MIND Technology, Inc. (MIND) Q1 2027 Earnings Report, Transcript and Summary

Greetings, and welcome to the MIND Technology First Quarter 27 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ken Dennard, investor relations. Thank you, sir. You may begin.

Operator. Good morning, and welcome to the MIND Technology Fiscal 27 First Quarter Earnings Conference Call. We appreciate all of you joining us today. With me are Robert Capps, President and Chief Executive Officer and Mark Alan Cox, vice president and chief financial officer. Before I turn the call over to Robert, I have a few items to cover. If you would like to listen to a replay of today's call. It will be available for 9 days via webcast by going to the Investor Relations section of the company's website at mine-technology.com, or via instant replay feature until June 18. Information on how to access the replay was provided in yesterday's earnings release. Information on this call speaks only as of today, Thursday, June 11, 2026. And, therefore, you are advised the time sensitive information may no longer be accurate as of the time of any replay, listening, or transcript reading. Before we begin, let me remind you that certain statements made by management during this call may constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 2 thousand. These forward looking statements are based on management's current expectations and include known and unknown risks, uncertainties and other factors many of which the company is unable to predict or control that may cause the company's actual future results or performance to materially differ from any future results or performance expressed or implied by these statements. These risks and uncertainties include the risk factors disclosed by the company from time to time in its filings with the SEC, including its annual report on Form 10 k, for the year ended January 31, 2026, Furthermore, as we start this call, please refer to the statement regarding forward looking statements incorporated in our press release issued yesterday. And please note that the contents of our conference call this morning are covered by these statements. And now with that behind me, I would like to turn the call over to Robert Capps. Robert?

Okay. Thanks, Ken, and thank you all for joining us today. it is only been 8 weeks since we last talked, and not much has fundamentally changed. there is not been a sea change in the market or our business. But much of what I would say today will sound pretty familiar. Our results for the first quarter were essentially in line with our expectations. And once again reflected positive adjusted EBITDA. During the quarter, we were able to deliver the remaining orders that slipped past our fiscal year end. As usual, I will touch on our results for the first quarter and provide an update on the current market environment. Mark will then provide a more detailed review of our financials. And I will return to wrap things up with some remarks about our outlook. I think the near term market can best be described as uncertain with less visibility than normal. there is a great deal of uncertainty in the world in terms of economics, politics, and security. As you would expect, this causes companies and governments to be cautious in committing to exploration and survey projects. As a result, our customers are reluctant to commit to equipment purchases most notably larger system orders. Current conflict in the Middle East, and the changing perceptions of its resolution exacerbate this uncertainty. The longer-term outlook, however, is much more positive. There are definite signs of recovery. I will talk more about this later. Now our backlog of firm orders as of April 30th, 2026 was approximately $7.6 million compared to $13.9 million as of January 31, 2026. And $21 million as of April 30th, 2025. As expected, we delivered certain orders that were unable to ship prior to the end fiscal 26. This, coupled with a protracted customer decision making, contributed to the backlog decline. Additionally, as we approach the summer months, I want to remind you that in a normal environment, new orders do not always arrive at a constant rate throughout the year. Variance in order flow is commonplace and not a cause for concern. Macro uncertainty has magnified these pauses as customers iron out their operational plans. However, we maintain our belief that long term outlook in the marine exploration survey industry is very positive. And an uptick in activity is inevitable. Outside of our backlog, which is defined as orders for which we have a purchase order or signed contract in hand, Pipeline of potential orders remains solid, and several times greater than our firm backlog. We are continuing to pursue certain significant projects, a few of which totaled $10 million or more each. Some of these opportunities involve new vessels for governmental organizations and require successful bidders to provide security bonds. Something we are now capable of doing. We have taken actions in recent months to strengthen our positioning and make ourselves more competitive bidders. This provides us with optimism as we work to convert these opportunities into firm orders in the coming periods. Now turning to our results, Marine Technology product revenues for the first quarter fiscal 27 were approximately $9.7 million. Revenue was flat sequentially and improved from last year's first quarter. We once again produced positive adjusted EBITDA of approximately $800 thousand compared to $1.1 million in the fourth quarter and a loss of $179 thousand in last year's first quarter. Our aftermarket activities are providing stable and recurring revenue stream that is supporting our overall results. This component of our business has become increasingly important and represented about 50% of our revenues in the first quarter. As a reminder, this aftermarket activity consists of spare parts, repairs, service, and other support activities. While this business is influenced to some degree, by the general activity level within the industry, It is more recurring in nature than orders for new systems. Customers might be slow to purchase new systems, but their existing equipment will need maintenance to keep operating. This benefits MIND since expenditures for aftermarket activity are generally operating cost. As opposed to capital expenditures. As our installed base of Seamap products continues to expand with it, comes a prospect for increased aftermarket activity. I am pleased with the resilience of our results in the face of widespread uncertainty. And our aftermarket activity continues to be an important contributor to our consistency. I firmly believe Mind is well positioned to capitalize on opportunities in future periods to stimulate order flow and generate sustainable results. Now I will let Mark walk you through our first quarter financial results in a bit more detail.

Thanks, Robert, and good morning, everyone. Revenues from marine technology product sales totaled approximately $9.7 million for the quarter. Robert mentioned, our first quarter results benefited from approximately $4 million of orders that slipped out of fiscal 26. We also continue to see strong aftermarket activity that provides a solid foundation of recurring revenue. Activity supports our overall results and serves as a buffer in times of reduced large system order volume. First quarter gross profit was approximately $4.1 million. This represents a gross profit margin of 42% for the quarter which was in line with the same period a year ago. The sustained margin strength was supported by product and reflects a greater contribution of spare parts and other aftermarket activity that generate favorable margins. We expect our cost structure optimization efforts and greater production efficiencies to help us maintain favorable margins in future periods. Our general and administrative expenses were approximately $3.5 million for the first quarter of fiscal 2027, This was up both sequentially and when compared to the same quarter a year ago. Sequential and year over year increases are primarily due to higher incentive compensation, and stock based compensation with the latter being a noncash item. Our research and development expense for the first quarter was $310 thousand which was down both sequentially and compared to the first quarter of fiscal 26. Consistent with prior periods, these costs were largely directed toward the development and enhancement of our streamer systems source controller offering. Operating income for the first quarter was $14 thousand compared to an operating loss of $658 thousand in the first quarter of fiscal 26. First quarter adjusted EBITDA was $811 thousand compared to an adjusted EBITDA loss of $179 thousand in the same quarter a year ago. Net loss for the first quarter was approximately $400 thousand after income tax of $476 thousand. As a reminder, our income tax expense results primarily from our operations in Singapore. As of April 30th, 2026, we had significant working capital of approximately $37.8 million including $17.7 million of cash on hand. Company continues to maintain a clean debt free balance sheet with a simplified capital structure. We expect our solid foundation significant liquidity, and operational flexibility will allow us to pursue opportunities in the coming quarters to enhance stockholder value. I will now pass it back over to Robert for some concluding comments.

Thanks, Mark. As I mentioned at the outset, macro uncertainty and geopolitical turbulence are causing customers to delay order commitments regardless of industry or end use. This is challenging our near term visibility. And it is likely we will we will see some softness in our results. However, there are signs of recovery. And the longer term outlook continues to be very positive. The conflict in the Middle East has served as a sobering reminder of how important energy security is for countries around the world. As some have speculated, the Strait of Hormuz blockade triggered what may be the largest oil supply shock in history. We believe this bodes well for additional orders in future periods as geopolitical instability and long term supply concerns will drive exploration activity in other parts of the world. there is an immediate need to replenish lost production and secure reliable energy supplies. Another near term dynamic that has the potential to drive incremental activity is the rapid increase in oil prices. But this goes somewhat hand in hand with the need for energy security but we find that customers are often more motivated to launch large programs when the economics are compelling. While we anticipate our customers ramping operations in the coming months capture the benefits of an attractive pricing backdrop, We have not yet seen the orders associated with this activity. Some of our customers have reported increasing backlog. Which is a very positive sign. We also note several industry commentators are predicting a resurgence in exploration and survey activity. Something that we are monitoring very closely. The underlying dynamics within the marine technology industry remain in the intact and our long term pipeline of opportunities continues to be very positive. Our prospects are plentiful, and there are emerging opportunities to capitalize on new areas of focus within the market. Uncertainty has clouded visibility for the past several months. But we remain well positioned for the future. I am confident that any near term softness will dissipate in the coming months as markets stabilize and volatility becomes less severe. As a result of our efforts in recent years, Mind is nimble, and operating efficiently. This positions us to more readily weather the storms that have historically challenged our business. Rather than sit idly by as customers hit pause, we have continued to innovate and expand our capabilities to address new opportunities. This gives us a competitive edge to capture orders and meet evolving needs in coming months. Our customers are constantly looking to get ahead of the curve. Operate more efficiently, and solve new problems. And they want to partner with suppliers to do the same. Now turning to our Outlook, current visibility continues to indicate that our results for fiscal 27 to be down when compared to fiscal 26. Despite this view, we believe this will still be a positive year for MIND. As I noted on our last call, it will be difficult to replicate the system order volume that we have enjoyed over the past 2 years. Given our recent customer discussions and the prevailing uncertainty. However, we expect to be cash flow positive for the year even with lower revenue. And our growing aftermarket business will provide us with a stream of recurring revenue to buoy our results. Further, we have meaningful cash on hand to make strategic moves and position the business for the future. As we have previously discussed, we continue to be aware of the challenges and limitations of being a small public company. Although we are uniquely positioned with a simple capital structure and a debt free balance sheet, there is a need to add scale and enhance stockholder value. We are actively pursuing opportunities. There are a few different ways we can achieve the desired scale. We can execute identified organic growth opportunities. We can acquire assets or businesses that are similar to our existing business. Or we can combine with other organizations. We continue to identify and evaluate such opportunities. Fortunately, we have ample liquidity to carry out a transaction. Should the right opportunity arise. However, we will not jeopardize the immense progress that we have made in MIND to chase an opportunity that does not fit what we do. Preserving and enhancing stockholder value will always be our primary focus. While we are motivated, we intend to be very disciplined in our approach to capital allocation weighing the expected return with the cost of capital. Outside of strategic mergers and acquisitions, our capital allocation framework consists of investments in organic growth, such as expanding existing product lines, and strategic alliances with industry partners. Each of these represents a tool we can use to generate our strength and returns. We can draw on any 1 of these or a combination thereof. As market conditions permit and the return on investment meets our threshold for value creation. In summary, we have a different differentiated approach best in class suite of products, and a unique aftermarket business that will continue to support our financial results for years to come. We are focused on innovating, expanding our capabilities, adding scale, and partnering with customers that appreciate our technology. As these customers prepare for increased activity, we plan to be ready to meet that demand. We have taken meaningful steps to strengthen the company. Establishing a resilient platform on a solid foundation. Going forward, we will keep building on that foundation. Improving our standing within the market and sharpening our competitive advantage. All of which we believe will propel MIND into the next phase of growth. Our liquidity will prove advantageous as we expand. And we intend to deploy this capital strategically to pursue new attractive opportunities meet the evolving needs of our customers. As we execute these priorities, our focus remains as it always has. on driving sustainable, long-term value for our stockholders. And with that, operator, I think we can open the call up for some questions.

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Moment, please, while we poll for questions. Thank you. Our first question comes from the line of Tyson Lee Bauer with KC Capital. Please proceed with your question.

Good morning, gentlemen.

Hey, Tyson.

Let's you ended with liquidity, so let's talk about liquidity. You had an $4 million on accounts receivable since the end of July or January. To April. And given the pause button that you described for expectation for fiscal Q2, should we anticipate that your cash balance should be above $20 million by the time we have the next earnings call.

I am not going to predict an exact amount, but I would expect us to start to convert receivables and inventory into cash. So I would expect us to generate cash for the year. So where it hits, I am not going to predict, but conceptually, you are in the right direction there.

Okay.

But we are in a solid position of more than $2 a share in cash. How we get to in this quarter. Yes. I think it is fair to say. I mean, working capital of $37 million, and that is a-- that is a-- it is a solid working capital number.

Which is so, yeah, $4 a share and you got a $5 stock price. Your SG&A was up $250 thousand year over year, primarily just due to, incentive comp is all of that.

Will that Yeah. Primarily the timing of that, actually. If you if you look year over year, the overall amount is not gonna be that different.

it is just a matter of where it hit in the period. it is the bigger factor. Okay. So should we expect SG&A ongoing level to recede or are we gonna maintain this level?

I think we will see it come down some. We typically the first quarter is a bit higher just because of year-end activities. You know, audits, things like that. So I would expect to see that coming down a bit.

Okay. Are you willing to at least in general, describe the composition of your backlog of $7.6 million? Any large orders or systems within that or are they all fairly small and any timing or scheduled shipments?

it is a variety of things. there is no huge systems in there at this point. So it is mostly, you know, smaller things. You know, some new orders, some new system activity, you know, some of the smaller size as well as, you know, aftermarket activity. You know, timing, you know, I think we will see most of that certainly this year. I cannot see off the top of my head if it is all next quarter or some the next, but you know, obviously, we have lots of book and build business as well. And so there is lots going on there.

So it is just a-- it is a mixed bag. So we walk into this fiscal second quarter with approximately $5 million recurring some minor add ons to there. We do not have the 1 system that landed in Q1. So Q2 should be your low point knock on wood, revenue wise for this fiscal year.

that is probably right. I mean, that can change, and we still have, you know, 6 weeks to go and lots of things can happen, but that is probably right.

And when do we get to a point of backlog order recognition where if we do not start to see that materialize, that could have an impact on the second half of this fiscal year. Where we start slipping, quarters. To the right of the calendar.

Yeah. it is it is hard to say, Tyson. It kinda depends on the nature of the order. Some things, you know, we can we have enough visibility. We can start building before we have the order in hand. We have done some of that in the past. You know, some things, you know, turn more quickly than others. It just depends what the orders are. So I think you know, I do not think we hit that situation till, you know, much later in the year. Probably not until we get to the fourth quarter, frankly, or going into the fourth quarter. Okay.

We talked about-- yeah. Obviously, you talked about pipeline projects you can build ahead even though you do not have the project in hand per se, couple of $10 million each. Are there any timelines to those comments, or catalyst events that allows those to be realized? Like, is there a budgetary-- government budgetary, passage or certain testing that needs to be completed by X date or an RFP, Any color on that side of it with the pipeline of projects?

Sure. The short answer is no. Really No governmental deadlines, things of that nature. no, you know, hurdles we have to get over from a testing or demonstration standpoint. it is, you know, just going through the process. These are larger projects. Which involve, you know, more than just our equipment. So they move at their own pace. Sometimes, and sometimes we are not the we are kind of the tail being wagged. Sometimes given the size of our kit compared to the overall project. So it is just a matter of these things going through their process. Okay.

And are you then teamed up with tier 1 suppliers, especially on military side or government contracts? So you are the second contractor?

So there is not an easy answer to that. We are certainly partnered with others for other parts of the kit. But, typically, we are dealing directly with the principal, if you will, and not going through, like, an integrator or another integrator. We typically are the integrator for these projects. As it relates to our as it relates to our equipment.

So you somewhat control your own destiny in that regard?

Yeah. Yeah. In that regard, yes. But, again, these are larger projects, so there are other aspects to it that can have impact on schedule.

A lot of comments about the Middle East. You do a lot of business with European contractors a lot of activity in Asia. And some of these are nonpetroleum or non gas type end use or whether surveying and exploration, it is scientific hydrographic, deep sea mining, renewable offshore, not in The US now, but in other places. Why has that slowed down? That it does not seem like that should have a lot to do with the Strait of Hormuz and those things. But that if China wants to do deep sea mapping, or we are doing deep, you know, mineral exploration off the East Coast Of Africa and those areas, they seem to be independent of what is going on in the Middle East. So why are we not seeing more activity in those regards?

Well, I think we are seeing activity there. Is the short answer. But, you know, there is marginal activity that is through in the Middle East area that is being impacted. But think the overall uncertainty politically and economically is causing people to be cautious in committing exploration dollars or capital dollars anywhere in the world. You do not know what the, you know, energy, you know, pricing environment is going to be. You do not know what the security environment is going to be. So I think that just causes overall uncertainty and therefore overall caution. You know, all over the world, not just as it relates directly to the Middle East.

Okay. And typically in this time frame, we see some activity coming out of your bigger customers in Europe, especially Scandinavia. Is that still percolating? And still there, just not realized, but you do expect something before the end of the year Or what is the status of some of those bigger customers that have been repeat customers in years past?

Well, I think, you know, they have been cautious as everyone else has been. In making commitments this year in the last several months. I think they are very encouraged about what they are seeing in the future. I do not see that they are quite ready to pull the trigger on things and start to expand capacity. But that is something we hope to see. So I think, you know, it is like what Mark said, you know, people have been cautious given the uncertainty. But, you know, they all, I believe, are feeling fairly optimistic about the future based on what they are seeing from their customers. And what they are seeing from their backlogs. Okay.

And last question for me is, what are you hoping to accomplish or to see to show to your shareholders before the next earnings call after Q2 is over and hopefully realize some of the stuff in your Outlook that you are providing the second half of the year. Are there some things that shareholders can be watching for?

Sure. I mean, obviously, you know, we start to see order flow will be important. But, yeah, I want to caution everyone, you know, timing is uncertain. And just because we do not get the order, you know, by a certain date does not mean things are fundamentally different. But I think looking for order flow, and we continue to look for opportunities to expand our offerings. So that is something we are very actively pursuing right now. So those are the sort of things that we are looking at, but again, timing is uncertain on lots of these things.

Alright. Thank you, gentlemen.

Yeah.

Our next question comes from the line of Ross Taylor with ARS Investment Partners. Please proceed with your question.

Thank you. Ross, on these new areas, these, you know, $10 million plus potential contracts, what are the end markets that are being served?

Typically, these are quasi governmental agencies. Who are building vessels or equipping vessels for a variety of scientific and exploration purposes. So it is not directly energy related, necessarily, although there is an aspect of that. But there are all sorts of other things they look to do you know, deep sea mining, hydrographic survey work, things of that nature.

But the customers are generally governments, not corporations for these big contracts?

Yeah at least quasi governmental. that is correct.

Okay. And obvious how many of them are ex US, outside The US?

I would say all of them are. All of them are.

And how many do you have, do you think? Is it 2? Is it 4?

it is it is it is a small handful. I do not wanna get too specific some competitive reasons. But it is a small handful.

Okay. And you said, obviously, the your that it would be some draw on you know, the balance sheet or the working capital side because of the need to secure provide security for these deals. How much is that gonna end up being if you have a 10 if you have a $10 million deal, how much do you have to put up from your side to or because you are basically gonna, I assume, buy some form a bond on that.

that is correct.

Yeah. And we put that facility in place with the HSBC recently so we can do it you know, that matter. We do not have to post cash collateral at that point. But know, it varies based on the contract, but you were talking about a couple million bucks maybe.

Okay. Okay. So if you have 2, 3, 4 of these, obviously, it will, you know, it will would we see that as an impact on cash, or would not be would it be an issue not be an impact?

That should not be an impact on cash. Not doing this new facility. It should not be. Yeah.

Okay. So in looking at that this situation, it does seem a little odd in many ways. I mean, the Chinese have aggressively been mapping pretty much everything inside every island chain they can find. Off their shores. It would seem that The US and our allies need to do the same. So, hopefully, this will get going. When you see this, what kind of have you built inventory at this stage? Is there on the balance sheet for any of these potential deals?

To some degree, yes, but not a great deal. I mean, we have not been building a large system to spec. With our components. That we tend to in the stock. Because some of these components are also part of our aftermarket business. So we sell with spare parts, you know, they also are parts of new builds. So we can kinda pursue both at the same time. But it is it is not as though we have built a, you know, large system that is sitting on the shelf. So there is some lead time involved.

Okay. And you expanded your facility, I think, physically, certainly, down in, what, Texas? How is demand for that at this stage?

That is starting to ramp up. We are starting to see improved results there. You know, improved activity, and we think that will continue to increase. So we are pretty optimistic about that. You know, it is not gonna be, you know, $30 million a year, but it is it can be meaningful for us.

Okay. And with that, as you see that move forward, would that change right now, the $5 million-$5.5 million per quarter you are doing on kinda maintenance and repair, should we expect to see that You know? Because that I think of that as a base in this new additional capacity being on top of that. Is that a correct way to see that?

that is a that is a good way to see that. that is exactly right. That should be fairly recurring and fairly predictable. that is why we are encouraged by that.

Okay. So we what we can see is in here is that as we push forward, even if you are not getting new orders that you should see the maintenance and repair part of your business move forward grow.

that is correct.

Okay. You talked a lot about the various and sundry options you have to scale up the company, what kind of financial hurdles, benchmarks Are you having in place for making that decision? you know, is this something that needs to be, you know, accretive to earnings, additive to free cash flow EBITDA, needs to have a 20%, 15%, whatever I mean, have actually laid down you talked about having a discipline with it. Have you laid down metrics? And if so, what are some of those metrics?

Yeah. I do not wanna get too specific at this point, but we certainly anything we do, we want to be accretive without a doubt. And there is there is some then non financial metrics that we want to look at as well, which are really involve risk around a transaction. I wanna make sure it is something that we understand that we can manage well. So just because we see something that you know, on a spreadsheet, has a has some great metrics, great returns, you know, that does not mean there is not risk involved in that. So that is the other aspect we are trying to evaluate. In these various opportunities.

Okay. And when you are looking at where what do you feel mind's core competency is? And, therefore, what when you are looking at these deals, how are you seeing the reach of them?

Sure. So, obviously, we had some specific products-- products, rather. Sorry. That are some unique technology that we that we can add other things to. So the ability to in a very economic way, add additional products and addition additional capability is a strength of ours. We have the ability to build things very effectively and very efficiently through our facilities both here in The US and in Asia. And I think that gives us an advantage in taking in other additional products that perhaps we can build more efficiently. And therefore, garner more margin. So I think that is our to our core competencies. And we do have some unique technology that we think we can build from. As well. So I think those are the key aspects of us.

K. And I would be remiss if I did not note that you issued stock at $11, and currently, your stock is selling, you know, in the basically $5. At some point in there, it would be strike me as it would be hard to ignore the fact that you have a chance to actually buy back some of what you issued to reduce the dilution and still leave a fair amount of cash on the balance sheet.

Yep. that is true. Now we have as we have said before, you know, we put that in place to give this opportunity. And if that is you know, we think if we think that is the best use of our capital at a certain important time, point in time, that is what we will do. But, obviously, I am not gonna predict or indicate what our indicate you know, what our intentions are. But that is an option for us.

Okay. And just generally, when you are looking at going back to your potential order book, how many of these are kinda new prospects or new uses, and how many of them are as Tyson was referring to kind of repeat buyers?

I am thinking through. They are combination. I am I am I am pausing because I am thinking through the list. There certainly are some new customers in this list as well as some repeat customers who are expanding capacity.

Well, it is obviously we are in a period of struggle, but as Tyson noted that you are current working capital at about $4 a share puts very little value on the business. So, hopefully, we will be able to get some of this stuff turned around in the near future and get some value reattached to it. Okay. Thank you very much. Good luck.

Our next question comes from the line of Howard Root with Fairhold Capital. Please proceed with your question.

Good morning, and thanks for taking my call.

Good, Howard. So a quick question on the income taxes. The $476 thousand seemed like a huge number. I understand it is international, but is that an aberration Is there a way of getting that down? Or what is the cause of that? Well, we are profitable in overseas in Singapore primarily. So we pay taxes in Singapore. We have losses in The US that but we cannot apply against that. So, basically, you have taxable income that is not sheltered by an untaxable losses, if you will. So that is the reason for that. You know, there are some things that we are doing to try to mitigate that. But, fundamentally, as long as we are making money there, and not making money here, we are gonna see that sort of aberration. Now 1 thing we are doing is trying to you know, generate more income in The US. Through our repair activities in our Texas facility. And that will help reduce the appearance of that because we will start to generate you know, taxable income in The US will be able to shelter from our existing loss carry forwards. Wow. that is I mean, obviously, there is there is a lot of ways to shelter that. When it is a controlled subsidiary, you should not be having that much in a subsidiary when the parent is not making that much. But is there any action to kinda minimize that? Because that is a huge number based on last quarter. Is that gonna continue at that level? We do so there are limitations on what you can do. You know, transfer pricing rules between all the countries. So there are some limitations as to how aggressive you can be. But that is something we look at on a continuous basis. But do we figure that is a going number? I mean, if we do the same number as revenue next quarter, it is gonna be the same amount of income taxes? Well, Howard, that is it is hard to predict because it depends exactly what revenue hits in a particular quarter. So that can certainly could be a bit more. It could be a bit less. It just it can vary because you are you are kinda on the margin right now. So a small change can have a big percentage impact. Okay. So on backlog, in prior quarters, gave us an update if there were any material contracts since the quarter end. So has there been any new material orders added to the backlog since April 30th? Not material. We would have said so. No. Okay. You know what? And then it was just nothing large. Right. So is the backlog can you give us any update on the backlog at the end of May or to in the end of last week? From that $7.6 million level? Yeah. I really do not wanna get into that. But, again, we if we have a significant you know, change in backlog, we will we will announce that. But other than that, I do not want you too specific. And then the stock repurchase plan, obviously, you have not filed your 10-Q, and I do I would request that you do that at same time do your press release going forward so we can get all the details to be able to ask these questions. But I am assuming that you have not purchased any shares under the stock repurchase plan today? that is correct. Okay. So my last question then, and we kinda got last question I got to this. I mean, the $40 million net tangible book value and really the working capital primarily from oh, well, actually, yeah, primarily from really well timing the ATM stock sale. $4.40 a share in per share, $4.40. That leaves only at today's price basically $0.50 or $0.60 per share of residual value on the market value. Because Is the company looking at the opposite? Because you are talking about maximizing stockholder value as in you guys acquiring something else. Why is not it the maximizing share stockholder value either buying your stock or having someone buying this and giving us the value for this business, rather than basically 1 quarter piece price to sales ratio. Right. that is option. That certainly is an option that we are looking And that is the reason we put the buyback program in place so we would have that option. Again, I do not wanna tell the rep what our intentions are, what we may or may not do. As it is a function of you know, other factors as well, but that is certainly an option for us. Okay. So then finally, what at what point in time in the future do we look at this? This is not working. We need to do something different. More of an aggressive change. Is it end of this year I think I think there is we have got a long runway there. I think there is enough progress in lots of opportunity. I think we have got a long way to go on that. Okay. Thanks for taking the questions. Yep.

This concludes our question-and-answer session. We would now like to turn the floor back over to Mr. Capps for closing comments.

Okay. Thanks, everyone, for joining us this morning. I look forward to talking to you again in a few weeks, a few months for our second quarter results. Thanks.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.