Thank you for standing by. This is the conference operator. Welcome to the Ballard Power Systems Fourth Quarter 2024 Results. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. I would now like to turn the conference over to Sumit Kundu, Manager, Investor Relations.

Thank you, operator, and good morning. Welcome to Ballard's fourth quarter financial and operating results conference call. With us on today's call are Randy MacEwen, Ballard's CEO, and Kate Igbalode, Chief Financial Officer. We will be making forward-looking statements that are based on management's current expectations, beliefs, and assumptions concerning future events. Actual results could be materially different. Please refer to our newly filed annual information form and other public filings for our complete disclaimer and related information. I'll now turn the call over to Randy.

Thank you, Sumit, and welcome everyone to today's conference call. 2024 was a difficult year for the hydrogen fuel cell industry. Amidst prolonged policy uncertainty, a multiyear push out in development of hydrogen projects and the deployment of fuel cell applications, in a challenging funding environment an industry rationalization is underway. Notwithstanding this challenging industry backdrop, Ballard achieved important progress in 2024. And I want to highlight four key achievements relating to order intake, product shipments, operating cost reductions, and product development milestones. First, on order intake. Put simply, 2024 was a record-breaking year for Ballard for total new order intake for our power products. We secured new order intake of approximately $113 million during 2024, punctuated by a new order intake of $75.4 million in Q4. Both records. We ended the year with a record year-ending order backlog of $173.5 million, an increase of 41% compared to the end of Q3. This order backlog includes a twelve-month order book of $98.9 million, up 48% compared to the prior year. Now this outcome is particularly noteworthy given the challenging industry dynamics and the contrast with most of our competitors, underscoring Ballard's technology and market position. We were front and center for most major commercial order announcements in the European and North American markets for PEM fuel cells in our target applications in 2024. We move next to product shipments. Delivery of fuel cell engines in 2024 grew by approximately 30%, increasing from over 500 engines in 2023 to more than 660 in 2024. This marked the fourth consecutive year of engine shipment growth, representing a CAGR of approximately 40%. Our 2024 deliveries of PEM fuel cell engines accounted for over 90% of our total revenue in 2024. We shipped a total of 56.5 megawatts of fuel cell engines, reflecting a…

In Q4, we divested our small backup power business, which was non-core to our strategy going forward. This allows us to focus more sharply on high-power stationary applications aligned with our core product strategy. We next provide some commentary on the status of hydrogen policies in the dynamic US market. First, from September to January, the U.S. Department of Energy was extraordinarily busy with various funding awards related to the hydrogen industry, including hydrogen hubs, grants, credits, and loans. And second, in early January, the Department of Treasury and IRS released at long last the final rules for the 45V clean hydrogen production tax credit. These rules were an improvement from the draft proposed in December 2023. Unfortunately, following that and with a flurry of activity from the White House, what we've seen is a temporary pause on IRA and IIJA funds, including the issuance of new awards and disbursement of federal funds under open awards. Now we've seen a strong reaction to this proposed pause, including legal challenges. These developments likely mean the US hydrogen fuel cell industry will experience continued policy uncertainty for the foreseeable future. Of course, we're closely tracking the dynamic tariffs context and the implications for our business. Now a few final comments before I hand the call over to Kate to walk through our financial results. Results including revenue and margins faced challenges from broader industry headwinds, we made significant progress in several important areas, including order intake, product shipments, operating cost reductions, and product milestones. We started 2025 with an exciting position for our twelve-month order book stood at $98.9 million, up 48% compared to the prior year. Based on our order book and sales activity, we expect a solid year for production and shipment of fuel cell engines for the bus, rail, and stationary markets in 2025. Our 2025 focuses on our customers and our controllables, including prioritized product development and product cost reduction programs, while also maintaining disciplined spending and balance sheet strength for long-term competitiveness and sustainability. With that, I'll now pass the call over to Kate.

Thank you, Randy. Amidst challenging market conditions, particularly the delay in the availability of low-cost low-carbon hydrogen, which has led to a slower adoption of hydrogen technology, compounded by materials removed from our order book that were communicated in Q3, Ballard reported $24.5 million in revenue for Q4, reflecting a 42% decrease compared to the same period last year. For the full year, revenue totaled $69.7 million, representing a 32% decline compared to 2023. Ballard reported a Q4 gross margin of negative 13%, an improvement of nine percentage points compared to Q4 2023. However, lower annual revenue and a product mix heavily weighted towards power products placed pressure on our gross margins for full year 2024, which decreased by eleven percentage points from 2023, reaching negative 32%. We reported total operating expenses of $161.3 million for the year, which included a $17 million restructuring provision, of which $0.7 million was incurred in the fourth quarter. Excluding these one-time costs, underlying total operating expenses were $144.3 million at the lower end of our guidance range of $145 million to $165 million. Looking ahead to 2025, we expect total operating expenses to range between $100 million and $120 million, representing an approximately 30% reduction or $45 million from 2024. 2024 capital expenditures were $27.6 million, also at the low end of our 2024 guidance range of $25 million to $40 million. We expect 2025 capital expenditures to fall between $15 million and $25 million, representing a reduction of $12.5 million from 2024. Our 2024 cash usage of $147 million was down 10% from the prior year due to only a portion of the restructuring benefit being realized in year. We expect to see the full benefit of our cost reduction initiatives to be achieved in 2025, with lower overall operating costs and capital investment. As of year-end, we had approximately $604 million in cash, a reduction of 20% from the previous year. Given the current macroeconomic environment, and in the context of our 2025 operating plan, we remain disciplined in our spending, ensuring we continue to invest strategically in our growth while maintaining a robust balance sheet, accelerating our path to profitability, and extending our cash runway. As Randy highlighted, as a result of these initiatives, we have no near or mid-term financing requirements. With that, I'll turn the call over to the operator for questions.

Thank you. We will now begin the question and answer session. If you're using a speakerphone, please pick up your handset before pressing any keys. We ask callers to kindly limit themselves to one question and one supplemental. First question comes from Rob Brown with Lake Street Capital Markets. Please go ahead.

Good morning.

Good morning, Rob.

Just starting with kind of the order activity seems to be quite strong in the quarter. How does the order book look into 2025? Is there sort of continuing activity or is the uncertainty there kind of weighing on things and it's too early to say kind of how 2025 orders are shaping up?

Yes. Good question. I think first of all, perhaps a comment just on the overall order backlog. So $173.5 million. It gets notable roughly half of that is in the bus market. But interestingly, about 40% is in the rail market. When you look at the geographic split, roughly 60% Europe and 40% North America. And so I do expect that split Europe and North America likely to continue as we move forward. In terms of new order intake in 2025, there are a couple of opportunities we're working against right now that we would expect to close out, you know, likely in the April, May time frame. But I would say whether it's April, May, September, etcetera, historically, what we've seen is that Q4 is typically a large order intake month or quarter. We've seen that the last two years. And I do say there's volatility from quarter to quarter, and we are seeing you kind of step back we in 2024 and even a little bit in 2023 and Q4 of 2023, we are seeing some larger chunkier orders coming in, and so that does weight the order book in those quarters when they land. Our goal the last number of years has been to secure long-term supply agreements, kind of platform wins with customers. Lock them up, get our products into their infrastructure and into their platforms, and in some cases, those orders, you know, will effectively be burnt off over the next year or two depending on how long those orders are for. So in some cases, it'll take a period of time before those customers come back for follow-on orders. But we're very excited about the order intake we've really seen since Q4 2023. In Q1 2024 and Q4 2024, and we'd expect to see a couple of good quarters this year as well.

Great. Thank you. And then on the stationary business, where do you are you seeing the demand growth? I know you talked about focusing the higher power up part of the market, but give some color on kind of the stationary market growth you're seeing. Yeah. That's been one of the markets that I think surprised us with some of the orders and and

some more significant orders from stationary in 2025. A couple areas that we're that we see is kind of the I'll call it weak grid or microgrid applications. Think about things like filming sites, or event sites, or construction sites where you need power and there may not be high grid reliability. Similarly, we're seeing opportunities for EV charging where there's some weak grid applications. So there are a few customers that are pulling on those market opportunities and we're seeing demand from. And then the I think the data center market is still very early stage. You know, we completed an important program or trial, I should say, with Microsoft and Caterpillar and now we're looking at, you know, next opportunities. And, of course, we've announced the Vertiv development plan that we're working on. It's an interesting market opportunity, but we need to validate the value proposition for PEM fuel cells in that application. So that's kind of the landscape. We're not really focused on small stationary applications. We're really looking at things that are, you know, typically 100, 200 kilowatts and up. And we have some customers that are looking at opportunities in the one megawatt plus range as well.

Okay. Thank you. I'll turn it over.

Yep. Thanks, Rob.

The next question comes from Dushyant Ailani with Jefferies. Please go ahead.

Hi. Thanks for taking my question. Just I guess the first one on the platform customers that you talked about. Could you share what percentage of your backlog or order book is are those long-term platform customers? Versus how many of them are actually, you know, new customers?

Yeah. The way I would think about it is that roughly, you know, if you kind of look at our revenue last year and our revenue this year in our order book, we have probably eight customers that account for, you know, 70 to 80% of the business. And all of those eight customers are effectively repeat business. So we've done a very good job once we're getting into platforms to helping customers transition from development to trials and ultimately to, you know, more scale deployments. And so we've seen customers progress through that. There are additional customers that are on that journey as well.

Understood. Thank you. And then just on the OpEx guide, the $100 million and, you know, $120 million, could you talk about what are some of the levers you can pull to maybe kind of trend below that or towards the low end of the guide? Basically, just trying to figure out if there's any more, you know, room you stem the cash burn.

Yeah. I think that's an excellent question, particularly in light of the restructuring in September. I think Randy spoke to it very effectively in the script when we're looking at our overall program prioritization activities. The rationalization of our product portfolio. I think as we're moving, kind of away from our legacy products and into our next generation of core products, that are gonna be introduced in the later part of this year and into next year. I think that's really an opportunity for us to find additional efficiencies. Thank you.

The next question comes from Jordan Levy with Truist. Please go ahead.

Good morning, all, and thanks for all the details. Just going back to some of the earlier comments on kind of cadence of orders in 4Q. I think you mentioned that these can these timing of orders can be lumpy and I'm just wondering if at least in the U.S., should expect that to be a little more lumpy this time around given some of the expiration of the fuel cell ITC and some of that sort of thing?

I don't think so. I think when we look at kind of the key market we have in the US is the bus market. And you know, we continue to see strong interest in that marketplace. And we're gonna be delivering 200 engines at least in that market this year. And we're working with, you know, the key players in that market, and we're seeing that they've got sales pipelines that they're working against. And the funding that that typically relates to, the low no funding is really kind of not in the hydrogen space, if you would. It won't more in zero emission buses. So we're not seeing any retraction from that initiative. Of course, everything is it's very dynamic and things could change, but right now, we're seeing, you know, kind of consistent type of growth opportunities in the US on the bus side.

Great. And then and maybe just a follow-up on on Project Forge. I know you all kind of continue to make good progress on that. Can you just remind us one, maybe on the timing of that? And then two, kind of what what the ultimate kind of impact you all expect from a margin perspective is? I know that ultimately kind of volume ramp is sort of the biggest lever, but I know that this is kind of another way to chop at some of that margin here.

Yeah. Well, I mean, this is a really critical initiative on the cost reduction for our bipolar plates, which you know, we're looking at a potentially 70% cost reduction. This is pretty significant. In terms of the timing, we've had some challenges with one supplier of equipment that's delayed a little bit couple of months. They've did some testing and have completed some changes to that appointment and have since shipped those. So they've actually arrived here this week, some of the final pieces to that. So, certainly, the front end, there were kind of five key steps in our bipolar plate production. All five steps have been reimagined with new processes and cut times, but importantly with new equipment and a lot of automation. And so we'll see a pretty significant increase, a 5x increase in the ability to produce bipolar plate capacity while also seeing that reduction in cost. That reduction in cost volume is not not the key lever on that. It's very much the new processes and new materials. And so we're expecting that to likely really move into production in 2026. As you think about the timing, the additional equipment that's arrived recently here, will be commissioned certainly by June, we'll look at some optimization in Q3 and into Q4 and start to see some real benefits from this in the 2026 time frame.

K. Thanks so much.

Sure.

The next question comes from Rupert Merer with National Bank. Please go ahead.

Hi. Good morning, everyone. Thanks for taking the question. If I can start with the rationalization that you're seeing in the market, wondering if you can talk about how that impacts your customers and supply chain, and maybe we can start with the twelve-month backlog, if there's any potential for that to be impacted by further rationalization?

Yeah. Rupert, great question. Certainly, last year, we saw some dropout of the order book with rationalization. We had a few customers last year that went insolvent, filed for bankruptcy. You kind of look at the order book that we have this year and the customers we have in that order book, they don't have the same risk profile from a liquidity perspective that those customers some of those customers did last year. So we're not expecting to see that type of duplication. Kind of industry rationalization, I do think when we look at, you know, the we have seen some suppliers, you know, showing a lot of concern, particularly those suppliers who have invested in production capacity expansion. They're now seeing very low utilization. And some of them thinking about the long-term strategy and whether this should be core for them going forward. But overall, a number of the suppliers have been working with, we've revalidated their commitment and feel pretty strong about the key supplier list that we have right now. Not just in the stack material set, but also in the key balance of plant components. I think tariffs will pose another challenge for some supply front, but you know, I think we've done quite a bit of work on that front. In terms of just the other aspect on industry rationalization, this on the competitive side, it does offer opportunity. And what we're seeing is that, you know, probably about nine, ten companies in the space went bankrupt last year. We obviously had another one filing for bankruptcy overall in 2025 already. You know, that's not good for the industry. It's not good for, you know, overall landscape. But, of course, it does mean there are a few players that we were competing with before that really had very de minimis market share and were, you know, putting out very low prices to try and grab market share. We've seen some of those players fall off in 2024. We actually kind of look at a five-year outlook on what does the competitive landscape look like five years from now. And with the investments we're planning, with the position we have currently, we feel very strongly about our five-year outlook in terms of our competitive positioning.

Great. So thanks for the color. And quick follow-up on that. Does that open up any M&A opportunities or any those competitors that are falling off that maybe have some interest?

Yeah. In the cases of some companies that have filed for bankruptcy in solvency, we didn't see anything there that we found that was attractive or additive to our business. One of the things we are loathed to do is make an investment that would increase our cash burn. And so, you know, certainly as we look at M&A opportunities in a market that's going through rationalization and we haven't seen a lot of consolidation, but I expect to see some happening. You know, one of the highest criteria for us to assess any opportunity is whether it's a cash flow positive contributing as opposed to cash burning.

Oh, great. I'll leave it there. Thank you.

Yep. Thanks, Rupert.

The next question comes from Martin Malloy with Johnson Rice. Please go ahead.

Good morning. Thank you for taking my question. Just a bigger picture question. We'd love to get your thoughts as you look out on availability of hydrogen for your customers and how that might change going forward. Particularly interested in your thoughts about gray and blue hydrogen potentially becoming more available. There's some larger projects in that area. If you could just maybe offer your thoughts on that and then and how you see that developing in the timetable.

Yeah. Martin, thanks for the question. We actually spent quite a bit of time in the last sixty days on some European customer trips and industry events and then at the fuel cell and hydrogen expo in Tokyo, recently as well. And have the opportunity to meet with a lot of partners and customers and industry players and exchange thoughts on what's happening in the industry in 2024, what's happening in 2025, were the key trends. And one of the big topics of discussion, of course, Martin, is availability of low-cost low-carbon hydrogen. But as you point out, there's an increasing perspective including in some markets where we saw really reluctance on looking at what I would characterize as blue and gray hydrogen market opportunities as well. So I do think, you know, as you think about the Europe the US context right now with a new leadership there, there's far more support, I would say, for blue hydrogen than we've seen probably a few years ago. And to us, particularly between now and 2030, 2035 time frame, the color of the hydrogen is not too critical for us. Of course, we'd like to see lower emissions, but what is important to us is getting deployment of vehicles and stationary power applications with low-cost hydrogen. And seeing over the longer term a transition to much lower forms of hydrogen, in terms of carbon intensity. I do think the next two or three years will be important on how the clean hydrogen production tax credit plays out in the US marketplace. But we're seeing and just had some discussions with a key industry participant yesterday on the dynamics in that market. And there's certainly development going on, you know, that is associated with blue hydrogen opportunities. And I think there's some progress being made on CCUS, and SaaS and certainly some applications where you could see some offtake. So I would say kind of mixed report overall. Policies aren't as strong as we'd like to see. The financing environment is, you know, challenged when policy is uncertain. But we are seeing more opportunities on the gray and blue hydrogen side. And in terms of green hydrogen coming online, I do think that the revised forecast put out by the hydrogen council in the late fall are kind of forecasts that we think are credible forecasts for 2030 and 2035.

Great. Appreciate your thoughts. Thank you.

Yep. Thank you.

The next question comes from Craig Irwin with Rob Capital Partners. Please go ahead.

Good morning, and congratulations on the strong bookings, Randy. Nice to see the progress there. So one thing I was hoping you might be able to do is kind of bridge the disclosures around shipments in 2025 versus 2024. So today, you said 2024 had 660 engines shipped, representing 56 megawatts and that was up 30% over 2023. Last year, you said 540 modules. And 74 megawatts. Obviously, the module definition is a little bit broader. Can you maybe close the gap and help us understand that if we use the wider definition, what the megawatt ships could have been for 2024? Is this still similar to a 30% growth rate or is there something else here that maybe you're deemphasizing to pursue these large orders you're booking?

Yeah. So Craig, thanks for the question. A couple of things. First of all, you know, we're providing two metrics because they're both critically important. So one is the engine unit volumes. And certainly, when we look at our revenue forecast internally, for example, at 2028, 2030, etcetera, the revenue lines are important. But to me, I'm always looking at the engine unit volumes line to see how that, you know, is gonna impact supply chain cost reduction opportunities, etcetera. What you do see in terms of the difference between the number of engines that we ship versus the megawatts is which engines we're shipping. So, you know, we have 70-kilowatt engines, which typically are being shipped for the European bus market for twelve-meter buses. We have 100-kilowatt engines that are typically being shipped to the US bus market plus the European eighteen-meter bus market. Then you have 200-kilowatt engines that we're shipping for a variety of applications. Originally designed for marine, but we've been able to use the container package solution quite elegantly for some other market applications, including rail, and for stationary power market applications as well. So that's typically what's driving the difference. Think what you'll see this year we're gonna have quite a few 200-kilowatt engine shipping in 2025, given the rail order we have from CPKC. So the total megawatts relative to the number of units will be disproportionately higher, I would say, in 2025 based on that driver. They're both critical numbers because as you scale up the megawatts, certainly that's improving our leverage on the MEAs. And bipolar plates and stacks overall. And then as you scale up the number of unit volume units on modules, you know, that's really helping on components that go into our engines as well.

Understood. Understood. Then, you know, as I look at the forecast out there for adjusted EBITDA for this year, it seems you're positioned for some fairly dramatic improvement over the last couple of years. You know, your restructuring activities and then the progress you've made on gross margins. But the point of uncertainty that most of us are looking at right now is not how effectively you budget your frictional costs. Right? You've done a good job there. Is gross margins. So maybe can you unpack the puts and takes as far as the gross margin outlook for this year? You know, is it feasible for us to see positive gross margins before the end of the year? Is that really an operating priority right now?

Yeah. So great question and good observation. Before I talk about margins and Kate can supplement as well, just to comment on the cash operating costs. I appreciate the commentary that we've made some progress there. We're still looking though at opportunities for additional cost reduction, particularly, you know, we're tracking the market adoption indicators very closely. And as if we see changes there that we think require changes in our cost structure, we'll take action as well. When we look at gross margin, and I want to talk about contribution margin first, a couple key really important levers there are pricing. And then our total variable cost. And we have spent quite a bit of time assessing both pricing and total variable costs. And I think we have strategies on how to, you know, improve in some cases or hold the line in some cases on the pricing side. And importantly, reducing our total variable cost on existing modules that we're shipping in 2025 and 2026, etcetera, we have eleven key initiatives underway here that will improve contribution margins, in 2025 and into 2026. So I do think we're gonna see a nice movement on contribution margins. And it'll drop down to gross margins as well. I did want to highlight though on the gross margin front, the fixed production overhead costs we have there's fairly limited levers to adjust that cost structure at this stage. We consolidated, you know, did some rooftop consolidation with some of our European facilities in 2025. That will show up a little bit in our gross margin expansion in 2025. But we now are gonna need volume to help see the move from contribution margin to gross margin expansion in and that, you know, is gonna take candidly a couple years before you really see some acceleration there. So the levers are mostly at the contribution margin level. And there's a high you asked whether this is a priority. I can tell you it's probably the highest corporate priority is that, you know, contribution gross margin, those lines. Kate, anything you want to add?

I think the only thing I would add is I think Randy walked through that beautifully. I think the only thing I would point out is in terms of the trajectory and the expectation on gross margin for 2025. We clearly do not provide guidance for gross margin, but I would expect due to all the things that Randy had mentioned, that we would see a stepwise improvement on gross margin on the year kind of looking at the trajectory from 2023 to 2024. Then into 2025. Again, I don't expect us to be positive gross margin on the year, but certainly a lot more positive than we were in 2024.

Understood. Last question, if I can if I squeeze another one in. You guys have been disciplined around CapEx. The suspension of your investment into the Gigafactory. Everybody understands that in this environment. Can you maybe talk about what priorities you have in this, $15 to $25 million CapEx guide for the year? You know, and that $10 million delta in there are there individual projects, or is this maybe just a contingency for upgrades or repairs in existing facilities?

Yep. I'll start and then Kate can supplement Craig, and it's a good question. So certainly, as we look at 2025 CapEx, one of the key contributions to the planned spend this year is the completion with Project Forge. And, you know, that's a program we had budgeted about three years ago about $18 million in total. And so there's a component that will land this year as well as we complete that project. Beyond that, we're looking at fairly modest CapEx spend in year and, you know, we typically have kind of between $5 and $8 million a year just in, I'll call it maintenance CapEx for our facilities and testing infrastructure. And then some modest investments in additional testing improvements, I would say. Kate, anything you want to add there?

No? All good.

Well, thanks again for taking my questions. Congratulations on the bookings.

Yep.

The next question comes from Jeffrey Osborne with Please go ahead.

Hey, good morning, Randy. Just two questions on my side. One, a quick one on the orders in Q4. Were any of those safe harbor related as it relates to cash timing or delivery timing?

So Jeff, welcome back first of all. And I apologize. I don't think we heard the question clearly.

Yes, I was asking about thanks for the welcome back. But I was asking about any orders in Q4, were those related to safe harboring activity for the 2024 investment tax credit?

Yep. No. Not none.

That's what I assumed. And then just as you look at the 40% of the backlog as it relates to the US or North America, I think for the US portion of that, are you going through sort of account by account on both the bus and the rail side? To, you know, ascertain the potential delays in timing of the hydrogen? Build out associated with those bus depots or other locations, or are these folks producing you know, on-site just with the third-party delays? Does that pose any risk to the timing of deliveries of the finished bus module?

Yeah. So first of all on the rail side, the two key deliveries we have on the rail side are the North American locomotive market CPKC. They've already installed two hydrogen refueling stations, one in Edmonton and one in Calgary. They also have electrolyzer hydrogen production, so they have in-house hydrogen production capacity. So there's no linkage with that order to availability of hydrogen. The second one in the rail market is the Stadler order for a commuter rail application in the San Bernardino area. And that one already has hydrogen availability secured. So no issues there. On the bus side, a number of bus transit operators that we've been selling to through our vehicle OEM, typically New Flyer, they've been selling their buses too with our engines. Already have on-site in some cases, hydrogen fueling stations. So there's no infrastructure requirements in terms of dispensing. And there are there's they're procuring and have been procuring hydrogen for some time, a couple of them have actually on-site hydrogen production. So if you look at AC Transit in Oakland, if you look at OCTA in Orange County and Sunline in Palm Desert area, there's a few of them that have very locked down hydrogen strategies as well. Of course, there's a number of new transit operators. By the way, Foothill Transit in the LA area already has their hydrogen strategy as well. So I don't see a lot of challenge with the deliveries in 2025. On the bus side in the US market. And what we have seen, of course, from time to time, there are delays where the transit operators aren't ready to take the buses, and that causes the bus OEM to push back on our delivery schedule. We're not foreseeing that this year, but of course, that's always a possibility.

Great to hear. That's all I have. Thank you.

Sure. Thank you.

Jeff.

This concludes the question and answer session. I would like to turn the conference back over to Randy MacEwen for any closing remarks. Please go ahead.

Thanks, Toshiya. And thank you everyone for joining us today. Kate, Sumit, and I look forward to speaking with you next quarter. Thanks again.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.