Q3 2021 Innovative Solutions and Support Inc Earnings Call
Good morning, ladies and gentlemen, thank you for your patience, we will be starting the conference in about five minutes.
[music].
Good day and welcome to the innovative solutions and support first quarter 'twenty 'twenty One earnings conference call.
All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.
After todays presentation, there will be there will be an opportunity to ask questions to ask a question. You May press Star then one on I touched him phone cause enjoy your question. Please press Star then two please.
Please note this event in regard.
I'd now like to turn the conference over to Mr. Geoffrey Hedrick. Please go ahead.
Good morning, this is Joe.
Welcome to our conference call to discuss our performance for the third quarter of fiscal 2021.
Current business conditions and outlook for the coming years.
Joining me are Cheryl Mastercard approach it on a rolling around our CFO.
Before I begin I would like to read some safe Harbor.
In Harper.
Message.
Thank you, Jeff and 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 that are subject to risks and uncertainties that 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 SEC and other public filings now I will turn the call back to Jeff.
It's Ralph.
There was another reasonable.
Revenue was up.
Both year over year as well as significant significantly on a sequential basis with backlog increasing over 40% in the last three months.
Margins remain strong and we are one of the best cash flow bottom and bottom line profitability quarters in quite some time.
Results were once again, driven by a balance of OEM and retrofit programs and reflect the shales.
A range of various products. We believe this strategy is both diversity.
The Bulks diversifies markets and products.
Well provide a strong foundation for continued growth.
And the signing of a merger rebound in general aviation.
Extra on aviation.
Supported delivery of 33 turboprops and the second quarter more than double the 15 delivered in the same quarter a year ago.
He also noted that new equipment or.
Activity continues to be strong and appears to be sustainable.
And that resulted in a strong demand for the King Air 360.
Junior to succeed with.
Our auto throttle on the production aircraft.
We were pleased to be working with amongst some of the most respected names in the aviation industry Textron Bourne partners and others.
The cover story in our recent history.
Foreign magazine prominently mentioned.
Yeah.
Excuse me this rough sense technology.
In the previous issue we were selected.
By Flying magazine.
Jose.
Editor's choice finalist selecting the three of the most innovative companies.
For for that year.
Among those two of three companies were Spacex for landing there booster rocket.
Ireland and.
No.
North Atlantic.
Garment for automatically landing expired.
Single engine airplane.
And through.
Our auto throttle that's one of the three most innovative products.
And the most recent issue flying magazine mentioned, our threat defense technology and.
And its application in the 10 year 360.
Okay.
I ask the Nashville machine auto throttle.
Prevention of pilot from over <unk> and over temperature in the engine.
Just first defense provides.
Provides.
Most of them are AAA DMCA protections.
That DMCA.
Is in fact, the wash of control.
Well I loss of control of a twin engine airplane when you lose the engine.
One engine.
This has been our.
Problem for 100 years.
Solved in.
Very high Trust.
Uh huh.
Turbofan.
Aircrafts, but hazard.
But ah causes.
More fatalities.
And multi engine airplanes and even shingles.
We're especially pleased that the industry has embraced our arms around technology.
So the product is covered by multiple U S and foreign patents and provides.
Full authority digital engine control protection for existing installed engines on a retrofit basis.
Revolutionary feature.
Is the protection against favorable loss of control actions, which are loss of an engine.
Causes the airplane.
<unk> cautions.
I'm, sorry, and causes the pilot to lose control of the airplane, causing it to flip on us back crash.
Hi.
Okay.
I was pleased at.
We also noted that in our.
In order for 11 state of the art cockpit primary obligations.
Navigation systems.
We're a premier online retailer.
That is upgrading its purchased $76 seven Boeing aircraft.
In response to expanding demand of air cargo operation.
This has been noted before.
This has been noted before.
<unk> toward older aircrafts.
Reconfigured.
Operations remained strong.
Excuse me.
Strong.
These aircrafts from high cost effectively.
Use of entry for legacy carriers also for newer operators initiating or expanding their air cargo platform.
Revenues are growing with an increase in demand for aircrafts on which we can have long term production contracts. We are also seeing strong demand for our legacy and retrofit products in particular air cargo remains robust as represented by previously.
We mentioned or from a well known airline retailer.
This is very good business utilizing our standard flat panel displays.
Finally, I'll remind of minor modifications as required we continue to four corners.
Andrew our backlog.
We continue to supply and clicks with card credit card upgrades. In addition.
They haven't.
Indicated additional needs.
We are currently discussing those needs with them.
First nine months of the year have been very good as it affects.
As the effects of a global pandemic.
Monterey.
Nonetheless, we remain vigilant and watching for any signs of conditions.
Including any impact.
Our supply chain with a strong order book and momentum building.
Phil that we've reached an inflection point.
Goal is to leverage the success and future growth and build value for our shareholders.
I'd like to turn it over to Ralph.
Thank you, Jeff and thank you all for joining us this morning.
Looking at the stores third quarter revenues were $6.2 million an increase from 6 million in the same quarter a year ago, but also up over $1 million sequentially from the $5.1 million in revenue in the second quarter of this year.
As Jeff mentioned, we are building momentum in the business.
Revenues were generated primarily from our OEM production contracts included a PC 24, and King Air Auto throttle programs, followed by sales of our air cargo customers gross margins for the quarter were 54% consistent with our historical and recent margins total.
Total operating expenses for the second as everybody else.
For the third quarter of fiscal 2021% or $2.2 million unchanged from the year ago quarter.
Research and development expense decreased from the year ago quarter, primarily due to the transition from primarily STC development and certification to production research and development expense was almost 11% of our quarterly revenues, reflecting continued strong commitment to innovation and new product development given us.
<unk> volumes increase.
Selling general and administrative expenses are up from the year ago quarter. As a result of an increase in head count and professional fees, we selectively selectively added to our organization to support current and anticipated growth.
We continue to emphasize tight operating cost controls and currently believe current quarterly operating expense levels will be maintained in the current range for the balance of the year.
For the quarter operating income was unchanged from a year ago at $1.2 million, we recognized a noncash $1.5 million or <unk> <unk> per share tax benefit in the quarter.
In the June 2000 at June 32021 quarter valuation allowance were released for all federal and most state deferred tax assets. The company continues to be in a three year cumulative income position as well as continuing to have future forecasted income projections. As a result, net income was $2.7 million.
Or <unk> 16 per share in the quarter up from $1.3 million or <unk> <unk> per share and a year ago quarter.
The company remains in a strong financial position cash flow from operations was $1.5 million in the quarter and $3.8 million on a year to date basis. Despite the payment of approximately $20 million in dividends. This fiscal year. We've ended the period with cash and equivalents of $7.5 million.
One quick note is that we did take a deposit for an order from a customer which added to cash and also correspondingly recorded in our current liabilities. This order is expected to be completed by fiscal year end.
We anticipate being operating cash flow positive for the full year. The company is debt free. Consequently, we believe the company has sufficient cash to fund operations for the foreseeable future now I'd like to turn the call over to share.
Thank you Rochelle and good morning, everyone.
This was a rewarding quarter as we grew our revenues and increase our backlog.
We see indications that the demand for our products is increasing.
The increased demand is from many sectors of the market.
Cargo and general aviation.
And for both OEM production and retrofit products.
So let me provide additional information around some of our revenue generating programs.
<unk> success.
On the production on the production side.
We have mentioned that you have.
Foundation of OEM products.
That's we expect to generate recurring revenue over the next several years.
The Pilatus PC 24 program.
Is continuing to grow has allowed us steadily increasing production volumes.
Toward this successful.
Perhaps.
Our government contract on the KC 46 continues to run at expected production rates.
We're also seeing interest from Boeing for additional systems for exports.
The conditions in the general aviation market are improving and Textron noted the shortage of available used aircraft is driving demand for new aircraft.
As a result, we are experiencing.
Increased production rates for our King <unk>, Oh, it's wrong.
Consequently in addition to providing a stable base of recurring revenue on the OEM side.
Our oral solids production line is also becoming a growth engine on the aftermarket side, we'd take strong.
We expect.
We expect a rebound.
In this market to generate increased activity in the journal of retrofit market for the kingdom as well as the PC 12 or so.
Through our other dealer maintenance center networks.
As previously articulated and as illustrated in the article about flying magazine.
So is getting a lot of attention and therefore is the focus of our research and development efforts.
Growth potential is very strong in many different markets and we are in the.
Process of responding to requests.
Some oems toward additional platforms.
Platforms.
Despite the overall market sluggishness in the transport sector, we are having success in the retrofit market.
The gross demands where it cargo capacity.
One high profile program is a contract you announced with a well known retailer that continues to grow the Boeing 767 obsolete.
He is retrofitting the cockpit display system.
But the growth of online shopping has attracted a host of other players into the market as well and a fast way to build air cargo capacity is through a 757 or 767 conversion.
With over a thousand operational loss of employment. So that's six seven available for cargo conversion, we expect to see our flat panel display business remains strong.
New orders in the third quarter of fiscal 2021, the $9 million that is a steady increase from $7.6 million in the second quarter and brings our total new orders.
The 22 million.
Backlog as of June 30 was $90.5 million up $2.8 million from the end of last quarter.
Safety protocols throughout our industry from those at DSA to those restricting travel to certain countries have been an obstacle.
It's hard to navigate and our business development efforts.
As Jeff noted.
It also.
Have added complexity to the supply chain that guidance our production process.
Fortunately you have managed to successfully negotiate these challenges by anticipating potential issues and minimize the impact on our business.
This has us confident in our future as we believe eventually.
To ensure relaxation of Covid 19 related restrictions will provide a business a healthy tailwind.
Before turning the call back to Geoff Let me quickly applaud the ongoing efforts of our employees to integrate new safety protocols into our standard operating procedures.
And this has enabled us to maintain productivity.
You've seen their health safety and wellbeing.
I'd now like to turn the call back to Geoff for some closing remarks.
Chung.
It was a strong third quarter.
With progress achieved.
Across virtually all of our key performance metrics.
Remember earlier this year, we reduced routes, we've distributed nearly $20 million in dividends to our shareholders.
And we now have been building.
Our momentum.
Across the business.
To reward loyalty even further.
We've increased our cash.
Cash at 50%.
From operations.
We expect this momentum a recovering market and a strong balance sheet and a growing backlog to lead to continued success. Operator. Please turn this over for questions.
Yeah.
Uh huh.
We will now begin the question and answer question to ask a question you May Press Star then.
One on your Touchstone Paul.
We are using a speakerphone please pick up there.
Thank you.
Gary Your question Kristina.
Would like to withdraw your question please.
Thank you.
At this time, we will pause momentarily to assemble our roster.
Our first question comes from David Campbell with Thompson Davis <unk> Company. Please go ahead.
Hey, Jeff.
From a real congratulations what a quarter.
Alright.
Dan.
It's finally coming through.
Okay.
Look.
We all know.
Have a good situation.
You've been up.
Staunch supporter.
Things are starting to all come together.
Survive.
They haven't done it pandemic.
Felicia.
Not in a recovery mode, but rather a continued operations mode I give them.
The entire team incredible credit but.
And accordingly.
This retailer we're talking about.
We'll probably build a fleet of over 500 aircraft over the next three to five years.
And.
We're happy that he has chosen to put our equipment on latest conversion and a more than 50% of their fleet.
What are the Fedex you are expanding.
Go ahead please.
Yes.
Focusing now on buying boxes.
Okay.
Masters now as you can imagine inexpensive relatively and then I have a reasonable volume shell.
I think for Fedex and some of the other package carriers.
Focusing on new airplanes from Boeing.
Boeing look I look at.
You know, there's going to be big demand for it look at Airbus Airbus.
<unk> just announced a three there are 330 cargo cargo version of this resource.
<unk>.
Alright.
So what we believe is.
Well.
We think that we see a number of smaller package carriers.
Okay.
767, and Thats our cockpit.
The only comp competitive cockpit tax four times as long ago as strong almost a month cost significantly more than it has.
Much lower proven reliability.
When looking for problems.
I see.
Supply chain problems with some companies.
Uh huh.
Alright.
Because of the shortage of semiconductors.
Yes.
In fact youre.
Deliveries.
Good luck.
I'm concerned about supply chain, we happen to have serious problems yet.
But there is two problems.
Similarly, and semiconductor related.
And increasingly the lifetime forgiving semiconductor is getting shorter and shorter.
They're coming up with new technologies.
Almost every year, which forces.
The obsolescence of some of the existing technology.
It's always an issue to date, we haven't had a serious problem.
But redesign our designs are materially different than most designs and that we make our designs.
Series.
Smaller sub assembly boards, such that if we have a problem with a given.
Hum.
Uh huh.
Technology given circuit as an example.
If it goes obsolete or you can't get where April.
Instead upon acquiring an entire system.
We can take a small subs.
Subsystem part of that and modify that route.
And we've been doing this kind of thing for over 30 years.
Helps us solve the problem entirely pretty sure it has mitigated.
So we're watching it.
Obviously, an issue, but today, we've been able to manage it very well.
Oh, that's great.
You'll probably get to on the Airbus.
Jim.
Isn't.
Is that a possibility.
Possibility as well, but right now we're delighted to be focusing on Boeing 760 Sevens.
As you know we've got.
Shopping five or 800 of them done already.
And.
And.
It's been a huge success the reliability of the equipment is.
Is the best I've ever seen in my career. So we're delighted we keep our fingers crossed tried to continue to keep our quality.
Well based on your momentum based on the.
$1.2 million to earn pretax.
In the June quarter.
I'm estimating you might make a two and a half million pretax.
In the September quarter, Yeah, Yeah.
I feel like I'm.
And Youre right.
Raising the hurdle.
Every time.
Okay.
Great support and we appreciate it.
Yeah.
I think everybody here in the next time, we go after New York I mean, all army.
Hi, Jeff.
Our buyer much.
Ooh.
I'm, saying I'm being very.
Very good.
Circumspect because.
We're talking about another potential wave of Covid.
God knows what favorite politicians are going to do.
Sure.
I think our best brand X.
Execute on what we've got.
Thank you and just keep putting our shoulder to the wheel if we could grow faster than we have in the past I'll be delighted.
I'm not planning on it.
Hmm.
Well Jim.
Uh huh.
I'm not flying around that much because I used to I am not summit in New York as much as I used to.
This trip I ads in New York.
It was canceled by the OCC.
Oh, the Covid thing.
So I think I suggest you get in your opinion are in flight and Richmond.
By lunch out here.
Yeah sure.
Mark came down to see a fair amount of it on a train.
I see.
And he lives for two hours.
Excuse me.
Thank you Vince.
Got it.
We reported GAAP range on that.
The point anyway.
Yeah.
Sure.
Thank you David it's good talking to you.
No you Didnt hear the King airs last time you can.
Right.
Hey, you got the King airs.
He's got to come down here.
I will come back.
Right.
Uh huh.
Let somebody else ask questions. Thank you.
Thank you.
Good talking to you.
Our next question comes from George Meng with Toyota and chose please go ahead.
Hey, good morning, guys. Thanks for taking my call.
Could you guys comment on the cadence of the retrofit business now on the on the auto throttle.
It's much slower than I would like.
That's principally because we need to hire.
Sure.
Basis rehab a retrofit now.
As friction free coming through.
<unk> and Textron service centers.
<unk>.
Revenue or so.
King airs.
Through Textron.
Now why are directly attached there.
The F B O separately and we believe.
That's a huge opportunity yet untapped.
<unk>.
I can only tell you that I have now taken a personal interest in making that happen.
Okay.
And on the OEM business like Textron for example, what is the approximate time lag between when you need to ship your product to them for them to put it in their plane and ship their product what sort of is it a month three months six months.
How far ahead do they order the auto throttle to put in their plane.
I honestly can't give you exact guidance proactive carriers.
Fixed income approximate.
Six to nine months because in the production cycle of the airplane. It takes that law, so that big things and they asked for.
Election of its somewhere in the middle of that.
Manufacturer of the airplane so much more determined.
How long it takes to build the airplane.
And then anything else and we've been servicing them and in many cases in a matter of weeks.
And we're building now inventory.
So that we can deliver.
Very short lead times.
For our.
<unk>.
<unk> customers and for <unk>.
<unk> truck.
Yeah cause looking at Textron numbers, they're planning on producing dramatically more planes in the back half of this year than the first half. So I'm just sort of wondering about that.
Yeah.
And then where are we.
We have already.
Alright, we're already looking at automating certain functions gesture to be able to GAAP.
Repeatability, not so much to say labor.
To assure that quality and repeatability.
Yes.
Gross.
Any reassurance.
Reinsurance the company has a history of growing its revenue very quickly.
And during the Rvs every period.
Kris.
Production rates month over month or two to one.
I don't want to do it again.
And in fact, we did I do.
Sure.
Saturday.
We grew very very quickly.
And the company honestly the company has always been designed to do that because in the retrofit business you have to assume that you have.
Potentially shorten lead times.
And the company is geared to do that so we're geared to accommodate the rapid growth.
Believe texture I hope Textron appreciation I think the industry, we've got tons of accolades from the auto throttle and if you read the awareness.
<unk>.
Just sort of why it's almost like you said Gee this is a Greg Armstrong.
You can fixture on an airplane.
Yes.
Yeah, well the weight Textron is talking I think you'd better be ready for a big back half yourself.
I bought a conference call or two ago, you were talking about a new sort of lighter lower cost version of auto throttle. If I have the words right and I was wondering is this sort of this sort of version would it be applicable to sort of like a Cessna type plain or what kind of plane would that be you.
As for <unk>.
As an example.
Immediate target would be to textron.
Each track.
58.
Which is a small light twin.
That.
Periodically experiences these lawsuit patrol actions.
It's less critical and.
Some of the smaller airplanes.
It has been a challenge.
Yep.
Yeah.
Remember to you that.
5000 chairs are all potential market share.
Sure.
It's possible.
Over 100, a month for the foreseeable future.
That would be a burden ash thing if we could do that.
And I'm, assuming that these auto throttles will go on the new remodel C 90.
Well off that hasn't been a prime target at this point.
And the reason is it's a different certification.
Hum.
So there will be a little bit more work to get certification.
Signing it not apply.
Getting the operational improvement.
And so profit on a different certification.
The 203 hundred.
Okay.
And how is the progress on new commercial Oems and military.
And military it's good.
Military military programs.
How did they take a long time.
You sort of start takes two or three years, you've got a growing.
But we're progressing.
We're progressing in a number of fronts and we're pursuing that as we speak okay.
There are as you are aware.
Significant number still of turboprop airplanes and the military all over the world.
We continue to.
Bringing our check them.
It should be pretty blunt with you if I could if I could find 12 sales cement today I'd hire them all.
Okay.
Well Manny you might be recruiting me, if it's like shooting fish in a barrel like that.
Hey, Scott.
No other privately insured fishing apparel.
It's rewarding when they do have loved the product.
Hey, Joshua Thrill so everywhere.
We've been really joins us and we've got a lot of other products. We were at a recent shull.
Presented this on us and they said Oh by the way I would.
We'd like to take a look at your flood checkup fresh so we've got a dozen people at work acquiring on that so that's good business too.
Yeah, that's great yeah. It sounds like you have a lot of momentum coming with the Oh and you are hitting on all cylinders here.
I've been doing this a long time.
I remind us I've got to keep pushing on all of the time, because the ability to take your eye off of it.
You'll find out.
Pretty abrupt.
Change in philosophy.
So so far so go ahead, we're going to keep at it.
I'm more concerned about a nice steady continuous and predictable rise in our revenues and profit and I think that's possible and that's what we're focusing on.
We managed to actually grow over the pressures in this pandemic pandemics.
Our customers.
Got it.
From that.
Pandemics.
We are optimistic that we will continue to grow.
There are some general recovery.
Thank you for taking my questions.
Good morning.
Thanks for asking actually.
Okay.
Okay.
Our next question comes from Michael Friedrich <unk>, a private Investor. Please go ahead.
Good morning, gentlemen, great quarter.
Certainly the new orders in the.
The uptick in that area is very very encouraging I just wanted to touch base I think the last caller went over most of my questions, but I wanted to just go over some of the some of the things that.
Really wanted touched on so on commerce.
Current state of the FAA and I know this is always sort of a moving target, but I believe last quarter. I had asked if you guys had any any pending applications out there right now and.
Have there been any approvals during the last quarter that they just basically things you didn't bother to or things you didn't let us know about or so.
We've got the we've gotten.
Some S T SEC issue I don't know precisely how many but I can tell you that I would be.
I would be more aware of serious problems and I haven't heard of any serious problem. So that's the good news.
Blocker with you.
Yes.
This is probably a good working relationship but honestly in the old days when I started the industry.
There was a lot of mutual respect and confidence between the manufacturer and the FAA.
Yeah.
It has been in general terms.
Very very cooperative and.
And still Richard.
I'm Todd Shaw.
Reality is that their work they work hard.
Right.
Yes.
Thanks sure all the work is done but yet.
On a regional period of time.
Okay.
I never thought I would.
Not complaining about the FAA, but I can't complain about the FAA.
Doing fine.
That's awesome alright, so Jeff are there any FTC is right now pending that would be for either aircrafts other than the PC 12, or the king airs.
Thanks, Matt.
I really can't.
I need to get back on that and that would be just on just on the yes, just not at the rough sense not on Navy.
We have a problem.
Probably.
No no new aircrafts for Shay.
Precursor I'll call long two offering.
But updates to the existing aircraft and making sure that we get the various versions of a two year guidance. So that we can accommodate.
That whole 5000 aircraft.
Great great. So the previous caller had mentioned the.
Touch back on the the cheaper version.
Uh huh.
And so it might be available.
Would there be.
I'm guessing maybe more significant OEM possibilities in that area. Since there was so many more of those planes that are that are produced out. There is that is that the way you're seeing it yet or do you believe it'll be kind of in line with the turboprop numbers.
I honestly don't know.
I can tell you that.
I've looked at.
The possibility of coming up with a lower cost smaller version four application and less expensive aircrafts.
The King Air is probably.
Five to seven times, the cost of the small twinge shell.
Oh, I don't want to spend our money.
At the same time.
It's still a critical still can be a partner.
And I think people are now recognizing it's not simply the auto throttle its just simply got cruise control.
It's a significant and very valuable.
Yeah.
Production and pilot workforce.
And as that's becoming.
Acknowledged by the people in the industry.
The market.
Increases in the meantime.
It took 17 years.
Sure.
To come up with you all around when we got him.
I'm offering.
So number one I'll take what I forgot about 17 years.
Since a couple of them.
But this one.
But I think we could do it and if there's a real demand for it.
I believe we could we could fulfill that to match the goodness.
We weren't sure.
I almost half of Africa's package now.
Bill.
<unk> functions with you on our trial.
So we have a pretty strong position I'm happy to share that's.
That's great and Jeff did you can stay in the within the past answer that you guys could do 50 to 100.
Retrofits are months.
Kind of ideally.
I'd love to do it either way.
Well I think we need to go out and talk to the MRO.
Oh, my MRO, but the F B O S.
The individual shops, all over the country as well.
Tetra Tech's transparent great job, you're really the reason, we're looking now of putting together.
Our dedicated came to do these installations, which means that they can do them.
And a half or a third of the time.
Texture on spread.
Sure.
As cooperative as any OEM I've ever known and then wonderful.
And we're working with them, but we want to expand that.
Sure.
We think we can get an accepted shop.
We're going to work out it gets some salesman out there.
That's great that's great and the online retailer, who we name we cannot use of those 400 planes I think that they'd have to add do.
Do you expect to be a player on a majority of those.
Those all be sadly.
We will either be on all of them are not.
Oh, okay.
No we're on.
So we think we're going to be on all of them.
We treat our customer either way, we sure we wont have a problem.
And you can.
Scott.
A retailer of that kind in the world.
Yeah, Yeah, I can take a wild guess.
Yeah.
We're just kind of do our job is to support them.
Sure.
Hum.
It's capable of even if you have any what are the components.
You're still flying airplanes for five for 10 days and that may enhance the airplanes.
No.
Croatia or.
Are you going to be able to go home and services.
Yeah Yeah.
Just trying to do our job and do it well actually yes, and yes, and one and one more question and this is more for the people who might be listening today. They haven't heard it before but can you just kind of quickly touch GAAP on the limited amount of downtime that that these planes have window when theyre, having a retrofit it was enacted plane or.
Correction as compared to what normal flat.
Flat panel displays switch out.
Well, there's long in one hour.
First from a sort of five.
For Fox, having six have been rectified.
And from what we hear I mean, our feedback.
It takes about 1400 man hours to install it and roughly 30 days.
Now that doesn't become a problem.
Doing a conversion from a passenger airplane tau cargo airplanes, or just kind of be down for three months anyway.
However.
If you actually want to bring an airplane in and that are hurting there's already.
Already converted into a cargo airplanes and there's a lot of I'm not sure.
And while uptake and wanted to upgrade the cockpit.
With our apartment.
We've had it John is as little as 24 hours.
Traditionally it takes three to five days.
<unk> is a Polish joke.
Three to four weeks for our competitor shall we feel that we have a strong.
Market advantage, there's only two of them.
I know and are certified for the <unk>.
Five six.
That's great and then there's a lower price point or the actual equipment is that correct.
Yeah.
I'll just briefly address that.
Price point and my roommate not regarding pork I know, we all think about when we think about it.
If you keep up 767 army ground.
Talk to you about $75000, a day and wash revenue on that ship.
Okay.
Josh you want and if you put the airplanes out for 30 days.
Yeah.
I can't I can't I can't say.
David sure you're talking about you're talking about.
Order of magnitude more.
Sure.
It's not always true because a lot of times, it's a strong story.
Passenger cargo conversions.
They're not.
We have a distinct advantage.
We do have a price advantage.
Right.
But I think all the other features more of them.
Compensate for any different specific fishing season.
Sure.
Operator.
It's been a good product it's kind of good.
Tension and incredibly reliable you're talking about 250.300000 hours MTV has been tracking better.
Yeah.
Fantastic Fantastic well, Jeff everybody, Thanks, again, a great quarter.
Yeah things are definitely looking very positive.
Hopefully I'll be talking to you get in three or four months.
Okay, perfect Alright take care.
Yeah.
And our last question for today comes from is a follow up from David Campbell with Thompson Davis <unk> Company. Please go ahead.
Hey, Jeff This is David I've been trying to reach you several times on the telephone and the office number and no one ever answers it and I'm not sure you know.
We're getting the message is because I guess.
The Covid thing do you have a limited.
I am all set.
And you are all contracted.
I've been in.
You know I'm spending some time in Florida now so I'm on a roll on the road more often than not.
And I have had.
Some of them.
Surgery done shop.
One thing or another I've been a little a touch I'll send you a note.
Make sure you got my number okay.
Is it again and tell number that would be good.
I don't have to.
Yes.
Sure Yeah, Okay, well what are you seeing any drivers tax.
Thanks, a lot.
Hi, Sheila.
Okay.
What I was going on with my staff.
Okay.
Hello, Mark.
Question comes from Michael Baker with being their partners. Please go ahead.
Hi, Jeff. Thank you for all your good work.
I'm relatively new to this but just wondering.
Q commentary.
Whether you've had much contact with the liability insurance carriers.
Who.
Typically for commercial users.
King airs.
Our ensuring the owners of those aircraft.
I remember.
Remember youre doing it and.
And I applaud that I actually think.
Stretching up I would have thought.
The insurance coverage would be all right.
I guess insurance coverage I don't want to rush of people. They don't do anything until somebody runs over there, but and then when they run out of their first then they get serious I suspect are preoccupied with other things.
Well actually I should talk to them and come out and that's kind of I'm going to.
Turn it over to Ralph to answer your question. So yeah. So thank you.
People, we have been educating the underwriters, we are sending them information and trying to talk to them. We just sent them sent out to fly an article.
Too many of the underwriters.
But it seemed fruit.
Jeff just said hard to get traction I mean, do you think it's a no brainer, but where.
Yes.
You know get some more traction so we keep following up and keep doing it and hopefully the lifeboat will come on because I think if it comes on the one that will come on to too many sadly I think.
What I had anticipated in a way.
Is it if I were to lose a family member.
Crash.
I would be angry obviously.
And I would probably say look.
This technology was available to make your airplane schaefer and enjoy.
And part and I'm going to go after here.
When you have one of those happen.
Than you.
Look it's a problem in a different way.
It seems like.
If you're a commercial user of the King air or a corporate user of the King Air and this technology is available and you can <unk>.
Meaningfully reduce prospective liability if operating that aircraft that.
Yeah.
You are Mel season.
Okay.
Okay.
I would say I'd go crazy.
Your first choice.
Well I found I actually asked.
Our attorney in New York.
And the mouth Fischer's.
As it becomes more obvious than you can really make the case, where there's a case for a male patients, but it's got to be pretty well understood. The recent articles and flying magazine has showed strongly publicized.
Managers and safety issues associated with your Io trial.
It's probably getting to that tipping point, let's say.
Well not to not to belabor the point, but.
To the extent that you reach out to the trade publications in our liability insurance arena.
They may find this.
Technology interesting.
Hum.
Encourage your continued efforts it.
It seems like.
It seems like it would be an important factor in.
Delivering services to the 5000 King airs that are excellent. So anyway. Thank you for your.
Good work for responding.
Well I can tell you that.
When the FAA told us that.
Matt.
They lost 100 people a year and what we were doing were to save their lives.
It was humbling.
I don't know about you know nothing I've ever done in my life shaped antibody in July.
Michelle reported by all.
So.
It is.
It's a wonderful opportunity.
Sure give back for good fortune.
Hi, pointing out sure.
Yes.
Hum.
I agree with you, 100% hopefully we'll get some traction.
Okay. Thank you.
Thanks for your interest continued interest thank you.
Alright.
Hi, good.
This concludes our question and answer session I would like to turn the conference back over to Mr. Geoffrey Hedrick for any closing remarks.
No we're done we're done.
Thank you.
Okay.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.