CPS Technologies Corporation (CPSH) Earnings Call Transcript & Summary

Good morning. My name is Adrienne, and I will be your conference operator today. At this time, I would like to welcome everyone to the CPS Annual Shareholders Meeting. [Operator Instructions] I would now like to turn the call over to your host, Grant Bennett. Please go ahead, sir.

Thank you, Adrienne, and welcome to each of you. I'm Grant Bennett, the President and CEO of CPS Technologies Corporation. It's just past 10:00 a.m. on Friday, April 24th, and I hereby convene our 2020 Annual Meeting of Stockholders and call it to order. On behalf of myself and the other Directors and officers of CPS, I welcome and thank each of you for joining us. We're holding the meeting obviously under some unusual circumstances. Officially, the meeting is an in-person meeting, but we are pleased that you can join us telephonically. What we'll do is proceed through the meeting in an in-person format. And when we're done with that portion of the meeting, we'll open up the call for questions and comments. May I now introduce the other Directors who are here in person or primarily by telephone? By the way, we -- as I'll comment later, we're, of course, operating but practicing social distancing here. The other Directors present in person or by telephone are Thomas M. Culligan, Francis J. Hughes, Jr., Ralph M. Norwood and Dr. Daniel C. Snow. And the officers of the company who are present in our conference room, but each of us at least 6 feet apart, Charles K. Griffith Jr., Chief Financial Officer; Susan April, Vice President of Administration and Corporate Secretary; Charles Da Rosa, Vice President of Operations; Dr. Mark Occhionero, Vice President of Marketing; and Cheryl Olivera, Vice President of Sales. We also appreciate a representative of Wolf & Company, P.C., the company's independent registered public accounting firm, who is on the line and would be available to respond to any questions later. Let me now proceed to conduct the formal part of the meeting. And once all the votes are taken, we will adjourn the meeting officially. I'd like to make some brief comments, and then we'll open the call to any questions. So during the meeting, Chuck Griffith, our CFO, is operating as the Corporate Secretary for the purposes of this meeting. And Mr. Griffith, before we proceed to the consideration of the proposals presented for this meeting, will you please present the notice of the 2020 Annual Meeting of Shareholders.

As indicated in the notice of meeting and accompanying documents, which were mailed commencing on or about March 16, 2020, to all stockholders of record as of March 6, 2020, as certified by the affidavit of the company's transfer agent and registrar to do the mailing of such notice and accompanying documents, which notice and affidavit will be filed with the records of the company, we are here today to consider the following business items: one, election of 5 Directors to serve on the Board of Directors until the next Annual Meeting of Stockholders and until their successors are elected and qualified; two, a stockholder advisory vote on the compensation of the company's named executive officers as disclosed in the proxy statement for the meeting; three, a stockholder advisory vote to determine the frequency of voting by stockholders on the compensation of the company's named executive officers; four, approval of the CPS Technologies Corp. 2020 Equity Incentive Plan; five, ratification of Wolf & Company, P.C. as the independent registered public accounting firm of the company for the fiscal year ending December 26, 2020; and six, consideration of and action with respect to such other business and matters as made properly come before this meeting or any adjournments hereof.

Thank you. We will consider each item in the same order in which it appears in the notice of the meeting. Are there any stockholders present who have not voted by proxy or who wish to revoke a proxy previously given? If so, ballots are available. I note that there are no stockholders present who have not voted by proxy. I will now ask Mr. Griffith to furnish us with a count of the number of shares represented at this meeting.

There are present at this meeting, in person or through representation by proxy, a total of 11,999,317 shares of common stock, which is 90.85% of the 13,207,437 shares of the common stock of the company, outstanding and entitled to vote at this meeting.

Thank you, Chuck. In view of your report, I hereby declare that a quorum exists at this meeting. We're now ready to proceed with the transaction of business. There are 5 items that require action at this meeting. So let's move on to consideration of the proposals. Proposal number one, the Election of Directors. The first matter to be voted on by the stockholders is the election of 5 directors to serve on the Board of Directors until the next Annual Meeting of Stockholders and until their successors are elected and qualified. The nominees of the Board of Directors, by unanimous vote of its independent directors, are Grant C. Bennett, Thomas M. Culligan, Francis J. Hughes, Jr., Ralph M. Norwood and Daniel C. Snow. Do I hear a motion that these nominees be elected as Directors to serve on the Board of Directors until the next Annual Meeting of Stockholders and until their successors are elected and qualified?

I so move, if you can hear me through this thing.

Thank you. Mr. Hughes is so moved. Speaking through his mask, thank you for wearing that. Are there any other nominations or discussion on this motion? As I see none, because of the procedures necessary to deal with proxies, we will vote for all proposals after consideration of the final proposal, and we will announce the preliminary results of the voting on each following tabulation of the votes. So we'll now proceed to the next order of business. The second matter to be voted on by stockholders is a stockholder advisory vote on the compensation of the company's named executive officers as disclosed in the proxy statement for this meeting. Do I hear a motion that the compensation of the company's named executive officers as disclosed in the proxy statement be approved?

I so move.

Thank you. Is there any discussion on that topic? As there appears to be none, let's proceed to the next order of business. The third matter to be voted on is a stockholder advisory vote to determine the frequency of voting by stockholders on the compensation of the company's named executive officers. Stockholders may elect to vote on the compensation of our named executive officers every year, every 2 years or every 3 years. Stockholders may also abstain from voting on this proposal. The Board of Directors has recommended that stockholders elect to vote annually on the compensation of the company's named executive officers. Do I hear a motion that the stockholders vote to determine the frequency of voting by stockholders on the compensation of the company's named executive officers?

I so move.

Thank you. Any comments or discussion? Okay. Proposal number four, approval of the CPS Technologies 2020 Equity Incentive Plan. The fourth matter to be voted on is the approval of the CPS Technologies Corporation 2020 Equity Incentive Plan, which provides for the issuance of up to 1.5 million shares of CPS common stock upon the grant of awards made under the plan. Do I hear a motion that the CPS Technologies Corporation 2020 Equity Incentive Plan be approved?

I so move.

Thank you. Any comments? Let's proceed to the next and last item of business. The fifth and final matter to be voted on by stockholders is the ratification of the appointment of Wolf & Company, P.C. as the independent registered public accounting firm of the company for the current fiscal year ending December 26, 2020. Do I hear a motion that the appointment of Wolf & Company be ratified?

I so move.

Thank you. Any comments or discussion on that topic? If not, having introduced each item, let's proceed to the voting. I now declare the polls open for voting on all proposals. All proxies and ballots should be turned into the secretary for tabulation. No proxies or ballots or revocations or changes to ballots or proxies will be accepted after I declare the polls close. I would now ask one of the proxies to cast a ballot on behalf of all the shareholders who voted by proxy. Are there any other proxies or ballots to be collected? There appears to be none. Therefore, let me declare the polls closed. It's 10:15 a.m. The votes will now be tabulated following which we will announce the results of the voting. And as there were no changes, the tabulation prepared immediately before this meeting is ready for review. We'll now have the preliminary report of the voting from Mr. Griffith.

The holders of 7,679,933 shares of common stock present or represented by proxy and voting at this meeting have voted to elect Grant C. Bennett to the Board of Directors. The holders of 144,637 shares of common stock withheld authority with respect to such nominee, and there are 4,171,608 broker nonvotes. The holders of 7,684,848 shares of common stock present or represented by proxy and voting at this meeting have voted to elect Thomas M. Culligan to the Board of Directors. The holders of 138,712 shares of common stock withheld authority with respect to such nominee, and there are 4,171,608 broker nonvotes. The holders of 7,683,323 shares of common stock present or represented by proxy and voting at this meeting have voted to elect Francis J. Hughes, Jr. to the Board of Directors. The holders of 140,237 shares of common stock withheld authority with respect to such nominee, and there are 4,171,608 broker nonvotes. The holders of 7,559,380 shares of common stock present or represented by proxy and voting at this meeting have voted to elect Ralph M. Norwood to the Board of Directors. The holders of 251,280 shares of common stock withheld authority with respect to such nominee and there are 4,171,608 broker nonvotes. The holders of 7,665,592 shares of common stock present or represented by proxy, and voting at this meeting have voted to elect Daniel C. Snow to the Board of Directors. The holders of 158,015 shares of common stock withheld authority with respect to such nominee and there are 4,171,608 broker nonvotes.

Thank you, Chuck. The holders of a majority of the shares of common stock entitled to vote on this matter have voted for each of the nominees. I, therefore, declare that each of Grant C. Bennett, Thomas M. Culligan, Francis J. Hughes, Jr., Ralph M. Norwood and Daniel C. Snow has been elected director to serve until the next Annual Meeting of Stockholders and until his successor is elected and qualified.

The holders of 7,603,712 shares of common stock present or represented by proxy and voting at this meeting have voted to approve the compensation of the company's named executive officers as disclosed in the proxy statement for this meeting. The holders of 201,700 shares have voted against approving such compensation. There are 22,297 votes abstaining, and there are 4,171,608 broker nonvotes.

Thank you. The holders of a majority of the shares of common stock voting on this matter have voted to approve the compensation of the company's named executive officers, as disclosed in the proxy statement for this meeting. I hereby declare that such compensation has been approved.

The holders of 4,069,639 shares of common stock present or represented by proxy and voting at this meeting on the matter have voted to approve the compensation of the company's -- this isn't right. I've named every year -- I'm sorry, named executive officers every year, right? Sorry. The holders of 10,337 shares of common stock present or represented by proxy and voting at this meeting on the matter have voted to approve the compensation of the company's named executive officers every 2 years. The holders of 2,314,981 shares of common stock present or represented by proxy and voting at this meeting on the matter have voted to approve the compensation of the company's named executive officers every 3 years. There are 1,432,752 votes abstaining on this matter and 4,171,608 broker nonvotes.

Thank you. The holders of plurality of the votes cast at this meeting on the matter having voted to approve the compensation of the company's named executive officers every year, I hereby declare that stockholders shall be given an advisory vote on the compensation of the company's named executive officers every year. I can't -- I'm allowed to make a comment here. I'm -- it's encouraging to me that a number of shareholders voted every 3 years. If we -- if -- the fact that we have a proxy statement and annual meeting every year, means that the -- if you like, the incremental effort of voting every year is not great, but I do think that our compensation policies take a longer-term view. And I'm just pleased to see the views of the shareholders on this topic.

All right. The holders of 7,567,986 shares of common stock present or represented by proxy and voting at this meeting on the matter have voted to approve the CPS Technologies Corp. 2020 Equity Incentive Plan. The holders of 234,620 shares have voted against approval of the plan. There are 25,103 votes abstaining, and there are 4,171,608 broker nonvotes.

Thank you. The holders of a majority of the shares of common stock voting on this matter having voted to approve the CPS Technologies Corp. 2020 Equity Incentive Plan, I hereby declare that such plan has been approved.

The holders of 11,982,060 shares of common stock present or represented by proxy and voting at this meeting have voted to ratify the selection of Wolf & Company, P.C as independent registered public accounting firm of the company for the current fiscal year. The holders of 9,958 shares have voted against the election, and there are 7,299 votes abstaining.

Thank you. The holders of a majority of the shares of common stock voting on this matter having voted to ratify the selection of Wolf & Company, P.C., I hereby declare that such appointment has been ratified. If there is no further business to come before the meeting, I will adjourn the formal part of the meeting. And after adjournment, Mr. Griffith and myself, and for that matter, any other member of management would be happy to answer questions. Is there any other business to be brought by those who are here present? There is none. So do I hear a motion to adjourn?

I so move.

Thank you. All in favor?

Aye.

The motion to adjourn the meeting is. [Audio Gap] Formal part of the meeting adjourned. Let me -- as we move to the informal part, let me thank all of you for casting your votes. And we appreciate your interest in the company. And again, appreciate you casting your votes. Let me make some fairly informal comments, and then we'd like to open the line for questions. The first topic I'd like to comment on is COVID-19. I'm sure we're all tired of this topic. And yet, it remains a topic that continues to consume a great deal of our time and attention. CPS has been open and operating throughout the unfolding epidemic, and we expect to continue to do so. The disclaimer that any comments are valid only effective of the date hereof perhaps has never been more appropriate than it is now as it relates to this topic. As you'll see here, we feel very good about where we stand vis-à-vis COVID-19, and things can change quickly. Nonetheless, we've been open. We are operating, and we expect to do so. The cybersecurity and infrastructure security agency, an agency within the Department of Homeland Security, is charged with providing guidance at the federal level regarding which businesses are essential and which businesses are nonessential in the event of emergencies. This agency of Department of Homeland Security is known by its acronym CISA. CISA declares that the defense industrial base is essential and CPS is fully and squarely in the defense industrial base. This federal guidance is advisory in nature, the final decisions remain with state and local officials. The Massachusetts Governor, Charles Baker, in his executive orders, which do have the force of law, has largely followed the guidance of CISA in determining which businesses are essential and which are not essential. He's declared the defense industrial base essential and literally uses the word urges companies within it to remain open and operating. And as a result, we're pleased to be able to do so. Let me touch on 4 topics very briefly: our employees, our customers, government legislation to assist companies and the likely impact of COVID-19 on our financial performance. First, our employees, the health and well-being of our employees is, of course, our primary concern. To this end, we have fully and aggressively implemented all CDC and OSHA guidance relating to stopping the spread of COVID-19 in the workplace. We continue to operate 3 shifts a day in the factory, but shifts have been staggered to prevent overlap. Cafeteria has been reorganized. Social distancing markers are placed throughout the facility. Work stations have been moved to facilitate social distancing. The temperature of all employees is taken every day. Masks have been distributed and are used by employees. Those employees who can work from home are doing so, et cetera. With the full involvement of all employees, we are making CPS the safest possible workplace, recognizing that COVID-19 will be with us in the United States for some time to come. I've met individually with each employee who falls into the CDC high-risk category should they contract COVID-19 to ensure that we're taking additional precautions to protect them. There has been and continues to be absenteeism resulting from COVID-19 due to the obvious factors, schools being closed, the need to care for family members who have COVID-19, or in some cases, simply anxiety about being outside of the home in the current environment. We are working with employees individually to simply do the right thing and as a result, although absenteeism has been much larger than normal, it has been and we believe will continue to be manageable. I'm deeply grateful to those employees who have come to work every day and continue to do so. Next, our customers. Demand from our customers, so far, has remained strong; I must say, in fact, surprisingly strong. Some individual programs that customers are delayed and are being stretched out, but by and large, our core demand remains strong. All of our major customers in Europe, in Asia and in the U.S. have continued operating throughout the epidemic. There are a small number of smaller customers who have closed at least temporarily, but again, our largest customers have continued to operate. Given the international nature of our customer base and recognizing early on that COVID-19 would disrupt transportation networks and supply chains, we took action to increase safety stock in various parts of the world. This increased safety stock has allowed us to meet delivery commitments in spite of increased absenteeism at CPS and in spite of difficulties and delays in international freight forwarding. I particularly commend our operations team led by Charlie Da Rosa for excellent planning and getting well ahead of these challenges caused by COVID-19. We've continued with outstanding delivery performance through this period. Thirdly, there have been several pieces of legislation to assist businesses to weather this storm. As mentioned, we are very fortunate. Customer demand remains strong, which is obviously a real blessing in this current environment. Our balance sheet remains strong. As you know, in the second half of last year, we entered into a new significantly larger line of credit with BDC New England. Because demand remains strong, the liquidity is solid. We need every employee. We have had no layoffs or reduced hours. Because of all of these factors, we're not currently participating in the payroll protection program of the CARES Act. Obviously, things could change, but we currently will leave the CARES Act money to be used by those companies that need them. We are participating in and are grateful for one key benefit in the Family's First Coronavirus Response Act namely the provision that obligates us to continue to pay employees who are absent due to contracting COVID-19 but then allows us to recoup that payroll cost by reducing the company's portion of the payroll tax. This benefit is very helpful for those employees who cannot work due to COVID-19, either contracting of themselves, due to caring for a family member who has contracted COVID-19 or due to being home to care for children who are now out of school. Lastly, what's the impact of these factors on our financial performance? There was essentially no impact on our first quarter 2020 financial performance. There will be an impact on our financial performance going forward. But as of today -- and I strongly caution that things can change quickly, as of today, we believe the impact in the upcoming 2 or 3 quarters will only be modest. For example, freight cost to Europe have more than doubled as a result of air traffic coming to a near standstill. There are obviously labor inefficiencies internally due to absenteeism. Nonetheless, we believe the impact will be modest. Although we don't release our internal annual operating plan publicly, let me say, I believe we will be able to meet our internal annual operating plan targets approved by our Board of Directors last December in spite of COVID-19. I can also say that plan shows year-over-year growth in both top and bottom lines. Let me shift to just comment that our first quarter has concluded. We very much look forward to releasing our first quarter 2020 results and discussing the positive developments that underlie those results. I will leave that discussion to our quarterly conference call, which will be within the next 2 weeks. We'll be issuing a press release with the timing of that call, most likely next week. Let me comment on the bigger picture, what I'll call the fundamentals. By fundamentals, I refer to market developments that relate to demand for our products, the competitive environment and our own internal strength and progress. The fundamentals remain strong. And in fact, in spite of the epidemic, in my opinion, these fundamentals are stronger than they've ever been. Demand for IGBT or power modules continues to grow worldwide, not only for traction applications but also due to new applications areas such as use in the electrical grid. We continue to be active in automotive power module development activities at several customers even though the rollout of EVs is slower than many people would have predicted. We have had a sustained effort for over 2 years seeking to more deeply penetrate the U.S. defense and aerospace markets. By their very nature, these markets require high reliability and high performance. And that's exactly what our metal matrix composites provide, higher reliability and higher performance. We are continuing to make progress in penetrating these markets. For example, we now have components in many satellites. Our components are in all of the current generation of the U.S. GPS satellites. We're in several black box defense satellites. We're in several scientific satellites. We have a key component on Perseverance, the next Mars rover, which NASA is scheduled to launch this summer. Internally, our march on the path of continuous improvement continues, certainly, somewhat affected but not stopped by COVID-19. And via continuous improvement, we're strengthening our competitive position. So in summary, while not immune to COVID-19, we believe its impact on us will be modest. Demand today from our major customers remain strong. We're on track with our annual operating plan, a plan developed last year prior to COVID-19 and a plan that calls for growth in both top and bottom lines. The fundamentals in the marketplace remain positive, and we believe our competitive position is strengthening. With that, let me open the line for questions. Adrienne, did you see if anyone has any questions or comments.

[Operator Instructions] The first question comes from the line of Donald Mercer.

I got 2 or 3 short questions. One of them, I'll start from the top -- executive -- do all executives hold stock in the company?

Yes, all executives do own stock, and all executives have stock options.

Is that the same thing for the Board of Directors?

Yes, it is. Yes, it is. All members of the Board of Directors individually own stock. And of course, Frank Hughes also represents our largest single institutional shareholder and larger shareholder, American Research and Development.

Now here's the most serious question. I know you covered the COVID-19 a lot, but this would help other companies that are trying to open. I want to know how many you've actually lost, how many passed away that you know of, that work for you? Has anybody died that work for you on your payroll?

Thank you for asking. This is a very -- this is -- the human element of this is critical. The short answer is no. We have had 2 employees test positive, both employees were in their 30s, and both employees are recovering very well without any serious complications. We've had many, many more employees test negative. And we -- of course, no one can know for sure because you can't see the virus, but we have growing confidence that we really are creating a very safe workplace. And to be candid, my primary concern is that employees may contract the virus outside of work rather than here. But no, no one has died. No one has been seriously ill. And so far, 2 employees have contracted it.

Okay. Let me tell you what would help all the people. That's 2 people out of -- what's the total number of employees that you have?

That's 2 out of approximately 160.

Okay. So that's -- then that's less than 2%. I think this is what the governor should know how you're operating and other company -- might allow other companies to open up if they put together a proper physical arrangement to operate. I think it's very important. Because I think it looks like you've done a very good job.

Well, thank you, Don. And...

Excuse me. You don't even know those 2 people got sick on the job or down the street.

Right. And -- we don't know. There's a lot of news out there, but what we have done is just with a laser-like focus, we've gone to the actual published CDC guidance and the guidance there is that when employee does test positive, we, of course, send them home, but we interviewed them, and tried and determined, asked them to try and identify where they think they might have gotten it. And in both cases, our employees felt that they contracted it outside of CPS. But our view is that the COVID-19 is not going to magically go away. And as we've -- yes, we've implemented, but let me call some emergency measures, things like temperature checks on every employee as they come to work. But fundamentally, the changes that we're implementing are here to stay and will simply create a healthier workplace. It will help prevent the spread of the flu and bronchitis and so forth. So anyway, that's where we are. Let me comment that we -- although we're not in touch with the state government on this topic, we're located in the town of Norton, and we are in touch with the Norton Board of Health, and they've been very supportive, and they appreciate the clear and correct information that we're providing.

If this -- if the above information was handed up to the governor, and he's trying to deliberate on when to open and who can open, I think some of the [ save ] information, which is a job that you've done, would help. And I understand also that you might want to carry this on to avoid the absenteeism or the regular flu and the regular flu season that would help the payroll there also. But I think getting back to the governor to tell him that some companies under certain conditions should remain -- or can remain open because you've -- you've been successful at it.

Well, thank you. You do give me an idea, Don. We have found our state representative and state senator to be helpful in -- to be interested in us as a manufacturing company and to be helpful. And I will contact them and just update them on what we're doing and our progress. And that may be one avenue to get this information into the state government.

Yes. You might contact your local where you reside, your representative and senator. They are also -- because he might have a different thought process.

Yes. Yes, that's exactly what we'll do.

If there's anything, you know I'm here. I would not be too far if there's anything I can do for you, let me know, please.

Don, thank you very much. Thank you, and vice versa.

Stay healthy. That's what we've got to do.

Yes, yes.

I'm still working myself as my operation. It's not as intensive as yours.

Good for you. Good for you. Wear a mask.

Yes, I do. When I'm within 6 feet of -- when I go down the street or walk around your house, I'm outside, I don't bother. I need the fresh air.

All right. Thanks very much.

[Operator Instructions] We have a question from the line of Warren Silver.

Stay safe. I just had 2 questions to ask. I noticed in the 10-K that the Attleboro lease of 13,800 square feet was reduced to 2,000 square feet of storage. Does this mean that our armor division is closing down? Or what's going on there?

Excellent question. Warren, excellent question. In Attleboro, we had 2 operations. One operation was our tool and dye shop, which fabricates the injection molding, tooling and other tooling we use to make our components. Completely independent of armor, we concluded that we could reduce the lead time in fabrication of tooling by moving that operation to Norton and combining it with our machine shop. And because the machine shop operates 2 shifts a day, we could keep the tool and dye shop running 2 shifts a day. So we -- last December, we moved the tool and dye shop to Norton. And that was actually well over half of the square footage that we were using in Attleboro. And then the -- what we have done is, we've kept intact the armor fabrication capability, which is in Attleboro. And we -- it's been some time since I've talked about armor, and just candidly, everything has moved slower in that sphere than we would've hoped. And I'm primarily talking about -- on the market -- sales and marketing side. But the crisp answer is, we have not only fully preserved the ability to fabricate armor but we are continuing to pursue the opportunities that I've talked about in the past, and we believe that we will be successful in that area. So the risk of repeating myself, we've reduced some ongoing expenses by moving our tool and dye shop out of Attleboro. And we've also moved the individuals that were in Attleboro on a full-time basis over into Norton. But we have preserved fully the ability to fabricate armor, and we're continuing to try and move forward the programs that we've targeted. So we're not out of the business, it's just moving more slowly than we would have hoped.

And the second question I'd like to ask is, in the 10-K, you mentioned that 3 of the largest customers provide 75% of the business. And yet the way you just discussed it now, we seem to be pivoting the corporation towards getting more government work, space work and defense contracts. Is this a permanent thing? Or does this reflect a lack of business coming from the EV business and the electric car business and others? I like your comments on that, please.

Sure. So the demand from those 3 customers that we -- are our largest customers is strong. And all 3 of them are forecasting continued growth, and we believe that we'll participate in that growth. And when we talk about our first quarter results, we'll elaborate a little bit more, but everything is very positive with those customers. However, what we would really like to do is to further diversify our customer base so that we are not so dependent on a small number of customers. And with that objective in mind, we're aggressively pursuing aerospace and defense business. And the aerospace and defense business is very good business. The margins are very solid because the -- our materials provide real benefits that have significant financial benefit in those applications. In general, however, each individual application in the aerospace and defense market tends to be smaller in quantity than some of the commercial opportunities. And so we really are making very good progress but the -- in terms of percentages, these large commercial opportunities continue to be our largest sources of revenue. But in short, we do want to diversify our customer base, that's an explicit major target, and we're making progress in the aerospace and defense area. We'd like to get into some larger, really, recurring programs in the aerospace and defense business. Realistically, satellites aren't that larger market. They are very attractive market, but that's what we're trying to do is further diversify our customer base.

Okay. This is one other question. There's a new company that's starting out in Normal, Illinois. It has backing from Amazon and the others, Rivian, R-I-V-I-A-N. Amazon has invested $700 million in it. And they are producing electric delivery vans. And -- has anyone from us, our company called on them? Or is this a potential lead that we could follow through on?

We're certainly aware of them, delivery vans and pick-up trucks. And the -- we are tracking -- what we're trying to do? So we produce a component that goes into the motor controller that goes into an electric vehicle. And in most cases, the vehicle manufacturer sources a completed module from a module manufacturer. In a very few cases, the OEM makes the module themselves. And -- but what we are doing is tracking to the extent humanly possible, on a worldwide basis, where are the OEMs getting their modules, and we're calling on those customers. So in short, yes, it could be an opportunity for us. And we believe that they are evaluating modules from at least 2 of our current customers for use in their vehicles.

Okay. Well, thank you very much, and all [ our friends at ] CPSH, stay safe.

Thanks very much. Same to you, Warren.

The next question comes from the line of Stephen Fasi.

I just have sort of a general question about the satellite and aerospace industry. Is that analogous to like the automotive industry where you sell to a module company that then provides that to the final customer?

I -- well, let me -- I'll let Charlie and Mark to chip in here for a minute. But we -- while fully abiding by nondisclosure agreements, let me say, our customers include Lockheed Martin, they include Raytheon, they include Northrop Grumman, they include Ball Aerospace, they include International Rectifier. And all of those companies either supply into or make satellites themselves. And so in some cases, we're dealing directly with a satellite maker. In many cases, we're dealing with a key component supplier who's selling into the satellite maker. In the electronics world, there's a sharp demarcation between a space-rated component and one which is not. So that if we're dealing with a company that's making components, they clearly indicate making modules, for example, lots of DC-to-DC converters, for example, they'll indicate and the specification will be different, if it's for space application than if it's for a commercial application.

Steve, this is Mark Occhionero speaking. With regards to space applications, we have done some cryogenic testing of our material. And it turns out, not only do we have a weight advantage, but we also have a thermal performance advantage that these applications need. And we're talking about very low temperatures. Our material behaves better than the competing materials, like copper moly and copper tungsten, at 80 degrees and 100 degrees Kelvin. So we're talking very low temperatures.

Yes, Steve, just to give you a specific example. I'm thinking of one product we make. If you look at the print, it says it's a complex part, and they call it an interposer. And it is, if you like, a structural component that the satellite manufacture themselves use. And in many other cases, we are making housings that module manufacturers stuff with space-qualified, radiation-hardened electronics and sell to the satellite maker. And then I'm also thinking of another example in a scientific -- a satellite that was a scientific mission, just some very custom scientific analytical equipment on board. And we have, let me just call them, custom components that are designed specifically for that application.

Okay. Great. Appreciate it. I'll like extra color on that, too. I guess that covers my questions, but I'd like to commend you on your sort of quick response, so it seems anyway, to the pandemic and say that, as a stockholder, I think the right thing to do health-wise is also the right thing to do business-wise. So I encourage you to maintain your procedures.

Thank you. Thank you. We agree entirely. We agree entirely. Adrienne, we need -- as you know, we scheduled this call for 1 hour, and we have about just, I think, 2 minutes left, but is there a last question?

We have no questions in queue.

Okay. Let me thank everyone for joining us. Thank you for your support. Thank you for casting your vote, and we'll be issuing a press release again most likely next week, the latest, the week after. Our excellent auditors are also working remotely, and they're doing a great job, but we need to just conclude the review of the Q1 results. And then, again, within 2 weeks, we'll be holding a call where we can discuss those results. Thank you very much, and stay safe. And with that, we'll sign off.

This concludes today's call. You may now disconnect. Thank you.