Blink Charging Co. (BLNK) Earnings Call Transcript & Summary

Good afternoon, and welcome to the second day of JPMorgan Autos Conference. My name is Bill Peterson, U.S. Clean Tech and Metals and Mining Analyst. Really pleased to have Brendan Jones, the CEO, relatively new CEO of Blink. And he's going to walk through this presentation. But basically, I think I'd like to introduce the audience, maybe some generalists here or people that don't know the story too well, but hopefully, you can kind of paint a picture who Blink is and we'll go to Q&A. I look forward to taking your questions.

Sure, absolutely. So I want to make sure my mic is on. Can everybody hear me? All right. Great. So Blink is a company that's been around for a long time. It started in 2008 as 1 of the first charging companies that are arrived on the scene. And then went in through a lot of the fits and starts that a lot of the start-ups did in those age and emerged very differently. In 2018, it was listed on NASDAQ. And then in 2020, the company decided to restructure and reframe itself in the EV infrastructure space. It brought on new management, brought on new charger technology and then since that date has really seen its growth to give you an idea, in 2020 in January, we had a little less than 40 employees. We have 623 today in the company. We operate in a few countries, we operate in 27 today. We had 1 product line that we sold. And now we have a multiplicity of product lines, both DC, L2 and other. So the company is seeing tremendous growth. Year-over-year, we've doubled our revenue and just came out with the best quarter in the history of the company. And when we look at how we differentiate ourselves as a company from competition, we're really a full-service infrastructure provider that is fully vertically integrated. We produce a significant amount of our own equipment. We design our own networking services with our own in-house developers, and we go to market in 2 ways. The company sells chargers or they own and operate chargers. And that gives us diversification in our revenue streams and allows us to play on what is having more upward trend, the sale of chargers or the owner operating chargers. We protect our revenue. So the other big change in the company is we've gone while still maintaining a growth-based posture because we believe that's appropriate. We're also focusing on the fundamentals of the business, and that's cost reduction, cost avoidance, efficiencies, efficiency in the manufacturing process, efficiencies in everything we do. We've acquired 6 companies since September of 2020. 2 of those in the mobility space, 4 of those in the EV infrastructure space. And we're at the final stages of being able to combine them all together now. And we still have 3 networks operating. We're reducing those to 2. We have a lot of other back-office systems that we're reducing to 1 when we get to the end of this year. So we're in both growth mode, efficiency mode and consolidating the companies that we bought simultaneously and had our best quarter. So we see -- when we look at the automotive industry today, and where penetration is going to be predicted. We see nothing but upside opportunity. And basic numbers that we play off on are by 2030, the estimate at 35% EV penetration that you'll need about 30 million, excuse me, it would be nice was 300 million -- [ 30 ] million chargers in the U.S. Our baseline today is 4 million today. That's where we sit. And those charges are both in home, in the car, in the workplace, on the highways, it's across the board, and we play in all of those segments as well. So we think we're well positioned. So that's the here's the elevator speech. So now we can jump in.

Let's actually stick on IP. So you do have a hardware side of the business in software, which software is obviously a key enabler, too. So what is the core and key sort of IP and the differentiators within that?

So right now, what you want is you're having more integrated services come into your charging environment. So we decided to go with a brand-new IP stack. And the reason we did that is we're seeing a lot more customization being asked for by fleets in different businesses. We're seeing a lot more API integrations take place, and we had 1 client where they just say, hey, we'll give you an order for 3,000 charges, but please customize this to look like everything we want it to look like. And right now, when you take a look at some of the legacy networks out there, they have a lot of trouble doing that because they're built on old technology stacks. We redeveloped our technology stack with this very purpose because the space of adopting. You can't go to a 100-year-old fleet company and say, "Hey, well, we're going to teach you how to do it with our fleet software. They say no, we'll take your data and you're going to customize it so it's meaningful in our environment." So you have to respond to the customers, and that's why we rebuilt the network.

Yes. So the company is, I guess, becoming more vertically integrated. And even early on, it's kind of always had a hybrid model, meaning you can sell hardware and software, you can operate a network and other was kind of already on. We actually see some more evidence that some sort of -- others are moving in that direction, too. But I guess, how should we think about the mix or the progression of the business? Maybe first on the hybrid from purchasing equipment to being an operator. And then what are the key benefits maybe to enable that by being vertically integrated drives that?

Yes. So let's first listen some of the comments I made earlier when we look at selling equipment. The need for equipment is going to continue for the foreseeable future. So we get to the 2035 number, and we need the 30 million chargers. If we get to 2040 and we're at 50%, that number goes up dramatically. So there's going to be no short-term or even long-term drop off for the need for chargers on the sales model. But what we're also seeing, while the sales model continues to grow, you also want a lot more companies and municipalities are asking for charging as a service simultaneously, where they're like, "oh, you guys operate it, and we might want to call it to the revenue. We might give you some capital to help install them." So we see that growing simultaneously. So we want to make sure that when we approach, whether it's a municipality, whether it's a private owner of property that whatever they need for charging, we have a solution and we don't say no. And that's where we feel is the biggest differentiator. We do this in Europe, and we're doing this in the United States. And if it's the post office, that the post office wanted us to own the chargers, we'd say, yes, but you have to pay a kilowatt price. They wanted to operate the chargers. So we're now their service provider, we'll maintain them. we get network fees and we get the cost -- the margin on the commodity sale.

And how should the mix look like if you go out 3 to 5 years?

Yes, in terms of the split between the models. Yes, it's hard to predict. But I think right now, we're about 80-20, and I'm okay with that right now. I think you're going to see it get closer to 50-50 but we'd be happy if we get to 60-40 right now by 2030. And we like that sustainable long-term revenue that you get from the owner-operated model, but we're not going to turn away sales. Yes.

Okay. Let's maybe pull it kind of more to the near term. So last quarter, most of Blink's energy sales came from Level 2. And I think there's a perception that's all about DC fast and public charging, which I know we're going to get to that. But I guess do you expect this to continue towards Level 2 charging? Or is it just more of a factor that the fast charging network broadly, not only yourselves but really even the industry is this still kind of new?

Yes. I think the data hasn't changed. While new cars have come out in the market, new platforms, faster onboard chargers in the vehicles and then more DC fast chargers and higher speed. When I started, I was arguing that you need DC fast charging because some people didn't think you even need that. In fact, 1 auto OEM was arguing you needed only 110 charging. So this is way back in 2009 and 2010, and that doesn't seem like that long ago. So what we look at DC, let's look at Bloomberg Financial Services, MacKenzie, Price Coopers Waterhouse, all of these data analytics companies have come back and said 90% to 10%. Bloomberg was even much more. Actually, they said 97% L2 and 3% DC fast charger. We tend to think the number is closer to the 90% number. So that is most likely our future, and that fits. What we have to -- the bright-shiny object of DC fast charger, and I've been installed a ton of them. So I can't say I don't like them. I do like them. But it's clear that it's the bright-shiny object. There's nothing sexy about L2 charging. You hide L2 charging in a garage or it's around the corner, you put out DC right in front, so everybody can see it. But the utilization, you're going to see move and is going to always be overwhelmingly -- the kilowatts dispensed from L2. And so you need to get them out there. Let's face it, when it's Americans driving their cars, DoT keeps telling us for the last 30 years that they sit 95% of the time. I don't think having an EV is going to change that. I don't think you're going to drive it anymore. Now fleets is a different situation there. So you have to manage that duty cycle. But that's the healthy split. We will invest as a company in DC fast charging where it makes sense. But you have to have some capital offset on those installations, and we'll sell them right now. We've sold 1,000 DC fast chargers, actually 987, I got to correct myself, stick to the numbers, but almost 1,000 DC chargers this year already. Only of those, only a few of them were on the owner-operator model. We'll do the owner-operator model, but the cost and the operation intensive nature of it and the cost of install is 15% to 25% more than what it is for DC for an L2. And I gave that example of if an average cost between $1 million and $1.3 million for 4 350-kilowatt DC fast chargers, and then if you ask me to put in 4 L2 chargers, and I say, okay, $7,000 for full install of each charger. And then you breakeven on those installs in under 24 months. And that's a return on C. That's not on the -- on just on being EBITDA positive on the units. DC fast charger 7 to 10 years at a minimum and depending how much capital offset that you get from NEVI programs or others, that's just getting to the breakeven. The return on C is further out.

Needs to be high utilization and probably some benefits like you're talking about. But -- so 1 of the recent fairly recent announcement to the contract for the U.S. Postal Service. Can you elaborate on the momentum of, I guess, the sort of public fleet contracts such as this one. This is an area we've talked about a lot as the fleet side that is probably underappreciated in the grand scheme of things?

Yes. So fleet is the hot space, right? We see multifamily dwelling on fire right now and then we see fleet. And government fleet is leading the charge first, and then private industry fleet is following up second. So the post office was the single largest government EV contract that went out for EV infrastructure, 41,200 -- [ 500 ] chargers over a 3-year plus period of time. Blink was 1 of 3 companies that won that award. And this represents a major sea change for a U.S. government entity or quasi, it's the post office. We always remember that, to make this big leap. The revenue that this represents over these 3 years for Blink is outstanding. 1 year of this revenue forecasted next year is more than all the revenue Blink made in 2021. So it's a sea change in terms of what it does as it transitions a very, very large municipal fleet over to EVs and the opportunity that it presents to us. Now what our job is to maximize the way we're doing business with the U.S. government. So we get our unfair share of this. And it's really interesting, the way they structured it. So it's a bit of year 2. We're in year 1 now and year 2, how much you're going to get is performance-based. It's based on how well you did in that. And we've gotten some extremely positive indicators from the U.S. post office, even maybe some awards, hopefully, on how well we performed as a vendor. So what is interesting though, it's just not that. When we make the announcement that we got U.S. post office, then the floodgates opened up, and we just got another governmental fleet deal that we signed today in Washington, D.C. And it's -- so you get that positive momentum as a company. And we're just at the very, very beginning of it. It's going to explode over the next 5 to 10 years.

Yes. Yes. I'd say the whole -- the broader chargers space has been sort of volatile and impacted by the announcements from Ford and GM and others to move to the Tesla, NACS standard. And obviously, can use the Tesla network. Blink and others have really -- everyone's kind of announced that they can use NACS. But I guess how do you think of this sort of move by the OEMs to the standard? What does it mean for Blink? What does it mean for the industry? Is it really that important in the grand scheme of things?

I have to be careful what I say because I don't want to take away from the big announcement. But it's a lot of hoopla. And the reason why I say that, let me qualify. My job at Nissan as the leading executive for EV and EV sales was to push the CHAdeMO standard, which is not even a standard anymore. But yet the industry moved on.

They supported for some period of time.

Yes. The industry moved on. It adapted. It was just more of a -- Okay. So we're going to go with CCS and the cars changed to CCS. Whilst Tesla has been doing a great job out in the space, so is the rest of the industry. And what has come up is the manufacturing capability of chargers, the manufacturing capability of cables and connectors. And remember, it's only in this country. So in Europe, CCS is mandated by law. You can't do a Tesla standard, they banned it. They allowed it in the United States. So they want to make it, the cable and the charger companies, including Blink are going, well, we can beat the cables, we can make the chargers. It's no big deal. And what this provides is more charging opportunities out there. So you don't have to go to a Tesla station. You can go to a Blink station and charge your Tesla. And today, Tesla is our #1 customer. So more Teslas charge on our Blink chargers than any other brand, makes sense. It's the largest market share, but they also, and they have to use the little adapter. They have no problem. So for the industry, I see this as easy. We proved the design. So we -- first thing we did is in the test facility, we got a Tesla cable. We attached it to one of our AC chargers, we ran it through the paces. No problem. We've now got the prototypes for the DCs. We're going to put it on. We'll have the first unit ready to go to deliver in November and then we'll start mass production of our new advanced DC fast charger next year with a Tesla connector on it, or NACS. We're trying to get away from calling a Tesla and call it NACS, North American Charging Standards, so to say, Tesla.

But presumably, you're going to have to support even CHAdeMO for some period of time, and then it will be probably CCS.

Yes. What we'll do with CHAdeMO is we won't rip any CHAdeMOs off, but we probably won't add any more on.

And CCS.

And keep the CCS' out there and do a dual charger system. Now Teslas right now, one of the things that confuses people is you can't go to a Tesla station today and charge a few one of those other OEMs. First, you've got a cable length issue. It only is designed to reach Tesla's independents to 12-foot and 14-foot cables for a reason, so they can meet all the poor placements on every vehicle. A Tesla station is a very short cable only meant to hit a Tesla. Vitali, my partner. He's his Mustang Mach-E and Ford is transitioning, it will not charge at a Tesla station. Now what Tesla is going to do is they're going to change the stations moving forward. They're not going to retro back to the old stations. So while we're adding new NACS chargers at the same time, and I think that's great because remember, we need 30 million chargers. So this is just all right, it's legitimized independent charging companies like Blink in the eyes of Tesla drivers to now do DC fast charging for Teslas as well. And we see that as a big revenue opportunity, not a negative.

Yes. Talk a little bit about some of the policy support benefits. I'd like you to kind of comment on where -- how you guys can benefit from NEVI and how your sourcing the manufacturing strategy may help there or any benefits from the IRA that you point out there really kind of tailwinds for the firm moving forward?

Yes. So NEVI is going to be, as we talked about DC fast chargers just a second ago, and we talked about the capital-intensive nature of them. So that -- the money and this -- it's $5 billion dedicated to highway based infrastructure, and that's needed because it's very difficult to get a positive ROI on those stations. So that's going to help accelerate that adoption. The other $2.5 billion in that funding, that's for rural and for disadvantaged communities. And we're going to play a big role in that because we already do that today. And that's where you need a mix of L2 and DC fast chargers to really build up the infrastructure because what we see going on today is that if you're at a rural community, the only thing that's there is a highway charger. You don't have charging in the community. And the 2.5 is going to focus on that and bring charging to the disadvantaged communities. So EV adoption can be whole scale, not only isolated to rich areas and rich demographics. The next part is great. So we're building a new factory, and we're doing this because of the Inflation Reduction Act and the benefits afforded there and from DOE lending that -- so JPMorgan [indiscernible] or 1.5% interest rate on a pretty [indiscernible] is a good deal. Thank you, U.S. government. So we're taking advantage of those opportunities provided to get to scale. Right now, it's a unique opportunity. I can -- I've got the land and the building and everything. I just need to do e-loan. And with the incentive structures coming from some of the states, I can get into the building and start manufacturing at 0 capital investment. And that's really going to spear this movement towards U.S.-based manufacturing for DC fast chargers and others and more by America to apply for NEVI your charger has to have 55% local content in it. And that can be a combination of the labor and the componentries, but you can't just assemble because your some assemblies have able to be built here. So you're talking a little bit core level of manufacturing and just saying I'm putting the pieces together and I'm by America now. You can't do that with the -- under the new act.

Yes. Maybe just thinking about globally. So can you discuss the strategy around the global charging market, how you see your position in the key regions, especially Europe, but you're also even have footprints in other places. But how fragmented are these markets compared to the U.S.? And how can you leverage the technology and your IP across the globe?

Yes, they're are in all different shapes and sizes and states right now. So Europe is accelerated. So in Mainland Europe, and when you think of the big countries, all of the big countries in Europe are very, very put. They're pushing ahead and they're ahead of the U.S. And the only country that's ahead of them is China through a lot of policy mandates in there. Utilization is up in Europe. Europe is much more friendlier from a policy perspective, where they're mandating you do it. And then secondarily, when they mandated, they're providing the public access to where the chargers are going at a much more higher rate than the U.S. is. If we look at the policies, it's different. If you go down a highway between Belgium and the Netherlands, there's gas stations on that highway and those are where -- what the rest stops are. In the U.S., we only see that on toll roads for the most part. You got to go off and it's private. In Europe, they're all there. So they're structurally adjusting those for DC fast charger. And then in the municipalities, they have much more aggressive policies towards putting chargers right curbside. We're seeing some movement in New York City has got some on LiPo charging, but they're much more aggressive and they need to be because as an anecdotal comment in Amsterdam, they just banned internal combustion engines from driving into the city by 2025. So if you own one in the city, you can drive it on a legacy basis and you'll grandfather you. But after that date, if you've got an internal combustion engine, you're not allowed to drive into the city. You have to leave it outside the city. So you need more charging in the city for that. So now there's a big push for more L2 to where cars sit and lie. And then when we look at the other countries that we want to go into, we go in what we call an arm's length. We'll be a distributor, we'll provide our network to a third-party entity, and we'll test the waters. We don't go into the emerging markets on an owner operator in a brick-and-mortar, hey, so we just provide our services, and we make revenue out of that. But as those countries start to emerge and become more advanced and the adoption is higher, we'll begin to up our operations and make changes that are needed. When we started our LATAM strategy, it was just -- it was very, very nascent. We'll get $5 million of revenue this year out of LATAM and that's out of this very slow, and we see that doubling and then tripling in the years to come out of that region. Europe, we just see a massive opportunity. The hot market for Europe for us will be moving into Spain, which has the highest degree of incentives in the European market today. And that's where we target some of the markets is who's offering the most dollars to install.

Yes. just pivot a little bit to technology and also maybe manufacturing supply constraints. So last year was obviously kind of a lot of issues for every company, semiconductors, other components, power electronics that were an issue. Do any of these remain?

They do. There's still a little of a hangover effect. They're not all cleared out. You're still seeing some issues on chips, but they're minor. Power supplies depending on the manufacturer and are they overcommitted and what's their failure rate because on a DC, it's 1 of the most failed parts is your power supply on it. But they've smoothed out a great deal. What hasn't been relieved is outside of the charging manufacturing ecosystem, there's the power ecosystem and transformers are still on the biggest delay out there. And so the NEVI program, it's not in danger, but it's in delay because of -- there's not enough transformers to go around. But what we're doing is we learned a lot of lessons. We had to use gray market suppliers. We had to do a lot of things to bring on new suppliers and then test those new suppliers. So for us, it was maintaining those relationships. We don't have one redundancy now. We have 3. And so if we end up in a constraint again, we know who to pivot to, and there's a lot of good lessons to learn. And then the diversification of those supplier bases don't base them all in one country because you saw some concentrated shortages in one geographic area where if you wanted to pivot, they didn't have the capacity in another who could make those. So we're making sure we have geographical dispersion on who's making subcomponents, chips, everything. And a lot of that is also going to be moved to the United States.

Okay. One of the sort of I'd say, broader complaints in the industry, not directly to Blink or any 1 single company, but it's related to kind of uptime service reliability. What measures is the team taking to ensure uptime is -- for example, meeting the NEVI standards or even above?

Yes. So a lot. I'd say the biggest change in this topic I'll give you just the daily life of it. It's not that quality wasn't important. We paid attention to it. We had 1 quality meeting a week usually. Now we have quality meetings every day and sometimes twice a day, and we're not indifferent than the rest of the companies out there who are taking this very, very seriously. And it's allowed us to -- we got to go back and reengineer the process and understand where failure is happening. We've identified that while there are some quality issues in the products themselves, those are minimalistic. It's really software and connectivity and customer validation issues that are driving this level of dissatisfaction. And it's 1 of the reasons why Tesla has a better system, quite frankly, it's all plug-and-play. So the vehicle connects with the charger, the customer does nothing. Plug-in charge on the CCS is going to help with that, but then eliminating the complexity that you go into credit -- the higher failure chargers are ones where credit cards on them, and it's because the credit card failures and there's another point in failure. And then when you go beyond credit cards, it's the ones that aren't simple as tap and go, or driven by the mobile phone. You got to do a different type of credential. Those have the next highest. So we have to be really cognizant of first, we had one state that was mandating Magstripe credit cards on every charger. Now they backed off that. That was going to be a customer disaster. We already know the failure rate is the highest on for customers on that. So the industry is formed a counsel. All the companies are participating it. Blink is participating in. It's to get to root cause analysis across the board and to make sure that we structurally adjust so people when they charge, they get it. And 15118, or adopting the Tesla standard is going to really help because the car, then talking to the charger, you're done. And more and more OEMs are building that into the vehicle. Mercedes Benz [ me ]. It's built the same system as Tesla, you plug into the charger and it handles everything for you. You don't do anything. And that's the way we want to move to as we continue to interact with the public is less of swiping, less of tapping, less of mobile app, more of just connecting and going.

Before I move on to the financials and kind of use of cash, things like that, I want to see if anybody in the audience has any questions. All right. We'll keep moving then. So can you walk us through the gross margin trajectory through the year? And I guess, how do you -- what kind of -- what are the expected improvements that you see relative to the second half of last year?

So what we'll see this year is we'll see starting out. We're in August, and I wish I could change this, but my friends in Europe simply don't want to work in August. I haven't figured this part out yet. So we'll always -- we're going to see a little -- and I'm all Irish, so I have a little sympathy but that just a little. So we'll see a little drop as we have in previous years in seasonality in Q3. It always bounces back in Q4, and Q4 usually is our strongest quarter. So we anticipate that to continue. And internally then, we're still working on a lot of cost saving initiatives as we talked about. So we put our guidance out there, we upped to 110 -- 120, excuse me, as the high point for revenue. We see us achieving that target. Everybody asked the question, is there some upside? Yes, there is the potential for upside, but I want to make sure we hit a target. I don't want to go in there and say, well, let's be gung-ho. And let's make this know what our obligation is to our shareholders and our customers has hit the target, we said, and that's what we're going to do. We see some strong indications of upside in when we do the Q3 number, we'll go ahead and adjust. But we're going to do that based on the data and the validation of that data, not based on, hey, I want to put a good number out there and see the stock pop up the next day. We're not going to do that because what comes up, goes down, not always. And the same with the EBITDA number. We really -- we didn't start giving guidance until March of this year is the first time. And we started complementing EBITDA, and we really looked at the numbers, and we identified December [ 20 ] towards the month that we could really get it. And all the numbers are lining up for that. Now may it happen before that? Yes, it's a possibility. It could happen, but that's the date that the entire company now is marching to make sure both on cost reduction, revenue avoidance, revenue enhancement, new product offerings to get to that target. We have to be disciplined now. We can still say growth like we used to and just beat growth. But now we have to be very metric and efficiently driven. We have to act like a mature industry even though we're still at the nascent stage, we got to apply everything we learned in business school and everything we learned from our previous careers to really start running our company that way, and that's what we're doing.

Yes. I think along that you -- I think you tell you there's some areas to focus on [ core ]. So I think there's -- you discussed small [indiscernible] to drive further cost synergies in revenue opportunities. Can you elaborate on some of those?

Yes. So right now on a cost synergy, the networks are our number one cost that we have to cut out. They're very intensive, both on a human capital and on the cost of maintaining something that's a little older than something that's brand new. So 1, 2, 3 of those will be sunsetted. Then it's the duplication of 4 different financial systems that we have out there. We have 1 platform identified. We've already integrated 1 in. We have 2 and 3 more that are in the integration process. Again, that's another expense reduction. And it's a headcount reduction as well that we're going to hit on that. And then there's the ancillary systems. CRMs were aligning globally, right now in the U.S. and just now in the U.K., thank you, it's on board. We have the commonized CRM system. In Latin America, we've commonized to Salesforce as well. Now we have to tackle the rest of Europe. And then Israel, Greece everything we're integrating into 1 CRM. So we know who our customers are, everything about those customers, everybody about asset management where they sit in 1 database. And I can pull a report on utilization on a charger in Greece as easy as I can pull 1 in Latin America and tell you, "Hey, today, this is how many sessions this chargers had. So once we consolidate that, even our -- even the amount of people we have administering systems from an operational gets reduced and we're just more efficient and we're more accurate in our data and make better decisions.

Yes. As we kind of come to the end here, how does Blink feel about its current cash position? Is there any liquidity needed to see through scale up? What levers does Blink have to raise capital opportunistically?

So we have to do 1 more raise to get to the EBITDA number. There may be a debt instrument used in conjunction with that. But we've identified the dollar amount, and we've identified that we need more and more raise. We don't see another raise after that needed. So when we go out, we're going out and we're saying, this is the raise and I know people have said that before, but again, falls into this culture we're developing of if we say it, that's what we're going to do. And we've looked at the numbers. We know where we need to be on the cash burn rate, we already have that in target. We know how much capital we need to get there and then keep that going into the future. We see that. So it's going to be a raise, the raise will be somewhere between 75 and 125, depending on our needs at that time. We've already talking to the bankers and everyone about this, it's out there. So then we're at that number. And I'll tell you the whole company, Vitali can tell you where everyone is now, for the first time, they're now involved in this culture of getting us to this and they understand the significance of being EBITDA positive. And frankly, from a competition and maybe a little bit of ego, I only got a little of ego. We want to beat others on this and get there. So -- and say we did our last raise, now look at us go. So that's all in sight, but this comes with what you have to do and we have to restructure the whole company around this idea of continuous improvement and everything affects everything else. It doesn't matter where someone works in Blink. They got to become now cost conscious. They have to learn how to be cost avoided. We have to have better purchasing decisions to take on the cost of raw materials. And that's everything that we're doing now from a company that just had under 40 people to 623 and growing exponentially every year, you really got to be disciplined. And we're learning that. I come from that background so it makes it easier for me to understand, but it's still as a leader, you got to keep preaching this every day and you've got to live it yourself, you can't fly first class. And you got to show examples to the employees what that means is that when we cost save, we cost save for ourselves and for our shareholders.

Well, that's a good place to wrap up, Brendan. Thanks for sharing your insights. Appreciate it.

Thanks folks.