Nicolas Finazzo: Yeah. I understand. And as you see, the amount of revenue we need to generate to cover kind of our fixed overhead. Once we hit that, that’s where it becomes everything falls to the bottom line. And we just don’t know that at the beginning of the year, we can estimate it based on our prior experience. And we look back five years and we said, well, geez, how did we perform previously where we didn’t know exactly what we were going to buy, we had assumptions. We didn’t know exactly what we were going to sell, and that’s not new to us. I mean, we’ve been in that situation every year since we’ve had this company. But as we look back five years, we actually did pretty well on our estimates of where we would end up at the end of each year, based on a lot of information that we didn’t have at the beginning of the year.
This year was worse. This year for all — this year was worse as far as our ability to predict where we would end up. For a number of the factors I just mentioned on why some of these delays occurred in closing, but there are other factors that exist in the industry today. This is a very different. We haven’t experienced an industry with this level of problems. I don’t know when I don’t recall it. I mean, when you look at all the issues Boeing is going through with the certification, recertification of the MAX, other issues that have come up recently regarding 737-9 issue or the MAX 9 Airbus with the problems it’s having on its geared turbofan, and that just seems to be prolonging. We have an expectation there’ll be over 600 A320s grounded.
So what that’s done is that, has made predicting the availability of feedstock to be very difficult because these are circumstances that we haven’t experienced before. So — and these situations change during the year. So as we’re — the beginning of the year, we’re trying to make a determination of how much feedstock can we buy. These events that are unusual and we haven’t seen them before make it really difficult to predict how much we’re going to buy. Couple that with when we buy something, we generally look at it as we’re going to purchase at the price at which we can make sense parting it out. And we always believe parting it out is the lowest value we can get out of the flight equipment that we buy. As we acquired this flight equipment, we may have thought, it’s going into our part-out machine, and that would be easier to predict because we can calculate how long it will roughly take us to get it through the repair cycle, although that’s even been problematic lately because of an extended repair cycle time.
Putting all that aside, if you can predict when it gets through the repair cycle, then you can predict with some specificity, as when you’ll generate revenue on a go-forward basis from USM. But that’s not what typically happens. What typically happens is we look at it, we say, well we’re going to sell this as USM. No, I’m going to keep these parts and I’m going to rebuild an engine, then I’m going to take that engine and I’m going to put that engine out on a lease. Or if the market opportunity is better to sell it, I’m going to sell it. And being able to predict which of those avenues we’re going to pursue to monetize that investment is fluid. It changes as we acquire the material. It changes based on market demand during the year, and it changes based on the condition of the assets when we actually get it in our hands.
Because a lot of this you don’t really know until you physically get the assets and you have an opportunity to start looking at it and seeing where the true value is in the metal that you bought. So, it’s all those factors that just make it really difficult to forecast on a go-forward basis. And it’s why we really feel that it’s not in the investors’ interest for us to give very specific guidance. However, directionally, how should our investors feel about what the prospects of the company are on a go-forward basis? Clearly, you have to point to available inventory and fixed assets. So what do we have to sell or lease at any different level? You have to look at the investments we’ve made on the MRO side in expanding on our accessory side for pneumatics capability, which we have yet to receive — which we have yet to complete and get a benefit from tripling the size of our structural component shop, which we are almost there.
But we have yet to receive a dime’s worth of incremental revenue from tripling the size of our building because we’re not quite finished with it yet. Our Millington facility, which is about to come online, and we made an investment in that, though we have yet to see any return on that because that facility will be up and running here in the next quarter, but is not yet up and running and contributing. The development of all the capability we’ve got on the landing gear side. We for the first time in the history of that landing gear business, have been receiving contracts from airlines and OEMs to overhaul their landing gear, which is producing a significant amount of recurring revenue that we can point to. And now we can forecast that out more accurately because it’s not go fight for every landing gear you can get.
It’s — we have recurring contracts. And by the way, that is not just on the landing gear side, but we’re seeing that on the accessory side as well. On the airport MRO side, our issue there is besides Millington, which has yet to come online, is just building up the labor force to accommodate the demand. We’re in good shape on that. We still have lots of room to grow, but we’ve got to get more mechanics to be able to do that.
