Q4 2021 Innovative Solutions and Support Inc Earnings Call
Good morning, and welcome to U N a.
<unk> solutions and support fourth quarter and fiscal year 2021 earnings conference call.
All participants will be in listen only mode.
Do you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
After today's presentation there'll be an opportunity to ask questions.
To ask a question you May Press Star then one on your Touchtone phone.
To withdraw your question. Please press Star then two.
Please note this event is being recorded.
I would now like to turn the conference over to Mr. Geoffrey Hedrick. Please go ahead.
Good morning, this is Geoff Hedrick.
I am chairman of the board joining me today are real when Dan our CFO.
Mask poor.
We will discuss the fourth quarter.
Formats for fiscal 2021, and the 2021.
<unk>.
I would like to turn it over to rail we have safe harbor message well.
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.
Thank you Ralph.
Finish the 2020 one fiscal year.
Positioning us for strong top and bottom line growth going forward.
The strength of our growing OEM demand provides us an excellent foundation for the growing demand in the retrofit sector and the segment.
The order book the auto throttle are now developing.
Military sector on King Air and larger multi engine aircrafts.
Our turbo fan auto throttle program doubles the market opportunities.
We are expanding our sales force and our planning.
Thanks.
Expansion of our strategic marketing.
Our growth has been affected by the lack of sales people.
Exacerbated by the pandemic.
Our recent emphasis has produced a new strongly experienced G H.
Sales director and.
And we are in the process of finding individuals with the <unk>.
Other two market segments military and air transport.
I will now turn it over to ROE for the financial analysis go ahead Ralph.
Thank you, Jeff and thank you all for joining us this morning.
Fourth quarter revenues were $6 9 million.
From $6 $3 million a year ago.
As a result, we saw sequential revenue growth in every quarter. This year revenues were generated in each of our general aviation and military markets.
Recurring revenue from our PC 24, senior auto it's Robert production programs.
Gross margins for the quarter were $57 six up from 50.
Three in the year ago quarter, with the increase attributable to product mix as well as the favorable leverage achieved by the growth in revenues.
Margins remained in line with historical averages.
<unk> expenses for the fourth quarter of fiscal 2021 were $2 1 million down both sequentially and compared to the third quarter of this year as well as from $2 3 million in the fourth quarter of last year.
Compared to a year ago research and development expense was marginally lower at 10% of quarterly revenues R&D was in line with our historical averages and continues to reflect our strong commitment to innovative and new product development.
Selling general and administrative expenses were down from the year ago quarter. The decrease reflects lower professional fees and benefits expense in the quarter.
We believe quarterly operating expense levels will increase as the company expanded the sales and marketing efforts this fiscal year.
For the quarter, we generated operate operating income of $1 9 million or 27% of revenue.
We reported taxes of approximately 356000 in the quarter. The company recognized the tax benefit in the fiscal third quarter of fiscal 2021 due to the reductions in deferred tax asset valuation allowance.
Therefore income tax expense will be recognized when I go forward basis, the company anticipates, a tax rate should be in the 21% range.
Bottom line net income was $1 5 million or <unk> <unk> per share for the quarter up from $1 2 million or <unk> <unk> per share in the year ago quarter.
Quickly looking at results for the year total revenues were 23 million, our third consecutive year of revenue growth.
Net income was $5 1 million or 29 cents per share, which includes $1 1 million or six cents per share and tax benefits, reflecting the release of a deferred tax valuation allowance.
As a result, this was our most profitable year in over a decade.
The company remains in strong financial position, we generated $4 6 million of operating cash in fiscal 2021 with 800000 of operating cash flow in the fourth quarter.
Fiscal year end September 30, we had $8 3 million of cash on hand, and that is the answer.
Disbursing approximately $20 million of cash dividends in fiscal 2021.
The company is debt free.
I'd make one additional note on the balance sheet that due to the ongoing global supply chain challenges.
Among other things the ongoing COVID-19 pandemic, we are maintaining a slightly higher than normal levels of inventory simply as an added measure of precaution.
However to date, we have managed to largely avoid production disruption disruption as a result of the supply chain challenges, even amongst an increase in production volume.
We believe that the company has sufficient cash on hand to fund opportunities for the foreseeable future now I'd like to turn the call over to sure sure.
Thank you Andrew good morning, everyone fiscal.
Fiscal year, 'twenty, two and innovative solutions to support made good progress.
Virtually every aspects of its business.
Revenues were up for the fifth consecutive year margins expanded compared to the fiscal 2020, driven by improved productivity and efficiency. Despite the extraordinary measures undertaken to ensure the safety of our employees customers and vendors in response to the COVID-19 pandemic.
Yes.
While we recognize the pandemic continues to fall.
<unk> lives and many industries are reporting labor shortages.
We have experienced a few disruptions.
Nevertheless, we remain vigilant to quickly identify and resolve any issues that may arise.
So let me provide that.
Additional information around some of our revenue generating programs.
Driving our success.
Company has three OEM production contracts that continue to provide a level of stable recurring revenue.
The general aviation market seems to be improving and as a result extra is reporting increased demand for king gas in which we are the supplier of production results.
Currently somewhat optimistic.
May see some increase in revenue from these programs.
Our strategy has been to use our kingdom Oracle as the foundation to branch out into adjacent assays as well as expand beyond turboprop into the business jet market.
Docs are equally valuable.
I am happy to report that we are expanding our oral solid market to retrofit any appropriately equipped fitness citation <unk>.
<unk> 103 hundred business jet.
The Pilatus PC 24 program results can making steady progress.
Textron.
<unk> also reported a nice increase in the number of PC 24 has delivered over the first nine months of 2021.
Picture on accolade us OEM production contracts are therefore expected to provide a steady level of recurring revenue.
Some potential for growth in fiscal 2022, as well as their Austin.
Our government contracts on the KC 46 continues to run as expected production rates.
In addition to our OEM business, we continue to grow our retrofit business primarily.
Ill displays for air cargo conversions.
We have a competitive advantage in the mini cargo operators are buying used 700.
57 aircraft for conversion aircraft on which we believe we have the best cost with upgrade on the Mark.
For some perspective, the only other competitive cockpit.
Upgrade on the market takes four times longer to install costs significantly more and its proven reliability is much lower.
In addition to OEM applications are also is an ideal retrofit at auction.
Adopting a much more aggressive approach to the also retrofit market, having hired a dedicated business development professionals and expanding our reach beyond Textron's, one service centers to target independent fixed based operators.
Our maintenance.
Operations.
Mark.
I should also briefly mention.
Two recent.
The recent announcement.
The European Union, and Canada certification of our King get it also opens up new geographic markets.
Our expansion into the business jet market.
Like the base to expand into another adjacent market.
Finally eclipse continues to show interest in technology upgrade of the cockpit.
Ongoing discussions regarding additional needs.
New orders in the fourth quarter of fiscal 2021 was $6 5 million, bringing the new orders for the year to $28 5 million.
Backlog as of September 30 was $91 million.
250% increase over the course of the last 12 months.
Fiscal 2021 was a good year.
Uh huh.
US well positioned for continued success.
End markets have not fully recovered to pre pandemic levels and various safety and other protocols have been an obstacle.
Our emphasis on price performance across various markets has enabled us to deliver strong returns.
Before we open for questions. Let me once again applaud the ongoing efforts of our employees to integrate new safety protocols into our standard operating decisions, which has enabled us to maintain productivity without jeopardizing the health safety and wellbeing.
Unlike now to turn the call over to questions.
Thank you.
At this time, we will open the floor for questions.
If you would like to ask a question you May Press Star then one on your telephone keypad.
If youre using a speakerphone please pick up your handset before pressing mckeith.
To withdraw your question. Please press star two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
Our first question comes from David Campbell with Thompson Davis <unk> Company. Please go ahead.
Good morning, everybody Hey, David.
Sure.
And there's a lot of presentation on excellent results.
For the quarter, although of course.
<unk> targets.
This is because I'm always optimistic.
But let me get it when they ask you a question.
And then just one.
Yeah.
And new products.
Hey, Rob.
Substantially increasingly.
Opportunities.
For you to get new residence.
Why do you need new salesmen, why do you need more salesmen.
Very well.
I believe.
We are massively understaffed.
And that the opportunities.
Our.
Multiples of what we are.
Presently we are realizing.
And Thats, primarily because we don't have active people in the field.
So I mean, if you think about the revenue that we want to generate we're talking about trying to generate 25 to 30 million this coming year.
Yes.
Attempting to do that to try to do it with one guy.
Yes.
Yes, it makes sense.
No.
We're looking for smart.
Both people to deal with the <unk> III.
And again remember we have three market segments.
We have made.
The Biz jet, which were which is now being covered by.
Our latest.
<unk>.
Market marketing director.
And we need an equivalent of that for military and we'd need a equivalent to that for air transport.
We've got a lot of business.
That's it.
Heritage business, but we want to which brand R. R.
Both those segments.
Inventory on the air transport.
Huge opportunities there that have yet to be touched and we need sales guys to do it.
Yes, the sales table.
They're likely to come from.
Existing.
Company competing companies or are they likely be people that have no no experience in the business.
Thank you all.
They come from from.
<unk>.
Companies or in the case of the military.
Get retired.
I was going to retire debt.
For sure.
Officer Corona War.
Our commander.
Commander.
Alright.
It was a pilot.
Had extensive flight test experience et cetera.
And do them.
Sure.
Yes.
Opportunities add practice revenue et cetera.
Yes.
Would be military for sure the commercial air transport would come from.
What are the people.
Example, there's been a lot of acquisitions and the comp.
Combining.
Multiple companies.
Having a number of people looking for something to do and that's what we're going to try to exploit.
How we've done it in the past it's worked out well.
Okay last question.
Backlog was down.
Previous quarter, So I think it was $9 million.
Hey down to $9 1 million.
That's strange that the backlog was going down when the revenue leverage going up so can you.
Glenda shipments go up the backlog goes down so long we have been shipping quarters.
Our backlog is easily goes up.
Relatively small amount.
Very good.
Obviously, it's something that we keep an eye on.
It was consistent.
Subsequent quarters, we had an equivalent we would be concerned, but I'm not concerned in this case.
It's gone up massively.
Over the past year so.
I am delighted for that.
Alright, thanks for the help I appreciate it.
Thank you David.
It sounds good by the way.
Well I'm still here I'm more of a in a way.
Yeah.
Oh I'm reminded people talk guys remind me there.
The reports of my death are premature.
Oh go ahead, Jeff don't forget here, he was kind enough to see me.
Well I will do it okay.
Thanks Kara.
Our next question comes from Roger Nedrow private Investor. Please go ahead.
Yes. Good morning, Thanks for the good call today.
You paid out a nice dividend at the end of last year is with an eight point some million dollar balance on the cash on the balance sheet are there anticipated to pay out a dividend again this year.
Not really.
We're not anticipating it put it that way.
No.
But.
It was.
Ludwig I want to make sure that.
Whatever.
And we had we paid out in this.
And this year, where we had some conference and the tax situation et cetera for our stockholders Thats all.
So.
Right now we are.
Making investments.
And we want to keep some reasonable amount on hand.
In the near future, we don't see I don't know.
But that may change.
Yeah.
Company has a habit of generating pretty consistently cash and as we generate cash.
We're all happy to distributor serving over 100 million in cash I think.
Over the years.
Yeah.
We consistently do that.
But nothing there's nothing planned right now answering your question.
Okay. Thank you keep up the good work.
Thank you.
Okay.
Our next question comes from Michael Friedrich.
Private Investor. Please go ahead.
Good morning, everyone I didn't hear a whole lot in the call about what was happening with the.
The large air cargo.
Any online retailer that was retrofitting and building a large fleets is all of that still on target and still continuing to do well.
Yes, we have.
In rough terms, just under 100 aircrafts John.
So I mean.
Some of those aircrafts.
Airplanes that they bought from somebody that is already John the upright joy.
But the important issue.
Where plywood with.
It's exhibiting our outstanding reliability.
Chapters in the field.
That's going well and we wanted to take very good care of that customer.
Okay, and remind me again, how large their fleet could be when theyre done.
Well I mean, it's speculation.
If you want to know my speculation I think it could be bigger than than what it's now the biggest fleet, which would be Fedex, it's about 700.
Right I remember.
Equipment when.
When they had seven airplanes.
Uh huh.
Their growth has been.
Calculus.
Alright.
Come through about the same or more.
Simply because it has huge resources behind us.
Bluntly.
The profile as you know has changed I mean I.
I personally.
Some of our online.
I mean, I'd say free driving into the store.
Honestly, so they've got to move those packages around.
And there's a limit to how many trucks you can put on the road show.
I think the growth is inevitable and I think.
Hum.
We're on a hell of a good horse in the race.
Okay, great. Thanks, Jeff.
Yeah.
Yeah.
Once again you May press Star then one if you would like to ask a question.
One final time as a reminder, you May press Star then one if he would like to ask a question.
Our next question comes from Glenn Remington Private Investor. Please go ahead.
Good morning, Thank you for taking my call.
I really like just stock.
Beginning my journey with this company, but read quite a bit I think I understand the notion of what you are.
Building there.
Hi, I'm wondering if you could speak a little bit to the notion of future proofing with all this conversation about alternative fuels electrification.
Whether it's R&D or whether it's software baked in for future.
The application.
I'd be curious what your feedback would be on the 510 going forward with with all of these alternatives that everybody seems to want to talk about.
Well I mean.
Mark This is Geoff Hedrick Mark perspective.
The electric airplane, it's Scott.
I may have application.
Short runs near in urban areas.
But it certainly doesn't have a good.
Opportunity for long runs for a simple reason.
The.
Airplane and electric airplane.
When it lands.
It takes off which means it has to carry that.
This amount of weight through the entire.
Yes. Thanks.
Fuel.
Sure.
So at least 30% of its weight.
Reduced.
Are you seeing they load it has to carry.
So shortly on my practical lifetime, I don't think I'll see you.
Huge change.
Well I didn't think honestly I didn't think.
The electric car.
As quickly as it did so.
I'm not sure, but I believe the airplanes are very different problems and all that to the car.
They're all yours.
All of the question.
<unk>.
<unk>.
Right now there are airlines that are looking at them running all of that fuels. If you can make them economically practical that's terrific.
<unk> is a major cost in the operation of an airplane. So you don't want to raise that per unit cost of that.
Fuel if at all possible so.
Maybe it's just in summary, I honestly.
I don't have the wisdom of giving you an accurate answer I get it wrong, we speculate that.
And I think.
The electorate.
Airplane will be.
Well, let me jump reasonably short runs around urban areas along with longer runs will still be done by these massive airplanes right.
Yes.
And.
They have gotten over the years much more fuel efficient.
There is a huge room Sharon.
The operators.
Optimize.
G up their equipment.
Ben.
Billions and billions of dollars doing yet.
Direct operating cost.
Dissipate.
Many of them to be a driving force.
Don't see any major changeover.
Really excited about the safety and efficiency aspect. So I just wanted to say thank you for your hard work and I'm very excited with your company.
Well, that's very kind of you to say that means a lot to ask Trust me.
Yeah.
Our next question comes from Rick Teller private Investor. Please go ahead.
Good morning.
I'm not sure I heard SRAM correctly, there Mike sounds it was kind of going in and out a bit.
But did you say something about working with them.
Embraer.
Parcel retrofits or something.
Yes.
Because that's a whole new let's call it brand of Av.
Aircraft did well.
Once I hearing that correctly, and maybe I just misheard.
Yes.
I think well.
I believe what we said was we were working on the Embraer aircraft Embraer marriage.
Wonderful airplane.
300, and spend that Super seller terrific and is ideal and does not have an auto throttle and we can provide and provide some.
Great.
Palpable.
Safety features and.
A reduction of workload.
So.
What we're focusing on now.
We're working directly to get retrofit.
Installations, and that's different than that.
And OEM has.
For example, when you have a building airplanes from scratch.
You can put parts wherever you feel.
As appropriate when you have a retrofit situation.
More likely have cables and hoses and stuff in places that you don't work you have to learn to deal with this.
Company has done retrofits for 33 years or so.
We know what we're doing.
There's a huge opportunity and we're working that with them.
People like that.
That with people, but with airplanes like the Embraer air and other airplanes.
Retrofit potential Ferrara, what's wrong.
Yeah.
We're going to be looking at both the military and expansion in the shelf.
That was for plumbing and turbo fans, what's your brain areas.
Does that answer your question, yes, yes, yes. It does are you in talks with any other Oems for <unk>.
Including all the throttles in their newer models.
Emily we're always in talks but.
Substantive talks.
Not so much.
We're moving well there.
The reality is that the market is magnitudes orders of magnitude.
And then the OEM market and we loved the OEM market, we're delighted disappear but.
But certain programs director fragrances mass.
Massively larger and we wanted to focus on that as an example, one of the things we're doing just to give you. An example, the retrofit.
Dave.
The installation of our auto throttle.
Joe.
The King Air.
Hum.
It has taken.
Seven cases over 100 hours of late.
Or to put it in.
Estimated that originally you had about 40 to 50.
But with recent work in development and refinement.
In New Jersey et cetera, we've reduced the time to install this to 120 hours.
That's a significant savings for the operator, but more importantly airplanes.
Airplane for 35 years.
Hello, Eric.
Hey.
Airplane, even for an hour.
Whatever reason it just.
Right.
All of our certainly feel like we need it.
And so we're trying to we're trying to focus on minimizing the.
In fact, our impact how about retrofit installations.
That is very different.
Attached or.
Yes.
Then what you would.
Usually place.
Yeah.
Because youre not youre not interested in.
Moving stuff around and that kind of thing that you have to do.
Thats it.
That makes sense.
Yes, yes.
And the fact that you're.
Expanding potential retrofit markets things like Embraer air presumably other manufacturers.
Yes that would be behind.
The new focus on.
Working with our fixed based operators.
And other things other than the Textron systems.
Yes, the Textron program is a wonderful program.
I actually admire them for showing me.
Responsibility and clarity.
<unk>. This is as quickly as they did in their production.
And they did a great job.
And.
I I really commend them for doing that they recognize.
A real safety feature you already talked about 100 people a year die.
That's right.
It's a humbling Challenge Trust me.
And then you're right.
What we have now is working with us and trying to get them up to speed. So that they can turn airplanes.
Got a quick one and we're looking at new kinds of airplanes for instance, the embraer.
And not a prop airplanes, it's a turbofan airplane with a different kind of range and so we have we have.
Right now our application.
Alright, well thank you.
Youre welcome.
Our next question comes from Roger Goldman Private Investor. Please go ahead.
Good morning, Jeff and team.
Nice to nice to hear about another year of progress My dad is looking down with a smile.
Okay.
A couple of things Jeff.
The first is <unk>.
Just wanted to comment a little bit about electric airplanes.
My son, Jay could you also a shareholder.
He is the senior Guy in our company called basic technology.
Which has.
<unk>.
They're based in Burlington, Vermont, and they are operating very differently.
Then the others the others seem to be more interested in an IPO then in the future of aviation.
These guys are very.
That's a personal comment Jeff.
Hey, guys.
Okay.
These guys. These guys are really interesting in terms of and you might just want to take a look at their website, but they.
<unk> got airplanes are flying.
What are they in Vermont.
Burlington.
Yeah.
I had a hard shutdown for 45 years.
Okay.
But but there are a couple of things one is.
The improvements in batteries are happening very very quickly in second.
They have a pretty unique battery configuration.
And there are already a bill.
<unk> signed up for UBS.
The government as a customer and a lot of where they are the planes are flying.
Waiting for FAA approval.
And they're focused on package delivery not customers because as you well know package delivery is three times the size of customer deliveries in terms of potential revenue. So I just mentioned that it's worth having somebody on your team look at their website and if you want an introduction I can make it.
Certainly not worth spending a lot of time on but keeping an eye on that.
The second thing is I'm delighted to hear that you're ramping up your marketing and sales effort.
I've always felt that there was a lot of opportunity to move faster with this suite of products in the marketplace.
And it sounds like what you're doing is you're redefining the marketplace to be much bigger than you had been.
And.
I think the ramping up of sales and marketing in and it looks like Youre also doing a little bit of branding is just terrific.
I compliment you on that.
Third of course is the question I ask you every year, which is you've got a lot of cash and we've got a lot of credit lines I understand your conservatism about dividends, but.
Wed like to lobby again for short term dividend to reward the shareholders.
No I agree.
For me it says is that cost for the stock was zero.
Yes, I know.
Alright.
Yeah.
Honestly I think yes.
Look the company is willing to provide.
But right now the.
Dividends flurry that we did.
This year.
Well it was John.
John for obvious pragmatic regions.
Yes.
It's always nice to have a little cash and $8 million in a hell of a lot of cash now.
$50 million.
But we don't.
We will probably keep.
Hum.
Amount and $10 million to $12 million.
Yes.
Paul will take a look at Denver, having being out we're not we're not.
We're not obsessed with cash.
Hey, guys.
But we wanted to.
Put it that way.
No I understand I always look at cash.
Plus available credit, particularly in this interest rate environment, if interest rates were different I would feel differently.
I understand that and I know I know, but.
Right about now.
I prefer to focus my energies toward developing a market, which I think I'll have a better return they get any cash from the baggage but.
I get that one.
But.
Anyway, Okay.
Again, the most important point I am making Jeff is as well done on on raising your ambitions for the company.
Well in fact, we appreciate that.
And your support.
Our shareholders are really important to us talk about them and think about them a lot. So.
Sure.
I appreciate your support.
Okay stay well Jeff.
Thanks.
Our next question comes from Glenn Wilmington, Private Investor. Please go ahead.
Yes, Hello. Thank you had one other question.
I noticed in the release.
Following along for a while now there was a lot of mention about approvals.
And additional regulatory jurisdictions for your products and I guess in simple terms I'm curious if the bureaucratic overhead cost to achieve those are captured in this year's books, but the future sales won't have the burden of those costs spread out against them. So I'm wondering if it.
As more of a one time business development investment and then in the future the sales just stand on their own.
Well, yes, it is a one time.
Oh man.
Practically.
You know every time.
Remember every.
Tony has been wrong.
Potentially that's already.
And it isn't it isn't terrible.
But it's no.
Oh, Yeah, Yeah, you have to submit the Petco Park, it's the bureaucracy that exists worldwide now, but it is a one term one time effort and once you get it.
Okay.
Maintenance in some cases, but it's minor.
So the answer is yes. The good news is once you get authorization in Canada and Europe.
I'll have to do it every year.
It gives you an opportunity now to sell worldwide are in that area.
Perfect. Thank you very much.
Okay.
Our next question comes from Brent.
Derrickson retail please go ahead.
Hi.
Hi, there.
I'm curious to know why pay these dividends why not keep the cash on the books and maybe buyback some shares because one of the biggest let's face. It. We're all here because we want to make money.
Dividends are nice, but when you're in one of the largest shareholders in some of these other funds that own the shares they.
They make a lot of the money.
On a dollar basis.
Rather see the stock price up it Hasnt gone anywhere.
In 14 years.
Biggest bull market, we've seen in 10 years and the stock is still sitting here.
It hasnt been over $8 since 2007.
So as a shareholder I'm not real happy sitting minutes factors is sitting here doing nothing.
And can you.
I'd, rather I'd rather not.
Hold these.
Hold the shares until I die I'd like to try to make some money myself. So no quarter was good year is good but at the same time nothing's happened.
Yeah.
Well Stephanie.
Something must have happened because one of them.
Sure longer tells me.
<unk> cost for them, where they're at.
Best friend as Euro minus.
Something must have happened and that's what happened in the 100 and some odd million that was distributed.
As you know I'm a.
Sure I'll do myself.
And.
And we did and we have a buyback in the past we did that we do.
Aggressive one some years ago.
Problem when it happens is that I have.
Limited liquidity in the stock buyback.
Buybacks.
Right back at it.
Producers that.
Great.
Even more so it's not.
I've been advised that fast.
Not such a good idea.
Would like to believe that.
If we distribute the dividend.
Could also consider buying stock.
No.
It's not a simple answer.
We.
Oh.
We took.
The opportunity or is that too.
Two.
Distributing.
The dividend.
Dividend.
It's a capital gains goes up by 30%.
It may be.
More attractive to have the cash.
Then I stopped that.
Would go up and then the question is with a higher capital gains since the stock go up as fast so.
I'm not proud of the fact that I was trying to judge things I try to just run the business.
Most practical way.
I appreciate your interest and.
Do I anticipate.
Buyback not right now, but certainly you know I don't have an issue George.
Before.
Okay, so as far as the.
Additional employees are you, saying that without these employees.
And that can be able to grow the way you want to.
We're going to stay at the same.
Well right now, we're anticipating growing sort of 20% to 30% now.
I don't know that that may not be at for Nvidia, but.
I think it's a good solid growth.
One should focus on right.
No we've never made an acquisition.
But if we.
I would prefer not to go out and borrow money to make an acquisition and have the additional burden. So I would like to have some free cash in the business and $8 million is not a lot. So I mean.
Well I have a different.
Honestly I haven't tempered opinion.
I'm, just telling you what my feeling job.
And by saying, it's going to limit the growth.
One way or the other.
We're going to focus on the growth, we're going to do whatever we can to optimize the growth.
I don't know if I heard you correctly earlier.
On the call you said that you had maybe.
What kind of about 100 planes for your online retailer.
This quarter this quarter.
Short of 100, I don't know what it is today, but it's somewhere between 80 and 100.
And that was reflected in this quarter's earnings report.
And that was what.
And that was reflected in this quarters.
The 100 airplanes as I explained that.
A good portion of those airplanes.
John as an example.
American Airlines had a whole bunch of them.
760 Sevens that were modified with our equipment onboard so.
The operator bought those airplanes.
In some cases converted.
The passenger ones.
So Scott freighters.
And so there is some percentage that were already equipped with all right.
Panel displays system.
Yes.
And so.
Well, we'd probably.
About half of those airplanes.
We're all new and they were all done this quarter that were done over a period of time, because they know all of them, but they were before lease through other companies.
Hello.
All of them and then lease them back.
One last question.
Since the first quarter, we returned in new orders have been increasing.
This quarter.
The decline is that a seasonal thing or is that something else.
It's pretty hard.
Seasonal seasonal typical protest.
Buildup.
As long as I've been in the business.
Much as I like everything that would be it.
Uniform gross right. It always ends up being a little bit of a sad truth.
The first quarter.
Suffers from.
Yeah.
Equipment out in new.
Your yearend sales that occur.
We do our price increases on on a physical basis. So when we go to a new fiscal year.
There's a price increase.
Some of our customers take advantage of.
Ordering and taking the leverage at the end of the year. So the end of the year tends to be.
Favre put it that way.
Okay. Thank you.
Youre welcome.
This concludes our question and answer session as well with our conference call. Thank you for attending today's presentation. You may now disconnect.
Thank you.