American Superconductor Corp

NASDAQ:AMSC

Earnings Call Analysis

Firm Turns Corner with Diversified Growth

The company reduced its net loss to $1.6 million or $0.06 per share in Q3 fiscal 2023, a significant improvement from a $9.6 million loss year-over-year. They ended Q3 with $25 million in cash and anticipate Q4 revenues between $36 and $40 million, with possible positive operating cash flow up to $2 million. The outlook is fueled by demands in renewables and diversification into sectors such as semiconductors, military, and utilities. The company has delivered an outstanding quarter, with a robust pipeline and scaled-up operations. They are prepared to leverage market tailwinds in renewables, electric vehicles, and infrastructure for future growth.

A Strong Performance in Fiscal 2023's Third Quarter

The company kicked off their earnings call with a bolt of optimism, highlighting that the total revenue for the past nine months has matched the entire revenue of the previous fiscal year. This sets the stage for any progress in the fourth quarter to translate into year-over-year growth. The third-quarter revenue, hitting over $39 million, surpassed expectations thanks to robust demands, especially for energy power system shipments as customers require deliveries sooner than forecasted.

Dominant Grid Segment and Soaring Wind Business

An inspiring growth story unfolds within the grid and wind segments. The grid segment, responsible for about 85% of total revenue, grew over 60% compared to the year-ago period, marking a record-breaking quarter. Meanwhile, the wind business is picking up speed, contributing approximately 15% of the revenue and growing an impressive 90%. This vitality is underpinned by a diversified array of product shipments across renewable, industrial, semiconductor, and military applications, with new orders booked over $34 million for the quarter and a 25% increase in backlog from the previous year.

Strategic Wins: Inox Wind and U.S. Navy Programs

Strategic milestones were achieved with the procurement of a second 3-megawatt electrical control systems order from Inox Wind and orders securing ongoing Navy development programs. These developments are expected to unfold across 2024, contributing positively to the year's outlook. Over the last five years, strategic actions have propelled the company's grid business revenue to nearly triple, featuring consistent revenue growth and successful integrations of acquired companies.

Financial Highlights and Profitability

The financial picture is getting brighter, with revenue figures of $39.4 million for Q3 of fiscal 2023—a leap from $23.9 million in the same quarter of the previous year. The non-GAAP net income settled at $900,000, showing that the company's profitability is making headway. Gross margins also saw a significant rise to 25% for the quarter, a stark improvement from just 2% in the prior year, thanks to higher revenues, favorable product mixes, and increased pricing across product lines.

Liquidity and Cash Flow

The company reinforced its financial stability ending Q3 with $25 million in cash, cash equivalents, and restricted cash, which is notably higher than $24 million as of the end of the second quarter. They succeeded in generating positive operating cash flow at $1.3 million for the quarter.

Looking Ahead: Q4 Projections

As for the fourth quarter of fiscal 2023, there's cautious optimism with revenue expectations set between $36 million to $40 million. The company aims to keep its net loss under $3.5 million and its non-GAAP net loss below $1.7 million. Operationally, cash flow is expected to break even or potentially generate up to $2 million.

Earnings Call Transcript 2024-Q3

[Operator]

Good morning, and welcome to the AMSC Third Quarter Fiscal 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to John Heilshorn of LHA. Please go ahead.

[John Heilshorn]

Thank you, good morning, everyone, and welcome to American Superconductor Corporation's Third Quarter Fiscal 2023 Earnings Conference Call. I am John Heilshorn of LHA Investor Relations, AMSC's Investor Relations agency of record. With us on today's call are Daniel McGahn, Chairman, President and Chief Executive Officer; and John Kosiba, Senior Vice President, Chief Financial Officer and Treasurer. American Superconductor issued its earnings release for the third quarter of fiscal 2023 yesterday after the market closed.

For those of you who have not yet seen the release, a copy is available in the Investors page of the company's website at www.amsc.com. Before I start the call, I would like to remind you that various remarks that management will make during today's call about American Superconductor's future expectations, including expectations regarding the company's fourth quarter fiscal 2023 financial performance plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995.

Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those set forth in the Risk Factors section of American Superconductor's annual report on Form 10-K for the year ended March 31, 2023, which the company filed with the Securities and Exchange Commission on May 31, 2023, and the company's other reports filed with the SEC.

These forward-looking statements represent management's expectations only as of today and should not be relied upon as representing management's views as of any subsequent date to today. While the company anticipates that subsequent events and developments may cause the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements.

Also on today's call, management will refer to non-GAAP net loss, which are non-GAAP financial measures. The company believes that non-GAAP net income loss assists the management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these noncash, nonrecurring or other charges that it does not believe are indicative of its core operating performance.

The reconciliation of GAAP net loss to GAAP net income can be found in the third quarter of fiscal 2022 earnings press release the company issued and furnished with the SEC last night on Form 8-K. All the American Superconductor's press releases and SEC filings can be accessed from the Investors page of its website at www.amsc.com.

With that, I will now turn the call over to Chairman, President and Chief Executive Officer, Daniel McGahn. Daniel?

[Daniel McGahn, executive]

Thanks, John, and good morning, everyone. I'm really excited to share some great news with everyone today. I'll begin by providing an update and sharing a few remarks on our business, John Kosiba will then provide a detailed review of our financial results for the third fiscal quarter, which ended December 31, 2023, and will provide guidance for the fourth fiscal quarter, which will end March 31, 2024. Following our comments, we'll open up the line to questions from our analysts.

We're really pleased to announce another quarter of outstanding financial results. Total revenues for the third quarter of fiscal year 2023 exceeded our expectations and guidance range. The business really outperformed this quarter. We showed higher revenue. We showed expanded gross margins. We had positive operating cash flow. We generated non-GAAP net income, and we continue the rate at which for booking orders to backlog. Total revenue for the past 9 months is about the same as total revenues for our entire previous fiscal year. Let me repeat that because I think it's important, and I'm convinced that people are missing this point about the strength of our business.

Through the first 9 months of this fiscal year, we had about the same revenue for the 12 months as the previous entire fiscal year. This means that whatever we do in the fourth quarter will be year-over-year growth.

I won't steal John's guidance later in the call, but given the fact the basis is about $100 million, you basically see the revenue for our fourth quarter as the growth of our business for the fiscal year. This success was driven by our pricing initiatives, product and regional mix and overall customer demand. All signs this quarter are very positive. Our third quarter revenue of over $39 million was driven by new energy power system shipments. This was due to customers' demand needing products earlier than forecasted. We are finding lead times are shrinking and our customers want products sooner. We see this as a great indicator of the health of our business.

Our grid segment revenue accounted for approximately 85% of AMSC's total revenue and grew over 60% versus the year ago period. This represents a record-breaking grid quarter with unprecedented quarterly revenue. Nearly 15% of the revenue came from our wind business which also grew about 90% versus the year ago period, 60% and 90%, these are big numbers. During our third quarter, we saw a diverse set of product shipments. We shipped voltage compensators, capacitor banks, harmonic filters, transformers, rectifiers, Volt VAR optimizers, ship protection systems and electrical control systems. These products went into renewables and a variety of industrial markets, including semiconductor, mining as well as our Navy projects.

During our third quarter, we booked over $34 million of new orders and grew our 12-month backlog to over $137 million. Our backlog at the end of the third quarter increased by nearly 25% when compared to the year ago period. We had $25 million of new energy power systems orders. Our new energy power systems orders have averaged over $30 million a quarter during fiscal year 2023, varying by quarter because of timing.

These third quarter orders serve an increasingly diverse market. They represent strong contributions from the renewables market with wind and solar projects accounting for approximately 2/3 of the total. Industrial orders, which contributed approximately 1/3 of the total include orders for utilities, metals and mining as well as semiconductor projects.

With strong demand across our end markets, we expect to continue to grow and diversify our grid business through these and future strong bookings in both Renewable and Industrial sectors.

Okay. Let's talk about some great news and when. We secured our second 3-megawatt electrical control systems, or ECS, order from Inox Wind. Inox Wind has requested immediate delivery under this $8 million follow-on order, and we expect to ship these ECS over the course of calendar year 2024. It is depending on our payments. Inox would like all sets to be delivered during our first quarter of fiscal 2023, but we see it impacting the first and second quarter, it could take longer to deliver if they are not timely with their payments. Inox's business seems poised to take off in 2024. Their public information would lead one to believe this. We are off to an encouraging start in calendar year 2024 with this follow-on order from our partner Inox for our cutting-edge 3-megawatt class ECS. We see continuous demand for the 2-megawatt turbine and our 2-megawatt ECS as well.

Additionally, we have made progress on our Navy development programs and secured orders to continue that work. We are working to insert our technology into multiple Navy's fleets. Over the past several years, we've taken a series of very deliberate actions to diversify our business and grow through our grid business. Over a 5-year period, we nearly tripled our grid business revenue and had consistent revenue growth of over 17% compounded annual growth rate. We acquired and integrated 3 companies which have successfully broadened our sales leverage, expanded our content of offerings and contributed to our increased total revenue. We are pleased with these results and super excited about the rest of the year.

Now I'll turn the call over to John Kosiba to review our financial results for the third quarter of fiscal year 2023 and provide guidance for the fourth quarter of fiscal year 2023, which will end March 31, 2024. John?

[John Kosiba, executive]

Thanks, Daniel, and good morning, everyone. AMSC generated revenues of $39.4 million for the third quarter of fiscal 2023 compared to $23.9 million in the year ago quarter. Our grid business unit accounted for 85% of total revenues, while our wind business unit accounted for 15%. Grid business unit revenues increased by 61% in the third quarter versus the year ago quarter, while our wind business unit increased by 87% over the same time period.

Looking at the P&L in more detail. Gross margin for the third quarter of fiscal 2023 was 25% compared to 2% in the year ago quarter. Gross margin for the third quarter of fiscal 2023 was positively impacted by the higher revenues, a more favorable product mix and the favorable impact across the business from pricing increases across our product lines.

Moving on to operating expenses. R&D and SG&A expenses for the third quarter of fiscal 2023 were $10 million compared to $9.3 million in the year ago quarter. Approximately 11% of R&D and SG&A expenses in the third quarter of fiscal 2023 were noncash. Our non-GAAP net income for the third quarter of fiscal 2023 was $900,000 or $0.03 per share compared with a net loss of $7.7 million or $0.27 per share in the year ago quarter. Our net loss in the third quarter of fiscal 2023 was $1.6 million or $0.06 per share. This compares to a net loss of $9.6 million or $0.34 per share in the year ago quarter.

Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results. We ended the third quarter of fiscal 2023 with $25 million in cash, cash equivalents and restricted cash. This compares with $24 million on September 30, 2023. Our operating cash flow in the third quarter of fiscal 2023 generated $1.3 million.

Now turning to our financial guidance for the fourth quarter of fiscal 2023. We expect that our revenues will be in the range of $36 million to $40 million. Our net loss is expected not to exceed $3.5 million or $0.12 per share. Our non-GAAP net loss is expected not to exceed $1.7 million or $0.06 per share. We expect operating cash flow to be breakeven to positive cash generation of $2 million. We expect to end the fourth quarter with no less than $25 million in cash, cash equivalents and restricted cash.

With that, I'll turn the call back over to Daniel.

[Daniel McGahn, executive]

Thanks, John. We didn't guide to that last quarter, but we are this quarter, and that has meaning. This is the second quarter in a row where we've achieved positive operating cash flow and expect to do that again for a third quarter. Strong market demand from renewables, industrials and utilities drove new energy power systems orders for our third quarter of fiscal year 2023.

Our orders illustrate market diversification from customers in metals, mining and materials and semiconductors to military and utility applications. We see opportunities for our products and services as utilities address the addition of distributed power into the electric grid. We have a robust pipeline of opportunities, thanks to strong market demand, and we are aggressively going after those opportunities.

We see the wind market strengthening in India, and that should translate into expanded business for us next year. We've been able to make significant progress in all our U.S. Navy programs, and we see more ships on the horizon. Our resilient electric grid system in Chicago continues to operate as planned and we believe we have a solution that can solve many existing problems in the electrical grid of many cities. We are committed to the continued diversification of our business, expanding our scale and reach domestically and internationally and investing in resilient markets that create a path for a more sustainable world.

Our key growth markets are renewables; mining materials and metals, particularly for electric and hybrid vehicles; semiconductors; utilities and military.

We believe the march towards a more sustainable world will be a driver for the markets we serve in the foreseeable future. Our products are expected to play a central role in this evolution, and we continue to intensify our efforts and collaboration to take advantage of these trends. We continue to work towards growing a business that's supporting power management at the substation level for renewables, mining and metals, utilities and for military uses as well as supporting customers in the semiconductor industry.

We have turned the corner and delivered another outstanding quarter. We aren't looking back. We can see the fundamentals of our business are well grounded. It feels like we have the wind at our back. Policy is driving more renewables; the reshoring of semiconductor capacity in America, the rise of the electric vehicle and investment in American infrastructure. All 4 we see as tailwinds. If you believe that there needs to be a solution to climate and decarbonization and you're wondering who will be providing these solutions, you have come to the right place.

To conclude, we've built a stable and diversified business that we believe is well positioned to capitalize on the future of investments in renewables, the future of investments in semiconductors, the future of investments in electric vehicles and the mining of the materials that go into these 3 markets as well as the defense business. We are driven by the opportunities that climate change presents to us as well as the electrification of transportation.

Our products provide grid support at the power consumption point of the electric vehicles. Our products also provide support at the mining and factories for the metals and materials used to build these vehicles. We've evolved from being a very concentrated business with both customer and market concentration to a more diverse business while at the same time growing revenue and improving margins. We are focused on improving the financial performance of our business and continuing to deliver a diversified business and on making progress towards our longer-term priority of building a sustainable business. I think the team has done a terrific job of achieving this.

When we look at our prospects and what our sales pipeline looks like, they're strengthening, not weakening. Orders are becoming larger, not smaller. The types of markets we serve are becoming more diverse, less concentrated. So when I look at the near term, say, the next year or so, I think our prospects are great. We believe that our differentiated solutions and set of capabilities are a significant advantage that will allow us to serve our customers ever more efficiently. I want to thank our team for their hard work and support, and I look forward to reporting back to you at the completion of our fourth fiscal quarter and fiscal year-end.

Gary, we'll now take questions from our analysts.

[Operator]

[Operator Instructions] Our first question comes from Eric Stine with Craig-Hallum.

[Eric Stine, analyst]

So maybe can we just start with wind. Could you just discuss -- you talked about it a little bit, but I just want to make sure I'm clear on it. How you expect this 3-megawatt order? And I know it's payment dependent, but this -- the order for the 3-megawatt control systems, how you see that playing out here in calendar year '24? Were you talking fiscal Q1 and Q2 is when you would expect the majority of that?

[Daniel McGahn, executive]

Yes, that's exactly right. I think it will be roughly balanced between the 2 -- the first 2 quarters. They wanted as fast as possible. We're at a point now where -- they're going to be hand to mouth in the short term, and we want to make sure we support them as best we possibly can, as quickly as we possibly can, but I don't want to set your expectations too higher. It even could leak a bit into the December quarter or third quarter. It really depends upon our ability to manage our supply chain, but it really starts with them paying everything on time, which to their credit, at least recently, they've been pretty good at. But I do want to make sure that everybody on the call understands that risk.

[Eric Stine, analyst]

Yes. No, understood. And then just sticking with wind on Q3, right? I mean that your -- the December quarter, I would assume that the majority of that is the 2 -- I mean, systems for the 2-megawatt turbine or there might be a little bit of 3-megawatt in there. How should we think about that?

[Daniel McGahn, executive]

Yes. It's really 2-megawatt in Q3, and we're just starting to get ready to start to deliver on the beginnings of the order that we received back a couple of quarters ago. We're at a point now, Eric, kind of where we were early in the 2-megawatt where we're going to get hopefully, a series of successive orders, maybe they'll be similar in size, maybe they'll grow in size. But we actually have a chart in the slide deck, we try to show the history that we have for the 2 megawatt. We're hoping that we're going to see that happen again with the 3. And all signs from India and from Inox lead us to believe that, that's probably correct.

[Eric Stine, analyst]

Okay. And so -- I mean when we think about this -- nearly $6 million -- now taking out the $8 million order for the 3-megawatt right? I mean, is this kind of a representative number for primarily the 2-megawatt, you layer the 3 on top? Or how do you think about kind of a quarterly run rate, again, knowing that you might have 2 quarters that are higher? What that looks like here through fiscal '24?

[Daniel McGahn, executive]

Yes. I think if you go back, let's look at the previous, say, 3 quarters and so and looking at that run rate, that's probably where we are with the 2. I think there are some indications in the market that they're going to sell more 2s as well. But again, it's always hard with this customer to be able to forecast it. Part of why we have focused so much on grid is we love Inox, they're a great customer. But as their business slows down or starts up, their access to capital could either help or hamper their ability to deliver to their customers. So we want to do everything we can to support them. We've been waiting for years for this business to start to come back. And I think one of the key messages today, we really feel like the wind is on our back now literally in India, and we should have a strong, we think, '24.

[Eric Stine, analyst]

Yes. No, that's great. You've been -- I know you've been waiting on that for quite some time. Maybe just turning to the Navy business. I know you've talked about it for quite some time about looking to get into Allied Navy's new ship platforms. It seems to me like your commentary today was stronger than I've heard in the past. Curious if that's a misread on my part or that was intentional and kind of maybe next signpost we should look for?

[Daniel McGahn, executive]

Yes. In communication, it's not what you say, it's what they hear and you're hearing me. So clearly, we see more ships on the horizon. So just kind of the 3 take-home messages here are we have a great new energy business that's supported by the backlog. We're converting orders at a very consistent rate. We feel the winds on our back, particularly in India, and we see more ships on the horizon and a clear path to them. These are not words you heard me say last quarter, the quarter before that. It is a different feeling. It is a different message today.

[Operator]

The next question is from Colin Rusch with Oppenheimer.

[Colin Rusch, analyst]

Could you talk about the impact of pricing on your year-over-year growth here in the quarter? And how we should think about the mix of unit growth and pricing growth driving top line acceleration in calendar '24?

[Daniel McGahn, executive]

We hope that the pricing initiatives are behind us, we've been able to reconcile cost and pricing. We've done a really good job, we think, to try to support our customers' needs at the same time. So when we look at the growth as part of it is pricing, part of it is just the absolute value of the projects are greater. Many projects in renewables, many projects in semiconductor and many projects in mining are leveraging not only 1 product line, but maybe 2 or 3, right?

So the average order size for a project is going up as well. So pricing is a piece of it. I wouldn't expect that to continue. I guess that there's more inflationary pressure. We'll have to respond to those things. But we've been able to work, I think, very well with our customers to ensure timely delivery and a price that we think still is competitive. We are a premium-priced product. We do have proprietary content in everything we do, so that should garner that. But the growth going forward, I think is really, Colin, going to be reflective of the pipeline and the ability for us to convert those orders and that the order sizes are getting larger.

[Colin Rusch, analyst]

Fantastic. And then on the supply side, obviously, you've gone through some lumpiness in terms of the supply availability and some dislocations. As that normalizes and you guys scale a little bit, can you talk a little bit about your ability to start driving cost out of the products and some incremental cost efficiencies from a manufacturing perspective as well?

[Daniel McGahn, executive]

Yes. I think those come in -- and I've said this on previous calls, when you start doing multiples of the same thing, and we're seeing that in different parts of the business. Obviously, ECS and SPS reflect that because you're making copies over and over that, that as you see that demand, it will allow rise, it will allow us to potentially look at our supply chain and look for cost reduction. I'm very optimistic in winds that as they grow their volume that we're going to be there for them as a good partner to make sure we're providing proper pricing.

So I think in the near term, most of the inflationary pressures are behind us. I won't say all, because there's always that risk. I think a lot of the availability pressures have been reduced. We're seeing lead times start to shrink, and we're seeing customers start to push us to be able to deliver faster, which is, I think, a great indicator of the health of the business.

[Colin Rusch, analyst]

Great. And then final one for me is just around maturity and evolution of customer conversations in lieu of the ongoing performance in Chicago with the grid solution. Can you talk a little bit about how many folks you're talking to, how those conversations are maturing and how to think about the potential for another demonstration project or a follow-on order?

[Daniel McGahn, executive]

Yes, I don't want to do another demonstration, and I don't see the first 1 as a demonstration at all. It's an asset that's in the grid, it's got full rate recovery. It's an operational capability that the utility wants and they want to do more of. You're probably hearing me start to, I'll say, quiet my rhetoric with REG. For those of you that have been around me for a while, I think you understand what that means. I'm very excited about REG and the feedback we're getting from customers, particularly in the U.S., we really do have a solution that's needed right now. So I think as we make more progress, demonstrable progress there, we'll give more updates, but I don't have anything else to say today.

[Operator]

[Operator Instructions] The next question is from Justin Clare with ROTH MKM.

[Justin Clare, analyst]

So I guess, first off, you did mention that order sizes are getting larger here. I was wondering if you could just talk about what's driving those larger orders? Is this a function of a more comprehensive product portfolio? Are there other factors are your customers' project sizes increasing? Maybe you can just give a little color on that.

[Daniel McGahn, executive]

Yes. I think both are contributing factors. I think the first one is the main driver. We're now bidding in the projects with a larger scope. We're now becoming known in the market as being able to deliver all of that as kind of a one-stop shop, and that I think is helping us. But I think also a lot of the work that we're looking at are larger projects, be it on the renewable side or the industrial side as well. So those are all good indicators we think about the health of the business.

[Justin Clare, analyst]

Okay. Great. And then how do you think about potentially further expanding that product portfolio, whether it's in-house development of products or looking at acquisition that could further support your products?

[Daniel McGahn, executive]

Yes. I think given the fact we've had this appetite, we have a demonstrated track record now recently at doing these 3 deals that have helped expand. The first one was more content for the Navy. And then we've talked a lot about the last 2 over the previous couple of years here. We're known in the market as a good company to work with and potentially be an acquirer. We're getting a lot of inbound traffic in that. So we want to be choosy about what we do and try to extend the business. We want to grow and if acquiring more content allows us to grow more quickly, then we think that's something that we should certainly consider.

[Justin Clare, analyst]

Got it. Okay. And then shifting gears a little bit here. You did mention that lead times seemed to be improving in your supply chain. I think last quarter, you had mentioned things moving from 15 months to potentially under 12 months for some projects or for some products. I was wondering how you see things trending ahead here? Do you see further improvement on the horizon? And then could this enable an acceleration in your ability to convert backlog to revenue?

[Daniel McGahn, executive]

Yes, I think the potential is there. I think our lead times are now closer to 9 to 15 months depending upon the product line, which means that we can generate orders here this quarter, next quarter and have some impact still on next fiscal year. So I think that's an important comment to make there. But we see a very robust pipeline of things that we're working on and trying to close. And we're -- we haven't figured it out. I'm tremendously excited, probably the most excited I've been about the prospects of the business, not just the results.

[Operator]

This concludes our question-and-answer session. I would like to turn the conference back over to Daniel McGahn for any closing remarks.

[Daniel McGahn, executive]

I just want to make a few key points here. Our business hasn't been in this strong of a position really ever when you think about the diversity, you think about the numbers and the performance. The business we've been talking about, we've now built. We've built a business that has generated cash from operations in the past 2 quarters and expect to do that again in the March quarter. We've been able to add new pieces in new markets, and we've been able to manage, as we discussed, pricing. We are growing. We think there's a series of tailwinds driven by climate change that are here to stay, and are driving the new energy part of our business, including the reshoring of U.S. semiconductor capacity and the move to more electric vehicles.

Wind in India appears to be strengthening. We have a new product that's in our partner's hands, and they're about to grow and build their business with us again. It feels much different now. It feels like the winds on our back. We also see more ships on the horizon. We have made progress with our development efforts with the U.S. Navy. We see an expansion of this business coming, hopefully, very soon. After all the work the team has done to feel that moment is near where we know what ships we could go on and see them on the horizon, it's quite exciting indeed. I can't stress that enough.

Lastly, we've been able to successfully integrate multiple acquisitions and believe that could continue in our future to add more pieces to attack our markets with more content, a deeper, broader offering means as we continue to push for growth. We can get at it more quickly. I hope after hearing I speak today, you are as excited as we are about our business. For those of you that have asked me why AMSC and specifically, why now? We have demonstrated a business for multiple quarters that generates cash from operations. That business has multiple policy tailwinds. We feel the wind is on our back in India, and it appears it will start to blow harder. We see more ships on the horizon and see a clear path to them. We have successfully integrated multiple acquisitions and hope to continue that in the future. I'm looking forward to talking to you again when we report our fourth quarter and full year results. Thank you, and good day.

[Operator]

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.