P&F Industries Inc. Q1 2023 Earnings Call
Speaker 1: Know oh know.
Speaker 2: Hello, everyone. We will be starting in just a few moments. We're waiting for a few more participants to join. Please stand by. Please stand by.
Speaker 1: Thanks for watching!
Speaker 2: Hello and welcome to P&S Industries' first quarter of 2023 earnings call. My name is Melissa and I will be your coordinator for today's event. Please note, this conference is being recorded and for the duration of the call your lines will be listed only. For any who haveBlue statistical coordinates link via the chat
Speaker 2: However, you will have the opportunity to ask questions towards the end of the call. This can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point, please press star 0 and you will be connected to an operator. I will now hand you over to your host, Mr. Richard Goodman, PNF's General Counsel, to begin today's conference. Thank you. Mr. Goodman, please take it away. Mr. Goodman, please take it away.
Speaker 3: Thank you, operator. Good morning. Welcome to P. Good morning and welcome to PNF Industries first quarter 2023 conference call.
Speaker 3: With us today from management are Richard Horowitz, Chairman, President, and Chief Executive Officer and Joseph Molino, Chief Operating Officer and Chief Financial Officer.
Speaker 3: Before we get started, I'd like to remind you that any forward-looking statements discussed on today's call by our management, including those related to the company's future performance and outlook, based upon the company's historical performance and current plans, estimates, and expectations, are not intended to be a
Speaker 3: which are subject to various risks and uncertainties and could cause the company's actual results for future periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the company. These risk factors and uncertainties are described in today's press release under forward-looking statements as well as in our most recent SEC filings, which you can find on the company's website.
Speaker 3: including our 2022 Annual Report in Form 10-K , our quarterly reports in Form 10-Q .
Speaker 3: and other documents. Forward-looking statements speak only as the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise.
Speaker 3: I would also like to remind all participants on this call that, as we've been doing for the past several conference calls, with respect to the question and answer portion of today's conference call, the length of the questions from any particular stockholder or other caller, together with management's responses, are limited to 20 minutes. Additionally, please be aware that during the question and answer session, the questions are limited to 20 minutes.
Speaker 3: Management will only answer questions directly related to the company's first quarter 2023 results of operation and financial condition as disclosed in a press release published earlier today. We must insist that you adhere to this procedure. Management will not be entertaining any questions to go beyond the scope of this call and with that
Speaker 3: I would now like to turn the call over to Richard Horowitz. Good morning, Richard.
Speaker 4: Good morning. Thank you, Rich, and good morning everybody. Thank you all for joining us this morning.
Speaker 4: to discuss P&S results for the three-month period ending March 31, 2023.
Speaker 4: I hope you're all doing well as this country and the world continues to face the ongoing economic pressures and the ongoing crisis in Ukraine as well as tensions with China and Russia.
Speaker 4: well as this country and the world continues to face the ongoing economic pressures and the ongoing crisis in Ukraine as well as tensions with China and Russia. We pray for a peaceful end to all these conflicts.
Speaker 4: I would also like to direct your attention to the company's press release that was released earlier today, which includes the company's March 31, 23 balance sheet, statement of operations, statement of cash flows, and a discussion related to the company's results.
Speaker 4: for the three-month period ended March 31 of this year, and how these results compare to the same period in 2022.
Speaker 4: Further, I wish to highlight a number of key factors that impacted our first quarter 2023 results.
Speaker 4: There was significant improvement in high-tech revenue and gross margin. The gross margin in Flora Pneumatic improved as well. Our consolidated operating expenses were essentially flat compared to the first quarter of 2022. We aim for the
Speaker 4: which we're all quite familiar with, was the primary cause for the increase in interest expense.
Speaker 4: Finally, in order to make better use of everybody's time, yet be mindful of the purpose of this conference call, I would like to remind you all of the following.
Speaker 4: and as Richard just said as well, maybe a little redundant. First, as you think has become our standard practice, we will move directly to a question and answer session and not restate what is already in this morning's press release.
Speaker 4: Secondly, please be aware that we will only be answering questions directly related to the company's first quarter results.
Speaker 4: Please be aware that we will only be answering questions directly related to the company's first quarter results and the financial condition
Speaker 4: We must insist you to adhere to this procedure. And finally, please be mindful of the 20-minute time limit, as previously noted, what you plan to enforce.
Speaker 4: To the extent shareholders of other callers with pertinent questions have multiple questions, please complete your portion of the Q&A within the 20-minute limit. And then we will move on to the next questionnaire.
Speaker 4: And with that we will be happy to answer any pertinent questions that any stockholder or person on the call may have. Operator?
Speaker 5: Operator.
Speaker 2: Hello, as a reminder, if you have a question, you may press star one on your telephone keypad.
Speaker 2: We'll take a moment just to see if we have any questions.
Speaker 2: You may press star one on your telephone keypad.
Speaker 2: Okay. And we do have a question coming through from Timothy Stebose, a private investor.
Speaker 2: Timothy, you can go ahead.
Speaker 6: Timothy, you can go ahead and eat. Good morning, everyone. Can you hear me?
Speaker 7: Yes.
Speaker 6: Good morning. I own about 4% of the company.
Speaker 6: Congratulations. It's been a long time coming. Lots more work to do but a return to material profitability. Congratulations, first of all.
Speaker 6: that things are looking good and obviously there's potential upside with Air Max and other areas too. How are you feeling about things? Is this the most optimistic we've felt since 2019? This is not your first call and I certainly know that you know how these things go, but we do not give projections and giving opinions is a projection. So we can't do that.
Speaker 6: That sounds like a party. Please let me speak, Lincoln. Well, I feel like you are kind of nasty. You kind of were nasty with me and I don't think it was necessary.
Speaker 6: I meant let me speak please I'm enthusiastic my question was enthusiastic my my question was congratulatory my question I've been around a long time I was trying to commiserate and be close and with you guys and I get the gate crashing down it's inappropriate
Speaker 6: question to connect with you as my CEO when I own 4% of the company that shame on you.
Speaker 6: So I'm sorry, but it's just not right. So, you know, I didn't need a formalistic answer that was legalistic to the question that was inclusionary and welcoming.
Speaker 6: I'm sorry, but it's just not right. So, you know, how do you feel? I didn't need a formalistic answer that was legalistic to a question that was inclusionary and welcoming and warm.
Speaker 6: So maybe you can try to answer the question differently. I would respectfully ask you to answer, try to answer the question differently. Maybe I'll be more specific since you apparently don't know how to be emotionally vulnerable and connect with people. You mentioned three specific things in the press release. You mentioned three specific things that were problematic or that have created headwinds for the company. Obviously, inflation. You say increasing inflation. You mis-spoken the press release. You should have said it's decreasing inflation now.
Speaker 6: But, you know, there's still inflation issues, but it's not increasing, by the way. So you might change that reference next time. But you mentioned inflation and you mentioned international supply chain and you mentioned domestic transportation. And the specific question I have for you since we're so boilerplate here and so boring is... against...
Speaker 6: Can you give me a qualitative sense and please don't stiff arm me again, okay? Can you give me a qualitative sense? Maybe Joe can answer this.
Speaker 6: Can you give me a qualitative, I prefer a quantitative sense, but give me a qualitative sense since, you know, we already know what happens when I ask questions that are too specific or whatever. Of how you think those factors, how materially those three factors that you bring up at the beginning of the press release are a drag on the company's potential profitability and that when those reverse to normal or if you
Speaker 6: an anecdotal sense, not guidance, not predictions, but a sense of those specific three things that you mentioned and pointed out, how you feel about the potential for the reversal of those three things to allow us to continue to have material improvement. How's that? Is that fair or is that something I need to be stiff armed on?
Speaker 8: Joe, you can answer the question. Yeah, let me do my best, Tim. Going back to your original comment about increasing inflation, look, I would agree that I think things are maxing out, but during the first quarter we were still seeing some inflation. Now, that's a general comment. I would say for us.
Speaker 8: we're seeing an environment of increasing input prices throughout. Certainly in the very first half of...
Speaker 8: 22 and we really didn't write size, that's where the pricing until the back half of 22 and as we're now anniversary a quarter where I felt like we feel like we were behind last Q1 so there's a benefit there obviously we got caught up. On the transportation and...
Speaker 8: Certainly the cost of transporting across the ocean, I don't have the exact figures in front of me, but I think we're pretty close to pre-pandemic levels, and certainly 12 months ago Q1 or 22, we are still very high. So obviously that's a benefit. You know, I would say...
Speaker 8: me address, I apologize. What was the third one?
Speaker 6: Well, inflation, transportation costs per the beginning of the press release.
Speaker 8: inflation transportation costs and international supply chain. Well, you know, the supply chain is solid. We are still seeing some delays in overseas deliveries, but nothing that we haven't been able to manage. It's really a non-
Speaker 8: you know, non-factor. A little inconvenient, but it's really a non-issue at this point.
Speaker 6: Oh really, okay. Do you, in essence, view these kind of four items, and again, you put trends in the certainties towards the...
Speaker 6: Well, not the very beginning of the press release, but do you view them in the national supply chain, which I guess is mostly resolved at this point, but I mean...
Speaker 6: Yeah. Do you view domestic transportation costs, international supply chain, inflation, and, well, Boeing?
Speaker 8: As all now essentially tailwinds and not headwinds in the direction they're moving? Yeah, they're not tailwinds. Boeing, as publicly disclosed by them, has plans to increase production over the next 12-24 months in a pretty dramatic way and as we said
Speaker 8: about that what we see is that opportunity.
Speaker 8: Again, there's there's material profitability here. I presume that's heartening and exciting to you guys. Yes. Yeah, my records go back pretty far and it was a heck of a quarter going back.
Speaker 8: Again, there's material profitability here. I presume that's heartening and exciting to you guys, yes? Yeah, my records go back pretty far and it was a heck of a quarter, going back quite a number of years.
Speaker 6: this alter or how has this altered, if at all, your view of
Speaker 6: of further acquisitions or the broad issue of capital allocation actually probably bring in your profitable as far as ramping up the dividend, doing a Dutch tender buyback, stocks pretty cheap here.
Speaker 6: perennially cheap. Making acquisitions, has your tone and tenor at the board level or the attitude of management, you know probably whichever one of you want to answer or can answer, has that changed or other, do you view new opportunities as we're presumably more optimistic?
Speaker 6: making acquisitions, has your tone and tenor at the board level or the attitude of management, probably whichever one of you want to answer or can answer, has that changed? Or do you view new opportunities as we're presumably more optimistic about the company?
Speaker 6: We are always in the market looking for acquisitions and we continue to do so. And that has not changed at all. Is that your question? Yeah, and then capital allocation more broadly as it relates to the fact that we have this earnings report that we're releasing today.
Speaker 6: any more nuanced view on capital allocation. You did a great job buying back stock from you know the open market over the, I'm sorry, from private shareholders including me in the past which you know great accrual of value for everyone who remains. I was able to get back into stock. I like the company here.
Speaker 6: how do you, at the risk of incurring your ire, how do you view buybacks at this point? We've discussed it, we just continue to discuss it at each and every board meeting. And at this time the board feels very comfortable.
Speaker 4: with, you know, allocating our funds for other things right now, saving it for acquisitions, etc., etc.
Speaker 4: Can you hear me? I hear a click. Can you hear me okay?
Speaker 4: Okay, how much time do I have left? We review it regularly at all the board meetings. At this time we're not so...
Speaker 4: So focused on stock buyback even though it is on the price We feel as well, but that's that's not where we feel the allocation is right now that can change of course We have bought our board meeting this month, and it can change again, but we review it every month every board meeting
Speaker 6: Okay, I appreciate that. Broadly speaking, are you seeing...
Speaker 6: I'm not saying that you're seeing more opportunities and I don't see your eyes popping out of your head, but are you seeing more opportunities and a little more, not excited, but in the acquisition space about what you're seeing with what's going on in the economy? Or any less?
Speaker 4: but we're seeing less optimistic stories, less earnings for these companies historically. Now it's less, so values are coming down a little bit, but nothing really. Joe, you wanna answer that? Yeah, I don't know that the landscape on the acquisition has?t a low rise in investment on the Mal Possibly
Speaker 8: on new products trying to expand in Europe . Some customers that are large customers that we feel are deeply embedded in some nice trends. So we just have a lot going on internally, organically that we're excited about. And we're still not 100% aclu.com.
Speaker 8: absorbed with the
Speaker 8: the gear acquisition. I mean it's integrated, but now it's time to do something with that integration. So there's a lot of internal focus right now. Again, as Richard said, we're not going to turn down an acquisition that might come across our desk, but we don't have...
Speaker 8: You know, we don't have a massive project going on to search out a company just to buy anything right now.
Speaker 6: Okay, one more question then if I may. As far as, and I like organic growth.
Speaker 6: Have you ever shared with the street and or can you share with us now?
Speaker 6: I love quantitatively but qualitatively a sense that you have from the acquisitions and the moves you've made about how sizable greater than overall economic growth or the growth in the markets that you're in.
Speaker 6: the strategies that you've been employing here, the acquisitions and all the new products and whatnot. I'm not gonna ask for EBITDA margins or growth percentages and earnings per share or earnings per share numbers, but as far as like revenues go, can you guys share with us?
Speaker 6: sense of you know with where you got the company where you think you're going um you know do you have a 10%
Speaker 6: long run annual revenue growth goal for the next five years or are there any projections or notions with regard to revenues that you can share with us or the the overall growth of the company based upon your your your strategies you've employed that you believe in.
Speaker 8: Joe, I don't think we can answer that question, but if you feel it's something you can add, you can go ahead and add it. Yeah, I can't answer it. I mean, I can only answer it this way. I think there's opportunity. For us to absolutely grow faster than...
Speaker 8: the overall growth in the market of 3% or whatever that is, I think we would be disappointed if that was the best we could do in the next three to five years. As I said, we think that our relationships in aerospace are gonna allow us to grow faster than that. We think our opportunity in Europe is gonna allow us to grow faster than that. And as I said, we've got some.
Speaker 2: Thank you very much and as a reminder you can press star 1 to ask a question. Our next question comes from Andrew Shapiro of Longdale Capital Management. Andrew, please go ahead.
Speaker 4: Hi, thank you. Can you hear me okay? I had trouble getting into the question queue. Yeah, yeah, we hear you, Andrew. Are you hearing a click on the phone? Are you hearing a click on the phone?
Speaker 6: A little bit of a click, but it was more that I kept on hitting the number one and it was not registering my questions. And then I finally did something. I was fearful I had to call dial in, dial out. And please, hopefully don't take these seconds off of my greens
Speaker 6: No problem. Thank you. Go ahead. No worries. All right. So your release mentions that there are multiple growth opportunities provided by both Jackson Gear Acquisition and also other product lines.
Speaker 4: Can you expand a little bit on the opportunities you're pursuing with each of these areas?
Speaker 8: Sure, Joe, go ahead. You're the better guy. The Jackson gear business had a lot going on in the international mining area, and I'm not talking about coal mining, just about every other mining that you can think of, because we sell a suite of gears.
Speaker 8: that are somewhat generic to mining across the globe. And we're one of our key, one of Jackson's key customers, supplies worldwide. So that's pretty exciting. We had a little bit of mining business before.
Speaker 8: but it was somewhat regional in the Pennsylvania area. So that's one area. And then again, as I think we probably said,
Speaker 8: in the Pennsylvania area. So that's one area. And then again, as I think we probably said, when we made the acquisition,
Speaker 8: The profiles of gears that can be made now by us are much broader, larger, more complex and that just opens up markets. I mean the gear business if you can make most profiles you're somewhat industry agnostic. I mean gears are just in just about every industry.
Speaker 8: that you can think of. So we like that because we're not wedded to anyone particular area to grow. In some years, certain areas grow faster than others and we can focus on those opportunities. Does that answer your question?
Speaker 6: Yeah, and I think you also referred about growth opportunities in some other product lines. Are you able to expand at all on that? Sure. Is there anything outside of gears?
Speaker 8: Yeah, I mean, we're as I think we said, we're in development with some products with a couple of key customers. We're working on tweaking the line for a particular market that one of our customer partners has gotten heavily into.
Speaker 8: They're very big in the rental market, industrial rental market with tools and they're doing a great job with that. And so...
Speaker 8: Those are probably 2 of the things that I would call out on the high tech side.
Speaker 9: All right, and I'm going to migrate here to Florida, New Madden, and some new product development in the second here. So.
Speaker 9: the Florida pneumatic and some new product development in the second here.
Speaker 9: Well, it looks like we can look forward to asking more about this in future quarters because you have talked about this rental line. It sounds like you may be developing some unique products for that rental line. Is that correct in what you just said? I don't know that they're unique. They're just better targeted. We're not talking about brand new inventions, but...
Speaker 8: the market has
maybe a different profile for the suite of tools that you might sell there as opposed to our regular line. So again, we're working directly with our, one of our largest customers at HITECH on making sure that we've got that all covered.
Yeah
Okay, your release mentions the development of a cordless installation tool for the aerospace market for which you've begun taking orders.
Can you elaborate a bit more on this product? And is it in high-tech or Florida Pneumatic's aerospace offerings or both? And this application's market size opportunity? The one that we're talking about is specifically Florida Pneumatic. And it's a little bit different than Florida Pneumatic.
I don't know what the release says exactly in front of me, but we have a suite of aerospace cordless installation tools we're working on. So one is out taking orders, working on another version, and we're pretty excited about it. The customers we've talked to are pretty excited about it. So it'll get tested out in the field.
You know, we're taking orders, but it's our first foray into directly ourselves into cordless. We're very excited about it. And you know, we'll see. I think that there's probably...
more interest right now in Europe on that than here in the US. For whatever reason that doesn't mean that won't change, but we've got a lot of customers interested.
we'll see. So does that mean like, does that mean like Airbus when you say aerospace customers interested in the Airbus? Not only Airbus but yes the Airbus dominates the European market for aerospace of course. Right yeah so and can you describe a little bit more about the application.
of this tool and maybe the market size opportunity?
Well, it's an installation tool. We make plenty of installation tools for all aerospace customers. An installation tool, or at least the way we view it, is you're trying to get a fastener in place and tightened typically in a small space inside the aircraft.
you usually have to work at some sort of odd angle and that's one of kind of Jiffy's claim to fame is we make a whole suite of of installation tools that work at 17 degrees and 25 degrees and whatever depending on what what they're trying to install so right now those are all attached to an air hose and the customers that have them love them but depending on the application and in the
You know, how the customer views cordless versus non cordless, there's a market for a cordless product. It's got advantages and disadvantages. Obviously you're not tethered to anything, so that's a wonderful thing if you're in a tight spot. But you know, you've got the battery to deal with, batteries wear out and have to be replaced. So
We think there's a real market there, and we're excited about the specs on our tool, and so are the customers.
What's the timeline like for a product like this from taking orders to shipping and booking revenues?
I would say within a couple of months. I don't know exactly. I mean, our general delivery time in aerospace is.
I want to say 10 weeks or so. I'm probably getting yelled at by some people. Okay, and you're taking orders now. You have a product. Yeah, we're taking orders. We're planning on shipping on product. Really, it'll finish product.
Okay, and can you just further your goals and plans to introduce other versions of such cordless tool products later in 23 which you referred to in your press release as well? Yeah, we've got an alternative version of that that's right behind it. I don't have a...
Delivery date on that and when it's going to be available, but soon it's right by, I'm going to say 3rd quarter ish.
All right, and can you expand on and similarly discuss the new what you refer to as the new limited life parts that Jiffy Air Tools has begun to market?
Limited life parts. When we are leaving thank youside without Carman are
Oh, the keys? Well, okay, so just so we're clear, Jiffy has for some period of time sold consumables along with its tools. Is that what you're referring to?
I'm only referring to what was referred to as new limited life parts. I don't have it in front of me, but I'm assuming that's what we're talking about. So, in the process of installing...
components on a on an aircraft. There are these things called hex keys which are used to sort of line up the fastener in the hole and they're consumables they they they break. It's not a big material thing though it sounds like then.
Um, oh, I know I think it's a seven figure line of business. Oh, well, that's meaningful. Okay. No, no. And you just started to market it. So what's the kind of timing on that rollout and when it starts to...
You know, I think what we're referring to is there was a time when we couldn't make our own or we couldn't make them very efficiently. But now we we've all we vertically integrated that whole process. And that's I think what we're trying to get at is that we have a bigger opportunity as a result of our... Sounds like then it'll be overhead absorption will be where the major impact would be.
Yeah, and I think cost savings now that we're vertically integrated there.
All right, on Florida Pneumatic, regarding the automotive revenue declines, you said were associated primarily due to your price increases leading to unit volume declines? While the gross margins were improved, was that sufficient to maintain gross profit or about how much did the unit volume drop hurt this subsegment's gross profit?
But it depends on what you know, we've got a suite of 25 or so it's probably even more 30, 50. So SKUs complete tools for Aircat, it was really a bit of a strategic decision. So there were a couple things going on. So what we have learned
in sort of marketing our Aircat brand more directly in the last five or six years on the Amazon platform. We've learned a lot about the brand and...
sort of marketing our aircat brand more directly in the last five or six years on on the Amazon platform. We've learned a lot about the brand and and you know what kind of
market power we've got and really what we've learned out in the marketplace is that the customers have viewed our brand just about as strongly as the top brands in the category whether that be CP or IR so we chose to try to move up
the value chain there and price ourselves a little closer to the top brands and a little farther away from the less premium brands. We did lose a little bit of unit volume, but we were very excited about our ability to maintain our value chain.
margins, you know, pretty close to where we were. And more importantly, what we also learned is that
margins, you know, pretty close to where we were. And more importantly, what we also learned is that we were
Fairly inefficient with our advertising dollars. We really had a brand that was deserving of actually, believe it or not, less advertising because the tool sells itself. So the bottom line impact is actually a benefit. That whole strategy, well, maybe we lost a few.
a few hard dollars in margin, we've actually gained it in contribution because we've dramatically been able to reduce our spend. So we've repositioned the tool as a premium brand and that's what it is.
which presumably provides them greater margin away from the other tools, or did they just get rid of the corral and bin for everyone.
No, there's still a tool corral for Home Depot. They've put a little less emphasis on this line. I can't exactly tell you why. I guess they look, it's sales per square foot and margin per square foot. And is this the type of tools.
Joe, is it the type of tools or it was just their Husky offering? I don't know whether it was just Husky or not. I mean, I'm sure they move things in and out of that corral all the time. I just know that. Okay.
tools or it was just their Husky offering? I don't know whether it was just Husky or not. I mean I'm sure they move things in and out of that corral all the time. I just know that it's affected us.
All right, well, let's move on here. Last quarter's call, you discussed how Florida Pneumatics revenue margin mix was favorably impacted by rebounds in the aerospace product line, both commercial and defense, and that helped fill up part of the hole from some of the commercial Boeing business lines, 737 MAX and 787, the slow production ones, and they have not yet fully recovered. So, that's all I have for you today. Thank you. Thank you. Thank you.
to their pre-pandemic and grounding consumption rate. In fact, you highlighted in your press release what the monthly production rate was and kind of the timing that 2025, they might get back up there and step up in there as we continue through the rest of this year and into 2024.
Because you filled in some of that product line, you know, that hole that was created when Boeing's business dropped off in that area, when this business comes back and presumably PNF, Jiffy, et cetera, maintain their share.
Does the company have the production capacity to accommodate the return of that Boeing business? You know, the fact that all this new business? Go ahead, Richard. Sorry. That's a good question, Andrew. And the answer is yes.
We, Joe can give you the specifics, but we've added some new machinery at GIPHY as well as HITECH, some significant capital expenditures in the last six months in the seven-figure area total. And for that exact thing, for that exact reason at GIPHY and at HITECH.
to increase efficiency and be able to handle more. Absolutely. Jerry, may I add anything to that? I'm assuming that's because you have some visibility on this return to business and the company's ability, likelihood of achieving and getting the business and then ability to deliver on that business.
Well, I'd like to say that was the case, but it's more about efficiency and getting more to the bottom line. The byproduct is that we can do more business, but the motivating factor for us was to increase margins and profitability.
Well, I'd like to say that was the case, but it's more about efficiency and getting more to the bottom line. And the byproduct is that we can do more business, but the motivating factor for us was to increase margins and profitability. I'm not exactly- Jerry, you wanna hear anything? No. No, it works. Okay.
Yes. Joe, do you want to add anything to that? No, you had it, you're spot on. Yeah, well I'm running, so I'm going to... Let's talk a little bit more about Europe if we can.
Sure. You know, can you give more color on the inroads the company has made into Europe ? It generally takes several quarters to get certified onto a line before you can book shipments and revenues. Where in this process has your aerospace tools progressed in Europe and the prospects and timing for such, you know, for the prospects that you're seeing? Are you already booking revenues?
and are we just at the order phase? We're shipping product to Europe as we speak. Okay. To sell. It's being sold. We've taken orders. We've shipped the product to the customer.
Okay.
On the last call you thought the opportunity for Jackson Gears and its energies was still in transition, but there would be tangible progress in Q1, which you've shown and you've talked about.
Can you elaborate on the additional benefits and whether revenues margin or both that have momentum continuing into this current Q2 that we're at?
Yeah, I mean, we're we really feel like we've just gained our footing here in Q1 on the gear business. We're excited about the team that we've got in place there. And as Richard alluded to, we've put in some automated equipment and we look forward to seeing those examples and getting to this biggerled linen worship in Q1 2020. Thank you, guys very much. And, once again, manuals health,ured service campout shaking out what order Ka
Vertically integrated with some other equipment. We have a lot of business and frankly our sales people are probably.
How do I put this? They can get more business if we could get more through the plant. So we're doing everything we can. To make that happen. Okay. All right and following up on the capex thing, you discuss capex for some very high payback automation equipment. That was delivered and then there was others that were about to be delivered when we last called.
For it to be meaningful, it'll be Q3. Yeah, but but we're, we're, I believe there's still one piece that we're waiting on. Joe, am I right about that? I think we just got it. We got four pieces of equipment. All at the moment, and there's other other things to come. But we've got a little bit of a learning curve on the four things we've brought in.
And, you know, one at Jiffy, one in Cranberry, and two in Punxsutawney. You know, we've got to get up to speed, which we will. There's nothing. Um.
crazy about doing that, but Richard's right, third quarter, but I would say probably even closer to fourth quarter till we start to see.
The bigger benefit, you know, all these things got to get into Q. We've got to get them programs. We've got to get
parts loaded onto them and tooled. So it's gonna take a little bit of time, but we're excited about it and there's no reason to expect that we won't be in pretty full production by Q4, but Q3 will start to see some tangible benefits.
Okay, two remaining questions. In the OEM engineered solutions segment, are there any other particular areas, industries, or products that have grown worthy of any call-out and elaboration other than your rental market type of tools in the industrial side? you
We're working on some we're working on some other new products, but I don't really want to get into what those are, but we've got some nice development.
So that was really good. I appreciate the efficiency of getting straight to the Q&A. And I wanted to ask if you guys could consider.
because your press release this quarter in particular was really, I think, improved and provided some greater clarification on things that eliminated my need for other questions. But the time horizon from when you issue the release to the start of the conference call is so tight.
that I am could I ask you guys consider if you're able to do it is to release the earnings report the night before if at all possible and then have this call or potentially have this call an hour or two later in the in the On the same morning if you're going to do it just to give a little more time
to get through the press release since it's not going to be rediscussed in your script, which I appreciate. I think that's the optimal way of doing it, but to have a little more time with it to create thoughtful questions would be helpful. And I'll end that discussion. We'll try to talk about it, but making the call later.
It's hard because if we can make it later, it's running into lunchtime on the East Coast.
I wouldn't want to do that. I wouldn't want to do that. Not for us. Not for us. Not for us. Not for us. But for all of us. It's not called the Zwol. But we'll definitely consider what it's talking about. If the press release in the 10Q is in the can.
already, then perhaps it could get released the night before. But if not, don't reduce the information you provide in the release. I found this release more useful. By the way, does the share count change? We have a share count you can share because the 10Q is not yet out.
on the undervaluation of the stock price. It's just a shame to reinstate a buyback when your stock price is inevitably gonna be higher rather than perhaps considering a modest 10B5.
small program to be in the market with queuing up of 500 chairs a day.
or whatever it is at these price levels. It would be something you should, you know, on the next quarterly board meeting, is just kind of kick that around about putting in a modest 10B5 plan that is basically buying a few hundred shares a day. It'll add to the...
trading liquidity which frankly will add to the Better and improved valuation on on the stock price as it is so just got you Okay, we thank you. Do we do it as I said, but thank you Andrew and Lola We will definitely consider what you're talking about as always
Thank you. Thank you. Thank you. Thank you. Thank you, everyone. As a final reminder, if you'd like to ask a question, you can press star 1.
As we have no further questions in the queue, I'd like to hand it back over to Mr. Richard Horowitz. Sir, please go ahead. Thank you all for spending some time with us today and discussing our earnings. We look forward and of course our dividend. We put an announcement last night that our second quarter dividend was $2.
will be distributed in a short order in the next couple of weeks. And we look forward to speaking with you in our Q2 conference call in a few months. Stay well everybody. Thank you so much operator and everybody else.
Thank you. That concludes our conference today. Thank you for joining us. You may now disconnect. Host, please stand by.