Q2 2024 CPS Technologies Corp Earnings Call
Unknown Executive: Public Demand and Competitive Factors. Such factors could cause actual results to differ materially from those in any four-looking statement.
Such factors could cause actual results to differ materially from those in any forward looking statements.
Unknown Executive: Additional information can be found in our filings with the SEC.
Additional information can be found in our filings with the SEC.
Chris Witty: Now, I would turn the call over to Brian to offer his perspective on the second quarter highlights. After its chuck, will review the financial results in greater detail, right?
Now I would turn the call over to Brian to offer his perspective on our second quarter highlights after which Chuck will review the financial results in greater detail Brian.
Brian Mackey: Thanks, Chris. Our second quarter revenue was $5.00 million with an operating loss of approximately $1.3 million. Revenue for the quarter declined.
Brian: Thanks, Chris our second quarter revenue was $5.1 million with an operating loss of approximately $1 $3 million.
Unknown Executive: Revenue for the quarter declined year over year, primarily due to the fulfillment of our U.S. Navy armor contract with Kinetic Protection, as expected, along with some shipment delays related to labor shortages and other issues, which I'll review further in a moment. While near-term performance will continue to be negatively impacted by such issues, we are optimistic about the trends later this year and heading into fiscal 2025, as well as the number of growth drivers that are lining up for 2025 and beyond.
Brian: Revenue for the quarter declined year over year, primarily due to the fulfillment of our U S. Navy Army contract with kinetic protection as expected along with some shipment delays related to labor shortages and other issues, which I will review further in a moment.
Brian Mackey: The second year over year, primarily due to the fulfillment of our US Navy armored contract with kinetic protection as expected, along with some shipment delays related to labor shortages and other issues, which I'll review further in a moment. Bottom line results for the quarter were also lower year over year due to the reduced revenue and production challenges that impacted both ongoing shipment volume and a new product introduction in hermetic packaging.
Bottom line results for the quarter were also lower year over year due to the reduced revenue and production challenges that impacted both ongoing shipment volume and a new product introduction in hermetic packaging.
Brian Mackey: While near-term performance will continue to be negatively impacted by such issues, we are optimistic about the trends later than this year and heading into physical 2025, as well as a number of growth drivers that are lining up for 2025 in the arms. I'll now turn the call over to Chuck to provide more details about our financial results, after which I will provide some additional details.
Chuck Griffith: Chuck, thanks, Brian. As was just mentioned, the company's revenue total 5.0 million in the second quarter compared with $7.4 million last year. We previously announced that the fulfillment of armor orders for the U.S. Navy suite of aircraft carriers would negatively impact results by approximately $2 million per quarter. Kinetic protection with our full support continues to pursue additional work for other naval ship classes, and we're cautiously optimistic about additional orders. In parallel, our trailing 12 month book to bill ratio excluding armor remains on a growth trajectory running at 1.10 at the end of Q2 and is continued to take upward early in Q3.
Unknown Executive: Our trailing 12-month book-to-bill ratio, excluding Armour, remains on a growth trajectory running at 1.10 at the end of Q2, and has continued to tick upward early in Q3. However, our ability to fulfill open orders for non-Armor products has experienced challenges related to filling open manufacturing positions. We had an unusually high number of manufacturing personnel out of work on non-work related disabilities, which created short-term challenges for our production. Anecdotally, the local labor market seems to be loosening at this time. We have now added to our training a number of new hires, and we expect to have a third shift up and running next month for certain core manufacturing tasks.
Chuck Griffith: However, our ability to fulfill open orders for non-armer products has experienced challenges related to filling open manufacturing positions. We had an unusually high number of manufacturing personnel out of work on non-work-related disability, which created short-term challenges for our production. Our local job market remains tight in Q2, which negatively impacted our ability to convert orders to shipments. And, anecdotally, the local labor market seems to be loosening at this time. We have added in our now training a number of new hires, and we expect to have a third shift up and running next month for certain core manufacturing tasks.
Chuck Griffith: This is expected to significantly boost our top line growth, particularly in the fourth quarter and beyond. We have the orders; the difficulty has been in fulfilling them. We reported a gross loss in the second quarter of 0.2 million dollars, or approximately negative 4.6% of sales, compared with gross profit of 2.2 million dollars, or approximately 29.6% of sales last year. This decrease was due to the impact of fixed cost on the lower revenue totals, as well as other issues. One new hermitic packaging product in particular created significant losses as the ramp up to volume was more challenging than expected.
Unknown Executive: This is expected to significantly boost our top line growth, particularly in the fourth quarter and beyond. We reported a gross loss in the second quarter of $0.2 million, or approximately negative 4.6% of sales, compared with a gross profit of $2.2 million, or approximately 29.6% of sales last year. This decrease was due to the impact of fixed costs on lower revenue totals as well as other issues. However, we anticipate that gross margins will improve in the second half of 2024.
Chuck Griffith: We anticipate that gross margins will improve in the second half of 2024. Selling, general, and administrative expenses, or SG&A, totaled $1.1 million in the second quarter versus $1.5 million in the prior year period. As we remain focused on controlling costs, even while investing in new product development efforts and business development initiatives to accelerate long-term growth.
Unknown Executive: Selling, General, and Administrative Expenses, or SG&A, totaled $1.1 million in the second quarter versus $1.5 million in the prior year period, as we remained focused on controlling costs, even while investing in new product development efforts and business development initiatives to accelerate long-term growth. The company posted an operating loss of $1.3 million in the second quarter compared with operating income of approximately $0.7 million last year. And we reported a net loss of $1.0 million, or $0.07 per share, versus net income of $0.6 million, or $0.04 per diluted share, in Q2 of 2023.
Brian: As we remain focused on controlling costs, even while investing in new product development efforts and business development initiatives to accelerate long term growth.
Chuck Griffith: The company posted an operating loss of $1.3 million in the second quarter compared with operating income of a product from the lead 0.7 million last year, and we reported a net loss of $1.0 million or $0.7 per share versus net income of $0.6 million or $0.4 per diluted share in Q2 of 2023. Turning to the balance sheet, we ended the quarter with $6.3 million of cash versus $8.8 million at the start of 2024. This cash balance does not include the fact that, for the first time, we had $0.75 million invested in T-bills at the end of the quarter to take advantage of higher interest rates over the longer term.
Brian: The company posted an operating loss of $1 3 million in the second quarter compared with operating income of approximately zero point $7 million last year, and we reported a net loss of $1.0 million or <unk> <unk> per share versus net income of zero point $6 million or <unk> <unk> per diluted share in Q2 of 2023.
Unknown Executive: Turning to the balance sheet, we ended the quarter with $6.3 million in cash versus $8.8 million at the start of 2024. This cash balance does not include the fact that, for the first time, we had $0.75 million invested in T-bills at the end of the quarter to take advantage of higher interest rates over the longer term. Trade accounts receivable as of June 29th totaled $4.1 million versus $4.4 million as of December 31st, 2023. Inventories also totaled $4.1 million at the end of the second quarter compared with $4.6 million at the start of the fiscal year. Now, Brian will provide a more in-depth discussion of the second quarter. Drone Q2.
Brian: Turning to the balance sheet, we ended the quarter with $6 3 million of cash versus $8 $8 million at the start of 2020.
Brian: Start of 2020 for this cash balance does not include the fact that for the first time, we had the <unk>.
Brian: Zero point $75 million invested in T bills at the end of the quarter to take advantage of higher interest rates over the longer term.
Chuck Griffith: Trade accounts receivable as of June 29 totaled $4.1 million versus $4.4 million as of December 31, 2023. Inventories also totaled $4.1 million at the end of the second quarter, compared with $4.6 million at the start of the fiscal year. Turning to the liability side, payables and accruals total $3.3 million at the end of the second quarter versus $3.6 million as of December 31, 2023. The balance sheet does remain very strong with a current ratio of $4.5.
Brian Mackey: Now Brian will provide a more in-depth discussion of the second quarter. Thanks, Chuck. During Q2, the tight local labor market impeded our ability to hire qualified individuals to fill open positions and expand as our order book grows for our non-armored products. This negatively impacted our ability to fill orders. We have recently added new personnel in key manufacturing roles who are now in training and expect to have a third shift up and running later this month. While this will likely not impact Q3 as much as we would like, it should improve our top line in the fourth quarter and beyond.
Unknown Executive: During Q2, the tight local labor market impeded our ability to hire qualified individuals to fill open positions and expand as our order book grows for our non-Armor products. We have recently added new personnel in key manufacturing roles who are now in training and expect to have a third shift up and running later this month. We have taken steps to ensure this will not happen again.
Brian Mackey: We also face supply chain constraints, which have impacted product shipments in the quarter. For the first time in the known history, the company and the producer of one of our ingredients in our MMC formulation ran out, which directly impacted our production Q2, only receiving a new supply the first week of Q3. We've taken steps to ensure this will not happen again. We remain cautiously optimistic that the coming quarters will show improvement in product completion and delivery to market. We are confident in the continued growth of our core product lines, MMC, and hermetic packaging. During the quarter, the number of first articles we shipped for these two product lines was again aimed, the same as Q1.
Unknown Executive: We remain cautiously optimistic that the coming quarters will show improvement in product completion and delivery to market. We are confident in the continued growth of our core product lines, MMC, and Hermetic packaging. Although the revenue from these new first articles is limited, they represent future revenue growth opportunities as our customers evaluate the first articles we provide before potentially transitioning to volume purchases.
Brian: Some of our core product lines M C in Hermetic packaging.
Brian: During the quarter the number of first articles we shipped for these two product lines was again eight the same as in Q1.
Brian Mackey: Although the revenue from these new first articles is limited, they represent future revenue growth opportunities. As our customers evaluate the first articles we provide before potentially transitioning to volume purchases. Regarding armor, we remain positive about the likelihood of kinetic protection winning new armor orders for additional classes of Navy vessels. This work continues. And we believe our ballistic solutions have a large potential market across various military applications.
Brian: Although the revenue from these new first articles is limited they represent future revenue growth opportunities as our customers evaluate the first articles, we provide before potentially transitioning to volume purchases rigor.
Brian: Regarding armor, we remain positive about the likelihood of kinetic protection, winning new armor orders for additional classes of Navy vessels. This work continues and we believe our ballistic solutions have a large potential market across various military applications.
Brian Mackey: During the quarter, we also announced a new SBIR Phase II award with the US Navy Air Systems Command, valued at over $1 million, in which we'll continue to develop our novel Mel Matrix Composite Solutions for Thermal Energy Storage Applications. This phase II contract will address the needs of Navarist Advanced Intermediation Guides and Missile Extended Range Program, where Advanced Energy Storage enables Extended Range Missile Capability. Our novel composites are lightweight, dimensionally stable materials that can reduce size, weight, and power consumption, providing them a more durable, easier to manage solution and conventional methods. This new phase II effort, now underway, represents the company's first such award in many years.
Brian: During the quarter, we also announced a new S var Phase II award with the U S. Navy Air systems command valued at over $1 million, and which will continue to develop our novel metal matrix composite solutions for thermal energy storage applications. This phase two contract will address the needs of NAV errors advanced anti radiation guided missile extend.
Brian: Mid range program, where advanced energy storage enables extended range missile capability.
Brian: Our novel Composites are lightweight dimensionally stable materials that can reduce size weight and power consumption.
Brian Mackey: But more importantly, it highlights our ability to develop advanced solutions that will lead to commercial opportunities. Such wins underscore not only our unique capabilities, but the successful execution of a long-term growth strategy based on focused product development that's responsive to customer demand. We continue to pursue funding opportunities with various federal agencies, particularly where we can provide a unique solution that addresses customers' requirements.
Unknown Executive: We continue to pursue funding opportunities with various federal agencies, particularly where we can provide a unique solution that addresses customers' requirements. We currently have two outstanding Phase I proposals, as well as the Phase II proposal for radiation shielding, which I discussed at length last quarter. As a reminder, CPS successfully designed a novel MMC that provides neutron and gamma radiation shielding in a compact solution.
Brian Mackey: We currently have two outstanding Phase I proposals, as well as the Phase II proposal for radiation shielding, which I discussed at length last quarter. As a reminder, CPS successfully designed a novel MMC that provides neutron and gamma radiation shielding in a compact solution. Earlier this month, we submitted a provisional patent application to the USPTO, which covers our core design methodology. With this filing now complete, we can have more direct discussions with potential customers, including those who first learned of our solution during our presentation at the National Reactor Innovation Center program review at Idaho National Laboratory in April.
Unknown Executive: Earlier this month, we submitted a provisional patent application to the USPTO, which covers our core design methodology. We can now have more direct discussions with potential customers, including those who first learned of our solution during our presentation at the National Reactor Innovation Center program review at Idaho National Laboratory in April. The early positive feedback we have received indicates interest from potential customers with both stationary and mobile applications. In the second quarter, we also got our new 5-axis CNC machine up and running thanks to the $200,000 matching grant from the Massachusetts Manufacturing Accelerate Program.
Brian Mackey: The early positive feedback we have received indicates interest for potential customers with both stationary and mobile applications.
Brian Mackey: In the second quarter, we also got our new five acts of CNC machine up and running, thanks to the $200,000 matching grant from the Massachusetts Manufacturing Accelerate Program. This capital investment broadens our offerings to response to customer demand, approving our appeal to new and existing customers, particularly in her manufacturing packaging. While we have leveraged both federal and state resources to directly address market requirements, we are also pursuing internal growth opportunities through new product development. As we indicated with our plan last quarter, in Q2, we successfully completed our first manufacturing trials of fiber reinforced aluminum or FRA per our exclusive global licensing agreement with Triton Systems. In the near term, we will be expanding our production trials, validating the material properties of the FRA samples we produce, and continuing to engage potential customers.
Unknown Executive: While we have leveraged both federal and state resources to directly address market requirements, we are also pursuing internal growth opportunities through new product development. As we indicated in our plan last quarter, in Q2, we successfully completed our first manufacturing trials of Fiber Reinforced Aluminum, or FRA, per our exclusive global licensing agreement with Triton Systems. FRA offers a compelling solution for applications that require stronger materials, including at elevated temperatures with reduced weight.
Brian: While we have leverage both federal and state resources to directly address market requirements. We are also pursuing internal growth opportunities through new product development.
Brian: As we indicated was our plan last quarter in Q2, we successfully completed our first manufacturing trials of fiber reinforced aluminum or FRE per our exclusive global licensing agreement with trading systems in the near term, we will be expanding our production trials validating the material properties of the SRA samples we produce it.
Brian: Continuing to engage potential customers.
Brian Mackey: FRA offers a compelling solution for applications that require stronger material, including at elevated temperatures, with reduced weight. We anticipate having products ready for market in fiscal 2025. Similar to the internal effort to develop and commercialize FRA materials, we also recently had a successful test of our lightweight UH-60 helicopter flooring. CPS pursued this testing based on the results of our funded Phase I design effort, even though the Army did not allocate funding for a potential Phase II effort. Internal development of other products, such as high temperature barrier material, is also ongoing.
Speaker Change: <unk> offers a compelling solution for applications that require a stronger material, including at elevated temperatures with reduced weight.
Unknown Executive: We anticipate having products ready for market in fiscal 2025. Similar to the internal effort to develop and commercialize FRA materials, we also recently had a successful test of our lightweight UH-60 helicopter flooring. CPS pursued this testing based on the results of our funded Phase 1 design effort, even though the Army did not allocate funding for a potential Phase 2 effort.
Speaker Change: We anticipate having products ready for market in fiscal 2025.
Speaker Change: Similar to the internal effort to develop and commercialize that foray materials. We also recently had a successful test of our lightweight U H 60 helicopter, Florida C.
Speaker Change: C. P F pursue this testing based on the results of our funded phase one design effort, even though the army did not allocate funding for a potential phase two efforts.
Brian: Internal development of other products such as high temperature barrier material is also ongoing.
Brian Mackey: Later this month, we will also submit a Phase II proposal to the US Army that is built upon our successful results in Phase I related to controlled fragmentation, tungsten, and warheads. Overall, we are executing our strategy to win additional business, expand into new markets, and increase our manufacturing capabilities to accelerate top line growth in the quarters to come. We will improve order fulfillment for our core product lines and continue to build upon the various firsts that we have recently accomplished. First production of FRA materials, first million dollar Phase Two SBIR award in over 25 years, first commissioning of five acts of CNC capabilities, first patent filing in many years by the company.
Brian Mackey: While near-term headwinds remain, we are upbeat about the future as we enter the second half of fiscal 2024.
Unknown Executive: We can now open the call up for questions, operator. Certainly, everyone at this time be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speaker phone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we pull for questions. Thank you. Once again, everyone, if you have any questions or comments, please press star, then one on your phone.
Operator: We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Please hold while I poll for questions. Your first question is coming from Greg Weaver from Invicta Capital.
Unknown Executive: Please hold while we pull for questions.
Greg Weaver: Your first question is coming from Greg Weaver from Invicta Capital.
Greg Weaver: Your line is live. Hi.
Chuck Griffith: Good morning, Brian and Chuck. Thanks for the opportunity to ask a question here. You can guess where I'm going to go here. The gross profit, could you give a little more detail, Chuck maybe in terms of quantification of how much the manufacturing issues aid into the result. I mean, he had basically 100% flow through the revenue drop in the gross profit drop. Yeah, so we had one item in particular, which unfortunately, depending on how you look at it, was the number one selling item in dramatic packaging. It was a, it was a new item for us.
Charles K. Griffith: Could, could you give a little more detail, Chuck, maybe in terms of quantification of how much the manufacturing issues aided into the result? I mean, you had basically 100% flow through of the revenue drop in the gross profit drop. Yeah, so we had one item in particular, which we will price the product based on a particular gold price. And in many cases, that gold price is artificially low. And then we bill them for the differential, you know, when we actually produce the parts. So if the gold, we will build them for that differential. The problem we had with this particular product was that the scrap did not occur until after the parts were plated.
Chuck Griffith: And unfortunately, we had to make almost twice as many of them in order to get that high volume out to the customer. And what particularly hurt us is I don't, I don't want to get too technical, but basically many of our Hermetic packages' package products are gold plated. And typically, with our customers, what happens is we will price the product based on a particular gold price. And in many cases, that gold prices is artificially low. And then we build them for the differential, you know, when we actually produce the parts. So if the goal, if we, if we contract with them based on the gold price of $1,000 and the gold price of $2,500, we will build them for that differential that we have to pay to our plater. Obviously, we will build them for that differential.
Chuck Griffith: The problem that we had with this particular product was that the scrap did not occur until after the parts were plated. And what that meant was that we had already paid not just for the, for the cost that we assumed for that $1,000 gold, but we actually paid for the $2,500 gold with no ability to recover it. And so that, that one item all in, you know, in and of itself, you know, I can't say we would have a great gross margin without it, but we would have had a positive gross margin without it for sure.
Charles K. Griffith: And what that meant was that we had already paid not just for the cost that we assumed for that $1,000 gold, but we actually paid for the $2,500 gold with no ability to recover. Hurtful, I guess. And then, you know, there were certainly other things Brian mentioned. We had an item that reduced revenue towards the end of the quarter because we couldn't get it, and for the first time in literally the history of the company. I don't know if you know Mark Oceanero. He's been here for well over 30 years.
Chuck Griffith: So, you know, that was, that was particularly. Heardful, I guess. And then, you know, there were certainly other things; Brian mentioned. You know, we had an item that reduced revenue towards the end of the quarter, that because we couldn't get it. And, you know, first time in literally the history of the company. I don't know if you know, Mark Ocean Arrow. He's been here for well over 30 years. And, you know, it's never happened before. So, you know, just one of those kinds of.
Speaker Change: Yeah, It's it's never happened before so you know just one of those kind of.
Charles K. Griffith: Lukey things, I guess we could say, but so I think that's, you know, that's, Obviously when we're at $5 million in revenue, that doesn't help absorb as many fixed costs as we want it to. Gotcha. Okay, appreciate the detail there, Chuck. So the current quarter from your comments, I'm reading through the lines here, but it sounds like it's a similar.
Speaker Change: Lew key things I guess, we could say, but.
Chuck Griffith: So, I think that's, you know, that's, you know, obviously when we're at $5 million in revenue, that doesn't help, you know, absorb its money, fixed costs as we want it to suck. Gotcha. Okay. Appreciate the detail. So, so the current quarter, from your comments, I'm reading through the lines here, but it sounds like it's a similar situation. Okay. Well, certainly so that, that, that item that we didn't have came in the first week of July. So, so the quarter's off to a slow start, based on that. But we think so talking about the hermetic packaging item, we solved the problem.
Speaker Change: So I think that's that's.
Speaker Change: <unk>.
Speaker Change: Obviously, when we're when we're at $5 million in revenue that doesn't help.
Speaker Change: Absorb as money fixed costs as we want it to.
Speaker Change: Got you Okay I appreciate the detail there Chuck.
Speaker Change: The current quarter from your comments I'm reading through the lines here, but it sounds like it's a similar situation.
Speaker Change:
Chuck: Well, certainly so that that that item that we didnt have came in the first week of July. So so the quarter is off to a slow start based on that but.
Speaker Change: But we think so far.
Unknown Executive: We think so,
Speaker Change: Talking about the Hermetic packaging item, we solve the problem alright, we know we know what caused the issues that caused us to have the scrap all those parts those issues have been solved we'd been manufacturing this product now.
Brian Mackey: Right. We know, we know what caused the issues that caused the staff to scrap all those parts. Those issues have been solved. We've been manufacturing the product now, you know, with a good yield. We're not throwing half the product away after it's been plated. So, you know, that's, that's been solved. And, you know, and as of today, the other, the other issue of the missing, you know, the ingredient not being available has been solved. And it shouldn't happen again. Yeah, I think the add to that, Greg, as Chuck described, some of these issues have come to an end.
Speaker Change: With with a a good.
Speaker Change: Yield.
Speaker Change: Got thrown half the product away. After it's been played it so that's.
Speaker Change: That's that's been solved.
Speaker Change: And.
Speaker Change: And as of today.
Brian Mackey: They either ended in Q2 or early Q3. The labor shortage and hiring process is one that extended more into this quarter, with those people being trained and implementing that shifts later this month. You know, those products will then go out from there and become revenue. A few weeks later, so that is certainly an impact to Q3 until we catch up on the amount of volume going out the door to fulfill these open orders, which will be more fully in place in Q4. Yeah. And just to add a little bit to that. So, I think I mentioned it during the talk earlier. The issue is not getting orders.
Unknown Executive: At the end of Q2 or early Q3, the labor shortage and hiring process is one that extended more into this quarter with those people being trained and implementing that shift later this month. You know, those products will then go out from there and become revenue a few weeks later. So that certainly has an impact in Q3 until we catch up on the amount of volume going out the door to fulfill these open orders, which will be more fully in place in Q4. Yeah, and, and
Unknown Executive: The issue is not getting orders; the issue is fulfilling orders, and we're moving ahead in that process, and I would expect significant improvement in Q3, but we'll see.
Chuck Griffith: The issue is fulfilling orders. And we're moving ahead in that process.
Chuck Griffith: And, you know, I would expect, well, I would expect significant improvement in Q3, but, you know, we'll see; we'll see. Okay. Yeah. Any reworked drag from the base plate problems before in this quarter, this past quarter? Not specifically to that. No, I mean, there are always, you know, issues that come up, you know, now and again, and we're working through those, but, but not really in that second quarter or expected. You know, going forward, expected anyway, going forward. It was there any armor, the tag ends of that in the in the five million. Yeah, yeah, it was about a quarter million dollars of armor.
Speaker Change: As you know issues that come up you know now and again and we're working through those but but not not really in the second quarter or expected.
Speaker Change:
Speaker Change: Going forward.
Speaker Change: Expected anyway going for us.
Speaker Change: And was there any armor.
Speaker Change: Again to that in the in the $5 million.
Unknown Executive: Yeah.
Speaker Change: Yes, yes, there was it was about a quarter of million dollars of armor.
Unknown Executive: Okay, that was related to the kinetic protection, right? Yeah. Yeah, right. Okay, so that's going away. But we're picking up on some of the other stuff that was slow. And so congrats on the SBIR award. So the million dollars, that's over what timeframe? And it sounds like from your comment, Brian, that that's the revenue starting to come in.
Chuck Griffith: Okay, that that was related to the kinetic protection. Right. Yeah. Okay. So that's going away, but we're picking up on some of the other stuff that was slow. Okay.
Speaker Change: Hey.
Speaker Change: That was related to the kinetic protection right.
Speaker Change: Okay. So that is going away, but we're picking up on some of the other stuff that was slow okay.
Greg Weaver: And so congrats on the SBIR award. So the million dollars, that's over what time frame, and it sounds like from your comment, Brian, that that's the revenue, starting to revenue already. Yeah, we've already instituted in Q3, Q3. So that's a monthly invoicing by us over 30 months. Yeah, 30 months, it's about $100,000 a quarter, ballpark. Okay. Good. Okay. Yeah. I'm glad to hear you're out trying to get more of these awards because that's helped. It's helpful to help them cover your overhead and develop new products. Okay. Yeah. I mean, they have to hand out money, and helping you develop new products, you know, makes sense.
Speaker Change: And so congrats on the the Spi.
Speaker Change: S B IR award.
Speaker Change: So the million dollars, that's over what timeframe and it sounds like from your comment Brian that that's b revenue ing starting to revenue already.
Unknown Executive: Yeah, we've already instituted it in Q3, so that's a monthly invoicing by us over the next 30 months. Yeah, 30 months. It's about $100,000 a quarter ballpark.
Brian: Yes, we've already indicated in Q3, three so thats.
Speaker Change: The monthly invoicing by us over.
Speaker Change: 30 months 30 months at about $100000 a quarter ballpark.
Unknown Executive: Okay, good. Okay. Yeah, I'm glad to hear you're out trying to get more of these awards because that's helpful to help them cover their overhead and develop new products.
Speaker Change: Okay got it okay, yeah, and I'm glad to hear you're out trying to get more of these awards because it's helpful to help them cover your overhead nothing developed.
Speaker Change: New products so.
Unknown Executive: Okay.
Unknown Executive: Okay.
Speaker Change: That actually.
Unknown Executive: Yeah, I mean have to hand enough money and helping you develop new products.
Speaker Change: Makes sense.
Greg Weaver: And really, the future of those products, I think, is, you know, there's a lot of potential. Maybe it's just, you know, in terms of, you know, making them, getting them ready. And then actually making them into a production line. And just to follow on, have you got a specific person or persons on staff now that are chasing these? I know it's a lot of paperwork to do these grants or awards to qualify someone. Just kind of focused on that now. Yeah, our VP of R&D, who's been with the company for three years now, has that depth of experience.
Speaker Change: Okay.
Unknown Executive: You know, there's a lot of potential. And just to follow on, have you got a specific person or persons on staff now that are chasing these? I know it's a lot of paperwork to get these grants or awards, but is someone just kind of focused on that now?
Unknown Executive: Yeah, our VP of R&D, who's been with the company for three years now, has that depth of experience, and I'm very familiar with SBIR as well. But that's where you see the renewed effort in SBIR at CPS starting a few years ago, where we've gotten the five or six phase one wins now, and now the first phase two, and we're going to continue in that direction. We, you know, it fluctuates, but we see opportunities where the offerings that we can put together may or may not address the DOD, DOE, or maybe NASA opportunities. So that's certainly going to continue from us, because we now have that system in place, led by Dr. Ketcher, who leads our R&D team.
Greg Weaver: And I'm very familiar with SBIR as well. But that's where you see the renewed effort into SBIR at CPS starting a few years ago, where we've gotten the five or six Phase One wins now, now the first Phase Two, and we're going to continue in that direction. We, you know, it fluctuates, but we see opportunities where the offerings that we can put together may or may not address the DOE, DOE, maybe NASA opportunities. So that's certainly going to continue from us because we now have that system in place, led by Dr. Ketcher, who leads our R&D team.
Greg Weaver: Great. Thank you.
Unknown Executive: Great. Thank you. Well, good luck with that and getting the production smoothed out. Thank you.
Greg Weaver: Well, good luck on that and getting the production smoothed out. Thank you. Thanks. Great. Thank you.
Unknown Executive: Once again, everyone, if you have any questions or comments, please press star, then one on your phone. Please hold while we pull for questions. Thank you.
Operator: Thank you. There are no further questions in the queue. I'll now hand the conference back to Brian Mackey, President and CEO, for a closing remarks.
Unknown Executive: There are no further questions in the queue.
Brian Mackey: I'll now hand the conference bride back to Brian Mackie, President and CEO, for closing remarks. Please go ahead. Great. Thank you for joining us today and for your ongoing interest in CPS Technologies. We look forward to speaking with you again after the end of the third quarter. If you have any questions in the interim, please reach out to our investment relations advisor. Thanks. Thanks, everybody.
Brian Mackey: Great. Thank you for joining us today and for your ongoing interest in CPS Technologies. We look forward to speaking with you again after the end of the third quarter. If you have any questions in the interim, please reach out to our Investment Relations Advisor.
Unknown Executive: Thank you, everyone. This concludes today's event. You may disconnect at this time and have a wonderful day. Thank you for your participation.