Loop Energy Inc

TSX:LPEN

Earnings Call Transcript 2021-Q4

[Operator]

Good morning and thank you for standing by. My name is David and I will be your conference operator today. At this time, I'd like to welcome everyone to the Loop Energy Q4 and Full Year 2021 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions]

I'd now like to hand the call over to our first speaker today, Bill Zhang, Investor Relations. Bill, you may begin.

[Unknown Executive]

Thank you, David. Good morning, everyone. Welcome to our Q4 and Full Year 2021 Results Conference Call. Joining me today is our President and CEO, Ben Nyland; and our CFO, Damian Towns.

Our Q4 2021 news release, MD&A and financial statements can be accessed from the Investor Relations page on our website at www.loopenergy.com. I would like to remind our listeners today that our comments and answers to your questions may contain forward-looking information. Forward-looking information by its nature is subject to risks and uncertainties that may cause stated outcome to differ materially from the actual outcome. Certain material factors or assumptions were applied in drawing the conclusions or making forecasts or projections, which are included in the forward-looking information.

Listeners are warned not to place undue reliance on forward-looking statements. Please refer to our 2021 annual information form dated March 22, 2022, for more information. During today's call, there could also be references to product backlog. Product backlog is a non-IFRS financial measure intended to provide additional information and should not be considered as substitute for measures of performance prepared in accordance with IFRS.

In addition, this measure does not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other companies. Please see our Q4 MD&A release for the definition of and further information about product outlook. I would also like to caution our listeners that any projections provided today regarding Loop's future financial performance are effective as of today's date. It is our policy not to comment on or update this guidance between quarters.

I would now like to turn the call over to Loop's President and CEO, Mr. Ben Nyland for his comments, followed by Q&A period.

[Ben Nyland, executive]

Thank you, Bill. Good morning. And on behalf of the team at Loop Energy, welcome to our Q4 and full year 2021 earnings results conference call. I'm delighted to report another strong quarter and share some highlights from another successful year as we continue to lay the foundation for future growth in markets worldwide. During the call today, I will touch upon our financial performance and position as of December 31, 2021. I will also provide some context regarding the current market and macro factors we see impacting the hydrogen economy.

I would like to share some key focuses for Luke and finish by updating you on the progress of our key initiatives. There will be some time for questions at the end of the call. First, some highlights and key takeaways. We booked record revenues in 2021 of $1.4 million, almost 3x our revenues from 2020 despite the ongoing challenges presented by the COVID pandemic. 2022 is off to an excellent start with more units ordered in the first 2.5 months than in the entirety of 2021. There's a very strong macro environment momentum towards hydrogen and fuel cells in all 3 of our major markets: China, Europe and North America.

We are on track for the launch of our next-generation product, which we expect will provide us with both a larger total addressable market and strong improvements in product performance even beyond our current offerings. We are seeing positive results that our eFlow technology can have a significant impact in the electrolyzer market and are getting strong interest from major players to establish a commercial relationship. Let's start with a view of our 2021 results and operations. We have gained significant traction from our various target markets. In 2021, we achieved 19 purchase orders for our fuel cell solutions and we are targeting an increase to purchase orders for 60 units in 2022.

With POs in hand for 22 units so far in 2022, we feel we are well on our way to meeting this target. We expect to continue to broaden and further diversify our customer base across international markets this year as we turn our focus towards increasing unit production. Like many companies on commercialization path, we are experiencing operating losses, which we expect to be able to mitigate over time as we scale our operations and purchasing power. We are actively enacting a plan to reduce our costs as we continue to scale.

Our cost reduction targets are based on customer requirements to scale their own products, balanced with ensuring that we have operating capacity to supply what the market needs today. With $67 million in cash as of December 31, 2021, we remain in a strong position to meet our 2022 targets, including delivering upon our cost base and product development projects. Moving on to what we see in the macro environment. In China, in spite of the strain the pandemic is putting on the economy and supply chains, Chinese markets continue to push for hydrogen as demonstrated with the recent announcement of 2 more hydrogen cities.

One of China's key priorities is hydrogen production and developing fueling infrastructure. Within the 14th Five-Year Plan, hydrogen is one of the top 6 priorities concerning energy security. Based on this, we believe that China has identified hydrogen as a clean and renewable energy source that will be critical in securing its national security and national energy independence, with about 70% of its oil and gas currently being imported.

China has also committed to becoming carbon neutral by 2060, resulting in a push to decarbonize their roads and industrial sector. For all of these reasons, Loop continues to expect that China's hydrogen and fuel cell sector will experience a step function type of growth that is consistent with the growth of other sectors in China, such as solar, wind, semiconductors and battery electric vehicles. Loop's strategy in China is to ensure that we are positioned to benefit from that expected rapid growth when it happens. Switching our focus to Europe.

We believe that the pandemic, economic disruptions due to climate change and the Ukraine conflict have underlined the need and progressed momentum to embrace hydrogen and hydrogen fuel cell technology throughout the continent. Although I will focus on the macroeconomic impact of the crisis in Ukraine, our thoughts and well wishes go out to all of those individuals who are being impacted by this conflict and the suffering that they are currently enduring.

It is reported that the conflict in the Ukraine has added energy security as a major concern for Europe from an economic perspective. Coupled with the existing momentum to transition to clean energy, we understand this has led to an acceleration of hydrogen production and infrastructure projects in Europe. On March 8, 2022, REPowerEU, a joint European action for more affordable, secure and sustainable energy announced the goal of Europe becoming the industrial leader in clean hydrogen. The initiative has Europe looking to accelerate its electrification and renewable hydrogen efforts.

As part of its reported strategy, Europe proposes a hydrogen accelerator to develop the necessary infrastructure, hydrogen storage and port facilities to ease the demand for Russian gas and oil. Overall, we believe that the world's reaction to the crisis in Ukraine is raising the urgency of energy security in countries where that has not historically been a concern. And we believe that hydrogen and fuel cells are appearing as a key pillar of energy security for many countries.

Moving closer to home. The United States continues to be the world's second largest producer and consumer of hydrogen behind China accounting for 13% of global demand. The hydrogen Earthshot program launched in June 2021 sets out a proposed 1 1 1 goal to reduce the cost of clean hydrogen to $1 per 1 kilogram in 1 decade. In November 2021, President Biden also secured the $1 trillion U.S. infrastructure bill which provides a landmark of $65 billion to modernize the power grid, improve supply chains for clean energy, including hydrogen and carbon capture technology; and conduct renewable energy demonstrations as well as an additional $17.4 billion for port renovation.

Before updating you on some customer developments, I'd like to discuss a few key themes that drive the rhythm of our business and how we work with customers. Our customer adoption cycle ensures that we focus on supporting committed customers and partners who have documented path to scaling their operations. We are delighted to have added 10 customers in 2021. And we plan to continue to build our customer base to support our growth plans. This approach ensures that Loop is partnered with like-minded companies dedicated to deploying fuel cell vehicles at scale who we believe can provide Loop with growing product demand in the immediate term as well as the future.

As a result, we are confident that we will continue to grow the number of customers in the customer adoption cycle and advance multiple customers through this cycle. Continuing to win and gain market share requires a product that harnesses superior technology. We believe Loop's patented eFlow fuel cell architecture provides just such an advantage with new levels of fuel efficiency, peak power and durability which we refer to as our 16-90-10 advantage. With a focus on reducing the total cost of ownership, we believe our eFlow technology enables us to deliver up to 16% higher fuel efficiency versus same class alternatives and 90% more peak power in the same-size stack than our competitors, providing higher payload capacity and increased operating parameters.

Our testing also indicates that our bipolar plate delivers up to 10x better current density uniformity than conventional bipolar plates, which we believe will reduce TCO for customers through lower service and maintenance costs. We believe that our customer adoption cycle helps us to focus with our customers on collaborative and scalable relationships while our 16-90-10 advantages deliver the value proposition our customers require to be successful.

With a strong go-to-market strategy and leading technology, we are confident that Loop has the product line to provide relevant solutions to our customers and their applications. We are focused on commercial mobility, which we believe presently has over USD 1 billion total addressable market. As of today, Loop offers 30, 50 and 60-kilowatt fuel cell modules with additional systems to accelerate the integration of vehicles in the pilot and scale-up phases. We are excited to be expanding this product line in 2022 with the planned introduction of our 120-kilowatt fuel cell module.

The 120-kilowatt module will incorporate our in-house developed and manufactured next-generation bipolar plate. The new larger plate will augment our product offerings and significantly improve our ability to service applications such as coach buses and long-haul heavy-duty trucks. We believe our product developments will help grow our total addressable market. This new bipolar plate also allows us to enhance our existing product offerings further. The improvements will enable us to service both our commercial mobility target markets as well as adjacent markets such as stationary power systems and specialty vehicles.

Due to the versatility of our products, we can serve these applications without engineering custom solutions, which can consume large amounts of time and resources. 2021 was the first full year Loop commercially offered its fuel cells, and we are very pleased with the market's initial reception. To ensure continued success, we are driving towards cost-out targets based on what our customers have indicated they need in order to scale.

Our cost-out strategy involves production scale-up, design improvements and vertical integration. We anticipate the introduction of the new, larger, bipolar plate with the 120-kilowatt fuel cell solution will significantly reduce our cost of goods as it incorporates both design improvements and the vertical integration of the manufacturing process for the bipolar plate. By mid-March, we have secured purchase orders for 22 fuel cell units from Europe, North America, China and Australia. We have already exceeded our total orders for 2021 and this puts us on track to triple the number of units sold versus last year.

Importantly, the purchase orders in Q1 have come from a diverse set of customers and geographies. While we're excited about the momentum in China, Europe and North America, we also recognize the value in not developing a dependency on any 1 market or customer. We believe that as we continue to diversify our customer base, we will be able to improve our ability to set expectations for our investors.

We believe that the addition of customers to our customer adoption cycle and the purchase orders that this is generating is the best way to measure the success of our go-to-market strategy. As you might expect, our backlog has continued to grow. As of December 31, 2021, it was just over $53 million compared with $45 million as at October 31, 2021. The first fleet of buses powered by Loop Energy fuel cells has now been operating for 10 months in Nanjing, China. The fleet continues to exceed our uptime and fuel efficiency targets as of the end of February, has completed over 400,000 kilometers of operational service and is expected to be a big contributor to meeting our 2022 target of 750,000 cumulative kilometers across all field operated vehicles with the Loop fuel cell system.

We view this fleet as validation that the lab performance that we have seen from our products has successfully transitioned into the field, and we believe the stage is now set to scale production into the market. We are increasingly confident in our decision to establish our wholly-owned Chinese subsidiary, Loop Shanghai, as we continue to build out our manufacturing facility and grow our team in the Shanghai area. The facility is on track to be operational in Q2 of this year. We expect to share more about our China strategy and demonstrate the market interest that we are gaining soon.

This month in Europe, Slovakian based OEM mobility and innovation launched a bus powered by a Loop 30-kilowatt fuel cell system for markets across Europe. We also announced on March 17 that our customer Innotest is integrating that same 30-kilowatt product into their home power energy system, which will be sold in Switzerland and other European markets. We believe the fact that both of these companies are able to use the same Loop product for 2 very different applications is a great validation of the versatility of Loop's products and our ability to continue to focus our outbound efforts on commercial mobility, while taking advantage of inbound demand for adjacent market opportunities.

To support our go-to-market strategy in Europe, we are expanding our sales team and have established our global services group. In the United States, we hired a Director of Sales in North America, and we are seeing a positive response to our product offerings. We believe this is a good indication that interest in fuel cell technology is growing in the same way in the U.S. as we have seen in China and Europe over the last few years. Finally, I want to share that we are actively exploring how our technology could be utilized in electrolyzer applications. Throughout 2021, we worked with multiple entities to better understand the potential for eFlow's innovations to address the key challenges of traditional PEM electrolyzer designs. We are excited with the results and hope to be able to share these with you soon and the opportunities that eFlow might unlock in the electrolyzer space. Thank you again for calling in today, and Damian and I will now take questions.

[Operator]

[Operator Instructions] We'll take our first question from Rupert Merer with National Bank.

[Rupert Merer, analyst]

If I look at your backlog $53 million as of December 31, and you're targeting 60 POs this year, can you give us a sense of what that might translate into as far as a revenue target would go for this year?

[Damian Towns, executive]

Yes. Thanks, Rupert, and good morning. Obviously, it's a tough question to ask because that's going to be very dependent upon where those 60 purchase orders come from in geographic location, product mix as well. So I think also, as you're aware, our revenue that we report also includes some parts that we sell to our customers to make sure that the customer integration is a positive experience. So I think in terms of absolute guidance, we're not providing any guidance on the revenue number. I think the 60 POs, there will be a large portion of those that converge into revenue. And in terms of probably the dollar value, probably looking at our results in 2021 is going to give you best guide in terms of what to expect.

[Rupert Merer, analyst]

Okay. Fair enough. And in your disclosures, you talk about to target production capacity of 200 units by year-end. Can you talk about where you are now and what you need to do to get to that level of production?

[Ben Nyland, executive]

Yes, absolutely, Rupert. So where we are now in our facilities is at a run rate of 100 units per year. We've got a number of changes that will be happening that are planned for this year to bring us up to 200 units per year in our North American facilities and a mirrored 200 units per year capability in our China facilities. That is just a matter of executing the projects underway, and we're very confident that, that will happen.

[Damian Towns, executive]

Just to add to that, that's obviously on a single shift basis. So there's obviously the ability once that equipment is in place and running at that capacity, we can add additional shifts to increase capacity to meet the future anticipated demand.

[Rupert Merer, analyst]

Okay. Is there much of a capital requirement remaining to get you to that level? Or is this mostly a staffing increase that's required?

[Damian Towns, executive]

There's certainly still some capital requirements to go in. We're anticipating between sort of $20 million and $30 million worth of CapEx for 2022 to be able to get up to those levels with a good amount of that going into Shanghai to build out that facility, which we're targeting as at Q2 2022.

[Rupert Merer, analyst]

All right. Great. And if you're looking in the future of the potential for step change in the market size, where would you need to be in terms of capacity in 2023 do you think? Or when do you need to have a step change in your production capacity?

[Ben Nyland, executive]

Well, I think, Rupert, one of the benefits of the way in which we're building out our capacity is that we will. Once the foundation is in place, we will be able to scale it. As Damian said, what we've got is a single shift, which is easy to increase quickly. We'll continue to do that. In the Chinese facility, this first phase of build-out actually only occupies about 1/3 of the available space in the facility. And so we can quite easily increase the size of the utilized space in the facility and also increase the number of shifts to deal with that capacity. The exciting part of a step change is it's very rapid growth. The challenging part of the step change is if you don't know when it's coming, you don't want to invest too much in advance of that. And so we're really walking that line making sure we're ready and making sure we're nimble enough to move when we need to.

[Rupert Merer, analyst]

Maybe just 1 final question on that then. If you need to be nimble to respond to the market. How long does it take? What's the lead time in order to increase your production capacity when you need to?

[Ben Nyland, executive]

So the ordering new equipment can take 3 to 6 months, hiring people, especially in the Chinese market is a faster process. So it's probably 3 to 6 months to get the equipment and maybe another 3 months to get it fully in place.

[Damian Towns, executive]

And I guess the last time [indiscernible] also the production numbers that Ben just outlined, that is single shift. So we can meet that initial bit of capacity with increasing shift numbers before we need to look to deploy additional CapEx. But at the end of the day, from my perspective, that's a good problem to have if we're struggling to produce the required volumes. But I think we've got a plan in place to definitely address the growth that we're seeing currently.

[Operator]

Next, we'll go to Michael Glen with Raymond James.

[Michael Glen, analyst]

So just want to come back on to the Shanghai facility. So when that's -- that's going to be selling -- that we'll be selling the modules, correct?

[Ben Nyland, executive]

That is correct.

[Michael Glen, analyst]

Okay. So is that -- can you say -- like when we're thinking about customers on the other side of that, is the initial -- should our initial inclination be that, that's going to -- some of that capacity is going to sell into your existing partner in China? Or are there other partners being contemplated?

[Ben Nyland, executive]

So we'll have some announcements related to this coming up over the next few months, Michael. So you can watch for that. Certainly, our existing partner will be one of the entities to offtake this. But just like my comments in the script about having a diversity across geographies and customers, we are definitely looking to expand our customer base in the Chinese market so that it's not just selling into 1 entity.

[Michael Glen, analyst]

And that China business would sell solely in China? Or is there an export opportunity?

[Ben Nyland, executive]

That's a good question. Export is a possibility. At this point, it isn't a specific plan. But as mentioned previously, certain markets may take off faster than other markets, and there would be that flexibility to use the Chinese capacity to supply other markets if the need arose.

[Michael Glen, analyst]

What does your -- is the sales team or business development team in China? Is it in place? Or are you still building it?

[Ben Nyland, executive]

You'll be seeing some announcements about that in the next little while.

[Michael Glen, analyst]

Okay. Then just on to supply chain. Can you -- in terms of everything right now happening with commodities. When you look at what your modules are made of, is -- should we be thinking about substantial inflation on your cost of goods sold over the coming year?

[Damian Towns, executive]

Yes. Look, I think, Michael, if we were further down the production and we were already at scale, you'd certainly be looking at fuel surcharges, inflation. So the nice thing is that because we're really at that early commercialization phase, we were doing onesies and twosies in 2021. So as we have the ability to scale up from the '19 purchase orders that we received in '21 to the 60 that we anticipate being able to get to in 2022, I think we'll be able to have that benefit of scale, which will significantly drive down our costs. I think in Ben's prepared remarks, he also referenced it's 1200 or 120-kilowatt unit, which will also reduce our overall cost per kilowatt and also our larger plate design. So we're confident we're still going to be able to drive out significant cost in 2022, even with the headwinds of inflation ahead of us.

[Michael Glen, analyst]

Okay. And just coming back to China, like when you're thinking about going into that market, like, how do you characterize or think about what I imagine is a very quickly evolving competitive environment. Do you need to align yourself with some entity over there in order to think about getting to a higher sales level? Or like how do you feel about going into market your Canadian company flowing into that market? Is it a big uphill battle?

[Ben Nyland, executive]

So I think, Michael, the reality is in any big market, having the right partnerships, the right relationships in the business is going to be very important. In China, that's definitely the case. We've taken an approach that we believe China is certainly one of the most important markets for us to be able to participate in. Formation of Loop Shanghai as a wholly-owned subsidiary, but effectively its own company within the Chinese market. It was an intentional decision by us because of that need to partner with and work with Chinese companies more closely than we felt we could as a foreign entity across the Pacific Ocean. So we will be working to forge relationships and customer relationships, and we're confident, as I said in my script, that the decision to go down this path is the right one. We're seeing great indications that we should still have some good successes over the next little while, and we're looking forward to sharing those with you.

[Operator]

[Operator Instructions] Next we'll go to Mac Whale with Cormark Securities.

[MacMurray Whale, analyst]

With the introduction of the larger unit, where do you think your -- like how should we think about the trend in sort of an average per unit kilowatt size just for modeling purposes? Where do you see that going? Will you stay in the sort of the range you are now and add just a few? Or over time, do you think the 120 is where you'll see your mix skewed to?

[Damian Towns, executive]

Thanks, Mac. The 120 obviously helps us opening up our total accessible market quite significantly by being able to hit that heavy truck market. I think in terms of where our customer mix shapes out will really determine what that revenue mix looks like. We've had a lot of success already selling into that 50-kilowatt sort of area. You've seen the mobility and innovation coming through with the 30-kilowatt bus. They're being transferable to Innotest. So really, it depends on where the customer uptake comes from. Obviously, as I mentioned before, being able to sell larger units will help drive down our overall cost per kilowatt but really hard at this stage to provide that lens that I think you're after in terms of what that mix looks like. Ben, I don't know if you've got anything to add to that?

[Ben Nyland, executive]

Yes. I mean, Mac, I would say, in 2022, the mix is really going to be our existing product line. We're obviously bringing the 120 to market. But the plan is in the second half to have a number of infield demonstration units. What I will say is there is really good demand in the market for this 120 size. And the 120 will also give us the ability to bring to market product up to 300 kilowatts. And so by covering that 30 to 300-kilowatt range over the next few years, we feel like we'll have products that really address almost the entirety of the commercial mobility market globally. And where ultimately that mix lands, we're going to have to see. But the 120 and the larger sizes will certainly we would expect to start to take up more of the mix starting in '23 and moving beyond that.

[MacMurray Whale, analyst]

The reason I ask is because, I guess, we really don't care about the next couple of years, right? Like you're in this business to make thousands of units. And I'm trying to think out 4, 5 years when you look at the total addressable market that your -- or total assessable market that you're looking at, what do you think the average industry kilowatt per unit is.

[Ben Nyland, executive]

Well, I think that's a very difficult question to answer. And I'm not trying to dance here, Mac. I just think -- so first of all, I absolutely agree with your assessment that what we really care about is 4 or 5 years out. I think there's going to be demand across the spectrum from 30 to 300 kilowatts. Where that demand is concentrated, it's going to depend in a great -- to a great extent on kind of macro factors and macro developments that we don't have a lot of control over.

We expect that at the lower end, 30 to 60 kilowatts where we see municipal buses, urban delivery trucks, there's a lot of pressure to get rid of diesel emissions. That pressure is going to continue to grow on those and we expect that market to scale quite nicely over the next 3, 4, 5 years. Markets like the long-haul heavy-duty trucking market, where the 120 and up are really focused are dependent on things like distributed hydrogen fueling, and we're certainly seeing pressure in the market right now to expand those sorts of things, but it's hard for us to predict. So we would expect long-haul heavy-duty trucking to start adopting hydrogen and fuel cells over the next few years. And if that does so in a meaningful way, then certainly our mix is going to skew upwards towards those bigger units.

[MacMurray Whale, analyst]

Okay. And then when you look -- I mean we can back calculate -- you can make a guess at your kilowatt per unit average, say, last year and the number of units you provided, obviously, we know your revenue so we can figure out what your dollar per kilowatt is. Do you think over and is high, right, for obvious reasons. And obviously, you can't penetrate the market with it being that high forever, right? So what do you think your cost reductions over, say, 5 years need to match, like you'll see a match in your sale price on the dollar per kilowatt. That's equal to that? Will they trend the same?

[Damian Towns, executive]

I think, Mac, obviously, there will be price pressure as the volumes increase in the fuel cell market. So that would certainly come down. The costing that you're seeing through our income statement and what we're producing at, again, it's the onesies twosies. It's buying one-off items. So I think we have a -- and we will if you look to right below in terms of scale of production, the cost will come out significantly quicker than the price reductions we'll do. So we believe that the market here, there will be good margins to be made. We just need to get through the scale-up phase. We've gone through with obviously tested technology in the lab. Now tested in the field, and we're confident that we'll be able to get the cost out. So this will be a very real business going forward. And the nice thing from my perspective is that the market there today with our product offerings for us to gain that traction, demonstrate the value of the eFlow and also hit our sales projections.

[Ben Nyland, executive]

Sorry, I'd just add to that, Mac. We're working very closely with our customers. And as I've mentioned, we intentionally identified customers who have tangible scale-up plans and [ price ] to market for their own products. And so we work closely with them to understand what our pricing needs to be in order to facilitate their plans. And these are both smaller companies that are part of the market today that Damian was referring to and other companies who are more interested in the large market that you are just referring to in 4 or 5 years. And so we're confident that our cost out and our pricing strategy is going to make us very successful in that as that market develops.

[MacMurray Whale, analyst]

Okay. And so as you see -- my last question is just around the 200-unit rough capacity on one shift. Is that -- can we think -- can you provide us with some -- I mean, we can kind of do the math, too, but is thinking about cost coming -- or price coming down a little bit and your kilowatts going up, like is that a $20 million revenue facility? Is that what that can generate? Is that the rough ballpark number? Or am I way too high or low in your mind?

[Damian Towns, executive]

I think it's fully not far off to be honest, Mac. Obviously, the 200 units is what we're trying to demonstrate out in the Burnaby facility. As Ben alluded to earlier in the call, obviously he was getting our Shanghai facility up and running and perhaps we'll provide the market with some greater clarity in terms of our strategy in China. I think you'll see what that facility will be able to bring to the market and perhaps some exciting news out of China as well.

[Operator]

There are no further questions at this time. I'll now turn the call back over to Ben Nyland for any additional or closing remarks.

[Ben Nyland, executive]

Great. Well, thank you all. Thanks again to all the attendees for coming on this call, your ongoing interest and support of Loop. We've been really pleased to share with you today the company's performance and how we are exceeding business performance expectations that we set out during the IPO process. We're looking forward to reporting on a strong start to 2022. And just lastly, I'd really like to put a big thank you out there to the entire Loop team for the amazing work that they did in 2021, and the excitement and enthusiasm they're showing as we move forward into 2022. Loop's footprint is growing around the globe, and we're very excited about what the coming year holds. Thank you again. and we'll see you next month -- next quarter.

[Operator]

And this concludes today's conference call. You may now disconnect.