AXT Inc

Good afternoon, everyone, and welcome to AXT's second quarter 2021 financial conference call. Leading the call today is Dr. Morris Yang, Chief Executive Officer, and Barry Fisher, Chief Financial Officer. My name is Leah, and I will be your coordinator today. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press star, then zero on your touchstone telephone. As a reminder, this conference call is being recorded. I would now like to turn the call over to Leslie Green, Investor Relations of AXP. Please go ahead, ma'am.

Thank you, Leah, and good afternoon, everyone. Before we begin, I would like to remind you that during the course of this conference call, including comments made in response to your questions, We will provide projections or make other forward-looking statements regarding, among other things, the future financial performance of the company, market conditions and trends, including expected growth in the markets we serve, emerging applications using chips or devices fabricated on our substrates, our product mix, our ability to increase orders in succeeding quarters, to control costs and expenses, to improve manufacturing yields and efficiencies, to utilize our manufacturing capacity the schedule and timeliness regarding our relocation, the growing environmental health and safety and chemical industry regulations in China, as well as global economic and political conditions, including trade tariffs and restrictions. We wish to caution you that such statements deal with future events, are based on management's current expectations, and are subject to risks and uncertainties that could cause actual events or results to differ materially. These uncertainties and risks include but are not limited to overall conditions in the markets in which the company competes, global financial conditions and uncertainties, COVID-19 and other outbreaks of contagious disease, potential tariffs and trade restrictions, increased environmental regulations in China, market acceptance and demand for the company's products, the financial performance of our partially owned supply chain companies, and the impact of delays by our customers on the timing of sales of their products. In addition to the factors that may be discussed in this call, we refer you to the company's periodic reports filed with the Securities and Exchange Commission. These are available online by link from our website and contain additional information on risk factors that could cause actual results to differ materially from our current expectations. This conference call will be available on our website at axt.com. through July 2022. Also, before we begin, I want to note that shortly following the close of the market today, we issued a press release reporting financial results for the second quarter of 2021. This information is available on the investor relations portion of our website at AXT.com. I will now like to turn the call over to Gary Fisher for a review of our second quarter results. Gary?

Thank you, Leslie, and good afternoon, everyone. We are pleased to report that total revenue for the second quarter of 2021 was $33.7 million, up from $31.4 million in the first quarter of 2021, and up 52% from the $22.1 million in the second quarter of 2020. Our revenue results were well ahead of our guidance, driven by continued growth in indium phosphide, gallium arsenide for LED applications, and raw materials. Of our total revenue, substrate sales were 24.9 million in Q2, compared with 23.4 million in the first quarter of 2021, and 16.9 million in Q2 of 2020. Revenue from our two consolidated raw material joint venture companies was 8.8 million in Q2, up from 8.0 million in Q1 of 2021, and up from 5.3 million in Q2 of 2020. In the second quarter of 2021, Revenue from Asia Pacific was 73%, Europe was 19%, and North America was 8%. In the second quarter, no customers reached 10% of revenue, and the top five customers generated approximately 31% of total revenue. This is now the second consecutive quarter where we had no 10% customer. This means that revenue growth breaking through the $30 million level is not overly dependent on one large customer, and this diversity is a good thing. Gross margin in the second quarter was 36.3 percent compared to 36.8 percent in Q1 and up from 30.6 percent in Q2 of last year. The increase was primarily driven by product mix and increasing revenue volume. Total operating expenses in Q2 were $8.3 million, up from $8.0 million in the prior quarter and $6.3 million in Q2 of 2021. R&D is one of the drivers creating the increase and as a result of two major R&D programs that are going on. We also have additional expenses associated with going public in China, as well as increased employee stock compensation expense and bonuses. Total stock compensation expense for the second quarter of 2021 was $975,000. Operating profit for the second quarter of 2021 was $3.9 million. compared with an operating profit of $3.6 million in Q1 of 2021 and an operating profit of $478K in Q2 of last year. Other income and below-the-line items, including tax provision and minority interest for the second quarter of 2021, was a net gain of $500,000. Especially noteworthy in Q2 is a net profit of $1.5 million from the partially-owned companies in AXC's supply chain that are accounted for under the equity method. The market for raw materials has tightened up, and raw material pricing has increased. The tax provision was 900K. Our Q2 results included approximately 280,000 in tariffs as a result of the 25 percent tariff charge on importing wafers into the United States from China. For Q2 2021, we had a net profit of 4.4 million, or a profit of 10 cents per diluted share. By comparison, we had a net profit of 3.4 million, or a profit of $0.08 per diluted share in the first quarter of 2021 and a net profit of $361,000 or a profit of $0.01 per share in Q2 of last year. The share count in Q2 was 42.727 million shares. Cash, cash equivalents and investments were 58.5 million as of June 30th. By comparison, at March 31st, it was 66.9 million. The decrease included the one-time payment of approximately 3.7 million for shares in Tongmei that we purchased, which were previously held by minority interests. In addition, inventory increased 4.2 million, accounts receivable increased 5.1 million, and AP only increased 2.7 million. Depreciation and amortization in the second quarter was 1.7 million, and capital investments were 7.4 million. Okay, this concludes the discussion of our quarterly financial results. Let me give you a brief update and comments about our plan to list our company in China on the star market in Shanghai. We are working closely with our China investment banker and our China law firm handling the IPO transaction for us. They have some experience in this as they are also helping another NASDAQ listed company. The star market authorities and the China SEC have raised the bar for companies wanting to go public. Their focus includes semiconductor companies and material companies, and we qualify in both of those categories. We believe we are a world leader in our fields. We, of course, have healthy revenue and growth. We also have a strong customer list and have partial ownership of 10 raw material companies located in China. And we have over 1,000 employees in China that are citizens and pay income taxes there. We are advised that our company going public on the star market should be an attractive offering. The bankers have informed us that we are on track and that our teams are responsive and professional. The process is time-consuming, but our teams are taking it in stride and doing a good job. We hope to be ready to file late this quarter or in the fourth quarter. In conclusion, it has been a busy but very good quarter with solid customer traction and new opportunities unfolding. I'll now turn the call over to Dr. Morris Young for a review of our business and markets. Morris?

Thank you, Gary. Good afternoon, everybody. Our Q2 results demonstrate that the momentum in our business continues to build as a renewed need for compound semiconductor substrate drives market expansion. Historically, we have had a number of quarters where certain product categories were performing well while other categories languished. Today, it feels like our business is firing on many cylinders. We entered Q2 expecting our revenue to be approximately flat following strong growth in Q1. However, we continue to see increasing demand in both gallium arsenide and indium phosphide subplates, as well as healthy growth in our raw material business. This allowed us to deliver solid growth margins and increasing profitability. It is clear from the market demand that our new factory and capacity expansion will build at exactly the right time. With them, we're now able to support current and emerging customer requirements across growing applications such as 5G telecommunications and its related technologies, data center connectivity, LED-based sensing and display, and a variety of new consumer-related devices. I'm pleased to report that in Q2, we qualified with another Tier 1 customer who plays an important role in the supply chain for major end customers in many of these areas. This was a very extensive qualification process. and we believe it can open new doors of opportunities for us in the coming quarters. It also underscores the value of our investment in our manufacturing and business processes, in-house expertise, and product development. We believe we are now in a strong position to win market share and expand into key new emerging applications. Now turning to product categories. Indy Phosphide set a new revenue record in Q2 and once again surpassed Gallium Arsenide as our single largest product category. This year, we are on track to grow our Indy Phosphide revenues by more than 35 percent with demand being driven by a number of customers across a diversified set of applications. Once again, we believe this indicates an acceleration of some big trends in the technology landscape. In particular, we saw continuous trends for 5G and its related technologies. At the substrate level, It can be difficult to distinguish between optical connections specifically for 5G equipment and those for related technology like passive optical networks that support 4G and 5G functionally. For our perspective, any modernization of telecom infrastructure that utilizes lithium phosphide is positive for our business. Demand continues to be strong and we have been able to scale up our manufacturing to keep customer delivery times as flexible as possible. Data center connectivity demand remains steady and at a positive level. As a result of the overall growth in adoption of silicon photonics in the data centers, silicon photonics technology provided a number of advantages. such as lower power consumption and increasing bandwidth and data transfer capabilities. We completed the direct qualification of a Tier 1 customer in Q1, and we believe we're now selling indirectly into another major player in this space. I'm also very pleased to report that we're beginning to ramp volume for new customer devices that we believe is now moving into production. We expect the rent for our substrate related to this application to be gradual over the coming quarters, adding incremental growth to our business. Our qualification into the supply chain for this customer is the result of many quarters of collaboration with both the end customer and its supply chain partners. Turning to Gowling Aspect, we're seeing signs that market supply is tightening. All revenue for LED applications grew by more than 20% in Q2. Demand was driven by high-end applications, including automotive and lighting and display. As expected, revenue from wireless applications declined modestly in Q1, As we move into Q3, however, wireless revenue is expected to grow nicely from Q2 levels as a result of a broad-based IoT application demand. Our success for development of 8-inch gallium arsenide wafers for LED applications, such as microLED and LiDARs, is setting the stage for a new wave of growth. Among the many benefits, we believe 8-inch gallium arsenide will help to enable the scale and efficiency required for very large volume applications. Industry news and customer interest suggest that microLED are likely to become the next major volume driver for gallium arsenide chips. MicroLED can support higher brightness, higher dynamic range, and wider color gamut. while achieving a faster update rate, wider viewing angle, and lower power consumption. Their application extends from wearable devices and handheld devices to very large screens like high-end televisions. Tier 1 players are driving the development of this technology, and we believe that our wafers are already being used for early stage activities. The level of customer activity and general industry excitement gives us confidence that micro-LED will come to market and is also a factor in our motivation to deliver the 8-inch gallium arsenide wafers. Now turning to the germanium substrates. As expected, revenue from germanium substrate decreased modestly in Q2. However, the satellite solar cell market looks to be healthy in the second half of 2021, and we expect to see growth this year. Finally, I want to touch on our raw material business, which grew another 10% sequentially in Q2 after a 45% sequential growth in Q1. As you may recall, we recently consolidated two joint ventures for you which manufactures high-temperature PBN crucibles and PBN-based tools for OLEDs, and Jingmei, which is a diversified industrial high-purity material supplier. In 2020, both companies relocated to our campus in Kajou, enabling them to expand capacity in response to strong market demand. To me, today, Jingmei is processing approximately 12 tons of material per month, which is more than 25% of the world's yearly consumption of gallery. Its robust growth has been made possible by the new state-of-the-art facilities that not only allows it to handle more demand but also attract new customers and open up incremental business opportunities, such as material recycling, Coming to Q2, we expected the raw material portion of our business to come down a bit from a record number in Q1. However, continued expansion, coupled with a recovery in pricing of raw materials such as raw galleon, has allowed both companies to continue to grow. The improvement in commodity pricing also enabled the joint venture which will account for using the equity method to perform very well in Q2. We saw another meaningful increase in their contribution during the quarter. We believe the demand environment should remain healthy this year and that their performance will continue to be positive to our results. In closing, this is exciting timing obviously. The investment we have made over the past years in our facilities, our team, and our business processes are producing solid returns in our results. We are participating in several major technology trends, and we are now in the supply chain of some of the most prestigious companies in the world. Further, our growth and record results underscores the expanding number of major applications for compound semiconductor infrastructure, as well as our strong competitive position. As we look ahead in Q3, we expect this momentum to continue. I will now turn the call back to Gary for our third quarter guidance. Gary?

Thank you, Morris. As Morris discussed, the demand environment remains healthy in Q3. Indium phosphide coming off a very strong recent quarter, we believe we'll see continued growth. We also expect growth in gallium arsenide revenue. Germanium substrates and raw materials are expected to be consistent or about equal to the results of Q2. As such, we expect to see revenue in Q3 of between $34.5 million to $35.5 million. We believe that our net profit will be in the range of 10 to 12 cents with a share count of approximately 42.8 million shares. This concludes our prepared comments. Morris and I will be glad to answer your questions now. Leah?

And as a reminder, to ask a question, please press star, then the number one key on your touchstone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. And your first question comes from the line of Richard Shannon from Craig Helen. Please go ahead, sir.

Well, thanks, Morris and Gary, for taking my questions, and on the very nice numbers here. I guess my first question is on your comments regarding the Tier 1 qualification. I wonder if you could give us a little bit more color on who this company is. Are they an OEM or a supply, somewhere in the supply chain? Can you talk about applications? And specifically, you know, which substrate material and size that it was on?

Well, obviously, we cannot name customer names, as you understand. But this customer we've been working with for the last almost two years. And the category of material that we're working with them are Indian phosphide material. And they have an interest in three and four-inch, and they also have a future interest in six-inch Indian phosphide as well. So they are a true tier one customers in the United States and supplying to major customer demands.

Okay, that is helpful. Let's see here, a quick question looking back on your second quarter numbers, your gross margins at a healthy level, you know, in context here of the last couple of years, but down a little bit here, even though indium phosphide was strong, and I think if I'm reading my numbers right here, the raw materials are also very good. Usually that's a positive mix shift, but it was a bit down there. Maybe you can help delineate the driver's egg, Gary, please.

Yeah, it's no single thing. It's It's some job variances from within the manufacturing unit. It's some increased pricing for raw materials. And there's one other thing I can think of. Let's see. And we have some gallium arsenide orders from a long-term friendly customer. that didn't have the company average gross margin. But we want to keep working with that customer because we've been with them for years. But a couple quarters ago, you guys were asking, can we get back to 35%? And we said, yes, we think so. But let's wait till we get there before we become overly confident. We still have room to grow. You know, there's some low-hanging fruit that we can identify, plus just some good hard work. But I still want to stay right in the mid-30s, 35, 36, until we prove that we can do better. But we're not settling for where we're at. We'll see what we can do.

Okay, fair enough. Last question, I'll jump out of line here, kind of a multi-parter here. Obviously, your guidance here is very strong, and you're calling Audenium Phosphide first as a driver here. I wonder if you can delineate the drivers here. Last quarter you talked about 5G and related technologies. To what degree is that and or Datacom the strength here versus some of these new applications for which last quarter you said could drive as much as 5% to 10% total in the past five for the year? Can you help us understand that a little better, please?

Yeah. I think You know, I'm certainly watching the 5G demand. I read 5G was sort of expected for the first quarter, and it is expected to ramp up nicely in the second half. However, we are seeing our sort of pound-related business to be very strong in the first half already. So if it's going to grow nicely in the second quarter, then that should add more fuel to the fire, so to speak. I mean, as we said, our data center business was steady, but it didn't really have a very strong growth in the first half. But we also saw our customers' announcements saying that the second quarter is going to grow nicely. We hope that's going to help us. And we also qualify with the other Silicon Photonics customer. I think, you know, noticeably, I think we've been very excited about this new application that we qualified and we believe it's in the process of ramping into production. And we will just have to wait and see how much more it will give us when they ramp into full-scale production. going into the second half of the year. And we have some other iron in the fire, so to speak. So I think, you know, to distinguish Indian phosphide, let's say back in 2014 and 15, we had very nice growth, but that was the main growth engine was palm's business. And then we have the silicon photonics coming on strong. But now we're seeing multi-prong, multi-point growth. of growth. They are not necessarily related with each other, but they are all sort of connected to the benefit of using Indic phosphide either for the wavelengths they produce, which can transfer data very quickly within a fiber optic transmission line, or that specific wavelengths can monitor health parameters in a specific application. So I think those are very exciting fields. I think we should see continued growth for many years to come.

Yeah, let me just link that to one of the comments I made in my prepared comments, that we didn't have any 10% customers for the second quarter in a row. So that That's another way to illustrate the diversity of the applications for indium phosphide. It's kind of a renaissance for indium phosphide, just lots of interesting things happening. And one of the things that we like about the business model is once you get into an application, it can have a long trajectory in terms of the useful life. It can last a long time.

Next question? Great. I appreciate that. That covers it for me. Thank you. Thank you, guys. I'll jump out of line. Thanks to you.

Once again, if you would like to ask a question, just press star and then the number one key on your touchtone cell phone. And your next question comes from the line of a medical science. Please go ahead. I'm sorry, from the WS financial. Please go ahead, sir.

Hi, Gary Morris. Gary, could you just talk about the inventory going up so much and your accounts receivable going up so much these last quarter? Is there something you're planning as far from your customers that your inventory is sort so much versus revenue? And the same thing with receivables. I guess, are you providing extending out credit terms, or is revenue just coming in towards the very end of the quarter?

Yeah. Well, let's stick on AR for a second. The AR did expand it for two reasons. One is increased revenue, which that's fine, of course, but the second is that the day sales outstanding shifted in the wrong direction. So for the Previous quarters, from the last previous four quarters, if you average the DSOs by quarter, it comes to 81.75 days, which, you know, which isn't like a great, you know, it's not a great DSO. It's never been a strength for us. Part of that's because we have so many sales in greater Asia, and, you know, just to frankly, in case people don't know, but there's a lot longer time to pay in China, Korea, Japan. So the DSO went up by eight days to 90 days, which would be worth about $3 million into the accounts receivable. So if we had stayed with the previous four-quarter average, the AR would not have gone up as much. It would have still gone up because of sales, but it would have been $3 million less. As regards – so I'm not – there's no extended terms. There's no special deals. There's no – we're not aware of anyone that is going to become bad debt. You know, we don't have any of those kinds of problems generally. It's just – it's stretched, and it's probably also – and I didn't have time to do the analysis, but if we ship, you know, sort of in the second half of the quarter, then we're not going to – we're not going to collect in the same quarter. So in the case of Greater Asia, if we ship any time after the first 20 days, we probably won't collect it in the same quarter. As for inventory, there's a couple of things going on there. Number one is we're growing. And our production management people and schedulers tend to stock up when they see growth on the horizon, which they are. You know, we have a weekly production control meeting, which Morris attends. And so everyone's tied into what's happening in the company and the opportunities and the things that we're addressing. The second thing that's happening is we did buy ahead on raw materials because we have visibility about raw material. That's one of the benefits of owning all these companies. And we could see as the year progresses that, The average selling prices are not going to come down. They may stay firm or maybe inch up a little bit more. But if they inch up, we didn't want to delay buying, so we bought ahead a little bit. So there's, you know, as a business person, Hamid, I'm okay with both of these. I wish our AR was a faster cycle time. But it's just the nature of these customers in Asia that they're slow pay. It's not 30 days for sure. Morse, do you have any other comments about inventory or AR?

Well, my comment is this. I mean, look, the revenue grew by 62%. Our inventory didn't grow 52%. We do have a larger inventory than your normal silicon industry because we deal with many different products. We deal with different parts. And our product cycle is longer than normal. But if you look at AXC's history, we normally carry a larger inventory. So that's the nature of the business. So I'm glad to see inventory goes up because that means our business revenue is growing up.

Okay. And then in Q1 earnings call, you talked about a Tier 1 customer qualifying you for manufacturing of substrates. Now you have a second Tier 1 customer. When do we start seeing this in the revenues, if we haven't already, as far as mass production goes? And is there quite a bit of difference between the two as far as their indium phosphide demand and ordering would look like?

Yes, these two are two different customers, but I think they are both heavily into indium phosphide, and they are in two different fields. The first one is already in production. We're delivering. The second one we just qualified, but we think the revenue should start to come in gradually in the next couple of quarters.

Okay, great. Thank you.

Thanks, Colin. And we have a follow-up question from the line of Richard Shannon from Craig Hallam. Please go ahead, Shane.

All right, then. Let's hear a couple questions, guys. First of all, I guess one for Gary on CapEx here. What do you expect for the second half of the year, and then how do we think about it beyond this? I know at some point we're going to see the – investment sunset sunset in the new facility here but um obviously may see some pickups here with some some tier ones coming in here so give us a sense uh quantitatively or qualitatively what we should expect in capex you're going for that'd be great yeah well i would say a year ago i expected that capex for this current year uh would be lower than it actually is so uh

But what's happened is there's so many interesting opportunities that we're addressing. And so we've added more equipment, for example, Indian phosphite furnaces. We've added more expensive test equipment, like surface scanning equipment, at the request of some of these Tier 1 customers that they want us to have the very best in their opinion. So I think it's going to stay at this level, at least through the rest of this year. It's going to be a mixture of equipment, but also some facilities. The COSO government is giving us a bargain deal on a site adjacent to our current site. There's already a building there, and we will be fitting that building out as we look towards micro-LED. Morse, you want to add any more comments?

Yeah, I do want to chime in here. I think, you know, obviously we are in a very interesting time. We already attracted $49 million investment from China Invest PE Fund, and we are gearing ourselves up for the stock market with expected market cap that we do expect from them. then we should have very well funded. But look, also with the demand for 8-inch gallium arsenide for micro LED as well as very strong demand for indium phosphide, I don't think we can afford to slow down on the expansion of our facilities. Because 8-inch gallium arsenide is not expected to become a major revenue generator until 2024, second half. But by then, the addressable market by then is about at least $250 million. So, you know, we've got to build to that end. But, of course, we've got to do it gradually. We've got to do it cautiously. We've got to make sure that we win the customer's trust and P.O., before we commit big time. But there are things that we got to do the preparation such as R&D in terms of feasibility and yield and increase the growth. And we also need to do the preparation for the facilities that we need to build for the macro LED expansion. So I think I'd much rather see that the demand environment requires us to spend more money to build more capacity for our future business.

Great. Morris, you kind of answered part of my answer to the next question, so I'll ask it directly and fill in based on what you just said here. But just speaking specifically to micro-LED here, you talked about it for a while as being the potential biggest opportunity you have in front of you. And you just mentioned, you know, major revenues in 2024, second half of that year. What things have to happen between now and then? And, you know, like when would you have to start, you know, with a major capex spending? When would, you know, when would you have to, you know, start a building or retrofitting building or whatever? When would you have to have, you know, confidence that you've won this customer in order to do those things?

Yeah, absolutely, Richard. You know, the business doesn't just jump up in 2024 second half. I mean, I think the customer is, already started to deliver sample quantities to them last quarter, and we will continue to deliver sample material to them. Well, it's not sample anymore. It's going to be pilot productions, and it's going to start to ramp, but meaningful revenue is going to start coming probably as early as 2023, but not to the very large, they call it, pilot production, volume production, and very large volume production. So, the very large volume production is defined in 2024 second half, okay? So, but we definitely need to do R&D for sure, and we need to build some facilities to house some of the development work that we need to do, such as crystal goals as well as wafer processing casual. And that's, we need to spend money on those, okay? So you can see the R&D expense is going to go up, but we need to also do some design and some facility improvement we're going to need to build in Kajol in the next year, I would say. But we will obviously need to measure or control the spending until we start to see the orders start to come in. In other words, there are three big spending into micro LED. One is R&D that we need to do the investment now. The second part is the facility improvement in crystal growth, as well as wafer processing. But they are in pilot line kind of development. So we don't need to spend big money but we need to see that these processes were fitting to be qualified into the customer's line. And then once we got that, then we should have pilot line purchase order from our customers as well. And then in the next, in 2023 second half, I believe we need to spend big money in terms of, you know, buying more equipment and buying more, build out the facilities in order to fulfill the orders. Because don't forget, these are addressable market in hundreds of millions of dollars. So it's going to triple, double, at least double our gallium oxide facility capacity, if not triple and quadruple. But we need to know the demand environment, you know, and so, you know, first thing first is do the R&D first. and then we need to invest some facilities as well.

Okay. That is great perspective, Morris. That is all for me. I appreciate the time, guys. Thanks.

Thanks, Richard. Next question.

And we have a follow-up question from Ahmed Kursan from BWS Financial. Please go ahead, sir.

Hi. I just saw this filing that you guys are proposing, $60 million shelf. Does this have to do with what Morris was just talking about, And why do you need this cash? This is the first time you're doing a shelf in five years.

Well, the old shelf expired. The previous shelf was, I think, the third shelf that the companies had in place. So I view it as prudent to have a shelf in place. It is because of the growth, and it gives us an option to finance the growth. We wouldn't probably do 60 million if we did anything at all, but it would be modest. But it's one more tool in the fire for how we get all this stuff done. And it's being driven by very strong demand for indium phosphide, good demand for gallium arsenide, and then on the horizon, gallium arsenide doubling or tripling in terms of the TAM. That's why I used the word renaissance earlier. There's just a lot going on. So that's why we put the shelf in place.

Okay. Thank you.

Yeah, you're welcome. Good to hear from you. Next question.

And I'm showing no further question at this time. I would like to have the call back to you, Dr. Mars Young. Please go ahead, Steve.

All right. Thank you for participating in our conference call. In August, we'll be participating in the 13th Annual BWS Financial Growth and Value Summer Investor Series, as well as the Jeffrey Semiconductor IT Hardware Communications and Infrastructure Summit. We hope to see many of you there. As always, please feel free to contact me, Gary Fisher, or Leslie Green directly at if you would like to set up a meeting or call with us. We look forward to speak with you in the near future.

Thank you. Have a good afternoon, everybody.

And this concludes today's conference. Thank you for your participation and have a wonderful day. You may all disconnect.