BKTI - AMEX

Good morning, ladies and gentlemen. And welcome to the BK Technologies Corporation Conference Call for Fourth Quarter and Full Year 2024. This call is being recorded. And all participants have been placed on a listen-only mode. Following management's remarks, the call will be open for questions. There is a slide presentation that accompanies today's remarks which can be accessed via the webcast. At this time, it is my pleasure to turn the floor over to your host for today, Mr. John Nesbett of IMS Investor Relations. Sir? Please go ahead. Thank you. Good morning, and welcome to our conference call to discuss BK Technologies' results for the fourth quarter and full year 2024. On the call today are John Suzuki, Chief Executive Officer, and Scott Malmanger, Chief Financial Officer. Take a moment to read the safe harbor statement. Statements made during this conference call and presented in the presentation are not based on historical facts or forward-looking statements. Such statements include, but are not limited to, projections or statements of future goals, and targets regarding the company's revenue and profits. These statements are subject to known and unknown factors and risks. The company's actual results, performance, or achievements may differ materially from those expressed or implied by those forward-looking statements. And some of the factors and risks that could cause or contribute to such material differences have been described in the morning's press release and the BK's filings with the U.S. Securities and Exchange Commission. These statements are based on information and understandings that are believed to be accurate as of today and do not undertake any duty to update such forward-looking statements. Okay. I will now turn the call over to John Suzuki, CEO of BK Technologies. Please go ahead, John.

Thank you, John. Thank you everyone for joining today. I'll start by reviewing some of the highlights of our operations and financial results during the quarter and the full year. Then I'll turn it over to our Chief Financial Officer, Scott Malmanger, for a deeper dive into our financial results. We'll conclude by opening up the call for a brief Q&A. We closed 2024 with a strong fourth quarter. One that exceeded our expectation and was characterized by exceptional execution across the organization. Revenue increased 9.9% to $17.9 million, and gross margin continued its upward trend to 41.2%. Fully diluted GAAP EPS increased significantly to $0.93 which was the result of strong execution in the quarter and also included $0.37 related to a one-time noncash benefit from deferred tax asset provisions. Our non-GAAP adjusted earnings per share in the quarter was $0.61 per diluted share. A significant increase compared to non-GAAP diluted adjusted EPS of $0.20 in the fourth quarter of last year. Q4 represents our sixth consecutive quarter of profitability for the business. The quarter caps off what was a pivotal year for the company. In 2024, we exceeded our financial and operational targets. Delivering revenue of $76.6 million and gross margin of 37.9%. We had initially expected full year revenue consistent with the $74 million we reported in 2023, and we targeted full year gross margin of 35%. So we're pleased to have surpassed both of these benchmarks. Also, you remember that on the third quarter call, we upwardly revised our target full year non-GAAP adjusted EPS to $1.92 per diluted share. I am pleased to report coming in at $2.30 per adjusted diluted share. Key contributors to the overachievement were the additional upside revenue, higher than expected gross margin, and a lower actual taxation rate. All of these items positively impacted net income. On the new order activity side, we saw the BKR 9000 momentum building from agencies looking for a multi-band option. At a price point within their budget. We expect this momentum to continue to build in 2025 as we ramp production and deliver more BKR 9000 to the market. We closed the year with a backlog of $21.8 million at December 31, 2024. $5.8 million higher than the backlog at December 31, 2023. We believe that this higher backlog helped set the stage for further growth in 2025. Slide five is an illustration of the progress we've made with our gross margin performance. Much of which can be attributed to our operational execution. The shift in our product mix to the BKR 9000 and our cost reduction strategy such as transitioning our manufacturing operations to East West. Fourth quarter gross margin reached 41.2%, and full year gross margin was 37.9%. I do want to take a minute to address the uncertain macroeconomic environment. In terms of tariffs, we, like many other companies, are monitoring the situation closely and we have gamed out several different scenarios and mitigation plans. Earlier this year, we announced price increases in the range of 5% to 10% on our radio products and certain radio accessories. This new price list was recently accepted by the federal government and becomes effective April 1, 2025, for our reseller network. Initial customer feedback has been supportive as they understand why we are increasing our prices. And to date, we have seen no demand change or pushback from the market due to the higher prices. The BK supply chain like that of all our competitors, is global. With parts manufactured and assembled in numerous countries around the world. An increase in tariffs increases our product cost. But it will also increase the product cost for all our competitors. We are not in the position to predict the reach and trajectory of the tariff situation. So our business priority remains on delivering quality radios to the frontline first responders, while also delivering profitability to our shareholders. In terms of Dodge, while the federal government remains an important customer, we estimate that only 35% of our 2025 revenue will come from the federal government. Down from 49% in 2023. The BKR 9000 is driving this change as more local and state governments are adopting the multiband BKR 9000 radio. Nonetheless, there have been recent changes at the federal level. For example, some of our contacts have changed given the recent layoffs, early retirements, and incentives to terminate. That said, the BK brand reputation is very strong. Within our key federal customers. And regardless of leadership changes, we remain confident that the BK brand will remain the brand of preferred choice. Turning to slide six. You can see how our focus on margin improvement has resulted in adjusted net income growth dating back to the fourth quarter of fiscal 2023. You can really see from this chart how the revenue shift, outsourcing of our manufacturing, and cost reduction efforts have driven exponential improvement in our profitability of our business. We expect to see profitability continue to improve over the long term. Here, we provide a longer-term vision view of the transformation of BK's business. On an annual basis, we have steadily grown revenue with a CAGR of 19% to $76.6 million in 2024. Annual non-GAAP adjusted EBITDA and adjusted net income have dramatically improved as well. A breakthrough into profitability in the full year 2023. We built on that progress in 2024 with full year non-GAAP adjusted EBITDA of $10.4 million and non-GAAP full year adjusted net income of $8.5 million. In sum, 2024 was a strong year for us, and we believe we are just getting started. With that, I will now turn the call over to Scott Malmanger, CFO, to take a deeper dive into our fourth quarter and full year financial results. Scott?

Thanks, John. Sales for the fourth quarter totaled $17.9 million, an increase of 9.9% compared to the $16.3 million for the same quarter last year. Full year revenue increased to $76.6 million from $74.1 million in 2023. Gross profit margin in the fourth quarter was 41.2% compared to 35.1% in the fourth quarter of 2023. And improved sequentially from 38.8% in the third quarter of 2024. Gross margin for the full year was 37.9% compared to 30% in 2023. Exceeding our full year margin target of 35%. Selling, general and administrative expenses or SG&A for the fourth quarter totaled approximately $5.2 million compared with $5.3 million for the same quarter last year. Full year SG&A decreased to $21.2 million compared with $23.0 million in 2023. Operating income totaled $2.2 million compared with operating income of $400,000 in the fourth quarter of 2023. Full year 2024 operating income was $7.8 million. Compared with an operating loss of $777,000 in the previous year. We recorded net income of $3.7 million or GAAP EPS of $1.03 per basic and $0.93 per diluted share in the fourth quarter of 2024. Compared with a net income of $290,000 or $0.08 per basic and diluted share in the prior year period. For the full year, net income was $8.4 million or GAAP EPS of $2.35 per basic and $2.25 per diluted share compared with a net loss of $2.2 million or $0.65 per basic and diluted share in fiscal 2023. As John mentioned in his prepared remarks, included in GAAP EPS for the fourth quarter and fiscal was a one-time noncash income tax benefit related to deferred tax assets that added $0.37 and $0.27 per share respectively. The deferred tax provision was due to the release of a $3.6 million valuation reserve allowance on net operating loss carry forwards. Non-GAAP adjusted earnings which adds back net realized, non-realized, gain or loss on investments, stock-based compensation expenses, severance expenses, and excludes the one-time noncash income tax benefit related to deferred tax asset provisions. Was $2.4 million or non-GAAP adjusted EPS of $0.67 per basic share and $0.61 per diluted share in the fourth quarter of 2024. This is compared with non-GAAP adjusted earnings of $704,000 or $0.20 per basic and diluted share in the fourth quarter of 2023. For the full year, non-GAAP adjusted earnings totaled $8.5 million or $2.40 per basic and $2.30 per diluted share compared with adjusted earnings of approximately $3,000 or breakeven non-GAAP adjusted EPS in 2023. We reported non-GAAP adjusted EBITDA of $2.8 million in the fourth quarter of 2024, compared with non-GAAP adjusted EBITDA of $1.3 million in the fourth quarter of 2023. Non-GAAP adjusted EBITDA for the full year 2024 was $10.4 million compared with non-GAAP adjusted EBITDA of $1.5 million for the full year 2023. Based on the analysis of all available evidence, both positive and negative, the company has concluded that it currently does have the ability to generate sufficient taxable income in the necessary periods to utilize the benefits for the NOL deferred tax assets. Given our improvement in profitability, that NOL carry forward has been recognized as of December 31, 2024. Standard tax rate and going forward, we expect to be realizing a more range of 21% to 26%. Our balance sheet improved considerably to support our growth initiatives. As of December 31, 2024, we have approximately $7.1 million of cash and cash equivalents and no debt. Working capital improved to approximately $23 million at the end of December 31, 2024, compared with $6 million at December 31, 2023. Shareholders' equity increased to $29.8 million compared with $21.3 million at December 31, 2023. I will now turn the call back over to John.

Thanks, Scott. As we begin to move through 2025, we have identified certain operational and financial goals in keeping with our growth strategy. With our visibility today, from a financial performance perspective, we're targeting 2025 revenue to reflect single-digit growth with a gross margin of at least 42%. We are targeting 2025 full year GAAP diluted EPS in excess of $2.40 and 2025 full year non-GAAP diluted adjusted EPS in excess of $2.80. In line with our strategy to grow brand recognition, and our exposure to additional market verticals, we plan to increase our investments in sales and marketing, to further accelerate the BKR 9000 adoption rate. Likewise, we expect to increase our investment in R&D, and build up our engineering capabilities to strengthen our software expertise and offerings. As I mentioned on previous calls, we are ramping development of our new multi-band BKR 9500 mobile radio, which will be designed for installation in first responder vehicles and will be marketed as a companion radio to our BKR 9000 multiband portable radio. We expect to begin recognizing revenue from the BKR 9500 in 2027. Turning to our final slide. Earlier this month, we announced the rebranding and expansion of our SaaS business unit. To be known going forward as BK One Solutions. Interoperability between communication devices and platforms has long been a challenge for the public safety market. The mission for BK One is to provide rapidly deployable solutions which significantly increase the effectiveness of the public safety response and maximize first responder safety. Solutions will be comprised of SaaS, software applications, and certain hardware applications that help solve the interoperability problem. The BK One family of offerings include Interop One, our push-to-talk over broadband service, enabling on-demand creation of ad hoc user groups, that can include anyone with an active smartphone. Locate One, an on-premise solution providing real-time tracking of personnel and assets via GPS functionality. And RelayOne, a rapidly deployable portable repeater kit designed to extend range and facilitate interoperability between different types of public safety and military radios. And we have additional offerings in various stages of development we're excited to add to the BK One brand. We believe that our solutions will improve public safety interoperability, attracting both new and existing customers, as we drive sales for BK One as well as our BKR series radios. In closing, BK executed exceptionally well in 2024. And we made excellent progress establishing solid operational and financial foundations. We're confident that BK Technology is well-positioned to continue its growth trajectory and drive enhanced results and value for our shareholders through 2025 and beyond. With that, we can open up the call for questions. Ali?

Thank you. At this time, we'll be conducting our question and answer session. Thank you. Our first question is coming from Jason Schmidt with Lake Street Capital. Your line is live.

Hey, guys. Thanks for taking my questions and congrats on some really strong results here. John, just curious if you could discuss how order activity has been year to date. And then just given the macro backdrop, if you're seeing any sales cycles start to lengthen.

So in terms of our first quarter order volume, I would say it's in line with expectations. Typically, you know, our order cycles are seasonal. With Q2 and Q3 being our larger order intakes and then Q4, Q1 being lighter. In terms of this year, I would say it was in line with expectations. The second question really deals more so on the federal government than on the state and local. The federal government budget was just a continuing resolution that just passed, which is good news because that means our federal customers have funding through the balance of the year. This year, it's actually happened a little bit later than it has in previous years. And so where we probably would have seen some earlier orders on the federal side, the first quarter. Funds weren't really available. And so now we're expecting those funds to start flowing in the second quarter and so on. But the funds are there. They've been released, but with a slight delay.

Okay. That's really helpful. And then if you could just update us on kinda where you're seeing the most interest for the 9000.

Yeah. It's in the state and local market for sure. The thing with the state and local market is they do operate in bands. Typically, the primary communication system for the city or the county or state operates up to 800 megahertz frequency band. If you compare that to, say, Wildland Fire, which operates in a completely different band, the 150 megahertz. So you have customers that are especially our wildland fire customers, who when they're on mission for a wildland fire, need to operate at the 150 band when they go home and they start doing their day job, they need a radio that can operate at the 800 band. So having a multiband radio where you have one radio that basically fits both missions is very attractive to them. And the fact that our price point is within their budget is what's helping us drive sales.

Gotcha. And then just a last one from me, and I'll jump back into queue. Looking at this solutions business and kinda incorporating the SaaS and software applications, how should we think about the timeline before the software initiative becomes a bigger part of PNL?

That's a good question, Jason. I think, you know, we're still putting our foot in the water just to kinda take a temperature. We've learned a lot over the last couple years since we, you know, introduced Interop One, and we continue to learn about solutions. And I'll give you a short example. One of the wildland customers that we had, he was telling us about how he was looking at Interop One to coordinate communications on Fairmount Wildline Firefighter. So he's responsible for some logistics, and he has contractors that come in. He's not quite sure who they'll be, but when he forms his team, he'll use Interop One as a way to communicate to them. He's also looking at using Locate One so that he can actually identify on a map where these water trucks are at any point in time. And so you know, that's a good example where you have two solutions that can be combined together to provide an overall solution for a problem that he's having. Right? How do I communicate with these with my subcontractors, and how do I know where they are? So we see a lot of those needs in the marketplace, and I think there's a lot of siloed solutions to deal with one or two parts of that solution. The intent of BK One is to bring under a single umbrella these different solutions, but give the customer the look and feel and the user interface that he's really dealing with one solution. That has different aspects. So all of that it's gonna take us time to get traction in the marketplace. My hope is as we finish 2025 and set our vision for 2030, we'll provide some clarity in terms of, you know, how big we think the solutions business could be for BK.

Okay. That's helpful. Thanks a lot, guys.

Thanks, Jason.

Thank you. Our next question is coming from Sameer Patel with Askeladdin Capital. Your line is live.

Hey, congrats on a great finish to the year. Sounds like a good start to 2025. I'll start with one for Scott. Would you be able to walk back from your adjusted EPS guidance to adjusted EBITDA? Any important kind of inputs into that particularly? I think you mentioned tax rate. I wasn't sure if that applied.

Yeah. It was basically for the fourth quarter. You know, we had the valuation reserve allowance that was basically a nonbook entry. So we were able to recognize that and that kind of flowed through. So that was the significant adjustment there to get from a GAAP to a non-GAAP basis. If you look at the chart, you'll see the non-GAAP reconciliation, you can see the detail there. And then it's the standard stuff that's gonna be recurring, the stock-based comp. Non-cash stock-based comp, and then basically, the depreciation, amortization, the standard type adjustment.

Okay. So just to be clear, that $2.80 figure implies something in that 21% to 26% tax range.

Correct. That is correct.

Okay. So that's a full I just wanted to make sure there's no so that's a fully tax EPS number.

Yes. You're correct.

Okay. Okay. Perfect. That's fine. Second one, I guess, for both of you all. You know, look. I mean, your guidance seems fairly conservative. Obviously, last year, you beat it by a pretty wide margin. And then just looking at this year, I mean, your trailing bookings are around $85 million. You talked about a, you know, 5%, 10% price increase going through. You know, should we expect that that guidance is sort of subject to revision as you go through the year and, you know, get more tangible data points on how things are progressing?

Hey, Sameer. It's John Suzuki. So, yeah, we're you know, we're actually in some very uncertain times. Right? I think that if the tariffs hold off, that would be a reasonable expectation that we'd be raising guidance throughout the year. But I can't tell you today. Right? What's gonna happen on April 2nd or May 3rd or and so on. Right? So we need to be prepared. We started that by the price increases, but as you know, it takes a while for price increases to affect your backlog. So we expect to see those price increases as impacting our financial more in the third quarter than the second quarter because most of our backlog does not include those price increases. So it's impossible for us to predict. Right? What's gonna happen this year, but we've done is put a benchmark out there. We've made our best assumptions. And then as the situation on the ground changes, we will continue to update the market.

Okay. Perfect. And I think I think in response to Jason's question, did I hear you say that at the end of 2025, you're kinda gonna put out some and you set up multiyear targets looking out to 2030?

Yes. We had when I first started with the company, in 2021, we set out what we called Vision 2025. So that was revenue, gross margin, and EBITDA targets. At the end of this year, when we review the full year, I'll compare it against that Vision 2025 number. And then set what we would call 2030 Vision. And at that point, I think we will provide some more clarity between what I would say our core business, our core radio business, versus what the potential is for our solutions business.

Okay. That makes sense. And, yeah, I mean, you're gonna fall a little short of that 2025 target. But, you know, considering all the macro headwinds you faced, I think you've done a really admirable job. Maybe one final one just on that press release you put out about the Interop One order, from the State Forestry Agency, if you could just provide maybe some more color on the background, you know, kind of scope of that order. You know, I'm sure you're limited in kinda what you can say specifically, but just any color would be helpful just as we think about the SaaS business growing.

Yeah. I think it was a great example of, you know, so we were working with the client doing a pilot, and then hurricane Helen hit. And they were I guess, surprised by the amount of damage that it took place. But they were thrilled right, because we had the pilot communication system up, Interop One. How effective it was during that whole crisis and how many how they were able to get everyone on a common channel in essence. Right? Whether they had a smartphone or they had an LMR radio, just the ability to assess damage and to communicate action plans was very effective. And the customer had commented that he had trialed a number of similar systems in the past, and he felt that Interop One was the one solution. That met their needs. And subsequently, they placed an order for it. So to me, it tells me again there's nothing better than doing field trials. And if there's an incident that occurs during that, you know, that really drives home the point.

And do you have, like is there can you share anything about the number of users or just roughly the size of that order?

Yeah. I would prefer not because we went through the customer. Yeah. And initially, they said they would, but then they, you know, as it gets up higher in the organizations, they tend not to do those things. So promise that I wouldn't do it.

Understood. Appreciate the time. I'll turn it over for other questions. Thank you so much.

Thanks, Sameer.

Thank you. Our next question is coming from Oren Harshman with AIGH. Your line is live.

Hi. Congratulations on all the progress. Keeping in mind that a lot of the backlog today doesn't include the price increase. Is there still can you continue to show margin improvement even in advance of the price increase? Begin to hit the numbers? Is there still more to go with the existing plan versus any tariff-related backlash based on where we are today in the world?

Yeah. Good question, Oren. So let me try and characterize the year as we see it. Right? So our first quarter is basically done, and we are gonna experience healthy margins in the first quarter because we didn't have any tariffs. And we'll talk about that in about six weeks. I would say, we're pleased with the quarter, and it's in line with what our expectations were. As I go into Q2 and if we get a 25% tariff, that's a pretty significant tax. We put on there. Most of the backlogs we have does not include the price increases. And, therefore, we expect that our gross margin will probably drop below certainly below what you're seeing in Q1. And probably drop below that 42% so that if you take what we expect in Q1 versus what we would expect under Q2 with the tariffs, we'd probably be in line with that 42% for the first half of the year. As I look in the second half of the year, the price increases will kick in. Plus we do have some additional cost operational cost improvements. And our belief is for the second half of the year, we will be floating around that 42% mark. That's just the simple math. Now a lot of things could affect that. Product mix, for example, can affect that dramatically. Our assumptions on what's being tariffed could be different. So we just we put a stake in the ground. And like I said, if the situation changes, we will provide updates to the market.

Okay. In terms of the 9000, you know, obviously huge TAM compared to where you've been at before. You know, if I just look at the 9000 growth, for the current conservative base case scenario, if I just look at the 9000 growth, then we safely assume that the 9000 is going significantly faster than the rest of the business and that that's the growth driver.

Yes. And in terms of the margins, the gross margins on the 9000 you know, with tariff without tariff, however you wanna put it, you know, are you seeing those in terms of being premium gross margins being more specific than you wanna be?

Yeah. I would say historically, what we said is the 9000 was gonna be 60% gross margin. Product. Now that's before any tariffs. Right? So parts of these the 9000 you know, these parts are sourced globally. So depending on what those tariffs, if any, come into play, that will have an impact on our gross margin for that product. Now that will obviously being offset partially or math doesn't quite work because of the difference whether if you're increasing price or zero gross margin, but part of that would be offset by the higher price once that kicks in.

Yes. Okay. My last question is just on the software side of things. Know, typically, you know, till now, software has just been a driver to try and promote more radio usage to promote the 9000. Are we hearing from you that there's also possibly after, you know, signing up sounds like a real commercial customer and I know you have a few smaller ones. Is it also a revenue source? That we could do it as? Keeping in mind, it's still small. Obviously, you can change has a pretty high gross margin also.

Yeah. I think the optimal word is small. But yes, because we've now added two more products into our portfolio. When you're dealing with a SaaS business, it's you know, the revenue is very low, but it's just reoccurring. You're dealing with a product like Locate One, which is an on-premise software solution, The sale is a one-time sale plus support cost. Right? Ongoing support cost. But that's a much higher revenue number. RelayOne is more of a hardware product solution. And, again, it's a higher revenue product. So you'll start seeing or we will start seeing from BK One Solutions much higher revenues in this year than if we had just focused on Interop One.

Got it. But does Interop One have its merit as its own SaaS business, or it's still really just a driver of 9000 sales?

Yeah. No. It has its own SaaS business. We monitor that. I just look at the benefit of that still. I mean, it's not making money on its own. It's still a losing proposition even with the customers we have on there. But if you look at it as a marketing tool and our belief for it to drive 9000 sales, it's more than pays for itself.

Can you see, though, the possibility how it gets based on your pipeline, how it actually gets to be you know, a breakeven or a profit center on its own.

Yeah. Absolutely. No doubt.

Okay. Thanks so much.

Thank you, Oren.

Thank you. We have another question from Sameer Patel with Askeladdin Capital. Your line is live.

Hey. I just wanted to follow-up on the tariffs piece. And, you know, I respect and understand that this is a very you know, calling it a moving target might be an understatement. First of all, just to confirm, based on what you said, so your goods would fall into that non-compliant with the USMCA category. So they'd be subject to the full tariffs.

So our products do comply with the USMCA. So in the first quarter, we paid zero tariffs.

Okay. So they are in that category. Okay. That's good to hear. And then second would be I mean, you mentioned I mean, what would you look to do if those became sort of more permanent? I mean, I know you talked about, for example, being able to do a little bit more assembly, in Melbourne.

Yeah. Certainly, that's an option. The advantage that we have with our partnership with EastWest is they have a number of different factories around the world. And so we would have to assess, right, where the administration is applying the tariffs. And then overlay that where EastWest has manufacturing facilities. We've already engaged with them. I mean, we can pick up these lines and move them to another facility. Now that takes six months, nine months potentially to move a supply chain. But if we deem that the tariff coming out of that particular country is more expensive than operating or moving the line to a country with a lower tariff or no tariff, that's just an economic decision. It's one we don't take lightly because it takes six months to nine months to move a supply chain. And the last thing you wanna do is move it just to find that the administration has changed their mind. On the tariff. So it's something that we just have to watch and monitor. There are definite options. Our best case is to get our cost continue to get our cost down and then where we have to continue to raise our price. As I mentioned in the script, this is not unique to BK. Right? If you listen to our competitors' announcements, they're experiencing the same thing. We all have global supply chains. And we'll all be impacted by tariffs. And I believe that we just need to be monitoring the situation and then taking the appropriate actions to preserve our profitability. Will it be rocky in the interim? It could be. Because tariffs can be implemented within 48 hours. Trying to get price increases adopted into the market can take two or three months. Or longer if it's dealing with the federal government. So there's always a lag. In that aspect. At the end of the day, we do believe it's gonna get settled out. And we wanna be in the most optimal position once the trade issues settled out.

Yeah. I'm on the sorry. Go ahead.

Yeah. Our long-term vision remains the same. Right? We wanna get to 50% gross margins. We think we can do that.

Yeah. So it sounds I mean, you're just waiting to see how it plays out it sounds like you have a lot of good options. It's more just, again, you don't wanna be making a seven-month decision based on something that the administration has changed, you know, twelve times in the past three days.

Right.

Yeah. Perfect. Okay. And then just a final note, did you pull forward any inventory or production in Q1 kind of ahead of the implementation date?

Well, I would say we tried to. So it was certainly on our mind, and we tried to do that. The actual result was not the same. We did our inventory, as you'll see, went down. I would love our finished goods inventory to skyrocket up to mitigate some of that risk, but we just couldn't pull it off.

Understood. Alright. Thanks for the time.

Thank you.

As we have no further questions on the lines at this time, I would like to hand it back over to management for closing remarks.

Thank you, Ali. Thank you all for participating in today's call. We look forward to speaking with you again when we report our first quarter results. All the best to all of you, and have a great day.