Universal Electronics Inc.

Q1 2023 Earnings Conference Call


spk01: Good day and thank you for standing by. Welcome to the Universal Electronics First Quarter 2023 Financial Results Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to the speaker today, Kirsten Chapman. Please go ahead.
spk00: Thank you, Jules, and thank you all for joining us for the Universal Electronics 2023 First Quarter Financial Results Conference Call. By now, you should have received a copy of the press release. If you've not, please contact LHA Investor Relations at 415-433-3777 or visit the Investor Relations section of the website. This call is being broadcast live over the Internet. A webcast replay of this call, including any additional updated material, non-public information that might be discussed during this call, will be available on the company's website at www.uei.com for one year. During this call, management may make forward-looking statements regarding future events and the future financial performance of the company and cautions you that these statements are just projections and actual results or events may differ materially from those projections. These statements include the company's ability to timely develop and deliver new technologies and technology upgrades and related products introduced this year, including meeting the demand of interoperability across devices, platforms, and ecosystems in the home. The timing and extent of the recovery of the consumer electronics channel is believed by management. Achieving the new product development successes as anticipated by management, including in the HVAC market and its groundbreaking line of ultra-low power and energy harvesting controls products designed to address the growing demand for more sustainable solutions in electronic devices. The continued successful collaboration with existing and new customers in developing and launching next-generation products, software solutions, and technologies into existing and new growing markets, which results in increased sales and market growth share for the company. The ability to optimize the company's manufacturing operations on a timeline and to the extent expected by management. Management's ability to continue to manage its business inventories, and cash flows to achieve its goals of net sales margins and earnings through financial discipline, operational efficiency, manufacturing footprint, and utilization strategies, and product lines and business diversification management. The continued decline of the company's market capitalization and consequent impairment of the company's goodwill. The impact of the company's financial results that it may experience during the supply chain constraints, inflationary pressures, and macroeconomic conditions in its consumers are experiencing. The direct and indirect impact the company may experience with respect to the business and financial results stemming from the continued economic uncertainty affecting consumers' confidence in spending, natural disasters, public health crises, including the continuation or resurgence of COVID-19 pandemic. or governmental actions, including war. The company undertakes no obligation to revise or update these statements to reflect events or circumstances that may arise after today's date and refers you to the press release mentioned at the onset of this call and the documents the company files with the SEC, including its 2022 Annual Report on Form 10-K. In management's financial remarks, adjusted non-GAAP metrics will be referenced. Management provides adjusted non-GAAP metrics because it uses them for budget planning purposes and for making operational and financial decisions and believes that providing these non-GAAP financial measures to investors as a supplement to GAAP financial measures helps investors evaluate UEI's core and financial performance and business trends consistent with how management evaluates such performance and trends. In addition, management believes These measures facilitate comparisons with the core operating and financial results and business trends of competitors and other companies. A full description and reconciliation of adjusted non-GAAP measures versus GAAP are included in the company's press release issued today. On the call today are Chairman and Chief Executive Officer Paul Arling, who will deliver an overview, and Chief Financial Officer Brian Hackworth, who will summarize the financials. Paul will then return to provide closing remarks. It is now my pleasure to introduce Paul Arling. Please go ahead, sir.
spk03: Thank you for joining us today. For the first quarter of 2023, while we met the high end of our guidance for net sales and earnings, neither of these measures reach our standards for long-term financial performance. So we are executing strategies to diversify our markets and realign our global operations, in particular, optimizing our manufacturing footprint. While we are experiencing headwinds in our home entertainment channels, we continue to see growth in sales and market share in the connected home market. As we have discussed previously, we are leveraging our foundational competitive advantages, our innovation in device control and connectivity technology, our excellence in new product development, and our commitment to providing a great customer service. Solving the consumer demand for interoperability across devices, platforms, and ecosystems in the home is a core foundation of enabling a truly smart home experience, which is exactly what we are bringing to our customers in the climate control, automation, and security markets. These areas will continue to grow in the long term, driven by underlying macro trends such as global warming, rising energy costs, and the need for smarter and more sustainable product solutions. However, near-term, our new product and customer successes have yet to fully offset the sales decline due to subscriber loss in subscription broadcasting, particularly in the US. Additionally, our consumer electronics customers are also experiencing near-term order declines, driven mainly by economic weakness in the consumer or retail channel. We believe the impact in the consumer electronics channel is temporary, and we expect television sales to recover. as the battle for the primary operating system for entertainment and information in the home escalates. In this regard, we are extremely well positioned with our key accounts and are working to help bring new features and more sustainable solutions to the OEM brands that lead this industry. Looking at our current backlog of customer programs, as well as our product development pipeline, we believe net sales will hit their low watermark in the first half of this year. We are actively refocusing our product development efforts to align with current market dynamics that will help us achieve better sales results later this year and into next. What has been encouraging is that even while we are in a period of higher levels of consumer uncertainty, the number of project design wins in both new and existing accounts is accelerating, the majority of which are for new products, representing incremental sales growth versus replacement business. As we have mentioned before, sales and development cycles in these new channels are typically longer. Subsequently, these new product design wins are expected to contribute modestly to sales in 2023 and then drive top line growth in 2024. More importantly, these design wins give us great confidence that our differentiated solutions and technical capabilities are key assets that will return us to growth and profitability in the not so distant future. In our HVAC channel, we can now boast seven major brands as customers. Collectively, these brands represent over 30% of the world's HVAC market. Many of the newer accounts represent design wins achieved in the past six months and reflect key new products that will drive global customer penetration in the industry. We've won new major awards with leading brands like Daikin, Carrier, and Mitsubishi Train, for their more advanced connected thermostats. In addition, earlier this year, our teams kicked off customer initiated developments for several smart thermostat solutions based on our tide dial and tide touch platforms scheduled to ship in Japan, Europe, and other markets in 2024. These important design wins validate our product roadmap efforts for this channel which we started nearly two years ago and offer a positive view for the future. The success we are achieving in the HVAC market is strikingly reminiscent of the earlier phase of success in home entertainment. We focused on gaining traction through project wins with the leading companies in the world. We then executed on those wins, innovated further in our products and technologies, and as a result, won even more business with leaders in the industry. Our keys to success are stronger today than they have ever been. Our ability to execute at scale for our customers and provide connectivity and importantly, interoperability across an increasingly chaotic smart home infrastructure is proven through our history with some of the largest companies in the world. These attributes are strongly desired by our customer base as they look to become more integrated into the smart home of today and tomorrow. In our home security and automation business, it is a similar story. We are adding to a small but growing customer base, attracting new customers and increasing customer share with our new product design wins for controllers, sensors, and other home automation products with leading brands like Vivint, Hunter Douglas, and Somfy. Product introductions will begin later this year and ramp into 2024. These accounts have expressed a strong commitment to bring more product opportunities to us as a result of their initial exposure to our superior technical know-how, innovation, and customer engagement experience. Even in our video service provider channel earlier this year, we secured major program wins for new television streaming platforms in the US and Europe, that we will begin shipping later this year due to the shorter design and development cycles inherent with these products. As is the nature in our business, we can't provide more details surrounding these customer platforms right now, but rest assured we will continue to expand our market reach even in this more subscriber-challenged market. Turning to a review of our plan to optimize our manufacturing footprint worldwide. To manage the changes in the global supply chain and governmental policies, we have been working on expanding our manufacturing footprint outside of China. Last year, we started building a new energy efficient and sustainable factory in Vietnam that will provide additional capacity. Once it is running at near optimal levels, we plan to ramp down our manufacturing volume in China and reduce our overall manufacturing overhead as we transfer volumes out of our other facilities. Although we will temporarily experience continued overcapacity, our plan ultimately will lead to an optimization of our global supply chain footprint, taking into account the adjustment in product mix and monthly volumes across channels as we continue to transition our business into newer markets with lower volumes and higher ASPs. With all of these wins and actions underway, we are confident we will return to long-term growth and profitability. Now I'll turn the call over to our CFO, Brian Hackworth, for a review of the financials. Please go ahead, Brian. Thank you, Paul.
spk05: First, I'll review the results for the first quarter of 2023 compared to the first quarter of 2022. Net sales were $108.4 million at the high end of our expectations. This compares to $132.4 million for the first quarter of 2022. reflecting headwinds in the video service channel as well as an uncertain economic environment, which have led to households spending less on discretionary goods and ultimately affecting our end-user markets. Gross profit for the first quarter of 2023 was $27.6 million, or 25.4% of sales, compared to 28.9% in the first quarter of 2022. The decrease in our gross margin percentage is due primarily to underabsorbed manufacturing overhead and lower royalty income associated with a slowdown in television sales. As Paul mentioned, we're taking steps to restructure our factory footprint and eliminate manufacturing inefficiencies. I'll elaborate. As I mentioned before, for a variety of reasons, ranging from the enactment of certain governmental policies to changes in the global environment, over the past five years, We expanded our manufacturing footprint, evolving from producing finished goods solely in China to expanding and converting our Mexico factory from refurbishment to a full production plant, to now ramping up production in Vietnam. Today, as we focus on diversifying our business into higher growth markets and becoming less dependent on the video service channel, we've seen a shift in product mix towards climate control and home automation categories. In these newer channels, the average selling price for thermostats, wireless controllers, and security products is significantly higher than products in our video service provider channel. Consequently, less factory floor space will be required per sales dollar. Our restructuring plan will enable us to lower our concentration risk in China, eliminate excess manufacturing overhead costs, and ultimately return gross margins to a normalized rate. Our goal is to reduce our cost structure by approximately $15 million and with sales growth, return our factory utilization rates to upwards of 90%, with the flexibility to expand as needed. The first step in the plan requires that we establish a manufacturing facility in Vietnam. For the past two quarters, we've been hiring and training manufacturing personnel at our Vietnam facility. We're currently awaiting two final permits, which we expect to receive in May, and at which time we can begin production. Once we've reached a level of operational efficiency in Vietnam, which we estimate to be in October of this year, we anticipate that we'll begin the process of shutting down our southwestern China factory, thereby reducing our manufacturing footprint in China from two factories to one. The third phase of our restructuring effort will be to streamline our operations in Monterrey, Mexico, resulting in a smaller and more efficient manufacturing footprint to meet production volumes for North American customers. We expect this transition to take place in the back half of 2024. Operating expenses were $31.2 million compared to $30.4 million in the first quarter of 2022. SG&A expenses were $23.1 million compared to $23 million in the prior year quarter. R&D expenses were $8.1 million compared to $7.4 million in the prior year quarter. Operating loss was $3.6 million compared to operating income of $7.8 million in the first quarter of 2022. Our first quarter of 2023 effective tax rate was 19.9%, consistent with the first quarter of 2022. For the first quarter of 2023, net loss was $3.5 million or $0.28 per share compared to net income of $6.1 million or $0.47 per diluted share in the first quarter of 2022. Next, I'll review our cash flow and balance sheet. On March 31, 2023, cash and cash equivalents were $56.9 million compared to $66.7 million at December 31, 2022. Cash flows used by operating activities were $2 million for the first quarter of 2023 compared to $18 million in the prior year quarter. In regard to our line of credit, we extended the maturity of our $125 million credit facility with U.S. Bank from November 1, 2023 to April 30th, 2024. Now, turning to our guidance. For the second quarter of 2023, we expect sales to range from $105 to $115 million, compared to $139.1 million in the second quarter of 2022. We expect a net loss ranging from $0.15 to $0.25 per share, compared to EPS of $0.66 per deleted share in the second quarter of 2022. Looking at the second half of 2023, Based on the expected timing of our new product introductions and customer forecasts, we continue to expect net sales for both Q3 and Q4 to exceed Q2 net sales. I would now like to turn the call back to Paul.
spk03: Thanks, Brian. Our strategy to address the new market dynamics and to rebuild UEI into a stronger company, better position for growth and profitability is progressing. Although economic pressures and the longer product development cycles in our newer markets inform us that sales impact will likely be gradual in 23 with a greater effect beginning in 2024 our team is innovating winning business and maintaining uei's long-standing position as a leader in consumer device control we are committed to creating products and technologies that help everyday consumers easily discover and interact with the devices and services in their home we know with our healthy product development pipeline sales opportunity conversion, and strong customer relationships, we expect to return to long-term growth. As always, stay tuned. Operator, we can now open up the call for questions.
spk01: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask questions, you will need to press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Also, as a reminder, please refrain from asking multiple questions during your time. If you wish to ask another question, we do ask that you please queue up again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Gregory Burns from Zodati. Your line is now open.
spk04: Thank you. Can I just get the 10% customers to start off?
spk05: Yeah, sure. Daikin and Comcast. Daikin came in at 18.1%, and Comcast came in at 13.6% for the quarter.
spk04: Okay. All right. And then it seems like where the quarter landed and where you're guiding for the second quarter is a little level of stability and a little more stability in the subscription broadcast market. How do you feel about the outlook there now based on what you're seeing in terms of what the customers are communicating to you and where are the inventory levels in that channel? Do you feel like we've reached kind of a near-term plateau?
spk03: Yeah, Greg, it's a difficult one to answer because obviously it'll vary customer by customer. We did have some customers whose purchases were lower than what they've communicated to us their needs were, which means what they did was they were using inventory for deployment. So they were ordering less than they would otherwise need for deployment. But as we all know, you can't do that forever. A company needs to buy enough to deploy. Over the long term, your purchases are equal to your deployments. So we did have a few of our customers that we noticed that and spoke with them, and they, in fact, confirmed that that was going on. Certainly subscriber counts, though, are down. This has hurt our business over time because new additions, are the biggest source of volume for us. New additions, of course, take multiple units per installation. There is repair and replacement business. People do break or lose their remotes. We love dogs and children because they like to carry remotes off and chew them. So there is a repair and replacement business. We have seen some customers reach what we believe to be probably a longer term, more stable level of volume. In other words, the subscriber counts have been less impactful on them because they've already gotten to a point where they've dropped off in purchasing and it's leveling off. So it varies by customer. But one thing we would say is that over the next couple of years, Where growth is likely to come from is these new channels. And as I highlighted in the prepared comments, we now have one business with it's, again, strangely reminiscent to the home entertainment business. We've aligned with seven of the largest in the world. I think it's actually five of the top eight. We won projects with them. And as it begins, you win one or two SKUs. And then as you perform on those, you are awarded more. This is exactly what we did in home entertainment. And these companies control, again, almost one-third of the HVAC units worldwide. So we're making quite a bit of progress and getting quite a bit of traction on wins in that market. We do think that that part of our business, the smart home part of our business, non-home entertainment, is probably where the most growth is going to be experienced. And as I said, consumer electronics goes through this from time to time. We've been in it for a long time. We've looked at data going back decades. The TV market is not high growth. It never grows 30%. But it goes into the high single-digit growth rate, and then in some periods it shrinks. Right now, we're probably going through that shrink because of the economy. Retailers have not stocked up. They have a little bit of a worried outlook over the next number of months. But TV is going to be an active market for us in the years to come. There's a real battle emerging, as you've probably seen in the press, As far as TVOS is concerned, there's a lot of major companies going into this, most of whom we're aligned with. So I think this is going to be an interesting few years ahead of us, but it will go through periods for quarters where it'll be difficult, and then after that, it grows. So we're not long-term concerned about consumer electronics.
spk01: All right. Thank you.
spk03: Sure.
spk01: All right. Thank you so much. Please stand by for our next question. Our next question comes from the line of Brian Ruttenberg of Imperial Capital. Your line is now open.
spk02: Brian Ruttenberg Great. Thank you very much. First question I have is about your cash and balance sheet and what you expect it to look like in the second quarter, the end of the second quarter. obviously down in the first quarter. Your debt was down a little bit. Where do you see things shaking out in the second quarter?
spk05: I think it's going to be similar. I think when you deal with cash flow on a quarterly basis, sometimes it could be difficult to forecast, and one of the reasons why we don't give quarterly forecasts on it, because you could have a customer that's, you know, here's an example that will pay you $5, $6 million at the end of the quarter, and they could easily push out a couple of days and actually know that falls in the following quarter. So, On a quarterly basis, it's difficult, but overall, I'd say I expect it to be similar in Q2 as in Q1.
spk02: Great. And then in terms of demand, typically, seasonally, you have your best quarters and third quarter. What are you seeing in terms of third quarter? I know that you're only getting through second quarter. Can you give us any kind of visibility into that third quarter, that key quarter?
spk03: Yes, as Brian said, we expect, we don't give that forward guidance. We, of course, did provide a range of guidance for Q2. So we don't provide, we never have really. Actually, it's been more than a decade, I think, since we've provided guidance out further. But, so I can't say we've never done it, but we haven't in probably at least 10 years, I think. But Brian did say that we, right now, what our forecasts say, based on customer wins and customer forecasts, that, you know, Qs 3 and 4 will be better than Q2.
spk02: Great. And will those – I guess I'm going to ask one more question that you're probably not going to answer, but do you see those, you know, down significantly year over year? Can you give us any kind of color on – as a percentage, you know, first and second quarter we're down X, therefore third and fourth quarter's will probably be down a similar amount year over year. I didn't know if you could give us any kind of color for the rest of the year.
spk03: Yeah, really couldn't give you any numbers because, again, we don't provide that guidance. To be fair, last year's Q4 wasn't as good, so it would be an easier comp, speaking from your perspective. But, you know, look, our goal here is We have many parts of our business. Home entertainment has struggled. The video service provider business has come down. The consumer electronics business is fine, but it goes through temporal changes. It just so happens that early this year when we've seen a downturn from the video service provider, we've also seen one of the probably every five years or eight years declines in TV sales. due to economic difficulties and retail issues that some of our customers are experiencing. So that part of our business has been tough. We, of course, have a different opinion on each part. But the smart home area, as we outlined, we've got a lot of new customers there. We've got a lot of design wins. They take a little longer. Some of them will come out this year, but we'll have lower volumes when they start. We're really trying to build for a better future at UEI at this point. If we could do something to have a huge amount of sales next quarter, we'd of course do it. But I think that building this back in these new areas takes a little bit of time, but we're looking towards a better 2024 based on the wins we're getting right now and we've gotten over the last six months. And the sales pipeline is pretty full right now in terms of the number of projects that we have to architect, design, architect, engineer, and then build. We've got a lot of work to do to get that done, but that's the good news. These projects have been won. We now have to either develop them or, in some cases, wait for the customer to ship the companion product. Because most of our business, as you know, is a companion product. We sell a controller for another product that has to be built. We're not always the long pole in the tent. Sometimes our products can be done in six months, but the companion product takes a year, so we have to wait a year before we can sell that companion product. So it doesn't matter, though, either way. The development lead times on some of these are longer. We'll start to see, as we outlined in the prepared remarks, Some of that volume will begin later this year, but some of these projects won't launch until Q1 of next year or Q2. But we're winning them, and we really feel very strongly about the potential in that part of the business. There's a few billion dollars worth of market out there, and we're just getting started. And we're aligned in HVAC with almost one-third of companies that are building almost one-third of that market today. So we've done the first step, which is to align ourselves with the leaders. We've won projects with them. Now we're going to go in and perform on those projects and win more.
spk04: Great. Thank you.
spk03: Yep.
spk01: Thank you so much. Please give us a moment while we stand by and compile the Q&A roster. And again, as a reminder, to ask a question, you'll need to go ahead and press star 1-1 on your telephone. Star 11 on your telephone.
spk06: Our next question comes from the line of Gregory Burns of Sudati.
spk01: Your line is now open.
spk04: I just wanted to follow up on some of that pipeline commentary that you just made, Paul. Can you just give us an idea of some of these more recent project wins or program wins? Like what types of applications those are for? Not necessarily specific customer details or anything, but just an idea of kind of what applications you're winning projects for.
spk03: Yeah. The ones I can mention, I will. Of course, we mentioned Daikin and Carrier. We also mentioned what we call METIS or Mitsubishi Electric Train, which is a joint venture here in the U.S. And as far as the products and technologies we're selling here, they're typically smart climate control devices. So we also have wins on products that Those out there who have been to CES have seen Tide Dial and Tide Touch. We have some standardized products that we've done this in home entertainment as well. We build standardized products, and then customers can either take them as that standard product or modify them, slightly the design of them. But the inherent value in them is the technology behind them. So these are the types of products clearly in HVAC that we're winning. And therefore, in many cases, a full smart thermostat.
spk04: Okay. Have there been any more incremental wins of the Hunter Douglas kind of Vivint flavor, like in the more home automation? Yeah.
spk03: There have. There are no new customers I can name right now, but even of the names we mentioned, we've added to the number of projects that those customers have awarded us. Because again, as our strategy is, we win a project or two, but then we are in at that customer, and if the customer is happy with the performance they're getting, they'll give us opportunities for other products. And in some cases, we pitch products that they may not have considered before, and they will consider us for that. And we have been winning projects in that market as well. There's no new names I can mention yet. But as I said, the pipeline has gotten pretty active right now for these projects and PIs, as we call them, that we're working on. And, again, it gives us a lot of real positive thoughts about both later this year, because they'll start to fold in some of them, but really for next year. Okay.
spk04: And then just to understand the timing, with some of the – that you've announced already, like Hunter Douglas and Thompi, are you shipping for those customers yet, or are those still like kind of second half?
spk03: Well, we have a couple projects with these customers, yes. We had one that I can't mention that was delayed, but it wasn't delayed due to us. They had approval processes. Sometimes customers have to go through an approval process that can take months. So if you forecasted it in a specific quarter, it can slip to the next. But our view on that is longer term. It's not good when that happens, obviously, but over the long term, it's not as relevant, right? If you're performing well on a product, and the customer continues to give you new SKUs, that's what really matters.
spk04: Okay. And then lastly, I know you sized kind of the total market, you mentioned a few billion, but specifically for the HVAC market, how do you size the opportunity there? And can it be as big as like the legacy home entertainment business over time or a fraction of the size? How should we think about that HVAC opportunity specifically?
spk03: Well, HVAC alone is probably almost as large now. Now, we're not considering our served market to be just like we did in home entertainment, by the way, places like China, because the HVAC systems there are often run with lower level controllers and There's not as good a margin opportunity there. We did the same in home entertainment, by the way. We do not have really any exposure to the Chinese market for subscription broadcasting because it's different economics. Similarly, in HVAC, we do not consider that part of our near-term served market. So when you look at global estimates of HVAC volume, they might be higher than I'm about to state because I'm excluding that from our market estimates. But that market today is over a billion. Home entertainment total between consumer electronics and video service provider is over a billion. It's probably in the mid-1 billion range. And the HVAC market is growing faster. It has a growth rate of high single digits, maybe even close to double digits. It's a growth market and there's a lot of action there because the controllers are becoming much more sophisticated and uh, because they're, they're making them smart as most people out there are very aware of. But in addition, they want to become a more important part of the smart home architecture. And there's a lot of things that you can do with these products that you weren't able to do before. They're not just about temperature management. They could be part of a home automation system, right? A smart product would know what the temperature is outside. It would know the desired temperature inside, and it may be even able to know presence of humans. So presence of humans could mean different temperature control mechanisms or algorithms. In addition, it may control the shades because it's a hot day and you're not home. Maybe you'd like the shades to be shut to keep your house cooler. You may want them open when you're home. There's any number of automation scenarios that you can envision. And these companies, HVAC companies, want to become a more integral part of that smart home. So they see us as a good entry there because we're connected to most of these protocols in the home. And in fact, most of the products that are in the home already have our control mechanisms inside of them. Televisions, sensors, et cetera. So we're experts and we're considered this even by the home entertainment companies, particularly the consumer electronics companies. We're embedding this into televisions today with LG. So we have real device knowledge within the home. We can discover, configure, and control them. And the HVAC companies are extremely interested in becoming a more relevant center of that smart home experience. I think it's a real good selling feature. It's probably the reason why we have so many of the top players interested in working with us, giving us projects in that area, and we think we can grow it from there. And again, it's strangely reminiscent to where we were in home entertainment some years ago, where our share wasn't as high, and we declared that it would be higher, and some who didn't believe us were wrong, right? We kept growing because we really have the capability. All right.
spk06: Perfect. Thanks. Thank you so much. Please stand by while we compile the Q&A roster. All right. At this time, I would like to turn it back to Kirsten for closing remarks.
spk03: Well, that would be me. I'll do that. I'm Paul Arling. Thank you for joining us today and for your continued support of Universal Electronics. We plan to present at the B. Reilly Annual Investor Conference later this month. Hope to see some of you there. If you have any questions, don't hesitate to reach out to us. Have a great day.
spk01: Thank you for participating in today's conference. This concludes the program. You may now disconnect.

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