Good day, and welcome to the P&F Industries Inc. Q2 2020 Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Mr. Richard Goodman, the Company's General Counsel. Please go ahead, sir.

Thank you, operator. Good morning, and welcome to P&F Industries second quarter 2020 conference call. With us today from management are Richard Horowitz, Chairman, President and Chief Executive Officer; and Joseph Molino, Chief Operating Officer and Chief Financial Officer. Before we get started, I'd like to remind you that any forward-looking statements discussed on today's call by our management, including those related to the company's future performance and outlook, are based upon the company's historical performance and current plans, estimates and expectations, which are subject to various risks and uncertainties, including but not limited to; risks related to the global outbreak of COVID-19 and other public health crisis; exposure of fluctuations in energy prices, debt and debt service requirements; borrowing and compliance with covenants under our credit facility; disruption in the global, capital and credit markets; the strength of the retail economy in the United States and abroad; risks associated with sourcing from overseas, importation delays; risks associated with Brexit, customer concentration, adverse changes in currency exchange rates, impairment along with assets and goodwill; unforeseen inventory adjustments or changes in purchasing patterns; market acceptance of products, competition, price reductions, interest rates, litigation and insurance; retention of key personnel, acquisition of businesses, regulatory environment; the threat of terrorism and related political instability and economic uncertainty; and information technology systems failures and attacks; and those other risks and uncertainties described in the reports and statements filed by the company with the Securities and Exchange Commission, including, among others as described in our most recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, and our other filings. These risks could cause the company's actual results for future periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the company. Forward-looking statements speak only as of the date on which they are made and the company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future developments or otherwise. And with that, I would like to now turn the call over to Richard Horowitz. Good morning, Richard.

Good morning, Rich. Thank you so much, and good morning, everybody. Thank you all for joining us this morning to discuss our second quarter 2020 results. Before I get started, let me just apologize in advance; with the -- in New York where we are at our home offices, there has still a week later, there's been enormous outages of power outages, power surges, lack of things; so our phone lines are very, very weak. Believe it or not, if the world has time even, so we're going to try to speak up as much as we can, we may get interrupted in the middle of a phone call, hopefully not, but just to put you on notice about that. I hope all of you are doing well under these most trying circumstances and times that we are all living through. I'd like to acknowledge that this has been and continues to be extraordinarily challenging times in terms of health and the economy, and our thoughts are with all those who are affected by COVID-19. I would like to direct your attention to the company's press release that was released earlier today, which includes the company's June 30, 2020 balance sheets, the statement of operations, and statements of cash flow. In order to streamline today's call, I would like to note the following: first, instead of our management summarizing the company's results and other information from the press releases, as we have done historically, we have decided to move directly to a question-and-answer session. Anybody who reads the press release can pull the information, there is no need for us to be cited over and over again. Second, please be aware that we will only be answering questions relating to the company's results of operations and financial conditions. We must insist that you adhere to this procedure. Management will not be entertaining any questions that go beyond the scope of this call and this quarter. And with that said, we'd be happy to answer any burning questions anybody may have at this time. Operator? Operator?

Thank you. Yes, I'm here, right. [Operator Instructions] Alright, we can go ahead and take our first question from Ken Zell from Zell Capital Management [ph]. Please go ahead, Ken.

Hi, good morning, gentlemen. Thank you for taking my call. In your release, you talked about…

I'm sorry, I'm having trouble hearing you, Ken. Could you speak a little louder, please?

Yes. On your release, you talked about $840,000 reduction in SG&A. Can you give some of the detail of what -- what goes into the $840,000 number?

Sure. Joe, you can answer that question.

Sure. That would include things like advertising, Co-Op -- Co-Op fee we pay with the customers, freight reductions, compensation, anything related to compensation that would go down with the compensation; those are probably the big -- the bigger items.

And Joe, do you see any of those reductions can be permanent for either the rest of the year?

Yes, I would say it is likely that those reductions will hold throughout the rest of 2020. If this is going to be our revenue, it would be a net. Well, let's put it this way; I don't want to -- we don't anticipate a large rebound in revenue in the foreseeable future, certainly for 2020. So I would say, yes, those reductions are going to be -- I wouldn't call them permanent, but certainly through the end of the year.

So, I guess if we just said that all tied to revenues; there would be up saving [ph]?

Yes. And there are some subjects; there are some variable and subjective expenses in there that were -- were also used to try to save money.

Yes, sure. Do you may be foresee any additional reductions going forward?

It is dependent on the revenue stream going forward. You know, the things which would worsen in a significant way on the top side, yes, we'd have to make further changes.

Okay, fair enough. The $1.6 million impairment charge, can you give us some of the specifics for that? When we will get regardless?

The bulk of it is related to the high-tech subsidiary, and the bulk of that is related to an intangible labeled customer relationships. And this is probably a little more accounting detail than we need [ph] but there is -- when revenue falls dramatically, new projections are performed internally, and we work with a valuation consultant to try to develop what the impact would be on that intangible. To the extent revenue falls, kind of -- by definition where these evaluations are done, customer relationship value also drops; it's just sort of the nature of how these valuations are done. So, I don't know if that's helpful or it answers your question?

No, that is helpful. And I was always under -- at least I had the idea that the impairment charges was going to change in the year in that quarter; that's good?

Yes. Well, typically -- management is actually required to review it quarterly. In the absence of dramatic changes in revenue, you typically don't make changes during the year but as per GAAP, if there's a dramatic change in things, a significant events, i.e. COVID, we're required to take a look at things each quarter. So we did obviously, and felt that that was the appropriate adjustment.

Okay. And given the crystal ball out do you anticipate your charges in the coming quarters?

Again, this is sort of the nature of the way these things work. If your revenue is steady going forward, I would say no. In addition to that, we've taken a pretty big chunk out of the intangibles. In fact, I believe on the customer relationship side, I'm having fun and I'm not sure there's even much of that left on high-tech. So, I'd say the short answer is no; I don't anticipate but -- the market will decide.

Okay, fair enough. I appreciate taking my questions. And I'll back up, and give somebody else a chance. Thanks.

You're welcome.

All right. We can go ahead and take our next question from Andrew Shapiro from Lawndale Capital Management. Please go ahead, Andrew.

Hi guys. Can you hear me okay?

Yes. Thank you, Andrew.

In your comments in the press release you had, I guess, we will call it a forecast but it's just some insight as to what you're seeing here because we're already in August. I'm also trying to get a feel for how you came out of the quarter ended June because obviously April and May were very bad, but I don't know if you saw any green shoots in June. On our last conference call, when I asked about different catalysts to look out for growth, you guided to different catalysts to look out for growth. You mentioned a few items. In oil and gas prices are trending back up to $40 a barrel. Some planes are going back in the air albeit the 737 Max is not up there yet but Boeing's even announced plans for some production, I think reinstatement and mobile job is starting calling on garages again. So did you experience or see any green shoots starting in June or are you seeing them now or more follow through going into August?

Well, the short answer is we did not see any of this in June at all. We've seen and continue to see that but I don't want to overly emphasize but we've seen a little bit of breathing room and a little more activity from our general customer base. Having said that $42 a barrel price for the crude is nowhere near what it needs to be for drilling. If you look at the I believe is the Baker Hughes recount, the recount is basically de minimis. It's like nothing. We went back and we would looked we haven't seen this low rig count since we start looking at 1968. That's what we spot going backwards from today, all the way back to 1968, there hasn't been anywhere near this kind of a low number of this drilling. People just simply in America are not drilling because the pricing is just not there. We've been told we're not experts in the oil field directions for making tools to the oil field. But we've been told that oil will have to be in the mid-50s even be brief, not to be robust, but just get started again when people do it. So mid-50. So we're far off those numbers, unfortunately. Having said that there is a little bit of activity in the tool. We're seeing a little activity and I say little activity in that area. As for aerospace, Boeing is virtually non-existent. We are still waiting for them to be approved by the FAA for the 737. They passed all the tests, but they still have more things to do and that hasn't happened. They say that they were going to be making, not the exact number but make 20 a month or something along those lines where they will make 4x that amount before this. We've been getting sporadic, and I mean, sporadic orders from Boeing, but not from Washington State, which was the big place. We've been getting sporadic orders from other places, even Europe but nothing of any consequence. So there has been no activity, and they're not taking visitors. So there's just nothing going on there. It's amazing to us that the government hasn't really stepped in there because they keep saying how important Boeing is to the economy and the country, and they haven't done anything to be proactive about it, so that company is still floundering dramatically and horribly. As for mobile jobbers, maybe Joe can give some color on that. We are finding air cap to be fairly robust in a relative sense, compared to where we were a couple of months ago. And we have found our retail business to be also fairly robust compared to where it was, but it's been for the last six weeks or something to that tone since the mid-year. We're cautiously optimistic that we're starting to head in the right direction but nothing to get crazy and excited about. Joe, you want to add to any of this?

The only thing I would add is that on the automotive side people aren't buying new cars right now so they're repairing the old ones. Once the shops were open, people didn't have to bring the cars in so that work continues and people need their tools.

Right. And then with respect to the recently acquired do business, when we integrated it in and you said there's obviously some maybe disruption and that things have been ramp up, are you experiencing that kind of ramp up on the order volumes? Are those depressed levels because of the pandemic as well? It seems we've gears this custom work that you guys do might actually be in greater demand during this time.

Again, the short answer is yes, we're doing all the setting up and moving it and getting the glitches out and getting it all going in our new factory in Punxsutawney that's all behind us. The beginning of the second quarter is behind us. So we decided in the queue or perhaps even at least in my question. One of them we said that we are at the level that we brought the business through pandemic levels of sales. If we could get out if we were admitted into some customers that we had, we're very confident we would be getting a lot of business but unfortunately, they're not letting us in. So we're getting enough business to keep to the level that we were pre-pandemic but we feel like we can go much more as soon as we can get out and see people. We talk to them but it's an engineer product to see things. So we get some business but not as much as we would get if we were able to get out there and we're hoping to get out there very, very quickly. Joe, you want to add on?

Yes, I would just add that it's an engineered sale and in many cases, you need to work with another engineer on exactly what you're trying to accomplish. While some of that can be done over the phone and the internet, it's a lot easier in person and certainly, if you're trying to grow the business and work with people you've never worked with before. It's really difficult to do without a face to face meeting. Some of our key target customers, with lots of locations just frankly, aren't letting us even have visits. Until that changes, we're probably stuck at this sales level which, frankly, I'm not disappointed in considering where the world is and we're kind of flat from what we bought.

We think the prognosis in that area is very, very promising when the world gets into some kind of semblance of order.

When you said things on the retail side had been holding up, are you referring when you use or phrase retail that includes, or is Home Depot?

Home Depot?

Okay. It appears from the published balance sheet in your press release that maybe some of the PPP loan was reclassified as a current liability. So can you explain is this due to headcount reduction or some other factor?

Joe, we're going to be as soon as we're able to in October. Joe will expand on that. As soon as we're able to in October, hopefully, because the loan forgiveness we intended to do that. We expected that has been no issues at all but want to talk about.

Here's sort of the mechanics, Andrew. Since we are not certain that the loan would be forgiven the documentation right now, stated the two-year loan is no interest until month seven. So we basically developed an amortization schedule beginning in month seven to pay the loan down over eight -- the full amount of the loan down over 18 months and the principal payments that are made between the date of the filing and the next 12 months is considered short term and the remainder would be long term. That's just how it is. That number will move, obviously, each quarter.

So, you're building an amortization principle because of GAAP or because the loan term itself doesn't require repayment until year two?

No, no, you're required to start paying it down over an 18 month period. It is not all due at the end of 24 months.

It's not a bullet. Okay. It starts amortizing in Week 7 or whatever.

Just like a mortgage. They amortize it like a mortgage.

All right. Then I understand why that would be the case because you definitely have to assume it's not forgiven until it is. When you're choosing to seek your forgiveness are you planning to use the eight week period and if so, have you submitted your forgiveness application yet, or are you planning to use the 24 week measurement?

We're using the 24 week measure so we won't be seeking forgiveness until sometime after the end of -- towards the end of October.

Okay, got it. Based on the fact that your facilities are essential businesses and kept open and in bag that you reduced revenue stream, etcetera, have you had to do some headcount reduction and some of the forgiveness might not come in or have you been able to maintain your headcount sufficiently that you would expect at this point for forgiveness?

We had layoffs after the PPP was used up. Joe, why don't you give the specifics?

We had no choice but to lay off about 15% of the workforce nationally sometime in June, and a few more people are going after that. Mathematically given how the calculation is done, we will know we are not better off by keeping them and also, what we were finding was that having people around and being inefficient was actually causing the people that needed to do work be inefficient, and it's just one of those strange things about manufacturing. So, we felt it was in the best interest of the company to have a reduction in force and try to be efficient as we could. Having said all that, our preliminary estimate is that the vast majority of the loan will be forgiven.

If you do use the 24 week period, I think there's a window or an opportunity if you get the opportunity to ramp up and re-hire that we might even be able to expand that.

Yes, that is true. If things turn around before I think it's October 25, or so, I think that's the 24th. If we're able to bring back some people before that, that would actually improve our business.

Right. That's why they amended the legislation to create the 24 week period where what makes it basically for Hospitality restaurants, other types where they didn't have any staff at all, and recently have staff. What you guys did but still made cuts, okay?

Andrew, we have to be honest. We don't really have a crystal ball. Nobody in the country, in the world does because they don't know how the government -- they have never gone through this so we're only giving you our own intelligence on this but we don't have any clue how it's going to be treated or handled or everything else. Cannot be another draw.

As a result of this circumstance, and that there's going to be a new normal, have you stepped back or alternatively come up and pivoted your focus on new products as a result of the COVID situation and its potentially prolonged existence where people will adapt? There probably is going to be a different way of doing things in lots of circumstances as a result of this pandemic experience. Are there new product opportunities or shifts that you have implemented or foresee doing?

In the queue, there was actually a section that we discussed, that our engineering projects are still going on full steam ahead, actually more steam than before actually, but I don't know if it's related to COVID. I think is related to the fact that we're just doing things in engineering and create the products and we discussed that. There are things and there will be more things coming on in that regard. Specific Joe, you can give him a few.

Andrew, I don't know that it changed anything dramatically. I think it may have just accelerated kind of the direction we were already heading in. We are certainly looking at development with an eye towards what things may change, what sorts of opportunities for full sales exist in the post-COVID economy or possibly with some sort of stimulus on infrastructure projects, things like that, or how people buy tools. So nothing's really new, but I think it's sort of moved us -- it provided an accelerant to move a little faster in some of those projects to take for management things and turn around.

I have other questions. Let me back out and give others a chance, [indiscernible]. You let me know and I'll always take a break. On the last call you said the majority of the Blaz-Man gear products integration was accomplished in Q1. But there was some small things to complete here in Q2, this just occurred. What would you estimated were the redundant or extra costs incurred during Q2 that were in this quarter and can we expect Q3 operating results in the Blaz-Man gear products area to formally reflect the integration and costs at a level we should expect going forward?

The answer is yes as I said earlier. It's behind us, setting it up all that stuff. The only caveat is what sales are we going to be getting without being able to see customers. We expect things to stay at the level they're at right now but we will see growth once we can go out there. Joe, you want add on to that?

I would say Andrew that the few things that were left in Q2 ended up being a little more challenging than we thought and I fully expect Q3 to show better results profit on the [Technical Difficulty].

Hello?

Can you hear me?

You kind of cut-off there, Joe, at the end.

I'm sorry. I'll say it again. I fully expected to…

Cut-out, again.

Yes, he keeps cutting off.

What I was trying to get at was if there was an estimate, especially since you said it was a little more challenging in Q2 than you thought it would be, would be what the estimate or the redundant or extra costs that were incurred in Q2, that would at least be the tail end the profitability in Q3 assuming revenue streams are the same.

That is a fair statement. Q2 was, you had a few things in there that we didn't expect nothing consequential, but some things in Q3, we don't see anything like that.

Right, and I was just trying to get an estimated $100,000, $200,000 what kind of salaries was it going Q2. I can't give you an exact figure but certainly it's a six figure number of savings we will see in Q3 over Q2. So big enough to notice.

Taking into account the cost of capital and contingent purchase consideration, would you say this acquisition is now creative to earnings already or not yet?

Certainly, on a go forward basis, it's accretive. Payback involved in our investment but it's throwing off cash flow. Definitely becoming accretive in the third quarter.

And can you remind me or our listeners here about the contingent purchase consideration? When is that testing takes place and, I think it's a payment that would be due?

First, it's a pretty immaterial number. We look at it every quarter and we remove a very small fraction of the upfront purchase price. So I don't think it would be material. Even if it was all paid in one shot, it wouldn't be that material. You're talking about something that would be paid over 24 months so I don't even think you're going to see it. It's not even going to be worth talking about. It's too small.

Do you accrue for it so it's a little miniscule build up?

Yes, the way we're required to do it is that the act of closing, we actually do a projection of what we expect it to be and it's actually in the purchase price, kind of buried in there. Then all we do is try to -- we tweak that every quarter if we feel we need to. So it's already in there. The only way that you would see additional P&L expense would be if we underestimate it and also in the other direction if we significantly overestimated would have a small pickup. But again, we're not even talking about $100,000 opportunity here over a couple of years. Even if I was off 10% or 20%, you just wouldn't see it.

Right. On prior calls, you guys spoke of many of your tools being used by Boeing on more than just the 737 Max but on other platforms, and while they have greatly reduced their production pace, they haven't completely shuttered. As they use tools, things break, they wear down and get lost etcetera. They have a tools inventory and that tool inventory gets eventually drained down and we're certainly working on working capital as best they can and that's the headwind that you and other suppliers face. Do you have any visibility into and get a feel for we'll just call it some point stabilization level of orders from Boeing or hearing of any business from them at all?

We probably get orders. In normal times we would get orders from the dozen Boeing facilities, something like that. I might be off by a few but it's certainly more than a couple. I would say and this is an estimate, 60%, 70% come from one facility or one very closely. We've set up facilities up in Renton, Washington, which is just outside of Seattle. We are getting tool orders from everywhere else. Even some in the Washington State area, South Carolina, California, I don't know all them since I can't remember where they all are. We did some tours but call it 70% of the infrastructure offline. So that's millions of dollars of sales that are really kind of crumble halt. We don't have any more knowledge than you do about one we might start getting these orders again. So in other words, we just followed what they choose to do with Renton could be an indicator or a tailwind or something good for P&F. If you read in the newspaper, that Renton was backed up to making 50 planes a day, that is absolutely a leading indicator of our sales to Boeing without a question. If somebody had in six months, we're going to need 50 planes a day. You can absolutely count on that happening and a significant impact on all that. Even if they said 10 planes a day, that's something.

I don't think they hit a light switch and all of a sudden the other 50 anyway. It will be an ampere on last quarter's call. You said you introduced a fastening tool to the new fastening system from military aircraft, and they're just starting to get a little momentum when things got put on hold. Did the order book at all open up on military aircraft in this program and do you have better visibility now as to when that might happen?

We have orders. We've gotten orders for those tools, but we're not going along as nearly as quickly as we would be if the engineers and the production staff and the procurement people were in the office in the building. They're just not there full time. These orders require sort of a team of people to be involved and someday somewhere in the building others are, others coming back for months. It's very difficult to get any more real momentum but we absolutely have gotten some initial orders for that tool. See the tools.

Similarly, while things are slow and all that, but on a few of the pre-COVID calls, you spoke with concrete initiatives that were beginning to merry up for the pneumatic shifting and high tech resources to go after the aerospace market in a bigger way, but with long lead times in this field, which could be several quarters to a few years before you saw the results. Does any of that at all move forward either in the background at P&F or in the background without physical visits taking place between you and your customers?

I would say no from what I know.

Similarly, a couple of larger space customers that you are working on some of the R&D in connection with their potential accounts and you saw, for example, same story.

Unfortunately, they're not -- Airbus is starting to open up in Europe. We've been there actually and we're talking but in America nothing.

Speaking of Europe, you said progress was developing for aircraft. In addition to aerospace tools and distribution opportunities in Europe, are these efforts back on track with the European economy in the opening before ours?

They're starting to get back on track but you're starting from a dead horse you just don't flick a switch and it just goes on but the answer to your question is yes, it's absolutely getting started there in Europe. Europe is doing much, much better than America as you know.

Now you've referred a few times to the 10-Q and I'd asked in the past, and unfortunately, still, the case is your 10-Q comes out after this call. So you don't have the benefit of the 10-Q and some of the numbers in there. In this instance, you didn't have the script. Are there some depreciation and amortization numbers that you normally say in the script Joe, that do not make it into the press release that you can share? Or are they all in the press release that we can dig out?

What we chose to do Andrew and hopefully it remains in there is that while we dispense with the script that had a few numbers in them, we tacked on the cash flow statement to the back of the press release. So the things that I would normally discuss are there in fact, way, way more detailed than I ever talked about. I would also say that a good deal of the management discussion and analysis that ends up in the queue is discussed in the press release. So we really do have a lot of the data from the queue here. In fact, I think you have on a relative basis what you really need. I do not know that there is much of any consequence that you're missing. Obviously, it's not a full time team. But I think the bulk of what you need is there in the release. It's in the release for sure.

Okay, good. We'll look through it. We only had a few hours with it before the call began. And so that's, it is what it is. I don't think the press release makes mention of the current shares outstanding number or does it? Even if the one for EPS calculations, all they had was a March 10-Q to go off of. Is there any other meaningful change in the current outstanding number?

I don't have it in front of me but I would have to say that I cannot give a reason why there would be a meaningful change.

I would say there is nothing that I could think of.

In what ways do this on the forwarding and national retail side, in what ways do you have visibility of Home Depot cell-food [ph] stocking?

They really don't give us much visibility at all. Joe, can you say anything?

I think we have -- Andrew, is your question like is Home Depot stocked out are they overstocked? What are you trying to get at?

To the extent you have some visibility, then I probably have a few more questions. To the extent we're in the dark, it's a negative in the risk.

I mean, I guess that -- why don't you ask your question, and maybe I can answer it. I'll do my best.

So you had a newly refreshed product line. I can't recall if it was pre-COVID or not, if you started to experience the new orders, because remember when we initially took it in and took this big batch in and it was a while or a slow period initially, even though you understood the products were selling, they weren't necessarily having to reorder because there had been initial stocking and then COVID kicked in and so I'm just kind of wondering what the takeaway was from that newly refreshed product line and had you experienced the new orders, etcetera and how was it fairing against the other Home Depot labels that would be offered at different price points?

That is information we would really have. But let me remind you, Andrew, that the line refresher score was done at the end of 2018, not 2019. So it was way before COVID. So we had the whole year of 2019 with the new line. I'm sure that we discussed it on one of the calls that Home Depot made a decision at that point to bring some named products into their product offering. So we expected and in fact, we did have a reduction in our business slightly. Not meaningful just definitely seven figures of a drop in our earnings on our sales because they brought other things.

That was last year?

That was last year and this year I guess all bets are off. We wouldn't know anything here this year. Though we've had in one particular thing spray gun, we are having a very big order flow to them from Home Depot for that much more than we anticipated. I guess people using it. This is me talking and I don't even know what we're talking about but guess they're using the spray gun for like cleaning materials and stuff like that. So it's being used for alternate uses than what was actually intended for, for us in the automotive area.

Well, treat your zone. Maybe to marketing and whatever some follow through in that new area.

Right, but we haven't had any input this year from them as to what's going on this year based on their expectations. Operator, if there aren't any other questions and then we'll continue with you.

[Operator Instructions]

As of now there's no others, right?

No, not right now.

Andrew, then you can continue.

I only actually have a few more on this. In light of the economic challenges, everyone is having and the company is relatively no debt levels in a period of time when debt costs -- interest rates are so low. Especially when you assume substantial forgiveness on the PPP loan. Where do you stand in your time allocation efforts of focus on synergistic acquisitions? Is that something that's on your plate? Is it something you'll need to see? Although you guys really aren't historically buyers of distressed assets when you've done that that's actually not worked out too well, but [indiscernible] family businesses where the founder is nearly not having a good line of succession and wants to sell out, I have to believe in this very challenging COVID time that there are going to be plenty of people who want to tack it and stop the fraud and retire. Are you seeing that yet and are you even spending time and resources looking at that or are you spending more time and resources at HQ looking at cost cuts because at times your hands are tied on the marketing?

We're doing both. We've been just talking about it for the last month or so that there has to be opportunities of companies who are breathing very heavy, and may be much more in a place to advance going to the other things, selling of their business and whatever else. We're starting to look into that much more carefully but up until this point, we would just and we still are struggling to try to revive the business and be creative in our own world, trying to make things be proactive and make it better. But the answer to your question is, yes, we are at that point now, and we're looking. Distressed companies is not our forte and we're not going to go down that road. But other kind of companies, little niche companies that fit into our business, like the gear business and other businesses that we bought will be the focus.

It's certainly not the right time until you see some of the unique headwinds stripping out unique to you such as the 737, etcetera. When this thing starts bouncing back and horning you've now experienced another economic recession of great depth, okay. In fact, some yearning [ph] about what your views on the exit because at the end of the day P&F is a small little niche business as well.

I don't really know what you're asking, what's the question?

Well, I guess the question is, are you having any thoughts down the road upon the recovery on the biz of saying, you've had enough of this as well on these cycles. Just like the founders and other executives-

Andrew, I know this but we really couldn't comment on that even if we did. But anything is possible as time goes on.

Maybe we can have a discussion over dinner at some point.

That'd be fine.

When we all can see each other again.

We can have a virtual dinner in the meantime.

I have no further questions. Thank you.

Thank you for your time today. Operator, any other questions?

Yes, we do have another question. We can go ahead and take our next question from Thomas Hershfield from Embroidery [ph]. Please go ahead, Thomas.

I'm just sitting here in the bleachers listening to the heavy hitters here and I am a stockholder. I tried to buy the stock for the last so many months, but there's no volume in stock. I know this is not the quarterly results but when this conversation that you guys are having you own over 50% of the company, so the liquidity is horrible, you just can't get any stock. I think the company has tremendous potential. But let me just give you one example of trying to figure out. The AIRCAT 3H drill at Home Depot sells, I contacted 19 Home Depot's to get it. No one had it. The earliest you could get it was two weeks out. Then I went to other tools.

Thomas, can I interrupt for a second? We don't sell any AIRCAT tools at Home Depot? AIRCAT is available through distribution or on Amazon.

The AIRCAT at Home Depot isn't yours?

I would be surprised if there was an AIRCAT tool available to sell at Home Depot.

There's pages of them like what I'm looking at right now.

At Home Depot?

Yes, 38 high took hammer impact drill. I don't know how to pronounce it. There's SYOSET jack.

We are not aware of any AIRCAT at Home Depot at all. I would be very curious to see that website. Thomas, let me ask you a question, is at Home Depot online, is it homedepot.com? Maybe from their website there, Tom?

I called to buy the deal. I said I'm trying to figure something out here. I can't find the slackers there's nothing there. They get great equipment, great tools but you can't get the tool so I called Home Depot I said, listen, I'm a contractor and I want this drill. So I got to wait two weeks to get the drill sent to me? Because you're not able to do your asset and so it's so what is it? They go back after they sell it and get it delivered? So like they get the margin.

I really don't know. We'll have to check into that but we sell AIRCAT through distribution. If you want AIRCAT to get it there, you get it next day really, but we'll check.

You shouldn't have any trouble getting an AIRCAT on Amazon.

So I guess if Home Depot is advertising your product without your knowledge, how could that happen?

I don't know the answer to that.

It's not only that one piece. They got pages of them and everything's the same so I called them I said listen I'm a contractor and you say two weeks for a drill. I want the drill. That's the best we could do. It seemed a little crazy.

If you wanted a tool, go to Amazon.

I do embroidery. If somebody sold my ability I want some money out of it. I want to know what's going on. So if Home Depot is selling your product and you don't know they're selling it and it's like, there's no one finding deals.

They're not getting it from us. Again, we can't talk about this five times and totally different.

Well, I want to talk about is the five times the margin gets lost along the way to the end product. So for instance, let's say, I go to Home Depot and I get that drill, who gets information on the warranty?

Well, if you submit a warranty card, we would get that information.

So you have the end user of every single product?

Well, hold on. Let me fully answer the question. If someone submits a warranty card, that information ends up at Florida Matic. If someone chooses not to submit a warranty card, we don't know who that customer is in general.

Would you have the rough percentages how many people do put a warranty card?

Funny, I asked that same question of one of our people the other day. It's not a large percentage. I'd be guessing. I'm going to say 10%.

It's like Mr. Lambert used to stay with CS, whoever controls the end user will control everything. So whoever knows who bought my AIRCAT and Home Depot tells me to take a half hour down the road, no big deal. You know who he is. My thing is a contract that goes to buy, they couldn't get I was shocked. I went the night I called 19 of them. Another quick question I've run out of time. So we're going to cross. The PPP from the query was it $1 figure to that?

Yes, the PPP loan is $2,900,000. A little over $2.9 million.

I understood. I saw that U.S. one. I'm talking about the one Great Britain.

There's no PPP on Great Britain. We had this $30,000 from the U.K. Just to be clear, that's not a loan. The U.K. government provided many small companies a certain amount of money that did not have to be repaid. So I don't know, what do you want to call it? A $1?

It was $1.

Okay. I was just doing the quick numbers, 29, 24 you get three from the government. You actually did very well, all things considered. When I see the availability of the tools and everything else, I say, you know what, why can't I buy the stock? I know it's not something you can answer me, but it's crazy. There's absolutely no liquidity at all in the stock and I've been trying forever to buy it and you got to buy what 25 shares, 50 shares? It's really crazy. Then the last thing is, when do they meet again as far as discussing the dividends?

When do we need again to discuss the dividends? Is that the question, I'm sorry?

When do we meet again to talk about again because there is nothing in the pipeline.

We talk about it at the board meeting, and we review it every quarter. But there's nothing to report on as of now. When there is certainly when there is something to report, we will. I can't find another crystal ball. When the country is going to get back to normal, we can give you a better answer.

Well, I don't when the country is going back to normal, but I know this, fracking didn't exist 20 years ago so one of the tools they use for different things right now, they have to be applied to some of the industry too where their salesperson can find that industry. I don't know. But there's definitely other uses for the tools. Minor thing that you can discuss everything clear blue in the face and handle these regulations. The bottom line is there's no stock to buy in the company. So my feeling is it should be a private company. I don't understand it. What do you do? Nothing there.

Today's oil problem we've had for quite a while.

If I was upset like a negative standard to this company's terrible don't do this don't do that. It's the opposite. I think the company is a good company, I think it's tremendously undervalued, but there's no stock to buy. And it's like the worst nightmare.

There are people who buy stock. I can't debate it with you. But there are plenty people who buy the stock as they accumulate it and they are focusing on what's going on.

If I went out to buy 5,000 shares.

I'm sorry, Tom. This is not really even part of this phone call. Possibly to speculate on.

Can I ask my last question? If there was no stock and no price, there'd be no phone calls. You would never have the means. Everybody is interested in the stock price. That's all we're interested in. As I said if you make more money, Joe makes more which is the stock price. If the stock price is depleted, and there's no liquidity, it's like, okay, it's not going -- In February, you traded under 10,000 shares for a month. There is no remedy, I understand that. You either buy it and either sell it and shut up and move on or what?

All right. Thank you for your time.

There are no further questions at this time.

Thank you. Have a good day everybody and stay safe and well. We'll be back to you with our third quarter results from there towards the end of the year. Thank you, all.

This concludes today's call. Thank you for your participation. You may now disconnect.