P&F Industries Inc (PFIN) 2023 Q1 法說會逐字稿

Hello, and welcome to P&F Industries' first quarter of 2023 earnings call. My name is Melissa, and I will be your coordinator for today's event. Please note this conference is being recorded (Operator Instructions)

I will now hand you over to your host, Mr. Richard Goodman, P&F's General Counsel, to begin today's conference. Thank you. Mr. Goodman, please take it away.

Thank you, operator. Good morning, and welcome to -- good morning, and welcome to P&F Industries' first-quarter 2023 conference call. With us today from management are Richard Horowitz, Chairman, President, and Chief Executive Officer; and Joseph Molino, Chief Operating Officer and Chief Financial Officer.

Before we get started, I'd like to remind you that any forward-looking statements discussed on today's call by our management, including those related to the company's future performance and outlook are based upon the company's historical performance and current plans, estimates, and expectations, which are subject to various risks and uncertainties and could cause the company's actual results for future periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the company.

These risk factors and uncertainties are described in today's press release under forward-looking statements as well as in our most recent SEC filings, which you can find on the company's website, including our 2022 Annual Report on Form 10-K, our quarterly reports on Form 10-Q, and other documents. Forward-looking statements speak only as of the date on which they are made, and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments, or otherwise.

I would also like to remind all participants on this call that, as we've been doing for the past several conference calls, with respect to the question-and-answer portion of today's conference call, the length of the questions from any particular stockholder or other caller, together with management's responses are limited to 20 minutes.

Additionally, please be aware that during the question-and-answer session, management will only answer questions directly related to the company's first-quarter 2023 results of operation and financial condition as disclosed in the press release published earlier today. We must insist that you adhere to this procedure. Management will not be entertaining any questions that go beyond the scope of this call.

And with that, I would now like to turn the call over to Richard Horowitz. Good morning, Richard.

Good morning. Thank you, Rich, and good morning, everybody. Thank you all for joining us this morning to discuss P&F's results for the three-month period ending March 31, 2023. I hope you're all doing well as this country and the world continues to face the ongoing economic pressures and the ongoing crisis in Ukraine as well as tensions with China and Russia. We pray for a peaceful end to all these conflicts.

I would also like to direct your attention to the company's press release that was released earlier today, which includes the company's March 31, 2023, balance sheet statement of operations, statement of cash flows, and a discussion related to the company's results for the three-month period ended March 31 of this year and how these results compared to the same period in 2022.

Further, I wish to highlight a number of key factors that impacted our first quarter 2023 results. There was significant improvement in Hy-Tech's revenue and gross margin. The gross margin in Florida Pneumatic improved as well. Our consolidated operating expenses were essentially flat compared to the first quarter of 2022. And rising interest rates, which we're all quite familiar with, was the primary cause for the increase in interest expense.

Finally, in order to make better use of everybody's time, yet be mindful of the purpose of this conference call, I would like to remind you all of the following, and as Richard just said as well, maybe a little redundant. First, it has become our standard practice, we will move directly to a question-and-answer session and not restate what is already in this morning's press release.

Secondly, please be aware that we will only be answering questions directly related to the company's first-quarter results and the financial condition. We must insist you to adhere to this procedure. And finally, please be mindful of the 20-minute time limit as previously noted, which we plan to enforce to the extent shareholders or other callers with pertinent questions or have multiple questions, please complete your portion of the Q&A within the 20-minute limit, and then we will move on to the next questioner.

And with that, we will be happy to answer any pertinent questions that any stockholder or person on the call may have. Operator?

(Operator Instructions) [Timothy Stabosz], private investor.

Good morning, everyone. Can you hear me?

Yes.

Good morning. I own about 4% of the company. Congratulations. It's been a long time coming, lots more work to do, but a return to material profitability. Congratulations first of all.

Thank you.

Thank you.

Can you give us -- looking through the press release, I didn't see too much as far as guidance or anything. I know you don't give formal guidance, but it's certainly worth asking you fellows your sentiments. How do you feel? I mean, there's some sense in the press release that things are looking good and obviously there's potential upside with Air Max and other areas, too. How are you feeling about things? Is this the most optimistic we felt since 2019?

This is not your first call, and I certainly know that you know how these things go. But we do not give projections and giving opinions is a projection. So we can't do that.

Now that sounds like a party (multiple speakers)

Timothy, let me speak, okay? What we said in the press release --

Well, I feel like you were kind of nasty. You were kind of nasty with me, and I don't think it was necessary. (multiple speakers)

Let me speak, please. I'm enthusiastic. My question was enthusiastic. My question was congratulatory. My question -- I've been around a long time. I was trying to commiserate and be close with you guys and I get the gate crashing down. It's inappropriate. And I don't appreciate it. So I'm not asking for formal guidance. I'm asking for a sense of how you feel. And if you can't tell me how you feel, that's an insult. If you cannot -- if you can't be vulnerable enough with me on an open-ended question, to connect with you as my CEO, when I own 4% of the company, then shame on you. So I'm sorry, but it's just not right. (multiple speakers)

Okay. How many other questions (multiple speakers)

So as a CEO, I didn't need a formalistic answer that was legalistic to a question that was inclusionary and welcoming, and warm. So maybe you can try to answer the question differently, I would respectfully ask you to answer -- try to answer the question differently. Maybe I'll be more specific since you apparently don't know how to be emotionally vulnerable and connect with people.

You mentioned three specific things in the press release. You mentioned three specific things that were problematic or that have created headwinds for the company. Obviously, inflation. You say increasing inflation. You misspoke in the press release. You should have said it's decreasing inflation now. But yeah, there's still inflation issues, but it's not increasing by the way. So you might change that reference next time.

But you mentioned inflation and you mention our international supply chain and you mentioned domestic transportation. And the specific question I have for you, since we're still boilerplate here and so boring, is can you give me a qualitative sense -- and please, don't stiff on me again, okay?

Can you give me a qualitative sense -- maybe Joe can answer this, can you give me a qualitative -- I prefer quantitative sense, but give me a qualitative sense, since you know, we already know what happens when I ask questions that are too specific or whatever -- of how you think those factors, how materially those three factors that you bring up at the beginning of the press release, are a drag on the company's potential profitability and that when those reverse to normal or if you estimated that they were more normalized, how much more profitable will you be?

I'm not asking for quantitativeness. I'm asking for an anecdotal sense of a basis for like your optimism for the future because, hey, wow, last time around in 2019, we didn't have this crap going on these three things you mentioned. So I'm asking for kind of like an anecdotal sense -- not guidance, not predictions, but a sense of those specific three things that you mentioned and pointed out, how you feel about the potential for the reversal of those three things to allow us to continue to have material improvement. How's that? Is that fair or is that something I need to be stiffed on

Joe, you can answer the question.

Yeah, let me do my best, Tim. Going back to your original comment about increasing inflation, look, I would agree that I think things are maxing out. But during the first quarter, we were still seeing some inflation. Now that's a general comment I would say. For us, our input costs were up directly still trickling up, but I don't want to quibble over whether it was increasing and it stopped in April. But I would say that -- let me just say this.

Okay.

That we certainly were seeing an environment of increasing input prices throughout, certainly the very first half of '22, and we really didn't right size, that where's the pricing until the back half of '22 and so on. And as we're now anniversarying a quarter where I felt like -- we feel like we were behind last Q1, so there's a benefit there, obviously. We got caught up.

On the other transportation and certainly the cost of transporting across the ocean, I don't have the exact figures in front of me, but I think we're pretty close to pre-pandemic levels. And certainly 12 months ago, Q1 of '22, we are still very high. So, obviously, that's a benefit. You know, I would say transportation costs might be a couple of percent of the cost of the product. So you know if things get cut in half, you could kind of do the math on the benefit there. And I'm sorry, I don't remember your third area that you wanted to be addressed. I apologize. What was the third one?

Well, inflation, transportation costs for the beginning of the press release. Inflation, transportation costs, and international supply chain.

Well, you know, things are -- the supply chain is solid. We are still seeing some delays in overseas deliveries, but nothing that we haven't been able to manage. It's really a non-factor. A little inconvenient but it's really a non-issue at this point on.

Oh, really? Okay. Do you, in essence, view these on kind of four items? Again, you put trends and uncertainties towards the -- well not the very beginning of the press release, but do you view them international supply chain, which I guess is mostly resolved at this point -- but I mean, yeah, do you view domestic transportation costs, international supply chain, inflation, and well Boeing as all now, essentially tailwinds and not headwinds in the direction they're moving to promote?

Yeah, they're not for most of their time. They're not tailwinds. Boeing -- Boeing is publicly disclosed by them, has plans to increase production over the next 12, 24 months that are in a pretty dramatic way, and as we said, they're one of our largest customers. And as Boeing goes, our aerospace business goes. So we're pretty excited about at least what they've said. So we'll see how that pans out. But I'm rooting for them. So we're excited about that, what we see is that opportunity.

Again, there's material profitability here and I presume that's heartening and exciting to you guys, yes?

Yeah. We're -- my records go back pretty far, and it was a heck of a quarter, going back quite a number of years on a relative basis.

How does this -- it's one quarter, obviously, but it sounds like there's some optimism, speaking very broadly. how does this alter or how has this altered, if at all, your view of further acquisitions or the broad issue of capital allocation actually probably bring in your profitable as far as ramping up the dividend, doing a Dutch tender buyback, stocks pretty cheap here, perennially cheap, making acquisitions are -- has your tone and tenor at the Board level or the attitude of management -- probably Rich, whichever one of you want to answer can answer -- has that changed? Or are there -- do you view new opportunities as we're presumably more optimistic about the company?

We are always -- Tim, we are always in the market looking for acquisitions and we continue to do so. And that has not changed at all. Is that your question?

Yeah. And then capital allocation more broadly as it relates to the fact that we have this earnings report that we're releasing today. Any more nuanced view on capital allocation. I mean, you've done -- you did a great job buying back stock from -- in the open market over the -- I'm sorry, from private shareholders, including me in the past, which was great accrual of value for everyone who remains. I was able to get back in the stock. I like the company here. How do you -- at the risk of incurring your ire, how do you view buybacks at this point?

We've discussed it. We continue to discuss it at each and every Board meeting and at this time, the Board feels very comfortable with allocating our funds for other things right now, saving it for acquisitions, et cetera, et cetera? Can you hear me? I have a click. I don't know if --

Yeah.

Can you hear me, okay?

Yeah. Okay. How much time do I have left?

I mean, we review it regularly at all the Board meetings, and at this time, we're not so focused on stock buyback, even though it is on the price, we feel as well. But that's not where we feel the allocation is right now. That can change, of course. We have brought to the Board meeting this month and it can change again, but we review it every month, every Board meeting.

Okay. I appreciate that. Broadly speaking, are you seeing more opportunities? And I won't say, your eyes are popping out of your head, but are you seeing more opportunities and a little more -- not excited, but in the acquisition space, about what you're seeing with what's going on in the economy.

I -- we're not seeing any more or any less, but we are seeing less optimistic stories, less earnings for these companies historically has been now it's less and so values may come -- are coming down a little bit, but nothing, nothing really. Joe, you want to add to that?

Yeah. I don't know that the landscape on the acquisition side has changed dramatically. And I don't know that we see that that's our fastest way to growth here in the short run.

I'm sorry, it's the fastest than it's (multiple speakers)

I don't -- I'm not. I don't think that's necessarily the fastest way to growth. And we've got a lot of things we're working on, new products, trying to expand in Europe. Some customers -- that are large customers that we feel are deeply embedded in some nice trends. So we just have a lot going on internally, organically that we're excited about, and we're still not 100% absorbed with the Gear acquisition.

I mean, it's integrated, but now it's time to do something with that integration. So there's a lot of internal focus right now. Again, as Richard said, we're not going to turn down an acquisition that might come across our desk, but we don't have a massive project going on to search out a company just to buy anything right now.

Okay. One more question then, if I may. As far as -- and I like organic growth, have you ever shared with the street and/or can you share with us now? I love quantitatively, but qualitatively a sense that you have from the acquisitions and the moves you made about how sizably greater than overall economic growth or the growth in the markets that you're in. The strategies that you've been employing here, the acquisitions, and the -- all the new products and whatnot.

I'm not going to ask for EBITDA margins or growth percentages and earnings per share numbers. But as far as revenues go, can you guys share with us a sense of -- with where you got the company, where you think you're going? Do you have a 10% long-run annual revenue growth goal for the next five years? Or are there any projections or notions with regard to revenues that you could share with us or the overall growth of the company based upon your strategies you've employed that you believe in?

Joe, I don't think we can answer that question, but if you feel there's something you can add, you can go ahead there.

Yeah, I can't answer it. I mean, I can only answer it this way. I think there's opportunity for us to absolutely grow faster than the overall growth in the market of 3% or whatever that is. I think we would be disappointed if that was the best, we could do in the next three to five years. As I said, we think that our relationships in aerospace are going to allow us to grow faster than that. We think our opportunity in Europe is going to allow us to grow faster than that.

And as I said, we've got some product introductions and other things. So I can't give you a number, but I personally would be disappointed if 3% was the best we could do. That's probably the best answer I could give you.

Okay. Okay. Thank you. I have no further questions. Thank you, Joe, for being magnanimous about my questions. Thank you.

(Operator Instructions) Andrew Shapiro, Lawndale Capital Management.

Hi. Thank you. Can you hear me, okay? I had trouble getting that into the question queue.

Yeah, yeah, we hear you, Andrew. Are you hearing a click also on the phone? Are you hearing a click also on the phone?

A little bit of a click, but it was more that I kept on getting the number one. It was not registering my questions and then I finally did something and was fearful I had to call, dial in and dial out, please hopefully don't take these seconds off with my 20 minutes of allotted time?

No, no. Absolutely. No problem.

Thank you.

Go ahead. No worries.

All right. So your release mentions that there are multiple growth opportunities provided by both Jackson Gear acquisition and also other product lines. Can you expand a little bit on the opportunities you're pursuing with each of these areas?

Sure, Joe. Go ahead. You'd be better with that.

The Jackson gear business had a lot going on in the international mining area. And I'm not talking about coal mining. It's just about every other mining that you can think of because we sell a suite of gears that are of somewhat generic to mining across the globe. And we're in -- one of our key -- one of Jackson's key customers supplies worldwide. So that's pretty exciting. We were -- we had a little bit of mining business before, but it was somewhat regional in the Pennsylvania area. So that's one area.

And then again, as I think we probably said when we made the acquisition, the profiles of gears that can be made now by us are a much broader, larger, more complex, and that just opens up markets. I mean the gear business, if you can make most profiles, you're somewhat industry agnostic. I mean Gears are in just about every industry that you can think of. So we like that because we're not wedded to any one particular area to grow. In some years, certain areas grow faster than others, and we can focus on those opportunities. Does that answer your question?

Yeah. And I think you also referred about growth opportunities in some other product lines? Are you able to expand at all on that at this time?

Sure. Outside of -- you mean, outside of gears?

Yeah.

Yeah. I mean, we're -- as I think we said, we're in development with some products with a couple of key customers. We're working on tweaking the line for a particular market that one of our customers -- one of our customer partners is gotten heavily into their -- they're very big in the rental market, industrial rental market with tools and they're doing a great job with that. And so, those are probably two of the things that I would -- I would call out on the Hy-Tech side.

All right. And I'm going to migrate here to Florida Pneumatic and some new product developments in a second here. So well, it looks like we can look forward to asking more about this in future quarters because you have talked about this rental line. It sounds like you may be developing some unique products for that rental line. Is that correct? What you just said?

I don't know that they're unique. They're just better targeted. Not -- we're not talking about brand-new inventions, but the market has maybe a different profile for the suite of tools that you might sell there as opposed to our regular line. So again, we're working directly with our -- one of our largest customers at Hy-Tech but making sure that we've got that all covered.

Yeah. Okay. Your release mentions development of a cordless installation tool for the aerospace market for which you've begun taking orders. Can you elaborate a bit more on this product? Is it in Hy-Tech or Florida Pneumatics, aerospace offerings, or both? And this application's market size opportunity?

The one that we're talking about is specifically Florida Pneumatic. And it's -- I don't know what the release says exactly in front of me, but we have a suite of aerospace installed -- cordless installation tools we're working on. So one is out taking orders working on another version, and we're pretty excited about it. The customers we've talked to are pretty excited about it. So it will get tested out in the field.

We're taking orders, but it's our first foray into directly ourselves into cordless. We're very excited about it. And we'll see. I think that and there's probably more interest right now in Europe on that than here in the US for whatever reason. That doesn't mean that will change. But we've got a lot of customers interested. And we'll see.

Does that mean like --

Go ahead, sorry.

Does that mean like Airbus when you say aerospace customers interested in (multiple speakers)

Yeah, the Airbus dominates -- not only Airbus, but yes, the Airbus dominates the European market for aerospace, of course.

Right. Yeah. And can you describe a little bit more about the application of this tool and maybe the market size opportunity?

Well, it's an installation tool. We make plenty of installation tools for all aerospace customers. So the -- an installation tool or at least the way we view it is you're trying to get a fastener in place and tightened typically in a small space inside the aircraft, you usually have to work at some sort of odd angle, and that's one of kind of Jiffy's claim to fame is we make a whole suite of installation tools that work at 17 degrees and 25 degrees and whatever, depending on what they're trying to install.

So right now, those are all attached to an air hose. And the customers that have them love them. But depending on the application and how the customer views cordless versus non-cordless. There's a market for our cordless product. It's got advantages and disadvantages. Obviously, you're not tethered to anything. So that's a wonderful thing if you're in a tight spot. But you've got the battery to deal with, batteries wear out and have to be replaced. So we think there's a real market there, and we're excited about the specs on our tool. And so were the customers.

Okay. What's the timeline like for a product like this? From taking orders to shipping and booking revenues?

And I would say within a couple of months. I don't -- I don't know exactly.

Okay.

I mean our general delivery time in aerospace is and when I say 10 weeks or so, I'm probably getting yelled at by (multiple speakers)

Okay. And you're taking -- and you're taking orders now? You have a product (multiple speakers)

Yeah. I know. We're taking orders. We're planning on shipping on product, really finished product.

Okay. And can you just further your goals and plans to introduce other versions of such cordless tool products later in '23, which you referred to in your press release as well?

Yeah, we -- as I said, we've got an alternative version of that. It's right behind it. I don't have a delivery date on that and when it's going to be available, but soon it's right -- I'm going to say third quarter-ish.

Okay. All right. And can you expand on and similarly discuss the new -- what you refer to as the new limited life parts that Jiffy Air Tools has begun to market?

Limited life parts? Oh, the keys? Well, okay. So just so we're clear, Jiffy has, for some period of time sold consumables along with its tools. Is that what you're referring to?

I'm only referring to what was referred to as new limited life parts (multiple speakers)

I don't know have it in front of me, but I think that's what we're talking about. So in the process of installing components on an aircraft, there are these things called hex keys, which are used to sort of line up the fastener, and the hole, and their consumables. They break -- they break off (technical difficulty)

It's not a big material thing, though, it sounds like that.

No, I think it's a seven-figure line of business.

Oh, well, that's meaningful. Okay.

I don't think that's (multiple speakers)

No, no. And you just started the market it. So, what's the kind of timing on that rollout and when you guys would start to (multiple speakers)

I think what we're referring to is there was a time when we couldn't make our own or we couldn't make them very efficiently. But now we've all -- we vertically integrated that whole process. And that's I think what we're trying to get at is that we have a bigger opportunity as a result of our (multiple speakers)

It sounds like there will be overhead absorption will be where the major impact would be.

Yeah.

Okay.

And some -- and I think cost savings now that we're vertically integrated there.

All right. On Florida Pneumatic, regarding the automotive revenue declines, you said were associated primarily due to your price increases leading to unit volume declines. While the gross margins were improved, was that sufficient to maintain gross profit? Or about how much did the unit volume drop hurt this subsegment's gross profit?

Well, it depends on what -- we've got a suite of 25 or so it's probably even more, 30, 50, so SKUs, complete tools for AIRCAT. It was really a bit of a strategic decision. So there are a couple of things going on. So what we have learned in sort of marketing our AIRCAT brand more directly in the last five or six years on the Amazon platform, we've learned a lot about the brand and what kind of market power we've got. And really, what we've learned out in the marketplace is that the customers have viewed our brand just about as strongly as the top brands in the category, whether that would be CP or IR.

So we chose to try to move up the value chain there and price ourselves a little closer to the top brands and a little farther away from the less premium brands. And so we did that, and yeah, we did lose a little bit of unit volume, but we are very excited about our ability to maintain margins pretty close to where we were. And more importantly, what we also learned is that we were fairly inefficient with our advertising dollars. We really had a brand that was deserving of -- actually, believe it or not, less advertising because the [bigger] tool sells itself.

Okay.

So we -- the bottom line impact is actually a benefit. That whole strategy, while maybe we lost a few hard dollars in margin, we've actually gained it in contribution because we've dramatically been able to reduce our spend.

Okay. That's even better. (multiple speakers)

So that's what's happened, and we've repositioned the tool as a premium brand, and that's what it is.

All right. I only have eight minutes left, and I'll ask the questions here. So I'm going to move on. You mentioned on the last call, your tools, private label for Home Depot under the Husky brand are no longer in the tool corral or the tool bin but in a separate aisle. Why would they put their own label, which presumably provides them greater margin away from the other tools? Or did they just get rid of the corral and bin for everyone?

No, there's still a tool corral for Home Depot. They put a little less emphasis on this line. I don't -- I can't exactly tell you why. I guess they -- look, it's sales per square foot and large per square foot and (multiple speakers)

Is it the type of tools -- Joe, is it the type of tools or it was just their Husky offering?

I don't know whether it was just Husky or not. I mean I'm sure they move things in and out of that corral all the time. I just know that it's affected us.

Okay. All right. Well, let's move on here. Last quarter's call, you discussed how Florida Pneumatic's revenue margin mix was favorably impacted by rebounds in the aerospace product line in both commercial and defense, and that helped fill a part of the hole from some of the commercial Boeing business, 737 MAX and 787 the slowed production ones.

Yeah.

And they have not yet fully recovered to their pre-pandemic and grounding consumption rate. In fact, you highlighted in your press release what the monthly production rate was and kind of the timing that 2025, they might get back up there and step up in that as we continue through the rest of this year and into 2024.

Because you filled in some of that product line, that hole that was created when Boeing's business dropped off in that area. When this business comes back and presumably P&F, Jiffy, et cetera, maintain their share, does the company have the production capacity to accommodate the return of that Boeing business that affected all this new business? (multiple speakers)

That's a good question, Andrew. And the answer is yes. We -- Joe can give you the specifics, but we've added some new machinery at Jiffy as well as Hy-Tech, some significant capital expenditures in the last six months in the seven-figure area. And for that exact thing -- for that exact reason, at Jiffy and at Hy-Tech to increase efficiency and be able to handle more. Absolutely. Joe, is there anything to add?

No.

I'm assuming that's because you have some visibility on this return to business and the company's ability likelihood of achieving and getting the business and then ability to deliver on that business.

Well, I'd like to say that was the case, but it's more about efficiency and getting more to the bottom line. And it's the byproduct is that we can do more business. But the motivating factor for us was to increase margins and profitability. Joe, you want to add anything?

Volume. Okay.

Yes. Joe, do you want to add anything to that?

No. You're spot on. That's right.

Yes, I'm running. So I'm going to -- let's talk a little bit more about Europe, if we can.

Yeah, sure.

Can you give more color on the inroads the company has made into Europe? It generally takes several quarters to get certified onto a line before you can book shipments and revenues. Where in this process has your aerospace tools progressed in Europe and the prospects and timing for such -- for the prospects that you're seeing? Are you already booking revenues? And are we just at the order phase?

We're shipping product -- I'm sorry, Richard, go ahead.

No, go ahead, Joe. That's fine.

We're shipping product to Europe as we speak to sell. It's being sold. We've taken orders, we've shipped the product to the customer.

Okay. On the last call, you thought the opportunity for Jackson Gears and its synergies was still in transition, but there would be tangible progress in Q1, which you've shown, and you've talked about. Can you elaborate on the additional benefits and whether revenues margin or both that have momentum continuing into this current Q2 that we're at?

Go ahead, Joe.

Yeah. I mean we're -- we really feel like we've just gained our footing here in Q1 on the gear business. We're excited about the team that we've got in place there. And as Richard alluded to, we've put in some automated equipment and vertically integrated with some other equipment. We have a lot of business. And frankly, our salespeople are probably -- how do I put this, they can get more business if we could get more through the plant. So we're doing everything we can to make that happen.

Okay. All right. And following up on the CapEx theme, you discussed CapEx for some very high payback automation equipment that was delivered, and then there was others that were about to be delivered on our last call. What's the status of those purchases and the timing of implementation? And you also spoke of more CapEx coming. Is Q3 when you expect to see the full run rate benefits of these expenditures? Or is it further down the road?

No, I would say some of it -- for it to be meaningful, it will be Q3, yeah. But we're -- I believe, there's still one piece that we're waiting on. Joe, am I right about that?

I think we just got it.

We just got it.

There's really four pieces of equipment all at the moment, and there's -- there are other things to come, but we've got a little bit of a learning curve on the four things we brought in. And one at Jiffy, one in Cranberry, and two in Punxsutawney. We've got to get up to speed, which we will. There's nothing crazy about doing that. But Richard's right, third quarter, but I would say probably even closer to fourth quarter until we start to see the bigger benefit.

All these things got to get in the queue. We've got to get them programmed. We've got to get parts loaded onto them and tooled. So it's going to take a little bit of time. But we're excited about it, and there's no reason to expect that we won't be in pretty full production mode by Q4. But Q3, we'll start to see some tangible benefits.

Okay. Two remaining questions. In the OEM engineered solutions segment, are there any other particular areas, industries, or products that have grown worthy of any callout and elaboration other than your rental market type of tools in the industrial side?

We're working on some other new products, but I don't really want to get into what those are, but we've got some nice development going on. We have say (multiple speakers)

Yeah. I also noticed you greatly improved the website. Don't think it went unnoticed. So that was really good. I appreciate the efficiency of getting straight to the Q&A. And I wanted to ask if you guys could consider because your press release this quarter, in particular, was really, I think, improved and provided some greater clarification on things that eliminated my need for other questions.

But the time horizon from when you issued the release to the start of the conference call is so tight that could I ask you guys consider, if you're able to do it, is to release the earnings report the night before, if at all possible, and then have this call or potentially have this call an hour or two later in the -- on the same morning if you're going to do it.

Just to give a little more time to get through the press release since it's not going to be rediscussed in your script, which I appreciate. I think that's the optimal way of doing it. But to have a little more time with it, to create thoughtful questions would be helpful. (multiple speakers)

We'll try to talk about it. But making the call later, it's hard because if you can make it later, it's running until lunchtime on the East Coast. (multiple speakers)

All right. Well, I don't want to do that. So I wouldn't want to do that. (multiple speakers)

Not for us, but for all the stockholders and all. So -- but we'll definitely consider it. We'll look into that.

Well, if the press release, in the K -- the press release and the 10-Q is in the can already, then perhaps it could get released the night before. But if not, don't reduce the information you provide in the release. It is -- I found this release more useful. By the way, does the share count change? Do you have a share count you can share because the 10-Q is not yet out?

It has not changed.

I don't think it's changed at all, 3 million. (multiple speakers)

That means you have over $10 a share in tangible book value, let alone over $13 a share in overall book value. So yes, we're all in agreement on the undervaluation of the stock price. It's just a shame to reinstate a buyback when your stock price is inevitably going to be higher rather than perhaps considering a modest 10b-5 small program to be in the market with, queuing up of 500 shares a day or whatever it is at these price levels.

It would be something you should done in the next quarterly Board meeting. It is just kind of kick that around about putting in a modest 10b-5 plan that is basically buying a few hundred shares a day. It will add to the trading liquidity, which frankly will add to the better and improved valuation on the stock price as it is. So.

Just got you. Okay. We do it as I said, but thank you, Andrew, and we will definitely consider what you're talking about as always.

Thank you.

Thanks.

Thank you.

(Operator Instructions) And as we have no further questions in the queue, I'd like to hand it back over to Mr. Richard Horowitz. Sir, please go ahead.

Yeah. Thank you all for spending some time with us today and discussing our earnings. And we look forward -- and of course, our dividend, we put an announcement last night that our second quarter dividend will be distributed in short order in the next couple of weeks.

And we look forward to speaking with you in our Q2 conference call in a few months, and stay well, everybody. Thank you so much, operator, and everybody else.

Thank you. That concludes our conference today. Thank you for joining us. You may now disconnect. Host, please stand by.