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spk05: Greetings and welcome to Transact Technology's fourth quarter and full year earnings conference call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ryan Cordella. Thank you. You may begin.
spk09: Thank you, Rob. Good afternoon and welcome to Transact Technologies' fourth quarter and full year 2022 earnings call. Today we'll be discussing the results announced in our press release issued after market close. Joining us from the company is CEO Bart Schultman and President and CFO Steve DiMartino. Today's call will include a discussion of the company's key operating strategies, the progress on these initiatives, and details on our fourth quarter and full year financial results. We will then open the call to questions. As a reminder, This conference call contains statements about future events and expectations, which are forward-looking in nature. Statements on these calls may be deemed as forward-looking, and actual results may differ materially. For a full list of risks inherent to the business and the company, please refer to the company's SEC filings, including its reports on Form 10-K and Form 10-Q. Transact undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Today's call and webcast will include non-GAAP financial measures within the meaning of SEC Regulation G. When required, reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company website. And with that, I'd like to turn the call over to Bart.
spk03: Thank you, Ryan, and thank you to everyone for joining us on the call today. Clearly, I cannot be more pleased with our fourth quarter results or with the trajectory of the business as we enter 2023. As always, these numbers could not have been possible without the tireless efforts of the entire Transact team. Thank you so much for your hard work and constant innovation. Before I jump into some dialogue regarding our two key markets, let me provide some highlights for the quarter and year end. Our total revenue of $18 million for the fourth quarter was up a full 61% from the year prior period. with our casino and gaming market being up an incredible 123% to nearly $11 million. Our FST recurring revenue is also up approximately 14% to $2.4 million in the quarter, reflecting strong use of labels and additional software across our installed base. For the full year, we saw our total revenue grow by almost 48% to just over $58 million, which was our highest full-year revenue number since 2015. This fantastic result was driven by an increase in our casino and gaming market of approximately 96% to $30 million for the full year, and an increase in our FST recurring revenue by approximately 18% to $8.7 million, which was within our $8 to $10 million guidance. I will now discuss more about our two key markets, FST and gaming and casino. First, our FST market. I mentioned earlier our FST recurring revenue, which, as a reminder, consists of software, label sales, and service, so its third full year of sequential increase and its third quarter straight of over $2 million in revenue. We had another very strong quarter of label sales and yet another wrecked quarter for software sales. As our terminal install base continues to grow, we will see our recurring revenue number continue to rise and smooth out in the long term. Second, we are currently working with a number of large international QSR restaurant brands on testing and implementing our labeling solution, not just nationwide, but across parts of the world. In fact, we are already expecting the large QSR to start coming online in the second half of this year, which is the large opportunity I spoke about in our last call. Our expanded sales force has seen the restaurant market open back up for us as restaurants face growing inflation with labor and food costs. So we're just starting to fill the pipeline with new restaurant opportunities. As many of our investors know, we began selling our FST terminal in 2019, right before the unfortunate events of the pandemic and lockdowns had ensued, shutting down restaurants everywhere. But with some good fortune, we found success in the grocery aisle and in C-stores, which became in many cases restaurant replacements with expanded fresh food offerings. Our BOHA terminal with our labeling-only software provided an efficient and productive way for C-stores and groceries to sell fresh food. As we grow the number of opportunities in the restaurant market, I do remind our investors that from beginning of the lead to close can take almost 18 months of work. The QSR, I mentioned, has taken over two years to convince them to convert to our cloud-based labeling technology. Third, we continue to see success in the SMB market. Our sales team has already closed at least two SMB restaurant chains so far in the first quarter, and I believe that is just the beginning. Now let me touch on our paid terminals added in the quarter and for the full year. In the fourth quarter, we added 251 paid terminals collectively. ending the year with 12,180, up 2,362 from the year end of 2021. While this number is clearly below where we thought we would end the year, we did see a certain amount of fourth quarter sales get pushed into the first and second quarters. With the opportunities in the pipeline, I have plenty of confidence in our outlook for FST's 2023 results. We continue to see great traction with the number of valuations currently underway across some well-known international brands. While it will take some time to close the opportunities in the pipeline, I believe in our ability to execute these in 2023. Now let's talk about our casino and gaming market, which continues its streak of historic success. Let me start with a little background on the business. Pre-COVID, the casino and gaming market growth opportunities were driven by casino expansions, slot replacement cycles, and new casino openings around the world. We basically operated what was essentially a two-horse race for casino printer sales worldwide. However, from what we can tell in our conversations with customers and industry contacts, this dynamic has at first slowly and now quickly changed heavily in our favor. As we discussed at length last quarter, late in the second quarter, we began to pick up market share from customers around the world due to our competitors' inability to supply customers with their printers. We began to add an additional production line in the third quarter based on slot manufacturers' demand and our ability to get the needed parts and electronics to build our printer. With the demand continuing, we then began to install a fourth production line in the fourth quarter, which is starting to manufacture printers on that line right now. Transact's casino and gaming printers have become the market. We are breaking sales, delivery, and backlog numbers for our printers at record pace, and this shows no signs of slowing in 2023. As such, we feel confident that our casino and gaming sales will continue to be strong for 2023 and clearly be bigger for the full year 2023 versus 2022. Additionally, with the increased level of production, we were hoping to finally work our way into an inventory position versus air shipping our printers directly from the point of production. As a reminder, our casino and gaming products typically have gross margins above our corporate average, which is showing up in our financial results as experienced in the fourth quarter of 2022. This is an incredible moment for our business and is the result of the hard work and dedication of our R&D and procurement teams. And let me send a huge thank you to our gaming and casino sales team that had to juggle all the new orders and demand by customers and keeping them all happy. There's been a lot of work accomplished at Transact, and we all know electronic parts shortages are an issue around the world. I cannot thank our engineering and procurement teams enough for the work they did to ramp up production to meet this market demand. You know, I can only say it has truly been crazy. With the favorable FST market and the growing gaming and casino sales, I feel it important to give some guidance to our shareholders and analysts. Please understand this guidance is based on what we know today. We are currently anticipating full year 2023 total revenues to between $70 and $72 million. Additionally, we are anticipating that as a result of our cost-cutting initiatives, which were fully implemented in the third quarter and projected revenue growth we are projecting, We're also anticipating total adjusted EBITDA between $5.2 and $5.4 million. Both of these items are based on the assumptions I have discussed. Now with that, I'd like to turn the call over to Steve to discuss our financial results in more detail. Steve?
spk07: Thanks, Bart. And thanks, everyone, for joining us. Let's now turn to our fourth quarter and full year 22 results in more detail. Total net sales for the fourth quarter were 18 million, up 61% compared to 11.1 million in the prior year period. For the full year 22, total net sales were 58.1 million, which was up 48% compared to the 39.4 million in 21. Sales from our food service technology market, or FST, for the fourth quarter were 3.1 million, down 13% compared to 3.5 million in the prior year period. For the full year, FST sales were 12.4 million, down 2% compared to $12.6 million in 2021. These declines were entirely driven by lower hardware sales, mostly as a result of seasonal fourth quarter slowness in Q4-22. We added 251 paid terminals in the fourth quarter and ended the year at 12,180 units in the market. Our recurring FST sales, which include software and service subscriptions as well as consumable label sales, for the fourth quarter were $2.4 million, up 14% compared to $2.1 million in the prior year period. For the full year, recurring FST sales were $8.7 million, up 18% compared to $7.4 million for the full year 21. Our R approved for the fourth quarter of 22 was $806, down 16% compared to $965 in the fourth quarter of 21. As Bart has mentioned before, The downward pressure in ARPU is a result of additional terminals in the install base, which are currently not generating any recurring revenue. But the good news is we're growing our population of BOHA terminals printing labels in the market, giving us fertile ground to hunt for additional business and eventually sell additional BOHA software apps to these customers. Our casino and gaming sales reached a quarterly record of $11 million, up 123% from the fourth quarter of 21 and up 42% sequentially from the third quarter of 22. We saw strength across the board as our casino and gaming products continued to pick up market share, with our international sales up 108% year-over-year and our domestic sales up 131% year-over-year. For the full year, casino and gaming sales were up 96%, slightly more than $30 million. This was a result of the new competitive dynamics that Bart spoke to, including a competitor's inability to supply their customers with product, leading to increased market share for Transact. POS automation sales for the fourth quarter more than doubled, increasing 143% from the prior year to $3 million. This was the result of higher Ithaca 9000 sales due to a key supplier once again being unable to deliver product this quarter, as well as a special project we were able to service with our POS printer for a large QSR, combined with our ramp in production, allowing us to fulfill orders sooner than expected. However, sales decreased sequentially, as expected, as shipments of printers for this special project came to an end. POS automation sales for the full year were 10.7 million, up 121% from the full year 21. Moving to Transact Services Group, or TSG, For the fourth quarter, TSG sales were down 24% year-over-year to $946,000. This decrease was largely due to slower sales of spare parts and accessories. For the full year 22, TSG sales were $5.1 million, down 15% from the full year 21. However, due to the need by customers in certain markets to keep their printers working longer due to supply chain constraints, we expect TSG revenue to grow in 23 as we supply spare parts for this new demand. Moving down the income statement, our fourth quarter gross margin was 45.8% as compared to 38.7% in the prior year quarter. Full year gross margin was 42% as compared to 39.1% in the full year 21. These gains were a result of a favorable change in product sales mix and price increases we instituted during 22 to help offset inflationary effects. Our operating expenses for the fourth quarter increased 12% to $7.7 million. For the full year 22, operating expenses were $32.1 million, up 30% from the full year 21. Breaking this down a little bit further, our engineering and R&D expenses for the fourth quarter increased 7% to $2.1 million. For the full year 22, these expenses increased 15% to 8.6 million. The increase was largely due to higher expenses related to designing out unavailable parts and qualifying new parts as issues arose throughout the year. Our selling and marketing expenses increased 2% to 2.6 million for the fourth quarter. And for the full year, our selling and marketing expenses were 11.3 million, which was up 48% on a year-over-year basis, largely due to a return to pre-COVID levels of spending as well as the build-out of the FSD sales group and higher sales commissions to our casino and gaming sales team. Lastly, our G&A expenses increased 27% to $3 million for the fourth quarter. And for the full year 22, our G&A expenses were $12.2 million, which were up 27% from the full year 21. The increases were largely due to across-the-board salary increases and higher depreciation and expenses to support the company's new ERP system that we implemented during 22. We generated operating income of $494,000 in Q4 22 compared to an operating loss of $2.6 million in the prior year period. For the full year, our operating loss was $7.7 million compared to an operating loss of $9.4 million in 21. Now, the bottom line, we recorded net income of $260,000, or 3 cents per diluted share, compared to a net loss of $823,000, or $0.08, per diluted share in the year-ago period. For the full year, we had a net loss of $5.9 million, or $0.60 per diluted share, as compared to a net loss of $4 million, or $0.43 per diluted share in the year-ago period. Our adjusted EBITDA for the quarter improved to $1.3 million, compared to an adjusted EBITDA loss of $2.2 million from the fourth quarter of 2021. And for the full year, our adjusted EBITDA loss was $5.2 million compared to a loss of $7.5 million in 2021. As Bart mentioned, looking to 2023, we expect to generate total adjusted EBITDA of between $5.2 million and $5.4 million, which would be a great turnaround for Transact. And with that, I'd like to turn the call over to Bart for any closing remarks. Bart?
spk03: Thank you, Steve. It's been just a Hell of a ride the last 12 to 18 months, but here we are with an exciting 2023 coming. I do want to mention that I will be attending the Roth Conference that's coming up Sunday night, Monday and Tuesday in Southern California and available for one-on-one should you want to come and join and meet with me. With that operator, I'll turn the call over to questions.
spk05: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for questions. Our first question comes from Jeff Martin with Roth MKM. Please proceed with your question.
spk04: Thanks. Good afternoon, Bart and Steve. Hope you're both doing well. I wanted to start out with some insights about the guidance. It's well above my model for 2023, so great to see that. EBITDA profitability is material. I'm curious if you could kind of give high level how that breaks out between You know, casino and gaming, which obviously you've got significant, you know, wind at your sails there. And then, you know, with FST, it sounds like FST, you're looking more towards a 2024 significant ramp in terminal installs. Am I reading that right?
spk03: Yeah, good question, Jeff, and thank you. And hope all is well at your end, and clearly we'll see you over the weekend. The way we look at the year on a macro basis is we'll see lower POS sales only because the special project is over. We'll see higher TSG sales. It is interesting that in certain markets that we used to serve, we're being asked to supply spare parts, which of course is at wonderful margins. And then we do expect both casino and gaming and FST sales to be up. Regarding casino and gaming sales, Clearly, we're trying to meet the demand, and the fourth production line is up and running, and I think we're pretty good right now at leveling up the factory and eventually getting to ship printers by sea so that we can start stocking some printers, which will help our customers out because they're still paying for air freight. In our FST business, we are seeing a better first quarter than we had in the fourth quarter. We saw some orders get pushed out. You know, when we were in the POS business, the fourth quarter was always our lowest business because most restaurants do not want to install new technology once Thanksgiving comes and the holidays start. You know, we are at a cycle of the business where we've won a lot of C stores. We've won a lot in the grocery aisle. And now restaurants are starting to pick up. and that seasonality of restaurants will have an effect on our sales just in timing. But we are expecting that one large QSR will start rolling out technology, which will include both terminals and software, and that should start towards the middle of the third quarter. If everything goes right with the testing and all that, We expect to start rolling that out, and clearly that'll begin in the mid, beginning mid to end of the third quarter through the fourth quarter, and then we'll definitely pick up next year. But we do have some other projects that we should see incremental growth in 2023, both in our recurring revenue and our hardware sales for FST. So 23 versus 22 should be up.
spk04: Okay, and then could you give us an update on your large QSR customer, how their rollout is going, what kind of visibility you have? I think we ran into some issues with a large integration they were working on. Does that continue to be a distraction? Any color there would be helpful.
spk03: The large QSR that we're working on, we don't see any distraction. I'm not sure what that was about, but, you know, we are –
spk04: Trying to get large, large C store, not large QS.
spk03: Oh, large C store. I'm sorry. I'm sorry. I'm sorry, Jeff. You know, we are starting to see business come back. So, you know, we're staying close to them. It's been a funky kind of six to eight months with them with starts and stops and all that. But we have seen some new orders come in, Jeff. So that bodes well for continuing rollout. So we, you know, hopefully that continues. But we have seen some orders come in the first quarter.
spk04: Okay, great. And then in terms of component supply, it sounds like those issues are largely behind you, you know, knock on wood. But I'm curious if you had any additional challenges in Q4 or thus far in Q1.
spk03: You know, the thing that we've been able to do, what we call a whack-a-mole, of course, is to get through the really tough part issues, you know, processors and things like that, motor drivers, which were really difficult. Now we see spot issues on some of the other parts. We have become a major customer of one of our suppliers because of putting in the fourth production line. So we feel we're now more important to them to pay attention to us. So we stay very close to it. You can understand we used to have daily meetings. We used to meet literally seven days a week. It was 24-7. You know, if something hit 2 o'clock in the morning, the calls would start. Now we're down to once a week and just trying to ramp up production. We feel good about it. We have, like I said, a meeting every week. We follow the production. And like I said, we are trying to get to an inventory position now. So it gives us a little confidence in the parts that are coming in.
spk01: Great. I'll yield to others. Thanks.
spk02: Yeah, thanks, Jeff.
spk05: Our next question is from George Sutton with Craig Hallam. Please proceed with your question.
spk08: Thank you. And Bart, congrats on the good results. So relative to what you were referring to with respect to an international opportunity with QSR brands, I'm just curious if you were referring to new logos or are you referring to the same logo as your domestic expected rollout later this year?
spk03: Oh, yeah. Yeah, so our QSRs are global. So every QSR that our big customers of ours are global. So we work with them both domestically and then not across the whole world, but in certain markets that they accepted our products. So, again, these are global QSRs.
spk08: So relative to the supply chain issues at your casino printer competitor, can you give us any update of what you're hearing in the market relative to their issues?
spk03: You know, I remember your, I loved your analyst report, a picture tells a thousand printers, right? I think that was your report. It was fabulous. Look, I don't want to talk about our competitor. You know, what we're grappling with is the demand. You know, it's kind of a, it's almost a perfect storm in a way, but a perfect, you know, blooming flower. You know, we've got a casino market that's come back after a very, very difficult time. Remember, casinos never close. And they closed in 2020 and 2021. So they're back. It's very crowded. I just got back from Vegas last week. Still very crowded. They're buying slot machines, which is great for us. But at the same time, we're basically the only printer supplier. So we're grappling with that challenge. I did do a shout out to my sales team, both inside sales and outside sales. When slot machine manufacturers who are also trying to grow their business can't get product, they get angry and not happy. And when they found out we had product, it was great that they came to us But we had to manage their expectations. Clearly, we were sold out in the fourth quarter. So I give a shout-out to my sales team, my inside team, Tracy running Worldwide Gaming, that they managed the customers' expectations and we kept them happy during what was a sprint for us, if you know the term sprint in the software world, to get all this done and be able to ramp up production the way we did. You know, these parts shortages are real. They're still out there. I give a shout-out to our suppliers, one in particular that worked with us on the chip. And by deciding to use the same chip across all of our platforms, they said if we would do that, they would respond in kind. And I do a shout-out to them to thank them and my engineers that said, okay, I'll make this chip work across all of our product lines. So, you know, it was a great effort. And, you know, from what we see right now, the demand continues. And we just got to stay on top of it. We've got to stay close to it. And we've got to understand our customers' expectations. You know, because the good news is we have printers, but the bad news is we have the printers. And we've got to maintain those relationships as, you know, we supply those printers to the marketplaces.
spk08: I understand. One other thing, Steve, I'm wondering if you could look at Q4 and then the full year 23 guide and break it down into volume versus price for us, given that you've raised prices. I'm just curious how much of a component price is.
spk01: You mean how much of the revenue go up because of each of those, George?
spk00: Correct.
spk07: It really is a combination. We're not going to break out specifically what it was, but it was a combination of the two. Obviously, volume was up, but price also contributed as well.
spk03: In 2022, in 2023, it's all volume. We haven't raised price in 2023, so it's all volume. The last price increase we put through was September of 2022. So the growth of 2023 will be, I mean, compared to the first quarter, our pricing is up, but also our costs are up. So you can't just look at that, right? Our operating costs are up because of wage inflation and all that. So it's really volume, George. I mean, the volume is up.
spk01: Some do the price go too because of the full year effect of the price increases, but Bart's right.
spk03: Here we are. But you also have expenses that are up. You have operating expenses that are up. We give a hell of a raise, you know, an increase to keep our employees.
spk02: So it's going to be a good volume year for us. Thanks, guys.
spk05: As a reminder, if you'd like to ask a question, please press star 1 on your telephone keypad. One moment, please, while we poll for questions. Our next question is from Mitchell Sachs with Grand Slam Asset Management. Please proceed with your question.
spk06: Guys, congrats on a super Q4. Thank you. So this is the first time I've seen you guys give guidance. Obviously, I've been following you a while. Can you just talk a little bit about why you have the confidence this year to give guidance? Obviously, it's a very nice turnaround from a business that, you know, had suffered during COVID and now into a nicely profitable stance. If you could do that, it'd be great.
spk03: Yeah, Mitch, when we looked at the numbers and now again, you know, we all know that something can change in June and bomb could go off or China could say they're taking it to another level. But what we see right now is a very steady casino business that and we do have these projects with FST. So we felt, due to the fact that we came through such a difficult period, that you deserved to hear from us what we were seeing, right? Now, again, things can change, and, you know, we saw that, you know, as the pandemic hit. Things can change. But given where we've come from and the support that we've had from the shareholders over these past couple of years and how difficult it has been for them to watch what's occurred, not just with us but other companies, we felt good about sharing some of this good news so you could at least see that we've made a lot of progress and we're expecting even more progress this year.
spk06: Awesome. And then with respect to the FST business, You know, we've been to the restaurant show and seen what's out there. Are you seeing anything out there from any competitors that give you any pause in terms of your kind of first mover advantage?
spk03: You know, I think the low-hanging fruit is labeling, Mitch. And, you know, when you talk to a restaurant company – and we'll talk about the different verticals, right? When you talk to a restaurant company and they are fighting – food inflation and labor and labor shortages and labor inflation, and you show them the labeling and you show them what it can save them. That's, you know, it resonates with them. You're not asking them to change the whole system. You're really just saying, look, here's what we can do. You've already had, you're either doing it by hand or you've got our old 9,700 in, you know, now look at what you can do with this thing. And it's resonating. So in the restaurant industry, you know, the talk of labor savings and the fact that, you know, they can see the label better and either not serve, you know, something that's expired or can see that something is expiring and make some stuff up so they don't lose that food and throw it out. And if we can save them 2%, 3% on waste, it's huge. So we're really focusing in on where we think we're the strongest, which is labeling. And it always has been. Now, the C-Store and grocery aisle is all about fresh food and labeling. And the interesting thing there is a lot of our customers are starting to see that that label can become a marketing device. And we're working with them on different designs and round labels and color labels and things like that. And the C-Store market is a very interesting market. I can like 60% of the C-store market are individual stores. So you're really just working on the top 30%, 40%. But they're all looking at fresh food as a growth. And when they start looking at that and looking at what's the most efficient, productive way to do that, clearly our labeling solution is catching their attention. And due to the fact that we've been in the industry the longest with labeling, We started with McDonald's, right? 9,700, started rolling it out, big orders in 2014 and all that. We've learned a lot about labeling and the different things that people can do with it. There are things that we do that nobody else does just because of our experience over the years. So what we are really trying to focus in on is when we look at the restaurant market, stop talking the huge story, get in and talk to them about where their costs are and how you can help their costs. They're taking temperature today. We get it. But if you can show them a clear label that says, hey, in two days, that thing's going to expire. Maybe you want to cook some more something with the tomato sauce. So you don't have to throw that out. So we've heard from restaurants how much money we're saving them on both labels, but also on food costs. And even one restaurant company told me personally that they think that the food that their food quality has gone up. So we're really trying to focus, Mitch, and, you know, I share this with you, on where we can sell because, look, restaurants are – they still have headwinds. Man, they came out of a tough pandemic, and they got inflation up the kazoo. They got food. They got labor shortages. When you can sit down and just say, look, you're doing this today, but look what we can do for you, and it's not that expensive. We can sell you the software for the labeling, and we can – sell you the terminal and all that, it really resonates with them. So that's where we're really taking the focus. Awesome.
spk02: Thanks. Yeah, you got it, Mitch. Thank you.
spk05: Our next question is from Jeff Martin with Roth MKM. Please proceed with your question.
spk04: Thanks, Bart. I wanted to ask you about your capacity in casino and gaming. I mean, you look at Q4 and was $11 million of revenue. You know, I always thought of the business as $5 million quarterly in terms of capacity at your market share. So I would suggest you're near 100% market share now. And on top of that, you've got pent-up demand to service. So I guess question number one is how much pent-up demand remains? Number two... do you anticipate your competitor, or within your guidance, do you assume that your competitor comes back into the market, or do you assume that you're kind of the only game in town still for the balance of 2023?
spk03: So what's important for us, and we're all doing a fair amount of travel to keep our ears to the ground to listen to what's going on with our competitor, because we have ramped up our production. we're assuming that we're going to maintain most of the market share through 2023. We do assume that it's going to come down a little, you know, because it's hard to imagine them not coming back. But, you know, our backlog is really high. I mean, people are locking up our production. So we have, and that answers the question, okay, well, why can you give some guidance? Because we have some visibility that we've never had before. Our casino customers would buy and we would ship. We always had inventory and now they're placing orders months ahead of time. So we have some visibility to the demand. But we do project in the second half that it comes down a little and still feel that the sales and EBITDA numbers are good. With the fourth line that we put in, Jeff, our capacity can meet what we consider the demand to be today. We look at the history of the casino business We do know that there was pent-up demand in the fourth quarter because there was this shortage of product in the fourth quarter. There was a huge shortage of product in the third quarter, so we were able to make up some of that shortage. But we are seeing the demand continue, and we do think that the fourth production line should meet that demand. Like I said, it's right now getting up and running, and we do believe that fourth line will continue. Let us meet if there's continued demand. And should there be more demand, which we're not expecting, we'll at least have that capacity because we are using that demand to put some printers on the ocean to eventually get to a stocking position. We don't want to have to charge our customers to air freight. So we are increasing the demand. You'll see our inventory come up a tiny bit because we want to put some product on the ocean and start to – service them out of our inventory versus air freighting to them.
spk01: Got it. Okay. That's helpful. Appreciate it.
spk02: Yeah. Thanks, Jeff. Thanks.
spk05: We've reached the end of the question and answer period. I would now like to turn the call over to Bart Schuldman for closing comments.
spk03: Look, I'd like to thank our shareholders. You know, 2020 was an amazing time when had launched some really cool technology, and you had a lot of people asking for it, and then everything just shut down. And I know I've talked about it, and everybody has experienced it, and it was tough on our shareholders, tough on our employees, tough on me to have to explain what was going on to our shareholders. And I really do appreciate the support that you gave us. I can only be thankful that we can, in return, share some success with you, drive that success through the business, and without any disruption this year, and let's hope we don't see any, you know, drive to these numbers that we've given you. I do look forward to those that are going to go to the Roth Capital Conference, be the first one of the year for us, and I'm happy to sit down and one-on-one. I am making myself available both Monday and Tuesday. I think Monday is getting filled up. Tuesday is also getting filled up, but I'd be happy to fill you in, to fit you in, and, you know, if we need to just have a beer or something, but I do want to thank our shareholders. I also cannot thank our employees more. These are really good people who never gave up and came through for all of us. So thank you very much. We look forward to our next conference call and continuing on this journey. Thank you.
spk05: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.
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