Operator: Thank you.
Edward Richardson: Yes. Well, we certainly agree with you and we had a long discussion with the board when they were here this week about buying stock and that’s under consideration. We agree, we think this company will be $500 million in the next three to five years And we have $25 million in cash today. We’ll go cash flow positive in 2025. So all the things you say we agree with, and we appreciate your opinion.
Wendy Diddell: Thanks, Ross. We’re going to move on. Okay.
Operator: Thank you. Our next question will come from the line of Barry Mendel with Mendel Money Management. Your line is now open.
Barry Mendel: Yes. A couple of things. One, when do you expect your backlog to start increasing? Because I think that would be a catalyst for the stock. I know you expect the big locomotive orders, at least last quarter you said, sometime in the third or fourth quarter of this year. So when do you expect the backlog to kind of bottom out?
Edward Richardson: Yes, on the GES side and the PMT side, we look at the backlog to start having some of these project-based businesses the end of Q2, the very beginning of our Q3, and then we expect the delivery will be over the next six months after that. So end of Q2 based on some of the beta testing we have and the customer’s forecast. And then — but Q3 should be a very strong booking quarter, Q3.
Barry Mendel: You’re fiscal Q3?
Edward Richardson: Our fiscal Q3, yes.
Barry Mendel: Okay. In terms of the semi space, because I recall last quarter I believe you mentioned the semi space expected to improve in the first half of calendar 2024, not just setting the second half of calendar 2024. What’s the reason for that shift?
Wendy Diddell: Hi, it’s Wendy. We — I think we’ve been consistent saying it’s — our customers have been forecasting improvement in the second half. We are hoping that maybe we would see some of that start to come in in the first half, but it’s always been consistent that they were not anticipating significant or really any recovery until the second half of calendar year 2024.
Barry Mendel: Okay. And [indiscernible] the magnetrons. What’s going on with that business?
Wendy Diddell: I’m sorry, could you repeat that? You’re a little bit distorted.
Barry Mendel: What’s going on with the magnetrons business in terms of capacity and sales there?
Edward Richardson: With magnetrons. Yes. Well, we’re building new test equipment. We’ve improved the carbonization of the filament on the tube. There’s a huge demand out there, probably over 5,000 tubes a year, and we’re trying to build our capacity to take advantage of that. And we have monthly progress in that area. Plus the 915 megahertz magnetron at 100 kilowatts, there’s the huge market for also creating synthetic diamonds and then they make hydrogen out of methane gas, which is another big application. So the magnetron business is strong and well and our restriction is how fast we can develop higher power magnetron and improve the quality of the ones we make already.
Barry Mendel: As I recall you, [indiscernible] capacity in that business earlier this year, in the spring or early summer?
Edward Richardson: Yes, we’re still having difficulty [quality] (ph) there. The problem is that tube type equipment is all custom-made and we’ve geared up now where we can build about 240 a month, but we need to get to 500 a month on the YJ1600, which is the 6 kilowatt tube. But we’re getting there. It’s progress. It’s slow.
Barry Mendel: When do you expect to get to 500 a month?
Edward Richardson: I would say six months out.
Barry Mendel: Okay. That’s clear. Thank you.
Edward Richardson: Thank you.
Operator: Thank you. One moment for our next question please. Our next question comes from the line of Ron Richards. Your line is now open, sir.
Unidentified Analyst: Hi. I was wondering, in light of all the problems that Siemens is having, I know that you’re in beta testing right now. Do you have any guesses as to when we might start receiving some orders from Siemens?
Edward Richardson: Yes, I think it’s similar to the other ones based on how they structure their capital request and money. So they put in for it. The part’s been successful in testing. And again, Q3, Q4 of our fiscal year is when we think we’ll be getting, per them, production orders. We’ve already received orders for beta testing and alpha testing, but production orders probably Q3, Q4 based on what they’re telling us.
Unidentified Analyst: Great. Okay, is this your fiscal Q3, Q4?
Edward Richardson: Yes.
Unidentified Analyst: Okay, great. Thank you.
