Aviat Networks, Inc.

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Welcome to the Eviant Network's fourth quarter fiscal year 2022 earnings results conference call. At this time, all participants are in listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 11 on your telephone. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host, Andrew Fredrickson.

Please go ahead.

Thank you and welcome to Aviat Network's fourth quarter fiscal 2022 results conference call and webcast. You can find our form 10-K, press release, and updated investor presentation in the IR section of our website at www.aviatnetworks.com, along with a replay of today's call in approximately two hours. With me today are Pete Smith, Aviat's President and CEO, who will begin with opening remarks on the company's fiscal fourth quarter, followed by David Gray, our CFO, who will review the financial results of our quarter in fiscal 2022. Pete will then provide closing remarks on Aviat's strategy and outlook, followed by Q&A. As a reminder, during today's call and webcast, management may make forward-looking statements regarding Aviat's business, including but not limited to statements relating to financial projections, business drivers, new products and expansions, the impact of COVID-19, and economic activity in different regions. These and other forward-looking statements reflect the company's opinion only as of the date of this call and webcast and involve assumptions, risks, and uncertainties that could cause actual results to differ materially from those statements. Additional information on factors that could cause actual results to differ materially from the statements made on this call can be found in our annual report on Form 10-K filed with the SEC. The company undertakes no obligation to revise or make public any revision of these forward-looking statements in light of new information or future events. Additionally, during today's call and webcast, Management will reference both GAAP and non-GAAP financial measures. Please refer to our press release, which is available in the IR section of our website at www.aviadnetworks.com, and financial tables therein, which included GAAP to non-GAAP reconciliation and other supplemental financial information. At this time, I would like to turn the call over to Aviad's President and CEO, Pete Smith. Pete?

Thanks, Andrew, and good afternoon, everyone. Thank you for joining us to review Aviat Network's results for the fiscal fourth quarter of 2022. The company continued to focus and execute on our key long-term targets of growth, margin expansion, and bottom line improvement, despite persistent supply chain headwinds and inflationary challenges. For the fourth quarter fiscal year 2022, the AVIAD team's hard work and commitment resulted in revenue of $77.4 million, which represents growth of 8.0% versus Q4 of last year, adjusted EBITDA of $9.1 million, a 31% increase versus the same period prior year, non-GAAP EPS increase of 52%, a strong debt-free balance sheet, Continued share buybacks of $0.75 million. For the full year fiscal 2022, Aviat achieved revenue growth of 10.2% to $303.0 million, which also represents our second consecutive fiscal year of double-digit top line growth. Adjusted EBITDA of $38.3 million, a 17% increase over last year. non-GAAP EPS growth of 24%, repurchased 5.4 million in Aviat shares. These financial results reflect the continued demand we see for our products in the market. In fiscal year 22, we increased our global share of demand and added 175 new customers. This demonstrates we have the differentiated offering to take accounts from the competition and grow. In North America, in fiscal year 22, we grew market share by 6% and are now number one overall in the region. On top of this, in North America, Q4 was our best bookings quarter in over a decade. And in the rest of the world, we continue to gain traction and post encouraging results and bookings. We see five main factors for our success in fiscal year 2022. Strength in private networks. innovation of our multi-band solutions, further evolution of our software offering, traction and expansion with the Aviat store, and our ability to navigate supply chain challenges. Let me touch on each of these. Our value proposition for private networks remains unmatched. Our reliable high-power radios, customer service and support, and end-to-end solutions offering including application software, managed services, routers, and now wireless access solutions via our Redline acquisition on the first day of the current quarter is second to none. We are the leading microwave vendor in private networks in North America and have increased our market share in this segment in fiscal year 22. Please note that for the first time, our private network share of demand is higher than the next two competitors combined. Revenue in private networks grew 11% this fiscal year, and FY22 was the highest bookings year in our history in this segment, which included, among other things, six new statewide network wins involving a mix of not only microwave products and services, but also routers, application software, and managed services. Our strength in this segment is unrivaled, and with our wallet expansion initiatives, our prospects and private networks are exciting. In fiscal year 22, we have seen significant wins and repeat orders for our unique WTM4800 multiband solutions. Aviat is the only vendor with a single-box multiband radio and an extended-distance multiband solution. all delivering ultra-high capacity transport over longer distances with total cost of ownership that is up to 90% lower than fiber. FY22 has seen significant market successes of our industry-leading multiband solutions, including an increase in multiband sales by more than 80% year-over-year, penetration into access networks of two Tier 1 accounts in West Africa, A new Tier 2 mobile operator win in Southeast Asia. A new Tier 1 mobile operator win in China that demonstrates Aviat's competitiveness versus Huawei. A new Tier 2 mobile operator win in East Africa. A large service provider in Germany with a 14,000 kilometer fiber optic network. Many new ISP and rural broadband networks in the USA and worldwide. Q4 was the highest bookings quarter to date for multiband with over 60% of these bookings from the EMEA region. Operators in countries with high microwave spectrum fees quickly recognized the benefits of deploying Aviat multiband as an alternative to traditional microwave-only links. In countries such as the Philippines, Nigeria, and Kenya, Aviab multiband links can provide savings of up to $20,000 USD per link per year in spectrum fees alone. In countries where spectrum fees are moderate, operators have embraced Aviab multiband systems to achieve the following. One, scale capacity up to 10 gigabits per second via software. Two, reduce power consumption. And three, cut tower-related costs and site visits when compared to using multi-channel microwave links that are scalable only to a fraction of the capacity. Multi-band is widely recognized to be a key solution for operators building or preparing for 5G networks, network rollouts, and Aviat leads the industry in this area. Moving to software. In the fiscal year, we enhanced our frequency assurance software, or FAS, with new algorithms for interference detection and reporting. We introduced new health assurance software, or HAS, to improve overall network health and reduce downtime. And we evolved our ProVision Plus platform with enhanced IP and PLS management capabilities. All these investments resulted in an increase in FY22 management and application software sales by over 50% compared to fiscal year 21. A key win here was with a large state government where we achieved the first sale of our hosted HIS software, which is a software as a service offering and will give us annual recurring software revenue streams. This contributed to the fiscal fourth quarter 2022 being our highest bookings quarter for management software since the company's inception. We are just getting started with recurring software, and we expect much more of this business in fiscal year 23. Another significant factor for Aviat's success in fiscal year 22 was the Aviat store. Initially launched to serve rural broadband ISPs in North America, The store is now expanding globally, and we added 72 new accounts in fiscal year 22. In the North America ISP space, Aviat has the number one position in radios licensed for operation. Clearly, our value proposition is working. The store represented over 8% of our fiscal year 22 revenues, and we look forward to the opportunity provided by large funding sources coming in the quarters and years ahead. This includes the $20 billion Rural Digital Opportunity Fund, or RDOP, and the $65 billion Bipartisan Infrastructure Fund, which have yet to impact our business. Looking forward, we can provide some intelligence on the RDOF program. Some customers have started limited spending against RDOF this quarter in advance of getting the actual funds authorized. Our customers believe funds will be dispersed later this calendar year or early next calendar year. If the program follows the CAF funding profile, we would estimate the peak of the spending would be three years from now. We continue to expect RDOF to be a positive catalyst for us. However, as with most government appropriations, the plan is subject to change. We thought we should share the color we have with you. To amplify our readiness for this catalyst, we are in the process of rolling out a new e-commerce platform which will increase our ability to address this demand in the U.S. and for customers with similar buying characteristics across the globe. Moving on to supply chains. Although the supply chain has been a challenge throughout the fiscal year, our team worked tirelessly to address issues and interruptions to ensure we met our customers' expectations. Our diligence and persistence in working with supplier partners to solve problems and shortages, along with our inventory approach to buffer supply interruptions, allowed us to deliver products and results consistently. In some cases, this has meant incurring expedite costs to alleviate bottlenecks and delays. In the fourth quarter, we again had no revenue impact from supply shortages. This despite semiconductor chips remaining on allocations, along with over 100 other components. Our costs were negatively impacted as a result of the COVID lockdowns in Asia. These lockdowns caused significant expedite fees to be incurred. Supplier push-out and decommits late in the quarter remain a problem, but the team successfully overcame this throughout the year, including six such events in the fourth quarter. Overall, we continue to see some improvement in the supply chain, but risks remain. The specific improvements include that lead times are stable. The number of critical shortages is no longer increasing. The number of force majeure events has recently reduced to zero. The overall number of components on allocation remains high, but we see evidence that we've gone through the peak of the allocation environment. The key risks currently include the semiconductor wafer shortage, as well as third and fourth level suppliers subject to COVID lockdowns. Our results for customers and shareholders would not be possible without all of the Avion employees. This was a solid quarter, an excellent fiscal year. We remain focused. and continue to execute, and those collective efforts are reflected in our financial and operational results. We've continued to demonstrate our ability to grow and to take share of demand. Aviat's core values include customer focus. As part of our focus on the customer, we advanced our voice of the customer process. This effort by our sales and marketing teams resulted in a fiscal year ending backlog of $245 million. This represents an increase of 9% versus the prior year. Our three growth drivers, 5G, private networks, and rural broadband, leave us well-positioned to capture significant opportunities with our differentiated products, software, and services offerings. Lastly, at the beginning of our new fiscal year, we closed the red line communication acquisition, which we anticipate to add approximately $20 million of revenue and be accretive to gross margin and earnings in fiscal year 23. We are pleased to have Redline as part of Aviat and are excited about the opportunity to further demonstrate the value of the Aviat operating system. With that, let me turn the call over to David to review our financials before coming back for some final comments. David.

Thank you, Pete, and good afternoon, everyone. During my remarks today, I will review some of the key fiscal 2022 fourth quarter and full year financial highlights. noting our detailed financials can be found in our press release filed this afternoon. As a reminder, all comparisons discussed today are between fourth quarter of fiscal 2022 and the fourth quarter of fiscal 2021, unless noted otherwise. For the fourth quarter, we reported total revenues of $77.4 million, as compared to $71.7 million for the same period last year, an increase of $5.7 million, or 8.0%, driven by strong growth in Europe, Asia Pacific, and Latin America. North America, which comprised 63% of total revenue for the fourth quarter, was $48.8 million, an increase of $2.4 million, or 5.1%, from the same period last year, driven primarily by our private networks business. International revenue was $28.6 million for the quarter, an increase of $3.6 million, or 13.3%, from the same period last year. As Pete mentioned, our backlog grew by 9.0% year-over-year to $245 million, continuing our trend of trailing four-quarter book-to-bill ratios above one which started in fiscal 2018. Gross margins for the quarter were 35.5% and 35.7% on a GAAP and non-GAAP basis, as compared to 36.1% and 36.2% in the prior year. Gross margins remained under pressure from inflationary headwinds and expedite costs related to supply chain disruptions. We also incurred additional costs to overcome the Asian COVID-related lockdowns, which primarily impacted our freight expense. Our mix this quarter was weighted towards our long-standing projects and backlog. As a result, our previous price actions were less impactful. Fourth quarter gap operating expenses were $22.2 million, increase of $0.1 million from the prior year. Fourth quarter non-GAAP operating expenses, which exclude the impact of restructuring charges, share-based compensation, and deal costs, were $19.5 million. This is a decrease of $0.9 million from the prior year due to general cost controls and benefits from prior restructuring actions. Fourth quarter GAAP net income was $4.3 million compared to $2.8 million last year. GAAP income before tax was $7.3 million, an increase of $3.6 million, or 95% from the prior year, driven by improved operating profit and a $2.6 million gain on marketable securities, partially offset by currency and M&A related costs. Fourth quarter tax provision was $2.8 million compared to $0.9 million last year. As a reminder, the increase in tax provision year over year will not increase our cash taxes paid. The company has over $500 million of NOLs that will continue to generate shareholder value via minimal cash tax payments for the foreseeable future. Fourth quarter non-GAAP net income, which excludes restructuring charges, share-based compensation, M&A-related costs, and non-cash tax provision, was $7.8 million compared to $5.3 million for the same period last year. The fourth quarter non-GAAP EPS came in at $0.67 per share on a fully diluted basis. compared to $0.44 per share for the same period last year, an increase of 52%. Adjusted EBITDA for the fourth quarter was $9.1 million, an increase of $2.2 million, or 31% from the prior year. Adjusted EBITDA margins were $11.8 million for the quarter. Moving on to the balance sheet. Our cash and marketable securities at the end of the fourth quarter were $47.8 million, up from $33.8 million the prior quarter. We continue to have no debt. Fourth quarter cash flows from operations were $13.5 million. The strong cash generation resulted from a moderation of supply chain-induced working capital increases we experienced earlier in the year. We executed $0.75 million of stock repurchases in the quarter. Our balance sheet remains very solid, leaving us well positioned to execute our long-term plans. With that, I will turn it back to Pete for some final comments. Pete?

Thanks, David. Just a few additional comments before opening up for Q&A. Fiscal year 2022 represented a significant year for Aviad Networks. The company continues to grow. We announced our first acquisition in greater than 10 years and are well on track to realizing the planned synergies. We announced our partnership with MaxLinear to develop the next generation system on chip, which will ensure our differentiation for years to come. This will be a more capable commercial alternative based on a newer generation of technology than competitor chips. The new generation will enable us to deliver ultra-high capacity payloads over longer distances with the lowest possible total cost of ownership. Additionally, this chip will consume less power and create advantages in cost, system design, and supply chain. Our strategy from a few years back was to work with MaxLinear as a strategic chip development partner and innovate in systems. This strategy has yielded significant product differentiation, as you can see from our market success and current product offering. With the latest partnership agreement with MaxLinear, we feel confident we have the right strategy for the future as well. Based on the company's outlook, we are establishing our 2023 guidance, inclusive of the red line communications business. Revenue for fiscal year 2023 to be in the range of 330 to 340 million. And adjusted EBITDA to be in the range of 43 to 45 million. With that, operator, let's turn the call back for a few live comments and then open up for questions.

Certainly. Thank you. Pete Smith, your line is now open. Please go ahead.

We just wanted to give a quick update on the Sargon Extraordinary Shareholder Meeting. We are disappointed in the results. We remain interested in the transaction. However, for there to be a transaction, there needs to be engagement, and to date, there has been very little. And since this has been a public offer, the information is in the public domain, and we don't believe that there's very much else to say. So with that said, we'd like to turn it back to the operator and start the question and answer period.

Certainly. Once again, ladies and gentlemen, if you do have a live question at this time, please press star 1-1 on your telephone. And our first question comes from the line of Scott Searle from Roth Capital. Your question, please.

Hey, good afternoon. Thanks for taking my questions. Pete, Dave, nice job on the quarter. Maybe just to dive in on the gross margin front, Pete, certainly headwinds on that front as it relates to inflationary cost component availability, the lockdowns in China, and the freight costs. Could you quantify the impact that you saw in the June quarter? And, you know, we've had some, I'll call it a thawing on that front. You know, what are you seeing in the immediate future as we're looking into the September quarter and into the back half of the calendar year here?

Yeah, I want to shy away from specific quantification, but it was, you know, a fairly large impact on our margins of the quarter, probably in the tune of 60, 70 basis points. What we see, you know, looking forward is, is actually an absence of those headwinds, and we expect a pretty good margin progression as we head into fiscal 23. So it's a little bit of a one-time event that we expect to continue the improving trend that we had seen in previous quarters starting up in 2023.

Great. And maybe looking at the services side of the equation, very good quarter. I think both from a top-line perspective and a gross margin perspective. I wonder if you could give us an idea, was there anything unusual in there in terms of one-time benefits, and particularly now going forward, is that a normalized level to be thinking about the gross margin performance, particularly as we start to see contribution from Redline coming in, and Pete, maybe from a high level as well? I know you gave the $20 million guidance for Redline for the current fiscal year, but how are you expecting that to flow in to the P&L over the next couple of quarters. How's yearly integration on that front going?

David, you go first. Yeah, I'll start off on the services margin question. Yes, we had a very good quarter in services margin that was driven by North America. We had some very good projects, but we've also been very focused on execution and taking cost out of our service offering, so we've made some good headway there. Do we expect to maintain those That level of service margin, probably not at that level, but we don't see a reversion to where we had been historically. We expect improved service margins overall.

And then on the red line part of your question, we've been aggressive in the way we've managed our supply chain. And, you know, Redline, we're starting to run that standard operating process on Redline. So we think that, you know, if you want to calendarize that $20 million, it'll ramp through the year. And we'll also be able to get our, you know, our operating system in there and start to reduce costs. With respect to how, you know, in the prepared remarks we said, that were, you know, ahead of our plan synergies. And that's really on the SG&A front that we are, you know, our thesis when we bought it, we thought that we could take costs out and that thesis has proven out to be true over the first seven weeks or so of ownership.

Gotcha. And if I could, just two last ones, just on the guidance, you gave guidance for the year. I'm wondering if you could calibrate, you know, sequentially, how you're thinking about things on the front. Sounds like the gross margins start to come back, but if you were to net out red line, you know, how are you seeing September shape up? And then that macro view for fiscal 23, you know, Pete, what's the thought in terms of the contribution of RDOF in there and any sort of the other government funding initiatives? And lastly, if I could, and I apologize in advance, but the obligatory Saragon question in terms of are there next steps for you? And that stated, are there other things and opportunities in the pipeline that you're starting to see that are piquing your interest? Thanks.

Okay. So there was three questions. So in our guidance, we do not have RDOF in our guidance, so we would say that that's a positive catalyst when that materializes. With respect to the progression, you know, we are a project-based business, You know, in our prepared remarks, we said that we had record public safety. So that would mean that, you know, we're on the July to June calendar that you'd see the ramp through the year. But I would expect that there would be, you know, some project cutoffs and, you know, a little bit of lumpiness from quarter to quarter. But the way our backlog is, you would expect the progression to – kind of go up as we move through the year. And then with respect to Sargon and Next Steps, I would submit that there are, you know, if there's engagement, there's Next Steps. If there's no engagement, there's no Next Steps. The positive outcome for us are it's raised our visibility and there's more opportunities for us to grow by acquisition than there had been previously. So, you know, while we didn't get the results we wanted in the extraordinary shareholder meeting, it's been net-net positive for Aviat.

Okay. Thanks so much.

Nice job on the quarter.

Thanks. Thank you.

Thank you. One moment for our next question. And our next question comes from the line of Tim Savage from Northland Capital Markets. Your question, please.

Hi, good afternoon. I wanted to talk about the booking strength in the quarter, which you called out in sort of multi-year or nearly decade terms. Maybe let's focus on North America and what the drivers were there for Q4 in particular. You did mention some initial spending activity on the RDOF side, and to what extent was rural broadband in general a factor in that order strength, or can we attribute most of that to private networks? And I'll follow up.

Yeah, Tim, I would attribute most of it to private networks, and that's why we gave the color of six areas. State networks.

Is that in the quarter or for the year?

That was for the year.

Okay. That's what I thought. And also to follow up on some of the carrier wins, well, I wanted to see if you could maybe toss out a book to Bill for Q4, either overall or in North America, just given the the superlatives you put on the numbers in terms of the year. And I was also interested in the Tier 1 win in Huawei's backyard, I guess, and how significant you view that to be and what that means both from a revenue perspective and also for future potential wins.

Okay. So, you know, I think the – We, you know, because we have a lumpy project-based business, we don't like the book to build, and that's why, on a quarterly basis, and that's why we said our backlog year over year is up 9%. The win in China, that's a demonstration of our ability to deliver our multiband, which is highly differentiated, and we're using that where in where the spectrum costs are highest in China or the cost of linking towers together is the most expensive. And, you know, I wouldn't say, you know, we want to raise guidance on that. We brought that up because it demonstrates our ability to compete in tier ones and in Huawei's backyard.

Maybe one more follow-up from me, if I may. You're coming off a couple of years organically of double-digit growth here, and looking at a more conservative start to that year organically this year, and mentioned that you don't really have much in the way of government or RDOF-supported revenue or nothing, actually, in your forecast. If Can that really by itself, I guess, you know, if that were to come through in some reasonable way, put you back into double digits for 23? And that's it for me.

Yeah. I mean, that's fair. I mean, Tim, you're probably doing the math on what it would need to be. And if it comes, it could certainly put the core business into that level of growth. Yes. And that would be, you know, kicking in of either the the RDoF funding or the Building Infrastructure Fund, or BIF, H.R. So we watch those items pretty closely, and if we get the kick in, then that'll be a positive catalyst for us.

Thanks very much.

Thank you. And our next question comes from the line of Eric Seppager from JMP Securities. Your question, please.

Yeah, thanks for taking the question. Can you talk a little bit about kind of some of the demand that you're seeing in Europe and how much this is related to the war in Ukraine?

Our biggest demand is in Ukraine. in the UK and that's a private network project similar to you know the bulk of our business in North America and we previously disclosed that we we only had one contractor in Russia and we only had one you know potential commercial opportunity in Ukraine so Ukraine Russian and War has had a de minimis impact on us. The bulk of the growth has been driven by private networks in the UK, but we have picked up some tier twos in Europe and some ISPs specifically in Germany.

Can you discuss, obviously you had some pretty robust growth in Europe. why are private networks coming alive so much for you?

Why are they coming alive? So, you know, if we roll back the clock about five quarters ago, we refreshed our commercial leadership because we were not doing very well in the EMEA team, and, you know, Uh, we've upgraded the team, the teams, you know, running our voice of the customer and our sales funnel process. And now I would say with that leadership, uh, we, we understand our value proposition. We chase opportunities that we can win and our conversion rate is better than, than it was five quarters ago.

Okay. And, and Africa was down a year over a year. Uh, was there anything, um, notable that caused that?

Yeah, I think that's the case. We think Africa is well-positioned for growth, and now it's really just a lull in the capex cycle, and I think, you know, watch that space in the coming quarters, and you'll see a bounce up there.

Okay, very good. Thank you. Thank you. And our next question comes from the line of Theodore O'Neill from Litchfield Hills Research.

Your question, please.

Can you give us any information about the mix between products and services and whether or not you're seeing stronger growth in either one of those?

So, yeah, we definitely had a mix. skewed towards services this quarter. It's typically, it's probably about six or seven percentage points higher than it normally is from a mix standpoint. And we also had, we already talked about the strong execution that increased the margins there. We don't think there's a fundamental shift in the mix between product and services. You know, as Pete said, a project-based business that is going to be a little lumpy and you're going to have this kind of variability quarter to quarter. This just happened to be a strong quarter for services coupled with, you know, positive margins on those services. So it was good for us.

Okay. And in terms of your North America revenue and market share here being so strong, I Is that a particular product area that's creating that for you, or is that across the board?

I would say our WTM high-capacity radio is a key product, but one of the reasons we win in private networks across the globe, and particularly in North America, is our end-to-end offering. We do the network design, the network plan, provide the hardware, software, and services, sometimes do the install, and sometimes we do the ongoing network monitoring. And that core competency along those elements of value are the components of the winning value proposition.

Okay, thanks very much.

Thank you. And our next question comes from the line of Oren Hirschman from AIGH. Your question, please.

Hi. How are you? Congratulations on the results. I just wanted to drill down again on Redline. How much of Redline working within this past fiscal year?

Past fiscal year? It's just over $19 million. Yeah.

So, yeah, so $19 million. Or at about $19 million. So we're signing up for nominal growth while we restructure the business and get our voice of the customer and sales funnel process in place. So that's, you know, we want to make sure we get the cost out, get the business, you know, off of the Canadian exchange and get it, the resources deployed and run our voice of the customer and sales funnel process. So that's what we're doing with Redline in the first 12 months.

Okay. Honestly, where I'm going with the question is just understand the organic growth rate, you know, even without Redline, considering how the backlog's risen and the books have been positive. It would seem like, you know, again, I don't know the timing of the orders on the book-to-bill, but it would seem like it gives you running room, especially not counting anything from RDOF for the infrastructure build-out.

Yeah. So, you know, we want to make sure that we give guidance that can hit. You know, you're right that we have RDOF upside if the We can pull in the backlog. We can, you know, and as we execute that, we'll revisit our guidance as we go through the year. Okay.

My final question is on the software side. I know you'd mentioned there are additional software offerings coming you alluded to. Can you say anything more about that or even just the timing?

So we, you know, we launched our about a year and a half or two years ago the FAS, frequency assurance software. Then we, in the last quarter, we launched our health assurance software, and we're contemplating a couple other assurance softwares to build out our software suite and help network operators, you know, run their networks at a lower total cost of ownership. We would say, you know, within the fiscal year, we will launch our next assurance software offering and build our advantage there. That would be great. Thanks so much.

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Pete Smith for any further remarks.

I'd like to thank everyone for your continued interest and your attendance on the call. We'd like to thank our suppliers, customers, employees, and shareholders. We look forward to speaking with you at the end of Q1 and giving you an update on our progress.

This concludes today's conference call. Thank you for participating. You may now disconnect. Good day.

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