Thank you for standing by, and welcome to the Fluence Corporation Q1 FY 2024 results. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, please join the webcast and type your question into the Ask Question box and click Submit. I would now like to hand the conference over to Mr. Tom Pokorsky, CEO. Please go ahead. Thank you very much. Good day, everyone. Thank you for tuning in to our first quarter 2024 investor update. I am Tom Pokorsky, the CEO and Managing Director of Fluence Corp. With me today presenting is Ben Fash, our Chief Financial Officer. Doug Brown, our Chairman, I believe, is also on the line, but due to some connectivity issues at his current location, he will not be presenting. But I'm sure he'll be listening. So we very much appreciate your interest, and we'll get right to it. Over the last several quarters, we have been telling you about our plans and actions to transform the company into a more cohesive and efficient global company. That work is ongoing and continues. However, we are seeing some significant positive results, as we will point out during this presentation. The first quarter was slow, as is normal in our business. I have worked in a number of water companies, and it's always been that way. It's the nature of the business. However, we are also delayed on a few firm purchase orders projects due to some bureaucratic signatures and things. Our business has many opportunities, and we're blessed with a lot of work available due to regulations. But unfortunately, with regulations comes bureaucratic delays, including permit delays, which is what we're seeing. I believe as we increase our pipeline and our order books, we will be able to start smoothing that out significantly. That being said, there are a number of positive results we're reporting for the first quarter. I will let Ben go through the details of the numbers, but I'd like to point out a few highlights. First and foremost, our first quarter EBITDA was $1 million higher than Q1 of 2023. Our gross margin for Q1 was 14% higher than Q1 of 2023. Our non-CES revenues or said another way, our revenues excluding Ivory Coast were 59% higher than quarter one of 2023. Our recurring revenue for Q1 of 2024 was 82% higher than Q1 of 2023. And also, very importantly, the SG&A for Q1 was about $1 million lower than Q1 of 2023. All of these items are as a result of our transformation of the company. Another interesting point is our North American municipal business, which is in its infant stages right now, has already received orders and booked more work than all of last year in the first quarter. I mean, the first quarter orders were more than the entire year of 2023. Finally, our project pipeline, and I will define pipeline because I know some of you out there in various areas of the world have different definitions of it, but our pipeline is defined as work or projects we are working on to pursue orders. It's not revenue. It's not backlog. They are a list of projects. However, they are defined projects where we've done enough work to at least put budget numbers to them. And they come to fruition anywhere from three weeks to three years after we start working on them. So it's a longer-term look. But that pipeline continues to grow, which will be the pool of where we pull our orders from. We still have nearly $50 million in backlog that is scheduled to become revenue this year, and we have a strong booking forecast for Q2 and beyond. All of these positive changes are truly indicators that our plan to transition to higher growth markets, improve our gross margin, and to run a more efficient business are working. We are very excited about the future growth prospects and our continued improvement. Finally, as Ben will provide more detail on, we are holding our guidance for 2024. Now I'd like to turn it over to Ben to dig into these numbers a little bit more, and then later we'll address your questions. Ben? Yes. Thank you very much, Tom. Good morning, everyone. Pardon me. I'm pleased to present the 2024 first quarter financial and operations update on behalf of Fluence. I will be covering some of the same details that Tom just went over, just in a little bit more detail. Revenue in Q1 of 2024 was $10.1 million, and that was $4.1 million lower than Q1 of 2023. However, when removing the impact of the Ivory Coast, the core business grew 59%. As Tom noted, the first quarter has historically been seasonally slower for the company, with Q3 and Q4 typically being the strongest. We do expect that revenue will increase significantly on a quarterly basis in Q2 through Q4. The shift in focus toward our SPS and recurring revenue products and services is having the desired effect on improving gross margins, which saw an increase of 14.1% up to 33.9% in Q1 of 2024. In addition, SG&A and R&D costs continue to improve. With the full benefit of the 2023 reorganization combined with the sale of the aeration and mixing assets, the company realized $1 million in savings in Q1 2024 as compared to the same time period in 2023. Revenue plus increased gross margin and lower SG&A led to an EBITDA loss of $1.6 million, which was an improvement of $1 million compared to the same quarter in 2023. As a result, the trailing 12-month EBITDA of the company increased to $1.2 million after finishing fiscal 2023 at $0.2 million. In terms of the performance by business segment, revenue and EBITDA in Q1 increased across all businesses other than our industrial wastewater and biogas business and the Ivory Coast. Industrial wastewater and biogas experienced some project delays due to permitting issues across several projects, but should be able to capitalize on their recent order success and strong backlog to deliver significant growth in 2024 and ultimately meet their growth objectives and targets for the year. The Ivory Coast addendum project also experienced delays, primarily related to the closing of the project financing. The financing is, however, expected to close in Q2, and the project is expected to commence shortly thereafter. Municipal water and wastewater, industrial water reuse, and Southeast Asia and China all showed material quarter-over-quarter growth and all were profitable on a standalone basis. In terms of new orders, Fluence signed $9.9 million in new bookings during Q1 of 2024, representing about 19% growth over the same period in 2023. Most notably, industrial wastewater and biogas booked $4.3 million in new orders, which was $3.2 million more than the prior Q1 in 2023, and its resulting backlog is up over $13 million. Municipal water and wastewater booked $3.5 million in North America alone, which surpassed their order total in the region for the same time period in 2023. As a result, backlog across the company as of March 31st, 2024, sits at $91.4 million, an increase of 124% over the same time period in 2023. Of that $91.4 million of backlog, $45.5 million is forecast to be recognized in Q2 through Q4 of 2024. The company's sales pipeline remained strong and continued to grow in Q1 of 2024. Our overall sales pipeline has grown from $332 million as of January 1st of 2023 to where it sits right now at $940 million, representing growth of 183%. Moreover, just since June 30th of 2023, the pipeline has more than doubled. And due to that growth in the pipeline, Fluence expects to book several significant orders in Q2 of 2024. As of March 31st, 2024, cash was at $16.8 million. In addition, the company holds $7.7 million in short and long-term deposits as collateral for current projects, of which $6.7 million are held specifically for the Ivory Coast project, a portion of which will be released after the warranty period of the main works closes. Operating cash flow used in Q1 of 2024 was $7.3 million. While it was expected that the company would generate negative operating cash flow in the quarter, it was higher than forecast, primarily due to the delay of the commencement of the Ivory Coast addendum and the associated first milestone payment that would come, as well as delays in collections on several large projects in Egypt. Fluence expects that operating cash flow will be positive for the balance of fiscal 2024 overall and should make up for the losses in Q1 2024. Fluence generated $1.3 million in investing cash flows, primarily due to the sale of the aeration assets, less typical closing costs, and escrow amounts. The company also invested $0.4 million in capital expenditures in the quarter. Lastly, the company also repaid $1.3 million in debt in Q1 of 2024. Fluence is currently repaying about $400,000 per month against the term loan issued by Upwell Water. To conclude the financial and operations review, the company is maintaining its full year 2024 guidance of $90 million-$100 million of revenue and $3.5 million-$4 million of EBITDA. If achieved, this would represent revenue growth of approximately 30%-40% and an increase in EBITDA of 3-4 times what it did in fiscal 2023. Back to you, Tom, for any closing remarks. Okay. First, I'll turn it over to the moderator to give you some instructions. Thank you. If you wish to ask a question, please join the webcast and type your question into the Ask a Question box and click Submit. I'll now hand back for the webcast questions. Okay. Well, what I see here regards our expectations for Q2 of 2024 order booking, and they ask for more color on that. Well, let me just say this. The pipeline is broken down into numerous sections. Some are just prospects that we're starting to work on. And on the other end of the spectrum, we're actually bidding some of the work where the projects are going forward now. We track very routinely the top 10 or 20 major projects. When I say major, maybe in excess of $750,000 or $1 million. And we have 10 projects we're currently tracking that we have high expectations for in the next 30-60 days, that total in excess of $50 million. I'm not going to go into detail on the projects, but that raises our expectations of a very strong booking quarter, so. And then also, there was a question regarding our pipeline of an increase more than $100 million. Can I explain a little more about this? Well, like I said, our sales team goes out and finds projects that are possible, probable, and they do their investigation on them. And if they are a realistic project that looks like it's going to go forward, we put it in our Salesforce, and we start working on it and ultimately get what I would call an application proposal out, a preliminary estimate saying, "We can do this for you, and it'll cost you $1 million." And then we lower it down from there, and as it goes through the funnel of the pipeline. The reason it's gone up so much is we have put more salesmen in the field. We have added sales staff in North America for both our industrial wastewater and biogas and our industrial water and reuse area. They are digging up a great deal of potential projects and very positive projects. Let me just give you one example of how the change in the company's working. Those two people work for two different divisions of the company, but they have decided to join forces in North America and go see industrial clients together. If there's an industrial client that needs to talk about a wastewater problem, our industrial water guy goes along and asks them if there's anything in the front end of the plant that needs fixing, treating the water coming in. And that's generating more leads and more work. The increase in the pipeline is strictly due to putting more salesmen in the field and going after the more high-profitable and growing market areas. Ben, there's a question about the cash flow. Do you see that? I do. I can take this one, and there's one other one I'll jump in and take as well, Tom. But. Okay. All right. Pardon me. The question was, do we expect to be operating cash flow positive quarter on quarter for the rest of the year? What I can say is we do expect to be cash flow positive for the balance of the year. Just given the lumpiness of the cash, especially around the Ivory Coast, as well as some large collections we're expecting out of Egypt, it is possible for a quarter to be flat to slightly negative. Overall, through the balance of the year, we do expect to be cash flow positive and to make up for the losses in Q1. The other question I received was the question around biggest contribution to negative EBITDA from corporate. I believe this person is discussing the business unit financial performance. How long are we expecting this to be significantly reduced? Well, that line item in particular is corporate overhead costs. By its nature, it is a cost center. It's the cost of the leadership team, our auditors, insurance policies, etc. While we are continuing as a management team to find cost-saving opportunities, my expectation is that we won't be able to significantly reduce that line item at this point in time. Okay. Thank you. Do you want to take the next one? Yeah, I'll take the next one. The question is regarding the PFAS regulations that are coming down from the EPA, mainly in North America, U.S. drinking water. PFAS is a very—how should I put it?—not well understood in the industry. Even the EPA does not know what they know; it's bad, but they don't know how bad it is. So the regulations around it are kind of hit and miss now, and they're just starting. But the EPA's regulations are more guidelines for the states. Having said that, PFAS is going to be a big deal globally, and it's early days in the U.S. We do not have technology that deals with PFAS right now. However, we recognize the importance of it. As Ben did in his previous job and I did in my previous job, we try to find technology to add to our stable, if you will, on what's growing in the marketplace. We are carrying on conversations with technology companies that deal with PFAS that do not have a big marketing organization. While we probably are not in position to make an outright acquisition to one of these companies, a start of making a marketing or a license agreement is something we are considering. At this point in time, it's early days, but we are not ignoring the PFAS market. We are looking into it because we do believe it'll be a potential growth in the future. Ben, there was a question about new institutional shareholders. Do you want to address that? Sure. The question is, in terms of. Or are you in position to? I can answer broadly, but without the register in front of me, I probably can't speak to specific percentages. But what I will say is, in terms of institutional holders, can you speak to any new holders in your register and, if possible, an approximate percentage? Just as part of the capital raise that we closed in two parts in November and December of this prior year, we did a good amount of institutional investors to our register. We're very pleased to do that. And we think that one of the successful elements of that capital raise was our ability to improve the overall makeup of that shareholder register, a number of which are very high-quality institutional holders. I don't have our cap table in front of me to be able to speak to exact percentages, but yes, that has increased since, well, really in November and December of Q4. Okay. Tom, I can take the next question as well if you'd like. Oh, yeah. And then I'll add something to it. Go ahead. Okay. So the question is, outside of CES projects, is the first quarter gross margin of 33% maintainable? I'm going to answer that in two parts. My first answer is, yes, it is absolutely maintainable and sustainable. I think one of the things that our management team has tried to make clear is we believe that this business, ultimately, with the technology profile that it has, can and should be a business that is generating 35%-40% gross margins on a long-term basis. That said, we are in the midst of transitioning this business and the product mix associated with it. And on that basis, we do expect that as the Ivory Coast addendum contributes more in Q2 through Q4 of this year, that that gross margin will likely come down as that is a lower-margin project. But with our core technology and product lines, we do believe that 33% and potentially higher is maintainable, and that is, frankly, what we're targeting. I'll just add something to that, Ben. Yeah, I'll just add to it that, in my opinion, this company is underperforming if we don't hit 35% gross margins on most of our work. 35% are better. I have daily, weekly conversations with our general managers of the unit discussing this. And of course, there's only two ways to improve it, and that is to get a higher price or reduce costs when you build it. And I'm happy to say that all the big jobs that we review, we review them for two major well, in addition to the normal liabilities and things like that, there's two major bullet points that we take deep dives in, and that is the gross margin on the job and the cash flow on the job. And I'm happy to say it's improving. When I talked about the bulk of the orders coming in in the near future, they are all up in that range or better. And that is one of our goals. This business should not be operating in the low 30s. It should ultimately be up in the high 30s. I'll take the next one on Ivory Coast completion. The Ivory Coast main works is complete construction-wise. They are in the commissioning phase right now due to some ability to get electrical and things like that. The commissioning likely will be complete about July and turned over to the customer. It is then when they will need someone to operate the plant. And we do not believe the customer will sign a 15-year operating contract that quickly. I just think the bureaucracy is too steep. However, there is a discussion and a very strong and positive discussion about getting us to sign a 2-year contract circa July, August of this year to operate the plant as it's idling. When I say idling, they'll be pumping water through it and then back to the lagoons because the distribution system isn't done yet, which is being done by others. We will likely get an operating contract later in the first quarter or second quarter or early in the third for a short time period. Next question is, what industries in North America are most promising over the next few years? And is there more interest in one-time payments for Fluence to provide as a service? That's a mixed bag. The industries that are strong are the food processing industries mainly, some power plants, power plants for industrial water and reuse, and food processing for our biogas. Those are the industries. And when I say food processing, we're dealing right now with fish processors, beef processors, sugar processors, and even large grocery chains. That is the most promising area now. There are food and beverage areas that are promising for our industrial water group. And then we cannot forget the big, strong municipal market. It's not industries, but municipal is also a huge market. And that takes a little longer time because these projects, you have to get in the early days of them, and it takes 1 year, 2 years before they bid them. So I think the food processing and the beverage and power are the answers to that question. See if we have any more here. Yeah. There's one more, which I can take, Tom. All right. Go ahead and take it. The question is, what is the outlook for paying down debt, and how much of the existing debt is at the higher interest rate of 12%? It continues to be the goal of the company to repay the Upwell term loan, which comes due in July of 2024. Fluence is working on several potential refinancing alternatives to achieve this outcome. The majority of the debt that is on our balance sheet is at the higher interest rate of 12%. Tom, I don't see any other questions at this moment in time. Okay. Unless there are no other questions, I guess we'll button it up. Again, thank you all for your attention and interest. If you do have any further questions, feel free to send us an email, and we'll be glad to address them. Thank you all. That does conclude our conference for today. Thank you for participating. You may now disconnect.