Aspen Aerogels, Inc.

Ladies and gentlemen, thank you for standing by, and welcome to Aspen Aerogels Inc. Q3 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, John Fairbanks. Please go ahead.

Good afternoon. Thank you for joining us for the Aspen AeroGels conference call. I'm John Fairbanks, Aspen's Chief Financial Officer. There are a few housekeeping items I'd like to address before turning the call over to Don Young, Aspen's President and CEO. The press release announcing Aspen's financial results and business developments, as well as a reconciliation of management's use of non-GAAP financial measures compared to the most applicable GAAP measures, is available on the investor section of Aspen's website, www.arajel.com. Included in the press release is a summary statement of operations, a summary balance sheet, and a summary of key financial and operating statistics for the quarter. The nine months ended September 30th, 2019. In addition, the investor section of Aspen's website will contain an archived version of this webcast for approximately one year. Please note that our discussion today will include forward-looking statements, including any statement regarding outlook, expectations, beliefs, projections, estimates, targets, prospects, business plans, and any other statement that is not a historical fact. These forward-looking statements are subject to risks and uncertainties. AST and AERGEL's actual results may differ materially from those expressed in these forward-looking statements. A list of factors that could affect the company's actual results can be found in Aspen's press release issued today. They're discussed in more detail in the reports Aspen files with the SEC, particularly in the company's most recent annual report on Form 10-K. The company's press release issued today and filings with the SEC can also be found in the Investors section of Aspen's website. Forward-looking statements made today represent the company's views as of today, October 31, 2019. Aspen Aerogels disclaims any obligation to update these forward-looking statements to reflect future events or circumstances. During this call, we will refer to non-GAAP financial measures, including adjusted EBITDA. These financial measures are not prepared in accordance with U.S. generally accepted accounting principles or GAAP. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a discussion of why we present these non-GAAP financial measures are included in today's press release. I'll now turn the call over to Don Young, President and CEO of Aspen and Arizona.

Good afternoon. Thank you for joining us for our Q3 2019 earnings call. I will start by providing comments about our performance and outlook. Next, John will review our Q3 and year-to-date 2019 financials and update our 2019 guidance. We will conclude the call with a Q&A session. The third quarter was important for us. Revenue growth accelerated to 48% versus last year. We increased our gross profit by a factor of five versus last year, and we expanded our gross margin by nearly two times relative to the first half of 2019. With this exceptional revenue growth and margin expansion, we delivered positive adjusted EBITDA in the third quarter and created the momentum necessary for an outstanding finish to the year. The good news is that we had a strong quarter, and the better news is that we have the potential both in the short term and in the long term to perform more effectively and to enhance significantly our profitability as we look forward to the coming year, 2020. Two of our three performance indicators for 2019 are focused on revenue, specifically to grow total revenue by more than 20% for the year and to have an increasing percentage of total revenue, at least 33%, derived from project work. We are on pace in 2019 to exceed these objectives. With respect to project work as a percentage of total revenue, We have defined project revenue consistent with others in our industry to be revenue stemming from a customer-specific scope of work which exceeds $1 million in size. This project revenue is distinguishable from our day-in and day-out maintenance work, which tends to come in smaller, steadier increments and has grown consistently since 2008 when we first introduced our Pyrogel and Crowdgel products. We set our 2019 performance indicator target for project revenue as percentage of total revenue to 33%, a significant increase from our performance during 2018. Project revenue both for the third quarter and for the first three quarters year to date 2019 was in the 40% to 45% range. The formation of a dedicated global project-focused sales team, working in concert with our regional teams, has contributed to our revenue growth in 2019. We expect to realize a continued significant return on project related investments in 2020, 2021 and beyond. Overall activity levels are high in both maintenance and project work. We are confident that we will exceed our full year revenue commitments for 2019. Again, to grow revenue by more than 20% and to have a growing from project work. Our focus in 2019 has been on our drive to profitability. During the second quarter, as I reported at the time of our last earnings call, we completed two major initiatives that focused on reducing our bill of materials in order to improve our gross margins. These initiatives, along with strong revenue growth, led to a significant expansion in gross margin in the third quarter compared both to the first half of this year. We expect gross margins for the second half of 2019 to be approximately 22%. At the time of our last earnings call, we anticipated completing a third initiative at the end of Q3 and expected to have all three initiatives contributing in Q4. The third initiative is technically complex, but will reduce significantly our bill of material costs. We want to implement it with minimal disruption to our manufacturing operations, especially at a time of substantial revenue growth. With this deliberate approach, we now do not plan to have the third initiative fully implemented until April 2020. This delay is the principal reason why we trimmed our 2019 adjusted EBITDA guidance by $1 million. The third initiative is a meaningful gross margin driver, and we are confident that it will have a significantly positive impact on gross margin and profit in 2020, especially when combined with the other two initiatives. In addition, we have an intense focus on making our existing manufacturing assets more efficient, more fully utilized, and thus much more profitable. Our drive to profitability is designed to enable the company to generate as much as $35 million of the Jesse D. Bidon from our existing manufacturing assets. There are two additional topics that I would like to cover in these prepared remarks. First is our new business creation initiative, and second is a final comment on our three performance indicators for 2019. Our new business creation work is an important element of the strategy to leverage our aerogel technology platform. As I discussed earlier this year, we are positioning ourselves to leverage our more than a decade of work creating proprietary and patented technology on carbon aerogel with an initial focus on the battery materials market. Our exploration centers on how we can take full advantage of three key attributes of our carbon aerogels, unique pore morphology, high electrical conductivity, and high mechanical strength. with a goal to improve the energy density of lithium ion and next generation batteries, a key enabler in expanding drive range in electric vehicles. Our team is actively characterizing our carbon aerogels and expanding our IP portfolio as we determine our potential value in the battery market. Our immediate objective is to attract one or more partners who have expertise in battery materials, battery production, and battery applications, and who can bring support and validation to our battery materials endeavor, much as BASF has done in the area of building materials. We continue to make progress with these partner discussions and anticipate formalizing one or more of them before year-end. Our goal is to build another attractive aerogel-based business stemming from our aerogel technology platform. And finally, to recap our three performance indicators for 2019, our first, 20% revenue growth and positive adjusted EBITDA. Second, project revenue comprising 33% of total revenue. And third, the formation of an additional partnership with a leading company aimed at leveraging our Aerogel technology platform into a new market. In addition, during the year, we discussed the the delivery of gross margin solidly in the 20s for the second half of 2019. Based on our revenue outlook and our active project pipeline, we expect revenue growth to be greater than 25% for the year and project revenue to comprise more than 40% of total revenue, in both cases exceeding our targets. Despite the delay in implementing the third gross margin improvement initiative, we expect the post-growth and to position ourselves for a further gross margin expansion in 2020. It is interesting to note that the third gross margin improvement initiative was expected to add two to three gross margin points to Q4 2019 results. Again, this is a technically challenging initiative, but financially a very attractive one. As a result of our deliberate approach to the third initiative, we are likely to miss the performance indicator to generate a positive adjusted EBITDA for the year and instead to be slightly negative to break even. However, we will be solidly EBITDA positive for the second half of 2019 and carry strong momentum and opportunities into 2020. With respect to the new business creation, as I noted earlier, we are actively engaged in discussions with potential partners related to our battery materials initiative and plan to convert one or more of these discussions into a partnership agreement before year end. The drive to profitability is our imperative for 2019. With strong revenue in Q3 and anticipated record revenue for both the fourth quarter and for the full year, and with improving profitability characteristics. We are positioning ourselves to generate additional significant growth and necessity in 2020. We believe the key to maximizing long-term shareholder returns is to build a strong energy infrastructure business that generates cash to invest and realize in the full potential of opportunities in our core and adjacent markets and to invest in business opportunities in new markets that can lead to significant breakout value. markets such as building materials and battery materials. The goal is to unlock our potential and to reset meaningfully the valuation of the company. Now I'll turn the call over to John for a review of our financial results. John?

Thanks, John. I'd like to start by running through our reported financial results for the third quarter of 2019 at a summary level. Third quarter total revenue grew 48% to $35.4 million. from $23.9 million in the third quarter of 2018. Third quarter net loss improved to $2.3 million, or $0.09 per share, from $6.5 million, or $0.27 per share, last year. The third quarter adjusted EBITDA was positive $1.4 million compared to negative $2.7 million a year ago. We define adjusted EBITDA as net income or loss for interest, taxes, depreciation, amortization, stock-based compensation expense, and other items that we do not believe are indicative of our core operating performance. I'll now provide additional detail on the components of our results. First, I'll discuss revenue. Third quarter total revenue of $35.4 million was comprised of product revenue of $35 million and research services revenue of $400,000. and represented growth of $11.5 million from last year's $23.9 million. This increase in third quarter total revenue was driven by solid growth in our core energy markets in the U.S. and Canada and continued strong shipments to the PTT LNG NONGFAB terminal project. Total shipments during the quarter increased by 33% to 10.4 million square feet of aerogel blankets, and our average selling price increased by 13%, $3.38 per square foot, right in line with our expectations. As a result, we are maintaining our average selling price outlook for the full year of $3.35 per square foot, plus or minus 5 cents. At the time of our second quarter investor call in August this year, we reaffirmed our projected revenue growth of between 20% and 28% for 2019, due to an increase in project revenue in both the sub-C and LNG markets. Our revenue growth of 48% in the third quarter was in line with our internal quarterly projections supporting our public annual outlook. As a result, we are raising the base of our 2019 full-year revenue outlook to $130 million and reaffirming the upside at $134 million, equivalent to growth of between 25% and 28% versus last year.

Next I'll discuss gross profit.

Gross profit was $7.7 million or 22% of revenue during the third quarter of 2019 versus $1.5 million or 6% of revenue during the third quarter last year. Improvement in gross profit was largely driven by the 33% increase in volume and the 13% increase in average selling price versus last year. offset in part by an increase in manufacturing expenses during the third quarter this year. At the time of our second quarter investor call in August this year, we projected a significant increase in revenue, capacity utilization, and gross profit for the second half of 2019. We also estimated that our gross margin would exceed 20% for the final two quarters of the year and approach 20% for the full year. Our third quarter performance was clearly in line with these projections. Looking forward, we expect to achieve both record quarterly revenue and a gross margin in excess of 20% during the fourth quarter. However, as Don mentioned, we are now projecting a two-quarter delay in one of our principal initiatives to offset the raw material cost increases we've experienced over the past two years. As a result, we expect our fourth quarter gross margin to remain in the low 20s in contrast to our earlier internal projections of an increase to the mid-20s. Accordingly, we are now projecting that our gross margin for the full year will be roughly 18%, short of our 20% target, but still a significant improvement to our 12% gross margin last year.

Next, I'll discuss operating expenses.

Third quarter operating expenses increased by $2 million, or 25% versus last year to $9.9 million. This increase was largely driven by quarter-to-quarter timing of expense recognition. On a year-to-date basis, our operating expenses increased by $1.2 million, or a more reasonable 5% to $28.3 million. And for the full year, we're decreasing our operating expense outlook to a range of between $37 million at the low end of our revenue guidance to $39 million at the high end of our revenue guidance, devised from our prior outlook of between $37.5 and $40 million. Next, I'll discuss our balance sheet and cash flow for the third quarter. Cash used in operations of $3.8 million during the quarter reflected a $5.2 million increase in working capital investment, offset in part by our positive adjusted EBITDA of $1.4 million. The increase in working capital included investments in accounts receivable associated with our 48% revenue growth during the third quarter and in finished goods inventory to support our anticipated record product revenue during the fourth quarter. Capital expenditures during the third quarter were $287,000 and principally focused on improvements in our East Providence facility. During the quarter, we increased our borrowings under our revolving credit facility the Silicon Valley Bank, by $2 million, principally to support our investment in India. We ended the third quarter with $1.2 million of cash, net current assets of $14.8 million, $4.9 million outstanding on our revolving credit facility, and shareholders' equity of $59.1 million. And importantly, we had access to an additional $7.6 million available under our revolving credit facility at quarter end. We're fine-tuning our full-year financial outlook for 2019. Total revenue is expected to range between $130 and $134 million, revised from prior guidance of between $126 and $134 million. Net loss is expected to range between $14.5 and $15.5 million, revised from prior guidance of between $12.8 and $14.4 million. Adjusted EBITDA is expected to range between negative $1 million and break-even, revised from our prior outlook of between break-even and positive $1.6 million. Again, this reduction in our adjusted EBITDA outlook is principally due to the two-quarters delay in one of our principal initiatives to offset recent raw material cost increases. EPS is expected to range between a loss of 60 cents and a loss of 64 cents per share for the year. revised from between a loss of 53 cents and a loss of 60 cents per share. The CPS guidance assumes a weighted average of 24.1 million shares outstanding for the year. In addition, this revised 2019 outlook assumes depreciation and amortization of $10.2 million, stock-based compensation expense of $3.9 million, interest expense of $400,000, and patent enforcement costs of $800,000. Full-year outlook also assumes a gross margin of 18%, an average selling price of $3.35 per square foot, plus or minus 5 cents. Turning to cash, we expect that our capital expenditures will total approximately $2.3 million for the full year. And within the context of the adjusted EBITDA range in our 2019 full-year outlook, we expect to fully repay the outstanding balance on our credit line with Silicon Valley Bank, and to exit 2019 with between $2.5 and $4 million of net cash on hand. Although we don't normally provide quarterly guidance, I'd like to emphasize that our updated full-year 2019 outlook includes our expectations for a strong fourth quarter. The differential between our 2019 full-year outlook and our nine-month actuals indicates that fourth-quarter total revenues is expected to range between a record $37.1 and $41.1 million. Fourth quarter net loss is expected to range between $900,000 and $1.9 million. Fourth quarter adjusted EBITDA is expected to range between a positive $1.8 and positive $2.8 million. And fourth quarter EPS is expected to range between a loss of 3 cents and 7 cents per share. As discussed earlier, we expect our gross margin to again exceed 20% during the fourth quarter.

I'll now turn the call back to Josh for Q&A.

At this time, if you would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, please press the pound key. And our first question comes from Chip Moore with Canaccord. Please go ahead. Your line is open.

Thanks. Hey, good evening. How's it going, guys? So another quarter of very strong growth, some good progress on margins.

Don, maybe you can talk about, it looks like you're on track to surpass the key objectives here a couple months away. Anything you can give us on how to think about 2020 in terms of early objectives? Start there.

Yeah. We're not quite ready to provide guidance for 2020, but I can tell you that we want to be able to build on the momentum that we're creating here in 2019. Our focus right now is to finish strongly here in Q4. We're positioned to have a record quarter. We're positioned to have a record year. That is really what's driving us right now. We think if we do those things well, we'll have a very promising 2020, which we'll talk about certainly at the next earnings call.

Certainly. Fair enough.

Had to try. So maybe we could talk a bit more about the project pipeline. It sounds like you're fairly optimistic. Maybe you can, you know, talk about sub-C, talk about LNG, what you're seeing there and how things are tracking.

Yeah. So we've had a – You'll remember, dating back now almost two years, we made a pretty significant investment in a project-focused, dedicated team. And that team is really working well with our regional folks who have all the local contacts. And we've built that pipeline out quite substantially, not only in the identification of projects, but in working hard to be sure that we're in the specifications of as many of those projects as possible. And in many cases, a preferred place in those specifications. And so we look at the pipeline for 20 and 2021 and even 2022. And we really like what we see. You know, we've been steady in the subsea business for a long time and we have an excellent value proposition. But I think what we'll see as we continue to deliver the PTT order throughout 2020, I believe that we will fill that in with additional LNG orders. Our value proposition is very strong on the LNG side. We've really demonstrated our value in maintenance and small projects and now in this large project. While I can't guarantee that every project will be between $35 and $40 million as the project in Thailand is, there are some really attractive projects out there that we're well positioned for here in the U.S. and around the world.

That's great. Yeah, we can certainly hope for some more of those $35 to $40 million deals.

That would be nice. On the growth margin side, can you talk a little bit more about some of the challenges for this third initiative? You know, is this a situation where we have to have some downtime, or how should we think about that as we approach, I think it was Q2 of next year?

Yeah, exactly. So this is something that we've been focused on. We executed the first two initiatives very effectively on schedule, and we knew this was going to be The more difficult of the three, we've got excellent people working on it. We're very confident that we will get it in place. We're just trying to mix it in, if you will, with the other constraints, if you will, or pressures that we have on our manufacturing facility. Growing nearly 50% this year, it puts a lot of good pressure on our facility and is testing that team. And we've been able to slot in the remaining tests required to feel confident about the third initiative here early in the new year. And that's what gives us confidence that we'll get it up and running and working hand in glove with initiative one and initiative two. And as I said in my comments, had we had it in place for Q4, we think it would have added two or three gross margin points to our, to what we anticipate to be our um, two, four performance year this year. So, um, it's, uh, it's valuable and we want to do it perfectly. And that's what we're trying to do.

That makes sense. And, you know, maybe the last one for me, um, on the partnership front, right. You know, we're, we don't have too much time left here in the year. So just, you know, want to gauge your sense of confidence that we see something, uh, by year end, not that that's necessarily critical, but just how far along you are in those discussions. Thanks, guys.

Yeah. We're very active, and we have multiple fronts going, and we are confident that we will do a good agreement, an attractive agreement here this calendar year. You're right. We don't want to do an agreement for the sake of doing an agreement. We want it to be something that creates value for us over the course of one year, three years, five years. But we are confident that we'll be able to get one or more of those in place before year end.

Exactly. That's what I was looking for. Thanks a lot.

Thanks, Chip.

Your next question comes from Eric Stein with Craig Hallam. Please go ahead. Your line is open.

Hi, Don. Hi, John.

Hi, Eric.

Eric, how are you? Doing well. Maybe I'll give a shot on 2020 and just ask it a little differently. I mean, just given like technique, for instance, very strong results, I mean, from your expectations, your commentary, what you're doing with EP20, I mean, is it fair to say that on the subsea side you expect growth, and then maybe on the LNG side, You know, I know you're working on the NONGFAB terminal right now for PTT. I see that PTT, you know, recently has come out with plans for their next terminal. And just, you know, curious your thoughts on, you know, the position you're in to hopefully win that.

Well, as you know, we had a good year in subsea this year. John, I want to say around $15 million or so, $16 million. And, you know, that's solid performance. It's not a record year, but it's a solid year for us in that area. We see continued activity levels in the subsea. As you cite, TechNeep has been our closest partner in this area really since 2004 or 2005. we feel well-positioned to continue to be successful in the subsea area. With respect to LNG, what we're really focused on is to deliver the PTT project successfully, which we are confident we will do, and during the year 2020, replace it, if you will, as we look towards 2021 and 2022 so that there's no drop-off in project revenue. We just continue to build our project revenue with perhaps a greater diversity of projects. And as I said to Chip, not everyone is going to be $35 to $40 million. So those are areas that are important to us. But the focus for us as a team is is not only growing our revenue, but this drive to profitability. We believe that if we, of course, get the third initiative in place, which we're confident about, take advantage of other opportunities we have to improve our operations, that we can continue to expand our gross margins and, therefore, have another significant impact year in improving our EBITDA. I think this year in the middle of the range is something like an $11 million improvement from 2018 to 2019. I really want to continue to build in a substantial way our EBITDA as we get into 2020 and beyond. It's time for this company to really demonstrate our ability to drive gross margin and drive profitability.

Yep, got it. Maybe just turning to the third Bill of Materials initiative that you've got. I don't know if you can give any detail on exactly what it is, but maybe more important, that 200 to 300 basis points you mentioned, when you said you thought you would get that in the fourth quarter, was that kind of the full impact, or do you think that as you get into 2020, the impact is greater than that on the gross margin?

I think, Eric, the

The margin improvement, we would have recognized one quarter of that improvement in the fourth quarter of this year. So, obviously, we expect that to carry through all of next year, right?

Okay, but it was a full – that's the full amount for the quarter. I mean, that's not – you were anticipating you'd get a month or so.

That's exactly right. When I talk about being a complex project or a task for our team, there's a lot of integration as it moves from our research and development group through the transfer of that down into our plant. There's a variety of third-party testing that needs to be coordinated, again, to be sure that we're delivering excellent product. There are a lot of pieces to this project. to this effort. Again, as financially attractive as it is, to do something that really trips up the plant for any period of time is too costly and too risky for us right now. We've really slotted a period of time early next year to put the final touches on that project and have it contributing starting on April 1st.

There is one other benefit that's likely to accrue to us through time next year, that this initiative would position us to be able to simplify our operations somewhat, and we would expect some improvements in productivity and a potential optimization of our manufacturing expenses moving forward. But that's to be seen, and I think we'd see an increasing benefit to that over the year.

Got it. Okay. Maybe the last one for me, you already touched on the partnership that you're targeting by year-end, but just on BASF, you know, maybe what kind of contribution that's been thus far with the SpaceLoft A2 product. And then, you know, I know you're working towards a second product, so just maybe some discussion around that.

We continue to work closely with BASF. I and part of our team was in Europe a couple – a few weeks ago, I guess, at one of the big trade fairs, and we really had an opportunity to spend some time together and focusing on creating these, what we call lighthouse projects, these really important projects that demonstrate the value of the high performance noncombustible material, so-called space loft A2, and we're working hard to do that with BASF. It has not been an enormous revenue contributor this year, but the potential is very significant. Also, our work, we're really working hand in glove with BASF on this second generation product as well. This is a product that we believe has great promise, not only in the building materials area, but in other markets as well. There's a product form to it. There's performance characteristics to the product that we think has real attributes in areas such as transportation and a couple of other areas that we and DSF are focused on. You know, BFF is a big, resourceful company, and we're, you know, of course, we want to go faster. I think both companies are very pleased with the progress we've made. Yes, we want to go faster, but we also want to do it right, and we think it's going to have a very nice impact on the value of our company over the course of, again, one, two, and three years.

Okay, thanks a lot.

Thank you, Eric.

Your next question comes from Ahmed Dayal with HC Wainwright. Please go ahead. Your line is open.

Thank you. Hi, Don. Hi, John. Just, you know, going back to the gross margin question, I just wanted to clarify, you know, so this is not an issue with finding replacement raw materials, et cetera. It's just implementing this improvement in the production process.

Yeah, I think looking just broadly, the initiatives that we have implemented or planning to implement this year are really three categories. We're qualifying, like you said, secondary lower-cost sources of supply for our high-value raw materials. But when we change raw materials, we go through a battery of tests to ensure that the characteristics and attributes of our our products are maintained and that there is absolutely no impact to our customers. And so we don't just go off out in the market, find a new supplier, get a new product, and implement it quickly. And so it's a very disciplined approach to change supply sources. The other place that we've been focusing on is optimizing our product formulations. and that we could reduce some of the volatile high-cost materials that have contributed to the material cost increases over the last couple of years. And once again, we'd be very methodical in our approach to changing formulations. And then finally, what's a lot easier and clearly we've already gotten in place is we're negotiating lower prices and volume discounts with our existing raw material vendors. So this really is a multifaceted approach. We had three principal initiatives on the slate for this year, and I guarantee you going into next year with our drive to profitability, we'll have another three or another four initiatives to put in place to try to spread our margin and drive better operating performance in the business. Understood.

Thank you for that. Could you give any color on how much of the BTT project has now been delivered?

We haven't – we're actually – we're not supposed to discuss the schedule of PTT. We're contractually bound not to. We have been able to say, and at the time we announced the project, it would begin shipments in the second quarter of 2019, and we would expect to complete shipments in the fourth quarter of 2020. We are on schedule, but that's really all I can say, you know, to that. But I think you can draw a logical conclusion from that. Thank you for that.

And is there anything else in the near term from a project perspective that is similar in size to PTT that you guys are working on?

PTT is a pretty large project for us. It would be the second largest project that we've done after the Reliance project in India, which was approximately $70 million delivered over a much longer period of time. So we have... several more projects that we have our sights on. But I would say that those projects are smaller, but they're plentiful in number. So our focus, and I think when we won the PTT order, I think I might have said, you know, it's a fantastic order. We love it. We're going to deliver it perfectly. You know, sometimes I'd rather have, you know, five $8 million orders than one $40 million order. And I think when we look out at the orders that we will win in 2020 and deliver in 2021 and 2022, I think you're going to see a lot more five, $10, and $15 million orders than you will see one or two, you know, $30 or $35 or $40 million orders. And I kind of like it that way, to be honest with you. We'll always take the big ones, but I like the diversity, and I like the way they get spread out in time.

Well, that's good, Connor. I appreciate it. I think that's all I have. I'll take my other questions offline. Thank you so much. Appreciate it. Thanks very much. Connor?

There are currently no further questions at this time. I'll turn the call back to Don Young for closing remarks.

Thank you, Josh. We appreciate your interest in aspirin aerogels. We look forward to reporting to you our fourth quarter results in February 2020. Have a good evening. Thank you.

This concludes today's conference call. Thank you for joining us. You may now disconnect.