MKS - Q2 2023
August 3, 2023
Transcript
Operator (participant)
Good day, and thank you for standing by. Welcome to the MKS Instruments second quarter of 2023 earnings conference call. At this time, all participants are in a 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 one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, David Ryzhik, Vice President of Investor Relations. Please go ahead.
David Ryzhik (VP of Investor Relations)
Good morning, everyone. I am David Ryzhik, Vice President of Investor Relations, and I'm joined this morning by John Lee, President and Chief Executive Officer, and Seth Bagshaw, Executive Vice President and Chief Financial Officer. Yesterday, after market close, we released our financial results for the second quarter of 2023, which are posted to our investor website at investor.mks.com. As a reminder, various remarks about future expectations, plans, and prospects for MKS comprise forward-looking statements. Actual results may differ materially as a result of various important factors, including those discussed in yesterday's press release and in our annual report on Form 10-K for the year ended December 31st, 2022.
These statements represent the company's expectations only as of today and should not be relied upon as representing the company's estimates or views as of any date subsequent to today. The company disclaims any obligation to update these statements. During the call, we will be discussing various financial measures. Unless otherwise noted, all references to combined company financial measures reflect the combined results of MKS and Atotech Limited, which MKS acquired on August 17th, 2022. Unless otherwise noted, all income statement-related financial measures will be non-GAAP other than revenue. Please refer to our press release and the presentation materials posted to our investor website for information regarding our combined company results, non-GAAP financial results, and a reconciliation of our GAAP and non-GAAP financial measures. For a detailed breakout of reported and combined company revenues by end market and division, please visit our investor website.
Now, I'll turn the call over to John.
John T.C. Lee (President and CEO)
Thanks, David. Good morning, everyone, and thank you for joining us today. MKS delivered strong results in the second quarter, led by excellent execution in our semiconductor market and prudent cost management that is reflected in our better-than-expected margins. We delivered second quarter revenue of $1 billion, adjusted EBITDA of $254 million, and net earnings per diluted share of $1.32. Revenue from our semiconductor market was above the high end of our expectations, despite the widely publicized decline in WFE spending. Our operations team executed well in shipping products from backlog, including those delayed due to the ransomware incident we experienced in the first quarter. Demand for our critical vacuum subsystems for deposition and etch applications declined considerably compared to a year ago, consistent with capital equipment spending trends, particularly for memory applications.
However, photonics solutions demand for lithography, metrology, and inspection remained resilient, offsetting some of the weakness. We anticipate continued strength in these photonics applications. Design and activity remains robust, demonstrating that customers value the unique capabilities MKS offers in these areas. In fact, revenue from lithography, metrology, and inspection applications in the first half of 2023 grew considerably compared to the same period a year ago. Our breadth and diversity across WFE applications, combined with our leadership position across most of the product categories we serve, reinforces our belief that we can continue to outperform industry WFE spending over the long term. We are a critical enabler of key inflection points in semiconductors, such as atomic layer deposition, high aspect ratio etch, extreme ultraviolet lithography, and advanced inspection, and are well positioned for when industry capital equipment spending recovers.
Looking to the 3rd quarter, we expect revenue from our semiconductor market to decline sequentially. However, after excluding the impact of the ransomware incident from the 2nd and 3rd quarters, we expect revenue in the 3rd quarter to be consistent with 2nd quarter revenue levels. Turning to our electronics and packaging market, revenue was softer than we expected amid the well-known weakness in demand for global electronics, such as PCs and smartphones. Demand for our chemistry solutions improved modestly on a sequential basis, but this was offset by continued softness in capital equipment spending, including for our laser drilling and plating equipment. Despite this cyclical weakness, we remain very excited about the long-term opportunity in electronics and packaging. One of the areas of particular focus is package substrates, which are a critical enabler and key building block for high-performance computing applications such as AI.
Just to build on that last point, much like what we've seen in the semiconductor industry in over the past 60 years, the manufacturing of package substrates is getting harder, not easier. High-performance computing applications require greater interconnect density. as layer counts increase to 20 or more, while interconnect feature sizes continue to shrink. This high degree of complexity gives MKS, with our unique combination of proprietary chemistry, plating equipment, and laser drilling solutions, the opportunity to expand our presence in this high-growth segment of our electronics and packaging market. As a reminder, this opportunity is one of the key reasons behind our acquisition of Atotech, and it's why MKS is strongly positioned for advanced packaging, which will continue to be an area of focus and investment for the company.
For context, based on combined company full year 2022 results, advanced packaging represents just under one-third of electronics and packaging revenue. Driven by our foundational portfolio for package substrate applications, as well as smaller revenue streams from wafer-level packaging, hybrid bonding, and other applications, we think advanced packaging solutions will be a more meaningful contributor to our revenue over the long term. Looking to the third quarter, we expect revenue from our electronics and packaging market to be consistent with second quarter levels. We anticipate a slight improvement in chemistry sales due to the seasonality of consumer electronics production, as well as an improvement in packaged substrate demand due to high performance computing applications such as AI. These improvements are expected to be partially offset by a cyclical downturn in plating equipment sales.
Turning to our specialty industrial market, revenue was in line with our expectations, with stable demand for our chemistry solutions for the automotive market, combined with good execution and recovering delayed revenue due to the ransomware incident. Looking to the 3rd quarter, we expect revenue to be consistent with 2nd quarter levels. However, after excluding the impact of the ransomware incident from the 2nd and 3rd quarters, we expect revenue to be slightly higher than 2nd quarter levels. In summary, I'm very pleased with our team's performance in the 2nd quarter. Despite muted demand across some of our end markets, we executed well. Thinking about our business in the 2nd half of 2023, we continue to expect MKS's total revenue in the 2nd half to be slightly higher than 1st half levels, driven by modest improvements across all three of our end markets.
Longer term, we are very excited about how we are positioned to capitalize on multiple secular drivers. AI, cloud, virtual reality, and electrification are just some of the examples of what is made possible by advanced electronics, and we are foundational to those trends. Now, I'd like to turn the call over to Seth.
Seth Bagshaw (EVP and CFO)
Thank you, John. I'll cover our second quarter results, then provide details on outlook for the third quarter. Starting with the second quarter, we delivered a revenue of $1 billion, above the midpoint of our guidance. Our strong top-line results were driven by better-than-expected revenue from our semiconductor market, more than offsetting soft electronics and packaging revenue. Revenue from our specialty industrial market was in line with expectations. We estimate we recovered $120 million of the approximately $160 million in revenue impacted by the ransomware incident in the first quarter. We expect to recover substantially all of the remaining revenue in the third quarter.
Turning to our semiconductor market, revenue was $440 million in the first quarter, growing 42 sequentially and exceeding our outlook due to strong execution on shipping products from backlog, including those that delayed by the ransomware incident in the first quarter. In the second quarter, we estimate we recovered $90 million of the approximately $110 million in revenue impacted by the ransomware incident in the first quarter. After excluding the impact of the ransomware incident from the first and second quarters, our semiconductor revenue declined on a sequential basis, consistent with softer industry demand for semiconductor capital equipment.
Turning to Electronics and Packaging market, revenue was $225 million, an increase of 1% sequentially, and declined 21% year-over-year, with Q2 2022 representing combined company results, including Atotech for the full prior year period. Excluding the impact of foreign exchange and plating pass-through, second quarter revenue declined 15% on a year-over-year basis. As a reminder, the ransomware incident had a minimal impact on revenue from Electronics and Packaging market. Moving to our Specialty Industrial market, rev in the first quarter was $338 million, growing 29% sequentially, in line with our outlook due to stable demand trends across our submarkets. We estimate we recovered $30 million of the approximately $45 million in revenue impacted by the ransomware incident in the first quarter.
As a result, after excluding the impact of ransomware incident in the first and second quarters, our specialty industrial revenue was relatively flat sequentially. Excluding the impact of the ransomware incident, foreign exchange, and plating pass-through, second quarter revenue declined approximately 3% year-over-year on a combined company basis. In the second quarter, consumables and service revenue across our three end markets comprised 38% of our total revenue. Turning to our margins, second quarter gross margin was 46.9%, sequential increase of 470 basis points, exceeding the high end of our guidance. Higher volumes, increased factory utilization, disciplined cost management, and stable product mix contributed to the strong performance. Second quarter operating expenses was $243 million, a sequential increase of $3 million, but still below the low end of our guidance, reflecting disciplined cost management.
Second quarter operating margin was 22.6%, adjusted EBITDA margin was 25.3%, both exceeding our expectations due to strong operating leverage in the model. Our integration of Atotech is progressing well. We made on track to achieve our cost synergy target of $55 million within 18-36 months post-close. We exited the second quarter, achieving annualized cost synergies of over $30 million. Net interest expense for the second quarter was $79 million, lower than we had anticipated, due primarily to favorable interest income and slightly lower interest rates relative to our forecast. Our tax rate for the second quarter was 35.5%, above our expectations, due to the geographic mix of income and changes in timing of tax credits and tax planning activities. We expect our tax rate to normalize in the third quarter.
Net earnings for the second quarter were $88 million, or $1.32 per diluted share. Turning to our balance sheet and cash flow, we exited the second quarter with cash and short-term investments of $758 million, compared to $880 million in the first quarter. Free cash flow in the quarter was a -$77 million, primarily a result of the lingering effects of the ransomware incident on working capital needs and timing of income tax payments. We expect our cash conversion cycle to improve in the third quarter and free cash flow to return to more normalized levels. We maintain an undrawn revolving credit facility of $500 million and exited the quarter with gross debt of $5.1 billion.
Our net leverage ratio exiting the second quarter was 4.3 times, based on a trailing twelve-month adjusted EBITDA on a combined company basis. Consistent with the prior quarter, we made a dividend payment of $15 million, or $0.22 per share. Before I discuss our third quarter outlook, I'd like to touch upon the non-cash goodwill and intangibles impairment charges in the quarter, which totaled $1.8 billion, associated with our Materials Solutions division, which represents the former Atotech business, and our Equipment Solutions business, which represents the former Electro Scientific Industries business. The current market environment, particularly the softer demand in the PC and smartphone markets, is the primary driver of both write-downs, with higher market interest rates playing a significant role in the Atotech impairment analysis as well.
As John indicated in his prepared remarks, we're very excited about the opportunity ahead of us in advanced packaging. In fact, since we announced our intent to acquire Atotech just over two years ago, the industry has increasingly recognized how much advanced packaging is critical to high-performance computing applications, including AI. Our leading position in deep customer relationships allows us to see inflection points earlier as we help our customers solve the greatest challenges on the horizon. That's why we assembled the broadest set of capabilities across chemistry and equipment that serve this attractive market in the growth we see ahead of us. I'll now turn to our third quarter outlook. We expect third quarter revenue of $930 million, ±$50 million.
By end market, our outlook is as follows: Revenue from our semiconductor market of approximately $370 million, ±$20 million. Revenue from electronics and packaging market of approximately $225 million, ±$10 million. Revenue from our specialty industrial market of approximately $335 million, ±$20 million. This outlook includes approximately $30 million of revenue we expect to recover from the ransomware incident in the first quarter. Therefore, we expect to essentially be caught up with the backlog of the customer deliveries by the end of this quarter. Moreover, as John mentioned, we continue to expect revenue in the second half of 2023 to be slightly higher than the first half across all three end markets.
Based on anticipated product mix and revenue levels, we estimate third quarter gross margin of 45%, ±1 percentage point. We expect operating expenses of $245 million, ±$5 million, consistent with second quarter levels. For the third quarter, we estimate adjusted EBITDA of approximately $210 million, ±$26 million. For the third quarter, net interest expense is expected to be approximately $85 million, reflecting projected interest rate increases. Our tax rate is expected to be approximately 26% for the third quarter. Given these assumptions, we expect third quarter net earnings of $0.98 per diluted share, ±$0.29.
In summary, MKS recovered well following the ransomware incident in the first quarter and despite the soft end market backdrop in the first half of 2023, delivering solid non-GAAP profitability. This is a testament to our more resilient and diversified business model following the Atotech acquisition, our ability to drive strong factory utilization and disciplined cost management, and our leading portfolio of foundational solutions essential to the markets we serve. Moving forward, we are focused on maintaining the high levels of execution we delivered in Q2, returning to normalized free cash flow generation, and working towards further deleveraging our balance sheet. With that, I'll turn it back to the operator for Q&A.
Operator (participant)
Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again, and please limit your question to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Sidney Ho of Deutsche Bank. Your line is now open.
Speaker 8
Great, thank you. Good morning. This is Jamal calling for Sidney. Guys, my first question is on capacity additions, I guess, in, in electronics and packaging. What I'm trying to gauge is when would customers return to, to these capacity additions, I guess. The question is: is it fair to think about this as a typical, like, memory cycle, right? Where you would first see utilization come back first, then it would be upgrades, I guess, benefiting your services, and then as a last step, customers would start adding capacity. Am I thinking about it the right way? I have a follow-up.
John T.C. Lee (President and CEO)
Yeah, hi, Jamal. It's John Lee. I think your question is about the electronics and packaging market, and I think those dynamics are very similar to, to semi, utilization rates going up and then capacity additions. I think that is the right way to think about it. You know, utilization is, you know, something that we see, you know, immediately with chemistry revenue. In terms of service, certainly servicing our equipment would be coming next. Then, of course, after that is capacity additions. As we pointed out, there have been a little bit of weakness in Q2 on equipment, the equipment part of our electronics and packaging, and that's consistent with, you know, the industry trends right now.
Speaker 8
Great, very clear, John. I guess staying on utilization rates within electronics and packaging, can you guys sort of give us a sense as to where utilization rates are right now? Based on conversations with your customers, where would you see those go, trend, I guess, in the second half? Maybe just to add to that, where should investors, I guess, look to gauge how utilization rates are, are trending through the second half? Thanks.
John T.C. Lee (President and CEO)
Yeah, I think, you know, what we're seeing with our customer base certainly is that utilization rates are incrementing upwards. I think that's why our guide for the second half is slightly higher than the first half. You know, a lot of that is driven by the cyclicality of the consumer electronics part of our electronics and packaging chemistry revenue. I think that's consistent with, you know, what happens every year with the consumer product cycle. That's why we're guiding second half to be slightly better than the first half.
Speaker 8
Thank you.
Operator (participant)
Thank you. One moment, please, for our next question. Our next question comes from the line of Jim Ricchiuti of Needham & Company. Your line is now open.
Jim Ricchiuti (Senior Analyst)
Hi, good morning. John, you've talked about revenue synergies from, from Atotech and the, the legacy E&P business. You know, with the overall market weakness, does that, does that incremental benefit at this point, just get pushed further into 2024, or are you seeing any indications of some momentum in that area?
John T.C. Lee (President and CEO)
Yeah, Jim, thanks for the question. You know, I think we pointed out even a quarter ago that we're getting some of that bluebirds coming in a little earlier than, you know, you would expect. I think what we are seeing is that the interest in our combined solutions remains very high. We talked about, you know, our Yokohama Tech Center, where we have a new plating tool, new chemistry, and new laser tools. That interest remains very high. I think the synergy in revenue will certainly come when ramps occur and hopefully, that happens in 2024, but of course, we're prepared for, you know, whatever eventuality that is. Today, we're just focused on getting those design wins and showing our customers the benefit of having that combined solution.
Jim Ricchiuti (Senior Analyst)
A follow-up question. Seth, you may have addressed this, but with the gross margins coming in a little better than expected, can you elaborate or a little bit more about what drove that? Was it mix? Was it just, you know, the revenues coming in a bit above target?
Seth Bagshaw (EVP and CFO)
Yeah. Thanks, Jim. Yeah, I mentioned the prepared remarks. It was a combination of all those factors, you know, mix, you know, very strong execution, the factory utilization, you know, cost containment. You know, to me, it's a testament of kind of how well we execute in a really difficult environment. I think that's fundamentally why we drove the margins up the way we did. Really happy execution. Team's done a great job, and I think that's really part of our DNA, historically speaking.
Jim Ricchiuti (Senior Analyst)
Your guidance this quarter, a less favorable mix, or is that... I'm just trying to reconcile it just in terms of the way you're, you're thinking about gross margins at the midpoint?
Seth Bagshaw (EVP and CFO)
Yeah, that's the way I would think about it as well. I think the mix is more normalized in the Q3 guidance. A little bit light on the revenue side, obviously, is a piece as well. Fundamentally, it's, it's really mix in Q3, a little lower volumes, and again, we can execute very well in the quarter.
Jim Ricchiuti (Senior Analyst)
Thank you.
Operator (participant)
One moment, please, for our next question. Our next question comes from the line of Krish Sankar of TD Cowen. Your line is now open.
Krish Sankar (Managing Director)
Yeah, thanks for taking my question. First one, John, you know, if I look at your guidance for semi ex-ransomware, it looks like it's gonna be flat sequentially, which kind of makes sense where the industry is, but it also, your customers are talking about drawing down their own inventory. If I put those two together, is it fair to assume your semi revenues could potentially dip sequentially in the December quarter?
John T.C. Lee (President and CEO)
Yeah, Krish, thanks for the question. That's not what we're seeing right now, Krish. The reason I'd say that is customers have been drawing down their inventory for a few quarters already. That's why we've guided, you know, kind of flat to slightly up in our semi revenues. I, I understand, and I've heard that some customers are drawing down-- have said they're drawing down their inventory, but, you know, what we've seen is that's been happening for multiple quarters already.
Krish Sankar (Managing Director)
Got it. Got it. That's very helpful. A similar one on the electronics packaging side. You said advanced packaging is less than 1/3 revenue, but it's growing, which makes a lot of sense. If you look at the other part of the business there, even on the PCB side, looks like that business has not inflected. I'm just curious, is the advanced packaging strength is kind of what informs you that your 3Q revenues could be similar to 2Q, given the other parts of the market are pretty weak?
John T.C. Lee (President and CEO)
Yeah, I think that's the way to think about it, Krish. You know, advanced packaging, especially package substrates and, you know, package substrates are the, you know, latest kind of most advanced 20-plus layer type packaging of chiplets, if you will. That's the area where we think there's going to be more of an uptick driving the overall EMP segment of our business. The other parts, like HDI and MLB, those areas remain kind of muted. I think it's really about these new technologies that we think will be helping us have a slightly better second half than first half in EMP.
Krish Sankar (Managing Director)
Got it. Got it. Thanks. Then a quick housekeeping for Seth. Term Loan A, is this still $900 million left or is it lower than that?
Seth Bagshaw (EVP and CFO)
I'm sorry, what was the question again, Krish? I missed that.
Krish Sankar (Managing Director)
On the Term Loan A, is it still $900 million left in Term Loan A, or is it less than that?
Seth Bagshaw (EVP and CFO)
Yeah, that's right. That's correct.
Krish Sankar (Managing Director)
Got it. Thank you very much.
Seth Bagshaw (EVP and CFO)
Yep. Yep. Thanks, Krish.
Operator (participant)
Thank you. One moment, please, for our next question. Our next question comes from the line of Steve Barger of KeyBanc Capital Markets. Your line is now open.
Steve Barger (Equity Research Analyst)
Thanks. Just staying on the advanced packaging theme, I think there's been a lot of talk about Chip-on-Wafer-on-Substrate capacity being added. I know you sell laser drilling packages to substrate manufacturers now. I think that requires plating too, right? Can you talk about how ramping CoWoS volume would benefit you, or is some other packaging scheme more, of, you know, better for your mix?
John T.C. Lee (President and CEO)
Yeah, Steve, that's a great question. The short answer is yes, that will benefit us. Then the WoS part, if you will, the chip-on-substrate part, that is where we play, and that's the substrate part. So even as people package chips onto, onto wafers, eventually that gets then packaged onto substrates, and that's really where Atotech and our laser drilling tools are exposed. Yes, we hope CoWoS continues to ramp, and, we'll be a beneficiary of it.
Steve Barger (Equity Research Analyst)
I guess, to, to the second part of the question, any specific packaging schemes beyond CoWoS, which are, which are most beneficial to you, or is that all just kind of variation on a theme?
John T.C. Lee (President and CEO)
It's really variation on a theme, Steve. You know, however you get the chip packaged, eventually you have to put it on a substrate. CoWoS is one approach. There are multiple other approaches, depending on the need, and but they all end up going on to a substrate.
Steve Barger (Equity Research Analyst)
Yep. You know, as we've gone through this downturn, have you been able to pick up any share with PCB makers, or, or can you talk about conversations there? Are there any signs of consolidation at the lower end for those, for those manufacturers?
John T.C. Lee (President and CEO)
Yeah, I think consolidation has always been a theme in that industry, so but I don't think there's anything new in terms of trends there. It's certainly in terms of share pick up, conversations we've had with many customers, has really been, you know, very, very good in terms of the package of solutions we're bringing to them. So we hope that that ends up, you know, turning into market share wins, and that's what we're working hard on.
Steve Barger (Equity Research Analyst)
Got it. Can I get a quick one in for Seth? You know, I, I just tried to do the math on the fly, but for the past three quarters, it looks like you've run primary working cap in the mid-30% range of trailing 12 months of revenue. Is seeing that come down to the low 30% range, part of the comment about cash flow normalizing, or, or what metric would you point us to, to, to watch that?
Seth Bagshaw (EVP and CFO)
Yeah, I think it's a good question, Steve. The first half of the year, obviously, had a lot going on. Ransomware in the first quarter, and we covered a lot of that in the Q2, as we talked about. The working capital, you know, metrics in those first half of this year were a little bit, you know, atypical for sure. And the reason we use free cash flow, negative free cash flow in Q2 is really normalizing the working capital metric. On the period marks, we said is we think Q3 would be more normalized. I think working capital is in pretty good shape, you know, relative to our guide and midpoint on revenue. And, that's why we believe the cash will be more normalized in the third quarter.
You can kind of go back in history and look at kind of a free cash flow metric relevant to revenue, and been sort of that, you know, you know, probably that low teens rate, you know, 12% or 13%. That'll move around on working capital requirements. That's kinda how I think about it in the third quarter. Again, we don't guide that level of detail, but that's probably a decent way of looking at it for Q3. Again, it'll be much better than the second quarter, for sure.
Steve Barger (Equity Research Analyst)
Understood. Yeah, thank you.
Seth Bagshaw (EVP and CFO)
Yep, you're welcome.
Operator (participant)
Thank you. One moment please, for our next question. Our last question comes from the line of Joe Quatrochi of Wells Fargo. Your line is now open.
Joe Quatrochi (Director)
Yeah, thanks for taking the question. one, one on the semi side. I think last quarter you talked about, you know, further clarity on the, the China export restrictions. I think that's in part you shipping to your customers, that they can then ship to Chinese custom- their Chinese customers, and then also you shipping to Chinese equipment OEMs. I was just curious how that factored into kind of the results or the upside in semi side this quarter.
John T.C. Lee (President and CEO)
Yeah, Joe, thanks for the question. I think the short answer is no change, you know, in terms of how we look at the China revenue going forward. I think the last quarter we talked about more clarity in terms of what's allowed to be shipped by our customers, shipping to their Chinese customers. That hasn't really changed. We also talked a little about, you know, how we are exposed to the Chinese OEMs and the restrictions there, and that has not changed either. Even though we're guiding semi to be, you know, flat to slightly up, it's not because of any change in our view of, you know, the dynamics for what we can and can't ship to China.
Joe Quatrochi (Director)
Got it. That's helpful. Then just as a follow-up, you talked about, you know, improving free cash flow looking into next quarter. Should we think about, you know, voluntary payments on the debt as starting to see that again next quarter?
Seth Bagshaw (EVP and CFO)
Yeah, I, I would probably... You know, we've said many times, we plan on deleveraging pretty aggressively. There's no change, obviously, in our policy and our goals. You know, we will, when the cash levels get back to appropriate levels, such as generating free cash flow, we'll definitely lean into that debt. That will be a, you know, I wouldn't guide on that in the third quarter at this point.
Joe Quatrochi (Director)
Okay. Thank you.
Seth Bagshaw (EVP and CFO)
Yeah.
John T.C. Lee (President and CEO)
Yeah, Joe, maybe I'll add another comment to the semi comment I had. The guide of flat to slightly up is ex ransomware, you know, so apples to apples in Q3, just to make sure that's understood and clear. Thanks.
Joe Quatrochi (Director)
Yep, thank you.
Operator (participant)
Thank you. I would now like to turn the conference back to David Ryzhik for closing remarks.
David Ryzhik (VP of Investor Relations)
Thank you for joining us today and for your interest in MKS. Operator, you may close the call, please.
Operator (participant)
This concludes today's conference call. Thank you for participating. You may now disconnect.