Innovative Solutions & Support - Earnings Call - Q2 2020
May 14, 2020
Transcript
Speaker 0
Good day, and welcome to the Innovative Solutions and Support Second Quarter twenty twenty Earnings Conference Call and Webcast. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Jeffrey Hedrick, Chairman and Chief Executive Officer.
Please go ahead, sir.
Speaker 1
Yes. Good morning. This is Jeff Hedrick. Welcome this morning to our conference call to discuss our performance for the 2020, current business conditions and our outlook for the coming year. Joining me are Sharon Mascupur, our President and Rell Vanan, our CFO.
Before I begin, I would like Rell to read the Safe Harbor message. Thanks.
Speaker 2
Thank you, Jeff, and good morning, everyone. I would remind our listeners that certain matters discussed in the conference call today, including new products and 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 our company's 10 ks, which is on file with the SEC and other public filings. Now I'll turn the call back over to Jeff.
Speaker 1
The coronavirus pandemic is reshaping the way we live and work, including the lives of our many dedicated employees of IS and S. As a business essential, we have managed to safely keep our operations open to meet our obligations to our customers, which includes markets that are vital to the nation's safety and security such as the military as well as cargo air carriers who are playing an increasingly crucial role in getting medical supplies that are needed throughout the country. Having recognized the challenges early on, we took aggressive steps to protect the health and well-being of our employees, our families, our customers and our partners as well as immediate and remedial actions to minimize the impact to our business. The results of these efforts have been rewarding. All 100% of the IS and S team members have complied with the new safety procedures and have come to work, my personal heroes.
These past three months resulted in a quarter over quarter revenue growth and the sixth quarter in the last seven in which we have generated sequential revenue growth. We generated strong cash flow and had one of the strongest quarters of new business back our backlog has increased to nearly $10,000,000 highest in years. The margins were impacted by period cost fluctuations in the quarter. We expect them to rebound to prior levels in subsequent quarters. We will deliver production quantities of our autothrottle to the OEM this quarter, which would represent the second major OEM contract in the general aviation market.
The Autothrottle has been six years in development, culminating with the FAA certification of the OEI upset protection and the adoption into a major OEM production. The general aviation market and autothrottle, we believe, provides an excellent opportunity and further inserts us into a market both in terms of an OEM production and retrofit. In a competitive market, this revolutionary autothrottle is a compelling differentiator that aircraft operators, especially in charter travel, military and specifically multi engine aircraft where the ThrustSense autothrottle is a unique patented source of lifesaving VMCA upset protection. Anecdotally, I would comment that as a pilot of thirty or forty years that I was always quizzical about the fact that they used to refer to the multiengine aircraft having more fatalities than single engine. Never made sense.
As I've we now understand why and what we've done here today. We were told by FAA engineer that although we lose four people, a well, one person every four days, that what we're doing what IS and S is doing here today will save lives. I'm very proud of that. Interest remains strong in the air cargo industry for our flat panel display technology, which operators have been installing into aircraft they are converting to expand capacity to meet the growing shipping needs, especially from the healthcare industry in light of the current pandemic. Certainly, our second quarter results suggest that our efforts to safeguard our employees as well as those around us have not significantly impacted our operators to date and that our end markets to date appear not to have been affected by many others.
But we understand investors are interested in the future and how this pandemic might impact future quarters. No one can say with any certainty, but we recognize it's an added risk. For instance, our supply chain or in our supply chain, we have not experienced significant disruption, though we have seen some minor disruptions such as supply of certain connectors. We are still dependent on the FAA before we can officially start officialing starting other auto throttles. And the FAA is under a shelter in place order, which could potentially slow the approval process.
Also, some new business meetings and demonstrations are being rescheduled due to the pandemic. I mentioned on the onset, the important thing is that we are receiving new orders, and we're working hard to satisfy our obligations to meet those orders. In fact, we are actively hiring to meet the growing demand. As a result of the uncertainty created by COVID-nineteen pandemic, we are and to help adequate liquidity during this period, we originally decided to participate in the federal Paycheck Protection Program under the CARES Act. However, since the time of our loan application, additional guidance has been issued by SBA and the Treasury Department that creates further uncertainty regarding the qualification of certain requirements for our PPP loan.
Out of an abundance of caution and in light of the new guidance, we have concluded that it is prudent to repay the PPP loan. This will free up that resource for other companies that have a greater need for the funds. The first half of the year has gone well, and we optimistic that we can continue an upward trajectory over the rest of the year as well as into the future. Let me turn it over to Ralph for some really boring financial details.
Speaker 2
Thank you, Jeff, and thank you all for joining us this morning. The Revenues for the first quarter for the 2020 were $4,800,000 a 15% increase over the 2019, reflecting increased product demand as well as increased customer service revenue, which was over $1,200,000 in the quarter. There continues to be engineering revenue associated with the F5 development contract. Gross margins for the quarter were 47.5%. That is down from last quarter as well as a year ago due to product mix, an increase in warranty costs and higher labor expense as we staff up ahead of future production demands.
We fully expect margins to return to levels recently achieved as these expenses normalize. Total operating expenses for the 2020 were $2,200,000 down from the first quarter and little change from a year ago, so has remained relatively stable despite the revenue growth we are experiencing. Research and development expense was up slightly from a year ago, reflecting an increase in the amount of internally funded R and D, which is expensed as incurred in contrast to funded R and D, is charged which to cost of goods sold. With the wind down of the F5 development contract, funded R and D has been significantly reduced. Selling, general and administrative expenses were essentially unchanged as we work hard to keep costs under control.
Interest and other income added $75,000 to the bottom line this quarter, which is a little less than last quarter, mostly due to the decrease in interest rates. Due to loss carrybacks, we recognized a $309,000 tax benefit in the quarter. The loss carryback resulted from the Coronavirus Aid, Relief and Economic Securities Act or CARES Act, which has been signed into law. The CARES Act amends the net operating loss provision, allowing for the carryback of losses to each of the two taxable years preceding the taxable year of loss. We reported quarterly net income of $438,000 or $03 per share, more than double the same quarter a year ago as well as sequential improvement from $332,000 or $02 per share in the first quarter.
For the first half of the year, net income is more than twice that of the 2019. The company remains in a strong financial position and generated positive cash flow of $500,000 from operating activities in the quarter. At 03/31/2020, we had $22,600,000 of cash on hand and no debt. We believe that the company has sufficient cash to fund operations for the foreseeable future. Now I'd like to turn the call over to Sherif.
Speaker 3
Thank you, Rael, and good morning, everyone. It certainly has been both an exciting and challenging first six months. As Jeff explained, as an essential business, we have remained open over the course of Pennsylvania's shelter in place directive. Our first priority was for the safety and health of our employees. So we acted swiftly to enact a plan that met and went beyond federal and state guidelines while maximizing the productivity of our workforce.
Additionally, production crews during the month of April were split into two different shifts, with each shift one week on, one week off, but paid for both weeks. Although short term productivity was reduced as a result of measures taken, we believe the overall results of this quarter will not be significantly impacted. We are currently meeting our delivery deadlines, and in fact, we are now hiring to staff up to meet the increase in production requirements. As you heard from Jeff, we expect to start shipping production overthrow units to an OEM this quarter. This is an encouraging endorsement of our autothrottle technology from a leader in the general aviation industry.
As we have mentioned in the past, the ability to incorporate VMC and mitigation in our autothrottle provides a tangible competitive advantage to twin engine aircraft and it seems OEMs want to capitalize on this advantage by in turn incorporating the technology into the new production aircraft. It offers a great selling point to prospective buyers as it offers potentially life saving rollover protection for twin engine aircraft. And VMC mitigation technology is a standard part of our autothrottle. We have been anticipating an influx of autothrottle production orders and while it may not be a year of big autothrottle shipments, it is shaping up to be the beginning of a ramp up we believe has significant potential. Once again, quickly reviewing the programs driving current results, the PC-twenty four program remains on track to deliver approximately 50 Pilatus aircraft this year.
Since only a quarter or two of deliveries are carried in our backlog, those for which a PO is in hand, you can understand why we believe our backlog greatly understates our future revenue potential. In the commercial and transport market, we are experiencing steady demand for our Boeing seven fifty seven and seven sixty seven portfolio of cockpit technology, primarily from the air cargo market, which is converting traditional aircraft into cargo transport planes. In the military market, we were recently awarded a production contract for the F5 air data computer that has been under development.
Speaker 1
This is a U. S.
Speaker 3
Navy fleet retrofit, but with many foreign militaries flying the F5, we're hoping to expand sales into the global market. Our production KC-forty six program also remains on track. New orders in the second quarter were roughly $8,300,000 giving us an almost $10,000,000 backlog at quarter end. One of the areas where we're feeling the effect of the coronavirus pandemic is in prospect meetings and demos that are getting pushed out to July and later. In addition to revenues generated from backlog of people, we also continue to experience a steady demand for customer service, intra quarter booking ship work and the contribution from long term contracts were only a fraction of the total contract is recorded in our committed backlog.
Let me turn the call back
Speaker 1
to Jeff for some closing remarks. Thank you, Sharon. While current conditions make it particularly difficult to forecast future sales with any real degree of certainty, we are confident that the prior progress we have achieved to date has positioned us well to prosper over the longer term. I want to turn it over to the operator for lines for questions and answers now. Thank you.
Speaker 0
Thank you. We will now begin the question and answer session. And the first question will come from David Campbell with Thompson Davis and Company. Please go ahead. Hey, good morning, everybody.
Speaker 1
Good morning. Are Thank
Speaker 4
you for all the good news.
Speaker 1
We're happy to give it to you. It's been a good time. It's an interesting time.
Speaker 4
It sure is.
Speaker 1
Especially with the massive downturn in commercial air transport. I guess it's down 95%. It's hard to believe. We just sent somebody out to Wichita and I think he said there were only about 20 people on the airplane. Although he said on one of the flights, there was a woman that was in completely wrapped in plastic with with her her wrists and and and ankles taped and a and a and a a ventilated breather
Speaker 4
Didn't want to take any chances.
Speaker 1
But what it speaks to, interestingly enough, is there's a hell of a lot more interest in flying from in charters and business jets where you could control, number one, the people that are going to be on boarding the airplane with you and number two, you don't have 100 people. So as an example, we had some friends down in Palm Beach who chartered an eight passenger citation to bring them back up. And when the price was distributed among the eight passengers, it was about the same as a first class ticket. So it's interesting that we may even actually see a strengthening in that market. We're delighted that we've established our sort of foot in the door.
Just by the way, David, the I did some looking. If I look at the three production programs, what we call the ongoing OEM type production programs, Their revenue at the end of next year will be equal just those three programs will be equal to our revenue last year total revenue last year. And that will be in just those three ongoing programs. So it's a problem that looks very promising. The promise that we're on, on spectacularly successful airplane.
Now you can ask your question.
Speaker 4
Okay. No, thanks for the comments. I just want to answer sort of technical question about the taxes. The CARES Act provided you some tax benefit in the second fiscal quarter. Well, that's the only quarter though.
Will the third quarter go back to a normal tax rate?
Speaker 2
Right. I mean, yes, that's the effect of the CARES Act. And going forward is and in the past quarters, we've since we have NOLs, we really haven't had any tax expense. So I don't expect tax expense.
Speaker 1
The truth is, David, this quarter this past quarter, it tended to mitigate the periodic fluctuations in period costs. So it kind of leveled those out. This coming quarter, they won't be there, but we expect an upturn in both volume and margin. So it will all balance out for a change. It worked with us rather than against us.
Speaker 4
So assuming there's pretax income in the third and fourth quarters, there shouldn't be any charges for taxes?
Speaker 2
Yes. That's yes.
Speaker 4
Okay, great. Well, what about the rest of the business? The flat panels growth in the cargo conversion market, that's likely to continue because the passenger market will probably stay down for some time, and they'll be using these passenger planes for cargo.
Speaker 1
It's a very good that's a very, very accurate observation, David. The reality I mean, think of it, you're an airline or a carrier, and you got a whole hell of a lot of airplanes, specifically 57s and 67s, which you don't need now because there isn't anybody to carry. And I don't expect to have large markets for several years because people, included, might be apprehensive about going to Europe or traveling. So it's going to be down those areas will be down. So the obvious thing is that you convert them to package carriers.
The other thing that we've learned in this last three or four months is that people rely far more heavily on Amazon and alike. And you can even see deliveries in that area. The online ordering, I understand it's going up by about 25% or 30% just in the last and I expect that people will get used to it. I certainly am getting used to it. Very nice.
So we could probably expect more and more. And take a look at the aggressive action that Amazon took, which was to essentially build their own fleet of airplanes. I mean, there a lot of them are on charter, but they're committed to that to the Amazon operation. And I think they're over 80 now, and it is very reasonable that they could be up to several 100 committed cargo aircraft, and they all would be converted from 5767s presently in service.
Speaker 4
It's amazing to me that these 57s and 67s all have old technology. In defense of
Speaker 1
the May, at the time, it was very advanced. That was the good news. Literally, there are other airplanes that were in production at the same time, the 37s and 57s really were analog airplanes where the 57s, 6.7s were substantially sort of a digital airplane. So they were a transitionary airplane, and that's and so they've got a lot of life left. Home.
And they're a very efficient way of moving cargo. The six seven has a lot of bulk space to move lots of packages.
Speaker 4
Right. Well, thank you very much.
Speaker 1
And when you look at deliveries now, I was looking something this morning, and they say, we'll deliver it in an hour. Why would you want to start your car and drive to the store and put on a mask? I mean, I don't want to do that, right? So anyway, I'm sorry to get carried away. You go ahead.
Speaker 4
No, I'm just saying thanks for the comments, and thanks for doing such a good job building the business. And I'll talk to you soon. Thank you.
Speaker 1
Thanks for your support.
Speaker 0
Our next question will come from Michael Frederick, Investor.
Speaker 5
Good morning. Good morning. Hey, I had a question, a follow-up question from the last call. You haven't been able to announce the new OEM partner yet. Has that been pushed way back?
Or is that still on schedule for maybe the next quarter?
Speaker 1
Simple answer is I don't know. Okay. I mean, have obligations under agreements that don't allow us to devote certain things, and that's all it is. And there's nothing very dramatic about it, to be blunt with you, and it doesn't really affect our business in any way. But you're right, it is a little odd, I would say.
Yes. To Hopefully, be honest with somebody will understand that it is odd, and they'll come to their senses. We'll see.
Speaker 5
Yes. And I'll be honest with you, it's not really hard to figure out who it is. But anyway Yes. I won't say any more. But anyhow, another question I had for you was you said that you had three OEM programs.
Is that the PC-twenty four, the tanker and the new OEM? Or are we talking about two Yes.
Speaker 1
That's exactly No, what it that's exactly what it is. And they're all solid programs. Obviously, the tanker is solid. The PC-twenty four has been a spectacular success as an airplane. They keep raising their rates, and we're adapting our manufacturing to accommodate as much as double the rates.
So we're in And strong the third, the OEM that we don't talk about is, quite frankly, we couldn't be more pleased with their cooperation and support and the realization that this is a significant safety feature for their aircraft and will be unique to them to that aircraft in the world, a real lifesaver. So
Speaker 6
That's fantastic.
Speaker 1
It's nice. We've got good partners, and I think the prospect of a lot of business.
Speaker 5
Great, great. So just real quick, you had said that you thought that by the end of next year that the three OEM programs would exceed, you say, last year's revenues?
Speaker 1
That's right.
Speaker 5
Okay. So all right. Great, great. And then one more quick question. The backlog, so for something to make in the backlog, are we to assume that that's something that's going to be delivered in, what, the next two quarters?
Or what's sort of the qualification?
Speaker 1
I don't think you can jump in. It's just remember, the backlog really doesn't reflect all the potential business. As an example, any OEM may agree to put their equipment basic on the airplane, let's say, But they don't give you a purchase order for the next twenty years. They only release purchase orders in over six month period, typically. Boeing did it, Douglas did it.
They will release a six month group of so the only thing we ever see in our backlog are those that six month period. The total if you took it, the total over the next ten years of the program would be obviously orders of magnitude larger.
Speaker 5
Okay. But to make it to backlog, you're essentially saying you need a purchase order?
Speaker 1
These orders with a defined schedule. Is that right? It sounds like.
Speaker 5
And ballpark, we're talking I
Speaker 1
mean how much time are
Speaker 5
we talking about there? To be delivered over how many months?
Speaker 1
I can't answer that. I don't know.
Speaker 5
All right. Okay. All right. Well, guys, great report. Just doing great.
Appreciate it. Take care.
Speaker 2
Our
Speaker 0
next question will come from George Murmaugh with CrediVenture.
Speaker 7
Hey, good morning, guys. That was a fantastic new order number today. To follow-up on that, approximately out of this new order, how much of this was new OEM auto throttle business versus the retrofit markets? And just in general, how is the retrofit market for the auto sense, auto throttle performing?
Speaker 1
Well, the business for the auto throttle is starting to really blossom now. We're getting a lot of interest. We've been doing PC-12s, and now we're doing King Airs as well. So the retrofit opportunity is orders of magnitude larger than the OEM business. To give you some idea, there's probably in just one airplane, there's a total market of over 5,000 opportunities.
So that's huge. And we're looking at other airplanes that we're working on now where they've built over roughly 9,000 of the airplanes. And this Autothrottle has gone from being a cruise control to a lifesaver in a multiengine airplane. As you're aware, the Addison, Texas scenario that we saw on the news where the airplane just gently rolled on over on its back and into the warehouse is not sadly an uncommon terminal scenario. Our system has been certified to prevent that.
Speaker 7
Right. Are you guys in discussion with additional OEMs on this AutoSense Auto throttle?
Speaker 2
Yes, we are. Okay.
Speaker 7
So on the new orders, I'm assuming that some of this is from the Autothrottle business, correct?
Speaker 1
Look, it's all very remember, this is all sort of happening in the last couple months. So defining it and trying to understand what each order means and relevance, it's, I think, premature. I think we have to kind of say things are maturing well in light of the pandemic and all the other crap that's been going on. We're pleased to just think about it. Under pretty adverse conditions, we were able to expand our business and grow it toward the future.
If we can just keep our heads down and work hard, hopefully, we'll keep that going.
Speaker 7
Okay. As you look out into the back half of this year and into next year, do you expect the gross margins in terms of product mix to sort of stay in this normal zone you've had the last couple of years? Or do you see any longer
Speaker 1
term I mean, look, there are a bunch of fixed associated with them that obviously building and things like that, that don't need to be expanded. And therefore, the gross margins will go up. Remember, I do remember, because I've been around a while, the year that we did over $60,000,000 returned $18,000,000 in profit and in cash, 30% net after tax. I don't expect to do that again, but that gives you an idea of how sensitive the margins are to volume.
Speaker 0
Our next question will come from Roger Goldman, Investor. Please go ahead.
Speaker 6
Thank you. Good morning. And I'm an investor. You guys knew my dad, who was a long term investor, and he died a couple of months ago. And now my sister and brother and I are investors.
And thank you very much for the good results and the good report. A quick question about your cash. Are you guys getting in the banking business? That's a theoretical question, of course. But you got a of cash on the balance sheet.
And question is, are there any interesting opportunities out there to do something with it in a low interest rate environment?
Speaker 1
Well, we're looking at that. But I'm reminded about two things. It was serendipitous that in a time when the federal government felt they had to loan money to the industry to keep it alive and so they would have cash flow and wouldn't go out of business, our business didn't need it and had that reserve in place. So I won't make any apologies for it.
Speaker 6
No, wasn't expecting And you
Speaker 1
one other thing. Yes, we're going to look at how we best use that. The company has now transitioned into a position, we believe, that will generate cash ongoing in the future, and that will change the equation. So we will look at that. Would like that to you're we at least the company and I always enjoyed your dad.
If I remember right, it was about '95, but I still remember him saying to me, I got onethree of my net worth in you guys, so get going.
Speaker 6
That's right. Well, he he died peacefully with all his marbles in January and basically told me I'm the executor. Basically told me, don't you dare sell that stuff.
Speaker 1
It's a
Speaker 6
good match. Thank you. Thank you. How old was that? Seven.
97 with all his marbles.
Speaker 1
97 with his marbles, and it came into our annual meeting. From Jersey, I believe.
Speaker 6
That's correct. That's correct. Well, hopefully, runs in the family. Anyway, thank you so much. By the way, I asking for anything specific in terms of how you use the cash, except there are going to be lots of bargains out there.
Asset values of a lot of companies are going to be dropping and cash becomes king, as you know, in this environment, having those two
Speaker 1
once a And year
we obviously are mindful. Look
Speaker 6
Yes. I'm not asking you to disclose anything, but just wanted to comment on it.
Speaker 1
Richard. I think we're okay. Trust me, we discuss it constantly.
Speaker 6
And I got a few other questions
Speaker 1
say, what are you doing with the money? So anyway.
Speaker 6
Okay. Well, I'm
Speaker 1
less of a patient.
Speaker 6
Yes. Well, I'm looking forward to meeting you. We're in Palm Beach in the winter. And actually, your comment about chartering is spot on. That's how we're getting north.
Speaker 1
It's a sensible way to do it. And you find out a PPI and you actually don't even have to land at Philadelphia International. In fact
Speaker 6
But we're going fly right into Westchester.
Speaker 1
If you're in the right kind of airport, you can land in Westchester and places like that with short
Speaker 6
That's where we're going, right into Westchester.
Speaker 1
Is that right? You know our plants here.
Speaker 6
Westchester, New York. Where?
Speaker 1
Westchester, New York, HPN or Westchester, PA.
Speaker 6
Oh, okay. Well, I'll come visit you.
Speaker 1
Well, are you in New York or Pennsylvania?
Speaker 6
So no. We're we summer in Western Mass and winter in Palm Beach.
Speaker 1
Okay. Pretty
Speaker 6
good life. Pretty good life.
Speaker 1
Yeah. I used to I I grew up in in Westchester County. Anyway, you have
Speaker 6
a good
Speaker 1
day, and we're doing we're we're hard, and we enjoy your family.
Speaker 6
Great. Well, thank you and best is yet to come.
Speaker 3
You bet you.
Speaker 1
Okay. Next.
Speaker 0
The next question will come from Steve Rudd with Blackwall. Please go ahead.
Speaker 8
Hi, guys. First, I'm very grateful that you all have been coming into work and organizing things as well as you have. And happy to hear everybody's voice on the call. We talked about the delivering production quantities of autothrottle this quarter. And if I remember correctly, the units can run up to $50,000 per unit.
So how many units are we talking about for this quarter, one way?
Speaker 3
A couple of dozen.
Speaker 8
A couple of dozen?
Speaker 1
Yes.
Speaker 8
Okay. So that would be then a significant impact
Speaker 1
I hope so.
Speaker 0
On
Speaker 8
right. That sounded different than what we had. And my numbers are about
Speaker 1
To be honest with you, I'm very I'm just I'm really pleased that our customer has committed themselves in such a terrific way. They've been a hell of a good partner, and the program is going along exceedingly well. There are even the simulators for the aircraft are even being built as we speak, and they'll be training people within a couple of months. So the program is moving along very well.
Speaker 8
Okay. So the incremental revenue could be as much as $1,000,000 or more?
Speaker 1
We don't want to we're not going to estimate that.
Speaker 8
That's just math. I was just All flexing my
Speaker 1
can do is there's a lot of moving marbles right now. And we're trying to keep them together. We're just focused we'd like to explain what we think is general opportunities, and we'll work hard to try to make the best out of realizing those opportunities.
Speaker 8
Okay. Fair enough. I did note that our gross margins were 47.5%. I think they run higher on Auto throttle. So that incremental those incremental sales, I'm assuming our sales, if we take a base of $4,800,000 for this quarter, we're going to be running up higher than that with a given that our margins in Auto throttle are a bit higher than that, be average gross margin of greater than 47.5 for this quarter we're in.
Speaker 1
Honestly, you get gross margins in the 45%, 50% range, you don't want to expect a hell of a lot more. You can get them. And we've had times that were over 65%. But there was some you try to run a business with that as a target, you're probably not going to grow the business very fast. So it's the elasticity of the curve, it sort of disappears when you get into those levels.
Speaker 8
That makes sense.
Speaker 1
The only people that can maintain those kind of margins is Heidi Fleiss.
Speaker 8
God. All right. I won't take I won't go for that too much more in a me too moment. And I'm not among those who are me too ed in any negative way. So let's talk about the Care Act.
Remarkable comment. Let's talk about the Care Act. What is the magnitude of the benefit that we're going to get on the tax benefit? Because I somehow that blew past me.
Speaker 2
Yes. The biggest benefit was for us was just the carryback. As you remember, the was signed into law a year ago or so. Couldn't carry any the change in law was you couldn't carry back losses, you can only go forward. So this new March, whatever the exact date was, late March, what it allowed companies to do is to carry back losses.
Now for us, since we're a fiscal two years, I mean, I assume the point was cash, right? You're
Speaker 6
going to
Speaker 2
file it, the company can get some cash, carry the loss back and that's another way of funding some companies. So that's the benefit we received from it. And now we just
Speaker 8
What's the dollar amount that we should expect to get back? Because you're talking of a refund, right?
Speaker 2
Yes. It's about $309,000 refund.
Speaker 8
Okay. Okay. Very good. And we get to take that from an accounting point of view, do we then take that into income or it gets we have to restate the prior years? What happens with that?
Speaker 2
No, no, no. It's a now thing. In our current Q2, you'll see a tax benefit of $309,000 in the P and L.
Speaker 8
Okay. So that will give us a from just a number point of view, it will give us a nice presentation, just for that point. Very good. The new order number that we had for that was stated in the press release, is it I take it, it's correct that none of that new order number is autothrottle? Or does it include that the roughly two dozen that we just talked about or what amount?
Speaker 2
It doesn't include. It does include it, yes. The 8.6.
Speaker 8
It does include I'm sorry, say it again?
Speaker 3
It doesn't include all of us, Ron.
Speaker 8
Okay. So it includes the units we just chatted about?
Speaker 2
Yes. Yes.
Speaker 8
Okay. All right. Terrific. Listen, all of you take good care of yourselves and your employees, and hats off to you. You're in the business of saving lives, and we really, really appreciate what you're doing.
Speaker 1
Thank you for your support. I guess that wraps it up. Thank you for your attention today. Thank you for coming, and thank you for support of our company.
Speaker 0
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.