Annmarie Gayle: Well, the main thing is, that every time – first of all, every time there is the upcoming elections, that’s clear, you’ll never get your federal budget through, and that’s the real background, to the continuing resolution. So, it just means that, you for programs that they’re not optimally funded, and they’ve got to make choices, when they get a pot of money. Some will go to X and some will go to Y, but not the amounts that’s contracted. So that’s what we’re seeing. But the biggest factor for example, the engineering business has been the pace at which the new programs go forward. So what I reported, for example, on the U.S. engineering side, we have two new programs now, which is going into its pre-production phase.
We’ve now got the small batch orders, and why I’m excited about this and see the promise, of returning the business to the $10 million. Is though – these parts that now, we’ve received the small batch orders for – are for established programs of record and the engineering part has is a result of obsolescence. What that means is, that the production quantities, is likely to be large, because they’ll be retrofitting those, for the assets in the field. So, I’m really super, super excited about those two programs that, we have back there and they’re on, we’ve now received. As I said, the pre-production order, the evaluation batch, and we expect the back end of this year that, we will get the production orders. So that’s on the U.S. side. On the U.K. side for engineering business, this last year revenues were significantly down, because of the, it’s like the priorities had shifted, for the main customers and they were really pursuing a lot of land-based applications.
But what we’re seeing now is an uptick of those orders that, were meant to come through, some of them are coming through and that business is quoting also a lot at the moment. So I am excited about that part of the business. And also, as I mentioned before, the Thermite, it’s a good example, Brian, we had two really major opportunities for the Thermite pre-COVID, and those had stalled and stalled and they’ve now just come back on the table. And those again, will be good opportunities for business, because now it’s in the production fees, not the design fees for our business. So the limiting factor, has really been more a bit of COVID, the slowness, the recovery from COVID, but also, the engineering business, they go through different fees from, they get a new program, where they’re doing the design fees.
It’s pretty small, but once that’s written into the program. And then you get the production orders, that’s really what gives us the kick, and that’s really where we are with these new programs. Of course, for that business, it has to continue expanding the number of new programs, it is supplying proprietary parts into. But I feel we’re in a good spot now with recovery, COVID. And then, also last year, where we saw a lot of land-based applications. We’re now seeing more and more naval requirements coming through, and have won some orders there.
Brian Kinstlinger: So two more, one as a follow-up to that one. In terms of the two programs that are, hopefully going to go into production in the U.S. as well as the new awards in the U.K. Is there any way, at least in total, to size what these mean? Are these contributors of each, $1 million, a couple hundred thousand dollars? It’s hard to understand the magnitude of the impact of these collective programs?
Annmarie Gayle: Yes, so the way to really think about the orders, is that first, there are a number of things, because it’s not just about the upfront, production quantities you get today. It is the fact that, this is a repeat order that you get over the time. So at any one point, like those two new programs that we have in the U.S., I think that that will probably be around $4 for that business. And then – on the U.K. side, that’s about $2 million. But that’s over the lifetime of program.
Brian Kinstlinger: Those are lifetime value?
Annmarie Gayle: No. Those are not lifetime values. Those are initial values that we expect.
Brian Kinstlinger: I can see why you think the recovery is ahead. And then lastly, on the balance sheet, which is obviously healthy, what investments for the company – is the company making to accelerate the adoption of your technology? Is it hiring more salespeople, marketing professionals? Just maybe highlight where you think you can invest to help accelerate adoption of your products?
Annmarie Gayle: Great question, Brian. So I think, please report, we’ve made really, really good progress since we last spoke. So, we’ve now successfully, and I don’t have permission to identify the group, but we’ve now successfully hired, a focus group in the U.S., a very, very well-established focus group, in the defense space. And the whole idea of that U.S. focus group, will be to provide better understanding of the opportunities we’re pursuing. Helping us, to map the opportunities, and model the opportunities more clearly, which I’ll expand on once we have that. In addition, the focus group will help us with identifying new programs, and making sure, we’re not missing any programs, and generally strategy. So, I’m very, very excited.
