Innovative Solutions and Support Inc (ISSC) 2002 Q2 法說會逐字稿

This is an unedited realtime transcript. An edited version with proper case and full speaker names will be available shortly.

Good morning, ladies and gentlemen. Welcome to now innovative solutions and support second quarter year-to-date earnings release teleconference. At this time, all participants have been police placed on a listen-only mode and we'll open the floor for questions and comments. It's my pleasure to turn the floor over to your host, Mr. Geoffrey hedrick, chairman and chief executive officer. Sir, please begin.

Good morning. This is geoff hedrick. Welcome to our conference call this morning. In a few minutes I'll discuss our fiscal year 2002 second quarter, and year-to-date financial results. The period ending march 31st of this year. Joining me on the call at our headquarters in exton, pennsylvania, is jim reilly, our cfo. Before I get started, I want jim to read the conference call safe -- overwhelm sorry, our safe harbor message. After that, I'll make a brief statement regarding the financial results and open it up for q & a. Jim.

Thank you, geoff. Thank you all for being on the call this morning. Certain matters discussed in this conference call, including operational and financial results for future periods, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially, either better or worse, from those discussed, including other risks and uncertainties reflected in the company's prospectus and 10k, both on file with the sec. Thank you, and geoff, back to you.

Thank you, jim. The sales for the three months ending 31st amounted to $6.6 million and the earnings for the same period up 1.1 million at 16% of sales or 8 cents per share. Revenue on the kc-135 program remains strong in the quarter, consistent with plan and remaining 1.8 million in revenue is essentially commercial rvsm systems, into both retrofit and oem customers. Our gross margins we remained up in the high 50, 58% for the quarter. It's result of delivering a higher concentration of mature and as which see it, we bring new business in the margins -- we've been able to sustain these 58% to 60% margins. So we're pleased to -- our design technology allows us to make a profit and stay competitive. We continue to invest in our future spending, with a fair amount of investment and product development, as evidenced by over the million dollars worth of investment or 16% of revenue. Substantial portion of that is focused on the -- flat panel program, which is moving on very well, and support of tit gauges and a joint program with collins for a air data product for retrofit opportunities. So the balance -- in balance, the primary investment was in -- display. Sga spending was down year over year in an attempt to hold the spending and while maintaining a significant number of opportunities, which we will talk about it a minute, we have received a number of new programs just in the last week, and I'll talk about those later. Operating income, in the period equalled $1.4 million or 22% of revenue. That net interest income was $150,000, roughly, and taxes remained at the 37% level. The six-month period, revenue was almost 14 million, 13.9, and 17 cents a share. Gross margins up at 60%. The program is working, and the design -- our design and transition into manufacturing has been balanced and effective. This includes new add aptations of some rvsm production like the aru that we make for broad ranger of customers. A significant number of additional stcs or certifications have further expanded that marketplace, and most significantly the faa has released a notice proposed rule making to confirm the requirement for rvsm domestically by the end of 244. That date is holding. They can no -- did not slide it, and that rule making we expect to be official and authorized in the next three months. What we're seeing now is a very, very significant burst in rvsm demand, and now that it is -- the signal is going out to 7,000 aircraft to require it, that you have 35 to 40 months to get your airplanes modified. So we expect a significant amount of additional business. We'll talk about those programs in detail. Again, the gross margins we've been able to maintain, and i think that's both the figure ma program active in manufacturing operations but also in the engineering operation where our focus is design for manufacture. To give you some sense, the last quarter, our direct labor was roughly 2% of revenue. We've actually driven it down further. And that is in part because we have put some automatic equipment in. We have a surface mount line, which is enhanced our responsiveness, and that was why it was put in. And the maintenance of our quality. But significantly, it also brings a reduction in our costs, significant reduction in costs, and that's helped us keep our margins up. Sg and h spending for 6 month was 2.9 million and down 7% year over year. We clearly -- after 9/11, the demand for avionics products was impacted, and so we pulled in the reins on our spending and happily, we've responded to that. Operating income for the first half was about 3.3 million, or 23% of revenue. The cash picture is most positive. Although with investmenting over $3 million in the plant, and another about a million in inventory, we still -- we still maintained a positive cash flow of over 300,000 of. We expect year-end cash flow to be over $5 million, net pre-cash. So that is a very positive view, as well as what we see as our significant new business opportunities and orders. I would like to address the balance sheet briefly. Stockholders equity at $61 million, and $43 million in cash. Our acquisition efforts continue. But we are intent on buying a very compatible synergistic companion, and we have probably reviewed close to 20 opportunities. And we have two or three that we're still looking at of those 20 strongly, and we'll be prepared and have all the cash we need to make those investments. In addition, in november we bought 250,000 shares of our stock at $5 a share. And with the exception of idb the development bond hone for 4.3 million, we have no debt. Let me just briefly announce three new orders we've received. And this in the last few days. We received a $4 million order from american express -- I'm sorry, airborne express. And with accelerated delivery, starting this fiscal year, and within a few months. In fact, they're trying to get a substantial portion of the whole program delivered in the next few months. That program was rvsm for a fleet of dc-9 and dc-8 aircraft, design provides them an ability to have a common part number for both aircraft, which is unique in the industry. And this is a product, derivative product we've been making for 10 years. And we have a sound understanding of what the profits will be, gross margins will be consistent. In addition, we got a million and a half dollar order from duncan aviation for a variety of biz jets, a first and significant order for a number of different biz jets, and finally almost a million dollar order from gulfstream, and we expect another one just about the same size within a week or two. We're negotiating that now. The gulfstream order is interesting in that they -- we are standard with gulfstream, but they have not had sufficient demand to order additional material in many, many months. Now we're seeing a tremendous demand on these rvsm kits. So in a broad range, we see a very strong -- finally, a very strong response in the rvsm, and again there are about almost 7,000 aircraft that need to get rvsm certification, and more than half of those will need equipment. And we remain the leading supplier of retrofit systems. We expect another 10 to 15 million dollars of additional business within the next four to six weeks. We've been informed by a couple of customers that they have selected us in the paperwork will be in momentarily. We're not prepared to release that information yet. But this shows very positive move in response. Flat panel program is exciting. It's growing very rapidly. We are talking to a number of major airline carriers about fleet retrofits ranging from 30 to $60 million. And they -- the cost benefit analysis is so compelling that we believe as we had planned, the opportunity in the air transport industry for our product is remarkable. In addition, we are in negotiations with major oems to provide this product as a retrofit with the endorsement. So this program has been exceptional. Our stc plans are moving along quickly. We are at a point where we have to now select an airplane, and we have been looking at a number of different boeing aircraft between the 737 and the 767. The 737 opportunities over 3,000 aircraft. The first response has been remarkable. By think the industry has universally -- universal accolades for our product. That's a quick summary. I'll turn it over to q & a. First question, go ahead.

Thank you. Ladies and gentlemen, the floor is now open for questions. If you do have a question or comment at this time, please indicate so now by pressing the numbers 1, followed by 4 on your touch tone phones. If your question is answered, you may remain yourself from the cue by pressing the pound key. If you have a question or comment, please press 1. Our first question from paul sockin of hummingbird value funds.

Hi. I have a couple questions. First, the 7,000 aircraft for the rvsm, what would the approximate revenue per plane be?

Well, it varies enormously. But I think the low end for rvsm retrofitted probably be something around $50,000. And the upper end is as high as -- our competitors have them as high as $200,000 an airplane.

Okay. Our revenue would vary between 50 and probably $125 or something like that.

Okay. And then I guess what is the competitive landscape look like? I mean, have -- has it gotten more competitive, less competitive? And how do you feel --

Hasn't changed materially. I don't think there's -- there's really two rvsm manufacturers. That's honeywell and ourselves. Our -- we have distinct price advantages. Notable performance advantages of flexibility. We clearly don't have the honeywell presence. It's a notable -- an important presence, and they make an excellent product. They make a fine product. I think we make a better product, from a competitive standpoint I think we're stronger today than we were before because we have -- i don't know, in the last quarter probably another five to eight certifications for various aircraft in the biz jet and commercial air transport marketplace. We are the only -- to many knowledge, we're the only people that have a system for the dc-8, and airborne's case they have dc-8s and dc-9s. We have an rvsm solution for both, and we have come up with a single part number so they can support both of their fleets with an air data system which they don't have today. So not only do they get compliance, but they get actually significant reduction and maintenance costs that almost -- virtually pays for the ins stallation, without the complyance issue. And the fuel savings that they will get out of reduced vertical separation, the reduced altitude shifts, will pay -- will actually pay for the system and actually give them a return on investment.

Got you. The other question I had was concerning the potential acquisition.

Yes. I guess first, you know, i guess we had discussions before, but I was just curious, is it -- are you still looking to do a very large acquisition as opposed to a little tuck-in, something that would complete the cash -- deplete the cash. Would you envision doing it for cash when you need to go out and take into debt or would you do it for stock and would if change the complection of the company?

I would say our first acquisition hopefully would not drastically change the complection of the company. And I'll tell you why. I think we necessarily need to be very prudent in our first acquisition. I mean, the obvious point is that we can't fail at it because I suspect a street would not be happy and punish us. So we clearly need a -- to have a very successful initial acquisition. Number two, we need to start changing in a smooth and controllable transition the complection and personality of the company with an acquisition -- with the anticipation that the acquisition would not be an immediate area, which means that we have to expand our infrastructures to deal with two sites. All of which we've all done. I've done many times, and we've all done this a lot. But every time you do it, you have to be careful. To answer your question about stock versus cash, we always maintained that we think that stock prices is cheap and therefore we would tend to guy in cash. We're prudent about keeping the cash. I was reminded just as an aside by herb kelleher from southwest, he reminded me that when 9/11 hit, they exercised their -- even though they may not have had a need immediately for the cash, they exercised substantially their whole credit line, because they wanted to be in a position and survival. Obviously, once again, the southwest has done a superb job in managing their business in difficult times. We took -- we took a note out of his book and watched our cash during this period of time, and controlled it. We see a dramatic turnaround. But we would still buy any acquisition we would make, and an ideal one would be in the $50 million range. Anywhere from 10 to 50. We may find a specific one that is smaller than that. We would tend not to get -- we would tend not to look for smaller acquisitions because they take virtually the same amount of management effort as a larger one.

Is so that would be 10 it 50 million in purchase price.

Yes. In that range.

And --

That doesn't preclude one that's an ideal one at 100 or obviously one at either end, but that would be the range of range. We have consistently looked at the 30 to $50 million companies. In fact, I can't think of one that is below 30. That one is probably -- there was one at 18. Go ahead, I'm sorry.

Oh, and and would this have to be accretive?

I've always maintained it has to be accretive.

Thank you very much. And we would buy a substantially with cash, but some stock and the reason we use some stock is we obviously require an ongoing interest from whoever we buy it from, other than perhaps a public company. We don't anticipate buying a public company. We would want to sustain the interest of clearly principles and the present owners. So we would have some portion of it would be stock.

Okay. Thank you very much.

You're welcome.

Thank you. Our next comes from chris versas of fbr.

Good morning. Just a couple questions. Can you talk about what backlog levels were at the end of march?

Yeah, we can, chris. The backlog was approximately $8 million at the end of march. And with the new business that geoff just articulated, it's probably about 14 or 15 million dollars right now.

Okay. How much of that is kc-135?

None. Well, the 700,000 is kc-135.

Yeah, 7, but substantially none. What it's showing us chris, what we expected -- over a year ago, is a transition from kc-135 would be picked up by all these aircraft that we're going to be driven to rvsm, domestically. 9/11 put a hiatus in that transition. But we're seeing now very dramatic responses. I guess because the realization that it's for real and the faa will enforce it.

Okay. Could you talk about that 14 to 15 million, what is the burn rate? Or to look at it another way, for the june quarter, how booked are you based on what you expect?

In the june quarter, about one half of the current backlog, chris, about $4 million, would be burned off in the june quarter. And about $3 million would be burned off in our fourth quarter, and $1 million would carry over at the fiscal '03.

We have, I think i mentioned, an additional 10 to $15 million that also is imminent that, will come in literally -- within the weeks, certainly six weeks roughly.

Are your thoughts you could ship that in the fourth quarter?

Yeah. Understand the product -- what we're seeing is, just briefly, we developed an rvsm product our addu. It's getting wide acceptance, outstanding acceptance. By the way, we're about to be put on boeing's preferred product list for 727, 737. To that will open a huge opportunity for us. So it was originally conceived this would be a business in general aviation product, our addu, we call it. We're seeing huge acceptance in the air transport because it's an inexpensive and most importantly very easy or installation. So we're seeing -- we're seeing opportunities right now, we're looking at air transport opportunities with that kind of thing of 5 to $10 million in the near future. And that's the kind of product you can ship relatively quickly. The customer may not require or demand it because it's still x number of months out. But we see the kind of thing we can turn around quickly, and we have -- so we're gaining some real confidence toward -- for the balance this year. There's a bunch of holes to fill, but we're seeing ways to fill it. On that note, you mentioned in your prepared remarks, geoff, that you expect to do roughly $5 million in cash flow for '02.

Right. And given what sounds like better visibility, can you share with us some of the expectations have you for the year that derive that $5 million cash flow number. The biggest thing that will generate the $5 million cash flow is if you look at our receiveables, at the end of the half, they were very high. And those will come down. In fact, since the close of the half, we've gotten how much cash in? 4.5 million since the close --

3.8 collected and --

Yeah, 4 and a half. Close to 9 million down to 4 and a half. About $4 million in cash has come in this the last few weeks. And we have a determined plan that -- it appears to be on a success path to further reduce our inventory. Part of that is our ability to produce a very -- nearly identical product. The addu basically, this design we have now, is one part number for -- I guess 35 different kinds of airplanes. So -- I mean, that enables us to keep our inventories down. And that is where we see the cash coming from.

Okay. I guess I was hoping for something in terms of the revenue expectations of the margins for the year, combination of that.

I figured that. But our best guess today is still flat. And then we expect to see it kick in and continue to grow later. So it's now an effort to keep sort of flat performance will make profit but we'll generate a lot of cash.

And when you say flat, I'm hoping you don't mean flat with the second quarter? Flat with the first half, second half?

Flat with the first half. The second quarter, some of that -- there was product we could have shipped on one of our contracts on actually on the air force contract. And what we did is which -- we were in a process of closing out of contract, so it was a four-year fiscal program. I asked them to review every single year of shipment, every single product that we got out, do a bottoms-up valuation of the program, confirm all of the receivables we have on that prior to shipping this last block, and that it was built -- but we didn't -- we chose not to ship it in the quarter.

Okay. And then just two quick ones, geoff: If the total outlook is flat, do you expect eps to be flat second half versus the first half?

Yes. It may be better than that. Right now, we're saying flat.

Okay. I would say more consistent -- we expect about 10 cents a share in each quarter, and that certainly is our target, to equal or exceed that, and probably generate that much or more in cash.

Okay. And just any update on the coo search?

We've interviewed five people, and we're closing in on two, and we're trying to find the right person.

Okay. Thank you.

The problem -- to address that, the coo we want -- we would like to see a coo that can make the transition to my job, take over my job, as i get older. And it's worth the effort to do that in a balanced and stable way.

Geoff, I stay in in a positive sense, I don't think anybody can do the job you do.

I hope that's a positive sense. Were you preferring referring to the performance this quarter.

No, just in general.

On a positive note, you've heard me a lot of times talk about this great future in rvsm and it will come back. The good news is it really is and we're happy to see it. I would have loved the timing to be better. And I can tell you, it is difficult for me to address too much of the detail on the flat panel program. But I can tell you that all the expectations that we had before we went public and talked about are actually coming to fruition.

Good.

I mean, it's remarkable. Very very satisfying. So we're very excited about the future. In the meantime, we're going to keep our head above water. I'm reminded the only way you win a race is you got to be in the race at the end of the race. So we're taking a sensible and conservative approach in that area. And I think planning a very strong foundation for the future.

Thank you. Good.

Thank you. Our next question from sellman of stifle nicholas.

Thank you. Good morning.

Good morning. You can talk just a little bit about gross margin? It seemed to come in from q1 to 57% from 62, 63. Is that just mixed or is there anything going to on there?

No. Remember, I've always maintained that every time it gets in the 60s, I'm uncomfortable. I guess we did -- you always get a mix from -- and I think it's probably more mixed on average it looked very, very good, actually.

Great. It's really hard, although we do margin analysis on products, especially when new products come in on the floor, to convince ourselves that we have comfort with the results. -- I mean, it went from 62.6 to 57.7. That's mixed kind of stuff.

That's all I was checking on.

Yeah, that's the kind of thing you'd see. 62 was superb. We are -- we continue to be very comfortable in that -- and apparently able to maintain with the work that we've done the margins in that range. And by the way, these are products. These are rvsm products now. So this is the kind of thing we look forward to, you know? It's quite good. And we continue to remove cost out of our pocket, by the way.

Earlier, you announced the navy contract for roughly 10 million? Is that in the backlog incomes you just threw out?

The navy contract, no. What we're telling you is we're talking about released. In other words, as you know, long-term multi-year contract is consistent of a release and a bunch of options for subsequent years.

Right.

We're -- and that number only released numbers. We have like $9 million in backlog that we're not counting in the number.

But it's a release.

You could call it unfunded.

So how much of that is funded?

About $400,000.

That was the initial buyout.

A bunch coming up.

They're going to dispense it more by little.

Okay. It's -- what's good about that, by the way, is that there's profit in a product. The customer is very happy with its performance. The specifics for the craft has been modified to put our part number -- is and circumstances -- er -- the is&s part number on. With we're now talking to the koreans that also have these aircraft. In addition, we're going to get gsa listing for our products so we see as a broad range application. And finally, it's our first navy contract. So we're delighted we can produce a profitably and the customer is happy with.

Great. Last question. What is your high count?

About 115 people.

Is that down for the prior quarter?

That's --

Consistent. We have been really -- we focused on keeping our engineering staff. They've done a great job.

Thanks very much.

Hang on. It's 108. And it's down about 10 -- well, from -- if you want specifics, I got the numbers in front of me. Year ending '01, it went from 112 up to 114, 116. In the beginning of this year, and down to 108 now. And the year ending '00 was 125. So it's down about 15%.

Got you. Thanks.

By the way, that's the good news. Not in engineering.

Thank you.

Our next question from edward fine of investment research.

Gentlemen, could you go over the three new contracts a little more specifically? The 4 million with the airborne express, how many planes is that? About a hundred airplanes.

And how many do they have, by the way?

It's a mixture of dc-9s and dc-8s, an rvsm system couplea of planes and they want part of that system right away.

What is the box mean, please?

The box is their data, it's air data interface for the auto pilot control. It's part of -- it's part of an rvsm system.

Part of an rvsm system?

Rvsm is reduced vertical separation minimum.

Right.

The faa is reducing the separation between -- required separation between aircraft flying above 29,000 feet from 2,000 feet to 1,000 feet. The distance between them. This effectively gives twice the -- obviously, twice the useful area for aircraft to fly in. And in order to comply with that, safely comply with that, the altitude measuring systems of the aircraft have to meet much higher performance standards. And that's what we make.

Okay. And what about duncan aviation? How many units?

Same kind of thing. It's a variety of -- duncan aviation installs this in a variety of different aircraft. Jet stars, falcons, cessna citations, a variety of aircraft.

How many units?

Basically a single part number for all aircraft. That's unique to our system. And -- the order is for -- the basic equipment to be afraid to -- applied for to a variety of aircraft. They're an installer. They are -- they install their -- install and certify and maintain corporate aircraft.

Is there any dollar amount to that contract?

$1.4 million.

1.4. And the gulfstream is -- is a half million?

No, is a million. And it's ongoing. We have a certified system for the gulfstream too, and gulfstream has around ordered additional systems against that large-blanket order. So you'll just ship the product out to gulfstream, of course?

Yeah, we ship to gulfstream and duncan, and we don't physically do the installation. We just sell the equipment for the installation.

Right. Okay. And what are your paydays running right now, by the way? Your accounts receivable?

Yeah, ed, good morning. As geoff mentioned earlier, the receivables at the end of the quarter were about $8.3 million. And we have collected about $3.8 million of that since. But I want -- wanted to point that out. But the reason for that is we've been carrying one of these small disadvantaged companies and giving them paydays that were a little bit outside the normal. And it would range probably in the area of about 50 to 55 days at the end of the quarter. But that falls off very rapidly. If we were to do the out sang -- days outstanding at the end of the interim months, it would be a lot less.

Well, --

A lot less?

Around 45 days.

Okay. And have you had any bankruptcies, by the way.

None. No bad debt.

Thank you. We have no bad debt and don't plan on incurring any.

All right. Thank you.

Thank you. Our next question is from ashock of icor.

First of all, congratulations. Great job, especially given the environment. Few questions. On rvsm, it appears as though you might be picking up some market share. Is that accurate? What is the state of competition?

We'd like to believe that. But it's a little premature to conclude that. Over the next three to six months, I think we have a good opportunity to increase our market share. Again, as the physical volume picks up, we can get more of a statistical view rather than individual views. We think there's a good chance we'll strengthen our market share. Our product is cheaper, easier to install, and has proven outstanding performance. So hopefully, that and the reasonably aggressive sales campaign will increase our market share. So we'd like to do that. And we think -- this is -- this happily is very consistent with what we had planned, two, three years ago. We saw this, we saw the kc-135 as being a major program that established -- helped establish our credibility and gave us a lot of great experience. And meantime, we felt people asked for what happens when that falls off? It's in the process of falling off, and we're seeing quickly that we're filling in the rest of it with the rvsm and hopefully expand interesting. We do our market share rapidly expanding the business as well, independent of even the flat panel, which we expect to have some significant contributions.

Next question for --

Next question for acquisition. You talked about target sizes, et cetera. Are you finding the market conditions are finally getting through to possible private companies, or are they still in general feeling that valuations should be a lot higher --

No, no, I think -- we had one that we had been looking at that had some rather remarkable expectations of value. And I think a lot -- reality has set in this a lot of areas. Like everybody, having started a couple of companies, we tend to be very optimistic about the future. And we all hope to we can get paid for that future. Where you stand, I suspect, depends on where you sit. And which I sit right now, i tend to be a little more conservative about expectations for the future. At issue here is that I think we have a strong fundamental organic product line. We have reason -- and good reason to expand by acquisition, and that acquisition must be added up. In fact, strategically expanding not only the growth of the required business, but have to actually help us grow and improve the corbis growth as well. So we want more than just a simple tick-tack add-on. That makes it much harder to find. Much more important to do the analysis. Over the past year, it's been so disruptive in the aerospace community, it was hard to set a clear tack through the acquisition process. That's become clearer, i think -- there's a better basic understanding in the marketplace. Without going into specifics of the deals that you're looking at, is it probable that if you're picking up a company in the -- let's assume $50 million neighborhood, that the company has a lot of revenues on the book or can we expect the revenue to come along with that? I would be inclined to be suspicious generally of revenue on the come.

Okay.

I guess that's the summary. It's an -- and let me tell you why. I guess it's worth discussing 30 seconds. If you're in our position and you have cash like we do, and have a modest, mature traditional product line, with very little opportunity other than almost 10% growth, then you can -- you go after, you take your resources and you put it into an acquisition, and you prepare to take some chance on the come because that is the only way you'll ever see your business expand. In our case, we have a different situation. We have an incredibly powerful stable of organic products. That we are convinced as a company will expand by 2 to 3 or 4 times, without just because of the marketplace and the product we're in. The last thing we want to do is put that intrinsic high-margin growth that we know about at risk because we diverted our energies toward expectations for business on the come, and a new business. So that's why we're doing what we're doing.

I guess last question, in the area of the flat panel, and I'll just ask to all of you draw questions answer them any way you feel appropriate, the first I guess is looking krvl at the -- conservatively at the flat-panel business and understanding that things have to go through a certain process in terms of approval, how far out do you think it is before you get 10% of your revenues coming from flat panel? What is reasonable there, being conservative?

Well, let me first speak to the fact that once the program kicks in -- remember, getting the sec right now, we're picking -- I mentioned we're picking an aircraft. We're literally trying to make a deal with a customer so that the ftc is not just a blind stc, that we go to a specific customer and try to get them to -- apply that stc or apply for another stc. This is for a specific customer. When we actually go into -- we actually go into production, it will step up relatively rapidly and it will represent 10% very quickly of our business. I only mention that because that kick-in time could easily vary by a quarter. In and out. I will tell you that there are no technical problems. So?

So would it be realistic to take your words and say by this time next year, --

We'll be shipping --

Flat panels should be considerably above 10%?

I think that's fair to say. I think that's fair to say. Now, I mean, at the same time, the rest of our business could explode too. But I think that's reasonable.

But that sets a floor on it and that's what I was looking at.

Absolutely. That's very reasonable. I think that's very reasonable.

Thanks a lot, and congratulations again.

Thank you very much.

Thank you. Gentlemen, we're showing no further questions at this time.

Okay. We'll close it down. We appreciate you all calling in and appreciate your questions, and if you have any additional questions, any interest, let us know. The details -- a little more of the details of the three programs we discussed should be on the business wire as we speak, or it will be in this morning. And I would say you can expect to hear about additional releases over the next couple weeks of a significant amount of additional business. So we're finally getting enthusiastic about the future. It's been a -- it's been a hot summer. And a cold winter. We appreciate your interest. Thank you very much.

Again, ladies and gentlemen, we do thank you for your participation on today's teleconference.