Legend Power Systems Inc. (LPS) Earnings Call Transcript & Summary

Legend Power Systems helps solve a problem that impacts 80% of all commercial and industrial buildings, and that is poor electricity supply. By first analyzing each building with its SmartGATE Insights, Legend can quantify how power quality is impacting the reliability, efficiency and lifetime of equipment like HVAC elevators and air filtration systems. Building owners not only receive a decent ROI with payback well insight 5 years, but they extend the life and quality of their buildings' components, all while being ESG-friendly. We're honored to have CEO, Randy Buchamer, with us today. [Operator Instructions] Take it away, Randy.

Great. Thanks, Ian, and thank you for the invitation and the opportunity to present. I'm the CEO of Legend Power Systems, Randy Buchamer, and I've got our Vice President of Sales and Marketing, Mike Cioce, on the screen here too that will participate in today's call. And we're very pleased to share what we believe is a really exciting high-growth story. And we believe that the timing is optimal with everything that's happening with our business and the external environment, et cetera. Again, thank you for your time and attending. And we're going to quickly go through with what we believe are the key aspects of the business which will leave you ample time to ask questions and things as we go along. So capital structure is fairly standard. You can read as well as I can read it out to. I think the points I would push out to you at this point would be that we did a raise mid-summer. That took our cash up to $10.4 million, and that money went directly into our -- onto our balance sheet without having to pay any debt or anything because we were debt-free. What that has done is given us the fuel in the balance sheet to grow. Everything is for offense: growing our sales, channels, people, et cetera. And we already have spent a lot of money on our product, et cetera. So again, money is for offense. So I think the timing is great there and it will allow us to continue to grow our Gen 3 next platform as we go forward. So on that note, Mike, maybe just talk about the problem, et cetera, that we solve. And then we can go back and forth and share our views on the business.

Yes, absolutely. I'd be happy to. Again, I appreciate everyone's opportunity. And as I stated earlier, the problem we solve really is one that's facing the vast majority of people that operate buildings today. At the end of the day, commercial buildings account for somewhere between 30% and 40% of the greenhouse gas emissions of the world, and the right thing to do is to lower that. But to compound the problem is that as we lower that it's actually getting harder to run those buildings. Specifically, as we start to decarbonize we're moving away from greenhouse gas-intense energy sources and moving to more renewables like wind, solar and batteries. And as that happens, the power stability goes down. And as power stability goes down, it's harder to run buildings. It costs more. It's harder to get those systems performance as high-tech systems performing in the way that you need to care for the people that depend upon those buildings. So when you look at the fact that there are north of 1 million buildings in North America alone across all the different verticals with the fact that we don't have direct competition, and it's a massive problem that has massive financial implications. We're in a real [platform]. That's one of the things that we're super excited about. So if you look at the heart of our platform, what we do is we take a look at the electricity that's coming in from the grid. And the first thing that we do is we determine what's the difference between what they provided and what's optimal. And by doing that, what we're able to do is give better information for decision making. We can get a real view to what's actually happening inside of the building from the power. So we've talked about trying to be a leader in the ESG space, if you don't understand the quality of the power that you've got coming in, it's hard to make better business decisions. So that's where we are -- that's where everything starts. And this has been a real big game changer for us because this has allowed us to go from a product sale that would save energy to a solution sale that holistically changes businesses. Because then what we're able to do is to show the value and to actually install SmartGATE platform, which actually does the corrections. And by making the corrections to the power that's coming in, we're able to get lower energy consumption, better performance of your assets, better reliability, better performance, lower expenses and more profitability. So when we talk about what the platform does and what our solution does, we really are focused on providing that optimal power, so that you can have -- so an organization can have that optimal performance. One of the other big game changers for our business has been how we go to market. What we're able to do now is to do what we call our Insights-led sales process. The Insights-led sales process allows us to put our SmartGATE Insights into facility to capture their data as well as get their KPI view. And what that allows us to do is to be able to take their actual experience and their actual power, and be able to show what the impact is to reliability and lifetime efficiency of everything in the building. And then we can also show the power to solve that. And the reason why that's been a game changer is it's allowed us to go from looking at 1 or 2 systems at a time to looking at 10, 15, 20, 30 systems at a time -- 30 buildings at a time for a customer. So what that's really done is that's really built out a very powerful model for us, unintended right powerful model. What we're able to do is for every 10 Insights that we put out, we expect 5 of those Insights to turn into full SmartGATE platform sales over the coming 12 months. And when we look at the fact that our target is 90 Insights per quarter, which we've been achieving for the last couple of quarters, that will convert to 45 SmartGATE platform sales over the coming 12 months. And when we look at our average sale of $110,000 as well as the annual recurring revenue that comes along with it of anywhere from [$50 million] to $4,500, there's a phenomenal revenue opportunity for us. So when we look at the heart of the business, that's really what's driving our business forward. Randy, do you want to cover off some of the road map?

Sure. I think that to leverage what Mike has already said, we moved and have evolved as an organization. When you -- when we started out with a single product, product was really focused on just helping people reduce electrical energy consumption in a building. And it went through different ideations, if you will, adding particular feature sets to make the product something that customers wanted to buy. So we went through the early adopters very early in the company's history. When you move through sort of 2018, the Gen 2, second generation of the product was introduced. And the whole idea there was to not just save energy, but also additional capabilities and credit platform that could grow with the needs of commercial building operators. The other shift was that, as Mike touched on, the product was single sales, long sales cycles. And the SmartGATE platform in 2018, 2019, what we started to see was million-dollar orders and multiyear orders from customers, because they saw the value in the platform and wanted to grow with it. As we go forward from there, what we've created is a platform that will continue to be able to be adaptive and flexible for new requirements for building electrical environments. So as power negatively affects the building, we'll be there to solve with the right solution for the problem. If you want to add EV charging or you want to add solar, you want to go demand response, you want to have some grid utilization, whatever it might be, the platform inherently on a go-forward basis has been designed to add the functionality as we need it. In addition, as Mike talked about the Insights, it has introduced a whole new, an assessment analysis tool at the beginning of the sale. But it also gets embedded into each unit, which gives us a recurring revenue stream and an ongoing analytical tool to help our customers have visibility to things that were going on in the building that they did not have visibility to before. So it's a very exciting time from that. That's where we were, that's where we're currently and where we're going. And we will follow and respond to the marketplace requirements for what people need to optimally run their buildings at the best level. Mike?

Yes, absolutely. And when you look at that trajectory of how we've taken the latest raise to power our growth, where that growth is going to come from is we're focused on our channel markets. Traditionally, if you look at our sales, we've been growing our strategic sales internally. What we found is that there are people in the ecosystem in the channels that have significant businesses that we can leverage to turn their remote sales teams into sales teams for Legend. And that's a phenomenal opportunity for us, and that's the path to us reaching $100 million in annual sales. Now to give you an example of that, if you look at the ESCO market, which is the Energy Services Companies market, they advocate energy conservation measures and they sell those to public sectors -- to public entities like municipality, school systems, state government to those types. That business right now is somewhere north of $10 billion a year. And the companies that are doing that right now are not active. Some of them are offering an active power management solution through SmartGATE, through Legend Power. Those companies that are offering Legend Power are winning more because they have higher energy savings. With higher energy savings, they're running more. Not only that are we able to help them win more business, but we're able to help them achieve higher levels of profitability and plumbing against these long-term contracts that are typically anywhere from $10 million to $50 million, that lasts anywhere from 10 years to 20 years. So we're finding that we're not only helping them win more business, but we're also helping them to make sure that everything that they put in is lasting the duration of the contract, which helps maximize their profitability. And that's just an example of the type of win-win solutions that the channel market really provides for us. It's a phenomenal opportunity to be able to tap into those additional sales teams. And when you combine that with all of the data that we're collecting, all the intelligence, that's another massive revenue opportunity for us. And that really drives our recurring revenue opportunities. The more we can show customers what's happening on the grid around them and how it's impacting their business, the more that we can continue to mitigate for them that additional recurring revenue opportunities for Legend. Randy, anything to add to that?

No, I think you covered that well. I think that we're seeing good adopting of the technology by the right channels they're looking for, and I think that's great. And it really ties in, Mike, to the key performance highlights. And I would start off by simply saying that one of the highlights for me over the last year, 1.5 years is that the external environment is looking for climate and decarbonization solutions. Every day in the paper, on the news, we see it all the time. So that's really helped create some great momentum in North America for us. We have put in over 300 systems, so proven product. We're getting good repeat orders. And one of the key things is we've got some very, what we call, marquee customers. One example is we've got one customer who standardized with our product in all their locations in Canada, and they've recently asked us to look at rest of world. That's a first for us where we're actually having a customer try to pull us into North America into markets that we're not currently in, but we're really excited about that. As Mike touched on, 3 sales channels that are exciting for us. We've got great Canadian and U.S. success. We're seeing our average revenue grow. Margins historically have been in the 50% range. They stepped back a little bit with our just new introduction of Generation 3 product and some supply chain challenges. But we are well on our way to building that back up into a high profitable business, and again, without any direct competitors. So I mean it leads to the question, why invest in Legend? And as I said, this massive climate change movement that's going on is incredible, and we're right there as a solution to help people. And I think the most important thing there is that we are a core piece of building management when it comes to power because we affect all of the appliances in the building. We go in an electrical room and address all the appliances. We're not just an HVAC solution. We're not just an elevator solution. We're not just a windows solution or anything at all that would be just for one category. We can do it all. We touched on it. We are the game. And interesting enough, that one company I mentioned that standardized on Legend across Canada, looked worldwide before they asked us to look at rest of world. And they came back and told us, "There is no one who does what you do." We used to be very proud of that, and we are. We also know that we're hearing from our customers that people are very concerned about going back to buildings that are safe, that their tenants won't come back unless buildings are safe. They're adding a lot of technology to make their buildings safe. But as we know, if the power isn't right, those safety systems are worthless. So again, it's just making the value proposition even stronger. Mike has done a great job getting a reseller channel established. And I think that's one of the key things we have in the last 3 years of brand and market development is, we've invested millions of dollars of creating the awareness, the education in the channels that are important to us and the vertical markets are important to us in Canada and Eastern U.S. And we're building from that. All those agencies, all those government facilities, et cetera, are aware of us. We're a proved product, and we're ready for growth. And also lastly is that we do have, our product is a very low CapEx. We do not need expensive equipment. We do not need fancy locations to develop our product. We'll talk about that, I'm sure, during the questions. But we have a very low capital business model that we're very excited about.

Yes, as far on Randy. And when you look at how that's driving customer engagement, it's impressive. We are dealing with some of the largest organizations in the world, some industry leaders that are really focused on not only doing the right thing for the planet, but doing the right thing for their investors and the people that depend on the revenues that they create. Organizations like Oxford Properties, like IKEA, we've got multiple agreements going with large organizations across North America. So when we look at how this is resonating, more and more people are starting to realize that it's -- that not only you have to decarbonize and do everything you can to reduce your greenhouse gas emissions, but you also have to stabilize your business in the process. And that's what they -- that's why they're leaning into us is that they see that. They see that not only can we help them achieve those ESG goals, but we can also help them achieve those business goals, by making sure that they're not destabilizing their buildings in the process. So that's really helping to drive our businesses forward and with some of the leading organizations in the world.

And as I mentioned earlier, we've got no debt. We've got a strong balance sheet with the raise we just have. We've already invested millions of dollars into our next Gen 3 product, which is being introduced in the marketplace as we speak. We've built out our large sales team and continue to build it out. We are building some inventory for growth. And Mike has a budget to build out the channels across North America with the ESCOs and the different resellers, et cetera. We've got the new data analytical tool and recurring revenue streams. So we're excited about that. When you look at the financial results then, a lot of it's looking at the rearview mirror. But what we're really excited is the aspect that we have invested the capital to date to go forward for offense. What we're really excited about is that we've managed -- proactively managed our costs during COVID, and made sure that we did the right thing with our team to go forward on a positive culture, which we did. And we've continued to fund the platform, but everything now is about offense. It's all about going out and getting that business. And Mike touched on the one slide of getting 90 Insight assessments in the quarter. And in a 12-month stretch, we would get 50% of those turned into orders at an average revenue of about $110,000. That's what's exciting. We're in our third quarter of meeting those targets. We're seeing a lot of the orders closed. We're hitting those metrics. And if we can continue to get the Insights up per quarter, keep our conversion ratio of 50%, keep our average sale $110,000 or more, business will grow significantly. The next question obviously then is we need to get more Insights out, and we can talk about that between the questions a bit. But we're excited about the ability to not continue to do 90 Insights a quarter, but actually continue to grow that and grow the business. So that's a quick overview of what we think are the key issues and key aspects of the business we wanted to share. We'd like to give you ample time to ask questions that we may go into the areas the organization we'd like you to welcome to.

All right, thank you for the presentation. First question is in terms of the hardware that goes into a site, is it a "one size fits all" thing? Or do you have like various different models you have to install maybe based on power capacity requirements?

Yes. So every building is different from a school to a retail store to a large tower. And we put the appropriate sized unit in for the size of the building. So there is many different sizes of the unit, but it's all based on the core technology to have different electrical environments. In Canada and the U.S., for example, condos and a lot of places have a different electrical environment. And the size of engine, if you will, that we put in corresponds directly to the electrical size and electrical demand that a building has.

If I can add on to that, Randy, one of the other things we also can do is we have the ability to be able to equip each system with what each building needs. So what that does is that allows us to be able to make sure that we're solving the right customer -- right problems for each customer with each of the client, but it also gives us the ability to be able to expand the platform in the future. If you look at the Tesla model, if you have other types of luxury vehicles and you didn't get the lane departure warning system, you want that, you have to go get a new vehicle. But with the Tesla, you can actually add that to your existing vehicle. We've taken the same approach. So what that enables us to do is for the customers that have been focused energy savings. And as we start to uncover more needs on stabilizing that power, we can add that capability to the platform to continue to grow revenue through the customer relationship.

So when you said solving the right problem for a particular customer, what are sort of the range of problems you might see that your customers need solving?

Yes, sure. So at the end of the day when we look at it, there are a number of major aspects of power quality. And we take a very different approach to power quality. Some of the people that are in the power quality game are trying to -- we equate to cholesterol, right, when you're looking at it. And high cholesterol starts at 240. So they're going to look at and say, "Okay, your cholesterol is 230. You don't have high cholesterol." But the reality is 160 is optimal and that's where you get the best quality of life. So that's one of the things we really focus on is not avoidance of the problem, but making it optimal, right? So what we're able to do is look at it and see what's happening on the electric feed. For example, if the voltage levels are consistently high, we can bring that down. If the voltage levels are low, we can bring those up. If it needs full regulation, we can do that. If there's issues on each leg of the service, we can go ahead and address that phase balance as well. So it gives us the ability to be able to rightsize the solution for what each customer needs to optimize the performance of their buildings.

And I would just add, I think what we've learned before we had the Insights analytical tool as part of the sales process that went in and analyzed power problems, Mike, to find out what was happening in the building, we have to put a system in for the customer to see results. And I think what's really exciting is with the Insights analytical tool, we can sit down and give a report on what's happening in a customer or prospect building. They may not even know that these things are happening, but they're seeing the results. They're seeing the cost or the lack of live equipment in a building, et cetera. And we can highlight why that's happening, but most importantly, prescribe a solution to those problems.

So when you go in to talk with a customer, given this is kind of a technical solution, how much do you have to, what level of explanation do you have to go into? Or how do you -- you just say, "Okay, this is what you're going to save." Is that the main thing that you are trying to sell with? Or how do you explain? Because I can imagine that you might have some locations or some companies where you're going to have very technical people and would understand the technicalities of power fluctuation. In other cases, maybe your customer doesn't.

Yes, sure. That's actually one of the key learnings over the last couple of years. If you look at kind of the way we used to sell, we were very focused on the technical side. But what we found is those decisions, those buying decisions were being made by an investment committee. There are people looking at it from an investment level. So what we really need to do is focus on not only showing the technical side of the house, that there is value in fixing it, but also quantifying that for the investment side of the house so they can make that decision. When we look at -- when we leverage the challenger sales model, which is all built around commercial Insights. the commercial Insights, it embraces the fact there's going to be multiple decision-makers involved. So we actively go up as part of the sales process and make sure that we're engaging with all of the players that are involved. And the beauty of the power impact report is what that allows us to do is to be able to build a bridge from the electric room to the boardroom where the decisions are made because the power impact report shows both. It shows the technical, but also translates that technical to business terms. So we can talk to a CFO and explain that $600,000 that they have just put in, that they're expecting in the last 20 years, isn't going to last 20 years. They're going to be lucky if it lasts 15. Address the problem now, fix it, and get that to be -- we get that to be optimal. We get that to be 20-years plus. So it really changes the game from us being that point solution, an energy solution and energy savings, to being a very broad-based solution that addresses the variety of needs across an organization.

And I would just add, I think the biggest thing is that historically we've gotten that simple payback game, what you save, and when compare it to other decisions that you could make in a building. And I think that moving beyond the simple payback to addressing core strategic objectives has moved our product, our discussions and our sales process and people into the executive room. And that's why we're seeing the larger orders. That's why we're seeing the multiyear commitments. Because executives are now saying, whether it's decarbonization, whether it's climate, whether it's ESG, whether it's their brand and how they present it to the marketplace, those are key business directives and we can help them fill those objectives. They're not as concerned about the technology. They're interested in the solution and the ongoing platform that can look after them for multiple years.

A prime example of that is one of our customers who had purchased a couple of systems before. They wanted to purchase a couple more. So we explained to them how the power impact report works. And they said, "Great. Let's go ahead and look at a few buildings." So we explained to them the value of looking at a broad base of buildings. So they said, "Okay, let's go ahead and look at 8 buildings to figure out which 2 or 3 we're going to do." After we deployed the Insights and showed them the results of that and showed them the impact of it, they made the decision to go ahead and buy all the systems for all 8 properties. So that, again, turns something that could have been 2 or 3 into 8. So the impact to our results is very powerful.

So given that this is fundamentally a B2B solution, does it -- would it ever make sense to have an offering for residential? Or is the market maybe just too big for B2B that you wouldn't even bother with that?

Yes. I know, we get asked us this different times of presentations. We kind of smile because we've had a couple of people that are in that market today, and they've come to us and asked us to buy them. What you're finding is when you're dealing with a lot of the small condos and residential, the sales cycles are almost as long, and the actual sale is very small. For example, a company that currently does that and asked us to buy them has an average sale of $1,200 to $1,500 per home, where ours is $110,000. We've got a $38 billion market. So no, we're really looking at the professional side, dealing with the commercial building owners, and there's no plan for us currently to get involved on the residential side.

So what are the barriers to entry for this business, and the key competitive advantage that Legend has that's keeping other competitors away from you guys?

Yes. And I think we should break it into 2 pieces. There is the nondirect competitor. In other words, if you're looking at your building and you want to improve it from a power point of view, you will look at, "How do I improve my pumps?" Or as I said earlier, elevators. There's different things you can do, window treatments, HVAC treatments. But we're the one product that looks at a building holistically and address all pieces of the building. So that's why we say we don't have a direct competitor from that perspective. The barriers to entry really are unique in that what we had to go through is earn the right to sale, and we've created the category. So that was one of the toughest things in the company's history was we had to create the awareness that there was a category and there was something. And we had to educate the customer that they had some challenges, but there were solutions. So the first barrier to entry is whether you are a building owner of hundreds of buildings or thousands of buildings, you rely on your electrical contractor, your electrical engineer, the utilities. And every one of those people will tell you, over the last 50 years, we have seen black boxes that promise things that don't deliver. So the biggest barrier to entry is a lot of people have come in and promised big things and not delivered. So there's a lot of skepticism. There's a lot of improvement. There's a lot of pilots, a lot of trials. And we went through that for 5 years. So as I said, it's not just, "I've got a product. I can come in." We've got IP that we think is substantial. Our advisors advise us that it's very difficult for anyone to do what we do in even a different way because of the process and IP that we have. And I think we also have a bit of a first-mover differentiation strategy that has given us an advantage. Because with a lot of the agencies in New York, for example, you have to go through approvals and you have to go through a long sales cycle running multiyears before you're even approved to be a product for them to consider. And we're at that stage. Now what we're finding is with the ESCOs and a lot of the resellers, they realize this. They've already got the direct channel to the decision makers. They've got the relationship. So what they're looking for is technology like ours, solutions like ours, that they can enhance their value proposition to their target markets with what we bring to the table. So we're excited about that, and we are not -- In any situation, we go out and have any bids or whatever in any competitive environment historically or to date.

So on the last conference call, you mentioned that you're dealing with some supply chain challenges. Has this decreased visibility, or decreased invisibility, and impacted your sales efforts?

Yes. I mean I don't think there's many companies that can say no to that question. We have Generation 3 product, which is virtually 100% rebuild of the previous generation. And components, whether it's cars, whether it's appliances, yes, everyone's been affected. We have been affected. We have visibility on the products. We have sourced products we need for our next quarter's deliveries. But in the past, we could look out and get a year's worth of product. Now we're getting quarter by quarter. It was week by week for a period of time, so we've seen some improvement. But it's also forced us to be better. What we've done is although has been a temporary price increase, it forced us to get people involved in the sourcing and procurement. And what we have done is brought in a professional procurement person with a lot of experience, to take our game up, to look at some of these potential challenges we may have in the supply side and look at how we could partner with people. Because what we were doing before was always chasing the best price. Now we're doing is we're building long-term partners that can scale and grow with us for the volumes that we expect to see. So It is a problem as it is for many companies. We're managing it. It hasn't adversely affected us where we've lost a customer. And there was no customer who said, "We will not do business with you," or "Cancel my order." And we already have strategies in place to make sure, in the event that someone was upset with delivery times, how we would handle it. So it has not impacted us to that degree yet. So we believe we're handling it, and we believe we've got a plan for the future for it.

You just mentioned that you're on your third-generation system. How is the -- what's changed from going to first generation to third generation?

It's funny, Mike, will give you probably a different answer from the sales side. But for me just looking at it, I mean you walk in the back where our inventory is. And it's the fact that you can't walk back there because there's so much inventory that's been that's going out the door the next quarter, lots of orders, is the system looks really professional and sexy. So why does the CEO say that? It might sound like a silly statement. But the early products 5 years ago, still look -- they look good, but they we're missing that really complete package. What we have now looks really good. It looks like when it goes in a room, it's a serious piece of technology. So that's my view. What it's done is it took away just the payback gain or how much do you save, so I can justify how many years I need to save to pay back the product, and allowed us to do 2 distinct things, as we mentioned earlier: one, introduce an analytical tool to do the test, do the building blood test and cholesterol test for the building, sit down with the owner, review those tests. "It's your data. Hear some solutions. What do you want to do?" So we made it and changed our sales process, everything else. And thirdly is the product and what it does, it saves more energy, it addresses 3 or 4 of the most popular, if you will, problems in a building that people have to address. And it's moved us from just that payback to being in a complete solution. It's moved from a product to being a platform. It's allowed us to sell single units to multiyear orders. And it's taken the reseller channel to look at what we do and saying, "Wow, this is something that can rain make, and I can leverage other products can add to this in my overall solution. So you're enhancing my value proposition." It's really changed how we do and how we'll proceed.

So you've engaged with numerous ESCOs, which have big, well-established sales channels. What kind of things have to happen to get to the point where you can have sales volumes in the 10s or 100s of units.

We are well on our way to those. When we look at or engaging with them, there's a lot of benefits to being a provider to the ESCO channel versus being an ESCO itself. When we look at the ESCO themselves, they have -- they're typically investing anywhere from $10,000 to $100,000 to pursue an opportunity. So what we're able to do is we're able to leverage on to that and to help them win more of those, to help them deliver against more of those with better results. So we're able to go into that market and have a much lower cost of sales by leveraging that existing sales channel. And as more and more ESCOs see that they're losing the competition that has this market that's instilling ESCOs to call and say, "Tell me about this market." Once you see that you've lost 2 or 3 deals to another competitor that's offering SmartGATE, they're saying, "Yes, let us look -- let us sell on this," right? So we're already starting to see the number of ESCOs growing, but we're also seeing the number of projects that were being included in ESCOs grow substantially. So when you again -- you look at the fact that there's north of $10 billion worth of deals that are done in the ESCO market alone, we are well on our way to getting some very significant traction in that.

And I think it's also the shift for the company from a direct sale. Because we created the market, we had to go make the calls ourselves and show that it was a salable product. We've reached that point. But I think what's really critical is the major partners in the reseller channel we're talking to are looking at us as a strategic solution, not just a product. They're seeing us as a way to increase their value proposition in the eyes of their target markets, which is not just a product again. They're really seeing us as a business solution and a technology. And I would say when you ask the question of things we have to do, we have to deliver on what we promised, number one. Two is, we need to continue our migration and transformation from a direct seller to a channel seller. And that means we have to have best-in-class training programs, support programs, all the things that create excitement and trust in the channels that we become the product of choice and top of mind. And that's what we're going to do.

Could a power company ever be a competitor to you?

When you say a power company, you're talking about utility?

Yes, utility.

Yes. Now as far as that goes, what we're -- we've actually been contacted by one of the largest utilities and asked -- they were asking us to join their Trade Ally program. Because when they look at their revenue opportunities, their revenue opportunity is top of the meter, and they know that there's additional revenue opportunities on the other side of the meter. So they see us as an enabler to that additional revenue, in addition to the fact that it enhances their product, it enhances their ability to deliver. When you look at the fact that the utilities are allowed to go plus or minus 10%, that's a 20% swing. And with all of the sensitive equipment that are going into building these days, they're designed for a very tight specification. So there are situations where they're delivering against their expectations, but it's not meeting the customers' expectations. So they see that as an opportunity for us to not only help them deliver the product, but also to lighten their load. Because when -- as the demand goes up, they have 2 options. They can either get the demand to go down a little bit or add additional capabilities. And adding additional production capabilities is the expensive way to go. So the utilities enjoy working with us, and they don't see us as a competition on any such.

Yes. And additionally, I would suggest that they see us as a solution to the problem that they have. They deliver power to the door, and after that, it's your problem. So if we can work with them in a way that we can help their customers become our customers. There's a win-win there. And the other thing is, we've had multiyear experience with virtually every utility in any spot that we have equipment, where we are eligible for incentives. We're work friendly with them. They've even given us some leads. They are the furthest thing from a competitor. They start out skeptical. But once we start working with them and show what we can do, they turn to ambassadors and promoters of the product.

Randy and Mike, thanks for being with us today. We did a great job with the presentation. Thank you.

Thanks for having us and appreciate everyone's time, and have a great one. Take care.

Thanks, everyone.