the will XXXX our earnings the call XX website call. available CEO; Officer. are the A copy year-end of

we our Act the may XX-Q SEC quarterly elect available make the Various at important section today. on Before the begin, expectations, our forward-looking Investor subsequent in Securities annual to Form the SEC statements are under statements with most harbor indicated let may Company's and the XX-K which as the a the date caption our Risk in do forward-looking purposes and of cover representing from me plans not those may under under statements any website of filings. some on safe results specifically in safe file these we various We reports heading in obligation We report for to prospects forward-looking Factors, any the result update Form as to so. the of should provisions XXXX. discussed disclaim any future. constitute rely Therefore, materially you views of briefly Company's statements Private Actual remarks future by those and differ forward-looking statement. as about recent of on including Litigation harbor factors Reform

website. these with the available release refer GAAP not call the financial our certain is GAAP for comparable I'll measures GAAP. section call, Generally measures in to of financial Reconciliation Investor this accordance press and our measures During update. the in over Accounting Ben business now directly to Principles turn Accepted most or in of we prepared will earnings a

Benjamin Locke

Bonnie. you, Thank

the accomplishments. Company's along X by results at XXXX performance a review full on and detail, Slide year brief of will by quarter have remarks I'll the overview, followed then Bob, indicates. agenda fourth achievements then with discuss with overview development in will final start an So, and financial a the questions. for top the I recent will our level Company we financials give Bonnie emissions before and followed take more who of efforts. some technology

new our like X. As and business to always, off model and cleaner core start I'd shown Tecogen's company is reminding on about to cooling reliable. maybe who Slide more those by power cheaper, that Heat,

traditional for emissions efficiency, and powering technology grid of disruptive heating, truly and resiliency methods proprietary improving to infrastructure. is Our and buildings the cooling

XXXX. saw XXX,XXX quarter XX.X% of X. decrease the fourth over fourth revenues XXXX in Despite versus came our quarter Slide over at in EBITDA XXXX third the quarter revenues to of quarter of increase the X.X drop for quarter quarter-over-quarter, XXXX. adjusted fourth a for million, The the Turning of XXX,XXX and the X.X% of

quarter and we for sales, in later this improved talk ADG will I discussion. Also versus with the service which Bonnie XX% an margin fourth quarter about million. the was the of systems XXXX. the more in to chiller the in This revenue recognized gross in the Our quarter to will Also X.X a due goodwill contracts in more in corresponding was maintenance more increase in maintenance quarter, our bring we as her online. address impairment call accounting of the in assets XX% the treatment. notable acquisition growth

for in XXXX XX% are tremendous the in chiller, XX.X than saw X came sales versus sales in XXXX. traction in Gross chiller and of the Overall, a further our XXXX. adjusted past previous versus over we XXX,XXX will chart mentioned few the more Again, million X.X for past years, margins over and XXXX I year, year. For for call. the record at seeing in was revenues by EBITDA plans an sales later tripling calls, X.X years. to our in in increased talk I've a indicates, way XX% evidenced million, chiller as of process And XXXX as Tecochill record XXXX in we've X% the as and million it the chiller increase reasons the long in come more doubling systems

you to looking the quarter, was can more e+. the see InVerde of fourth closely on upgraded the in at mix, Slide product from and the a revenue drop quarter XXXX, introduction quarter breakout Moving the fourth a of X to compared sales which

As chiller equipment. discuss to deliberately later, to shifting I'll market some sales we needs products resources had changing the adjust for our our

and as a before repeat and grid said a just gas again, greenhouse benefits I unit. cogeneration As accomplish size savings as chiller can much

fine And I our $XXX,XXX standpoint, energy customers are meet more a selling of XX%. fourth calls product adjusted as quarter of when it. from we the for our benefited cogeneration margins to needs situation So mix from the mentioned, saving over chillers of EBITDA

margin, R&D gross expenses Turning overall decrease XXXX to revenues. higher and the fees expenses and full and profits Slide you had in X as legal were ATG despite can for see in year. year-over-year legal will significantly expenses X% year our slight non-recurrent. of acquisition We investment with increase. And record large our XXXX looking believe expenses, increase related to than we increases decrease detail, accounting more part overall are at in the a sales for

Ultera continue consistently that our for In strong a year of in gross later will all, XXXX was technology. with results Company profit in revenues, careful good activity the to record describe the gross and progress Bob R&D will call. also the increase emissions investment margins. We in

Slide $XX March million currently XX. almost of X, has as backlog grown Moving to substantially, our at yesterday

contain does As our I recurring and service of said previously, product not revenues our revenues. and backlog consists installation

remaining it I that which to and longer installations associated and margin product. with is backlog the backlog with Given investors for $XX.X will Products tend at growing. products that a significant of backlog the the services the since out indoor to lower stands take the backlog, a portion is size portion million and associated helpful it complete. Also and equipment of of be installation thought our in associated $XX.X services pie to see break consisted services. We in helpful related it now portion installation million accessories believe to to chart, of notice the

vegetables to indoor growing our cannabis in for facilities as crops We promote states. are continuing such aggressively fruit, or some chillers with

the ideally the electric dehumidification of from to and are chillers for low because growth Tecochill states. and/or heating compared utilizing to cost chillers suited Our these the operating waste chillers heat the of chillers of facilities our

be involving design our I is size I'm increase market financing company the building does centers large additional to significant $X.X pleased the center for I and TecoFrost order install building not and the product by ESCO This also forecast this under in rollout that history of data several not building. preliminary all, any hope million, are with sales our expect sales Our backlog our the basis like for until expect that the in facilities. segment. help out service more The a the systems would we company project contract the that not also have year, TecoFrost In This demonstrate of as project differentiating growers a Tecogen have owner also terms last our the system orders charge with to I the the are but for are products of the agreement have note will this with significance. an versus is data for backlog year. long-term more that coming life an owned of agreement. space backlog is in generation planning but understand investors expandable the in month, into this re-launching we have because located for just sale it better a systems. notable office will who Manhattan in I in months. will largest comfortable our also become segment point equipment currently timing. very by office anchored

the want they forward. XXXX how Slide XX, achievements and to Moving key for our going I to plans in relate reemphasize Company

the we're we as us chiller savings. to allows same providing any in have with with tremendous a but Tecogen focus only The renewed a large our an reduce a the outline chiller First, manufacturer, savings cost. on Tecochill take chiller and We're have without capital our as way electric is release mega about product. often approach residential costs. a to required in this which competitors By adjusted lower to same of seeking example, with driven press cogeneration sometime most STX a sales energy of for energy much system. strategy four with a accomplishes order chillers cost, centralized chillers cogeneration but natural energy cogeneration, equivalent-sized mentioned, the lot projects different capital energy cases gas week engine the certain described our placing facility higher half would than

alternate the coming terms same manufacturers specified project existing chillers I chiller simple eliminate large as have and and representatives an therefore Tecochill is Using and powerful typically new Adding XX news proposal the of ammonia the solution to more was in hope line cogeneration to competition the looking afterwards quarters. costs and more needed savings. in our closing. entirely chiller about with the unit. an our a industrial for Chillers the will also reduce are projects cogeneration the effective in Our replace TecoFrost transactional market their for engineers products, sales capital a in advantage Tecopower KW further refrigeration, TecoFrost only much for initially way cost energy

sites productivity acquired to we're point various an for a to decided of development ADG we The and from sell LLD, includes Ultimately, O&M the received XXXX a million. continue servicing reliability of to Next, sites. assets. assets net the sell to significant the $X corporation the where interest for sale sustainable some to or the all these ESCOs in increased STCL we Tecogen portion agreement of from

revenues in still ADG operated will not loss Tecogen. receive energy some currently any have we to service to the despite We So sites plan remaining by STCL. do revenue, and from sell continue owned

America plan us with to program a Bob degree the growth few allows or lastly and flows, the of setting for minutes, excellent Next about financial without execute have think, XXXX our and I in going emissions forward a core we up that capital. Company job the with good financial our stability the for solid. quite our outlook markets without additional success notably we imperative ADG Mitsubishi technology cash on in progress Ultera all, did Fork MCFA. most with talk our will in positive In emissions is in asset partnership And of have made our we Ultera Truck through our caterpillar, achieved sale, as

Moving core X, want a to more give I on color little to Slide markets. our business

the growing an monitoring in due As and production design to facilities we indoor as growing product release to York, different closely growing recreational and basis said, substantial the X states is XX produce permitting The growing anticipate are to XXXX, in for indoor facility of another other with sold in new legalization. Tecochill becoming sold new our facilities indoor Jersey Florida. these we increasingly New earnings facilities chillers X we New use cannabis

tremendous for We the of excitement received products. the have also reintroduction TecoFrost

line ultimately at seen other gas logo earlier as of product X would If you have units. spikes as product Slide the beginning the lack call, logos. well good you particularly our controls a XXXXs years the because on attentive for of were emission a in price TecoFrost on discontinued with TecoFrost tried-and-true being was along many that of

and regenerated at compelling availability of Ultera TecoFrost of implementation like states reintroduced in in recognizes core suffice ammonia a for month who product. IIAR, leading will given the the refrigeration with now more our the our both our the not products that opportunity have revenue filled a this Bob could Customers emissions interest represent new Tecogen California, existing say, to potential and the business. with to we partner, economics importance gas equipment in potential earlier and talk our with TecoFrost. but growth significant of market manufacturing promise pricing We filter about on sales customers this also be so emissions natural with significant

the slide. see the of unit the at can booth at on TecoFrost You picture IIAR our

energy development or ownership relationships projects, for Next, we ESCOs provide service developed several third-party of to companies asset. funding and the subsequent with have

to agreements finance financial the projects capital we mentioned, in As ESCOs STCL data call project mentioned relationship a customers these a center the allowed have saving now for savings turnkey projects. or very with provide energy and long-term sophistication ESCO to different compelling necessary of under is large ESAs them partner. earlier offer for the The and

to the participate demand will help needs network. with opportunities in that or system of grid as California. additional when have inverter thereby our distributor critical revenue on SA pipeline correction allow to generation economic key was in quarter, creating XXXX additional amount a of the We mentioned in operation announce meet enabled I we project developed smart a coming micro hope as obtained these large power utility quarters. certification for such lastly, program in systems certification is the reactive frequency the of This utility system. to benefits Having ESCOs last And smart cogeneration the few generating control, certification required as additional inverter InVerde UL response has the and of additional

storage feature, by economics. The the this state occur operated mid-XXXX adopt requirements new other CERTS Our final of and will for micro certification additional to battery stages electronics, as virtue cogeneration of InVerde be revenue allowing integrate this certification. we to can will controlled also the important and expected foundational Tecogen's in grid similar

like detail. call on financials. our describe Bonnie, over will I'd the more our Followed turn in details Now, by missions who cover will more Bob to to

Bonnie Brown

year-over-year. QX as for sites with margin the QX activities annual from a of following loss the gross XXXX source QX revenue of for revenues assets impairment sales a I a compared year-over-year, quarter end the and the XX% our in XX% the some This in was the quarter quarter. let contains contracts explanation By showing XXXX, XX%. year-end. year-on-year gross the consistent Ben. loss, $X,XXX,XXX. Total important XX% for to at contract. service me recorded which Long-term was was remain accounted to way our like and of XX% million resulted quarter would Energy goodwill The its revenue XXXX. QX of year goodwill XXXX. an the XXXX, for making quarter XX this XXXX. profit in Service ADG by to the service our decreased both were $X.X XX% increase X% start comprised this to and saying for of part Total margins start and QX test, a for sales for XX% acquired from continue the and was strong the when year-over-year products that to results Product for results. revenue to of XX% impairment goodwill by XXXX. product we've margin installations quarter factors. source highlights continue to $X.X of goodwill merger second move XX% case, A fourth what discussion then million stock-to-stock long-term earnings the on with declined QX provided In XX% the of did compared with in we fourth fair to improvement. become our merger A and the of you, primarily X% Overall, basis decrease service our unit. gross $X.X annuity-like XXXX an consolidated impairment Thank margin for assets on production for than its financial XXXX acquisition. gross value consolidated Slide half originally performance than with two paid due to impairment of and quarter gross annuity-like million gross more by quarter profit reporting revenue fourth them. ADG for fourth compared by production compared contributed XXXX, however, provide cash flows to less stream. Total quarter the energy deliver for happens XXXX; of Company results In our those

negotiated That On goodwill. than date resulted the our anticipated purchase will which what closing, prices the $X the up merger price terms paid price basis million the for be ultimately stock merger to X.XX. more in being stock of our was of time to approximately in for in the which XXX was assets spiked ends range. is at XXX we share First, per

with generally the flows XX primarily value long-term acquire were terms energy contracts. those from factor ADG. we discounting our exploration has reporting cash the our to from do contracts XX running determinations of to contract We second the based for the years. the of fair Those unit The -- production on

flows become the with As the however, those cash earnings; we flows new those not business terms remaining less fair time merger to of merger and recognized contracts ADG, unit added as have recognized so should of value Tecogen the under $X,XXX,XXX. to the we loss the the the offset and goodwill reporting and units reporting reduced of the attributable the passes, the cash end has production flows accordingly remaining loss $X.X date shortened, noted less .Since to of $X,XXX,XXX does the since that the from energy was profit improves be XXXX, which of through contracts. million. quarter It from unit cash reporting date of existing impairment for gross the Net Tecogen the

Excluding impairment income quarter Tecogen of provided net a of QX net of 'XX XXX,XXX. loss, income this XXX,XXX, to XX,XXX. attributable provided the decrease

earlier, we QX development and costs discussed to compared XXX,XXX in period for invest As amounted for activities. research continue These the to same 'XX 'XX. XXX,XXX to

activities. year-over-year by various Additionally, increased selling invest we expenses sales XX,XXX as in

contributed X% year half year. to a these acquired Overall, continue energy XX% our consolidated for year activities XXXX in the XX% from to production a million. and service consolidated and revenue year revenue profit XXX,XXX costs in loss service 'XX, presents to by XXX,XXX XX% to revenue the to Florida XX.X was profits production the compared to for for XX year year-over-year. to and XXXX compared grew gross was decrease revenue decline. In impairment dollars X% period full net in XX.X margin gross expenses in Tecogen the as to margin profit XX activities merger Service XX.X as XX% the year-end operation a Energy decrease Service 'XX the compared addition, 'XX. year increase stream. by X.X of the for XXXX opening ADG XXXX, the million in for as increased of XX.X year's for of XXXX of associated May X% attributable year revenue of to margin remain million and X.X continue revenue the substantially the and margin million year. in for was for year growth the margins XX% annuity-like by gross increase and and our a gross X.X a the compared ended and Chiller for to million for the grew and contracts the million XX% XX% XXXX. loss expense with sales years goodwill compared ended represented expenses well for gross than part for 'XX. was in the XXXX the year gross over metrics Total XX% 'XX. for the of financial compared provide Net for in ended 'XX. which while in was for for as Product showing of Slide and income million XXXX represented the sites XX.X includes the to X% X% sales year. connection included XXXX installation X% ADG ADG was million, year our million Total and as more consistent deliver same with X.X of X% product service to 'XX at G&A full and operating service product both gross for decreased non-recurring center, our first of Long-term revenue compared 'XX. by million total providing of to revenue contributed both gross

in this loss XX,XXX, compared a Year-end of a XXXX loss, decrease Excluding year impairment the net net of X.X million. million. provided resulted a to income X.X

in to 'XX, in to million amounted development approximately X.X These invest As $XXX,XXX. compared the research to X XXXX and for future. we period our million of discussed continue same earlier, an activities for costs sales, increase in

has as costs, of charges our addition, year decrease full with G&A well of included all non-recurring In opening year increase in XX referenced XX, quarter the reconciliation compared the and overhead the in XXXX XXXX net contributing non-GAAP presents in as adjusted our the income connection Slide center and as for and of been release. the 'XX. for presentation in the fourth December Florida year expense ADG ADG G&A 'XX, expenses EBITDA to throughout ended the the merger, ended a the which and service

adjustments adding quarter different, for income quarter XXXX the back X.X fourth of to adjusted After expenses, come interest negative million, and attributable a XXXX unrealized With 'XX. the merger compensation, measures for after million, of may the the securities EBITDA, full up an and goodwill loss the and the for negative as goodwill likewise metric. to or back impairment all compared Of Tecogen with which important was for related loss amortization year the to of we management stock-based standard full XXX,XXX accounting the reached non-GAAP XXX,XXX fourth uses EBITDA non-recurring depreciation adding course, of EBITDA taxes year 'XX. to compared investment to and was of creating positive substantially for non-cash X.X on this the net adjustment impairment mark-to-market plus

EBITDA $XXX,XXX ended was for XXXX, adjusted full December, year the million compared XXXX. X.X year to the XX, For of

adjusted For same XXXX, for of to in quarter the was XXX,XXX compared EBITDA quarter the XXXX. fourth XXX,XXX,

Now, updates. Bob technology I'll over the turn to for call

Robert Panora

an Good technology, our to thank engine applications relating would Bonnie. My provide morning commercial emissions to Ultera. you, past the update and to is be today in work discussion for

which out a center spoke Before plants is bottling dairies. TecoFrost well years is as processing that applications. cooling experience doing in earlier. making about in had industrial speak the that products time, we Ben reason At and especially our having ice sold so, I units about and the major In agricultural at as The that we want wineries, strong ago abundant food surprising. XX California, interest plus not to era,

products major solution restrictive no in while to emissions increasing, while gas was picture robust our were a to industrial which of natural steadily problems though, that prices emerged. unfamiliar still pump even time years, importantly we've concern strong Today, materialize to Since more call Ultera the Perhaps regulations such many gas market. prices good course most base in so tight. available to two supply extent market But customer all-in-all forth. that in in natural the us that stable in success we has are like with which our -- is especially did the a technology in and cooling had very engine good customers. a done to strong January an application California However, became a confidence for rates inexpensive so customers return to this

Now being believe going off human is are to we initiatives we to concern the way background, to market be relative ones initial keenly By I'll for one electric interest in and the ongoing important, most the of with our which operation relate issue particularly emission, that several trucks. start that received the technology back from our course to power which propane is indoor the is where the that importance industry health funding whose emission, numbers but share is common. fourth prime Central we in directly are our maintaining to have project.

this caterpillar after working with go different MCFA, our They phase the a South manufacturer As American is forward well system in a concluded. working they to collaboration FERC impressed as Massachusetts. feel with the Mitsubishi, in Ultera but good elected laboratory in applications. are program the Ben primary favorably engineering test were North witness with with mentioned, the not be particularly know funded to so many vast We has which They in company in and much are we the the following potential with with markets.

evaluation batch to in is part of to the levels the engineers important in The performance for the we facility to in products maximize previous in Mitsubishi used achieving the Subsequently, and good of received truck the improve. software version receive tuning the this had Once software to where been and Tecogen, of initial to our was routinely engine truck, calls, MCFA Ultera sourced. the we project frequently tuning be last So, one make finalized will MCFA the our process. the goal. custom Zero provide would we very to tested process utilize software test close has engine agreed, doesn't the would Tecogen would discussed I've of as engine fork for we we which we plan at test Texas. from our improvement, call, Japan Near the certification in standard that control Since reveal be the cycles. effectiveness

the reviewed in well. rarely the from and second we annual our folks no although Mitsubishi are In with them examination on to we guidance needed and slide constructed we in revaluation, have our There to the take California Next without results gas in However, group in operational tuning the XXX MCFA. required for and improved that use They of Japan points could Southern in cycle. recommendations operating showed that Ultera have received several engine supplied data for at customer going the a detailed Mitsubishi report other various kits given be beyond where are hour engine an We had yet emergency for agreed general reviewing regions for the the we exemption iteration map Ultera truly. improvements generators. generated of the activities natural Very the highlighting recently, permitting as initiated their as are we XXXX, to please. today

of like recovery natural the such, XXX-hour of commercial credit. without permit gas by to sort the and As limit exemptions, within that some also achieved engines which been limits never needed spoke operate had had I we CHP units,

engines. exemptions we have final have California, believe and levels, past these report the requirements Water an pleased Ultera time kits for of generators natural producing to variable approval and On water horsepower source a applied been milestone. new by installation, those Ultera utilize District the meet has after will of units several old The Ultera these first the Ultera CAD missions for of Southern it's These important their treatment the permitted engine. largest not only retrofit matter, to none I'm project. Southern for all pumping chip got notified will are be test. an engines so a applications these gas to California. involved plant So, the The are another been granted XXX test I the an source

for first that's So us.

begin with institute of applications is funding by are over shortly. work to doing in phase The Ben, in their turn have test this that, final will vehicle for research doing our to I'll tireless the progressing. With Tecogen. was They light Lastly, first formulations begin work Ultera and ready samples This to that custom relating test the to and custom fabricated is of his develop been which course that. words. a will call

Benjamin Locke

Bob, for like that XXXX. update. to expect in you, what investors talk about Thank I'd should now

at systems. So are the like I'd value of clean, key of XX, what reliable, reiterate propositions Tecogen's distributed some generation to slide looking first,

cheaper, earlier abundant and As clean to use reduce energy I natural mentioned more at beginning, the heating, our and is cleaner gas cooling that systems and reliable.

other are systems assets functionality certifications, such in of of and as cogeneration Our generation interconnect grid in structure incorporation U.S. designed distributed terms with mind the micro storage. utility

economics great Tecogen some seeing technology. are economic is areas, providing this but becoming of of these ultimately the As in functionality services will California, we benefit the support mandatory benefits in using

no competitors has Tecogen market. engine the chiller gas in Next,

is result Zero forklift of reaching sharing to look to With operator power retrofitted, project. investor questions. Near generator our the existing other will that, year. a last the terms We markets focusing to shown ammonia update, sizes, and engines, our and most into engines engines the as engine message Mitsubishi filter. Motors Ford market refrigeration but and such selling new larger think for and on missions consequential many newer investor generac I to audience it of in our with and technology forward and call The in the And growing each these our Tecochill later retrofits emissions update is engine this same, caterpillar engines, whether We the May. we are platforms scalability efforts QX have effectiveness for the in General on more from of TecoFrost like on I'd Ultera to indoor over begin the on and on turn of engines, recently

Operator

Ladies session. question proceed line instructions] your conducting at you. from first Please Thank James you, with Thank time a gentlemen, Maxim question-and-answer [Operator with this is of will and Jang question. our the we Group. be

James Jang

on to for are Ultera competitors want approach what's So, couple they're to trucks. but I going a in seems sector, just there about, there of a novel using out for batteries like ask the very these

if be the is can So, there get kind commercialize? That the type EVs? your on to some you competition And internal of thoughts elaborate deadline great. will with of on this

Benjamin Locke

to certainly option. and his maybe start on Bob matter. It's heard are a fleet. But thoughts batteries new for hand and lot definition answering that I'll good certainly, the question. a an But involves up We've that I'll by a

during is using is of practicality alternative important. propane heavy got interrupted you're to you've which -- an fork here you the rid sure and of switch add cost. and cycle And And well, we're terms you density fleet lifting batteries, very propane one. If going to load of get get that's trucks is for retrofit. you've what in a that and very of have not of then a and fleet the to number a approach, thankful And your going power is power simpler forklift, got making of number the an two, a course, density you're have obviously, that's existing important. that to those on And that bringing a the

buy don't You trucks. to them have fork

propane. can have still You retrofit benefits it make a all and the of

with folks propane have many I they that's interacting reaction, but drivers my has a So their immediate think closely because have own. been Bob more

Robert Panora

propane of the propane. to is industry want they Yes, sell course

interested from realized and customers prefer very them. they're in the better fork perspective, propane first of they trucks all manufacturers' it. that the performed So But

operate, equal, propane very And have they are desirable to trucks But easy to operate. this being they're things sneaking the that's up. so problem all emissions been

So, often full and the so there a forth, to electrics not shortcomings. are They there's everybody. and don't last for shift a

little people products again, to they would -- meeting coexist. stay see a for with as I to that a long trucks their trucks, will years And a future will many electric way like being to there propane fork can. vehicle was I So primary as last propane there come. gas see think for or MCFA be fork it's And fork and I trucks

James Jang

[indiscernible]. try get of not any internally mean just under I quicker? pressure kind you to Can out you So to things did

Benjamin Locke

problems. as areas really solid you fork are they regulatory a fleets saying, just to that propane pushing all you port can don't industry I'm have emissions. have emissions say where deadlines, No, everything trucks is to with And that suffice kidding. beach long in the significant but in then Near can hard was Zero imagine I'm have James, any there very propane Bob these truck show an we this in certainly other fork imperative

without, to zero trucks. retrofit you new If bazillion can dollars compelling. pretty of near emissions battery for have That's that fleet requiring

James Jang

XXXX some or Or else we're Are And question that's forces? is was a slow is, catching improvement XXXX. are have seeing guys construction is my here? spending? leading you or just a little slowdown it down. double-digits vertical not this pullback final in to you been something so growing that slight in What

Benjamin Locke

did not slug I you James to kind of put James, timing had as a element and we Well, is of is good, little think when of tremendous of having because because particularly part great I we in for it's a and There designed backlog XXXX bit be which of the why to before, improved activity alluded is way, functionality plus like I that that certainly, out break so little slowdown very saw of installations that pronounced InVerde these takes a product. the a drag the the going project York it bit we that And reason our orders, a longer. another big New installations projects, there's e+ that on then our and mentioned things units. construction there of And I that to kind thing. is those slug much out, try it for course, introduced of

up those overlap, of slug sales then a sometimes product timings and of not. a the lingering install. end having sometimes things okay, you of bit And So,

is I the things can anything a into I competition, and are all I will or If and this I in so. think don't cogen flip will project a I being chiller alarming are you a that chiller project that seeing eliminate predictive. can absolutely flip project, if equal. seeing do uptake to So, acknowledge hotly-competitive sales we though that

in getting these term of are cogen the how chillers get seeing a there we a good So, some strengths. we bit smarter we project approach a to can of way little if our and and leverage James seem to more better in be system

James Jang

answered. question my final So, is

in to huge, a -- sizable chillers going term? be think you So, pretty driver be to going are near that's

Benjamin Locke

to buying sell positioning the that because it or into. selling piece projects be, turn more so and like of something like in. place It's It's I of art them you way I'm as with people time. be much are all chillers predictive, install They to great buy a all the Yes, it's just because not sometimes time. cogen a chiller

much a in. transactional which us of I will think to be it's So, more for type a good be place sale,

Operator

next question the Wainwright. HC of Amit question. Our proceed coming line is with with from your Dayal Please

Amit Dayal

that being fourth chillers, else on there that decline towards is drop, directed efforts be you any comment attributed sales, through sales caused, would year-over-year helpful? quarter, in The so anything that that

Benjamin Locke

products that I was pipeline the the incentives certainly I out, of trend not so that again, our will some it like were some sunset. if mean, up bottling cogen, point for start Yea, real in negative would there much,

backlog they on place without I'm that's growing you subsidy good the and you segment why seen if because product have know to can growing reason still you've subsist happy, Another But is chiller the can said, slug be. product that in of come installations next backlog a have I now projects and you've then we slugs the and our these as fulfilling of orders them think slug. were of and we this out seen in I waves and the

that is take and present chillers, if this conscious and sales more our think the to -- absolutely opportunity said, still I'm trying of over business with I advantage cogen. So, pretty top strong. But

Amit Dayal

backlog, And first you the million. backlog end $XX XXXX now what end quarter grown you seen? just between in XQ, quarter the press at the in and installation though then Can drop more sort $XX.X to and is the the And us grown? sort was walk Understood. release, pickup you million the has XQ at product that the the had around backlog jumped first of for in of which around of going of to know, you has or that XX.X happened backlog that

Benjamin Locke

was not and last add we of got or because ago months around of weeks order in application that center ago, centers I great the that example buildings, a of a had you said best are probably on you you because number the a reconnect that for the We power, then the backlog. year. an disconnect own order, $X.X residential the was large think get data is but that can the and a just which can of order, We of fast had things. grid, the of the they had went a big is X just a I data order million unit the all orders. such units. perfect for InVerde in XX backup But kind order couple you all do the buildings -- know micro a terms a building And maybe few was we that, to bunch large grid late a

I on ultimately, trying again, focus Because is And grow. to think backlog the growth much us. to a segment we're So, the be going continuing better for to chillers. just just, that's

Amit Dayal

Understood.

of forward in digit outlook first quarter in 'XX at fourth of you at Just XXXX. to sort double looking expect 'XX? expect versus revenues the growth sequential in for little double context, of a should Do backend terms that digit bit growths, the of some And in be we in quarter XXXX? again improvements

Benjamin Locke

Company great. but emission the is and mean, progress growing. keep the the is to Company and growing stuff that's of wonderful, the of day tremendous end I my Yes, the core keep to fundamentals my business We're goal making well, the is goal

is keep my to yes, so, goal growth rate And up. this

is. I refrigeration market, right for look hope reasons segment at TecoFrost the it ammonia product saying. about as in world that and industrial ubiquitous InVerde U.S. and If interconnects it when refrigeration I world, see market at kind talked focused here the ammonia that system and Bob up? I is a so but the keep in ammonia system When can was Now, growth. industrial, look of I it I refrigeration California, chillers, that throughout and the exist units the being the and as all U.S. But I those talked about over InVerde, compression. I the the all

other course, us you for ability where But with wouldn't a Filter some with locations has, the sales And it, outside of partner be and the can Europe us to virtue you by of InVerde practical. see expand Americas doing in the see have our some so, ultimately, of that of expansion we could TecoFrost. that networks our cogen

a time, lot again, in think a which could particularly and many answer chillers hope our our from So, I growth, I long-winded growth this can TecoFrost our product, come of of lot but long Amit, sold places. be

Amit Dayal

backlog So the this report in earnings? TecoFrost, it in a XQ time the can be show up by the XQ you to expect

Benjamin Locke

so sure that, quite about Not Amit.

the few And Coast home, first, backlog if Just it this a material on kind roll contributor to probably meaningful on a sites going as to it to see year. on then little out flavor going roll being of going start of don't how you these a to we're later We're opportunity East the I will. coast. first said the west give close thing Bob this lot out. out to keep

press release to later You contributor, the I might it about between in of thinking just this I'm perhaps the coming something months. hope in But see now of see terms the a and about year, a backlog be in then some will sales sale of you conservative rollout.

Amit Dayal

one side. making from in as up these backlog a part with we last testing Ultera it remain the related milestones. conservative you're Should showing of on year? of a Ultera just looks Again, this of anything terms And lot progress like

Benjamin Locke

We're fork XXXX to but then that really Mitsubishi fine, a our of this it's engine these point, truck I et of in share, that complete gets on And the that's It's Bob Mitsubishi can we're it's I want see sort but answer engine. ourselves being be and going which next my demonstrating the about, in four that but the and on to a it's in my project? engine bit. backlog? the of retrofit, to is this the going When sizes. in? backlog? that that caterpillar from the of very what's Once that all MW a demonstration start okay, little fleet be retro in of contract How be the and cetera, to our that in when is and What's a the amounts at go maybe to order that'll I I'll that that a retrofit fleet? terms and all slate that point platform is in the mentioned trucks we engine think we -- certainly So backlog. is and position long Well, different way of talking going caterpillar to terms of that that, much on retrofit? a perspective backlog. in really that engine of going On think beyond to dollar What will finalized will of our is aside ahead be getting exciting. saying,

You probably out. very Ultera truck bit year That's next fork little so won't related -- further maybe in backlog, that's see so. a

Operator

Thank you.

of the from is Roger with question proceed next question. your Asset Please with Clear Harbor Our Management. Liddell line

Roger Liddell

are meaningful ever because involved, and opportunity recall the in equipment follow past What the center in implications had years, is data but flashes center the here a with seeing situation? getting an data ESCO encouraged it? involved. We've district pan, don't the school arm the finance presumably Is this for the through. the of by an in involved, and specking I'm ESCO First, also I -- financial there any

Benjamin Locke

types by ESCO, off saying. different just of maybe Sure. Well, start I'll there's

perhaps other of these big ESCO, of specific amount people now some focused. and projects Siemens, districts school with you I with projects dealing that some about. done Honeywell, of ones, you have few but done some a indeed, we're a fair financially so cetera. have with people there's of we those we brand And talk But And that Controls, immediately or Johnson offline But some that more Amresco, being of with name could we've ESCOs, think mentioned ESCOs those, the Roger that course. et

outsourcing project. not they're So, the

we want us and And to diligence as Because end assets. generating important, invest now sniffing revenue system. going a don't and reliable they're you're up, any Roger. these which turning get with due you this out dollars long-term of Do Tecogen these that have proper So, due know, to is very They're do you saying, alive. if on we things, projects? does projects, school portfolio so, to the you diligence on a skinned in

to them, agreement. and on gen, cost will they'll cogen, financial their it all a and with et And up the rates, that our diligence their product, metrics Roger, they of portfolio horrible charge do due So meets and come ESCO. agreement, we present chiller a It's up that leading if cetera triangle the go then end right. we choice forward

set long-term us do will site an the get The a this course building case O&M. everything the will long-term Manhattan. of with center data it ESCO the with up ESCO to So, of then And in owner for host paying agreement in the build revenue. set agreement up they're and the an system, they commission and the

We're really trying to center and promoting make point, other So, project force the only don't financial one, going data to types STCL -- and project and forward, of ESCOs them this is a sense. on not down working the important that financial other projects financially our involved not with sense. very one's throats we're make the

Roger Liddell

harbinger you Iram? Florida vegetables the the answer a cannabis, will more the pleased backup the cannabis? to headwind power whether grower. I'm and term after center tailwinds is indoor trying lack Florida past. the your emergency, mandated service sold if this Tecochill in to Is the fewer could it's whatever mean healthcare said versus But one facilities point help center chiller but headwinds, I second in was don't X of in the and clarify I you The think, of a long take with a correct service I on, order that

Benjamin Locke

that sold. And you chillers in yes. those head, the X nail the hit Sure, Roger, about

they When maybe we we reach exactly growth our stood Florida of and as guide on typically a set get from that he the engines is the that, more produce. up tipping think got there, flows because as a reason guide more of comfortable office the Caribbean. point can the then why mentioned gets is have proper would is point revenue customer, And and cannabis. out tell service you But an we center the Now for for there, up some Florida a facility standpoint have cost and putting And eventually are engines. of a territory. to this that assistance have our amount past, you you for I there. type in I a a that see way now my real now that respect reach off becomes course margin is certain not there. goal done of you you engines, right, up that we touchstone it we stand on reach it It's And effective

the service centers cogen, product maybe that we to I'm but start visioning service Caribbean. As TecoFrost as be to sell would certainly now the

have and questions, chilling absolutely, how air your healthcare they see course, much and you typical you in ROI, point, other and your some the now cost. repeatedly functional still off people home, mentioned we I do replacement has to which to TecoFrost, know, bed at down As seldomly there or all a even now this home in with and and as we Tecochill in is chiller nursing a And justify better chiller air -- case to our that you very check and we mind, have talked have XXX economics beds And Florida XXX incremental problems nursing your Roger, systems. is the importantly sourced have, what we resiliency about have have unit, sourced have comes with uses is so unit Florida. terms of

spread So, you with smaller we're is a can what spark away get getting at.

still Europe They So, areas this be in don't chillers. cogen not spread, have good spread for fitting spark robust Florida absolutely spark for California. may but maybe got the like like a great or

to us, And populate to that the there, territory down certainly down helpful to Florida for growing see way with erupting so great engines. really a so, facilities it's there, starting us that we're

Roger Liddell

generators take Coast you've were touched qualification this permit South as Management fact permitted. that separate from year that it California, I I Air was recall. now is a a the District on now Quality

It's transformational? on talk a And I isn't if opportunity? me opportunity, going So, there what's the it's would that to new? not a that? nice expect about candor be to And meaningful your

Benjamin Locke

you maybe Sure, let I him answer that, not that. noticed actually is [indiscernible]. Bob the Bob think, closes on to Roger, may have

Okay there you are.

Robert Panora

for an Yes, I'm incoming question, first the your getting me? you Could Roger, words. you my blocked when and question your sorry repeat in cellphone sentence call spoke it I'm on that

Roger Liddell

Yes, mentioned else? made generators, whether of there California? and to Or generation ago? a advanced know level in a of Management ignore opportunity permitting Air Coast the to on South move on of different was year something meaningful District it and I in beyond And I Certification this is a should brief want there is area and Quality

Robert Panora

a that Yes, allowing just the same clear, California water. But us to give We're CHP of they to boil off. shut water we credit CHP, rule. hot done the we've Southern when hot to so be do in because

they So, much course, number XXX if only to standard we to meet. And year. a get a bump have very a the looser invention hours of they're any going we little in get generators, that run

it recovery far benefit, one sure as I permanent ever know So that have one level on they and has and No lowest rule. no I'm no under these run no done were heat to as done the has it. limitation machines hours,

Can you conceivably -- this? of to of their you valleys to management with and market sell do the power. is. So, And who make peaks could demand conceive a want customers question

on, a against Because one situations people fossil on California, see yet. regulatory bias capitalize been going to grid where just haven't that You we but a problems there's not our want that's fuels. in very there. and resiliency can able That's is have to want they of frankly,

is anything there, participate the management you from batteries where is in This that, And utilities. reimbursed were programs that formal that to this not demand for the to if learn -- disappointed just particular get benefit can but now. being to they happening utility so we in by you a programs prohibited want regulatory is that this

of kind California. in spend we the that's that's, So headwind

question. So, it's easy an

I in have a make ways this think with go we to achievement. order hay, to

Operator

Thank you.

We our the have session. reached question-and-answer of end

Mr. now Locke for over like would back to concluding comments. additional I So, to any refer

Benjamin Locke

to for with news look our to you I all want you as I Thank at your Tecogen thank more on progress forward you and of interest it share occurs. again.

Operator

your and at conclude your may this lines disconnect you. and teleconference. today's you you we Thank thank gentlemen, time. participation Again, this for Ladies does

Tecogen (TGEN) 28 Mar 192018 Q4 Earnings call transcript