TGEN - Earnings call transcript Q2 2020

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Operator

Greetings, and welcome to the Tecogen Second Quarter 2020 Earnings Conference. 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, Mr. and Counsel General Whiting, Secretary. Jack Thank you.

begin. may You

Jack Whiting

General Good at Secretary I’m morning, is Jack this Counsel Tecogen. and Whiting

provision release Now please second Act from website Litigation discussed note, important be this press Private XX, of call is being of Harbor report company’s statements on copy forward to and factors, Exchange under in website. by the quarterly factors, expectations investor section file heading Securities of earnings the would forward like result two the until press those the attention of the the section your included recent is XXXX. Actual materially for differ statement SEC for statements the in our Reform A purposes those under reports with website archived may regarding about which I recorded indicated investor of presentation, looking XXXX looking that various Tecogen.com our investor plans our remarks Harbor including our the direct Safe results at available are release filings. make these Securities most weeks August in quarter constitute the a XXXX. the of as in risk our under XX-Q form section Commission on the various and caption we annual and will available the Form earnings on to on and and for XX-K may prospects future Safe company’s

we to any of our statements obligation the as to any representing update should statements Therefore in some disclaim looking at views date any forward we While elect so. on as future, subsequent forward rely not to today. we may looking point do specifically

the generally second now regarding will we our Locke. to earnings or accounting turn the quarter to principles non-GAAP directly and with an is provided press Reconciliation accepted I this measures, of release comparable our investor During the call accordance in will over financial measures refer of to measures Benjamin these most section GAAP prepared GAAP. financial in not certain call, XXXX website.

Benjamin Locke

Thank you, Jack.

So with a here. followed XXXX, operating We are company and second of noted sales of quarter X.X as have And start summary the by cash in agenda million. are I for will results balance in overview performance which up, at company’s down. Slide the Product cash the generated of X.XX indicates on off the X expenses brief I quarter our end the a was million quarter.

We will afterwards. then questions of take course

on of would detail a more provide the and like as is selling short grid I of in that gas Slide shown savings X. provide provide Greenhouse reduce into numbers, significant systems go the operational details clean emissions, and Tecogen to I outages. efficient business energy maintaining to overview Before resiliency Tecogen and business on

We are distributed in experience. due our generation our a technical to leader technology extensive longevity and

and conditioning any air highest cooling sized products efficiency Our have other of system. equivalently the

stringent such ensures Our the in southern as quality emissions emissions California. meaning those air most technology even the proprietary Altera standards possible, cleanest

from transition grid deployed of three to recently these number systems of facility as independent micro seamlessly, grids XXXX. grid hundreds power a in operate restored. and operation flagship micro providing grid in number tie grids is to product ranked has terms to until being that Tecogen it verdict designed power cogeneration equal. operational offer Our can is operations of indefinitely of

country the the towards positioned than rest We world low are as well looks future. carbon a our of

Generac GM And to compared engines, zero range significant emissions traditional high these have big operational of generator expanded more Altera result Our when on of carbon engine from engines the on same, engine to engine par savings cell. project. sources. the forklift we with successfully to a engines from enabled recently the on emissions engines. near technology And fuel lastly Mitsubishi efficiencies retrofit Ford small to The Caterpillar is the across the sizes

several Alterra in of discuss coming technology commercialization to options the months. We have for are to our considering expand emissions and opportunities to potential expect more

turnkey second million in compared X.XX year-over-year. in of Service primarily Turning This X, X.XX a XXXX installation I our quarter existing minutes. lower COVID Services saw projects decrease will close few detail several slowed construction to talk second were our we out XXXX, revenues quarter as the in decline X.X% due to Slide restrictions. segment due of million segment a and in construction to is large more of projects to revenues about

pandemic. despite the the saw quarter, the strong revenues we from difficult environment product Importantly for

million Our quarter of increase first of second XXXX over XXXX. quarter and of second revenue the quarter XX% increase the over X.XX product was XX% a a

by Our XX% and COVID Energy down segment pandemic most was facility impacted XXXX. Production second quarter the from of the closures

the of though Fortunately we next margin, gross into Energy go our slide. more margins to decline will Production regard revenue even improved quarter to with from company, segment on some rebound XX% With of guidance is glad the decline margin year-over-year the of are and as margins have margin for at about a high the that I but XX% are the our timing event. I’m just smallest but XX%, minute, range. about XX% one pleased detail this XXXX XX% first always the revenue more a we And a in end will I in of has in guidance. a off to our margins on our the the was result talk second quarter to

loss and a quarter decrease efforts business XXX,XXX operational expenses, the but of year-over-year for loss OpEx compared XXXX XXXX. of the decrease XXXX. to in a compared first to result the XXXX quarter improve EBITDA quarter as EBITDA of XXX,XXX the end second from second XXX,XXX costs negative of quarter in negative resulting our control a an adjusted Turning gradual, of sustainable to of XXX,XXX quarter our adjusted in net was of showing a the The our and an are reductions XX% in X% processes to and with second

to of of reach while contributors that our as So goal are critically encouraged COVID. revenue core by and we is profitability, impacted product not were services our course

calculation definition adjusted million of in the quarter, cash cash quarter Slide and second the the other versus million EBITDA shows quarter outflows many in X.XX despite X, in the of As generated X.X of from for we XXXX. operations companies our EBITDA, have. negative

think on line balance the we is significant the X.XX probably our of most a I quarter, from cash end the the quarter. that one of of equivalents of XXX,XXX credit. our the at XXXX, brings the from our at X.X million also million important improvement cash of owe That balance when takeaways and end

on we future business fund get balance build expect to to we closer our As cash profitability reaching our growth. goal, to

I to Slide more each segment. X, to provide Moving in quarterly color revenues would like some on our

a of strong alternative for And in delivery we contributions cogeneration continue the higher First, customer chiller is as I higher sales products indicative than and increase first of cogeneration this contribution compelling of remain I as sales. gas XX% of to electric year. quarter. Product instead not importantly, timelines any and relating the only opportunities year-over-year as for chiller revenues mentioned, expensive chiller expect fully next a to led in our moment. we XX% chillers. quarter for This cooling to negative systems backlog will sales, were small by many our trends discuss from finding cogeneration of I chiller saw product tight a with quarter as more

that segment which regard of pieces and contracts be to is our O&M please with turnkey service services and a Next this consists more service our reminded which activity. services, revenues, is real parts, installation construction

while installation installation also state projects COVID to impacted individual resuming turnkey service projects remain our XX% our as this that is year-over-year, in overall are in quarter. close revenues declined are due that mainly the installation allow. Although finishing. in are revenue finished the a And service or portfolio to XXXX Those adversely

larger, recent As partners goal more on I installation is manageable projects. and with effective to in calls, focus projects, complex construction construction work have cost mentioned our on

year-over-year and contracts provided fact of COVID sites some the Service due piece our O&M energy declined slightly own restrictions to revenue services curtailed revenues almost service contracts enough we in COVID restrictions demonstrate our revenues our quarter are to and expect that segment, to a due saw revenues services services see growth saw was to O&M as we to upward their eased. the the quarter to fully as drop to steady we The resume were service contract closures. our in in including We the that Moving and declines COVID restrictions. only offset O&M production the each X% trends facilities, parts

to Turning energy production.

operation. a and hotels, as the recreational we a energy revenues earlier, I restrictions whereas facility to health of would COVID decline buildings sites residential out COVID facilities, that most and mentioned like impacted result production I production large As energy by our market of in large segments maintain point our were clubs saw closures.

sites some of opening the gradual some these undetermined. is reopening production in still of seeing energy are these timing But sites We our markets. of

this a O&M company these since smallest also are revenues muted. that production our that resume energy our accommodate current services, energy Fortunately, work But reopening production our is services with will segment so at will the of to to sites. customers contributor time, their the revenue and resume we contracted impacts to

to Lastly, on QX we come this as Services our XXXX, XX% margins had one-off gross when Slide, we in a segment. in in saw at activity XX% our compared overall

the second over improvements our to of due in first XXXX our margin. increased XX%,primarily Importantly, are quarter quarter margins margins products

margins now of I’m higher. maintaining to to XX% XX%. push goals have gross a But guidance internal We even overall our of for margins

to reiterate Turning the Slide I like to from quarter. some of takeaways key would X. the

both sales well, only despite COVID pandemic. down up were challenges our Service parts of resurgence to of revenue trends year-over-year its Product or and curtailing of the service any halting were and service product sites core numerous barring contracts steady sales and our quarter-over-quarter. business fully year, contracts of the the performed enormous First, pandemic. the rest the the pandemic. resume upward expect service I to due X%,despite

as lastly, XXXX as and the slowly is resuming turnkey services, start the to complex health from scaled reopen. see activity facilities, recovery in our have as next and strong installation takeaway large cash our for not we position. contribution levels some isn’t installations. products much a as we such hotels as And is of production Our also energy revenues key revenue The clubs though revenue back though slower

end X.XX we operations of X.X opposed I million million the was outflows quarter quarter million. and the as to XXXX.Our of equivalents our increased from balance mentioned, As cash cash quarter, by in generated second cash in X.XX

remains to And over call the with to that, our million of ways product our I questions. backlog operational the services. lastly, OpEx expect over Next. our I as OpEx The we seeing in our further and XX% down improvements down are expenses to hold our reductions and installation find are operator to backlog in the quarters X% and XX.X turn in improve X.X taking With year-over-year strong our backlog like coming we operations. quarter. quarter with in continue would for

Operator

comes H.C. Thank question [Operator of Wainwright. Amit proceed with Please Instructions] your you. Dayal Our first with the from line question.

Amit Dayal

Thank you. everyone. Good morning

the sort would through your backlog you. How market helpful, last rent. free market there, is sort you on picked discussion in you. improvements recovering of Going color of that that exposure from region New Has any from about to for up are York how thank seeing quarter be

Benjamin Locke

with to and regarding the regard with policies York New recovering Sure, the to or York their New like? regard pandemic

Amit Dayal

was could to I there to would I Well cover, helpful that but me. mean be if pandemic on additional you focus is the as much color as trying

Benjamin Locke

I Sure. and able to the with for the the mentioned the the home. for in as at closed Amit. anything unit a our as services New of cover if said, people services were exception lot is of were facilities multi sites maintain staying And hotels Yes, our of but will throughout I our populations, Cause in some pandemic those I right? We part residential. most, understand like, most portfolio York both I up their maintain

little are starting again to We are a open up start bit. back in York. loosen New see to starting that up Sites

know you cash by energy their the there partners. burden for our that. our and tell where Amit, I burden an with what see for on So opportunity our I in opportunity facilities a here done created of albeit think I’m encouraged ADG is facilities, on is think will lies model you I production this a a operation has lot I

their prepaid know, As their can cooling. to you these have got to partners, Cogeneration. their They OSUs, finance energy doesn’t plans replace water, don’t down hot our come they or is savings with and certainly where any opportunity now we be money It have their but get put have they project to there in could these chiller.

chiller You systems for but not zero and the have burdens. capital worth know, a our to at just for chillers, our installed of they to they ease their don’t have at replace the arrangements, financial of where may can have but cogen, and we, $X.X set they up get million $X.X project with they billion, partners can them cost

as to we resume, construction is other in up take see York, effort are a be New resurgence Construction as platforms. is business. are at certainly to and these back I sort projects this an of opportunity bit, starting I to Massachusetts starting whole in happening might starting said, or So a another And think to market the little a there but York for places. just And production energy again. come New not

I’m to you any clarify if So happy of that part like.

Amit Dayal

bring away lines, little you are from able being this anything Yes. have or you Along into from the bit to opportunity those to pipeline or a started add still that?

Benjamin Locke

Sure. No are. we

are York our the for our New in New to incentive it are in York is that that course. York, there to have years. Our in subtle driven new new, occur New product be just there, backlog, it, in energy inverted, pipeline they they drivers and too has and the all in Even going our not same are savings, these that not of are is about in know, you projects projects though for the

certain York, New gas reduction, Law by XX, Greenhouse requirements that particularly timelines. sets in you for reductions know Now a for carbon Local this buildings

by Our chiller biggest building. of for terms get your gas in so our are of the banks to for gas you in Greenhouse cogen slide, mentioned reductions systems Because cooling in and and is to systems compared going high a and that I one efficiencies our powering the building putting as buck Greenhouse equipment. our from as savings are our grid the heating

of an some mobilize as threats there resiliency all go So down. they people that top this We the for us and that opportunity outages can off is have that equipment good outage grid past should knowing course piece, is our make of of then and piece sure boils guys it lights an well. And quarter. time was up on, or keep feel the a every there the

good there. the So in not still make that still The us. again, incent the of drivers we in show fundamental taxes a I key and avoided think are carbon think York for penalties the is anymore, but savings New I it very proposition there particular,

Amit Dayal

Thank for you Ben. that

Just operating still that of on more gross of guide or you down from margins. range and maybe you what terms in and are have brought my one the both sort costs, side, within I know you for

some at? should expect we within levels you mandate So relative the year performance to similar or on look fronts, both the these of of variance should we what anticipate

Benjamin Locke

regards our So I that with will answer Amit, margins. to

As went margins our we saw there. margins up want product our product keep margins, to up, I

I get think we bit little even higher. a can

et goals agents, that to got have of a cetera. do our We lot supplier with

think keep chipping we more more. not and at margins Our hit I absolutely service challenging our environment. G&A difficult, bit difficult, but again to This going the are things going going margins are away very certainly our and a work because margins improve. are increase COVID past little service a to quarter, a related very certainly became inefficient But it to took became then

So to I and the on margins quarter, our the going and OpEx. rest of Amit improvements think on year, are see you next our

Amit Dayal

I That appreciate is your Thank have Ben. all you. all answers. I

Benjamin Locke

Great. Thanks Amit.

Operator

Thank you.

question proceed your Clear Harbor Blanton next Please with question. with comes Our Asset from Alex Management.

Alex Blanton

Hi.

was later. were for few wondering cost archived going no then There more a you that keep weeks. beginning only this to call and don’t to why keep Why year? some I at housekeeping archiving questions, Just is But questions for it. the you two

Benjamin Locke

question. maybe you you tell that your will next but get I offline,

Alex Blanton

opens. get the Okay. suggest out I market future would Then, also, before release the the in

a I common practice XX.That chance a it review give to to people is just out it. about came think

Benjamin Locke

We right Yes. at morning, We had continue a PR off this with them get to off. will glitch a this X we glitch our company Alex, usually and one X out at had a just O��clock, O’clock. morning. them get

that. about Sorry

Alex Blanton

Is that find can’t website either? why that - slides the on I the

Benjamin Locke

make sure afterwards, Alex offline you have with get that. will I to Perhaps you

Alex Blanton

think transcript post you they call. you do posted. a that also of the Do I would suggest don’t that? I

Benjamin Locke

about Can do we with quarter? all Alex, Yes. will up that talk take will that. you. the we I And

Alex Blanton

Sure.

Okay.

want company be actually about under to idea First, XX. you a good put the explain something more from Law -. there. A right to about I Might talk something memorandum the that? Local out Could

Benjamin Locke

things. not Alex one it is of those

your worth order is reach their XX-years that for profile, to gas down I is I the of your your that time profile so sets five goals. New but think you next reduction it defining for York it to spending get company XX carbon to timeline you. and in over our energy effort Basically Greenhouse to describe it it building to will a

And so related how tax, reduce they that. determinations they timeline will each building, or carbon the and can with footprint make that their penalized at it looks and be to

Alex Blanton

on How work? it at is be how it going all? does penalized, Or time pressure is there a to this

Benjamin Locke

It scales, don’t five heavy a think Alex, duty fines levy start the to road it bit. next little five-years maybe and scales down until over kicking the XX-years. I

think can I then. front to do I LED say in many the light I of your in we the of so But before what terms some of bulbs, you of move have to your mean, don’t exact reach goals in you footprint. sufficed only can right, course, needle me. put

gas That efficient is be that to is there needle. piece So recovery cogen, have XX% of moves to over efficiency And using and using your switching system the going very on that a going chillers electrics. heat the the instead move very, in equipment any to needle. high of

go could I the change mean, still being Law will could I a away. Local XX, out this felt the lies too, all say little opportunity. is this bit. Alex therein administration it And So this on

Alex Blanton

did it When passed?

Benjamin Locke

myself setting it, certainly But it up it, is are it. starting implement understand trying to I how understand believe, want building are to understand two don’t they policy It are understood to committees New to we passed down energy are years to firms is owners that. to be understand it. York narrow I on about going trying trying to ago,

think have The to on is it. is. mean, bottom a good going we what of reduce of I is got nuances the footprint. regardless line pretty the we are line the grasp bottom I that COX

heat as cetera. installed As properly is recovery, using running and long and equipment your et

is going gas try we and that really to that are the through to that takeaway footprint customers. Greenhouse to You reduce building’s the get

Alex Blanton

a reducing elected, and about of think he Joe you of that they If lines. would how a needed XX there gets into I that part footprint. And carbon $X be looked we is there Biden those was Have Along affect of talked modernized. and program assume trillion buildings has infrastructure million What plans mentioned that kind all? are number you? at to

Benjamin Locke

Yes Alex, there. a is there opportunity lot of

of it these Of our things not cogeneration you the same is, where we to in going know, places are can’t course follows be put they rubric efficient. systems

you then you the if know, that going to that heat You can’t not get are use XX% recovery efficiency.

you Places water, TECOCHILL. indeed market you those although use residential, to the have that hot that because your segment widened hospitals, multiunit So we that et into verticals is of still know, cetera. know well,

processes, can know or know, need get et manufacturing, water systems. more into you these we our ammonia Now you TECOCHILL industrial systems cetera refrigerated chilled where with even they

the into the ask I circle queue that make to make are few okay. some I you will your to And questions Alex more have everywhere maximum then jumping get sure opportunities, put opportunity you mind So if a the equipment. indeed want and following because just you there ask but is I the you folks to efficiency is them can to to back can’t again, if back I prescription sure of out that won’t give you

Alex Blanton

you. Thank Okay.

Operator

Thank you.

Oracle Our your Please with Manalapan from question. next Capital. comes question proceed from Vidich Joe

Joseph Vidich

on pretty first you congratulations rough this is, getting the a through it you the about Mitsubishi was equipment did the there restrictions, to more be could the to given kind my one, guess and pretty you Hi a know Ben. would just if if ability question just forklift is, well. bit JV guys little I Caterpillar ship quarter. I but Anyway, curious of know, there Japan. travel if talk

Benjamin Locke

too to of want this problems be got you you Yes. much on activity when, of over we about own say particular But, get that not We program are much own has I’m Maybe, want back certified. And Joe, push we opportunities didn’t there, is their I’m that because of know touch Bob of there sure be Mitsubishi front their is priorities. they didn’t track. too to looking know to we there I talk the kind what and to them in in want later the in sure right really are in respectful know them that engine that way other get at. have they trying with with the know, keeping will course, but we is we update, we now, to year. more not doing, have emissions But to are where that said,

we I’m that get going giving us don’t are but which to we any off, updates just a hold that, want don’t and because that Mitsubishi both partnership, we them want just this know engine do might, know say damage except right more good we you very certified, partnership the is on to So, now. to to rush We communication. to think want something in to

Joseph Vidich

Okay. strategy your space. a more are about, ADGE project you systems? That is a your go-to-market the bit like little of lot partners? It this momentum there regard know, you selling with sense. finance wondering, talk and division, you was seems know they are your could makes I in to How who

with whether it just more or budgets a tight budgets. there we hospitals little about go-to-market tight big bit be there if know, like just are strategy? wondering just some that your and with talk is It schools could opportunities You seems

Benjamin Locke

any to finance Between with. amount us are of four a finance that worked a five the I will the the a you And trick where is deliver of drop solar it their Sure, probably money and simple another electrons. we need eight is analysis that find to money, or The we site. them The And fund isn’t partners need honestly. our much nine to I a with and project fuel or down project projects have problem to meet hurdle said, got work kind begging find question. can yes, it or I’m good is I too find they all partners, as didn’t as have earnings that needed that going cell to is to of rates. it of that not sites use as it a farm can just sure

As our I you to are sure going for have use make heat. all said, site they the to

make is You that then entirely it using don’t, and finance rates have to hurdle sometimes. that your it again, folks, because equipment trouble sure for if runs these I’m and all project meets to return in they

anyways, So, is worried of not plenty I out the there. project think I’m about funds. finance project to ability There

we the with some are for themselves, projects And is companies and good. working looking that are that actively of

of a have something business talking folks They That panel, partners are to business Most co-gen. bring the we we the kind to for work good of sites, cogeneration they folks. a for go good development And and development hunting looking for would with waiting they their engineers So not exception. a with us operational find site project out sites. our find be can a doing, are really finance they them. solar are own but maybe for site challenged to there that got and is way they my together for

So project, cases? with And work and constantly ended we could we now a we of our of anytime it touch strategy. course to doing are ourselves, engineers So see a that we and to in or a energy have doing market PPA. in of you network go say, we those How lot we them. up that are we that offer with we we could sell you, prospective to consultants

coming in with alternatives the of And we front two were customer. always so those

are contacts, cards, tremendous doing will, opportunity customers, can also to to of web the to things these sending prospective existing are out amount you old a customers, We mailers on do we where days. to customers, direct if you

new to to go this us get to that discussions new also meetings York. down You know, for people, easily market trying thing created can communicate ways ways to home COVID people, to stay than forcing with more happen opportunities has New yourself to at

of for a So the just good of. finance projects plant. small activity of any customers. I relating finance reaching the these I a for be may entire mean, boiler strategy pent think I have of upgrade course which to these just to project things, partner I type Not pretty that but for part have a we out boiler finance would

is to lot So, opportunity. have economics that right. trick of go is There are those deliver a is The you need. project they to the finance that of people The no sites money there. find I shortage through.

Joseph Vidich

you is incentives in that or see being question and other the U.S. are in Local there nature, horizon with One if I’m on is this, Right. regard country the to around anywhere that curious you place currently? put that the mentioned any policies that there just are York Law City. XX New in other are similar of if or

Benjamin Locke

the there nationally Tax are incentives. Investment Sure, efficiency but incentives the for the is are course if typically of state-to-state. And that, of they Credit, most ITC,

big base, that how the utilities, much stick the Eversource mean, to I they measures. bring know, efficiency you their is can their to payers. customer reimbursed the As utilities Ed, and for is measuring Con efficiency rate get

find are, measures who in customized. those the often custom of saving we sometimes they that we X And not, more can oftentimes, something are we KW, incentive ourselves that these amount up, custom. put utilities hey sometimes can rebate come place need energy doing are show are to per kind The be and be they because dollars we guidelines. of so world prescribed, so incentives that is the they in and to their own the And because where is from meet efficiency, incentives the ones

a a in bulb putting not with light or are LED. We solar panel an replacing

in efficient that highly a displacing chiller putting plant. are the gas electric natural plant We

the bit and company a savings, and our help And So I more nuanced only why can one but systems calculate their is you these that Greenhouse understood, broadly there chillers gas that. how more think getting benefits, reduce appreciates and starting is the other little the of goals. it success with to it energy efficiencies those not is are more but become reasons understands chillers, how meet we utilities have

covered it. So your it, back I I think to circle Joe I I part can missed if the question, but of

Joseph Vidich

that that No. Thank is very appreciate. have. thanks is Ben great. much. is all great. That I I

Benjamin Locke

Sure.

You are welcome.

Operator

Thank you.

Oppenheimer. Michael question comes question from next with proceed Our your Please with Zuk

Michael Zuk

morning, Ben. Good

Benjamin Locke

to you. hear from Mike, Hi nice

Michael Zuk

Two part question.

Florida all, opportunities indoor in new how the of secondly, farming? or doing? And First any developments is operation

Benjamin Locke

Yes, indeed, questions. still Sure. are continued opportunities growing. Yes, good in we seeing indoor

we with, competitive are that competitive for him aware of cost much they a a more whole there was - bit. about that to I and is we started might the it growing that I is enough they and in to of indoor are aware XXXX. that a cost. are to sufficed lot around, ones that But little companies middle today XXXX and It of not were were slow that environment need that bit was then industry that the say that have dealing smart think a indoor more in talked I little but environment going be understand be the here in work to the to ones before operational to a and first want And tell are this XXXX don’t still indeed growing.

phase and for consultant already and customers aren’t maybe their that then and there they But is that looking designing are come our at customers design the go three anymore. still growing phase two, one. are maybe are stuff there the importantly, ones another and the So indoor have

And the are be are ones many that the for the that So in our still going repeat already it cases in are they customers. we have equipment, have ones to are that long haul. customers

in strong still is of exuberance markets it XXXX. the think it was I as not kind crazy as So

you ones remaining the are anything are little slowed if cannabis are on a good but think bit, down the that I read it ones I is growing, think, going our to indoor customers. that be a ultimately, the And that thing. is long-term

Michael Zuk

And Florida? do then we how follow-up in it

Benjamin Locke

great Good, market Yes, is Florida. for Right. us. Florida a

seeing good but for opportunity said releases, are think normally absolutely Florida. be maybe we and course press a seeing in cogen, our for will of at I we chiller we As press see not are of before, opportunities but looking And releases, I number perfect systems.

our customers have can equipment people down running. important, will there having that in know course so is sure is service that in make someone come Of center and they they very there the

put But So, good comes very inexpensive, prices maybe the in is gas know, super worried through, on have then people that extremely you expensive. still a is of course natural storm during even before, don’t chiller the on piece and running there. running down keep top put in of on those the their an instead get Every time It their you chillers keep chilling. yes, I comes electricity, power resilience so outage they an plant as strong they because capacity entire if a down cogen And we their very a gas. can gas hotel their is that. system, sparks about electric, gas, their if said they of a backup opportunity. we can and And have it downsize generator

more press I’m you the yes, hoping in So will market Florida to us see real that good releases related still for coming months. and, a is

Michael Zuk

question source fuel source. as a then hydrogen gas fuel and using the follow-up natural technology. What And in a operations is as difference between our regarding

Benjamin Locke

to let in his going is Bob house. that I’m that because take one right wheel

Robert Panora

fine. run hydrogen can you on it and an perform will Well, engine

makes to have some got and metal forth. has changes. (Ph) with so You [annulment] some issues Hydrogen

We quite of emissions do you no that, of There to a use Even drive as will the and but be don’t real will it no store that experimental on it. think account much NOX to it. know hydrogen be so still have doing that, see for but operation will so course, not one Having to a and where it with bit, tank little the it them. was have I need fuel towards said hydrogen, with had and transportation. for of some us most on there has path you and know pollution an this it be too time, you engine. a story I the for COX available hydrogen I Transportations engines, if if to it experience you renewables, will vehicle is a operate customer really out it long coming And will changes distance be from and costly on that, because available produce. impact. there going basically long hydrogen is have

application with produce really that electricity. on like does is can’t has it stationary mine it engine doesn’t or have car its low stuff benefits a show That it, where a ours to you and to You find that is efficiency the going it truck a very begin to with.

I that going. the answers so where know, that I is hope it question. You see

Michael Zuk

and the in targeting opportunities that and hydrochem question. I Northeast, if backyard. question Williams that wondering were getting was the into hydrogen my Well, rationale for there which companies And our was particularly distribution is basically purpose the the is was of whole

Robert Panora

- the I’m to It know, not heaters going that gas pipelines stay be, appliances, because but they are all think and stoves all I away. could you water seeing the really that the And natural would existing a a with and to And gas. with type pipelines. everything think are operate certain all in would be up set parallel burner thing for that I quite difficult of that the natural right do

Michael Zuk

type we And or you. joint question, one technology? an the a outsourcing venture final any Ilios of are Got of considering

Benjamin Locke

now, think found not right a that have something our it Mike use I efforts of we Not that on. good is

sell on. I with I I chillers, priorities now. we want focusing our Ilios is think to the initiative effort be and attention would of think that strategic success any right in we things top something time platform that really my not what particularly our don’t some are but having I to the the perhaps require once but have consider, stabilize, it can is is

Michael Zuk

look a And forward comments. productive your appreciate to third I quarter. Well

Benjamin Locke

Thanks Mike, I appreciate it.

Operator

you. Thank

with your Asset Our question. next proceed Management. with Alex Please Clear question from Harbor Blanton comes

Benjamin Locke

answers you. ask have some question, you got before I for your Alex

So it in is the on webcast PowerPoint website, section. available is the our

make the to you after after transcript send will hours link as available I you that this well. will so make XX it. will that get you sure sure And call And The be I have to the again; call.

Alex Blanton

So that Is the on other to read the could be you. transcript? website people Thank it. going

Benjamin Locke

Yes.

Alex Blanton

weren’t hard at they part the I They with slides. webcast time finding weren’t Yes okay. evident had Yes a these all.

Benjamin Locke

It is now Alex, I will send you the link.

Alex Blanton

Canadian seems U.S. be fact, COVID the has it Okay. operation, And Thank let very Canada you. a restricted they that in infection to from anybody by won’t me low rate. would The since

is operating that that environment Is now? better a how going? So right

Unidentified Company Representative

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Alex Blanton

COVID, retrofit would better cooling for result a or there as thing great. be their ventilation? any buildings renovation, to type this is a Is ventilation better like Okay, a market of of kind where developing? retrofit market provide a would there And system also that

Benjamin Locke

building. move is I more following want you the theory Perhaps, your air prevailing think from

they they keep what of people want to do And on or advised to I You air your cubic those whatever have air building. think are their conditioning. moving is some through feet HCFs

Some and conditioning larger air conditioning do a air of in recalculate both. systems some air outside little air, bit the inside then systems bring systems

to little to be efficient, are, conditioning of bringing systems less So more a air these flow I but air think air themselves bit keeps some advising that they outside they going. are maybe to adjust

whether see that but going to are do technology the I’m overall is have we seen like is airflow people going. more Now, in need that. a to not reacted of something relating or get redesign directly anything an I it. you far air sure people that is air in plant that, have their for that know, not just head us. only, chiller I if to bring to on outside But toward there I still bring notionally people lead that It reactive understand more don’t more might again, and

Alex Blanton

assignment? you profitable any buzz Do on have might you turn you a on, when any sustainable have Do basis?

Benjamin Locke

as our and now. profitable and to we just the as Yes, people here. of absolutely industries a want just these got terrible world thankfully, other that some company, around and be decimated. myself, well, Alex, the just get blow everyone not didn’t Unfortunately, I dealt Not hard got not hit me

my get goal, that. every then My I’m each get quarter the my be then we that after progress fortunate still up I And To that. goal that each think are striving I So that, quarter. of after profitable by to would quarter did. end towards made the like the the be we that next will that we goal morning is is profitable year, and

maybe we maybes, and deal good Alex, what is is this that those right result. as away. not this control we we to me of numbers didn’t they with much EBITDA pretty the that around mean, I striving we But play with I where the that are was maybe hand XXXX. they will But COVID revenues negative and the get there. anymore. number any But those a isn’t hard back or And negative without we will there. be. can I there. And quarter hits the But now to know COVID production come with absolutely took want we games here where up. pandemic I So service I barring resurgence say see we think it back had those things should as see are back back are energy And Right. numbers can’t right service to to in are Without service up COVID are numbers in enough are those I are up because go going those to up for.

a will back see be, come come production where margins where We the the back bit. there up little maybe won’t it should energy improve

good products that shape. we as we long flow our will going, as for in so be And order keep

Alex Blanton

much. very you Thank Okay.

Benjamin Locke

Alex. you, Thank

Operator

closing I time, we to appears comments. for any pass at have to floor It management questions no additional you. like Thank would this back so over additional the

Benjamin Locke

you safe. happen. all our thank listening updates more And as we they call. always, Well, sending for any Stay be to will as

Operator

does this teleconference this you disconnect at conclude your webcast. time. and We and gentlemen lines participation thank today’s your you and may Ladies for

Tecogen (TGEN) 13 Aug 202020 Q2 Earnings call transcript