Good day, and welcome to the Ultralife Corporation First Quarter 2020 Earnings Release Conference Call. As a reminder, today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Ms. Jody Burfening. Please go ahead.

Thank you, Kareen, and good morning, everyone, and thank you for joining us this morning for Ultralife Corporation’s earnings conference call for the first quarter of fiscal 2020. With us on today's call are Mike Popielec, Ultralife's President and CEO; and Phil Fain, Ultralife's Chief Financial Officer. The earnings press release was issued earlier this morning. If anyone has not yet received a copy, I invite you to visit the company's website www.ultralifecorp.com, where you'll find the release under the Investor Relations news in the Investor Relations section. Before turning the call over to management, I would like to remind everyone that some statements made during this conference call contain forward-looking statements based on current expectations. Actual results could differ materially from those projected as a result of various risks and uncertainties. These include potential reductions in revenue from key customers, uncertain global economic conditions and acceptance of new products on a global basis. The company cautions investors not to place undue reliance on forward-looking statements, which reflect the company's analysis only as of today's date. The company undertakes no obligation to publicly update forward-looking statements to reflect subsequent events or circumstances. Further information on these and other factors that could affect Ultralife's financial results is included in the company's filings with the Securities and Exchange Commission, including the latest annual reports on Form 10-K and the latest quarterly report on Form 10-Q. In addition, on today's call, management will refer to certain non-GAAP financial measures that management considers to be useful metrics and differ from GAAP. These non-GAAP measures should be considered supplemental to corresponding GAAP figures. With that, I would now like to turn the call over to Mike. Good morning, Mike.

Good morning, Jody, and thanks to everyone for joining the call. Today, I'll start by making some overall comments about our Q1 2020 operating performance, including the impact of COVID-19, and then turn the call over to Phil, who will take you through the detailed financial results. After Phil is finished, I'll provide an update on the progress against our 2020 revenue initiatives, then open it up for questions. For the first quarter of 2020, total company revenue increased 37% year-over-year, driving leveraged operating profit up 171% and GAAP earnings per share up 151%, despite a significant headwind from the COVID-19 pandemic, which caused an extended shutdown of our China operations and other supply chain disruptions. The teams delivered a Q1 organic revenue growth rate of 8% in the core business, led by Communication Systems, executing existing contracts under the U.S. Army's Network Modernization initiatives. At Communications Systems, first quarter revenues were up 75% year-over-year. And at B&E, revenues were up 30% year-over-year, with B&E SWE acquisition contribution more than offsetting the core revenue softness in China. The increase in Communication Systems' revenue and favorable mix, combined with the addition of the SWE acquisition and overall company-based cost operating leverage, resulted in the approximate 2.5-fold increase in operating profit and earnings per share year-over-year. As we continue to monitor the evolving impact of the COVID-19 pandemic, we have taken the necessary steps to safeguard the health and well-being of our employees in accordance with the protocols established by federal health organizations and state and local public health departments, while ensuring an uninterrupted flow of our mission-critical products, serving our medical device, first responder, public safety, energy, and national security customers. Based on several state and federal government mandates, Ultralife Corporation falls under the criteria of being an essential supplier of its products and services, and thus has maintained normal work operations across all its locations during the COVID-19 emergency response. In a few minutes, I'll give you further information on our revenue initiatives. But first, I'd like to ask Ultralife's CFO, Phil Fain, to take you through additional details of the first quarter 2020 financial performance. Phil?

Thank you, Mike, and good morning, everyone. Earlier this morning, we released our first quarter results for the quarter ended March 31, 2020. We also filed our Form 10-Q and Form 8-K with the SEC this morning, and have updated our investor presentation, which you can find in the Investor Relations section of our website. I would like to thank all those that helped make this happen. For the first quarter, consolidated revenues totaled $25.8 million, representing a $6.9 million or 36.7% increase over the $18.9 million reported for the first quarter of 2019. Overall, commercial sales increased 47.9%, boosted by Southwest Electronic Energy Corporation, or SWE, which we acquired on May 1, 2019. Government and defense sales increased 24.1% on favorable performance by our Communications Systems business. Excluding the contribution from SWE, sales grew 7.9%. Revenues from our Battery & Energy Product segment were $20.8 million, an increase of 29.8% over last year, attributable to a $5.4 million revenue contribution from SWE, which offset a $0.6 million reduction in our core commercial business, driven by the month-long shutdown of our China facility and supply chain disruptions caused by COVID-19. Including SWE, the sales split between commercial and government and defense was 71/29 compared to 63/37 for the 2019 first quarter. And the domestic to international split was 55/45 compared to 47/53 last year, due primarily to higher domestic sales of medical and public safety batteries as well as the addition of SWE. Revenues from our Communications Systems segment were $5.1 million, an increase of $2.2 million or 75.2% over last year. The increase primarily reflects shipments of vehicle amplifier-adapter systems to support the U.S. Army's Network Modernization initiatives announced in October 2018, and shipments of vehicle amplifier mounts to an allied country prime defense contractor. On a consolidated basis, the commercial to government and defense sales split was 57/43 versus 53/47 for the year earlier period, demonstrating the continued success of our revenue diversification strategy. Our consolidated gross profit was $7.3 million compared to $5.1 million for the 2019 period. As a percentage of total revenues, consolidated gross margin was 28.4% versus 26.9% for last year's first quarter, an increase of 150 basis points. Gross profit for our Battery & Energy Products business increased 20.5% to $5.3 million from $4.4 million. Gross margin was 25.6%, a decrease of 200 basis points from 27.6% reported last year, due primarily to unabsorbed overhead costs associated with the February government-mandated shutdown of our China facility. For our Communications Systems segment, gross profit was $2.0 million, an increase of $1.3 million or 200% compared to $0.7 million for the year earlier period. With the transition of vehicle amplifier-adapter systems for the U.S. Army to higher volume production, and the costly rework due to late cycle product changes now behind us, and aided by favorable sales mix, gross margin grew to 39.9% compared to 23.4% last year. Operating expenses totaled $5.8 million compared to $4.5 million last year, an increase of $1.3 million or 29%. The increase was attributable to the addition of $1.2 million related to the acquisition of SWE and an 11.8% increase in core engineering and technology expenses for new product development and testing. As a percentage of revenues, operating expenses were 22.7% compared to 24.0% for the year earlier period, an improvement of 130 basis points. Operating income for the first quarter of 2020 was $1.5 million compared to $0.5 million for the 2019 period, representing a 171% increase. And operating margin was 5.7% for the 2020 period versus 2.9% last year, driven by the 150 basis point improvement in gross margin and 130 basis point leverage in operating expenses to sales. Adjusted EBITDA, defined as EBITDA including non-cash stock-based compensation expense, was $2.5 million or 9.8% of sales, an increase of 109.5% over the $1.2 million or 6.4% for the first quarter of 2019. On a trailing 12-month basis, adjusted EBITDA is $12.3 million or 10.8% of sales. Our tax provision for the first quarter was $319,000 compared to $41,000 for the 2019 period, computed at statutory rates while excluding our net operating losses and tax credit carryforwards for GAAP reporting purposes. Accordingly, our reported tax provision for the first quarter is based on an effective rate of 22.9%, while utilization of our deferred taxes will drive the tax provision down to $77,000 or 5.5% when we pay our taxes. We expect that the net operating losses and tax credits included in our deferred tax assets will offset U.S. taxes for the foreseeable future. Including the interest expense on debt incurred to fund our 2019 SWE acquisition, and using the 22.9% effective tax rate, net income was $1.1 million or $0.07 per share on a diluted basis for the 2020 first quarter. This compares to net income of $0.4 million or $0.03 per share on a diluted basis for 2019. We utilized adjusted EPS to reflect actual cash taxes paid or to be paid and defined adjusted EPS as EPS, excluding the provision for non-cash U.S. taxes expected to be fully offset by our net operating loss carryforwards and other tax credits. As noted in the supplementary table in our earnings release, adjusted EPS on a diluted basis was $0.08 per share for the 2020 first quarter compared to $0.03 for the 2019 first quarter. We estimate that COVID-19 adversely impacted net income by approximately $500,000 or approximately $0.03 per diluted share for the quarter. The company's liquidity remains solid, with cash on hand of $6.1 million, working capital of $54.6 million, and a current ratio of 3.9. Subsequent to the quarter close, we began to collect a larger U.S. defense-related receivable, which will be used to invest in test equipment to meet the increased demand for our power supplies for ventilators, respirators, and infusion pumps, and to reduce our debt related to the SWE acquisition. We continue to carefully manage our liquidity to fund organic new product development, strategic capital expenditures, and M&A. In summary, the actions we are taking to drive profitable growth and ensure ample liquidity remain our highest priorities. As we navigate through these challenging times, we are well positioned to weather the storm while continuing to invest in growth initiatives and staying focused on releasing the full leverage potential of our business model. I will now turn it back to Mike.

Thank you, Phil. As a reminder, our strategy is to drive revenue growth opportunities through diversification, expansion of markets and sales reach, new product development, strategic CapEx, and potential acquisitions. Looking at the Battery & Energy Products business, market and sales reach expansion has been about diversifying more into the global commercial markets and international government defense markets to lessen our revenue fluctuation as a result of lumpiness in the U.S. government defense markets. As an example, just one year ago, we acquired Southwest Electronic Energy Corporation, or SWE, which serves the oil and gas exploration and production and subsea electrification markets. For the recently completed Q1, its third complete quarter as part of the Ultralife portfolio, the SWE acquisition was once again EPS accretive and provided 26% of total B&E sales. This compares to B&E’s other end markets of medical, which represent approximately 25% of total Q1 B&E sales, and U.S. government defense, which was about 27% of total Q1 B&E sales. These end markets share a focus on mission-critical niche applications, competitive differentiation based on quality and reliability, and long-term high-value proposition customer relationships. We like the individual end market risk mitigation, the fairly equal weighting of overall sales mix, each of these key markets brings. In addition to the diversification play, another key benefit of the SWE acquisition was that we obtained a highly valuable technical team of battery pack and charger system engineers and technicians to add to our new product development-based revenue growth initiatives in our commercial end markets. As part of our integration plan, we launched a global engineering council to more fully leverage our worldwide technical and manufacturing capabilities, to share best practices, solve common technical problems, and accelerate customer responsiveness. Now a current crisis caused by a catalyst, like the COVID-19 pandemic, has provided an opportunity to put this concept into action, and SWE will execute a recently received $1.4 million contract for a medical battery pack, supporting a respirator application under a short-cycle turnaround in serving the COVID-19 response. This contract is expected to ship throughout Q2. Looking at Q1 2020, core business key medical device, battery and charger shipments, were made for a wide range of applications, including breathing devices, infusion pumps, digital x-ray, and surgical robots. We also received new delivery orders for existing customer blanket and/or multiyear agreements, which totaled over $5.2 million, and continue to grow in Q2. In response to the global COVID-19 pandemic, we received projected increases from several medical customers for applications such as ventilators, respirators, digital x-ray, and infusion pumps. We have made immediate and accelerated CapEx investments to increase our test capability to respond to the added volume requirements and will continue to support the best of our ability, all expediting efforts of our customers. Looking at the other non-medical commercial and international government defense end markets, some examples of specific transactions in Q1 2020 included, $700,000 in orders from an international oil and gas customer for custom primary batteries for logging while drilling applications, $900,000 in orders from another international oil and gas customer for custom primary batteries for directional drilling and measurement while drilling applications; and a charger order from a global OEM prime for an international defense force. Lastly, for B&E's U.S. government defense customers, in Q1 2020, revenue was flat year-over-year, with a $4.9 million outstanding 5390 spot buy award originally expected to start shipment in Q1 now to deliver in Q2 and Q3, due to component supply chain disruptions. Separately, final first article testing for the next-gen 5390 primary battery, under a $21 million DLA IDIQ, is scheduled for the beginning of May. And for the 5790 battery, under the $49 million DLA IDIQ, at the beginning of June. Regarding B&E new product development, during the first quarter of 2020, activity continued on numerous projects, including beginning shipments of our first public safety radio batteries, with two additional public safety batteries and new product development going to production in Q2 and Q3; receiving a production purchase order for a new digital x-ray battery, with production expected to begin in Q2; entering the final testing for a new military communications backup battery; completing the validation of a new ventilator battery pack; receiving good customer feedback on SWE's DRILL-DATA 2 gauge released in the fourth quarter of 2019; and now in a designing phase or use at five key customers; and shipping pre-production samples of a ThinCell product for a new medical vital signs monitoring application. Lastly, regarding strategic CapEx, we continue to attack on two fronts, the manufacturing introduction of new products that will serve the Internet of Things applications, the rapidly growing wireless devices market, as well as next-generation 3-volt smoke alarms, asset tracking devices and metering. In our Newark, New York, USA facility, low volume production is underway for the new premium 3-volt product. In Q1, we continued design for manufacturing activities and adjusting automation equipment to achieve more reliable, higher-volume production in preparation for ramp-up activities in 2020. This new product provides customers with world-class product performance, safety, and a competitive price value proposition, as well as the supply chain proximity of being made in the USA. Interest remains high for this new 3-volt product, with Q1 and Q2 factory visits by several large customers postponed due to the COVID-19 situation; that expected to be rescheduled as the COVID-19 restrictions are eased and we implement appropriate protocols. Separately, in China, we now have new locally manufactured lithium manganese dioxide 3-volt cell, which is now shipping to global customers. We continue to make progress on our thionyl chloride cell upgrade project in China, involving numerous process improvements, which will help us expand our total available market with newly identified commercial and industrial applications. Also included are updates to our cell formations and designs, equipment, and facilities. Our goal is to produce the highest value proposition, best quality, and safest products in whichever one of our global locations best serves the supply chain of the particular end market and/or the OEM customer. Regarding Communication Systems, in Q1 2020, new product development revenue from products less than or equal to three years old represented approximately 65% of Comm Systems’ revenues. Key shipments included additional vehicle amplifier adapters for the U.S. Army’s Network Modernization initiatives and vehicle amplifier mounts for an international customer. U.S. Army's Handheld, Manpack, and Small Form Fit and Leader Radio programs continue operational test and evaluation with bottom line contract opportunities anticipated later in 2020. With regard to the system integration of cutting-edge server technology discussed during last earnings call, Communications Systems has about three variants to support a broad range of operational requirements from small tactical team support to full command center integration. One example is the development this year of capability for dismounted operations, providing a high computing solution set not previously available, which could enable on the individual processing of ISR data for the most real-time response available. We continue to be optimistic in this new growth area and OEM relationship, as expected product demand increases throughout 2020. Communication System engagements with major or prime contractors remained strong in support of new product development for integrated systems and amplifier platforms, product support for fielded products, and new business development to meet emerging radio capabilities in the field globally. Our continued investment in resources includes skilled personnel recruitment, test equipment development, product support, and facility upgrades, and affords us the flexibility and responsiveness to meet customer requirements. As many companies are working through the issues of COVID-19, Communication Systems has a few critical suppliers, which have limited or closed operations for a short duration as preventative measures. Our stocking levels do provide some gap insurance with minimum impact to current backlog, and we anticipate a quick resumption of normal operations as conditions improve, the economy recovers and supply chain shortfalls are remedied. In closing, in Q1 2020, first and foremost, we are thankful for the continued safety of all of our global employees, who have experienced very limited personal health impact so far as a result of the COVID-19 virus. This continues to be our number one priority, and we review it daily. We are also grateful that our teams were able to stay focused despite the significant distraction and deliver solid single-digit organic revenue growth, double-digit overall revenue growth, and triple-digit operating profit and EPS growth. And at the end of Q1, our total company backlog has increased by 18% since year-end without including any of the presently untapped potential from $84 million of existing DLA IDIQs. The COVID-19 breakout continues to create new challenges and opportunities each day. Obviously, there is a significant amount of uncertainty given the impact on the global economy, our specific end markets, and the worldwide supply chain. Whereas, at this time, it would be impossible to predict how this all plays out, we will work to overcome any hurdles and continue to strive for another year of profitable growth in 2020. Looking forward, at B&E, we are seeing a near-term surge in medical revenue due to the COVID-19 response, which is helping offset the impact of the oil price collapse on our oil and gas-related business. What we don’t know is how long the medical surge will last relative to the reduced oil price. Throughout 2020, we are also expecting to see the impact of other new revenue streams coming online, such as from new public safety radio battery packs, the new 3-volt product line, the new ER product line, and several other new ThinCell medical and subsea electrification application battery packs. Also, activity levels overall from the various defense department contracting channels and global OEM primes remain steady. At Communications Systems, we continue to complete shipments under our current U.S. Army program and other existing contracts, while maturing several other new customer integrated system products and projects and pursuing follow-on and new program awards. As a total company, our strong balance sheet, solid cash flow from operations, and disciplined adherence to our business model provide resiliency and afford us the opportunity to simultaneously pursue organic revenue growth through new product development, invest in strategic CapEx for competitive advantage, and seek out bolt-on acquisitions. Operator, this concludes my prepared remarks, and I’d be happy to open the call for questions.

Thank you, sir. We will take our first question from Gary Siperstein with Eliot Rose Wealth Management. Please go ahead.

Hi, Mike and Phil, good morning.

Good morning, Gary.

Congratulations on a strong first quarter. Mike, can you give us some color on – I couldn’t write as fast as you talk, so it seems like you guys are very busy. There’s a lot going on in a lot of areas. So you mentioned that SWE got a $1.4 million respirator order. I didn’t know if SWE was doing anything on the medical side, can you give us a little more color on that?

Sure. When we did the original acquisition, one of the things we were so excited about were all the additional people that we were bringing on board, the people that were the experts in the battery management systems and charger systems, et cetera. And knowing that our overall medical business continued to grow, one of the things we stated was that even though we recognized oil and gas business was cyclical, that as long as it wasn't in the exact same cycles that the government defense business is, that would be an overall good thing for smoothing our overall revenue. So we’ve been involved, as I mentioned in my prepared remarks, in sharing technical capability and best practices throughout the engineering teams. The team there is very used to doing very sophisticated battery packs. If you think about the conditions that they’re used to having to perform under extremely high pressures, extremely high temperatures, and all these kinds of things. When we saw this opportunity, there was a battery pack that had a short-cycle delivery, it seemed to be a perfect opportunity to have our SWE business operate on that contract. And so we’re really excited. Lots of time, people talk about having flexibility from facility to facility. But I think this COVID-19 situation caused that catalyst that created a strong pull as well as a push in terms of expanding our capability to do medical battery packs in more than just our existing facilities. So I’m very excited about seeing how SWE performs in this. It’s a reasonably simple battery pack that goes through all the same testing and quality checks that we have anywhere else we make it. But it just is really a good thing to be able to have the flexibility to build things in different facilities.

Super. That’s good to know. You also mentioned that backlog, I guess, increased close to 20% sequentially. You mentioned, I think, $5.2 million in new orders in the second quarter. Of that $5.2 million, how much was due to this medical crisis? And how much was this base business?

That’s a good question. We got – every quarter, we try to comment about that quarter’s orders against annual agreements, but they'd be blanket or other type of awards. I remember correctly, and I could be wrong, normally, it seems to be like it’s in the $2 million to $3 million range. So this came across as being a higher level than what we'd seen in previous quarters for the similar type of annual increases and blankets or other purchase orders. And then, without giving specific information, we’re going through a lot of exercises with our medical customers. They’re asking us what’s the most we can do. And they give us high numbers. And then they go and check all the other members of the supply chain, and then they figure out what they can produce in their facilities. And whether they’re able to get part and support from other suppliers, not just us? And that’s resulted in a nice uptick of the overall revenue for us, and that’s helped us increase our backlog. Some of the companies are going to have higher revenue this year than it did last year just purely based on the COVID-19 type response. I think it’s too early to give specific numbers of what that incremental amount will be. We’re somewhat balancing the surge request from medical, which I think is having some favorability against some of the pushouts as the medical industry is seeing elective surgeries and those kinds of things being delayed. There is a little bit of subtraction on the medical side. But overall, we view it as a net gain, but I think it would be premature to really give you some kind of quantitative amount for what that exactly be at this time. It’s just heading in a positive direction.

Okay. Okay. And then you talk about the 2 IDIQs, the $21 million and the $49 million starting testing, I guess, the $21 million, you mentioned, in May and the $49 million in June. Historically, how long does this – for those products, how long does the testing last before it goes into production and the government starts exercising those IDIQs?

That’s a good question. I think we originally got these contracts in 2017. So it seems like it’s taken forever. I have mentioned in previous calls how we have been receiving spot-buys along the way. One thing about these kinds of contracts is that certainly, technically, the government, the military, push the envelope. So this testing is extremely important. Many times you go through a couple of rounds of testing, and you’re proving your concepts out and you have some successes, and you have some failures, and then you sort of go back to the drawing board, make some changes and then go through testing again. And what I’m trying to represent in the comments I made today was that we feel like we’re sort of in that last round of testing. If we could finish that testing starting in May and June, through the next quarter or two, and pass all the other requirements, then we’d sort of be in the batter’s box for any future delivery orders against those contracts. And that’s the stuff that you want to get to. You do all this work just to get to where you’re in a position to be allowed to execute on delivery orders. In the meantime, especially as it relates to the 5390, I also mentioned, you may recall, in December last year, we received a spot-buy for 5390s. We had hoped to start shipping some of that stuff in the first quarter. There were some delays due to some global supply chain disruptions. That will ship in Q2 and Q3. So if you think about it, if we ship those in Q2 and Q3, we would – and we can finish the first article testing and get the totally signed off, it could be really good timing for the next-generation 5390. And we would hope that the 5790, which is a CFX blend version of our 5390 type battery, would be available shortly thereafter. So we’re excited about finally getting those into the position to where we might be able to get some revenue against those contracts.

Okay. Okay. Yes. So that was from 2017 from the initial award and...

I’m pretty sure it is. Yes.

And the final test – basically the final testing for the rest of this year, so that the possibility you could get all signed off and that could be 2021 revenue going forward and then starting the five-year process?

Yes. Yes.

Okay. Super. And then earlier this week, I think it was Tuesday, L3Harris announced a $95 million LRIP award on the radios from that $12.7 billion IDIQ. This is the – so this is the third – according to the news release, this was the third LRIP award and continued testing. So again, I know you’re not the prime, they’re the prime, but is that – and it said specifically in the release, this third LRIP award testing on the $95 million of radios will inform going into – instead of LRIP production, I guess, high-RIP production, I don’t know what the acronym is for going into full production. But can you give us any color on that?

Like we said before, we keep those specific details of individual customer relationships very private and confidential. We’re dealing with a number of different OEMs in the marketplace, and so out of respect for their privacy and their confidentiality, we don’t discuss those. But I will make a general comment that we do make batteries for handheld radios, we make batteries for manpack radios, we make amplifiers for radios. As a matter of fact, if there’s no radios, there’s no need for the amplifier. So anytime one of the large global OEMs gets a good contract like that, it’s a good day for us.

Okay. That’s fair. And well, how about this, based on history, after referred LRIP orders, does that usually lead to regular production? Because you guys specifically said this will inform final production in the news release. And then secondly on that, they talked about it being worth $12.7 billion with a five-year IDIQ and five years following. So if you assume it goes to full 10 years, and if you assume the government buys the entire $12.7 billion, that’s – over a decade, that’s $1.2 billion a year. And my understanding is it’s just two contractors, L3Harris and Thales. So are you seeing from what’s public, I know you don’t want to talk about what they tell you privately, but from what’s already out there public, does that usually lead to full production after this last test? And then finally, I saw the release on the $95 million for L3Harris. I haven’t seen anything on releases for Thales. So have they similarly gotten similar orders from the government if they’re the co-supplier?

Yes. It really wouldn’t be appropriate for me to comment on any of those details. I don’t have access to a lot of the transactional details. And I just know from my own experience, and as we just talked about, with some of these IDIQs, it takes a long time to go through all the different processes to get things through low-rate production and high-rate production. The only thing I could say as an outside layman and observer, is it seems like we’re making it through the important milestones of getting closer to having high-rate production and meaning revenue streams. But other than that, I really couldn’t comment, Gary.

Okay. No, that’s fair. And just turning to the balance sheet. So is your line of credit in the quarter?

No, there was no use of the line of credit, additional use of the line of credit. And if you go to the Q, the Form 10-Q, you’ll see in the statement of cash flows that we paid down the term loan in the neighborhood of $343,000. So no increase whatsoever. It’s going to start going the other way.

Okay. And so in the script, you mentioned – I think it looks like you finished the quarter with $35 million in accounts receivable. You mentioned in the script that there were some collections in April, and you can use that to pay down the long-term debt. It was $2 million? $3 million? Can you give us any color on that?

Gary, I would absolutely love to, but I’ll leave you in a bit of suspense, and you'll have to wait for our next conference call. And for you to see our success with this.

Okay. And then in terms of inventories, they were flattish around $29 million. Is that the expectation of a proper level? I mean with backlog up 20% and all these different projects, and Mike’s talked about in his script. What should we look for going forward? Is that fair? Can you dent it any more despite higher sales? Or is that going to start to trend up with the higher sales?

Gary, I would never publicly say that our inventory is at an ideal level. You always want to take the inventory lower. But when we look at the components of the – for example, that make up raw material, again, you’ll see in our 10-Q that the 63% of our inventory is raw materials, and then we – we then go through what those raw materials are. And based on what the backlog is, it’s one of those situations where you can say, thank God. So feel pretty good about where we are overall with the components in our raw materials. I think they’ll do us well to service the backlog, but also it gives us opportunities, some pretty good opportunities, to continue to reduce inventory levels, which, certainly, is our ultimate goal.

Okay. And also in the script, you mentioned that the China shutdown and COVID disruptions cost the first quarter $0.03, is that correct?

That’s exactly what I said, yes.

So on an adjusted basis, the first quarter without that, would have been $0.11? So that’s pretty good. Congratulations on that. And then not to be a – not to repeat myself, but – and I know it’s a different environment out there with the social distancing and the lockdowns, but have you guys looked to do anything on the IR front that’s new and different? Because we haven’t had any success in the past getting any analyst coverage. And with you guys being fully opened and doing well and having a quarter where earnings were up over 100% and backlog is up 20%, plus all the things Mike talked about. With the 6.75, 6.85 book and $0.40, $0.45 in trailing adjusted earnings, it just seems like we have a very cheap stock price. So it’d be nice to tell the world about that.

Gary, I agree with your assessment of our stock price when compared to the net tangible book value, your numbers are spot on. And what I will say is that we are getting numerous calls and we’re making numerous calls. So it’s not like we’re not doing anything on the IR front. We have been very active. We continue to be very active. And you always look forward to getting more and more – being more and more transparent, getting more and more information out there to satisfy the ultimate goals of IR, which are to increase shareholder value.

All right. That’s all I got. Thanks, guys. Congratulations again on a strong quarter, and keeping everyone healthy and safe.

Thanks, Gary.

Thank you, Gary.

At this time, we have no further questions. I’ll turn the conference back over to Mike for any additional or closing remarks.

All right. Thank you very much. Well, thank you once again for joining us for our first quarter 2020 earnings call. We look forward to sharing with you our quarterly progress in each quarter’s conference call in the future. As Phil mentioned, I would also like to note that the updated investor presentation is on the website, so check it out. And everybody please have a very safe day. Thank you very much for your participation.

Thank you. And ladies and gentlemen, that does conclude today's conference. We thank you for your participation. You may now disconnect.