Aehr Test Systems

Please stand by. Good day and welcome to the Ehr Test Systems second quarter fiscal 2021 financial results call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Mr. Jim Byers of MKR Investor Relations. Please go ahead, sir.

Thank you, operator. Good afternoon and welcome to Ehr Test Systems second quarter fiscal 2021 financial results conference call.

With me on today's call are Ehr Test Systems president, and Chief Executive Officer Gayn Erickson and Chief Financial Officer Ken Sping. Before I turn the call over to Gayn and Ken, I'd like to cover a few quick items.

This afternoon, Air Test issued a press release announcing its second quarter fiscal 2021 results. That release is available on the company's website at air.com.

This call is being broadcast live over the internet for all interested parties and the webcast will be archived

in the investor relations section of the company's website. I'd like to remind everyone that on today's call, management will be making forward-looking statements today that are based on current information and estimates and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These factors that may cause results to differ materially from those in the forward-looking statements are discussed in the company's most recent periodic and current reports filed with the SEC. These forward-looking statements, including guidance provided during today's call, are only valid as of this date, and Ehr Test Systems undertakes no obligation to update the forward-looking statements.

And now with that said, I'd like to turn the call over to Gayn Erickson, President and CEO of Ehr Test Systems.

Thanks, Jim, and good afternoon to those joining us on the conference call online and also listening on the over the web. Again, I'll go over the second quarter financial results later in the call, but first I'll spend a few minutes providing some details around the challenges we experienced during the quarter and how we responded. Then I'll turn to what we're seeing now and why we think things are moving in the right direction, and then following that in the next, we'll open up the lines for your questions. As we anticipated on last quarter's call, our bookings and revenue for the first half of our fiscal year were negatively impacted due to several customer-specific production ramp delays and push-outs of forecasted orders due to COVID-19-related impacts, as well as the continued challenge in global business environment created by the COVID-19 pandemic. These customers continue to indicate they believe the pushouts are temporary and they will require additional system capacity and consumables in the current fiscal year. We continue to be optimistic about generating significant bookings and revenue increases in the second half of this fiscal year compared to the first half based on these customer forecasts and the initial order flow we began to see already starting in the second half. At the beginning of the third quarter, just last month, we announced that we received a design win for a new high volume production testing burn-in application for a critical new mobile sensor application. This engagement with a new customer who is a supplier of sensors to a major mobile device manufacturer began with an initial $4.2 million order for an initial test cell consisting of a Fox XP production test and building system, a set of DIPAC carriers, and a Fox automated DIPAC loader and loader. This initial test cell is expected to shift during this fiscal third quarter, and we expect follow-on capacity orders from this customer in this fiscal year for additional test system capacity, DIPAC carriers, and a DIPAC auto loader solution for handling. We're proud to have been selected for this application, which we were awarded due to our unique technical capabilities and the cost effectiveness of our solution that was critical to this application, which will require 100% test, learning, traceability, and validation of these devices. Our highly differentiated FOX solution achieved this test requirement and met the customer's low cost of test targets due to the significantly higher parallelism that can be attained on our FOX XP systems and DIPOCs. During the second quarter, we also received a design win on an initial order from our lead customer for multiple DIPOC carriers for testing Vernon of the next generation sensor modules for more devices in trouble today. This order expands deployment of our test solutions to additional devices with this large multinational customer, and we're excited to engage with them earlier in the design cycle for this product. The customer will use our proprietary dyepads for production qualification, test, and burning of these devices. We expect this to turn to volume production orders for additional dyepads and have anticipated beginning shipment of the incremental dyepad capacity in our fiscal fourth quarter. However, this customer recently told us this capacity need is likely to be delayed until after our current fiscal year and instead will push into the first or second quarter of our next fiscal year that begins in June. We continue to be optimistic about the mobile sensor market space and continue to see increasing interest in our box systems and dye packs for production, test, and burning of complex 2D and 3D sensors in multiple mobile applications. Since the beginning of the current third quarter, we've received multiple follow-on orders and are seeing an increase in bookings forecast for our proprietary wafer packs and dye packs consumables across multiple market segments for our installed base of Fox wafer and simulated dyeing module test systems. This reflects customer capacity and consumable needs for our previously announced design range from customers for devices in silicon photonics, silicon carbide, Mobile Sensors, and Flash Memory. We're forecasting additional dye packs and wafer pack orders during the second half of the fiscal 2021 from our install base for these applications in these key market segments. As we've noted before, AIR's proprietary test and burning solutions include customized wafer packs and dye packs that are needed not only for new systems orders, but also for each new design win or each new device added to production tasks. As we increase our installed base of Fox systems with current and new customers, particularly with our Fox MP and XP multi-waper and simulated dial module test and burning systems, we expect our consumable business will continue to grow in absolute value and as a percentage of our total sales. Over the long term, we expect these recurring consumable sales to account for up to a half or even more of our total overall revenue. In Q4 of our prior fiscal year, we announced a new design win with a new tier one customer for a Fox NP system that we shipped in Q1. This customer is a global leader of communication transceivers for data center, telecom, 5G infrastructure, and is forecasting to transition to our Fox XP wafer level testing learning systems during this fiscal year to meet their volume production forecast. In addition to the order, In addition to the order we expect to receive this fiscal year, we expect them to continue to place additional systems and consumer orders over the next several years. We also announced that we've begun a new relationship with a new customer that is the world's largest outsourced semiconductor assembly and test supplier. During the first quarter, we began an initial marketing and sales campaign with this customer for our FOXP family of products, including air wafer packs and dye packs for production tests, burning, for library screening and devices with full wafer, simulated dye, and modules. This campaign is generating discussions with multiple potential new customers and continues to gain momentum with new customers, including yet another opportunity as late as the last few weeks. They have asked us that we not name them publicly yet as they see their move into the silicon photonics assembly, packaging, and test phase as a strategic initiative. They want to gain market share with some critical target customers before going public with what they see as a competitive advantage of being able to provide a total solution, including full wafer-level testing, burning, before assembly of the silicon photonics engines into the transducer modules. We expect to make this partnership public in due course. We continued to expand the device wind and release to production of the Fox XP for silicon carbide devices during the first quarter and second quarter. We added a couple new device design links for the new high voltage silicon carbide devices on our Fox XP system with our lead customer. They are using the Fox XP system for high volume production burning and infant mortality screening of silicon carbide devices at wafer level. for a few key applications including electric and hybrid electric vehicles. They are forecasting additional bookings and capacity needs for our box XP systems and wafer packs during this fiscal year and for years into the future. For those who are not familiar with it, silicon carbide is a very impressive material for high power and particularly high voltage devices for applications such as the needs of electric and hybrid electric vehicles, power trains, and electric vehicle charging infrastructure. affects most, if not every EV or HEV automotive company is moving to silicon carbide-based power drive and charging systems. The challenge with silicon carbide, it is known to have high infant mortality rates, but after a reliability burn-in screening, these defects can be completely removed to provide extremely reliable devices for these mission-critical applications. AIR is able to provide a complete solution for one of the key reliability screening tests of an entire wafer at a time, while testing and monitoring every device for failures during the burning process to provide critical information on those devices. This is an enormously valuable capability as it allows our customers to screen devices that would otherwise fail after they're packaged into multi-guide modules where the yield impact is 10x or even 100x as costly. The critical capability that only our solution can provide in the market today is the ability to test 100% of the die-on away from a single insertion, while providing 100% traceability of pass-fail results of every single device, including exactly what time during the testing, burn, and cycle the device fails. This is a critical feature for this customer to provide confidence to their customers that they are removing all early life barriers prior to shipment. This customer has made public presentations in industry conferences, touting the cost and quality assurance advantages of our Fox solution compared to traditional package or modular test. Our systems are not only able to test 100% of devices of 4 or 6 inches, as well as the ability to test 12 inch wafers, but we can test and burn in 18 wafers at a time on a single Fox X2 system. We continue to see the total available opportunity for silicon carbide and silicon photonics wafer level and simulated dye test markets to be approximately $250 million of moving capacity, including consumables based on total wafer starts, yields, and test times. The silicon carbide semiconductor device market is growing at a tremendous rate, with unit growth of high-power devices expected to grow at over 50% KJ from 2019 through 2025 per year of research. Turning to our package part business, as we've talked about before, we have started to see forecasts for renewed demand for package part deployment applications, particularly for customers seeking high voltage capability, reflecting a move towards higher voltages and other market requirements for devices and automobiles. We expect to see bookings resume from certain current air customers this fiscal year and also expect to generate additional new opportunities with our planned introduction of a new Package Part Burning product that has a very high voltage test capability. With being relatively conservative with our forecast in Package Part Burning, this segment still seems to be heavily impacted by COVID-19 delays in customer evaluations. Still, we do see the need for high voltage capabilities in both wafer level and packaged parts as a high growth opportunity for air and expect orders from several new customers, including both tier one and tier two level customers for packaged part burning systems this fiscal year and next. As we look to the second half of this fiscal year and beyond, we remain actively engaged in discussions with a large and growing group of potential new Tier 1 and Tier 2 customers that are considering using AIRS products to support several high market growth opportunities. These not only include silicon photonics and silicon carbide production burning, but also applications for automotive, memory in general, and microcontroller applications. The breadth of opportunity for our products makes us more and more excited about the broad-based adoption of wafer-level building. We continue to receive specific forecasts from existing customers for additional new capacity and expected additional bookings and shipments and revenue for our systems and consumables. These customers are in key growth segments that we have started to already penetrate, including silicon 4x and silicon carbide, and they have already purchased initial systems from us and are either in production or sampling the customers. They have told us explicitly that they plan for and will require additional capacity utilizing our Fox XD systems to test up to 18 full wafers at a time or dye packs with up to 1024 devices in each of nine blades per system. These customers have asked us to anticipate and secure specific capacity to meet their needs and have indicated they expect to place orders for this capacity this fiscal year. We're certainly excited about this strong level of interest. At the same time, COVID-19 related impacts have affected our customers and hindered our ability to forecast the timing of these orders. We continue to engage in ongoing discussions with a large number of potential new customers. However, these discussions have clearly been slowed by travel-related restrictions due to the COVID-19 pandemic and related precautions taken by several new potential customers worldwide, including policies for limited onsite engineers. This absolutely has delayed evaluations and initial orders for air systems and consumer products in the first six months of this fiscal year. Given this fiscal year's guidance, has been almost entirely based on current customer forecasts. We're taking a more conservative approach to our fiscal year forecast at this time and revising our revenue guidance for fiscal 2021 to be between $20 million and $25 million, while continuing to expect to be gap profitable for the fiscal year. With a fiscal year second half revenue range of $16 to $21 million, This new revenue range reflects significantly increased revenue in the second half compared to first half revenue of under $4 million. As we look into the second half of fiscal 21, we remain optimistic about the growth opportunities for our systems and consumables within our installed base of customers, as well as our ability to expand the number of customers using our family of factory solutions. We have additional potential customer engagements that can provide upside to our revenue for the fiscal year as well. We maintain our confidence in the long-term demand for our products, the attractiveness of the key markets that we serve, and our belief that we will come out of this worldwide pandemic stronger than we've been and with more production customers, more applications, and higher value products. Our key customers are serving some of the highest growth markets, including data centers, IGN infrastructure, sensors and technology for smartphones and tablets, electric and hybrid electric vehicles, and memory and data storage, and competing data centers, mobile devices, and hundreds of applications that are keeping the world connected. As a result, we believe our products will be in high demand this year and for years to come. And with that, let me turn it over to Ken before we open up the line for questions.

Thank you, Gayn, and good afternoon, everyone. As Gayn noted, our revenue and bookings for the first half of the fiscal year were negatively impacted by several customer-specific production ramp delays and pushouts of forecasted orders and the continued challenging global business environment created by the COVID-19 pandemic. However, these customers continue to indicate they believe the pushouts are temporary. Based on these customer forecasts and the initial order flow, We have started to see, since the beginning of the third quarter, we expect significant bookings and revenue increases in the second half of this fiscal year. At the same time, as we discussed on previous earning calls, we have taken significant actions to control spending and maintain our cash position as a result of customer order pushouts and delays in production ramps. In the fourth quarter of the prior fiscal year, We completed a restructuring that resulted in permanent savings of approximately $120,000 per year and also required mandatory vacation days to reduce costs. Starting in our current fiscal year, we implemented additional temporary cost reduction initiatives across the company. These measures included 30% pay reductions for our executive staff that took effect starting last quarter. The total of all cost reductions resulted in savings of over $550,000 in the second quarter. With our recent booking and improved forecast for the second half of the year, the temporary pay reductions for non-officers were eliminated starting in the current fiscal third quarter. The pay reductions for our executive staff remains in place. It is also important to note that even with these cost controls, our operational capacity and bandwidth have not been negatively impacted, and our main focus continues to be growing our revenue base within the large market opportunities that Gayn mentioned earlier. Now turning to the financial results, net sales in the second quarter were $1.7 million, down 16% from $2 million in the preceding first quarter, and down 76% from $6.9 million in the second quarter of the previous year. The sequential decrease from the preceding Q1 reflects a decrease of $484,000 in wafer-level burn-in revenues partially offset by an increase in customer service revenues of $155,000. The reduction in wafer-level burn-in revenues was primarily due to a decrease in system revenues of $630,000, which was partially offset by an increase in wafer pack, dye pack revenues of $146,000. The decrease from Q2 last year includes a decrease of $5.1 million in wafer-level burn-in revenues. This was primarily due to a decrease in system revenues of $2.8 million and a decrease in wafer pack die pack revenues of 2.3 million. Customer service revenues were flat compared to prior year. There were no package part system revenues in Q221 or Q220. Non-GAAP net loss for the second quarter was 1.7 million or 7 cents per diluted share. This compares to non-GAAP net loss of 2 million or 9 cents per diluted share in the preceding first quarter, which excludes the impact of stock-based compensation expense and a $2.4 million adjustment related to the closure of our Japan subsidiary and non-GAAP net income of $456,000 or two cents per diluted share in the second quarter of the previous year. On a GAAP basis, loss for the second quarter was $2 million or eight cents per diluted share compared to GAAP net income of $107,000 or zero cents per diluted share in the preceding quarter and GAAP net income of $251,000 or one cent per diluted share in the second quarter of the previous year. Gross profit in the second quarter was $377,000, or 22% of sales, up $150,000 compared to gross profit of $227,000, or 11% of sales, in the preceding first quarter, and down from gross profit of 3.2 million at 47% of sales in the second quarter of the previous year. The increase in gross margin from the preceding quarter is primarily due to a decrease in unabsorbed overhead cost to cost of sales, due to an increase in manufactured parts and inventory, and a change in product mix. Wafer pack, dye pack consumable revenues accounted for 46% of revenues in the second quarter, compared to 31% in the preceding first quarter. The decrease in gross margin percentage from the second quarter last year is primarily due to an increase in unabsorbed overhead cost to cost of goods sold. due to lower revenue levels and an increase in warranty cost as a percent of sales. Operating expenses in the second quarter were 2.3 million down 93,000 or 4% from 2.4 million in the preceding first quarter and down 631,000 or 21% from 3 million in the second quarter of last year. The decrease in operating expenses from the preceding first quarter is primarily due to a decrease in R&D expenses of 80,000. The decrease from the second quarter last year includes a decrease in SG&A of $656,000, primarily due to cost reduction initiatives implemented in fiscal 2021. SG&A was $1.5 million in the second quarter, flat from the preceding first quarter, and down $656,000 from $2.2 million in the prior year second quarter. R&D expenses were $820,000 in the first quarter, down from $900,000 in the preceding first quarter, and up from 795,000 in the prior year second quarter. Turning to the balance sheet for the second quarter, our cash and cash equivalents were 3.4 million at November 30th, down 2.9 million compared to 6.3 million at the end of the preceding quarter. Accounts receivable at quarter end was 1.4 million, up 313,000 from 1.1 million at the preceding quarter end, relating to timing of revenue in the second quarter compared to Q1. Inventories at November 30th were $9.1 million, about $955,000 from $8.1 million at the preceding quarter end. The increase in inventories includes an increase in labor and overhead of $371,000 related to an increase in manufactured parts and inventory. Property and equipment was $683,000 compared to $622,000 at the preceding quarter end. Customer deposits and deferred revenue, short-term and long-term, were $75,000, a decrease of $331,000 compared to $406,000 at the preceding quarter end, related primarily to the decrease in backlog from prior quarter. Our current long-term debt of $1.7 million is related to funds received during the fourth quarter of the last fiscal year under the Paycheck Protection Program, or PPP. The company applied for forgiveness of the PPP loan on November 6, 2020, and the Small Business Administration has 90 days to review the application. reviewed and approved the application. Bookings in the second quarter totaled $1.6 million and did not reflect any system orders. Backlog at November 30th was $1.1 million, down $147,000 compared to $1.2 million at the end of the preceding first quarter. Since the start of our current fiscal third quarter, the company has received a $4.3 million order from a new customer for a FOX XP test cell and also additional wafer pack, dye pack consumable orders, improving our overall backlog. Now turning to our outlook for fiscal 2021. As Gayn mentioned, COVID-related impacts continue to affect our customers' customers, creating delays in some anticipated orders and overall caution with our customers that has resulted in delays of some of our customer production ramps. With that in mind, we are taking a more conservative approach to our forecast for the second half of the fiscal year. As such, we are revising our revenue guidance for fiscal 21 down to between 20 million and 25 million, while continuing to expect to be profitable on a gap basis for the fiscal year, which includes the impact of the net gain on the dissolution of Air Test Systems Japan and the anticipated loan forgiveness of the PPP loan. This new revenue range still reflects a significant ramp in the back half of the fiscal year compared to the first half. This concludes our prepared remarks. We are now ready to take your questions. Operator, please go ahead.

Thank you. If you'd like to ask a question, please signal by pressing star 1 on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off until Iris will treat your equipment. Again, press star 1 to ask a question. And we'll take our first question today from Christian Schwab with Craig Hollam.

Hi, guys. This is Tyler on behalf of Christian. Thanks for letting us ask a few questions. First question. Hi, guys. So the first question, so on these multiple, I think you called it a dozen previously, or more than a dozen, Tier 1 and Tier 2 potential customers, engagements you have, either with Silicon Vitac and Silicon Carbide, as well as other customers, in the next couple of quarters of fiscal year and into next year, should we expect a majority of orders from these customers, or how many of these customer pipelines would you expect to turn into orders?

Okay, that's a good question. and kind of tease up how we're looking at our forecast. And I know there's, you know, we have lots of feedback with respect to people on how we look at our forecast and what we're doing. Primarily what we discussed is forecast for revenues and less about exactly what the bookings are. And obviously bookings come before revenues because you book, ship, get revenue. Right or wrong, when we started off the year, we tried to be clear in communicating that when we set the expectation for the year, we were basically communicating the majority of the forecast was only with install-based customers. Customers that were already one, that were already communicating to us that they intended to buy more. arguably believed to be a conservative stance at that time because the alternative was just sort of looking into when is COVID going to end, what's going to happen, et cetera, how do we anticipate. So, you know, we quite frankly just listened to what our customers were telling us. Generally speaking, when you look at forecasts, you actually forecast not only what the customers specifically tell you, but you anticipate winning new deals or that the customer will ramp or something, and that teetering goes a bit of a challenge to do. In our latest, if you will, guidance, we again took now our current specific customers, including the deal that we just won again, and what are they specifically telling us? You know, this is what we and the board have decided is our best way to communicate our guidance because, you know, we have a clear line of sight to those deals. It also helps to explain when I, in my preferred comments, it says, oh, and then we have other deals. So, again, I just want to make sure people understand that most of what we are talking about when we guide is I have, you know, customer A has told me they need this configuration for this price by this month. and that's how we break up our forecast. The downside of course to that is if a customer needs something, we can be wrong in specific incremental steps and we just try to do our best at figuring that out. In that range, if you want to interpret, because I guess we could have done this clearly, what they tell us is right there in the middle of that. and you said, okay, there's some downside and upside and we're just, we're trying to be as appropriate as we can in this environment to give people some guidance while we continue to be still leading the business to ensure that we are profitable. By the way, in that range, you could also interpret we're profitable at the low end so we must be pretty profitable at the high end and that's a fair way of thinking about it. So there's still dynamic range within that forecast. Now you specifically asked about customers, and, you know, we talked about Tier 1 and Tier 2, and just for folks that have not listened in the last couple few calls, we were describing Tier 1s as customers that were significantly large enough to do maybe $6 to $10 million a year on a, call it, average or good year, whereas maybe a Tier 2 might be $1 to $3 million. It's not how much we love those customers, but just sort of the buying power, which is a combination of their size, the markets they serve, etc., and we have a number of both of those, both as customers that are already qualified and those new opportunities. So back to your question in terms of, do we anticipate in our forecast for current customers, absolutely include some of our biggest current install those customers as well as some of the smaller guys. And in the case of the tier one that we announced that we run really late May at the end of the last fiscal year, as they shift from buying the first NPI system to production, we see them being a tier one customer. I mean, they're physically a very large company and have a significant forecast with us. And so that's an example where they bought small to begin with. We consider them a tier one. They were already a customer, but they'd only bought a small amount and they're about to buy, call it a significant test cell from us. So we have that in silicon photonics for certain. We have many more customers. We have both, I think, five or six customers that are already qualified for silicon photonics. And then we have over twice that many companies we engage with on the silicon photonics and the photonics space. Again, in our revenue forecast, Primarily, there is no revenue in the range that we shared with you related to new customers coming in. One of the challenges we're at right now is the reality is we're one month into our third quarter. And while we do have inventory, there's only so much time until even with large orders, we're not going to be able to necessarily ship it all before the end of May. and so you know I think as we anticipate this year we can see that the bookings for example would continue to be strong as the ramp is mostly just shifted which would afford us to have you know a believable strong backlog going into next year. Related to just new customers going forward Again, we're not talking, we try not to forecast all the bookings and things like that, but for certain, we do have over this next 18 months and certainly in the next year, anticipate that we will win a number of new customers across several segments, including silicon photonics, including silicon carbides. as well as some new application spaces that we haven't spent a lot of time talking about but we kind of alluded to in the memory and microcontroller space and some other things. There's actually a lot of activity and a lot of discussion in the market around wafer-level burn-in right now, but I think one of the themes that, and I realize, Tyler, I'm spending a lot of time answering this, One of the challenges right now is there's a lot of folks that are, you know, the semiconductor industry, I want to make sure people understand, is actually doing really well right now, which seems to be a big disconnect with respect to, you know, why is AIR having a couple of the worst quarters in recent memory? This is kind of a straightaway, if you will, where everyone's going as fast as they can. the microns of the world, many semiconductor companies. They're basically buying exactly what they're doing and they're just going fast. There's actually not a lot of kind of new development. There's not a lot of new process turns. People are kind of just sticking to their knitting and doing exactly what they're doing. And so in a scenario like us where we're just winning into these new silicon, photonics, silicon, carbide applications, some of those customers are kind of pulled back slowed down those ramps to their customers. And as a result, the bulk of our business was involved in this NPI or this new product introduction space. I'll just say one more thing here. Last quarter, I mentioned it. It was absolutely dead on that prior to then, everybody was just completely holding their breath. We couldn't fly in and see them. Things were just sort of moving laterally. But over the last three months, customers have realized they're not going to wait for the pandemic to be over. And the conversations are, you know, here's the order, it's coming. How are you going to install it? You know, we could maybe later in the call, I'll go into the actual tactical logistics of us flying in people and they're sitting in quarantine, then they do the installations and how to manage through all that. But We need to do that because we're going to be installing a bunch of systems in the second half.

That was great. I appreciate all that call, Gayn. Second question here, I want to follow up on your new customer order, this $4.39 order for customers serving a large mobile manufacturer. So I know we've kind of been surprised or maybe disappointed in the lack of follow-through previously here. So I'm just wondering if you could to add some colors and colors on your conviction that this customer will turn into more meaningful revenue in the future. Just kind of your best expectations to that customer today. Thanks. Sure.

And let me add to your comment about, I use the word disappointing follow through. I'm not sure you use that word, but I'll use it. For those folks that are kind of new to us or not familiar with the story, We had a very large mobile manufacturer who, it turned out, was the initial lead customer on our new Fox family of wafer leather and singularity dye and module products. And when they were first buying from us, it was unclear how they would deploy the tool in terms of which high volume applications, how long the test time was, and in As it turned out, what percentage of the devices were actually tested. What we have made clear is that we've seen that market space, in this case, turn to what is called sampling, which means they do not test 100% of every single device using a tool. Instead, do it for a quality, reliability, sampling test. which I won't go into a lot of detail, but the way to interpret it is if you're only doing a 5% or a 1% sampling, you only buy 5% or 1% of what you could. So there's a huge dynamic range there. And then the initial orders from These customers and these applications, we did not know whether they were going to be doing sampling or higher value production. And in fact, the sampling rate was lower than expected. And therefore, while they bought, you know, $10, $15 million worth, they didn't buy $50 million worth. Now, Specifically in this application, and we have to be really careful about what things we say, so I'm only going to try and say the same things I've said before, and specifically in the release. We have been told and are clear that this is actually a production burden, meaning it is a 100% test. So the good news is it doesn't have the 1 or 5% multiplier times it. The test time and the volume percentages I don't want to get into. I never will. Technically, there's some even uncertainty exactly what applications it will go into, although there are some of us that are read into the programs and know more than we will ever talk about. All I will say at this point is that we have been told there is volume behind it. We absolutely believe it, and this happens to be one of the customers that's asking us to secure allocation of capital and slots, et cetera, for additional capacity this year. So my voice may not sound it. I'm actually really excited about this one. I will maintain an extra amount of conservativeness and believe it as I see it. but so far so good and you know it doesn't take a lot of 4.2 million dollar test cells to add up when you're doing this level of revenue so this is actually really encouraging. The other specific thing I want to say on that because it may come up somewhere else on this new customer and I really mean it to come up through my pores, I am actually really excited about this not just because of the potential dollars which are you know are significant but that the customers specifically understood and selected our system based upon its capability for 100% validation of the device. This part could have been tested with what is known in the industry as a package part burning system. We sell them. Subtly, one of the differences between a package part burning system with a traditional convection oven is that you have to use lots of shared resources. I won't go into it. All it means is you just do not have the traceability and the validation of every single device. The Fox products have as much as 100 times the resources available to the devices, which allows us to 100% know that that part got tested, as well as thermally conductive Cooling and Heating gives us the ability to certainly know it was actually burnt in properly. That is more expensive than package parts. But in certain applications, we're able to, through wafer level or single-edged die, test so many more in parallel that we can actually do it more cost-effective while at the same time giving them much better data. They specifically spent more money to ensure that this device was 100% burn-in and Clarity and we have reason to understand why that was important to them and that is super encouraging to me because honestly that's what we've been out touting for years and they get it and so that was just really encouraging and I think this is going to lead towards more business and other opportunities that are similar to it because of the level of clarity of you know the value of this type of component and test.

That's great. Appreciate that. And then the last quick one and I'll turn the call over to the person over. A little bit of a modeling question, I guess, as well as fundamental. Your implied second half guidance with the visibility you have today, you know, any color on Q3 versus Q4, would you expect Q3, Q4 to be kind of similar in size or, you know, more of a progressive improvement through the end of the year and Q4 sequentially better? Any color there would be great. Thanks.

I mean, I would, I would, I guess we haven't really talked about it, but let me put it out there. I think it's pretty fair to say that Q4 would still be bigger than Q3, you know, given the current situation of our backlog, albeit, you know, we put the press release out for that last order for about $4.3 million, and we've had orders since then, by the way. We just haven't put out press releases on them. I'm not sure if I even said it in the original question, I think we got it at like, you know, 9 o'clock in the morning on the first. It's like it missed our quarter by, you know, less than 12, certainly less than 24 hours or something. It was pretty, pretty sad. So it would have been nice to sit there and backlog. There was certainly a backlog from day one. So, you know, you do need a little bit of a running head start to make sure you can shift things. So, you know, we haven't announced any significant orders as we are expecting yet this quarter. but I would say it's fair that the Q4 would be revenue-wise larger than Q3. I'm not sure it might actually be spread out or even, but I think revenue is fair to be larger than the first quarter.

That sounds good. I appreciate it. That's all for me.

Thanks, Dave. Thanks, Taylor. As a reminder, press star one if you have a question. We'll now hear from John Fichthorn with Dialectic Capital.

Hey, John.

Hey, Gayn. Thanks for taking my question. I appreciate it. So a little bit of a follow-on from the questions you just got asked in a slightly different way since he asked some of my questions. Hey, the bullet customer one with the $4.3 million order and then the bullet customer two, Are those different customers? Or same customer, different?

You know what? I'll tell you what. I actually do. I'm actually getting some feedback, John. I'm not sure if that's you. Okay, it seems to be better now. Okay. We had not made that clear, although I think most people had interpreted and you probably did. You're warm and close. So I do want to make it clear here. The end customer is the same. But the subcon is different, the application and the device is different. That's a good thing for us. And just because the end customer is the same, I can tell you, you don't just win one application and then you get another one. Internally, the groups can be different, the applications are different, etc. So this feels like a new win to us. Not certainly with the subcon, but even within the application in the group that it was running. And one of the reasons I'm particularly excited about is because there's cross-pollination going on in that customer to recognize and, you know, they found us in this application. They came looking for us. We said, can you do this? So that's the answer, John.

Great. Great, that sounds exciting. And so, without having to give any timeline around it, what do you think the total revenue potential is in these two products? Either one of them alone or two of them together, like over whatever period of time? I don't know.

Well, I'll tell you what. I'm going to weasel my way out of this one a little bit, but one thing is it just Looking historically, sometimes it's good to just point to people what has historically happened so you can say, see it publicly out there. We have been having a couple of million dollars worth of dye packs in Q4, I think each of the last three, four years or so. And normally what we get is we get a set of dye packs somewhere around fall, and then that turns into production around May. I kind of made it pretty specific. That's as we would have expected again this time, but they got pushed into the summer. So that's one example. So that type of device has generally been maybe a few million dollars a year of just the consumables. This new application, I'm going to just simply say there will be more. and you know a test cell is 4.3 million bucks or 4 million bucks a cell so they come in pretty good sized chunks. We have ranges of what it is and we also know that all of the deep data is not in and our visibility of this is actually still relatively limited. We can see the capacity needs maybe in the next six or nine months or so, but we will see as the device finally gets out and it's deployment in all the different devices, what the growth rate is. I'll tell you, I'll share one thing, and I think this is okay to say. I have been told by customers, you could think of even this one in the past, This is how big it is and how great it's going to be. And then they have not bought that much. And this is a customer that has certainly done that before. This time they told us less about how great it's going to be, but it's more obvious from their actions how big it's going to be. I don't know if that's a good thing, but it seems like when they tell us how great it is, it isn't as big as it is. And maybe the fact that they haven't said as much this time, maybe that's a good sign or not. But we know it's going to, it's a good size deal and there'll be more revenue.

But, you know, I have to believe that they need to plan their business. And so they have to give you some level of visibility. I mean, what are your lead times today? and you know the scope of those lead times like you know I mean either lead time shifts or or can you help us with an idea as opposed to revenue guidance through year end like where do you think your backlog is at year end maybe that'll help us understand what you think the scope is as we as we move forward.

I think what I will share with is given that The majority of what we have done with our forecast is basically shifted in time. I think it's fair to say that we believe, and I think if things play out as we expect, we should have a pretty strong backlog going into next year. I know that's kind of a weak way of describing it, but I think it would be a fairly substantial backlog going into the year. which is very different than it was this year when we went into this year and certainly last quarter. So I, you know, you actually asked a different question and I want to answer that and that is, well, given your lead times and staff, how much visibility they would give you, you know, there's pros and cons of our having a manufacturing capacity and infrastructure and supply chain to be able to ship significantly more and many of the revenue members we talked about. And I mean, you know, 10 times at least. So the downside is that as the customers come in and particularly this customer and other large tier one customers, they kind of go deep dive and make sure you have the capabilities to serve them, okay? So they know darn well that if they give us a multi-system order that we can ship that in five or six months, okay? So, you know, they don't have to give us too much visibility. You know, they're not forecasting, you know, 40 systems with us and think that we're going to ship those inside of six months. But, you know, even at $4 million test size, keep in mind that's only one system to us. And we have no challenge shipping, you know, multiple of those per month. with reasonable lead times. And our typical lead times on the street are in the 16 to maybe 24 weeks or so kind of the configuration, the backlog and stuff. So they don't have to give it that much.

Okay. And so that was great, by the way. Great weaseling out of answering the question. I applaud you. That was Black Belt CEO Dodge. I'm very impressed. So the On the transceiver customer, that sounds kind of like a new thing. What is the size of that opportunity? Maybe you could answer that one.

Okay, so let me start. So first of all, it feels like all of these silicon photonics guys have kind of a similar Pattern, and that is they start with one or two what we call blades, which is say one or two wafers of capacity to begin with. We now can do that with our new Fox MP systems. And then when they go to production, they'll buy XP systems that are either 9 or 18 blades or something like that. And so I think a general rule is to think about it that way. In fact, each of our initial silicon carbide and silicon photonics customers have all seemingly started off that way. I think except for our initial lead customer because we didn't have the NP systems to begin with. But the first XPs they purchased, they were doing all the quals and everything else, you know, two, three, four acres at a time, even though we shipped in a nine and 18 void system. What it feels like is, oh, you buy a three-quarter of a million or a million-dollar test cell or something, which is an NP system with a couple of wafers. And then you transition and you're buying a three or four million-dollar test cell as you move to production. And then you duplicate that over time. And the capacity of that just gets into what do you think is the market size. So if you look at silicon photonics and silicon John, I think you've looked at these before, not everybody understands, but you throw these numbers out, what is a silicon photonics? So silicon photonics is an industry description of an integrated device used for electrical to fiber optic or optical transmission. So historically fiber optic transceivers to and from are a very complex module made up of lots of different ICs and mechanical and electrical structures and lasers and things all integrated into this little package that is being used in the data centers it is used in telecommunication for across town it's even used for underwire undersea fiber optic transceivers they all the cost of a transceiver can be from three, four, $500 or more up to $10,000 for them. Well, the industry had been working for maybe a couple of decades. Companies like Intel who said, listen, the world hasn't gone to fiber optics because the cost of those transceivers is just so expensive. We're not going to have a fiber optic communications hub in our house. if the transceiver is $900 per channel. And this was actually one of the big misses in the 1999-2000 hubbub around why JDSU and the world's going to go fiber optic, and then it went nowhere. The reason is it was just too expensive. And so the world went in other directions and other kind of communications protocols and all. but the need for fiber optic or the end, if you will, of RF and microwave transmission through regular coaxials, et cetera, was running out of steam. And so folks like Intel were saying, I have an idea. I'm going to integrate all that stuff into one silicon and take the cost of the manufacturing advantages that you see with silicon manufacturing and I'm going to make a wafer with 500 or 1,000 devices on it and I'm going to take the cost from hundreds if not thousands of dollars down to tens of dollars. And that's what they did. Right? And there have been several other big companies, Cisco's are the world, that have been making these investments and the big deal is it allows the world to go to much higher bandwidth at much lower cost. I mean like, you know, a tenth of the cost. And when Intel introduced their first products in there, It was devastating to the industry because there were companies out there that were selling these products for $2,000 a piece or $1,000 a piece. And Intel was selling them for $400 and making huge margins on it. And so there are a lot of companies that went away. And so the industry analysts have said, wow, it's this enormously elastic market. And as the world puts out as much silicon photonics devices as they can, They're going to shift from copper-based communication protocols to fiber optic communication-based protocols. So there's this elasticity where the cheaper they make it, the more they'll come. So up until recently, the whole story is there's not even close to enough manufacturing capacity out there to meet the market needs. The big players include Intel, right? and people know that they happen to be just because they are a 10% customer of ours, okay? A favorite of ours. But there are other players, some of which we have mentioned and some we haven't, that are in that space and it's sort of a wild west as everybody's getting into it. The one thing that's interesting about the customer, and going back now to the customer that we won in May, okay? They are a large player in the transceiver business. and they're getting into silicon photonics. So unlike a lot of the players in the space that aren't actually making transceivers and are just getting into silicon photonics, these guys are one of the biggest players in transceivers and they're going to shift their business to silicon photonics. So the ramp is different for them. As soon as it works, instead of selling and all the differences in the manufacturing cost and the reliability of the footprint is so much smaller that it's a better product for them. One other thing, just one more thing, background on the whole silicon photronic space is that fiber optic communications is measured, is noted in both protocols and speed. And the speed of fiber optic communications were like 50, Thank you for joining us. And the good news is both photonics devices need not just a burn-in, but an aging and stabilization that air test provides with our wafer-level solutions. So people that are going to pull wafer silicon photonics are all looking at how do I do wafer-level stabilization of these photonics devices, and that's what we offer with this Fox XP. And so that's why, right now, almost all of the players in the market are talking to us. But it's unbelievable how they have stalled in the last six months. We were trying to figure out how we were even going to be dealing with all of the different benchmarks and all last summer when we put the new marketing and the cleanings in place in our facility last February. And right now, it's just sort of a lot of Zoom calls and stuff, but it's nowhere near the activity that we think will come back as soon as we get through this pandemic stuff. So that specific customer has a goal that you want significantly and that be bigger than our biggest customer in the space. And we do believe that in times will be.

Great. So you almost answered it in the last sentence and I appreciated the warm-up. Bigger than your biggest would be great. So I'll give it to somebody else. My last comment is Once again, I would like to reiterate that I think your board should continue to see some turnover. I appreciated that there was some last year, but boards should be refreshed. You did miss for six months, and I think you guys should either add or I'd like to see some board members buy some stock or management. Like, we're all out here risking our capital. You're on this board for 12 to 44 years. Reach into your pocket, buy a share. Show us that you believe in the story also. It shouldn't all just be Christmas presents of Gifts and Pay to be a board member and have your four nice dinners a year, the shareholders would like to see you risking some capital alongside of us. And that is a message from me directly to them. So thank you and good luck. Appreciate it. Good luck in the back half.

Thank you. Next we'll hear from Tom Tafeli with D.A. Davidson.

Hi, thanks for letting me talk to you. Just a couple quick ones. First is, when you look at the recent cost cutting you've done, has that impacted your ability to do trials with new customers or has it limited your engagement with new customers at all? I would say no. In no way have we slowed down anything. My pause is Things have slowed down that gives us some bandwidth that has allowed us to be cost-cutting, if you will. It's candidly the case. And, you know, Vernon or myself or anyone on my staff, you know, is working seven days a week anyhow, even though we all stepped up and said we're going to take direct cash pay cuts, you know, until we get to profitability, because it's the right thing to do. But... I don't believe that is the case. I don't think we're actually cutting off anything that's going on sales. We are absolutely engaged in some R&D programs. Sometimes maybe I can give more color on that. But the clear focus right now with everyone in the company, including every single day of the call, is the pending purchase orders, and the ones that we have, ensuring that we can install them and ship them as quickly as we can and get paid. Okay, great. And then maybe just a quick question on the competitive front. I mean, the fact that things have stalled a little bit here for a few quarters, has that enabled any competitors to catch up with you or have you seen any competitors try to do what you're doing in this situation? So at this point, I would say not at all. We have not seen any new competitors. We have not heard of anybody working on something that could be considered a multi-labor system for doing the kind of things that we're doing. There's no conduction-based multi or singulated die or module systems that we do with our mobile customers. There just isn't. When we're competing, it's like we're competing with a packaged part burning system. It's interesting, because keep in mind, we also sell those, arguably not much or none this year. There still is some markets where packaged part is cheaper and people are willing to make those trade-offs. It's very interesting that we have examples, like in silicon carbide, there's even some automotive companies that are moving from package to wafer level until we see both sides. So we do these cost of ownership models and convince ourselves why the wafer level makes more sense. So what I'm trying to point out is when we're competing, we're competing like against package part. And that is arguably an alternative, but very differentiated in terms of its value proposition, not only because we can be more parallel, but you get the yield advantage. by somebody doing it at wafer level before it goes into a package or a multi-chip module or something like that. And so that's the primary skill alternative to us, no real competitors. That's good to hear, just so we know that you're not actually losing any business. It's just purely being delayed. Yeah, and Tom, let me make that very specific. We have not lost a deal, right? that we have not actually said, oh, we lost to so-and-so and said, hey, what happened this entire last year? Nothing about this slowdown or pushout is a result of us losing the deal.

Okay, great.

And then finally, just a clarification. Starting this quarter, very little backlog. And you say going into next year with a fairly significant backlog or meaningful backlog, that means that new orders have to be Thank you for joining us. and, you know, they need to give us the order before then. So, yeah. Okay, great. And the summer, I bring that up because our fiscal year starts June 1st. So, anything in the summer is the next fiscal year. So, that's why. Yep. All right. Thanks, Gayn.

Thanks, Tom. We will take our last question from Larry Clavina with Clavina Capital.

Hey, Larry. Hi. Hi, Gayn. I've got some quick questions on timing. You're a mobile center new customer. When you talk about more systems to come, you talk about this fiscal year. Is that plural? In other words, in Q4, is there one more system that you're sure of, or is there more than one? Just to clarify that.

Yeah. Let me make sure. One of the Larry is able to understand the business very well for a little bit. One of the challenges is that in the test business, the typical automated test equipment and the test suppliers like in Bobfest, Teradine, Cozy, for example, Verigy that I came from before here, the testers in the wafer level test one wafer at a time. So one tester equals one wafer. Our solutions, we make single wafer solutions with the CP, dual wafer solutions with the MP, and up to 18 wafers with an XP. So when we talk about systems and system capacity, it's sort of how do I interpret it. So the next question Larry's asking is how many XPs are you going to get versus just how many what we call blades or testers within it. All we have stated, Larry, and tried to clarify is that There's absolutely more blade and systems testers worth of capacity and more die packs and more loader unloaders. We're not getting clarity yet as to do we think there'll be multiple XP in this fiscal year or not. I haven't gone there yet.

So you're saying you're going to have loaders, but you already got a loader on the system you're shipping this quarter. You obviously have another XP that you use that loader on. That's at least fair.

I'll tell you what, I'll go this far. They need at least another XP die pack and loader.

Okay, so at least there's one more system in Q4. But, you know, when I see S, it implied to me, plural, maybe there's more than one. But there's at least one, is that correct? Yes.

Yes.

And then on your new MP silicon photonics customer that's going to buy the XP, is that expected in Q3 or Q4, that order, do you know?

I'm expecting the order before I ship it, and I don't have the order yet.

How's that? What would be the cutoff on that system if you got the order?

Yeah, I mean I'll tell you what, we do have the ability to ship things on relatively short lead time. But generally speaking, you know, inside of like eight weeks or 12 weeks, you know, they're pushing it. So, you know, that goes to one of the original questions, I think, from Tyler, which is, do you think Q3 and Q4 will be the same? No, I don't. I think Q4 will be larger. And so, you know, we do have revenue. We do have revenue in Q3, which ends at the end of February, that we have not booked yet. And we definitely have revenue in Q4 we have not booked yet. Q3 is not over yet, but not everything that we booked in Q3 will ship in Q3 for certain.

The CP customer for data centers, is that still on track for at least getting off the ground before this fiscal year?

We have, okay, we haven't really gotten, part of this gets into how much work yet. So, for the folks that are listening, for a set of clarity, so we run a new customer about a year and a half ago for a data center related application that we continue to say is for this, you know, extremely high value in application, right? We do continue to forecast that they will buy multiple systems for production and have every reason to believe that. They are absolutely using the tool today for early production, ramp, et cetera. We're trying to figure out when the ramp is. We know for certain the ramp is delayed because of coronavirus, okay? 100%. And we have not seen the end of it yet. So I don't know exactly when that is. So right now, I actually don't have that in our fiscal year any longer because I have not specifically been told by them that they're going to take it from me. Therefore, I pulled it up. It doesn't mean that couldn't still happen. and we have the ability to ship, but I don't have the visibility with them as I do with some of the other customers.

So on that application or that system, that smaller system, if you got an order in a reasonable period of time, you could ship it quicker than for an XP or four weeks?

Similar. I actually have some CP capacity test cells around. I kind of understand for those that have come and visited, I know pictures of our products help a lot, So the product family, or the FOXP, has three different chambers, we call it. There's a single wafer, dual wafer, and multi wafer. And then in those chambers go blades. The blades are interchangeable between all the customers. And then in those blades are channel modules specific to applications. But there's only three flavors, and everybody is made up of the same three. So we just mix and match and configure the order. So if someone needed a couple of CP systems, I could ship them almost immediately.

Lastly, I'll be quick because we're running late. I'm going to shift a little bit to this voluntary memory potential that's out there. I don't know, four years ago when you were developing the XP, there was two fabs that got initiated and they were looking for somebody to Burnin System at the end of the line. I think they went with Tokyo Electron. You certainly weren't ready. The DXP wasn't even debugged or alone perfected. Everything I hear about that application was a disaster. I think they had a Luke Goldberg system that worked around your IP, but it didn't work too well anyway. We get the sense that there's probably another one or two fabs that are maybe getting off the mark shortly. Is... Especially with all the opportunities, you've got a full plate and the resources are limited. Doesn't it make sense to joint venture? You have a proven machine now. It's proven, the XP, it's the key technology for that application, but you need automation, which you don't have. Wouldn't it make sense to joint venture with somebody like a Brooks Automation? They've got a $5 billion market cap. It would de-risk the entire project. So you could get it off the mark. Certainly you could push XP's through your facility. You now have a good ops manager to help you do that. And so in order to secure that opportunity, it would be a monstrous, I think it would dramatically reduce the risk for the customer if you would present yourself in that manner. And ultimately, if you could land something like that, you could You could live the rest of your life on the consumables, because there would be something like a thousand bi-packs or so on that, if you could ever learn.

Wasteful packs.

The memory, so you teed up a ton of stuff there, Larry.

You clearly done your homework, okay? I just want to acknowledge several data points and maybe try and answer the one question that was embedded in there. So I want to acknowledge, we do believe that some, but not even close to the majority, of the memory companies have implemented wafer-level burning, and only in flash memory today, not DM. We believe that long-term, that it makes sense for all flash memory and potentially DM to go to wafer-level burning, and there's some specific reasons that this is taking some time. DRAM longer than FLASH and we have a pretty good idea why. The people that implemented wafer-level burning first with FLASH did it in what we believe is a compromised way and we've gotten specific feedback that they would like, that they're going to need more cost-effective higher parallelism, lower footprint, more automation in the future. and we do believe that long-term that is an opportunity and as long as I'm in the seat, we will always be trying to get into that space. We have shared vaguely with people that I will vaguely repeat it again, part of the investment in us as a company is actually that oars in the water related to automation and production cells and extending the XP and its capability so it is more applicable and more effective for massively high-value applications such as memory. And we are spending that money today. So in this downturn, in addition to the investments we're making in wafer packs, die packs, high-voltage packaged part and wafer-level burning systems, were also engaged on automation and some other things that we think are particularly appealing to multiple markets, including specifically the memorial guys. You alluded to the risk associated as a small company, and certainly a big part of the risk profile four, three, four years ago was the XP was but a glimmer in my eye or our eye and it was a sketch on a piece of paper and that was too far of a fetch for a FAB that's going to need up to 100 XPs per FAB to go after. I believe that we are on a path to be able to reduce that risk and that gives us opportunities. I will also tell people do not invest in our stock because you think we're going to sell a whole bunch of memory systems in the next six months. but we are engaged in working on some things and very specifically where the engagements in that area slowed to a halt during COVID. Not for us but everybody. The memory guys are absolutely just focused on getting what they were doing done and not doing things. There's no Well, we could be understanding of any programs and stuff that are really getting into on the wafer level side of things right now. But I do believe that we engage. So your comment about should we partner with somebody, et cetera, I think that is, you know, I understand. It makes sense. I don't want to comment about potential partnerships or things that are in play. I will acknowledge that could very well make sense to companies. before they go off and try and spend hundreds of millions of dollars on regular burning systems.

Yeah, particularly if you could just get your key technology, your XP system out the door, which would be a tremendous boom beer, but also the consumable business would be, like I said, literally set for life.

I believe that one of the critical weaknesses of the way people have deployed and one of the headwinds of why people have not been able to do wafer-level burn-in across a wider segment of flash as well as DM is the contact, where everyone has proprietary technology with what we call a wafer pack that can address it. So I think that's one of the differentiated things. I actually think the testers as well and the test cell and the automation, but for certain, The probe cards that are out there cannot address the high density, high power flash memory coming up. And it's something the wafer packs can.

It just seems like why take on the automation? That's really not the key technology. Just what you said is the key technology. And by partnering with somebody, it will dramatically reduce the risk to the customer. and, you know, get down the road. Just my thought, but hopefully, you know, you guys are seriously considering something like this.

I appreciate the feedback and stay tuned, Larry.

Thank you.

Okay. That will conclude today's question and answer session. I would now like to turn the call over to management for any additional closing remarks.

Okay, well, thank you very much, Aubrey, and thank you, everybody. We appreciate you listening in and taking some really good questions and giving us some good questions. I absolutely want to acknowledge we understand that, you know, the first half was, you know, certainly one of the, you know, less exciting times of AIR's history, even in recent memory. but I truly sit here at this edge and I'm so glad that 2020 is behind because it wasn't just the last six months, it was really all of 2020 that we were feeling it and starting up with this initial order and based on what the customers are telling us, it's not just COVID and all the other things going on in the world, we're actually more excited about 2021. So I'll leave it there. and appreciate it. And as always, you know how to reach us, reach out to us if you want to have follow-on conversations, et cetera. Thank you very much and we'll talk to you next quarter. Bye-bye.

That will conclude today's conference. Thank you for your participation. You may now disconnect.