Capstone Green Energy Corporation

Good day, ladies and gentlemen, and welcome to your Capstone Green Energy Earnings Conference call and webcast for the financial results for the third quarter fiscal year 2023 that ended on December 31st, 2022. All lines have been placed on a listen-only mode, and there will be a question and answer session following the presentation. As a reminder, today's program will be recorded. At this time, it's my pleasure to turn the floor over to Mr. Don Ayers, Vice President of Technology. Sir, the floor is yours.

Thank you very much. Good afternoon and thank you for joining today's fiscal 2023 third quarter conference call. On the call with me today are Darren Jamieson, Capstone Green Energy's President and Chief Executive Officer, and Scott Robinson, Interim Chief Financial Officer. Today, Capstone Green Energy issued its earnings release for its fiscal 2023 third quarter ended December 31st, 2022. We will be referring to slides that can be found on our website under the investor relations section during the call today. This conference call contains estimates and forward-looking statements representing the company's views as of today, February 13th, 2023. Capstone disclaims any obligations to update or revise these statements to reflect future events or circumstances. You should not place undue reliance on these forward-looking statements because they involve known and unknown risks, uncertainties, and other factors that are, in some cases, beyond our control. Please refer to safe harbor provisions set forth on slide two of the slides accompanying this presentation in today's earnings release and in capstone's filings with the Securities and Exchange Commission for information concerning factors that could cause actual results to differ materially from those expressed or implied by such statements. Please note that as Darren and Scott go through the discussion today, when they mention EBITDA, they're referring to adjusted EBITDA and the reconciliations in the earnings release and the appendix to the presentation slides. I would like to now turn the call over to Darren Jamieson, President and Chief Executive Officer. Thank you, Don. Good afternoon, everyone.

Thank you for joining today for a review of our third quarter fiscal 2023 results, ending December 31, 2022. If you would now turn to slide three. I'd like to run through today's agenda. I will start with a brief business environment discussion, and then update you on our strategic energy as a service rental fleet growth. As a reminder, our energy as a service, or EAS, business remains the foundation upon which we are building a stronger capstone. Next, Scott will provide more details on the third quarter financial results, and then I will dive deeper into the electric vehicle charging market, where we're seeing very exciting opportunities for us. We will then conclude with questions from our analysts, and I also want to remind you that there is an appendix to today's presentation providing more details and additional information on our products and the new IRA bill. Let's go ahead and jump to slide five. Slide five shows our current business environment that we're in today. Third quarter revenue was off $1 million compared to the same period last year, but to date revenue is up 9.5%. This revenue growth can be attributed to our energy as a service or ES business which has grown approximately 18% and continues to outperform the rest of the business. As you know, the energy service business, which is our FPP long-term service contracts, our spare parts and long-term rentals is our critical foundation. And what I am happy to say, the revenues are up 18% for the first nine months of fiscal 23, mainly due to higher rental revenues of almost 4 million at 3.9 and an FPP maintenance contracts of approximately 900,000. In addition, we have navigated a very tough supply chain environment and we are expecting to see significant improvements in the area this year. Looking ahead, I'm excited about what we've seen to start our fiscal fourth quarter and what I expect for the rest of calendar 2023. For the first nine months of fiscal 23, gross margins expanded to 16% from 14% for the first nine months of fiscal 22. However, I'll note that this was less than anticipated as ongoing supply chain expenses Freight costs and expediting charges continue to plague us more than we anticipated. Now let's move on to slide six. On slide six, you can see that on December 31st, 2022, there was about 40 megawatts of energies of service long-term rentals under contract and re-rental units under contract, which is a substantial increase from 17.7 megawatts on December 31st, 2021, which represents a 126% increase year over year. I'm proud to say that we're still on schedule to meet the company's target of 50 megawatts under contract by March 31st, 2023. I'll now turn the call over to Scott, our interim CFO, to go through some of the specific financial results. Scott?