And if you want to get qualified with larger customers and open-up the door for multiple products, it becomes very difficult and very restrictive. So having a company, not just the name, but a company that has a quality management system, that has an outlook on all of the corporate initiatives, that’s consistent with what we’re portraying as a corporation, which creates an image for a more powerful, more capable company that is going to focus on the verticals that can truly drive growth and provide better support. That’s the reason. And it will still be a logical approach. It’s not an overnight change, but as you’ll see, we’re introducing at trade shows. We’re changing literature, we’re changing websites, we’re doing all of that work behind the scene, but it’s a slow migration to ultimately get it to Allient.
With regard to the individuals within the companies, you’re absolutely correct. One of the first questions I receive at every single acquisition, post-acquisition meeting is what’s going to happen to our name. And we basically say that we will keep a brand, but for us, in order to be more cost-effective from the operating expense standpoint, we need to merge some of this together in terms of having all these individual entities having tax returns, having all the reporting that’s necessary, the audits that are necessary if you keep these independent. We’re bringing them together and we’re doing that now. So we’re putting logical groups of companies together. We’re retaining management, we’re retaining key individuals. What we’re doing though is saying, hey, listen, there’s a better way to operate as a combined entity, to get the power and the strength of the corporation out there to leverage that and to bring everything we have possible to bring a more complete solution into the verticals and satisfy our customers.
Do it with a higher level of expertise and focus. So I see no issue with us acquiring companies, in looking at our brand strategy over-time, we’ll have brands as products, but we’ll have a company, one company that will support and service multiple brands, okay, product brands, product lines, not companies. So we can simplify that whole side of our business. I think I’ve answered all your first question.
Ted Jackson: Yup. I mean, you get where I was going with it. It sounds like there is a shift in here. You’re going to basically centralize a lot of kind of behind-the-scenes stuff with regards to, like you said, basically a lot of the stuff in the G&A. I am curious with it, how does it play? I mean, a lot of the different sort of entities within Allient had independent standalone sales efforts. What are you doing on that front or is it too early to ask that question.
Richard Warzala : No, that’s certainly a fair question. That’s one of the things that we leverage very quickly is to, we have, there isn’t one Allient sales force, there will not be one Allient sales force. So make that very clear. I think while we can leverage many of the products in a solution in certain markets to certain customers, we’re still going to have that demand that comes from discrete products to certain customers in certain markets by pillars. So we have that that structure is already in place. What we’re doing is enhancing that. When I say enhancing it, I mean, for example, if we take defense vehicles, okay, we sit there and we go through our strategy session, and we determine, okay, what are we selling into this market, what applications and how many different applications are we servicing within, let’s just call it a defense vehicle.
And we find that it’s very significant and things that maybe the team wasn’t aware of. But now we’re better prepared to have a customer facing team that’s totally knowledgeable of everything we can bring to bear, have the support, the engineering support, application engineering support, and they can reach into the company, take an order from a customer for everything we’re going to supply in one time. That’s where the opportunity really lies. And then if you think about, if we maintain the way we did it in the past, these customers are placing individual orders at different locations. They all have to be entered, they all have to be invoiced, they all have to be tracked and so forth, and becomes complicated to do business with us. It’s like dealing with not one company, but multiple companies.
And that’s the one complaint that we would hear. Yes, you’re calling yourself one name, but you’re not acting as one name. And that’s part of the change. So from a transactional standpoint, the changes that we’re looking at is say, okay, internally getting the IT systems in place that can support a structure, an order comes in, it’s placed for an end user part number, let’s call it x. And that x has many different components and sub-assemblies coming from multiple locations within Allient. Take that order, we drive demand one-time throughout the company, be satisfied, we ultimately ship the product, we invoice once and we have one receivable, and we drive the revenue recognition and the profit recognition back into the specific TUs. So it sounds like it is a very tremendous simplification of the duplicative process.
We have to deal with one customer shipping many products with different customer service facing units facing to the customer, and all the transactional processing we have to go through. So that’s some of that simplification we’re talking about, but it’s also a true alignment of the expertise and digging deeper into those applications and supporting it with everything we have available. So there’s work there. We talked about systems in order to be able to do this, connecting those systems. Not everybody’s on the same computer system, but that process continues to move forward. But when that occurs, it really simplifies, and it’s a transaction that occurs electronically, not manually, each time, as some of it is today.
Ted Jackson: Well, I think you answered one of my next questions, which was, you know, sounds like with this reorganization, if you would have processed that you’ll be going through a consolidation of kind of back office systems and such and I assume this involves like, possibly new ERP, like a standardized ERP and CRM systems and things along those lines, and you’re in the process of kind of mapping that out. Having gone through that in my operational days, it’s clearly a multiyear project to kind of map that out and get it in place and get it into your solutions, you got to be really careful with it. I mean, is that what I’m hearing from you.
Richard Warzala : We need to be clear. We’ve been doing that. Okay. That’s been ongoing for multiple years now, and we have converted the vast majority of the acquisitions on to a common system, the vast majority. Some of the smaller ones I think is where the real benefit is to be derived, is we’re adding capabilities that didn’t even exist. So that process has been ongoing. It continues, and we have a really good team that was, I started my career in that area, and we have a really good team that from starting the project to executing and getting it implemented is a very short period of time, and it’s been done successfully over and over and over. So we’re not starting now. We’re well along the way, and we’re completing, I’ll say we’re on the final phases of completing the conversion and the cutover to a common system, and it won’t be all.
I do have to be clear. We do operate very well internally here using Hyperion or HFM to consolidate and do create business reports for us because there are systems that are deeply rooted in certain companies that you just can’t rip out. So where we can, and we are already well down that path, have been doing it, and it’s been done successfully, and we’re, I’ll call it in the later innings here of where we’re at the point of getting close to getting, they’re never done, but getting close to the point of getting the identified systems up and converted and running as a company.
Ted Jackson: Well, I think it’s going to be an exciting journey. And I been through some of that stuff before, and I will tell you, it’s pretty interesting. Beyond your stuff you’re doing to organize the business to be more effective with regards to customer facing, you know, when you get in and you start getting into, you know, cost improvements and cost savings stuff, you know that it’s much easier to make a dollar by saving a dollar than it is by going and selling stuff to make a dollar, if that makes sense to you. And I applaud you for going at it, and I look forward to hearing about the progress in the years to come, and I’ll step out of line. Thanks.
Richard Warzala : Sounds great. Thanks, Ted. And I think just to add to the back end of that is, the reasons for doing this is also to establish the foundation for the next level of growth in the company. And we feel the time is right. We’ve had several and many acquisitions we did at a fast pace. It’s time to bring those together and to establish this really strong base and foundation so we can move into the next level of growth that we expect within the company. So that’s the other important part of this as well. But thanks for all your comments and questions. I appreciate it.
Operator: Our next question comes from Brett Kearney with American Rebirth Opportunity Partners.
Brett Kearney : I had a question on your growing power technology pillar. Can you help us think about either magnitude or potential runway you’re seeing for some of your solutions there going into the fast evolving data center market, as well as your ability to supply that I think the SNC manufacturing acquisition unlocks the TCI business.
Richard Warzala : And I want to talk about one of the exciting opportunity areas for us and highlights, I mean, you’ve identified the combination of TCI and SNC and the opportunity for us with the management teams to look at the true synergies that these combined entities can bring. It’s extensive and it’s exciting. And you hit it as far as data centers and the ongoing demand and need for that, certainly that’s not going away. That will continue to explode over the years ahead. So the second thing you asked about, or you mentioned was the ability to supply. Certainly anyone following the industry has seen lead times have extended. They still have supply chain issues in that market for certain materials which have caused orders that can be placed for 12 or 24 months out still.
For us, the expanded footprint that these operations bring together, the Mexican facility that’s well established for SNC is that something that’s being leveraged immediately and it is resulting in our ability to service customers and supply. So we were capacity constrained. That’s been unleashed and it’s happening quickly. And I can only say, I compliment the teams in Wisconsin and Mexico and China and so forth for their efforts here to ensure that it happens as quickly, as efficiently as possible, and that’s actually happening. So that’s a great question. One of the bright spots and bright opportunities for the future, the synergies there are extensive and literally the opportunity to create this one company approach to the market exists with the combination of those two.
