Analysis Frontiers Included (NASDAQ:REFR) Q2 2023 Earnings Convention Name August 3, 2023 4:30 PM ET
Firm Individuals
Joseph Harary – President and CEO
Convention Name Individuals
Operator
Good afternoon, girls and gents. Welcome to the Analysis Frontiers Investor Convention Name to debate the Second Quarter of 2023 Outcomes of Operations and up to date developments. [Operator Instructions] This convention is being recorded at the moment. A replay of the convention name will likely be accessible beginning later at the moment within the Investor’s part of Analysis Frontiers web site at www.smartglass.com and will likely be accessible for replay for the subsequent 90 days.
Please notice that among the feedback made at the moment could comprise forward-looking data. The phrases anticipate, anticipate, plans, forecasts and related expressions are meant to establish forward-looking statements. Statements that aren’t historic information are forward-looking statements which might be made pursuant to the secure harbor provisions which might be a part of the Securities Litigation Reform Act of 1995. These statements mirror the corporate’s present beliefs, and numerous vital components may trigger precise outcomes for future intervals to vary materially from these expressed. Important components that would trigger outcomes to vary from these anticipated are described in our filings with the SEC. Analysis Frontiers undertakes no obligation to replace or revise these forward-looking statements to mirror new occasions or uncertainties.
The corporate will likely be answering most of the questions that had been e-mailed to it previous to the convention name, both within the presentation or as a part of the Q&A session on the finish. In some circumstances, the corporate has responded on to e-mail questions previous to this name, or will accomplish that afterwards, with the intention to reply extra questions of normal curiosity to shareholders on this name. [Operator Instructions]. Additionally, we ask that you simply preserve your questions transient within the curiosity of time.
I might now like to show the convention over to Joe Harary, President and Chief Govt Officer of Analysis Frontiers. Please go forward, sir.
Joseph Harary
Thanks, Jen, and welcome aboard. Hiya, everybody, and welcome to our second quarter of 2023 investor convention name. First, I need to welcome Eyal Peso, the Chairman, CEO and Co-Founding father of our licensee and Strategic Investor Gauzy Restricted to our Board of Administrators. Eyal and I’ve labored collectively carefully now for about 6.5 years since December 2016, and we share the imaginative and prescient of how good glass will be finished proper. Gauzy has invested important {dollars} not solely in Analysis Frontiers, however in factories and enterprise growth groups all over the world and cutting-edge R&D regarding SPD expertise. They proceed to interrupt ever-increasing efficiency data set for themselves, and it’s an honor and a pleasure to have Eyal Peso formally on our Board of Administrators. Turning to the numbers; we had good income development within the first quarter of 2023, and this development continued within the second quarter of 2023. As famous in our 10-Q filed earlier this afternoon, whole price revenue for the second quarter of 2023 was up over 116% in comparison with the second quarter of 2022. Most of this was from even increased proportion development within the automotive market, in addition to development within the plane market.
For the primary half of 2023, income was additionally up in comparison with the primary half of final 12 months, as soon as once more pushed by triple-digit proportion development within the automotive and plane markets. We proceed to drive down bills, in comparison with the identical interval final 12 months, bills had been down $131,000 for the primary 6 months ending June 30, 2023, and $118,000 or 14.3% for the second quarter of 2023. Between increased revenues, decrease bills and better funding revenue, our web loss for the second quarter of 2023 was $0.01 per share, which is about $250,000 or 33.5% decrease than the second quarter of 2022. And for the primary half of this 12 months was $0.03 per share, which was about $414,000 or 30.2% decrease than the identical interval of final 12 months. Let’s discuss now a bit about among the different developments for the reason that final convention name. In automotive, Ferrari’s Purosangue are being delivered to prospects with our SPD good glass roof, and we anticipate that deliveries of the SPD good glass roof for the Cadillac CELESTIQ will begin within the second half of this 12 months.
Trying in the direction of our expectations for the longer term, extra fashions are both specifying SPD whereas switching to us from different applied sciences. Additionally since our final convention name, we made substantial progress on touchdown 2 new OEMs, and one in all which has 3 fashions focused for SPD. And whereas we will not all the time give specifics till the client has spoken, I may provide you with some steering as to locations to look to offer you a greater thought of what is coming. Merely put, even when we will not say one thing straight, you’ll be able to look to see what different individuals are saying and doing. For instance, in case you have a look at the patent literature, numerous corporations have filed patents for brand spanking new and fascinating improvements utilizing our SPD supplies for varied functions, principally in automotive. Trying elsewhere, typically you might discover proud statements about their SPD initiatives on social media by individuals who work with these corporations. And typically you’ll be able to perceive the place an organization goes and the place they see their market and enterprise alternatives, by taking a look at how and the place they’re hiring. For instance, Gauzy has about 70 job postings for brand spanking new positions in key industries that we presently service. That is about double the positions they had been hiring for simply a short time in the past.
Let me additionally show you how to attempt to put among the occasions that you simply may see within the close to future in context, so you’ll be able to perceive their significance. Analysis Frontiers and our licensees exhibit and communicate at many business conferences about the advantages of good glass. Generally, this has a really direct influence. For instance, the Cadillac CELESTIQ got here straight out of an automotive glass convention that I spoke at in Detroit a number of years in the past. Primarily based upon our discussions with GM, we anticipate a number of vehicles from Normal Motors to make use of our SPD good glass. These conferences additionally serve to coach the business, as to the advantages of SmartGlass and assist them reduce by way of the advertising litter, claims and different noise made by different applied sciences. That is starting to bear fruit for us. Some automakers which have chosen different switchable applied sciences and even put them into manufacturing, have now come to us and our licensees due to dissatisfaction with the efficiency and sturdiness of those different applied sciences. We grew to become the gold normal by way of arduous work and serving to to coach the business, as to the variations in good glass applied sciences.
As we’ve got famous many instances on these convention calls, not all good window applied sciences are created equal. These automakers are coming to us and their glass suppliers from a place of information and a greater context. Do not be stunned that the placeholders they’ve set with different switchable applied sciences in the end get glad with SPD good glass. And along with the 2 new automakers I referred to above and their 4 totally different new automotive fashions focused for SPD, on this latter class, one other two to a few automakers presently utilizing different good glass applied sciences are severely contemplating switching to SPD. And why not? We have now higher efficiency and confirmed sturdiness.
Gross sales additionally proceed to develop and increase to numerous fashions of plane. Lots of you noticed bulletins by our licensee imaginative and prescient techniques, that they’re now supplying SPD electronically dimmable home windows on 2 very giant plane from Airbus, the ACJ A319neo with AMAC Aerospace and the ACJ TwoTwenty with Comlux. My closing remarks at the moment could have some very thrilling additional developments in aerospace. Deployment of SPD on trains and boats continues and for architectural functions as effectively. Now I take among the questions beforehand despatched in by our shareholders and included them into my presentation. Let’s take some extra questions. First query got here from Jared Albert. This was the New York one. Excessive warmth can scale back EV battery vary by 31%, a research reveals. Jared talked about a 2019 research from the American Vehicle Affiliation discovered that EV vary dropped 4% at 95 levels, that is form of well timed with the warmth wave occurring right here with out utilizing air-con, and 17% when AC was working. So take into consideration that. Your vary dropped 4% when it will get hotter and 17% when it’s important to activate the air-con. And our Secretary of Power truly was in an interview and began founding herself, as a result of her workers had turned off the air situation to extend the driving vary and fight the — pace up the charging of the automotive, once they cease for charging.
To assist fight vary loss, recurrent — that is the AAA research recommends precooling the automotive whereas it is plugged in in addition to utilizing sunshades or parking within the shade to assist scale back warmth. The preliminary settle down of a automotive takes extra power than sustaining it at a cushty temperature, the research mentioned. That is one thing we have been speaking about for years. Most air-con techniques are 4x to 6x larger than they have to be, due to the necessity to make individuals comfy. And you probably have an inside combustion engine automobile, that is not such an enormous deal, you simply run the air-con. However once you get into an electrical automobile the place you need extra of the automotive’s battery going in the direction of driving it and fewer in the direction of cooling it, we are able to scale back temperatures by about 18 levels Fahrenheit. So as an alternative of getting within the automotive being 90 levels at 72 earlier than you even activate the air-con. In order that preliminary settle down is definitely finished by our good glass.
One other query got here from Mr. Clare Hutton, why is — if SPD’s movie is cost-effective industrial and residential buildings or is SPD’s movie price efficient for industrial and residential buildings. And in that case, why is Analysis Frontiers not experiencing extra income from that space? And to reply the query, it was till lately that we had a movie that is accessible in 1.5 to 1.8 meter width. Now that that is occurred, I am glad to say that Gauzy and their growth staff have landed some fairly massive contracts for architectural, together with some high-visibility ones, which I am going to point out once more in my closing remarks. Second query from Mr. Hutton. The current automotive has a big sunroof and they’re complaining concerning the inside warmth. Is any of Analysis Frontier’s licensees approaching the OEM about SPD as an answer? Thanks in your response. Nicely, thanks in your query, Mr. Hutton. To reply your query straight, sure, Analysis Frontiers and myself personally even have had displays with Lucid and our licensees have additionally labored with them, and numerous carmakers are starting to get up to the truth that once they go to a panoramic roof system the place it is all glass, it is advisable to have an efficient means of cooling it. And typically they overlook about it till a midyear or mid-model downside arises, once they get sufficient complaints, and I feel you will begin to see an increasing number of of that the place vehicles with giant glass roof areas are going to wish a switchable resolution, as a result of we’ve got the simplest warmth discount, I feel that the developments are fairly favorable there.
Mr. Nelson says, any new potential makes use of for SPD recognized or exploring. One of many good issues about this enterprise is that, I have a look at Analysis Frontiers as truly having 250 patents on fairly fundamental supplies, kind of like in case you had a patent on chrome steel or titanium, individuals determine new and fascinating makes use of for it. And even simply this week, we have seen new makes use of for this within the automotive space that hadn’t beforehand been finished. So sure, the reply is sure. There’s fixed work with new progressive actions and naturally, the bread and butter like sunroofs and different areas of a automotive or a airplane or a ship or a constructing are on the market. This query got here from Mr. Albert. You mentioned that SPD pricing is 1/4 to 1/3 when it began. Is that nominal or actual? And is it Setra or SLK? What he means by that reference is are we going again to the Nineties with the primary automobile, which was the Setra luxurious bus by Mercedes, or the place we’ll afterward when Mercedes put the collection manufacturing within the SLK. The reply to your query is, I have not calculated the true discount in price, however the nominal — and when you think about that the majority of that interval inflation was 2% or much less, it actually hasn’t been that of a cumulative impact. However it’s the nominal discount of to 1/4 to 1/3 of the place we began with the SLK. So a considerable discount, and that is made this doable for even mid-level vehicles. And other people preserve asking me, are we nonetheless on the right track for the Asian carmaker with a mid-level automotive and the reply is sure. As we mentioned in at the moment’s press launch.
What I am going to do now could be, we have answered the entire questions which have come to us by e-mail. I’ve included them into my presentation. I would prefer to ask our operator, Jen, now to open up the convention to any extra questions individuals taking part at the moment might need, that we have not already coated.
Query-and-Reply Session
Operator
[Operator Instructions]
And our first query will come from Jeffrey Harvey, investor.
Unidentified Analyst
Joe, I’ve requested you this earlier than. I simply marvel, Tecnoglass is an enormous installer of home windows with totally different laminations. So I simply marvel if that an organization that Gauzy has approached, or is {that a} potential buyer?
Joseph Harary
We each know them, and each glass laminator out there’s a potential buyer, however we all know Tecnoglass very effectively. And as you might collect from possibly a few of my earlier remarks that the standard of information about good glass applied sciences and what they will and might’t do is certainly rising, and numerous that’s due to our efforts to coach individuals. In some circumstances, PDLC is completely positive for privateness and an inside software, however once you begin transferring to the constructing envelope the surface of the constructing, which is not less than 10x the scale of the market, individuals are realizing that you simply want one thing that really can scale back warmth and really present shading quantity, simply mild scattering. It is good to see that they are starting to comprehend that there are these variations.
Unidentified Analyst
One different factor that I feel — I do not know in case you’ve thought of this, however like within the state of Maryland, you are allowed to black out your aspect home windows, which I feel may be very unsafe for policemen. If that they had SPV on the aspect home windows, you might nonetheless block the solar and but the policemen may see contained in the automotive. So some effort to — clearly, price is in comparison with no matter movie they placed on vehicles now, as I am certain cheaper. However from police enforcement factor, I feel that will be an important various to having blackout home windows?
Joseph Harary
100% agree, Jeff. And as I — as somebody who cares about regulation enforcement, it is not the security of the motive force that they are frightened about with home windows, it is the security of the officers, site visitors cops — and we have realized over time, and I inform my youngsters and my grandkids this now, in case you’re stopped, after all, be respectful, it is not the place to argue. Take your keys, put it on high of the roof, in order that they know you are not going anyplace and put each fingers on the steering wheel and be very respectful. Officer security is essential. And I feel that in an age once you begin having an increasing number of aspect home windows grow to be switchable, anyone that does not untint their home windows when approached by an officer throughout a site visitors cease, goes to get approached with possibly a hand on a gun and numerous warning. And we may additionally — sure, there may be and I feel you will begin to see that on aspect home windows of vehicles.
And what you might do in most — in Europe, you are able to do no matter you need behind the B pillar, so it is not a difficulty there. The B pillar is the world between the entrance and the rear of the automotive. In America, you are able to do no matter you need on a B pillar and an SUV, which is greater than half the automobiles on the highway. So we’re actually — once you need to get into the opposite areas, you are speaking about 30% to 40% of the automobiles that aren’t SUVs on the highway. And we have had discussions and our licensees and their prospects, extra importantly, have had discussions about what ought to the rules appear like in a world of switchable glass, the place now you can alleviate that security concern. Thanks for the query and it is one thing that we have not actually talked about in depth up to now, I am glad that you simply raised it.
Operator
Your subsequent query will come from Leonard Litzau, Investor.
Unidentified Analyst
Good to be on the decision once more at the moment. I feel I simply have a few questions right here. Are there any actual contracts would redo to — home windows on buildings which might be there, as a result of now we all know you do not have to place scaffolding and issues exterior, you are able to do it from the within. And with the warmth wave we’re having and everyone getting finished off form, it might seem to be if there was something there, we might be listening to about it comparatively quickly. That is query primary.
Joseph Harary
And the reply, by the way in which, let me simply take that — is that there are architectural initiatives within the works that I feel will grow to be very seen and really good for SPD, and so they use numerous glass. I am sorry, your second query?
Unidentified Analyst
The second query is now that you simply’re chopping bills and issues are perking up and there is different individuals taking a look at placing it on. I feel we’re fairly shut on the crossover level to truly changing into worthwhile by the top of this 12 months. Is {that a} risk?
Joseph Harary
Nicely, I do not need to put a timeframe on it, as a result of that by no means is a good suggestion. However I’ll — I admire the truth that you acknowledge that we have finished numerous very steady price chopping. I imply in case you return during the last 7 years, nearly yearly has been decrease bills than the prior one. And as I discussed earlier, our bills had been down pretty considerably once more this quarter and for the primary half of this 12 months. I imply — precisely that. The thought is strictly that. We need to mainly hit profitability sooner, money stream optimistic sooner. And in case you have a look at that we have been very, very cautious about what number of shares that we have been issuing. We additionally need — are planning for a day, when the Board of Administrators will declare a dividend for our shareholders, in order that we may reward shareholders with out them having to ever promote any inventory. In order that’s all the time been our aim Sure, that is all the time been our aim, and we have been very cautious to do this. A few of our rivals, and I promise individuals I would not speak about it, have finished 60-1 reverse inventory splits, as a result of they’d have over 1 billion shares excellent proper now, and we have all the time simply felt that you simply’d be very prudent on the way you spend cash, and guarantee that each mission makes financial sense, as a way to — we and our licensees can earn cash on this and obtain profitability sooner. In order that’s all the time been our aim, and we have been sticking to our knitting, and I feel we’re effectively on our means.
Operator
And we’ll hear subsequent from John Stroble, investor.
Unidentified Analyst
Two questions. The primary is a few weeks in the past, a political blogger modified it from international warming to international heating, an enormous leap within the idea of the issues occurring on this planet. Final week, UN Secretary Normal Antonio Guterres, says it is now not international warming, it is international boiling. Given what’s taking place within the final couple 3 months, in every single place on this planet, it is — down in South America proper now, it is wintertime and temperatures are within the tons of. Is RFI, Gauzy and our OEMs going to have a concerted effort to level out that SPD is an excellent approach to struggle the consequences of worldwide warming on the person. And naturally, structure will surely be a really massive a part of that?
Joseph Harary
Sure. Initially, we’re all on this business as a result of there’s environmental advantages to utilizing our expertise. And one environmental profit, after all, is that we are able to considerably scale back the warmth inside a constructing or inside a automobile. The opposite profit is that we’re decreasing CO2 emissions, and that is essential as effectively. So in case you have a look at the rules in Europe, they’ve sure CO2 emission targets for auto producers for his or her fleet of automobiles. And for each gram per kilometer that they go above that, they are going to have a penalty of EUR 95 instances the variety of vehicles they promote in Europe. That is fairly a little bit of the penalty. We will scale back CO2 emissions by 4 grams per kilometer. And that is a message that is not simply one thing current. We have been speaking about this at conferences for a few years now, as a result of I feel the info may be very compelling. However sure, I imply, in an space additionally, we’ve got excessive power costs, conservation of power turns into very, essential. So within the Center East, for instance, you’ve numerous solar, numerous glass, and also you need to guarantee that issues are going as effectively as doable.
Operator
Your subsequent query will come from Francis Cotriva, Investor.
Unidentified Analyst
On the earlier name, you had talked about one thing you need to put a timestamp on profitability. However final convention name, you set a timestamp on shareholders getting rewarded within the 12 months 2023. We nonetheless — however the one two methods I may see them glad is, share value depreciation or dividends. And as of at the moment, I do not see any of that taking place. So if it is to happen within the 12 months 2023, this could occur inside the subsequent quarter, appropriate?
Joseph Harary
Nicely, we’ve got 5 months left in 2023. However my level, I feel, is, to begin with, dividends, we’ll contemplate declaring dividends when we’ve got a cushty money place and regular income. I feel that is simply the prudent factor to do. So I feel having mentioned that, you might in all probability see our expectation that it is the share value appreciation, that’s the means that we hope shareholders are rewarded this 12 months. And as issues grow to be extra seen and as individuals perceive the progress that has been made, not solely by us and our licensees, however by the business itself in understanding the variations between totally different good window applied sciences, I feel you are going to begin to see the rise to the highest. So we nonetheless have an expectation and we have all the time operated the corporate for the advantage of shareholders.
Unidentified Analyst
However the one means I may see that occurring is that if there have been main bulletins made.
Joseph Harary
Sure. I can by no means predict what will transfer a market. In our historical past, we have had minor bulletins that moved our inventory loads, and main bulletins that did not. The one factor I understand how to do, is deal with our enterprise and every thing else will maintain itself.
Operator
And we’ll transfer to our subsequent query from Jared Albert, Investor.
Unidentified Analyst
I had a single query. It is form of an orientation query. So let me simply set the stage for the query, which is again, on the annual assembly, we recognized one thing is getting larger, which turned out to be a superb prediction and the aim is to get SPD in at the moment’s techniques to get the worth down. After which it went into Mercedes, it permitted the work after which it got here out of Mercedes, within the considering was that it was priced, and simply form of an issue with Hitachi. And now — after which Gauzy got here on board, and has taken them form of no matter their timeframe was, however they have been capable of cross the OEM degree testing that Ferrari required. So that is possibly 3,000 vehicles a 12 months, with pretty — I am guessing pretty large margins. However in all probability given the expertise with mild tuner, they in all probability actually needed it to work. They did not need to undergo that once more. So now — so that is the stage we’re at now, so far as I can inform. And we all know that EV9 was proven within the investor presentation final March with aspect home windows that had been referred to as good glass. We all know Hyundai is an investor in Gauzy. And we all know that the CELESTIQ is popping out on the finish of the 12 months, presumably. And I assume it is Gauzy’s SPV. So my query is having form of been on this factor by way of 3 waves of manufacturing, for 3 movie waves, I am not going again to the Nippon Chemical boardroom in 1988, I am speaking about movie manufacturing, the place it might be placed on rolls and shipped.
Now you have not talked about Hyundai, and I’m involved as a result of the grandeur was going to be like the large mannequin. Possibly you do not need to point out it, however the level is, are we now on the stage the place SPD goes to enter vehicles and we’ll see a income ramp, or are we nonetheless form of stabbing round at nighttime, the place we are able to solely get into the tremendous high-end automobiles. And regardless of value reductions and every thing else, there’s another problem, there’s some optical readability points, there’s some adhesion points, there’s one thing else. As a result of what I’ve seen is the backdrop to this has now been pushed by high-temperature PDLC. They’ve been capable of are available in with roof techniques that survive on horizontal companies, and completely simply penetrate this market all the way in which right down to vehicles which might be within the 30s. Now we have seen the [ AmberLite ] product now granted that hasn’t but shipped exterior of China and Vietnam, however ZEEKR goes to begin promoting a product in England this 12 months. And I do not know if that roof system is on there or not. However the level is, in the event that they’re beginning to promote it in markets exterior of China, they’ve a aggressive product at this level.
In order that’s my open-ended query. If PDLC stands out as the pioneers with arrows of their backs. Then they’ve opened the concept to switchable glazing for the mass market, nevertheless it looks as if now could be the chance to return in with a greater product at an affordable price. View has crashed and burned. In the event that they completely distort the pricing market. I assume SPD remains to be too costly for architectural, however the thought was to enter mass manufacturing, get the worth down. Okay. So — that is my query. Now —
Joseph Harary
Really — okay. I did in our press launch at the moment and I feel earlier talked about an Asian producer and I feel that is about so far as I can go at this level. It is all the time — I did point out that it’s important to let the client go first, however check out what is going on on round you, and I feel it is fairly clear.
I feel your query although units up a extremely nice situation right here, which is — there’s a better consciousness of switchables. Individuals have tried cheaper PDLC. Sure, it may survive maybe, though our expertise in automotive testing is you actually — it is a very, very vigorous surroundings, and so they might imagine it is surviving. And the truth that among the individuals which might be placing these in, and I feel that is possibly an fascinating takeaway, to assume again to what I mentioned earlier within the name. There are two to a few producers which might be utilizing a distinct switchable expertise which might be actively and severely contemplating switching. And I’ve to ask you the query, why would they be doing that? And I feel the reply is, no matter it’s that they are being promised, whether or not it is price or sturdiness or efficiency, is simply not taking place.
After which you’ve us the place prices have come down. We have talked about it and your query was a superb one that you simply emailed in. And you’ve got efficiency that has been confirmed, and you’ve got adoption that is been increasing. And I do not actually assume PDLC has made nice inroads. I imply they received into some seen automobiles, however not in excessive quantity, and the truth that these automobiles are contemplating altering, tells me numerous what I have to know. So sure, I feel you set the desk proper that this can be a good time in our historical past, as a result of there may be nice consciousness, there’s a nice want. There have been some errors made by aggressive applied sciences and by automakers utilizing it and so they’re starting to comprehend it and beginning to treatment it, and that is the place we are available in.
In order I mentioned earlier, do not be stunned if the placeholder is the opposite expertise and the way in which you fulfill it’s SPD.
Unidentified Analyst
Let me ask you only a follow-up. If in two years, we’re listening to those sorts of convention calls, and we swap seats, wouldn’t it be time to get out? As a result of it is clear that for no matter cause, we’re simply not getting the adoption that we’d like, given the unbelievable tailwinds of switchable glazing is experiencing in sunroofs proper now?
Joseph Harary
I anticipate two issues to occur within the subsequent two years. I feel there may be going to be a shakeout within the business. Some individuals which might be right here now are usually not going to be right here even 6 months from now. There may be going to be a shakeout in applied sciences, as a result of as the restrictions of sure applied sciences grow to be higher recognized and typically it is by trial and underlying error, individuals cease placing that in. And I feel Ferrari is a superb instance of this. Ferrari had a Saint-Gobain electrochromic roof years in the past and it was a catastrophe for the Superamerica. And now Ferrari has an SPD roof. Mercedes had a PDLC roof years in the past, and so they switched to SPD. Now they don’t have anything. Nicely, there’s nonetheless gross sales occurring of MAGIC SKY CONTROL, nevertheless it’s principally on the market in present automobiles.
So what you’ve is, a continuing schooling. So on the one hand, you are going to have applied sciences which might be being tried now, which might be going to be confirmed to not be good. And in case you go on the AmberLite web site, for instance, and I am not going to trash them as a result of there is no actual knowledge on that web site. However in case you go on their web site and have a look at the samples that they are displaying, these very small samples of AmberLite and look how darkish they get. That is not going to maneuver anyone’s needle by way of warmth rejection or mild rejection or glare management.
Unidentified Analyst
Sure no person — AmberLite than I’m. I imply, they may flip it to 11 and it might be mainly agreed for — at a really mild setting. No, I perceive all that. But they’re promoting — they’re promoting throughout China. Okay. I imply that was my query. At this level is…
Joseph Harary
Sure, in 2 years, I feel that you will see some main adjustments within the business. I feel additionally you are going to see among the robust gamers get even stronger and stronger. And when that occurs, Katy bar the door, as Bob Sykes used to say.
Operator
And we’ll transfer subsequent to Artwork Brady, Investor.
Unidentified Analyst
Hello Joe, Artwork Brady right here. So up to now, at sure of the annual conferences, you used to have a show by Lincoln, on the Lincoln vehicles. And I am questioning what the standing is? We by no means hear a phrase about Lincoln. Are we nonetheless speaking to them? Or is there some –.
Joseph Harary
We’re and we’re speaking to their dad and mom, and we’re speaking to their rivals within the U.S., too. And I feel that with each automotive producer, there is a continuum of when issues get launched and the place they put it. Identical to Mercedes, put it on the SLK first, as a result of that was the automotive that was prepared that wanted it first, despite the fact that the S-class would have been a extra logical first selection for them. proper? So it’s important to have a look at variety of an entire panoply of explanation why a producer places one thing in or not.
In Lincoln’s case, we had been very honored to be put within the Continental once they had been attempting to rebrand it. They only, for no matter cause, and I do not need to go into extra element, weren’t capable of get their act collectively by way of collection manufacturing. And I do not assume that was due to us. On the time. That does not imply that issues have not vastly improved, the place it is a lot simpler now to get this right into a automobile, as a result of if you consider it, again then, you had one producer that will have it in collection manufacturing. Now you’ve not less than 3 laminators which might be doing it, truly 4. So it is a lot simpler to get this into collection manufacturing, SPD that’s, now that you’ve got 4 main gamers which have expertise in cracking the code on, getting SPD into collection manufacturing.
Unidentified Analyst
Any timeframe as to, after we may hear some form of an announcement from that group?
Joseph Harary
Not that I may share. Bear in mind, it is as much as the client to talk first. And typically, they’re going to enable us to say issues on social media, however not in press releases. Generally they will let you say one thing on a convention name, however not in a press launch. They’ve their causes, and we respect them.
Unidentified Analyst
However there may be some communication persevering with?
Joseph Harary
Sure. There may be. Very current as a matter of truth.
Unidentified Analyst
As a result of one other query that I’ve is, it is so scorching everywhere in the world, that your cellphone must be ringing continually in that regard. And if we will not present some very tangible outcomes with this sort of an surroundings, I do not know the place we might have a greater alternative.
Joseph Harary
Nicely, I feel it is — and I admire the query, Artwork. I feel it is not solely our cellphone is ringing off the hook, it is our licensees, too, and that is good. And bear in mind they’ve numerous telephones there, as a result of all of our key licensees have expanded dramatically their enterprise growth and customer support groups. And bear in mind, I mentioned have a look at the place individuals are hiring, okay? Take a look at the areas of the world and have a look at the industries they’re hiring for, and you may see a reasonably clear image of the place issues are going. And I did point out carmakers which might be — extra carmakers which might be approaching board with a number of fashions in some circumstances for SPD. I discussed an architectural initiative that’s bearing fruit. So all these items are taking place.
Operator
And we’ll transfer to our subsequent query from August Berman, Investor.
Joseph Harary
I do know I all the time get loads out of you, once I mentioned that — you are a formidable, however I do know personally modest individual, and I do know that I may get a response out of you once I try this.
Unidentified Analyst
Find it irresistible. Recognize it. Only a couple from me. I do know a few convention calls in the past, there was a point out of an aftermarket storm resistance product, [Technical Difficulty].
Joseph Harary
The audio broke up a bit bit, however I feel your query is it is nonetheless coming down? And the reply is sure, and that is one thing that we’re very enthusiastic about, as a result of it completely transforms the way in which that good glass is delivered to a constructing. You do not have to place up scaffolding, you do not have to get landlord approval, only a entire panoply of advantages from doing that. And likewise, it provides you this very massive market, as a result of numerous the federal government buildings have initiatives to extend their power effectivity, however they’ve a monolithic glass. It is not even laminated glass anymore. So in case you can faucet into that market and create a brilliant energy-efficient window, the federal government, being on the GSA schedule is a large, large market.
Unidentified Analyst
Okay. I am sorry, you mentioned that was going to be coming down in ’23 or that is one thing we’re form of trying on the future stuff?
Joseph Harary
We’ve not put a timeframe on it. I do not see any showstoppers and why it could not come out tomorrow if it wanted to. And I feel that we’re all pushing for that, as a result of I feel all of us perceive that within the architectural market, it is a recreation changer.
Unidentified Analyst
Okay. And then you definitely had referenced that — I feel you talked about GM versus Cadillac, who’re thinking about bringing extra fashions after the CELESTIQ. Is there a time period the place Cadillac desires to see or GM desires to see expertise for [Technical Difficulty] to a different automobile. The rationale I ask you this, as a result of I’ve form of my sights set on the Escalade IQ popping out subsequent week by way of automobile that appears to suit the worth level and could be an superior operate to have, something you’ll be able to in say phrases of timing?
Joseph Harary
It might be an superior operate for the Escalade. It in all probability will not be an superior operate within the Escalade. It in all probability will not be subsequent week when it comes out. However I feel you begin getting penetration on totally different SUVs on the market, as a result of bear in mind, SUVs have numerous glass, and also you even have extra flexibility as a result of the necessities on an SUV are totally different than on a passenger automotive. So it is a bit bit extra relaxed by way of tints, for example aspect home windows, and the again and issues like that as effectively. So sure, I imply, look, we’ll — we’re not stopping with what we’ve got. Let me put it to you that means.
Operator
And your subsequent query comes from Tom S, Investor.
Unidentified Analyst
Sure, you talked about the anticipated Asian automotive, not less than one, possibly multiple final convention name, this convention name. Is that — are you able to communicate to if that is an EV or gasoline? And is it mid-price? I do know you are not releasing what automotive it’s, however I feel you’d have the ability to share one thing on that?
Joseph Harary
It has a mid-price and it has a luxurious addition. And by way of ICE versus EV, I feel it might be on each, relying on the way it sells. Not our function, however the drivetrain itself.
Unidentified Analyst
If you say it might be on each, however not our function, you are saying not SPD?
Joseph Harary
No, no. What I am saying is — thanks for clarifying. No, what I meant to say, and I apologize if I wasn’t clear, is it may be on each in ICE and in EV, okay? And there is no cause why it might be on one and never the opposite. Whether or not they select to introduce it on each is known as a enterprise determination on how the vehicles, the ICE versus the EV is promoting for that mannequin. Has nothing to do — has nothing to do with SPD being higher or not. It is good for each. On ICE — sure.
Unidentified Analyst
It is nothing you might say it is undoubtedly going to be one or the opposite, might be each. However once you say anticipated, you are assured it will be a mid-priced Asian automotive, one or the opposite, otherwise you’re simply unsure at this level?
Joseph Harary
Assured it will be a mid-priced Asian automotive, and I feel that it is as much as the producer, and so they could not have even determined but, what the mix is between EV and ICE on that automobile.
Unidentified Analyst
Okay. So it seems like you’re assured in saying, it will be not less than one both ICE or EV might be each. That is what.–.
Joseph Harary
Sure. I am assured it will be on the automobile, query is what are they going to place out first. And I do not know that, they do not know it both.
Unidentified Analyst
After which we’re considering for timeframe, the fashions had been being launched in what, September? Do you’ve an thought on October, any thought on timeframe after we may hear something?
Joseph Harary
Not that I may share. Nothing I may share. I am sorry.
Unidentified Analyst
We’ll go on some historical past when vehicles are launched, so what we’re taking a look at for months normally out of your previous expertise.
Joseph Harary
Each carmaker has a distinct form of introduction schedule. It was a bit bit extra inflexible. So that you knew, for instance, when Mercedes was doing a mid-model adjustments and issues like that. Now it is just about throughout the board. I feel one of many issues that form of modified this a bit bit was the Tesla Mannequin S remains to be the Tesla Mannequin S. And what they’ve mentioned is, if we’ve got an enchancment that we need to put in that automobile, and it is prepared at the moment, we’ll put it in at the moment. If it is prepared subsequent month, we’ll put it in subsequent month and if it is prepared subsequent 12 months, we’ll put it in subsequent 12 months. In order that they’ve form of modified the way in which that automakers take into consideration upgrades on the automobile, to be nearly like a steady enchancment, which I feel is an effective factor. I feel it is a good factor that — I imply, the advertising guys could like the truth that that they had extra predictability as to when new options are popping out, in case you’re promoting a automotive. However I feel that for the patron, you need the automotive that you simply go to the dealership to purchase, to be the very best they might be at any given time.
Unidentified Analyst
Final couple of issues on this. The wording is anticipated. Are you able to give like an thought on confidence degree? Are you speaking 99% or 80%? And likewise you assume an possibility or possibly a trim bundle? I do know you in all probability say you do not know, however something you might share on these 2 questions?
Joseph Harary
So that you form of have a continuum right here additionally. One thing might be an ‘possibility,’ however be on 80% to 90% of the vehicles. For instance, sunroofs, are on over 80% of premium vehicles. It is an possibility normally. Why? As a result of the carmakers earn more money on choices and so they make on normal tools. Proper? So it has nothing to do with what you’d anticipate form of an financial determination to be made. It is extra like what’s the carmaker going to earn more money on.
Unidentified Analyst
After which the opposite one, final one, qualifying the anticipated. Are you able to get into that a bit bit on — we’re speaking 99% or 60%. Do you’ve any ideas on how assured that degree is?
Joseph Harary
I am very assured. However I’ve seen issues that appear like they had been sure to occur, and the Continental, for instance, was an excellent instance of one thing that — I imply, you had the CEO of Ford occurring CNBC and speaking about our good glass roof as a key function of the automotive, and it did not make it into manufacturing. So you might be — I imply, to the surface observer, if I noticed that, I noticed Mark Fields say on TV, hey, that is the best factor since sliced bread and we’re actually enthusiastic about it. After which it would not make it into manufacturing, you are by no means a 100% sure about something.
Unidentified Analyst
With that mentioned, it sounds such as you’re fairly assured that both 90% or one thing in that realm of confidence?
Joseph Harary
I am very, very, very, very — how’s that 4 very’s, with out placing a quantity on it, assured.
Operator
And Mr. Harary, it seems there are not any additional questions. I am going to flip the decision again to you for any extra or closing remarks.
Joseph Harary
Okay. Initially, as a reminder, look, if we did not get an opportunity to get to your query or in case you really feel we have not absolutely answered it, be at liberty to name or electronic mail us, we’re glad to do the very best we are able to to guarantee that everybody will get their questions answered. A few closing remarks. Initially, as you’ll be able to inform from the lead into this, it has been a really thrilling 12 months for us. A part of that pleasure is the success we have had that individuals find out about and a part of that pleasure is what’s coming. And let’s speak about what’s coming, what is going to the longer term carry? Actually, continued penetration in our 2 largest markets, automotive and plane is one thing that we’ve got superb visibility on. And the way in which that this progress is occurring can also be essential to grasp.
In automotive, we find out about McLaren, Ferrari, Cadillac and the Asian automaker popping out with SPD panoramic teams and their automobiles. Along with them at the moment, I additionally talked about 2 new automakers moreover them and their 4 automotive fashions, in addition to an affordable expectation in one other 2 to three automakers presently severely contemplate switching from another switchable glass expertise to SPD. We’re clearly seeing the advantages of switchable expertise being higher understood by the automakers. We’re additionally seeing that they are getting extra conscious of the strengths and the restrictions of various switchable applied sciences. And because the best-performing good glass expertise with confirmed sturdiness, and a really stringent requirement that it might be on the warmth clamping roof of a automotive. This can assist us proceed to win extra enterprise sooner or later in automotive.
One other merchandise, some fairly thrilling architectural initiatives with excessive visibility are within the works. And the way in which that selections are being made is evolving for our profit as effectively. We spoke about extra educated decisionmakers. The opposite factor to grasp is the locus of that decision-making can also be altering for our profit. For instance, in some industries, the producers name the pictures. Nevertheless, in others, it is the buyer who makes selections, if the producer permits them the free will to take action. So what you need to do is you need to guarantee that, the client is ready to decide, as a result of in case you see SPD in comparison with anything on the market, and I am not simply bragging, it is what we have been advised, there is no comparability. So letting the client determine what they need is vital. And in an space the place the client makes the choice, however heretofore, it has been the producer that is perhaps stopping that from taking place clearly, one good instance of that’s the airline business. And once you begin to see airways themselves and never simply the producers determine on plane contents and configurations, you will perceive the vital sea change that has already occurred.
So keep tuned for a short time longer right here. There are roughly 150 airways on the market, and so they’re competing with one another utilizing the passenger expertise primarily, to win the enterprise and to differentiate themselves from others. Analysis Frontiers, our licensees and most significantly, our traders will all profit from all of this. And I sit up for sharing these developments with you and thanks all in your assist and encouragement.
Operator
This concludes at the moment’s convention name. Thanks for attending.
