Unique Fabricating [UFAB] Conference call transcript for 2022 q1
2022-05-13 16:27:06
Fiscal: 2022 q1
Operator: Good day, ladies and gentlemen, and welcome to Unique Fabricating First Quarter 2022 Earnings Call. It is now my pleasure to turn the floor over to your host, Jeff Stanlis. Sir, the floor is yours.
Jeff Stanlis: Thank you, operator. I would like to welcome everyone to Unique Fabricating’s First Quarter 2022 Earnings Conference Call. Hosting the call are Doug Cain, Unique Fabricating’s President and Chief Executive Officer; and Brian Loftus, Unique Fabricating’s Chief Financial Officer. Before I turn the call over to Doug, I would like to remind everyone that matters discussed on this conference call will include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Forward-looking statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the company’s actual results, levels of activity, performance or achievements to be materially different from those expressed or implied by today’s call. All such forward-looking statements are based on management’s present expectations and are subject to certain risk factors and uncertainties that may cause actual results, outcomes and performance to differ materially from those expressed by such statements. These risks and uncertainties include, but are not limited to, those discussed in the company’s annual report on Form 10-K and quarterly reports on Form 10-Q that are filed with the SEC pursuant to Rule 424(b), and in particular, the section titled Risk Factors. All statements on this call and including those in this afternoon’s press release are made as of today, and Unique Fabricating does not intend to update this information unless required by law. In addition, certain non-GAAP financial measures will be discussed during this call. These non-GAAP measures are used by management to make strategic decisions, forecasts, future results and evaluate the company’s current performance. Management believes the presentation of these non-GAAP financial measures are useful to investors in understanding and assessing the company’s ongoing core operations and prospects for the future. Unless it is otherwise stated, it should be assumed that any financials discussed in this call will be on a GAAP basis. Full reconciliations of non-GAAP to GAAP are included in the press release that was issued earlier today. With that said, I would now like to turn the call over to Doug. Doug, the call is yours.
Doug Cain: Thank you, Jeff, and good afternoon, everyone. Unique Fabricating, Brian, and I appreciate your investment of time for our update of the company’s outlook, overall operations and financial results. The management team and our associates continue to make improvements across all aspects of our business. Our first quarter results show improvement over the third and fourth quarter of 2021, and demonstrate the effectiveness of actions taken with further benefit to be seen in the quarters ahead. Based upon our completed and ongoing initiatives, including the cost recovery efforts, customer rationalization project, and market diversification activities, we are improving our relative position in the markets we serve and one of the stronger and more capable suppliers in our competitive space. While overall market and supply chain challenges continue, we are well positioned to realize the benefits as the supply chain issues continue to normalize and volumes increase. Our Q1 operational performance was negatively impacted by the ongoing labor challenges and the continuing increases in raw material and other costs across all aspects of the supply chain. With the positive top line impact of the cost recovery activities, our $35.3 million net sales slightly exceeded our prior guidance and is the highest level since Q3 of 2020. As noted previously, this cost recovery partially offsets the actual cost increases we have seen and continue to see. The complexities of effectively flexing cost of the continuing short-term change in release schedules also had a negative impact on plant efficiency and operating margins. Labor availability challenges in certain locations and cost increases throughout the supply chain are continuing in Q2 and are consistent with the overall and persistent higher inflation throughout the economy. While we have seen and do expect to see continued challenges through Q2 and in the second half of 2022 from a chip shortage and other factors outlined previously, we are experiencing improving supply chain availability and higher customer demand volumes with less short-term fluctuations. I am proud of how our entire team is meeting these comprehensive challenges with urgency and a strong commitment to finding solutions. We continue to respond effectively with the focus on taking care of customers and of augmenting our capability. As these conditions provide opportunities for Unique, we are confident that we have taken necessary steps to drive improved performance as volumes increase. Our comprehensive cost recovery activities initiated during Q2 of 2021 and have delivered positive results to date by offsetting some of the cost increases. We are now having success in our pivot to a more targeted cost recovery approach focused on specific programs most negatively impacted by logistics and continuing raw material cost increases. We expect these cost recovery activities to be fully realized by the end of the second quarter with more than a $2.5 million annualized benefit, partially offsetting the higher inflationary costs we continue to see. Simultaneously, our smaller customer rationalization project continues. During Q2, we expect to exit approximately 20 smaller customer relationships and are passing along more significant price increases and higher minimum order quantity requirements for other smaller customers. These actions improve the efficiency and productivity of our plants by reducing complexity with minimal revenue impact. Despite high ongoing costs related to our being in a forbearance condition with the bank syndicate, we have seen a reduction in our SG&A cost to the approximate $5 million level previously communicated. We have continued our tactical investments in laser cutting and robotics to improve our operating margins in a sustainable manner through reducing labor costs and improving material utilization. The higher quotation activity we mentioned on the last conference call has continued. Year-to-date, we’ve secured approximately $31 million of COI or customer order intake. We are continuing our focus on market diversification with 12% of our 2022 wins in the appliance market and 18% in the medical and consumer goods markets, with 70% in the transportation market. We have identified key targets to realize additional wins with medical device suppliers. In addition, we recently achieved approval to produce reaction injection molded front of DASH HVAC seals for a high-volume light duty truck application, which will enable us to further expand applications within our automotive HVAC customers. We are continuing our collaboration efforts with adjacent suppliers for expanded product offerings in the areas of integrated impact foams and formed optical and decorative films. Light-duty new vehicle inventory has continued at historically low levels with approximately one million units on hand each of the last seven months compared to more than three million each month throughout 2019 and 3.4 million units March 1, 2020. Resulting from the low inventory, U.S. light vehicle sales continued to be less than previously forecasted providing additional pent-up demand supporting a positive longer-term outlook. The seasonally adjusted annual sales rate or SAAR did increase to approximately 14.0 million units in Q1 2022, representing the best quarterly sales performance since Q2 of 2021. The independent North American automotive forecast as of April 19 remained flat at 14.7 million units for 2022 from March’s or approximately 13% above 2021, which was equivalent to the 2020 production units. As stated previously, the combined production from 2020 through 2022 forecasted volumes indicates an approximate shortfall of more than nine million units from the average of the last four pre-pandemic years. The prolonged production shortfall and the low inventory levels lead to a positive North America production outlook for 2023 with 16.5 million units down 0.2 million from March’s forecast at an average of approximately 16.8 million units from 2024 through 2027. We are not yet seeing any meaningful negative impacts for North American production from the events continuing to unfold in Ukraine and in China, except to contribute to the increase in raw material and logistics costs. Utilizing the third-party forecast of 14.7 million units to be produced in 2022, recognizing the Q1 increase from previous, the decrease for Q2 and a higher overall second half production value, we are slightly reducing our range for Q2 net sales to be between $35 million and $37 million from the prior guidance of between $36 million and $38 million for Q2. We are confirming our prior guidance of between $75 million and $79 million for the second half of 2022 and confirming the full year forecast previously provided of between $145 million and $152 million. With overall supply chain issues continuing to improve through 2023 and the forecasted production levels dropping approximately 1% from the previous expectation, we can also reconfirm our sales forecast for 2023 with a range between $169 million and $179 million. We see similar positive trends for demand and improving supply chain conditions, both near term and longer term in our other markets where we also see higher supply chain costs. We are experiencing an uptick in appliance production volumes, both near-term and midterm forecast as well as increased quoting activity in consumer goods and appliance markets as onshoring activities from China specifically gain traction. Within the next few months and subject to the myriad challenges the IRS is currently facing, which have been causing substantial delays, we still expect to receive a combined $2.1 million from the United States government related to income tax loss carrybacks and employee retention credits. We continue our collaborative work with our bank syndicate as we develop a longer-term framework to enable the execution of our growth plans. To date, we are maintaining sufficient liquidity for us to operate in these challenging times. Brian will now provide an overview of our first quarter 2022 financial results.
Brian Loftus: Thank you, Doug. Good afternoon, everyone. Turning to the first quarter results. Net sales for the first quarter of 2022 increased $0.5 million or 1.5% to $35.3 million as compared to $34.8 million in the first quarter 2021. The increase in net sales as compared to the same period in 2021 is primarily due to our cost recovery efforts where we passed some of our cost increases to our customers through pricing. Of the $35.3 million net sales for the first quarter, customers in the transportation market accounted for approximately 89%, appliance at approximately 9%, with the remaining 2% primarily attributable to our consumer off-road market. Gross profit for the first quarter was $4.8 million or 13.5% of net sales compared to $5.9 million or 16.8% of net sales for the same period last year. The decrease in both gross profit and gross profit as a percentage of net sales reflects the higher manufacturing input costs and the inefficiencies of the operating environment, which were partially offset by our cost recovery efforts. Selling, general and administrative expenses for the first quarter of 2022 were down to $5 million compared to $5.8 million for the first quarter of 2021. The decrease in SG&A was primarily the result of lower salary expenses and lower amortization expense as certain intangible assets became fully amortized since the first quarter of 2021. These lower expenses were partially offset by higher professional fees related to our forbearance agreement. Operating loss for the first quarter of 2021 was $194,000 compared to an operating income of $48,000 for the same period last year. This decrease is the result of increased material, freight and labor costs, partially offset by our cost recovery efforts and lower SG&A expenses. Interest expense was $0.5 million for the first quarter of 2022 compared to $0.7 million for the first quarter last year. The year-over-year decrease was primarily due to favorable mark-to-market adjustments on our interest rate swaps. Net loss for the first quarter of 2022 was approximately $0.6 million or $0.05 per basic and diluted share compared to a net loss of $1.1 million or $0.11 per basic and diluted share in the first quarter of 2021. We had an income tax benefit of approximately $0.2 million for the first quarter of 2022 compared to an expense of $0.4 million in the first quarter of 2021. I’ll now provide a brief update on our financial position and liquidity. Total debt was $47 million as of March 31, 2022, compared to $48.4 million as of December 31, 2021. We ended the quarter with approximately $0.8 million of cash and cash equivalents and $5.2 million of net availability on our revolving line of credit. Doug will now provide some closing remarks. Doug, back to you.
Doug Cain: Thank you, Brian. With Q1 results, we’re now seeing the benefits of higher volumes and lower fixed costs, despite the ongoing extra expenses related to our forbearance agreement activities. We’ve been committed to significant operating improvements and organizational enhancements through these last challenging two years. As a result, we’re now better able to effectively capitalize on increasing volumes across all our markets with supply chain availability improving, and can generate improved operating results over the next quarters. Our team remains focused on continuous improvement in all areas and realizing the benefits from enhancements now in place. We are positive about the midterm and longer-term outlook for our position in the markets we serve and the resulting improved operating profit as we maintain our fixed cost discipline. We remain committed to our vision of delivering profitable growth and increasing shareholder value that follows from our brand of providing innovative, optimized and sustainable solutions for our customers. With that, we will open the call for questions. Operator?
Operator: Our first question comes from Michael Taglich from Taglich Brothers.
Michael Taglich: Hello, great quarter, $1 million positive EBITDA. That’s a terrific performance in this environment. So thank you for – I’m sure you had to work very hard to do it. Doug, would you do me a favor, would you please first repeat the guidance that you’re giving now for Q2?
Doug Cain: Yes. So thank you for the question. So again, we’re using the latest forecast that we have and what we see.
Michael Taglich: And what number is that in North America auto sales that you’re pegging that to?
Doug Cain: Yes. So it’s basically the overall 14.7 million units to be produced in 2022. The IHS data, the last one that was updated middle of April had a slight increase in what was produced in Q1, a slight decrease for Q2 and then slight increases for Q3 and Q4. So as a result, we have just modified slightly our Q2 range of revenue that we’re expecting to be between $35 million and $37 million. We’re confirming our second half numbers between $75 million and $79 million. And then for the full year, confirming again the $145 million and $152 million for the full year numbers, which again is comparison to about $122 million that we did in 2021. In addition, based upon all we know today and based upon the third-party forecast and the business one to date, we’re expecting a range of between $165 million and $179 million in sales for 2023. And we’ll be able to maintain the fixed cost discipline primarily around the SG&A, even with the increasing sales values. And that’s where the operating leverage comes from.
Michael Taglich: Terrific. So at this point in the quarter, we’re about halfway through the quarter, you’re basically saying next quarter, that Q2 will be – should be at least as good as Q1 or better?
Doug Cain: Yes. So, we’re slightly better on the top side. Again, on the cost side, the cost increases and the challenges have continued. And as I mentioned, our cost recovery activities, you always end up behind the curve with these things. So as costs increase, you end up eating some of the costs, you work with the customers collaboratively as best you can, you work on other cost reduction activities, which are kind of behind the curve. So Q2, we’re still a bit behind that curve. But with the things that are in place that will be fully implemented before the end of Q2, Q3 is when we’ll really begin to see the benefits of all this and have our gross profit and our operating margins improve Q3 forward.
Michael Taglich: But you had a headwind in Q1 as well, correct? So if I looked at it sort of like you had a quarter-over-quarter you had a headwind in Q1, you have a headwind in Q2. And Q3 and Q4, hopefully, we have some fun, if you will, right?
Doug Cain: That is our intention. I appreciate the way you characterize that.
Michael Taglich: Okay. Great. With this modest ramp that we’re seeing, much more modest than you were looking at. I’ll tell you what – I’ll get back in line. Thank you for answering the questions. I know it’s not easy raising prices and collaborative is probably not actually the way it feels. But you’re doing a great job. Very impressive. Thank you.
Doug Cain: Thank you for that. And again, in your comment to the ramp, again, Q1 and Q2, Q2 should be slightly above Q1, but Q3 and Q4 do see a pretty significant increase on a percentage basis. When I gave that range of $75 million to $79 million. So there’s an increase that’s happening.
Michael Taglich: Great. Thanks. Hi, good afternoon Doug and Brian. And a quick question on the SG&A. You’ve managed to bring that down really very nicely. You roughly have five right now, and that includes some forbearance agreement fees of roughly $200,000. As you see, as you look at – so let’s eliminate that forbearance fee in QS48. As you keep ramping up volume in – well, to some extent in 2022 and in 2023, where do you see that SG&A going?
Doug Cain: So again, thank you for the question and the observation of the work that’s going on with that. So two things. One, we have a very small amount of our business that runs through, I’ll call it, an agency relationship with some of our Asian business that we do that’s commission-based. So there’s a little bit that we had that’s commission based that would increase relative to volume. The rest of the SG&A costs are predominantly fixed, and there is no view that there’s going to be anything that is required to be able to – or to necessary to support the volumes even into 2023. We have some ongoing work that we’re doing in finalizing the implementation of our Plex ERP system that was built into some of our forecast and some of the reductions. When we reach the agreement with the bank syndicate and the forbearance agreement fees drop off, then we would replace some of that maybe with a little bit of these, I would say, infrastructure costs. But the target condition is to maintain a $5 million, no more than $5 million SG&A level as we go forward.
Unidentified Analyst: Okay. And then maybe a question on the gross margin. It’s been very much pressured by – you had mentioned some raw material cost and sort of the inefficiencies in the plants. Can that go back to a 20% level at some point in the next couple of years?
Doug Cain: So I appreciate the question. I like the way you face that can. Can it? Yes, it can. What we’re targeting is a ramp, which is partially a product of our having basically in our operating expenses, it’s one-third variable and two-thirds fixed there. So there’s also quite a bit of operating leverage as the revenues increase with our OpEx. We’re targeting in the second half of the year to have a gross margin to be 16% plus in the second half and Q2 is going to remain challenged, again, as we finalize this additional group of cost recovery and also cost reduction activities. So there’s a lot that we’ve done relative to working again collaboratively with our suppliers and with our customers, working through material substitutions, changing locations of sourcing to reduce the logistics cost. So it’s not just a topside activity, but it’s a comprehensive look as far as the raw material and logistics costs. And so the combination of higher production volumes and these cost recovery activities and the cost reduction activities. We are planning to be north of 16% in the second half of 2022. And then, again, as we’ve discussed in some of the calls previously, you’ve got an inflation on your P&L, where all the costs are higher, and therefore, your overall gross margins as a percentage basis tend to be a little stressed. Longer term, we are targeting to be at 20%, but I would say if you moved into 2023, you’re sitting more in the 18% range, 18% plus is what we would be targeting. And then the next phase would be to reach the 20%.
Unidentified Analyst: Great. That’s very, very clear. Appreciate that very much. Thank you.
Doug Cain: Thank you.
Operator: We now have John Nobile from Taglich.
John Nobile: Hi, good afternoon Doug and Brian and thanks for the call and for taking the questions. And I just want to say it was nice to see actually in this challenging environment that you were able to pay off in the quarter, what was it about one point something million paid off $1.4 million in debt. So that was kind of nice to see that on the balance sheet. But Doug, I was hoping that you could talk a little about your ability to pass on rising costs to auto manufacturers?
Doug Cain: That’s a – I’ve got a smile on my face right now. That’s a somewhat loaded question, John, considering that I’m sure that I have a few of my customers that are on the call today, which makes it a little bit challenging. But what I would tell you is, again, it’s an ongoing process. Our OEs and our Tier 1s in transportation have a process. Some of the process is more complicated, onerous and time consuming. Others are a little bit, I’ll say, more collaborative, that’s on the transportation side, and I’ll touch that again. If we go to the appliance and the consumer goods and the medical, there’s a greater willingness and a greater understanding and I think in a greater history of understanding cost increases in the supply base. They’re real. There’s no hiding what they are. I guess the Producer Price Index went up 11.1%. Today, year-over-year was the number that was out there. So they’re willing to do it and then they’re also more willing to pass those costs along to the end customer. So you’re seeing that in all of the appliance business and et cetera, that’s out there. So that is, I’ll say, somewhat simpler. Again, we have to provide documentation and support for the raw material costs that we have. We do discuss increasing labor costs, packaging, et cetera. We try to do this in a cost sharing. That’s the reason that I’m very clear in all my communications that we are not passing along and have not intended to pass along 100% of our cost increases. And that’s the way that we represented it with our customers. And to date, we’ve been able to get all of our customers in the transportation space, whether Tier 1, Tier 2, Tier 3 or what have you as well as the consumer goods and appliance to understand the need for the cost increases and we’ve been able to pass those along. Unfortunately, as the costs have continued to increase, we’ve had to go back and there was a Phase 1, a Phase 2 and now we’re in a Phase 3. And as noted in the comments, we have been more targeted in what this is with specific programs, some specific product sets and specific raw materials and are working through with the customers now and are bringing that phase to a conclusion no later than the end of June. And that’s the reason, again, we’re saying Q2 will remain challenged a little bit from the operating margin perspective. And again, with some of the other issues that are out there, but then Q3 and Q4, we’ll again see another step change improvement. So Q4, we had 10% – or 90% cost of sales or 10% gross profit, Q1, we had 13.5%. And again, like I said, we’re targeting to be north of 16% in the second half of the year.
John Nobile: Okay. Well, thank you for that. But did you make prior comments that you anticipated – I know it takes a while to get to the auto manufacturers as far as getting the increased cost passed on to them. But after the second quarter, say, by the second half of the year, barring further increases in prices, you feel that you’ll have attained the cost – not cost reduction, cost recovery efforts by then?
Doug Cain: Yes. That’s what our intention again, subject to nothing dramatic increasing again, as I have made the comment before, I’m not sure I’ve done it on this call. And again, this is Doug Cain speaking, specifically. But to date, as I mentioned in the call, we have not seen an impact directly in North America from the Ukraine situation, from the China COVID situation, which is having significant impacts in other parts of the world. It may find its way here, but one of the things that I had predicted or forecasted or expected, was that the scarce raw materials, chips and other things would find their way to North America where the – it’s a little more stable relative to a production environment from the other areas I mentioned. We’ve seen that to be true. Some of the OEs and others have mentioned that in some of their comments relative to production. So we’ve seen that being a piece of what we’ve got. So production is going to be better here. We also expect, and again, I can’t give you the date, but that we’re beginning to, on the materials that are involved in transportation, seeing a bending of the curve where now our raw material suppliers are no longer coming to us saying their base raw materials are going up. They’re now coming to us for price increases relative to their labor and packaging and energy and these other inflation costs. So the percentage increases while relentless are lower, and they have also made comments that, in some cases, they are beginning to see a reduction in their base raw material. So sometime in the second half of this year. Again, I can tell you we will begin to see a tilt in that curve and then the same stickiness will occur in trying to get the pricing, the cost recovery on the upside. There will be some stickiness in the cost recovery on the downside, let’s say. So we expect margins to improve for both of those reasons. And into 2023 for that reason.
John Nobile: All right. Well, thank you for that. And just one final question. I wanted to get an idea of the current rising cost and the supply chain issues, how they’re impacting your competitive position? I wanted to see if it’s actually – has it been of a benefit? Or do you think it’s been like a detriment? And I’m thinking, might competitors have been leaving the space where when things do pick up, it’s going to be beneficial to you? I was hoping you could talk a little about how the current situation is impacting your competitive position?
Doug Cain: No, that’s an excellent question. I could probably spend 30 minutes to three hours trying to answer that question comprehensively. So what I would tell you, and again, going back to the notes in Q2 of 2021, and we actually mentioned this at our Q1 2021 earnings call, we said we were going to – and we’re beginning a process of cost recovery all the way back then. At that time, we were kind of on an island, and we were told we were on an island, and we were told a lot of other things, too. But we were told that we were early in doing this, but we had to do it. And because the process takes so long, we began to see the benefit of this in Q3 and Q4 of last year. Had we not started it then, we wouldn’t be seeing the benefit until now. And I do know that there are some suppliers out there, some in our space, some in other spaces that have been unwilling to maybe approach their customers in the same way and therefore, they’re now going at it today. So early, we were in a position that where competitively, this was frowned upon. I would also say again, with the forbearance agreement situation that we’ve been under for the last year, that’s also had a negative impact on our ability to win business in certain industries and with certain customers, and that’s the reason this – completing this agreement with the bank syndicate is important to us commercially. So that’s been an overhang for us. So the combination of raising prices and being in a forbearance agreement situation has provided, I’ll say, some of our competitors’ opportunities and are part of the reason for our lower than hoped for, lower than desired, lower-than-targeted COI numbers. Now with that being said, everybody else is caught up with us. And if you look at the public communication from suppliers across the industries and what we know privately is occurring, everybody is now going after price increases. They have to. Everybody is challenged with some of these same things. So the level field – and the playing field is more level today. And the fact that we continue to supply, meeting customer demands, being very flexible, working collaboratively with our suppliers and our customers, has kept us in a pretty good position with them. And we expect that when we complete the situation with the bank, this will open us up to be in a much better competitive situation with our customers. There is nobody that we’re aware of, okay, because the raw materials, the base raw materials our global commodity parts in which we are being – where we’re paying more than someone else is paying. We are a high-volume user. So therefore, we know that everybody else’s prices in the same way, labor costs in the same way, et cetera. So we believe our competitive position is actually improving now as other people are catching up to the cost recovery activities. That’s a long answer, but it’s a pretty complicated situation. So overall, we feel like we’re in a very good competitive position from our cost structure, our fixed cost structure, from our facilities, from the logistics that we have relative to being in all regions of North America. We have very little exposure from a supply base or even from a sales base to Europe and to Asia. And therefore, we feel like we’re well positioned as we go forward.
John Nobile: Okay. So you’re getting in the game of cost recovery ahead of time maybe was a little bit of an impediment to your growth because of that versus the competitors. But now that they’re actually finally starting to increase their prices, which I guess they’re forced to, that’s only going to help your competitive position at this point because now it’s more of a level playing field, I believe?
Doug Cain: Yes, that’s a much shorter – that’s a short synopsis, yes. But you’re absolutely correct.
John Nobile: Basically sum it up. Yes.
Doug Cain: But that all took place in Q2 of last year because we had to.
John Nobile: Good management team. Keep up the good work. Thank you.
Doug Cain: Thank you.
Operator: We now have Michael Taglich from Taglich Brothers.
Michael Taglich: My question is answered, guys. Keep up the good work. Thank you. All of my questions have been answered. Thank you.
Operator: Okay. We now have George Melas from MKH Management.
George Melas: Yes. Hi again – Doug and Brian, you’re doing a really pretty big effort to diversify the customer base, 30% of your CRI so far this year is away from transportation. So if you look at 2023, what percentage do you think would be away from transportation? So – and I don’t know if you can break it further into appliance and sort of consumer, industrial or medical?
Doug Cain: Yes. So what I would say is, again, that’s another one of those things that’s a math issue that’s interesting. So as Brian had commented in its earlier things in Q1, 89% of our business was transportation, 9% appliance and 2% consumer and medical. And with transportation increasing Q3, Q4 and into 2023 because of the vehicle builds, you won’t see a dramatic difference in those percentages. We would expect to probably see in 2023 a couple of percentage point drop in transportation, equally picked up by appliance and consumer goods. You just got an 800-pound Gorilla that when it grows, it’s very hard to move the percentages. The dollar value increases, though are quite substantial. I can’t remember what I’ve done in the last presentation that I did, but I think over two years, there’s a 75% increase in our medical business in a 40% or 45% increase in our appliance business from 2021 through 2023. But even with those increases, the percentages will probably end up being closer to 85% or 84% and 16% for the other, with appliance being probably 11% and the other about 5%. That’s a rough approximation. So in absolutes, it’s growing, it’s just hard to move the percentage a lot.
George Melas: I think you answered the question a lot better than I asked. Great. Thank you very much.
Doug Cain: No problem.
Operator: Sir, there appear to be no further questions in queue. Do you have any closing comments you would like to finish with?
Doug Cain: Yes. So again, Brian, I, the entire management team and all 1,000-plus employees of Unique Fabricating, really appreciate the continued interest, in investment and support and belief in what we’re doing. We are very positive about what we’re seeing. It’s taken a little bit longer because a lot of the other macro factors that are there. Again, Q2, I would love to tell you will not be challenging. Q2 will remain a little challenging, but we are firmly convinced Q3, Q4 and beyond are going to show the more dramatic improvements in operating performance and revenue growth. And with a bank agreement in place, the return to the very high rate of customer order intake that we had because customers are wanting to give us business and are waiting for that situation will be resolved. So we’re encouraged, and we appreciate your time investing today and look forward to talking individually or in group or wherever it may be, we always make ourselves available. Thank you.
Operator: Thank you, ladies and gentlemen. This does conclude today’s conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.
