Alexium International Group Limited (AJX) Earnings Call Transcript & Summary

Good morning, and welcome to the FY '26 Results Presentation and trading update for Alexium International Group Limited. My name is Simon Moore and I am the Interim Chairman of Alexia International Group. And with me today, we have the company's Chief Executive Officer, Billy Blackburn and the company's VP Finance are Heather White. Billy and Heather will run you through the presentation today, and I will provide some concluding remarks at the end of the presentation. And with that, I will pass over the presentation to Billy and Heather. Thank you.

Thank you, everyone, for joining this evening and this morning in Australia. Tonight, we'll run you through a brief summary of the results, a trading update on the business, along with some commercial updates and a progress update on our operations and acquisition at Microtech. And then lastly, a few customer and project-specific updates. With that, I'll turn it over to Heather.

Hello. Here we have our fiscal year '26 results compared to our fiscal year 2025 results. These are coming straight out of our annual report, which was recently published. There is a slight revenue growth from fiscal year '25 to fiscal year '26. And part of that is driven by the acquisition. And then the cost of sales also went up for reduction in gross margin, a reduction in gross margin driven by a production issue in the last quarter that has since been resolved, but did drive some some inventory write-offs. Operating expenses increased as expected with the acquisition, and there were also some impairments that were recorded in fiscal year '25 as well. The total result for fiscal year '26, if we normalized it by excluding the effect of the impairment, would have been approximately 4.5 million versus the 6.2 million that you see here, which would be much more in line with fiscal year 2025 results. Billy?

Thank you, Heather. So on to the trading update, with the production restored at Dayton and we've added a strengthened leadership to the team. We're now ramping volumes from manufacturing and sales of our microencapsulated PCM and flame resistant coatings. We have a forecast for the rest of the year that's going to be trending growth month-over-month driven mostly by the cornerstone in Dayton and consolidating our manufacturing there, gaining the efficiencies and cost savings through that. So for the acquisition, we had early setbacks from taking over the facility. We've been at the helm since really beginning of February. And we took on the plant as is, where is. It was an asset transaction and we were very interested in the technology and the manufacturing assets and capabilities as well as the team. Early on, we learned that the plant had had some work to be accomplished and preventative maintenance, some deeper maintenance, just the general operation needed some attention, as did the team. So it's pretty natural when you take over a facility, you have a season of integration. We were very aggressive in looking to move volumes from contract manufacturing into the integrated manufacturing from the acquisition in Ohio. Early on, we found some problems in the plant that set us back. So we had to turn our attention to fixing the processes, fixing some of the procedures related to them and getting back into some training with the team. Happy to report we've now stabilized that and have returned to normalized daily operations and are ramping the volumes there as we sit here. We expect that to continue throughout the rest of the year, and we've got a KPI, a key goal for the year to move 80% of our formulated products to the Ohio facility by the new year. So around January, we expect to have 80% of that concentrated in Ohio. As a reminder, we've been reporting this for some time. The manufacturing strategy remains to mix our production for redundancy and expanded capacity to have contract manufacturing and in-house manufacturing. So the ability to produce at 2 sites and have redundancy across the formulated products and many of the microcapsulated products. We've also implemented new quality control standards at the new plant. We are now putting volume through at lower raw material costs despite disruptions geopolitically and some price increases we've taken in on raw materials. We're still operating with some of our key larger volume raw materials under those of the business that we bought back earlier this year from Microtech. All of this is going to culminate in a more competitive position for the business. Right now, it's about ramping those volumes and stabilizing the sales from that manufacturing. The technical team has also vetted in new technologies that came with the acquisition. With that, we got 3 new PCM technologies that we're now ramping production on and pushing into the market. That's 2 different types of microencapsulated shells, so new shell technologies for microcapsules and then a multitude of different temperature cores, different mill points that position phase change materials for different cooling applications in different markets, especially outside of bedding, you're going to hear that from me tonight. We're still focused on delivering success within the concentrated betting market where Alexium has historically operated. But we're also pushing into adjacent markets. And I'll give some updates along those lines tonight. One of the major shifts over the last quarter has been in the organization chart and the addition of leadership. With Heather being on the team now for around 9 months, she's brought some real stability to the financial team and to the planning and the daily management of the business. That's freed me up to focus more on commercial and operational pursuits. We recently appointed Randy Lane is our Chief Operating Officer, and that was in July. Randy is historically the President of Microtech. He's been away from Microtech for the last 5 to 6 years and rejoined Alexium's in the PCM business, joined Alexium 2 years ago, has been on our Board for the majority of the last 2 years. And as we went out to look for operational leadership, it was a natural selection to bring Randy in and ask him to take over the operations. He's local to the business. in the Ohio area, very familiar with the people, the processes and the operations in whole. So we're happy to have him on the team, and he's already making a significant difference there. And you'll see that trending in the results as the months coming. Also, Mick Letner is our technology lead, and he's been very integral in vetting all the technologies that came with Microtech and some of the new technologies that are coming out of the legacy Alexium. So we're rolling out really new microcapsules in the new industries, and we've leveraged some of the technology that came with Microtech to open some of those doors. Some of the shales that are used in other markets are different than those used in the furniture and bedding space. So we're starting to push those out and getting a lot of interest in other markets. We have a new plant manager that has been hired. They're starting next Monday. This is a very significant hire for us because that plant has been devoid of a plant manager for years now. And we brought in a very seasoned operational professional that's going to get hands on leadership and work within the plant, work within the team to drive the efficiencies each day, to drive quality and to bring a safety culture that's compliant with all the state and federal regulations here in the U.S. So we're very excited to have him joining next week. I will announce that publicly before the next webinar, person's name. So continuing with the trading update in the sales and technology area. The new PCM coding placements that we've been signaling for some time now are now ramping, and majority of that production has been repositioned to the Ohio facility. We're ramping up PCM for nonwovens for a placement with a large international brand. So that bed, we saw it in Las Vegas. It was showing in the Las Vegas World Market. It's a beautiful product. We're excited to see the sales increase there. And we've gone to week-over-week shipments as that program is ramping now. We've also been talking some time about our entries into the foam market specific to bedding. And that in coatings and PCMs infused into foam. As a reminder, election was historically very concentrated in bedding, very concentrated in PCM and also very concentrated in just textiles. We've now diversified that into foam in addition to textiles. We're also moving that into other areas with FR as well. So starting to diversify within the concentrated market of bedding, the product mix, I think the customer mix because not all customers are making foam beds. And the foam market is 1 of the fastest-growing areas for bedding. So we've had some good success recently with topical coatings and infuse PCM in that space. I'm happy to report, we're also having some successful in FR and foam and textile as well. So we have volumes ramping in that area throughout the rest of FY '27. And we'll be trending that and showing the advancement of sales and those placements and some of the announcements tied to them in the next 4C. Excited to announce that we've got our first placement of our FR technology AlexiShield, and that's for foam in the furniture space outside of bedding. We actually got that to a foam coating to a customer that was launching and ramping production that had been moved to the U.S. from Asia. And they were failing the U.S. regulatory burns. And we were able to step in and add a coating to the product and get it there with a finish line, and it passed quite well. So that is starting shortly. We got our first order for it last week. We'll start shipping in the next few weeks, and we anticipate that to ramp throughout the rest of the fiscal year as well. Most notably, that's a large space in furniture worldwide. So now having that successful placement and knowing that the product works there, we'll increase our marketing and sales efforts across the globe to find more placements from foam for Alexasield. And as a reminder, ElexiShield is our latest FR coating. We developed it a couple of years ago in response to regulatory pressures from U.S. on banned substances. So it's free of any current band and any proposed ban substances. Also, it's very suitable for other continents that are a little more progressive than the United States and the regulatory area for furniture and bedding in places like Australia and Europe, it's suited for placement in those markets as well. Okay. We also have several active projects for non-bedding PCM placements. Those are in construction materials and energy conservation also for transportation for FR. These -- many of these were catalyzed by the Microtech acquisition, and that opened up several adjacent market potentials for the microcapsules that we make at that facility. They had a very good SEO marketing engine, and they were getting a lot of leads and requests for development houses and research institutions looking for new products for thermal management. And also, we've gotten a lot of requests also there for FR in adjacent spaces. So we're looking to push into non-bedding markets. The U.S. bedding market remains depressed. Consumer confidence, it remains low. Despite that, we're gaining ground in the space through foam and through FR diversification. And then lastly, we have a large placement about to commit this fall, which would be our October, November, and that's for an MPC coding in furniture upholstery. So another adjacent market where we're placing PCM finished textiles into furniture. We expect it to be a large volume. These furniture products are made worldwide and multiple continents and it drives significant volume. So we anticipate giving a more material update around that in the next update, which will be in th 4C. But that project is progressing nicely, and we're starting to see the forecast as we move in towards the new calendar year. So the general commercial update, we brought process across all 3 commercial platforms. So our PCM, ElexoShield FR and Alexiflam. We have new customer requests in furniture, building materials and energy conservation as well as apparel. For the furniture piece, it's been cooling and also FR products for protection. In the building materials, it's been for thermal management. We're getting a lot of requests right now for our products to go into as an additive into products that basically buffer the energy demand and energy spike in buildings in the heating and cooling cycle of each sun up, sun down. Also energy conservation around electronics. As you know, data centers is a real hot button in the United States. One of the things data centers are looking for is ways to cut energy costs and to cool the equipment where it requires less HVAC cooling and fans. And then lastly, we've been getting requests for cooling and apparel. Those are a little further down the line where we're working on more washed durable microcapsules that can be infused in the yards. So that's a little further down the line, but it's a very novel request, something we get quite often. And we're now starting to make inroads into our microcapsule thermal stability to the point where we can get to infusing it to fibers, which requires extremely high heat. And that's been 1 of the deterrents in the past. We're starting to get that sorted out now where we start to look at that. And that would ultimately result in wash durable base change cooling and coatings. Sir, we validated production in Ohio for all of our formulated PCM coatings at this point. So what does that mean? That means we can make our AlexiCool product lines, or BioCool product lines all of them have now been approved for production and have been run at production scale in Dayton. So that paves the way for us to hit the goal of moving 80% of that type of production to date by the end of the year. And the reason we want to do that is for cost control, quality control and full utilization of the fixed cost and assets that we've acquired. So we had a bit of a stumble out of the gate, but we've regained our footing now, and we're regaining the momentum that was lost over the last 3 to 4 months, which puts us back on plan for midyear into the new year to start to hit some of the milestones that we've committed to. International MPC business is continuing to grow, grew throughout the fourth quarter of FY '26. And then we have some new specialty foam starts coming in Europe later this first half and towards December. There were several legacy customers that came with the adjacent microtech business that hadn't had a lot of attention or development work turn their way. So we reinvigorated that and our development team is working with them and our sales team to qualify those opportunities. Again, those are in adjacent markets, like building materials and energy conservation. And then new segments in the heavy industrial sector are definitely opening up new opportunities. We've gotten 2 bid requests recently to bid on development work for, again, energy conservation. And these are large utilities. And we believe -- we don't know exactly what they're in application is at what we believe they're looking at cooling in large electrical domain applications, such as data centers and large metropolitan markets. For Alexishield, again, we're happy to have our first placement in furniture or foam. AlexyShield is also suitable for textiles. So we are developing barriers that go into beds and furniture that are textile barriers that self extinguish. We're also doing coatings that are directly applied to foam. And the favorability of foam has led us and the regulatory and regulation of materials that gets put in foam them has led us to make those more priorities because they are more urgent needs. And generally, the new entries that we're getting there are moving quickly because we're solving the problem that's imminent to these companies that's precluding them from launching and rolling out products. So we're able to leverage our material being free and banned substances and also solving a real-world problem for these customers that actually has a large market tied to it. So quite excited about that. AlexiGuard is our other formula. It does contain organic fosters, which was banned in furniture and bedding, but is not banned in other coatings in the construction area and other FR coatings and industrial applications. So we're going to continue marketing that and trying to grow that placement as well. It's also a very good added to materials has a softener and an FR. So it has dual duty there. And then again, we're looking for growth in furniture. And then lastly, we have a large project in the development cycle. We're moving to third-party testing now, and that's for FR coatings on transportation foam So I think large-scale transportation like trains, planes and buses, where there's a lot of foam using a lot of seating, also foam used in sound dampening insulation in those vessels. So we're in late stages of testing on that. And hopefully, we can give some commercial updates to some starts there in the coming quarters. Lastly, Alexiflam and our #1 target for AlexiFlam is the wash durable FR coding for flame-resistant nylon cotton as we often call it FRnicool. We're in the late stages of limited user evaluations with the U.S. Army, with the war department in the States. Those tests have been conducted for the last 6 months in Hawaii. We're still waiting with bated breath, the final results of the user waretest. As soon as we have those, we'll know what worked, what didn't, if they want us to dial in certain attributes of the fabric. And if we're going back to the lab, it could be things like softening it, making it have more drape, which the fabric make the fabric drape better, softer, less stiff. And then also it could be in the area of breathability. They've asked for a lot of attributes of this fabric that have a balancing act tie to them. If you turn, you increase one, you have to decrease the other to meet the balance for all the reflectants and weight and breathability criteria. So we put several in play with them, and it made it through to the testing. And again, we're waiting for those results. We anticipate them actually here in late September, early October, but we're at the mercy of the U.S. government and the Department of Wars budget decisions and any of the decisions they might be making globally that can impact this. On the operations, we've had this plan out there since early this year. And again, this is a long Alexium's pursuit of being a manufacturing-centric business. We're deep into that now. Again, we had some stumbles early on and taken over the plant. And I'll remind everyone, Alexium has been doing evolution over the last several years. So really going from a technology development firm to sales and marketing firm pushing that technology into the market to now becoming a manufacturing company is sales and marketing, pushing the volume to our own plant. So it's been quite an evolution for this young, small team. And we have had our stumbles, but we have regained our footing picked ourselves back up and carried on. So -- and we've been lucky to have the good support of our investors and our Board and have the capability to do that. So things are starting to stabilize now in operations. So we completed this earlier this year, and the goal remains to maximize the efficiency of the existing assets. So that's not only capacity utilization, fill the plant up. It's also to get the most out of each shift before we add another shift or add more head count or fixed costs. So we're deep into that pursuit right now. The stumbles we had earlier were due to the process inefficiencies, poor condition of some of the equipment -- not poor condition of the assets, but it needed some love and care maintenance, things like seals and pumps and lines that had to be rejiggered, rebuilt, replaced, training, industrial hogging around cleanliness of lines. We had to go up that learning curve quickly this year to find ourselves where we are now, which is a stable -- much stable place and ramping. So we're deep into bucket 1 there, and we're filling up the first shift now. So microcapsules are running each day. And now we're running the formulating lines almost daily. And as we continue to transition our formulated products from contract manufacturing to that plant, we anticipate the first shift to be probably matched out by the holidays this year around the new year. That will be the time to start thinking about capacity expansion through labor, meaning adding another shift or a hybrid shift that crosses over the first. And then from there, can we continue on to a third shift, and then ultimately to 24/7. The sales revenue and volumes will dictate that. But we're being very measured in how we bring the business to the plant to allow the team to stabilize, to gel under the new leadership, the new quality programs and for us to learn from some of the best practices they had in place over the years. They've been at the microcapsule business much longer than us. There's a lot of legacy knowledge there to harvest and leverage, and a lot of experience. They need support, they needed leadership and they needed some new energy. And so we brought that and now let's turn the corner. Lastly would be Bucket 3, max out the labor utilization. We'll start looking at capital expenditures. And when we say capital expenditures here, we really mean we're going to add significant capacity to the plant. It may be significant capabilities, and that could be drying capabilities, filtration, more reactors. We are making a lot of different types of capsules now that are taking us into different industries. Many of those industries have much larger volume demands than the bedding and furniture space. So there's a chance that we may need bigger vessels on the front of the process to keep up with that. But all our exciting prospects. but we are going to walk -- excuse me, crawl before we walk before we run and take a measured approach here and apply to lessons learned in the first few months of run into operations. So Q4 updates. Look, NexTech and AllexiPCM processes were merged in the third quarter of FY '26. That rationalization created an optimized platform for drying microcapsules. So we're selling powders into some other industries now, but also in the bedding industry, we're infusing powders into fold with customers that full foam beds. Also, this integration of the 2 processes created an efficiency between the 2 businesses merged and better quality for formulated coatings, also lower costs. It also consolidated the market. That was 2 of the major microcapsule producers in North America merging to 1, leaving 3 that we're aware of in North America and in less than 5 to 10 worldwide. We've also made gains in yield and uptime optimization. We essentially in the front of the process, we've gotten to an efficiency in the process where we increased the volumes on 1 batch by 30% to 40%. So in the same window of time, the same labor and fixed costs, getting out 30%, 40% more product out of that patch. And then uptime optimization has been through really preventative maintenance and loved care at the plant. So whenever you -- some examples, just to get you into the weeds here, but when you rebuild a pump, you better have a novel than 1 ready to go when that 1 breaks. So it's the pump the pump rule is 3. So you have 1 in working, 1 that's broken being fixed and 1 ready to go. So things like that are pretty traditional preventative maintenance that wasn't being executed quite that well. So we're starting to put that operational discipline into place, and it's showing up in the pounds per ship already. Workforce training and operational discipline. That's coming mostly from leadership. We have brought in some outside training. We recently gave EOT and hazardous workers, operations training to the entire team. Randy brings a style of leadership that's admirable, he leads from the front. He's been in the plant showing the guys how to run the processes, working on the line showing them what good looks like leading by example. And that's been fantastic. The new plant manager coming in, we expect more of the same which will duplicate Randy's efforts and allow Randy to step back to a more strategic level and driving the business. And lastly, we've eliminated a lot of bottlenecks and non-value-added activities we found that their business had been through a slow season and had some struggles, and that led to some bad habits. So we basically eradicated those, put people into some different seats, and pointed out the efficiencies of some of the things that were happening. We also made some change into the supply chain flow in the plant and the way materials are warehouse should they receive. And again, every little bit adds up to a lot in the end. So in the last quarter and the quarter coming up, we don't expect any major capital investments. We again are moving capacity -- moving products there to utilize the capacity in Ohio. And for this next quarter, we will stay focused on that disciplined pursuit. Phase 2, a little more there, but going from a 24 -- excuse me, 8 by 5 shift to ultimately at 24/5 will be a staged approach such as laid out. And that will be driven mostly by new microcapsule production supporting formulated products. And the formula products you hear a lot about from us are going to be electric pool and Bicol for PC. And they're also making our formulated Alexishield coatings at the Ohio plant as well. So that will start to fill up the capacity throughout the rest of the calendar year. And then lastly, as demand grows, will ramp even further from there, and then we'll be looking to add additional shifts. So it's really driven by the third -- well, all of this is driven by volume, right? So the more volume we push into the plant, the more we utilize the capacity once we get to a successful utilization rate, which is north of 80% the additional 20% is planned maintenance and any unplanned maintenance baked into that 20% to 15% left over. That's a pretty healthy target for this plant. That's going to trigger a second shift and third shift once we pull up the second. There has to be clear economic justification. So this utilization is really -- it's quite simple. Volume over cost equals more profitability. And having control of our costs in control of our volumes and quality is what underpins the customers want the product. It's also very helpful for our customers to see that our processes and our plant was integrated into our business. They can come and see where we make their products. They can come and audit the quality. They can see how we package and store inventories. It's very helpful in the development process with customers. So a little further into customer and project updates. Our business development and product development pipelines are as healthy as they've been in the company's history and definitely in my history with Alexium. So new cooling and energy conservation and new FR projects, all commencing started in late quarter 4 of 2026, and then we will be more private commencing in FY '27. And those started last year will be ramping throughout the fiscal year. So in the fourth quarter, we had 2 new cooling pillow projects, 1 for the Alexicool coating and 1 with our Eclipsys heat dissipation textile. We are in a multi-melting point coding development for an energy conservation application. So that's reached the pilot scale production this month. We actually had trials over the weekend and the product came out beautifully today. So we're in negotiations with the customer there, and we expect to be reporting sales in that market by the 4C in October. We signed some new agreements in August, and those were request for development work on additional thermal management in the energy conservation, both with very large utilities. We took our first order for the FR coating again at the AlexyShield and that's for furniture, and that order is shipping this month. So we'll push further into that market as we go forward. As I said, for Nicoool, the Army, we're at the mercy of their time line, but they have signaled and maintained that it would be September, October at the latest. So as soon as we know something, we'll make that known to the shareholders. And in the pipeline, our business development product in pipeline are very healthy right now. And let me -- that's a very general statement. So let me try to capture what that means. We have to apply discipline daily, weekly, monthly here to keep from -- we have to resist the temptation to chase so many things that come in as leads. So many opportunities that can hit our pipeline, we stack our pipeline to focus on near-term revenue from products that we can make right now that have been tested and are mature and ready for prime time. And that's the focus this company needs to have in order to generate cash positive results and continue growing from there. If we chase everything, we would achieve very little. So the pipeline has a lot of business in it that's really focused on short-term revenue in our core markets that align well with our product development, business development and manufacturing strategy. And the team is hyper-focused on delivering results from that, and we've changed as Alexium over the years from that scientific development company that chased a lot of intellectual pursuits to a more sales and manufacturing organization that's focused on delivering production and revenue from production. That's a tight change for this company. And we're going through that change now and look, it's been a bumpy ride, and it's -- there's going to always be bumps along the ride. But this is how we're building a stronger foundation, and this is how we're going to deliver long-term success that's sustained. So we're going to stick with that discipline for now, but the pipeline is very robust. But just know, you'll get card hearing this from me, focus, focus, focus on execution short term. So in summary, we've overcome the post-closing challenges after the acquisition in Ohio, Glad to report that we're stabilized now and are ramping again. We've recommenced and ramping production in the bedding market despite soft conditions and many new nonbedding placements are coming through early on in the fiscal year now. Very excited about that. We have a lot of friends and a lot of relationships and good products in the bedding market, and we want to continue that pursuit. But we -- our aspiration is for the bedding market to just be 1 percentage piece of a pie, a larger pie that's diversified across many markets. And our goal is to deliver thermal products and protective products through FR to a lot of different markets. We just found ourselves concentrated in bedding and how to weather the storm and deliver short-term success there. Now we're starting to slowly work our way out of that, leveraging new technology and the manufacturing to get us there. But we do want to deliver success in the bedding market, and we do want that to be a big part of our book, but not the majority and not an over concentration like it has been in the past. So it's a parallel pursuit. And again, we're aimed at reaching cash positive results by the new year. That remains the goal. And then lastly, we were disrupted in Dayton with some problems in the manufacturing facility. Again, those are behind us. Really during that period, we lost about 3 to 4 months of momentum that we were very excited about in January. It's not lost forever. It was paused while we worked through those issues. Now we're regaining that momentum. The opportunities are still there. So now we're back into the early phases of ramping. So it's really just a delay of 3 to 4 months. And then leadership in operations is stronger than it's ever been with new plant management and Randy coming on as the COO. We're very excited about where we're heading. The executive leadership team here with Heather, Nick Lattner in Technology, myself and Randy is also stronger and more well rounded than ever has been in Alexium. So despite the disappointing results, the company is well-positioned to ultimately and finally deliver good results and make that just a milestone into growing this company to where it should have been all along. So with that, I'll turn it back to Simon to bring us home, and then we'll move into some questions and answers, and we'll do our best to answer all the questions that have come in overnight and during the session here.

Thank you, Bill, and thank you, Heather, for your contributions. Look, at the conclusion here, I'd like to say, from the Board's perspective and from my own perspective. The company has made significant strides. The 1 place where that has yet to be reflected is on the scoreboard accounts, which is the financial results. We do recognize that at the moment, we're running behind where we should be in terms of the financial performance of the business. And management is very focused on catching up on that gap and getting us to a position of being self-sustaining from a capital perspective as soon as possible. The headway that we've been making with customers across a number of different products in a number of different industries is extremely positive. And from where we sit as a Board, and I'd say our board engagement is at an extremely high level with the team, I think we would be confident in saying that the growth we're seeing in the underlying activity in the business is real and that the progress is very tangible. We will be back to you with a 4C for the September quarter end, which will be delivered at the end of October, and we'll have another session probably in the week following that, where we will again run through the 4C results and provide a comprehensive trading update. It's -- I understand from all shareholders' perspective, being a long and frustrating journey so far. But I think we're at that point where investors should certainly remain cautiously optimistic and hopeful about the future. We are making strong progress, and I think we will start to see that over the course of the next 6 months in terms of the results. And with that, I'll throw it back to Heather to be effectively our moderator for questions. We had a couple of people submit questions ahead of time as they were going to be unable to attend the webinar itself.

And if you have a question, please put the question into the chatters per the instructions. And Heather, we also got to pass those along and direct them towards Billy, myself, or if it's a very hard question she'll answer it ourself. So thank you.

I Sure. Some of the questions that have come in have already been answered, so I'm just going to skip those. The first 1 has not been answered of all the improvements that have been initiated over the last few years, when are we going to see those in the results?