Q1 2025 LightPath Technologies Inc Earnings Call
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Speaker Change: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to the Light Path Technologies First Quarter Fiscal 2025 Earnings Conference Call.
Speaker Change: During today's presentation, all parties will be in a listen-only mode.
Following the presentation, the conference will be open for questions.
Speaker Change: This conference is being recorded today, November 7th, 2024, and the earnings press release accompanying this conference call was issued after the market closed today.
Speaker Change: On our call today is Lifebats CEO Sam Rubin and CFO Al Miranda.
Speaker Change: I'd like to remind you that during the course of this conference call, the company will be making forward-looking statements that are based on current expectations.
Speaker Change: involve various risks and uncertainties as discussed in its periodic CSEC filings.
Speaker Change: Although the company believes that the assumptions underlying these statements are reasonable, any of them can be proven to be inaccurate and there could be no assurance that the projected results would be realized.
Speaker Change: In addition, references made by may be made to certain financial measures that are not in accordance with generally accepted accounting principles or GAAP.
We refer to these as non-GAAP financial measures.
Speaker Change: Please refer to our SEC reports in certain of our press releases, which include reconciliations of non-GAAP financial measures and associated disclaimers.
Sam Rubin: Sam will begin today's call with an overview of the business and recent developments for the company.
I will then remove...
View financial results for quarter and the full year
Speaker Change: Following our prepared remarks, there will be a formal question and answer session. I would now like to turn the conference over to Sam Rubin. Sam, the floor is yours.
Sam Rubin: Thank you, operator. Good afternoon to everyone and welcome to Light Path Technology's first quarter fiscal 2025 financial results conference call.
Sam Rubin: The first quarter of 2025 demonstrated our continued transformation from a pure component supplier to a system provider.
delivering new products, contracts, and
Sam Rubin: Since we've laid out three pillars of growth of which our business is built upon. The first is our proprietary cameras and optics.
Sam Rubin: Second are solutions for government and defense, and the third are new commercial applications.
Sam Rubin: For those not familiar with our history, I will provide a brief overview.
Sam Rubin: Prior to this shift, Lightpath has been, for the greater part of 30 years, an optical component provider. What many years ago was a unique technology, molded optics, has become now a crowded marketplace going through the classic transformation and commoditization.
Sam Rubin: As a result, Lightbuff's core business was eroding, unit prices decreasing, with them margins and profits.
Sam Rubin: In 2021, we set a course on a new strategic direction, one that leverages some of our key technologies to deliver subsystems and system-level solutions, instead of simply just components, which drive higher ASPs and ultimately gross profit dollars.
This transformation has been very successful for us.
Sam Rubin: And in this quarter, we reported that 30% of our revenue came from those activities.
Sam Rubin: This type of revenue was much less significant for us before we began going down this path.
Sam Rubin: Through our investment in differentiated technology, we have positioned ourselves as a leader in the field of infrared optics.
Sam Rubin: We have an exclusive license from the government to commercialize new materials developed at the Naval Research Lab, as well as our partnership with the Department of Defense, Defense Logistics Agency.
with the goal of replacing germanium in DoD applications.
We are not only
Sam Rubin: the go-to partner for anyone looking to phase out germanium but have also earned ourselves a seat at the table at some of the most important discussions and projects in today's defense world.
Sam Rubin: Four years ago, we could only have dreamt of being in such a position.
Sam Rubin: Naturally, since these are defense programs we're talking about, we're a bit limited in what we can share, but we will try to share as much as possible.
Sam Rubin: Recently, the DoD, via Defense Logistics Agency Strategic Materials, has awarded us Phase II funding to support the qualification of additional new black diamond chalcogenide glasses as a substitute to geomanium.
Sam Rubin: Phase 1 was a significant success, resulting in the qualification of several new proprietary black diamond materials.
Sam Rubin: These materials are now designed into multiple programs of record and demonstrate significant additional value beyond simply replacing germanium.
Sam Rubin: In Phase 2, we will continue working with DLA to qualify additional black diamond glasses to be included in DoD systems.
Sam Rubin: The validation this represents cannot be understated as it directly translates to new defense programs that rely on hourglass for which we are the exclusive supplier of record.
Sam Rubin: During the quarter, we also received an initial development contract from a new European defense customer for the use of black diamond glass in optical systems.
Sam Rubin: Additionally, we also received a follow-on order from a European defence customer for infrared assemblies for use in FPV, that is First Person View, drone applications.
Sam Rubin: These orders are enabled by, and are a validation of, our recent efforts to obtain a European defence licence.
Sam Rubin: as well as highlight our growing recognition as a trusted supplier within NATO-aligned regions.
Thank you.
Sam Rubin: As a reminder, more than 30% of our sales come from defense, most of those in the U.S.
Sam Rubin: Obtaining the European Defence Licence now opens the door for us to grow our defence business in Europe too.
Sam Rubin: And those two recent wins are lead indicators to the success of this strategy.
Sam Rubin: In addition to our investment in materials and differentiating technologies, we have also invested in development of our camera technologies.
Sam Rubin: Just over a year ago, we completed the acquisition of Visamit Technologies, integrating their expertise with our proprietary materials to develop advanced thermal cameras and imaging systems.
Sam Rubin: We have now built a portfolio of unique thermal cameras that have created a strong entry point for us in the system-level product.
Sam Rubin: and enables us to carve out a market share in a market estimated to be $9 billion of TAM and growing rapidly.
Sam Rubin: Our efforts in the camera business, our first pillar of growth, are focused around Lightpath's unique camera solutions.
Sam Rubin: This started with the introduction of Mantis, an innovative broadband or multispectral infrared camera that is the first of its kind and enabled purely by our unique materials from NLS.
Mantis opened doors with several
Sam Rubin: establishing our reputation for producing cameras that are not only groundbreaking in design but also practical for applications in harsh and high sensitivity environments.
Sam Rubin: And with a price tag of $30,000, we're positioned as industry leaders from a cost-to-performance perspective.
Sam Rubin: This is significant for future growth of the company, as selling hundreds of cameras at $30,000 each has a completely different map to our top-line growth.
Sam Rubin: than selling just the lenses that go into those cameras, which can cost about as little as a cup of coffee, which used to be our business model prior to this transformation.
For more information, visit www.FEMA.gov
Sam Rubin: In addition, we recently launched our new optical gas imaging camera platform to detect fugitive gas emissions for oil and gas industry.
Sam Rubin: The new OGI camera is specialized technology using infrared cameras to detect and visualize gas emitted such as methane in industrial settings.
Sam Rubin: OGI cameras are capable of visualizing gas that are invisible to the naked eye by detecting the infrared energy absorbed or emitted by those gases.
Sam Rubin: The topic is of extreme importance to the oil and gas industry both in the US and Europe following new regulation curbing those emissions and imposing high penalties on operators.
Sam Rubin: LightBuff's purpose-built OGI camera leverages a non-germanium lens to improve upon current technologies by offering a cost-effective, higher sensitivity, and ultimately more effective solution.
Sam Rubin: This OGI technology applies to other sectors as well, where we see the opportunity to launch additional incremental products, leveraging our know-how, all without incurring significant development expenses.
Sam Rubin: On the government and defense side of the business, our second pillar, we've seen traction pick up significantly.
Sam Rubin: Similar to the materials technology differentiators that already landed us one program of record, our technology differentiator has landed us the Lockheed Martin missile program.
Sam Rubin: Under this program, we are developing a new camera system for Lockheed Martin that will be part of a missile system.
I'm sorry.
Sam Rubin: Due to pressing needs from Zeroth Army, the customer, the program is now on a very accelerated timeline.
Sam Rubin: Though it started only a year ago, we have already achieved airworthy qualification of our subsystem and can begin shipping units for flight tests.
which the team is currently working on.
Sam Rubin: The Lockheed Martin program is potentially transformative for Lightpath. Not only is it exactly the type of business we were targeting in our new strategy,
But the size of the opportunity can completely transform us.
Sam Rubin: If Lockheed Martin wins against Raytheon, which they are competing against, we could expect to see revenues of between $50 million to $100 million a year once in full production.
Sam Rubin: Though we are still in development, the progress of this project is so fast that Lockheed and the customer are already looking to start setting up for low-rate initial production next year, which is the last step before full production.
Speaker Change: For a company our size, with $35 million or so in revenue, a contract like this could completely transform us.
Speaker Change: And although there is a possibility that Lockheed will not win against Raytheon, we know that this technology we developed is so transformative and important that the same customer is already integrating it into at least two additional programs.
Speaker Change: I'll now turn to our third pillar of growth, which is new commercial applications, such as automotive.
Speaker Change: As those that follow us know, Lightbuff has been working with several Tier 1 and Tier 2 automotive OEMs to develop and qualify thermal imaging solutions for use in ADAS.
Speaker Change: Per a new mandate set by the National Highway Traffic Safety Administration by 2029, all new cars should include an emergency braking system that can identify pedestrians in pitch-dark conditions from a certain distance.
Speaker Change: To achieve that, it appears that thermal imaging is going to be adopted into every new car.
which means a significant addressable market opportunity.
ahead of those upcoming catalysts.
Speaker Change: We begin to strengthen our operational capabilities to support future growth. Subsequent to quarter end, we welcomed Steve Garcia as General Manager of our Orlando Manufacturing Facility.
Steve brings extensive operational experience in high-growth environments.
Speaker Change: and he will play a vital role in scaling our production processes to meet the increasing demand of our products, particularly for defense and industrial applications.
Speaker Change: His addition enhances our ability to support large, mission-critical programs while maintaining our commitment to quality and innovation.
Speaker Change: Now, I'd like to turn the call over to our CFO, Al Miranda, to talk about our first quarter fiscal financial results.
Al, please go ahead. Thank you, Sam.
Al Miranda: I will keep my review to a very succinct highlight of the financials this quarter.
Al Miranda: As a reminder, much of the information we're discussing during this call was also included in our press release issued earlier today and will be included in the attend queue for the period. I encourage you to visit our website to access these documents.
Al Miranda: Revenue for the first quarter of fiscal 2025 increased 4% to $8.4 million as compared to $8.1 million in the same year ago quarter.
Al Miranda: Sales of infrared components were $2.6 million, or 31% of the company consolidated revenue.
Al Miranda: Revenue from Visible Components was $3.3 million, or 39%. Revenue from Assemblies and Modules were $1.1 million, or 13%. And revenue from Engineering Services was $1.4 million, or 17%.
Al Miranda: Gross profit increased 22% to $2.8 million or 34% of total revenues in the first quarter of 2025 as compared to $2.3 million or 29% of total revenues in the same year-ago quarter.
Al Miranda: The increase in gross margin and the percentage of revenue was primarily driven by a more favorable product mix weighted towards visible component sales and assemblies and modules, which typically have higher gross margins than infrared components.
Al Miranda: Operating expenses increased 23% to $3.3 million for the first quarter of fiscal 2025, as compared to approximately $2.7 million in the same year-ago quarter.
Al Miranda: The increase in operating expenses were primarily due to an increase in legal and consulting fees related to business development initiatives as well as increases in sales and marketing spend to promote new products.
Al Miranda: Net loss in the first quarter of fiscal 2025 totaled $1.6 million, or $0.04 per basic and diluted shares, as compared to $1.3 million, or $0.04 per basic and diluted share in the same year-ago quarter.
Al Miranda: The increase in net loss was primarily attributable to higher legal and consulting expenses related to business development initiatives.
Al Miranda: EBITDA loss, a non-GAAP term, for the quarter ended September 30, 2024 was approximately $0.5 million compared to a loss of $0.4 million for the same period of the prior fiscal year.
Al Miranda: The decrease in EBITDA in the first quarter of fiscal 2025 was primarily attributable to the previously mentioned additional legal and consulting expenses related to business development initiatives.
Al Miranda: Cash and cash equivalents as of September 30th, 2024 totaled $4.3 million as compared to $3.5 million as of June 30th, 2024.
Al Miranda: As of September 30, 2024, total debt stood at $3.9 million and backlog totaled $21 million.
Al Miranda: In closing, I view our performance in Q1 as a strong indicator of the solid footing and growth trajectory of LIHPAD.
Al Miranda: Financial results underscore the progress of our strategic investments with positive impacts on revenue, margin improvements, and steady pipeline.
Al Miranda: We remain focused on executing this strategy with discipline and delivering value to our shareholders as we scale and grow.
Speaker Change: With that, I'll turn the call back to Sam for some closing remarks.
Sam Rubin: Thank you everyone for taking the time today to attend our call. Looking ahead, we will continue to drive the future of imaging as seen through our proprietary black diamond optics, leveraging our clear advantage in capabilities as compared to legacy germanium-based solutions.
Sam Rubin: With defined catalysts in automotive, defense, and camera solutions market, I have never been more confident in our path ahead.
Speaker Change: With that, I'll turn the call over to the operator to begin the questions and answers session. Operator?
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by 2.
comes from Jason Schmidt with Lake Street. Please go ahead.
Jason Schmidt: Hey guys, thanks for taking my questions and congrats on the strong results. I want to start with the European market because it sounds like you guys are seeing some pretty significant traction there. Sam, I just want to clarify your comments on some of these customers maybe eclipsing that 10% threshold. Did you provide a timeline on when that could occur?
Jason Schmidt: When we talk, for example, about large programs, it's pretty much the same cycle as in the U.S.
initial development, prototypes, low-rate initial production, and then into production.
which can often be two years or so.
Jason Schmidt: Most of the times we report about it when we're already well into the program.
Jason Schmidt: Naturally, we don't report about it when we just get an inquiry or start working on it. So, I'd say in most cases, it's up to one year from the moment we report about it until we start seeing some...
some real production level orders.
Jason Schmidt: The FPB drone might be the exception there where it is actually something where it is not one of those large difference programs that has to go through enormous qualification, it's actually more of those technologies where
Jason Schmidt: Armies around the world are trying to move faster and adopt commercial solutions to be able to get them in faster. So the FPP might turn into revenue or is turning into revenue much faster.
Speaker Change: Okay, great. And is the sales team and sales channel in that market fully built out or do you still need some work there?
Speaker Change: I think we have a pretty strong sales team there. Maybe there's some sales channels where in the defense part in certain countries, we need local partners.
Speaker Change: So, even though EU is the EU and spending within the EU and our defense license covers the entire EU, certain countries want to do more local purchasing or want you to have a local partner. So, there could be countries where we'll be signing up distributors.
Speaker Change: could be countries outside EU such as Turkey and the UK where we will need distributors just because the way things are there.
Speaker Change: Okay, that makes sense. And last one from me and I'll jump back into queue. Any update on how you're thinking about the timeline for the Lockheed decision?
Speaker Change: No significant changes on our side. I mean, as we said, we received the Airworthy qualification, which we're very proud of, and I'm immensely proud of the team in Texas for everything they've done there.
Speaker Change: We're building flight-worthy units right now and, you know, the timeline is fluidic, but we're still, you know, hoping to get some indications around the coming September-October time frame.
Perfect. Thanks a lot, guys.
Thank you.
Speaker Change: Your next question comes from Glenn Madsen with Leidenberg. Please go ahead.
Speaker Change: Hi, thanks for taking the question and congrats on the results. The top line was a little better than I expected.
The
Speaker Change: You know, I'm curious as it comes to the kind of the camera business, the assemblies.
Speaker Change: and modules. You know, in my projections I have a kind of a strong back half kind of built on the sails.
Shmuel Rubin
Speaker Change: that you're seeing a good response from the customers that are set there.
Speaker Change: can move faster into translate into revenue. A lot of it is from the industrial commercial space, so furnaces and high-temperature process monitoring.
Speaker Change: So with them it's more driven by their budget cycles, so come end of year now there's some end-of-year spending, but we suspect most of it is going into next year's budget, which means January to June we'll be seeing a lot of those orders and deliveries.
Speaker Change: Even on the different side of cameras, it is more of a...
Speaker Change: There are some of the larger defence programmes, with the exception of course of the Lockheed Project which is a very, very customised long-term project. Even when we're providing cameras, data drones and so on.
Speaker Change: The turnaround cycles are very fast. The DoD is making tremendous efforts to adopt commercial technologies, the dual-use technologies faster, and we're gaining from that, so we're benefiting from that well.
Speaker Change: I missed it, I'm on multiple calls, but in the past you've mentioned the other defense program that you're working on, I believe it's like a helicopter, Apache maybe, a helicopter application.
Is there an update there?
Speaker Change: We're working on the initial prototypes. Small delays but nothing major. So I'd say the team is doing very well there.
Great.
Thank you. Very good.
Speaker Change: No, I was going to say, no significant update on that.
Unfortunately.
Speaker Change: Yep, and then the second quarter in a row you mentioned two.
Thank you. Thank you.
Speaker Change: Lockheed, is there any color you can give further in terms of
Speaker Change: All right I'll stop the recording and we can get started.
Speaker Change: So these programs, actually we don't know that much about them. We don't always know the full details of the programs.
Speaker Change: But they're moving along, and we feel confident that Lockheed is really looking at that as the ultimate solution for those programs.
Thank you.
Speaker Change: Great, thank you. And the last one for me, I know this is...
Speaker Change: Not really a fair question. I know it's been two days, but there's real politics. There's, you know, the new administration may be tough on China, may be a little more friendly with Russia. There's the two sources of germanium. Can you just talk about if there's any?
Speaker Change: Initial thoughts as to what it all means for you guys?
Speaker Change: So I don't expect or foresee, we're not planning on any significant changes there. We've already, just as a reminder, proactively significantly reduced our exposure to germania by canceling a few multi-million dollar orders a year and a half ago or so.
Speaker Change: So, we already, you know, took actions towards that. I think if anything...
Speaker Change: The results of the election might increase some defense spending around the world, but and defense now is a you know close to 50 going on Going to be 50% of our business at some point. So that's probably good for us
Right, right. Okay, thanks, Seb.
Thank you.
Next question comes from Scott Buck
with H.C. Wainwright. Please go ahead.
Not specific to the qualification milestone, we recognize Lockheed Revenue
Speaker Change: What's that? Yeah, we did. We did, oh sorry, we did have some revenues there. That shows in the engineering services group? Yes, it's in engineering services.
Speaker Change: Scott. Okay, it doesn't sound like it with a huge number.
It was, uh, it was about a million.
Speaker Change: on some of these larger potential wins, and I'm thinking Lockheed specifically, but we can broaden it out. How should we think about the gross margin on those opportunities versus, you know, kind of today's consolidated margin?
Speaker Change: So those are government programs and there's government accounting associated to them. So government dictates the gross margin pretty much as I think it's something like 25 percent but their baseline of 25 percent of what is sort of includes management fees, SG&A and so on.
Speaker Change: So it's probably a bit too early to translate it into what it would look like in our growth margins But my rough guess, Al, is somewhere between 30 to 40 percent
Absolutely, definitely between 30 and 40.
Speaker Change: Okay, perfect. Well, that's it for me guys. I appreciate the time. Thank you.
Thank you.
Speaker Change: Your next question comes from Brian Kinslinger with Alliance Global Partners. Please go ahead.
Great, thanks. I got a couple of questions.
Speaker Change: Did I hear correctly, now that you've got multiple cameras, you think adoption begins to pick up and orders begin to pick up about 12 to 18 months from now? Is that how I understood your response to one of those questions?
Speaker Change: No, I meant that January of this year, when on the commercial, industrial side...
Speaker Change: when new budgets of those power plants and utilities and so on come into effect on January 1st.
Speaker Change: We know for a fact that, you know, we have quite a few customers that have budgeted...
Speaker Change: our cameras into their next year, meaning calendar 2025. So we expect over the next seven to eight months to start seeing a pickup in that.
Is there any way to quantify what that means?
What I mean is that
Speaker Change: 10% of revenue, do you think? 20% of revenue? I mean, how do you think given those those ticket sizes? Is there any way to quantify it? Yeah, I'd say, look, if we look at the product groups of assemblies and engineering services sort of bundled together, that has gone up to about 30% of our revenue in this quarter.
Speaker Change: I could definitely see that going up to as much as 50% over the next few quarters.
Speaker Change: This is our future and where the growth is coming from by far.
Speaker Change: And maybe I'm drawing a blank, maybe it was answered last quarter, so I apologize. That large customer that has gone away for you for now, are they still evaluating black diamond materials?
Speaker Change: And if so, is there a reasonable time frame to expect adoption? Sorry if I forget to answer that.
Speaker Change: No, you're absolutely right. We haven't spoken about it in a while. Actually, I was at that customer a couple of weeks ago and working out a plan with them on both getting Black Diamond into their systems to replace geomaniums. They have not yet done that.
Speaker Change: As well as a few other long-term strategic things we're working on together. So I'm very hopeful that that customer is going to come back and we're going to win them back.
Speaker Change: and it's a very, very significant potential. As a reminder, that customer used to be anywhere between four to six million dollars a year for us.
Speaker Change: but from your from your comments you're not quite that confident yet it's it's you're still working on trying to get that done
Speaker Change: And then, how long do you expect phase two of the testing, I think it's with DLA, how long, how long do you see that lasting? And then, is the next phase moving into production?
Speaker Change: But realistically, they are already embedded in a couple of programs of records. We just haven't done that in an official manner. But from DLA's point of view, that qualification has finished.
Speaker Change: The next 6 classes DLA is paying for the qualification, the project is defined to be up to 24 months.
Speaker Change: Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host
Speaker Change: you and Al's comments that you're confident that you're going to begin to grow revenue a little faster. Is that because some of these orders don't flow through backlog so we'll never really see them in backlog? Just reconcile the flat backlog with the accelerated pace of growth please.
Speaker Change: Yeah, definitely. So, you're absolutely right. A lot of the camera business is what we'd call book and turn. We have sub-assemblies of them ready, we have, you know, modules, and we can turn a camera around and ship it within two to three weeks.
Speaker Change: and with unit prices of $10,000 to $30,000 for the cameras that can be pretty significant in some of the book in turn.
Speaker Change: In addition, I want to just remind, we're looking at the backlog, it's flat year over year. Up until about a year ago, we had our sports gun site companies, the same one we mentioned, in the backlog, right about every November, they would come in with a renewal that was between $4 to $6 million.
Speaker Change: So we're flat, quote unquote, without what used to be a $46 million customer.
Speaker Change: So it is actually a growth of all the other businesses outside that customer.
Speaker Change: Their last order was their last... No, about a year ago, about a year ago we cancelled Joe Moon and did not renew it. Yeah, so the order fell off about a year ago. Yeah, so the flat backlog doesn't reflect either side probably of that order.
Speaker Change: There was probably a million and a half left in there that previous owners got it. Yeah. My last question is, yeah.
Speaker Change: As you look at the backlog, two questions for that, which is the non basically camera business. How much of that generally gets recognized in 12 months? And the second part of the question is, how do you see the mix of products in terms of margin profile or product?
Can you kind of give us any direction on that?
Speaker Change: So most of the backlog is between, you know, ages out in 12 to 15 month time frames. We don't have a lot, Brian, it goes past 15 months on the backlog.
Great.
In terms of the next maybe, that's my last question.
Speaker Change: The mix is more heavily weighted towards sort of the visible components and some of the visible infrared components, the component business, and some of the simple assemblies like doublets.
Speaker Change: for the bigger things like Sam's talking about the cameras we will get you know at best a three-month order
Great. Thanks so much, guys.
Thank you.
Speaker Change: Your next question comes from Oren Hirschman with AIGH Investment Partners. Please go ahead.
Speaker Change: Hi. Congratulations on the progress. I just want to hear more about the go-to market for the infrared industrial cameras and the timing and if you've seen any early traction, even if they're not huge dollars, but multiple orders.
Shmuel Rubin
Speaker Change: Yeah, definitely. So, the go-to-market roughly half a year ago when we were joined with Jason Messerschmidt that came from FLIR.
Speaker Change: Jason was in charge of all North American sales at Fleets, a few hundreds of millions of dollars.
Speaker Change: and has really developed a go-to-market strategy and team here. That included recruiting a couple of people.
to that both from FLIR and from other industrial applications.
Speaker Change: people that live and breathe that oil and gas and sorry no pun intended about breathing the oil and gas but but they know that world inside out. In fact actually we just finished today a one-day session on on the go-to market strategy for the next few weeks.
Speaker Change: Traction, because of that, is much faster than what we're used to.
Meaning?
Speaker Change: When we announce a product like the methane detection cameras that we announced three weeks ago, that is already after Jason Messerschmidt and Rich and Chris and the GoToMarket team that focuses on that segment have already been at customer sites testing and validating it.
Speaker Change: So, most of the time, by the time we announce a new product in the oil and gas, it has already some customers behind it.
Speaker Change: Now, from there, going and scaling it up is much easier because most of those times, those customers are distributors or integrators that then cover a specific geography or area.
Speaker Change: So, for example, the first furnace cameras that we shipped out were to an integrator in the southeast.
Speaker Change: that we know has already had quite a number of orders coming right as soon as their customer's capital budget goes into effect on January 1st.
Speaker Change: So I think this is something we're very positive on. We're able to move into large chunks of revenue much faster when it comes to those cameras once we've already validated them at a customer.
I agree. Okay, thank you very much.
Thank you.
Next question comes from Jean Enger with engerletter.com
Jean Enger: Hi Sam and Al, keeping up the good work and of course we're all looking forward to what happens with Lockheed in the next year or so.
May I ask you guys...
Jean Enger: I don't know if you can say specifically if you're involved with the sustainment $200 million
contact for Project Longbow.
Speaker Change: You probably know what that is related to the Apache or AH-64. But that's also with Northrop Grumman, not Lockheed. Does that involve you guys?
Speaker Change: Well, first of all, a lot of those programs, the Apache modernization being one of them, there is one lead prime, but then could be multiple other subprimes.
Speaker Change: So, I can't comment specifically on this prime or that prime.
Speaker Change: But I would say that every time there's a project that talks about modernization or an existing platform like the Apache in this example
Speaker Change: you can assume that a big part of the modernization is bringing the electro-optic systems up to speed. And actually, if you look at the DOD budget,
Speaker Change: The modernization of the Apache actually has a line item that talks about the electro-optic system.
I'm totally in love with that.
Speaker Change: Okay, well I know also Poland is buying 70 of them and the Netherlands has been okayed to have this new fire control target acquisition radar system, so I was wondering, you know, if that provides incremental additional business for you guys. I hope that it does.
Speaker Change: and whether it does for Latvia, or would this be just Orlando-made materials?
Speaker Change: get any upgrade like this well after the U.S. So if we are working on such a program, I would say we would be providing it for at least five years to the U.S. helicopters before it made its way to any of the foreign customers.
as friendly as they are.
Okay, I was, the reason I brought up helicopters...
Speaker Change: I'm concerned that as we go into laser warfare, and especially intercepting drones, that's going to become increasingly something that countries are looking at, although I don't know, you might know the answer, how they can move lasers.
Speaker Change: because the drones and incoming missiles these days can be maneuvered and typically a laser shoots in a straight line. But with that said, a helicopter is not a really great platform in terms of it has vulnerability.
Speaker Change: So, I'm wondering whether your lenses and your glass can be coated, for example, in some way that it will deflect or reflect laser and provide a countermeasure in and of itself to laser beams.
Speaker Change: Customer or user would wish for it to be so I'm not sure if that specifically would happen But I just want to circle back to the second half of your previous question regarding Latvia
Specifically, if we provide, if we would
I appreciate it.
Speaker Change: Apologies if I got too detailed, and my final question would be regarding space, which you haven't mentioned.
Speaker Change: I've also been seeing that there are new developments which are focused on collision avoidance of debris through satellites or defensive measures if one of our satellites is being targeted, such as an effort to disrupt communications.
Speaker Change: You have acknowledged that you're involved in space communications, whether it's Starlink or somebody else. And I'm wondering whether the new approach of basically LIDAR in space to give proximity and manage space better, which is called management, has involved you guys.
Speaker Change: I'm not aware of us being directly involved in that, but it's very possible that through one of our LIDAR customers we are.
Speaker Change: We work with multiple different companies that work on LiDAR, automotive and other LiDARs. So we might be indirectly involved in it, but I'm not familiar with that.
Speaker Change: anyway I look forward to hopefully a successful year, Sam you've done a tremendous job of changing around neccessarily on the direction of the company and I welcome that
Thank you, Gene. Thank you, Gene. Thank you.
If there are no further questions, please continue.
Speaker Change: Thank you, operator. And thank you again to each of you for joining us on today's earning conference call. We look forward to continuing to update you on our progress and great results. And we strive to deliver value to our valued shareholders. Thank you and goodbye.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
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