Q4 2020 CPS Technologies Corp Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the Cps Technologies Corp year end Investor Conference call. At this time, all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question during the session you will.
Meet the press star one on the telephone.
The require any further assistance. Please press star then zero on your telephone.
Be advised the today's conference is being recorded.
And the like to hand, the conference over to your Speaker today Jack Griffin. Thank you. Please go ahead.
Thank you operator, and good afternoon, everyone I'm joined today by Grant Bennett, our president and CEO and Michael Mccormack, our Chief operating officer.
Before we begin the business portion of the call I would like to point out to all of you that statements. In this conference call that are not strictly historical are forward looking statements within the private Securities Litigation Reform Act of $19 95, and should be considered of subject to the many uncertainties that exist in Cps <unk> operations and environment. These.
Uncertainties include the impact of COVID-19, economic conditions market demands and competitive factors such factors could cause actual results to differ materially from those in any forward looking statements now ill turn the call over to grant to offer his perspectives on the annual and fourth quarter results. Thank you.
Chuck.
First Chuck and I are delighted to be joined today by Michael Mccormack, Our new Chief operating Officer, Michael began on January 4th after relocating from Florida.
As I mentioned in our press release, when he joined US Michael brings deep skills in business development, the new product expansion and the M&A and has significant experience in the defense aerospace and the armor markets. He also brings energy focus and drive.
Eight weeks.
And the working together I can authoritatively say that he is delightful to work with.
We'll hear from Michael later in the call, but say Hello, Michael Hello, everyone. Thank you Chad and thank you grant.
Great great.
Today, we announced revenues of $20 9 million and an operating profit of $914000 for the year ended December 26 2020. This.
This compares with revenues of $21 5 million and an operating loss of 597000 for the previous year.
For the quarter.
The fourth quarter of 2020 revenues were $4 2 million with an operating loss of 291000. This compares with the same period, a year ago, where revenues were $5 4 million and an operating profit of 367000.
As.
I indicated in the press release 2020, it was unique in <unk>.
So many ways as all of us understand professionally and personally.
As the year progressed customer demand for our existing larger volume products, primarily based plates going into traction.
Transportation applications.
Declined and in fact, they declined sequentially each quarter during the year because of COVID-19.
As the country's locked down due to COVID-19.
Incidentally I should say the.
Yeah.
About 50% of our revenues come from for.
From Europe, and as countries Lockdown due to Covid train ridership decline delivery schedules for new trains were pushed into the future and demand for power modules declined accordingly.
In addition, some of our customers.
As COVID-19 evolved expected problems in the supply chain, including in the international transportation and the increase their safety stock of inventory in the first half of 2020 when.
When demand declined they found themselves with excess inventory, we have been producing at a rate lower than our customers had been consuming product during the second half of 2020 as those customers have been drawing down their excess inventory.
That's the negative news on.
On the other hand, the positive news is that <unk>.
Demand increased for other products, particularly aerospace applications.
And the customers largely held two development schedules for new products as a result, new products continued to move through our pipeline.
With the travel all but eliminated we redeployed resources to accelerate internal continuous improvement improvement projects to increase margins.
We implemented a planned price increases the net result of these factors of the negative and positive.
For the year of two 8% decline in revenues, but a positive swing of $1 $5 million in operating profit or on a percentage basis at 253% increase.
Globally.
<unk> continues to be highly disruptive.
And cause uncertainty in forecasting.
However.
We know our customers have reduced some of their excess inventories.
And as we take of all available information into consideration, including their updated forecasts.
Inventory levels.
In manufacturing schedules, we believe the fourth quarter.
Likely represented the bottom in terms of the demand.
I'll discuss.
Bigger picture after Chuck reviews, the financial results in detail.
However, before handing the.
Of the microphone over to Chuck Let me just note one or two recent developments in addition to Michael Mccormack survival.
I note our order for hyper Tech armor panels for crew served weapon stations on aircraft carriers, we expect to begin shipping these panels towards the end of the second quarter of this year.
The third quarter will be our first full quarter of production of these panels the long lead time.
The ceramic tiles that are a component in the panels.
We congratulate NASA and the jet propulsion laboratory the remarkable successful landing of the Mars Rover perseverance.
We're delighted to be.
A participant in that program.
We produced for the JPL.
Our SEC Hermetic housing, which houses and protects the power supply for the Sherlock scientific instrument on the Rover.
Sherlock is an acronym for scanning habitable environments with Raymond and luminescence for organics and chemicals, It's a deep UV spectrometer, which is at the heart of the Rover submission.
Needless to say reliability.
Of the power supply in harsh environment is key and that's certainly what we provide.
Just more broadly.
We've commented several times that we.
We've had a concerted effort to strengthen our sales marketing and business development efforts in the U S Aerospace and defense Electronics industries.
The.
Our revenues.
Our approximately 70% of our revenues are exports and we're delighted at that.
We're truly a worldwide supplier, but we see tremendous opportunities in our own backyard and they've been focusing in the U S Aerospace and defense electronics industries.
The the results of this activity has been very meaningful in terms of new design wins, new bookings new customers and new.
Products.
Chuck Let me now turn.
The time to you to discuss the financial results in more detail. Thank you grant.
So revenues for the quarter totaled $4 2 million, representing a 22% decrease compared to the $5 4 million in Q4 last year as grant mentioned this was primarily due to the reduced shipments of our output of.
Products for the year revenue was $20 9 million compared to $21 5 million for 2019 of 3% decrease.
Margin for the quarter amounted to 12% of sales compared to 18% of sales from the fourth quarter last year. We finished the year with an annual gross margin of 20% compared to a margin of 12% in 2019, the largest factor affecting this percentage was the new contracts with our three largest customers, which we.
We've discussed in the past.
Selling general of the general and administrative costs totaled $3.2 million compared to last year's $3 1 million. This increase was predominantly due to increased payroll costs from 2020 compared to 2019.
The company incurred an operating loss for the quarter of 291000, which compared to an operating profit in Q4 2019 of 369000 for the year 2020, we generated an operating profit of 914000 compared to an operating loss of 597000 in 2019.
Turning to the balance sheet, we're happy to report that we ended the quarter with $195000 of cash and $0 of borrowing against our line of credit.
It gives us a net cash number of 195000 is the significant improvement over our cash position at the end of Q3, when net cash was of minus 722000 and a further improvement from the beginning of the year with net cash was minus $1 1 million.
Accounts receivable at December 26, 2020 totaled $2 9 million compared with $4 1 million at December 28, 2019, our days sales outstanding totaled 62 days at the end of the year compared with 68 days for the year end of 2019. Several factors contributed to this reduction not the lead.
<unk> of which was the negotiation of better payment terms with one of our larger customers.
Inventories totaled $3 7 million at December 26, 2020, compared with $3 1 million at December 28 2019 the.
Inventory turnover in the most recent for quarters was four five times compared to six two times for the for quarters ended December 28 2019.
This decrease in terms of directly related to the decrease in purchases from our largest customers as we previously discussed.
Inventory was reduced from $4 1 million at the end of the third quarter.
And we expect to continue this trend over the next few months.
Turning to the liability side, you'll see the zero dollars drawn on our line of credit.
Payables and accruals totaled $1 7 million at December 26, 2020 down from $2 3 million at December 28, 2019.
You'll also see the inclusion of the note payable not on last year's or not in last year's liabilities. This is due to the financing of new equipment in the first and third quarters of this past year.
Lastly, I'd like to point out the significant improvement in our current ratio over the course of 2020, we started the year with a respectable 2.0 ratio, but finished the year at three eight.
And so for further discussion, let me turn the call back over to grant.
Thank you Chuck.
As this is our first quarterly call of the new year I thought it might be helpful to provide a higher level look at who we are and why management is very excited about the future of Cps.
Let me comment on three topics essential to understanding our business.
Our core competency of our product pipeline and our primary markets.
Our core competency is our technology for combining metals and ceramics to form metal matrix composites. This competency includes the intellectual property the novel process technology developed at Cps.
And very importantly, it includes the design manufacturing and quality capabilities to produce real products to customer specifications ship. These products on time and do so with attractive margins.
In short it's the IP is both the intellectual.
Of the IP is the is the the core of understanding of the chemistry and the process. It's also the understanding of the execution translating that chemistry and processes.
Into real products.
<unk>.
The combining metals ceramics for.
From this category of materials called metal of matrix composites, where metal is the continuous matrix and ceramic is the reinforcement today, our primary metal matrix composite material is combination of the metal of aluminum the ceramic silicon carbide known by its chemical symbol al sick.
Our product pipeline.
Metal matrix composites have properties.
Provide compelling performance benefits in certain applications for example in the high voltage power module area using an al sick base plate rather than of copper baseplate can increase the lifetime of the module by 10 times.
By eliminating the mechanical stresses associated with differential coefficient of thermal expansion.
Yes.
In the space applications using analysis housing or package can provide a $50 to 75% reduction in weight and vehicle armor applications in metal matrix composite armor panel can provide much longer life in harsh environments and for a given weight.
Better ballistic protection.
However, the benefits of metal matrix composites.
Our usually realized only if the end product is designed from the ground up to take full advantages of the properties of metal matrix composites for example.
At <unk> base plate enables of power module to have higher functionality and longer life and a much smaller footprint, but debt benefit is only realized if the customer actually designs and builds a new module with the smaller footprint.
In other words.
It's rare that we directly substitute.
Our product for an existing alternative material.
In almost every case to fully realize the significant benefits. The composites provide requires a new design of the <unk> product.
This observation is critical in understanding of our product pipeline.
The applications. We serve are generally high reliability high performance applications, the time between when a customer selects <unk>.
<unk> for their application, we call that decision of design win and the time when the customer has completed the development testing and manufacturing scale up of their new product is generally a minimum of two years more typically five years and seven to eight years.
Not uncommon.
This means that the products that are generally generating revenue today result from design wins that occurred 2345 or as many as eight years in the past.
However, it also means the once a product is in production it generally stays in production for many years.
Our recently announced purchase order for hybrid Tech armor panels for crew served weapons stations illustrates this pipeline dynamic very very well CBS Cps began development work.
On these kinds of panels in 2012, we achieved the crew served weapons station design win in 2015 by.
By that I mean, the design was set and our immediate customer had selected us.
On December eight 2017, we issued a press release, indicating that the Navy had begun sea trials of our hybrid tech armor in other words the development of the product the full product was completed.
Between December 2017, and February 2021, a period of for years. The Navy evaluated the performance of the panels. The C installed on the USS Carl Vinson performed extensive ballistic testing confirmed the panels fully met the new rigorous specification developed by the Navy.
Obtained funding from Congress developed the preliminary installation schedule and finally placed a purchase order.
While to many on the outside it seems like nothing was happened during happening during these for years in fact, a great deal of what's happening is our product was moving through the pipeline towards full adoption and production.
With that background.
Management is very excited about where we stand today because we are excited about what is in our current pipeline.
There are design wins with tier one automotive supplier for base plates for Silicon carbide base modules for audit of.
Automotive applications moving through our pipeline there.
There are of design wins for power modules for use in power grids moving through our pipeline. There are design wins for our <unk> heat Spreaders for application specific integrated circuits and fiber optic applications moving through our pipeline there of design wins for the <unk>.
Package similar to that found on the Mars Rover for space applications that are in our pipeline.
There are of design wins for complex expensive and enabling components for other satellite applications in our pipeline.
Not all of new projects, our customers begin reach completion.
We can have a design win and the end product in which the customer was going to use that product can be cancelled along the way and.
In addition development and market introduction timelines can change for these reasons, we generally don't comment in detail on any specific design win Intel It is very near or has actually entered the production stage.
The third area I want to comment on is is.
The primary markets that we serve.
Many but not all of our markets could be summarized by this sentence Cps is electrifying the green economy.
One key market for us as power modules, we supply base plates and the high voltage power modules also known as <unk> modules. As indicated also provides the 10 times improvement in module life compared to a copper baseplate above certain voltage levels historically.
Brickley the primary market for these high voltage modules has been electric trains.
That continues to be of large and growing market.
However.
It's been depressed by Covid this year.
But the market will rebound however.
However, two major long term trends are opening up new very significant related markets. These trends of renewable energy and the electric vehicle.
Our modules connect renewable energy sources wind turbines and solar panels to the electric grid Likewise power modules connect charging stations for electric cars to the grid in fact power modules are the very heart.
Of an EV charging station.
Obviously.
Electric vehicles are key I'll come to that in a minute, but reflect for a minute on the growth in wind turbines solar farms and EV charging stations that need to be installed and connected to the grid over the next decade. It represents a very exciting opportunity.
ABB semiconductors in Switzerland is as of.
And very important customer for us.
ABB semiconductors.
Last year was acquired by Hitachi of Japan.
<unk> moved into a new legal entity Hitachi power grids.
Their focus.
Is the electrical grid on a worldwide basis, obviously many of the base plates, we provide we touchy power grids and up and modules and the electric grid.
Power modules also enable the electric vehicle there are many many many different designs for power modules in Evs and most today are not using ASIC. However, <unk> properties are compelling in some designs, particularly.
Currently those using silicon carbide based rather than the silicon based power modules. We are excited about the design wins, we have for silicon carbide based automotive power modules with the tier one suppliers and we are confident that there'll be more design win.
<unk> as time goes on I do make a distinction between a tier one supplier in the automotive OEM itself.
We achieved the design win at the tier one supplier the tier one supplier then needs to achieve the design win at the automotive OEM.
But we're very excited about all of these sub segments in the high voltage power market traction of trains wind turbines charging stations electric grid infrastructure.
In the electric vehicle.
The third market era's second market for US is the aerospace and defense applications also provides higher reliability and lighter weight for many aerospace and defense electronic applications, where on the Mars Rover. We're in the current generation of GPS satellites.
Have parts on the F 35, the F 22 of these markets tend to be very conservative and the timelines are long, but once designed in demand last for many many years in the in these markets, we're earning our stripes the old fashioned way one design win at the time and the pipeline gets increasingly ex.
Sighted.
The third market is lids and heat Spreaders for high performance Asics graphics chips in fiber optic applications in the interest of time, let me defer discussion of this for the future date.
And.
Finally in other market is.
Armour, our focus is vehicle armor, it's not body armor.
Our hybrid tech panels.
Provide advantages in two areas severe environments, such as at sea or in high temperature environments, such as near the exhaust.
Or engine of vehicles and secondly.
The hybrid tech panels, we believe.
Are the optimal solution for very high threat levels, where conventional solutions just don't work.
A fairly small market today, but unfortunately growing.
In the troubled areas in the world, where those conflicts exist.
The crew served weapons station is an example of.
Our armor in the first area of severe environment.
We have the order for one aircraft carrier, but our partner of the prime contractor in this case.
Has an.
Indefinite delivery indefinite quantity order.
For the U S aircraft fleet, we're confident orders to us for additional carriers will be released reasonably soon.
February 2nd press release, we commented that the Navy has over 400 ships in total.
The Coast Guard has.
Well over twice that number of ships, obviously much smaller but at the same need exists on many coast guard vessels.
We believe MMC is.
As I indicated provide the best solution to very high threats and we are doing some joint development with some partners in this area and hope to be able to say more of that about that sometime later this year.
Let me stop there, but I hope that's been helpful and providing an overview of who we are how our products come to market and what are the markets in which we're participating.
With that.
Operator could we open the floor for questions.
Yes, Sir and ladies and gentlemen, if you would like to ask the question Bressler of one on the telephone again, if he would like to ask the question first the one that comes from.
We'll pause for just a moment to compile the Q&A.
Okay I'll rephrase. The question you have Walter Schnecken well, Sir your line is open.
Thank you Hi, Grant have you been.
Yes, just fine thank you.
I have two questions for us it was great to hear about all of the design wins I know I havent been up there for a number of years, but.
How much capacity and I realize we will have to talk revenues because of different things. She was a lot more of a lot less material.
How much capacity does that facility actually have.
Very broad terms in dollars versus the $20 million you've been doing for a number of years now.
It all came in.
Very good question.
<unk>.
Michael you've been studying that very question a little debt on it you come out on that.
Well for a nice to meet you all nice meeting you.
So I think it's safe to assume debt.
Out of any significant investment and additional capital equipment, we could probably handle of volume two to three ex are current.
And the combination of shifts work.
The more utilization of the small space, but from from a capacity standpoint of the capital investments made.
Could.
Easily handle a number of twice the revenue.
Let me just amplify on that slightly which is.
Operating three shifts a day.
But the second shift.
<unk> is much smaller than the first and the third shift is really of skeletal shift only operating.
Those specific operations, where it's not economical to turn the equipment on and off.
You want running 24 hours, a day and <unk>.
So.
We.
We could we could essentially double.
Of the employment base in the factory.
And again in real broad terms.
<unk> doubled the revenue.
The product mix is important.
The aerospace and defense kinds of products that we've been booking.
The tend to be higher revenue.
Lower volume.
So the product mix is also important.
But in broad strokes, it's two to three times.
Good.
Second speech question the.
Stock market guards have been very calling for your shareholders Hum you personally and anyone else who's been had the patients to stay with the company a long time, having said that.
We look at your December 30, <unk> balance sheet, you've got 200000 of cash $200000 of liabilities 6 million of equity you talked about it all came in you might need some more capital equipment.
How can you not.
So I'm, making up a number of two to 3 million shares put for.
<unk> $40 $50 million of cash on the balance sheet never worry about financing again never worried if you need money. If you find an acquisition opportunity never worry if you need to expand the plant taking equity from 6 million to 40 or $50 million.
It seems to me, but not taking advantage of this to the benefit of your shareholders is fiscally irresponsible.
Yeah.
Chuck do you want to comment and then also from that as well.
So obviously were.
We're exploring opportunities.
We really don't want to comment too much other than that at this point in time.
But we're certainly aware of that the situation.
Situation you have described the exists for us.
Do you want to.
Yes.
Let me just say.
To do what you described in.
Involves.
It involves some SEC filings and.
It involves.
The engagements with the the appropriate.
Banking individuals.
And.
So it isn't done overnight.
But the board and management is.
Absolutely.
Brightly aware.
Of the additional opportunities.
Debt become available for the reasons you described.
So.
Let me, let me leave that there.
Youre correct in stating that.
It hasn't been done as of February 24th meaning.
<unk>.
But but I.
I would not draw a conclusion that it is not going to be done.
Got it okay, I mean because.
Your line.
We arent the beat it to the death.
This obvious I've had because you know I do a lot of Microcap companies.
<unk>.
They have been very as the group have been very active where Theres Fox had gone up net multipolar changing the dynamics of there.
Financial balance sheets by a lot so.
The.
Just one last question out of the $20 million Aero space broadly defined is roughly what percentage of revenues I know attractions biggest.
Today aerospace.
Aerospace.
I'm thinking out loud here frankly the.
The the percentage has changed.
For the dynamics, we just described.
But.
Aerospace has moved.
From from.
The 20% to probably.
The 35%.
In the last quarter or two from.
And just lastly, just the comment.
Specced route for us on the call I, just wanted to wish him well in retirement.
You are wonderful.
Wonderful.
Hey, Thanks, a lot guys. Thanks very much I appreciate your comments.
Bye bye.
For our next question, we have Samus barn, Thomas Your line is open.
Thank you. Thank you I have a very simple and basic question as it relates to <unk>.
The company's public view when you guys were.
Were awarded that hybrid Tech armor contract and you guys went public with the news there was a substantial surge.
As it relates to your your shares.
My question is has other design wins come to fruition would you guys be having the same approach as it relates to letting the public know about these design wins in contracts.
Sure.
What I tried to describe.
Well in the short in the short answer is we would like to do it for.
The other design wins, what we have done.
With the with kinetic protection and these hybritech panels and.
Again by that.
We released press releases one in 2017.
Of that come.
Customer.
Had spent the money.
Two to install the product for extensive evaluation and.
And then they place the order so the answer is yes.
And and.
We anticipate.
We anticipate.
Certainly in the next several months.
That.
You'll you'll see.
One or more of what you described.
Well said it sounds like you're holding some cards close to the chest I appreciate that and thank you.
For the time.
Thank you.
For our next question Tim.
Tim O'connell.
Tim Your line is open.
Hi, Good afternoon, gentlemen, my question actually was also around.
Consideration of an equity raise considering what's happened to your stock. This year. So it was pretty much addressed.
Earlier in the Q&A. Thanks.
Okay. Thank you.
As you raised the topic again, let me let me just indicate.
The debt.
We see it as a tremendous opportunity.
And and.
Describing the exact timing or amount, we're moving forward on that front.
Alright, thank you.
For the next question, we have Lauren Silver Lauren Your line is open.
Good afternoon, gentlemen, the grant I want to thank you for keeping our company.
Survival mode for the last.
The 36 years of thank you <unk>.
Hopefully we could break out no.
One question in regards to adjust to the amount of space.
Sure.
So there's no other aircraft had an electric engine in the appliance.
And then I see no United aircraft and the vertical takeoff.
Mode.
<unk>.
Come from <unk>, and then I saw the other day, there's a company called Dolby, that's how big the spot and Thats backed by Reid Hoffman.
And you mentioned.
Industry is making the transition from silicon.
So silicon carbides and I know speaking to people the phone line on an airplane or vertical takeoff.
Operations all of them.
To have the base plate.
Aluminum so of cloud.
J b to B closer, but how does the cop of base plate the <unk>.
Plenty of obviously.
The function correctly.
These other general I'm going to say.
In the past we always have.
All of our own cash flow I think we want to raise up some money and make these investments here.
Quickly on the vertical business.
Business the ROI.
The release of again Aerospace Industries Association predicted the USA mobility market will begin deployment in 2025 ex works at the head of $115 billion in revenue.
The 10 years after yes of any comment on that.
You are exactly on the market and.
The market is not tomorrow, but is that application is squarely.
In our crosshairs and what I mean by that is.
The advantages we bring every single one of them.
Have real value in that application the reliability of the weight of the higher power.
The higher efficiency switching made possible by silicon.
Carbide die longer battery life.
And we.
We are working.
The today.
We have orders.
For product.
Debt.
A major player that you would recognize.
In that space.
Is doing development.
On the the.
The the power module for aviation applications. So in short.
We want to be in every single.
Electric plane of any type of.
And we.
We are.
On a worldwide basis.
We're seeking out.
For calling on and in several cases working with the tier one suppliers that will be serving those applications.
Yes.
We are.
You commented on this actually is by 36 the year here.
And.
It's the time has gone by quickly.
And the fascinating applications that we work on is one of the reasons that I Love This company.
And many times I've said to myself, we're just we're a little too far ahead of the market.
And as we look at this electrification you talked about electric planes, but look at the electric car.
Look at the.
The displacement of hydraulic systems by electric systems and industrial applications.
We believe our time has come and we're very excited about it.
Of the fact I'm also very excited because of the retiring after the first.
For years at Wells Fargo, and then February the <unk>.
First week I thought it was the first of all of this time, we of course always able to sell some of the share of sort of held for many years and pay for my Granddaughter's education, hopefully at Berkeley for Boston.
Again, you never know when youre going to be surprised but I just want to congratulate everyone for their dedication and the hopefully the next three to five years will be very beneficial for all of the shareholders who stood with US all of these use thank you.
Fantastic.
And congratulations on your retirement by the way Berkeley's Wonderful school of I know the.
The president there Roger Brown well.
So replace.
Okay.
For our next question, we have Greg Bever, Greg Your line is open hi.
Hi, good afternoon gentlemen.
On the armor order you got for the kinetic for $28 7 million.
Does that translate to for Cps H.
Let me turn that over the Michael Hi, Greg how are you.
So each order to kinetic protection on an order of magnitude of about half of that order comes to Cps.
Okay. Thanks, that's helpful and now it's an idea of Q right. So.
You indicated that you're expecting revenue beginning in Q2 now what should we think about there there was some kind of draw against the idea of IQ, but obviously, it's not the full amount that's been.
The order trend.
The contract the kinetics of protection has.
As a five year <unk> Iq.
For up to 10 ship sets.
The initial order was for the first ship set.
Got you. Okay. That's helpful. Thank you and then just the second question was on the Q4 gross margins.
Do those reflect all of the price increases that we talked about before in terms of your of your customers for the modules.
Yes, they do.
So I guess, what should we think about the go.
Go forward here. This is all a function of.
Top line.
12% I believe I calculated for the quarter I mean, we were on our weight of 'twenty before.
Yes.
Youre correct.
Sure.
I think it is the top line that we that we need to focus on and arc right. So yes, we are.
<unk>.
Our fixed costs.
We are confident.
In the.
We're confident in the in the return of higher demand.
In the base plate business.
As Covid subsides and for that reason.
We have kept our fixed costs, where they were where they were a year ago more or less.
And.
So part of what's going on is yes.
Yes, it's a top line fixed cost dynamic yes, okay.
Lastly, the kind of tying into that for the first question.
We think that armor as of one of your better margin opportunities.
I think yes.
Michael or.
Chuck do you want to comment on that yes, I think thats fair to say I think we expect that to be the case, yes.
Okay great.
Great.
Thank you very much good luck.
Thank you.
And for centers, we don't have any further questions at this time. Please continue.
Okay.
The thank each of you for joining the call.
As you probably all know are located just south of Boston I realize that no one's traveling currently but the <unk>.
Any of you to visit us.
See what we do if you would like.
We.
Look forward to our next quarterly call.
And we.
We certainly will have.
We will have some press releases between now and then.
We always appreciate hearing from you many of you send.
Material that's helpful to us and.
We thank you for that but we thank you for the your interest in the company and.
Hope you remain safe <unk>.
<unk>.
When it becomes available and we look forward to speaking with you in a quarter. Thanks very much.
And we'll end there.
And ladies and gentlemen. This concludes today's conference call. Thank you all for participating you may now disconnect.
[music].