Ladies and gentlemen, thank you for standing by. Welcome to the CPS Technologies Corp. 2021 Year-End Investor Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one on your telephone. If you require any further assistance, please press star then zero. I would like to hand over the conference to your speaker, Mr. Chuck Griffith. Sir, you may begin.
Thank you, Jeff, and good afternoon, everybody. I'm joined today by Michael McCormack, our President and Chief Executive Officer, who will offer his comments on our fourth quarter and annual results. Before we begin the business portion of the call, I would like to point out that statements in this conference call that are not strictly historical are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and should be considered as subject to the many uncertainties that exist in CPS's operations and environment. These uncertainties include the impact of COVID-19, the Russian invasion of Ukraine, economic conditions, market demands, and competitive factors. Such factors could cause actual results to differ materially from those in any forward-looking statement. Now, I'll turn the call over to Michael to offer his perspectives on the year and fourth quarter results.
Thank you, Chuck, and good afternoon, everybody. Thank you for joining us. Today we are pleased to announce the fourth quarter revenues of $6.2 million and an operating profit of $312,000 for the quarter ending December 23, 2021. This compares favorably with revenues of $4.2 million and an operating loss of $291,000 for the same quarter a year ago, ending December 23, 2020. The financial results in the fourth quarter were anticipated based upon the proactive restructuring steps we executed in the third quarter and mark our best overall quarterly performance since the pandemic began. We believe this past quarterly performance is more indicative of our near-term outlook for the business.
The nearly 50% growth in revenue as compared to the same quarter a year ago is extremely noteworthy, as well as the 13% increase from the third to fourth quarter results. We are demonstrating continued incremental improvement because of the changes we are implementing to create inherent value and generate greater revenue and operating margin, and deliver shareholder value. For the fiscal year, we were recording revenues of $22.5 million, in comparison to revenues of $20.9 million in fiscal year 2020. The 7.5% annual organic growth rate over the fiscal year is consistent with our strategy. Fiscal year 2021 reflects the second-highest year ever in terms of revenue for the company. For the fiscal year, we are recording $513,000 in operating income.
The company is also reporting net income of $3.2 million in 2021 versus $914,000 in fiscal year 2020. This increase is due to the reversal of the company's total tax reserve. In addition, this also marks our second consecutive year of profitability. Our book-to-bill of 1.67 : 1 for the fiscal year 2021 continues to reaffirm our growth strategy is translating into results over a larger sample of data. We are cautiously optimistic that the increased sales of fiscal year 2021 will directly translate into steadily increasing revenue in fiscal year 2022. COVID is still omnipresent. We are continuing to monitor all aspects of our supply chain and remain vigilant on ensuring availability of raw goods to create and deliver products to our customers. The viability of our entire chain has been challenged since the pandemic outbreak nearly two years ago.
We are confident we have multiple plans in place to control the issues we can control. I'll speak a little bit later more about the overall business progress moving forward on the call, but for now, I'll turn it over to Chuck, and he'll discuss the financial details in a little bit more detail.
Thanks, Michael. Revenues totaled $6.2 million in Q4 2021 compared to $4.2 million generated in Q4 2020. An actual increase of 48%. This increase was due primarily to the increase in sales for armor and hermetic packages in the fourth quarter of 2021, as well as the impact of COVID-19, of the COVID-19 pandemic on sales in the fourth quarter of 2020. Gross margin in Q4 2021 totaled $1.4 million or 22% of sales. This compares with gross margin in Q4 2020 of $ 500,000 at 12% of sales. This increase in margin dollars directly correlates to the increase in revenue between the two periods. Selling, general, and administrative expenses totaled $1.0 million in Q4 2021, compared with SG&A expenses of $789,000 in Q4 2020.
This increase was due to the increase in sales employees, total compensation expense, and to an increase in commission expense due to the higher sales volume. The company experienced operating income of $312,000 in Q4 2021 compared to an operating loss of $291,000 in Q4 2020. This increase in operating income is due primarily to the increase in revenue, as we previously discussed. For the year ended December 25, 2021, revenues totaled $22.4 million compared to $20.9 million in 2020, an increase of 8%. This increase was due primarily to the increase in sales for armor and hermetic packages in 2021. Gross margin in 2021 totaled $4.8 million or 21% of sales. This compares with gross margin in 2020 of $4.2 million, which was 20% of sales.
The increase in margin dollars is directly correlated to the increase in revenue. Now, SG&A expenses totaled $4.3 million in 2021, as compared to SG&A expenses of $3.3 million in 2020. Several factors contributed to this increase. The company incurred an expense of in excess of $300,000 for one-time restructuring costs in 2021. The company paid the salaries and benefits for both our retired CEO and our new CEO during the first half of 2021. They were both here at the same time, adding about $100,000 to our SG&A expenses. We also added three new sales positions in 2021, which contributed to our overall increase in compensation.
The company experienced operating income of $513,000 in 2021, compared to operating income of $914,000 in 2020, and the decrease was due primarily to the increase in SG&A expenses, as we previously discussed. The company reported net income of $3.2 million in 2021 compared to $900,000 in 2020, and this increase is primarily due to the reversal of the company's deferred tax reserve. In December of 2018, the company set up a valuation reserve against its deferred tax asset. At that time, following a period of sustained losses, management determined that it was more likely than not that this tax asset would not be used.
Management has reevaluated this decision in light of recent profitability and expected future profitability, and has determined that it is more likely than not that the company will be able to fully utilize this tax asset. As such, a tax benefit of $2.7 million has been recorded on the income statement as of December 25, 2021. Turning to the balance sheet, we ended the quarter with $5 million of cash. This is an improvement to our cash position of $195,000 at the end of 2020. In May, we completed our at-the-market filing and began raising funds over that program. Through the end of the year, we raised approximately $3.4 million net through the ATM offering. These funds have enabled us to completely cease borrowing under our bank line of credit.
In addition, we have been able to absorb the increases in accounts receivable as our sales grow and in inventory as we develop our armor line. Our raise under this offering is being managed such that we've covered our short-term cash needs. We've become more selective regarding the days and market prices at which we will sell additional shares. As such, no additional cash was raised during the fourth quarter under the ATM program. Accounts receivable at December 25, 2021 totaled $4.9 million compared with $2.9 million at the end of December 26, 2020. Our days sales outstanding totaled 72 days at the end of the quarter, compared to 62 days for the prior year. This increase was due to the inclusion of about $600,000 of deferred revenue in the 2021 year-end accounts receivable.
If we take that amount out, then the days sales outstanding at the end of 2021 would have been 53 days, which is in line with previous years. Inventories totaled $3.9 million at the end of December 2021, compared with $3.7 million at the end of December 2020. This increase in inventory is due to increased armor materials, offset by better management of inventory in other product lines. Improved inventory management is now an area of focus. The inventory turnover in the most recent four quarters was 4.7 x compared to 4.5 x for the period ending December 26, 2020. Turning to the liability side, payables and accruals totaled $2.8 million at December 25, 2021, up from $1.8 million at December 26, 2020.
This is due to greater expenditures resulting from higher sales levels as well as the accrued restructuring charges which we previously discussed. For further discussion, I'd like to turn the call back over to Michael.
Thank you, Chuck. This past quarter and fiscal year, we continue to make positive, measurable progress on streamlining and improving current operations, while also simultaneously addressing our long-term goals to grow through a sustained to a medium-sized business. As an organization, we are completely focused on increasing our ability to add sales and improve our ability to execute. We have substantially rebranded the company and improved our web, social media, and digital presence. We are now able to reach more potential customers, investors, and potential new employees about our ability to supply innovative, custom-made, materials-based solutions to solve our customers' most challenging issues. We have also continued to add additional staff members that will enable us to scale the size of the business without significantly adding cost as we execute. We have hired more engineers, more sales staff, and in-service members, to name a few positions.
I would like to take a moment to discuss our approach to increasing our overall technical bandwidth, growing our approach to product innovation. We are adding technical staff to address the growing demand of our products across all three product lines: the hermetic packaging, armor, and the metal matrix composite business. Our engineers are working with the business development staff to develop solutions that specifically address customers' requirements while working predominantly in a funding-constrained environment. This is directly equating to the addition of new customers, especially in the RF microwave market segment. Most importantly, this is bringing about a renewed interest in our industry-only AlSiC package. I'm quite pleased with the progress we are making. We have re-energized the contract research and development services business, as evidenced by our participation in the Small Business Innovation Research and the Small Business Technology Transfer programs.
The SBIR and STTR programs are the key reason for most recent success in the HybridTech Armor program line with the United States Navy. These programs are highly competitive awards that encourage domestic small businesses to engage in federal research and development programs with the potential for commercialization. In addition, as these programs advance through research and development or R&D to commercialization, they are afforded additional intellectual property protections and sole source manufacturing rights within the U.S. federal government. We have recently been awarded an exciting research and development contract with the U.S. Army Aviation Community to address their thermal management concerns on future vertical lift programs, or FVL as they call them. The FVL program is a plan to develop and replace the current utility, attack, cargo, and reconnaissance helicopters in the entire U.S. armed forces.
Although the program is just beginning, we are immensely proud of our engineering staff to propose a novel solution to our military counsel's guide over several potential solutions, including numerous prestigious academic institutions, to help dissipate heat over large areas for critical aviation applications. I'd like to specifically mention the magnificent work of Dr. Steve Kachur, Dr. Mark Occhionero , and Mr. Bill Holmes in this endeavor. We are also awaiting notification on several other contract research and development opportunities from both the Department of Energy and the Department of Defense. As we look beyond fiscal year 2021 now, CPS is continuing to follow up on the success of the past quarters with improving production volumes. We have made a commitment to our new material resource planning, MRP tool, in conjunction with our new enterprise resource planning tool, ERP, to enhance the efficiency and profitability of the entire operation.
We hope to have this conversion done before the end of this fiscal year. The future is extremely bright at CPS, and I'm not just saying that because I'm the CEO. There's several large-scale future opportunities in all three of our product lines: medical packaging, armor, and metal matrix composites. These opportunities are significant also within the markets we are focusing on, aerospace and defense and commercial consumer electronics. The entire staff is working towards the growth in product offerings while improving profitability. We are quite pleased with our recent quarterly performance and expect that we will continually and incrementally improve as we move forward quarter to quarter and year to year. We are aware of the unpredictability of the COVID pandemic, and also hope that as the year progressed that the potential impacts on business will continue to be less and less.
The impact of the unprovoked Russian invasion of Ukraine should have negligible impact on CPS, as we've had almost no sales in those countries. We have lots of additional opportunities to take, both small and large, and keep the entire staff focused on finding the ideal innovative material solution for customers' needs. With that, I'd like to take a moment so that Chuck and I are prepared to answer any questions there may be about the business, whether it be fiscal year 2021 or the last quarter, and we'll open the....
Open to questions.
At this time, I would like to remind everyone in order to ask a question, you will need to press star one on your telephone. Again, please press star one on your telephone. To ask a question, you will need to press star one on your telephone. We have a question from the line of Stephen Posely. Sir, your line is open.
Oh, hi. Can you hear me? Sort of a general question. Can you say roughly how your business breaks out between, say, defense and national security and other applications? Perhaps where you have visibility on where that's going.
You want me?
Go ahead, Chuck.
I think we have something on that in our 10-K, which obviously we haven't published yet, but I wanna say that defense is in the neighborhood of 25% of the business for 2021. We think it's gonna continue to grow. For last year's numbers, it's in that range.
Okay, thanks. That kinda put it, gives me a good sense. It looks like it's probably, unfortunately, a general growth area at the moment.
Yeah, right.
Thank you.
You're welcome.
Again, to ask a question, please press star one on your telephone. There are no further questions at this time. Please continue. Oh, we have one. Greg Weber, your line is open.
Hi. Good afternoon, gentlemen. Thanks for taking the question. Just curious, could you speak to operating leverage? I mean, you had nice, great top line and nice gross margins, but, you know, penny in earnings. Could you talk a little bit about what we should expect there on a go-forward basis?
In terms of what are you? Can you repeat the question?
You had very good revenues.
Mm-hmm.
Gross margins are back up into the low 20s again, and yet we earned $0.01 a share. I'm trying to, you know, what should I think about the OpEx situation? You know, it sounds like you're fixing some problems there. Do we need more capital to get more earnings or what's the plan?
Yeah, we definitely expect more earnings. I think that as we talked about, you know, that SG&A number for this year included quite a bit of expense that is, you know, one-time due to the change in leadership and some of the other changes that we've made during mainly during the third quarter. Without those, as I said, those are one-time deals and I think that we would've seen an increase in earnings over all other things being equal. We would've seen an increase in earnings over the year had we not had to incur those expenses. I do think we'll see much better earnings going forward than we did, you know, especially in the first three quarters of 2020, 2021.
Maybe just a follow on there. In terms of the gross margins, how should we think about their going forward? You're obviously doing a lot to try to streamline operations, which should help, I assume, margins. Just due to product mix or whatever, any color there from, is there more gas in the tank here beyond the 2022 you just put up?
Yeah. Well, you know, this is Michael, Greg. You know, certainly it's a focus of ours. You know, we continue to have issues that I'm pretty proud that we're continuing to improve the growth strategy because as you know, there's quite a bit of inflation going on. It's been a little hectic as to how we can keep our costs controlled and how do we control those costs, improve margin, and also keep happy customers. It has been a bit of a dynamic. This, I guess, the second part of the year, as inflation has really taken hold in the supply chain. But I think for the most part we've overcome that. We're earning a little bit better.
Like, I think that overall we've slightly improved, but we did have quite a few headwinds there we had to battle. I think as we move forward, as the mix begins to improve, a little bit, we anticipate continued progress.
Okay. Hey, you're definitely not alone on that front in terms of input cost inflation. Are there any escalators in your contracts or you gotta go back basically and try to raise prices separately?
Well, you know, that's always a difficult issue. Some of our contracts are extremely long with our customers, and there are different provisions in each of those to address these things. Whether it be, you know, annual repricing, surcharge pass-throughs, et cetera, et cetera. Each of them are kind of unique, I guess, Greg.
Okay. Thank you very much. Good luck.
Thank you.
Next question from the line of Patrick White your line is open.
Hi, Michael. Hi, Chuck. Congratulations on a fine year and a fine quarter, and I'm glad to see all the progress you guys are making. I wanted to ask you a little bit about the HybridTech Armor business. It seems to, in terms of the order pace, be a little bit lumpy. Is that something that you think is going to be the case for the next two or three years? Or do you think you're gonna get to the point where it's going to be a little bit predictable? And the second part of that question is that you mentioned 25% defense-related revenue. Is that all attributable to HybridTech Armor or is there something else going on there? And can you comment on any of that?
Thank you, Patrick, for the question. This is Michael. The HybridTech Armor orders will be lumpy, which is not great. However, the good side is they're rather significant in material. By the nature of the industry that we are dealing in, we are still only halfway through our current contract on the HybridTech Armor for the U.S. Navy. Armor itself is kind of, you know, you get a big order, you work it off, you get towards the end, you get another big order. The lumpiness, I guess you were referring to, Patrick, is kind of there.
Armor predictability will occur once we start transitioning some of these programs that we're working on today, executing with the Navy and some of the ones we're bidding on, which are program of record awards within the National Defense Authorization Act. That will give us the predictability and visibility out years in advance. We're very quite happy with our armor business and where we're heading. You know, given that we're in probably year two of production now after five years or seven years, if you take a longer view of R&D start, we have lots of opportunities both, you know, domestically and international for HybridTech Armor. You know, customers and nation states continue to see the value of our product. It's relatively lightweight for a significant kinetic energy threat. It has incredible properties when you get into environmental conditions. We think we're just begun.
With our armor business, I like the way it's scaling right now. We're controlling costs as we scale. We have lots of large opportunities, whether they be in the U.S. Army Aviation Community, foreign nations in their ground vehicle community. You're quite aware of our progress we're making in the U.S. Navy surface fleet. Yes, we're happy with that. The lumpiness comes with big losses. I think, you know, when we look at the business as a mix of product lines performing well, I think in the longer aggregate, it will be just fine.
To answer the other question, Patrick, that 25% is not just the Navy contract. That Navy contract is maybe half of it, ballpark.
That's interesting. That helps. I can hear the senior voice alerting myself. I'm worried. I'm looking forward to maybe mid-deck or whether, you know, maybe 50% of your business but maybe we'll see .
Yeah.
We'll see. The other question I have, if you don't mind, is with respect to your mention of some new customers in RF business, can we think of that as 5G related? If so, how significant might that be in terms of maybe percentage of overall revenue, you know, out two or three years?
Well, certainly, you know, as we continue to increase, you know, our aerospace product offerings, that has some visibility to us and some we don't have visibility into on what the applications are. I would say it's probably more likely space related. I don't know specifically the use case of 5G. I don't think so. You know, it's more of the aerospace side. It has led us into the RF microwave side.
I have other questions, but I can set aside if there are others on the queue. But if not, I still got more if you don't mind.
Go ahead, Patrick. We're good.
Yeah.
In the power electronics space that, you know, I know you all are particularly suitable to the silicon carbide area, which is, of course, very suitable in the EV space. I understand there's a bit of movement towards GAN in certain aspects of power electronics and even, you know, lower voltage applications in transportation, solar, wind. Any thoughts that you can share today as to whether the technology you offer is suitable to more than just silicon carbide? Is it also applicable to stuff like GAN, which I think can generate a little less heat and maybe isn't as significant a, your technology is not as good for.
Well, you know. Yeah. Let me just, you know, offer the comment that, you know, we're working, you know, with a lot of folks in the collaboration of R&D and future EV applications. You are correct. There is a technology shift from the silicon carbide and that is going on. There are other applications other than AlSiC that we're actively working. All of that is working together. Particularly, you know, the messaging of this week, it's extremely optimistic for us that the president and the infrastructure folks are talking about, you know, renewed interest in domestic manufacturing.
You know, obviously most of our concern in this market is not can we do it's our competition and how can we be competitive to close most of those opportunities. Right now we are doing well with R&Ds, and our customers are inventing different products that are a couple of years out, if you will, Patrick, right now. We are a viable supplier of that. We're interested. I think high voltage more than low seems to be working for us. You know, our greatest advantage is with the AlSiC obviously.
I take it there's other technologies that you're bringing to the table that maybe haven't been announced yet beyond AlSiC?
Correct. Obviously we at any time, you know, we're a product-based business, Patrick, so we have different products that are in production. We have products that are in R&D. A lot of times the cycles with our customers and partners is kind of close-held, and that's years for them to qualify and get that product going.
Right.
You know, these are products that have been started several years ago and are stepping through the gate by which they become a full rate production.
Excellent. Can I go with a couple more questions if it's okay. One, you know, thinking out maybe two, three years from now, 2025, you're looking to become a midsize company, and I'm not sure what you mean by that. Can you add any color as to, you know, what you would be looking for in terms of a model, that investors can think about with respect to a handful of things? One is contribution margins from today going forward, and growth rates.
When I mention contribution margins, really to distinguish between gross margins, which I've seen as low as 20%, but presumably your contribution margins might compound into something more like, you know, 30% or more because your fixed costs are going to be really good. You know, might we be looking at 30% gross margin, you know, maybe a mid-decade if your contributions or margins are higher than the gross margins?
Yeah, I mean, I think that's certainly our goal to get to about a 30% gross margin. That, you know, we've you know gone from, I don't know, 2020-2021, 2021-2022 for the fourth quarter. We're continuing to work towards you know getting that number even higher. Yes, frankly, 30% is sort of the goal that we're shooting for ultimately, and hopefully we can get there sooner rather than later. We think speaking for myself on the finance side this the you know ERP and MRP systems that Michael had mentioned earlier I think are gonna help us a lot in getting to that place.
Just to quickly, Chuck, you know, Patrick, to your point is, you know, obviously we see there is a relationship between revenue volume, contribution margin. As I mentioned earlier, one of the reasons we made an investment in an MRP tool is as we continue to grow, we wanted to improve our margin while we're growing. You can kind of see, if you will, I don't want to nip some sort of timeline on it, but we are working towards the ability to scale the business. I guess scale is probably a good way to understand small to medium. Because there are different ways to speak about how we want to grow the business. We don't really quantify it as a dollar thing, but we have goals obviously year to year.
We know that as we grow, we need to cut and contain and keep our costs down so that as we scale up, our margins improve. That is actively what we're working on. That's part of what we were trying to share with you about the tools. You know, we basically talk in terms of people, processes and tools, how we can, as we grow the business, scale the business.
Sure. Is it unfair to ask you, and I'll ask it anyway, whether it's, you know, conceivable that, let's say, you know, with all these initiatives you have in place that, you know, we could be. It's not undoable to get to, you know, 15%-20% gross rates going into this mid-decade time frame.
It's a goal. I mean, we've achieved 7.5 this year. We have goals of that or greater. But again, you know, we're in a dynamic environment. COVID. Now we have a return to almost Cold War-esque environment. There are some things we can't control, Patrick, but certainly from a planning standpoint, as a business, we want to grow our business on all of our product lines, all our offerings in depth from early technology levels to full production. That's ongoing. We think with the addition of this tool, some of the new hires we've had, we are gonna put all these pieces in place during 2022 and probably, you know, give me a quarter or two, Patrick, and ask the same question.
Mm-hmm.
That's the goal, right?
Well, I think I'm done my part. Thanks for letting me ask all these questions. Congrats again on the year. Michael, seems you got back at the right time here along the truck, and you certainly are in a dynamic space with all that is going on, both with CPS as well as with power electronics and movement to efficiency. Good luck in the future. Enjoy your weekend.
Thank you.
Thank you, Patrick.
Next question from the line of Anthony Marci. Your line is open.
Yeah. Hi. Good afternoon. A couple of questions. To what extent does inorganic growth play into your future? In other words, you know, are there companies out there that you're looking at or that can hasten, you know, your level of revenue or profitability?
Well, you know, this is Michael. Certainly the base of our plan is continuing organic growth on the material science line. Are we open for opportunities that are completely aligned with our growth strategy? Yes. Are we actively seeking them? They're made aware that we're here and we're open. Do we have committed resources to that? Not full-time, yet. I guess we're open, I guess, would be the question for that. But it'd have to match with our strategy for growth, right?
Got it.
We'd like to be extremely selective because we are having so much success right now. The history of M&A success is kind of littered with, you know, great successes and great not-so-successes. So we stay, if you will, under our skis as we continue to grow. I, although we're open to it, but it's not, you know, certainly a prime goal to grow. We've been taking lots of opportunities the way we're competing today. Got it. A couple more questions. The new defense budget, does it hold any? You know, is there anything in there that would directly benefit you or with any new programs? Certainly, you know, it's a large document.
For the most part, we have one component that's not in this year's budget. We think it's gonna be in FY 2024, which is the U.S. Navy's conversion of our HybridTech Armor to surface fleet application that we're cautiously continuing to monitor. It takes a while to get into defense budget. I think for the positive side of the defense budget would be Congress's commitment to fund that Small Business Innovation Research program, which is probably one of the reasons we returned to re-energizing that services part of our contract research and development. Congress is firmly stepped up on funding the SBIR, STTR program. We have obviously with a few PhDs in material sciences, we have depth and reach to the academic side.
We have a few partners, Carnegie Mellon, University of Arkansas, to name a few. We work with MIT. We're, you know, obviously companies, our company is used to working with these academic institutions, and that's a well-funded program in this year's budget. I think if anything you could take away that, you know, one funded congressional research program that is based upon domestic sourcing and commercialization of products is exactly what we need.
Got it. Okay. A final question. You know, given that it sounds like you're predicting or forecasting, you know, higher growth, better profitability this year, what are your IR trends? Obviously no one follows. No sell side firm follows the stock on a research standpoint. I don't think anyone follows the stock, to my knowledge. What are your plans in terms of just making yourself more visible to the investment community?
It's definitely something that, you know, Anthony, that we're working on. I think we recognize that we can do a better job in that area and I think that it's something that, you know, going forward, it's probably something that we'll be addressing sooner rather than later to do a better job. We will be addressing it to do a better job. I think that, you know, we can. It'll be something that you guys can see as we move ahead in 2024. Yeah.
Certainly, you know, just to follow up on Chuck's comment, we did have a short list of four this year. Like our trade shows, Anthony, not that we don't wanna go and attend, but I don't know how it is in your industry in particular, but conferences aren't greatly attended yet with COVID. You know, we're not very sure that conferences are gonna happen. We have a list of four conferences that we're trying to get to. We've targeted them. I think we're working towards that. I think in the past, you know, Grant and Chuck, you know, outside of us have attended, and we're trying to get back to that.
I mean, are you referring to investment conferences or trade conferences? Because investment conferences just now are beginning to go back to attendance. There are a lot of conferences that are done even today, virtually, which I think would. My suggestion would be to try at least, you know, once every several months or three months, you know, do an investor conference, you know, virtually so at least they're getting the word out.
Yeah. I think it's a great idea. And we'll. Yeah.
Okay. Do you currently employ an outside IR firm or is it just purely internal at this point?
At this point it's purely internal.
Got it. Okay. All right. Well, good. Thank you very much.
Thank you.
Questions from the line of Lenny Dunn. Your line is open.
Hi. Congratulations on the way you're running the business. I'm gonna address the dilemma we have as a large investor in your firm. I completely understand that you can't disclose the defense contracts that, you know, are proprietary. I also understand that you can't give a lot of guidance because a lot of the contracts you have is the subcontracts you have, and you can't antagonize people that give you the contract. It leaves us kind of in a dilemma as investors because we really can't get our arms around the totality of what's going on. I understand the reasons why you can't do those things. Are there some things that you can do to give us at least some forward guidance in broad terms without being specific and, so that, we have a little better handle on what we own? Hello?
Yeah, we're here. Yes. Excuse me.
Well, I think, you know,it's Michael, and thank you for the comment. You know, we certainly would endeavor to get to that point, but we're not there. We're sharing with you the most we feel comfortable with sharing. You know, we're trying to improve our communications with all of our investors about how we think the future is gonna be, how much more can we tell you as our guidance, I guess, but that's kind of far for us right now, if you will. You know, right now, you know, we are trying to walk a line here, right? We have customers. To your point, we have customers that don't want us to disclose things. We have competition, we have pandemics, we have war.
We have lots of things we don't control. The things we do control, we don't see enough of to, I think, change the pace of the way we've been reporting the business. We try to share as much as we can, I guess. That's the best I can share with you right now.
Yeah. Well, you know, I was encouraged by-
Come up and visit. You know, we welcome you to come and visit. I mean, we can figure that out offline and we can show you more.
Yeah. Well, a couple of problems. Number one, the last week or so, I've been in the hospital as I'm recovering from COVID, so I can't, you know, come visit. Having said, I'm very encouraged by what I saw with the options and exercise from insiders. So obviously you're sending us a message that you certainly believe that everything's gonna be very good going forward or that wouldn't happen. You know, just, it's just very hard to evaluate. I'm certainly not discouraged at all. Long-term holder. I may continue to add. I just wish we had a little better way of understanding where we're going forward. I don't know what effort you can make to at least disclose a little more and give us at least a better feeling of what we own as owners.
Yeah. I think certainly, you know, we'll continue to, as you know, in the past, we've you know, if we get major contracts that allow us to announce, we're certainly gonna announce those kinds of things. You know, we talked a little bit about, I think it was in December with our bookings, you know, our sales bookings for the year were double what 2020 and 2019 were. You know, those kind of things obviously we'll continue to do, you know, as much as possible.
Okay. Well, I have cash and do whatever you can do to help a little. We very much appreciate it.
Okay.
Sounds good.
I hope you feel better too, Lenny.
Yes. Well, eventually I will. Yes. Thank you.
There are no further questions at this time. Please continue.
If that's it, Chuck, I think you know, on behalf of Chuck and I, thank you, everybody, this afternoon for your time. You know, hopefully you feel like we feel that the business is doing well. You know, obviously Lenny pointed out that Chuck and I have kind of soldiered on. We believe it is a good business, and we look forward to talking to you guys more. We welcome the feedback. Thank you very much. Have a great day.
Thank you, everybody.
That concludes today's conference. Thank you, everyone, for participating. You may now disconnect.