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spk04: Good day, and welcome to the Velodyne LIDAR fourth quarter and year end 2021 financial results 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 also note this event is being recorded. And I would now like to turn the conference over to Andrew Chan. Please go ahead.
spk07: Thank you, Operator. Good afternoon. This is Andrew Chan, Head of IR for Velodyne LIDAR. Thank you for joining us today to discuss Velodyne LIDAR's fourth quarter and year-end 2021 financial results. On our call, Chief Executive Officer Ted Tewksbury will open with his vision and a review of 2021 accomplishments. Then, Chief Financial Officer Drew Hamer will review the financial results and outlook. Ted will return to summarize and open the call for questions. To ensure that we address as many analyst questions as possible during the call, we request that you please limit one initial question and one follow-up question. Before we begin, I would like to remind you that shortly after the market closed today, Velodyne issued a press release announcing its fourth quarter 2021 financial results. Velodyne also published an investor presentation. You may access the press release and the presentation in the investor relations section of VelodyneLIDAR.com. Today's discussion includes forward-looking statements. Please refer to our press release and our SEC filings, including our most recent 10-K and 10-Q, for a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements. In management's financial remarks, non-GAAP metrics will be referenced. Management provides 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 help investors evaluate Velodyne's core operating 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 these non-GAAP measures versus GAAP is included in the company's press release issued today. Now, I'd like to turn the call over to our new CEO, Ted Tewksbury.
spk05: Thanks, Andrew, and thanks to all of you joining us today. I'm very excited to be on my first call as CEO of Velodyne LiDAR. In the several months that I've been at Velodyne, I have been meeting with employees, customers, partners, and board members. I have been enormously impressed with the deep bench of talent here, the strength of our customer relationships, and the capabilities of our products and technologies. We have everything we need to achieve our mission of creating smart technology for a world in motion and our vision of science in service of safety. Velodyne invented LiDAR as we know it. creating an entirely new industry. LiDAR is a critical technology for autonomy, enabling the movement of people and goods safely through the world. It has the potential to transform every industry as we know it, and demand is growing exponentially across a wide range of applications. Velodyne has always been the LiDAR technology innovation and market leader, and is well-positioned to capitalize on this opportunity. I joined Velodyne to build on its strong foundation to create the fastest growing, most profitable, and financially successful global LiDAR company. As CEO of three public technology companies prior to Velodyne, I have a proven track record of scaling new technologies into profitable growth businesses. I'm here to do the same for Velodyne. I'd like to start today with a brief summary of our Q4 and full year 2021 financial results and some recent highlights. Then I'll discuss our focus areas for 2022, followed by an overview of product traction we are seeing with customers in our target markets. In the fourth quarter of 2021, we sold a record number of sensors for a quarter, more than 4,900 units. This brings sensors sold to over 15,000 for 2021. of which 2,400 were solid state. With a strong fourth quarter, we delivered full-year 2021 revenue of $62 million. Drew will provide a detailed review of our financials in a moment. The first step in any business transformation is to get the right people in the right seats. Last year, we announced key new hires, including our Chief Product Officer, Sinclair Vast, and our Chief Operating Officer, Jim Barnhart. Last month, we hired Dr. Anurag Gupta as Executive Vice President of Engineering, responsible for both hardware and software. Anurag's proven engineering leadership will help us accelerate the introduction of cutting-edge, next-generation LiDAR solutions. Last June, we opened our India Design Center in Bangalore, and we are already benefiting from the addition of a large team of brilliant engineers. In 2021, Velodyne put in place a strong foundation for growth. In 2022, our top priority is to accelerate the path to profitability by rationalizing our cost structure and driving LiDAR deployments at scale across a wide range of industries. Our strategy for doing this consists of four pillars. The first pillar is to drive LiDAR volume in early autonomous markets, such as industrial, robotics, and intelligent infrastructure, paving the way for success in later automotive applications. We are synchronizing our investments to coincide with two major waves of LiDAR commercialization. The first wave will be dominated by industrial automation, robotics, and intelligent infrastructure. According to Yolei, These markets alone are estimated to be $2.8 billion by 2026, and their growth ramp has already started. Velodyne has the right products ready to ship in volume to these markets today. The second wave, autonomous vehicles, or AVs, and advanced driver assistance systems, or ADAS, will ramp into production later in the decade. According to Yolei, By 2026, the automotive market is estimated to be another $2.9 billion, bringing our total available market to $5.7 billion. Within automotive, our strategy is to focus initially on trucking, AVs, and leading-edge electric vehicles, or EVs, which are an excellent fit for our existing products. Based on our conversations with many automotive Tier 1s and OEMs, We believe that mainstream adoption of LIDAR in passenger cars will require smaller form factors and lower prices than are currently available today. Supplying high-performance LIDAR at scale into the early markets will generate near-term revenue while enabling us to perfect the high-volume, low-cost manufacturing needed to succeed in automotive and other price-sensitive applications. This strategy will enable us to benefit from successive layers of revenue growth, maximizing our return on investment over both the short and the long terms. The second pillar is to develop high-performance sensors at a price point to accelerate mass adoption. As I mentioned, this is essential for automotive and ADAS applications, where sensor prices need to fall well below $500 before most Tier 1s and OEMs will deploy LiDAR at scale. Velodyne already offers the broadest LiDAR portfolio with the best overall performance to price ratio in the industry. This includes both rotational as well as solid state sensors for a wide variety of applications. Going forward, we are pursuing a multi-pronged approach to reducing product costs even further while simultaneously meeting our customers' most demanding performance requirements. First, we are developing new sensor architectures with fewer components and inherently lower bill of materials costs. Second, we are employing a platform-based design approach, leveraging our proprietary chip-based technology, the micro LiDAR array, across our entire product portfolio. We will continue to miniaturize, integrate, and modularize common building blocks to improve engineering efficiencies and scalability. Third, we are using software configurable hardware to address diverse use cases with speed and agility. These initiatives will enable us to drive prices down while simultaneously pulling gross margins up. The third pillar, is to expand our software to deliver complete autonomous vision solutions to our customers. Our customers use our LiDAR sensors as one component of a system that also includes software and sometimes other sensors. Our goal is to provide as much of that solution as possible to increase our value to customers while expanding our revenue and gross margins. In 2021, we strengthened the company's software offerings with the introduction of the Vela Development Kit, which we call VDK. VDK provides customers with the ability to plug in our LiDAR sensors with Vela, an off-the-shelf library of software functions to fast-track their solution development. Our Vela software translates raw point cloud data into actionable information, delivering high-level perception outputs for roadways, sidewalks, and indoor environments, including scene segmentation, object detection, velocity estimation, free space detection, and LIDAR-based odometry. The next generation of Vela and VDK will include even more advanced software and machine learning capabilities, including scalable machine learning, enabling our sensors to continuously learn improve performance, and adapt to changing environments and use cases. Platform services, enabling customers to develop their own applications with Velodyne LiDAR, using our cloud analytics, diagnostics, calibration, perception, visualization, and other APIs. Sensor fusion, enabling multiple LiDAR to be integrated with camera, radar, and other sensors for applications like ADAS that require redundancy. And new vertical market solutions optimized for our target applications, including warehouse robotics, intelligent infrastructure, AV, ADAS, and ground truthing. And finally, our fourth pillar is to lead with operational and manufacturing excellence. With over 67,000 sensors shipped to date, Velodyne has established itself as a clear leader in shipping LIDAR at scale. In 2021, we made excellent progress in transferring our high volume products offshore. 80% of our Velleray line and 100% of our Puck product family are now running at contract manufacturers. We expect to complete the transfer of all of our lines offshore later this year. while maintaining optionality for Buy American compliant products here in the U.S. In 2022, we continue to increase the automation of our manufacturing processes and put in place the capacity to deliver high volumes and quality levels as required by an industry poised for significant growth. Successful execution of the four pillars will enable Velodyne to focus investments on high ROI opportunities that deliver greater value to customers while lowering the company's overall cost structure and driving the volume levels needed to build a profitable growth business. Now, I'd like to provide a deeper dive into the impressive progress we've made with customer adoption of our products in our three target markets, industrial and robotics, intelligent infrastructure, and automotive. The industrial and robotics market is closest to large-scale commercial deployments. Companies worldwide are automating their supply chains to save money, improve efficiencies, and alleviate bottlenecks caused by the pandemic and other macro issues. In warehouses, our customers are using Velodyne LiDAR-enabled robotics to move goods with a high level of precision, efficiency, and safety, helping to maintain continuity of operations. Currently, e-commerce retailers and sidewalk robotics programs are deploying our LiDAR for fulfillment, delivery, and data center operations. For example, one of our customers is Gatic, whose middle-mile delivery trucks fulfill revenue-generating orders daily for Walmart and other Fortune 500 companies. In industrial environments, customers have integrated Velodyne's LiDAR sensors to power robotics in airports and seaports. Also, Velodyne is the LiDAR provider of choice for drones. Our sensors enable 3D mapping and digital twin modeling of indoor and outdoor environments, providing an efficient and cost-effective way to map large areas in just hours. The second target market ripe for commercialization is intelligent infrastructure and smart cities. Melodyne's Intelligent Infrastructure Solution, or IIS, generates real-time data analytics and predictions, helping to improve traffic and crowd flow efficiency, improve sustainability, and protect vulnerable road users. LiDAR reliably collects data in any weather or lighting condition, 24-7, IIS is cost-effective and easily installed with a single sensor. It can provide coverage for an entire intersection, replacing inductive loop detectors, camera, and radar. Our award-winning solution is implemented across three continents, with North American pilots rolled out in seven states so far. We expect traction in the intelligent infrastructure market to accelerate with new funding from the recently passed $1.2 trillion infrastructure bill. The third market, automotive, includes both AVs and ADAS. While Level 2 Plus and Level 3 ADAS have been slower than expected to reach full deployment, we remain convinced that the high functional safety levels needed for automotive require LiDAR as an essential component of the sensor suite. Autonomous shuttles, including BEEP by Navia, May Mobility, and leading robotaxi innovators such as Motional, are integrating Velodyne's LiDAR in their systems to provide the highest levels of performance and safety. New electric vehicle companies like Faraday Future are using our solid-state directional sensors to leapfrog traditional EV OEMs. Melodyne will power their autonomous driving systems to help deliver a comprehensive suite of highway, urban, and parking autonomy features. Trucking accounts for over 72% of the transportation of goods in the U.S. alone. Autonomous trucking programs are rapidly expanding to address capacity, efficiency, safety, and environmental concerns. Melodyne's LIDAR and perception software are being deployed in driverless trucks by companies like Ford Autosan and Trunk Tech. For safety-critical applications, our Pedestrian Automatic Emergency Braking Software solution, also called PAEB, has been shown to dramatically improve safety in darkness as compared to current camera plus radar solutions. Tragically, 2021 saw an historic increase in roadway fatalities. Data show that approximately 76% of pedestrian fatalities happen at night or in low-light conditions. Velodyne's PAEB can help prevent these tragedies and save lives. Velodyne is actively working with the National Highway Transportation Safety Administration and other government agencies to update performance standards and require the safety performance that LIDAR can provide to help protect vulnerable road users. Finally, Velodyne would not be where we are today without our partners and customers. Our Automated with Velodyne program now has 100 partner companies, including NVIDIA and Siemens. Our partners are working to commercialize next generation autonomous solutions in the global market using Velodyne's LiDAR sensors and software. While we are proud of all of these successes, We acknowledge that the company needs to do a much better job of parlaying these opportunities into financial results and shareholder value. We believe that the focus provided by the four pillars strategy will enable us to do this. We also recognize that the company's previous guidance has fallen short of actual financial results. As I start my tenure as Velodyne's new CEO, It is important to me to build credibility and trust with all of our investors and analysts. With that in mind, it would not be judicious to provide guidance beyond the range of our visibility. As you have seen, Velodyne is experiencing robust customer demand for our products across all of our target markets. These early deployments of Velodyne LiDAR in real customer products are the best leading indicators of revenue growth in the next several years. That said, our ability to supply this demand is severely constrained by shortages of critical semiconductor components needed to build our sensors. Given our limited visibility, we will not provide full-year guidance as the company has done in the past. Instead, we will provide quarterly guidance as we move into 2022. We look forward to providing longer-term models when our visibility improves. With that, I'll turn it over to Drew to provide more detail on our financials.
spk00: Thanks, Ted. Hello, everyone.
spk06: It's my pleasure to speak with you today. As noted at the onset of the call, I will provide non-GAAP results for the fourth quarter and full year 2021. Starting with the fourth quarter, Total revenue increased to $17.5 million, up from $13.1 million in the third quarter of 2021, reflecting across-the-board improvements. Product revenue grew to $13.7 million, up from $11.8 million in the third quarter of 2021. This reflects our third consecutive quarter of increased demand and growth in our unit sales volumes. During the fourth quarter, we sold more than 4,900 sensors, of which more than 900 were solid state, reflecting a linear increase in demand. The weighted average selling price per sensor increased to $2,738 in the fourth quarter, compared to $2,622 in the third quarter, reflecting strong demand for our products. License and services revenue was $3.9 million, up from $1.3 million in the prior quarter, reflecting an annual royalty true-up of approximately $2.4 million due to increased usage. We delivered a gross profit of $3.2 million, improving $7.4 million when compared to a third quarter gross loss of $4.2 million. This reflects increased sensor licensing revenue, the benefit of higher volumes, and improvements in production yields and reserves for potential excess materials. Operating expenses were $35.2 million compared to $33.4 million in the third quarter, primarily due to increased investments in our technology. Net loss improved to $31.8 million, or 16 cents per share, compared to $37.5 million, or 19 cents per share, in the third quarter of 2021. We ended the year with $294.4 million in cash and short-term investments, compared to $350.3 million at December 31, 2020. This reflects $89.3 million from the exercise of our publicly traded warrants, offset by our operating cash usage of $120.7 million. For the year ending December 31, 2021, We are pleased to have grown our unit volumes to over 15,000 LiDAR sensors, up 35% compared to 2020. We are proactively working to achieve mass adoption pricing levels, and we lowered weighted average selling prices from $4,632 in 2020 to $2,988 in 2021. Total revenue was $61.9 million compared to $95.4 million in 2020. Product revenue was $48 million compared to $68.4 million in 2020. The change reflects a one-time $11.1 million stocking fee in 2020 and $16.3 million related to lower ASPs in 2021 that are partially offset in 2021 by an increase of $7 million in the volume and mix of sensors and parts sold. License and services revenue was $13.9 million in 2021, compared to $27 million in 2020, which reflected a non-recurring fee for the patent cross-license agreements entered into during the second and third quarters of 2020. Net loss was $129.8 million compared to $65.1 million for 2020. Turning to guidance. As Ted mentioned, going forward, we will provide guidance on a quarterly basis until visibility into market conditions improves. Based on currently available information, we expect revenue for the first quarter to be between $10 million and $12 million, driven by shipments of product to the company's global customer base. We expect the number of sensor shipped and weighted average selling prices to fluctuate each quarter based upon customers' needs and product mix. The revenue guidance excludes an estimate of the non-cash contract revenue charges of $5 million to $7.5 million investing in the first quarter of 2022. This is expected to result from the issuance to Amazon.com NV Investment Holdings LLC of a warrant or the Amazon warrant. to purchase up to an aggregate of 39,594,032 shares of the company's common stock, subject to adjustment investing in accordance with the terms and conditions set forth in the Amazon warrant. While we believe the warrant has far-reaching value implications to Belladon LIDAR, the accounting rules fall within U.S. GAAP revenue standards since the warrant is directly related to our product sales with Amazon. The number of warrant shares vesting will primarily be proportionate to the discretionary purchases by Amazon or its affiliates and recorded as a contra revenue in the periods the discretionary payments occur. The vesting of the warrant shares is based on these discretionary payments made pursuant to existing commercial agreements with Velodyne and Amazon, any possible future commercial agreements between Velodyne and Amazon, and the anticipated entry into an agreement between Velodyne and Amazon related to the use of Velodyne's technology. With that, I'll turn the call back to Ted.
spk05: Thank you, Drew. We have taken decisive action by strengthening our exceptional leadership team, adding outstanding engineering talent, and advancing our roadmap of LiDAR innovation. As you have seen, we are experiencing strong traction across multiple applications, especially in industrial, robotics, and intelligent infrastructure. And this is the best leading indicator of revenue growth in the next several years. To summarize, we plan to make LIDAR ubiquitous in a wide range of mainstream applications by focusing on the four pillars. First, by driving LIDAR volume in early autonomous markets. Second, by developing high-performance sensors at a price point to accelerate mass adoption. Third, by expanding our software in order to deliver complete autonomous vision solutions. And fourth, by leading the industry in manufacturing and operational excellence. By focusing on the four pillars, we plan to expand our value to customers while accelerating the path to profitable revenue growth. LiDAR is going to make our communities safer, our supply chains more efficient, and our planet greener. And Velodyne is leading the way. I thank each of you for joining today's call and look forward to touching base throughout the year as it unfolds. In March, we will be at three events, Cowen's Virtual Mobility Disruption Summit, Berenberg's Virtual Industrial Technologies Conference, and Roth's Annual Conference in person. Then, in April, we will present at Bank of America's Annual Global Automotive Summit, hosted in conjunction with the New York Auto Show.
spk00: Operator, I'd now like to open the call for questions. We will now begin the question and answer session.
spk04: If you'd like to ask a question, press star, then 1 to join the queue. If you are using a speakerphone, please pick up your handset before pressing the keys. If you'd like to withdraw yourself from the question queue, press star, then 2.
spk00: We will pause momentarily to assemble our roster.
spk04: And the first question comes from Colin Rush with Oppenheimer. Please go ahead.
spk03: Thanks so much. Gus, can you break out the mix of hardware sales by application? Obviously, the automotive market is coming a little bit slower than folks had expected. So I'm just curious, you know, how much of those hardware sales are actually going into testing programs and how much of it is going into all these other industrial applications that are actually growing right now?
spk06: We see our sales, this includes all of our R&D sales and everything else, so it's not just the commercial sales or the industrial, but we do see our split. It's probably running around at 30% in the automotive space, and the rest is going across various industrial sales.
spk03: Okay, excellent. And then, you know, as you ramp up production, can you talk a little bit about yield coming off those automated lines and what you're seeing and and how much improvement there might be left to go in terms of some of the cost reduction and efficiency of that manufacturing.
spk05: Colin, we're not going to talk openly about our yield. However, I can say that we're seeing, under Jim Barnhart's leadership as our COO, we're seeing continuous improvements in our yield.
spk03: Okay, great.
spk00: I'll take it offline. Thanks so much, guys. The next question comes from Raji Gill with Needham & Company.
spk04: Please go ahead.
spk01: Yeah, thanks for taking my questions. I appreciate it. Just drew on the gross margins. We've started to see some improvement on the product gross margins. The negative decline is not as great. It's about negative 8%. And the overall gross margins have been helped by a higher mix of licensing and services. So when you kind of look into 2022, how should we think about the ASP declines? And then how do we think about kind of the mix of licensing and services? So we clearly see, you know, you guys moving offshore to kind of reduce the cost of manufacturing, reducing the product cost. But how do we think about ASP? Should we be expecting kind of another decline in ASPs as you kind of ramp production? So any thoughts there would be really helpful. Thank you.
spk05: So let me – this is Ted. Let me just comment on the ASP trends that we're seeing. First of all, long-term, as I indicated in my prepared remarks, we are committed to driving down our cost structure so that we can reduce our prices. And second thing is we pull gross margins up. So that's all happening. However, in the short term, we have headwinds from the supply constraints that I mentioned. There are particular semiconductor components which are in scarce supply. And in some cases, we have to pay higher than normal prices for those components. And fortunately, we're able to pass on those costs to our customers in the present environment. So you will see ASPs starting to drift up due to that second trend. But then, you know, going forward towards the end of the year and into 2023, you'll start seeing ASPs coming down. Anything you want to add to that?
spk06: Yeah, so I think it's similar to what Ted said, maybe phrasing it differently, is, you know, right now we're not in normal times with everything that's going on with inflation. This is the first time people have seen this in decades. So our customers are understanding of that, and we will see ASPs come up a bit. But in a normal situation, I think as we've talked about it in the past, we think of, You know, ASPs coming down kind of on a linear basis over time. I think of it as like a four-quarter kind of linear line that you might average out so that you can see it trending down. And that's going to be a function of us bringing to market sensors that have a lower price point, like our Bellarays and others, while we still may maintain higher prices on some of our other sensors. So we'll be giving you the weighted average ASPs across all the sensors, but we do expect to kind of on a linear basis over time we should see that trending down. when things return to normal.
spk05: And I should add to that that the increasing prices that we're seeing as a result of the supply constraints are not causing us to lose design links because the entire supply chain is in the same environment, including all of our competitors.
spk01: Very good. It's my follow-up. I appreciate it, Ted, outlining the strategy, the four pivots. Just wondering in terms of your customer portfolio, You did mention that you're seeing an increased penetration of solid-state sensors. I'm wondering, you know, how we think about solid-state sensor penetration this year, what customers in which end markets are adopting the solid-state, and wondering about, you know, the nature of some of these multi-year agreements and how you're looking at those multi-year agreements and project pipelines progressing throughout the year. Thank you.
spk05: So let me first comment on the solid state sensor question. We are seeing solid state sensors being sold into automotive applications. Also, a lot of the robotics and industrial automation applications are using solid state, but they're also using rotational. So we're seeing both types of sensors being sold in those kinds of applications. In the intelligent infrastructure segment, the surround view rotational sensors are very popular. Our products are very popular because you can mount one on a telephone pole at an intersection, and you've got immediate real-time 3D view of traffic and road conditions and pedestrians and other vulnerable road users. So we're seeing both of those. But we do expect to see a continuing increase in the solid-state sensors. They do have the benefit of a lower price point and are very suitable for a lot of those industrial applications. As far as the multi-year agreements are concerned, you will notice that they were conspicuously absent from the press release as well as from the prepared remarks. The reason for that is that these are very important metrics that we use to measure the business internally. and we will continue to measure both multi-year agreements as well as the funnel statistics, the number of active customer projects that we have ongoing. The company was very transparent in the past in providing those details in these calls. However, given the increasingly competitive nature of the industry, we've made the decision that we will no longer be reporting those multi-year agreements and active projects in the funnel as we've done in the past. We are in the process of defining new metrics that we will be able to share with you that will give you a more accurate leading indicator of future revenue growth, and we'll start doing that next quarter.
spk00: Thank you. The next question comes from Sam Peterman with Craig Hallam. Please go ahead.
spk02: Hi, guys. Thanks for taking my question. I want to ask first on sales for next year. I'm sorry, for next quarter. Can you break down how much that you expect to come from products versus licenses and services?
spk06: Yeah, so a vast majority of that's going to come from products. We have kind of a run rate of licenses and services of around a million dollars a quarter. And so that should continue. And then the rest will be coming from products.
spk02: Okay, great. That's really helpful. And then kind of a bigger picture here, you mentioned a new architecture that you're transitioning to. Can you describe that architecture a little more? And then can you talk about what that means for, you know, the fellow family of products that you have been developing as your next-gen products?
spk05: So, yeah, I'd prefer not to give any more detail publicly on the architecture that we're working on, the low-cost architecture. I think, you know, the company has... you know, erred in the past and being a little bit too open announcing products before they were ready for full volume production. And I think that doesn't serve our investors well, doesn't serve the company well. It certainly serves our competitors very well. So we don't want to do that anymore, but just elaborate a little bit more on the products that we have in the development queue right now. The first, you know, would be these new architectures to achieve the performance that our customers require in our target market at a much lower price point. And that's particularly to accelerate adoption in automotive, where, as I mentioned, our customers are demanding prices of several hundred dollars. So that's a pretty big hurdle, and that does require new architecture development. The second kinds of products that we have in the pipeline are next generations of platforms that we already have, where we are addressing new use cases as well as reducing costs. And we're doing that, as I mentioned in the prepared remarks, by leveraging reusable hardware, software configurability, and the micro LiDAR array. which has really been a workhorse building block that we can proliferate through the entire product line in order to reduce cost, improve the scalability, and get products to market very fast. And then the third new product category, of course, is the software, where we continue to move up the software stack in order to deliver complete solutions to our customers and deliver more value to them, which in turn increases our gross margins and our profitability.
spk02: Okay, great.
spk00: Thanks for the detail. That's all for me. Thanks, Jim. We still have time for questions, so if you'd like a question, press star, then 1 to join the queue. All right, this concludes our question and answer session. I'll turn the conference back over to Ted Tewksbury for any closing remarks. Well, thank you all for joining us today, and we look forward to seeing you at the upcoming events. Thank you very much. Have a good day. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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