Kulicke and Soffa Industries, Inc.

Greetings and welcome to the COLEC and SOFA 2024 third quarter results. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joe Elgandy, Director of Invest Relations. Thank you, Joe. You may begin.

Thank you. Welcome everyone to COLEC and SOFA's fiscal third quarter 2024 conference call. Fuzen Chen, President and Chief Executive Officer, and Lester Wong, Chief Financial Officer, are also joining on today's call. Non-GAAP financial measures referenced today should be considered in addition to not as substitute for or in isolation from our GAAP financial information. GAAP to non-GAAP reconciliation tables are included within our latest earnings release and earnings presentation. Both are available at .kns.com along with prepared remarks for today's call. In addition to historical statements, today's remarks will contain statements relating to future events and our future results. These statements are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and are subject to risks and uncertainties that may cause our actual results and financial condition to differ materially from the statements made today. For complete discussion of the risks associated with COLEC and SOFA that could affect our future results and financial condition, please refer to our recent and upcoming SEC filings, specifically our latest form 10K as well as the 8K filed today. With that said, I'll now turn the call over to Fuzen Chen for the business overview. Please go ahead,

Fuzen. Thank you, Joe. Good afternoon, everyone. Through all the past quarters, we continue to execute on several growth initiatives, including driving critical progress in advanced packaging and advanced dispense qualification, enjoying broadening adoption of our new mobile funding solution, while we also observe ongoing utilization improvement. Across several of our key end markets, before reviewing our quarterly results and performance, I would like to mention a few points on the recent industry momentum within summer compression. There have been three key milestones which we are excited to expand. First, the formation of, as well as our membership in the U.S. Joint Semiconductor Consortium was announced last month. Resonnect Holding Corporation, leading provider of global semiconductor materials, formed this consortium to support industry collaboration and market adoption of new advanced packaging production solutions. After joint and the Joint 2 were created in Japan, the U.S. Joint Consortium will present the third joint consortium globally and the first in the United States. A combination of 10 leading equipment materials and the process company based in the U.S. and Japan will present the U.S. Joint forming members who have the near-term goal to establish a U.S.-based R&D facility with advanced packaging capability. Construction for the U.S.-based R&D facility will begin in the current calendar year and completion will provide access for critical industry leading advanced packaging technology, material and processes which are now readily available locally to many of our U.S.-based customers. Our second key milestone is associated with collaboration with a subsidiary of a large semiconductor company called Gromaret, who has successfully demonstrated our leading fluxless summer compression. Our FTC system, which is capable of direct copper to copper bonding as a center features, can also enable an exciting new -to-wafer hybrid bonding process. Hybrid bonding involves making both conductive and dielectric bonds provide specific benefits for select end markets, with a lower requirement for capital intensive funds and investment relative to existing -to-wafer hybrid solutions. We expect this boundless FTC process to further expand our long-term -to-wafer and heterogeneous opportunities. As explained by industry headline, there are many hybrid bonding processes, including -to-wafer as well as -to-wafer. This innovative TCB enables hybrid solution target -to-wafer applications for deployment in high volume consumer and compute markets by offering a lower capital intensive path to hybrid-based triplet assembly. At a higher level, adopting triplet-based packaging can reduce product development time, allow for amortizing design costs over broader end markets, and is critically important in extending most law. With our existing FTC system, which can bound -to-copper interconnect as standard features, can provide a more direct pathway to triplet-based production. For many customers, those who are seeking -to-wafer hybrid options now have an additional accountability. As industry accelerates the adoption of thermal compression, we continue to enjoy growing commercial success and broadening market access through our intimate and expanding customer engagement. Over the past four years, on a trading basis, our TCB business has grown by 10 times, and we are still in the early stage. This was accomplished through new access to silicon photonics, 3D sensing, and leading edge markets, including our first mover position in front of the TCB at leading IBM customers. We have continued to drive industry adoption and have announced several wins in assembly and test space earlier today, highlighting these rapidly growing opportunities. Also, we continue to make progress in our foundry engagements and remain very optimistic that we can unlock an additional leading edge customers over the near term. Similar to our initial IBM customer engagement, which began in 2020, new technology wins with the leading customers require a lengthy and collaborative engagement process and significant patience. This recent win and evaluation progress have solidified our TCB process as a long-term solution to support the growing adoption of triplet-based architectures. While there are several different technologies in the process to support the diverse needs of the future triplet market, we are well prepared to support the industry with our leading solution. We are clearly excited as we are securing position in the new market, supporting AI, HPC, and AI-based technology. We have historically not included from our self-market. This win provides confidence in our leadership as well as long-term potentials for flux-less adoption. Due to thermal compression adaptability, our off-box -to-copper capability and broader customer set is providing lower value to entries for mass market triplet adoption. Thermal compression demands an emerging technology with a long technology life ahead to support this growing market need. Even intercontact technology can be challenging for analysts and investors to focus. Although I would like to remind investors to not overly focus on one specific intercontact technology. There are many packaging transitions across our end market with a growing number of trade-offs, largely between cost and performance, but also production capability and system label requirement. It is critically important to recognize that the high volume cost-sensitive portion of the semiconductor assembly market will also need a stakedye solution over the long term. These varied market needs are becoming more evident every quarter as we are actively developing several multi-dye and stakedye solutions which are being evaluated across our customer base. Many of these higher volume opportunities will likely demand more cost-effective processes, such as vertical wires and reman independent from many of today's PCBs and hybrid-focused markets. For our humble wire-bounding route, we are pleased with our new market footing and access we have demonstrated. Recent customer adoption combined with ongoing innovation provide a strong foundation to support long-term advanced packaging adoption. I am very proud of our team for developing and driving the recent customer success across the portfolio. Tending to a gene-quartered business result, we were able to achieve our guidance midpoint while generating slightly more non-GAAP EPS than anticipated due to our operational focus. At high level, we expect most of our end-market have already experienced a trough label of demand over the past 18 months. Over this time, certain markets began showing signs of improvement while other markets faced headwinds that restrict our corporate label performance. For example, our wire-bounding revenue on a -to-day basis has improved by 42%. Despite this relatively meaningful label of improvement, we also experienced offset due to well-known automotive and industrial headwinds, which reduced wage demand earlier this year. At this point, we are pleased to begin seeing signs of multiple end-market are improving gradually, allowing better coordination, and we remain optimistic. While the market environment has become more positive, we expect our high-volume solutions are still well below the normal demand level we would consider sustainable for the broader industry. Our co-bore and wage businesses have room to grow. Looking at our end-market more specifically, we continue to see utilization improvement in general semiconductor, target of demand improvement in LED automotive and industrial, resilience in APS, and ongoing recovery in memory. Within general semiconductor, utilization rate for wire-bounding have continued to improve gradually, allowing half a year to reach the critical tipping point expected to try high-volume customers to broadly require capacity addition. This auto activity has centered around high-volume regions, where utilization rate has averaged over 80% for the past two quarters. At the same time, the rest of the world has legged slightly, but is continuing to improve. As expected, global board-bounding utilization rates have exceeded 75% last quarter and are anticipated to be in the high 70% range within the fourth fiscal quarter. Looking into fiscal 2025, we continue to anticipate semiconductor unit growth expectation will support an additional step up in demand for our high-volume solution. We also anticipate ongoing industry growth will continue into calendar 2025 based on market forecast, but also due to ongoing global front-end related investment. In addition to the improving general semiconductor dynamic, we also book approximately $20 million in thermal compression revenue during June quarter, which includes our recognition of an additional FTC system which supports the recent TCP-enabled hybrid development milestone. With automotive and industrial, we have also seen improvement in demand as our interconnect leadership position is actively supporting emerging process if utilized in efficient power storage, power delivery, and power control for electric vehicle charging infrastructure, industrial application, and sustainable energy generation. We continue to see many innovations affecting power semiconductor assembly, which are driving the need for more robust interconnect technologies, such as our recent high-power interconnect or HPI solution within wage-bounding. HPI being deployed in high-volume battery production as well as for more efficient power conversion required for charging and sustainable energy applications. We remain directly involved with several global EV manufacturers, the broader power semiconductor technology transitions, as well as the leaders in the dynamic battery market. Open-node this quarter, we continue to support an exciting dispense opportunity recently deployed with leading solid-state battery companies. While the market of automotive and industrial may still be digesting capacity, we expect ongoing improvement to continue throughout fiscal 2025. With memory, we see customers investing in new capacity and technology, which is supporting the net market and gaining support for new stag-dye solutions in the large and established LOP DDR market. Wirenet is arguably the largest stag-dye market in the semiconductor market, relying nearly exclusively on wire-bounding technology. We expect high-volume DRAM to transition to 3D packaging format over the coming years. Several important leaders in the memory market are expected to accelerate development and pre-production activity over the coming quarters. With higher volume production to begin in late-calendar 2025 or early 2026, similar to growing leading edge and high-volume assembly needs for triplet-based architectures, the memory market continues to seek out new ways to leverage packaging technology to drive greater transistor density per area. Our thermal compression and vertical wire solutions are anticipated to effectively meet the net market's performance, manufacturability, and cost requirements, versus emerging technology such as triplet-level heavy-bounding that can pro-gibitally expensive due to the requirements for front-end capability as well as known year challenges. We remain in a very unique industry position and evident in our leadership enabling critical technology transition such as direct -to-copper and fluxless adoption for leading edge applications, high-power interconnect solution for automotive and industrial applications, and vertical wire solution for high-volume consumer-oriented market. This emerging solution supplements our existing broad portfolio of interconnect solutions. We are well positioned to support customers' needs while delivering significant long-term value to investors. In closing, after nearly two years of capacity adjustment, we are pleased to continue seeing gradual signs of broader-based cyclical recovery across multiple end markets. Gartner recently projected a 17 percent semiconductor revenue industry growth rate through calendar year 2025. This growth expectation seems very reasonable considering ongoing global front-end investment and is expected to be later primarily by AI, automotive, and general semiconductor, which we expect will directly benefit the company and its investors. Global innovation rate, we are moving to the high 70 percent range, also increasing confidence for a more robust 2025 recovery. I will now turn the call over to Lester for the financial review update.

Thank you, Fuxen. My remarks today will refer to gap results, unless noted. While there continues to be headwinds across specific end markets, it remains a transformative time for the company. As Fuxen mentioned, multiple end markets are showing signs of improvement represented in utilization rates as well as growth expectations into next year, while momentum in our portfolio of advanced packaging solutions is accelerating through both our direct customer qualifications and broadening industry adoption. During the June quarter, we generated $181.7 million of revenue and a 46.6 percent gross margin. Gross margin were largely affected by product and customer mix. Operating expenses came in slightly lower than expected as we have maintained a significant focus on operational efficiency as our development teams remain nimble and were effectively reallocated to support in-demand projects over the past quarter. DAPTAC expense came in at $4.1 million during the June quarter. We continue to anticipate an effective tax rate above 20 percent through the remainder of fiscal year 2024, largely related to our R&D tax treatment under section 174. Our repurchase program remains opportunistic and we have again increased our repurchase activity sequentially. During the June quarter, we booked $44 million of open market repurchase activity, which represents a sequential increase of nearly 18 percent and a 64 percent increase over the previous December quarter. As a reference point, we repurchased $728.5 million through both open market and accelerated repurchase activity under the existing repurchase program since August of 2017. At the end of the June quarter, we had approximately $73 million remaining on this existing share repurchase authorization. In addition to the long-term nature of our share repurchase program, we continue to support an industry-leading dividend program as we continue to execute our new long-term growth opportunities. As Susan clearly explained, we remain very optimistic in a broader multi-market recovery over the coming quarters. Although we may not be at the tipping point yet, we anticipate meaningful capacity demand improvements for our high-volume markets over the near term. For the September quarter, we expect revenue of approximately $180 million plus or minus $10 million with gross margins of 47 percent. Non-GAP operating expenses are anticipated to be $69 million plus or minus 2 percent. Collectively, for the September quarter, we expect GAP EPS of 22 cents per share and non-GAP EPS of 35 cents per share. Looking ahead, we remain very focused on our close customer engagement and look forward to providing additional details to the technology transitions we are involved in that are supporting new technology and adoption milestones which will help build a foundation in memory, dispense, and thermal compression growth prospects over the coming years. This concludes our prepared comments. Operator, please open the call for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from Craig Ellis with the Riley Securities. Please proceed with your question.

Yeah, thanks for taking the question. Thank you for all the help with the new product information. I wanted to inquire on a near term item first and look a little bit beyond the September quarter. As you look at the gives and takes for the fiscal first quarter with the broad based or coordinated recovery you talked about, how do you think about the impact of what you are seeing with some improving end markets or portions of end markets versus still relatively low utilization levels in most of industry? Thank you.

So Craig, you are asking about

Q4 FY20.

Calendar, yeah.

Okay, so I think we expect a gradual recovery with a slight improvement into September. Although we saw the iteration rate went up, but a sphere not high enough to trigger a broader recovery. So at this moment, actually, I think we are seeing Q4 actually flat compared

to Q3.

That is helpful. And then as you look out further, Fusin, and this is more of a question about what your customers are telling you and how they are telling you to get the business ready for what should be some seasonal acceleration in the business. Can you just talk about how you envision the slope of recovery playing out? It seems like we have got very uneven demand dynamics across markets. Indeed, some are recovering, some seem to be still trying to find the bottom like industrial. What does that mean for how the business might perform as we think about calendar 1Q through 3Q next year?

Okay. So Craig,

you see in the past about six quarters, our revenue relatively is quite flat. But at this moment, it's our feeling. This is the first time in the past eight quarters we see multiple end market improvement in coordination. For example, I think early 2023, the bull bond actually picking up a lot. In the meantime, the wage impacted by industrial and also auto. So that's why I think we actually almost have a contract activity six months of quite flat. By all we are seeing from our feedback, we've seen auto really coming back. The Q3, Q4, we also get quite good order from the EV company for the wage prices and the memories are also picking up. So if you are asking about 25, I think many people have an optimistic view about 25. With the governor, he took 75%. This will actually trigger brother recovery and in all many end markets. So if you ask about sustainability, this is our view. We probably can see the growth into the Q1 because of our generation rate. It's an inch up close to 80%. But also, I think it's not impossible if we see flat to slightly very, very minor sustainability over Q1 and Q2 with a stronger recovery in the Q3, Q4, and 25. Hope I answered your questions.

That's really helpful, Yusen. Thanks for taking the questions.

Thank you. Our next question comes from the line of Chris Sankar from TD Cowan. Please proceed with your question.

Hi. Thanks for taking my question. I had a few of them. First of all, for the clarification, when you said December quarter flat, what is September? Was it for revenues or utilization rates?

Oh, actually, because we also guide Q1, we also guide 180 for Q4, right? And actually, Q3, we just finished with 181. So I mean flat is a revenue. By utilization, we are actually seeing continued to inching up some area already over 80% for two quarters. And average right now, I think it's 75. We do expect in Q4, we'll go to higher 70, but still not touch 80% yet. So that's why I answer if ask sustainability, it's hard to get, you know, because of recovery expected by Gartner, we will have chance maybe go up in Q1. But it's also not impossible we see flat also, or actually very, very minor, you know, she's an energy supported by a second half based recovery.

Got it. Got it. And then just on that point, Prudhant, you know, historically, you know, OSAT had an appetite to add capacity when utilization rate is about 90%, given the lead times are not that long. So is that a fair assumption? In that case, maybe the recovery is truly leading sometime next year till we get to 90%? Or do you think there's an appetite to add capacity even below 90?

Well, I think it's 80%, you know, trigger additional additional buy actually we did see we did see, you know, OSAT start to contribute in we actually start from our Q3 and the Q4, also from China, we also have memory OSAT also start to have a buy. So we feel also is the lead capacity

now.

Got it. Got it. And then two quick questions on advanced packaging. One is, can you talk a little bit about the status of the TCZ Coal at the Taiwan foundry? What is going on there?

Okay. So I think we actually have an engagement and the qualification, actually multiple projects, you know, over there. And this place is, we believe is going to be a growth for us in the futures. The qualification is for the product list. And this is for the high end, you know, you know, the products. And it's a product list. And for the product list, we are the only one in the mass production, you know, for the industry. And the qualification actually take long time. The previous IBM company, we took close to two years to finish it. But so far, in our opinion, we believe all the results come out positive. And we have early the production for the first customer is intended for first half of 25. We feel positive. And we have an initial discussion, you know, about capacity, you know, and also delivery schedule at the early stage. So we expect to reach a new near-term milestone. And we will be able to update if you want, maybe in our December or November.

Got it. And then final question. I think in the last time you previously mentioned, I find 25 advanced packaging, dedicated AP revenue could be $200 million. Are you still sticking with that number? Or do you think it might be lower than that?

Chris, could you repeat?

I think last quarter you said in fiscal 25, advanced packaging revenues could be $200 million. Dedicated AP. Is that still the case?

Yeah. So this is our forecast. Our GCB alone in 25, last quarter, we forecast about 100 million. But for the dedicated, for the dedicated, you know, the advanced packaging, this is including GCB, also including a vertical wire, and also including a system in packaging. So all these are adding together will cost $200 million. And, you know, since we are adding more engagement, you know, side, we are doing a long-term forecast. At this moment, we probably will be able to show you in the next couple of quarters.

Thank you very much, Susan. Thanks.

Thank you. Our next question comes from the line of Tom Duffley with DA Davidson. Please proceed with your question.

Yeah. Good afternoon. Appreciate the question. When I look at the guidance for flat next quarter at 180 million, is there any kind of a shift between end markets or products, or is it going to be fairly similar to what you had this quarter?

Okay.

And then, Susan, when you looked at the slides you produced, and you gave a five-year average for the different segments, when you look over the next five years, do you think that those are pretty good numbers, or do you think some of those markets were overstated with the upturn or understated because of growth drivers?

Tom, are you talking about which number? Yeah.

On your slide, you had a five-year average for the different segments. And I was wondering if those five-year averages are good on a go-forward basis, or if you think they're over or understated for the next five years?

Yeah. Good. So, yeah. So, Tom, Lester, we believe that those numbers are good going forward on a five-year basis. As a projection going forward, there might even be a little bit of an upside going forward.

Okay. Great. And then finally, Lester, when you look at the Project W that was cancelled last quarter, what was the cost associated with that, and have those expenses or costs been reallocated?

So, I think for Project W, there's minimal cost associated with in Q3 and Q4 going forward. And we have reallocated those resources. I think in my remarks, I mentioned that we kept our backs down because we reallocated those resources in an efficient manner to projects that was more in demand for the quarter and going forward.

Great. Thank you.

Thank you. Our next question comes from the line of Dave Dilley with Steelhead Securities. Please proceed with your question.

Thanks for taking my questions. A couple, let's start on advanced packaging. I was wondering if you could just help us understand the applications that you have thus far kind of captured in order to produce this 10x growth in your thermal compression bonding. And just digging into that puzzle just a little bit further, I think we all recollect your first customer here was a big IDM CPU provider. If you could kind of just help us understand at that big customer, what are you doing, chip on wafer or chip on substrate? And how does that help you win business at the big foundry?

So, Dave, I think we start to get more significant revenue in 2021. So, it's about you know, less than $10 million. So, within four years, I think, you know, first, I think we start with OSET. You know, at the OSET, we are working with an IDM company and we develop extra chip on substrate. And in the meantime, I think, you know, when we work with OSET, we also working with, you know, the customers who focus on silicon photonics and also like 3D sensing. You know, so right now, I think we have, you know, special market silicon photonics, silicon sensing, and also have actually more important heterogeneous integration. So, I think last year, we was, 23 was $76 to $18 million. So, we actually start to focus, we believe in the futures. There are few bigger area for us. Why is the OSET? We actually feel very comfortable. We continue to get more revenue and more application over there. And number two is chips to substrate. I think we are doing very well. What we are focusing right now actually is going to be a chip to weather. We believe this is a future market as well as a foundry. So, with these two areas, I think we probably will fill out our goals for the next couple years.

And that's the outsourcing of part of the co-op process to the OSATs. And I think that's the OS part, the chip on substrate. Is that a beneficial trend for you guys given that you already have relationships with these OSATs and they are using your equipment or do you have to go in and kind of prove yourself completely new there?

Yeah, it's a beneficial to us.

I'm sorry, I didn't hear that.

It's beneficial to us.

Okay. Okay, final question from me is just on the core business. A couple years ago it was obviously running at much, much higher levels. And I'm just kind of curious, is there any reason that you can see that that core business wouldn't achieve peak levels of revenue again like it was a few years ago given the appropriate circumstances in the end markets?

Well, David,

you are asking about core business, right? So, actually the year 2020 to 2021, I think we actually went up from like 500 something, you know, to about 1.5. It's a 2.6 growth, 2.6 actually. That's very, very significant. So, that's why I think 21, 22, 1.5, I think a lot of customers, they overbuy a lot of core business. Therefore, I think we are down to this level. But if you look at it, if a ground kind of prediction is correct, the 17% unit growth, just assume, you know, half of that is, say AI related or whatever, even like 8%, right, will trigger a lot of capacity buy for our core business. I give you an average of a normal four-winder business. Like even before COVID, it's about $500 to $600 million. So, with, you know, trigger capacity buy, I think you can calculate, you know, we are still, this year, still less than $400 million for four-winder. So, we believe we have a huge, we have a huge, you know, opportunity in core business. Also, you know, our new technology has value for the future in the four-winder, including VFO, and also in the weight of HPI. So, we do believe semi-conductor downturn, normally no more than six quarters. We already have an eight quarter, including this quarter, maybe nine quarters. So, longer the downturn, actually we believe upturn somewhere will be stronger and strong, you know, start from there.

Yeah, the longer you stay under the curve, the bigger, you know, be over the part of the curve when things get better, right? You know, everything kind of evens out that way. Okay, thank you.

Thank you. Our next question comes from the line of Ross Cole with Needham and Company. Please proceed with your question.

Hi, thank you for taking my question. I noticed that you mentioned you expect the December quarter to be flat compared to the September quarter. And you're expecting gross margin to remain roughly the same area for the quarters as well? Thank you.

So, actually, I think maybe that was a high, so it's less than the December quarter. I don't think we guided to the December quarter. I think what Putin said was actually the September quarter, which we just guided to, is flat to the third quarter. He did mention for the December quarter, which is our first fiscal quarter for 25, you know, there is some uptake, but then there may also be some seasonality in there. So, I think right now, it's the same. As far as gross margin is concerned, yeah, I think we believe that gross margin will stay around the 47 percent level through the rest of the calendar year. But then we'll pick up in the calendar year 25 as some of our cost reduction issues kicked in, as well as some of our newer products, which are that suddenly get traction, but will have a lot more traction in 25. And those are much higher margin products. So, we still are aiming towards a 50 percent gross margin on a Y basis.

Great. Thank you for the clarification and the answer.

Thank

you. Thank you. Our next question comes from the line of Christian Schwab with Craig Howland Capital Group. Please proceed with your question.

Great. Just, Fusin, you know, other than Gartner, you know, enthusiasm for, you know, revenue growth or semiconductor unit growth,

is any

of your dialogue with any of your customers suggesting that the first half of calendar 25 that they plan on giving you a bunch of orders?

I think everybody we talk optimistic on 25 because Gartner has been very long. Actually, you know, the short term, you know, we have been in this chart for six to eight quarters already, right, if you look at it. And historically, we don't see this. That means our market is stabilized and in the future we have a new product to offer. But the short term, I think, is really hard to judge. You know, in the meantime, the iteration rate is an inch into 80 percent, right? You know, 75, we do believe finish Q4 would be a high 78. And, you know, that's why it didn't trigger capacity by maybe customers still have a little budget concern, you know, and the medical, all these. So if you ask me about Q1 and Q2, it can go up, but it can also be flat, also be, if it's just an energy, we don't expect a major one. But actually, we are quite bullish. So as many customers we talk 25, you know, we agree.

And then just in further clarity, what type of applications or ad markets are people most excited about a recovery in 25, automotive, industrial, etc.?

Okay, I can tell you, of course, we look at, you know, our advanced packaging. And we also look at, you know, the wedge founder is a lot of auto, industrial, and many is a bull bonder, right? So bull bonder, actually, you know, the customer is in general semi, and it's also auto and also in AI. So I think the application is quite broad. And, you know, I mentioned the average normal year of a bull bonder should be 500 to 600, right, even before COVID. And we have been in a prolonged downturn. And we do believe a little bit of broader recovery. I think we probably will

be the first one to see that recovery.

Okay, great. No other questions. Thank you.

Thank you. There are no further questions at this time. I'd like to turn the floor back over to Joe for closing comments.

Thank you, Alicia. And thank you all for joining today's call. Over the coming quarter, we'll be presenting at several conferences and road shows. As always, please feel free to follow up directly with any additional questions. This concludes today's call. Have a great day, everyone.