Good day, and welcome to the Astro-Med Second Quarter Fiscal 2016 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to David Calusdian of Sharon Merrill Associates. Please go ahead, sir.

Thank you, and good morning, everyone. Hosting this morning's call are Greg Woods, Astro-Med's President and CEO; and Joe O'Connell, Senior Vice President and CFO. Greg will begin today's call by reviewing the company's operating highlights and business outlook. Joe will take you through the financials. Greg will make some concluding comments, and the management will then be happy to take your questions. By now, you should have received a copy of the news release, which was issued earlier today. If you have not received a copy, please go to the Investors section of the company's website, www.astro-medinc.com. Please note that statements made during this call are not statements of historical fact -- are considered forward-looking statements within the meaning of the Securities and Exchange Act of 1934. These forward-looking statements are based on a number of assumptions that could involve risks and uncertainties. Accordingly, actual results could differ materially. Such forward-looking statements speak only as of the date made. Except as required by law, the company undertakes no obligation to update these forward-looking statements. For further information regarding the forward-looking statements and the factors that may cause differences, please see the company's risk factors in the company's annual report on Form 10-K and other filings Astro-Med makes with the Securities and Exchange Commission. With that, I'll turn the call over to Greg Woods.

Thanks, David, and good morning, everyone. Astro-Med reported a profitable second quarter, highlighted by strong orders, a healthy backlog and our 12th consecutive quarter of year-on-year revenue growth. Net sales increased 7% to $23.9 million as we continue to execute on a multi-pronged strategy built on new products, geographic expansion and the recurring revenue stream of our consumables business. Sales in our domestic channel increased by 14% year-on-year in the second quarter. In addition, we are beginning to see the benefits of our expansion into countries within Europe, Asia and Latin America. Also, we are broadening our sales reach in Canada, branching out to more of the Western provinces. Joe will review our financial results in more detail shortly. But first, let me give you a couple of additional data points and provide some perspective on our performance. Sales in our QuickLabel Systems segment grew 12% to more than $17 million for the second quarter, a record for the company. QLS continues to perform as expected, and new color inkjet label printers we launched in recent quarters are beginning to be well received by customers around the globe. As our worldwide installed base of printers continues to ramp up, we are seeing very rapid rise in the demand for consumables for our inkjet printers. This pushed our current 2-shift production at our largest converting center, here in West Warwick, above its normal operating range, and we, therefore, incurred a significant amount of overtime to meet the customer requirements that occurred in Q2. To accommodate the increased demand and reduce operating costs, we'll be moving to a 3-shift production schedule this month. This is the first time in the company's history that we will have a 24-hour operation. Moving to an around-the-clock production schedule provides improved asset utilization and efficiencies that…

Thank you, Greg. Good morning, everyone. I'm pleased to be with you to discuss the Q2 fiscal 2016 financial results. As Greg noted, Q2 marked the 12th consecutive quarter of revenue growth on a year-over-year basis. Our net sales grew 7% to $23.9 million led by our domestic sales channels. Sales to domestic customers were up 14% over the prior year at $17.3 million. Sales to our international customers were down $7.8 million to $6.6 million. However, the lower international sales volume is due to fluctuations in foreign exchange rates, which lowers our revenue by $900,000 or 12.5%. Turning to the business segments. QuickLabel Systems reported sales of $17.1 million, another quarterly record. That represents an increase of 12.1% from Q2 of fiscal 2015, primarily driven by the Kiaro! family of printer products. Sales in our Test & Measurement group, which consist of ruggedized products and data acquisition systems, totaled $6.8 million. That's down 3.8% from the prior year period. As Greg mentioned, the variances relates to some aerospace customers extending orders beyond the second quarter. Moving to the second quarter sales by product categories. Our consumables totaled $13.3 million. That's up 22.1% from the second quarter of fiscal 2015. Hardware sales were down from a year earlier to $8.6 million; while our service parts and repairs contributed $2 million to the second quarter sales, an increase of 31.5% from the Q2 of last year. Second quarter 2016 sales generated gross profit of $9.8 million compared to $9.6 million in the prior year. Gross margin for the quarter was 41.1% compared to 42.9% in the second quarter of 2015 and was up from 40.7% in the first quarter of our current fiscal year. The 180 basis point change in the gross margin from Q2 of last year was primarily a…

Thank you, Joe. In summary, we move into the second half of fiscal 2016 with a substantial backlog and continued strong demand for our products and services. Orders through the first 6 months of the fiscal year stand at a robust $51.5 million, 15.4% ahead of the prior year. We are continuing to deploy our lean tools throughout the organization. We are taking the necessary steps to upgrade our infrastructure to support our long-term growth plans. The company is generating positive cash flow, and based on current business environment, we are well positioned to achieve our key operational and financial objectives, including our full year revenue guidance of $93 million to $103 million with an EPS of $0.70 to $0.75. With that, Joe and I would be happy to take your questions.

[Operator Instructions] And we'll take our first question from Jeremy Hellman.

I've got a number of questions here, some kind of bits and pieces on the financials and then some more larger strategy stuff. But on the bits and piece questions, you mentioned CapEx in the quarter was 637k. Taken that in context of your comments about adding new equipment and such over the 18 to 24 months, is that kind of 600k to 700k going to be a reasonable figure for each of the next 6 quarters or so?

I don't think so, Jeremy. I think we'll probably -- it's $1.2 million for the first 6 months of this year. The first quarter was comparable to the second quarter. I think we'll probably end up around $2.4 million for the year, a little higher than normal. But I think we will drop back towards an annual -- probably a $2 million level after that. I think this year we had just some interesting capital expenditures that position the company for the future.

Okay, sounds good. And then tax rate was 37% in the quarter. Is that a reasonable number to use to model, or should it come down...

Good question. I think, year-to-date, we're at 33%. With the first quarter, we had some rollback of some FIN 48 items. Probably 36% I think would -- probably for modeling purposes for the next 2 quarters, I think is probably a reasonable expectation.

Okay. And then going into the foreign exchange question, there's obviously the direct impact of 900k you mentioned. But beyond that, I was wondering how much the currency represented a headwind in sales opportunities that might have been deferred or missed or otherwise where a company customer in another country might have purchased, but otherwise found the pricing to work against them and deferred doing business with you, if that happened at all.

Yes, it's tough. We don't have any direct data that tracks that exactly and saying that's the reason why people didn't order or delayed an order. So I don't see that being as a major impact. In lot of our businesses, it's in local currency, so there's not a direct impact on that. With the aviation business, most of that business worldwide is done in U.S. dollars, so that kind of helps to mitigate it in that case. So in certain countries, yes, they're facing bigger issues than others. But it really more would impact potentially margins from our branches because they price in local currency.

Okay. One last one from me, and then I'll hop back in the queue. Just want to double-check some of the numbers that you mentioned, Joe. Did I get that right that total consumables in the quarter were $13.3 million and thus about 55% of overall sales were recurring?

That's correct, Jeremy.

And we'll take our next question from Joe Furst.

Could you discuss a little bit about your multiyear backlog in airplane printer area?

Yes, I'm not sure exactly what you want to know about it, but it continues to build. We don't give exact data on that. But we said in the past it's well over $100 million. It continues to be in that range. Obviously, it's growing both from our existing accounts and certainly the RITEC acquisition as well as the Miltope acquisition last year added to that the number of contracts that we have which, of course, go out 5 to 15 years typically.

And the next question will come from Evan Greenberg.

So my first question was kind of addressed by Jeremy, but I wanted to know where it fell on the revenue line. Was it just on -- in terms of the currency issue? Was it on the top line or...

Yes, absolutely right. Exactly right, Evan.

So we could say that came right out of profits on that?

Well, of course, you've got the impact on the expenses also with the foreign currency, so it's somewhat -- it represents the whole P&L, but the $900,000 that he talked about really is the top line impact.

Okay, all right. So the expenses -- so needless to say that it did have an impact on earnings.

Yes, it did. Absolutely right.

All right. And how much longer do you think this will last? You think it's another quarter or 2?

Well, it's hard to say. I mean, obviously, the currencies are fluctuating pretty significantly these days. It's -- we're all just, obviously, very closely paying attention to what's happening, but there's a lot of uncertainties right now in the foreign currency markets.

Okay. It's hard to assess. And the other question I had was the acquisition costs for last quarter, were they significant? Were they over a couple hundred thousand dollars? And did you find the acquisition yourself?

We did. We certainly did, and at a little less than the couple hundred thousand in the numbers. As you know, Evan, everything now gets expensed. So it's -- there's no deferral of the cost associated with those kinds of integration. But it wasn't -- it did not reach the level of $200,000.

Okay. Well, that's impressive, Joe. You guys should run an M&A shop. Of course, Gregory has done a lot of that before, but very, very, very efficient job. Also, I wanted to know what the impact was in terms of the Oracle implementation. Or was it an Oracle implementation you had?

It was. It was a JD Edwards product. It's called an EnterpriseOne actually, as you know, but Oracle purchased JD Edwards a couple years back. But it's really their state-of-the-art platform. I guess, at this point, it's probably one of the more popular if not the most popular ERP product that Oracle is marketing. But it does change the dynamic for us in terms of information that's available to us on the platform. That was not available through the old green screen world product that we had with JD Edwards. So the benefit for this, of course, is it will be in the years ahead because information now is available to people who put together a number of different opportunities to tie it in with our CRM application as well as our product lifestyle management program. So there's a number of completely integrated platforms that now will be able to provide information to the various functions in the organization, and then at some point, we'll try to bring in our branch operations. As you know, our 4 branches are on a cloud-based application, but eventually we'll basically move the 4 operations into our EnterpriseOne platform so that we'll have -- on a global basis, we'll all be looking at the same information.

And next we'll go back to Jeremy Hellman.

So you mentioned at the outset, and I know it is not a lot of time in the saddle with Daxus yet. But I was curious for any early feedback you've gotten from your customers or potential new verticals that you're looking to get into on that?

For taxes? I'm sorry, I didn't catch that Jeremy.

Daxus, your new product line. And I know it hasn't been a while but curious for any kind of early feedback you're getting out in the marketplace?

Oh, Daxus. Yes, sure. I can give you -- I mean, of course, like you said, we didn't have a lot of time in the open marketplace, although, we did beta test it and had it out with our dealers. So the response has been extremely favorable. If you look at the products that we have out there and since I've been here, which is about 3 years now, it's the first major new release in that data acquisition marketplace for us. And it was started really over a couple years ago. So it's been a long time in development. But it's based on internal technology that was 100% owned and developed by Astro-Med, and because of that, we have very good control. We're able to tweak it as we went out and did Voice of the Customer over the past 1 1/2 years or so. So in the initial runaround -- they've already sold kind of the first batch of units that they had. We have orders for those, and of course, we have to deliver those over the next coming months. So it's looking very favorable. The nice thing about it is it gets us back into the automotive area where we really didn't have a product that really competed in that sector for the last probably 6 years or so. So it's nice to be able to reenter that market with a strong product. And we continue to be very strong in the other transportation markets, especially aerospace.

Great, that's good news. And then just kind of switching gears a little bit, I think there's -- the overall takeaway here is certainly positive. Things are continuing to move kind of up and to the right as everyone likes to say, but kind of borrowing from consultant speak and the spot analysis sort of look, in terms of weaknesses and threats over the next couple years, what do you see as your biggest worry points?

On the weaknesses and threats side you're asking about?

Yes.

Yes. I think, it's really just a matter of doing a good job with the integration of these acquisitions. Our typical rule is, the faster the better, so we try to move those along very rapidly. And then, again it's -- I don't necessarily call it a threat, so to speak. But it's -- as we're a growing organization, it's you're bringing in "the best and brightest." Right? So it's getting the right people quickly enough both from an internal training and moving up process as well as going to the outside because we certainly don't have enough capacity inside. So that's something that we're working at diligently. It takes a lot of guidance to make sure that we're moving that in the right direction. Externally, I mean, there's always different competitors that are going to be coming and going in the business, the different segments. I think we're pretty well diversified. The aerospace business looks very strong. The airlines continue to have big backlogs, so that looks good. And in our QLS business, it's a very broad spectrum of customers. So -- the good thing in that horizon could be who has the unknown killer product that might be coming out in the future, and of course, to mitigate that threat, we have a very robust product development process. As you've seen, we're releasing products at a much more frequent pace now than we have in the past. That's kind of our defense against that is to try and be out in front of everyone else.

Our next question comes from Andrew Redding [ph].

I think some of my questions were already answered. But the G&A increased about 90 basis points over the second quarter of 2015, and I was wondering if they're onetime items. It sounds like there are, at least, almost $200,000 of acquisition costs. Would that be included in there? And are you expecting to go down to the same percentage in the future?

I think we should, Jeremy. That's a good point. Yes, we did also a little depreciation in there also as a result of the amortization on the investment we've made in the EOne product. So -- but yes, I think as you say, you're seeing some of that acquisition cost resident in the G&A category.

Okay, great. On the RITEC asset purchase, Greg I think mentioned that there are contracts that go into place next year. Are you expecting to see much revenue impact in the second half of this year or really not anything until next year?

The latter.

Yes. They're just starting to ramp up now. So they have a number of new -- on past calls, we talked about kind of how this works. It's when you win one of these deals, there's typically anywhere from 1 to maybe sometimes 2 years or more of certification, qualification before the aircraft is in production. So they've got -- we've got a series of contracts. We have a nice one that is in production right now, but it's just in the early stages. But in fiscal '17 and '18 there's a nice ramp on that one.

Okay. So long runway so to speak. And -- I think you're going to get royalties if there are products sold in the military side by the other company, the seller. Is that expected to be material? Or is that pretty much a very minor item?

I don't expect -- it's reasonable, but it's not material.

Right.

We'll take the next question from Ronald Cowen [ph].

I'd like to know -- our company's -- Astro-Med has been around for -- since 1969, I believe. And now we're getting away from the medical field or out of the medical field for the most part. I'd like to know what -- have you guys had any discussions about changing the name of Astro-Med? If you're aware, recently, Google changed its name and a couple other companies changed their name. And I would like to know where do we stand on changing the name of Astro-Med?

Yes. So that does come up from time-to-time. Matter of fact, I end up -- I go to some of these conferences, and I get sat at the tables with the medical people and they start asking me medical questions. I have to tell them we're really not in that business anymore, but -- yes, so good point. We actually have retained an outside marketing consulting group to review that because we do get that quite a bit. So we're hoping to have something -- it takes a little while. It's a big move. But we are looking at that very seriously. And we would likely make some type of change before the end of the year. We've to get [ph] a good name, and we've got to get the URLs. There's a lot involved with making these kind of changes.

Yes. You answered my question in a positive way because I was going to suggest that you hire an outside firm to do it because I think it's a monumental task. But I think it needs to be done. My second question to you is -- well, I'll put it 2 ways. I'll put a comment. You guys are doing an excellent job with the company and repositioned the company for future growth. My worry is that we're not getting enough shareholder value. We're not increasing the shareholder value. And I've called and said, hey, look at -- what are we going to do about the dividend? We have a lot of cash. Obviously, you made a comment that you're going to make the acquisitions, which you are doing. So you answered my question several conference calls ago. But looking forward, our stock's down. I want to know how we're going to increase the dividend and also get more investors to buy Astro-Med stock. And I guess we answered one question, changing name could help. But I'd like to know what we're going to do to increase shareholder value? Because at the end of the day here, all these people that are calling in, they're calling about the progress of the company, but they really care about the shareholder value. And right now, our shares are down. So we need to take action and increase shareholder value. And I'd like to know more how you're going to do it other than we change the name. And I have some suggestions too, but I'd like to hear what you have to say.

Well, let me start off by saying that we're not focused on increasing short-term share price. So our belief is that continuing to put the infrastructure in place and to expand our markets and product lines to deliver increased revenue and operating income, that's really where our focus is. And ultimately, that will lead to a higher share price. We're very convinced of that. So on an ongoing basis, the name -- the name is -- that's really not done to increase share stock price. That's really -- that was done to better reflect our strategy and where we're going in the marketplace. So I think what will happen is it's a natural occurrence of improving our operations, and we would expect that the shareholders would reward us for that.

Okay, okay. So my other concern is, we have a board consisting, I believe, of 5 people. Is that correct?

Pardon?

We have a board at Astro-Med consisting of 5 board members. Is that correct?

There's 6, actually.

Six board members. Okay. What about -- some of those board members have been serving a long time, and they're getting up in age. I want to know if you also hired an outside firm to look at the board, the way we're -- the way the board's picked? If we need to make some changes in the board, maybe add a board member? Because obviously, some of the board members are getting up in age. And I have a concern that when Albert Ondis was CEO, that we didn't have enough succession plans in place. And so I would like to know if you have looked into maybe hiring another board member and making some changes in the board level of the company?

Yes. Well, that's not up to me, of course. But we have a nomination and our governance committee, so they do review that at each of our board meetings. So on a quarterly basis, that is reviewed, and they take a look at the members and also do look at possible additions to the board.

Okay. I guess you've answered all my questions all my questions now, and I want to restate that I think you guys are doing a good job. I think you're positioning the company for growth. And I've been a longtime shareholder, probably over 20 years, and have been affiliated with Astro-Med for over 30 years, so I'm glad you guys are doing a good job, and I'm glad to be a shareholder.

And next, we'll go back to Evan Greenberg.

The question I had, Steven [ph] -- I know everyone loves the cash position of this company or they say should [indiscernible] dividend or buy back stock, which I think you bought back stock from Albert's stake and reduced -- helped reduced share count, which was fine, but we don't have enough float as it is. In terms of dividend, I think it's adequate for this company being that we're in a growth mode now. If you found an acquisition that were sizable that would increase the size of the company, maybe even double the size of the company, and it were significant and it were a mid-8 figure acquisition, do you have the credit lines already lined up and the bank lines that are adequate to make that acquisition? Is that something you've contemplated?

It's a good question Evan. We've actually talked to a number of banks in terms of, as you say, position the company because of the possibility, as you say, of a significant acquisition being available to us. So we've had a number of folks who have -- expressing interest in being able to step up and help us if we were to come across an opportunity that looks very attractive for the company's growth.

We'll go next to Steve Busch.

So most of my questions have been answered. I do want to say I'm glad to see you're out there going to roadshows or at least going to investor conferences now. That's -- I think will help the stock. Certainly your execution and our earnings should be starting to show, and our revenue growth should be starting to show Astro-Med as a growth company. But sometimes it takes time for investors to see that. My main question revolves around our global, I mean, our ruggedized printer business and our airline business in general. So we have about $100 million backlog over 5 to 15 years. What percentage is in the 5-year range, do you think?

It's tough to break that out. We don't actually have -- we don't disclose I should say. So just to give you a picture of on how that works, though, is it really varies by airline manufacturer or OEM. We call them OEMs and then the Tier 1 suppliers to those OEMs. We have some of them that -- we'll get an order on Friday, and they want it delivered in 5 days. We get other ones, we'll get an order, it's a blanket for 12 months. So the actual releases of those kind of contract orders is very variable depending on the different customer.

Right. But I guess what I'm trying to get at, global airline orders, as you stated, are up nicely or strong. Air traffic is increasing. Warren Buffett just bought Precision Castparts because of that. Is there any chance in the next 2 years that are more heavily weighted orders will start to increase more rapidly? Or are we still on kind of just a steady trajectory for 15 years on that particular line?

I would expect -- again, because of the work that we've done in the acquisition front that you'd see in fiscal '17 and '18, you'll start to see that ramp at a faster pace.

And next we'll go to Tom Spiro.

First, on the subject of RITEC. If I understand this call, the sales at this point are negligible, but we're expecting a pretty significant increase in the next couple of years. Am I right?

That's right, Tom.

Okay. What was it about RITEC's technology that enabled RITEC to win those significant contracts in the face of competition from us and Miltope and the other folks? So what did RITEC have that we didn't?

I don't want to divulge all the details there, but they had some nice manufacturing techniques in terms of some of the mechanisms that they use in the printers, some of the firmware that they used in terms of the control algorithms. So it was a nice feature set there, and some printhead control technology that we liked as well. So that gave them a viable product. And then once you've got a viable product, it's a matter of salesmanship and relationships and that type of thing. So we kind of inherited, obviously, all of those -- both relationships and the technology they had.

And are the contracts that will kick in, in the next year or 2 contracts with the OEMs or with the airlines or a little of both?

Yes, it's really both.

I see. Okay. Well that's exciting. Secondly, on the ERP system. I know we began the implementation, I guess, a couple of quarters ago. I wondered if we've now reached a point where you feel that it's -- perhaps it's a net positive or it's not too much of a drag. There's a learning curve in these things, and it takes a while for an organization to adjust. Where do we stand in that adjustment process?

No, you're absolutely right, Tom. It is a learning curve. And obviously, because we had a system that was 20 years old, folks were very comfortable, I guess, with the application. I think we can -- each day, I think people get more comfortable with it. I think certainly we went live, as you know, at the beginning of March. And so I would think we would -- every day, I think there's an opportunity for people to get even more familiar and more comfortable with the product. I think the productivity aspects of it, I think, are evident as you talk to the -- whether it would be the data entry folks or the analysts to be able to go through and get information today that they will have more difficulty getting in from the old system. So it will continue and improve each day.

That's helpful. And next, R&D -- Greg, I think you may have mentioned in the call or perhaps 2 calls ago that we're going to shoot this year for an R&D as a percentage of sales of between 7% and 8%. We're a little under that in Q2. I'm curious, are we sticking with that 7% to 8% figure for the full year?

Yes, I think I mentioned at the last quarter or 2 is we get some pulse work in there, like some of these aircraft certification programs, you get some big bills for those things. We can't really control that. But we have more of those in the queue. So exactly on the timing, it's hard to predict exactly on a quarter-by-quarter, but I think if you look at it for the full year, we're comfortable at the 7% to 8% range.

I see. When I see the cash sitting on our balance sheet, I guess, I come away with a sense that the company is certainly not capital constrained. So I guess, R&D -- we can spend the money we need on R&D or the upgrade of our equipment. CapEx of $2 million, $2.5 million isn't a whole lot if we got 20-year old equipment. Is there an opportunity to accelerate any of that? Or we're really going at the appropriate pace?

Well, one of the things I mentioned were these new presses, and just to give you a kind of -- it's just one type of equipment that we use, but just to give you an example. We go a little bit slow upfront, and then we'll be more aggressive after the fact. But we've spent really the bulk of this year -- probably the first half of the year anyway, selecting the proper type of equipment. It's being built right now. We'll get the first one in here just before the end of the fourth quarter, and some time during the fourth quarter, we'll go online. Assuming that does what we expect it to do, this is all servo-driven vision control, so it's a very automated piece of equipment. It's productivity is -- it should be coming in almost at 3x what a current press does. So we just want to validate all that, make sure that's true. And then we can go forward and bring on multiples after that. So if we wanted to take higher risk, we could bring 3 or 4 of them in at once, but then, of course, you run the risk of if it doesn't do what you expect, you've got 3 or 4 machines to rework. So that's kind of how we're approaching it.

I see. Okay, okay, that's helpful. I noticed G&A as a percentage of sales was up in the quarter. I think we mentioned there's a little bit of acquisition expense there. But sales as a percentage of sales -- selling expense as a percentage of sales down in the quarter, it seemed to me those were sort of trends we wouldn't want to continue, G&A growing as a percent and selling as a percent declining.

That's a fair statement, Tom. I think that's not our expectation. I think this quarter here did experience some -- a little bit of a spike in terms of the G&A.

I see. I see. Lastly on the subject of foreign currency, obviously, no one knows where it's going to go. The dollar may stay here, may not. Is there anything we can do over, not the near term, but sort of the medium term, a year or 2 or 3 to shift some of our costs into the similar revenues, moving assemblage or distribution or those kinds of things to diminish our exposure somewhat?

Good question, Tom. We've actually looked at a number of opportunities to realign the organization, if you will, to be able to mitigate some of those problems. So I think in the months ahead, you'll probably have a lot more to talk about in terms of some of those possibilities.

[Operator Instructions] We'll go next to Charlie Doe [ph].

A follow-up question on the CapEx. So when you look up beyond 2000 and -- fiscal year 2017, it sounds like you've got a lot of money that will flow to the bottom line. Do you expect CapEx to come down dramatically at that point?

I think -- Charlie [ph], I think probably where -- for planning purposes, we've put in a model of $2 million, maybe up around there between 10%, perhaps higher than that. But I think $2 million to $2.2 million is what our expectation is for the next couple years.

Right. But after that it should trail off dramatically?

Well, we -- historically, we've probably averaged maybe $1.5 million, if you will, for just kind of maintenance type of things. So I'd say it will drop off, but I don't think it will not drop off in half. I think we have -- as you say, we have some programs that are going to be pretty ambitious to grow the business. So I would say somewhere in the neighborhood of $1.5 million to $2 million is probably what we'll think about for the next few years.

Right. So in terms of the ruggedized printers, what's the size of the contracts that have been responded to in terms of RFPs and the size of the RFPs in hand that haven't yet been responded to?

We don't disclose that. The only thing that we kind of put out there is that the backlog is over $100 million as we've said in the past, and then the quarter-to-quarter orders, you'll see those as they come in.

Right. So that's a kind of change in policy over the last year in terms of information provided. So what's the rationale for not providing the -- more specific information?

What, the details of the backlog?

Right. So last year you were indicating that you had $192 million of backlog information or contracts in hand. So the company has decided kind of not to release that information. So I was just curious as to what the rationale is for that?

Yes, it's just for competitive reasons, quite frankly. We've gotten some feedback from other people in the marketplace that they can kind of use that information against us.

Yes. So what's the ratio of the expected consumable revenues to kind of initial sales prices for the printing products, the data acquisition products and the ToughWriter printers?

In general -- the rule of thumb that we've used, and it's pretty well held over the last several years, is that we've looked to get really the purchase price of the printer and consumables for at least a 3-year period after the sale. So some people will use them for 4, 5, 6 years, but for our modeling purposes, we figure about 3x the printer sale price.

I got you. And -- so it sounds like the research development cost kind of expected to be stable over the next couple of years in terms of percentage of revenues?

As percentage, yes.

And what's the outlook for new products for the rest of fiscal 2016 and 2017?

Yes. So you've kind of seen the clip that they've been coming at. We're trying to maintain that pace really going forward. So the whole idea is to get the vitality of the products up there. And like I said earlier in this call, best way to stay ahead of the competition is just to be releasing things that cannibalize your own products instead of waiting for the competitor and trying to copy them. So we kind of have 3- to 5-year plans for each of our product lines that say exactly what's coming out. Some of those would be minor enhancements and then some like the Daxus, a brand-new product that didn't exist before. So we've got -- really, in all the 3 main product lines that we have in the marketplace right now, all have 3- to 5-year road maps of new products.

Right. And how would you describe the success of the outlook for the Asian market? How's that been developing?

Yes, of course, we're kind of late to that party there. So we've just established our operations over there. But I was just at a tradeshow in Shanghai last month, and it's amazing to see. Relative to the same things we saw in the States and in Europe, same type of demands are there for our products. It's just a matter of getting out there and getting things set up. So we've got some nice initial sales, but mainly right now, we're looking at getting the dealer networks established. If you take China for example, obviously, it's a huge country, and it's not a few salespeople to cover. It's a big dealer network that we need to put in place. But the good news is the dealers are excited about the products. And we've been making some joint calls with some of the dealers that we have added, and they've been successful already. So I wouldn't expect a lot in this fiscal year. I think you'll start to see that, of course, in '17 and '18 ramp up nicely.

And it does appear we have no further questions. So I will return the program back to you, Mr. Woods, for closing remarks.

Great, thank you. Well, thank, everyone, for joining us here this morning. We look forward to keeping you updated on our progress, and we'll be back to you on the next call. Have a good day.

Okay. And this does conclude today's program. Thanks for your participation. You may now disconnect.