Good morning. My name is Julie. I will be your conference moderator today. At this time, I would like to welcome everyone to the Legend Power Systems Q1 2023 financial results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, press star one. Thank you. Legend Power, you may begin your conference.
Thank you. Welcome to Legend Power Systems fiscal 2023 Q1 investor call. I'm Randy Buchamer, Legend's Chief Executive Officer. We're pleased to have you join us on the call today to discuss our corporate progress and financial results for the first quarter of fiscal 2023, which were the three months that ended December 31, 2022. Please note that certain statements in this call may be forward-looking in nature. These include statements involving known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from their expressed or implied in our forward-looking statements. For more information about Legend's forward-looking statements and risk factors, please see our MD&A which was filed on SEDAR today under our company profile at sedar.com. I'm joined by Florence Tan, our CFO, Paul Moffat, our COO, Mark Petersen, VP of Engineering, and Mike Cioce, VP, Sales and Marketing.
Florence will provide a financial update and overview of Q1. Paul Moffat will update you on the key initiatives we have taken to address the core challenges we discussed during our last quarterly call. Mark Petersen will discuss how our new pre-sales analysis and Power Impact Report process is working and how well Gen3 is performing in the marketplace. Mike Cioce will report on the significant sales movement made over the last quarter and how positive the sales efforts continue to be. Our business is growing, and we're making significant progress. Gen3 is exceeding performance expectations and customer feedback is very positive. We have successfully made the shift from selling a product to implementing a collaborative consultative sales process which provides our prospects with amazing visibility as to how effectively and efficiently their buildings are or are not operating.
We clearly see our consultative sales approach with insights into Power Impact Report strongly resonating with our prospects and customers. We'd love to name some of the companies that we have either secured business with or achieved significant progress with, but due to confidentiality agreements, we cannot. I trust and hope that you've been able to surmise, based on the recent press releases, that we have secured and negotiating deployment schedules for several multi-million dollar, multi-year commitments. More detail on these wins will be made on a regular basis, and Mike will talk about some of them too. Inbound prospect inquiries are growing based on referrals and awareness of how well Gen3 is performing in the marketplace. Our order visibility is strong, and numerous company making deals are being conducted as we speak. Individual order discussions now can exceed tens of millions of dollars and have multi-year deployment plans.
We have over CAD 4 million in working capital and over CAD 2.1 million in cash. We have about CAD 1.8 million in paid inventory and work in progress, which creates about CAD 3 million in additional cash contribution when shipped and collected. During last quarter's call, we discussed our key improvement areas. Paul will provide details on what steps we've taken to ensure we achieve our improvement objectives. Just as a reminder, the key improvement areas have and will continue to be to manage our cash and reduce operating costs. We've made recent reduction in costs over the last month or so. Improve our cash flow and particularly our cash collection times, cost of goods, supply chain challenges. Margin improvement is ongoing.
Paul will talk about how we've implemented additional methods to improve our margins, and we see visibility on getting back to historical margins over the next while. Managing our installation costs and leading the quoting process improvements will also be discussed. On that note, Florence, if you please would provide the financial highlights for the quarter.
Thank you, Randy. During this quarter, revenue recognized was CAD 403,000, compared to CAD 169,000 in Q1 FY 2022. Revenue recognized was based on two SmartGATE systems delivered and three completed installations, compared to two systems delivered and no installations in the prior year. Sales and installation pipelines as well as sales bookings backlog are both healthy, and we will see the transition of these to revenue recognition over the coming months. Gross margin in the first quarter of fiscal 2023 was 25%, compared to 22% in Q1 FY 2022. Given the company had taken action last year by increasing sales prices, we've seen a moderate increase in margin. We continue to closely monitor the inventory component pricing and supplier order fulfillment lead times to appropriately plan the scaling of Legend sales.
The company ended the quarter with CAD 2.06 million in cash, no debt, and CAD 4.25 million in working capital. With this working capital, we continue to proactively focus on the items critical to attaining our growth projections, and we will continue to frugally manage our capital resources as we always have and squeeze the most out of every dollar provided by our shareholders. We're excited with what this new year will bring and are very optimistic about the future. Thank you. Now over to Paul Moffat, Legend COO.
Thanks, Florence. Good morning, everyone. As I reported last quarter, our business management system continues to evolve and improve, leading to our second quarterly operations and KPI review meeting next week. I'm seeing both improvement and predictability in sales order and production planning, as well as a lot of turnaround time improvement in our installation and commissioning processes. On-time delivery has also improved, which in turn achieves the installation dates desired and targeted by our customers and speeds the time to customer benefit and to our incoming cash. Again, our continuous improvement is certainly a journey. We're now all fully committed and engaged. I only see improvement from here on. In addition to positive changes now realized in our customer payment terms, our improved delivery and turnaround times have shortened our cash cycle, again strengthening our cash flow.
Our evolved sales order process increases internal visibility and gets everyone on the same page, it really ensures all the critical requirements of those deals are met before committing the company's cash and resources. This process works with the end in mind, we're targeting all of our customer installation dates and all internal processes strive toward those dates. Seemingly simple step, it aligns all of our efforts to one goal and improves overall lead times dramatically, it's another win for our cash flow. We are still seeing supplier price increases and there was 2 or 3 of them in the last quarter. We have realized, as you've seen from Florence's update, a small margin improvement, largely due to implementation of our new price model.
We will definitely see further improvement as there's been great strides on installation cost reduction and component cost initiatives. In fact, many of the deals we're signing now include these gains. As part of our efforts to increase capacity, a large portion of our sub-assemblies, the simple ones, but those that really require significant workload overall are being put out to tender with our incumbent plus 3 other competitors, one of which is a candidate for system assembly and test. In addition, we are investigating near and offshore manufacturing as a primary source of capacity in the mid to long term. Coupled with increasing our internal capacity this year, this dual outsourcing strategy will provide growth capacity, flexibility, and delivery and cost alternatives. Combined, these efforts reduce our cost of goods sold while ensuring capacity does not constrain growing demand.
At the same time, Legend is balancing the need for long lead time components, as I've discussed before. Although supply chains are improving somewhat, as opposed to capacity, they will ultimately gate deliveries for the near future. We've now had a 2nd U.S. contractor size installation for a large multi-residential SmartGATE opportunity, and we'll see those results in March, and we expect a significant improvement in installation costs as the contractor rates are much lower. More importantly, our standard cost model has been deployed. Our installation partners are quickly realizing the win-win opportunity of getting in early with our SmartGATE Insights installations, then capitalizing on the volume of installations that will follow. Long lead time materials continue to arrive in support of our Gen3 backlog.
We will be shipping a handful of systems over the coming weeks, and we have over the past several weeks, and a set of 10 shortly after. Although supply chain is improving somewhat, we'd not be in this situation without the long lead time orders that we placed previously for critical components. Engineering development continues at a strong pace, with functionality that will support both customer features and deployment optimization, all within our current Gen3 hardware platform. I'm excited to see these developments being tested and released now on our factory floor, and I know they will further improve operations down the road. I'm thrilled to see continuous improvement on all fronts and efforts to reduce costs, improve turnaround times, and plan for business growth and flexibility. I'm very excited by what I see ahead of all of us. Thank you.
I'll now pass you over to Mark Petersen, our VP of Engineering.
Thanks, Paul. I just wanted to speak briefly and provide an update about our customers' experience in deploying Gen3 and how we present the SmartGATE in the market. I wanted to start really with what has changed. You know, approximately a year ago, we spoke on some of these calls about validating our new approach and how historically we've presented a product to our customers that offered energy savings and was inherently somewhat one-dimensional. We knew we needed to increase our offering and value that, you know, the customer saw from us. To that end, we created the Gen3 system and developed the technology to build upon our early success, you know, based in energy efficiency and really with the goal of driving, you know, value from multiple angles with our customers.
You know, the technical advances we brought to the marketplace with Gen3 was really key to this new approach. The new features that we brought allowed us to define, you know, the Active Power Management category, which we're absolutely a leader in. And bring value to the customer, you know, from multiple angles, like I said, including energy, you know, data aspects as well as power quality, and really was a significant expansion to our offering. A key aspect of that is this data-driven approach, and Randy mentioned this briefly. It's centered around a customized report on the power quality and current state of a facility that we use to identify and quantify the opportunity with every customer we look at in each of their buildings.
You know, our insight system and the analysis that's included with it that details the opportunity around their existing power quality is really a key component of our customer journey and is very central to our selling process. We spoke about this in the past, this is a huge shift in how we presented the technology to customers and was one of the last remaining points that we felt that we really needed to validate, you know, our selling model. Why I wanted to speak with you today was just to, you know, to emphasize with dozens of Gen3 systems now successfully deployed, you know, we're closing the loop with our customers, the results and feedback on this front has been absolutely fantastic. We're seeing great results both in terms of the alignment of, you know, the energy savings we're able to provide.
Really the new feedback is that the reliability and improvement they're seeing a lifetime of equipment, you know, is having a meaningful impact on their facilities and their business. One particular example comes to mind, that last week we were speaking with a large multifamily property management company and longtime Legend Power customer. During the project wrap-up meeting, they spoke to us about the tremendous value they see in deploying SmartGATE systems in their facilities. They specifically referenced that our new data-driven reports that are generated from the SmartGATE Insights system, including the power quality report, both the pre and post SmartGATE, was absolutely a key factor in their decision to continue to deploy Legend SmartGATE systems in their facilities and to look for further opportunities to deploy more SmartGATEs throughout their portfolio.
You know, really for us, I think this is, this is the best feedback we could have. You know, the customer's voice is always, you know, one we're trying to channel and follow up on. For me, it really put the exclamation point on the results we're seeing, you know, with our customers and in the market today. Just wanted to share that, and I'll pass it over to Mike, to talk, provide an update on his end.
Thanks, Mark. Appreciate that. Again, as Mark had mentioned, business is good. Things are very good, and it's getting better and better quarter by quarter. Orders are coming in, both large orders as well as some smaller orders. Our new payment terms are working out great, and it's resulting in more cash coming in earlier. The systems that are being deployed are generating phenomenal results, as Mark had mentioned, and those results are driving even more results. For example, we were delivering the SmartGATE performance results for the largest order in our company's history, and the customer saw that not only did we exceed their energy savings expectations of 5%, but what they also saw was a dramatic decrease in maintenance repair costs that was saving them even more than they originally thought that they would.
In fact, a very senior executive said not only did we exceed the ROI expectations, but the buildings just run better, and that's better for the people that depend on them, tenants, employees, as well as investors. Those results right there prompted them to buy 10 more systems on the spot. What's exciting is that this is not a one-off. Another customer that had purchased a double-digit number of systems had the same reaction. Again, after seeing the energy savings being exceeded, they indicated that in the first few months of operating, they had already seen the entire first year's anticipated maintenance and repair savings, stating that they hadn't had to replace a control board since the systems were installed. That had been a monthly occurrence for them in the past.
This one category alone is saving them tens of thousands of dollars per year. Again, on the spot, saying that they want more and identified another 10 buildings immediately. These are examples of how the Active Power Management approach is driving results for our customers and for Legend as a whole. Again, as we said before, that success continues to drive more success. As a result of that, we are now working with four new multifamily customers that are larger than either of these organizations, based on the results that we're generating. When we combine this success with the success of the New York City systems and the hundreds of schools and other buildings they are electrifying, the opportunity there is for hundreds of systems over the coming years. These successes are continuing to drive results in other areas as well.
One of our largest retail customers with a double-digit number of SmartGATEs is looking to expand deployments not only across North America, but other markets as well. This one opportunity alone represents over $20 million in new pipeline with them alone. Now, another example of our success with our systems generating more success, we had a prospect that somewhat skeptical for years, and once they heard about the results within the city, they actually did a 180 and asked us to assess over 20,000,00 sq ft of Class A office space in Manhattan for one of the most well-respected names in commercial real estate.
With that said alone, we are currently assessing over 75,000,000 sq ft of commercial office space in N.Y. alone, again, representing opportunities for hundreds of SmartGATEs. We continue to be written into new ESCO deals and have more and more partners and resellers engaging every quarter. The results we are generating is helping to drive momentum with resellers across the board. This trend is accelerating sales. It's resulting in portfolio-wide deployment planning results in the pipeline of hundreds and hundreds of SmartGATEs. At the end of the day that the orders are rolling in, both big and small, great results from the latest generation of systems being deployed, the largest pipeline we've ever seen, and resellers growing, the future for Legend is brighter than ever. With that said, I'll pass it back to Randy.
Thank you, Florence. Thank you, Mark, Paul, and Mike. Hopefully, you're getting the message that we're very excited about the business and our progress. We've all been working hard for years to establish Legend Power Systems as a solution that is critical for business improvement tools and not just an energy-saving solution. Alternative energy growth and the increased problems with the grid ensure that Legend solutions have a huge marketplace. That just continues quarter by quarter. There's a continued massive shift of corporate effort to climate and environmental initiatives becoming top corporate objectives. The world is seriously committed to take steps to positively impact climate change. In all of our markets, we see consistent and systemic change to make buildings less harmful to the environment, combined with improving efficiencies, reducing costs, and making a better tenant experience.
The U.S. government is committed to making it easier for corporations to adopt electrical energy-saving technologies for commercial buildings, and they continue to induce programs that support Legend solutions. To be clear, we are discussing numerous $10 million deals or greater, and several have been secured, and some are in the deployment planning stage. Clearly, we are seeing the world looking for products like Legend SmartGATE Active Power Management Platform, and we're poised for significant growth. All of us have much to look forward to, and we expect to see continued confirmation that the time is now for Legend Power and our solutions. On that note, we would be delighted to take questions that you may have.
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touch-tone phone. If you'd like to withdraw your question, please press the star followed by the two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment please for your first question. Your first question comes from Bill Chapman from Investor. Please go ahead.
Good morning, everyone. Randy, I was curious on the Green Proving Ground, when do you anticipate you'll get the results from this?
Well, we will be putting in systems, you know, over the May, June frame.
Okay.
Those will operate for, you know, 60, 90 days.
Okay.
You know, we'll sit down and look at that. I mean, that, to be clear, is a deployment plan strategy. They're not looking for results to prove the system works. They're looking to decide the deployment plan and schedule they'll deploy with the equipment. We're pretty excited about that.
Okay, good. Well, let me ask you too. You mentioned in several press releases ago, in this press release, on this call, you had 50+ ESCOs or resellers interested in partnerships. Can you tell us how many have actually engaged in a formal relationship with you?
Yeah. I'm gonna let Mike take that 'cause he deals actively with them, and he can share some of his insight on that.
Yes. We are currently actively writing business with 12 organizations, and we have another six that are actively under NDA and reviewing our partnership agreement.
Oh, okay, good. Last question. Your prior Q4, you mentioned you had a CAD 15 million objective in 2023 for revenues. Now this press release said you anticipate that you'd be equal to your or exceed the target. Is that still what your target is, CAD 15 million in revenues in 2023?
Yes, it is, Bill. We're fulfilling with the things we have and the timing of where the deals are that will be exceeded. That's the hope. Our stated-
Yeah.
Goal is CAD 15 million in book business.
Okay. That's everything. Thank you very much, guys.
Thanks, Bill.
Your next question comes from Jeff Kowal, private investor. Please go ahead.
Yeah, hi. Good morning, guys. Thanks for that update. Appreciate it. I got a few questions for you. Randy, you mentioned a couple of things between the press release and the NDA. So sort of to paraphrase here, you say targets set towards operational goals. Then another section, you say something about sales bookings, pipeline is healthy and in line to exceeded expectations. Would both those points refer back to what you just reiterated in regards to CAD 15 million in bookings for 2023, or can you expand a little bit on that?
Yeah. I think what we're seeing, Jeff, is visibility on in excess of the target of CAD 15 million. It's all down to timing and what's booked by what year, et cetera. You know, we're, we're seeing now and in discussions of planning, multimillion dollar deals over multi-years that significantly exceed that goal. I'd say it's really a timing thing, but it's gonna catch up where a bunch of these are gonna hit. I do expect that we will exceed that in fiscal, in book business, and I think that we'll see some significant growth commitments that will be multi-year that we can count on that will help Paul with his ordering supplies and production. We can really get things more systemically than ad hoc.
Lots of good news on that side, as Mike was talking about.
Do you think when you get a multi-year sort of commitment that you'll be able to be more expressive, not necessarily with, you know, the entity, but maybe with a multi-year sort of revenue forecast? Or do you feel like it's just gonna come sort of when it comes in pieces, and you won't be able to provide visibility on a multi-year basis for one particular customer?
It's probably just all of the above. I think what we're seeing now is we had some press releases that if you read them carefully, although some of them did mention names, you know, for example, DCAS had their own press release and on their own website talked about a four and a half billion dollar budget for electrification of schools. We put a release out without names suggesting that we had a commitment to be spec'd in as a standard offering on new facilities. We know there's over 110 of those planned over the next three years. We're starting to, in our best way that we can, dispel and share some of the good news with the marketplace. That's the first answer I would give.
Secondly is, what you're gonna start seeing is either names or without a name, talking about a commitment for the calendar or fiscal year, but also mention that there is further business in multi-years. What we're finding is, you know, when you're doing... You know, if you're doing 100 buildings, et cetera, people aren't doing that in 3 months. It's not the way the business works. People shut the buildings down. They have, you know, particular times each year where they shut buildings down and do maintenance work and put in new switchgear or whatever they might do. We get pretty well on a scheduled basis and also with electric contractors' resources when they can do things. We can schedule out quite well, and I think we can communicate on that basis, yeah.
I think what happens is we get the pipeline. You know, it's been growing significantly. As we can communicate progress on that, I think what shareholders will understand is that we do have a significant flow of orders and probably I think people will be able to figure out pretty clearly that it's multi-year and, you know, the deals are a significant size. The answer is still but what I said at the beginning. It's all the things you mentioned. It just depends on the customer and the market and the commitment.
Okay. That was helpful. One more from me for now. Can you update us on your cash and working capital position since the end of December?
Yeah. We did on the call. We have about CAD 2.1 net cash as we speak, about CAD 4 million in working capital, about CAD 1.8 in paid inventory. It's about CAD 1.4 million in inventory. It's about CAD 250,000 in work in process and about CAD 130,000 in sub-assembly ready to go. That CAD 1.8 million inventory at a 40% markup, which is what we're going out the door as of on a go-forward basis, creates about CAD 3 million of additional cash contribution without any liability or payable against it. We only have about CAD 90,000-CAD 100,000 in payables.
Based on your cash and working capital, Randy, how do you view your capital requirements moving forward? In particular, I mean you know, I know it's kind of a boilerplate statement, but in the MD&A, there's a in paragraph two, on page 13, it says something to the effect that you will need to raise additional capital. Can you comment a little bit about that? Usually when investors see that, they assume that it's gonna be equity, but I would hope that in your case that maybe that debt is a possibility here on the strength of these entities that are giving you these POs. Thank you.
Well, I guess there's a few questions there. Firstly is that we don't have any debt currently. The question about page 13 on the MD&A about raising money. You know, at some point we'll have to do that for the growth we have. We're gonna have very quickly carrying tens of millions of CAD of work in process and receivables, et cetera. We currently don't have the balance sheet for that. However, what we have done, if you look back several months, or two quarterly calls ago, we said that we were going to more effectively communicate our progress to the market, so the market would appreciate, and we believe we would have an appreciation in our valuation, our currency. We've seen sort of CAD 0.15, you know, pushing CAD 0.40.
There's been some good progress there. If we had taken money, for example, at $0.15, it would've been far more costly if we'd done it, if we were doing that today, which we're not. What is our goal? Our goal is we can use instruments like the government has some different programs. We haven't been successful with those to date, but we are in dialogue with it. There are banks that will factor paper with the significant names of the clients we're dealing with, that will factor the paper for you. There's different alternatives available to us that we are looking at now. One of the huge changes we've had, you know, right before the end of the quarter, we had bookings of a, you know, a little over $1 million in the last week of Christmas.
That came with about CAD 350 of cash up front on the 25% with order. You know, Jeff, it doesn't take much for a couple of these orders we have to secure the 25% down with the order, and we have significant upfront cash. That pushes out the question about working capital. The goal as a CEO that I have is not to dilute shareholders. It's to create the currency we have, additional value and at the appropriate time when it makes sense and, it works for the organization and shareholders is to increase the capital base. There's no plan at this point to do that in any immediate basis. We will continue to manage our cash as we have.
I mean, and the last thing I'd say, Jeff, is, you know, we took this approach, I think now five quarters ago. We made the call that we felt the market would be more difficult, and we were gonna reduce our costs. We took CAD 1 million out. We've continued to do that, increase margins, reduce our staffing, and we took out another CAD 15,000 a month last month in costs. We'll continue to watch the costs. We'll continue to get more cash contribution on the inventory as it goes out the door, since there's CAD 1.8 million in prepaid. Treat that as CAD 3 million in cash when it comes in. We'll continue to use alternative methods to factor paper that are available in commercial vehicles.
It's not our plan in the immediate future to do anything that would be dilutive to the organization. Great.
Thank you, Randy.
You're very welcome, Jeff. Thanks for your support.
Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one. Your next question comes from Rob Ware from Waratah Capital Advisors. Please go ahead.
Yeah, thanks. Waratah Capital. Guys, I appreciate, I appreciate all your comments around the macro. you know, decarbonization is very enticing and your, you know, your customer base obviously has a, a mandate to execute on this. I guess I've monitored these developments for 18-24 months, and I'm just trying to reconcile the Q1 2023 results with, you know, two ships reinstalled, with, you know, the revenue guidance and talking towards hundreds if not thousands being sold. I just can't get my... or I can't reconcile, the quarter with the operating highlights section coupled with your comments on the call. It just, it seems like the longest sales cycle in history.
I'm just wondering, like, why does it take so long for these various customers, the various resellers to actually sign on the dotted line?
Yeah. Thanks, Rob. There's a couple different avenues there, you know, on the ESCO side or partner side and the direct side. Let me break it into two pieces or two components. I'll start with the direct side. you know, the deployment of our product, the sales cycle is longer than a lot of different products. It's not something like we, you know, you order a calculator or a phone on Friday and you get it Friday night. We get commitments from people that are looking for a year out. They perhaps may not have budget till 2024, but they'll give us a commitment to proceed. They may not have a shutdown period for the equipment to go in, so it can't be rev rec. And significantly over the last year...
I mean, one thing I did was I ordered a boat, 19 months before I got it, and it was waiting for electronic components for seven months, and I got it last year at the end of the summer in November, which was really appreciated. We're seeing that in the marketplace. It's the same with us. I mean, control logic boards, things like that. I used the analogy in the board meeting yesterday. It's like having 100 cars ready to be sold, Rob, but you don't have brakes and you don't have a steering wheel. Everything's held up until you can do that. Also, we have very strict rev rec parameters that we must meet. Until we complete all those, the rev rec isn't appreciated. It's gonna catch up.
You're gonna see a little bit of snowball, as you see a lot of these systems get delivered. We've said in the fiscal when we started out that the number of rev rec will be small, but the order backlog and growth will be significant. I don't see that changing for 12-18 months. The second part of your question is the ESCOs. A lot of times what they'll do is they'll write deals, and, you know, Mike can back up more detail on this, but they'll put a proposal in as an offering with other competitors to a client to look after their buildings and provide energy management services and products.
Once they secure or the client says, "You're our chosen partner," the ESCO or partner has to then tighten up the offer and go to a stage where they commit to exact dollars and things rather than more directional. That process can take 18-24 months, and then the actual deployment of products, another 12. On that premise, what you're gonna see is business drop in because we've gone through that process with the ESCOs and partners. It does take the time. It's kinda like a big bulge in the hose, but the only way you get around that is you get a lot of business going, and then it continues to drop in. Hopefully that answers a little bit of your answer to your question.
It's a little bit with supply and supply chain delays on specific components and being able to rev rec our revenue. It's the sales cycle. It's also the time that our partners take on large deals. 'Cause remember, we're a small component. Some of these ESCO deals are hundreds of millions of dollars over 10, 15, 20 years. We're a small component, we are at the premise that our product goes in when they've got a secure deal. Is there anything else you'd add on that, Mike, or have I covered that?
No, Randy, you hit the nail on the head. Again, just with the cycles of the ESCO market and the performance contracting market, as Randy said, you know, after a vendor selection is made, then they have a very robust, third-party energy analysis where they go through and they validate everything. Once that's done, then they move into funding. Once funding's done, they move into contract, and then they actually move into execution. Those, the ESCO deals definitely have a tail on them. Again, what you're looking at, when you see our rev rec numbers are exactly that. Our rev rec numbers are based on, as Randy said, our rev rec policy. Randy nailed it.
I would add one other thing, Rob, to your question is, because we're starting to see the significant size of orders, what we'll catch up sooner during the year and going into 2024 will be much more clear on backlog and timing to cash and orders, better visibility. Because we are in the process of you know, developing the deployment plans. I mean, City of New York is a perfect example where they announced four and a half billion dollars to electrify the schools, just the schools. And they're doing that between now and 2030. As that gets more definitive for us, we can share that to the marketplace. I think you'll see, that roll into more predictable rev rec because we can predict the install dates and things like that.
Hopefully we're getting through those ugly periods, but that's how I'd answer the question, Rob.
Okay. I appreciate it, guys. Thank you.
Presenters, there are no further questions at this time. Please proceed with your closing remarks.
Just wanna give it last chance. If anybody has a question, maybe just give it 15 seconds if there is a question. No questions, operator?
There are no question at this time.
Great. Well, listen, we appreciate everyone's time. We've got a committed and talented team, and we're getting stronger. We've got, we believe, an absolutely outstanding Active Power Management Platform. We all know that the markets have high energy costs, they have power challenges, there's ESG and climate change objectives. Our partners and our customers and our prospects are seeking innovative ways to reduce their energy costs, but also improve the quality of their building's energy. We believe the future looks very good for Legend Power and our stakeholders. We're very excited about the progress we've made, and we think as more and more we can share the progress with you'll be very excited about the progress of the business. We believe the time is now for Legend, we wanna wish everyone a fantastic 2023.
Thank you for your support, and everyone have a great legendary day.
Ladies and gentlemen, this concludes your conference call for today. You may now disconnect your lines. Thank you.
Thank you, operator.
You're welcome. Have a good day.