Q4 2019 Earnings Call
Ladies and gentlemen, thank you for standing by for the innovative solutions and support calls the conference will be get it just a few moments. Please continue to hold and thank you for your patience.
Good morning, and welcome to the innovative solutions and support fourth quarter 2019 earnings Conference call. All participants will be in listen only mode should you need assistance. Please signal 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.
He may press. The Star then one on your Touchtone phone keypad to withdraw your question. Please press Star then too.
Please note this event is being recorded.
Now I'd like to turn the conference call over to Chairman and CEO Geoffrey Hedrick. Please go ahead.
Good morning, this is Jeff ever.
You're welcome here. This morning core conference call and discuss our performance for the fourth quarter and full fiscal year 2019 current business conditions and our outlook for the coming here.
Joining me are Shahram askarpour pressure.
Well I.
And our CFO .
Well I forget about like realms or read our safe Harbor message. Thanks.
Thank you Jeff Good morning, everyone I would remind our listeners that certain matters discussed in the conference call today, including new products and operational and financial results for future periods are forward looking statements are subject to risks and uncertainties.
Could cause actual results to differ materially either better or worse from those discussed including other risks and uncertainties reflected in our company's 10-K, which is on file with the FCC and other filings now I'll turn the call back.
Thanks, Rob the company's revenue operating results and operating cash flow showed significant improvement from both a year ago.
Core as well sequentially from the third quarter of this fiscal year.
This call. It 2019 results reflect cost controls and marketing focus I initiated in fiscal 2018.
The strong crash enabled us to record a significant increase in all our key financial metrics this year.
Revenues growing 27%.
Over fiscal 2018.
We ended physical his call.
2019.
The best core.
New orders and the highest orally quarterly intake.
And more than two years.
And that only includes a portion of the yours, we expect to came from Polaris.
Production I've been very successful to PC 24.
And in 22.
In 2020, they have indicated.
They intend to increase annual production by 25% from the 40 aircraft they will deliver in 2019.
I attribute these results to our disciplined commitment to better leverage.
Core technologies and integration in our designs.
In both the commercial general aviation and military markets.
Driven by the growth of production sales of our flat panel displays utility management systems as well as ongoing contribution of our repair and maintenance operation, we expanded gross margins to over 56% this year.
The primary focuses.
Action revenues developing new products has been the foundation in which the company has bill.
It is right compared to many other car companies like ourselves.
We believe we have a higher proportion of investment and research and development.
So we're open to opportunistic funded development contracts, such as new air data and computer being developed by the net further Navy aircraft.
Which we believe as gross domestic and international production sales potential.
Our focus on innovation is why we havent object strategy of investing in a fewer but more promising markets in products.
One of them more promising technology, we have developed is a patented trust sense auto throttle.
With auto throttle Stcs for both single and twin engine aircraft secured we have products that address a market that is estimated to be over 5000 aircraft.
Yeah.
Certification of engine out lots of control mitigation function.
Yes.
Is it breakthrough major milestone this service this certification.
Auto throw technician technology on the market and is.
Certified to mitigate uncontrolled catastrophic accidents in engine.
Relations multi engine aircraft.
Washington control mitigation as a major major shift safety feature.
Of the auto throttle. So is it required separate special Epay certification, which took us over two years to complete.
Principally because it's never been done therefore, we are hung on to bring this new technology that has.
That has potential to save lives.
In order to Mike.
Restaurants more cost effective.
We're also developing means and methods to reduce installation time, which not only helps Kathy aircraft operational sooner, but can reduce costs to the aircraft owner and operator.
Right now our plan is to continue to pursue additional stcs and the retrofit market aircraft with large existing fleets.
We are also talking to a number of Oems have expressed interest in our on trials expanding our OEM business should we believe.
Additional stability in our revenues.
We see a large market opportunity for the process and we continue to increase its function.
Adding new enhancements so in the fourth quarter revenues.
Up sequentially for the severance time, and eight quarters and improvement in bookings, we have a solid foundation to build our oral trial business.
Let me turn it over to round for discussion on financials. Thank you Jeff. Thank you all for joining us this morning.
The fourth quarter of 28, the company reported net sales of 44.8 million.
33% increased $3.6 million in the fourth quarter, a year ago that is our fourth consecutive quarter of revenue growth seventh quarter in the last eight generates sequential revenue growth and follow so 35% growth revenues achieved in the third quarter.
We had another strong quarter product sales and customer service revenue, which led to a very strong 59, and a half a percent gross margin our best fully gross margins in several years.
Margins are benefiting from this study increases the revenue, which has enabled us to better leverage our fixed manufacturing costs and lower material costs due to product mix. In addition, the company also benefited from reduced warranty cost in the quarter, reflecting both reduced warranty costs being incurred and reserves that were required for longer term warranty period.
Is ending.
Total operating expenses for the fourth quarter fiscal 2009 were 2 million a decrease of 300000 from the same quarter a year ago total operating expenses are also down sequentially from the third quarter.
Research and development expenses in the quarter were 522000, which is less than that of a year ago, reflecting our strategy to now our new product development efforts on fewer but more promising new technologies.
Selling general and administrative expenses in the quarter were down approximately 200000 for the fourth quarter fiscal 2018 since the workforce reduction in late fiscal 2018 general and administrative general and administrative expenses have normalize that this occurred at this quarter current rates.
In the quarter, we earned 118000.
The other income primarily in interest from our cash balances.
In the fourth quarter, we recorded a small income tax benefit reflecting the utilization of some of our available tax loss carry forwards.
The company reported its most profitable quarter in several years nearly doubling our net income from just three months ago with fourth quarter net income of $4 million were six cents per share.
In the fourth quarter last year, we reported a net loss of 414000 Rthree thought for three cents per share.
Quickly looking at the results for the year total revenues were 17.6 million up 27% from 13.9 million for full year 2018.
The company reported fiscal 2019, net income of 1.9 million or 11 cents per share a significant improvement from a net loss of 3.7 million were 22 cents per share for fiscal 2018.
We believe that the company remains in a strong financial position, we generated over 2 million a positive cash flow in fiscal 2019 can head $22.4 million of cash on hand at September Thirtyth 2019, the company is debt free.
We believe the company has sufficient cash to fund operations for the foreseeable future.
I'd like to turn the call over to Cheryl.
Thank you Raul good morning, everyone.
Hi, Jeff related.
We had good performance in the fourth quarter, which led to significant year over year increase in all of our.
Financial metrics revenue margins earnings and cash flow.
Many of the factors drove our success over the last 12 months on holding pace.
Some cases improving.
By the headed into the new year, we believe our greatest growth opportunity lies in our latest technology across sense oral solids.
So let me take a minute to elaborate on some of our comments.
We provide a better appreciation of why we so strongly believe in this technology.
We now have stcs on both single and twin engine General Aviation aircraft.
And we are working on additional stcs as well as developing additional features that enhance the value our existing certified Oro throttles.
Included in that new technologies in our proprietary.
He is our proprietary vmc mitigation technology, we believe is by far the most valuable.
Vmc mitigation is the fed stuff kind STC.
And since discount Thats traffic lots of control mitigation feature has never been done before the FAA had no reference certification backgrounds consoles.
When evaluating our technology.
Three separate organizations within the FAA being our aircraft certification office. This small afternoon standard branch and small aircraft evaluation.
Not to come to terms and develop acceptable means for certification of the safety critical system.
Since the announcement and demonstrations made by SNS to mitigate the fatal condition caused by the professional control during an engine not condition.
The industry expect and media properties, various supporting occupancy cost technology.
Consequently, you can appreciate why.
The recent receipt of SPC has us greatly excited.
The prospects for almost all especially installed in multi engine aircraft types.
Why Vmc mitigation is the biggest new feature of our auto strong programs you are making other valuable improvements as well.
Previously you had emphasized on the importance of reducing the installation time.
And we have caught can get aura throbbing strides installation time, almost in half by including our standby instrument within the same unit that performs the auto strong functionality as part of this recent FCC.
Our final note on euro.
Is that we are in negotiations with some Oems for inclusion of our auto follow as standard equipment in their production aircraft.
We believe that.
Hello. These efforts will lead to a strong demand for this technology that not only reduces pilot workload, but is believed to be potentially lives.
And as previously mentioned, while we are investing heavily in the growth of our auto throttle business.
Comes at a time.
When the performance of our base business remains solid.
This quickly reviewing the program.
Driving current results.
The PC 24 program has been running at a fairly healthy levels in support of the 40 aircraft Gladys expects to deliver this year.
Actually adjust to around 50 next year to meet the increasing demand from what has been quickly recognized as one of the most successful new aircraft launches in recent years in recent memory.
Again since this is the long term contract, which we believe will span multiple years and generate demand for thousands of units only a fraction of that ultimate value is in our backlog.
In the commercial transport markets experiencing maybe demand from four to 5.767 portfolio of coffee technology.
As I mentioned last quarter, we believe in part due to the sunsetting of support for the remaining CRT displays in service.
Many of the domestic and international owners line. These aircraft tend to be smaller operators that typically rely on the MRO channels for upgrades and therefore, we continue to support our distribution channels.
Many of these says RF products that are closed off the shelf, making them more profitable.
The military market.
Our production KC 46 program continues for what as new orders are being the seats.
The Navy a five engineering contract to develop and new AD data compute as has been completed.
Anticipated production order will be awarded to us to retrofit the us Navy five fleet.
With the new AD data computing.
You orders in the fourth quarter.
No our best in two years.
And that September Thirtyth had the highest yearend backlog you three years.
We have also seen a steady flow of repair and maintenance revenue.
The company continues to ship more equipment in the field. It follows that they need to support and maintain that equipment continues to grow.
Let me turn the call back to Jeff for some closing remarks.
Thank you Charles.
Fiscal 2000, maintaining your strong financial performance as well as a year of encouraging progress, creating virtually an entirely new market.
As we previously discussed we are taking.
Every measured and deliberate approach to.
Approach any maturing a autothrottle market. It's the same time, we're committed to leveraging.
Our existing technologies to generate profits and cash and provide the time, we need to make sure that our new technology has the greatest opportunity for success in.
The New certification currently award for.
MCV a mitigation.
There is really a pivotal.
Event and the evolution of this emerging market.
We continue to invest resources as needed to cultivate the market and believe overtime. This investment will be rewarded I'll turn it over the operator.
Thank you.
Thank you at this time, we will open the floor for questions. If you would like to asking question. You mean press Star then one on your telephone keypad. If you are using a speakerphone. Please pick up your headset for pressing the keys to.
To withdraw your question. Please press Star then too.
At this time, we'll pause momentarily to assemble the roster.
Yes.
My first question comes from David Campbell.
Homesend Davison company.
Good morning, everybody.
So happen.
Good Thanks, Alan says you good quarter.
And you know you're you're beginning to be.
Substantially profitable again.
I take it they the PC 24 production increase rejected for next year.
No. It is that any of the any that in the backlog of $6 million.
Some of it and some of virtually none.
Fortunately none.
So.
The backlog then is four contracts.
For the.
KC 46 and.
And.
Some other military applications.
Correct. The one third we have.
Remember our fiscal year Assa offset from the.
Calendar year.
There is from there so.
I have a lot.
24 in there a PC 24 as Ben.
Probably the most remarkably successful.
Program, we've seen a long time.
Great job.
Excellent and beyond.
The KC 46 is an ongoing program.
You need to support and.
Hi.
Pretty much I planned revenue stream.
Continuous for a long time.
Right.
The auto throttle.
However did have.
You received approval from the I see a but you had revenues from it.
In the quarter is that right.
We were.
Well, we we received.
A number of Stcs recently, but the most important most significant.
So one from multi engine aircraft.
This business about.
Mitigating up an engine out which.
Sadly ends up being a catastrophic.
Okay.
So they have a has approach that.
We'll go into production.
In calendar year and.
Optimistic because.
Worse.
The best part.
Does that is that what you're.
Is that your with your principally negotiating with.
Oh original equipment manufacturers.
Oh yeah.
As you can expect there, but a number of Oh, we haven't said have expressed interest in it.
Hi, its application also the military.
And commercial.
Markets as well.
Is applicable, though I mean multi engine aircraft.
In which a loss of a single engine.
<unk> costs out of control condition that sadly it doesn't end well typically so at any right. That's what it's therefore it works and the ebay has has approved and they show you know.
Really very good.
Thorough judgment and investigate as I said this is new technology and requires.
Great deal overview before.
Certification is that is.
Approved.
And is this the primarily for.
Manufacturers of business aircraft.
No that's applicable as applicable to military aircraft left aircraft turtle brought a number of.
Absolutely and their cash for any.
I mean, there was an airplane.
What happened to Ansys airplane slows down a little too much with an engine, but an engine our holiday.
At rolls over on us back or whether.
It's extremely difficult to recover.
And what our system does.
Anticipates that condition and makes modifications to the trust.
Joe I'll, either flight crew to maintain control airplane.
The bridge and is that none of this is in the backlog right kind of its in the backlog where did that affect cars until we have.
This certification and it's been a long road.
But we've tested that a lot I can attest to that by life [laughter] why don't work still doesn't work I think diet.
Yeah. This is not the P 24 is not.
It does not use this equipment that right.
She tried before but right now we focus on turboprop aircraft and Thats a terminal Fenton aircraft the KC 24 pads.
Has just mitigation system.
That that's something similarly.
Okay.
That's under the same thing bye bye.
That's a Palestine.
Hey, Dave patents pending on.
As a mitigation technology.
Right right.
So it at this point as far as revenues are concerned.
For fiscal 2020, you don't really know what they're going to d., but.
Yes. If this program is successful they ought to be up from 2019, there right.
That's true depends on how fast it and Ed.
Swings in production.
Michael.
I guess, the trimming past I'm more optimistic we know there so that we know there as.
A significant revenue and profit opportunity out in the future the exact timing again as middle I'm certain because it's all new technology.
Right.
Right.
And you're not its competition can't take the this is running here.
I never said [laughter] I never said I can only tell you that there's nobody else that's doing well hard going.
It's taken US two years, you've got to certify Oh, we have a number of patents and patents pending so other than that Ken I can only say that that if we do our job well run like Oh, My God reverse and work our butts off to make it happen. So if we do that we have a wonderful.
Oh opportunity.
Right right.
Well. Thank you very much a then from and well.
The I appreciate it down.
Thank you.
Our next question comes from George from rent Miranda.
Corrado venture.
Hi, good morning, Thank you gentlemen.
He asked some questions regarding the autothrottle.
I'm trying to understand better the cadence on the go to market on that so he is it ready for sale today or do we need one more clearance or is it ready to go now.
I I assume it is very ready for sale today, we have.
A couple of improvements, which we believe.
Shouldnt be included in the.
Production installations.
So the answer is yes and no.
Yes, it's ready to go I Wouldnt get sound like today.
[laughter], but.
Yeah.
We expect a couple of them programs, which will have implemented within a month or so so it's it's on track I guess is it more accurate as.
Explanation.
And then on your on the go to market the 2020.
I hear a lot of talk on Oems. He is the walk me through the cadence of your strategy is it mostly OEM Stolfi 20 go more to the M. are always in the aftermarkets or how you go to market on this and what's the cadence of it.
Well I'll have you have equipment manufacturer smolyansky equipment manufacturers that have expressed interest we've headwinds from and Europe and and in the United States.
Well, we're talking to him about them implementing it in their production aircraft.
But but maybe you it was actually intended and design for retrofit application, where there's an enormous interesting market a much bigger that even sustained production for the next 10 years, what it looked like.
And that that market is.
Continues to look very strong or expanding in that so where we feel like go after identifying and pursuing the aftermarket through through.
After yours and.
Finance installers and <unk>.
Depending on the aircraft throughout borrowers.
Some cases, there may be military aircraft or you have in the military installers its kind of it's kind of passage very cost effective et cetera.
The auto throttle system.
As a typically a half for a third the costs.
Oh previous competitive systems and it has the added feature.
So a lot of some control medication.
[laughter].
So I have have emrose. It has started started placing orders yet for this for 2020.
I haven't because recognized certified and literally became certified.
Four days ago.
So oh okay.
So we know we kicked so they are on trial, but we know the lab.
I think they know that we were working on BMC, a medication and show that gets asked you see when castrol or an airplane and gotcha.
So it's it's the margins moving parts by something no has never been done before so we don't have any historical reference.
Okay to I would expect a lot of pent up demand given the recent crashed the activity.
[laughter] told right again I'm more.
The more prudent I think Tom I, I am delighted and excited about an exit.
It's really Oh boy I'd, I'd think we need to.
Do our job and work hard to see if we see a bit matures and do as big an opportunities we.
Initially believed.
Yes. Thank you.
Thank you.
Our next question comes from Charlie Pine with Van Clemens in Kyle.
Hi, Paul Good morning, good morning, everyone and.
First of all congratulations on a great quarter.
And congratulations on a wonderful turnaround year you.
Well the hard work is starting to pay off and delighted to see it.
Well. Thank you for that that's what it's been very rewarding gives you can imagine.
As shown on the entertainment had a great job. So we're delighted we we've we've been able to develop no.
Really innovative technology, while weve been able to produce and profit and and show some reasonable growth and the business. So we're pleased we need to keep it up I guess so.
Well hopefully it will be even more rewarding in the next couple of years.
So.
Okay I've a couple of questions then Oh I'm.
One scratched the surface a little bit more on this on the recent developments with the auto throttle. So I understood I guess from your answered the previous question that you just got.
Engine out certification.
On December 8th is that correct.
Okay.
<unk>.
Okay. Yeah. It has it do you anticipate putting out a separate press release for that we will obviously because of the timing.
<unk>.
<unk>, which do we release first and.
<unk>.
Okay I totally understand.
The other thing I guess I'm, a little bit confused about you said that there's a few little nips and tucks that have to be done.
Really get this to the point, where are you going to actually start putting it into aircraft like the king years. So jump when do you actually really believe that you'll start to get the you know to actually recognize some revenue and do some of the first install but.
It doesn't sound like it's going to happen in the current corridor, but do you think we'll start to see some of this in in the January quarter or is it going to be pushed back into the March to June corridor.
Oh.
<unk>.
Yeah I get that.
<unk>.
<unk> Star.
<unk>.
Wow.
Going to start slow.
Okay.
<unk>.
[noise] I'm sorry here I'm can can you send in hearing you say that again.
<unk>.
He.
Aircraft.
<unk>.
<unk> yeah.
Deliver on many times and all that it's tempting 0.3 to six months so <unk>.
Market acceptance crocheting.
Oh.
Okay. So we said we should factor a fairly deliberate and slow ramp then we over the over the next view corridors, though.
With the with the idea, though that we will begin to see installs in 2020.
Yes, yes.
Importantly, you're just have to watch.
Climatic.
This is one of those.
<unk>.
<unk>.
Oh man behind it so.
<unk> for sheet wrapping Atlantic prototyping.
More exponential.
What about the what about the up cake with with a threat sense. The S.D.C. that I guess, you got or what was it the P.C. 12 that you're getting any installed in that.
Yes.
We're starting with that as well so.
Barriers are going well, we're looking at our focus right now just to watch now has to look at a number knew Oh Oh Oh.
Crap, primarily Nokia.
<unk>.
But it it offers.
For both aircraft.
<unk> protection when she was important.
<unk>, you're talking about having $100000.
Check to make sure. It's okay. So things like that really I off so they can be quantified besides the obvious performance and shanty adventures.
Right well finally in the last thing I'd like to get clarified can you refresh my memory again for what the.
What particular aircraft that you have the <unk>, yeah computer contract with the Navy for what was that.
That's fine.
Yep, Yeah, you said you have five that's correct.
Okay, and I, if I heard you correctly in you said that that that that that that air data development computer that that has been completed at this point <unk> white girls and stuff like that.
So.
Even for they kind of <unk> program, we're waiting for that too.
I'm more prepared always made a lot as you know we may not.
These names.
6000.
Computers at various times from yours sounds coming no, but it's probably one of the research program.
I see well that's great what about when when do you think that you you indicated that you are expecting to get production orders, what what would be a reasonable timeframe to receive receipt of such <unk> I don't want to speculate I mean, there are <unk>, but we were at all.
Early next year, we restructuring and as much of production orders.
Oh, I'm gonna how many <unk>.
Kind of get installers wind up and training center or something.
They lead times, all I'm stretch it out.
Sure.
Start slowly and build from there.
Okay.
Well. Thank you very much in providing this additional color to me and to other people I'm sure that are listening and once again you know what.
Really pleased to see.
Results for this year and.
Looking forward to what's going to be occurring over the next couple of years, So I'll I'll get off and let somebody okay gig.
And.
I don't know that on Arab to provide car.
[laughter].
Oh My <unk>.
Well don't get too don't get to colorful now.
I'm too old recall.
Oh.
Our next question comes from Irene Golden in a private investor.
[noise] good morning.
The old Guy you remember I hung out of your kids.
Okay.
I have actually I'm just out of a hospital.
<unk> here that.
But I I hope you're recovering well thank you.
I've always think curious about the employment level, how many people are working and I, we hire right.
<unk> I would try I mean people or hiring.
Okay.
The other thing I think the questions Gotta answered we have not so that anyone else brushed yet how we do not expect to for a number of quarters is that correct.
Oh, that's not crap, where you have so I'm number of all trials.
P.C. 12 market Oh, you did very good.
Tenured into that the product <unk>, we're spending time now trying to optimize the installation, which ends up being an important issue because.
My name and stores have eliminated through court capacity. So if we can reduce the time.
<unk> it texting strong we can put in more I are right, obviously sex obviously.
I can't find improvements aspects choice function. So we had dogs as well, but okay. We've already installed.
Very good results are kind of field.
Problems.
And.
The the language.
And <unk> <unk> opening up.
Chow and addition, we're gonna what kind of number of new aircraft.
A number of aircraft different aircraft.
Much larger aircraft.
That we can provide what is.
I really strong.
Improvement and.
Aircraft <unk> and.
<unk>.
So.
Oh Alright, My last question is.
Hi, <unk>.
Notified due to increased production.
For the next couple of recorders.
I understand the aircraft is extremely successful.
She 24, yes, <unk> 0.0 <unk>.
We bought a P.C. 12.
2000, so I'm going extremely extremely happy with.
Aircraft and.
Support the P.C. 24 is a wonderful airport.
Okay.
And Eric.
<unk>.
25 per cent you're over here.
Alright.
Just fine. Thank you very much I want to congratulate you guys.
For doing.
Such a wonderful job and giving us such a future of.
<unk> extremely.
Exuberance, okay. So thank you I hope connect sprang out.
I'm glad to hear your route.
I want to make sure you're on the next phone call right. So it's alright. Thank you I hope to say you at the next town you owe me.
<unk>.
Thank you.
[noise] one final time as a reminder, you mean press star than one if you would like to ask a question.
Our next question comes from Michael Frederick Private Investor.
20, gentlemen, I had a just a question about the flat panel display units they appear to be the main driver or big companies sales over the last 10 years or so how much of a contribution can we expect from that area going forward and has that been the main driver of growth for the year So far.
It's a 24 was also.
Well I wrote books last year.
The expected that the revenues from the air transport side flat panels.
Stay at this level.
The near future at least.
Okay, and I know you've been installing these for quite a while I mean, what is the life of of this installation how often does it need to be turned over or is it is just something that requires a software upgrade every once in awhile is there any repeat business on this this installation.
Once they actually again.
You get to a soda and that was a remarkable things.
We looked at American Airlines treat for example, I mean, we're getting.
Over 100000 hours of meantime between failures.
That's maybe yet [laughter] going without any failures, which is a remarkable.
And so so this is this is why.
Very good name in the industry.
Yeah.
Friends to those air transport.
Displays.
And and we get repeat business just by other people coming in and buying our system. Despite.
Oh, Yeah I'm I'm is is one of our competitors and they provide the retrofit.
Solution for the same airplane.
People tend to buy ours.
Oh.
Because of our quality and.
Yeah, and you're alone here.
<unk> <unk>.
Minimizing.
And time <unk>.
If you take a commercial where transport Ashley chapel.
Our system installed a matter of three or four days.
Systems are as much as 30 days and when an airplane sits on the ground.
She is rubber no oh somewhere.
Aircraft 50 to 75000, a day Wow.
[laughter].
<unk>.
Oh, virtually an order of magnitude to more of an impact.
<unk> okay.
Okay, great Great and we'll just one quick general question, then that would be if you talk to any of the installer is right now I think most of them are still pretty busy with the the F.A.A. mandates for this year, but can you give it a little bit of an idea of once is what's the next gen Ah installations going to play how much more valuable it's something like.
<unk> in that World, then sort of the world, we're leaving behind.
Oh, we have we are a threat sense been able to.
Provide.
Huge number of aircraft potentially you ability.
What is becoming.
Increasing demand for required navigational performers that is.
80, S.B.N.X. trend is trying to keep the aircraft position very well control and the timing of the aircraft change as it goes through which a flag phase.
Very carefully to find that enables something more aircraft and play.
Schervish over the same airspace and New York.
As in in many of those changes invaluable it's been proven and.
It's a necessity for the system and play management systems commercial and military aircraft.
40 years.
Yeah.
<unk>.
[noise], so anyway <unk>.
Leave.
That it will have.
Next Gen and we'll put an additional demand in command on <unk>.
Great Great and just one for one more quick question I'll, let you go and that is the the the newly a certified S.T.C. how much will would that make a material change and the cost of the purchase up in auto thrust in other words would that be an additional purchase that goes with the.
<unk> auto through that part of the overall package.
Yeah.
Yeah.
If I understand your question you seem to the U.S.D.C. for the V.N.C.A.
Is that going to increase the cost.
The not the cost of installation, but the actual cost of the of the purchase.
<unk>.
Yeah, I have a proxy strategy to to potentially offer that as an option.
But but we believe that everybody's going to take that option. Okay. Okay. It's not.
It's not a huge.
Costs increase but obviously.
When you need it it's very nice being that.
Family.
I haven't actually has.
Most recently and I like.
Oh.
Like Texas.
Hawaiian even if this is applicable even.
Twins, a lot like ones down.
Right in our name of.
You don't know exactly what the cost wise, but it is well understood that if you.
Single engine.
And then engine out that you.
You have to keep the speed.
Speed up it can then badly.
Yeah, Yeah, Yeah, the Texas, one certainly sounded like that's what hat or at least that could've been the costs of what happened anyway. So.
Well. Thank you for your time and good luck welcome. Thank you for your interest.
I guess, that's the end of it I I I'm I'm pretty sure everybody's interest today, thanks for autonomy.
[noise].
This concludes the question and answer session and concludes the innovative solutions and support fourth quarter 2019 earnings call. We thank you for attending today's presentation. You may now disconnect.