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spk05: Good afternoon, and thank you for joining today's third quarter 2021 conference call. As you read our earnings press release, and as you listen to this conference call, please recognize that both contain forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which could cause actual results to differ materially from such statements. These risks and uncertainties include those spelled out in our earnings release, those described in our annual report on Form 10-K for fiscal 2020, and those described in subsequent filings with the SEC. You should consider all forward-looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures during this call. Our earnings press release and the financial supplement posted to our IR website Each provide a reconciliation of these non-GAAP financial measures to their most comparable GAAP financial measures. On the call with me today are Jeff Andreessen, our CEO, and Larry Sparks, our CFO. Jeff will begin with an update on our business and a review of our results and outlook, and then Larry will provide additional details of our third quarter results and fourth quarter guidance. After the prepared remarks, we will open the line for questions. I'll now turn over the call to Jeff Andreessen. Jeff?
spk00: Thank you, Claire, and welcome to our Q3 earnings call. Q3 revenues were $263 million, which is $27 million below the low end of guidance provided on August 3rd. While the low end of our guidance had factored in the impact of the reduced workforce and the two-week factory shutdown in Malaysia, Our plans to adjust to continued limitations in Malaysia also included shifting supply to our other sites that manufacture weldments. Unfortunately, the plan to fully recover the lost capacity took longer than anticipated. The combination of these had a direct impact on our gas panel integration business and our ability to ship gas panels at the forecasted run rate in September. In simple terms, the $27 million below the low end of guidance equates to approximately one and a half weeks of gas panel output. As for the mid to high end of our revenue guidance range, those had assumed a more aggressive ramp and recovery of the lost capacity. I'd like to take a step back to review a bit more in detail the issues that affected our Malaysian factory over the past several months. In June, the Malaysian government issued an enhanced movement control order that initially limited our workforce to 60%. We saw the COVID cases increasing in early Q2 and built inventory ahead, which enabled us to offset some of the impacts for early July. We operate in the southern portion of the country near Kuala Lumpur, which had a much higher rate of COVID cases, and this led to the government's decision to shut down most businesses in the region in July. We manufacture about 50% of our weldments in this facility, and between the two-week shutdown and prolonged output constraints, we lost about 40% of our output through mid-August. The majority of the output from this facility is used internally by our gas panel integration sites. We were able to utilize our other manufacturing sites to offset a large portion of the lost capacity, but we were not able to offset all of it. And as a result, this impacted our gas panel revenues more than we forecast. During this period of reduced capacity, our focus was working very closely with our customers to meet their critical deliveries and continue to do so, continue to do this as we recover our backlog. Today, because the vaccinated level of our workforce in Malaysia of over 400 people is well over 90%, we are permitted to operate at 100% capacity and are in the process of adding additional capacity. Given our recovery in Malaysia and our estimates of the impacts of the supply chain constraints we see today, we are on track to recover our output and believe we can ramp revenues by about 10% in Q4 versus Q3 levels. With regard to supply chain constraints, for over a year we have extended our purchase orders to the six to nine month range to provide the same level of visibility to our suppliers as our customers are providing to us. One positive aspect of the challenges the entire supply chain is experiencing is that we are all working together to help maximize overall industry output and address customer demand as we all manage through this period. There has been no change to the strong demand environment. In fact, it has continued to strengthen. We continue to expect to set new revenue record in Q4. But the continued challenges in the supply chain have dampened our expectation from what we previously expected to deliver this quarter. The strong demand from our customers indicates sequential growth for Q4 and also into 2022, and the limitations of the supply chain have had the effect of lengthening and prolonging our visibility into what looks like a very, very strong year ahead for 2022. Our progress on gross margin improvements is on track. and we are pleased to report a 16.7% gross margin for Q3 in spite of the revenue shortfall and its impact on our factory efficiencies. Net earnings of 81 cents per share were up over 30% from the same quarter last year, even with the higher share count. For the first nine months of 2021, we have grown net income by over 80% compared to the first nine months of 2020. Now that we are nearly through 2021, it is apparent that the underlying demand for wafer fab equipment, or WFE, continues to be very robust and is expected to continue at these unprecedented levels for the foreseeable future. With semiconductor supply constraints pervasive and ongoing, most major device manufacturers have provided multi-year visibility into their heightened levels of investments, which are being put into place to support ever-increasing demand forecasts. Companies across the supply chain are working to increase capacity, and so are we. Earlier in the year, we talked about our plans to increase CapEx in order to add the capacity that will enable I-Corps to retrieve quarterly run rates in excess of $400 million. We continue to aggressively drive these efforts ahead of a very strong 2022. We continue to believe that 2021 is just the second year of a multi-year growth cycle propelled by the conversions of multiple demand drivers, such as 5G, IoT, AI, high-performance computing and autonomous vehicles, in addition to more recent initiatives in support of domestic semiconductor supply self-sufficiency. Together, all of these drivers are resulting in increased capital intensity for the semiconductor industry and higher levels of investments in fab technologies and capacity. In this extremely healthy business environment, I-Corps plays a critical role, especially as the greater intensity of etch deposition and EUV lithography plays into our focus on fluid delivery for these critical applications for leading edge devices. Now I'll update you on the progress the team has made on our strategy to leverage our engineering capabilities and IP portfolio to develop new products that will result in longer-term expansion of our share of served markets, as well as drive the operating model towards increased levels of profitability. We continue to make progress on our proprietary next-generation gas delivery solution, as well as with our other components we have developed as part of this overall R&D effort. Our first fully configured next generation gas panel was shipped and will start qualification this quarter. The qualification process is expected to take at least six months. We continue to work with two additional customers and given the current demand on their engineering resources during this robust period of WFE investments, we currently expect to ship our second beta systems in early 2022. In our chemical delivery business, we shipped a beta chemical delivery system to a North American customer in the third quarter. We expect this qualification period to extend through this year with first revenues occurring in early 2022. Additionally, we expect to ship another beta unit for an additional application in early 2022. We completed the qualification of our first evaluation unit of our proprietary liquid delivery subsystem to a Japanese customer in the third quarter. As I noted on our last call, the scale of this first opportunity is relatively small, but an important step in penetrating the Japanese market, which is the largest portion of the wet processing SAM, as well as continue to quote opportunities at other OEMs that are larger in scale. In our precision machining business, the two qualifications we highlighted last quarter will begin to see first revenues beginning later in the fourth quarter. These qualifications will both increase our proprietary content on a gas panel and be accretive to our gross margin profile. In summary, in a very challenging operating environment, the team is working extremely hard to ramp the business to address the customer demand we are experiencing. and we expect to return to record-setting revenue levels for the forthcoming quarters. Our fourth quarter revenue guidance of $275 to $305 million indicates our expectation for sequential growth above Q3 and our target to achieve a new revenue record for the company. Given the supply chain challenges, our current forecast for Q4 is not quite as high as we expected a quarter ago. but we have strong visibility for at least six months and anticipate continued sequential growth as we move into 2022. At the midpoint of Q4 guidance, our expected growth in 2021 will be below WFE growth. However, we have consistently outperformed WFE over the longer term and expect to outgrow WFE in 2022. We are also pleased with our gross margin improvements in 2021, and as we look to 2022, we expect strong earnings leverage on the revenue growth forecast as a result of the continued gross margin improvements. Which brings us to Larry's discussions of our financial performance and further details on our outlook. Larry? Thanks, Jeff.
spk02: First, I would like to remind you that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share-based compensation expense, amortization of acquired intangible assets, non-recurring charges, and discrete tax items and adjustments. There is a very helpful schedule summarizing our GAAP and non-GAAP financial results, including the individual line items for non-GAAP operating expenses, such as R&D and SG&A, in the investor section of our website for reference during this conference call. Third quarter revenues were $263 million, up 15% year over year, but a 7% decline from Q2, due to the limitations in Malaysia and supply chain challenges Jeff discussed, and the resulting impact these had on our overall gas delivery subsystem output. Given the challenging operating environment, we are pleased with our gross margin and profitability performance in the quarter. Gross margin of 16.7% was similar to last quarter, as continued cost reduction programs and favorable product mix were offset by labor and efficiencies due to the lower factory volume. Compared to the third quarter of 2020, gross margin increased 210 basis points and the flow through on the incremental revenue volumes year over year was above 30%. COVID related impacts on our gross margin continue and are primarily related to higher freight and logistics costs. The impact of these higher costs on our gross margin remains around 50 basis points and are expected to persist for the foreseeable future. Q3 operating expenses were $16.3 million, slightly below forecast due to the timing of new product engineering materials purchases. Operating margin of 10.5% was 65 basis points below Q2 and 220 basis points above Q3 of last year. For the nine months of 2021, operating margin has increased 300 basis points over the same period last year. Interest expense for Q3 was $1.5 million, down slightly from Q2 due primarily to a lower overall effective interest rate. Our tax rate for the quarter was 11%, reflecting a true-up to a slightly lower expected tax rate of 12% for the year, given the lower expected U.S. income and geographic mix. We reported earnings per share of 81 cents, 9 cents below Q2 as a result of the 7% decline in revenues and very similar operating performance. For the first nine months of 2021, net income increased 82% compared to the same period last year. Now I will turn to the balance sheet. We ended the quarter with cash and investments of $227 million, which was a $20 million decline from Q2. as a result of cash use and operations of $14 million, capex of $3 million, and a debt reduction of $2 million. A large portion of the use of cash can be attributed to the increase in inventory, which was driven by higher purchasing activity aligned with strong customer demand while our output was constrained. The resulting inventory turns for Q3 were 4.9 compared to turns of around six on average for the past year. Q3 day sales outstanding increased slightly to 42 days due to the higher volume of late quarter shipments. We finished the quarter with total debt of $166 million. Last week, we completed a refinancing and a $100 million expansion in our borrowing capacity from our existing credit facility from $300 million to $400 million. This facility will have a $150 million term loan and a $250 million revolving credit facility. The new credit agreement extended the maturity date from February 2023 to October 2026 and decreased the overall interest rate, resulting in a forecasted Q4 interest cost savings of approximately $300,000. Given the debt refinancing and expansion, we now have more capital available for acquisitions and investments supporting our strategic growth initiatives. Now I will turn to our fourth quarter guidance. With revenue guidance in the range of $275 to $305 million, our earnings guidance is $0.82 to $0.98 per share. I mentioned earlier that our solid margin performance in Q3 benefited from favorable product mix at these revenue volumes. In Q4, we will see a higher mix of gas panels, roughly offsetting the benefit of higher revenue volume, so we are expecting similar gross margins in Q4. We continue to drive improvements to our gross margin profile. Our key strategies to drive gross margin higher are through incremental cost reduction programs, growing our share within our higher margin components businesses, and increasing our content of proprietary IP within our products. We are on track with our gross margin improvement plans and expect to continue to deliver on greater margin leverage as we progress into 2022. Our Q4 operating expense forecast is $17.5 million, with the majority of the increase due to the extra week this quarter. We continue to make incremental investments in R&D supporting our new product development programs, the new ERP system, and additional costs associated with becoming SOX compliant this year. We expect our interest expense will come down to $1.2 million in the fourth quarter, our tax rate to be approximately 12%, and our fully diluted share count to be approximately 29 million. Our tax planning rate over the next couple of years continues to be in the range of 12% to 13% given current tax policy. Finally, as Jeff mentioned, we are stepping up capacity investments this year to support the strong demand forecast for the next couple of years and expect CapEx to be around 2.5% to 3% of revenues for 2021. In spite of the higher CapEx, we expect to deliver strong free cash flows in 2021. For Q4 specifically, we expect to generate strong cash flow from the P&L and also generate cash flow from working capital as we show improved cash conversion metrics compared to Q3. Operator, we are ready to take questions. Please open the line.
spk04: Thank you. Ladies and gentlemen, we will now be conducting a question and answer session. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tool will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment, please, and we'll pull for questions. Our first question comes from the line of Craig Ellis with B Reilly. Please proceed with your question.
spk01: Yeah, thanks for taking the question, and thanks for the detailed discussion on the operating items affecting the quarter. Jeff, I wanted to follow up on that. One of the questions I've gotten from clients is regarding market share implications for what happened operationally and with an impact to both weldments and gas panels. What's the company's view on whether or not there was any market share implication from what occurred?
spk00: Well, Craig, thanks. Thanks for those comments on our Malaysia update. Appreciate that. I think as you think about share shifts, we don't see any real change in our customer strategies. If there's any share shifts, I would say they're temporary in nature, and I would say they would be largely around our weldment business. And, you know, so if I looked at Q3 and Q4, if I was just to put a number on it, I'd say it would be no more than 10 or 15 million that our customers would have had to reposition to support their business. in lieu of some of the constraints we had coming out of our Weldman factory. So hope that kind of helps put a frame around it.
spk01: Yeah, that's great, Jeff. And then nice to hear the very constructive calendar 22 color. The question is this, given the nice growth that we're seeing in the fourth quarter, although some of that is facilities just getting ramped back up to normal, How should we think about what's possible as you move through calendar 22? Not looking for specific guidance, but the company has been investing to build its capacity to 400 million, which is 33 above the level that we'll exit this year. So in any color on how things could proceed would be quite helpful. Thank you.
spk00: I think our view of next year is going to be market growth in the 10% range, so we're certainly going to see growth year over year. I think as we kind of look at our early part of next year, we see steady growth from Q4 into Q1. Some of that may be muted by the supply chain constraints that we're all seeing, but you would hope that those will begin to lessen, so I think we'll see steady growth into next year. Now, I couldn't actually predict the quarter-to-quarter and the size, but one question that probably comes up is, as you recover a lot of this shortfall this year, does it fall into next year? The answer is, yeah, I would say a large portion of this will continue into next year, but I don't expect a huge step function in the first quarter, but hopefully we see steady improvements throughout the year after that.
spk01: Got it. And if I could just, yep, yep. And if I could throw one in for Larry. Larry, we're, despite mix, we're staying at high levels on gross margin. We'll get volume help as we go through next year. But is it going to be volume help that really is adverse to gross margin? Or how should we think about gross margin potential as the business continues to grow sequentially? Okay.
spk02: I think, you know, we're modeling and expectations to continue on 10 to 20 basis points improvement as we kind of go into 2022. You will have an increase in gas panel absolute business, but I think, you know, our plan is to continue to push on the component side of the business as a higher percentage of our overall revenue, which, as you know, between the precision machining businesses and kind of recapturing some of the weldment business. I think those will help us and be very margin accretive as we go through the year. So we did it this year, and I think the expectation is we will do that next year. So we're expecting to continue this kind of march up in gross margin as we go into 2022. Sounds good.
spk01: All right, Jeff, Larry, thanks so much for the help.
spk00: Thanks. Thanks. Thanks, Rick.
spk04: Thank you. Our next question comes from the line of Tim Disley with DA Davidson. Please proceed with your question.
spk07: Yeah, thank you for taking the question. So, Larry, just to follow up on that, it sounds like over the last year you had a 30% incremental gross margin, which is obviously quite impressive. But what would you say the natural incremental or transient margin is on the incremental dollar of revenue on a go-forward basis?
spk02: We've been around 20%, I think, when you look at the mix, combination of the mix and the cost improvements.
spk07: Okay. So what was the big difference over the past year that drove it up to 30%?
spk02: I think there was a few things. One is we did some cost reduction activities. We talked about closing the Union City business and changing our cost profile there. But I'd say one of the biggest components is really around precision machining and growing that piece of the business as a percentage of our overall revenue profile. I'd say if you You take that, combined with a few of the other cost issues we had around materials and a few things, that's really what's driving us a little bit better.
spk07: Okay, great. And then, Jeff, when you look at your next-generation gas panel and your liquid delivery system, which do you think is going to be the bigger driver in 2022, and which one is the bigger driver ultimately?
spk00: I think next year the bigger driver will probably be some of the success in the liquid delivery module, the chemical delivery systems that we have. If those evaluations complete and wrap up, those are fairly large wins for us. You're going to be designed in on a new generation of a tool. I think longer term, obviously, the next generation gas panel will have the biggest effect on the company and its profitability profile as we add more and more content onto the gas panel that we manufacture and design.
spk07: Okay, great. And then just finally, when you look at the hiccups over the last quarter or so with manufacturing, has that changed your long-term process at all? Are you doing anything on a more permanent basis, like keeping a higher inventory level going forward, or any changes that might be more permanent?
spk00: Yeah, I hate to use the term 2020 hindsight, but I think you learn from these events. I think that there are some inventory positionings that we could beef up, even in respect to some of the other supply constraints. So I do think we will look at things differently We're also looking at things geographically differently as well. We haven't solidified any of those plans as we're kind of managing through this phase, but they'll definitely be considered going forward. And the industry is only getting bigger. So it's kind of why we've had a few hiccups this quarter and challenges. It's a pretty exciting place to be right now.
spk07: Yeah, no, absolutely. Okay, well, thank you both for your time. Thank you.
spk04: Our next question comes from the line of Quinn Bolton with Needham & Company. Please proceed with your question.
spk08: Hey, Jeff and Laurie. I wanted to ask about the lower fourth quarter revenue guidance relative to 90 days ago. Can you sort of walk us through what the impact there is? You know, did you still see some impact in early October from the lower weldments, shipments coming out of Malaysia that affected gas panel integration? or could it be some of that 10 to 15 million potential share shift that you'd mentioned in response to Craig's question?
spk00: Yeah, good question. What I would tell you is our factory in Malaysia is fully operating, and maybe there was very little effect on early October. I mean, as we look at October versus, for example, last quarter, we're seeing kind of a higher run rate of revenue already, which gives us some confidence that we're seeing some improvements along other supply chain challenges. But I would say, as you look at it, I'd really say it's the other supply chain challenges that are muting it. I think we have some recovery to do in weldments, but the vast majority of it is related to other issues within the supply chain that you've heard. These are very pervasive across the industry and the sub-tier suppliers as well.
spk08: Yeah, that's helpful. Thank you for that. And then I guess the second question is just as you go through this period of disruption in weldments and gas panel integration, is that prompting any audits or, you know, sort of, you know, OEM customers coming in to kind of do a review of the supply chain? Or do you think they understand sort of that this was a, you know, kind of, you know, COVID effect in Malaysia? It wasn't specific to the company. It's pretty broad based across the country and it hasn't prompted any, you know, new reviews or audits or anything like that.
spk00: No, I think the simple answer is no, but I'll expand on it. I mean, we work extremely close with our customers all the time, and there's always a review of your continuity of supply and working with our customers. So there's nothing new that would happen. That's a normal course of business. I think, you know, I wouldn't say we're 100% unique, but, you know, the southern portion of Malaysia was hit really hard with COVID cases, and so it was unique to a very few number of suppliers, whereas a lot of the suppliers you hear that are in Malaysia are up in the Penang area, which is in northern Malaysia. So a bit unique to those of us that operate in the southern portion.
spk08: Got it. And then just a quick one for Larry. The $400 million of annual revenue capacity, when would you think you hit that? Is that something you achieve in calendar 2022, or is that a longer-term capital investment plan?
spk02: Well, it's a longer-term plan. I think, you know, for us, we have to be and plan our capacity, you know, well ahead of the requirement. Our customers, you know, want to see that, especially when we're talking about brick and mortar and some of the longer lead time capacity investments. So, you know, we have to put that in place. I mean, we talk about 10% growth year over year, and And, you know, we'll continue to fill that up as we go through 22 and into 23, I think.
spk00: Yeah, I think the way you can think about it, Quinn, is that, you know, at 400 million or so run rate, let's say it's a billion six versus what we're estimating now. And that's quite a large increase in WFE. So this will support us for several years, if not three or four. We'll have pockets of investment and machining and things like that that'll continue. We want them to continue to outgrow WFE, but I think largely brick and mortar and the integration side, we're in pretty good shape with the plans we have today for several years out. Got it. Thank you.
spk04: Thank you. Our next question comes from the line of Krish Sankar with Cowan. Please proceed with your question.
spk06: Hi, thanks for taking my questions. This is Stephen calling on behalf of Krish. Jeff, maybe first question for you on your gas delivery products. Historically, I think the gas delivery products have had variable inventory since they're customized products. I was curious, what are your cycle times today for those products compared to the typical average of four to six weeks?
spk00: That's a good question. I mean, I think what you're saying is, I mean, our lead times are definitely expanded with our customers, given some of the supply constraints. But, I mean, typically, if we were operating in a normal environment, they would be under a month, and they're probably longer than that by a week or two.
spk06: Got it. Thank you for that. And just sort of one other longer-term question related to, I guess, your expectations to outgrow WFE next year. I know you're not providing a long-term forecast right now, but just given the sort of the urgency to add headcount sort of in the near term here as you're recovering from the issues last quarter, I was curious, like, you know, sort of your headcount growth plans going into early next year, if you could provide a little color on that, that would be helpful, like in terms of, you know, the growth rates will be significantly greater than, which you've been growing the last couple years, or more in line?
spk00: I'm not sure I understand the question, so I'll start to answer it. You tell me if I'm on the right track. First, I don't think that our biggest issue is getting people. It's a little tougher now, but we are adding heads, fairly consistent. Most of it is the effect of some of the supply chain. It keeps your factories less efficient. So that's actually, once the efficiency level comes up, that's going to help reduce the need to add kind of rate for rate people in the next year. Our labor content generally in the gas delivery area is pretty low. I won't give you a specific number, but it's below kind of 5% of total cost. So we'll continue to focus on hiring in advance of the revenue outlook that we have. Today I don't You know, we would like to see it faster, but it's not like it's hit its hand still. People are coming back to work.
spk06: Perfect. Thank you.
spk00: Yeah.
spk04: Thank you. Our next question comes from the line of Patrick Ho with Stiefel. Please proceed with your question.
spk03: Hi there. Good afternoon. This is Brian calling in for Patrick. Thanks for letting us ask a few questions. Maybe first, Yeah, maybe conceptually, maybe directionally, and if you want to, you can quantify, but from a gross margin standpoint, you know, thinking about sort of the 16-7-ish level here in 4Q, roughly in terms of gross margins, and thinking about the initiatives you talked about, Jeff, and kind of the, you know, the beta tools that you're going to get higher gross margins on and sort of the six-month qual times, you know, you may start to dip into some of the that favorable mix second half of next year. Can you talk about relative to sort of the 4Q this year, where you think your gross margins, assuming we're kind of in that growth mode year over year still relative to this year, what those gross margins could kind of look like? You know, could we be at 17% year end? Any sort of commentary would be helpful.
spk00: I'll start, and Larry can add if I miss something. But you're talking about 17%. at the end of 2022, because I think Larry basically said, given, you know, where we're at today, we see relatively flat Q4 gross margins. But he also indicated that, you know, kind of the area of, you know, gross margin improvement will be between 10 and 20 basis points on a quarterly basis. So certainly we would be unhappy if we didn't have a 1.7 on the gross margin by the end of next year.
spk03: Okay, got it. Yes, I was talking about just like the year end, not necessarily the full year, right? Okay. That's helpful. And then maybe in terms of, you talked about sort of the refi and the additional flexibility it gives the company here moving forward. Obviously, you know, we're hitting levels on the house that people didn't expect to in terms of the WFE number, and it's expected to go higher next year. And obviously, you know, it's hard for a lot of suppliers to keep pace in this kind of a growth environment and this quickly. So, I mean, are you seeing that in terms of sort of the landscape out there of the vast supplier landscape? It's pretty ripe maybe for further kind of, uh, consolidation at the moment. And does that kind of play into, um, some of the moves you've made recently?
spk00: Well, I, what I would tell you is, is, and we've been, you know, um, pretty consistent that the, the kind of the MNA landscape is, is pretty active right now. Um, Beyond that, I wouldn't comment about anything specific, but you do know that we're looking for a higher IP content, higher margin type acquisition. Obviously, when we did the refinancing, part of it was just the rate environment was really good. We're coming up on getting within a year of our last five-year debt, and we wanted to refinance it between now and, say, February of next year or so. But in doing that, the company's grown. This added some flexibility going to $400 million from $300 million. So it does give us better flexibility to do M&A, and it gives us more capacity to do a larger-scale M&A should the opportunities be out there that fit for us.
spk03: Okay, great. Thank you.
spk04: Thank you. You're welcome. Ladies and gentlemen, this concludes today's question and answer session. I would now like to turn the floor back to Jeff and Andreessen for closing comments.
spk00: Thank you for joining us on our call this quarter. I'd like to thank our employees, suppliers, and customers for their support and strong execution in this historic demand environment for the semiconductor industry. We look forward to updating you on our next earnings call in early February. In the meantime, we hope to see you at one of our Q4 investor conferences, such as the CEO Summit at Semicon and those being hosted by DA Davidson, UBS, and Stiefel. Operator, that concludes our call.
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