Q2 2020 P&F Industries Inc Earnings Call
Okay and welcome to the P. and ask industries, Inc. Q2, 2020, <unk> earnings Conference call.
Today's conference is being recorded at this time I would like to turn the conference over to Richard Goodman, The company's General Counsel. Please go ahead Sir.
Thank you operator.
Good morning, welcome to clean up industries second quarter 2020 conference call.
Well, that's today, sometimes matter, what your Horowitz, Chairman, President and Chief Executive Officer.
<unk> Molino, Chief operating Officer, Chief Financial Officer.
Before we get started I'd like to remind you gonna have you forward looking statements discussed on today's call biometric, including those related to the company's future performance and outlook based upon the population historical performance at current plans estimates and expectations, which are subject to various risks and uncertainties, including but not limited to risks related to.
The global Opic oversight chain, another public health coaches exposure to fluctuations in energy prices you haven't debt service requirements following a compliance with covenants.
<unk>.
Disruption in the global capital in credit markets strength, the retail economy, the United States in a broad risk associated with the sourcing from overseas.
Station delays risk associated with what the customer concentration.
First changes in currency exchange rates impairment of long lived assets and goodwill unforeseen inventory adjustments will change the Chicago market acceptance of products competition price reductions interest rates litigation insurance, which entropy personnel acquisitions of business and regulatory environments.
Terrorism or the political instability of economic uncertainty.
They should acknowledge the system failures and attacks and there's other risks and uncertainties described the reports and statements filed by the company with the Securities and Exchange Commission, including among others as described in our most recent annual report on form 10-K, a quarterly reports on form 10-Q, and all other filings use risk could called the company's actual result.
The future periods of differ materially from those expressed any forward looking statements made by on behalf of the company forward looking statements speak only up to date on which they are made and the company undertakes no obligation to update publicly or revise any forward looking statements whether as a result, we're commission future developments or otherwise and with that.
I'd like to now I'll turn the call over to the Charles Good morning, Richard.
Good morning, rich. Thank you so much and good morning, everybody. Thank you all for joining US this morning to discuss our second quarter Twentytwenty results before I get started.
Let me just apologize in advance.
With the in New York, where we are home offices.
Still a week later, it's been enormous outages apparel ravages Carver surges.
Lack of things from a phone lines are very very weak.
Our non after all this time, even so we're going to try to speak up as much as we can we may get interrupted in the middle a phone call hopefully not just to put you on notice about that.
Oh I hope all of you were doing well under these most trying circumstances and problems that were living through.
I'd like to acknowledge that this has been continues to be extraordinarily challenging problems in terms of health.
And the economy and our books with all those were affected by corporate magazine.
I would like to direct you to you or your attention to the Companys press release that was released earlier today.
Which includes the company's June 30, 2020 balance sheets statement of operations and statement of cash flow.
In order to streamline todays call I would like and what the following first instead of our management summarizing the company's roles and other information from the press releases. We have had done historically, we have decided to move directly to a question and answer session anybody who.
Read the press release could fill the information this movie frozen food.
ER besides over and over again.
Second please be aware that we will only be answering questions relating to the companys results of operations and financial conditions.
We must insist that you would here to this procedure management will not be indicating any question for go beyond the scope of this call in this quarter.
And with that and with that said.
We'd be happy to answer any burden of course, if anybody may have at this point operator.
Operator, Thank you yeah, I'm here I'm, sorry, if you'd like to ask a question for these signal by pressing star one on your telephone keep that if you're using the speakerphone. Please next year.
Turning now.
To allow your single <unk> equipment.
So I want to ask the question, we'll pause for just a moment.
All right. We can go ahead and take our first question from Canada, South from fell capital management.
Please go ahead Jim.
Hi, Good morning gentleman, Thank you for taking my call.
In your release, you're talking about.
It's always on truck I'm, sorry, I'm, having trouble here when you can can you speak a little louder. Please.
Yeah, well on your release you talked about 840000 dollar reduction that's you name.
Hi can you give some of the details there.
What did what goes into that 803000 dollar number.
Sure. Joe you can you can answer that question.
Sure that would include things like.
Advertising co up coffees, we pay with to customers rate reductions compensation anything related to compensation that would go down the.
Compensation those are probably the big all the bigger items.
And Joe do you see any of those reductions can be permanently.
The rest of year.
Yeah, I would say it is likely that those reductions will will hold throughout the rest of the twentytwenty.
This if this is going to be our revenue.
It would be in that well, let's put it this way I don't we don't anticipate a large rebound in revenue in the foreseeable future certainly for 2020, or so I would say yeah. Those reductions are going to be I wouldn't call the permanent but certainly through the end year.
So I guess.
It said that.
All tied to a revenues.
There would be a pure Steven.
Yeah, I know some subject you know there are some.
They're golans objective expenses in there that were also reduced as you know to try to save money.
Yeah sure sure.
Do you, maybe three or see any.
Additional reductions going forward.
It is dependent on the.
The revenue stream going forward and you know where things were too.
Worsen.
In a significant way on the top side, yes, we'd have to make further changes.
Fair enough.
The $1.6 million German Churchill can you give us some of the specifics for that.
In regard does it.
The bulk of it is related to the high tech subsidiary and and the bulk of that is related to.
Hey, a and then tangible labeled a customer relationships and you see probably a little more accounting detailed and be but there's when when revenue falls is dramatically.
Projections are performed internally and we work with the valuation consultant to I'm trying to develop what the impact would be on that in tangible benefit to the extent revenue falls.
On a by definition wouldn't valuations are done customer relationship value also drops its just sort of the nature of how these valuations are done so.
Got it that hopefully that answers your question.
Not that it's helpful. I was always under.
At least I had the idea that.
He impairment charges, which we've done at the end of year in that quarterly with so that's a good yeah, yeah, well typically what.
Management is actually required to review quarterly.
In the absence of dramatic changes in.
In revenue.
Do you typically don't make changes in during the year.
Right.
Yeah as per gap.
If there is a dramatic change in things a significant events I eat coated.
We're required to take a look at things.
Each quarter. So we did obviously and felt that that was the appropriate adjustments.
Okay.
And given your Crystal ball out to you anticipate.
I mean were charges in coming quarters.
So again this is sort of the nature of the Lady things work, which is good revenue was steady going forward.
I would say no. In addition to that we've taken a pretty big chunk out of the intangibles.
In fact, I believe on the customer relationship side and haven't front any pull I'm not sure there's even much of that left.
Hi Tech so I'd say the short answer is no I don't anticipate but.
You know the market will decide.
Okay, well turn appreciate taking my questions not pick out Gibson to be able to change. Thanks.
Welcome.
All right. They can go ahead and take our next question from Andrew Shapiro from Lawndale Capital management.
He's done how to Andrew.
Hi, guys can you hear me okay.
Yes, Thank you Andrew yes.
So.
In your comments in Louisiana and in the press release.
You had I guess.
Well call it a forecast, but it's just some insight as to what you're you were seeing here because we're ready and in August.
And I'm also trying to get a feel for how you came out of the quarter ended June because obviously April and they were more more very bad, but I don't know piece, so I mean.
Green shoots and eating in June on our last conference call.
[noise] when I.
Ask about different catalysts to look out you are two to look out for for growth or that you guided to different catalyst to look out for growth.
You mentioned, a few items and in oil and gas prices are trending back up to $40 a barrel.
Some claims and going back in the air, albeit the.
737 Tonight.
Next is not up there.
Yeah, the Boeing's even announced.
Plans for [noise].
Some production I think green statement.
And mobile jobbers, you're starting calling on garage is again, so did you experience or see any green shoots starting in June or are you seeing them and are you partial seeing them now or more follow through going into August.
Well.
The short answer is we did not see any of us in June.
Correct.
And we did see.
We've seen and continue to see but I, but I don't want to overly episodes that we've seen a little bit of you know a breathing room and you know a little more activity from our you know from our general.
Customer base, having said that $42 per barrel oil price.
For the crude is no in there.
What it needs to be <unk>, but it would be drilling if you look at the I believe Baker Hughes recount.
Mhm pretty fast.
The rig count is basically.
The minimus, it's like nothing different than it's been we went back and we look we haven't seen this low rig count since we stop looking at 1968 that'd be stopped coming back from from today, all the way back in 96, there hasn't been anywhere near this kind of.
Drilling.
People just simply in America on our drilling because.
The pricing so if not there we've been told we're not experts in the oil field production for making tool to the oilfield, but we've been told that oil would have to be in the mid fiftys wouldn't even be breathing.
Not to be robust, but just good gets started again when people do it.
So mid 50, so we're we're far off those numbers. Unfortunately, having said that well you know there is.
Sorry.
But never mind okay.
Having said that there is a little bit of activity.
In the two reversing a little activity and I said little little activity in that in that area as for.
Aerospace Boeing is.
Virtually nonexistent.
We are still waiting.
With him to be approved by the essay for the 737, they have they passed over the past, but they still have more things to do and there hasn't happened.
They say that.
They said that they were going to be making don't hold me to the exact number but.
Twentys, you know, maybe 20 month or something along those lines, where they would make order objective.
<unk>.
I want to be four times not amount before this.
And and that we've been getting sporadic and I mean sporadic order from Boeing but not from Washington State, which is the big place.
Getting sporadic orders from.
Other places, even even Europe, but nothing.
Nothing that any consequence of is there's been no activity and they're not picking visitors and <unk> Bill.
So there's just nothing going on there it's amazing to off.
The government hasn't really stepped in there because it keeps saying how important Boeing is the economy and I'm in the country and they haven't been anything to be proactive about it so that companies do floundering dramatically horribly.
As for mobile Jobbers, I don't I don't maybe Jochen give some color when that we aren't we are finding aircat to be fairly robust in a relative sense, I mean compared to where we bought a couple of months ago.
We have found a our retail business to be also fairly robust compared to where it was but it's it's been for the live.
Six weeks or something Tonight to you know since since since the mid year.
So you know we're cautiously optimistic that you know the starting heading the right direction, but you know nothing nothing they get Crazy Im excited about George you want to Anthony this.
Oh, the only thing I would add is that on the the automotive side.
People aren't buying new cars right now.
So they're repairing old ones.
And you know once these shops what open.
People didn't have to bring the car then.
So that work continues.
And you know people new daughter their tools.
Right and then with respect to be recently acquired do business.
When he intergraded it in.
And you said, there's obviously, some maybe disruption and that things would then ramp up are you experiencing that kind of ramp up on the order volumes and.
Are those or are those at a.
Depressed levels, because independent Nick as well see news gears. This custom work that you guys do.
Might actually be greater demand during this time.
Yeah again, the short answer is yes, we're doing all the orbis setting up and.
Moving it and getting them glitches out and you know getting an oil going on or new factory and punxsutawney, that's well behind US first half really you know at the beginning of the second quarter country behind us So and we've been really our athletically decided it in the Q.
Or perhaps even might come I put it in my first it was one of them. We said that that we are at the levels that are booming book of business three pandemic levels, Upsells and and if we could get out if we were admitted into some customers are we've had a we would be would we have here.
Confident we will be would be getting a lot of business, but unfortunately, but not letting us in so we're getting enough business to keep the keep to the level that we were pretty pandemic, but we feel like we can go much more said as we can get out and see people.
We broke them, but the you know if an engineered product and you see things and so we get some business, but not as much as we would get if we were able to get out there and we're hoping to get out there very very quickly Joe you want to head on.
Yeah, I was just add that it's an engineered sale and in many cases, you need to work with another engineer on exactly what you're trying to accomplish and well some of that can be done over the phone and the internet.
It's a lot easier in person and certainly we've been trying to.
Grow the business and work with people you've never worked with before.
It's really difficult to do without a face to face meeting and some of our key.
Target.
Our customers.
Lots of locations, just frankly, our readiness even happen visit.
So.
Until that changes, we're probably stuck at the sales level.
Which frankly I'm.
Not disappoint, you know considering where the world with them and you know what kind of flat from what we bought.
So what have we I mean, and we think the prognosis in that area is.
Very very promising when when the real gets a different kind of assemblon water.
Okay and.
And when you said things on the retail side have been holding up.
Are you, referring when you use a phrase retail that includes or is a home depot.
Home depot.
Okay.
It appears from the publish balance sheet in your press release.
The maybe some of the P.P.P. loan was reclassified as a current liability and if so can you explain is just do the head count reduction or some other factor.
Joe.
Sure we're gonna be we're going to be as soon as we're able to in October I know juggling spin up as soon as we're able to in October hopefully because you know the the loan forgiveness, we will be doing we intend to do that sort of the do it we don't we expected to be no issues at all but giovanna too.
Brooklyn, Yeah here sort of that I can't fix Andrew since we are not certain that the loan would be forgiven.
While the documentation right now.
State that the two year alone.
No no interest until one seven.
The so you basically developed and amortization schedule beginning in lung seven to pay alone down over eight the full amount alone down over 18 months.
And.
The principal payments that are made between the date of the filing and the next 12 months is considered short term and the remainder would be bought Carmax just how it is so that number will move obviously.
So you're building that amortisation of principal because of gap or because the the loan term itself doesn't require repayment.
Until year two.
No no you're you're required you're required to start paying it down over an 18 month period. It is not that does not all due at the end of 24 months, it's not about Oh, it's not a bullet okay.
It starts amortizing and send them or whatever eight that's like a more get amortized like a mortgage yeah all right.
And so then I understand why that would be the case, because you definitely have to assume you're it's not forgive them until it is when you're choosing to seeker forgiveness are you planning to use the eight week period, and and and if so have you submitted your forgiveness application yet or are you planning to use the 24 week measurement.
Oh.
So we're we're using the 20 poorly massive so we won't be seeking Caribbean. This until sometime after the end to walk you know towards the end of October.
Okay got it and based on the fact that your facilities are.
Oh were essential businesses and kept open.
And and double to reduced revenue stream et cetera.
Have you had to do some headcount reduction and some of.
The forgiveness might not come in or have you been able to maintain your.
Head count sufficiently that you expect at this point full forgiveness.
We had we had in Europe right Hadley I'll, let your general you can say, but we had layoffs.
After after the.
The PPP was used up.
We've had that Joe I wanted to get Pixelworks.
Yeah, we.
We we had no choice, but to lay off about 15% of the workforce nationally.
Sometime in June and a few more people going after that.
We just.
Mathematically given how the calculation was done we were no we're not better off by keeping them.
And also what we were finding was that.
Having people around and being and efficient was actually causing the people that neither do work the inefficient and it's kind of it's just one of those spring things about manufacturing. So we felt it was in the best interest to the company to Charles.
Have a reduction in force and try to be assist in addition, as we could having said all that.
Our preliminary estimate is that the vast majority of alone will be forget it.
Right and if you do use the 24 week period, I think dues, a window or an opportunity. If there are if you are if you get the opportunity to ramp up in rehired that you might even be able to expand that.
Ah, Yes that is true if we're able to if things turned around the four.
I think its October 26, there. So I think that's 24, we could if were able to bring back some people before that that would actually improve our.
For goodness.
Right, that's why they amended the legislation to create the 24 week period were what makes it basically for hospitality restaurants other types where.
You know they didn't have any you know a staff at all no reason to have staff for you guys did but still I'd make cuts, okay and you get out its about Andrea that it is I mean, we'd have to be the honestly I mean, what this and say we don't really have a crystal ball nobody in the country and rural does because we don't know how.
How the government you don't have never got good as the Fortunately, we only give you our own our own you know intelligence on this but we don't have any clue how is gonna be treated a handled and everything else from.
There's just so you know caveat in that regard.
Yeah.
No him as a result of this oh.
Circumstance in that there's going to be a new normal.
Have you step back or alternatively come up and pivoted or your focus on.
New products as a result of.
The co good.
You know.
Situation, then it's potentially prolonged existing so you know the way people will.
Adapt you know that probably is going to be different no way of.
Doing things in lots of circumstances as a result of this pandemic experience.
The new product opportunities or shifts that you have.
Implemented or proceed doing.
In may and the Q there was actually the section that we discussed that our engineering projects are still going on full steam ahead, I'm actually what's the poor accurately.
I don't know if it's related to sort of deposit I think it's related to the fact that we're you know just doing things to it you know engineering and create new products and we discussed that.
And and the Roggow, they're they're all things in there will be more things coming on in that regard.
Specifics, Joe maybe you can give him if you can answer that.
You know either I don't know that it changed anything dramatically I think it may have just accelerated kind of good direction Youre are heading in and we're certainly looking at development with an eye towards will what.
What things may change, what sorts of opportunities for tool sales exist.
In the post covert economy war or.
Possibly with some sort of.
You know stimulus on infrastructure projects things like that so.
Well how people buying cycles.
So.
No, there's nothing really new but I think it sort of moved us.
Ill provide an accelerant to clear they move a little faster than some of those projects to take full advantage when things been sent around.
Right right I have other questions, let me back out and give others a chance and are please god I believe if anybody off for the Q, Andrew but ER. Okay. You can back I'll go back in if you like.
I don't know, how you're going to I, just got downloadable yet.
There's nobody else you can tell people moved to suddenly more or less.
Let me know and I'll always take of I'll take a very good guy.
Okay. So on the last call you said the majority of the blasting gear products integration was accomplished in Q1, but that there were some small things to complete here in Q2. This would that just occurred.
What would you estimate or where the redundant or extra costs incurred during Q2 that we're in this quarter and can we expect Q3 operating results.
In the Blackman gear products area to kind of fully reflect the integration and cost.
At a level, we should expect going forward.
Yes, the answer the answer is yes, as I said earlier.
It's behind us, but the sitting in a bold I've got the only the only caveat is or what sells if you're going to be getting without being able to see customers. It off and we expect we expect things to stay at the level, they're out right now, but we will see growth. Once we can go out there Joe when it opened up.
I would say Andrew that.
But the few things that were left in Q2, I ended up being a little more challenging than than we thought and I fully expect.
Q3.
If you show better results profits on me.
I see too I think it'd be oh.
Hello.
Loan growth.
Here.
You bet, you kind of cut up there Japan on styles I'll say it again I fully expect it seems.
[noise] cut out again.
Yeah, you keep any now.
Okay.
Well, what I, what I was.
Trying to get at it was if there was an estimate, especially since you said it was a little more challenging than Q2, you thought it would be would be lucky guesstimate ward, who have done winter extra costs that were incurred in Q2.
That would at least a tailwind to profitability in Q3, assuming.
You mean revenue streams are at the same.
Yeah.
That is right that isn't that is it fair statement.
Assisting the Q2 was you had a few things in there that we didn't expect nothing consequential, but some things in there right Q3, we don't see anything like that.
Right and I'm, just trying to get an estimated enough hundred thousand 200000, what kinda size was it during Q2, it would be better to give you that they can get to pick I understand.
I think I mean, I can't give me an exact figure handy, but certainly its six figure number of savings we would see in Q3 over Q2.
So you know that big enough to notice.
And are taking into account the cost of capital and contingent purchase consideration.
Did you say this acquisition is now accretive to earnings are ready or are they not yet.
Jeremy.
I mean, certainly on a go forward basis, it's a clean and.
Yeah, It's I guess he answers yet you having said if there's a that payback involved in our investment, but it's throwing off cash flow.
Okay, definitely becoming accretive in the third quarter.
And can you remind me or ask listeners here about the contingent purchase consideration and you know when when does that testing that takes place and.
Payment I think it's a payment that would be do.
Yeah first it's a it's a pretty immaterial number we look at it every quarter I mean, it is a very small fraction of the upfront purchase price. So I'm not I don't think could be material, even if it would all paying and in one shot.
It wouldn't be at material and you're talking about something you'd be paid over 24 month. So I I don't even think you're gonna see it's not even going to be worth talking about it too small do you look do you accrue for it. So it's it's little miniscule build up or yeah. The way it caught.
The way we're required to do it.
Is that the App at closing, we actually do a projection of what we expected to be in to actually in.
It's actually in the purchase price kind of buried in there and then Oh, we do is try to we tweak that every quarter. If we feel we need to so it's already in there.
Sorry baked in.
The only way that you would see additional personnel expense would be at who we underestimated and.
I'm also in the other direction if we.
Significantly overestimated did have a small pickup but again, it's not even we're not even talking about 100000 dollar opportunity here.
A couple of years and <unk> and even if I was off 10% or 20% just wouldn't see it.
Yes, what.
Right.
No I mean I'm Oh prior calls you guys spoke of many of your tools.
Being used by Boeing on more than just the sort of in 37, Max but on other platforms and while they have greatly reduced.
Yeah and production.
Case, they haven't completely shuttered.
And so as they use tools things break they were down they get lost et cetera.
You know they had the tools inventory meant to inventory gets you know eventually drain down and they were certainly I'm working on working capital as best they can't in that.
And as that's a headwind that you and other suppliers phase.
Do you have any visibility into and good feel for you know, we'll just called at some point stabilization level of orders from Boeing or or you're going to NIM business around them at all.
Yeah.
We probably get orders in normal times.
We would get orders from a dozen going facilities something like that.
Like the off by a few but it certainly more than a couple.
I would say and this is an estimate.
60, 70% come from one facility or one very closely.
Good set of facilities up and renting.
Washington, which is just outside of Seattle.
We are getting tool orders from everywhere else.
Even some of the Washington State area, South Carolina, California, I don't know all the Boeing because I can't really all that.
So we do get central worse, but.
Call it 70% of the infrastructure off off offline.
So.
And that's you know millions of dollars of sales.
Our really kind of it crown to halt.
So and we don't have any more knowledge than we do about one we might start getting those orders again.
Right. So in other words, the you know who just followed.
When they choose to do with rent and.
Could be an indicator or UBS.
A tailwind or something good for PNM yeah.
Yes, you write it down even paper it if you read in the newspaper that renting was back up to making 50 claims the day.
[laughter], absolutely a leading indicator Abbas Abbas sale for going without a question if that if somebody pad in six months, we're going to be a 50 claims today you can absolutely count on that having a significant impact on all that.
Well, even if they said it all anyway, even if they said 10 times a day, that's something yeah. I mean 10 would have not I take anything right now, but right now it right because that I'd zero.
Yeah, I mean, I don't think they get a light switch and all this and go to 50 anyway. So yeah of course.
It'll be a ramp up I'm on last quarter's call. You said you introduced a fascinating tool set a new fastening system for military aircraft and we're just starting to get a little momentum.
When things we've got put on hold did the order book at all open up military.
Aircraft in this program in India, better visibility now as to when that might happen.
Oh, we have orders, we've gotten orders for those tools, but.
Where.
We're not going along as nearly as quickly as we would be if he engineers and production staff and.
Procurement people were in the office in the building so just not their full time and it gets a.
You know these orders require sort of a team of people to be involved.
And someday somewhere in the building others are others haven't coming back until you know for months, it's very difficult.
He did any real momentum, but we absolutely have gotten some initial orders or that her that tool.
So the tools and stuff.
Okay.
And.
Similarly, while things are slow and all that but on a few of the pre coded calls you spoke of concrete initiatives that we're beginning to marry up Florida pneumatic Chipping in high Tech resources to go after the aerospace market in a bigger way, but with long lead.
Times and in this field, which can be several quarters to you know a few years before you saw the results.
Does any of that.
All moved forward either in the background at PNM or in the background without physical visits taking place between you and your customers.
I would say I would say to answer to that as no.
Gentlemen, I know.
Yeah, I would agree and your that its ground overhaul right.
And similarly, a couple of large aerospace customers that you're working on some of the R&D in connection with there 'cause potential accounts.
And you saw for example, same story with any metrics we can.
Fortunately, there not or not I mean, Airbus is starting to open up from Europe.
Start over there and we've been we've been there actually im talking but you know in America.
Speak speaking of Europe, you said progress was developing for Aircat.
In addition to aerospace tools and distribution opportunities in Europe, and I are these efforts back on track with the European economy open before hours, if you're running this you know the starting to get back back on track, but you know you're starting from a debt holders.
So dozens of different flick, a switch or it just goes on but but that's the question is yes, but it's absolutely getting started there in Europe Europe is doing much much better than America as you know.
Right.
Now you've referred a few times to the 10-Q and I've asked in the past. Unfortunately still the cases your 10-Q comes out after this call. So you don't have the benefit of the.
The the 10-Q and in some of the numbers in there and in this instance, yeah. You didn't have the scrip are there some depreciation and amortization numbers that you normally see scrip Joe that.
Did not make it into the press release that you could share or are they all in the press release that we can dig out we when we <unk>, what we chose to do Andrew and hopefully it may again, there is that while we dispense with the script that had a few numbers and then we tell.
Act on the cash flow statement.
So the back of the press release, so the things that I would normally discounts are there in faster way way more detail than I ever talked about.
So all right I love them real Dan and I would also stated that a good deal of.
The management discussion and analysis that ends up in the queue is discussed in the press release, So really do have a lot of the data from the Q here. In fact, I think you have on a relative basis, what you really need I don't know that this much the merchant any consequence that do that you're missing obviously, it's not a full time.
Q.
But I think you know the bulk of what you needed there what is yeah and we all had its a number that you don't really get onto ours with it.
It's in a really well for sure okay. Good well, we'll look to it we only had brining a few hours with it the for the call began and so that's.
It is whether there's.
But I don't think the press release makes mention of the current shares outstanding number or does it and even if the one used for EPS calculations all the habits on March 10, two to go off of is there any other meaningful change in the current outstanding number.
Well I don't have it in front of me, but I would have to say I cannot give reason why there would be a meaningful change obviously nothing that I can think of.
Okay.
And in what ways to use this on the afforded them at the retail side and what ways to your visibility of home depot sell throughs stocking.
They really I mean.
They really don't give as much visibility.
At all but ER.
Joe do you can you I mean do can you say, they're more likely to it I think we have done well I'm Andrew we hear a question like its home depot stock Gallery Overstock, what's what are you trying to get at I and to the extent. They Ah you have some visibility than I'd, probably have a few more questions to the extent during the day.
Markets a negative in a risk I mean, I guess it wouldn't have any job why don't you asked why did you asking a question and maybe I can answer it I'll do my best.
So you had a newly refreshed product line and I I can't recall, if it was.
Pre codes that are not if you started to experience the reorders because remember in the initially took it in the took just you know big big batch in and it was awhile or a slow period initially even though you understood the products were selling.
They weren't necessarily having to reorder because they had their initial stocking and then kind of cold it kicked in and so I'm just kind of wondering.
What the take rate was from that newly refreshed product line is have you would have you experienced the new orders et cetera.
And how was it fairing against the other home depot labels.
That would be an offer that they've got to different price points, yeah that out but that doesn't submission. We would really have but let me remind you answered that the would there be held the line review the line Refreshers. Your growth was done in 2018 or the into 2018 or 29 thing. So it was way before corporate so we have.
Today, we had the whole year of 19.
With the new line.
And I'm sure that we discussed at one of the almost accruals.
That they that at home depot or made a decision at that time to bring some named products into there their product offering. So we expect to be expected and in fact, we did have a reduction in our business slightly not not.
Well, maybe from a little meaningful.
It's definitely something figures.
Have you know a drop in our earnings on their sales because they go to it over things.
I'm not as last year that right that was last year and Ah. Yes. This year I guess, we're better off really I don't we wouldn't know anything.
Earlier this year.
Though we've had though we've had.
In one particular thing Sprague on.
We will we were having a very big order flow to them from from home depot for that.
Much more than we anticipated.
I guess people using a different me talking and I don't have enough from what we're talking about but I guess, but using spray going for like spree.
Cleaning pure cleaning materials and stuff like that sort of being used for orphan. It uses them. When you know what it was actually intended for for us and the automotive area.
<unk>.
Yeah, well you know teaches own the you know evaluate maybe some marketing and whatever some follow through on a new areas you don't even bumps the sales even further.
Right, but we haven't had any input this year from them.
As to what's going on this year based on their extirpated.
Expectations.
Yes.
And finally, they like operator.
There are there any other questions and then not doesn't it will continue with you.
Sure I was just touch on mine the audience that that they would like to ask a question to just thinking about pressing style why on a tough on keetac. After I guess, they're using a speaker phone to make sure I didn't meet function is trying to talk to other statements which Eric.
I think as of now there's no others right.
No that's not right now fans or anything like it is continuing.
I only actually have a few more on this.
In.
Uh huh.
And in light of the economic challenges everyone is having.
And the companies.
Relative to maybe no debt levels in a period of time when.
Debt costs are.
Interest rates are so low.
And.
Especially when you see.
Substantial forgiveness on the PPP loan.
Where do you stand in your.
Time allocation after its focus.
Synergistic acquisitions.
And is is that something that's on your plate is that something you would begin to see although you guys really aren't.
Historically.
Hi is a distressed assets when you've done that that's actually not worked out too well that really like from your family businesses.
Where the founder is nearly not having a good morning succession and wants to sell out I have to believe in this very challenging coated time.
They're going to be plenty of people, who went into kind of packaging and and and stop the slot in retire our you've seen that yet and are you even spending time and resources looking at that are you spending more time and resources and HQ looking at cost cuts.
'cause it sound doing that on hands are tied on the marketing for the month, Yeah, we're doing but we're doing both but were but we would have been because just talking about it for the last month or so that the there has to be opportunities of companies, who you know are breathing very heavy and may be much more in a place to advance going to the other things.
You know selling of their business or whatever else and where we're starting to look into that much more carefully but do not at this point we would just.
We still are.
Struggling to try to write the business.
Created in our own world trying to make things be proactive and make it better but to answer. Your question is yes. We were at that point now we're looking right at the right distressed companies not or Forte, and we're not going to go down that road, but you know other kind of company, if you're a little but she company to fit into our into our business like like.
With your business and other business good will be will be focused.
Right now, it's certainly not the right time and there you know until.
Do you see some of the unique.
Headwind stripping out to.
That or are you need to use such as you know the 737 et cetera.
But when this thing skirts.
Bouncing back and homing you know you you've now experienced another.
Economic recession of great.
Yep.
Okay any thoughts on your end about what your views on the exit because the end of the day.
PNNT is a small little niche business as well.
[music].
I don't really know within what you're asking if you know what's the question yeah, well I guess the question is are you having any thoughts down the road upon the recovery of the because.
Saying you know you've had enough from this as well or these cycles.
Just like the founders and other executives you know.
Yeah, I really don't really you know after I know I know you know, there's nobody really couldn't comment on that even if we if we even if we did.
But you know I guess anything is possible as time goes on you know.
Oh, no maybe you can have a discussion over dinner at some point Uh huh that'd be fine.
But before that when we often see it's when we all can see each other again, yeah [laughter] because of a virtual did or would it be front burner.
I guess, so I have no further questions. Thank you and then Nike free upon each other.
I think if you're talking today.
Operator or any other questions.
Yes, we do have another question. We can go ahead and take our next question Tom that's okay. Her steel.
Right right or any please go ahead China.
Yeah, I'm just sitting here in the bleachers listened to the heavy hitters here and I am a stockholder.
I tried to buy the stock for the last so many months, but there's no volume in stock I noticed that and then do them quarterly results.
But when this conversation that you guys. They haven't you own over 50% of the company. So the liquidity is horrible just use kind of getting stock I think the company has tremendous potential but let me just give you. One example, what I'm trying to figure out.
The ex cat.
Three H threeeight.
Well at home depot itself.
Hi Tech at 19 home depots to get it.
No one had the early she could get it was two weeks out.
And with the other two things got tools thinking I'm tightens I see on this I guess it.
Can I interrupt for a second we don't sell any aircat tools that home themselves right. We don't sell it has had a aircat is available through distribution or on Amazon Amazon.
Yeah, we don't sell me I kinda doesn't equal we hit us.
I'm sorry, there should be it can't at home depot isn't yards.
I remember there right. If there was an air cat air tool available to sell at home depot.
I can't even shot pages of at this stage like when I'm looking at right now at Throwaway depot height.
Yeah, three ace I took hammer impact Europe and.
I don't know how to put out there that's why I O S E T New York.
It says I am.
Yeah, we delivered not aware of any aircat at home depot at all.
Okay. This is able to buy all devoted area.
The loaded I would be very curious to see that website.
But let's let's check in Tennessee.
Yeah, I get home depot <unk>, how this let me ask this question is at home depot online with it if it yeah.
It's clearly ideas on it it's on their website, but no I don't know I caught the by the deal I said, you know what I'm trying to figure something out here I kept by the stock is there's nothing there. They got great equipment, great tools, you can't get the tools that probably wasn't listen.
I'm a contract I want this drill.
I got away two weeks to get the drill centene.
You know I've enjoyed the your attitude that if it so what does it.
They go back after they sell it get it the limits will they get them I'd be don't I really don't know well have to go out the check into that but we feel a cup tournament.
Two distribution, that's that's well if you want there to get there to get next day really but looks like it shouldn't have any trouble getting an air CAD pull on the other one.
Okay. So I guess, if home depot advertising product without getting dollar how could that happen.
Yeah.
I don't know the answer that I don't know because there's no it's not only that one piece.
They get pages of them everything the same sex and take all of this isn't a contract I figure two weeks for a drill I want to drill that's the best we can do.
So what happens it seems like it seems a little crazy.
I'm going to Amazon if you wanted to go to Amazon.
Okay, I like I do agree if somebody so my body I want some money out of it I want to know what's going on so held people selling your product you don't know this selling it and it's like there's no one farmingdale fantastic, they're not they're not getting it from us, but we'll again because we can't talk about a five times of cookie passenger okay, well I don't want to be talking about how you know what are we talking about is the five times.
Imagine gets washed along the way to the end product. So for instance, whats I went let's say I go to home depot and to get that drill he gets the information on the warranty.
Well you submit a warranty card we would get that that that information. So you would kind of how do you have the and use of every single product. So when you say well not hold on let me let me when fully answered the question if someone submits a warranty card that information ends up at Florida pneumatic.
If someone chooses not to submit a warranty card, we don't know who that customer is.
In Jan would you had that rough percentages on many people do put warranty got.
Hi, I mean.
It's funny I asked that same question of one of our.
People the other day, it's not a large percentage I I'd be guessing I'm going to say, 10%.
Well, it's like Mr. Lambert used to say, we'll see is whoever controls to get you will control everything so it wasn't knows who bought my ear cat.
And I want people to take a have thought of down the road no big deal.
Yeah, you might think is a contract that goes to buy it they couldn't get I was shocked I look at night I called Nike them. They are another quick question over that time, so we're going to call.
The P.P. from.
Yeah, the Queen with.
With your dollar figure than that.
Yes, the TPP loan is 10 million 900 boot keenly 900.
Yes, I wonder, how many hours or something like that you called out front little over 2.1 million barrels. The U.S., we got I understood I saw that U.S., one I'm talking about the one.
Great Britain.
Oh, there's no pp burn in Great Britain.
We list it's up on.
Released when you're in there that is $35 UK.
Yes.
So just to be 30005, which.
$30000 when you've got.
Hey, good to be clear, that's not alone UK government provided many small companies a.
A certain amount of money that did not have been repaid. So I don't know what did you want to call it.
I forget one like just like I agree I.
It was a great. It was a gram yeah 30 that okay. So yeah. No I was just doing the equipment, but you know 29 24, you got three from the gotten too you know you actually did very well all things considered and when I see the availability of the tools and everything else. They say you know what.
I kinda by the stock is this is I know, it's not something you're going to answer would be but it's crazy there's absolutely no liquidity at all in the stock and you know I've been trying for ever to buy it and it's just.
You got to buy what do you know.
25, she is 50 she is like.
You know I know, it's really crazy, but and then the last thing is.
When do they meet again its though.
I think the dividend.
When do we meet again to discuss with dividends with it and the board of directors that the question I'm sorry, Yeah remote support and then after that it can actually when do you need again to talk about again, there's nothing in the pipeline Yeah, I would I wouldn't read we talk about it at every board meeting and we and we reviewed every quarter, but there's nothing to report on it hasn't now when there is certainly.
When they had something to report we will.
Again, I don't have a crystal ball if you can tell I guess when the country going to get back to normal we can give you a better answer.
Well I you know I don't know when it comes back to normal, but I know this if you know fracking didnt exist 20 years ago. So what are the tools that used to different things right now they have to be applied to some of the industry to whether sales person could find that industry I don't know, but there's definitely other usage uses for the tools Michael thing as you can discuss everything people in the face in heavily.
Regulation the bottom line is.
There's no stock the buying a company so my feeling is.
I see that should be a private company Oh I don't I don't think it's just when you do nothing there.
Okay, but today, Joe problem, we've had for quite a while you're making it or whatever.
It is at Agios government econ.
Problem, but if I would if I was upset like a negative stand like could you just companies terrible they'll do this down to that.
It's the opposite.
I think the companies. It is a good company I think it's tremendously and there's no stock to buy it looks like.
Not yet, but that's what the any help you know extra involved I mean, there are people, who buy stocks Gander I kept the beta with you but are there I mean are probably people who by the stock has accumulated they tell us what Richard on budget. If I went out the buying 5000 shares have to I calculate is not part of our I'm sorry, Tom This is not really even part from focal I can't.
Ladies and possibly speculate on can I ask my last question.
If there was no stock and no price there'd be no phone calls.
You wouldn't have the leader he would have always thing everybody is interested in the spot price. That's all we're interested in and I just didn't you make more money, Joe makes my anything which the stock price.
If the stock prices depleted and there's no no liquidity, it's like okay.
Like you know you might the February.
Great and a chip 10000, she has one month, but anyway.
There's no remedy I understand that's either by it I mean to sell it shut up well want or what.
Okay.
All right.
In fact, if you're on top.
And it gets there no further questions at this time.
Okay. Thank you. Thank you will have a good day, everybody and stay safe and well it will be back to you I would have third quarter results when they are.
Provision that either.
Sure.
This concludes today's call. Thank you for your participation you may now disconnect.
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