Good morning. Thank you for attending Aspen Aerogels, Inc. Q3 2023 Financial Results Call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. I would now like to turn the conference over to your host, Neal Baranosky, Aspen’s Senior Director of Corporate Strategy and Finance. Thank you. You may proceed, Mr. Baranosky.

Thank you, Elliot. Good morning, and thank you for joining us for the Aspen Aerogels fiscal year 2023 third quarter financial results conference call. With us today are Don Young, President and CEO; and Ricardo Rodriguez, Chief Financial Officer. There are a few housekeeping items that I would like to address before turning the call over to Don. The press release announcing Aspen’s financial results and business developments as well as a reconciliation of management’s use of non-GAAP financial measures compared to the most applicable U.S. generally accepted accounting principles, or GAAP measures, is available on the Investors section of Aspen’s website, www.aerogel.com. In addition, I’d like to highlight that we have uploaded to our website a slide deck that will accompany our conversation today. You can find the deck at the Investors section of our website. On today’s call, management will make forward-looking statements about our expectations. These statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks and uncertainties include the factors identified in our filings with the SEC. Please review the disclaimer statements on Pages 1 and 2 of the slide deck, as the content of our call will be governed by this language. During this call, we will refer to non-GAAP financial measures, including adjusted EBITDA. These financial measures are not prepared in accordance with GAAP. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. The definitions and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and a discussion of why we present these non-GAAP financial measures are included in yesterday’s press release. And one final note, during the Q&A session, in the interest of time, we ask that you limit your questions to two questions at a time. If you have additional questions beyond the initial two, please get back into the queue and we will get to all questions. I’ll now turn the call over to Don.

Thanks, Neal. Good morning, everyone. Thank you for joining us for our Q3 2023 earnings call. My initial comments will highlight our Q3 performance and Q4 outlook, the status and impact of several critical elements of our strategy and our EV OEM development pipeline. Ricardo will dig deeper into our financial performance and our business strategy. Ricardo and I will expand upon last week’s announcement related to our upgraded revenue and adjusted EBITDA outlook for 2023 and the addition of Audi and Scania to our list of OEM design awards. We will conclude with a Q&A session. Q3 revenue was a record at over $60 million. PyroThin thermal barrier revenue was $33 million, surpassing that of our Energy Industrial business for the first time. We believe PyroThin thermal barrier revenue for the second half of 2023 will be 3 or 4 times larger than it was for the first half of the year. Gross profit for the second half of 2023 will be 2 or 3 times larger than for the first half of the year. Energy Industrial activity remains strong while the team manages through a supply constrained period as we shift Plant 1 to produce PyroThin thermal barriers and, quote, test the system of our planned supplemental supply for Energy Industrial. We are making good progress on both initiatives. In addition to the ramping of the PyroThin thermal barrier business, a highlight for Q3 is the continued progression of our gross margins through 2023, 11% in Q1, 17% in Q2, and 23% in Q3. We anticipate continued gross margin expansion in Q4 as we progress on the path to achieving our targeted 35% gross margin. Based on our Q3 performance and current momentum, on October 24, we announced a revenue outlook of at least $225 million, favorably modified from an earlier outlook of a range between $200 million and $250 million. The UAW strike has not impacted our revenue, but we will remain cautious until the tentative agreements have been ratified and the auto workers are fully back to work. We also announced an improvement to our 2023 adjusted EBITDA outlook from a mid-point of negative $50 million to a mid-point of negative $35 million, our second enhanced adjusted EBITDA outlook in as many quarters. The improved outlook for adjusted EBITDA is driven by higher volumes, leading to a fuller fixed cost absorption. We expect this trend to continue in Q4. Also, on October 24, we announced the additions of Scania and Audi, both part of the Volkswagen Group, to our list of design awards. We expect revenue from these two awards to commence during 2024, scale in 2025, and be significant contributors in 2026 and beyond. We anticipate the opportunity to serve other European OEMs as well and continue to believe that we remain on track to reach our target of six OEM design awards by year-end. Two key elements of the implementation of our strategy are first, the full conversion of Plant 1 in East Providence to PyroThin thermal barrier supply. And second, the commencement of our supplemental supply dedicated to our Energy Industrial segment. We believe that both strategic initiatives will be functional in early 2024. A third key element of our strategy is the balancing of growth, scale, and profitability, which includes the right timing of Plant 2 in Georgia. Our focus prior to the restart of full construction of Plant 2 is to utilize our existing assets, supply arrangements, and current commercial opportunities to build a business that has the potential to produce annually approximately $550 million of revenue, approximately $200 million of gross profit, and approximately $140 million of EBITDA. We believe we are well-positioned to attain this level of performance. Current industry headlines citing uncertainty related to EV capacity investments by OEMs and to the ramp for EV demand are consistent with the underlying assumptions we have used since early 2023 informing our operating and investment plans. Given the challenging capital environment, we are working to avoid unnecessary dilution for our shareholders by seeking to operate from a position of operational and financial strength, and potentially by partnering with the DOE Loan Programs Office, with whom we remain in close contact regarding our Advanced Technology Vehicle Manufacturing loan application. We believe a more measured ramp in OEM EV production may enable us to have a capital-efficient growth path utilizing our current assets that leads to profitability in the near-term and without sacrificing our full growth opportunities in the longer-term. Ricardo, over to you.

Thank you, Don, and good morning, everyone. I’ll start by covering our third quarter and year-to-date results before moving on to the 2023 outlook and then handing the call back to Don. For this quarterly call, I don’t have any meaningful strategic updates to cover, and I’m happy to simply focus on reporting our results. With the third quarter representing an important transition period towards higher revenue run rate levels that enable meaningful reductions in our operating losses. Our strategy is also yielding positive developments in our commercial pipeline, such as the recent conversion of the LOI from Audi into an award, and our gearing up of production to begin supplying Scania at higher volumes next year. As Don mentioned, we feel confident in our ability to receive additional OEM awards as we focus on delivering results with our existing assets. To cover our performance, I’ll start on Slide 4 beginning with revenues. We delivered $60.8 million of revenue in Q3, which translates into 66% growth year-over-year and 26% growth quarter-over-quarter. As Don mentioned, this was an all-time company record. We didn’t suffer any supply disruptions, thanks to the team’s efforts over the past 12 months in Rhode Island and Mexico to preemptively manage our supply chain. Year-to-date, we have delivered $154.5 million of revenue, which reflects a 28% year-over-year increase. Year-to-date, energy industrial revenues were $97.3 million, an 8% year-over-year increase. Given our limited aerogel production capacity in Q3, we continued to focus on optimizing our energy industrial product mix to lighten the load on our operations by making those products that require the least standard hours of processing and deliver $27.9 million in sales, reflecting a 21% quarterly decrease and a 13% year-over-year increase. As we’ve previously mentioned, our energy business is sold out. We have a clear line of sight to about $216 million of annual demand and currently have approximately $118 million of backlog in orders to fulfill over the next few quarters. To fulfill this excess demand, we are focused on continuing to optimize our mix for steady supply during the remainder of the year and bringing in supplemental supply as soon as possible. EV thermal barrier revenues of $32.8 million were up 175% year-over-year and 160% quarter-over-quarter, reflecting the accelerating ramp in GM’s production of Ultium platform-based electric vehicles and steady volumes in the Toyota nameplate that we supply the bZ4X. General Motors has more than doubled the production of models that we supply them on a quarter-over-quarter basis. Our year-to-date EV thermal barrier revenues were $57.2 million, representing an 88% increase when compared to the same period in 2022. Next, I’ll provide a summary of our main expenses. Material expenses of $22 million for the quarter made up 36 percentage points of sales, continuing to reflect the work that our supply chain and procurement groups have put into reducing the cost of some of our main raw materials. We see this as temporary relief and the result of conservative planning as well, so we will remain vigilant with the goal of ensuring that we can keep these below 40 percentage points of sales. The Q3 performance enabled our total year-to-date material costs to be of $58 million, or 38 percentage points of sales, or 200 basis points favorable to our target of 40 percentage points of sales. Conversion costs, which we describe as all production costs required to convert raw materials into finished products were of $25 million, or 41 percentage points of sales in Q3. These costs include all elements of direct labor, manufacturing overhead, factory supplies, rent, insurance, process logistics, quality, and inspection. These results compare favorably to conversion costs in Q2 of this year, which were at a 46 percentage points of sales. This is the result of much better fixed cost absorption on our aerogel production costs, driven by the higher sales run rate level of this quarter. As previously mentioned, our long-term target for these costs at a roughly double revenue run rate is of 20 to 25 percentage points of sales. So we aren’t done managing these. While we’ve made improvements primarily thanks to the efficiency of our operations in Mexico, we need to continue capturing additional opportunities to reduce these costs. Looking ahead as our teams start running all lines of our aerogel plant in Rhode Island to make PyroThin without any switchovers and find their flow, we’re sure that we’ll see some efficiencies. In Mexico for EV thermal barrier part assembly, this week we have a focused team with all hands on deck on increasing the uptime and throughput of our encapsulation and assembly equipment to drive efficiency and enable the next potential step up in demand. The launch next year of simpler designs for prismatic cells on a new set of encapsulation equipment that can be shared across programs will drive additional efficiency. Year-to-date, our conversion costs of $69.2 million reflect 45 percentage points of sales, and our performance improvement year-over-year here has been primarily driven by fabricating $9.9 million of subsea products within our Energy Industrial segment in Mexico versus in Rhode Island. In Q3, company-level gross profit margins were of 23%, and our gross profit of $13.8 million is a $20.2 million improvement over our gross loss of $6.4 million during the same quarter last year. Our Energy Industrial segment delivered $5.8 million of gross profit, or 182% year-over-year increase. In EV thermal barriers, we delivered $8 million of gross profit in Q3. If we compare this quarter with Q2, our EV thermal barrier gross profit improved by $9.1 million on incremental revenue of $20.8 million. Our third quarter of 2023 gross profit in EV thermal barriers was $16.4 million higher than the gross loss of $8.4 million that we incurred during Q3 of last year in this segment, reflecting the benefits of starting to operate at a revenue run rate that aligns with the size of our operation.

Thank you, Ricardo. We have covered a significant amount of ground today in reviewing Q3 and our near-term outlook. Before we move to Q&A, I would like to emphasize our focus on driving significant profitability from our existing resources and opportunities. We believe the near-term business profile as we have it constructed and again consistent with our current assets and commercial opportunities has the potential to produce on an annual basis approximately $550 million of revenue, approximately $200 million of gross profit, and approximately $140 million of EBITDA. We believe Q4 will be the next significant step towards this level of business performance. At the same time, we believe that we maintain our full longer-term upside potential as we continue to win design awards from EV OEMs to expand our profitable base load of energy industrial revenue and to leverage our aerogel technology platform into additional high-value markets, including our ongoing work in battery materials. The key point is that we are seeking to avoid unnecessary dilution for our shareholders by optimizing the use of our existing assets and opportunities to create a dynamic and cash-generating business. With that, we welcome the Q&A session.

Thank you. Our first question today comes from Colin Rusch with Oppenheimer. Your line is open.

Thanks so much, guys. With the cadence of these incremental wins and the start of production, can you talk a little bit about the dynamics around selling in to just fill the channel and get these guys supplied up to start production and how much actual sell through you’re seeing on the vehicles at this point.

Sorry, Colin, maybe just to clarify, so sell through on the end of General Motors specifically, or is this more related to additional OEMs?

The dynamic we’re trying to get after is how much of the growth is really coming from selling into the OEMs. And as you have an incremental cadence of new program wins, there’s going to be growth to support the production. But there’s a lot of concern around how these vehicles are selling and potential stagnation in terms of growth at some point. So that’s the dynamic we’re trying to get after.

Yes. I mean, I think there’s sort of two parts to thinking about this one, right? I mean, we’ve known that some of these EVs have been sitting in lots for over a year at this point, right. And we factor that into our conservativism as we factor in the volume plans, not only when we are making our own plans, but also when we’re quoting these opportunities. And when it comes to Ultium specifically, it’s a little tough to assess how close General Motors is to hitting the demand limit when they only produced, we estimate around 14,000 vehicles in Q3. And there’s roughly 3,000 to 4,000 Chevy dealers in North America. And that doesn’t even come close to getting up to the limits of consumer demand for these vehicles. So we do think that GM has a ways to go in terms of ramping up production before they start to see any limit on consumer demand. Now, as we look at additional opportunities, kind of going to the second part of the question, I mean, we – in the same way as we plan the ramp from GM, and we truly have learned a lot through the delays with GM’s ramp on how to deploy capital in these opportunities, how to design the processes to execute them. And we apply a very similar level of discounting to some of these opportunities in 2025 and 2026 that we’re being awarded here in the near-term. And it’s worth noting that, once an OEM puts together a sourcing package for a vehicle that is two to three years away, a lot of work has already been done and a lot of investment has already been made. And so we do feel pretty good about our ability to get more wins for this 2025 and 2026 timeframe. Now, additional programs, I think for that 2027 and 2028 timeframe, we do expect that to continue being retimed and frankly, see the recent news of some retimed EV investments as something that was kind of inevitable, just given everyone’s cost of capital. And we were surprised that it actually took this long to ratchet back some of these investment expectations. But we still feel very good about the opportunities that we have on the horizon for 2025, 2026. And even if we go back to our plans in 2021, we have not had to adjust those downward based on what we’re seeing.

Colin, I would just add, I think the momentum that we’ve had moving from Q2 to Q3, I think you’ll see that momentum continue for us here as we move into Q4 into the new year.

That’s super helpful. Thanks so much, guys. And then as you work through contracting on new product wins with these new customers, the value of both mechanical and the thermal performance of the material is becoming really well understood. I guess, I’m curious about any potential for price leverage on your part or at least price preservation, even as you get into higher volumes with some of these customers, given that mechanical performance.

Yes. I mean, for us, it’s really not just about the underlying merits of the material and the critical problems that it solves, but also the amount of capital that we’ve deployed and that we will continue to cautiously deploy here and an emphasis on paying it back, right. So we will manage pricing in a way that kind of come hell or high water, we really align with the gearing that we’ve presented here on Slide 6, for example, right. I mean, we want all programs and all sales that we execute here to not pull us away from this path of getting 35% gross profit margins, and we’ll manage pricing to do that.

Thanks so much, guys.

We now turn to Eric Stine with Craig-Hallum. Your line is open.

Hi, Don. Hi, Ricardo.

Hi, Eric.

Hey. Good morning. So maybe for me, I know in the past you had talked about that $550 million run rate, 25% EBITDA margin, and very good slide appreciate that, that you gave this morning. I think previously you’d said thought that was possible in the next four to six quarters. And I know you’re managing the contract manufacturer and ramping things up and you’re constrained in EI and all of that. Is that still something that you see as possible on a run rate basis by, I guess, your expectation had been 3Q of 2024?

It’s not unlikely. I mean, we actually included a slide in the back for everyone’s benefit on. If you just look at GM alone and the ramp that they’re in, right, so kind of in spite of the headlines, if you just look at the IHS ramp and if you see GM’s intended ramp, it’s even higher than this. But there’s the potential for them to just continue doubling production every quarter for at least two more quarters, right. And the implications of that on our revenue run rate, supplemented by the supply from China for our Energy Industrial business, put us on this path to be able to get there. Now, whether it happens in Q2, Q3, Q4, we’re just cautiously managing it. But we do see it as something that is still possible.

Understood. Yes. Just making sure that’s still kind of the expectation that is helpful. And then maybe for my follow-up, maybe just an update on the DOE loan that you’re in the mix for. I know previously you’d talked about potentially hearing kind of next steps by year-end and the expectation that if you’re invited for further diligence, that’s a great sign towards the eventual award or possible award. Just curious if that’s still the view.

Thank you, Eric. Yes. The DOE – the LPO process, we continue to be closely engaged with the LPO office and the team, if you will, on that side of the table and working very closely with them. Our team’s doing a great job. I think we’re putting our best foot forward. And of course, it’s always an unpredictable process. But we do believe that we’re on that timeline that we outlined earlier, and we hope to be able to keep you posted on that here as we work our way through Q4.

Okay, thank you.

Thank you.

We now turn to Alex Potter with Piper Sandler. Your line is open.

Great. Thanks, guys. So I was wondering just maybe obviously, you’re working on the contract manufacturing avenue with your partner in China. Any update you can give on how that’s progressing? What gives you confidence that everything is on track and on time?

Well, again, we’re impressed by them. We’re working very closely. It’s a matter of qualifying our products, setting up the supply chain, the logistics, working with our energy industrial customers. And it’s going very well. And we have said that we will test the system here over the course of 2023, and we’re doing just that now, and that it should be up and contributing at the early part of 2024. And Alex, we’re right on that path. So we’re confident. We’re impressed by the work that we’re doing together with our supplemental supplier and again, right on track.

Okay, that’s great to hear. And then the second question I had was on the PyroThin volume that you’re selling into GM for the Ultium product. Just kind of curious, are they putting PyroThin themselves in their own inventory or are they taking it from you and putting it directly into a vehicle and pushing the vehicle out? I’m just trying to understand, obviously, you’re producing, you sell to them. But I don’t know if just I guess trying to gauge whether there’s the potential for inventory buildup or shortages at any point between you GM and then downstream of GM.

Yes. I mean, I think the best way to think about it is that it’s fair to say that a part that we’re making in Mexico right now probably won’t find its way into a finished vehicle for about a month. And so when the ramp is as significant as what we’re seeing right, looking at the 14,000 vehicles, Ultium based vehicles that we believe GM built in Q3 isn’t totally enough to explain our revenues, right. If you take our revenues divided by 14,000, you end up with a CPV that’s way higher than what’s actually there. And so GM is building up a decent amount of inventory here to enable the ramp. And from what we understand, I mean, they’ve been hand to mouth here during Q3. And we’ll have to see really kind of going back to Colin’s question on, we’ll see how long these vehicles then spend on the lot to translate that into ultimate sales for GM. But we do see about a one month delay, which kind of gives us the chance to recognize revenues and build revenues of a month ahead of the end of the quarter.

Okay, got it. Thanks. That’s very helpful. I’ll pass it on.

Thank you.

Our next question comes from Jeff Osborne with TD Cowen. Your line is open.

Thank you. Good morning. Two quick ones on my side. I was curious on the Audi win, that’s great to see. Is that part of a broader program as part of the VW family that maybe is just starting with one vehicle in 2024? Any help there would be helpful because I thought you were targeting more pack designs across multiple vehicles as opposed to a one off. So understanding that would be helpful. And then any other updates that you could share on the battery materials side of the business. You haven’t talked about that in a few quarters, but I’m just curious how that’s progressing would be also helpful to understand.

Yes. So I’m happy to jump in on the first one there, Jeff. Yes. So the Audi program is an electric vehicle platform, which means that multiple different Audi nameplates could be based on this platform.

And then on the battery material side, we continue to work on advancing the technology and we are endeavoring to solve a hard problem. And we are making, I think steady and interesting progress on that. We’ve kept quiet on it to a great degree on purpose as we’ve continued to advance that. I think it will be an opportunity for us to talk about it in the coming earnings call or two, and I would really like for that to not only talk about the status of the technology, but perhaps also the status of one or two working relationships we have with third-parties at that point, helping us advance the technology and taking it that next step. But it’s a very exciting program for us. We’ve got an excellent team of people working on it, and it’s – we’re careful in our expenditures, but it’s adequately and well-resourced to continue to advance that technology.

Excellent. I appreciate it, Dan. That’s all I have.

Thanks, Jeff.

We now turn to George Gianarikas with Canaccord. Your line is open.

Hey, good morning, and thanks for taking my question. Maybe just to focus on some of the potential EV OEM awards that you haven’t announced yet that could get announced by the end of the year. Curious, can you just shed a little light on when you expect potential volumes to start there? Just so we can understand, when we look to 2024, how diversified will your PyroThin business be away from GM? Thank you.

Yes. Thanks, George. So I mean, those awards would really kick in, in 2025. The meaningful volumes, and the ramp would happen in 2025. So for 2024, it’s fair to say that we will still be fairly concentrated on GM, which is proving out to not be a bad thing now, and then Toyota and Scania will also ramp up in the second half of next year.

Thank you. And maybe to the extent you could share any details on Toyota, I mean they seem to be at least in their public pronouncements going back and forth with their commitment to EVs. I mean what sort of momentum do you see with that account? Thank you.

Yes. I mean, I think we would put them in similar bucket as the other OEMs. I mean they still haven’t announced a broad battery platform strategy. Instead, it’s more of a nameplate by nameplate approach, and that scope can increase, but we don’t see anything here in the near-term for 2024.

Thank you, George.

We now turn to Chris Souther with B. Riley. Your line is open.

Hey, guys, thanks for taking my questions here. Could you talk through the moving pieces on the revenue and EBITDA guidance for the fourth quarter? You said revenue is expected to grow, gross margins are expected to increase, and you had a $7 million EBITDA loss in the third quarter. So what are the moving pieces around the low end of the EBITDA guidance, $8 million loss? Can you talk through what you’d need from a revenue perspective to hit the positive EBITDA in the fourth quarter, or is some specific output out of China or other factors that would kind of be in play there?

Yes. No, that’s a good question. We knew you’d kind of go there. And we really are protecting for the doomsday scenario here. If you look at the negative 40 of EBITDA, right, of potential EBITDA. I think we’ll be forthcoming tightening that up as November materializes here. But for us, really, when we looked at the UAW agreement not being ratified, some of the big certification work streams with the contract manufacturer still in full swing and the potential cost of an additional turn of certification on those products. Really, if you combine all of those negative things, that could happen, albeit with low probabilities, that’s how you end up at the negative 40 of EBITDA. And yes, I mean I do think that given the ramp that we expect for Q4, we will have an opportunity to potentially tighten that range.

Understood. Okay. That’s really helpful.

Yes. Chris, I would say that there’s a reasonable chance that we’ll provide one more update before year-end on some of these topics that you and your colleagues have asked about revenue and EBITDA, additional OEM awards, commentary on the DOE LPO, those sorts of things I think it could very well be appropriate for us to again update you all one more time before year-end.

Got it. Okay. That’s really helpful. And then just you kind of talk through your sales not matching up kind of as a leading indicator of GM production because obviously, the implied ASPs otherwise would have been very high here. Where are the ASPs kind of shaken out if we exclude the Scania stuff just for kind of general cars SUVs that are in your OEM awards? And how much revenue are you guys getting from awards that you haven’t yet received as far as kind of component sales that are related to testing and the like? I just wanted to see if you could kind of provide a bit more clarity around that.

Yes. I mean, the prototype revenues right now make up, well, less than 10% of our PyroThin revenues. And then I’m assuming you mean more around in when it comes to the rest of the PyroThin revenues, you mean more around our content per vehicle, right. How that is tracking?

Yes, exactly. Yes, exactly.

Yes. And so I mean we’re still pretty consistently seeing our content per vehicle in that $700 to $1,000 per vehicle range, given that the bulk of what we’re supplying is vehicles with pretty large packs and pouch cells, right. And when we add one of these prismatic programs, I think the content there is more in that $350 to $400 per car range, and – but nonetheless, I mean it’s a much simpler part to produce. It requires a lot less capital. And so we’re happy with the economics of those awards as well. But right now, I mean if you’re looking at what we’re producing here, what we produce here in Q3, what we’ll do in Q4, and most of 2024, it’s still going to be this large pouch configuration with the CPV in that $700 range.

Got it. Okay. That’s really helpful. I’ll hop in the queue. Thanks.

Thanks so much.

Our next question comes from Tom Curran with Seaport Research Partners. Your line is open.

Good morning, guys. When it comes to the supplemental supply that you’re in the process of testing with your Chinese contract manufacturing partner, is the expectation still that once that’s fully ramped to the maximum expected capacity, that your available quarterly revenue capacity for Energy Industrial would be around $37.5 million? And then when it comes to that $118 million backlog of unfilled orders, how much time do you feel you have to catch up with those orders? And do you have any risk or liability related to letting them remain unfilled past a certain point in time?

Well, it’s a good question, Tom. We are very close to our Energy Industrial customers and the distribution channels and the engineering firms, and we actively communicate with them to be sure that we’re meeting their expectations. And – but we are in a position to switch over to the supplemental supply again early next year. And we feel that we will fulfill our obligations, our responsibilities to those customers, and quite frankly, that business is strong. Our sales team on the Energy Industrial side is very active on the Pyrogel side of the business and the Cryogel side, and the LNG part of the business. And so that business is going to continue to grow and be an important base load of revenue and gross profit for our company. And so again, we feel we’re in a good position with those customers communicating well. Yes, the backlog and you might remember if you go back to the last time we were short of capacity. The backlog is substantial, and – but we’re in good shape. As long as we communicate well, I think we’re good.

Yes. And if I may add, I mean, the team is pretty good at assessing what gets into that $118 million backlog and which orders they accept. And an order there makes it into that $118 million if the team has line of sight to fulfilling it within a reasonable time frame.

Glad to hear that. That’s reassuring. And just to follow-up and try to clarify, within the $550 million, would you think of fully eventual fully available annual revenue capacity for EI being around $150 million?

Yes. Yes, we would. I mean when we think about the $550 million, we do think about the PyroThin part of that being $400 million, and the remaining part being the Energy Industrial side of our business.

Got it. Thanks for that clarification, Don. And then turning to EV TB, when it comes to these next two potential awards that you remain very optimistic about landing before year-end, would you still expect at least one of those to result in a new customer essentially, what would be customer number four?

Yes. That’s correct. Yes, I mean, we kind of put your bingo board there on Slide 3, Tom, and we would expect different logos on there.

Ricardo, I love playing my bingo. I’m almost 50. Thanks, guys. I’ll turn it back.

Thank you, Tom.

This concludes our Q&A. I’m going to hand back to Don Young, CEO for closing remarks.

Thank you, Elliot. We appreciate your interest in Aspen Aerogels. We look forward to staying in close touch with you and reporting our fourth quarter 2023 results to you early next year. Be well and have a good day. Thanks so much.

Ladies and gentlemen, today’s call has now concluded. We’d like to thank you for your participation. You may now disconnect your lines.