Cicor Technologies Ltd. (CICN) Earnings Call Transcript & Summary

I would like to welcome you to our webinar, Monilog - Loads on Transport Goods. And I'm very pleased about the great interest. After a short introduction about Cicor and the Cicor site in Dresden, I would like to present how to eliminate the black box in the transport and storage of your goods. By the term black box, I mean in particular, what happens to your goods during the journey to the customer. The Cicor Group is a globally active provider of full cycle electronics solutions. Currently, 2,200 employees work at 12 locations in Europe and Asia. Our commitment to our customers is to offer an unrivaled range of products and value-added services. We use leading technologies for high-end electronics to produce advanced electronic devices. To do this, we can also apply our high-precision substrates and microelectronics, which is required for specific industries such as aerospace, medical and military. The site in Western Germany is the youngest member of the Cicor family. Here are some facts and figures about the manufacturing side. In addition to the various technologies for the EMS sector, I would particularly like to highlight our more than 30 years of experience in the industry. A very special role is played here by our development department with 10 engineers, who deal with electronic layout software and embedded firmware development, respectively. One of the product lines we develop are the Monilog data loggers, which our customers use to monitor the transport and storage of their goods. Many companies are integrated into a global network of suppliers and customers. Many areas are digitized or are accompanied manually to ensure high quality of both the preliminary products and the company's own products. Nevertheless, problems accrue again and again at interfaces due to unclear conditions. Seamless tracking is not always guaranteed, even though this may have been communicated by the service provider. Some of these risks, these emergencies are shown here as pictograms and are certainly more or less known to everyone. Everyone knows the global supply chain. We buy our products from suppliers scattered all over the world, and they are delivered to us in a variety of ways. Through quality certificates and incoming goods inspections, we ensure that only flawless materials are used. The respective products are manufactured in the factories. Final tests in your production confirm the faultless function, so that the delivery to your customers can take place. Nevertheless, it happens again and again that a device does not function properly when it is put into operation at the customer side. Time consuming troubleshooting begins. The schedule is programmed, the customer puts pressure on you and is dissatisfied. These are the consequences. In addition to the damage to your image, additional costs rise that were not calculated. This means that your calculated profit is reduced. Nowadays, we sometimes know where our products are. This is because we often receive information about time and place from customs, from loading, from transshipment points, from logistics centers among others. But we do not know what the condition of our product is. Each of us may have had the private experience. The packaging is fine, but after opening the package, we discover that the delivered product is damaged. This is already annoying in that case because we wanted to use the product immediately. Now we have to get a replacement, send it back, wait for replacement and so on. The entire logistics chain is our blind spot. Point by point information is not enough. After all, consider how difficult it is, then what happens in the case of an non-visible damage, which will be the case much more often in reality. Here, further delays and additional costs rise because the damage product is first used and installed. Only later as to the commissioning with testing and troubleshooting takes place. One reason for this is the incomplete visibility of the conditions of your equipment and parts in the supply chain. There are a wide variety of electronic sensors for different physical properties. For example, acceleration, temperature, humidity, air pressure and light incidents can be detected electronically. The Monilog data loggers measure and store the data continuously. At the same time, a comparison is made with the configured threshold and limit values. If limited values are exceeded, it -- as in the event of an incident, measurement data curves are recorded and stored at high frequency. The important thing here is how short the reaction time is, eg, in order to actually record the first usually the largest impact. Our devices are characterized by a reaction time of only 1 millisecond. This ensures high data quality. At the same time, we pay attention to the lowest possible energy consumption in order to ensure a long service life for a long monitoring operation or repeated use. This could provide reliable answers to the questions, where is my product and how is it doing. The recorded monitoring data can be analyzed and displayed with our Monilog analyzer software. In addition, we offer our customers the possibility of displaying the data in a web portal for devices with a mobile radio transmitter unit. The question where are your transported goods, is shown here in the example. As an example of continuous data acquisition, the temperature curve over time is shown here. Clearly visible are the temperature differences during transport. If the temperature exceeds or falls below the limit values, the alarms are marked with a red dot. In contrast to the continuous display of the temperature curve, here is an example of event-triggered shock measurements. Only the threshold values and the limit values are exceeded has the measurement carried out at higher frequency, and the acquisition of measurement data curves for detailed analysis will be done. If the threshold values are exceeded, the event is also marked with a red dot here. So far, so good. But what does 6 or even 15G mean now? To answer this question, let's look at impact in detail. An impact is defined, on the one hand, by its amplitude, the acceleration. At the same time, as shock always has a duration, this figure shows 2 impacts: the data logger records the curves for 1 second or 1,000 milliseconds. As you can see, the highest acceleration for IMPACT 1, the dark blue curve, is at 200 milliseconds. For IMPACT 2 on the light blue graph, we can read the highest acceleration at 400 milliseconds. Both impact values are approximately 6G. This implies the idea that both IMPACT events have the same weight. Perhaps you remember 2 formulas from your physics lessons at school. The first formula describes what is acceleration. The acceleration AB is the change in velocity per time interval. From our graph in the previous slide, we have recorded the acceleration and the duration of an impact. This allows us now to calculate the original speed of a transported object before the impact. The impact energy is the kinetic energy of a moving mass. To calculate this energy, we can use this second formula. For impact, we look for high energy impacts. This means that the impact should not only have a high G value, but also a long impact duration. Coming back to our 2 curves. The impact duration for IMPACT 1 is 20 milliseconds and for IMPACT 2, 150 milliseconds, respectively. If it transform the formula for calculating acceleration to speed, we get speed is acceleration multiplied by time. For IMPACT 1, the shock strength is 1.2 meters per second. And for IMPACT 2, it is 9 meters per second. This means that the speed for IMPACT 2 was over 30 kilometers per hour. I think we can somewhat imagine an impact at 30 kilometers per hour. In electronics, we use the frequency to indicate time. Therefore, I would like to introduce one last formula for today. The frequency is the reciprocal of time. This means that Shock 1 has a frequency of 50 hertz, and Shock 2 has a frequency of 6.7 hertz. Smart electronic filters help to evaluate the really interesting impacts. You can configure our Monilog data loggers with a low pass filter. By suppressing high-frequency vibration components to capture and evaluate the interesting impact events only. This is a unique selling point compared to many competitive products on the tracker market today. If according to Murphy's law, a damaging event can occur, it will unfortunately happen at some point. The advantage of making the brand spot in your supply chain visible is that you know if you need to take action. If, for example, physical limits are exceeded, on the basis of the analyzed data, you can decide which repair is necessary and which personnel with which spare parts are needed. This means that you react immediately with exactly the right activities. In addition, you can explain to your customers in a concrete and competent way what has happened and what consequences it has on their new product. As representatives of our Monilog product portfolio, I would like to introduce 2 devices to you here. The first is our Monilog EnDal smart. This compact data logger measures all environmental data, such as humidity, temperature and air pressure as well as, of course, the impacts that occur. A separate tilt sensor is also used to determine the position of goods in the room. These swaying movements can occur, for example, when loading with a crane on the case of wave motion during ship transport and can lead to damages. At the same time, the device records the exact position with GPS. The data storage are protected with a multilevel password and complies with the current deemed standards. This means that they are also recognized in court proceedings and by insurance companies. The second device is our Monilog Shock Display Curve 2 plus. It contains all the functionalities that the EnDal smart just mentioned. With the help of a display, all measured data can be shown directly. Further features are external pressure sensors and a near-field communication interface, respectively. With the associated Monilog Connect app, you can read out the status report with your smartphone and send it if required. This report includes all alarms and the largest measured values for a quick assessment of the transport and storage quality on site. A use case for monitoring a magnetic resonance thermograph. In the presented case, the magnet is prefabricated at various locations distributed worldwide. Already underway to assembly, the transport is continuously monitored in order to detect non-visible transport damages. All the in-housing parts for the liquid helium, for cryogenic cooling of the coil, the superconducting wire are very sensitive against external shocks or loads. Further internal installations of the vacuum vessel, for instance, radiation and isolation shields, suspensions elements, which hold the inner vessel in position are not visible from the outside and cannot be checked easily. In addition, these have to be as small as possible due to cost and warming. All electrical connections are sensitive against package. They have to be reworked if a maximum acceleration is exceeded. All this work and additional control activities were required before continuous transport monitoring was carried out. With the use of electronic sensors, this work was eliminated and costs were saved. At the same time, productivity is increased because the condition of the whole MRI is clear. All your advantages at a glance. In one simple sentence, a supply chain manager once told me, since his company has been using Monilog data loggers, he gets sleep soundly again. Because if no alarms are registered, he can use the transported goods. And in the event of alarms, he is able to trace the damage event and act accordingly. I am convinced that I have presented you an interesting way in which modern sensors and intelligent data analysis can be used to detect emergencies in sensitive products and thus prevent later malfunctions. Within the next minutes, I look forward to your questions. Thank you very much for your attention.

Now you have the possibility to ask your questions. You can do this in the Q&A section as shown in the picture. [Operator Instructions]

Are there any questions from you? There's a first question. How do I configure the threshold values and where do I get them? The threshold values and the alarm values too can be configured conventionally with your computer. For that, you have to use the Monilog Analyzer software. And this software is free of charge. On the other hand, with the Shock Display Curve, you have also the option to configure the values directly on the unit. The second part of the question, where do I get them to obtain the correct threshold and alarm values we have often discussion from our customers? For that, please ask the designer of your product. Only he or she knows what is the -- what are correct values. And if you do not have any value, you have to do special drop tests, which help to determine the threshold values. Are there questions from the auditorium? There's another question from Zara. Is it possible to use external sensors? Yes, it is possible. I have shown an example from the -- in the presentation for the Shock Display Curve 2 plus. For that Monilog Data Logger it is possible. We use cables with secure bayonet connectors for this. And in addition to this pressure sensor, we have the possibility to use temperature and humidity sensors as well as acceleration sensors. For that, we offer also different cable lengths. Any further questions from you? Yes. How do I receive the recorded data, and is there a report? To receive the data we have -- we offer 3 different ways. The first is that you read the data on the display of the equipment. Maybe you remember on the Shock Display Curve 2 plus in the presentation, there is a small display on it, and you will be able to read the data. This allows that you can be -- directly they handover on construction sites from one transport to another one. So this is the one hand -- the one possibility. The second and the most common option is to download the data to your computer. For that, you have to use the Monilog Analyzer software. And then you have the complete recorded data on your computer and you can do the analysis of all the data. You can create a report and can send this report as you want. And the third option is that you can read out the data via -- not the data, I'm sorry, you can read out a status report with the NFCs, with the near field communication, with the Monilog Connect app. And then you have 2 sides of data, which can be sent to the quality manager or to someone else who needs this data. That's quite a good question for different physical properties. So the temperature, let's begin with the temperature. Our temperature range, which we can detect is from minus 40 to plus 60, in some cases, to plus 85 degree centigrade. For acceleration, we use different acceleration sensors. The most common is that we use a range from minus 8 to plus 8 and minus 16 to plus 16. And we have a special range from minus 100 to plus 100. So this is the range for the acceleration. And for humidity, yes, of course, all of us -- all of the tracker, we use the same -- more or less the same sensor. So typically, the range is from 0 to 100% humidity, but we decreased a little bit -- or reduced a little bit the range. So we have a range from 20 to 80 percentage of the humidity. Further questions, please? No further questions? Okay, then thank you very much for your interest in the presentation, and thank you for coming. And I would say goodbye to all of you. If you have any further questions, you can send me an e-mail or get me on call. It is possible to see or to download the presentation afterwards if you want. Thank you again, and see you later. Bye.