EMCORE Corporation

Q2 2023 Earnings Conference Call


spk06: Good day and thank you for standing by. Welcome to the MCOR Corporation fiscal 2023 second quarter earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Tom Minichiello, Chief Financial Officer. Please go ahead.
spk05: Thank you. Good afternoon, everyone, and welcome to our conference call to discuss MCOR's fiscal 2023 second quarter results. The news release we issued this afternoon is posted on our website, MCOR.com. On this call, Jeff Bridger, MCOR's President and Chief Executive Officer, will begin with a discussion of our business highlights. I will then update you on our financial results and will conclude by taking questions. Before we begin, we would like to remind you that the information provided herein may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act of 1934. These forward looking statements are largely based on our current expectations and projections about future events and trends affecting the business. Such forward looking statements include projections about future results, statements about plans, strategies, business prospects, and changes and trends in the business and the markets in which we operate. Management cautions that these forward looking statements relate to future events or future financial performance and are subject to business, economic, and other risks and uncertainties both known and unknown that may cause actual results, levels of activity, performance, or achievements of the business or in our industry to be materially different from those expressed or implied by any forward-looking statements. We caution you not to rely on these statements and to also consider the risks and uncertainties associated with these statements and the business, which are included in the company's filings available on the FCC's website located at SEC.gov, including the sections entitled Risk Factors in the company's annual report on Form 10-K. The company assumes no obligation to update any forward-looking statements to conform such statements to actual results or to changes in our expectations, except as required by applicable law or regulation. In addition, references will be made during this call to non-GAAP financial measures, which we believe provide meaningful supplemental information to both management and investors. The non-GAAP measures reflect the company's core ongoing operating performance and facilitates comparisons across reporting periods. Investors are encouraged to review these non-GAAP measures, as well as the explanation and reconciliation of these measures to the most comparable GAAP measures included in our news release. With that, I'll now turn the call over to Jeff.
spk07: Thank you, Tom, and good afternoon, everyone. In Q2, MCOR made significant progress in its transformation into an aerospace and defense business. Inertial navigation grew 21% over the previous quarter to 24.3 million, driven by strong performances from our Tinley Park, Bud Lake, and Alhambra fog operations. Consolidated revenue totaled 26.8 million, which was up 7% from Q1 23. Aerospace and defense generated 94% of revenue. Inertial navigation was 90%. Broadband overall was 6%. Defense opto was 4%. And CATV represented less than 1.5% of our top line. There were encouraging improvements in the business as it continued to work through the operating challenges of a significant transformation. generating a gap operating loss of $12.2 million. Our non-gap operating loss and adjusted EBITDA both remained roughly flat at a negative $8 million and negative $6.5 billion, respectively. Essentially, the improvements in gross margin and revenue in aerospace and defense were erased by the continued erosion of broadband. The restructuring that we announced two weeks ago represents the logical conclusion to the end of the broadband era at MCOR. As we pointed out in our announcement, we made a determined effort to sell the broadband and defense opto businesses, which started last September. Although we had significant interest, which manifested itself in a signed letter of intent and term sheet, we could not reach a definitive agreement or close the transaction. Historically, MCOR's board had made numerous attempts to sell the broadband business beginning all the way in 2014, employing different banks at multiple points in time over the past nine years. The inertial navigation business continued to grow both organically and through M&A during the period, finally reaching the point where MCOR became two distinctly different companies. In this tale of two companies, The inertial navigation and broadband businesses developed with independent personnel and assets. The lone intersection of these two businesses was the indium phosphide wafer fab, which is being shut down as part of the actions we announced. However, we prepared for this decision by building a significant stockpile of indium phosphide chips for our fog products and consolidating our chip-making operations for quartz MEMS and lithium niobate in concrete. In summary, the actions we've taken effectively carve out the assets and other costs in the broadband business from MCOR without affecting inertial navigation. MCOR is now a pure play in inertial navigation. This transformation is really just the beginning of the next set of changes in our manufacturing operations. Many of the improvements that we made in automated assembly for cable television that resulted in a reduction in fixed assets, improved productivity, and profitability will now be applied to inertial navigation. Over the next few years, you should expect to see a reduction in the manufacturing floor space we require, a reduction in inventory, and improvements in profitability. Our final objective for broadband is to serve our customers last time by requirements and ensure an orderly exit from the business for customers and employees alike. We are still processing last time by orders, but believe that the total amount should be approximately $10 million, which will ship over the next two quarters or so. Turning now to aerospace and defense, I'll begin my comments by stating that we had strong performance in our space and navigation, Tinley Park, and Alhambra operation. Q2's book-to-bill was a little low at 0.85, but several significant orders were pushed out due to contracting priorities inside of the DoD. We expect the book-to-bill will be approximately 1.2 for the June quarter. Demand was solid across the board, with civil aviation seeing a surprising upswing. We also received orders for new UAV platforms, which are expected to total $5.6 million over the next few months as full funding is released in parts. We also booked significant follow-on business for the fiber optic gyros that control targeting turrets from two important customers. BAE's armored multipurpose vehicle program is continuing to pick up momentum as it heads into full-rate production. International bookings were strong for turret-based platforms stemming from our strong position in AMPV, CROWS, and Escribano's Guardian II programs. On the naval side of our business, we received new orders for the next generation Mark 54 lightweight torpedo IMUs and continue to ship against our strong Mark 48 torpedo backlog. New torpedo programs are emerging, and we are being called in to leverage our expertise in the demanding vibration environments of undersea weapons. On the precision-guided munitions side of things, we were slowed down a little bit getting export licenses, but are working with our customers to qualify products with less restrictive licensing requirements. Beyond program capture, we are seeing important signs of acceleration in key programs into the low rate of initial production phase, which is a key indicator of long-term growth. In particular, infrared search and track has become a key area of focus, and our multiple design wins in this application stand to benefit. Our IRST product has now achieved an important production readiness milestone with Boeing, Lockheed, and NAVAIR, and we are ramping up production for these important deployments on the F-A-18 Hornet. The Space and Navigation Team has built multiple TAMU inertial measurement units in support of the design, integration, and qualification as it continues to meet shipment targets for board. These two systems are critical to the launch schedule for United Launch Alliance. Our expectation is to complete qualification late in the calendar year to enable significant volume builds and launches going forward. When these products hit full production, they are expected to produce $20 to $25 million of revenue per year and help significantly improve gross margins. QMEMS had a nice uptick in shipments this quarter, but margin didn't scale quite as well as we expected, largely because of the timing of certain charges, which can be lumpy. As the entire company moves to its new ERP system in the coming months, we expect that these fluctuations will be less pronounced. Before I move on to guidance, I'd like to provide some comments on the recent acquisitions in our integration programs, which are a key area of focus this year. Both the L3 para space and navigation business, as well as the former KVH inertial businesses, are performing well and are clearly accreted. On the integration side of these acquisitions, Space and Navigation is running a common ERP system with the rest of MCOR and has made the cutover from L3Harris IT systems with resulting reduction in TSA costs. We are expecting the transition for Chicago to complete in the June quarter, but we've already moved the Rhode Island engineering team out of KBH's building and have now switched both the Chicago and Middletown offices over to the MCOR IT domain. We expect to integrate CamStar into Concord and Chicago after we complete the ERP upgrades and exit transition services. Ultimately, this will make MCOR more efficient and will help us improve our processes, costs, and inventory. Turning now to guidance in the current quarter, we expect that semiconductor shortages will slow down production for some products, tamping down growth a bit for inertial NAV in the June quarter. Additionally, We are moving forward on our last-time bills from a standing start and have not yet scheduled production dates. Excluding these last-time buy bills, we expect revenue in the $25 to $27 million range for the June quarter, of which $24 to $26 million is the inertial navigation business. With that, I will turn the call back over to Tom.
spk05: Thank you, Jeff. Consolidated revenue for fiscal 2Q grew 7% on a sequential quarter basis to $26.8 million, despite the soon-to-be-shutdown broadband segment contributing only $1.6 million, or about half of the already low level for this business the quarter before. A&D segment revenue grew 16% sequentially to $25.2 million. More importantly, inertial navigation, which is the A&D segment without the defensive left defense optoelectronic products grew by 4.3 million or 21% to 24.3 million and was 90% of total MCOR revenue. All product lines within inertial NAV were up in the March quarter when compared to the December quarter. QMEMS and the Alhambra based FOD business performed well. And the two most recent acquisitions in Tinley Park and Bud Lake both turned in excellent results. Combined, Tinley Park and Bud Lake accounted for 64% of inertial NAV revenue. Moreover, both acquisitions continue to be nicely accretive to the bottom line. Let me now turn to the rest of the operating results, the focus of which will be on a non-GAAP basis. A&D gross margin improved in the March quarter to 24%, up from 22% in the December quarter, driven primarily by the increased revenue. Conversely, the extremely low level of broadband revenue dragged down the overall consolidated margin to 16%. Operating expenses were $12.4 million in fiscal 2Q compared to $11.8 million in the prior quarter. The $600,000 increase was largely due to material expenses for development work on FOG programs. On a consolidated basis, the operating loss in the March quarter was 8.1 million compared to 8 million the quarter before. Adjusted EBITDA was flat at negative 6.5 million. Net loss was 8.3 million or 18 cents per share compared to 8.2 million or 22 cents per share in fiscal 1Q. Shifting to the GAAP results for a moment, fiscal 2Q net loss is 12.2 million or 27 cents per share. This included 1.3 million of transitional expenses stemming from last year's acquisitions and 900,000 in litigation expenses that included a $500,000 payable as part of the settlement agreement. Turning to the balance sheet, we had cash of 24.8 million at March 31st compared to 24.2 million at December 31st. The $600,000 net increase included 15.4 million in net cash proceeds received from the financing completed in February offset by the following uses of cash during the quarter. $6.5 million adjusted EBITDA, $4.8 million for working capital related to normal business operations, $1.4 million for acquisition transaction costs, $400,000 for litigation-related expenses, $1 million used for financing activities, and $700,000 for CapEx. Before we get to your questions, I'd like to review several items related to our recently announced restructuring program. This plan includes, one, the shutdown of all of MCOR's linear optics operations, which consists of cable TV, chips, wireless sensing, and defense optoelectronic product lines, as well as the closure of the Indian phosphide wafer fab. Second, a related reduction in force of approximately 22% of our total workforce, for about 100 employees, primarily in Alhambra and China. This action has already begun with expected completion by around the end of July. Third, reducing our facility footprint by approximately 25% by vacating a portion of the space currently in use in Alhambra and Concord, as well as exiting our remaining small facility in China. These actions are anticipated to be completed by the end of September. For severance costs, which we anticipate will be a combination of accelerated stock vesting and cash over time, we expect to record a gap charge in the June quarter of around 2.1 million. We also anticipate yet to be finalized gap charges for facility consolidation, timing of which will coincide with the dates we actually vacate the various spaces, the bulk of which is likely to happen during the September quarter. From a P&L perspective, Once the program is fully completed, the restructuring should reduce costs and expenses by a total of at least $12 million annually and is predominantly attributable to the elimination of broadband. It is expected that the activities related to the shutdown of the broadband segment and the defense optoelectronics product line will eventually be reported as discontinued operations. Timing of this will depend largely on the extent to which we have completed production for last for customer last time buys. Our results of operations going forward from that point will consist solely of our inertial navigation business, including lithium niobate and quartz chips used in our fog and quartz MEMS products. With that, we are now opening up the call for your questions.
spk06: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. And please stand by while we compile the Q&A roster. Our first question comes from Richard Shannon from Craig Hallam. Your line is now open.
spk04: Well, hi, guys. Thanks for taking my questions. I'm not sure if I have a good sequence of these. Maybe I'll just kind of go roughshod over these. Jeff, first question for you. Did I catch correctly that you have not baked any last-time buys into the revenue guidance for this quarter? That is correct.
spk07: We're essentially at a standing start here. Some of this is going to require... semiconductors where we don't have the lead time completely squared away. And, you know, we are looking at a substantial number of chips that are going to go through the fab, and you've got time for wafer qual and other, you know, things that you just can't speed up. So that's why we haven't really baked it in.
spk04: Okay. Okay. Fair enough then. I think you referred to some shortages of components coming in that hurt your two MEMS Was it QMS? Is that the right one, Jeff?
spk07: No, actually it isn't. It's going to hit us a bit in Bud Lake this quarter. And it's the sort of thing where you've got circuit boards that were supposed to arrive end of April, beginning of May, and now we're getting June, July dates for the finished assemblies. And if that happens, we expect it's going to push some revenue out into the September quarter.
spk04: Okay. I suspect for most of your products, we probably wouldn't consider these boards to be commodities. Are these specialized in some way, and can you describe the constraints, and is this something that's kind of a one-time thing, or do you have continued risk from this?
spk07: You know, there's certainly nothing you can read into it. If I had to guess, it would be FPGAs, because they've been exceedingly difficult, and there's probably – some high rel components in there, but, um, that's just, you know, call it a, an educated guess.
spk04: Okay. All right. Fair enough then. Um, maybe kind of a two part question. I know you said this on the last earnings call and you just repeated here today about expecting a book to bill of about 1.2. And I can't remember if this was referring to AMD in total or, uh, just in the INS business. Uh, but can you, can you kind of give us a sense of where these were, where these, uh, bookings are coming from and what kind of lead times do those come before they hit the revenue line?
spk07: When you say lead times, oh, I follow you. Okay, so time to build. Some of it you'll actually see virtually immediately as soon as the orders are left because they're for products that are normally rolling through the assembly lines. And, you know, it's a wide variety of things. So I'll give you an example. One of the drones that we got a big win on, and there are a couple, we got only about a third of the order that we were expecting. And, you know, as we talked to supply chain in our customer, they said, hey, you know, we just haven't had all the funding released from the particular branch of the service that buys these things. And that's just sort of common. And what you're seeing to a degree is just jockeying around of dollars, partially because of, you know, the way that expenditures are set up for the Ukraine, right? So it has caused a bit more reshuffling of dollars than normal, but we're not expecting this to be a long-term thing. Okay.
spk04: Fair enough. Maybe a couple of core questions for me. I'll jump out of the line here for a bit.
spk00: Yeah.
spk04: So you talked, you know, a fair amount about the TAMU program, and they repeated your comments from last quarter about hopefully qualifying by the end of this year and getting to a nice run, right, hopefully at some point after that at a very healthy level. But maybe in the interim here, how do you think about kind of the progress here over the next few quarters? And I think you've mentioned in the past, hoping to get to a break-even point, which I believe you're looking at somewhere in the $30 million range or a little bit more. How do we think about the kind of linearity and the kind of a source of drivers here from your guidance to getting to that break-even point? And do you think it can be by the December quarter? And if not, when do you kind of foresee that happening?
spk07: Yeah. i'll answer this in parts i'll get the second part about break even to tom but essentially you're already starting to see it so the the the team program is currently being run on time and materials and then on top of that um there is additional um an additional contract for us to buy long lead materials for you know call it roughly the first year's worth of production And that's a pretty significant amount of money. It's, I don't know, $8, $9 million, something like that. And so what you're seeing is some of that material coming in, it will become units next year, even though we don't have the purchase orders for the assemblies now because the final price won't be set until we're done with qualification. And then you'll see it return to a normal sort of, hey, we're going to order X number of these and there's a fixed price associated with them. So what you're going to see over the next couple quarters, and I had mentioned this before, but I didn't provide a lot of explanation, is a nice gradual ramp. And that ramp is going to come from first, you know, let's call it material purchases, increased amounts of activity, time and materials, engineering and manufacturing engineering, ultimately the assembler and technicians over the next two quarters. And so you're not going to see a step function in this. And so those are the things that you're looking for. Again, when you think about it, though, and you say, okay, well, MCOR is already out buying, and this is under contract with Space and Sensors and ultimately ULA, is already out buying long-lead materials that go all the way through 24, I think that's a pretty strong indicator of where the program is.
spk04: Fair enough. That's a good explanation there. A couple of quick questions for Tom, and I'll jump out of line here. First of all, what kind of shares are you expecting for this June quarter? And as you get increased sales within either the A&D or INS business, whichever you want to refer to, what kind of margins should we see there?
spk05: Richard, was the first one shares outstanding by June? Yes. Yes, so that, so this quarter, you can see it's an average because of the shares that we issued in February. But when it's all done, you should be around 53 and a half million shares.
spk06: Okay, great.
spk05: Okay. Because, yeah. Yes. You know, we moved from 22 to 24 on, you know, over $4 million in increase in revenue at A&D. And that jump in margin probably would have been a little bit better than that had it not been for some other items that Jeff alluded to in his prepared script. So, you know, with growth in this quarter, not as much as last quarter, but still growing, you're looking at, you know, high 20%. 27, 28, in that range, all the things being equal. By the way, that's for inertial NAV slash A&D. That's not for the consolidated company.
spk07: Yeah. The other piece, Ben, Richard, I think you were asking about was the break-even point change relating to the restructuring and how that all plays out. I get that right, Richard?
spk04: Certainly, it was a question of interest for me, yes.
spk05: Okay. So, it's, you know, lowered. So, after all the restructuring program is completed, and we are a strictly an inertial navigation business, the, you know, the OpEx profile changes. And so, you know, what used to be call it roughly about 11 million in gross profit needed to overcome OPEX net of depreciation, that's now lower to call it 9.5, somewhere in that range. So I think if you did just over $30 million, call it 31 in revenue, and just over 30% in gross margin, that math would get you to a break-even point for adjusted EBITDA.
spk02: Perfect. Thanks, guys. I will jump on the line. Thank you very much. We're going to give it a few more seconds if you have any questions.
spk03: That's star 11 on your telephone. One moment, please.
spk06: Our next question comes to us from Brian Kinslinger of AGP. Your line is now open.
spk01: Great. Thanks for taking my questions. On the semiconductor shortage at Bud Lake, what is your confidence level that this won't impact the September or December quarters in a negative way?
spk07: Well, first of all, it's not the same thing. You know, this is, well, same thing. We think it's an isolated incident. It's not like the manufacturers come back and said, well, you know, what we told you was, you know, 40 weeks is now 80 weeks. It's not that at all. It's two cards with a couple of common parts that have been pushed by two months. So, and this is, you know, when I say it's an issue, now we're talking about, you know, something in the order of half a million to a million dollars worth of revenue. But if that would have occurred in the June quarter, you know, you'd be looking at roughly 10% quarter-over-quarter growth or something like that. It's just not going to be quite that much because, you know, you've got visibility to knowing exactly what needs to shift, exactly when it needs to shift, and we're looking at, you know, the material that's in the circuit boards, and it just is what it is, right? I mean, I'm not the only guy talking about this.
spk01: Sure. Moving on to precision guided ammunition, you touched on that on the international piece. I know you had a large order that you shipped in December, and you had talked about at that point opening doors to larger orders, both internationally and domestically there, and that you were qualifying your SD-170 with other defense contractors. Maybe if you can provide some progress you're making there, it would be great.
spk07: Progress is fine. Again, you know, what we said, and we talked about domestic, was domestic in terms of Turkey, where Asilsan, Roketsan, and Tubitech, they have a different set of requirements for their internal programs, i.e., feeding the Turkish military, and what they are allowed to sell in the outside world. And so we're qualified for export right now. And there's actually been some large opportunities for us. And even though we do not carry the most restricted form of license, which is ITAR, the Commerce Department has gotten some pushback from state. And so, you know, some of the EAR licenses that we were expecting to get, you know, the business is ours. You know, they just haven't come through. We don't have a hard no on a couple of them, but, you know, keep pushing out the dates and, you know, working the problem. The potential solution is to go to a product that does not require a license. We have one that is right underneath the spec at which licensing is not required. And so that's the one that we're working on to replace the units that we've been working with. So, I, you know, it's just, it's a licensing thing. It happens in certain parts of the world. Countries that were our friends before, you know, administrations change, and their idea of who friends are changes. And we just have to live with it.
spk01: Great. Thanks. One follow-up, and last one for me on KMU. You gave us some great details, and it's great to see that you are ordering for product for 2024. You talked about milestones that you were going to expect to achieve in March. Can you share an update on those milestones that were hit and any details on them? Or are you able to?
spk07: The only thing that I would say is that we're expecting to reach or hit our critical design review roughly in August. And so we're expecting to have integration complete by then. And that's the next one to look for.
spk01: Great. Thanks very much.
spk02: Thank you. Please stand by for our next caller. Our next question comes from the line of Richard Shannon with Craig Hellam.
spk04: Well, hi, guys. A couple of big picture questions for you, Jeff. First one, I'd love to get your sense of kind of the evolving, you know, geopolitical situation, especially as it impacts the United States DOD budget, and also internationally, if you think that's relevant, and kind of the impacts, positive or negative, that you see with your portfolio today.
spk07: Wow, great question. So, you know, the way that I see the current budgeting situation inside of the DOD is there's just a lot of scrambling to reorient plans because, you know, when you talk about, you know, support given to foreign countries usually tends to come right out of the stockpiles of the U.S. military. And then later on, they have to figure out how they're going to replenish it. So it's not like a case where, let's say, the U.S. government offers $10 million in aid to Ukraine and somebody's out there writing a checkbook. No, they're counting the value of things that are essentially sent to Ukraine and then later on figuring out how to pay for replacements. So there's a lot of noise. There's a lot of shuffling around, but I'm not sure that I would read anything more into it than that. It just creates some short-term problems that push orders from one quarter into the next. But it just is what it is. But beyond that, as you take a look at the heightened sense of preparedness that I see when I go out and talk to international customers, when I look at who is interested in what, I think that overall the spending, let's call it backdrop, is going to be more aggressive. The sorts of things that our, not just NATO countries, but major non-NATO allies like, for example, Taiwan, the things that they're interested in, the number of them are only going up. And so the challenge is that You know, for several of us that are sitting in the critical path of some of these things is to find a way to get the supply chain, the whole supply chain, because we are part of larger weapons systems organized to be able to supply that. So I think that the budget environment in general is very strong for products like ours. It's interesting when you take a look at, I'll give you one example, you take a look at the amount of GPS jamming that is going on in the Ukraine. You know, the smart guys over at the Pentagon have taken a hard look at this and have extrapolated that to, well, what might happen if China decides to be more aggressive toward Taiwan? and i think that's resulted in a lot more emphasis on finding solutions in the inertial navigation space where gps denial is is not a problem so overall um you know there's you know the rising tide that lifts all boats in this area is certainly at play but in inertial nav i think even more so okay uh great great thoughts here jess and
spk04: As we see this political football happening with our budget deficit, do you have any experience, and what are your thoughts here on whether we get some – if we get some sort of shutdown or even get close to it? Are there impacts to funding? Like I think you mentioned in some other program, all the funding wasn't released. Do you see any potential issues from that happening here in the near term?
spk07: Well – You know, the game of chicken that constantly goes on with budgeting between, you know, three branches of government, and usually two of them, is certainly of concern. I doubt that either side of the aisle wants to see something like that happen. But it would certainly be concerning if it did. I can't imagine it would go on for very long. A solution would be reached. especially in light of what's going on in the banking world right now. You know, putting U.S. creditworthiness on the line at a time like this, I can't imagine someone with a rational mind wanting to do that, but you know, this is politics. So, I don't have any well-formed thoughts, Richard, about how it would affect us. I think the overall concern about certain countries becoming more belligerent is going to outweigh most other factors in that analysis, though.
spk04: Okay. All right. As always, I appreciate those thoughts, Jeff. I think that's all from me. I'll jump right along again. Thanks a lot.
spk06: Thank you. With that, I would like to now turn it back to Jeff Bridger, Chief Executive Officer, for closing remarks.
spk07: Thank you. I'd like to thank all of you for your interest in MCOR. And I do want to close my comments with a little bit longer set of points than I normally would. And that relates to our broadband team. You know, the broadband team really led the way in hybrid fiber coax technologies that allow the world's cable networks to grow from simple, you know, radio-based systems into the backbone of Internet services around the world. MCOR's linear EML became the de facto standard for advanced CATV networks. And when COVID started to shut down everybody, network providers turned to MCOR to upgrade the transmission networks that really made work from home a reality during the pandemic. Linear EML technology allowed the company to capture business from our competitors, generate significant profits, and cash flow that allowed the company to make this transition to aerospace and defense. giving MCOR a bright future. So to our broadband team, I would simply say thank you all for your hard work and creativity through the years. And Tom and I want to wish you all the best of luck in your future endeavors.
spk03: And that's all.
spk02: Thank you for your participation in today's conference.
spk06: This does conclude the program. You may now disconnect.

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