Welcome to the Beam Global year-end 2021 Financial Results and Corporate Update Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ms. Kathy McDermott. Please go ahead.
Thank you. Good afternoon, and thank you for participating in today's fiscal 2021 conference call. We appreciate your support and interest in Beam Global and for taking the time to join our call. Joining me today is Desmond Wheatley, President, CEO, and Chairman of Beam. Desmond will be sharing his thoughts and observations about our fiscal 2021 results and his perspective on the business. First, I'd like to communicate to you that during this call, management will be making forward-looking statements, including statements that address Beam's expectations for future performance or operational results. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
For more information about these risks, please refer to the risk factors described in Beam's periodic report on Form 10-K that will be filed tomorrow, March 31st, 2021, our most recent Form 10-K and other periodic reports filed with the SEC. The content of this call contains time-sensitive information that is accurate only as of today, March 30th, 2022. Except as required by law, Beam disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. I'd now like to take you through financial results for the 2021 fiscal year ended December 31st, 2021.
Beam Global reported record revenues in fiscal 2021 of $9,001,751, compared to $6,210,350 in fiscal 2020, an increase of 45%. In the fourth quarter of 2021, the company generated revenues of $3,487,649, a 56% increase over $2,207,006 in the fourth quarter of 2020. The company invested in sales and marketing resources during the past two years by increasing the sales team, adding consultants, and investing in marketing. We're delivering more higher unit orders, the largest of which was a 52-unit order for the State of California's Department of General Services.
There's an increase in state and federal funding programs available to provide incentives to invest in electric vehicles and electric vehicle infrastructure. These programs have supported our growth, and we expect that they will continue in the future. Our gross loss in fiscal 2021 was $971,644 or 10.8% of sales, compared to $710,974 or 11.4% of sales during fiscal 2021. The gross loss in the fourth quarter of 2021 was $340,624 or 9.8% of sales, compared to $537,937 or 24.4% of sales in the fourth quarter of 2021.
During 2021, we saw price increases on many of our purchase materials, primarily for steel and batteries, as well as transportation cost increases due to COVID-19 related issues. We were able to partially mitigate some of the transportation costs by delivering systems using company resources. We implemented some design changes and streamlined our manufacturing, which provided some cost reductions in labor efficiency during the year. In addition, with the increased production levels in 2021 compared to 2020, we were able to benefit from increased fixed overhead absorption. This resulted in a small improvement of our gross margin, excuse me, our gross loss as a percentage of sales in 2021 compared to 2020, despite the cost increases. Operating expenses as a percentage of revenue decreased by 10% in fiscal year 2021 compared to 2020.
Operating expenses were $5,627,674 in fiscal 2021, compared to $4,496,660 in fiscal 2020. Operating expenses in the fourth quarter of 2021 were $1,674,683, down from $1,799,242 in the same period of 2020. The increase in total year operating expense was primarily due to increases in sales and marketing to support revenue goals, research and development for design changes and cost reductions, and accounting and filing fees related to a change in auditors and our proxy and meeting costs. Net loss as a percentage of revenue decreased by 11% in fiscal year 2021 compared to 2020.
The net loss was $6,596,039 for the 2021 fiscal year, compared to $5,213,025 for the 2020 fiscal year. For the three months ended December 31st, 2021, the net loss was $2,014,811, compared to $2,336,524 for the same period in the prior year. This is primarily attributable to the increase in gross loss and increased operating expenses. At December 31st, 2021, we had cash of $21,948,512 compared to $26,702,804 at December 31st, 2020. The cash decrease was primarily from operating activities, which was partially offset by cash generated from the exercise of warrants.
Our working capital decreased from $28,133,031 to $24,611,810 from December 31st, 2020, to December 31st, 2021. With that, I will turn the call over to Desmond to provide a business update.
Thank you, Cathy, and thanks to everybody for tuning in and for your support. Listen, before I get started here, I just wanna remind all of you that we are in the flight path of the Marine Corps Air Station Miramar. So far, nothing's flown overhead since we started this call, but it's going to happen for sure. When that does happen, there's gonna be a tremendous roaring noise because, I mean, we're literally a mile away from the base, and they fly right over our offices. That's part of the way we keep the rent down here. But at any rate, just be aware of that. If that happens, I may even have to stop talking because it's so loud, but I'll pick up right where I left off.
Just don't be surprised, and, please don't concern yourself for me. 2021 was a year in which Beam Global broke record after record after record. The various records which we broke spanned almost every area of our business. Let's start with deliveries and revenues. In the second quarter of 2021, we delivered a record number of EV ARC systems, up 109% over the same period prior year. In the third quarter, we set another record for deliveries and revenues, with deliveries increasing over 123%. Q4 was time for another record for deliveries and revenue, with a 45% increase in system deliveries over 2020. Not surprisingly, all these record quarters contributed to the biggest year of system deliveries and revenues in our history.
By the time the year was over, we'd manufactured 124 EV ARC systems, delivered 119, and generated revenues of over $9 million. This compares to 69 systems in 2020 with revenues of just over $6 million, amounting to a 45% year-over-year increase in revenue. In Q4 of 2021, we had a 59% increase in revenue over the same period prior year, with a significant increase in system deliveries over the prior quarter and over the same quarter in 2020. Now, in the past, when we've had a very strong fourth quarter, we generally entered the following year with little or no backlog and a lot of work to do to start the machine rolling again.
In 2021, along with all the record-breaking deliveries and revenues, we also had a record year of sales, which were up over 131% from the prior year. This meant that for the first time in our history, we were able to enter a new year with a strong backlog of contracted orders for our products and little or no interruption to our production. Backlog is not always the best metric to use when you're measuring our progress because, of course, it goes down when we convert it to revenue. It is nevertheless very positive for us to enter a new year with a healthy backlog, particularly because January and February can be slow months for new orders. This record number of new contracted sales in 2021 was contributed to by several other records.
For example, we received the largest single order in our history, 52-unit system order from California's Department of General Services. The order was funded by California Governor's Office of Emergency Services, validating again the disaster preparedness and resiliency aspects which are unique to our EV charging infrastructure products. That 52-system order was, of course, a follow-on order through our California contract, which has been in place for many years and renewed more than once. In fact, we're currently in the process of renewing it again. A further contribution to our historically high 2021 sales came from yet another record, which was that we received the largest first-time order in our history from the United States Marine Corps. 21 EV ARC systems as a first order to be deployed across Marine Corps bases in the continental United States and Hawaii.
All the DGS and Marine Corps systems have since been deployed. That Marine Corps order set another record in that it was the largest order we received through our General Services Administration contract. I feel very confident that it will not retain this record for long. The Marine Corps was not the only federal agency to place orders through our GSA contract in 2021. Historically, we've generated significant revenues through government sales. In fact, during COVID, that's how we earned the majority of our revenues. Most of those have come from state, municipal, and local governments. 2021 did not disappoint in this area either, as we received orders from or delivered product to 20 different U.S. states and also Canada during the year.
2021 was the first full year in which our GSA contract was active, so I suppose it's not surprising that it was also the year in which we received the greatest amount of revenue from federal opportunities in our history. Another record, soon, I believe, to be broken. The United States government is today the largest consumer of diesel and gasoline in the world. It has a current mandate to replace its 675,000 internal combustion engine vehicles with zero-emission vehicles. It will soon become the largest consumer of electric vehicle charging infrastructure in the world. We're all aware that the federal government does not always move at a pace consistent with the commercial world. However, like a mighty battleship with a full head of steam, it does not readily change course and is very hard to stop once it gets going.
Beam Global has the fastest deployed, most scalable, lowest total cost of ownership, and most resilient EV charging infrastructure product in the world. It's made in America, and it delivers clean, green energy to the vast new fleets of electric vehicles which are coming. I cannot think of a product which is better suited to meeting the aggressive and accelerating goals of the federal, and indeed all other governments in the U.S., the United States and globally, for that matter. With that said, we believe that the orders we received from the federal government in 2021, though they did set a new record for us, will seem fairly insignificant as the machinery of that contract spins up in the remainder of 2022 and the years to come. We are not leaving this to chance.
We have significantly increased our investment in government relations, and it's paying off. Our internal government relations specialists and our two D.C.-based consultants have been responsible for making sure that off-grid EV charging infrastructure language is included in funding bills where it was previously neglected. We've been made eligible for programs which previously excluded us, like CALeVIP and the Clean Miles Standard and Incentive Program. Beam Global has been voted onto the board of directors of the Electric Vehicle Charging Association. Perhaps most striking of all, when the Federal Highway Administration released its program guidance document on the National Electric Vehicle Infrastructure Program, they used a picture of Beam Global EV ARCs on the front cover. I think that's what's called a buying signal in sales parlance. People quite often comment that we generate a lot of revenue from government customers as though there's something wrong with that.
It's true, as I've mentioned, that particularly during COVID, a very high percentage of our revenues came from government customers. Prior to COVID, enterprise customers often made up more than half of our annual revenues. Of course, as people stopped going to the office and visiting other types of businesses, the requirement for workplace or amenity-style charging was reduced significantly, and therefore, so were our enterprise revenues. Notably, even though we lost this avenue of revenue generation, which as I said, was more than 50% often, we were still able to hold and even grow our revenues in 2020 and 2021 because the growth in government made up for the loss in commercial sources.
It might be reasonable to assume that post-vaccine, with the return to normal life or at least something like it, Beam Global ought to expect a return of enterprise spending on EV charging infrastructure, and indeed, we have. In 2021, we received purchase orders from non-governmental business sectors, including automotive, commercial real estate, construction, travel, entertainment, and education. We also saw continued growth in sales to utility customers. One of the many misconceptions about Beam Global is that we compete with utilities. In fact, we're increasingly adding them to our customer list because our product is ideally suited to their requirements on many levels. They too need to deploy very large volumes of electric vehicle charging stations, and they need to do it quickly.
Utilities are not generally known for their rapid deployment of infrastructure, but our EV ARC gives them an opportunity to provide EV charging faster than any traditional method. The increasing number of blackouts and brownouts is causing utilities to seek methods to deliver electricity to their customers in manners which are not reliant upon large and centralized infrastructure. Regulators are calling upon them to provide resiliency in the face of the increasing risk of blackouts caused by more severe weather conditions and of course, the ever-present threat from nefarious nation-state actors. This is only going to become more important as electricity replaces oil as our transportation fuel. The United States has a strategic petroleum reserve to ensure that we never run out of diesel or gasoline, but there is no strategic electric reserve. In fact, in most markets in the United States have insufficient capacity to serve current load.
This is why we experience blackouts and brownouts during heat waves when everybody turns up their air conditioning. Our products continue to provide electric vehicle charging and emergency power during those sorts of events or any other grid failure. The current situation in Ukraine and our deteriorating relationship with the Russians, who we know have already hacked the U.S. utility grid, when combined with existing lack of capacity, makes the requirement for rapidly deployed EV charging infrastructure, which does not rely upon centralized utility grid, more urgent than ever. It's probably true that for the foreseeable future, the majority of EV charging will be supplied by the grid.
The utilities know, and so increasingly does the government, that we must have charging solutions which are faster and more scalably deployed, and which will continue to operate when the utility grid fails or cannot add sufficient capacity quickly enough to keep up with the demands of all the new electric vehicles. To give you an idea of how acute a problem, and therefore an opportunity for us this is, it's helpful to understand that an electric vehicle has a similar load profile to a single-family residence in California. Each time you add an electric vehicle, it's as though you're adding another home to the demand on the grid. Of course, electric vehicles will come far faster than new homes ever could, and as a result, will be much harder to keep up with.
Charging an electric vehicle with a 350 kilowatt DC fast charger is like turning on 500 homes at the same time because of the speed at which the electricity is delivered to the vehicle. The electric utility grid was never designed to replace oil as a source of transportation energy, but we'll need sufficient electricity to replace oil over the next few decades. The grid cannot be expanded quickly enough to keep up with transportation electrification. Beam Global is in many ways creating the early stages of a strategic electric reserve with our products. A fact that is recognized not only by our federal and state government customers, but also by our growing portfolio of utility customers. The combination of our pipeline and backlog continue to set new records throughout 2021 and leading into 2022.
Pipeline is in many ways a better metric than backlog when measuring our progress, as long as we continue to do a good job of converting it into revenue. Historically, we've taken a fairly conservative view where pipeline is concerned, meaning that we don't add opportunities to our pipeline unless we have a very reasonable expectation that they can and may convert to revenue at some point within a reasonable time frame. The reason the pipeline is a more worthy metric, so long as we stick to these high standards, is because, as I've already mentioned, backlog converts to revenue and increasingly does so within the period between our reporting on it. Said another way, the more efficient we become, the faster we deliver products to customers who've ordered them since the last time we reported backlog.
As a result, those orders never appear in the backlog that you get to see. I believe that we're continuing to use sensible and reasonable methods where calculation of the pipeline is concerned. There are four important aspects to our pipeline which I want to share with you. Of course, the most obvious is the size, which today is over $90 million. The second is whether or not the pipeline is growing, and it is. As long as the pipeline is growing and the revenue that we report is growing with it, then we are executing on our growth plan. The other two important aspects of our pipeline makeup are, A, that the size of the initial customer orders are increasing, and B, that the timeline between initial contact and receiving a purchase order from a customer is shrinking.
In other words, prospects are ordering more units in their first order and accelerating through our sales cycle faster than any time in our history. Our improved efficiencies in the factory and our ability to produce and ship product in greater volumes and shorter time frames, combined with this accelerated sales process, means that we're in a position to convert early stage pipeline into revenue at a faster and greater rate than ever before. Now I believe there are several reasons why these initial orders are bigger and moving through our sales cycle faster. Some of those reasons are related. First of all, there seems to be an increase in the urgency around the ordering of EV charging infrastructure.
This is not surprising, as there are more and more mandates and financial incentives in place at a time when there are simultaneously more and more attractive EV models available to the public. Ten years ago, when we first started making solar-powered electric vehicle charging products, electric vehicles were the domain of elitists in Teslas and tree huggers in cars like the Nissan LEAF. Fast-forward to today, and now we see a whole host of new products like the Ford F-150 Lightning, GM's electric HUMMER EV, Rivian's R1T, Ford's Mustang Mach-E, the Kia EV6, and about 100 other compelling EV offerings which are formatted and increasingly priced to be attractive to the average American consumer.
Situation in Ukraine is again contributing, and that the very high oil prices, which are being translated into greater than $6 a gallon gasoline, are invigorating consumer interest at a pace which might have been hard to predict even a year ago. All in all, there's a dramatic increase in the requirement for EV charging, and that increase is coming with urgency. Customer urgency is music to our ears because, again, we have the fastest deployed, most scalable, most robust, and lowest total cost of ownership EV charging infrastructure solution available today. Because we positioned ourselves to support any EV charging company rather than competing with them, we're in a position to be in increasing demand regardless of which EV charger or service provider a customer may choose. We deploy ChargePoint, Blink, Electrify America, Enel, or any other quality EV charger and service provider.
We just do it faster and without the need for construction, electrical work, permitting, utility bills, or risk from blackouts and brownouts. We have essentially productized out all the risky, time-consuming, and variable cost aspects of EV charging installations. At the same time as we're seeing this significant increase in the urgency around the deployment of EV charging infrastructure, we're also seeing an increase in the acceptance of our product as a mainstream solution to provide the infrastructure which makes EV charging work reliably, scalably, and robustly. Whereas in the past, we used to have to spend a good deal of time convincing prospective customers that our products worked and then go through a process where they order one or two units before feeling sufficiently confident to order larger quantities. The questions we now get are no longer about whether or not the product works.
Rather, they're focused upon whether or not we can produce the quantities that our prospects require within the increasingly urgent time frames under which they're now operating. This year, I've already toured several large organizations through our factory to demonstrate not how our products work, but that we are set up to meet their requirements for the types of large orders which they believe they will need fulfilled. I'm not representing to you today that we've received such an order, but I do believe that the inquiries are serious and that they're coming from entities who have the wherewithal and the need to place such an order. In my view, it's only a matter of time. I'm happy to report that none of these organizations left disappointed.
This is in no small way due to the investments and efforts that we've been making in our factory, anticipating that this time would come. In our final assembly area, which is, if you like, the bottleneck in our production capability, we now have six workstations, each of which is capable when staffed of producing an EV ARC in a shift. That means if we produce one EV ARC per station per shift and run five shifts a week, we can produce 1,350 EV ARC systems per year. Moving to two shifts, five days a week, we produce 2,700 systems per year. If we move to three shifts, seven days a week, we can produce over 4,000 systems annually from our existing 53,000 sq ft facility in Mira Loma, California.
Remember that our fixed costs will not increase along with the increase in revenues. Producing that volume of products would generate somewhere between $100 million-$260 million of revenue in a year, but it would do nothing to satiate the requirement of our customers and prospects. Quick glance at our current customer list will, I believe, leave you recognizing that any number of them could deploy several thousand EV chargers without coming close to meeting their needs. We've made further investments in the factory, such as tooling, equipment, and most importantly, human resources.
We've increased headcount on our manufacturing floor, and we've also increased the experience and skill set requirements of those newer employees. The result of this is that we're paying more per hour for those employees, but we're reducing the labor cost per EV ARC through increased efficiencies, utilization, and quality of workmanship. In 2021, we also invested in bringing new manufacturing leadership to our company. This, of course, the most important step that we could take along the path to mass-producing high-quality products with controlled costs. I'm very happy with the progress that our new leaders have delivered. The fruits of their labors and our investments are clear to see when you look at the increasing volumes of products passing through our factory. They're perhaps a little harder to see, but no less dramatic when considering our cost structure.
In the face of the highest inflation in over 40 years, and without increasing our prices, we actually improved our gross profitability in 2021 over prior year. It's true that we continue to report a gross loss, and it's also true that the improvement year-over-year was minor, but it was an improvement nonetheless, at a time when the cost we were paying for materials and components were going up faster than I have ever seen. Comparing two equally equipped EV ARC, one produced shortly before COVID and one produced during this last month, I can see over $6,600 of cost increases for steel, aluminum, copper, EV chargers, and even for the first time in our history, batteries. $6,600 accounts for around 10% of the selling price of an EV ARC model I'm comparing.
In other words, we've been seeing a greater than 10% increase in COGS required to make an EV ARC, and yet we improved our gross profitability at the same time as we bore these costs and without increasing our selling prices. How did we do that? Simply stated, while the costs that we cannot control have been going up, we have done a very good job of bringing down the costs that we can control. I've been reporting for some time that as we increase volumes through our factory, the fixed overhead costs shared amongst larger volumes of product would have a decreasing impact on cost of goods sold for each individual product. We have witnessed that impact in 2021 as a result of the dramatic increase in units fabricated and shipped.
We've also decreased the cost of direct labor required to fabricate an EV ARC by approximately 36% since the end of 2019. Transportation is another area where we've seen significant external cost increases over the last couple of years. To counter that, we've invested in increasing our ability to deliver our products with our own equipment. We now employ a mix of third-party transportation companies and our own in-house delivery equipment and personnel. Using our own teams and equipment reduces risks and costs and has played a significant role in our increasing ability to deliver our products on time and as inexpensively as possible.
While the gross profitability improvement has not been as impressive as I would have wished, in the face of the highly inflationary period we're currently navigating, our own internal cost reducing and efficiency increases have been dramatic, better than 10% in 2021. We believe that many of the inflationary cost increases may be temporary. While we do not anticipate a full return to pre-COVID cost structures, we do believe that some of the higher prices we're paying, particularly for steel, will return to some sort of normality through the end of 2022. Our vendors are certainly representing that to us. As prices normalize, we will see a reduction in our BOM costs and all the improvements we've made, which have resulted in better than 10% cost reductions internally, will compound to provide what I believe will be significant improvement in gross profitability.
Of course, we always have the ability to increase our selling price if we view that as being in the best interest of growing the business. I'm hesitant to do that at the moment as increasing volume is so important to our growth plans, and I don't wanna create any barriers to that increased volume. There are some areas where I believe we can increase costs without negatively impacting our opportunities. For example, we do plan to start to pass on any increased pricing in the EV chargers our customers select that we buy and install on their behalf or integrate rather into our products. For example, ChargePoint chargers, which are a popular choice with many government customers, have increased in price by 26%. We absorbed those cost increases during 2021, but we do not intend to do that with new customers.
That particular reversal of absorbing a vendor's pricing increase is worth 2% of gross profit to us. The real opportunities for margin expansion come from cost reductions. We already have line of sight to other material cost savings through the efforts of our engineering and operations teams, and we will continue to rigorously pursue those efforts. I believe that additional significant cost reductions will be achieved as we replace the energy storage solutions we're currently using with our own as we integrate the new battery packs from our recently acquired company, formerly known as AllCell Technologies in Chicago. Batteries currently account for almost a third of our bill of materials, and I believe that the initial margin recapture will reduce our BOM cost by something in the order of 7%.
Further collaboration between our Chicago-based engineers and scientists and our San Diego-based engineering team promise to deliver as much as a 15% decrease in our BOM costs within the next 12 months. The combination of our cost reduction efforts, including a significant reduction in battery costs, along with some return to normalcy in materials costs and the increasing volumes we anticipate in 2022, lead me to have a high degree of confidence that we will return to positive growth profits this year. Because of our tremendous discipline around cash management and cost controls, the route to bottom-line profitability and positive cash flow is not intellectually challenging to chart thereafter. To illustrate this, it's helpful to analyze the change in our operating loss between 2020 and 2021.
While our operating loss increased in absolute dollars during the year as a result of our investments in sales and marketing, R&D, and other improvements to the business, it did not increase anywhere near as much as revenues did. As a result, we actually had an 11% reduction in our operating loss as a percentage of revenue. Absent the extraordinary inflationary pressures that have increased the cost of materials and commodities that we integrate into our products, that reduction would have been closer to 20% as a percentage of revenue.
This is a perfect illustration of what I've long reported, which is that as we increase volumes to our factory, and I certainly expect that we'll continue to do so, we will be able to reduce our costs through increased efficiencies, value engineering of the products, and as a simple result of the increasing operating leverage that we have. We remain well-capitalized with the funds necessary to execute on our growth plans and with no foreseeable need to raise capital. Now, as I've often said in the past, not needing to raise capital is not the same thing as saying I would never do it. There may be a strategic benefit to doing so from time to time. If there are, and if they clearly are in the best interest of our existing shareholders and the growth of our company, then I will of course consider them.
Two examples of what I consider to be excellent strategic reasons to raise capital are, firstly, if there's a dramatic run-up in our share price and I'm able to further shore up our balance sheet defensively and to assist with our growth plans without it being terribly dilutive, I might consider that. Secondly, I am acquisitive, as is perfectly illustrated by our recent acquisition of AllCell Technologies in Chicago. In the case of that acquisition, we did an all-stock deal, and so there was no need to raise capital alongside the acquisition. It also came with no debt.
However, there may be other worthy targets which will bring tremendous increased value to Beam Global and which would be improved by the raising of capital, either at the time of an acquisition or at some point in the future to fund growth or new technologies or some other competitive advantage for Beam Global. In any event, were I to countenance such a move, I would only do so through the same lens that I always use when considering investments for this company. Is it in the best interest of the existing shareholders, our employees, our customers, and the company? If the answer is yes, you can count on me to at least explore the opportunity. If the answer is no, you can equally count on me not to invest our cash or our precious equity in a folly.
To be absolutely and abundantly clear, we do not need to raise capital, and we are not seeking to do so. I hope you will agree that the AllCell acquisition illustrates this level of discipline on my part. In that instance, we acquired 100% of the assets in a fantastic technology company operating in a vibrant and growing space for around 10% of our equity. The seller has an opportunity to gain more equity in Beam Global through earn-out provisions in 2022 and 2023. I'm looking forward to paying those earn-outs because I'll only do so in the event that we've had a couple of fantastic years of performance from this newly acquired entity. The acquisition was accretive in almost every way. With it comes increased revenues and gross profit from AllCell's existing line of business.
With it also comes a significant reduction in our COGS through margin recapture first, and then through cost reductions in our suite of products as a result of the engineering and scientific efforts of our combined teams. We acquired a significant intellectual property portfolio, which will help make Beam even harder to compete with when combined with our existing patents and other IP. We acquired a team of some of the most experienced and respected engineers, scientists, and manufacturing experts in the battery space, perhaps anywhere in the world. This at a time when energy storage and battery technology is more important than it has never been, and yet nowhere near as important as it's going to be. The structure of the deal was well-crafted in that the seller at once became one of the largest shareholders in Beam Global.
Our priorities have become perfectly aligned as they seek to help us grow the business and as a result, their significant equity stake in it. As if that weren't enough, the stock we used as currency for this acquisition is restricted. Even in the event that those restrictions are lifted, the seller has contractually agreed to sell no more than 4% of average weekly volume ever. Even were they to liquidate their entire position, they'd have to do so in a way that would have an immaterial impact on the way our stock trades. I'm confident that we won't have to rely on that covenant because these are clever people who own a big chunk of Beam Global. The last thing they want to do is hurt their investment through irresponsible trading. They certainly don't need the cash. Our new energy storage product makes the batteries safer.
Many of the fires you may have heard of would not have happened had they been using our new technology. It also makes them longer lasting and more energy efficient, which is another way of saying less expensive because you can cycle more energy through the batteries without having to replace them. It's an excellent and well-protected technology differentiator at a time when the world is electrifying rapidly and increasingly in an untethered manner, which relies upon safe battery energy storage for its efficacy. You can see from the way this deal is structured and from all its many benefits that if we do continue down a path of acquisitions, and it's my plan to do so, that we will only acquire companies which will bring the greatest amount of value with the best possible deal structure.
Our corporate sponsorship business unit continues to make progress, though of course not always as fast or as I or perhaps many of you would like to see. Nevertheless, the progress is real. We've engaged The Superlative Group, arguably one of the best respected and most experienced corporate sponsorship selling consultant groups in the world, to sell the Driving on Sunshine contract. Superlative has made a business of selling corporate sponsorships for stadiums, mass transit, and other highly visible venues. Our model of engagement with them sees them being paid only if they're successful. The fact that they're investing significant time and resources into selling the Driving on Sunshine network is a strong indication to me that they believe they will succeed. I continue to believe that, too. They have a growing pipeline of qualified prospects who have demonstrated an active interest in sponsoring the network.
I have personally been involved in several face-to-face and virtual meetings with many of these prospects, so I know that their interest is real. Half an hour after we finish this call, I will lead a tour of our factory for one of those prospects here only because they're interested in the sponsorship program. It's a very large organization whom all of you will have heard. They would not waste their time coming to see our factory unless they had a legitimate interest in the Driving on Sunshine sponsorship program. This does not mean that I have closed a deal, but it does mean that the business model of sponsoring the world's only Driving on Sunshine network is a sufficiently good idea to attract the very best organizations in related fields. I remain confident that we'll make a success of this business entity, though I still cannot say when.
2021 was a year of records, and many of them, including, by the way, a new world record for the longest flight of a production electric airplane powered only by locally generated and stored renewable energy. It was a lot of fun. It got us a lot of good press, but we should also not lose sight of the fact that there are around 20,000 airports in the United States. They will all need a significant amount of charging infrastructure, and our products are uniquely suited to provide that charging because we do not require construction, electrical or other disruptive activities which most airports dread. Yet another niche market which provides a huge opportunity for us. Of course, we intend to sell a lot more of our energy storage solutions, which provide lightweight and high energy density to the aviation sector.
We're already powering aircraft, drones, and a whole host of marine and other vehicles, such as submersibles. Another record we set was through the improvements to our EV ARC product, which result in it being able to deliver 12% more energy than previous versions. The new EV ARC is the most powerful version of the product we've ever produced. We'll continue to improve our existing products and develop and deliver new ones, like our EV Standard and new EV ARC, in the months and years to come. We will also continue to develop our IP portfolio, both in energy storage and in our charging and energy security products. In fact, we received another Chinese patent in 2021 and filed many other applications. As I said, 2021 was a year of records, but those are all records that we intend to break in 2022.
I believe we will do that, and I believe we will break them again in 2023, and I believe we'll keep doing that for many years to come. We're addressing several massive and new opportunities with huge influxes of capital coming from both government and enterprise. We have unique and patented products and a proven history of being able to sell them and produce them at ever-growing volumes and with ever-improving cost structures, even during the most challenging of times. I have never been more committed to this company or more excited by the prospect of continuing to grow it. Thank you all for your support, your time, and your attention. Now I'll return the call for any questions you may have. Thank you.
We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch-tone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question will come from Noel Parks with Tuohy Brothers Investment Research. Please go ahead.
Hello, Noel.
Hi, good afternoon. Just had a couple things I wanted to touch on. I was wondering, thinking about some of the nuts and bolts of allocation of the federal money that's on the way. I'm just curious, similar to the procurement contract that you have in California or that's in place in California that makes purchasing easier for state and municipal agencies. In other states in the country, are you seeing right now more of that urgency as far as, for example, state incentives where purchasers are kinda anxious to get their orders in?
I'm wondering if you're seeing a little bit more of a standing back and waiting and see as different states are waiting to see how the infrastructure bill funds are going to be distributed and what sort of allocations they'll get.
I think stand back and wait and see is a pretty good description of what we witnessed for the first sort of 10 years of our being involved in this business. I've often said we were a little too early to the party. Now we have very good seats. The fact is, we have a contract in place with the State of California, State of Florida, State of Massachusetts, but most importantly, probably and most germane to this conversation, we have a GSA contract in place with the federal government. By the way, our GSA contract is quite different than most GSA contracts, which are only available to federal entities. Our GSA contract is also available to any governmental entity, so long as they have a disaster preparedness or emergency requirement.
Of course, our product fulfills disaster preparedness and emergency power requirements. That's another way of saying that anybody who is in a hurry to get this done and is looking for funding doesn't even need to get a contract in place with us. They can just use the federal contract. State of California has also made their contract available to other state and governmental entities too, should they want to use it. Those are excellent vehicles for us, and we're seeing a lot of increased activity through it.
To the core of your question, I do believe that there is still a little bit of waiting to see how some of these federal funds are gonna be spent, the $5 billion on the highways and the $2.1 billion in rural and disadvantaged communities in particular. Again, we've done an awful lot there and are very well placed to do that. At the same time, all we are seeing right now is an increase in interest and urgency around EV charging infrastructure. It's just amazing how different things are today than they were a year ago and certainly two years ago. As I mentioned in my comments, the orders that we're getting are bigger initial orders, and they're moving through our sales process faster.
That is not because we're more charming than we used to be, it's because the people need the product and they need it quickly. I think you can see a combination of things, but yes, as I also said, federal spending is a bit like a battleship, takes a bit of time to get it up to speed, but goodness knows when it gets up to speed, it's hard to stop.
Great. Thanks a lot. I was wondering, as you look at the year ahead, as far as your internal R&D, I'm just curious, can you talk about maybe what some of the priorities are? I guess I was particularly curious about on the software side and whether this is gonna be a big year in terms of, for example, you know, new releases or if it's gonna be more sort of a blocking and tackling sort of maintenance, basic enhancements kind of year.
First of all, R&D basically serves sales and marketing as its customer. That's our philosophy. We don't invest in R&D because we think it's fun or interesting. We only invest in things that we believe will have a significant opportunity within a market to monetize. That's the same as our philosophy around investing in patents. Barrier to entry.
Sure.
and monetizable. Yeah. You have raised a very interesting point, which is this software thing. The answer is, yes, you will see us concentrating more heavily on software and firmware this year. You will also see us continuing to concentrate on hardware. The EV standards are very high priority for us to get out this year, as we believe it will be one of the biggest, if not the biggest numerical seller that we have. We're gonna make all of our products more intelligent, more data-rich, more sensor-rich, and more manipulatable. You're gonna see that have a tremendous impact on their capabilities in the market.
In fact, one of the things that's important about us is because we are a technology company, because we produce new and proprietary technologies, we are able to accelerate our capabilities in a way that just connecting to the grid simply can't. That's fairly finite. You know, you can't speed up digging a trench or concrete takes a certain amount of time to dry. Our products will get better and better and more and more intelligent. You will see investment in that this year. On the energy storage side of our business, you should also expect to see us continue to invest heavily in that space as well. Again, always with sales and marketing as a client. It'll be driven with profitability at the core, not science.
Great. Thanks a lot.
Thank you.
The next question will come.
Yes.
The next question will come from Tyler DiMatteo with BTIG. Please go ahead.
Hi, Tyler.
Hi, everybody. Thanks for taking the question here. I was just wondering if we could dive a little bit deeper into the AllCell acquisition there. I know you briefly said gives you access to new customers and markets. Can you kind of talk about the overlap there in terms of of you know the customer base and the differentiation and just compare them, if you don't mind, please?
No, I'd be delighted to. I've been involved in a lot of M&A activity throughout my professional career, and I got to tell you that this is the clearest and most obvious strategically beneficial acquisition I've ever been involved with. The simple fact of the matter is it's a great fit for us in terms of reducing costs, bringing in revenue, bringing in gross profits and everything else. To get to your question, yes, they have been selling energy storage solutions to customers which are very similar to the customers that we've been selling charging solutions to over the last many years. They've been selling energy storage to electric vehicles, to micro-mobility, to drones, to submersibles, to aircraft. We've been selling EV charging to electric vehicles, to electric bicycle motorcycles,
Our products are being used to power drones and aircraft. We've been basically firing at many similar targets, but always separately. As I look at their existing customer list and they look at ours, there are tremendous opportunities. In fact, every conversation I have with anybody now who's looking for EV charging for whatever new fantastic vehicle or contraption that they're considering, the first thought that goes through my mind is, good God, you're a consumer of batteries. Surely you need batteries which are safer, more energy-dense, and longer life and lower cost, and that's precisely what we provide. Great for us. From their point of view, of course, so many of their customers, you know, they have electric devices of one sort or another.
The greatest challenge for them is to get charging infrastructure in place, and that's what we're terribly good at, faster and more scalable than anybody else. Cross-selling is often one of these things that's sold with acquisitions. Frankly, as an investor and as a guy who's done a fair amount of M&A, I pretty much treat it with a pinch of salt most of the time I see it. Sounds great, but does it really? How often does it really happen?
In this case, I genuinely believe that it's a significant opportunity. It's only, believe me, it was not a driving force behind doing the deal. We would not have done the deal if it wasn't gonna make us more profitable, add more revenue, make us stickier, harder to compete with than everything else. Cross-selling is not even icing on the cake. It's the little baubles on the icing, but we're gonna make those baubles pretty important.
Okay, great. Thanks for answering the question, and I'll turn it back to the queue. That's all I have.
Thank you.
The next question will come from Alejandro Nuno with Maxim Group. Please go ahead.
Alejandro, how are you, man?
Good, Desmond. How are you? Thank you for taking my question. I was curious if you could touch a little more on Electrify America. They recently announced the new charging, which is gonna include those solar canopies. I know they have about 30—they've ordered 30 EV ARCs so far. Is there any more orders in the pipeline that we should be expecting soon? Or have they spoken to you at all about how much they plan on spending on that off-grid EV ARC technology?
I'm not gonna speak for what orders Electrify America may or may not make, but I will tell you that we're actively engaged with them. In fact, I had a conversation regarding that piece of our business just last night. Let's not get too. I wanna make sure that we don't in any way conflate the idea of putting a solar canopy with an EV charger with what we do for a business. There are lots of companies out there now installing solar canopies above or near or adjacent to EV chargers. That's a construction project. In most instances, those solar canopies are grid connected. Even if there are batteries on site, the whole thing's grid connected. It's a construction project.
You're talking about permitting, you're talking about pouring foundations, you're talking about teams on site and engineers and specialists and all that sort of stuff. That simply is not what we do for a living. I've got nothing against it, by the way. I think all EV chargers should have a solar canopy with them. That's a great idea. Bit of shade and some solar onto the grid is a great idea. Nothing against that. I've got nothing against battery storage at EV chargers as a means to sort of deflect demand charges and other utility costs that the charging companies are trying to get away from, and even, frankly, as a resiliency play. When the grid goes down, you've got battery backup that gives you a couple hours of batteries. Let's not in any way conflate that with what we do.
Our resiliency is forever. Every morning we produce more energy. It's not a matter of charging batteries from the grid and then when they're discharged, you wait till the grid comes back up, which after Hurricane Ida was six weeks in certain areas. That's not a solution, okay? Our products continue to operate during those types of environments and generate and store electricity. So from a resiliency point of view, we beat them hands down. Then the key thing I keep saying is product. We are product, we are not project. Everything we do is produced in a factory, delivered to site, ready to operate. This is not going out and getting out your tape measure and your tool belt, and starting on a process.
Two years earlier when you got into the environmental impact and permitting process is when you started that. Yeah, Look, I think it's great. We love and value Electrify America as a customer. We can't wait to do a lot more work with them. We're proud of them for putting solar arrays on their deployments, but it should not be conflated in any way with what we do for a living.
Great. Thank you so much, Desmond. I appreciate that. One last question. Along the lines of the increase for the EV ARC, the number you gave was about $6,000, correct?
Now, to be absolutely clear, the increase I cited was $6,600, a little bit more than that actually. What that refers to is the increase in cost of components and materials like steel and aluminum and that sort of stuff that we have incurred and absorbed since COVID began. We've had an increase of $6,600 in cost, and yet we improved our gross profit. That's the thing I want everybody to understand from this.
As you're looking at gross profitability, just please understand that we did not increase our sales price, and yet we increased gross profitability, or improved gross profitability, to use a better word, in the face of all these costs and in spite of all these cost increases, which tells you we had to get the money somewhere else. The only way we could do that would be by reducing our own costs through increased efficiencies, disciplines, and other things that we have been doing.
Understood. That $6,600 did not include the cost of the chargers as well that you were taking out in 2021, correct?
No, in that instance, that did include an increase for cost of the charger. I was just comparing two EV ARCs, and included the cost of increase of the charger. What I went on to say was after that, although I do not anticipate or intend to increase the cost of an EV ARC today, remember when we deploy an EV ARC, we deploy on it a factory integrated charger which is produced by somebody else, ChargePoint, Blink, Enel, Electrify America, whoever it is. Those have gone up in price.
What we are going to start doing now is telling our customers that we will not absorb the price increase of the EV charger that they are acquiring from any other vendor, that we will in fact pass those cost increases through to them. We've been absorbing that in 2021. We're not going to do that anymore. As I mentioned, in one instance, that's worth about 2% of gross profit to us. 2% may not sound like a lot, but we work bloody hard to squeeze every percentage point as we can out of these things, and I'm damned if I'm gonna subsidize a charging company's chargers. Not that there's anything wrong with what they're doing, by the way, but I just don't think we're gonna absorb it and we're not gonna subsidize it.
We will pass that cost increase through to our customers and endeavor to hold the cost of the EV ARC steady, and all the gains that we'll get will come through further cost reductions, which, as I say, we have pretty damn good line of sight to.
Great. Thank you so much, Desmond. Appreciate it.
Thank you, Alejandro. All the best.
The next question will come from Jay Burke. Excuse me, Jay Burke, investor. Please go ahead, sir.
Hi. Thanks for taking the call.
Hi, Jay.
I am an investor, and I have a couple questions. One-
Please.
Hello? Yeah.
Yes, please go ahead.
One is why did you change auditors?
Good. Do you want me to take them one at a time, Jay?
Why did you change auditors?
Yes. Simple reason. There's nothing sinister about it.
I'm not suggesting it is.
Like, you fly off on a red flag, so I just wanna make sure that nobody's raising their red flags. The fact is we had been using a company called Salberg & Co., which is a Boca Raton-based boutique audit company. When we were small and before we went up onto a national exchange, they were perfectly appropriate and adequate, and frankly, much less expensive than the much larger nationally recognized audit firm that we've gone to now. The simple fact is when you are operating on a national exchange and when you're growing as we are and capitalized as we are and everything else, you really cannot proceed with a boutique firm. You have to have one of the large and nationally recognized auditors, and that's why we made that decision.
It's nothing negative at all about Salberg. They did a great job for us. The new auditors have found nothing remiss with anything that they did or anything that we ever previously reported. It's just a fact of life. Move up to national exchange, get bigger, you need a nationally recognized audit company.
Who did you change to?
RSM.
Okay. My second question is, do you think your M&A background is going to drive this? In other words, is your focus going to be on your product? What I understand is that you're product driven.
Right.
As you discussed with the battery, you know, I mean, with whoever this is that you're getting part of the components from, to pass that on to the consumer, is that gonna be sort of the goal so that you can control that?
Yes. Whenever I see opportunities which will allow us to lower our costs or increase our technology stickiness, make us harder to compete with.
Mm-hmm.
Introduce us to new markets, or new customers, but within our strategy.
Mm-hmm.
You can expect me to be interested in those opportunities. Also, by the way, global or geographic expansion. I'm very interested in Europe. Acquiring our way into Europe is a significant potential for us. What I will not do is go out and buy a profitable dog food company just because it's-
Yeah, right.
Profitable or accretive.
Mm-hmm. Mm-hmm.
I will continue to execute on our strategy. We're very happy with the clean mobility for all strategy. As long as it fits within that nexus of clean energy and transportation, you can expect it has the other attributes I've already described, you can expect me to be interested in it. Again, most people who've ever done M&A with me will call me difficult. Difficult translates to you as an existing shareholder that I will not do a deal unless it's absolutely right for us. I don't fall in love with them, I don't grab at shiny things, and I won't do a deal to enrich future shareholders or bankers.
Yeah. When you try and get some cash to buy something, you're doing it to reduce the cost.
Of course.
Good. Okay. Well, thank you.
Thank you.
Thank-
The next question will come from Amit Dayal with H.C. Wainwright. Please go ahead.
Hi, Amit. How are you?
Thank you. Hey, Desmond. Thank you for taking my questions. You know, just focusing on 2022, how should we think about, you know, sales mix, you know, between government and enterprise this year, compared to, say, 2021?
They're both going to grow. Now, you asked me mix.
Right.
The truth is, I think at the moment I have more insight into where I think government sales are going to go than where enterprise sales will go. I would say that if someone was holding a gun to my head and I had to pick which one or other of them, at the moment, I would say government sales. I want to be absolutely clear. We have a couple of enterprise non-government opportunities which we're working at the moment, which could eclipse anything we've ever done with the government before. It's. There simply isn't enough historical data for me to give you a scientific response to that question. There is gonna be some more art than science and forecasting at the moment. The good news is that there's no question in my mind that the combination of the two things, we're gonna see some very good stuff this year.
Is that pipeline, you know, I guess I think you said $19 million. Is that pipeline sort of 50/50 between government and enterprise?
$90 million, not $19 million. In case you said that. You may not have, but it's $90 million. It's in excess of that. I think that's probably more heavily weighted to government at the moment, but in truth, you've caught me unprepared. I did not actually look at the breakdown between government and enterprise in the pipeline prior to the call. I would say at the moment it's probably a little more heavily weighted to government, but that can change very, very quickly.
Understood. Then, you know, with this AllCell acquisition, are we looking to be potentially gross margin positive in 2022?
Yes.
Okay. Thank you. Have you already implemented any price increases, or are these going to come through maybe later in the year?
We have not yet implemented any price increases. However, as I said in my comments, we do not intend at this point to increase the price of our product. We have already started to communicate to new prospects that if in the event that they select an EVSE, a charger, which has increased in price, we will be passing that price on to them. You know, they have options, right? The truth of the matter is there are quite a lot of now good quality EV chargers out there.
One of our philosophies and one of our commitments to our customers is that we will always try to steer them towards the least complicated, least expensive solution which will fit their needs. Their needs come first. Sometimes they choose things which frankly are a lot more than they need. We're gonna help them where that's concerned if they'll take our help. The fact is, if they choose a charger which has gone up in price, then we will not absorb that cost. As I said, in the one instance that I described, that's a 2% return of gross profit to us. It happens to be one of the instances that we do more often than many others. It should be impactful.
Got it. Thank you. You know, the folks who are coming to get a tour of the facility for the sponsorship side of things, you know, how deep are those discussions? I mean, at what stage of you know these you know transaction potential are you at with those guys?
They know the cost, they know the business model, they know the benefits, and they are coming to see us and get comfortable with our ability to manage it. Now, you know that as I tell everyone on my sales team, if there's no ink, it stinks, right? We can tell lots of people the costs and benefits and do tours all day long. It doesn't make us any money. I'm just.
What I'm trying to communicate to you is the types of organizations that are doing this, it's just, it doesn't, it's not reasonable to suggest that they would come and visit us and tour the factory and everything else like that unless they were at least you know, had some pretty high degree of interest in what we're doing here. I don't wanna overstate something. I wanna be careful about what I, how I describe this. I'm just, it's when you've been in business for as long as I have, you start to understand that when enough people keep asking for something, eventually one of them takes it.
Have there been other tours like this or other sort of discussions that have gone this far on the sponsorship side of things?
No, it's much more active now than it's ever been. There's no question about that. It's taken a little while. I mean, there's all the other things that contribute. Remember, the sponsorship of this network is kind of like, it's in many ways, it's very, very tuned into the whole EV thing, right? A couple of years ago when we first started putting this in front of people, they didn't really kinda get it. There was not much urgency. They weren't really sure or not sure. But that's very much changing now. You could yourself in five minutes write down on the back of a napkin about 10 different companies that would be obvious players for this. You might find that some of those are on our pipeline list.
Okay. Understood. Thank you, Desmond. That's all I have. Appreciate it.
Thanks, Amit. All the best. I think we're a little over time, operator, but I'll take another question if there is one.
Yes, sir. The next question will come from James McCullough, Investor. Please go ahead, sir.
Hello, James.
Yes, good afternoon. I had a question regarding the pricing strategy. It's almost a three-part question. First one was, is there a price ceiling right now on your product that you feel that you can't bump up against? Number one, and then as far as the strategy, most well-run companies, I would say, are passing on raw material or the cost increase now more so than we've ever seen. For the most part, consumers are accepting those increases. I'm a firm believer in your product and the need for your product and would anticipate a huge demand. I was just usually price follows demand.
I was just curious as to why you felt it was so important not to pass on any legitimate cost increases on your current product line, as opposed to putting forward some modest increases. Third question was-
Yeah.
On the pricing. Is that due in part to the government contracts you've got that limit the potential or have a fixed price in the contracts?
Yeah.
Then the last question, if you can absorb all this, is, if you know the, what percent of your cost of goods sold is actually the purchase price of the chargers that you are installing?
Those are all excellent questions, James, and frankly you're talking about things that we spend a great deal of time talking about here. The first answer to the first part of your question is no, there is no ceiling on our product. We have invented a brand new product for a pretty brand new industry. There are no comps out there. I'm not Komatsu selling against Caterpillar or anything else like that. It similarly, it's not a cost plus margin type of model like a project would be. What we've had to do is try to price the product in a way that there are two contributors to it. First of all, we seem to be getting an ever-increasing sales doing that.
We're not, it's obviously not priced so high that no one will buy it. At the same time, we have a very clear path to profitability, in fact, very good profitability even at this price. Taking out inflationary matters right now, I'm very confident that at this selling price, we can get to a 50% gross profit. If you look at the sort of volumes that you and I believe are gonna happen, you can see that that ends up being a very profitable business because we have a lot of operating leverage. There's no ceiling. To your point about the government contracts, yes, we do have pricing in place with certain government contracts, which we have to negotiate an increase over if we do that.
Again, we're very happy to have those. I don't view them as problematic. I really don't. Because as I said many times, the opportunity with our business actually right now is cost reduction. We don't need to increase our price. We can find many more ways to reduce our costs when we get to much larger volumes or even before we get to much larger volumes. We're in the process of doing that right now. I described much of that in the call. I don't think those contracts. Volume is our best friend. The more volume that we do. In fact, I'll say this to you even more assertively.
If one of our salespeople came to me and said, "I could sell 1,000 of these units tomorrow if you took $5,000 off the selling price," I'd say, "Do it." We would make a bucket load of money doing that. Volume is absolutely our friend, we're gonna go along with that. As for the percentage of cost of the EVSE against the total cost of our product, it goes anywhere from a couple of percent to 10%, depending on which version the customer chooses. There's a great deal of variation in that. By the way, the cost of the product, the cost of the EVSE doesn't always directly link to its capabilities.
In other words, there are some which are quite expensive with a certain set of capabilities, and then there are others which are much less expensive that can pretty much offer the same things. But we, you know, we don't drive that bus. Usually, our customer has already decided what kind of charger or service provider they want. All we're doing is replacing the construction and electrical process required to get that thing installed. Did I hit all four of them?
You got them all.
Okay. Thank you, sir.
Thank you.
This concludes our question and answer session. I would like to turn the conference back over to Mr. Desmond Wheatley for any closing remarks. Please go ahead.
Well, we're over time, so I'm gonna keep them brief. You can probably gather from my tone, I'm feeling pretty good about the business right now. Everybody is operating well. The first half of last year was not stellar for us. We made the changes that we needed to make, I think, and it was all personnel. Any of the benefits that we described here today pretty much took place in the second half, particularly in the fourth quarter. I'm really looking forward to continuing through this year. Everything seems to be lining up right for us. It's tough. We got a lot of inflation to deal with, but everything is lining up for us at the moment. I feel very good about the business. I'm happy that you're involved. I thank you for your questions and your attention. Let's make some money together. Bye-bye.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.