American Superconductor Company (AMSC) Q3 2023 Earnings Name Transcript

American Superconductor Company (NASDAQ:AMSC) Q3 2023 Earnings Convention Name January 25, 2024 10:00 AM ET

Firm Individuals

John Heilshorn – Lippert/Heilshorn & Associates, IR

John Kosiba – CFO, SVP & Treasurer

Daniel McGahn – Chairman, President & CEO

Convention Name Individuals

Eric Stine – Craig-Hallum

Colin Rusch – Oppenheimer

Justin Clare – ROTH MKM Companions

Operator

Good morning, and welcome to the AMSC Third Quarter Fiscal 2023 Monetary Outcomes Convention Name.

All contributors will probably be in listen-only mode. [Operator Instructions] Please be aware this occasion is being recorded.

I might now like to show the convention over to John Heilshorn of LHA. Please go forward.

John Heilshorn

Thanks. Good morning everybody, and welcome to American Superconductor Company’s third quarter and financial 2023 earnings convention name. I’m John Heilshorn of LHA Investor Relations, AMSC’s Investor Relations company of document.

With us on at the moment’s name are Daniel McGahn, Chairman, President and Chief Government Officer; and John Kosiba, Senior Vice President, Chief Monetary Officer and Treasurer. American Superconductor issued its earnings launch for the third quarter of fiscal 2023 yesterday after the market shut. For these of you who haven’t but seen the discharge, a replica is offered within the Buyers web page of the corporate’s web site at www.amsc.com.

Earlier than I begin the decision, I wish to remind you that varied remarks that administration will make throughout at the moment’s name about American Superconductor’s future expectations, together with expectations concerning the corporate’s fourth quarter fiscal 2023 monetary efficiency plans and prospects represent forward-looking statements for functions of the Secure Harbor provisions underneath the Personal Securities Litigation Reform Act of 1995. Precise outcomes might differ materially from these indicated by such forward-looking statements because of varied vital components, together with these set forth within the danger components part of American Superconductor’s annual report on Type 10-Okay for the yr ended March 31, 2023, which the corporate filed with the Securities and Alternate Fee on Might 31, 2023, and the corporate’s different experiences filed with the SEC.

These forward-looking statements characterize administration’s expectations solely as of at the moment and shouldn’t be relied upon as representing administration’s views as of any subsequent date to at the moment. Whereas the corporate anticipates that subsequent occasions and developments might trigger the corporate’s views to vary, the corporate particularly disclaims any obligation to replace these forward-looking statements.

Additionally on at the moment’s name, administration will discuss with non-GAAP internet loss, that are non-GAAP monetary measures. The corporate believes that non-GAAP internet revenue/loss assists the administration and traders in evaluating the corporate’s efficiency throughout reporting intervals on a constant foundation, by excluding these noncash, nonrecurring or different costs that it doesn’t imagine are indicative of its core working efficiency. The reconciliation of GAAP internet loss to GAAP internet revenue will be discovered within the third quarter of fiscal 2022 earnings press launch the corporate issued and furnished with the SEC final evening on Type 8-Okay.

All of the American Superconductor’s press releases and SEC filings will be accessed from the Buyers web page of its web site at www.amsc.com.

With that, I’ll now flip the decision over to Chairman, President and Chief Government Officer, Daniel McGahn. Daniel?

Daniel McGahn

Thanks, John, and good morning, everybody. I am actually excited to share some nice information with everybody at the moment.

I am going to start by offering an replace and sharing a number of remarks on our enterprise. John Kosiba will then present an in depth assessment of our monetary outcomes for the third fiscal quarter, which ended December 31, 2023 and can present steerage for the fourth fiscal quarter, which is able to finish March 31, 2024. Following our feedback, we’ll open up the road to questions from our analysts.

We’re actually happy to announce one other quarter of excellent monetary outcomes. Whole revenues for the third quarter of fiscal yr 2023 exceeded our expectations and steerage vary. The enterprise actually outperformed this quarter. We confirmed larger income. We confirmed expanded gross margins. We had constructive working money stream. We generated non-GAAP internet revenue, and we continued the speed at which for reserving orders to backlog.

Whole income for the previous 9 months is about the identical as whole revenues for our whole earlier fiscal yr. Let me repeat that as a result of I believe it is vital, and I am satisfied that individuals are lacking this level in regards to the power of our enterprise. Via the primary 9 months of this fiscal yr, we had about the identical income for the 12 months because the earlier whole fiscal yr. Because of this no matter we do within the fourth quarter will probably be year-over-year progress. I will not steal John’s steerage later within the name, however given the very fact the idea is about $100 million, you mainly see the income for our fourth quarter as the expansion of our enterprise for the fiscal yr.

This success was pushed by our pricing initiatives, product and regional combine and general buyer demand. All indicators this quarter are very constructive. Our third quarter income of over $39 million was pushed by new power energy system shipments. This was as a consequence of clients’ demand, needing merchandise sooner than forecasted. We’re discovering lead occasions are shrinking and our clients need merchandise sooner. We see this as a terrific indicator of the well being of our enterprise.

Our grid phase income accounted for roughly 85% of AMSC’s whole income, and grew over 60% versus the yr in the past interval. This represents a record-breaking grid quarter with unprecedented quarterly income. Almost 15% of the income got here from our wind enterprise, which additionally grew about 90% versus the yr in the past interval. 60% and 90%, these are massive numbers.

Throughout our third quarter, we noticed a various set of product shipments. We shipped voltage compensators, capacitor banks, harmonic filters, transformers, rectifiers, Volt/VAR optimizers, ship safety programs and electrical management programs. These merchandise went into renewables in a wide range of industrial markets, together with semiconductor, mining in addition to our Navy tasks.

Throughout our third quarter, we booked over $34 million of recent orders and grew our 12 month backlog to over $137 million. Our backlog on the finish of the third quarter elevated by practically 25% when in comparison with the yr in the past interval. We had $25 million of recent power energy programs orders.

Our new power energy programs orders have averaged over $30 million 1 / 4 throughout fiscal yr 2023, various by quarter due to timing. These third quarter orders serve an more and more various market. They characterize sturdy contributions from the renewables market with wind and photo voltaic tasks accounting for roughly two-thirds of the whole. Industrial orders, which contributed roughly one-third of the whole, embody orders for utilities, metals and mining in addition to semiconductor tasks.

With sturdy demand throughout our finish markets, we count on to proceed to develop and diversify our grid enterprise by way of these and future sturdy bookings in each renewable and industrial sectors. Okay. Let’s speak about some nice information in wind. We secured our second 3-megawatt electrical management programs, or ECS order from Inox Wind. Inox Wind has requested rapid supply underneath this $8 million follow-on order, and we count on to ship these ECS over the course of calendar yr 2024. It’s relying on their funds.

Inox would really like all units to be delivered throughout our first quarter of fiscal 2023, however we see it impacting the primary and second quarter. It might take longer to ship if they aren’t well timed with their funds. Inox’s enterprise appears poised to take off in 2024. Their public data would lead one to imagine this. We’re off to an encouraging begin in calendar yr 2024 with this follow-on order from our accomplice Inox for our innovative 3-megawatt class ECS. We see steady demand for his or her 2-megawatt turbine and our 2-megawatt ECS as effectively.

Moreover, we’ve got made progress on our navy improvement applications and secured orders to proceed that work. We’re working to insert our know-how into a number of navy’s fleets. Over the previous a number of years, we have taken a collection of very deliberate actions to diversify our enterprise and develop by way of our grid enterprise.

Over a 5 yr interval, we practically tripled our grid enterprise income and had constant income progress of over 17% compounded annual progress fee. We acquired and built-in three corporations which have efficiently broadened our gross sales leverage, expanded our content material of choices and contributed to our elevated whole income. We’re happy with these outcomes and tremendous enthusiastic about the remainder of the yr.

Now I am going to flip the decision over to John Kosiba to assessment our monetary outcomes for the third quarter of fiscal yr 2023, and supply steerage for the fourth quarter of fiscal yr 2023, which is able to finish March 31, 2024. John?

John Kosiba

Thanks, Daniel, and good morning, everybody.

AMSC generated revenues of $39.4 million for the third quarter of fiscal 2023 in comparison with $23.9 million within the yr in the past quarter. Our grid enterprise unit accounted for 85% of whole revenues, whereas our wind enterprise unit accounted for 15%. Grid enterprise unit revenues elevated by 61% within the third quarter versus the yr in the past quarter, whereas our wind enterprise unit elevated by 87% over the identical time interval.

Trying on the P&L in additional element, gross margin for the third quarter of fiscal 2023 was 25% in comparison with 2% within the yr in the past quarter. Gross margin for the third quarter of fiscal 2023 was positively impacted by the upper revenues, a extra favorable product combine and the favorable affect throughout the enterprise from pricing will increase throughout our product traces.

Shifting on to working bills, R&D and SG&A bills for the third quarter of fiscal 2023 have been $10 million in comparison with $9.3 million within the yr in the past quarter. Roughly 11% of R&D and SG&A bills within the third quarter of fiscal 2023 have been noncash.

Our non-GAAP internet revenue for the third quarter of fiscal 2023 was $900,000 or $0.03 per share in contrast with a internet lack of $7.7 million or $0.27 per share within the yr in the past quarter. Our internet loss within the third quarter of fiscal 2023 was $1.6 million or $0.06 per share. This compares to a internet lack of $9.6 million or $0.34 per share within the yr in the past quarter. Please see our press launch issued final evening for a reconciliation of GAAP to non-GAAP outcomes.

We ended the third quarter of fiscal 2023 with $25 million in money, money equivalents and restricted money. This compares with $24 million on September 30, 2023. Our working money stream within the third quarter of fiscal 2023 generated $1.3 million.

Now turning to our monetary steerage for the fourth quarter of fiscal 2023, we count on that our revenues will probably be within the vary of $36 million to $40 million. Our internet loss is predicted to not exceed $3.5 million or $0.12 per share. Our non-GAAP internet loss is predicted to not exceed $1.7 million or $0.06 per share. We count on working money stream to be breakeven to constructive money era of $2 million. We count on to finish the fourth quarter with at least $25 million in money, money equivalents and restricted money.

With that, I am going to flip the decision again over to Daniel.

Daniel McGahn

Thanks, John. We did not information to that final quarter, however we’re this quarter, and that has which means. That is the second quarter in a row the place we have achieved constructive working money stream and count on to do this once more for a 3rd quarter. Sturdy market demand from renewables, industrials and utilities drove new power energy programs orders for our third quarter of fiscal yr 2023. Our orders illustrate market diversification from clients in metals, mining and supplies and semiconductors to army and utility functions.

We see alternatives for our services as utilities deal with the addition of distributed energy into the electrical grid. We now have a sturdy pipeline of alternatives, because of sturdy market demand, and we’re aggressively going after these alternatives. We see the wind market strengthening in India, and that ought to translate into expanded enterprise for us subsequent yr. We have been capable of make important progress in all our U.S. Navy applications and we see extra ships on the horizon.

Our resilient electrical grid system in Chicago continues to function as deliberate and we imagine we’ve got an answer that may clear up many present issues within the electrical grid of many cities. We’re dedicated to the continued diversification of our enterprise, increasing our scale and attain domestically and internationally and investing in resilient markets that create a path for a extra sustainable world. Our key progress markets are renewables, mining supplies and metals, notably for electrical and hybrid automobiles, semiconductors, utilities and army.

We imagine the march in the direction of a extra sustainable world will probably be a driver for the markets we serve within the foreseeable future. Our merchandise are anticipated to play a central function on this evolution and we proceed to accentuate our efforts and collaboration to reap the benefits of these tendencies. We proceed to work in the direction of rising a enterprise that is supporting energy administration on the substation degree for renewables, mining and metals, utilities and for army makes use of in addition to supporting clients within the semiconductor business.

We now have turned the nook and delivered one other excellent quarter. We aren’t trying again. We are able to see the basics of our enterprise are effectively grounded. It appears like we’ve got the wind at our again. Coverage is driving extra renewables, the reshoring of semiconductor capability in America, the rise of the electrical automobile and funding in American infrastructure, all 4 we see as tailwinds.

In case you imagine that there must be an answer to local weather and decarbonization and also you’re questioning who will probably be offering these options, you could have come to the appropriate place. To conclude, we have constructed a steady and diversified enterprise that we imagine is effectively positioned to capitalize on the way forward for investments in renewables, the way forward for investments in semiconductors, the way forward for investments in electrical automobiles and the mining of the supplies that go into these three markets in addition to the protection enterprise.

We’re pushed by the alternatives that local weather change presents to us in addition to the electrification of transportation. Our merchandise present grid assist on the energy consumption level of the electrical automobiles. Our merchandise additionally present assist on the mining and factories for the metals and supplies used to construct these automobiles. We have advanced from being a really concentrated enterprise with each buyer and market focus to a extra various enterprise whereas on the similar time rising income and enhancing margins.

We’re targeted on enhancing the monetary efficiency of our enterprise and persevering with to ship a diversified enterprise and on making progress in the direction of our longer-term precedence of constructing a sustainable enterprise. I believe the group has completed a terrific job of attaining this. After we take a look at our prospects and what our gross sales pipeline seems like, they’re strengthening, not weakening. Orders have gotten bigger, not smaller. The varieties of markets we serve have gotten extra various, much less concentrated.

So after I take a look at the close to time period, say, the subsequent yr or so, I believe our prospects are nice. We imagine that our differentiated options and set of capabilities are a big benefit that can permit us to serve our clients ever extra effectively. I need to thank our group for his or her onerous work and assist, and I sit up for reporting again to you on the completion of our fourth fiscal quarter and financial year-end.

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

Query-and-Reply Session

Operator

We are going to now start the question-and-answer session. [Operator Instructions] Our first query comes from Eric Stine with Craig-Hallum. Please go forward.

Eric Stine

Hello, Daniel, hello, John.

Daniel McGahn

Hey, Eric.

Eric Stine

Good morning. So perhaps, can we simply begin with wind? May you simply talk about — you talked about it a bit of bit, however I simply need to make sure that I am clear on it, the way you count on this 3-megawatt order? And I do know it is cost dependent, however this — the order for the 3-megawatt management programs, the way you see that enjoying out right here in calendar yr ’24? Have been you speaking fiscal Q1 and Q2 is if you would count on nearly all of that?

Daniel McGahn

Sure, that is precisely proper. I believe it will likely be roughly balanced between the primary two quarters. They need it as quick as potential. We’re at a degree now the place they are going to be hand to mouth within the quick time period, and we need to make sure that we assist them as finest we probably can, as shortly as we probably can, however I do not need to set your expectations too excessive. It even might leak a bit into the December quarter or third quarter. It actually relies upon upon our skill to handle our provide chain, nevertheless it actually begins with them paying all the things on time, which to their credit score, at the least not too long ago, they have been fairly good at. However I do need to be sure that everyone on the decision understands that danger.

Eric Stine

Sure. No, understood. After which simply sticking with wind on Q3, proper? I imply that the December quarter, I might assume that almost all of that’s the 2 — I imply, programs for the 2-megawatt turbine or there could be a bit of little bit of 3-megawatt in there. How ought to we take into consideration that?

Daniel McGahn

Sure. It is actually 2-megawatt in Q3, and we’re simply beginning to get able to begin to ship on the beginnings of the order that we obtained again a few quarters in the past.

Eric Stine

Okay.

Daniel McGahn

We’re at a degree now, Eric, form of the place we have been early within the 2-megawatt the place we’ll get hopefully, a collection of successive orders. Perhaps they’re going to be related in measurement, perhaps they’re going to develop in measurement. However we even have a chart within the slide deck we attempt to present the historical past that we’ve got for the 2-megawatt. We’re hoping that we’ll see that occur once more with the 3-megawatt. And all indicators from India and from Inox lead us to imagine that that is in all probability appropriate.

Eric Stine

Okay. And so — I imply once we take into consideration this, practically $6 million, now taking out the $8 million order for the 3-megawatt proper? I imply, is this sort of a consultant quantity for primarily the 2-megawatt, you layer the 3-megawatt on high? Or how do you concentrate on form of a quarterly run fee, once more, figuring out that you simply might need two quarters which are larger? What that appears like right here by way of fiscal ’24?

Daniel McGahn

Sure. I believe when you return, let us take a look at the earlier, say, three quarters and so and taking a look at that run fee. That is in all probability the place we’re with the two megawatt. I believe there are some indications available in the market that they are going to promote extra 2-megawatts as effectively. However once more, it is at all times onerous with this buyer to have the ability to forecast it.

A part of why we’ve got targeted a lot on grid is we love Inox. They’re a terrific buyer. However as their enterprise slows down or begins up, their entry to capital might both assist or hamper their skill to ship to their clients. So we need to do all the things we are able to to assist them. We have been ready for years for this enterprise to begin to come again. And I believe one of many key messages at the moment, we actually really feel just like the wind is on our again now actually in India, and we must always have a powerful we predict, ’24.

Eric Stine

Sure. No, that is nice. You have been — I do know you’ve got been ready on that for fairly a while. Perhaps simply turning to the navy enterprise. I do know you’ve got talked about it for fairly a while about seeking to get into Allied Navy’s new ship platforms. It appears to me like your commentary at the moment was stronger than I’ve heard prior to now. Curious if that is a misinterpret on my half or that was intentional and form of perhaps subsequent signpost we must always search for?

Daniel McGahn

Sure. In communication, it is not what you say, it is what they hear and also you’re listening to me. So clearly, we see extra ships on the horizon. So two — simply form of the three take-home messages listed here are we’ve got a terrific new power enterprise that is supported by the backlog. We’re changing orders at a really constant fee. We really feel the winds on our again, notably in India, and we see extra ships on the horizon and a transparent path to them. These usually are not phrases you heard me say final quarter, and the quarter earlier than that. It’s a completely different feeling. It’s a completely different message at the moment.

Eric Stine

Okay, I am going to flip it over. Thanks.

Operator

The following query is from Colin Rusch with Oppenheimer. Please go forward.

Colin Rusch

Thanks a lot, guys. Are you able to speak in regards to the affect of pricing in your year-over-year progress right here within the quarter? And the way we must always take into consideration the combination of unit progress and pricing progress driving high line acceleration in calendar ’24?

Daniel McGahn

We hope that the pricing initiatives are behind us. We have been capable of reconcile price and pricing. We have completed a very good job, we predict to attempt to assist our clients’ wants on the similar time. So once we take a look at the expansion as a part of it’s pricing, a part of it’s simply absolutely the worth of the tasks are better. Many tasks in renewables, many tasks in semiconductor and plenty of tasks in mining are leveraging not just one product line, however perhaps two or three, proper? So the common order measurement for a venture goes up as effectively.

So pricing is a bit of it. I would not count on that to proceed. I assume that there is extra inflationary stress. We’ll have to answer these issues. However we have been capable of work, I believe, very effectively with our clients to make sure well timed supply and a value that we predict nonetheless is aggressive. We’re a premium-priced product. We do have proprietary content material in all the things we do, so that ought to garner that.

However the progress going ahead, I believe is actually, Colin, going to be reflective of the pipeline and the flexibility for us to transform these orders and that the order sizes are getting bigger.

Colin Rusch

Implausible. After which on the provision aspect, clearly, you’ve got gone by way of some lumpiness when it comes to the provision availability and a few dislocations. As that normalizes and also you guys scale a bit of bit, are you able to speak a bit of bit about your skill to begin driving price out of the merchandise and a few incremental price efficiencies from a producing perspective as effectively?

Daniel McGahn

Sure. I believe these are available — and I’ve mentioned this on earlier calls, if you begin doing multiples of the identical factor, and we’re seeing that in numerous elements of the enterprise. Clearly, ECS and SPS mirror that since you’re making copies again and again. That as you see that demand, it’ll permit rise, it’ll permit us to doubtlessly take a look at our provide chain and search for price discount.

I am very optimistic in winds that as they develop their quantity that we’ll be there for them as a great accomplice to ensure we’re offering correct pricing. So I believe within the close to time period, many of the inflationary pressures are behind us. I will not say all, as a result of there’s at all times that danger. I believe loads of the supply pressures have been decreased. We’re seeing lead occasions begin to shrink, and we’re seeing clients begin to push us to have the ability to ship sooner, which is, I believe, a terrific indicator of the well being of the enterprise.

Colin Rusch

Nice. After which last one for me is simply round maturity and evolution of buyer conversations in lieu of the continued efficiency in Chicago with the grid resolution. Are you able to speak a bit of bit about what number of of us you are speaking to, how these conversations are maturing and the way to consider the potential for an additional demonstration venture or a follow-on order?

Daniel McGahn

Sure, I do not need to do one other demonstration, and I do not see the primary one as an indication in any respect. It is an asset that is within the grid. It is acquired full fee restoration. It is an operational functionality that the utility desires they usually need to do extra of. You are in all probability listening to me begin to, I am going to say, quiet my rhetoric with REG. For these of you which were round me for some time, I believe you perceive what which means.

I am very enthusiastic about REG and the suggestions we’re getting from clients, notably within the U.S. We actually do have an answer that is wanted proper now. So I believe as we make extra progress, demonstrable progress there, we’ll give extra updates, however I haven’t got anything to say at the moment.

Colin Rusch

Nice, thanks a lot, guys.

Operator

[Operator Instructions] The following query is from Justin Clare with ROTH MKM. Please go forward.

Justin Clare

Hello, thanks for taking our questions.

Daniel McGahn

Hey, Justin.

Justin Clare

Hey. So I assume, first off, you probably did point out that order sizes are getting bigger right here. I used to be questioning when you might simply speak about what’s driving these bigger orders. Is that this a perform of a extra complete product portfolio? Are there different components, are your clients’ venture sizes growing? Perhaps you may simply give a bit of colour on that.

Daniel McGahn

Sure. I believe each are contributing components. I believe the primary one is the primary driver. We’re now bidding within the tasks with a bigger scope. We’re now turning into identified available in the market as having the ability to ship all of that as form of a one-stop store, and that I believe helps us. However I believe additionally loads of the work that we’re taking a look at are bigger tasks, be it on the renewable aspect or the commercial aspect as effectively. So these are all good indicators we take into consideration the well being of the enterprise.

Justin Clare

Okay. Nice. After which how do you concentrate on doubtlessly additional increasing that product portfolio, whether or not it is in-house improvement of merchandise or taking a look at acquisition that might additional assist your merchandise?

Daniel McGahn

Sure. I believe given the very fact we have had this urge for food, we’ve got a demonstrated monitor document now not too long ago at doing these three offers which have helped broaden. The primary one was extra content material for the navy. After which we have talked loads in regards to the final two over the last few years right here. We’re identified available in the market as a great firm to work with and doubtlessly be an acquirer. We’re getting loads of inbound visitors in that.

So we need to be picky about what we do and attempt to prolong the enterprise. We need to develop and if buying extra content material permits us to develop extra shortly then we predict that is one thing that we must always definitely take into account.

Justin Clare

Obtained it, okay. After which shifting gears a bit of bit right here. You probably did point out that lead occasions appeared to be enhancing in your provide chain. I believe final quarter, you had talked about issues transferring from 15 months to doubtlessly underneath 12 months for some tasks or for some merchandise. I used to be questioning the way you see issues trending forward right here? Do you see additional enchancment on the horizon? After which might this allow an acceleration in your skill to transform backlog to income?

Daniel McGahn

Sure, I believe the potential is there. I believe our lead occasions are actually nearer to 9 to fifteen months relying upon the product line, which implies that we are able to generate orders right here this quarter, subsequent quarter and have some affect nonetheless on subsequent fiscal yr. So I believe that is an vital remark to make there. However we see a really sturdy pipeline of issues that we’re engaged on and making an attempt to shut. And we’re — we’ve not figured it out. I am tremendously excited, in all probability essentially the most excited I have been in regards to the prospects of the enterprise, not simply the outcomes.

Justin Clare

All proper. Nicely, that is nice to listen to. I am going to go it on. Thanks.

Operator

This concludes our question-and-answer session. I wish to flip the convention again over to Daniel McGahn for any closing remarks.

Daniel McGahn

I simply need to make a number of key factors right here. Our enterprise hasn’t been this sturdy, on this sturdy of a place actually ever, when you concentrate on the variety, you concentrate on the numbers and the efficiency. The enterprise we have been speaking about, we have now constructed. We have constructed a enterprise that has generated money from operations prior to now two quarters and count on to do this once more within the March quarter.

We have been ready so as to add new items in new markets, and we have been capable of handle, as we mentioned, pricing. We’re rising. We expect there is a collection of tailwinds pushed by local weather change which are right here to remain, and are driving the brand new power a part of our enterprise, together with the reshoring of U.S. semiconductor capability and the transfer to extra electrical automobiles.

Wind in India seems to be strengthening. We now have a brand new product that is in our accomplice’s fingers, they usually’re about to develop and construct their enterprise with us once more. It feels a lot completely different now. It feels just like the wind’s on our again. We additionally see extra ships on the horizon. We now have made progress with our improvement efforts with the U.S. Navy. We see an enlargement of this enterprise coming, hopefully, very quickly.

After all of the work the group has completed to really feel that second is close to, the place we all know what ships we might go on and see them on the horizon, it is fairly thrilling certainly. I am unable to stress that sufficient. Lastly, we have been capable of efficiently combine a number of acquisitions and imagine that might proceed in our future so as to add extra items to assault our markets with extra content material, a deeper, broader providing means, as we proceed to push for progress. We are able to get at it extra shortly.

I hope after listening to us converse at the moment, you’re as excited as we’re about our enterprise. For these of you which have requested me why AMSC and particularly, why now, we’ve got demonstrated a enterprise for a number of quarters that generates money from operations. That enterprise has a number of coverage tailwinds. We really feel the wind is on our again in India, and it seems it’ll begin to blow more durable.

We see extra ships on the horizon and see a transparent path to them. We now have efficiently built-in a number of acquisitions and hope to proceed that sooner or later. I am trying ahead to speaking to you once more once we report our fourth quarter and full yr outcomes. Thanks and good day.

Operator

The convention has now concluded. Thanks for attending at the moment’s presentation. Chances are you’ll now disconnect.