Earnings Call
Research Frontiers Inc (REFR)
Earnings Call Transcript - REFR Q4 2021
Operator, Operator
Good afternoon, ladies and gentlemen. Welcome to Research Frontiers Investor Conference Call to discuss the Fourth Quarter and Year-End 2021 Results of Operations and Recent Developments. During today's presentation, all parties will be in listen-only mode. This conference is being recorded today. A replay of this conference will be available starting later today in the Investors section of Research Frontiers website at www.smartglass.com and will be available for replay for the next 90 days. Please note that some of the comments made today may contain forward-looking information. The words expect, anticipate, plans, forecasts and similar expressions are intended to identify forward-looking statements. Statements that are not historical facts are forward-looking statements that are made pursuant to the safe harbor provisions that are part of the Securities Litigation Reform Act of 1995. These statements reflect the company's current beliefs, and a number of important factors could cause actual results for future periods to differ materially from those expressed. Significant factors that could cause results to differ from those anticipated are described in our filings with the SEC. Research Frontiers undertakes no obligation to update or revise these forward-looking statements to reflect new events or uncertainties. The company will be answering many of the questions that were e-mailed to it prior to this conference call, either in their presentation or as part of the Q&A session at the end. In some cases, the company has responded directly to e-mail questions prior to this call or will do so afterwards in order to answer more questions of general interest to the shareholders on this call. I would now like to turn the conference over to Joe Harary, President and Chief Executive Officer of Research Frontiers. Please go ahead, sir.
Joe Harary, President and CEO
Thank you, Paul, and hello, everyone, and welcome to our fourth quarter and year-end 2021 Investor Conference Call. I also want to welcome our Board of Directors, Darryl Daigle, Alex Kaganowicz, and Graham Settle, who are joining us today as well. Let's review the past year together and look forward to this year and some exciting developments that we expect to happen in the next nine months. This year, we showed our lowest loss in 27 years. For the third quarter, we even earned a profit, something no other smart window company has ever done. The company's fee income from licensing activities increased by $434,584 or 52% for 2021. Total annual expenses decreased by $304,000 or approximately 9% in 2021. 2021 was the seventh consecutive year that expenses were lower than the year before at Research Frontiers. The company's net loss decreased by $494,512 to $0.06 per common share. The net loss for 2021 was Research Frontiers' lowest net loss in 27 years. We're also in strong financial condition. We continue to have no debt. And as of December 31, 2021, we had liquid assets of about $3 million and working capital of approximately $3.7 million. The company expects to have sufficient working capital for at least the next 22 months of operations. And as you'll hear later, this will probably last longer because we expect increased revenues from automotive in the second half of this year. That 22-month estimate does not factor in these additional revenues. Some of the highlights in this past year include increased revenue from automotive. Also, now that Gauzy is shipping wider SPD film, we saw the beginning of shipments of SPD-SmartGlass for architectural projects. This year, there are also significant new projects in the aircraft industry, including the ACJ 220 program by Airbus, Comlux, and Vision Systems. Airbus has already announced orders for 15 of these transportation category-sized jets. Each of these A220 aircraft will have SPD electronically dimmable windows covering 50 structural windows. Aircraft manufacturer Epic also started delivering jets to customers with SPD-Smart EDWs. And last month, a merger between two of our licensees, Gauzy and Vision Systems, was announced. This was a transaction that had our full support and one that I had personally worked on with Gauzy and Vision Systems for the past two years. It created the largest internationally diversified smart glass technologies manufacturing company in the world. Gauzy raised $60 million in the Series D financing to acquire and fund the growth of the newly combined company. The combined entity now has over 70 certified industrial partners, five dedicated manufacturing sites, 14 global offices, international subsidiaries on six continents, and customers in over 50 countries. It also has over 60 patents and 20 unique categories. It has 180 employees globally, approximately $50 million in 2021 revenues. So let's discuss now some of the other developments in 2021. Let's start with our largest market. In autumn, we kicked off 2021 with an announcement in January by Cadillac at CES, which highlighted a four-quadrant SPD-SmartGlass roof in their flagship all-electric Celestiq. Also in automotive, there was a new government contract in the area of specialty automotive. We also had continued and growing use of our SPD-SmartGlass technology in serial production with McLaren and more upcoming models are also being discussed with them. McLaren has told me that the SPD-SmartGlass roof has very high take rates and is quite popular with customers. Prestigious publications with millions of readers each have highlighted the range of extending benefits of SPD-SmartGlass in this, the Celestiq and other electric vehicles, with a highly coveted 5.5% increase in driving range. They also noted the significance of grams per kilometer reduction of CO2 emissions when SPD-SmartGlass is used in internal combustion engine vehicles. And these are not the only benefits. We also make people more comfortable and safer and protect the interior of cars. And then we noted that SPD-SmartGlass used in fixed non-movable panoramic roofs in cars, which is the trend, can also reduce weight in the roof by up to 13 pounds and eliminate the need for 54 components. This reduces costs and increases driving range and reliability while contributing to the stability of the car on the road. The benefits of SPD-SmartGlass were discussed in many prestigious automotive publications such as Automotive News, Autoline, the Detroit Free Press, Wards, Automotive News, and others; more recently, on the Automotive News daily news program, First Shift. So on the widely followed Daily Drive podcast. And just last week, we had technical peers in Wards Automotive. And I invite all of you to check out some of these articles and videos on our website and social media platforms. And with our strategic benefits in the areas of electric vehicle range extension and reducing CO2 emissions in internal combustion engine vehicles, we have certainly gotten the attention of the automotive industry, both car manufacturers and their suppliers. I note that Hyundai and Sekisui and others heavily involved in the automotive industry create substantial investments in our industry through equity investments in our licensee, Gauzy. Now let's talk about other important developments in other key markets for our SPD-SmartGlass technology. This year, you also saw display manufacturer LG display of Korea combined their transparent OLED display technology with SPD film to make vibrant, high-definition displays and televisions that turn into clear windows at the touch of a button. These were exhibited at the Munich Auto Show showing use of these products in automotive and at the January 2022 CES in Las Vegas, showing the consumer electronics use of this product. One recent report indicates that LG has moved forward with plans for a new TV with a 55-inch transparent OLED SPD screen that's intended for the home entertainment market and slated for release in 2023. This fall, you also saw BMW introduce in Munich a stunning concept car using SPD-SmartGlass to control the look and output of the car's headlights. Other new areas such as more yachts, consumer electronics, and architectural applications have also grown. And in trains, our licensee, Gauzy, delivered SPD-Smart train glass to their customer, Rehau, for the Deutsche Bahn Idea Train. Rehau is a large supplier to the train and other industries with over 20,000 employees. And trains used a lot of glass and SPD-SmartGlass preserves views on such iconic luxury and sightseeing trains as the Shiki-Shima train in Japan and the Rocky Mountaineer trains in North America. And the Deutsche Bahn Train opens up SPD to a much larger new market, commuter and regional transfer trains. And since our last conference call together, SPD-SmartGlass were shipped to yet another large train project for a series of commuter trains. Now, let me pause and take some other questions that our shareholders have sent me by e-mail. Some of them I addressed in our general presentation, but here are the additional questions that were e-mailed to us. From Chuck Michaels, what effects will the Gauzy acquisition of Vision Systems have on REFR? And what are the prospects for SPD glass used in additional vehicle models with the introduction of the new EV Cadillac? Thanks. Well, thanks, Chuck. We spoke earlier about the substantial advantages that we see in the Gauzy-Vision Systems merger. And that is why I've been supporting the efforts of both companies to get this transaction done for two years. Both great companies to begin, and together, they're even more formidable. Regarding your question about the near-term timing of other automotive revenues in the GM authority article in October about the SPD range extension on EVs, I noted that the Cadillac Celestiq is on track for launch with the 2024 model year. So this means that the car is actually coming out in calendar year 2023. We expect revenues from automotive from other projects in serial production to come in Q3 2022 for one vehicle and Q4 2022 for another vehicle. These may start generating revenue for us then or perhaps one quarter earlier than the start of production depending on when the OEM wants this glass delivered. So to answer your question, Chuck, there could be several cars in serial production generating revenues for Research Frontiers prior to the Celestiq coming out in 2023. John Nelson set in a series of questions, which I touched on in my presentation. Thank you, John, for sending those. I think our shareholders benefited from my including those topics in my presentation. One additional one for Mr. Nelson, how is the response to your products at CES in January? Well, many of you saw the Gauzy post on social media of the Chairman of Hyundai Motors spending quite a bit of time with us at CES along with his Chief Technology Officer and the Korean Economic Ministry. I actually took the photo they used. We also had politicians and groups from Tesla, Stellantis, and other visitors. CES was a great show in Vision System, Gauzy, and everyone did a great job presenting our SPD technology there. We actually benefited also from the fact that some of the larger companies had pulled out of CES due to the Omicron virus. And the companies that were there got upgraded to better locations and actually got a lot more attention. And we have people just stopping dead in their tracks when they saw the transparent OLED display that we had on the outer edge of the booths to catch people's attention. It was a compelling video of SPD being used in so many different applications. And also just the fact that you could do this with a transparent OLED really blew people away.
Unidentified Analyst, Analyst
Hi, Joe, two questions. One about Germany, one about China, two very big countries to Research Frontiers. With this invasion of Ukraine, Germany has done a U-turn in its defense spending and cutting off the Nord Stream two pipeline, which is going to have dramatic effects for Gauzy, I suspect. Do you have any feel for this? And maybe Graham Settle might have a thought about it, too.
Joe Harary, President and CEO
Graham has extensive experience in various global markets. So far, Gauzy's business has not faced any disruptions. Much of the production flow comes from the chemical production in Tel Aviv, where the emulsion facility operates, and then it is shipped to Germany for coating. Any global turmoil can lead to challenges, but Gauzy has been innovative in handling unusual situations. For instance, they successfully navigated through the pandemic despite Germany's multiple shutdowns. We'll need to monitor the situation closely. Some larger issues may arise from disruptions in the automotive industry due to initial chip shortages and now the ongoing situation in Ukraine, which affects many components they rely on. However, I don't believe this will ultimately impact our revenues. I hope for a swift and positive resolution so that we can return to normalcy soon. I'm still hopeful for that.
Unidentified Analyst, Analyst
The second country is China, and Xi Jinping has ordered that everybody cut back on luxury goods. Of course, China has been one of our key markets for automobiles with SPD. Any thoughts for that?
Joe Harary, President and CEO
Yes, it's the largest auto market in the world. It's hard to say how the Chinese people will react to that kind of directive. There are really two aspects of China. First, it is a consumer market, and it's important for luxury goods. Some of the cars being released are more general-purpose, so I don’t think they’ll be significantly affected. Based on the production numbers of some luxury cars, the rest of the market should compensate. Therefore, I don’t anticipate much disruption from China in that regard. As a manufacturer, we remain largely unaffected by China because we’ve taken great care to avoid dependency on China, especially concerning our intellectual property and our chemistry. We have set up production in other areas of the world for a specific reason, which I don’t believe will be impacted by this situation. It’s an excellent question, and we will find out together.
Unidentified Analyst, Analyst
Yes. Thank you. Good answers on both.
Joe Harary, President and CEO
Thank you.
Unidentified Analyst, Analyst
Hi, Joe. How are you?
Joe Harary, President and CEO
Hey, Art. How are you?
Unidentified Analyst, Analyst
Listen, can you explain a little bit about the disposition of Vision Systems regarding safety. And the reason why Gauzy wanted to buy their technology, they call it ADAS. A-D-A-S.
Joe Harary, President and CEO
Right. Well, basically…
Unidentified Analyst, Analyst
What is that whole effort?
Joe Harary, President and CEO
The ADAS refers to assisted-driving technologies. The safety tech division consists of camera- and sensor-based systems that Vision Systems has developed over the years. Their experience is not limited to autonomous vehicles; they initially worked on control systems for trains and buses, where similar technology is applied, and they have become quite proficient in it. It's worth noting that there is a company called Gauzy, which specializes in material science and is well-known in the PDLC market for producing high-quality products. They anticipated a larger market for SPD and became a licensee, subsequently opening two factory lines and expanding their emulsion production in Israel, making significant investments in SPD for future growth. Originally, they were an electronics controller company that began working with PDLC due to a request from a manufacturer for controllers. They soon recognized that the real issue lay not with the controllers but with the quality of the PDLC products being offered in the market. As a result, they decided they could produce better products themselves and became a PDLC manufacturer. They also possess expertise in electronics. When considering SPD-SmartGlass or any smart glass as a system, you must account for the solar component, the intelligence for the controller, and the Internet of Things aspect of what it controls. Now, they have consolidated all this expertise in one place. Additionally, Vision Systems has also evolved into a material science company, developing interlayers that are highly valued by their licensees, offering excellent UV protection and laminated characteristics. The materials they produce complement the films that Gauzy manufactures, enabling them to supply a complete pre-laminated stack to the industry. This capability is likely welcomed by many, especially in the automotive sector, which I mentioned earlier is experiencing significant progress.
Unidentified Analyst, Analyst
Will the SPD fit into this whole technology?
Joe Harary, President and CEO
In the ADAS technology or in general?
Unidentified Analyst, Analyst
Both.
Joe Harary, President and CEO
Okay. In ADAS, it's used for things like covering sensors or protecting them or regulating the light that is going into sensors, so they can work more effectively. And also, these sensors act as controllers. So, for example, your camera may tell your window what to do. So, it's a very simply ADAS system.
Unidentified Analyst, Analyst
,:
Joe Harary, President and CEO
I believe these micro lenses will enhance the ADAS systems if they perform as expected. They could potentially improve visibility, making them a complementary technology that enhances the overall system. We are genuinely excited about these developments; however, we remain neutral since we collaborate with nearly all existing systems. Our technology is very user-friendly, allowing these systems to seamlessly integrate with our smart glass.
Unidentified Analyst, Analyst
How do we benefit from the ADAS systems if they're installed?
Joe Harary, President and CEO
As I mentioned, this is one way to control our smart glass. We can continue this discussion later to allow others to ask questions. Essentially, the ADAS system functions as an intelligent control system that offers significant benefits. Additionally, it’s important to note that the ADAS system is employed in autonomous vehicles. Smart Glass is anticipated to play a crucial role in these self-driving vehicles due to the interactions between passengers, their surroundings, and their devices. Therefore, the combination of SPD with an ADAS system can be quite advanced.
Unidentified Analyst, Analyst
Thank you.
Joe Harary, President and CEO
Thanks a lot, Art.
Unidentified Analyst, Analyst
Hell, Joe.
Joe Harary, President and CEO
Hey, Michael. How are you?
Unidentified Analyst, Analyst
Okay. Now that the so-called sweet spot was reached in terms of the price, the declining price of SPD film and also the fact that Gauzy now could produce it in much wider sizes, could you indicate what progress has been made in terms of getting SPD into the architectural market since we had the last conference call?
Joe Harary, President and CEO
Sure. So Gauzy ships film that is much wider than Hitachi ever shipped before and there are some architectural projects that, that glass is being used for. One of the things, just to kind of maybe go to the other part of your question about the sweet spot and the costs, one of the things that we designed into their coating facility is the ability to do variable width coating. So for example, for the train project that I mentioned, that series of commuter trains had to ship film that was 1.55 meters wide for them. Now, I mentioned that precise number because in the past, you'd have to either take a roll of film that was 1.6 or 1.8 typically, and cut it down and lose 10% or 20% through cutting. Now, you don't have to do that, you could actually coat the film for large projects exactly the width that's needed. So you eliminate any kind of wastage from cutting and things like that. And actually, I was happy to hear, in connection with some of the automotive projects that I had alluded to, that part of the thing that Gauzy is focusing on with that in order to bring in the product at a good price for the OEM was the cutting and getting the film exactly custom-sized for the customer so they don't have wastage. So these are the happy problems we focus on now, not whether the technologies will work or whether it could be coated wide enough, but instead, how do we make it more effective or better for the customer?
Unidentified Analyst, Analyst
Do you foresee the price of SPD film further declining, so it will be even more attractive to…?
Joe Harary, President and CEO
Yes. In the business plan that I've seen for the facility in Germany, the cost can come down substantially even more than what they are now. So I think we're well on our way towards being a very feasible technology for all different types of applications, not just high-end ones.
Unidentified Analyst, Analyst
But Hitachi still is producing SPD film as well. So we have like two suppliers. Is that – are they...
Joe Harary, President and CEO
Yeah. It's always good to have multiple suppliers, especially for competition and redundancy, and the automotive industry likes that.
Unidentified Analyst, Analyst
Are you still trying to get a third one in the United States? You once mentioned the geographic?
Joe Harary, President and CEO
Well, at one point, Gauzy was considering putting their factory either their second factory, the one that's currently in Germany in the United States, in Asia. My guess is with the connection with European and Asian car manufacturers, you might see the next one in Asia first.
Unidentified Analyst, Analyst
Oh, I see. Okay. Thank you for…
Joe Harary, President and CEO
But it's not a big deal, because we had projects here in the United States, some government projects that they were able to send by air shipment, DHL, the film. So it doesn't really matter where you are in the world, and that's one of the advantages of our film-based technologies, you can do that.
Unidentified Analyst, Analyst
Thank you, Joe.
Joe Harary, President and CEO
Thanks a lot.
Unidentified Analyst, Analyst
Thank you. Hi, Joe. How are you?
Joe Harary, President and CEO
Hey, Alan. How are you?
Unidentified Analyst, Analyst
I’m well, I’m well. Is it any – is it possible that you could provide any revenue projections for this year and next, since a lot of things seems to be coming together?
Joe Harary, President and CEO
No. I don't mean to be glib about it, but these are going to depend on things such as what month this year production starts for some of these vehicles and whether they front mode and based on demand or whether they have more of a steady-state production of cars with our technology. And not even our production licensees know those questions yet. But we're not capacity constrained, so it doesn't really matter. I mean, we obviously want to do as much and as fast as we can, but we have the capacity to do it.
Unidentified Analyst, Analyst
No, I understand that, but it's been a long time coming. In 2011, when you secured the deal with Mercedes, your stock was at $10, it peaked at $10, and now it's at 1/5 the price. Nothing significant has happened in 11 years. I've been a long-time stockholder, and I don't understand why the current management team remains if they can't generate the revenue we all expect from this company.
Joe Harary, President and CEO
Well, I appreciate the fact that you and I are both long-term shareholders and…
Unidentified Analyst, Analyst
It seems you have a strong technology, but there are concerns about its potential.
Joe Harary, President and CEO
Yes. Alan, the two things that we had to solve were cost and cost. And we did that. And the added benefit was width as well. So markets that didn't exist to us now exist like architectural. And I guess maybe what I would also say is, we're in an industry that's not very easy to do. If you look at our two closest public competitors, one is their stock has been decimated.
Unidentified Analyst, Analyst
Yes, what's the name of that company?
Joe Harary, President and CEO
That's View. That's View. And another one, Crown, has no revenue. So, maybe we're the tallest midget, but start to use a politically incorrect thing. But it's not an easy industry and they would kill to be in some of the markets that we're in, like automotive and aircraft.
Unidentified Analyst, Analyst
Yes. I see View is $1.50, $1.60 that it was $10 not in the past year...
Joe Harary, President and CEO
It was $10 when they reached back, yes, it was $10 a year ago.
Unidentified Analyst, Analyst
I just want to say that you're a great guy, and we hope to see this come together eventually. Everyone believes there is a tremendous opportunity here.
Joe Harary, President and CEO
I was born three months premature. Patience is not my strong suit. So there's nobody more than me that want to see this happen sooner. But you want to also see it done right. And I think that what you see when things aren't done, right, is some of the disasters that have existed in other parts of our industry. So we focus on quality customers, quality installations, and doing things right and also not subsidizing it. I mean, we obviously will make long-term investments in things. But if you look at for economics on View, every dollar of revenue cost them $4 and there's no expectation that they're going to get economies of scale. So, every time they announce a new project, I love it. I mean they're digging a deeper hole. And when you're digging a hole, you should stop digging.
Unidentified Analyst, Analyst
I know you mentioned that some time ago, and it’s clear that the stock has not performed well. However, stocks function as voting machines, reflecting how well any individual company is doing at the end of the day.
Joe Harary, President and CEO
Once we start generating revenue, you'll be able to view us more like a traditional company. Right now, among smart glass companies, we are performing quite well and we are certainly not taking anything for granted. I enjoy working 20-hour days filled with opportunities. I must say, we are fortunate to have amazing people at our licensees who are working very hard, as well as talented individuals at Research Frontiers. We are fully engaged, although it's a challenging industry. From what I can observe about our competitors, we appear to be the ones poised to succeed.
Unidentified Analyst, Analyst
I think View is focusing in on more of the architectural industry or China and skyscrapers...
Joe Harary, President and CEO
Yes. They are mainly focusing on domestic markets because one challenge with glass-based technology, compared to film-based technology, is the difficult logistics. Shipping fragile, heavy, and expensive glass worldwide for projects is not easy, especially in the current environment with supply chain disruptions. In contrast, we are simply shipping film by airfreight and laminating it, which is much easier.
Unidentified Analyst, Analyst
All right. I have patience, and I just hope your execution moves forward, and we can get to a profitable company eventually.
Joe Harary, President and CEO
Thank you. Thank you. Well, we did something no other company did. We stopped it. Now the idea is to show a consistent profit. And while revenues may be choppy in the beginning as these markets start to emerge and develop. Over time, because of our business model, we have very modest expenses and it all flows to the bottom line. So we should be a very profitable company.
Unidentified Analyst, Analyst
Okay. let's hope so and thank you for your time.
Joe Harary, President and CEO
Thank you, John.
Unidentified Analyst, Analyst
Hi, Joe.
Joe Harary, President and CEO
Hey, John.
Unidentified Analyst, Analyst
Thank you again for all your efforts, particularly for the excellent job in managing costs over the years. I have to ask this question, and if you can't comment, I understand. One of the sources of revenue mentioned was a special government contract in the automotive sector. Can you provide any further information on that?
Joe Harary, President and CEO
Without naming the government agency, I could say that it's a very highly visible high-end use of SPD-SmartGlass that can promote security and comfort inside a vehicle.
Unidentified Analyst, Analyst
A vehicle?
Joe Harary, President and CEO
Actually, it's a fleet of vehicles, and the expectation is that this will have applications beyond the initial agency we are collaborating with. This type of thing usually starts there and eventually finds uses in many different areas. I apologize for being a little brief.
Unidentified Analyst, Analyst
All right. I understand that you are guarding the potential business.
Joe Harary, President and CEO
I believe that my license agreement with this agency has legal implications. Therefore, I want to avoid any legal issues, as I prefer the outcomes outside of jail rather than inside.
Unidentified Analyst, Analyst
Yes. Okay. Understood. Thanks. Thanks and go Research Frontiers.
Joe Harary, President and CEO
Thank you, John.
Unidentified Analyst, Analyst
Yes. Hi, Joe. How are you?
Joe Harary, President and CEO
Hey, Alan. How are you?
Unidentified Analyst, Analyst
Okay. Now you mentioned in your comments that the cost has gone down. Does that mean that we could see in car models that are not as expensive as some of the ones that you've already been in, but more moderately priced cars?
Joe Harary, President and CEO
Absolutely. Absolutely. Yes. That was the goal…
Unidentified Analyst, Analyst
That's something that's on the horizon? That's what I'm asking.
Joe Harary, President and CEO
On the near-term horizon, yes.
Unidentified Analyst, Analyst
Okay. That's all I have. Fair enough. Thank you very much. Bye-bye.
Joe Harary, President and CEO
You’re welcome. Bye-bye.
Operator, Operator
We have a question from Francis Cordoba. Your line is open.
Unidentified Analyst, Analyst
Hello, Joe. How are you today?
Joe Harary, President and CEO
Hey, Francis. How are you?
Unidentified Analyst, Analyst
My question is, what has been the problem with costs? It seems as if that's been the main problem. Years ago, when I met with Bob, he said it was very inexpensive to make. And that was quite a few years ago. And now you're finally talking about costs coming down. What was the problem?
Joe Harary, President and CEO
Let me break it down into several parts. The materials we use are synthesized, so that isn't the costly aspect. The most expensive part of the system is likely the transparent conductive coatings on the plastic. Having a single supplier, like Hitachi, can create some challenges. Hitachi produces a great product, and we appreciate its reliability, which is crucial for new technology. However, relying on one source can lead to monopolistic behavior, and having a second supplier could encourage Hitachi to reduce prices. The high costs aren't solely due to the technology; with higher volumes, we can purchase components like the coated PET at much lower costs, contributing to overall savings. Additionally, manufacturing yield plays a role. The Gauzy facility in Germany is state-of-the-art and is much newer than Hitachi's facility, utilizing advanced technology like LED-based UV curing that minimizes heating during the curing process. This results in better throughput and quicker turnaround times with more process control. Gauzy has also implemented innovations, such as variable width coating, to reduce material waste. Economies of scale apply here as well; while using this technology in one vehicle may be expensive, integrating it into a million vehicles significantly lowers the cost. As we progress, prices will continue to drop. I've observed prices that are considerably lower than today's rates, which are already lower than Hitachi's, especially at larger volumes.
Unidentified Analyst, Analyst
Are they experiencing any problems coating?
Joe Harary, President and CEO
Was that Gauzy or Hitachi? In the beginning, everyone struggles. Coating is an art, but both products have high yields and quality. If you have experience as a customer, you’ll end up with something that’s not exceptional. One of the best things that happened to our industry was how rigorously Mercedes tested in the beginning because that was what we needed for the entire supply chain.
Unidentified Analyst, Analyst
Is there a difference in the actual color of Gauzy versus Hitachi film?
Joe Harary, President and CEO
Subjectively, I believe the Gauzy film appears darker to me. When compared side by side with the Hitachi film, it looks more black. For a specific coating thickness, it appears darker, but the materials used are the same.
Unidentified Analyst, Analyst
McLaren is getting it from Gauzy or Hitachi?
Joe Harary, President and CEO
I'm not allowed to discuss where they're getting it from.
Unidentified Analyst, Analyst
Okay.
Joe Harary, President and CEO
Initially, before Gauzy was involved, McLaren was still producing their vehicles and has previously used Hitachi film and preferred it.
Unidentified Analyst, Analyst
I don't think they would prefer a darker film than the lighter one, but that's just me.
Joe Harary, President and CEO
I think you might be right. They're both great products though. Thanks.
Unidentified Analyst, Analyst
Okay. Thanks.
Joe Harary, President and CEO
Bye.
Unidentified Analyst, Analyst
Hey, Joe. How are you?
Joe Harary, President and CEO
Hey, August, how are you?
Unidentified Analyst, Analyst
Good, good. Just one question for me. The new autos that you're talking about that are going into series production later this year, are those more moderately priced vehicles?
Joe Harary, President and CEO
Some are, yes.
Unidentified Analyst, Analyst
Meaning sub-$60,000 cars?
Joe Harary, President and CEO
I don't know what they're going to charge. They're typically known to be much less expensive than the cars we've been in.
Unidentified Analyst, Analyst
Got it. Perfect. Thanks, Joe.
Operator, Operator
And we have no more questions in queue at this time.
Joe Harary, President and CEO
Okay. Well, look, if we haven't fully answered any questions that were either e-mailed to us or present in our presentation today or during the Q&A, just e-mail me and we'll do our best. A couple of closing remarks. We began a year of great accomplishments for your company. In our main revenue segment, automotive, great companies like Gentex who I'm a big fan of saw Q4 revenues down 21%. And weakness was driven by an overall double-digit decline in production. But even in the midst of this and the pandemic and the chip shortage and the supply chain disruptions and other logistic disruptions, Research Frontiers' automotive revenues were up for the year. I mentioned in January 2021, Cadillac announced the use of the four-quadrant SPD-SmartGlass sunroof on their all-new electric flagship, Celestiq. And during the year, more-and-more companies increased their investment in electric vehicles, and they also accelerated their timetables, both were helpful for us. Every major car company has announced an all-electric strategy and energy efficiency and the reduction of CO2 and other emissions remains an important topic for the industry, and our ability to extend the range of electric vehicles by 5.5% is significant. And the advantages of using SPD technology has been recognized by virtually every major automotive publication out there. Hyundai made an equity investment in our licensee, Gauzy. And when I was at CES two months ago, the Chairman of Hyundai Motors himself, along with the CTO and the Korean Economic Ministry visited Gauzy's booth where SPD sunroofs were on display. Spent quite a bit of time there too, I must say. It was an honor to meet them. Other licensees have also moved forward automotive projects to put SPD-SmartGlass into serial production. And next week, we're demonstrating a new concept in solar protection for a major OEM on one of their new electric vehicles. As noted, we expect revenues from these new automotive programs to start coming in perhaps as early as the next year, with start of production of these vehicles in Q3 and Q4 2022 and the Cadillac Celestiq in 2023. Also, Vision Systems had a major project win with SPD-Smart EDWs being used on the Airbus ACJ 220 as well as the Epic and other aircraft. And trains using large amounts of SPD-SmartGlass are transporting passengers on the rails, and new higher-volume train projects were started this year internationally. LG Display announced a new transparent OLED technology that thanks to SPD turned the clear window into a high-definition TV. And in architectural, it remains to be seen whether companies like Crown will overcome the financial scale-up and other technical challenges they currently face, whether the economics of our electrochromic business will ever make sense for the architectural or whether companies like View will even survive the year. My estimate is to have between nine and 11 months' worth of cash. So if I was Rao Mulpuri, as I need my advice, he's probably out there trying to have capital now, which is why they probably haven't filed their financials in over a year. But all is well because they help promote the idea of smart windows to the market. Their sales teams are helping us in our licensees' businesses by building awareness of the benefits of dynamic variable tint windows. And their performance also makes our SPD technology look good. So architectural projects using SPD-SmartGlass have now begun to ship because Gauzy can coat wide film on their dedicated SPD film production line outside of Stuttgart, Germany. And they also expanded this year the emulsion production capacity in Tel Aviv. And in fact, our licenses have expanded production capacity in all areas of the supply chain from the chemistry, production, to the film coating, to the fabrication of end products for all industries, including the architectural, automotive, aircraft, marine, transit, and consumer electronics businesses. And the merger between our licensees, Gauzy and Vision Systems, created a powerhouse who has growth on our SPD technology. And unlike competitors, View, Sage, and Crown in the architecture space, we have a worldwide coverage and much better economics and logistics and certainly better performance. So the seeds of success and growth have been planted and are beginning to sprout. Future looks bright. We all entered in 2022 with strength and a strong position to grow and prosper. I thank all of our loyal investors for their continued support and trust, and I thank you for participating in today's call.
Operator, Operator
This concludes today's conference call. Thank you for attending.