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#Okay, <UNK>.
As we commented, there's many, many items when you look at all of them.
A lot of them are noise level.
A lot of them kind of cancel each other out quarter to quarter.
But the three ones that we highlight, which are the more significant, are ---+ I don't know if I was to call it shutdown, but we did a restructuring, so we laid off some people, unfortunately, in California and Arizona.
And if you look at Q4 compared to Q3 there's about a $400,000 benefit in Q4 as compared to Q3.
As we said, going forward, the annualized benefit is about $2.3 million.
We didn't get the full benefit in Q4.
And the reason ---+ well, let me make sure I'm clear about that.
As a comparative matter we didn't get the full benefit because there's some benefit in Q3.
But we got the full benefit of it in Q4, just in terms of the big picture, if you want to look at it that way.
That's one of the components we talked about.
The shutdown ---+ that's an accounting mechanism where we accrue during the year for shutdown credits and then the credits were taken when we have a shutdown, a planned shutdown.
This is not some shutdown that all of a sudden happens because, I don't know, let's say business is bad and we shut down the factory for a day or two.
These are planned shutdowns for holidays.
That has been our normal accounting practice and procedure for many years.
The benefit there was, again, close to $400,000, and then aerospace maybe $0.5 million.
And if you want to call it mix, that's fine.
So those were the three items we highlighted.
Everything else is kind of noise level.
There is some benefit from the additional revenue.
And we strive very hard to focus on our cost line, whether it's SG&A or cost of goods sold, across the board, and especially when things aren't going so well.
And we had a pretty rough third quarter, so we did pay attention to that.
Well, this year is pretty straightforward.
The benefit of aerospace with the big programs is a lot of visibility.
And we talked about GE.
We are at the level we expected to be at this year with GE.
So I wouldn't expect a big difference in this calendar year or fiscal year with GE.
I think that the spike in terms of the forecast is more in the 2017 and 2018 year.
And that's largely driven by the neo program, I think.
We are on the 747, but that's a legacy program and it goes along very nicely.
But as far as we know, we are not ---+ we haven't heard any reason to believe that there's going to be any kind of ramp up or spike in the 747.
And some of the other programs we talked about last time are smaller programs.
And they haven't come online yet.
GE is approved and therefore we are approved through GE when those programs come online, but there less significant in terms of what you are talking about in terms of revenue drivers.
But the big one is going to be the neo LEAP engine from ---+ the A320 with the LEAP version.
And that's 2017 to 2018 when that would spike.
Now, since you brought it up, I guess ---+ I don't think you were going for, but I probably should mention that this customer has been very helpful to us and they have put us in touch with three, maybe four but at least three other very significant OEMs.
And we are working with them now on programs and qualifying.
I don't want to mention names.
I think that's not appropriate at this point.
But you would know them; they are household names.
So we are not ---+ we are trying very hard not to only be about GE in terms of aerospace.
And as I commented before, there are a lot of small customers out there that we just need to do better with.
And we are working pretty hard and getting focus.
I think we have a nice sales team at this point around the world and especially the US.
And it's the job of our sales teams to go wear out that shoe leather and knock on some doors and get some of this other business from companies that you've probably never heard of.
But nevertheless, you put 10 or 20 of those together, it's meaningful.
And in terms of short-term, meaning this year and next year, that's really where the upside is because the other stuff, the big stuff ---+ the forecasts are very obvious.
And the upside with the big stuff, the big companies ---+ that's where you get into development stuff.
And even with GE, and I mentioned before we do a lot of development work with them as well ---+ but usually you are talking several years out before those things become a factor in terms of revenues.
So in terms of the top line for aero, we really need to see business from those companies you are not familiar with in order to drive the top line over the next couple years.
The rest of it will somewhat take care of itself.
And then, like I said, there's other programs with GE.
But these other companies that GE has helped us, introduced us to, let's say ---+ and more than that, actually, more than just an introduction, where we are talking seriously about ---+ with those companies about their programs as well including even MRO.
I'll mention that as well.
That's an area of interest for us that we would like to focus on.
Some of our competitors may not really interested; they say it's too small.
But we really like that idea of MRO.
It's a little bit of a niche we're trying to develop.
And if you know who is MRO ---+ and they are household names.
These are very large companies that are doing MRO work.
Oh, sorry ---+ MRO, maintenance and repair operations.
These are big facilities that do major maintenance for air carrier type airplanes.
This is not like a place that you would ---+ I'm not referring to a place where you would bring a small airplane, a private airplane to.
So I don't know if that helps but there ---+ at least a little more color.
I'm glad you said that because we are using fiscal and calendar.
When I talk about the big programs ramping, spiking even, that's calendar 2017, not fiscal 2017.
So that's still a couple years out, based upon the forecast that we have.
The range you talked about ---+ maybe you want to talk $8 million to $12 million.
You say $8 million to $10 million.
That might be a range, you might think about that kind of range.
And it's up to us, really, to go out and get the additional business.
But it's not ---+ I don't think that we are talking about $10 million of business we are going to be able to achieve in a quarter, by the end of the year.
That's ---+ even by putting together a number of the smaller opportunities.
Bump up meaning ---+ I guess you mean improving or lowering our SG&A expense or ---+ I'm not sure what you mean by it, <UNK>, by bump up.
You mean going up or down.
When you say bump up in cost or bump up in margin.
Okay.
So I would say maybe.
I [don't think it could be] significant.
In other words, G&A for this coming fiscal year as compared to Q4.
Some of us did take pay cuts in Q4, and that was really a solidarity thing with the people out West because some of our hourly people were working short weeks.
We just didn't have enough work for them.
So some of the salaried people felt, well, it really is not fair for just the hourly people to work short weeks.
So some of the salaried people took some pay cuts as well during Q4.
And that would have affected SG&A, of course, in Q4 as well.
And those salaries have been restored, so the salary cuts are no longer in effect.
So in the terms of the SG&A, I don't think it's a spike but it could trend up.
I think it could trend up during this current fiscal year as compared to Q4.
But it's always our objective and our effort to keep our SG&A costs under control.
It's important for a Company like Park, because SG&A is significant when you are more of a niche company because you have to have the SG&A to develop the niches.
If you are big-volume company making widgets, you don't have to have a lot of SG&A for that.
So SG&A is going to be more significant for Park.
But that's the reason we have to watch it more carefully as well and not let it get out of control.
It's important for us in order to be able to develop opportunities.
It's important for our future.
But like I said, we are not a big-volume widget company that that makes a lot of stuff, the same stuff every time, where SG&A is not that significant.
But because it's more important for us, we have to watch more carefully as well.
Otherwise, if we let it go and don't pay attention to it, it will escalate too quickly.
<UNK>, you are comparing it to last year's first quarter.
Is that what you're saying.
Okay, so ---+
As we ---+ okay, let me answer.
As we explained numerous times, last year's first quarter was very much an anomaly.
It was one of those major inventory corrections in the electronics industry, which we paid for dearly in the second quarter and third quarter, as we know.
Look what happened in the first quarter as compared to the third quarter.
That's the electronics cycle.
We've discussed that at length and especially when we announced our second-quarter call, we did our second-quarter announcement, we said the first quarter ended up being one of those inventory anomalies, inventory build which led to the corrections.
So from a electronics perspective ---+ that didn't affect aerospace; you are correct.
From an electronics perspective, if you compare our first-quarter of this year to the first quarter of last year, it's not meaningful because that quarter is not a meaningful quarter.
It wasn't a sustainable quarter.
So really, when I give you my comments at the beginning, we are comparing it to the history, like fourth quarter, third quarter, fourth quarter, and then first quarter because we think that's a more meaningful comparison.
So yes, we said the run rate for the first eight weeks is $38 million.
We said that's up a little bit, as you know, because you have with the fourth quarter number is now.
And the fourth quarter is up a little bit from the third quarter.
As far as the environment in electronics ---+ okay, good question.
We think it kind of recovered but not ---+ recovery is not ---+ we don't want to see Q1 levels again.
That's not a recovery, that's an excess.
So we think things have kind of recovered and normalized.
Actually, in Asia we feel pretty good.
In the US maybe not so much.
But I'm not sure ---+ we don't believe that's a cycle thing.
We just think that's more the ongoing movement of electronics manufacturing in the Western world to Asia.
That's more of an ongoing trend rather than short-term relating to a cycle.
So as I commented, still not doing so well out West in California and Arizona in electronics.
But as far as the industry is concerned, we think it's ---+ as much as you can never say normal, it's kind of normal.
I think we also commented that we are not sure exactly how to see through that because some of what we see in terms of maybe optimism could relate to our new products more than just the industry in general.
So those are my comments.
You are asking about the fourth quarter in gross margins.
Okay.
Well, that should be sustainable.
We explained some of the things that affected Q4 as compared to Q3.
But that kind of margin should be sustainable.
That, of course, assumes that the top line is sustainable.
If the top line is sustainable, then the gross margins should be in line.
There's nothing really unusual or extraordinary about Q4 gross margins.
We just want to give some color as to why they came up from Q3 more than you might have expected, <UNK>, based upon the revenue improvement.
Okay, good question.
I'm going to be a little cynical here, though.
First of all, yes.
As we mentioned, I think, on the last call, more than 50% of our electronics revenues go into what we call infrastructure, meaning telecom and Internet providers.
So that's really a driver for us.
And I think I would agree with that statement that that seems to be somewhat of a common theme.
But the reason I'll be cynical is because the electronics industry is so bad at this kind of stuff.
Let's go back to Q1.
We just talked about Q1 of last year.
And when things were very, very strong we were asking our OEMs and our customers daily, really, what's going on here.
Is this sustainable.
I think we reported in our Q1 conference call last year people say it's going to last.
And what happened.
Probably a week later it all fell apart.
So sorry for being cynical, but ---+ maybe I'm too old.
But we've just in through so much work.
It almost ---+ we have to discount, let me put it that way ---+ certainly not ignore but discount the input we are getting from the OEM community.
And they are very smart people.
They are smarter than we are.
It's not that they are not smart.
It's just that there something about electronics that it's just very difficult for people to really predict accurately what will happen and particularly in the manufacturing side, because the market is one thing.
And of course, <UNK>, the manufacturing side then that gets exaggerated by all the inventory practices.
And we are in manufacturing.
So it makes it even more difficult to see through to the end market and what's going to happen.
But maybe that's too long-winded an answer.
So I guess the short answer is, generally I think what we are hearing would be consistent with what ---+ your comment.
But we are always just playing it week by week and trying to figure out what's going on from that perspective.
I think you are in roughly the right range.
Like ---+ as <UNK> said, we purchased about 563,000.
And that was over time.
So before the first quarter the average will trend down the second quarter, assuming we don't have an extreme number of option exercises or something like that to drive it back up, should be ---+ trend down into something in that range.
Yes, some of those buys were into Q4 and some in Q1.
And we don't have that breakdown for you.
You can take the Q3 number and subtract the total, and that's what it will be at the end of Q1.
And <UNK> said the only thing that will go the opposite way would be option exercises.
But we don't think that would be that significant.
I guess I should say, because I don't want to imply something contrary to this, we don't know.
The authorization is still open.
We are not saying whether we will buy more or not, but the authorization is still open, of course.
And we are not predicting what will happen.
Okay.
Operator, how are we doing.
Okay.
Thank you, operator.
Thank you, everybody, for listening.
<UNK> and I are here today, so if you have any follow-up questions, please give us a call.
And we look forward to talking to you again soon.
Thanks again.
Bye.
