Ameresco, Inc.

Thank you for standing by and welcome to the Ameresco Incorporated First Order Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Mrs. Lila Dillon. Vice President, Marketing and Communications. Ms. Dillon, you may begin.

Thank you, Robert, and good afternoon, everyone. We appreciate you joining us for today's call. Joining me here are George Sakalaris, Amoresco's Chairman, President, and Chief Executive Officer, Soren Hull, Senior Vice President and Chief Financial Officer, and Mark Chiplock, Vice President and Chief Accounting Officer. Before I turn the call over to George, I would like to make a brief statement regarding forward-looking remarks. This call contains forward-looking information regarding future events and the future financial performance of the company. We caution you that such statements are predictions based on management's current expectations or beliefs. Actual results may differ materially as a result of risks and uncertainties that pertain to our business. We refer you to the company's press release issued this afternoon and to our SEC filings. These documents discuss important factors that could cause actual results to differ materially from those contained in the company's projections or forward-looking statements. We assume no obligation to revise any forward-looking statements made on today's call. In addition, we will be referring to non-GAAP financial measures during this call. These non-GAAP financial measures are not prepared in accordance with generally accepted accounting principles. A GAAP to non-GAAP reconciliation, as well as an explanation behind the use of non-GAAP financial measures, is available in our press release. and in the appendix of the slides, which can be downloaded from our website. I will now turn the call over to George.

George? Thank you, Lila, and good afternoon, everyone. 2020 marks not only the 50th anniversary of Earth Day, but also the 20th anniversary of the founding of Amoresco. Since our inception in 2000, which have seen tremendous technology advancements across our industry. When we started this business, we entered into an addressable ESCO market of about $2 to $3 billion annually, which grew to $7 to $8 billion in recent years. And with our investments in distributed generation, energy infrastructure, battery storage, microgrids, and smart technologies, we have evolved our business and now participate in a combined market opportunity of $20 to $30 billion annually. We have witnessed a heightened awareness of the importance of energy savings and renewables. During this time, we have been consistently profitable. We have built over $7 billion of projects, and our customers have been able to annually realize approximately $1 billion of energy savings. In the past 10 years alone, we have helped reduce over 55 million metric tons of CO2 from the atmosphere. We are very proud of the accomplishments and grateful to our customers and our employees. Unfortunately, This 20-year anniversary is also marked by one of the largest health crises to face the world in many years. Much like the energy solutions we provide, Maresco, as a company, is resilient. In the face of COVID-19 pandemic, we prioritize the health and welfare of our employees and the communities in which we operate. The company quickly established risk prevention policies consistent with current CDC guidelines and state, province, and local health agencies. These policies are being monitored and updated as new information becomes to light. Our geographic footprint of over 70 offices allows us maximum flexibility in our operations, more efficient execution on our project and greatly reduces the risks associated with having all employees in a single location. Our employees' transition to the work-from-home environment was accomplished seamlessly, as we already had the required technologies in place. We are also using this time and our technology platform to invest in our people with a number of employee training initiatives underway. Our work in the field continues, with few disruptions and added protections at each site. Maresco's work qualifies as an essential service in most jurisdictions where we operate, which has enabled us to continue to execute on both project contracts and the build-out of our energy assets. Early in the crisis, we worked closely with many of our customers to move ahead of schedule on some projects to avoid potential delays. This is a good example of how Amoresco is working hand-in-hand with our customers to ensure the development, design, deployment, and operation of their critical infrastructure. We have also built a tremendous network amount of resiliency into Maresco's business model. As many of you know, we have purposely continued to build out our energy asset portfolio in our operational and maintenance business, specifically to add a greater level of visibility and predictability through higher margins recurring revenues. We also entered this year with record levels of contracted backlog, in our project business, providing further visibility for this year and beyond. 2020 is off to an excellent start with strong first quarter results. Although I will go into our first quarter financials in more detail, I do want to touch upon some key highlights to the quarter. Revenue of $212 million represents the highest first quarter revenue in the company's 20-year history, growing 42% compared to last year's first quarter results. We gained significant operating leverage from this increased revenue level, growing our net income by 50% to $6.2 million, adjusted EBITDA by 50% to $21.2 million, a non-gap EPS to 15 cents from 2 cents one year ago. We continue to execute smartly and safely to minimize disruptions on both our contracted project backlog and energy assets in development. Our customers remain as committed as ever, although many of them have had to shift near-term focus resulting in a slower than normal pace of pipeline activity as they prioritize the COVID-19 crisis. We do, however, expect the pace of new business activity to resume later in the third and fourth quarter. We have also shifted our focus to executing on our existing work in progress on both projects and assets, given our great existing project backlog and assets in development. Given these dynamics, we expect our project backlog and assets in development metrics to remain relatively stable in the near term. Before handing the call over to Doran, I want to point out the potential business opportunities we anticipate post-COVID-19. Many companies, institutions, and government entities will exit this crisis in a challenged financial position with a need to reduce their operating budgets. At the same time, many of these organizations are facing declining revenue opportunities and a history of deferred spending on vital infrastructure. In this environment, we believe that MRSCO's guaranteed cost savings from energy efficiency and distributed energy assets will be in greater demand. As this demand increases, we are able to offer our customers flexible financial solutions that do not require any upfront capital. Even before COVID-19, an interesting funding model called public-private partnership, or P3s, has been finding increased interest across the industry. Public-private partnerships are long-term contractual arrangements between a public entity and a private partner that deliver and fund needed infrastructure and services. The higher education sector has demonstrated considerable interest in the P3 model with a few high-profile contract awards that will outsource their entire energy and water infrastructure. Maresco is aggressively pursuing such opportunities with strategic focus on small and medium-sized colleges and universities where we have significant relationships and a competitive advantage. We entered 2020 with an outstanding backlog, multiple recurring revenue streams, and a great competitive position and platform, allowing us to achieve impressive results even in a challenging environment. While the COVID-19 crisis presents near-term challenges, we expect to look back on 2020 as yet another year of strong growth and important company milestones. And as we look beyond the COVID-19 crisis, we believe we will experience an even greater demand for energy savings contracts, providing critical infrastructure upgrades while returning meaningful savings to our customers. We are well prepared for these expanding market opportunities in front of us. I will now turn the call over to Doran to review the financials. Doran?

Thank you, George, and good afternoon, everyone. As I review the company's first quarter 2020 financial highlights, I ask that you please refer to our press release and supplemental slides. for more complete financial information. Our strategy of creating a more predictable and resilient business model paid off once again this quarter as we generated impressive results and have the visibility to maintain our guidance even in the face of the COVID-19 crisis. Execution on our contracted project backlog, along with the recurring revenue streams produced by our company-owned assets and O&M business, led to financial results that are strong and well diversified from a geographic and client perspective. First quarter revenue of $212 million increased 42% from the previous year, driven by much higher projects business in a quarter that is usually impacted by seasonality. As noted, The company, along with our customers, worked tirelessly to proactively deploy more resources on projects in anticipation of potential COVID-19 related slowdowns. We estimate that we were able to pull forward approximately $20 million of revenue from these efforts. With a large percentage of project revenues, gross margin of 18.1% was impacted by our mix during the quarter. That said, Gross profit dollars exceeded our expectations for the quarter, while controlled OPEX growth provided strong operating leverage for the company. Also benefiting our bottom line during the quarter was a $2 million discrete tax benefit from the CARES Act. Our liquidity remained strong, giving us the ability to fund our growth strategy. The company ended the quarter with $40 million of cash on the balance sheet, And during the quarter, we also amended our senior credit facility to provide additional availability under our revolving credit line. We have not seen a material change in the market for non-recourse project financing. And furthermore, we believe that we continue to have the ability to monetize our asset pipeline and recycle the proceeds into additional opportunities. Project backlog saw a small decrease sequentially as we executed on a significant amount of contracted backlog during the quarter. Although award activity slightly slowed during the quarter, our total project backlog remained strong at $2.2 billion, representing growth of 7 percent from the same quarter last year. We made a calculated shift to focus on our backlog. Since we are considered to be an essential business, we have been able to deliver on most of our contracted projects. While we may face minor delays with travel and logistical challenges, we are confident in our ability to continue to execute throughout the remainder of the year. Our Amoresco Assets business faced similar dynamics during the quarter. Operating energy assets ended the quarter at 255 megawatts with 298 megawatts of assets in development and construction. Similar to our projects business, our focus during the COVID-19 crisis has been and will continue to be on execution of this strong backlog of assets in development. Given our strong first quarter results and visibility into the remainder of the year, Maresco is maintaining the guidance we provided with our fourth quarter results. While we normally do not provide quarterly guidance, Given the unusual circumstances, we will provide some color on the second quarter. We anticipate second quarter revenue to be down sequentially due to the proactive pull forward of $20 million of project revenue that contributed to our strong first quarter revenue results. We also expect an additional $10 million of revenue will be pushed out of the second quarter to the second half of the year as a result of project delays. Combination of the revenue shifts along with incremental remobilization costs will reduce second quarter operating income by approximately $6 million. Full year 2020 results should be another year of solid revenue and earnings growth. We are confirming our guidance from earlier in the year, specifically with 2020 total revenue to be in the range of $910 to $980 million adjusted EBITDA to be between 102 and 112 million dollars, and non-GAAP EPS in the range of 86 to 96 cents. To provide some additional detail, we anticipate gross margin to range from 18.5 to 19.5 percent, with interest and other expense at approximately 17 to 19 million dollars. This guidance excludes the impact of any non-controlling interest activity and any additional charges related to the company's restructuring activities, as well as any related tax impact. Our guidance is predicated on current COVID-19 restrictions and disruptions, not worsening, and with a slow return to a more normal operating environment starting by mid-year. Now I'd like to turn the call back over to George for closing comments.

Thank you, Doran. To conclude the call, I would like to leave you with three key takeaways. First, despite this challenging time, our recurring revenue streams and great contracted backlog give us stability and good visibility for 2020 and beyond. Second, we have the cash and access to funding that allow us to execute on our strong asset development pipeline. And third, once the COVID-19 crisis subsides, we believe that customer needs will drive even greater energy savings and distributed energy generation opportunities. Before we take your questions, I would like to again thank our employees, our customers, and our partners for making MRSCO a great success story and for their extra hard work during these challenging times. The entire team hopes that you and your family stay safe. Operator, I would now like to open the call to questions.

Thank you. And at this time, I would like to remind everyone, in order to ask a question, simply press star one on your telephone's keypad. If your question has been answered and you'd like to remove yourself from the queue, please press the pound key. We'll start our first question with the line of Noah King. Your line is now open.

Good afternoon. Thanks for taking the questions. And first, it's good to hear your voices and hope that you, your families, and those of your employees in the community are all doing well. So let me just convey that upfront. Maybe can you comment on the cadence of 2Q so far on the project side? You know, just anticipating just $10 million of revenue delays, that's really not much at all in a week and change of lost revenue. So help us understand what you've seen so far to give you confidence there. Did delays really present at the beginning of, say, the beginning of the month and start to ease up over time? Just Kind of help us understand how you're getting to this $10 million expectation.

Yes. First, you know, $20 million, we pulled it forward because we had more people, more resources, allocate them into the various job sites. And that helped a lot. And we had, of course, in order to change that schedule, work with our customers in order to be able to accelerate that construction and worked out very well. And what we have experienced in some of our jobs, what we call project delays, is a particular job, they might be shut down for a week or two, and then we have to secure the site and then coming back and remobilize again and get going again. And during the month of April, there's various states that were closing. And most of the jobs, especially in hospitals, it happened in a couple of situations, a couple of school systems, and so on. And the other thing that's happening on some of the sites, let's say one of the subcontractors tests positive, then we have to stop construction, clean the site, and then probably take another week. So we remobilize the resources for that particular site. And then in addition to that, we pretty much on the construction site, we shut down in Ontario and U.K., But we continue to work there to do design and development work and so on. And we anticipate that they will come back by June 15th. And that's all the indications right now. So that's why I know it's a small number, but the thing that's going to hurt us a little bit too is the margin too for the quarter. Because every time you close down a particular site and then you start again, it costs you a little bit more money. And the other thing that's happening, let's say you have electrical subcontractors, you have mechanical subcontractors, we have to control the number of people on their particular sites. So we have to follow the rules and regulations as they might become. Practice safety, otherwise, for whether it's our employees or the subcontractor's employees, and be cognizant of that. And this is the estimate that we have from the various units We had a meeting a week ago or so, and the number looks reasonable. Let's say even if it's a little bit more, we feel very confident, though, it has just been shifted to the next chorus. And the same applies, what we have seen more delays is what I would call in the delays, in going out with new RFPs as well as moving contracts from the awarded to the executed contracts. And that's why I made the statement. The customers, though, they remain committed and engaged. And our people, we make sure that we stay in close contact with them. And they say to us, you guys wait. Once we get over this crisis, we will be with you. And that's why, again, we feel very comfortable that we will see the pickup later on the awards as well as moving contracts from the awarded to the executed. I'm sorry, go ahead.

That makes sense. Just so I understand the first part of what you said, what kind of screening have you had to put in place or are you implementing broadly to make sure that your contractors and your subcontractors are kind of following all appropriate health protocols. Putting in place.

You're talking about, I don't know if I understood the question right. Yeah, sorry, Noah.

Yeah, can you just talk about what kind of testing and screening requirements you put in place to monitor for COVID amongst the labor force on these jobs and to minimize the risk that you're going to have these types of shutdowns?

Yeah. All the CDC guidelines, we've been following them, and pretty much all our employees. And actually, now when we start up in the office, we bought the infrared thermometers that anybody, before they come into the office, we will take their temperature. Everybody has to wear a mask on the particular sites and maintain the distance and so on. So we've been following all those guidelines.

Okay, that's very helpful. And then just quickly on the energy assets, you know, any change in expectations on the timeline for deploying, say, 50 megawatts of renewable assets this year? And are you still comfortable that McCarty Road will come online by year end?

Yes, the schedule is that McCarty Road will come online by the end of the year. And I think it's scheduled something like late November, beginning of December. And then we had a total, I think on the last call we mentioned 50 megawatts of total capacity installed by the end of the year. And we still maintain that. I'd like to point out there are a couple of projects on that that is pretty good size. And if by any reason the utilities delay the interconnection, that might slip into early next year. But as far as us delivering on the construction, we don't encounter any problems.

Understood. Well, thank you, and good luck and good health to you all.

Thank you very much. Same to you.

And our next question will be coming from the line of Chris Von Horn. Your line is now open.

Good afternoon. Thanks for taking my call, and congrats on the solid execution in the quarter. Thanks, Chris.

Thanks, Chris.

So I just want to talk about the puts and takes on your adjusted EBITDA guidance. Is some of that from mix? Is some of that from cost controls? Is any one of those weighted more than the other?

Yeah. Actually, Mark actually did the actual calculation, or I'll let him answer that.

Yeah, I mean, Chris, I think, as you know, it's a function of all that. I mean, it's certainly going to be impacted by mix, and we've got some good visibility there in terms of the projects that will drive revenue for the remainder of the year. For the revenue that we're expecting for the next nine months, about 80% of that is going to come from a contracted backlog, at least on the project revenue side. We've got another 16% that we expect to come from awards that we'll convert to contracts. to contracts and then just a little bit of book and burn. We're certainly gonna expect to maintain some discipline with OpEx, but yeah, we feel pretty comfortable with the EBITDA ranges holding steady for the rest of the year.

Okay, got it. And then when I think about your backlog, do you use the sales mix that you provided on slide five as a template of what backlog might look like, or is backlog gonna shift more towards that recurring and less project work. Any clarity there?

I mean, Q1 is generally heavier recurring just because seasonality-wise, you know, projects can be a little bit lower. You know, that should start to even itself out, you know, expect a heavier mix of projects at the back end of the year. So from our project backlog perspective, we'd expect that to pick up by the end of the year and we'd start to see the percentage from assets and recurring start to level out a little bit.

Okay, got it. And then this last one for me, there's a lot of chatter around municipal and government budgets and the pressure that they're seeing. We're hearing that the cost savings and the value add that some of the projects you do are you know, those projects are going to be maintained, if not, you know, kind of added to to help kind of weather the storm. Is that a fair assessment? Is that what you're seeing in the marketplace?

Yes, and that's why I say because there will be budgetary constraints and they will need to do many of these upgrades and save money on their budgets. And that's why we think that the business will pick up at the other end of the COVID-19. If you our business model is that it's a third-party financing. So they don't have to come up with the upfront capital, so we help them reduce their operating expenditures. So it's budget neutral, you might say, the offering that we have. And that's why the federal government loves it a lot.

Got it. Makes sense. Well, thank you so much for the time, and stay safe, everyone. Thank you.

And our next question will be coming from the line of Chad Dersheimer, your line is now open.

Thanks. Congratulations on a solid quarter.

Thank you very much.

I was wondering if you could just comment on the debt markets. And specifically, while I recognize one of the benefits to your business model is the fact that you're not taking on the direct risk, your customers, you're still reliant on you know, a liquid and sound lending market. And what we're seeing, aside from the injection of liquidity from the Fed, you know, is somewhat concerning. So I'm just wondering, you know, how you think about sort of an optimistic rebound post-COVID and juxtapose that against what you're seeing in the debt markets.

Yeah, I will let Doran handle that. But my overall comment, I will say that we see an opportunity, but I will let Doran explain it.

Yeah, sure. So I think I've just got to kind of split this into two pieces. One is the market for the lenders who participate in the energy financing process. on the energy efficiency side, which is the project side of our business. And we certainly haven't seen a pullback on that side. Again, this is, you know, companies who are financing the guaranteed savings from the energy savings contracts. When we move into the kind of Amoresco asset side of things, we have not seen a slowdown in the project financing. You know, we are, you know, engaged in a number of, you know, a number of, lending relationships and our indications thus far have been that each and every one of those institutions is still willing to step up and make new loans, do refinancings, whatever it might be, and spread activity while rumored to be pretty heavy. I don't think we're necessarily seeing it when the rubber hits the road. at the end of the day when we negotiate terms. So we haven't really seen the impact of that. And I think that, you know, furthermore, what you've probably seen is the – when you think post-COVID, you know, really what that comes down to is, well, would the broader capital markets be there and be available? And, again, that – you know, you've seen the bond markets start to open up a little bit again. Obviously, the spreads are not back anywhere where we'd be interested in – pursuing things, but I think we're not seeing the pullback thus far.

That's helpful, thanks. Then I have a two-part follow-up, if you would, and one is kind of internal as well as external. I guess for the internal question, the work-from-home environment has provided With many of the other companies that I cover, data points that are suggestive that productivity is actually increasing from some of the sales force, that the forcing function of Zoom meetings or virtual meetings, not limited to Zoom, being acceptable. has allowed for sales folks to increase the closing ratio or the number of sales calls. So one, you know, are you seeing any of that kind of play out? And then I guess the flip side to that would be, you know, that potential contagion into CNI starts, which, you know, obviously if you're seeing virtualization is a benefit, that may have negative implications on starts. And I'm wondering, you know, what your thoughts are on both of those. Thanks.

Yeah. First, you know, speaking for myself, I've been very pleasantly surprised the way that working from home, it has worked. And we're going to have to start thinking about, rethink of how we do some things and how we may be ultimately, we will actually probably reduce operating costs in the company because we're learning different things. As far as doing virtual meetings with particular customers, when it comes to the initial meetings and the contact, I would say yes. But the thing that we have run into delays, when you need a board to meet and have a virtual meeting with the board presentation in order to approve the projects or a school committee meeting or a college trustees meeting, This is where we have seen some delays. And I will say this much, though, that the last week, two of those meetings are going to happen, and we have been bugging them, telling them to have it virtual, and Dave just told me one of them, they're going to have to do it. So I don't know what's going to happen, but it's a way of doing business, and some of the boards and trustees and so on in the and the school committee meetings, maybe they will get to that point. It's a much more efficient way rather than have to travel to the particular locations. We will save a lot of travel and expenditures.

Great. And so if you see that play out, you know, any thoughts on CNI starts? Because that would be the consequence of sort of positive.

And actually, we have seen quite a bit of CNI starts. And I did on the last call, we did say it. I mean, a substantial amount of the work that we do on the design build is from the CNI customers. Because sometimes we approach them and say, look, we want to develop a solar plant for your facility. And they say, yes, great. I said, we want to own it. They say, great. And then you go down the road a little bit and they have a lower cost of capital than we do. They say, thank you very much. You designed it. You developed it, designed it, built it for us, and we'll pay you. And we've seen that quite a bit. And that part of the business is picking up, and we are making more of an effort in that space. And I think I did mention it last time that the CNI, they are getting into it because, especially in the distributed generation, because it pencils out. Otherwise, it's economic. It's more economic for them. And, of course, it has the environmental benefits attributes associated with it. So, and maybe these virtual meetings will probably accelerate that business. But we're paying attention to it, Greg. Great. Well, thank you very much. Thank you.

And again, if you'd like to ask a question, please press star one on your telephone's keypad. Next question comes from the line of Craig Irwin. Your line is now open.

Good evening. I hope you're all well, and thanks for taking my questions. First thing I wanted to ask is your EBITDA in this quarter was really impressive. Can you maybe clarify for us whether or not there were any individual project closeouts or one-time items that contributed to strength there, or is this sort of a new stair at the bottom of the annual steps that we're looking at as Amoresco is building this really impressive assets business?

I can take that real quick, Craig. This is Mark. There really wasn't much at all from a closeout perspective in Q1. Very minimal. I mean, we had some minor impact, but it was very small. So, yeah, not a whole lot. It was really just the contribution from the projects themselves. And, you know, that's generally just based on timing. So, you know, we don't normally plan for those anyway, but Q1, I can tell you that, you know, just really had no impact at all.

So can you give us a little bit more detail, maybe, Doran, on the mixed contribution on the asset size? Was there anything that outperformed? Specifically, you know, have the RIN issues maybe left you behind at this point? Are you seeing seasonality help you a little bit with PV? You know, was there anything particular that we can call out for the strengths? Or is this really the new annual beginning as we do climb these stairs?

Yeah, look, I'll jump in a couple of things. One is that as we talk about acceleration of some of the pull forward of revenue, you know, some of that is in design build where we've got a lot of incremental gross profit, not a whole lot of additional incremental OPEX going on to that. And I think that's a mixed issue with respect to energy assets. We did see performance, especially on the solar side, look really good. I think, you know, on a weather, you know, the weather adjusted, you know, when you look at our projections, they don't really – you know, forecast for that kind of, uh, good weather. So solar certainly did well, um, within the portfolio. So that's why you kind of saw that, uh, saw that going up. Uh, I can't, I can't say that this is, you know, um, you know, paradigm shift. I wouldn't, I wouldn't describe it that way though.

Okay. Understood. Understood. So then big picture question, right? Um, stimulus, uh, particularly infrastructure is on a lot of people's minds. Um, You know, looking down the runway, a lot of people are thinking maybe this is something that goes more to municipal and state governments than, you know, roads and bridges. But either way, it's something that could be additive and incremental. Can you maybe describe for us what you're hearing on the infrastructure side? And, you know, everybody knows Trump's a builder, right? He comes from construction. and he didn't screw up the performance contracting program when he came in in his presidency like his predecessor. Can you maybe describe for us what gives you confidence that he's not going to do something stupid like Obama did when he introduced the competing funding for performance contracting? And, you know, can you maybe shed a little bit of light on your discussions with D.C.?

Yes. I mean, one of the things that... MRS has done very, very well building out projects. So we have great execution of various projects. And most of the work that we do is infrastructure-based because we're addressing boiler plants, chiller plants, combined heat and power, which is a cogeneration, or take the Wood River infrastructure the Savannah River plant that we built, which was with wood, $200 million project. So we do large infrastructure projects. And the government, and actually that's why last year the federal government has the largest execution of energy savings performance contract because basically they get the infrastructure upgrades with using third-party money. Now, if they come up with a stimulus package where It addresses more infrastructure upgrades. We can leverage those dollars to do more upgrades, whether it's a state facility, whether it's a municipality or the federal government, whatever the case might be. I don't think you can see us going into building bridges and roads, but on the other hand, the infrastructure in many other areas, even if it's away from the performance contract, it's just design built, because we have pivoted the company to be able to do design-built work, because that has benefited the company, especially on the gross margin. They allow a gross margin, but they add gross margin dollars. It contributes a lot, and that's how we were able to leverage the company. And many of those, from an example I can use, from the RFP process to actually executing the contract, One of the largest contracts that we signed last year, design-build, it was six weeks. And some other ones, it's even less time than that. So we love that kind of business. And we have pivoted the company to be able to do more and more design-build work. So we will take advantage. That's the bottom line. We will take advantage of that program. And I think you will be a contributor if it comes to pass.

Great. Thank you for that. So another big picture question, right? So California, the low-carbon fuel standard, is obviously a big benefit to the green gas market, cellulosic gas and green gas in general, something like 180 projects, most of them tiny but in process there. And I know you guys are going to participate. Canada this summer is going to be filing its clean fuels program in the Canada Gazette, which – will be the point that starts the clock for people to actually be able to start construction on new facilities. Can you talk to us a little bit about your project development in Canada historically? Have you seen the Canadian market historically as an attractive market? How well prepared are you to maybe go in and serve the Canadian green gas opportunity if we see this heat up the way it has in California?

We are talking to quite a few people up in Canada to develop some green gas sites in Canada. And as you probably know, we have a great presence up in Canada. We have five offices with the center located in Toronto, Canada. And with our group down here, we leverage in our group, and trying to develop some sites up in Canada, and I think we have a couple right now that we are talking to people, but very early stages. But what has happened in Canada, which is probably more interesting, some of the utilities, they are looking for green gas, and we are talking to a couple of them, maybe for long-term contracts, shipping some of the green gas from the United States to Canada. So I think I mentioned it last time, And I will mention it again. We have a great pipeline right now of green gas plants. We did say that we have one be up and running by the end of this year. We have two coming up and running at the end of next year. We anticipate that we will have probably three the year after that. So we have a very good pipeline of green gas plants, but we're always looking for more. We think that market is developing, and for the better. I did mention last time that we are looking to get some long-term contracts, and we continue negotiating those contracts. It will slow down a little bit because of the COVID-19 crisis, but for the long term, we think that's going to be a great, great opportunity for this company. It's... it would be a great catalyst for us.

Excellent. That's great to hear. Stay well, everyone, and thanks for taking my questions.

You're welcome.

Thank you. And we don't have any further questions. Professor, please continue.

I guess none. So thank you very much all, and looking forward to our next call. Thanks. Thanks.

And this concludes today's conference call. Thank you, everyone, for your participation, and you may now disconnect.