P&F Industries (PFIN) 18 May 202020 Q1 Earnings call transcript

Company Profile

Participants

Richard Goodman	General Counsel
Richard Horowitz	Chairman, President and CEO
Joseph Molino	Chief Operating Officer and CFO
Andrew Shapiro	Lawndale Capital Management

Call transcript

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Operator

Good day, and welcome to the P&F Industries Inc. Quarter One 2020 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the call over to Mr. Richard Goodman, P&F Industries General Counsel. sir. ahead, go Please

Richard Goodman

Joseph Good Earnings welcome today Conference Horowitz, CEO; are operator. CFO. Officer first from P&F quarter Richard and and President XXXX Call. Chairman, Chief morning, you, Operating to and and Industries management Molino, Thank With us

XX-Q, borrowing facility; markets; on started, the related discussed of in the annual Form current to statements abroad; in our current are future outbreak others by reports Form Commission, global customer of the and call other energy we the and along the attacks; forward-looking and global regulatory but United our uncertainty; get you purchasing Securities based unforeseen including, credit any and fluctuations concentration, disruption insurance; the management, described businesses, capital political covenants expectations, and to; Form with filings. and which and various those in among instability risks our in requirements; and of debt and not in associated terrorism with importation interest litigation to uncertainties, economic compliance sourcing of our under reductions, and reports outlook, economy XX-K, rates, of in market Company's and rates, crisis; with estimates and inventory the technology like Company's most and other key and plans, I'd Before of risks and retail acquisition information environment; by impairment and filed the in historical upon products, delays; States retention remind to the changes Brexit, other acceptance uncertainties and our from to and associated exchange related recent overseas, with adjustments that subject on currency credit quarterly patterns; statements limited public health or adverse today's prices, on personnel, strength those exposure performance service risks and in COVID-XX goodwill; systems the described Exchange including and X-K our assets report threat changes performance the of failures are related Company as risks with risks including competition, reports price debt

could statements materially results Company's made risks those These cause actual future behalf for Company. to the on of or any in periods the forward-looking by differ expressed from

statements result statements, speak or publicly obligation they Forward-looking undertakes of as and a no are update only the whether information, which to as new future on forward-looking any revise the Company of developments date made or otherwise.

And with Richard. Richard Good now would I morning, to the like turn over Horowitz. that, to call

Richard Horowitz

our release and same unprecedented Rich, with Good brief wellbeing. good us today morning, joining for and the time this our you direct everyone thank year you I country morning, is comparison morning. that incredible information. much. safe for from period took thank everyone's our results in hoping more quarter earlier in and how you a ago. of safety to of We're state they will and the XXXX in this begin of call first a the pray and world, And just everybody, so I all summary for today's we

emphasize at XXXX intended and call ended review also March company's to purpose this month XX, is share discussion the do, and the only This statement for management's data balance of always businesses. And I that course, morning's operations of today's our current pandemic the how analysis. be affecting sheet of of what release presented per to with P&F’s point three the is and results will as along our most period wish discuss

to we briefly ramble, company, of key move do ask after brief my provide course I these to Joe points cash questions the key any information After topics. to your I best speech, which review you Molino such, affecting flow will your on my that. As the that an that, after to please will and confine update ask Q&A

The to for a period same of compared was $XX,XXX,XXX first consolidated ago. year $XX,XXX,XX revenue the quarter company's XXXX

in effect published the earlier in factors novel the revenue today, quarter release business consolidated the were causing Hy-Tech’s revenue. discussed global of ATP oil, felt compounded lesser of on press the the crude negatively price decline As significant effects of which the was company's degree, the COVID-XX, a in our decline most with the our lines and the or to COVID-XX coronavirus which first net significant negative impacted

a quarter to lower sold favorable what up first of PTG call efficiencies, addressed. in ago, subsequently to margin compared less XX.X% This this or was first XXXX. XXXX. to year period to products business and COVID-XX slight the and manufacture the same quarter in gross was quarter Florida primarily to due first a compared XX.X% year absorption XX.X% been due product compared things other margins overhead of we was this new first have The quarter XXXX margin consolidated same and year to our group of ago. The gross mix quarter of transmission during and a mix related XX.X% period decline in company’s to decline weakened turn XX.X% was the Hy-Tech’s margin efficiencies. which XX.X% gross gross compared due start the was Pneumatic's among power the in

items a quarter $X,XXX,XXX, project would Pennsylvania shorter efficient a it period of into than our of XXXX our as to that first and increase was as this general late this new in administrative far $XXX,XXX of incurred time to facility. were quarter greater significant most in of planned, result expenses the decision by originally acquired to this and complete up more than compared a be accelerate relocation selling, We result determined costs of XXXX driving gear expected. Punxsutawney potentially Our our the businesses the the and set $X,XXX,XXX was

transmission power for decision PTG this efficiencies earlier in However, group. our will greater result planned than

$XX,XXX decline was amortization period partially offset This short term XXXX. costs, lower quarter during to debt the expense issue due the compared was interest same $XX,XXX of Our borrowings. of increased in XXXX in by first to

the benefit $XXX,XXX to compared same tax $XX,XXX year. for of This quarter last reported we period a

above into consideration basis, a $XX,XXX. tax to reporting for the loss after in XXXX we first first quarter $XXX,XXX are a tax net of net the quarter all last of loss compared on after of an Taking year of the

the morning's release are and for basic We reminder, of share compared period and share to per XXXX much per common quarter diluted this you a year more additional $X.XX loss I first reporting ago. share press per common Again, in diluted as a to basic $X.XX same loss information. refer

please cash discuss flows. take At this call and time, Joe, the

Joseph Molino

the flows and $XXX,XXX were $XXX,XXX of quarter XXXX. to expenditures depreciation the amortization $XX,XXX Richard. to during first items XXXX of quarter intangible of based of cash and or you, Significant stock non-cash in $XXX,XXX, customer amortization Thank XXXX of amortization and $XX,XXX. stock were first $XXX,XXX, of Capital of based amortization consideration affecting assets compared payable quarter of compensation of operating lease other assets of restricted first $XXX,XXX,

[indiscernible] $XX,XXX other and $XXX,XXX payable were the the a and quarter during decrease decrease benefits, cash significant accrued of lease $XXX,XXX accrued decreased liabilities and $XXX,XXX of and by activities in prepaid the finally, in inventories $XXX,XXX, in aggregate in operating used receivable accounts decrease other operating decreased current accounts $XXX,XXX. of a assets, Additionally, liabilities and of compensation increase first in and of XXXX

Richard. to like over I'd that, turn the call back Richard? to With

Richard Horowitz

we the And Richard. like get you, discuss just how at we're the time, to Thank addressing pandemic. to I'd Q&A, before briefly this COVID-XX

in being the tools As manufactured parts beneficial impact at of XXXX many on China we although elsewhere. to manufacturing really this had facilities action, know, coronavirus this the we all that our and And during chain began time. not in were supply quality source other to material point despite

will except other bodies, cleaning by facilities such and many orders, our economy advantage as felt, assured, pass in take our but the economy. board teams that of our continue New how will York, or CDC and open. are for our offices which will protocols, closed corporate splitting of workers knows remain management the the in to guidelines be rest recovering government's how one to it our be well and of we the No We post ensure particular to disinfection diligently orders, social this enhanced or governmental global to shifts. this pandemic, is and work telecommute long governor's this all positioned working on business allowing directors practice fare and issued distancing, does Currently,

for April, the as applied will eight in Act, Additionally, approximately least period form million to loan. our plan in the we for workforce. $X.X protection week and the of at full maintain allow CARES in outlined us received This payroll

evaluate all payments. grateful They when relevant at very board of issue a government deciding are will the And provided that lastly dividend current has the funds dividend to decided time. and this facts not we future directors evaluate, us. will quarterly these We circumstances for the

the anybody may we'll of questions now. right be have. to our any end That's report Operator, answer happy

Operator

Instructions]. Thank you [Operator

will from Capital We our Please Andrew take first Shapiro with question go ahead. Management. Lawndale

Andrew Shapiro

a Several guys. others I'll hopefully question Hi get and few questions, into there's there. back out ask queue and the

And clarify correct much manufacturer, you from of I to understand, are just Is manufacturing. home, first want in Nevada? telecommuting to the I'm now? the I if Florida are you is states just what the just want it doing than off, of states First and where other the Pennsylvania, business each headquarters rest of working off the

Richard Horowitz

And all Florida of Two Pennsylvania. in manufacture our and factories we Yes, Pennsylvania, open. factors are Nevada. in

offices mostly in are point. in our are home sporadically working but this office, at -- open coming from we of and All as basically are our people needed,

Andrew Shapiro

deemed time… states And were all of these manufacturing various by during the essential the operations

Richard Horowitz

mentioned that… Yes, should have I

Andrew Shapiro

to Should they get remain lock are down the they open. odds again,

encountered have operating are within protected facilities which be outbreaks period in of employees of such the are company COVID? During and in spaced any this staff to occurrence of and fairly the out that manufactured is manner its our able any things

Richard Horowitz

good far. right success thus am with We've about had Joe, I that? that

Joseph Molino

don't COVID believe to contracted facilities. has anybody of actually, date, our this We of any inside

Andrew Shapiro

into the, it acceleration maybe we'll and will consolidating And albeit to your remains for of left non-recurring, cash the then costs? QX that What of with some acquisitions SG&A call, getting be the the of gear costs remainder expenses QX. the of

Richard Horowitz

specifics, Joe more you'd in the really QX are vast here majority Andrew. But like. stuff remaining but you the vast if you in we operating more full it the But little moved predominantly, the add and give and Joe, I'll capacity. majority can are but majority, color let there,

Joseph Molino

There's an after expense right. is Richard add, it’s just to more immaterial much figure. QX, of amount a not non-noticeable There's

Andrew Shapiro

referred then facility. to the were resolved? when start issues release issues press are be to those or What and they in were And up in new you your

Joseph Molino

a we run didn't did at production We all. in stop things, meaning

sets three rigged in installed, electric into being next machines was those build machines also new on a had that So of machines, then were come running, to installed. machines to machines being having had layout, were it's we're that off incorporating we we employees building. other plans being one were while And

you lot of word, can things of a maybe of imagine, amount the confusion time, activity in isn’t a of short going fair on. a As right lot a but amount very

you as plan productive a for as plan should would be month had not had the two. was if the placed So in, been placed or in where everything been production be it

did into more to like I So it's just of would nothing QX, this activity we say was it where was unusual I we XX an days would time, honest incredible scrunched say it be even got amount all done. -- probably

it thought a be to honest. we was great So effort

Andrew Shapiro

end resolved QX into to are So resolved? be QX, of far or the by how still were they they then or

Joseph Molino

new said parts get efficient that, of Having And machines of but two little will and a quarter. with consider and running the I huge take as at and consolidation, layout producing probably guessing two. end it up improvement to any will be one but better a QX, were us full each I'm by All or very quarter March. after any to say consequence with efficiency we're where it I just would from another the

Andrew Shapiro

QX in locations. in QX are consolidation. accelerated the doing you included run operating your Now rate basically separate

It had You've the time, referred better if you be up you what there and feel start get expected to will any? some. like seems et quantify these over savings, you issues would cetera. better and you Can

assume but QX’s from run else deconsolidated. on everything was Your which rate and we a expected rate, run be normalized savings pre-COVID would

the in I if don't think we're there of So we you What or end guess at called the comparing should to, the see know hope was day to on side, acquisition? call see compared cost it other QX? of benefits, on we there's the this but side what I guess savings revenue savings should I cost we'll to a I full October. QX, because achieve QX,

Richard Horowitz

And now just office salesman the small another two places let remind the in outside we I'll when But the believe that. sales six people person to of person, factories, zero one there. have an in have owners guy Joe original with of the started we and you, that Andrew, discuss with place and amount go rent there's we six had two engineering I and businesses just a Chicago de to company. places minimis

So you can one but now just in definition, to give Joe, the facility. we're new we But specifics. a much place facilities by moved bigger them

Joseph Molino

it's unclear when compared say what Andrew, So QX… savings to you

Andrew Shapiro

bought terms is, expected improving, QX of that presumably this of were this middle sense in of and of March. all you we whatever we the What end consolidation. was or October But most the SG&A it normalized side… done, would consolidation see a No, by the QX be but whole in the said was it's up issues could still from it's on effort, the but you the done start savings expected double that running cost And been now pre-consolidation. from evolving a in is that it's in the run-rate SG&A

Joseph Molino

in we of costs on the of certainly that have transition of Yes SG&A side QX, thousands direct. hundreds dollars were

In our addition to have margin is business. the what it half been should of probably in gear that,

are figures. on you rest lot margin not the I can't business should you what the would I say, be. the savings Other exact average. beginning with a than look tell to I the gear if of better going So, give QX, can't the company, a little like on exactly

if know your don't I answered So question. that

Richard Horowitz

that mentioned time things out, manufacturing QX making used I had because not would that. during SG&A they of to move there And and products also were less we obviously. labor, little obviously in much so that

Andrew Shapiro

scope trying approves a board, what the day that justify the Trying get guess know the for et profit to I guys you to acquisition, the gross feel and you acquisition, I'm of the revenue get Well things end the just you cetera. is the to board impact. of present

relocations QX basically QX normalized up costs for the and within and get to to segment set You Hy-Tech. think run-rate Hy-Tech PTG run-rate that of segment understanding about an normalized

Richard Horowitz

think I know and that and under had there's I to be lot yet we if you parts new I place saying is our certainly couple pin if whenever and But statement. lot a expect a you'd you what a going we far exactly as we the what what know margins it did projected up we is. if there that. it exactly and moving certainly moving company… parts a months And a company, when the certainly of don't you a would are and belt done ago of lot that all a of before see company move you've ever when will is move to we perhaps forecast to mean we the But we, know and had even back better. is when bought brought I good as or everything point Joe that there you realize will be be are thus really can don't

Andrew Shapiro

the PTG say of segments you margins, is don't margin sub so PTG provide the think do you I like margins when available? So

Richard Horowitz

No.

Andrew Shapiro

margins is the will overall it saying you're of or… run that up Hy-Tech the So at all

Richard Horowitz

As down you, I quarter of used this to labor went because move… the said being direct to it

Andrew Shapiro

this totally understand earnings here, that be understand I so understand perspective power to to I'm I trying generate? -- can that. project company trying I'm to

Joseph Molino

two about the or the have environment. proper issues is three would is now, whatever expected this not One sure I'm that's ago of given we months expectation

group businesses. say dealing lines many our probably supplying believe power product While cases among of because our in we're the that with best divisions all essential I will I transmission is of

work need fix work, a meaning away. it gear, In much breaks got the that, they who's breakdown somebody right down, a addition is to of

a by regular business lot the virus. unaffected that's there's of So

to So it's say. a little hard

of and quality multiple transition like we And go when hundreds we on as costs to costs, hard back old paid inside of I is million ultimately of little gear that easily And the full more the seven dollars. on once than thousands fraction costs, of would said what fraction, of I'll soft that. we a these for and our half if a made that that we businesses said, stood, business all or but inefficiencies they six imagine I pay paying we the went dollars operation with months, a are acquisition of which of were combined a

give been the expectation I pretty So think point. oranges answer, happened that's can't you a has because better this I at but Richard I'll it's apples I everything and think really with that much agree

Richard Horowitz

the the cost revenue changed realized know cutting they costs or You term consolidation what kind I has picture. are near the savings COVID are. of

but but it's you can projecting, [Multiple good. you understand tell really Speakers] all that. Speakers] [Multiple So I

Andrew Shapiro

more to queue… I’ll me. get back questions. come back have Please I in

Operator

our ahead. [Operator Investor. Private A Instructions] go is next question And Please Debrow, Henry

Unidentified Analyst

noticed was the file valuation Q, time to was any a of for I that and there said that results to imperilment morning, filed XXst? is quarter releasing and that any needed assets there first date as more the complete you first recently one is quarter And impairment. this that X-K reasons of the evaluate March

Richard Horowitz

answer I'll is had their public every answer expand quarterly the go least but delay, question, I that let through this no. believe can them. Henry. certain to you the now Joe delay from numbers, And through was company requirements the But Joe at

Joseph Molino

These that to numbers completed was the analysis release of regarding first assets done quarter. that for the was no reflect there is the the Yes, prior and earnings. impairment

Unidentified Analyst

reading was the XXth. just May something dated that X-K I'm And from

Okay.

payroll Let's first move in incurred quarter. the on. total What the was

Richard Horowitz

For the company? entire

Unidentified Analyst

Correct.

Richard Horowitz

that? have do Joe, you

Joseph Molino

answer that that not that can to probably on I take at we're the head, somebody have off try you. call my the we to and to a but get crack while know do answer of No, the top

Unidentified Analyst

to of $X.X? Speakers] to that trying amount I'm you've your to loan got the just PPP [Multiple

Joseph Molino

a ballpark, two of included. at not loan be payroll that's months would and number the course anyone that that number over the capped $XXX,XXX includes based approved was and yes, and so PPP payroll Speakers] [Multiple Well, on half of correct Okay. that making

Richard Horowitz

know strip don't you're actual letter. what population trying average I So It's to a to based upon this. get our

Joseph Molino

me for hourly forgiveness. the payroll that Speakers] half and plan. at borrow [Multiple finish include annualized would also part XXX,XXX the that just borrowing, to million. also in number includes payment include XXXX let insurance our that your calculation contribution includes, we our that took amount could the is, XXX(k) addition just which capped up for contribution Yes, of average answer months the includes two pension also of The the a pay that and It to rent that's believe for come X.X and question? health also employee the and I average. And for is figure, is Does with of that

Unidentified Analyst

be be two's less? expense will to fair it Would P&L say substantially quarter payroll for

Joseph Molino

loan, an where perfect we've we terminations not stated be the what's know. don't further far be. of you result know -- designed PPP Is future. the give is into knows payroll and held whether have have end legislation, you can't a going can't on to I I accomplish. who that exactly at you tell getting I’d happen. going Well, we're I I might made June have I which be to answer, we going our to as can't was is QX know loan that what see there been going off as of to you the the just to what you tell

Unidentified Analyst

the is weeks, of payroll? for was paying else weeks, number eight someone question a My

Joseph Molino

PPP that’s Act That's correct. That’s whole is, the is… what the what CARES

Richard Horowitz

eight was Will be your the weeks of following. pay that pay question weeks our consistent of XXXX? Maybe eight Is what question? Henry approximately in with is your

Unidentified Analyst

you for your receive expense be that amount you subsequent that think eight expense to the when received. I No, by will weeks presume salary I diminished loan. it's

Joseph Molino

way. that it our structure. from No, expense is separate work The loan doesn't really

is speaking on guidance future, the side. structure certainly Our is, some the loan on point be in it's it what unchanged, gets will there unchanged personnel At the relatively expense complete how forgiven.

fill because loss go in affects go is think speak. two we the other the separate profit loan, that loan words bucket the doesn't down so company. got are it doesn't to possibly the our and Those how payroll I conflating of related of In and what you're forgiveness doesn't and the things one while work. that

of, if our look L loan of looked like Does then forgiven. in when your satisfy We we have you gain on But will our answer extract the question? forgiveness there payroll. it If it payroll, will a calculation, separate somewhere gets the whatever quite else in is. will loan requirements our that P& the P&L what similar the look, to QX terms be

Unidentified Analyst

gain to be Other going is in future period? some

Joseph Molino

and yes forgiven, [Multiple it is loan Speakers]… the be will Whenever

Richard Horowitz

Henry, guidance all awful you how I of able we've if the that. familiar loan spent $X.X about that compare be of hopeful all. have that all how don't the well the to right not And but lot the requirements will of And before But us be we're are time this we be, will it and the PPP with how this large PPP, and on rules a used. funds an now know all predict can to forgiven much submitted. to at or will million we're a forgiven portion had be

will government not. we the know or if You choose that to and stuff audit

rules as following do always it. we course of We’re strictly

For and evolving, Friday. things released including that PPP this the the these on guidance many application forgiveness all treasury reasons, loan SBA just by keep

it's and don't any $X us will that the know kind million of eligibility scrutinizing as the here, we so can't companies the have in to that such than received of we like because loans make amount the that we or know stuff, time know. all And But be or we in as more predictions government about.

Unidentified Analyst

customer I he time I'm the have to of press to large make reading correct. the had you loss sure a sales it a a a customer? lost permits. questions Is you I two it if it or reduction release want in that other customer. In says

Richard Horowitz

up saying, did but customer I'm lose customers’ get of customers, picked that We we the you customer. the but we if many lost what

Unidentified Analyst

was yours customer happy, price differences. of credit, the the due to What reason? decision a And wasn't

Richard Horowitz

Price differences, essentially price differences.

Unidentified Analyst

first quarter customer And of the 'XX. how was much that in

Richard Horowitz

bit you could a We don't little information really maybe Joe, it that. that speak to give but you

Joseph Molino

low annual is customer's seven seven The year, prior the for low customer. years figures figures in revenue

Richard Horowitz

customers branded there have are product But the available picked to to many to do users purchase that if those as to that many sales go along who saying. they end they The want, now And product, up like I'm that product. is the what channels that having would said other you of without a customer customer. that understand the we customers, way to don't

So to ours customer out replacement unloading product absolutely while our certainly people going while our well to people to that -- buy ways to is of avenue of going get was to impact. find everybody's an number get once another there buy were are they're product inventory, of well the a our purchasing weren't the But are product. and the they just of last product, those at that customer, product and aware aware there where that

Unidentified Analyst

you prior you was inventory or Was there's… that it made customer. still anything selling for And only that this were them, whatever have

Richard Horowitz

it No, was there's nothing our product, about it. regular branded special

Unidentified Analyst

to you. of Thank come right going reserve to leave back. my I'm

Operator

Management. question next Capital Andrew with ahead. Please our And Shapiro go Instructions] [Operator Lawndale is

Andrew Shapiro

to just little have I I a follow more. Henry's have questions few ups bit few then a on get a and clarity more

product product. Regarding sale a products in it and the color automotive you give what more the line or from was distributor as little last of branded this… to customer a Can automotive

Richard Horowitz

It AIRCAT… was

Andrew Shapiro

And in the -- distributor something Europe? was this not U.S. a over

Richard Horowitz

It was both…

Joseph Molino

out as that there affiliated entity in well does de have Europe a minimis. They

Andrew Shapiro

And low was year? not when annual QX that that seven was said you figures last

Richard Horowitz

Annual, correct.

Andrew Shapiro

and million but winds and it's and the criticisms. over PPP and and you shifting on on have stuff, and $X loan going changing on keep familiar they the SBA forgiveness questions SBA which then just their rules more And very not I'm with, perspective Congress, whims to to Henry's political based the back

more a is weeks. in what isn't forgiven knows who So and few

is correct? think income you items, item. separate when the you'd it's this do like it's still a correct a be either of coming normal I through agree or things. So won't Is that that's your the whether statement not probably sounds reduction not forgiveness, be forgiven items. uncertain line margin various But line gross it'll an that It it

Richard Horowitz

Correct.

Andrew Shapiro

that in you paid release? When were referred in the March to bonuses bonuses press the

Richard Horowitz

March I XXth believe…

Andrew Shapiro

the during the in ways, then business of constrained here the are during annual we COVID make And guys outstanding period which or of executive of board board in period across variety cuts the PPP period in business, dividend the which PPP is the temporarily, program? least loan at the you excess cap and outstanding. has of rate the loan but have, cutting including constrained the limit that to the senior the the portion least $XXX,XXX implemented any PPP or of Has COVID the at a salaries reductions period is

Richard Horowitz

Andrew, understand want the you discussing answer not if I'll bit don't it know you. this on I to a I your question, for call. if compensation I executive question can But but explain if little we're more, see

Andrew Shapiro

your worked penny to were PPP covered your average million plus it's So worked annual in other out in it average the your -- that loan. PPP X.x the dollar, program, -- and monthly you have and that the payroll, that it's health out X.Xx the various

on been shareholder that's have so side. Dividends Okay. the suspended,

portions that, $XXX So the that's that senior million above part there's and the are your other yours, is guys’ what's included things in executive the and But are of Joe's and and PPP. beyond other PPP compensation salaries, the a involved on is in going with of rate PPP. annual not so

to I'm So has Speakers] any portion the have caps? salary the not in asking board implemented [Multiple the of Speakers]. excess yet [Multiple of reductions executive They rate senior

Richard Horowitz

time. this Not at

Andrew Shapiro

know disability, credit language. don't that's which able will unfortunately been said to that that any able held any be filed. has if -- your discussion the earnings I standard pertinent release you these Are the in there of XX-Q, Regarding not yet detailed you may so quarter’s to current be until prior won't changes questions August? to ask But are summarize we this call waiting until

Richard Horowitz

understand I he’s understand Again, I the asking… don't know what question. you do if Joe,

Andrew Shapiro

the the changes kind credit implied but facility XX-Q I if of XX-Q's that be changes, will out. detailed don't know in You not to there's there's the

I and shame questions can't it be until August. just questions a ask read can't now. it's I And So to not next to ask able

come asking facility in the to out, to in be I might was detailed any be that changes if you the could So credit out… summarize just come XX-Q

Richard Horowitz

my you are but no it. there onto To knowledge, add Joe can changes

Joseph Molino

to change think agreement queue The would allowing The loan. to the change credit capital outside agreement now, the of is credit borrow us PPP issuance the only right facility, of more… PPP to loan not the the prior the an one in change I for allow

Andrew Shapiro

So of for additional the change it's covenant just incurrence a debt?

Richard Horowitz

there Speakers] PPP the no an correct, in was [Multiple filed That's are changes X-K.

Andrew Shapiro

that it's able of audit, if it subsequent and that outside sure in all I and like have not in size the press maybe outside what what released got this referred and to finishing. did the forgiven. is, of about, to because be your am as processing for is PTG I see happy it. I'm see you but costs? if loan the costs not most, Hy-Tech. in hopeful all guys of early into that releases very The outside And the type And you'll talked called qualified that ATP that you What of press of release same functions to go an the you sounds later upon

Joseph Molino

would things metal then can't those ones, be do internally. metal hardening, and be prep could costs processing, big heat we Outside treating, things like

of just would have them. We’d for say use I So comments. those to different each are related language

Andrew Shapiro

in stuff release. same but the So different it's language

to in outside change permanent mitigate costs or these increases? Okay. a And you, are there do then can is anything costs Hy-Tech to such more

Joseph Molino

we them certainly mitigate all stuff to things Yes, the can time. analyze that we do and

in and is much At this don't As point, of we're our heat you we to treating ability pretty the have heat know, a vertically integrated. treated. do product

might things need do bringing it We at it. but ways that kind cost have look different but that of the this seem that metal on doesn't you bring in, in house point we at and at mean doesn't not depending manufacturing you of efficient to looked

So always that course. at of yes, we're stuff looking

Andrew Shapiro

still any, if remaining rest the the you that this What, planned CapEx identified items are have the in year? big of for

Joseph Molino

whole And to we'll lastly more know of on a Nothing will has we kinds something major of We're the the those be Obviously, any return consequence. and just know for a -- rest expenditure it that, for modest going a year try the lot -- in or been the monies. expenditures done while. got change serve we you a the new outlook be markets around CapEx maintenance finishing environment doesn't of there of course there's will the like business. if for to if quite of IT spend product you than CapEx

things So little the fall now going a here few all are bit pretty is quarters. current the to in off all next IT stuff so

Andrew Shapiro

here Certain on. know whereas reallocation effect of the businesses types resources of damaged COVID-XX term. to you point you focusing the it, With even of So and as part really companies are they and resurgence with the already governmental view on authorities where influx, people therapies have or potentially your deepest view? a cause socially bad et other long there's and down demand projecting vaccine, travel the views basically the with actually beginning not closures both observations but give pandemic as greatly visibility the of fall economic for unless close call gathered economy the therapies there's experiencing, an the your a back. of impact as the the would a point seeing not people to are as you seeing a well, et has views make things channels some there's the pandemic in been were masks going of and been selling. Can we'll well there's Can activities And probably supply are or the no supply from where are respect the company a and across be tight share of clearly to on on rolled influx, cetera, you of is doing now and who involved terms are of country vaccines bulk on an in cetera. in in

Richard Horowitz

this. country will Andrew, is or virtually us it answer and for this I know But impossible to make I this anybody in knows… don’t else you or who let Joe world predictions

Andrew Shapiro

of that you where seeing, potential not look, for asking versus serious am are I your until certain you I might that have are asking industries I who you No, in increase certain serve you, you have headwinds customer certain if you mean, there in encountered customers they obviously seen masks, in increases or subsectors -- your make either degradation Are am know, base. of areas reopen? predictions. business no have activity

Richard Horowitz

that to if at most not know to the Joe, you mentioned of of Joe, for said I give that? part chime have them you think you'll weeks I and to can't it's who orders. to to but I have asking. But any. of But business, I add very some been of can't low add a in. think to Andrew, that? that had some think good Joe, before brings. you what that And any this very, the question I we you moment But customers degree. the a that, any Having you're don't important have knows of what want degradation couple know want future pretty

Joseph Molino

PTG think the best. I earlier, is said I As faring

keeps and guys supply fare The think is rest the equipment very going government okay. we to I to the ordering be will specific. that military extent those industry

tell back prices $XX then helpful. barrel, up be gas going So oil if be could a to $XX me and are that or you to would

me be back If a air, planes helpful. are that when be would you tell in can going to

when tell calling can it If again, mobile garages the would you me jobbers helpful. be can start on

of different each know going slightly but of each those has different are certainly be when sort by business So don't affected a we they're turn factor… to going And any to around drivers. things

Andrew Shapiro

moved you some food product inside got Hy-Tech, development example, processing as new of And for mentioned. into

restaurants that to more obviously, tailwind into something are You than items headwinds? for goes people home offset, might be something consumed that might then And if food areas of have are have processing would have in many stuck types food it's areas healthcare. that certain that or when a or

Joseph Molino

Despite some doing no mitigate just, I put this in the other all, all, grow in there, growing it’s fall first PTG not -- best, dramatically. don't to and It's day the that the hanging to and think is materially way let's it way. I way of second it's it's is off. fact in Yes, going that it not

Andrew Shapiro

May reopenings? a at the seeing result And up? Are of pick your partial the are of rate June seeing you here run as run-rate you going to into of end orders and starting things

Richard Horowitz

there's it’s very say good orders. anything I've good of yet seen. from no of have a that I not or like and customers of that any inconsistent, orders day sporadically week would then times And No, We'll very rolling. two

Andrew Shapiro

think the quantify the yet? Act a they Act you call I back, I've to in timing back that CARES range a estimate money et you NOL of can provisions cash related think Can CARES of provided of seen provide can of of flow and flows cash changes companies from it's to and -- other already terms carrybacks, referred Do or they any range because tax the amount an cash of tax call carryforwards to? you that kind impact this of public the of primarily provisions have impacts range they of as either cash cetera. that the of

Joseph Molino

would a is rough estimate. that and I this say

about rest became call Over stuff to back. the of a combination us available that stuff that It's year, then and us. the to available million of $X.X of we expect was

just the it's So roughly next over $X.X million two quarters.

Andrew Shapiro

to back bit little Come back them out. that have helps every few Well, please. a right. I'll me I and pare questions. more to

Operator

Lawndale with Shapiro Capital Andrew have ahead. We Instructions] go [Operator Please Management.

Andrew Shapiro

[indiscernible] increase work and think the the to there military QX the the think Regarding all future oriented is all Was that, customer. limited regarding current and I and/or I or quarters? carryover into is aerospace that's

Richard Horowitz

one we the expect would to are orders for continue. These The not orders off are military part. most

a COVID, tell expect course, not from to are parts regular and exactly you on flow tools they're for Of these that basis. the military we how. of can't orders given an But develop I one ongoing project,

Andrew Shapiro

any customers --creating which end there to end user demand can tie particular are your programs the for as user tools? you aerospace And

Richard Horowitz

Like a aircraft… particular type of

Andrew Shapiro

one the makers the specific product your F-XX Stealth, of else. F-XX, se. it airframe aerospace which Is might of demand not But be something or per military customers, the assuming it the various to Is programs it's the be may

Richard Horowitz

so… for XXX sure, well Yes,

Andrew Shapiro

military. that's Yes, not

Richard Horowitz

That’s no… not military,

Andrew Shapiro

the this? military program created that Yes wondering just

Richard Horowitz

single no across aviation of variety there's are used No, tools These platforms. general a military are program. that

Now that I are these production the different to across hot will supplier tools, tools jets. obviously take for at many is say more will this, moment whatever's the but that the of kinds military useful

Andrew Shapiro

primarily other… or there Is it are Boeing

Richard Horowitz

No, primarily Boeing… it’s not

Andrew Shapiro

plan into we've long prior any has more And term in [Multiple of has crack calls, Airbus? there talked with the Lockheed. been And been indication as Speakers] progress to all at there

Richard Horowitz

Speakers] they’re one and country right now, up Airbus second that bit not open visitors. Boeing is there wanted starting two doesn’t with But visitors accept is little Not to accepting of that. they're thing in they to is just announce to and Airbus, sit visitors, [Multiple a issues, the

and sales they're zoom there know either. don’t that So we can't if calls even get I right It's now. only if doing

Andrew Shapiro

face there are an or did products actually call the probably that any current they of revenue year there that revenue would comparison, economic even from be new last apples make few hard any new Are do it's you quarter? generation showing any last lots to in apples again, from introduced they're since reduced activity introductions products COVID. the out but enhanced worthy the have quarters introduced And of it's over are you quarters. products a of products, though presumably over over particular particular the new Are to year few that

Richard Horowitz

Joe, It that what and But all stuff… was exactly you [Multiple with Speakers] do happened recall COVID. anything before

Joseph Molino

introduction of hold people we're we the there. a just there’s momentum tool for get now. a new the very system a are little for it, fastening system about new while were and -- on excited military very excited are orders of starting about We're to fastening for to And the talking kind aircraft,

So the once production I'm get get hopeful to little things the way providers flexible in that normal something a orders back some should of more that there. aircraft we military at

So but the answer right happening now. is nothing's yes,

Operator

to speakers for now be over time. comments. I'd back turn any further the conference It appears no to our to calls like additional at questions this and

Richard Horowitz

wish, our place some, we in safe to that everybody well by call have taking P&F together to and a the have in for of of we and that the time Stay And and hope we wish we you come get course well. a safe Thank all. the as time course, today. in thank better and day. August well. We be we good is world And you

Operator

this And you participation. for your call. concludes today's Thank

You may now disconnect.

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