Q4 2021 Applied UV Inc Earnings Call
[music].
Okay.
Good day, I would like to welcome everyone to the Q4 and full year 2021 applied.
Good day. I would like to welcome everyone to the Q4 in full year 2021 applied U.V. earnings conference call.
Earnings Conference call.
At this time, all participants are in a listen-only mode.
At this time all participants are in a listen only mode.
A brief question and answer session will follow the formal presentation.
A brief question and answer session will follow the formal presentation.
As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Brett Maas, Investor Relations from Hayden, IR. Thank you. You may begin.
As a reminder, this conference is being recorded.
It is now my pleasure to introduce your host Brett Maas Investor Relations from Hayden IR. Thank you you may begin.
Bret Moss: Thank you. Once again, welcome to Applied UB's fourth quarter full year 2021 earnings call. With me on the call are Mike Riccio, Chief Financial Officer, and Mark Lebeau, who has recently joined the company helping formulate business strategy.
Thank you once again and welcome to the applied UBS fourth quarter and full year 2021 earnings call with me on the call are Mike Ricky Oh, Chief Financial Officer, Mark <unk>, who has recently joined the company, helping Formula business strategy. As a reminder, all materials for today's presentation are available on the company's investor website.
Bret Moss: As a reminder, all materials for today's live presentation are available on the company's investors website at applied UV dot com. Before we begin, please take a moment to read the four looking statements in our earnings press release. During today's call, we'll make certain predictive statements that reflect our current views about future performance and financial results.
At apply digital applied UV Dot com before we begin please take a moment to read the forward looking statements in our earnings press release during today's call, we'll make certain predictive statements that reflect our current views about future performance and financial results. We base. These statements as certain assumptions and expectations of future events that are subject to risks and uncertainties.
Bret Moss: We base these statements and certain assumptions and expectations on future events that are subject to risks and uncertainties. Our most recent Form 10-K and 10-Q with some of the most important risk factors that could cause actual results different from our predictions. With that, I'll turn the call over to Mark Lebeau.
Recent Form 10-K , and 10-Q with some of the most important risk factors that could cause actual results to differ from our predictions with that I'll turn the call over to Mark <unk> Mark floor is yours.
Mark: Thank you, Brett. And good morning, everyone. It's a pleasure to be with you this morning to review the highlights of our most recent quarter and full
Thank you Brad.
Everyone.
Good to be with you. This morning to review the highlights of our most recent.
For the quarter and full year.
Mark: 2021 was a year of significant accomplishments centered around the closing and integration of three strategic acquisitions.
2021.
It's centered around the closing.
The ratio of three acquisition.
First of all of our business.
Mark: air and surface pathogens elimination process.
Air and surface.
Yeah.
Mark: well positioned to capitalize on increasing market demand, safer environments, born out of devastating impacts of a pandemic, as well as the most recently announced US government EPA, CMS policy initiatives all aim to improve in...
It's well positioned.
Increasing market demand.
The environment for now.
Yes.
As well as the most recently announced.
Yeah.
Yes.
Mark: We are well-positioned to serve a global market that's expected to reach $24 billion by 2030 as a leading provider of that the most popular
We are well positioned to serve a global market.
24 billion.
23.
Leading provider.
Elimination.
Okay.
Mark: tech businesses, facilities, and the people who move through it.
Facility and the people.
Mark: Simply put, we're in the business of providing solutions that address the growing demand for purer, cleaner, safer air in any environment where people live, work, and live.
Simply put we are in the business of providing solutions that address the growing demand.
Sure.
Sure Dave.
Are there any environment.
This work.
Throughout the course of 2021 invested nearly $15 million pre acquisition.
Mark: Throughout the course of 2021, we invested nearly $15 million in free acquisition.
Our portfolio.
Yeah.
Mark: Specifically early in 2021, we acquired substantially all the assets of the Kita Holdings, which folded its air-sized systems of air-terrification technologies into our mix of offerings for approximately $7.5 million.
Specifically early in 2021, we acquired substantially all the assets.
Holding rich folded this era XI system.
Jason.
Nick.
Possibly.
Cash equity.
Mark: Akita's 2020 revenue was 4.7%
A key to 2020 revenue.
Later that same year in 2021 actually in September we acquired substantially all the app.
Mark: Later in that same year in 2021, actually in September , we acquired substantially all the assets of Keshe Science approximately $3 million in cash and equity transactions. That's his revenue for the year.
$3 million.
Revenue for the 12 months ended October .
I just wanted to approximately $5 million.
Mark: These two acquisitions provide us with all the rights, title, and interests to the air applied.
These two acquisitions provide us with all of them right.
And interest through the year.
Si system.
Right.
Mark: finally on the acquisition front in 2021, we acquired substantially all the assets.
And finally on the acquisition front end time.
We acquired substantially all the assets.
Some of the line of air purification technologies, enabling full scientific yeah.
Mark: showing the line of air purification technologies labeled in coal assigned to the air purification technology.
Mark: cash and equity transactions. At the time of that close, I personally have a lot of questions surrounding AcCo understanding and
As an equity transaction at the time of.
At closing the transaction was valued at approximately one.
Mark: We set the stage for organic growth driven by a large and targeted marketing program kicking off on the mid-Q2 in the expected drive and expand market.
Acquisitions completed.
We have set the stage from organic growth driven by a large and targeted marketing program kicking off in Q2, and we expect to drive and expand market share in 2020.
Mark: begin to see positive and emerging shifts, excuse me, an energizing shift in the equivocation mark.
And to see positive in emerging shift excuse me, an energizing shifting the securitization market as we exited 2021.
Mark: that was an overhang for much of the last quarter of 2021 and into Q1 2022, as end-users awaited key policies.
Placing uncertainty that was an overnight much in the last quarter of 2021 and two.
Q1, 2022 at end users a way to keep policy decisions and funding allocations globally scientists and health care experts at navigating for improving their quality.
Mark: globally, scientists and health care experts have been advocating for improving their quality to control the transmission of airborne pathogens quite a while. And the pandemic has struck in 2020 for the height and importance of clean air for our personal health and for the health of the
Transmission of everyone.
Quite a while.
Pandemic is shop in 2020.
The importance of clean air personal health.
The back half of 2021 in early 'twenty two.
Mark: And back after 2021 and early 2022, there was much uncertainty as to how and when governments would respond to scientists' call to action for policy changes and if funding would demand
As much uncertainty as to how and when government.
Scientists.
All of the changes.
The funding will be made available.
<unk>.
Mark: Since then, government initiatives and commitments to funding by governmentally...
Since then government initiatives and commitments to funding by governmental agencies.
Mark: including the Centers for Medicated Medicare and Environmental Protection Aid, among others, reignited market activity.
The percentage of Medicaid and Medicare Environmental Protection agency among others.
Niv market activity.
Mark: increasingly encouraged by these developments and the advancement of new business opportunities toward
Recently encouraged by this development.
And then new business opportunities for contract.
One strong market headwinds.
Mark: We're one strong market headwinds that ship to the market tailwinds that have a compelling opportunity.
The tailwind that we're selling opportunities.
Mark: More specifically, the Centers for Medicaid and Medicare announced a meeting with stakeholders in February this year that mobile air cleaners installed in long-term care facilities held to ease education restrictions and are now inversible.
More specifically the centers for Medicaid.
Medicare announced immediate with stakeholders in February of this year that mobile air cleaners installed in long term care facilities.
Visitation restrictions now in Perceval.
No.
Mark: We're already getting to see interest and demand from our exclusive US distribution market.
I'm beginning to see interest and demand from our exclusive U S.
<unk> environment.
Mark: Likewise, as part of the President's Clean Air Agenda recently asked, EPA has recently launched a Clean Air and Buildings Challenge, which is called Action, and it can slice other guiding principles and actions to assist building owners and operators to reduce the risk from airborne viruses and other contaminants.
Likewise as part of the President's clean Air agenda recently that EPA has recently launched the air in buildings challenge just call to action.
This set of guiding principles in action as building owners and operators.
Airborne viruses and other things.
Hamlin.
Mark: We have two best of class tools available with the government detail and announced the potential tools in a consumer and business tool box.
We have two best in class tools available with the government detail and are now.
With tools.
Consumer and business tool box.
Mark: Together, as part of the American Rescue Plan, the Emergency Assistance for Non-Public School Program, but I know that the A&M has a lot to offer.
As part of the American rescue plan emergency assistance for non bonus program, but in others.
Mark: The government has made available over three and a half million dollars in funding to address the education when business disruptions caused by COVID-19 have happened.
The government has made available over $3 $5 million funding to address the education loan business disruption caused by COVID-19.
This includes improving ventilation system, including mobile and their sixth air purification systems to ensure healthier nonpublic schools.
Mark: including mobile and air, fixed air purification systems to ensure healthy air in non-public schools.
Yes.
Mark: Across the competitive landscape, the air purification market has been highly fragmented, and we are well positioned for the packet head-on. As a note, iRobot's Q4 2021 acquisition of Swiss Air Base Air
Across the competitive landscape.
Vacation market in the highly fragmented and we are well positioned to attack.
Add on.
Irobot Q4, 2021 acquisitions of switching.
Yes.
Mark: $72 million in a cash transaction, effectively adds air purification capability.
$17 million and a cash transaction.
Secondly, as the air purification capabilities.
Mark: products. This market transaction, in our opinion, affirms the opportunity in the space for the validate.
This market transaction in our opinion firms the opportunity in that space.
Validate our business plan.
Mark: Over the course of the last year, we had a number of high-profile installations and large venues and facilities that served as prime examples of our capabilities that we hold up as a reference to the House. These wins included the Palisades 5, which held, you know, 20,000 visitors and over 700 rooms, the Tennessee Department of Corrections, which housed
Over the course of the last year, we had a number of high profile installations in large venues and facilities that serve as prime examples of our capabilities that we hold up as references.
These wins included the policy size.
Yes.
20000 visitors mode 700 Green.
The department of corrections without.
Mark: the Armed Forces Research Institute, the US Army already improving grounds, and the list goes on. Clearly, our solutions are scalable, and the list of opportunities for further rewards is seemingly endless. We consider all the venues globally a very exciting time.
Dr. <unk> Research Institute in the U S Army operating proving ground and the list goes on.
Clearly our solutions, a scalable unlisted opportunities Furthermore, seemingly endless.
All other than just globally varying sizes.
Mark: ways to keep patients safe and patient and return to pre-pandemic levels.
Wade interim statement.
And return to pre pandemic levels operations.
Mark: Our sales pipeline is building as we continue to identify attractive opportunities for new businesses and we believe we'll provide a positive contribution to our future.
Our sales pipeline is building as we continue to identify attractive opportunities.
And we believe will provide a positive contribution to our financials.
Our 2021.
Mark: More importantly, we've expanded our network of international distributors to increase sales channels and product throughput. Our distribution channels include global leaders such as 360 Vyral Pharma in Africa, the Plant It division covering Scandinavia, Lutabata, and Lauter for the Middle East, among others. We closed out 2021 with a global distribution base of 52 distributors and dealers and now have presence.
Importantly, we've expanded our network of international distributors increased sales channels and product through our distribution channels include global leaders such as <unk>.
Pharma in Africa landed division cover in Scandinavia, the bottled water.
For the Middle East among others, we close out 2021 global distribution base.
Visitors and dealers now have presence in London.
Okay.
Mark: domestic and international distributors and dealers are key to the company expanding our global market share and reach
Domestic and international distributors and dealers are key to the company expanding our global market share and reach a clear differentiation between our company and our competition.
Mark: clear differentiation between our company and our company.
Mark: From a marketing perspective in 2022, we're preparing to launch a number of targeted initiatives that include digital, radio, and social media campaigns, all aimed at the following verticals, including cannabis, long-term care, schools, dental, and other healthcare facilities.
I'm, a marketing perspective in 2022 and preparing to launch a number of targeted initiatives that include digital radio.
Oshell media campaign aimed at the following vertical.
Canada's long term care, who will dental and other health care facilities.
But.
Mark: operationally we are also analyzing each of the points in our supply chain to tighten integration to optimize inventory and improve quality control and mitigate against supply chain disruption. They're so prevalent in our world today including exploring the use of large globally recognized
Operationally, we are also analyzing each of the points in our supply chain tight integration to optimize inventory through quality control and mitigate against supply chain disruption.
Well today, including exploring these large globally recognized contract OEM.
Tom.
Sure.
Mark: From a strategic transaction perspective, we're also currently exploring joint venture and other aeroside product placement pilot programs for established leaders in the long-term care, floral, veteran administration, and hospitality verticals, further increased market penetration and adoption.
From a strategic transaction perspective, we're also currently exploring joint venture and other aerospace product placement pilot programs established meters and the long term care Laurel.
The ministration and hospitality vertical further increased market penetration and adoption of our products.
Mark: We will also continue to seek out low-cost opportunities to bolster our legacy hospitality business, such as the recent vision mark act.
We will also continue to seek out low cost opportunities to bolster our legacy hospitality business such as the recent addition, Mach acquisition completed in late March of this year. This acquisition expands our reach into the luxury hospital space.
Mark: the late March of this year. This acquisition expands our reach into the luxury hospitals
New construction remodeling of hotels onto our core mud works mirror business Paul.
Mark: new construction remodeling that propels beyond our core Munwerks mirror.
Mark: Also, also, also to your name, also retention.
Also while also excuse me, while also potentially contributing towards online.
Mark: Lastly, I'd like to provide you all with a brief update on our senior executive search. We're pleased to state that an announcement regarding our permanent
Lastly, I would like to provide you of the brief update on our senior executive search. Please take an announcement regarding our permanent Ceos.
Mark: and we're also interviewing other senior executives who we expect to meet.
We're also reviewing other senior executives, who we expect.
Further strengthening events next I'd like to turn the call over to Mike Riccio, Our Chief Financial Officer for a review of our finances.
Mark: Next, I'd like to turn the call over to Mike Riccio, Chief Financial Officer.
Mike.
Thanks Mark.
Mauricio: Looking at the fourth quarter first, our fourth quarter net sales increased by 2.9 million to 3.9 million up from 1 million in the fourth quarter of 2020.
Looking at the fourth quarter one.
Our fourth quarter net sales increased by $2 9 million to $3 9 million up from $1 million in the fourth quarter of 2020.
Mauricio: The majority of this growth was driven by the three strategic acquisitions that essentially established our disinfection segment during 2021.
The majority of this growth was driven by the three strategic acquisitions that essentially established start disinfection segment during 2021.
Mauricio: Fourth quarter net sales increased by 10.3% sequentially when compared to 3.6 million in the third quarter of 2021.
Our fourth quarter net sales increased by 10, 3%.
Sequentially, when compared to $3 6 million in the third quarter of 2021.
Mauricio: This increase was the result of our efforts to continually integrate the operations of these three strategic acquisitions.
This increase was the result of our efforts to continually integrate the operations of these three strategic acquisitions.
Mauricio: Gross profit for the fourth quarter of 2021 was $1.6 million or 40.3% of revenue when compared to $106K in the year-ago quarter, primarily as a result of the addition of the disinfection segment. Sequentially, gross profit was up over $529K as compared to the third quarter gross profit of $1.1 million, primarily due to improved product mix.
Gross profit for the fourth quarter of 2021 was $1 6 million or 43% of revenue when compared to 100 6K in the year ago quarter, primarily as a result of the addition of the disinfection segment sequentially gross profit was up over 529, okay.
As compared to the third quarter gross profit of $1 1 million.
Primarily due to improved product mix.
Net loss for the fourth quarter of 2021 was $3 1 million compared to a net loss of $2 4 million last year in the fourth quarter. This loss was primarily due to the build out of our infrastructure to support the disinfection segment and the integration of the acquisitions.
Mauricio: Net loss for the fourth quarter of 2021 was 3.1 million compared to a net loss of 2.4 million last year in the fourth quarter. This loss was primarily due to the buildout of our infrastructure to support the disinfection segment and the integration of the acquisition.
Mauricio: For the full year 2021, net sales increased by 103.5% to approximately 11.7 million, up from 5.7 million in 2020. Again, the majority of this growth was driven through the addition of the disinfection segment through the acquisitions mentioned previously.
For the full year of 2021 net sales increased by 103, 5% to approximately $11 7 million up from $5 7 million in 2020 again. The majority of this growth was driven through the addition of additional specialty segment through the acquisitions mentioned previously.
Mauricio: 2021 net sales for disinfection for the disinfection segment were 5.7 million compared to zero in 2020. The hospitality segment began to rebound from the slowdown caused by the pandemic, reporting 5.9 million in net sales for 2021, an increase of nearly 4% when compared to 5.7 million in 2020.
<unk> thousand 21, net sales for disinfection for the Disinfection segment were $5 7 million compared to zero in 2020.
The hospitality segment began to rebound from the slowdown caused by the pandemic reporting $5 9 million in net sales for 2021, an increase of nearly 4% when compared to $5 7 million in 2020.
Mauricio: Net loss for 2021 was approximately 7.4 million compared to a net loss of 3.4 million in 2020. The increase in net loss in the 2021 was primarily due to the cost associated with the buildout of the disinfection segment.
Net loss for 2021 was approximately $7 4 million compared to a net loss of $3 4 million in 2020.
The increase in net loss in 2021 was primarily due to the costs associated with the build out of this section segment.
Specifically.
Mauricio: related to personnel costs due to the increased headcount, consulting costs and legal expenses related to the three strategic acquisitions, additional amortization expenses, increased advertising, product certification and testing, and corporate governance and public listing expenses.
Related to personnel costs due to the increased head count.
Sourcing costs and legal expenses related to the three strategic acquisitions additional amortization expenses increased advertising product certification and testing and corporate governance and public listing expenses.
Mauricio: almost half of the expense increase is related to well called one-time expense.
Half of the expense increase is related to what I'll call onetime expenses.
Mauricio: Looking ahead, we expect efficiency gains in 2022 as we increase momentum with the three fully integrated acquisitions and leverage target synergy.
Looking ahead, we expect efficiency gains in 2022, as we increased momentum with the three fully integrated acquisitions and leverage target synergies.
Mauricio: On a non-GAP basis, adjusted EBITDA was a loss of $4.8 million in 2021 compared to a loss of $2.6 million in 2020. We use adjusted EBITDA to assist in analyzing our operating performance by segment by removing the impact of certain key items that we believe do not directly reflect our underlying operations.
On a non-GAAP basis, adjusted EBITDA was a loss of $4 8 million in 2021 compared to a loss of $2 6 million in 2020.
We use adjusted EBITDA.
In analyzing our operating performance by segment by removing the impact of certain key items that we believe do not directly reflect our underlying operations adjusted.
Mauricio: Adjusted EBITDA is defined as operating profit or loss, excluding depreciation and amortization, and excluding spot-based compensation.
Adjusted EBITDA is defined as operating profit or loss, excluding depreciation and amortization and excluding stock based compensation.
Mauricio: In closing, we ended the year with $7.9 million of unrestricted cash available on our ballot sheet. Our ballot sheet is strong with ample cash on hand to support our growth initiatives. And we just recently announced that we will be using the same data as we did before.
In closing we ended the year with $7 9 million of unrestricted cash cash available on our balance sheet.
Our balance sheet is strong with ample cash on hand to support our growth initiatives.
And we just recently announced.
And we just recently announced that our board of Directors has approved a 1 million share repurchase program of our common stock in open market transactions that will remain in effect until September of this year.
This concludes our prepared remarks.
Operator, we can open the call for questions.
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments. Please press star one on your phone at this time.
Speaker Change: Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time.
Speaker Change: We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we pull for questions.
We ask that while posing your question. Please pickup your handset is listening on speaker phone to provide optimum sound quality.
Please hold while we poll for questions.
Your first question for today is coming from Jeffrey Cohen. Please announce your affiliation then pose your question.
Hey, good morning, how are you.
Good morning, Jeff.
Speaker Change: So I wanted to get a little more information as far as revenue composition by segment. If you could provide a little clarity from 21 as far as MindWorks error side.
So.
I wanted to get a little more information source revenue composition by segment. If you could provide a little clarity from 41.
Or is one more chair side.
Speaker Change: anything from Loomiside and then maybe give us some thoughts as far as 22 and revenues and segmentation of those revenues.
Anything from Luna side, and then maybe.
Give us some.
Thoughts as far as 22 revenues and segmentation of those revenues.
Speaker Change: As far as the revenues for 21, as I mentioned,
The.
As far as the.
Revenues for 'twenty one.
As I mentioned.
Speaker Change: hospitality or one works approximately 5.9 million in 2021.
Hospitality or morning works.
Approximately 5 million $5 9 million in 2021.
Speaker Change: and our disinfection segment was 5.7 million for 2021, again, as opposed to zero in the prior year. And our disinfection segment, as you may know, is made up of our aeroside
And our disinfection segment was five 7 million.
For 2021 again as opposed to zero.
In the prior year and.
Our disinfection segment as you May know is made up of.
Our aerospace.
Alex.
Speaker Change: and our scientific air products. Scientific air was only, well, both the CETA acquisition, two of the two or three acquisitions, CETA and scientific air, occurred basically in Q4, very, very, one late in Q3, one in Q4. So there was some contribution from them. But, you know, primarily the disinfection segment is due to the...
Our scientific air products scientific air It was.
Only will both both.
The <unk> acquisition to the two to three acquisitions caisson scientific air.
Occurred.
In Q4, very very late in Q3.
Q4, so there was some contribution.
From the.
Primarily the.
Disinfection segment is.
Due to the.
Speaker Change: What we'll call the from the acquisitions are our airside product.
From the acquisition of our aerospace product.
Speaker Change: Okay, got it. Could you talk a little bit about margins from current levels and how you're thinking about what they may look like going forward from the current, call it mid-30s? Yeah, well, as I mentioned, you saw the Q4 margins, tremendous increase.
Okay got it could you talk a little bit about.
Margins from current levels, and how youre thinking about what demand looks like going forward from their current call. It mid thirties.
As I mentioned.
The Q4 margins.
<unk> tremendous increase.
Speaker Change: from the previous quarter, just as we start to sell the higher margin tests and scientific air products. So from top to bottom, our STI air products are the higher margin contribution products
From the previous quarter, just as as we start this two two so the higher margin tests and scientific air products. So from top to bottom. Our <unk> products are the are the higher margin contribution products.
Speaker Change: followed by tests and then a fetus. So, as we blend in the newer or the later acquisitions based on some of the initiatives that Mark had discussed earlier, you're going to see improved margins going forward. The mix is much stronger now with those two, the two most recent acquisitions on the disinfection side.
Led by Cats, and then Peter so as we as we blend in these the.
Newer or the later acquisitions based on some of the initiatives that Mark discussed earlier youre going to see improved margins going forward. The mix. The mix is much stronger now with those two the two most recent acquisitions under this infection site.
Okay.
Speaker Change: That's perfect. And then as far as 22 on a sequential basis, any guidance or thoughts there as far as how the year may look sequentially through the quarter.
That's perfect and then as far as 22 on a sequential basis any.
Any guidance or thoughts there as far as how the year may look.
Sequentially through the quarters.
Speaker Change: I'm not prepared to give guidance today, however, I will tell you that as we fully integrate, as we continue to fully integrate the acquisitions, you will see improved sales, obviously, but also you will see improved margins from the improved mix that I just discussed.
Not prepared to give guidance today, however, I will tell you that as we as we fully integrate as we continue to fully integrate the acquisitions you will see improved sales obviously, but also you will see improved margins from the improved mix.
That I just discussed so.
And we're just finishing up Q1 now.
Speaker Change: And, you know, we're just finishing up Q1 now, still Q1 was, I would say, still in the process of integrating these acquisitions and
Still Q1 was I would say still probably in the process of integrating these acquisitions and.
Speaker Change: coupled with the initiatives that Mark described earlier, you're going to see some improvement in Q2 and beyond. That's the anticipation.
Coupled within the initiatives that Mark described earlier youre going to see some improvement in Q2.
And beyond that's the anticipation.
Speaker Change: But again, not prepared to give guidance at this stage, but the framework or the foundation has been laid from which we're going to continue to grow.
But again not prepared I'm not prepared to give guidance at this stage, but but the.
The framework.
<unk> has been delayed from which we're going to continue to grow.
Speaker Change: Got it. And one more if I may. The SGNA expense from Q4, should we think of that as the new baseline or were there some one-time charges in that? There are one one-time charges in there. Roughly half of that increase is related to one-time charges.
Got it and one more if I may the the SG&A expense from Q4.
Should we think of that as the new baseline or were there. Some one time charges in that.
Onetime charges in there.
Roughly half of that increase is related to onetime charges.
Speaker Change: You can use that as a guide. So there is a baseline, but the baseline would be slightly below that because he's one-time charges, you know, I'm not counting them going forward. Okay. Perfect. Those are for us. Thanks for taking the question.
You can use that.
The guide.
So there is a baseline, but the baseline would be slight.
Below that because of these one time charges.
Im not counting them going forward.
Okay, perfect that does it for us and thanks for taking the questions.
Thanks Chip.
Speaker Change: Once again, if there are any questions or comments, please press star 1 on your phone at this time.
Once again, if there are any questions or comments. Please press star one on your phone at this time.
Speaker Change: Your next question is coming from Chip Moore. Please announce your affiliation, then pose your question.
Your next question is coming from Chip Moore. Please announce your affiliation then pose your question.
Chip Moreo: Morning hey, thanks for taking the question guys.
Morning, Hey, Thanks for taking the question guys.
Chip Moreo: One of the circle back to margins that looked like I think disinfection segment margins were, you know, about 50% in a quarter. Just wondering, you know, you talked about scientific air and cares coming on and being accretive to margin. So is that should we think about that 50% margin as a reasonable rate on the disinfection segment? Or how should we?
Wanted to circle back to.
Margins it looks like I think disinfection segment margins were.
50% in the quarter.
Wondering you talked about scientific Aaron and kids coming on in and being accretive to margins. So is that should we think about that 50% margin is a reasonable run rate on the disinfection segment or how should we.
Think about that.
Yes.
Chip Moreo: Yeah, disinfection segment.
This inspection segment.
Chip Moreo: I'd say, again, it depends on the mix. It's definitely a larger margin, higher margin structure than hospitality, no question. And as I said, scientific air being the larger contributor in terms of margin.
I would say again it depends on the mix is definitely.
A larger margin.
Higher margin structure than that hospitality no question and as I said scientific air being the largest contributor in terms of margin.
Chip Moreo: And that's not far behind if we continue with the same mix and sales you'll see approximately the same margin in
Not far behind if we continue with the same mix in sales you'll see approximately the same margin.
Chip Moreo: in that segment, but again it's all going to depend on the mix of sales, but it is a healthier margin.
In that segment, but again, its all going to depend on the mix of sales, but it is a healthier margin question.
Chip Moreo: And any, we didn't talk about supply chain at all, but any impacts there or anything we should take into account on either side of the portfolio?
We didn't talk about supply chain at all but any impacts there or anything we should take into account.
On either side of the portfolio.
Speaker Change: Well, the one initiative, we have the China tariff reduction coming, so that will help for products that are, you know, imported from China, and we do qualify, so there'll be, there's, I haven't done the calculations completely yet, but there are retroactive adjustments as well as on a go-forward basis, so from a
Well the one initiative, we have the China tariff reduction coming so that will help for products that are.
Imported from China, and we do qualify so there'll be.
I haven't done the calculations completely yet, but there are there are retroactive adjustments as well as on a go forward basis, so from from <unk>.
Speaker Change: bi-chain logistics perspective, you'll see some improvement there. Also, there are some synergies that are occurring with the integration of these acquisitions as we look at the landscape of manufacturing and distribution, so we're going to start to enjoy those somewhat in 2022 as well.
Supply chain logistics perspective, Youll see some improvement there also there are some synergies that are occurring with the integration of these acquisitions as we look at the landscape of manufacturing and distribution. So we're going to start to enjoy those somewhat in 2022 as well.
Got it Thats helpful.
And then.
Speaker Change: And then, you know, in terms of the CEO search, it sounds like you've got something coming very soon.
In terms of.
The CEO search it sounds like you have got something coming very soon.
Speaker Change: How should we think about timing on that? I know you had a search firm maybe update us on the process there.
How should we think about timing on that I know you had a search firm.
Just update us on the process there.
Speaker Change: There'll be an announcement in the very, very, very short term.
There'll be an announcement.
In the very very very short term.
Okay, we'll stay tuned for that.
Speaker Change: Okay, we'll stay tuned for that. And I know you're not giving guidance, obviously, for the year, but I think, you know, in the past, we talked about scientific air and gas being, you know, a sort of 10 to 14 million contribution this year. Is that still reasonable, or how should we think about that?
Giving guidance, obviously for the year, but I think in the past we talked about.
Scientific Aaron Steen extra $10 million to $14 million contribution.
This year.
Is that still reasonable or how should we think about that.
I'm, sorry could you repeat that again Jim.
Speaker Change: So, I think, I think in the past, we talked about science, Sam and Kaz, both contributing, I think it was five to seven million in 22. Is that, is that still a reasonable expectation?
I think I think in the past we've talked about.
Thanks, Sam and <unk>.
Contributing I think it was $5 million to $7 million.
In 2002 is that is that still a reasonable expectation.
Speaker Change: Again, you know, we're not, we're not, I'm not in a position to give guidance, however...
Again.
We're not we're not we're not.
Inhibition of <unk>.
Give guidance however.
The.
Speaker Change: The overall contribution from those, you'll see, you will start, obviously you're going to see that now in the coming quarters because you saw a bit of it in Q4, but it's going to become more clear in Q1 and Q2 and onward. So yeah, I mean, that's, I'd say that's the floor and then, you know, the number that you see there and then we want to build from that. So.
The overall contribution from those.
You will see you will start obviously youre going to see that now in the coming quarters because you.
You saw you saw a bit of it in Q4, but it's going to become more clear.
Q1 and Q2.
And onwards, so yes.
Yes.
I would say that that's the floor and then.
The number that you see there and then we want to build from that from that so.
Speaker Change: I'm bullish, but not numerically bullish today.
Okay.
I'm bullish, but but but not numerically bullish today.
Speaker Change: Fair enough, understood. Okay. I will hop back in queue and let someone else. Thank you. Thank you.
Fair enough understood.
Okay, I'll hop back in queue, and let someone else on.
Thank you.
Got it.
Speaker Change: There appear to be no further questions in queue. I would like to turn the floor back over to management for any closing remarks.
There appear to be no further questions in queue I would like to turn the floor back over to management for any closing remarks.
Sure.
Well, thanks again, everyone for joining our call today should anyone have any additional questions.
Speaker Change: Thanks again everyone for joining our call today. Should anyone have any additional questions, everyone has our contact information. Please do not hesitate to contact either of us directly.
Our contact information, please do not hesitate to contact us directly. Thanks again for your time. Thank you.
Thank you ladies and gentlemen, this does conclude todays event you may disconnect. Your phone lines at this time and have a wonderful day.
Speaker Change: Thank you ladies and gentlemen. This does conclude today's event. You may disconnect your phone lines at this time and have a wonderful day. Thank you for your participation.
For your participation.
This is Jeff.
No.
Even if you Werent newmar.