American Superconductor Corporation [AMSC] Conference call transcript for 2022 q3
2022-11-02 14:00:04
Fiscal: 2022 q2
Operator: Welcome to the AMSC Second Quarter Fiscal Year 2022 Financial Results Conference Call. Please note, this event is being recorded. I would now like to turn the conference over to John Heilshorn from LHA. Please go ahead, sir.
John Heilshorn: Good morning, Sandra. Good morning, everyone, and welcome to American Superconductor Corporation's second quarter of fiscal 2022 earnings conference call. I am John Heilshorn of LHA Investor Relations, AMSC's Investor Relations agency of record. With us on today's call are Daniel McGahn, Chairman, President and Chief Executive Officer; and John Kosiba, Senior Vice President, Chief Financial Officer and Treasurer. American Superconductor issued its earnings release for the second quarter of fiscal 2022 yesterday after the market closed. For those of you who have not been able to see the release, a copy is available at the Investors page of the company's website at www.amsc.com. Before starting the call, I'd like to remind you that various remarks that management may make during today's call about American Superconductor's future expectations, including expectations regarding the company's third quarter fiscal 2022 financial performance, plans and prospects, constitute forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including those set forth in the Risk Factors section of American Superconductor's annual report on Form 10-K for the year ended March 31, 2022, which the company filed with the Securities and Exchange Commission on June 1, 2022, and the company's other reports filed with the SEC. These forward-looking statements represent management's expectations only as of today and should not be relied upon as representing management views as of any date subsequent to today. While the company anticipates that subsequent events and developments may cause the company's views to change, the company specifically disclaims any obligation to update these forward-looking statements. Also on today's call, management will refer to non-GAAP net loss, a non-GAAP financial measure. The company believes that non-GAAP net loss assists management and investors in comparing the company's performance across reporting periods on a consistent basis by excluding these noncash, nonrecurring or other charges that it does not believe are indicative of its core operating performance. The reconciliation of GAAP net loss to non-GAAP net loss can be found in the second quarter of fiscal '22 earnings press release that the company issued and furnished to the SEC last night on Form 8-K. All of American Superconductor's press release and SEC filings can be accessed from the Investors page of its website at www.amsc.com. With that, I will now turn the call over to Chairman, President and Chief Executive Officer, Daniel McGahn. Daniel?
Daniel McGahn: Thanks, John, and good morning, everyone, and thank you for joining us today. I'll begin today by providing an update and sharing a few remarks on our business. John Kosiba will then provide a detailed review of our financial results for the second fiscal quarter, which ended September 30, 2022. And we'll provide guidance for the third fiscal quarter, which will end December 31, 2022. Following our comments, we'll open up the line to questions from our analysts. We started our second quarter of fiscal year 2022 with positive orders momentum and strong market demand. Total revenues for the second quarter of fiscal year 2022 exceeded our expectations and came in above our guidance range. Our second quarter revenue of nearly $28 million was driven by strong new energy power system shipments. Our Grid segment revenue for the second quarter of fiscal year 2022 accounted for over 90% of AMSC's total revenue and grew versus the year-ago period. We had very strong bookings in the second quarter of fiscal 2022, and our Grid visibility now extends well into fiscal 2023. The team is executing and driving progress with both new and existing customers for our products. We announced $30 million of new orders in October and have a solid order book of over $100 million. During our second quarter, we saw a diverse set of shipments to renewable, industrial, semiconductor, mining and Navy projects. About one-third of our shipments were to renewable projects. Industrial shipments represented about one-fifth; semiconductor projects were over 15%; metals, mining and materials were also over 15%; and the Navy was nearly 10%. We believe we are well positioned to benefit from the tailwinds created by global decarbonization efforts. Mining, metals and materials at the heart of this movement, and that is where we have expanded our momentum and our broader portfolio of acquired products. We also see projected growth in the renewables market and increased investments in semiconductor capacity. We believe AMSC is certainly a more diversified and stronger business than it was a few years ago. We ended the second quarter with more than $37 million in cash. We have a strong balance sheet and order book. We continue to demonstrate our ability to manage our business effectively despite the challenging operating environment. We are executing against our plans of a more diversified and sustainable business. Now I'll turn the call over to John Kosiba to review our financial results for the second quarter of fiscal year 2022 and provide guidance for the third quarter of fiscal year 2022, which will end December 31, 2022. John?
John Kosiba: Thanks, Daniel, and good morning, everyone. AMSC generated revenues of $27.7 million for the second quarter of fiscal 2022 compared to $27.9 million in the year-ago quarter. Our Group business unit accounted for 93% of total revenues, while our Wind business unit accounted for 7%. Grid business unit revenues increased by 4% in the second quarter versus the year-ago quarter, while the Wind business unit decreased 40% over the same time period. Looking at the P&L in more detail. Gross margin for the second quarter of fiscal 2022 was 7% compared to 12% in the year-ago quarter. Gross margin for this quarter was adversely impacted by the continued drag on margins associated with the acquired Neeltran backlog and inflation pressure in the supply chain. To help provide some quantitative reference, Neeltran adversely impacted our quarterly consolidated gross margins by approximately 500 basis points. We made, and are continuing to make, considerable progress in reducing the Neeltran-acquired backlog. And as I mentioned last quarter, we expect to ship off most of that remaining acquired Neeltran backlog by the end of Q3 fiscal 2022. Moving on to operating expenses. R&D and SG&A expenses for the second quarter of fiscal 2022 were $9.7 million compared to $9.4 million in the year-ago quarter. Approximately 11% of R&D and SG&A expenses in the second quarter of fiscal 2022 were noncash. Our non-GAAP net loss for the second quarter of fiscal 2022 was $6.5 million or $0.23 per share compared with $5.1 million or $0.19 per share in the year-ago quarter. Our net loss in the second quarter of fiscal 2022 was $9.9 million or $0.35 per share. This compares to a net loss of $4.4 million or $0.16 per share in the year-ago quarter. Included in our Q2 FY 2022 net loss was a $1.9 million noncash expense for a final release of the cumulative foreign currency translation adjustment for the dissolution of our China entity. Please see our press release issued last night for a reconciliation of GAAP to non-GAAP results. We ended the second quarter of fiscal 2022 with $37.4 million in cash, cash equivalents and restricted cash. This compares to $43.1 million on June 30, 2022. Our operating cash burn in the second quarter of fiscal 2022 was $5.7 million. Now turning to our financial guidance for the third quarter of fiscal 2022. We expect that our revenues will be in the range of $22 million to $26 million. This revenue guidance contemplates at the request of our customer of other large-sized project within our Grid business being rescheduled to ship from Q3 to a revised requested ship date in Q4 FY 2022. Our net loss on revenue at this range is expected not to exceed $9 million or $0.32 per share. Our non-GAAP net loss is expected not to exceed $7 million or $0.25 per share. We expect operating cash flow to be a burn of $4.5 million to $6.5 million in the third quarter of fiscal 2022. We expect to end the third quarter with no less than $30 million in cash, cash equivalents and restricted cash. With that, I'll turn the call back over to Daniel.
Daniel McGahn: Thanks, John. A few weeks ago, we announced $30 million of new energy power system orders driven by growing market demand. We currently have three favorable tailwinds driving demand for our new energy power systems. These are investments in renewables, semiconductors and mining, metals and materials. I'll focus more time elaborating on the third tailwind comprised of mining, metals and materials because we booked significant orders in these markets, and there are important drivers fueling their expected expansion. First is the projected growth in the renewables market. Wind power projections are estimated to grow year-over-year in the markets we serve. According to Global Data, the U.S. is expected to add approximately 8 gigawatts in 2022 and increase by 26% over the next five years. The U.K. is expected to add 3.7 gigawatts in 2022 and expand by 46% over the next five years. And India is expected to add 2.5 gigawatts in 2022 and grow by 34% over the next five years. About one-third of our product shipments during the second quarter were for renewable projects. Second, as the demand for semiconductors increases, makers of chips are expected to expand their manufacturing capacity. The global semiconductor market was valued at $556 billion in 2021 and is expected to increase by nearly 14% in 2022, continuing to grow by 4.6% in 2023. As for its future development, analysts forecast this expansion at a compound annual growth rate of 8% over the next five years to reach a value of around $900 billion by 2027. Since 2021, in the United States alone, the semiconductor industry has announced nearly $80 billion in new investments through 2025. More than 15% of our product shipments during the second quarter were for semiconductor projects. Our third tailwind is the increasing demand for mining, metals and materials. Let me take some time to elaborate on this as this really is a new development in our business and our drive towards diversification and growth. Consider the global market conditions shaped by climate and environmental action. For example, achieving the goals of the Paris Agreement would mean quadrupling mineral requirements for clean energy technologies by 2040. Wind power, solar photovoltaics or PV, electric vehicles or EVs, all demand more materials and are also at the heart of this anticipated market shift. Wind power is positioned to be the leader in low carbon generation, followed by solar PV plants, both of which are material intensive. To give you some perspective, an onshore wind plant requires 9x more mineral resources than a gas-fired plant. And an electric vehicle requires approximately 6x the amount of key materials used when compared to conventional cars. In short, the quantity of key materials needed for the expected electrification of our economy is vast. The soaring demand for clean energy means mining for metals and minerals is on the rise. This demand comprised more than 15% of our product shipments during our second quarter as well as a significant part of our recent $30 million new Energy Power Systems order announcement. To be very clear, with the acquisition of NEPSI and Neeltran, we have positioned ourselves not only at the grid connection and control point the power projects, but also upstream in the business of the basic materials that go into the systems that make, store and move the power. This is a way for the company to benefit at multiple points along the supply chain of new energy solutions. This exciting energy future also depends upon computer chips, batteries and fuel cells that are built from silicon, lithium and carbon. All these building blocks must be mined, processed and assembled. Industrial manufacturers of these essential materials must be able to power their factories in ways that scale, without adding complexity or size. This is where we believe AMSC's products are uniquely well positioned to address market demand. Our voltage compensators, capacitors, harmonic filters, transformers and rectifiers can power the energy-intensive factories of the future without the risk of costly power interruptions that could hinder this journey to a better future. We supply products and capabilities that enable mines to effectively operate and meet the world's growing demand for metals and minerals. This demand for minerals use in EVs and battery storage is estimated to grow at least 30x by 2040. Lithium is expected to have the fastest growth, with demand increasing 42x by 2040, followed by graphite, cobalt and nickel. The expansion of electricity networks also will contribute to an increased copper demand for grid lines by 3x between 2020 and 2040. It's a very exciting new development in our business in dealing with these key materials for the energy future. Now let me turn to AMSC's other products and services. In addition to those markets, we're also focused on the Navy through our Ship Protection or SPS solutions. In an age of increasing global tensions, we're helping to move U.S. Navy ships into the future by installing protection systems that help them stay hidden from our enemy. Right now, we're focused on the successful installation of our ship protection system on the USS Fort Lauderdale. We have established and demonstrated our capabilities to deliver the SPS systems. In our backlog, we have the U.S. Harrisburg, which is scheduled to be delivered this fiscal year. The USS Richard McCool and the USS Pittsburgh. SPS contributed nearly 10% of the revenues in the second quarter of fiscal 2022 and have been a very consistent source of Grid revenue for several quarters. Our team is focused on continuing to expand our Ship Protection Systems into other vessels while we are installing our initial systems. We hope to have more news coming soon regarding what we will believe will be our bright future with the Navy. Our Resilient Electric Grid REG system in Chicago continues to perform well. We continue to see strong desire from this utility as well as others to further deploy REG into the power grid. It is clear, at least to us, that REG offers the capability and functionality to solve some of the nation's current critical grid infrastructure problem right now. Turning to Wind. We are supporting Inox and Doosan in the field with the initial prototype of a 3-megawatt class wind turbine and initial wind farm of 5.5-megawatt wind turbines, respectively. During the second quarter of fiscal 2022, we shipped 2-megawatt electrical control systems, or ECS, to our partner in India, Inox Wind. The design certification of the 3-megawatt class wind turbine, prototype for the Indian market, is complete. We believe Inox is in a good position to start expanding its business this year with the 3-megawatt class wind turbine, which we expect will translate into an expanded order book for us. Across our businesses, we continue to work through the ongoing challenges of supply chain constraints, transportation constraints and inflation. These challenges are very real. We have worked with our vendors to maintain stocks of key components and carry inventory. We are carrying inventory as well. We also have been managing through these challenges through constant interaction with customers as well as logistics providers. The team has been doing a great job of managing supply chain challenges and pricing it into proposals, where possible. We are, first and foremost, focused on what our customers require. And so far, we have been able to manage key customers' demand. Our company has a strong record building our business year after year, entering new markets and strengthening our existing product lines and services to our expanding customers. We believe we possess the ability, skills and dedicated employees capable of building on our successes with an eye towards executing on new opportunities. We feel very confident about the future and believe there are tremendous opportunities ahead for us. In fact, as we look ahead into fiscal year 2023, I am highly optimistic that our recent announced order book will result in a more diversified and financially stronger AMSC. We believe the integration of our recent acquisitions enhance the fundamentals of our company and address market opportunities more broadly and efficiently. As we experienced revenue growth in new energy shipments, coupled with working off the acquired Neeltran backlog, we anticipate meaningful gross margin expansion. With an uncertain economic outlook, our team has demonstrated extraordinary operational discipline. The team is doing a great job of managing the supply chain challenges and pricing it into proposals, where possible. We believe we are well positioned to take advantage of the decarbonization tailwind and expect to continue to grow and diversify our business. We have Ship Protection System orders for deployment on the U.S. of Harrisburg, the U.S. of Richard McCool and the USS Pittsburgh. We continue to hire talent alike with our long-term plan. We are executing diligently against our plans of a more diversified and sustainable business, and we expect a strong end to fiscal year 2022. I want to thank our team for their hard work and support, and I look forward to reporting back to you at the completion of our third fiscal quarter of 2022. Sandra will now open the line to questions from our analysts.
Operator: The first question comes from Colin Rusch from Oppenheimer. Please go ahead.
Colin Rusch: Thanks so much. Dan can you talk a little bit about the trajectory of your win rate, I think with the mining build-out as well as the semiconductor build-out in the U.S., there's a tremendous opportunity for you guys as folks think about power quality and the importance of power quality? But I'm curious about the competitive landscape and how you guys are shaping up versus some peers within that opportunity?
Daniel McGahn: Yes, I think it's a great question, Colin. With these new offerings represent some new competition for us. What we find is our way of trying to provide a whole solution for our customer helps differentiate us. Our ability to deliver timely and manage lead times very well for customers, give some additional competitive advantage. I think the fact that we understand the grid very well really puts us in a unique position as we look at competing with industrial customers, because they really look at us as an extension of the project team that's developing the asset that's going to connect to the substation. So, we think we're in a great competitive position, not only technologically, but from a lead time and also just from a general copper standpoint.
Colin Rusch: That's helpful. And then just shifting gears around the military. Obviously, there's a lot of geopolitical activity going on right now and shifting. I mean, are you seeing incremental movement on budget activity around scoping the opportunity there? Obviously, you guys have the appropriate approvals, and it's really just around ship-by-ship budgets. But are those budgets starting to move a little bit? And what's your sense of the overall pressure to upgrade given the broader environment?
Daniel McGahn: What we know is that the technology's been derisked. We know that we're in the throes of an installation on the very first ship. So I don't want to say the entire Navy is watching us, but the part of the Navy that matters to us is watching us. So we're really focused on ensuring that the risk around insulation, are retired on this first ship. We know - kind of the pathway on to the next ships, we know that there's the beginning of pull coming from inside the Navy to do more with them. And as I kind of mentioned in the remarks, we look forward to very soon coming back and talking about some demonstrable progress with the Navy.
Colin Rusch: Thanks so much guys.
Daniel McGahn: Thanks Colin.
Operator: The next question comes from Justin Clare from ROTH Capital Partners. Please go ahead.
Justin Clare: Yes, hi thanks for taking our question. I guess, first off here, I just want to ask about the guidance. I was wondering if you could just help us understand kind of what's driving the wider expected net loss in Q3 versus Q2? It looks like revenues could be down a touch, but could you also see some margin compression on the gross margin side or are you anticipating higher OpEx? So, just any color on the changes from quarter-to-quarter would be helpful?
Daniel McGahn: So let me - I'll do revenue, and I'll leave the important lines to John. Obviously for Q2, we came in a little heavier than we thought. So we had some work that we completed earlier than planned for Q2. So that helped to raise Q2 revenue a bit above what our expectation for. John mentioned in the prepared remarks that we have one project that a customer has said they would like to receive it in Q4. So that's shifted a pretty major project from one quarter to another. So as people kind of dive into the guide, just realized there's a couple of moving parts. We're trying to be as transparent as we possible could be. And if you want to talk to the other lines on the financial statement, go ahead, John.
John Kosiba: Sure, hi, Justin. So the guide really is flat quarter-over-quarter from a P&L side. When we guide, we have to prepare for the worst-case revenue scenarios. And our guide for non-GAAP is about $500,000 worse than the previous guide. I don't see any meaningful difference in gross margin anticipated quarter-over-quarter, and OpEx is relatively flat, maybe like go up a couple of hundred grand, but not enough to swing the needle in any significant way. So I'm looking at more as a push quarter-over-quarter, Justin, in Q3 versus Q2.
Justin Clare: Got you, okay that's helpful. And then just thinking through how things trend in the balance of the year, it looks like by fiscal Q4, you'll have the Neeltran backlog that has rolled off, so you could get a 500 basis point margin uplift from that. Just wondering if you could talk through kind of the other product lines, how you see margins trending? It sounds like cost inflation is an issue, but have you put in kind of the price increases that are necessary to kind of achieve a healthy margin level by the time we get to the end of the year or into 2023?
Daniel McGahn: Yes, I think your timetable is right on. We've been trying to price in elevated costs where we can. Obviously, you can see a strengthening in the order book. We were reporting orders on a quarterly basis in the low 20s. Now we've done 40 and 30 back to back. So we're obviously at an accelerated higher level of backlog that we've been. We look at a lot of the indicators across the business, so you really point to growth from where we are with inventory to what we're talking about with margins and things like that. So I was very, very optimistic that we'd see a strong second half. I think we're going to see that translate more into Q4. And my hope, not to go out too much further, but as we work with the team and look at 2023, we've done a lot of work already, and it's only the beginning of November to make sure that 2023 is a really strong year. So I know sometimes these calls are hard when people look at the numbers and the immediate impact, but I want to be clear, I'm really excited about not only how we're going to finish up this year, but what next year could look like.
Justin Clare: Okay great.
John Kosiba: Justin - on the margin, just you have Neeltran. So, on the same revenue you have the bump up in the Neentral, which you quickly realized. And then the other piece is the mix. As we start to see in Q4, so we did mention that we had a rather large great project pushed out, out of Q3 and into Q4. That mix is as we see D-VAR start to approach more historical levels of revenue, you're going to see some natural margin improvement just because the mix is going to get better leading into Q4 and hopefully continue on into FY 2023.
Justin Clare: Okay, very helpful, right thanks guys.
Operator: The next question comes from Eric Stine from Craig Hallum. Please go ahead.
Eric Stine: Hi Daniel, hi John.
Daniel McGahn: Hi Eric.
Eric Stine: Hey, so maybe just on wind. You talked about Inox and the three-megawatt turbine, the design certification complete. I know they've been making noise about this for - gosh, it's been one to two years, but lately talking about commercial launch and I guess, at least taking orders in the first quarter of 2023? And so just thinking through that, I mean when do you need to see a supply agreement and official supply agreement to hit that time line? I mean obviously, you're still optimistic. I think that's your business. But just curious on timing of when we might see that?
Daniel McGahn: Yes. I think that's the hardest thing to guess here is based upon how the demand is going to ramp and how quickly can we respond. We've tried to be clear. For a lot of our products, we're looking at nine, 12, 15-month lead times. In the case of Inox, we want to do the best we possibly can. But it always starts with their ability to pay. So I think if we see indications from their business that they're becoming more, healthy. That should translate into a good indication that our business is going to start to turn around on the wind side. So I think we always tell them, sooner the better to meet the demand that they've been talking about. But again, here, we're in November, and we've yet to enter into an agreement on the three-megawatt part. So I'll just leave it at that.
Eric Stine: Got it. And if they are truly serious and are going to stick to that timeframe, though, I mean, it would seem to be that - an agreement would be forthcoming in near-term where it should be?
Daniel McGahn: I'll let you read those tea leaves.
Eric Stine: Okay, fair enough. And then maybe just my follow-up, just confirming on the one project that pushed out, I mean is it fair to assume that, that's related to incentives related to - the IRA recently passed and just taking your temperature of what your confidence is that, that is, in fact, the Q4 event or potentially does that - could that slide further into fiscal 2023?
Daniel McGahn: Yes, it doesn't really have any bearing on the IRA or the investment, whatever it's called, the Inflation Act. This was something in backlog well before that. This is simply a customer requesting a different date. They have their reasons and what they have availability of labor and things. I don't read too much into it because we always see these things. And we tried - and hopefully, it works out well for us. I'm trying to be more transparent with people on why things are changing or what we're seeing, giving more transparency in what we're seeing. We see this all the time. As I said, Q2, we had a project happened a bit faster than we had anticipated. And we're signaling that we have one project in Q3 that should happen in Q4, with a high degree starting.
Eric Stine: Okay, thank you.
Operator: The next question comes from Chip Moore from EF Hutton. Please go ahead.
Chip Moore: Good morning, thanks. Just want to follow-up there, guys on that - just on that project. I'm assuming that's a D-VAR project. Is it just a sense of size on that, the project that could push to Q4?
Daniel McGahn: I mean, generally, we won't put it in a script, but it's not a significant number. So it's multiple millions.
Chip Moore: Got it, okay. So it's quite material. And then just on margins. You've got something like - you get a nice natural uplift in Q4 just on that Neeltran backlog cleaning up in volumes. If we look out, right, with the $100 million-plus order book standing well into next year, is there a way to think about pricing and margins within that backlog and how that might roll through? Is there any help you can give us there?
Daniel McGahn: Not a lot because we try - we're not a company that has typically guided margin. I don't think we're at a scale yet. But that - I mean, $100,000, $300,000 in a quarter, things like that happen all the time. So it's from a predictability standpoint, what I can say is that the orders that we've been booking, if we go back to what we talked about a couple of years ago with long-term models, with things getting to even higher revenue levels. That there's nothing that's changed in the business that doesn't allow us to meet those gross margin targets. The fact that we acquired a business that needs some work and some TLC, I think is a good thing. And I think we've learned that there's, a lot of market opportunities for the combined product line, maybe even more than we had originally anticipated. So I don't look at the issues with margin as a real indicator on the health of the business at this point, because we have such strong bookings. We know the margins in the bookings are going to only strengthen us over the coming quarters.
John Kosiba: Chip, what I can tell you is in that backlog, we do have all the latest cost anticipated in there. So the current cost on that backlog is where our costs are today. It is tough to do a year-over-year comparison of backlog because we're a project-based business. So - it's easy to just look at it and say, okay, did you raise your prices 9%? But what we can tell you is looking at the cost and looking at the prices that we have in that backlog, we believe it's consistent to what we're expecting margins to be in 2023.
Chip Moore: Yes, no, that's helpful. That's what I was looking for just to make sure you could get back to historical rates. And then if we do get Inox or some more ECS, orders that's a potential nice lift. Is the way to think about it?
Daniel McGahn: Yes, I think that's a good way to think about.
Chip Moore: Yes okay, I think the rest of mine is offline. Thanks guys.
Operator: This concludes the question-and-answer session. I would now like to turn the conference back over to Daniel McGahn for any closing remarks.
Daniel McGahn: Yes, thank you for everybody for listening. We're focused on our long-term plan of trying to create a more sustainable business, not only in what we do and the products that we offer the world, but just from a financial standpoint to continue to add diversification and growth to what we do. I am really happy that the company, we've been able to move, not only from looking at renewables and the military to now being an important part of our business is semiconductor. A lot of positive things appear to be coming down the pipe, particularly in the U.S., given the administration's commitment to things being made in America in that sector. And then this mining, minerals and materials portion, what we're realizing is a lot of the things we talked about during the beginning days of the acquisition, being able to cross-sell, being able to get interesting unique content that's not there in the marketplace that makes customers excited about us, I mean, that's really what we're seeing. So I think our future is very, very bright and even more diversified now than it was even a couple few years ago. So thank you, everybody, for your attention. We appreciate it. And I am - I'll say this, I'm really looking forward to the call in January, February timeframe, because I think you're going to see all the good things that we're - we've been talking about just start to come to fruition. And we think it's a really bright beginning of 2023 calendar year, hopefully, and into our fiscal 2023 as well. So thanks, everybody.
Operator: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect. Goodbye.
