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Edited Transcript of FLY.V earnings conference call or presentation 11-Apr-19 1:00pm GMT

Q4 2018 FLYHT Aerospace Solutions Ltd Earnings Call

CALGARY May 13, 2019 (Thomson StreetEvents) -- Edited Transcript of FLYHT Aerospace Solutions Ltd earnings conference call or presentation Thursday, April 11, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Alana Forbes

FLYHT Aerospace Solutions Ltd. - CFO

* Thomas R. Schmutz

FLYHT Aerospace Solutions Ltd. - CEO

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Conference Call Participants

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* Marc Berger

MKB Associates Inc - Financial Advisor

* Bruce Krugel

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Presentation

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Operator [1]

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Welcome to the FLYHT Aerospace Solutions Fourth Quarter 2018 Year-end Results Conference Call. (Operator Instructions)

I would now like to turn the conference over to Tom Schmutz, Chief Executive Officer for FLYHT. Please go ahead, Mr. Schmutz.

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [2]

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Thank you, Senuce. This call I'll provide some high points of our fourth quarter 2018 results, both financially and operationally. Alana Forbes, our CFO, will then provide a more detailed review of the financial results of our fourth quarter as well as 2018 in total. I'll then discuss some of the larger successes in 2018. And finally, we'll answer any questions that may have been e-mailed in or called in.

I want to start by thanking our shareholders and those who have dialed in or accessed the online recording to learn more about FLYHT. The 2018 year ended with a fourth quarter top line revenue and other income of about $5.9 million this quarter, which exceeded the fourth quarter of 2017 by 71%. This quarter included significant other income associated with the Bargain Purchase of Panasonic Weather Solutions from Panasonic Avionics Corporation last October. Alana will focus on the financial accounting details of this acquisition during her financial section.

Traditional revenue in the quarter was approximately $4 million, which was an increase over Q4 of 2017 by about 22% and an increase over Q3 of 2018 by 30%. Also, the quarter was profitable and filled with exciting changes at FLYHT.

One particularly exciting element of fourth quarter revenue is the Software as a Service or SaaS revenue in the fourth quarter. SaaS for Q4 was $2.3 million or 126% larger than Q4 2017 and 97% larger than Q3 of 2018. Our SaaS business doubled with the pickup of the SaaS contracts from the PWS acquisition, while we also grew 20% organically independently from the acquisition.

Growing our SaaS revenues was one of the principal objectives for the acquisition of PWS, and we feel we have increased FLYHT's value significantly through this SaaS growth, but we have not seen a corresponding capitalization value pickup in the market since the acquisition.

FLYHT had a reasonable quarter for Hardware revenue at $1.5 million and lagged last year's fourth quarter by about 33% and could have been better and would have probably rivaled that quarter, which was particularly strong, if we had not run into some supplier delivery issues at the end of last year. Those issues have been resolved for our first quarter 2019 shipments so we expect to be able to demonstrate continued robustness in our Hardware shipments for the first quarter of this year 2019.

FLYHT shipped 33 AFIRS hardware kit shipments in the fourth quarter, which brought the annual total of AFIRS kits shipped to 99, just 1 shy of 100 kits. This compares to 81 kits that we shipped in 2017. So trends are up in AFIRS hardware sales, and several of these shipments will be providing recurring service revenues or SaaS when they are placed into service, where we also believe there will be a continued rise in SaaS revenue.

License revenues were limited, both in this quarter and the last and as I had projected on previous conference calls. For the past 2 quarters, revenue in this category consisted essentially of true-up payments from our OEM partner from shipments used in ways that contractually yield more of a higher license fee.

During 2018, we made the bulk of our license shipments in batches in the first half of the year. 1 year ago, on this very call, I pointed out the trend had been established showing a decreasing revenue in the Licensing revenue category and increasing revenue in the Hardware and SaaS revenue categories. At that time, I called it a new normal since we had grown a robust sales order backlog, and the forecast for license sales through our partner for A320 and A330 subassemblies have been reduced. The result was licensing for 2018 was down 40% relative to 2017, while both Hardware and SaaS were up, SaaS significantly so.

This year, we see a flattening of annual revenues associated with the A320 and A330 Licensing shipments to our OEM partner to 2018 levels for 2019. The overall revenue for Licensing could increase, but that will rely on new licensing opportunities to ripen or for future business to be driven to Airbus from Boeing associated with the difficulties with the 737 MAX platform.

In summary, we don't anticipate that Licensing revenues will decrease in 2019 relative to 2018, and this is good news. Yet this is the result -- this will be the first year since 2016 that we do not see a significant reduction in Licensing revenue source. So hopefully, no more swimming upstream.

FLYHT has built a sales order backlog large enough now that we can count on filling a significant part of our budgeted quarterly shipment from this backlog and not all from booking shipped that we had to do just a few short years ago. FLYHT has been announcing the sales order backlog for 3 years now in order to provide shareholders better visibility into the unshipped contracts and purchase orders that can convert into revenue in the future. This backlog figure we announced at $61.9 million a couple of weeks ago. Generally, we project the backlog over a 5-year period since that is the typical contract length that we sign. The reason for the sales order backlog -- the reason the sales order backlog exists is for a variety of reasons. FLYHT may be working on a necessary Supplemental Type Certificate or STC, which gives us the right to install prior to shipment. We might be waiting for an aircraft to become available for a C check for installation. We may be waiting for a customer to take delivery of the aircraft. And in the case of outstanding SaaS, we're typically waiting for the AFIRS unit to be installed. We focus our customer engineering resources to get the ordered services turned on as quickly as possible once the equipment is installed, so it is rare that backlog SaaS is waiting for anything other than installation.

Now I'd like to turn over to Alana, who will provide details on the financial results. Alana?

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Alana Forbes, FLYHT Aerospace Solutions Ltd. - CFO [3]

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Good morning, shareholders. The big story of our fourth quarter was definitely the closing of the PWS acquisition and the resulting impact on not just our financial results but also on our day-to-day business as we integrate one FLYHT. Having said that, I'll take you through the key areas of interest on the income statement for the quarter and for the year, then move into highlighting the larger changes in our balance sheet.

Looking at the fourth quarter. Revenue from our traditional revenue streams were the highest we've recorded in the past 8 quarters, and the SaaS revenue from the former PWS customers had the largest impact.

Looking at the other income category. There are 2 sources contributing to this revenue. The first is negative goodwill, called Bargain Purchase, valued at the present value of the PWS inventory and capital assets that were required -- that were acquired by FLYHT, less the impact of deferred tax recoveries. This revenue was a onetime event arising on the date of acquisition. There was much discussion and a lot of analysis around whether the intangible assets acquired would also be capitalized, potentially adding to the Bargain Purchase. But in the end, the IFRS guidelines really placed the emphasis on market value as opposed to the value specific to FLYHT, which as FLYHT paid $1 for the lot, was not determined to be sufficient to support value for the intangibles.

The second portion of other income was the recording of the Q4 subsidy recovery received from PAC, which offsets the increases you see in our operating expenses. We will see varying levels of this subsidy continue to be recognized through the next 5 quarters of the acquisition transition period as the quarterly subsidy amounts were designed to offset expected expense levels throughout these periods. Also in Q4, operating expenses increased as we expected with the increased PWS headcount and additional building lease and accounting and legal expenses incurred leading up to and post the transaction.

2018 overall saw a revenue trend of downward pressure on Licensing revenue, which was replaced by Hardware sales and increased SaaS revenue. We saw an expected lower gross margin as well resulting from this change in revenue mix as our high-margin Licensing revenues represented a smaller portion of our total revenue.

Operating expenses increased in all 3 categories, although the largest increase was seen in distribution expenses, which reflects the increase in people costs from the PWS acquisition as a majority of the talent the acquisition brought to FLYHT is in that area.

Looking at our net finance costs. The main difference in this area is the result of foreign exchange fluctuations as the majority of our income and our receivables are in USD, while a portion of our expenses and payables are in Canadian dollars. $244,000 of the $247,000 income tax expense recovery is related to the Bargain Purchase, as the amount classified in other income was reduced by its expected future tax benefits and reclassed to income tax recovery.

Turning over to the balance sheet. PWS has brought us several trends you can expect to see continuing into the future as increased scale brings an increase in receivables and payables balances and a difference in the mix of current versus noncurrent inventory. You will also notice that customer deposits decreased at year-end 2018 as compared to 2017 ending balances. Q4 2017 was an exceptional quarter for customer deposits, with the majority of the associated shipments showing up as revenue in Q1 2018. Q4 2018 was much more typical of our historical customer prepayment pattern.

Contract liabilities show the balance of subsidy recovery payments received from PAC that belong to future months. And the increase in noncurrent loans and borrowings shows the carrying value of the convertible debenture issued in July 2018.

I will now pass this back to Tom for a discussion of our 2018 highlights. Tom?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [4]

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Thank you, Alana. I'd like to spend a little time to discuss the 2 highlights I discussed in the CEO letter included with our financials. The first has been mentioned, which is the acquisition of PWS. FLYHT acquired the assets of PWS in early October 2018. The details of this unique acquisition can be found in the FLYHT press release dated October 10, 2016, (sic) [2018] and in the financial report we just published. The essence of the transaction is that FLYHT will be paid a baseline USD 3.3 million payment to add a group of very talented U.S.A. employees to receive valuable real-time weather collecting intellectual property and enterprise systems and to add $20 million of contracted backlog with 12 airline customers and Synoptic Data PBC, which I'll refer to as Synoptic. Augmented Hardware shipments and corresponding SaaS revenues will begin in Q2, Q3 of 2019 as we start shipping significant PWS acquired backlog.

Also, FLYHT will continue to provide TAMDAR observations to the United States National Mesonet Program, funded by the National Atmospheric and Oceanographic Administration (sic) [National Oceanic and Atmospheric Administration] or NOAA. FLYHT will endeavor to grow the TAMDAR installation footprint and increase weather revenue opportunities with various meteorological agencies through our sales partner, Synoptic.

The second highlight in 2018 was completing the Boeing ecoDemonstrator Program early in 2018 and jointly publishing the results with Boeing and Embraer in August at the Airlines Economic Engineering Committee (sic) [Airlines Electronic Engineering Committee], or AEEC, Global Aircraft Tracking Working Group meeting in Kelowna, Canada. The 3 partners concluded that existing, commercially available equipment and network services, which is FLYHT -- FLYHT AFIRS and Inmarsat SwiftBroadband system, are suitable for providing distressed flight data and audio streaming capabilities that support the published ICAO objectives. This was the first time the entire feed for an aircraft's flight data recorder has been streamed over satellite network for the duration of a flight, which validates the Black Box in the Cloud use case. Additional first-time milestones included the cockpit audio streaming and the concurrent trigger transmission of historical FDR, Flight Data Recorder, and cockpit audio data with real-time data and audio. Management is confident that this positive trial result with FLYHTStream Triggered Data Streaming Patent, which has been issued in China, the United States and Canada and is pending elsewhere, and FLYHT's selection as Inmarsat's inaugural Aviation Certified Application Provider, or CAP, for Inmarsat's new SwiftBroadband-Safety services, has FLYHT well positioned to provide solutions to satisfy the upcoming January 2021 ICAO regulations regarding the timely recovery of flight recorder data, which are Modifications to Annex 6 for Amendment 40 from ICAO. We're seeing larger players making future product announcements for streaming-enabled flight recorders, which is a confirmation for FLYHT that the significant work and the patent protections that we have in this area have been excellent uses of the company's capital resources.

The use of FLYHT's products or intellectual property is, we think, inevitable because it solves some of the problems that need solutions in a very elegant, scalable and efficient way. There will be more entrants, and our team is engaged with an industry now to identify teaming opportunities for FLYHT to allow access to our intellectual property, our industry-leading experience and our proven capabilities, our time to market with our immense STC library, which by the way, is in order of magnitude larger than any other aviation SATCOM providers installation approvals along with our proven products.

We are also seeing new entrants for aircraft tracking function. I wrote a two-part letter and published it on the FLYHT website in 2017 that discusses this area, including Aireon and space-based ADS-B, which is a wonderful solution for tracking an aircraft.

FLYHT offers tracking as a value proposition but is not the value proposition for our system. The value of our system is that an operator not only knows where their aircraft is at all times with FLYHT products but they know how they are, they know what their status is, they know if there's anything unusual onboard. And if so, they have a method to diagnose it in real time while the aircraft is flying. This saves aircraft operators money. It streamlines their operations. It accelerates their decision cycles, and it improves the safety of their operations.

So with that, I will turn to questions that we received in e-mail. I only received a couple, one of which I integrated into the discussion that we previously had.

The second question comes from C.L. and it says, "Can you provide and rank a summary of FLYHT's top 5 sales initiatives with some discussion about where FLYHT is presently at with these, and when we may see conclusive news about them."

So it's difficult for me to discuss specific sales opportunities because they're quite sensitive, but I can talk about categories that we're pursuing. So the first category is I can assure you that we're still engaged in an Inmarsat trial. So that is still underway. It's with Inmarsat partners and with other operators. I hope to be able to provide more information on that, but it is an exciting opportunity for FLYHT and it continues.

That is not the only trial that we're involved with connectivity providers. We're actually involved with several. And we think that there's opportunities in each of those, and I hope to be able to provide additional information on those as time progresses.

We are also engaged with multiple well-known large operators in North America for a variety of solutions, including SATCOM, flight health and discussions on future rule changes. So that is a very large focus for the business. We're also partnering with other innovative solution providers to provide the market with a very unique solution that is currently bid to a major OEM and a major North American solution airliner. So those are a few classes of the areas where we're pursuing new business. I would love to provide more details, and I will, once they become definitive.

The next question I received also from C.L. was, "Please take a moment to discuss AFIRS kit sales, what they are, kits sold versus payments received and range of price."

This is a good question. This generally gets -- I think part of the question get to the heart of what do customers pay for your equipment. And that is a difficult question to answer directly because there's a wide range. We sell kits everywhere from really the AFIRS unit itself combined with an RF cable and an antenna, in the simplest case, to a kit that completely integrates the AFIRS unit into 717, 429 buses on the aircraft into the avionics equipment so that you can do dialing on the MCU, the multi-display function unit. So it's really going to depend upon the FCC and the aircraft type, the complexity of the kit. Our kits go from extremely simple to very, very complicated, and all of these kits include, at their heart, the AFIRS unit itself or, in the case of our PWS clients, the FLYHTLink unit with TAMDAR. We are integrating TAMDAR with AFIRS as well, and that will be something that we'll provide more information in the future.

So there's a very wide range of hardware configurations that we sell. Similarly, there is a wide range of clients that we sell, and the clients that we sell, in some cases, purchase only the hardware; and in some cases, purchase our real-time -- in most cases, purchase real-time data services with the hardware. And obviously, the deal that we strike will be more beneficial for our operators when they buy our SaaS services in concert with the hardware versus when they just buy the hardware by itself.

So you put all of those things into the mix and it creates a very, very wide range of pricing for our kits. I hate to put a figure on it, but it can go anywhere from $30-ish thousand up to $70,000, $80,000, really depending upon the configuration, the kit type, the customer, the quantities, the services that are taken. So there's a wide variety of prices.

Hopefully, that answered that question. I don't have any other questions on the e-mail. So Senuce, if there's anyone waiting to ask a question, we can take them now.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Bruce Krugel, a private investor.

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Bruce Krugel, [2]

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You've got most of my questions. I've just patched, hoping to get more clarity or color on each of them, and specifically as it related to the top 5 sales opportunities. I'll ask it another way around with regards the 4 themes that I identified in the report. The one was, so with the PWS acquisition, it sounds like installs are going to commence Q2, Q3 time period. TAMDAR/FLYHTLink installations accrue at that particular point in time? I'm trying to understand the rollout of -- in my report, I modeled 25 a quarter commencing Q2. Are you just still on track for 75 units this year?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [3]

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75 units of FLYHTLink/TAMDAR?

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Bruce Krugel, [4]

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Yes, to AirAsia?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [5]

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So that is the budgetary figure that we've been working. And I do feel like once the shipments start, they will start in earnest. The contractual terms that we have picked up through the acquisition of PWS put time limits on deliveries. So those should help with the acceleration and pace of deliveries. Right now the PWS assets that we acquired, there was a pretty significant lull in the shipment of product prior to our acquisition. So we've had to restoke the entire supply chain in order to get the deliveries started again. So that's, I think, one of the largest reasons why there's a delay between our acquisition in November. We acquired the first -- the key element, which was getting PMA parts manufacturing authorization from the FAA. We received that in December. And since that time, we've been working on restoking the supply chain in order to get our production re-running in Littleton; and then secondly, working with the PWS legacy customers with their delivery schedules.

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Bruce Krugel, [6]

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Okay. Moving on to the next thing in China. You alluded to the fact that you had production issues running to Q4, which were then fulfilled in Q1. Is it fair to say your Q1 AFIRS shipments would be up sequentially over what -- over the 33 you recorded in Q4?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [7]

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Well, I'm not going to provide the number of units. I will indicate that we feel like we've had a strong first quarter.

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Bruce Krugel, [8]

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Okay. And what does Q2 look like?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [9]

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Q2 is shaping up, so we hope to be able to provide some information regarding Q2 relatively soon.

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Bruce Krugel, [10]

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Okay. And moving on, first, Amendment 40 which, I think, is quite the opportunity for FLYHT. We've seen and I'll mix it in with the Airbus stuff -- with the Airbus Boeing 737 MAX dynamic. Are you seeing any initial interest directly at customers looking at your Amendment 40 solutions?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [11]

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Yes. In fact, we've already been shipping products to customers that bought us specifically for compliance. And one customer that I can point to is a customer that allowed us to publish her name, which was Azur. So that's a fantastic customer. We shipped our 2,000th AFIRS unit to them and press released that just last year. They bought product and installed it significantly to be compliant for Timely Access to Flight Data requirements in their regional jurisdiction. So there's other cases like that. I can't mention them because we haven't had the opportunity to press release their names. But we're seeing a significant amount of interest, and I think it's going to continue to grow as we get closer to member states of the UN publishing their own internal laws based on the ICAO Amendment 40.

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Bruce Krugel, [12]

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Right. And then maybe a follow-up question on the 737. I mean it's quite a large negative issue facing Boeing, and I understand the flight control system is not something that the AFIRS unit specifically addresses. But have you seen any interest, additional interest out of airlines to -- who are looking to improve or increase their safety looking at the AFIRS as a solution within the context of the 737 debacle?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [13]

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Yes. So the aviation space has received a significant amount of necessary attention with the unfortunate incidents and accidents with the 737 MAX and the Maneuvering Characteristic Augmentation System, or MCAS, that is the subject of the investigation and the software changes on the 737 MAX. Not only is the software for that system being changed, as I understand it, to have it rely on more than one of the angle-of-attack sensors, but to rely on both that are typically installed in an aircraft. But also Boeing, I think, is very engaged in making sure that the materials that are necessary for the proper training and the use of the system are revisited and reevaluated for training of 737 MAX pilots around the world. We are certain that Boeing is focused. And Boeing is a fantastic company. We are certain that they are focused, from their CEO down, on fixing the flight control system and that they will provide the information that's necessary to properly train the pilots who fly the MAX to use it.

As you mentioned, Bruce, our systems can help with many areas of aircraft operation, but our systems don't fly the aircraft nor do they interact with all the flight control systems. Our system is passive, so our system is installed on the aircraft. It hooks up to all of the communication information system buses on the aircraft, and it reads that information and creates real-time information for our operators. But it doesn't push anything onto the aircraft, so it's very safe in that regard. We don't interact or we don't cause any changes in the way that the aircraft operates.

Boeing and their flight control partners will solve the problem. And perhaps afterwards, they may look to other independent solution providers that can help them monitor their aircraft after these opportunities are accepted in different regulatory bodies around the world. So we have cooperated extremely well with Boeing in the past, and we certainly look forward to any opportunities to cooperate with them in the future.

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Operator [14]

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(Operator Instructions) Our next question comes from Marc Berger of MKB.

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Marc Berger, MKB Associates Inc - Financial Advisor [15]

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Congratulations on the PWS acquisition. If I understand it properly, you basically doubled your SaaS revenues. You also picked up over $20 million in sales backlog. Does that not effectively double the size of FLYHT?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [16]

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Yes. So we issued in the original press release, Marc, the preliminary impacts that we anticipated. And that, we highlighted the doubling of the SaaS, and we highlighted that we saw an immediate -- just with the backlog and the integration of their activities into our business, I think it was an USD 8 million annual pickup. So it's not quite a doubling of the overall business, but it was nearly a doubling of the overall business. So I think you're spot on.

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Marc Berger, MKB Associates Inc - Financial Advisor [17]

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Okay. Also, with regard to Inmarsat and the work that we're doing with them, is there anything with regard to creating the new black-and-blue-type box for the sky where we and Inmarsat could become the de facto black box for the future? And is there -- if so, is there anything with regard to Inmarsat having discussions with us about the possibility of them taking us over, so they would do the complete black box themselves?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [18]

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What we've published, Marc, is that we are currently pursuing with Inmarsat trials to evaluate their Black Box in the Cloud premise, which isn't always on streaming connectivity between the aircraft and terrestrial operations. That work continues. The -- if you look at the division of labor of where the partners bring value, Inmarsat, a very large multinational corporation, has a very, very robust and I think the most heavily used L-band satellite system for aviation, safety services, voice and data. So a very large player, extremely well established and very important to the industry.

They have a wonderful new system that they rolled out last year, SwiftBroadband Safety. It's in the L-band. They're looking for applications and ways to expand its use. They've been promoting and marketing this application for connectivity of aircraft in real time while they're flying. They need partners that can connect up to the different aircraft systems and push that information and data over their wonderful network. So that partner can be FLYHT, and so that's a very, very good relationship. We have a great deal of intellectual property, a very mature product, a great deal of capability in installing on the aircraft, connecting to systems, gathering data in real time, streaming that over communications systems like SwiftBroadband-Safety. And then on the other end, on the terrestrial side on the ground, we can gather up that streamed data into our UpTime and AirMap enterprise solutions. We can create products from those -- that data then comes in and then we can connect to customers that use that data in the way of commercial products through this enterprise system. So it's a very natural fit and teaming between our organizations.

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Marc Berger, MKB Associates Inc - Financial Advisor [19]

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With the SaaS revenues now about $9 million and obviously growing, what amount of SaaS revenues will we need to just be able to have those revenues get us to a breakeven point into the future?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [20]

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So that's a good question. I don't know that we have a ready answer.

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Alana Forbes, FLYHT Aerospace Solutions Ltd. - CFO [21]

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I don't think we have, yes.

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [22]

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So it's a complicated question because we have just changed, obviously, the structure of the company, and there are other -- I would say that there are other plans in play. So if it's okay, maybe you can ask that question again next quarter, and I'll provide you a more concrete answer.

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Marc Berger, MKB Associates Inc - Financial Advisor [23]

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Okay. Last question, any -- I know we've -- there was a research report done on FLYHT recently. Can you tell about any potential opportunities of having more research analysts to pick up coverage on FLYHT?

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [24]

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Yes. So we have been communicating, and I've been very dogged since I've been here trying to pick up coverage. The -- we've done 2 financial raises since I've been the CEO of FLYHT. The first was private place equity in early 2016, and the second was the debenture at the -- that we did in the middle -- the third quarter last year. We did the debenture last year in order to spruce up the balance sheet in order to do the acquisition, since the PWS, several of the customers had approval authority on the transaction. So both of those were done privately. We were lucky to do it privately because it was much more economical for FLYHT. The downside of doing it privately is that we didn't engage a bank and, therefore, didn't kind of create the opportunity for coverage that may come with those types of arrangements.

All that said, we have been -- I have been working with our investment relation partners seeking investor relations coverage from banks and other industry. I -- we have received information that seems positive in the future that we received it, but I guess we'll see. We're excited if that happens. The report that Bruce Krugel produced for the company I think is an outstanding report. And if you're interested in FLYHT, the background that he provides on the industry and the 4 major growth areas that he sees for the company, I think, are spot on. And I think he did a fantastic job. So we're very pleased to be able to offer that report to our investors in order to give them better insight. One of the rationale that we had in engaging Bruce to do that report was that the -- our business is complicated, and it's not as easy for the average investor to understand. And I think that Bruce painted a very clear picture of what we're trying to accomplish.

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Marc Berger, MKB Associates Inc - Financial Advisor [25]

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And again, congratulations. And I also saw Bruce's report, read it, and I think it was quite well done. And I think you're right. I think it opens up information to investors to let them get an idea of exactly of what FLYHT is and where it could be. Again, congratulations, and good luck going forward.

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Operator [26]

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This concludes the question-and-answer session. I would like to turn the conference back over to Tom Schmutz for closing remarks.

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Thomas R. Schmutz, FLYHT Aerospace Solutions Ltd. - CEO [27]

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Well, thank you for all of you that called in for your interest in FLYHT. So as I mentioned in the CEO letter, we're excited in FLYHT for 2019. We think it's going to be a great year. Just last week, FLYHT was featured in an mro-network.com article entitled If You're Not Using Big Data Results, Are You Behind? It was written by Lee Ann Shay and Sean Broderick. MRO Network is a leading magazine periodical for maintenance, repair and overhaul aviation industry. Sean investigated FLYHT's equipment use with our customers and described the value from our customers' perspective that our systems bring. Whether it's real-time monitoring of engine vibration parameters or automating the delivery of engine trending warranty information, our products are saving our customers time and money. Word is getting out, and we are starting to feel the momentum that we've prepared for, for so long.

Thank you for your confidence and your patience, and I look forward to discussing the first quarter results in about another month. Thank you very much.

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Operator [28]

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This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.