CPS Technologies Corp Q3 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Thank you. Good morning. Can you share with us the bookings in the backlog for the quarter?

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Okay. Can you tell us if bookings were greater than revenue?

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Okay, great. Thank you. I'm sorry. Brian, you talked about the external development as a source of funding research. And I understand the philosophy behind that, and I understand the benefits for it. But what I'd like to try to understand is how large a portion of the revenue that would be currently? And if you were to get what you wanted out of those projects, what percent of revenue would it be generating now, let's say, 12 months or 24 months from now?

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Right, understood. Got it. Okay. So it sounds like Q4 is going to be a nice rebound from Q3?

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Because of that, will you be requiring additional working capital? You mentioned in your commentary that working capital was a source of cash in Q3. So can we expect a reversal of that in Q4?

Question: Jim McIlree - Dawson James Securities, Inc - Analyst : Got it. Okay. That's it for me. Thanks a lot.

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : Hi, good morning. Good morning and welcome to Board, Brian. So I guess, what would you consider the best unexploited opportunity now that you've been at the company for a while and kind of maybe any changes or improvements you want to focus on?

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : Okay. And on the AlSiC front, I mean, specifically for heat sinks and things like that, that's kind of not as much a focus?

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : Okay. That's helpful. Thank you. Chuck, on the gross margin, you helped a little bit saying there was inventory write-offs and like due to scrap in the quarter. But I mean, the incremental flow through is over 100%, right? I mean, your revenue dropped versus the gross profit dollar drop sequentially.

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : And you didn't burn inventory either. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 02, 2023 / 1:00PM, CPSH.OQ - Q3 2023 CPS Technologies Corp Earnings Call

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : The reserves. So that was top line and a whole lot of COGS or added to COGS?

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : Right. That makes sense. Okay. What product area was this quality control issuing?

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : AlSiC.

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : All right. So for the current quarter, we're in there's still some yield issues, but the reserve is going to cover that, and you absorbed that in Q3? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 02, 2023 / 1:00PM, CPSH.OQ - Q3 2023 CPS Technologies Corp Earnings Call

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : All right. Okay. So we're back to the -- I mean, you had great margins over the last few quarters. That's one of the things I'm most excited about that you can get the earnings going. So this 30%-ish margin area is not unrealistic then, it wasn't a fluke?

Question: Greg Weaver - Invicta Capital Management LLC - Analyst : Okay, perfect. Thank you. Appreciate it and good luck.