Ballistic Recovery Systems: Wall Street Analyst Forum Presentation Transcript

| About: Ballistic Recovery (BRSI)

Ballistic Recovery Systems, Inc. (OTCPK:BRSI)

Wall Street Analyst Forum

February 15, 2007 9:10 am ET


Alyssa Akers - Wall Street Analyst Forum

Larry Williams - President and CEO


Alyssa Akers

Good morning, ladies and gentlemen, and welcome to the 18th Annual Wall Street Analyst Forum NYC Analyst Conference. My name is Alyssa Akers of the Wall Street Analyst Forum, and I'll be the host of today's Aerospace, Defense & Security Industry program.

Before I introduce this morning's corporate management, I'd like to review a few administrative details associated with today's conference. We believe analyst conferences of present feature will be increasingly defined by those with whom we've abridged these and new media to reach professional investors.

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I'd like to welcome those investors attending the webcast. The webcast is live and retrievable following today's meetings. Each company today will present for 40 minutes and do the question and answer session. And we've changed our conference format. Most of the managers will be able to meet much time during our management investor luncheon at 11:10.

I'd like to introduce today's first company, BSR. BSR is a company of 75 employees with annual sales of approximately 9.2 million. BRS has sold more than 25,000 of its parachute systems and saved more than 199 planes.

I'd like to introduce the CEO and President, Larry Williams.


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Larry Williams

Thank you very much. Good morning. I appreciate everyone being here and those that are watching via the web. This has been a challenge getting here with the weather in New York, but we made it. So we're happy to be here.

I thought I'd start off this morning by telling you a little bit about Ballistic Recovery Systems and who we are and what we do. We're a company that was founded in 1980. We have about 22,000 of our parachute systems installed, and these are whole airplane emergency recovery parachute systems. So that in any event, there is a problem with the airplane, you can deploy the parachute system and safely bring the airplane and its occupants to the ground.

I'm not going to be too technical in my presentation today. But there are a couple of types of aircraft that we're going to be talking about that it's important for you to understand right upfront.

The first is what we call recreational aircraft. These are -- I describe them as tube and fabric airplane. You'd hear me refer to them as sport airplanes or experimental airplane. These are generally very light airplanes that someone might build themselves or put together a kit and that sort of thing.

And then we'll talk about certified airplanes and these are airplanes that have an FAA type certificate, production certificate, and these are more of the Cessna, the Cirrus, the Diamonds and other airplanes that we will be talking about as we move forward.

One of our most important statistics is the number of lives saved. And this is critical in the respect that as we're approaching 200 lives saved now, it's important because of market acceptance and people are beginning to realize that the parachute system itself will actually work and because that it will save a life, there is more and more interest in putting parachutes on airplanes today.

In fact, we think, we probably have our 200th save, but one of the things that happens now is we don't hear about them as quickly. And sometimes they've occurred a few months ago, before we actually get the word about it, and we understand it was a deployment in Europe that we're just getting the information on now.

The system itself was an innovation that we are the only company anywhere in the world that has a certified system. That is the parachute assembly that will go on to a certified airplane.

What that means essentially is we have no US competition, and we are by far the world's leader in whole airplane emergency recovery parachute systems. We do have competition, and we do have other people that are selling other products in the United States. But we are by far the leader.

Now, these numbers I'm going to give you are based on the stock close a few days ago, which was quite a bit lower. We've had a little bump in the stock over the last few days, and the market cap is up a little bit. The shares outstanding 9.93 million. The float is up a little bit as well. And our 52-week range has run from $1.30 a share to about $2.45 a share. And I think we've closed at $1.75 yesterday.

One of the things that's important about BRS, I've been there a little over two years now, and it's taken me about 18 months of that time to really assemble the right management team. We've been able to do that. We have a very solid group of individuals that are now leading the Company in the various departments. This is the listing of some of the key players.

There is myself; our CFO, Don Hedquist; John Gilmore, Vice President of Sales; Gary Moore, who is running our International Operations and our Government Sales now; and Frank Hoffman, who is our Vice President of Engineering. I am quite proud of the team of people that we have and we are able to make a lot of the strides that we're making today based on these guys and their ability to move forward.

You may have seen the little tagline, "Defining Aviation Safety," which is a trademark that's registered to BRS. But I get a question about why would you want a put a parachute on board an airplane. And what I like is the other question that I'm getting more and more now is why not put a parachute on board an airplane.

Well, the truth is the parachute is there in the event that something happens and something goes wrong with the airplane. It's sort of, if you will, a last resort, an option that you can have to deploy the parachute and bring the airplane down safely, if something goes wrong.

The reason that a parachute makes sense is, in 2005, there were just over 1,600 involving general aviation airplanes in this country that resulted in 556 deaths. Now, if you all set that with the fact that we're saving 199 people, all of the sudden, parachutes start to make sense.

And we've seen a growing market acceptance of our product in the last year like we've never seen in the history of the Company. And I draw the comparison to airbags and automobiles. When airbags first came out for automobiles, the market was very reluctant to accept the technology.

And it wasn't until that people started to see the benefits of having the airbags and the number of lives that were saved by airbags that airbags became very, very popular and, in fact, became somewhat of a market differentiator. All of us, for example, saw the Volvo commercials where they crash the cars, the airbags deploy, then you have a number of airbags on board automobiles today.

We believe that the acceptance of whole airplane parachutes is following a similar pattern. It's right here in New York, for example. There was the Cory Lidle accident that occurred. That airplane had a parachute on it. That parachute wasn't deployed. It had nothing to do with what ultimately happened, but it was an airplane that was equipped with an option that could be used if everything else goes wrong.

So this is what our product looks like. It's pretty simple actually. Everybody knows how a parachute works, but there is a lot of technology that goes into it. We package the parachute in different configurations, whether it's going to be inside the airplane or outside the airplane where it might be supposed to have leather and that sort of thing. All makes a difference in terms of how the airplane looks or how the parachute looks.

And then, we'll have bigger parachutes for bigger airplanes and etcetera. And then the one characteristic that's common throughout all of our products is they're all rocket deployed, and this is very, very important in terms of being able to deploy the system at a very low altitude. And I'll talk more about that here in just a minute.

But I thought it would be good for you to see some of the airplanes that our product is one. This is in the certified general aviation category. That airplane is the Cirrus SR20/SR22.

Those aircrafts -- 100% of those aircrafts have our parachute on board. You can't operate, license, insure, do anything with the Cirrus airplane, unless it has an operating -- a fully functional operating parachute on board of the airplane, because it's part of the type certification of that airplane.

We also have what's called the Supplemental Type Certificate where we're on the Cessna 172s and 182s as a retrofit. You can take those airplanes, and we can put a parachute on those airplanes. In fact, we have a 182 that has a parachute on board. There are certified very light jets coming on the market. Most people have heard of the clips, for example, got a lot media coverage. This is a very fast growing market.

And you may have seen that the Diamond D-Jet, which is the picture we have up there, is going to have an option to put the Ballistic recovery parachute on board. In fact, it will come as a standard option, which basically means that unless you specifically tell them to take it off, it will be installed on board the airplane.

We have another area that called non-certified, which is the LSA, Light Sport Aircraft. This is a real growing area for us and we are seeing tremendous growth and tremendous opportunity in this new LSA area. And that's the example that the CT -- Flight Design CT picture that's up there.

Then we have the non-certified or the recreational product. This is what I was talking about kind of a tube and fabric. You know, you take some conduit, put some fabric on there and then bring the strength into the new propeller and you fly it kind of thing.

We do a lot of product for this. About 50% in terms of numbers of products are for the recreational area. But these are much less expensive product than the certified. In fact, the product ranges -- the prices range from $2,315 up to almost $17,500 on the bigger airplanes overall. So the product mix has a lot to do with there.

Now, the way the parachute works is actually quite simple. The parachute is installed in the airplane so that in the event you have a problem, you basically pull a handle. It's a manual activation system. When you pull that handle, the rocket then fires. The rocket extracts the parachute very quickly. It takes less than two seconds to get the parachute out. Then the parachute will open up and safely bring the airplane to the ground.

We've had successful deployments, especially on the wider airplanes as low as 60 feet from the ground where people have deployed the parachute and saved their life. So the reason the rocket is on there to give you a wide operating on-blow. So you can be at a fairly high out to deploy this system or you can be very, very low to the ground and deploy the system overall as well.

Our sales are working at BRS. We've made lot of changes over the last couple of years in terms of our focus and what we are doing. But our revenue growth remains very strong. Our FY'06 revenue versus FY'05 revenue is the double digits, 1.3%.

We are a growth company, and we are focusing our efforts on OEM sales rather than individual sales in other words going out to be individual pilot and convincing them to put a parachute on an airplane, is a long lead time to sale.

But if we can go to the manufacturers, you'll get the manufacture's to offer the parachutes that is a much better success for us in terms of sales. We've our cost structure under control. You may have seen it a little over year, about a year and half ago. We've brought a plant in Mexico where we manufacture

[Video Presentation]

We remain cash flow positive but we're always looking for additional savings within the company and one other things that we were able to do this year, is reduced our debt substantially. We had an unfavorable outcome in a law suit in '05. And we were able to payoff a big portion that associated with that.

And one of the most exciting things about BRS is our market success. The Diamond D-Jet is a very big deal. This would be the first jet Airplane to have a whole airplane emergency recovery parachute on board.

And there are several others that we're working with today. They are yet to be announced that are at some level of expressing interest or doing some work, as far as looking at putting parachutes on board the airplanes.

So as our financial results, our net sales increase first last year FY '06 compared to FY '05 were a $9 million $192,000 versus $816,000 that's a $176,000 increased or 13.3% increase.

The gross margin 3.331 versus 3.112, which acquits the 36.2 versus 38.3, we're seeing a little bit of gross margin pressure. We'll see some of that in the first quarter numbers and I expect that to continue over the next two or three quarters. And the reason for that is quiet simple.

We've done a couple of things that I feel like is very important from a strategic standpoint for the company. We were getting all of our canopies done in one location. And that always kind of concerned me, if we had a problem or interruption the supply chain.

So we purchase the Mexico facility where we can do that ourselves. And we've also outsource to another contractor about 30% of our production. And this is a purposeful decision on our part so that we're not depended upon one individual facility. So since -- something would happen to that facility or there would be an interruption in the supply chain we have a dual source to be able to continue the critical product.

We've done the same thing in the rockets. The people who were the supply the rockets for us and the rocket-fuel were working on dual source. I think that is well so we have an alternative there.

Now, what this has done for us is dramatically increase our inventory, because we've gone from one location essentially to three locations. The intent is, is to draw all that down to two locations at some point in the future. But that caused a rise in our inventory and that's reflected in terms of the pressure that we're going to see there.

We did report an income last year or income before tax from operations is $46,000 in '06 versus the $1,763 million loss that we had in '05. And almost all of that was associated with the losses. The legal settlement was about $1.9 billion to give you an idea from there.

So we're pretty proud of the fact that we continuously grow pretty substantial growth, pretty steady growth. We are focused on our cost to sales and keeping our operating margin in that 38% to 40% range. Again, we are seeing some pressure on that thing. We'll continue to see that, I think in the immediate future, and then we'll be able to get some more improvement on that as we solidify the supply chain.

Some recent developments are important for me to cover is the industry has changed a lot over the last couple of years. What's important about the industry change right now is the time to put a parachute on an airplane is actually when you design the airplane. It's very hard to go back and retrofit it on and kind of put the design into the manufacturing capabilities of the OME. It's really where you want to be.

Well for the first time in a number of years, we're seeing a lot of new airplane being designed. So as they are designing these new airplane, they are considering parachute, and designing the parachute in, which is very, very good for us.

The general market acceptance of our product is at an all-time high. We are literally, I believe, turning the quarter in terms of that resistance that we initially saw in the marketplace overall. And here is a good example.

I believe SAFETY is now a market differentiator just as what we saw as I talked about in automobiles with airbag. Take for example Cirrus versus Columbia. In the first quarter and second of '06, Cirrus sell 341 aircraft versus 67of the Columbia.

Now, the real difference between those two airplanes is the parachute. They're virtually the same size, virtually the same to be, virtually the same cost, everything in there is essentially the same. And the real differentiator is the parachute is simply itself. So we believe that that contributes to the overall success.

Also, with a Very Light Jet market there is a early growth opportunity out there, mainly associated with the Air Taxi operation. And that D-Jet has already announced that they are going to offer the parachute assembly. Cirrus is building is a jet. We assume it's going to have a parachute on board. And then, there are other OEM manufacturers in the Very Light Jet category that are looking at parachutes as well.

And in the GA Market, we have two to three other aircraft OEMs that are in the process of looking at and determining whether they are going to put parachutes on their airplanes or not. But this is all the reasons that we believe that we've turned the corner, market expectance is high and safety is a nice differentiator now.

Because of this, we're focused on expanding our management team. We are responding to the market -- to the market opportunities that are out there. And we are positing the company for this significant growth opportunity. Because what you have to understand is the development cycle to a put a parachute on airplanes is fairly long.

In a respect that there is a lot of engineering that goes into it. We go out and do a lot drop testing, where we actually take weight to stimulate the weight of the airplane, we'll drop it out of the back of the larger airplane, deploy the system to make sure that it works properly.

All those things take time and there is a long development cycle for that. So more recent development is -- we did do a private placement offering where we raise a little over $3 million, including about a $0.5 million of that from the Board and Senior Management that occurred in '06.

I mentioned the fact that we have our key management team in place and this has been very important for us in terms of our success and responding to the market expansion. And we are focused on the engineering department improvement and we've increased significantly our investment in engineering by about 31% overall and we'll continue to do that as develop a new product for new applications as we see those coming around the corner.

We've implemented some very tight expenses control and we are diversifying our product offering, so that we have different revenue streams. Now, one other things, for example, that I always get questions about is that we're very, very depended upon Cirrus and we're kind of a one customer-type company.

We're reducing that dependence among Cirrus and we're doing as much as we can to offer other products on other platform, so that we can diversify our revenues streams overall. And we're having pretty good success at that I'll think as time goes on.

The market continues to grow and to do very, very well. In 2005, General Aviation aircraft billings, for example, rose to just over $15 billion. That was a 27.2% increase over '04 and '06 numbers look relatively the same 20% something the increase.

And you'll see here that pistons make up 69% of the market and then experience the 20.2% growth in '05. That's really our market right there is the single engine piston aircraft market.

So you'll see there is very strong growth still occurring in the marketplace, which is very good. Some of our primary customers, our first ball is Cirrus design. Cirrus is the world's largest manufacturer of single engine high performance airplanes in the world. They make about 700 airplanes a year overall. And as I mentioned earlier, all of those airplanes have our system onboard.

Now, another thing I haven't talked about, but that's important there, is the system has to come back and be re-pack and recertified in the case of the Cirrus airplanes at 10-year internal. So that means that those airplanes will be coming back, and we'll be redoing those parachutes. That's a revenue stream for us as well.

Those start coming back in about two years. And then that will grow. For example, today, we're putting 700 airplanes in the market that in 10 years will come back and be repacked. So that's going to be a good revenue stream for us as well.

We've made improvements to our dealer network, particularly in United States and in Germany. So people have good access to our product overall. And then we believe that the future industry growth is very good for us in the VLJ market, over 500 airplanes a year. The LSA market, Light Sport Aircraft market is going to be over 1,000 airplanes a year and then the repack market.

And you can see that when I'm talking about they start coming in '09, but by 2012, we'll do 400 or so a year. And then the other area that we're expanding into is we're looking at Department of Defense type work. We believe for example that a whole airplane recovery parachute is a really good option for unmanned aerial vehicles.

You guys have probably seen some coverage on UAVs and the fact that they're being used for Border Patrol and Homeland Security and these types of things. They're flying them over populated areas.

And since there is not someone onboard the airplane, if something goes wrong and it comes down and it causes an accident, it could be very devastating. So we're really pushing to try to get recovery parachutes on these vehicles. And so that's the expansion opportunity for us as well that we're looking at.

Now, our customer concentration, I mentioned this a minute ago. If you look in the upper right total revenue, you'll see that in FY '06, 71% of our total revenue was from Cirrus. We had 4% that went through dealers, 9% in the LSA and then 16% direct.

And other recreational units that were sold that excludes Cirrus, you'll see that it's a 47%, 52% mix international versus North America, because we do sell over the world. What's significant is we saw 47% increase in our recreational product line in '06 versus '05 -- pardon me. That was lead primarily by growth in the Light Sport Aircraft area. And what is there is that was able to reduce our dependence on Cirrus. And we'll continue to see that type of reduction as we move forward.

Competition, I mentioned that in the very beginning, really we have no competition in United States. We have good market penetration there, but we're focused at the OEM level. In Europe, there are three other players out there. We have probably less than 20% of the total market share in Europe. I don't consider that to be bad news, I consider that be a growth opportunity.

And so that's the reason we focused on our dealer network improvements and access to the marketplace. And also it's one of the big reasons that we purchased the plant in Mexico is because our competitors are selling parachutes in the Czech Republic and former Eastern European block country where the labor rates are extremely low, and there is no way that we could compete on price with them, selling the parachute in United States.

Now, in Germany, for example, parachutes are required under the law. And that makes it a commodity-based product. What that means is, if the person is going to have to put a parachute onboard the airplane, they're going to buy the cheapest product they can buy. So cost pressure becomes very, very important there. And that was part of our strategy of buying the plant in Mexico.

In Asia, we have no real competition there, but there is a lot of expansion of general aviation in Asia, which is very interesting in terms of the growth opportunities that we see there. In addition, we have outsourced some of our canopy production in China as well for the cost reason.

We have an agent that we're working on there. We see some production opportunities. And one of the things we've done is focus on flight schools, because we believe that if you learn how to fly an airplane that has the parachute, you'll probably buy an airplane that has a parachute onboard.

And then India, which is an interesting market as well, is expanding. And we do have a dealer network setup there. We have an agent in India that is manufacturing the only certified airplane in India, which has our product onboard. And we're also focused on flight schools there as well.

So looking out into the future, ways to grow our business, we see some organic growth through the Light Sport Aircraft area, through the very light jets in other markets. We are reinvesting cost in our business. For example, the drop test capability there, I was talking about before and then our R&D investment is up again over 30%.

And we're always looking at acquisitions, particularly aviation safety-related type companies. We're always trying to expand our product line by looking at these acquisition opportunities. And then we've been focused on strengthening our balance sheet. For example, we had a total debt of $1.3 million, which we reduced by a little over $700,000 in November of '06.

And then we are building our Repack center to respond to all of those Cirrus airplanes that will start coming back here in couple of years. And we believe the DOD Business Development could be very strong for us in terms of opportunities they are particularly in the UAV type market.

So in conclusion, I believe firmly that our critical success factors are in-place. We have the right organizational team in-place and system in-placed to respond to what the needs are, that's out there. And our team is experience. They have good management experience.

The marketing conditions are better then they've ever been for us in terms of the acceptance of the product and new aircraft that are being design today that are in operating the BRS system. So we are very confident that the goals are achievable and we have identified those critical areas and focused our efforts on those critical areas to make sure that we are going to have the success that we say that we are going to have overall.

And as always we are very, very focused on bringing value to our shareholders by expanding the company, continuing our growth that we've traditionally seen and really focusing our efforts in those areas that we think we are going to pay-off us in future.

So with that I'll conclude and I'll open the floor to any questions you guys may have. Yes, sir.


Unidentified Audience Member

[Question Inaudible]

Larry Williams

Well, the cost of the system is actually built into the cost of the airplane itself. So it's not like that it is an option that going to add $10,000 and cost the airplane. Sorry-- I factored in and I'm not really in a position to, I guess reveal what the contractual pricing is that we have with Cirrus.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

Well, if you look at that our product ranges four of that, for a large system is going to run from $10,000 to $15,000. Because there are large volume customers, they are going to get us discount basically off of that so that will give you a rough coordination. That's great.

Unidentified Audience Member

[Question Inaudible]

Unidentified Company Speaker: No. Overall, it's not. Even if you take a retrofitting assessment for example, if you brought a new assessment today. And let's say that that system or lets say that assessment is going to cost you $400,000. To buy our system and the labor to put it and turn keys is going to run you maybe $20,000. So it's a very low percentage of the overall cost there. And in the aviation by the way, a good radio costing $28,000. It's not a big.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

Yes. There have been several. We've had over a 100 actual deployments. And we've saved so far a 199 people.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

Well, it's ranged from people who have literally walked away with no injury what's so ever. We've had some that have gone and had injuries with very, very light deployments, for example, our deployments were they've gone in the water and such that. But the system is working very, very well. It does a great job.

Where we're kind of focused at the moment is trying to convince people into trained pilots to deploy the system, so that -- there are number of cases where we've had accidents where there was no attempt to deploy the system. And that's unfortunate. So we really want people to use this system. You had a question.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

Well, we have looked at that. There's nothing in current development, I will say. And let me tell you why. The militaries try to do this for years with ejection seats and try to come up with a way to put a decision maker in the airplane that says, "This environment is the environment where, you know, the pilot and no one else control the airplane. We're going to automatically eject the pilot." They've been unsuccessful in doing that over the years.

One of things that we have to be concerned about would be reliability and any important deployment that something were to happen and it were deploy in vertically. So there has not been any real work being done. We don't have a current project underway but we're closely looking at that.

We are talking about and trying to work with some of the Avionics manufactures, especially with these Primary Flight Display that are all electronic now with CRT screen and that's sort of think.

We'd like to be able to put a pop in there that says "Parachute Available". So that if what happens when you're flying an airplane, you can give sensory overall especially if something goes wrong because you're trying process so much information you don't even think about the fact you've got a parachute.

So one of things we'd like to be able to do is to have an announcement that says "Parachute Available." So that maybe it would be key thing to respond to that. The other thing we're looking at is the possibility of going to electronic initiative resident the manual pool. That certainly can be done, we've done electronic initial with some of our UAV program that we've done in the past.

And there're certainly basis in this ranges of act that we're looking at as well, and we do have some available work underway with that.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

On your first question about the product line and the diversification, we are constantly looking at opportunities as they come about in terms of being able to expand our product line. However, we are very much focused on our core competencies and we don't want to get into making something that wouldn't make sense for us or fit into our current culture. For example, we don't want to make tires or brakes or other things such as that.

If it's a safety-related item, which is where we think we do have some expertise and some engineering capability, we're certainly going to look at that overall. Now since we bought the plant in Mexico, we are looking at other opportunities there that would be cut and sow operations that may not necessarily be parachutes, but that would just be contractual work that we would do with companies and not necessarily making another product to sell to expand our product line. But we certainly are going to continue to look for opportunities to expand our pipeline.

So does that answers your first question? The second question regarding the competition in Europe, you know, who knows what the competition is going to do. There are airplanes that are being imported in the United State with competitor products on board in the light sports area. However, those have been fairly limited so far. We have some pretty good barriers to entry. It would take several million dollars and a lot of time and expertise for someone to duplicate what we've done in terms of the certified products.

Parachutes tend to be very simple. Everybody knows what they are. But when you start talking about the deploying a parachute that's going to recover a 55,000 pound airplane that's going to 320 nauts without ripping the airplane apart, that's pretty significant technology they have going there. We believe we have an unusual level of expertise in that that uniquely qualifies us and would make it very difficult and very expensive for a potential competitor to come in and do that.

The competitors that we do have tend to be sport-based, they're very low end, and they're very, very small compared to us. We're probably ten times bigger than our next competitor, for example. Okay? Does that answer your question? Yes, sir?

Unidentified Audience Member

[Question Inaudible]

Larry Williams


Unidentified Audience Member

[Question Inaudible]

Larry Williams

Thank you. Do you have another question.

Unidentified Audience Member

[Question Inaudible]

Larry Williams

The unfavorable lawsuit?

Well, unfortunately that lawsuit -- surrounded an issue, contractual issue, when they went to develop the Cessna product. They had a gentleman that put in some money to help develop that product. In exchange for that he got an exclusivity to sell the Cessna product. After a period of a couple of years, after the system was certified there were a low number of sales.

The company at that time had decided that they felt like to sales effort wasn't what they wanted. And they choose to terminate contract. He felt like the contract was not terminated properly and he had some additional rights. He sued over that, and he won the case. And then the judgment came back, you know, at about, it was about $3.4 million.

We were able to go in and settle that we paid up to $1.9 million. We paid a payment upfront. We had two debt components associated with that, one that lasted for the first five years of principle interest. And then the second element of that is in your six, seven and eight which is interest only in the first five year.

So what we did is that first five year that we paid it off full. We do not have that debt anymore. We still have debt remaining in year six, seven and eight which is interest only right now. And we've advanced on that debt a little bit. And we'll continue as, you know, as the cash is available and we can, we may make decisions to pay that debt down as well, early if we can. But it's not as compensative as first one.

Okay. Anything else?

Unidentified Audience Member

[Question Inaudible]

Larry Williams

Yes. I mean, I guess what I should say that is when you deploy the chute it works. It absolutely works. We've had a number of what we called ground deployments or impact deployment, were the system activates when it hits the ground. So you know, we really want to encourage the pilots to remember that is an option if deployed early. So that, if they want. Okay. All right. Thank you very much.


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