Richard Greulich: Are you pursuing opportunities in the precision industrial at this point or no?
Alex Shen: Opportunistically, Yes. But we are pursuing more opportunities in defense because it’s so much more and so much more reliable with decades, decades of reliable PO capture opportunities, purchase order capture opportunities. Whereas precision industrial is — if you pursue it, how long they’re going to last. And if it’s not on a submarine or a heavy lift shopper, what if the need goes away, and there seems to be a program of record that’s authorized by Congress under the seal of the United States of America. How many of those precision industrial opportunities can turn into a problem for us.
Richard Greulich: Okay, I appreciate your work and I appreciate you taking the questions.
Alex Shen: Thank you.
Operator: Thank you. And the next question is coming from Mark Gomes from Pipeline. Mark, your line is live.
Mark Gomes: Thank you. First, I just want to echo Ross’s commentary regarding the GHM, the Graham earnings calls and how they handle that. It would be a good, I think, a model just FYI. I know it varies from program to program. But in general, if you look at the aggregate, do the parts you make tend to be needed closer to the front end or the back end of the final assembly process of the various programs? If you looked at an average across the aggregate.
Alex Shen: Average doesn’t really work.
Mark Gomes: You have a sense of the spirit of my question, right?
Alex Shen: Well, I sense it, but we make the components. We don’t build the boats. We make the components, we don’t build the helicopters.
Mark Gomes: Right. But if we look at helicopters as an example, right, if I ask that question specific to helicopters, the question would be some companies would be getting orders for helicopter number seven at a specific time and you would be getting your orders for that same helicopter at a different specific time depending on when those parts are needed for final assembly. And I’m just wondering if, on average, your parts that you make tend to be at the front or back end of that process.
Alex Shen: So I think I’m trying to answer the question, Mark, in a way that makes sense because we’re far away from the build cycle of the helicopter or the build cycle of the submarine. Our orders are for components. So I think what happened is they order the components, I don’t really know as far as front end or back end or how to really connect it to the customers’ actual schedules because it varies.
Mark Gomes: Got you. Yes. Okay. Now of course, I think it’s safe to say that you try to price out your work so that you could get to those 30%-plus gross margins we’ve talked about on Stadco and Ranor. I assume that’s still the plan?
Alex Shen: I price in order to maintain margins. I’m going to do my best.
Mark Gomes: Okay. So the follow-up to that is, would you say that the processes that you are continuously putting in place to improve the operation combined with the current environment as opposed to the one that we went through during COVID, and I’m sure the echos are still there. But is the current environment and your ongoing process improvement initiatives, are we at a place where all of that is more conducive to fewer hiccups going forward?
Alex Shen: I think we all underestimate the COVID impacts that are still being felt across all industries. I don’t think that we’ve reached steady state as far as expectations that resemble something precoded that’s more stable.
Mark Gomes: But we’re moving in that direction, right? Is it safe to say that the further we get away from COVID, the closer we get to reaching that normal state?
Alex Shen: I think it really depends on the individual companies and their operators. The overall, it’s — the impacts are certainly felt. We are doing — we are taking certain measures in each subsidiary, some similar, some different to location and region to further mitigate these impacts. I would like to think that we’re better than average.
Mark Gomes: Thank you.
Operator: That does conclude our question-and-answer session. I will now turn the call over to TechPrecision management team for closing remarks.
Alex Shen: Thank you, everyone. Please have a nice day.
Operator: Thank you. This does conclude today’s conference. You may disconnect your lines at this time. Thank you for your participation.
