Greg Peloquin: I want to touch on the excitement part of it. I thought the market and the shareholders got very excited last year on the enthusiasm as what I’m going to call Phase 1 rollout of our green energy solutions strategy. My opinion, I think they should be just as excited about Phase 2, which as I mentioned today, is coming. It’s coming. The suppliers, the customers have confirmed that. It’s project-based, but I would be just as excited about the next steps as we roll out this new product line, new products, new SVU going forward. I’ll let Ed talk about that.
Edward Richardson: We just instituted a program with our Board that they’re required to buy $150,000 worth of stock as part of their participation on the Board and that’s just been implemented. You’ll see that going in place. We have about $22 million or $24 million in cash. The difficulty is we have 24 foreign subsidiaries and only about $8 million of that cash is in the US. So, the answer to our buying stock back is that we won’t be doing that in the near future.
Operator: And thank you. And one moment for our next question. [Operator Instructions] And our next question comes from P. Ross Taylor from ARS Investment Partners. Your line is now open.
P. Ross Taylor: Thank you.
Wendy Diddell: Good morning, Ross.
P. Ross Taylor: Good morning. Congratulations on the move with the Board and getting the Board to be invested along with shareholders and management because I think that’s a very important step. I’ve rarely seen small companies succeed when the Board doesn’t have a stock, when the Board doesn’t have an interest along with other investors. Second or really the first question is, you commented saying that Lam is telling you that you should be ready for, my words, fiscal 20 — or calendar 2025 being the biggest year you’ve seen from them. Is that correct?
Edward Richardson: Yes, that’s correct.
P. Ross Taylor: And the biggest year you’ve had in that space was what, two years ago at $40 million or so in revenues?
Edward Richardson: That’s right.
Wendy Diddell: Last fiscal year, Ross, [indiscernible].
P. Ross Taylor: Okay. So what you’re really looking at is a situation where we would expect that pretty quickly, once they get this turn going, you’re going to see a pretty significant ramp up, pushing those effectively like a 100% plus growth in revenues over what they’re currently running at?
Edward Richardson: That’s correct. Yes.
P. Ross Taylor: Okay, and that’s — probably carries a better than company average multiple when you get up to that level or operating margin when you…
Edward Richardson: One those products, we make RF matches and proprietary products where the margin is better than our normal margins.
P. Ross Taylor: Okay. And so that alone we’re talking about $20-plus-million in revenues being added at, say, mid-30s plus operating margin. That itself is going to be a huge driver forward.
Edward Richardson: Absolutely.
P. Ross Taylor: Second is, you’ve talked about the ability to convert inventories and the like into cash. Do you have an idea of the thought process on how — what kind of cash generation you can get or creation you can get from drawing down your own inventories?
Edward Richardson: Well, what do we have? About 14,000 of the electric capacitor modules already built for wind turbines. What’s the total number that we have already built?
Greg Peloquin: Yeah, 14,000 built and about that much on backlog with customers.
Edward Richardson: All right. So it’s a matter of not if it’s when, it’s all timing when they’re going to release. And normally these wind turbines, they do their maintenance in the spring of the year and as Greg mentioned, right now they’re all going through a budgeting process. So we have these orders, but they haven’t released them. So it’s a matter of timing.
P. Ross Taylor: But what we should see is the ability to convert several million dollars of inventory into cash as they convert to…
Edward Richardson: Multi-million dollars.
P. Ross Taylor: Multi-million?
Edward Richardson: Yes.
P. Ross Taylor: Okay. Since it’s not several, I’ll take multi as being a larger number than several.
Edward Richardson: That’s correct. Okay. In a normal year, we do over $10 million a year with wind turbines alone.
P. Ross Taylor: It seems to me that listening to you guys talk, reading your release, that this quarter was a combination of unfortunate, uncorrelated, correlated events. They all hit in the same quarter. But at the same time, that this should be the nadir for what we see going on. And so we really moving beyond this quarter as you move to the second half of your year, we should start to see some incremental and then — what’s the idea where they always say about going broke slowly first and then rapidly, that we should see incremental and then rapid growth in top line earnings, free cash flow generation at all. I mean, listening to this was actually the most bullish call you’ve had and it’s kind of ironic that it’s occurring with the stock down 20% on the day and trading under $10 a share.
