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spk08: Good day and welcome to the NLITE second quarter 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on a touch-tone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Joe Corso, Chief Financial Officer. Please go ahead, sir.
spk00: Thank you, and good afternoon, everyone. I'm Joe Corso, Enlight's Chief Financial Officer. With me today is Scott Keeney, Enlight's Chairman and CEO. Today's discussion will contain forward-looking statements, including financial projections and plans for our business. Forward-looking statements are subject to risks and uncertainties, many of which are beyond our control, including the risks and uncertainties described from time to time in our SEC filings. Our results may differ materially from those projected on today's call, and we undertake no obligation to update publicly any forward-looking statement except as required by law. During the call, we will be discussing certain non-GAAP financial measures. We have provided reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures in our earnings release, which can be found on the investor relations section of our website. I will now turn the call over to Scott.
spk01: Thank you, Joe. Starting on slide three, Q2 was a solid quarter for Enlight. Despite the significant operational challenges and uncertainties we faced due to the prolonged COVID-related lockdown in Shanghai, we delivered revenue that was within our guidance range. Favorable product mix and solid execution of our strategic growth objectives helped drive gross margins above the high end of our guidance, which resulted in positive adjusted EBITDA for the quarter. Turning to slide four. Growth in revenue from strategic areas enabled us to generate $60.8 million of revenue in Q2. Our second quarter revenue reflects the continued geographic and strategic transformation of our business. In Q2, revenue from customers outside of China grew 12% year-over-year to $56.2 million, or approximately 92% of revenue, compared to $50.3 million, or 73% in Q2 2021. Our focus on strategic growth areas outside of China have resulted in eight consecutive quarters with year-over-year growth in our non-China industrial and microfabrication business. Our global manufacturing team did an outstanding job during a quarter in which our key assembly facility was either closed or running at suboptimal capacity for two months. A small percentage of our total workforce was able to gradually reenter our facility during the Shanghai lockdown, which began on March 28th, but much of our productive capacity was completely idle until June 4th, when we officially reopened our facility. Although the COVID-related lockdown in Shanghai lasted longer than we could have predicted, Our team rapidly resumed normal multi-ship production, enabling us to meet nearly all demand from our key customers. Despite the reopening of Shanghai, we continue to see challenges in the broader global supply chain. Lead times for many of our critical components continued to extend, and the cost of materials, labor, freight, and logistics continue to rise. Our recent experience with the COVID-related lockdowns in Shanghai have reinforced our decision to continue to invest in our manufacturing capabilities in the United States. Last quarter, we reported that we had installed the initial equipment required for the first phase of automation. In Q2, we began to increase the productive capacity out of our installed equipment, and in the coming quarters, we expect to increase output yields and add additional equipment to meet our automation targets. Finally, I'm pleased to announce that Chris Schechter has joined our team as Chief Operating Officer. Chris most recently was VP of Operations, Aerospace and Defense at Celestica and brings a strong manufacturing background to support our continued growth. Turning to slides five through six, where I will discuss revenue by end market. In microfabrication, we had another solid quarter. We generated $16.4 million of revenue, which represented approximately 27% of total revenue. Lower sales for microfabrication customers in China resulted in a 19% year-over-year decline compared to the record microfabrication revenue we generated in Q2 of 2021. We believe the current softness in our China macrofabrication business is largely macro-driven, and we continue to maintain a market leadership position, which we believe will enable us to grow as the macro environment in China improves. Outside of China, Q2 revenue increased year over year, and overall demand signals remain positive. We remain well positioned to continue our global leadership position by introducing innovative high-power, high-brightness semiconductor lasers for existing and new markets. In the second quarter, we developed a novel semiconductor laser with record peak power by leveraging our semiconductor device design and manufacturing capabilities. This technology has a wide range of applications, including LiDAR and other short-pulse imaging and sensing applications. We also continue to make excellent progress in the medical market, particularly for our newly released 2-micron wavelength lasers. We believe that this laser addresses a broad range of urological and other applications and offers Enlight yet another long-term growth opportunity. In aerospace and defense, second quarter revenue declined 6 percent year-over-year to $22.5 million, representing 37 percent of sales. Excluding advanced development revenue, Q2 aerospace and defense revenue increased approximately 18 percent to $9.7 million. overall sales in our aerospace and defense business was driven primarily by delays in receiving material required for certain directed energy development programs and fewer advanced technology development projects during the quarter. We view these delays as temporary as we continue to receive material required for our key directed energy programs and have signed several new advanced development contracts during the quarter. In the directed energy market, we had two major milestones during the quarter. First, we continue to demonstrate the ability to scale the power of our high-energy lasers, which we believe is critical for future defense systems. Second, we have expanded and deepened our engagement with potential customers, both in the United States and abroad. Our vertical integration combined with U.S. manufacturing enables us to take a system-level view of our customers' requirements and engage across multiple product levels, including diodes, fiber amplifiers, and beam-combined lasers. During the second quarter, we generated product revenue from the sale of laser products to multiple U.S. defense contractors and foreign allies and have engaged in many additional design and opportunities with foreign allies seeking to deploy land, sea, and air-based lasers. As a result, we believe we have both expanded our served market and increased our near-term revenue opportunities. Finally, turning to the industrial end market, revenue declined 12% year-over-year in the second quarter to $21.9 million, representing 36% of total sales. However, industrial revenue from customers outside of China increased 43% year-over-year to $20.2 million. On a percentage of revenue basis, Q2 industrial revenue from customers outside of China increased to 92% versus 57% in the same period in 2021. Industrial growth outside of China continues to come from strategic customers as we continue to deliver innovative solutions that enable our customers to increase their market share and at the same time increase their spend within light. One of our key differentiators in the industrial market is the programmability of our lasers. We first introduced our programmable lasers to the cutting market in 2018. where they were quickly adopted as they addressed the long-standing tradeoff between high speed for cutting of thin metal and outstanding edge quality for cutting of thick, mild steel. We've continued to expand our line of beam control technology, and recently we extended the dynamic range of the beam area by 4x, thus allowing a 5-kilowatt and light fiber laser to have the same cutting speed as an 8-kilowatt conventional laser for thin metal cutting while maintaining outstanding edge quality for thick metal. For laser additive manufacturing, we are enabling our customers to continue to dramatically improve productivity in this growing market by offering lasers that provide benefits along two key dimensions. First, our highly reliable and stable lasers enable new multi-laser tools, which improve productivity and reduce cost per part. Second, our programmable lasers can increase the build rate for additive manufacturing by two to eight X with excellent material quality. In addition, our lasers allow the microstructure to be engineered locally, thus optimizing the material properties such as ductility, strength, and hardness, introducing an entirely new capability for added manufactured parts. For example, recently our programmable lasers were used to print turbo machinery components with spatially optimized mechanical properties that would not otherwise be possible without the use of our lasers. Finally, our programmable lasers are also being employed in welding applications to increase productivity and part quality. We are also deploying integrated process monitoring technology, which will further expand our market opportunity. I will now turn the call over to Joe to discuss Enlight's second quarter financial results.
spk00: Thank you, Scott, and good afternoon, everyone. Beginning on slide eight. Total revenue for the second quarter of 2022 was $60.8 million, a decrease of $8.3 million, or 12%, compared to the second quarter of the prior year and was within our guidance range. Product revenue for the second quarter of 2022 was $48.2 million, a decrease of $5.4 million, or 10%, compared to the second quarter of the prior year. The decrease in product revenue year over year was driven by lower sales to industrial and microfabrication customers in China, partially offset by higher sales to strategic customers outside of China. Development revenue for the second quarter of 2022 was $12.6 million, a decrease of $2.9 million, or 19%, compared to the second quarter of the prior year. The decrease in development revenue year over year is attributable to the timing of project-based work we perform in the defense market. Turning to slide nine. Overall gross margin for the second quarter of 2022 was 25.3% compared to 29.4% for the second quarter of the prior year. Better than expected product mix enabled us to generate gross margins that were above the top end of our guidance range. Products gross margin for the second quarter of 2022 was 30.1% compared to 36.1% for the second quarter of the prior year. The year-over-year decrease in products gross margin was driven by sales mix, decreased capacity utilization of our Shanghai manufacturing facility, increased investments in U.S. manufacturing, and continued increases in production and freight costs. Turning to slide 10, non-GAAP operating expenses for the second quarter of 2022 were $19.3 million, or 32% of revenue, compared to $17.6 million, or 25% of revenue, for the second quarter of the prior year. The majority of the year-over-year increase is related to increases in salary costs, headcount, professional service fees, and investment in R&D projects to support our product roadmap and long-term growth opportunities. Turning to slide 11. Non-GAAP net loss for the second quarter of 2022 was $3.3 million, or $0.07 per diluted share, compared to non-GAAP net income of $4.4 million, or $0.09 per diluted share, for the second quarter of the prior year. The year-over-year decrease in non-GAAP profitability was driven by a combination of the decrease in product gross profit and increase in OPEC spending. On a gap basis, net loss for the second quarter of 2022 was $10.3 million, or 23 cents per diluted share, compared to $7.9 million, or 19 cents per diluted share, for the second quarter of the prior year. Adjusted EBITDA for the second quarter of 2022 was approximately $200,000, compared with $6 million for the second quarter of the prior year. Net cash used by operating activities was $4.8 million for the second quarter of 2022 compared to $1 million for the second quarter of 2021. The increase operating cash usage is the result of lower profitability as previously discussed and changes in working capital. Capital expenditures for the second quarter of 2022 were $7.9 million compared to $4.8 million for the second quarter of the prior year. We continue to invest in directed energy for the defense market and automation of our US facilities to serve our customers outside of China. Turning to slide 12. We ended the second quarter with cash equivalents and marketable securities of approximately $121 million and we had no debt. DSO for the second quarter of 2022 was 61 days and we had 157 days in inventory. DSO in the second quarter of 2022 was negatively impacted by the timing of shipments compared to prior periods, and the increase in inventory was driven primarily by material purchases for the defense and directed energy markets. Turning to slide 13 for our outlook for the third quarter. Based on the information available today, we expect third quarter revenue to be in the range of $60 to $66 million. The midpoint of $63 million includes approximately $49 million of product sales and approximately $14 million of development sales. Turning to gross margin. Third quarter products gross margin is expected to be in the range of 26 to 30 percent and development gross margins to be approximately 6.5 percent, resulting in an overall gross margin range of 21 to 25 percent. For the third quarter, we expect the adjusted EBITDA to be between negative $1 million and positive $2 million. We expect third quarter average basic shares to be approximately $44.6 million and non-GAAP diluted shares to be approximately $47.1 million. With that, I will turn the call back over to the operator for questions.
spk08: Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. And our first question will come from Greg Palm with Craig Hallam. Please go ahead.
spk03: Yeah, good afternoon. Thanks for taking the question. I guess starting with China, you know, what makes you confident that what is going on over there is macro driven and not maybe share loss from increased competition? Do you have any visibility into that? And then can you let us know, you know, if or how much revenue that you, you know, maybe actively walked away from over in that region?
spk01: Yeah, good, Greg. Thanks for the question. You know, I think as we've talked about previously, you know, in China, where we see our strength is in the microfabrication market and there, you know, best of our abilities, we continue to see strong engagement with design wins based upon the leading technology that we have. But the macro environment there was, you know, very challenging there. in Q2. And with respect to the industrial fiber laser business, as we've discussed, certainly we're not engaging with unprofitable business there. But we're not breaking out how much of that we're walking away from.
spk00: No, I think that's it.
spk03: Okay, fair enough. And as it relates to the lockdowns. Can you help us understand what the impact of those prolonged lockdowns were in Q2? And is there any assumption of continued impacts in the Q3 guide?
spk00: Yeah, Greg, so The lockdown lasted for longer than we had expected when we provided guidance in May. At the same time, when the facility reopened, we were able to ramp quite quickly. Kudos to the team operationally for being able to get back to multiple shifts as quickly as they have. So, you know, we left a couple million dollars on the table during the quarter, but it... you know, had we been open the entire quarter, I don't think it would meaningfully change your perspective or how we really did during the quarter, frankly. Okay. From a revenue perspective.
spk03: Yeah. Okay. And just in terms of the Q3 guide, any assumptions of, you know, whatever continued impacts or challenges or at this point, are you more or less back to normal?
spk00: Our operations are back to normal in Shanghai. So there are still some minor lingering effects. I mean, there was turnover and getting new folks into the facility. So that always takes a little bit of time to get back to the exact level of efficiency at which we were operating prior to the lockdown. But there is nothing that we see right now that looks like It will affect us the way we were affected in the prior quarter. Of course, we're concerned with the overall environment and the potential for COVID and other related lockdowns to happen in Shanghai. But our guide this quarter assumes that it's business as usual in our Shanghai facility.
spk03: Okay, good. I'll leave it there. Thanks.
spk08: Our next question will come from Jim Ricucci with Needham & Company. Please go ahead.
spk04: Hi, good afternoon. I just wanted to get an update on the automation activities in the U.S. At what point do you think that becomes less of a headwind? It sounds like you're satisfied with the pace of the progress you're making in this area. I wonder if you could give us a little better handle on how to maybe update us on the timeline?
spk01: Yeah, good, Jim. Thanks for the question. It's a very important strategic topic for us. You know, we continue to ramp up automation in the U.S., and we're currently seeing benefits of that ramp. We have more work to do, but we're certainly continuing to focus on, you know, the majority of our business in the fiber laser market outside of China having that automated for 2023. But we're continuing to, you know, make progress on that ramp and, you know, continue to be a top priority.
spk04: And then turning to the industrial, the growth outside of China was pretty healthy. You've highlighted a couple of areas and in your deck, you talk about welding and additive. I wonder if you can give us any more granularity in terms of the magnitude of those drivers and that 43% growth that you registered. And if I could just slip one in on the medical opportunity, is there a way for you to frame that opportunity for us as we think about possibly 23 and beyond?
spk01: Good. Jim, let me just make sure I've got the question. The first one is on the 43% year-over-year industrial growth outside of China and what are the key drivers there. The second one was going back to automation again.
spk04: Is that right, Jim? On the industrial growth, I just want to – maybe we'll take one at a time. I apologize. You highlighted some of the progress you're making in metals additive manufacturing. But if we could drill down further into that 43% growth, what were the – the major catalyst for that growth that you saw? To what extent should you anticipate that continuing in Q3 and Q4?
spk01: Good. Yeah, I think the short answer, Jim, is the reason we talked about what we're doing in Additive is that is a key driver of our growth. I think it's been, you know, it's an application area that has grown You know, grown nicely, but it still has a lot of promise for laser additive manufacturing to be truly viable. You know, we as an industry need to continue to drive productivity up significantly. And to do that, a couple of the key levers are more lasers per tool that gets you more parts at lower cost and more effective lasers. And we are demonstrating continued progress, not only in the technology, but also the adoption in that market. And so we do see opportunities for continued growth there. you know, how they play out quarter over quarter, that's harder to predict. But I do see laser additive manufacturing becoming a more important, you know, theme that will continue to drive growth.
spk04: How many customers are you working with, can you say, Scott?
spk01: Yeah, we don't break out the details, but it is more than 10 that are good customers. And There's quite a long tail there, Jim, of companies in this space that are doing some really interesting work that are, you know, sometimes below the radar. So it's a dynamic space that has the opportunity for continued growth.
spk04: Okay. And just quickly, just on the medical opportunity, which you seem excited by, I wonder if you could talk a little bit about how we might think about that contributing to revenues.
spk01: Good. Yeah, I think it is worth noting that we're making good progress there with a new product. Neurology is the first application which is driving demand, and we're seeing significant growth from small numbers this year. But it is a market that certainly has the opportunity to be you know, tens of millions of dollars of revenue for us. And over time, medical can be a more important part of our business. We don't break it out today. We put it into the micro space. But we do want to highlight that that is one of the drivers of what's going on in the micro segment for us.
spk04: Yeah, thanks. I'll jump back in the queue.
spk08: Our next question will come from Patrick Ho with Stiefel. Please go ahead.
spk05: Thank you very much. Scott, maybe first off on the products and the market opportunities, I think you highlighted in your prepared remarks the two micron series of lasers. Where are you seeing the, I guess, the earliest or the greatest adoption? Because if I recall, it was targeting several markets. Which markets are you seeing the greatest traction for that product initially?
spk01: Yeah, good, Patrick, yeah. The initial traction is in medical and in urology, but you're right, we have highlighted the fact that 2 micron does apply to a broader range of markets. There are defense applications, there are industrial applications, but for the current products that we're shipping, medical is what's driving that. Over time, we do see it as yet another example of a laser which enables a broad range of different and vertical markets. Great. That's very helpful.
spk05: And maybe, Joe, for you, on the cost side and the supply chain, didn't hear much of it on this call. Have you seen improvements on the supply chain front, and how do you look at the situation on a going-forward basis?
spk00: Yeah, Patrick, I think the good news is that we haven't seen the supply chain deteriorate further during the quarter. So in some areas, you know, it's been relatively flat. I will tell you that flat in terms of what we're seeing in terms of the health of our suppliers. The lead times have continued to extend. There are certain parts that are not as challenging for us to get, but costs are definitely up. Costs of materials are up. Freight and logistics are up. Costs of labor are up. And we think that they are going to remain at this level for some time.
spk05: Would you want to put any quantification on that? Like is it a 100 to 200 basis point impact or, you know, what's your thought on that?
spk00: Yeah, sure. So I'm happy to do that. So as we look kind of quarter over quarter, it was a couple hundred basis points that we saw of incremental costs between, you know, freight, logistics, and materials.
spk05: Great. Thanks a lot, guys.
spk08: Thank you. Our next question will come from Hans Chung at DA Davidson. Please go ahead.
spk07: Hi. Thank you for taking my question. So I just wanted to follow up on the course margin. So for third quarter, we have a revenue coming up a little bit from a sequential basis. And then product course margin kind of deep a little bit. And I guess there's definitely a factor, I mean, including the product mix or the cost premium you just mentioned due to the supply chain. So any color, I mean, just regarding the pros and cons and gross margin for the third quarter and how should we think about the gross margin, let's say, into the 2023?
spk00: Yeah, sure. Thanks for the question, Hans. You hit the nail on the head. There are two big impacts as we look at the margin in Q3 of 2022, the first of which is the mix of business. In Q2, we had a pretty favorable mix. It doesn't take much with our level of product revenue, you know, to sort of improve the product gross margin. In the second quarter, we obviously saw lower revenue, lower revenue from China, both in industrial and in our micro fabrication business. And we also saw a more favorable mix of business inside of our fiber laser business. And obviously offsetting that were freight, logistics, consumables, all of those costs that we've talked about. So as we sit here, our best view of Q3 is that the mix of business will moderate to something that is more in line with our expectations and we won't get exactly the same mixed benefits that we got in the prior quarter. But at the same time, we're going to see better absorption as Shanghai is not shut down for a for two quarters. So you look at that and you say that from a supply chain perspective, labor materials, things like that are going to remain relatively flat is how we got to our gross margin guide for Q3, Hans.
spk07: That's very helpful. And then if I look at the revenue mix by product type and then it's like the low power makes, I mean, going up and then medium power going down. Does that reflect to the weakness in macro fabrication? And then just any comment on that dynamic?
spk00: No, what you're seeing there is this quarter in Q2, 41% of our business were below the two kilowatt and below. That is largely driven by continued growth in the additive manufacturing business where Power is not the figure of merit like it was historically in the cutting market, particularly in China. So when you're looking at mix based on power and you can see if you go back four or five quarters, you'll see that the low power percentage of total fiber laser revenue has continued to increase. That's largely a function of the growth in our additive manufacturing business.
spk07: Got it. Got it. Okay. And then if I look at the inventory level, it's continued to go up. And then I know you kind of explained this related to some purchase for the direct energy program. But is it also kind of strategic investment in just in inventory overall because the supply chain constraint? And then how should we think about the inventory the management strategy going forward?
spk00: Yeah, great question, Hans. So you're right, inventory has gone up and you've identified a couple pieces of it. The first is that as the lead times for the material that we need have increased, we've strategically used our balance sheet to make sure that we are able to support our customers. As we've said in the past, organic growth is the primary thrust of what we are doing at Enlite. And we want to be in a position to be reactive to our customers' demands. And many of the customers that we are serving today They are growing, but we are growing our share of wallet inside of those customers. So we've made a strategic decision that today with the supply chain where it is to invest more heavily than typical in our inventory levels. And then as we mentioned in our prepared remarks, there have been a couple of areas in which we've invested in inventory, right? Directed energy is one of those areas. This quarter, we talked about initial volume sales of laser products to customers. In order to support what we see over the coming quarters and years, we need to be in a position to turn that inventory into revenue. And then the third piece of it, Hans, is that costs have continued to rise. So part of the inventory growth is that what we are buying and putting on the balance sheet is more costly today than it was a quarter ago or a year ago. So that's kind of the current situation. As we look in the future, we're taking a really hard look at where to continue to strategically invest in inventory or not strategically invest. invest in inventory. There will be some period of time where you'll see it around these levels as we continue to transition some of our manufacturing from Shanghai to the U.S. as we build buffer stock and the like. So it's something that, you know, we are managing. But today we're, you know, in a strong position from a balance sheet perspective to be able to do that to support our growth going forward.
spk07: Thank you.
spk08: You're welcome. Our next question will come from Paritosh Misra with Barenberg Capital Markets. Please go ahead.
spk06: Thanks for taking my question. Can you talk about your order book, you know, given the seasonality and whatnot? Is it slightly weaker for the time of the year, or you think it's kind of in line versus last year or so?
spk01: Yeah, Parish, you know, I think, short answer is, I'd say is in line. I think what we're seeing, as we noted in the prepared remarks, is very good traction in the strategic growth opportunities in directed energy, in additive manufacturing, in medical, and continued traction in our core markets. But from an order book standpoint, I think in line with where we typically are.
spk06: Got it. Thanks. And can you give us some sense of pricing also in your laser product? So sorry to be oversimplifying, but maybe on some sort of a dollar per kilowatt price metric, are prices still falling versus, say, last year? Or given the very high inflation that we have seen, perhaps you're seeing prices stabilize or maybe even go up?
spk01: Yeah, I think that the short answer is stability in general. There are some areas where we've seen price increases. But in general, stability, I think, would be the answer, especially as we're not engaged in the very low price business and cutting in China.
spk06: Understood. And maybe last one, what's the best way to think about the US dollar sensitivity or impact on your business, on your revenue as well as your operating income?
spk00: Yeah, thanks Paritosh. The impact that we have from currency is relatively insignificant today. Most of the revenue that we generate outside of China anyway is is in U.S. dollars. We have a little bit in euro. And then when you look to the China business, we've got a natural hedge because we both sell in. and we satisfy expenses in RMB. So we don't have, you know, a big exposure from a currency perspective today given the geographic composition of our business.
spk06: Thanks, guys.
spk08: That's all I have. Thank you. Thanks. Again, if you have a question, please press star then one. Our next question will come from Mark Miller with the Benchmark Company. Please go ahead.
spk02: Thank you for the question. What percent of fiber laser sales were for over six kilowatts?
spk00: Over six kilowatts this quarter was 40%, Mark.
spk02: And can you just remind me again on the margin comparison between the high power versus the low power in terms of margin contribution?
spk00: I think you've got to look at it by market. So certainly when you look at the cutting market, the higher power lasers carry much better gross margins than the lower power lasers. But there's also, for our business, all of the high power lasers are not made equally either, particularly when you start talking about certain configurations, whether they're programmable or not. And then I said market because it's important to make the distinction between the cutting market and the additive manufacturing market. So when you look at the additive manufacturing market, the product margins in additive manufacturing lasers, which we report as low power, tend to be higher than cutting lasers today.
spk02: And you indicated you're getting some traction on the welding application area. Can you give a little more color on that? Because that's been a dominant part of sales for one of your competitors.
spk01: Yeah, I think, you know, it's an area that we do see traction. I think we've highlighted other markets where we see more material growth for us, but it is a market that is an important market, especially with the expansion of EV, and will continue to be, you know, a market that we address.
spk02: Thank you.
spk08: Thanks, Mark. This concludes our question and answer session. I would like to turn the conference back over to Joe Corso for any closing remarks.
spk00: Thank you, everyone, for joining this afternoon and for your continued interest in NLIGHT. We look forward to speaking with you during the quarter. Have a great afternoon.
spk08: The conference is now concluded. Thank you for attending today's presentation.
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