Cambium Networks - Q1 2024

Executive Summary

• Q1 2024 revenue was $42.3M (+5% q/q, -45% y/y), with GAAP gross margin of 20.5% and non-GAAP gross margin of 22.7%; results fell short of Q1 guidance as gross margin was impacted by ~$7M in inventory reserves and supplier commitments (ex-charges GM would have been ~39.2%).
• Enterprise recovered sharply (+231% q/q), EMEA revenue rose +146% q/q, and sell-out exceeded sell-in as channel inventories declined; management targets EBITDA-positive in 2H24 and has reduced breakeven to < $60M quarterly revenue.
• Guidance reset: FY 2024 revenue cut to $205–$225M (from $215–$245M), non-GAAP GM lowered to ~40% (from ~44%), and non-GAAP net loss widened to $11.6–$18.0M (from $(13.6)–$2.3M), reflecting tougher enterprise pricing and mix.
• Catalyst: Final FCC/ISEDC approvals for ePMP 4600 6 GHz announced May 21; management expects PMP ramp to build through 2024, while BEAD is likely more of a 2025 driver.

What Went Well and What Went Wrong

What Went Well

• Enterprise revenue improved 231% sequentially as demand recovered and channel inventory declined; management launched first Wi‑Fi 7 product (X7‑35X).
• EMEA revenue increased 146% q/q on enterprise recovery; sell-out from distributors higher than reported revenue, supporting inventory normalization.
• FCC approval for 6 GHz spectrum (late Q1, and full approvals mid-May) positions ePMP 4600/PMP 450 product lines for growth; devices under cnMaestro cloud management rose 15% y/y.

What Went Wrong

• Q1 results came in slightly below the company’s outlook; PTP defense orders were delayed, and 6 GHz approval timing reduced PMP shipments.
• Gross margins were depressed by ~$7M of excess & obsolete inventory and supplier commitments; non-GAAP GM was 22.7% vs guided 41–44%.
• Profitability remained weak: GAAP net loss of $26.4M; non-GAAP net loss of $12.7M; adjusted EBITDA margin -36.7%; cash used in operations was $15.6M.

Transcript

Operator (participant)

Good afternoon. My name is Therese, and I'll be your conference operator today. At this time, I would like to welcome everyone to the Cambium Networks First Quarter 2024 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. To ask a question during the session, you will need to press *11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press *11 again. Please limit your questions to one question and one follow-up. Please be advised that today's conference is being recorded. Thank you. Mr. Peter Schuman, Vice President, Investor, Industry Analyst, and Public Relations, you may begin your conference.

Peter Schuman (VP of Investor Relations)

Thank you, Therese. Welcome, and thank you for joining us today for Cambium Networks First Quarter 2024 Financial Results Conference Call, and welcome to all those joining by webcast. Morgan Kurk, our CEO, and Jacob Sayer, our CFO, are here for today's call. The press release and CFO commentary referenced on this call are accessible on the investor page of our website, and the press release has been submitted on Form 8-K with the SEC. A copy of today's prepared remarks will also be available on our investor page at the conclusion of this call. As a reminder, today's remarks, including those made during Q&A, will contain forward-looking statements about the company's outlook and forecasted performance. These statements are based on current conditions, forecasts, and assumptions. Risks and uncertainties could cause actual results to differ materially.

Except as required by law, Cambium Networks does not undertake any obligation to update or revise any forward-looking statements for any reason after the date of this presentation, whether as a result of new information, future developments, to conform these statements to actual results, or make changes in Cambium's expectations or otherwise. It is Cambium Networks' policy not to reiterate our financial outlook. We encourage listeners to review the full list of risk factors included in the Safe Harbor Statement, today's financial results press release, and our most recent Form 10-Qs and 10-Ks filed with the SEC. We will also reference both GAAP and non-GAAP financial measures and specifically note that all sequential and year-over-year comparisons reference non-GAAP numbers except where otherwise noted.

A reconciliation of non-GAAP measures to GAAP is included in the appendix to today's financial results press release, which can be found on the investor page of our website and in today's press release announcing our results. Turning to the agenda, Morgan will provide the key operational highlights for the first quarter 2024, and Jacob will provide a recap of the financial results for the first quarter 2024, and we'll discuss our financial outlook for the second quarter and full year 2024. Our prepared remarks will also be followed by a question-and-answer session. I'd now like to turn the call over to Morgan.

Morgan Kurk (CEO)

Thank you, Peter. I want to begin by first introducing Jacob Sayer, our new CFO. For those of you who didn't see our press release, Jacob joined Cambium from Sensata Technologies, a global industrial technology company with over $4 billion in revenue, where he was most recently VP of Finance and headed Investor Relations, and previously held divisional CFO roles for the various segments of Sensata. Jacob has 15 years of experience with technology companies and another 17 years of experience in various investment banking roles. We are pleased to have him on board to help drive operational excellence, strategy, growth, and value creation. I would also like to thank John Becerril for stepping up as interim CFO for the past quarter.

As expected, the FCC finished the process for the long-awaited approval of 6 gigahertz spectrum in Q1, although later in the quarter than we had hoped, leading to lower-than-anticipated shipments of our point-to-multipoint (PMP) products. In the last week of the quarter, Cambium received final approval for our ePMP 4600 6 gigahertz access point products and standard power subscriber modules, with high-power subscriber modules expected to be approved in May. Summarizing the performance of Q1 2024: Revenues for Q1 2024 were $43.2 million. The shortfall to guidance was mostly related to delays in defense orders in North America and Europe in the point-to-point (PTP) business, which decreased 34% sequentially. We expect sequential increases in this portion of the business throughout 2024.

Our PMP business in North America was slower than anticipated, decreasing 14% due to the aforementioned timing of the 6 GHz product approval process by the FCC late in the first quarter. The FCC approval is anticipated to drive sales of Cambium's new 6 GHz ePMP 4600 and PMP 450v product lines, both of which are available today. On a positive note, enterprise revenues improved 231% sequentially as demand improved and channel inventory levels declined. Also in April, we launched our first Wi-Fi 7 product. While revenues came in only slightly below our outlook, gross margin did not meet expectations primarily due to an increase in reserves for excess and obsolete inventory of finished goods and components. We did see improved product mix sequentially during Q1 2024 as a result of increased enterprise revenues, and we maintained good cost controls and tightly managed our operating expenses.

Sales of Cambium's products out of the distribution channel, as reported by Cambium's distributors, were higher for Q1 2024 than Cambium's reported revenues, and we saw corresponding declines in channel inventories. We continue to make good progress in clearing channel inventories, and in aggregate, the inventories are approaching healthy levels. We are diligently monitoring and managing channel inventories as shorter lead times and increased cost of capital may drive different behaviors by distributors than in the past. As communicated previously, we expect channel inventories to be back to normal by the end of Q2 2024, which will result in sales-in and sales-out approaching equilibrium. This should drive incremental improvements of sales into the channel and, therefore, an incremental improvement to revenues.

Looking at some customer wins that are key to our future success: In the US, our enterprise business had a sizable win with the New Orleans Convention Center, a project which is expected to ship throughout the year. This win includes over $1 million of enterprise gear and was the result of Cambium's ability to deliver industry-leading performance in unique, high-density, dynamic deployment. The entire upgraded system will run on our cnMaestro X single pane of glass management system. The flexibility in dynamic reconfiguration is critical for the center and demonstrates the versatility of Cambium's solution. In Australia, Glencore, one of the largest mining companies in the world, selected Cambium's ONE Network to deploy and manage Cambium's fiber and Wi-Fi upgrade for a large mining camp.

This deployment will consist of a mix of over 350 indoor and outdoor Wi-Fi access points and Cambium's fiber ONTs, all managed by cnMaestro. The combination of indoor and outdoor Wi-Fi and PON-based interconnectivity from a single vendor results in a tightly integrated, cost-effective, and efficient network. In the PMP space, we had a significant win with a wireless service provider in Kenya, Safaricom, for a three-year deal to roll out residential and business connectivity using our ePMP product line, Cambium ONE based on tactical strength, ease of deployment, and the cost-effectiveness of the solution. Now turning to upcoming product introductions since our previous quarterly update: In March, we announced our first Wi-Fi 7 access point with the launch of our new X7-35X tri-radio, tri-band, 2+2+2 unit.

Wi-Fi 7 is another step forward in wireless connectivity, offering data speeds reaching up to 9.2 gigabits, ensuring lightning-fast downloads, seamless streaming, and lag-free experiences. While pushing the boundaries of performance, Wi-Fi 7 remains backwards compatible with all previous Wi-Fi standards. Wi-Fi 7 works with Cambium Networks' cloud-managed or on-prem cnMaestro management system for secure end-to-end network control. Finally, total devices under cnMaestro cloud management in Q1 2024 increased approximately 4% from Q4 2023 and were up 15% year-over-year. I will now turn the call over to Jacob for a review of our Q1 2024 financial results and Q2 2024 and full year 2024 financial outlook.

Jacob Sayer (CFO)

Thank you, Morgan. While the Q1 2024 results are below expectations, we do see the business beginning to improve and can now look forward to growth.

The Q1 2024 revenue shortfall was isolated to delays in government orders in the P2P business and the timing of approval for the 6 GHz PMP solutions later in the quarter than expected, the impacts of which we expect to be behind us shortly. Q1 2024 results included additional inventory charges and additional supplier commitments, which impacted gross margins by approximately $7 million and reflect the current state of the markets and product demand. Without these charges, gross margins would have been approximately 39.2%, which would have been closer to the original forecast at the start of the quarter but only slightly lower due to the impact of mix within defense products and P2P. We continue to work hard on managing our operating costs to align with the current forecast for 2024 and are focusing resources on those products and projects that are most critical for Cambium's future success.

Turning to the quarter, Cambium reported revenues of $42.3 million for Q1 2024. Revenues increased by 5% or $2.1 million sequentially. The majority of the increase in revenues was the result of improved order volume for our enterprise business in both North America and Europe, albeit from a low base. While PMP revenues decreased 14% quarter-over-quarter due to the delayed timing of approval for 6 GHz products in the United States and the territories, this was partially offset by some recovery for the PMP business in Europe during Q1 2024. P2P defense revenues were lower due to delays for defense orders in Europe and North America after strong year-end results.

By region, Europe increased 146% sequentially as a result of recovery in the enterprise business, while other regions decreased, with North America lower by 7% due to the timing of defense orders impacting the P2P business and delays in the approval for 6 gigahertz products hurting the PMP business, while CALA dropped by 8% and Asia decreased by 10% sequentially. Moving on to our gross margins: Our non-GAAP gross margin for Q1 2024 was 22.7% compared to a negative 25.1% in Q4 2023. The higher quarter-over-quarter non-GAAP gross margin was primarily the result of lower rebates and higher enterprise revenues and lower freight costs, although we were once again impacted by the need to increase inventory reserves and had a lower mix of high-margin, higher-margin defense products.

In Q1 2024, our non-GAAP gross profit of $9.6 million was higher by $19.7 million sequentially due to lower excess inventory charges, higher enterprise revenues, and lower rebates. Non-GAAP total operating expenses, including depreciation and amortization in Q1 2024, stood at $26.4 million, or 62.3% of revenues. When compared to Q4 2023, non-GAAP operating expenses were approximately flat during Q1 2024. The quarter-over-quarter operating expenses had higher G&A due to increased professional services and higher bad debt expense, offset by lower payroll and less spending on R&D materials. Our non-GAAP net loss for Q1 2024 was $12.7 million, or a loss of $0.46 per diluted share that was below our outlook for the quarter and compared to a non-GAAP net loss of $28.2 million, or a loss of $1.01 per diluted share during Q4 2023.

Adjusted EBITDA for Q1 2024 was a loss of $15.5 million compared to a loss of $35.2 million in Q4 2023. Moving to cash flow: Cash used in operating activities was $15.6 million for Q1 2024 and compares to cash used in operating activities of $6.2 million for Q4 2023. During Q1 2024, we continued to execute on converting receivables into cash and managing working capital closely, offset by the net loss. Turning to the balance sheet: Cash totaled $38.7 million as of March 31, 2024, an increase of $20 million from Q4 2023. This sequential increase in cash primarily reflects a draw of $40 million on the company's $45 million revolver, partially offset by the net loss: material purchases to suppliers and capital expenditures. As we look forward, we are focused on conserving cash by minimizing operating expenses, lowering capital expenditures, and continuing to convert inventory into revenues.

We expect to be EBITDA positive during the second half of calendar 2024 and have reduced our break-even profitability to below a $60 million quarterly revenue run rate. Net revenues, sorry, net inventories of $55.6 million in Q1 2024 decreased by $11.3 million from Q4 2023. Net inventories were lower sequentially, driven by both consumption and due to higher reserves. As a reminder, our goal for 2024 is to reduce our inventories balance to closer to $40 million. In summary, first quarter revenues turned out slightly lower than anticipated because of delays in timing of the defense shipments as well as the FCC granting approval of 6 gigahertz spectrum later in the quarter than we had hoped. Cambium expects to soon receive our final approval for 6 gigahertz ePMP high-power products. On a positive note, we had higher enterprise revenue as market conditions are starting to improve.

Our gross margin improved sequentially as a result of lower rebates and higher enterprise revenues in a very competitive business environment. We continue to see improvements in channel inventories and remain vigilant about managing costs, which should benefit future operating performance. During Q1 2024, we saw an improving start for enterprise business as the channel inventories continued to decline. As we regain scale for enterprise, we expect to improve our operational efficiency each quarter this year. For the PMP business, we now have approval by the FCC of the 6 GHz spectrum, which will help that business. For the P2P business, we are pursuing several large defense opportunities. We continue to work to consolidate a smaller number of product to a smaller number of product platforms for our overall business for the next few years.

Moving to the second quarter and full year 2024 financial outlook: Cambium Networks' financial outlook does not include the potential impact of any possible future financial transactions, acquisitions, pending legal matters, or other transactions. Considering our current visibility, our Q2 2024 financial outlook is as follows: Revenue between $43-$48 million, representing growth of approximately 2%-13% sequentially. Non-GAAP gross margins of between 40%-42%. Non-GAAP operating expenses, including D&A, between $24.6-$25.6 million, leading to a non-GAAP operating loss between $5.4-$7.4 million. Interest expense net is expected to be approximately $1.8 million, and non-GAAP net loss of between $5.4-$6.9 million, or net loss per diluted share between $0.19 and $0.24. Adjusted EBITDA is expected to be between -$4.2 million to -$6.2 million, and adjusted EBITDA margin between -8.8% to -14.4%.

We expect a non-GAAP tax benefit of approximately 25%, and we expect to have about 28 million weighted average diluted shares outstanding. Cash requirements are expected to be as follows in Q2: First, a paydown of debt of $700,000, cash interest of approximately $1.7 million, and capital expenditures between $1.5-$2.5 million. Our full year 2024 financial outlook is expected to be as follows: Revenues between $205-$225 million, representing a decrease of 7% up 2%; non-GAAP gross margins of approximately 40%; non-GAAP net loss between $11.6 million to a net loss of $18 million, or a loss of between $0.41-$0.64 per diluted share; Adjusted EBITDA margin between -2.2% to -6.8%. For the year, capital expenditures are expected to be approximately $9-$11 million. I'll now turn the call back to Morgan for some closing remarks.

Morgan Kurk (CEO)

We continue to work with our channel and end customers to manage inventory and improve efficiency while maintaining service levels. This has and continues to impact revenue. However, we believe we started this work earlier than others and expect equilibrium to occur by the end of Q2. We continue to focus on our internal processes to ensure that we don't overcorrect and fail to meet our customers' demand while minimizing inventory throughout the supply chain. Our PMP business is well positioned to grow with the newly released 6 gigahertz spectrum as our WISP customers compete with other broadband solutions on speed and reliability. Our platforming activities continue to progress with both architectural decisions and beginnings of development of both hardware and software.

While the benefits from these initiatives will be in the future, it is one of the most important actions we can take to impact our long-term prospects, driving faster initial development, decreasing feature implementation time, and lowering costs. After my initial review of the business last fall, over the past three months, I've been working with our go-to-market teams and our customers to make sure where we are going is aligned with where our customers need to go in our highly competitive markets. I am pleased with the level of access Cambium has to its end customers and the interest our channel has in driving the business forward. I intend to continue to be directly involved with our salesforce and customer base to ensure that the direction we're going and the decisions we're making are fully aligned.

While there continue to be challenges both internally and throughout the industry, I'm encouraged to how we meet these challenges, solve problems efficiently and effectively, and help move the industry forward. I'd like to share my continued appreciation for the effort and collaboration of our employees, partners, customers, as well as the investor support. With that, I'd like to turn the call over to Therese and begin the Q&A session.

Operator (participant)

Thank you. Now, as a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. And again, we do ask that you limit your questions to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question today comes from Scott Searle with Roth MKM. Your line is open.

Scott Searle (Managing Director and Senior Research Analyst)

Hey, good afternoon. Thanks for taking my questions. Jacob, congratulations and welcome aboard.

Jacob Sayer (CFO)

Thank you very much, Scott.

Scott Searle (Managing Director and Senior Research Analyst)

Maybe just a quick clarification. I'm not sure if I heard it, but Morgan, in the past, I think you've talked about Enterprise or Wi-Fi Sell-through. I'm wondering if there was a number there. Also wanted to clarify the gross margin impact on reserves. I think it was about $7 million. Wanted to clarify that. And then looking into the guidance for the full 2024, it implies a pretty significant uplift in the second half of this year, I think north of $58 million a quarter. What gives you the comfort and visibility at the current time? And then I had a quick follow-up.

Jacob Sayer (CFO)

Yep. So I'll start off, Scott, with the question on Enterprise Sell-through. It maintains a healthy level, very similar. I think we've said in the past in the $15 million-$20 million range, the range we're giving you, and it hasn't changed much this quarter at all. And we're working to start to drive that number up. And I'll let Jacob talk specifically to your other portions of the question.

Morgan Kurk (CEO)

Yeah, you heard correct, Scott, in terms of the gross profit impact on the E&O reserves. That was $7 million in the quarter. And then the last bit of your question was regarding the uplift in the second half of the year. You're absolutely right. We are expecting an uplift in revenue in the second half of the year. That primarily comes from the inventory contraction and the sales channel with distributors falling away. That's been a pretty significant headwind for the company as inventory levels have come down over the last four quarters. We expect that that process will come to an end here near the end of the second quarter of this year.

Scott Searle (Managing Director and Senior Research Analyst)

Great. Thank you. Very helpful. And if I could, Morgan, from a high level, BEAD is starting to get into the grant phase. Still early. Significant number of dollars that are available there, right, in terms of the $42.5 million. But wireless has been, I guess, a second candidate technology for that, right? It's a fiber-first mantra, in effect. But there are initiatives to try and push wireless as a viable medium within the BEAD deployments, particularly given that this is a last-time effort to connect the unconnected and that wireless is a much more cost-effective medium to be able to do that. So I'm wondering what your early thoughts are in terms of wireless and point-to-multipoint participation in the BEAD program, and specifically maybe coupling 6 gigahertz into that conversation. Thanks.

Jacob Sayer (CFO)

Sure. So a couple of things. So ARDA funding, which has been out for a while, requires a set level of speed but does not require licensed spectrum. So 6 GHz is absolutely applicable toward this, and our customers are eagerly starting to deploy and want the 6 GHz for that. In the case of BEAD, BEAD has some additional restrictions. BEAD can only be put on licensed spectrum, so that has to be done in the 3.5 GHz range. And while we think there will be some uplift from this, it is probably not so much a 2024 event, probably more like a 2025 event.

Scott Searle (Managing Director and Senior Research Analyst)

Great. Thanks. I'll get back in the queue.

Jacob Sayer (CFO)

Thank you.

Operator (participant)

Thank you very much. One moment, please. Our next question comes from Simon Leopold with Raymond James. Your line is open.

Victor Chewing (Analyst)

Hi, guys. This is Victor Chewing for Simon. You noted lower than expected 6 gigahertz shipments this quarter because of the delayed FCC approval. Does that shortfall kind of mostly roll into Q2, or is that recovered kind of through the balance of the year? Maybe how do we think about that?

Jacob Sayer (CFO)

Yeah. So there are still, I'll call it, learnings to go on in 6 gigahertz. So I don't think that just rolls into Q2. It's probably more rolling throughout the year. So 6 gigahertz is different for our customers than 5 gigahertz because of AFC, because they have to be granted various pieces of spectrum, and then how they can use it varies based on what current users of the band are doing. And so I think we're going to see some learnings, and this will take sort of 3-6 months for people to really get a better understanding of how they do mass-scale deployments, and then we'll see a significant takeoff on it. I'd probably model it to take on throughout the year.

Victor Chewing (Analyst)

Okay. So even without the delay, the 6 gigahertz ramp is a little slower than kind of what you're expecting?

Jacob Sayer (CFO)

Then we had originally had to spend. Yeah, I think that's a good way of putting it.

Victor Chewing (Analyst)

Okay. That's helpful. Just a quick follow-up, can you give us an update around progress with the adoption of the 60 GHz product and how we should think about momentum around that?

Jacob Sayer (CFO)

Sure. On 60 gigahertz? Yeah. So we're actually finding success in this product line with, I'll call it, enterprise customers more than we had thought. We're using it for a variety of projects, what I'll call, with our original intended base, but we're finding that there are other markets, so I'm hopeful with that. But it's a slow build, I would say. It's not going to be a step function. It's going to be a continued drive and increase. And the reason for this is economics. There are specific areas where this makes a lot of sense, where you have to transport a lot of data for a relatively short distance, and you don't want to have any chance, really, of interference. And so it's not like what I expect to happen in 60 gigahertz, where after a teething period, you see a big uplift.

This will just be a slow growth.

Victor Chewing (Analyst)

That's helpful. Thank you.

Operator (participant)

Thank you. Our next question comes from George Notter with Jefferies, LLC. Your line is open.

Justin Nader (VP)

Hey, guys. Thanks very much. I guess I was curious about the gross margin structure in the business. I think I heard you say 42% is the target for the year. But if you just sort of step back and think about where the gross margins would naturally land, obviously, in Q1, you had some E&O expense. You mentioned that. Obviously, you're going to have some more scale relative to the run rates right now as the inventory comes off, the business rebounds. What do you think a good sort of run rate gross margin would be as the business normalizes?

Morgan Kurk (CEO)

Probably, George, in and around the 40% range for the business. Obviously, there's a range of gross margins by product family, with defense being at the higher end of those. But yeah, 40% overall is probably a good modeling rate.

Justin Nader (VP)

Got it.

Jacob Sayer (CFO)

So, are you referring to for this year? Are you referring to long-term?

Justin Nader (VP)

Long-term.

Jacob Sayer (CFO)

Okay. So I think we had historically sort of modeled in kind of 50% was our target, and we were hitting a few points below that. I think it's going to be a bit before that occurs. With the excess inventory in channel, the enterprise margins are suppressed as everybody's competing to get inventory out of channel. And that probably won't recover tremendously until Wi-Fi 7 becomes the dominant term. And so the long-term margins, we should be able to move back up as we get scale. But as Jacob said, for this year, that's what we're looking at.

Justin Nader (VP)

Got it. So do you think that's, what, a 45% gross margin, a 43%, a 47? Any kind of thought on what that might look like after this?

Jacob Sayer (CFO)

Yeah. I think the long-term, it's certainly my goal is to have a north of 45. And I think with our government business, which is higher than normal, and with our focus on enterprise, which is higher than average, I believe those are achievable.

Justin Nader (VP)

Got it. Okay. And then I think you mentioned a bad debt expense going through G&A. Was that in the pro forma financials or excluded? I guess I'm trying to figure out how big that is and if it's in the numbers I'm looking at.

Morgan Kurk (CEO)

It's about $600,000, and it's in the non-GAAP numbers. We haven't excluded it.

Justin Nader (VP)

Okay. All right. Thank you very much.

Operator (participant)

Thank you very much. As a reminder to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw a question, please press star 11 again. If anyone has any further follow-up questions, please feel free to enter star 11. One moment. I'm showing no further questions at this time. I will turn the call back over to Peter Schuman, Vice President, Investor, Industry Analyst, and Public Relations, for the closing statement.

Peter Schuman (VP of Investor Relations)

Thank you, Therese. During Q2 2024, Cambium Networks will be presenting and meeting with investors virtually on Thursday, May 16th, 2024, at the Needham Technology, Media, and Consumer Conference, and on Tuesday, June 25th, at the Northland Growth Conference. In the meantime, you're always welcome to contact our Investor Relations Department at 847-264-2188 with any questions that arise. Thank you for joining us, and this concludes today's call.

Operator (participant)

Thank you, everyone. You may now disconnect from the phone call.