Innovative Solutions & Support - Earnings Call - Q4 2021
December 9, 2021
Transcript
Speaker 0
Good morning, and welcome to the Innovative Solutions and Support Fourth Quarter and Fiscal Year twenty twenty one Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Mr. Jeffrey Hedrick. Please go ahead. Good morning. This is Jeff
Speaker 1
Hedrick. I'm Chairman of the Board. Joining me today are Rell Winand, our CFO and Sharon Mascarpour, our President. We will discuss the fourth quarter performance for fiscal twenty twenty one and the 2021 completion.
I'd like to turn it over to Rel for the safe harbor message. Rel?
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 to Jeff.
Speaker 1
Thank you, Rell. We finished the 2021 fiscal year positioning us for strong top and bottom line growth going forward. The strength of our growing OEM demand provides us an excellent foundation for the growing demand in the retrofit sector in this segment. The auto throttle is now developing in our military sector on King Air and larger multiengine aircraft, and our turbofan autothrottle program doubles the market opportunities. We are expanding our sales force and planning ex expansion of our strategic marketing.
Our growth has been affected by the lack of sales people and exacerbated by the pandemic. Our recent emphasis has produced a new strongly experienced GA sales director, and we are in a process of finding individuals for the other two market segments, military and air transport. I will now turn it over to Rell for other financial analysis. Go ahead, Rell.
Speaker 2
Thank you, Jeff, and thank you all for joining us this morning. Looking first at the fourth quarter revenues were $6,900,000 up 5% from $6,300,000 a year ago. As a result, we saw sequential revenue growth in every quarter this year. Revenues were generated in each of our general aviation, commercial air and military markets with ongoing recurring revenue from our PC-twenty four and King Air autothrottle production programs. Gross margins for the quarter were 57.6%, up from 54.3% in the year ago quarter with the increase attributable to product mix as well as the favorable leverage achieved by the growth in revenues.
Margins remain in line with historical averages. Total operating expenses for the 2021 were $2,100,000 down both sequentially compared to the third quarter of this year as well as from $2,300,000 in the fourth quarter of Compared to a year ago, research and development expense was marginally lower. At 10% of quarterly revenues, R and D was in line with our historical averages and continues to reflect our strong commitment to innovative and new product development. Selling, general and administrative expenses were down from the year ago quarter.
The decrease reflects lower professional fees and benefits expense in the quarter. We believe quarterly operating expense levels will increase as the company expands its sales and marketing efforts this fiscal year. For the quarter, we generated operating income of $1,900,000 or 27% of revenue. We recorded taxes of approximately $356,000 in the quarter. The company recognized a tax benefit in the 2021 due to the reductions of deferred tax assets valuation allowance.
Therefore, income tax expense will be recognized on a go forward basis. The company anticipates the tax rate should be in the 21% range. Bottom line net income was $1,500,000 or $09 per share for the quarter, up from $1,200,000 or $07 per share in the year ago quarter. Quickly looking at results for the year, total revenues were $23,000,000 our third consecutive year of revenue growth. For the year, net income was $5,100,000 or $0.29 per share, which includes $1,100,000 or $06 per share in tax benefits, reflecting the release of a deferred tax valuation allowance.
As a result, this was our most profitable year in over a decade. The company remains in a strong financial position. We generated $4,600,000 of operating cash in fiscal twenty twenty one with $800,000 of operating cash flow in the fourth quarter. At fiscal year end September 30, we had $8,300,000 of cash on hand, and that is after dispersing approximately $20,000,000 of cash dividends in fiscal twenty twenty one. The company is debt free.
I would make one additional note on the balance sheet that due to the ongoing global supply chain challenges as a result of, among other things, the ongoing COVID-nineteen pandemic, we are maintaining a slightly higher than normal level of inventory simply as an added measure of precaution. However, to date, we have managed to largely avoid production disruption as a result of supply chain challenges even amongst an increase in production volume. We believe that the company has sufficient cash on hand to fund opportunities for the foreseeable future. Now I'd like to turn the call over to Sharon. Sharon?
Speaker 3
Thank you, Ril. Good morning, everyone. Fiscal year twenty twenty one Innovative Solutions Support made good progress in virtually every aspect of its business. Revenues were up for the third consecutive year, Margins expanded compared to the fiscal twenty twenty, driven by improved productivity and efficiency by the extraordinary measures undertaken to ensure the safety of our employees, customers and vendors in response to the COVID nineteen pandemic. While we recognize the pandemic continues to harm supply lines and many industries are reporting labor shortages, we have experienced few disruptions.
Nevertheless, we remain vigilant to quickly identify and resolve any issues that may arise. So let me provide additional information around some of our revenue generating programs that are driving our success. Company has three OEM production contracts that continue to provide a level of stable recurring revenue. General aviation market seems to be improving, and as a result, Textron is reporting increased demand for King YES, on which we are the supplier of production or withdrawals. Consequently, we are somewhat optimistic we may see some increase in revenue from these programs.
Our strategy has been to use our King Air Orbital as a foundation to branch out onto adjacent airframes as well as expand beyond turboprops into the business jet market, where our products are equally valuable. I'm happy to report that we are expanding our Orasol market to retrofit any appropriately equipped Tecnocitation Embraer Phenom one hundred and three hundred business jets. Gilatas PC-twenty four program is also making steady progress. Like Textron, Teladis also reported a nice increase in the number of PC24s delivered over the first nine months of 2021. The Textron and Teladis OEM production contracts are therefore expected to provide a steady level of recurring revenue The with some potential for growth in fiscal twenty twenty two as well as thereafter.
Our government contract on the KC-forty six continues to run at expected production rates. In addition to our OEM business, we continue to grow our retrofit business, primarily flat panel displays for air cargo conversions. We have a competitive advantage in that many air cargo operators are buying used seven fifty seven and seven sixty seven aircraft for conversion, aircraft on which we believe we have the best cockpit upgrade on the market. For some sense of perspective, the only other competitive cockpit upgrade on the market takes four times longer to install, cuts significantly more, and its proven reliability is much lower. In addition to OEM applications, our Orasol is an ideal retrofit option.
We are adopting a much more aggressive approach to the Orasol retrofit market, having hired a dedicated business development professional and expanding our reach beyond Textron's own service centers to target independent fixed base operators and our maintenance repair and operations center network. I should also briefly mention our two big recent announcements. The European Union and Canada certification of our King Air Autothole opens up new geographic markets, while our expansion into the business jet market provides the base to expand into another adjacent market. Finally, Eclipse continues to show interest in technology upgrade of their cockpit. We are in ongoing discussions regarding additional needs.
New orders in the 2021 were $6,500,000 bringing the new orders for the year to 28,500,000.0 Backlog as of September 30 was 9,100,000.0, a $2.50 percent increase over the course of the last twelve months. Fiscal twenty twenty one was a good year that has us well positioned for continued success. While end markets have not fully recovered to pre pandemic levels and various safety and other protocols have been an obstacle, our emphasis on price for performance across various markets has enabled us to deliver strong returns. Before we open for questions, let me once again applaud the ongoing efforts of our employees to integrate new safety protocols into our standard operating procedures. It has enabled us to maintain productivity without jeopardizing the health, safety or well-being.
I'd like now to turn the call over to questions.
Speaker 0
Thank you. At this time, we will open the floor for questions. If you would like to ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2.
At this time, we will pause momentarily to assemble our roster.
Speaker 4
Excellent presentation and excellent results for the quarter. Although, of course, you missed my targets, which is because I'm always optimistic. But let me tell you let me ask you a question, at least one. Your your sales and new products are going up, and you're substantially increasing the opportunities for you to get new revenues. Why do you need new salesmen?
Why do you need more salesmen? You're doing very well.
Speaker 1
I I believe that we are massively understaffed and that the opportunities are, multiples of what we are presently realizing. And that's primarily because we we don't have active people in the field. So, I I mean, if you think about the revenue that we wanna generate, we're talking about trying to generate $2,530,000,000 this coming year. If we are attempting to do that, to try to do it with one guy in the field doesn't that just doesn't make sense. So we're looking for smart, capable people to deal with the three segments.
And, again, remember, we have three market segments. We have the the jet the biz jet, which were which is now being covered by our our latest GA market marketing director. And we need an equivalent of that for military, and we need an equivalent for that for air transport. We get a lot of business that are that's inherited business, but we want to expand our our both those segments, both the military and the air transport. There's huge opportunities there that have yet to be touched, and we need sales guys to do it.
Speaker 4
Now these salespeople, would they likely come from existing com competing companies, or will they likely be people that have no no experience in the business?
Speaker 1
No. No. No. They all come we we we they come from from existing companies. Or in the case of the military, we may get a retired let's get a retired air force or navy officer, colonel, or or or or a commander that was a pilot and had extensive flight test experience, etcetera, and and and no do the the the opportunities at Patch River, etcetera.
So that's that would be the military for the for sure, the commercial air transport would come from one of the people. As an example, there's been a lot of acquisitions, and the comp the combining of multiple companies ends up having a number of people looking for something to do, and that's what we're gonna look and try to exploit. It's how we've done it in the past. It's worked worked out well.
Speaker 4
Okay. Last question for now. Your backlog was down from the previous quarter, so I think it was $9,500,000 Now you're down to 9,100,000.0 that's strange that the backlog is going down when the revenue opportunities are going up. So can you
Speaker 1
go ahead and explain that? The shipments go up, the backlog goes down. So when we have bad shipping quarters, our backlog is easily goes up. It's a it's a relatively small amount, David. I obviously, it's something that you keep an eye on.
And if it was consistent in in subsequent quarters, we had an equivalent, we would be concerned. But I'm not concerned in this case. It's gone up massively over the past year, so I'm I'm delighted for that.
Speaker 4
Alright. Thanks for the help. I appreciate it.
Speaker 1
Thank you. Thank you, David. You sound good, by the way.
Speaker 4
Well, I'm still in here. I'm walking away.
Speaker 1
I'm reminded people talk. Remind me that I'm looking good. I said, you know, the reports of my death are premature.
Speaker 4
Don't forget, Jeff. Don't forget you're you're coming up to see me.
Speaker 1
Yes, I will. I'll do it.
Speaker 4
Okay.
Speaker 1
Take care.
Speaker 0
Our next question comes from Roger Nedrow, Private Investor. Please go ahead.
Speaker 5
Yes. Good morning. Thanks for the good call today. You paid out a nice dividend at the end of last year. Is with an 8 point some million dollar balance on the cash on the balance sheet, are they're anticipated to pay out a dividend again this year?
Speaker 1
Not really. No. We have we have not anticipated. Put it that way. No.
We but it it was bluntly, I wanna make sure that whatever dividend we had, we paid out in this this in this year where we had some confidence in the tax situation, etcetera, for our stockholders. That's all. So right now, we anticipate making investments, and we wanna keep some reasonable amount on hand so that in the near future, we don't see an opportune but that may change. You know, we may which the company has a habit of generating pretty consistently cash. And as we generate cash, we do we're we're happy to distribute it.
We've distributed over a 100,000,000 in cash, I think, over the years. So it's a we we we consistently do that, but nothing in that there's nothing planned right now to answer your question.
Speaker 5
Okay. Thank you. Keep up the good work.
Speaker 1
Thank you.
Speaker 0
Our next question comes from Michael Friedrich Private Investor. I
Speaker 5
didn't hear a whole lot in the call about what was happening with the the large air cargo company online retailer that was retrofitting and building a large fleet. Is all of that still on target and still continuing to go well?
Speaker 1
Yeah. We have, in rough terms, just under a 100 aircraft done. So, I mean, some of some of those aircraft will be airplanes that they bought from somebody that had already done the upgrade to it. But the important issue is that we've we're flying with with, it's exhibiting our outstanding reliability and acceptance in the field. So that's going well, and we wanna take very good care of that customer.
Speaker 5
Okay. And and and remind me again how large their fleet could be when they're done.
Speaker 1
Well, I mean, it's speculation. I'll be honest. If you wanna know my speculation, I think it could be bigger than than what is now the biggest fleet, which would be FedEx. It's about 700. Right.
I remember I built equipment for FedEx when they had seven airplanes. So their growth has been spectacular. Suspect this do about the same or more, simply because it has huge resources behind it. And, abundantly, the profile for Christmas, as you know, has changed. I mean, I I I personally buy an enormous amount online now.
I mean, it saves me driving to the store, honestly. So they gotta move those packages around, and there's a limit to how many trucks you you can put on the road. So I I think the growth is inevitable, and I think we're we're on a on a hell of a good horse in the race.
Speaker 5
K. Great. Thanks, Jeff. Yep.
Speaker 0
Our next question comes from Glen Remington, Private Investor. Please go ahead.
Speaker 6
Good morning. Thank you for taking my call. I really like this stock. I'm beginning my journey with this company, but I've read quite a bit. I think I I understand the notion of of what you're building there.
I'm wondering if you could speak a little bit to the notion of future proofing with all this conversation about alternative fuels, electrification, you know, whether it's r and d or whether it's software baked in for future adaptation. I I'd be curious what your feedback would be on on the five ten going forward with with all these alternatives that everybody seems to wanna talk about.
Speaker 1
Well, I I mean, from my this is Jeff Hendrick. In my perspective, the the electric care plan has got may have application in short runs near in in urban areas, but I it certainly doesn't have a good, opportunity for long runs for a simple reason. The the the airplane an electric airplane has the same weight when it lands as it does when it takes off, which means it has to carry that that enormous amount of weight through the entire distance. A fuel based airplane burns off at least 30% of its weight, reducing reducing the load it has to carry. So, certainly, in my practical lifetime, I don't think I'll see a a huge change.
It look. I didn't think honestly, I didn't think the electric car would come as quickly as it did. So I'm not sure, but I believe the airplane is a very different problem than an electric car. Alternative fuels, it's all a question of of of of right now, there are airlines that are looking at and running alternative fuels. If you can make them economically practical, it's terrific.
But fuel is a major cost in the operation of an airplane. So you don't wanna raise that per unit cost of the of the fuel if at all possible. So maybe it's just in summary. I honestly I I I don't have the wisdom of giving you an accurate answer. I can only speculate that that I think it that the electric, airplane will be, limited to reasonably short runs around urban areas, but the longer the longer runs will still be done by, you know, these massive airplanes with big edges.
And they have gotten over the years much more fuel efficient. There is a a huge incentive for the operators to optimize the efficiency of their equipment, and they spend billions and billions of dollars doing it because it's a direct operating cost. So I anticipate that'll continue to be a driving force, but I don't see any major changeover.
Speaker 6
Really excited about the safety and efficiency aspects. I just wanna say thank you for your hard work, and I'm very excited with your company.
Speaker 1
Well, that's very kind of you to say that.
Speaker 7
It
Speaker 1
means a lot to us. Trust me.
Speaker 0
Our next question comes from Rick Keller, private investor. Please go ahead.
Speaker 5
Good morning. I'm not sure I heard Sharam correctly there. The my sound was kind of going in and out a bit. But did you say something about working with m Embraer, possible retrofits or something? And it is because that's a whole new, let's call it, brand of of aircraft.
Did I was I hearing that correctly? Maybe I just misheard.
Speaker 1
Yeah. What what said I I think what what I believe what we said was we were working on the Embraer aircraft. The Embraer makes a wonderful airplane. The Phenom 300 has been a super seller, terrific, and is ideal. It does not have an autothrottle, and we can provide it and provide some distinct, palpable safety features and, reduction of workload.
So, what we're focusing on now is, we're working directly to get retrofit, installations, and that's different than than OEM. As as an example, when you have a building airplane from scratch, you can put parts in wherever you feel is appropriate. When you have a retrofit situation, you'll more likely have cables and hoses and stuff in places that you don't want. You have to learn to deal with it. And this company has done retrofits for thirty three years, so we we we know what we're doing.
There's a huge opportunity, and we're working that with people like that. Not with people, but but with airplanes like the Embraer and other airplanes as, retrofit potential for our oil throttle. It has, we're gonna be looking at both the military and expansion in the GA. So, both of those are coming and turbofans, which is what an Embraer is. Does that answer your question?
I hope Yeah.
Speaker 5
Yeah. Yeah. Yes. It does. Are you in talks with any other OEMs for including auto throttles in their newer models?
Speaker 1
Well, I mean, we we're we're always in talks, but substantive talks, not so much. You know, we're we're we're we're moving the reality is that the retrofit market is is magnitudes orders of magnitude larger than the OEM market. And we love the OEM market. We're delighted to be in it. But for certain programs, the retrofit is massively larger, and we wanna focus on that.
As an example, one of the things we're doing, just to give you an example, the the retrofit that the the the installation of our autothrottle into the the King Air has taken, in some cases, over a hundred hours of labor to put in. We estimated it originally at about 40 to 50. But with recent work and development and refinement of procedures, etcetera, we reduced the time to install this to under twenty hours. That's significant savings for the operator. But more importantly and I owned an airplane for thirty five years.
People who own airplanes hate to give up their airplane even for an hour. I mean, they do we just for whatever reason, it just it it it it all of a sudden, we feel like we need it. And so we're trying to we're trying to focus on minimizing the the effect or impact of a of a retrofit installation. And that is a very different test or objective than what you would usually face at an OEM because they have you're not you're not interested in move moving stuff around and that kind of thing that you have to do in a in a retrofit. That any of that makes sense?
Speaker 5
Yep. Yep. And the the fact that you're expanding potential retrofit markets to things like Embraer and, like, presumably other manufacturers, I I guess that would be behind the new focus on working with fixed based operators and and and other things other than the Textron system.
Speaker 1
Yeah. The Textron program is a wonderful program. I actually admire them for showing the responsibility and clarity of implementing this as quickly as they did in their production. They did a great job. And and and and I I I really commend them for for doing that.
They recognize that there's a real safety feature. You know, they talk about a 100 people a year die. That's a that's that's a humbling challenge. Trust me. At any rate, what what we have now is working with FBOs and trying to get them up to speed so that they can turn airplanes and and fast quickly.
And we're looking at new kinds of airplanes. For instance, the Embraer is not a prop airplane. It's a turbofan airplane with a different kind of engine. And so we have we have broadened out our applications.
Speaker 5
All right. Well, good. Well, thank
Speaker 1
you. You're welcome.
Speaker 0
Your next question comes from Roger Goldman, private investor. Please go ahead.
Speaker 8
Good morning, Jeff and team. Nice to hear about another year of progress. My dad is looking down with a smile. A couple of things, Jeff. The first is I just want to comment a little bit about electric airplanes.
My son, Jake, who's also a shareholder, is a senior guy at a company called Beta Technologies, which has a a v t o l. They're based in Burlington, Vermont, and they are operating very differently than the others. The others seem to be more interested in an IPO than in the future of aviation. These guys are very that's that's a personal comment, Jeff. These guys are okay.
These guys these guys are really interesting in terms of of and you might just wanna take a look at their website, but they've got airplanes they're flying.
Speaker 1
Where are they in Vermont? Burlington. I I had a house up there for forty five years. So
Speaker 8
Oh, okay. So you you know the area. But but there are a couple of things. One is the improvements in batteries are happening very, very quickly. And second, they have a pretty unique battery configuration.
And they're already they've I believe they've signed up UPS. The government is a customer. And a lot of where they are, the planes are flying. They're waiting for FAA approval. And they're focused on package delivery, not customers because as you well know, package delivery is three times the size of customer delivery in terms of potential revenue.
So I just mentioned that it's worth having somebody on your team look at their website. And if you want an introduction, I can make it. Certainly not worth spending a lot of time on, but keeping an eye on it. Second thing is I'm delighted to hear that you're ramping up your marketing and sales effort. I've always felt that there was a lot of opportunity to move faster with this suite of products in the marketplace.
And it sounds like what you're doing is you're redefining the marketplace to be much bigger than you had been. And I think the ramping up of sales and marketing, and it looks like you're also doing a little bit of branding, is just terrific. So, I compliment you on that. The third, of course, is the question I ask you every year, which is you got a lot of cash. You got a lot of credit lines.
I understand your conservatism about dividends, but would like to lobby again for a short term dividend to reward the shareholders.
Speaker 1
I listen. I have one shareholder compliment me and said that his net cost for the stock was zero or less than
Speaker 8
his Yeah.
Speaker 1
I know. So so I I I'm honestly, I think there's a you know, look. The company is willing to to provide dividends. But right now, the the dividend flurry that we did this year Yes. Is Yep.
Was was was done for obvious and pragmatic reasons. Yep. It's always nice to have a little cash. And $8,000,000 is a hell of a lot of cash. You know, $4,050,000,000 are nice.
But we don't we will probably keep some amount on hand, eight, ten, twelve million on hand. And then if it gets if we got a big flow, we'll take a look at at dividend the air out. We're not we're not we're not obsessed with cash. We should have said No. But but it's a tool that we wanna use prudently.
Put it that way.
Speaker 8
No. I understand that. I always look at at cash plus avail plus available credit, particularly in this interest rate environment. If interest rates were different, I would feel differently.
Speaker 1
Yeah. Yeah. I understand that. And I know I know but right about now, I I, you know, I prefer to focus my energies toward developing a market, which I think I'll have a better return than getting cheap cash from the banks. But Okay.
You know? I get it.
Speaker 5
I get it.
Speaker 1
Anyway. I
Speaker 8
I again, the the most important point I'm making, Jeff, is is well done on on, raising your ambitions for the company.
Speaker 1
Well, thank you. We appreciate that, and we appreciate your support. Listen. Our shareholders are really important to us. We we talk about them and think about them a lot.
So appreciate your interest. Appreciate your support. Okay. Stay well, Jeff. Thanks.
Speaker 0
Our next question comes from Glen Remington, Private Investor. Please go ahead.
Speaker 6
Yes. Hello. Thank you. I had one other question. I noticed in the release and following along for a while now, there was a lot of mention about approvals and additional regulatory jurisdictions for your products.
And I I guess, in simple terms, I'm curious if the bureaucratic overhead costs to achieve those are captured in this year's books, but the the future sales won't have the the burden of those costs spread out against them. So it it I'm wondering if it's more of a onetime business development investment, and then in the future, the sales just stand on their own.
Speaker 1
Well, it is it is a onetime business development effort, practically. But, you know, every time as it remember, every country has their own certification authority. And it isn't it isn't terrible, but it's you know, you you have to submit the paperwork. It's the bureaucracy that exists worldwide now. But it is a one term one time effort.
And once you get it, there's maintenance in some cases, but that's minor. So the answer is yes. The good news is once you get authorization in Canada and Europe, you don't have to do it every year. It gives you an opportunity now to sell worldwide or in that area.
Speaker 6
Perfect. Thank you very much.
Speaker 1
You're welcome.
Speaker 0
Our next question comes from Brent Derickson, Retail. Please go ahead.
Speaker 1
Hi. Hi there.
Speaker 7
I'm kinda I'm I'm curious to know why pay these dividends. Why not keep the cash on the books and maybe buy back some shares? Because, you know, we're the biggest let's face it. We're all here because we wanna make money. And dividends are nice, but, you know, when you're one of the largest shareholders and some of these other funds that own the shares, you know, they they they make a lot of the money, you know, on a dollar basis.
I'd rather see the stock price up. It hasn't gone anywhere for fourteen years. Biggest bull market we've seen in ten years, and the stock is still sitting here. It hasn't been over $8 since 02/2007. So as a shareholder, I'm not real happy sitting in a stock because it's sitting here doing nothing.
You and can you Actually You know, I I'd rather I'd rather not, you know, hold these hold my hold the shares until I die. I like to, you know, try to make some money myself. So, you know, quarter was good, year is good, but at the same time, nothing's happened.
Speaker 1
Well, something must have happened because when a shareholder tells me that their net cost for their for their investment is zero or minus something must have happened. And that's what happened to the 100 and some odd million that was distributed. I as you know, I'm a a a an interested shareholder myself. And and we did and we have done a buyback in the past. We did that.
We did an aggressive one some years ago. The problem I have is is that I have a limited liquidity in the stock. And if I buy back as I buy back it, it it reduces that and constricts it even more. So it's not I I've been advised that that's not such a good idea. We would like to believe that if we distribute the dividend, you can also consider buying stock.
So it's not a simple answer. We we we took the the opportunity to to distribute the the the dividend. If the capital gains goes up by 30%, it may be more attractive to have the cash than a stock that would go up. And then the question is, with a higher capital gains, does the stock go up as fast? So, I mean, I'm not prepared to make those kind of judgments.
I try to just run the business in the most practical way. I I appreciate your interest. And, do I anticipate a buyback? Not right now, but certainly, you know, I don't have an issue doing. Done it before.
Speaker 7
Okay. So as far as the the the additional employees, are you saying that without these employees, you you're not gonna be able to to to grow the way you want to, or, you know, we're we're gonna kinda stay at the same
Speaker 1
Well, right now, we're anticipating gross of 20 to 30%. Now I don't know. That that that may not be Apple or NVIDIA, but, I think it's a good solid growth that we would should focus on. You know, right now, we've never made an acquisition, but if we if if I I I would prefer not to go out and borrow money to make an acquisition and have the additional burden. So I would like to have some free cash in the business, and $8,000,000 is not a lot.
So, I mean, I'm we'll have a different obviously have a different opinion. I'm just telling you what my feelings are. Am I am I saying it's gonna limit the growth one way or the other? No. Because we're gonna focus on the growth.
We're gonna do whatever we can to optimize the growth.
Speaker 7
I don't know if I heard you correctly, but earlier in the in the in the call, you said that you had maybe worked on about a 100 claims for your online retailer for this quarter. This quarter It's
Speaker 1
short of a 100. I don't know what it is today, but it's somewhere between 80 and a 100.
Speaker 7
And and and and that was reflected in this quarter's earnings report?
Speaker 1
And that was what?
Speaker 7
Was that and that was reflected in this quarter's report?
Speaker 1
Didn't do a 100 airplanes. As I explained, a good portion of those airplanes were already done. As an example, American Airlines had a whole bunch of of seven six sevens that were modified with our equipment on board. So the operator bought those airplanes, in some cases, converted them, the passenger ones. Some cases got freighters.
And so this was some percentage that were already equipped with our flat panel displays system, the cockpit. The and so but we probably did about half of those airplanes were all new, and they weren't all done this quarter. They were done over a period of time because they now own them, but they were before leased through other companies. Now they're gonna own them and then lease them back.
Speaker 7
One last question. Your since the first quarter, your trend in new orders have been increasing, and this quarter saw a decline. Is that a seasonal thing, or is that something else?
Speaker 1
It's pretty much it's seasonal seasonal is typical because you build up at least that as long as I've been in the business, as much as I'd like everything to be a a uniform growth rate, it always ends up being a little bit of a sawtooth such that the the first quarter, suffers from, getting the the last equipment out and and year year end sales that occur because we do our price increases on a on a fiscal basis. So when we go to a new fiscal year, there's a price increase, and some of our customers take advantage of of ordering and taking delivery at the end of the year. So the end of the year tends to be favored, put it that way.
Speaker 0
This concludes our question and answer session as well as our conference call. Thank you for attending today's presentation. You may now disconnect. Thank you.