Q3 2019 Earnings Call

Greetings and welcome to the X One company third quarter 2019 financial itself.

This time, all participants are listen only mode. A brief question answer session with all the formal presentation. If anyone should require up radar systems. During the conference. Please press star as you're on your telephone keypad. As a reminder, this conference is being recorded.

My pleasure to introduce your host Karen Howard.

Investor Relations for the next one company thinking with Howard you may begin.

Thank you Devin and good afternoon, everyone. We appreciate your time today for the X one third quarter 2019 financial results Conference call.

Referring to our slide deck I'd like to underlying with me today, our presenters John partner, our Chief Executive Officer, and Doug Sanders, Our Chief Financial Officer and Treasurer.

This does well the reviewing the results that were published in the press release distributed this afternoon.

Don't have that released its available on our website at Www Dot X one dotcom.

The slides that accompany our discussion today are also posted on our website.

On slide three under Safe Harbor statement as you may be aware, we will make some forward looking statements. During this presentation and they also during the Q1 day.

These statements apply to future events, they're subject to risks and uncertainties as far as other factors that could cause actual results to differ from where we are today.

These risks and uncertainties and other factors are provided in the earnings release, it's about other documents filed by the company with the Securities and Exchange Commission.

These documents can be found on our website www dot STC dot Gov.

I also want to point out that during today's call. We will discuss some non-GAAP financial measures, which we believe are useful in evaluating our performance you should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with gap.

We have provided reconciliations of comparable GAAP to non-GAAP measures and the tables accompanying today's release.

John will get started providing high level overview of our third quarter results as well, it's a business update Doug will go through a detailed review the financial results and then John provide perspective on our outlook for the rest of the year as well as a strategy update before we open up the line for questions and answers and with that it's my pleasure.

To turn the call over to John to begin John .

Karen good afternoon everybody.

Thanks for joining us for X once third quarter report.

Yes, one team has never been more excited we're confident in our product line up and technological advancements despite the more challenging market conditions.

I'll start on slide five with a summary of our financial results and then I'll update you on the progress with our technological developments.

We reported $10.9 million of revenue for the third quarter.

Following a record second quarter and compared with a record third quarter last year.

I'm pleased with the girls gross profit earned on that lower level of revenue our cost structure is at a stable level well suited to drive operating leverage on the growth, we anticipate from our pipeline and long term outlook.

Our operating expenses reflect the benefit of our cost.

Adjustments, but our software revenue levels resulted in adjusted EBITDA loss.

The comparison with last year's quarter demonstrates the sensitivity up the topline.

We finished the third quarter with $25.8 billion a backlog.

Along with our pipeline supports our expectations for the rest of the or.

Touch on that further towards the end of this presentation.

Now I'll update you on our technological progress.

Please turn to slide six.

We have stepped up the pace on the development front, while managing our costs, an inefficient and prudent manner.

Never before next once history up we had so many significant new machines within Suntrust timeframe.

All three of these platforms were announced in the past 12 months.

On the upper left is our newsstand printer.

Our S Max Pro which extends our leadership position in San Threed printing.

This model is an advancement of our workforce Smac sprinter.

Well suited for production manufacturing of molds and course for metal casting tooling and other applications.

We're currently shipping this new model.

On the upper right as our new production metal Threed printer Rx 125 pro.

This new platform features our recently patented triple advanced compaction technology, a C.G. the delivers industry leading quality.

We will begin shipping this model during this quarter Q4.

The photos on the bottom depicts our newest platform just announced this week our X one 160 pro.

This metal printer has been designed for the use in production and we will begin shipping. It next year I will touch on it further in the next slide.

Please turn to slide seven.

As I just mentioned I'm exciting excited to introduce you to our newest addition to our metal Threed printing family the X one Onesixty pro.

Sign for production with considerable input from customers in the automotive.

Aerospace and defense industries.

This is our tents and largest metal system yet.

Offering 160 leaders are billed volume, it's more than two and a half times larger than what's available on the market today.

The 160 pro print Switz six different qualified materials, plus ceramics, which is unparalleled in the industry.

Like the mid size X 125 pro it's designed with our new and patented quality feature the triple A.C.G. that dispenses spreads and compacts ultra fine powders to deliver industry, leading density and repeat ability.

We're also very excited that this model was designed to incorporate state of the arc industry 4.0 technology.

The 160 pro Leverages, our partnership with Siemens for the control system and mine sphere cloud connectivity.

So you can see where customers are so excited about this cutting edge metal binder jetting printer.

Please turn to slide eight.

I want to share with you a perspective on the outlook for the metal Binder Jetting technology.

Resulting from a study undertaken by an independent third party.

A German threed printing industry consultant called Am power.

This will help you better understand why or why we're continuing to advance our metal.

Printing technology.

Hey, Mpower interviewed over 150 people consisting of those in the metal additive manufacturing supply chain as well as users.

The covered system suppliers, representing about 80% of the installed base metal additive manufacturing.

And also about 10% of current users.

They captured up to 15 different metal additive manufacturing technologies.

We extract it some of the results from the report they are publishing.

With a key finding being the expected significant market expansion, a binder jetting technology, which as many of you know because the technology that X one pioneered.

Mpower calculated that binder jetting technology was about 10% of the metal threed market in 2018.

Estimate that will expand to 31% over the next five years.

And of course, the trouble mouth market is also expected to grow during that same time period.

They compare the expected expansion to the growth phase that selected laser melting experienced 10 years ago.

So naturally we're very excited about the this opportunity and ex ones position to capture our fair share of it.

I'm now going to let Doug walk through the details of our financial results.

Okay.

Thanks, John Good afternoon, everyone.

If you could please turn to slide 10, we'll start with revenue.

Revenue was down to 10.9 million in Q3, 2019, compared with our Q3 2018 record quarter.

The impact of global manufacturing conditions and process machine installations, which deferred revenue recognition resulted in lower revenue than we initially expected for this quarter.

Each of those in process machine installations are on track for completion during the fourth quarter, where we expect revenues to exceed 20 million.

As shown in the charts on the right on a trailing 12 month basis revenue was up 2% the 61 million.

Now, let's go to slide 11.

Here you can clearly see the driver of the revenue shortfall in the quarter.

Our machine sales were 4 million this year down from 9.7 million in last year's third quarter.

As I mentioned, a moment ago. The decrease was primarily due to the timing of finalizing installation of five machine projects located a customer facilities as well as the impact of a broader manufacturing slow down which has resulted in delays and customer purchasing decisions for capital equipment.

On a trailing 12 month basis, our machine revenue was up 17% the 35 and a half million, which continues to show strength in the long term adoption of binder jetting.

Now if we can turn to slide 12, a review machine unit sales.

As a reminder, our direct machines directly print components, such as metal parts for industrial and other applications and include our Innovent M Flex and excellent 25 pro platforms as well as our newly introduced X. One 160 pro platform, which is expected to come online in late 2020.

Our indirect machines print tools, such as Sam cores and moulds and include our S. Max Pro S Max and S print platforms.

Our indirect machines are our larger footprint systems, which set with such systems generally achieving a higher average sales value.

We sold nine machines in the 2019 third quarter compared with 15 last year.

Our 2019 third quarter machine sales included fewer and a lower proportion of our indirect machines and the third quarter of 2018.

As you can see on the charts on the left we sold four fewer indirect machines and two fewer direct machines and the 2019 third quarter, that's compared with the prior year quarter.

The number of machines in the mix change unfavorably impacted the machine revenue dollar decrease we saw in the last slot.

Despite a lower volume of units sold our machine sales during the third quarter continue to represent a diverse set of global geography, and customer applications and included a mix of industrial and research and development users.

Related to our 2019 machine platform launches the excellent 25 pro direct printer introduced at rapid this may and the S. Max Pro indirect printer introduced it Giefer. This June .

We expect our first deliveries and installation of these units to occur as part of our 2019 fourth quarter.

During the trailing 12 months, we sold 58 machines, a 32% increase over the prior 12 month period.

You can see the increase in both direct and indirect unit sales, which grew 39% and 24% to 32 direct and 26 indirect machines and the 2019 trailing 12 month period, respectively.

This increase was led by reinvent plus our entry level direct operating platform, which we introduced the market in April 2018, as well as our market leading S. Max for indirect applications.

Now, let's turn to slide 13.

Recurring revenue, which includes our threed printed and other products materials and services was 6.9 million in the third quarters about 2019 and 2018.

For the trailing 12 month period recurring revenue was 25 and a half million down from 29.2 million in the prior year TTM period.

For the quarter. This reflects a sequential improvement over the past three quarters, driven by an increase in aftermarket sales, resulting from our increased global installed base of machines and a boosting our indirect printing services operations based on higher customer demand.

For the trailing 12 month period. The decline is primarily attributed to a lower volume of both direct and indirect printing projects and the impact of the exit from our Houston in Italy facilities, which contributed 1.6 million into 2018 TTM period.

Again, these decreases were offset by an increase in our aftermarket sales based on our growing global installed base of machines.

Turning to slide 14, we'll talk about gross profit and margin.

Gross profit was 2.9 million, resulting in a to 26.4% gross margin for the third quarter of 2019 down from a 39.6 margin percent margin for the third quarter of 2018.

The decline was primarily driven by lower revenue volume in the quarter as our fixed overhead costs and product pricing remained stable.

For the trailing 12 months, we realized gross profit of 20.8 million and a gross margin of 34.1% up from 17.4 million and 29.3% and the prior year period.

The 29 can't TTM increase was driven by a reduction in fixed costs, resulting from our 2018 global cost realignment program initiated at the end to end of June 2018.

The improvement also benefited from lower net inventory impairment charges and facility exit costs.

Please turn to slide 15, and we'll discuss us DNA.

Comparing the third quarter of 2019 to 2018, our S. DNA expenses were slightly up about $100000 to five point threemillion.

We continue to see stability in our operating expenses in general following our 2018 global cost realignment program.

On a sequential basis, our decline in S. DNA was driven by the incremental costs the of the GIFA trade fair in our second quarter and certain executive compensation cost we discussed during our last teleconference.

For the TTM period, our S. DNA decreased by 1.2 million to 22.4 million.

The improvement was primarily driven by employee.

And consulting cost reductions associated with our 2018 global cost realignment program.

Please turn to slide 16 will discuss our investment spending in R&D.

Third quarter R&D expense remained unchanged at 2.4 million.

The 29 TNT TTM period reflects the benefits of our 2018 global cost realignment program, resulting in lower employee related in consulting cost.

With our recent introduction of the excellent 25 pro direct printing platform and the S. Max Pro indirect printing platform as well as our announcement of the X. One 160 pro direct printing platform earlier. This week, we continue to show both the effectiveness of our of our investments in R&D spending as well as the efficiency gain from the changes in our operating model.

Now I'll turn to slide 17 overview backlog.

To remind you our backlog includes firm orders received from our machine and recurring revenue customers.

That concludes our firmly committed machine maintenance contracts as well as the noncancelable portion of our operating lease agreements.

Backlog also includes orders from our global direct and indirect printing operations and other contractual services.

The 25.8 million, we see at September Thirtyth, along with other opportunities our global pipeline support our Q4 2019 target of 20 million plus and revenues.

That said there are always many variables that and that impact the realization of our revenue goals, including the pressure melting on capital equipment purchasing decisions from the manufacturing climate and our ability to execute particularly through the end of December .

Nonetheless, we remain confident our business, given our expanding product portfolio and our leading position within the additive manufacturing space for Binder jetting.

Turning to slide 18. This chart represents a waterfall of our first half and Q3 2019 cash flows.

Since I reviewed Q1 in Q2 previously I won't repeat that here instead I'll talk you through the Q3 section on the right.

We had approximately $100000 and cash capital expenditures for the third quarter.

We anticipate approximately 500000 of cash capex spending in Q4.

Working capital changes resulted in a source of cash of approximately 500000 during the third quarter benefiting from that net cash inflows from customers, partially offset by an increase in net cash outflows for payments to suppliers for inventory production and operating expenses to support our operating plan for the remainder of 2019.

We also bar, a 2 million against our credit facility to fund our operations.

Our net loss net of noncash items and other use 3.6 million of cash and we ended the third quarter was 6.1 million in total cash.

Our overall net cash outflow of approximately 5 million for the nine months ended September Thirtyth 2019, excluding our 2 million dollar borrowing compares favourably with our net cash outflow of 10.2 million for the same period and 2018.

If you turn to slide 19, you'll see our total liquidity at the end of the third quarter of 2019 and year end 2018.

At the ended the third quarter, we had 17.8 million of liquidity compared with 22.6 million at the end of 2018.

As mentioned on the previous slide we borrowed 2 million against our related party revolving credit facility to fund working capital usage, leaving $13 million of remaining availability.

As I referenced on the last slide which significantly cut our cash burn rate as compared to 2018, and our focus remains centered on profitable growth and operating cash flow generation for the business.

As discussed we've shown the ability to modify our operating model when necessary our 2018 global cost realignment program as an example.

We remain focused on effective and efficient cost management within our business.

We've also shown the ability to identify and execute on low cost sources of liquidity to support our growth initiatives, most notably our related party revolving credit facility executed in March 2018.

We continue to believe that we have sufficient liquidity support our near term growth plans.

That concludes my prepared comments now I'll turn it back to John .

Thanks, Doug.

Please turn to slide 21, and I'll discuss our outlook for the remainder of 2019.

As indicated in our third quarter Preannouncement macroeconomic concerns have heightened customers uncertainty.

However, as is typical for us we see the fourth quarter as our strongest quarter of the year expecting revenue in excess of $20 million and positive adjusted EBITDA.

We remain focused on effectively managing cost in cash.

And we continue to prudently make strategic investments necessary to advance our leading position in binder jetting technology.

We maintain our key keen focus on profitable growth.

Please turn to slide 22.

I'll briefly remind you of the pillars of our strategy.

First we've been expanding our customer an application focus identifying new market opportunities, which will drive revenue growth and profits.

Good example.

That is the collaboration arrangement, we announced a couple of weeks ago with global tungsten powders global manufacturing of talk tungsten metal powders together, we are focused on threed printing application using tungsten based materials, commonly used for cutting tools where resistant parts.

And high voltage electrical applications.

Second we are continuously expanding our technology core.

As I mentioned, a few moments ago, we're extremely excited about the three new machine platforms, recently announced which will fuel our future growth.

Finally, we initiated a renewed focus on record recurring revenue and I'm pleased to see a sequential increase in that recurring category.

Benefiting from our growing global installed base.

Such an aftermarket revenue base will serve to minimize volatility and to drive bottom line.

This strategy is embedded in our operating plans.

Around which all of our global X one team members are a lot.

Please turn to slide 23.

Over the years, I know X, one and others have talked about the Threed adoption journey.

This data on the slide was also extracted from the am power study and the steps are consistent with what we had experienced in San printing and now are seeing in metal printing.

The journey starts with awareness, which includes the termination of what is possible and where value can be added.

We believe that in many marketplaces are now aware of the many capabilities a binder jetting technology.

Next is the identification of a real relevant application, which also considers optimal redesign to maximize the benefits of threed printing in the assessment of costs.

Next is a testing process, which evaluates the resulting material properties in assesses the cost advantages.

Potentially the most time consuming step is next and that is qualification.

This includes quality factors to ensure consistency measurement of possible defects and the creations up the specifications for design materials and processes at the end of the journey.

Is the consideration of the supply chain. This includes a make buy decision and qualifying suppliers and the move to scale production, which incorporates multiple threed printing machine installations.

We have many customers in various stages of their journey for metal Threed printing.

As with any emerging technology, the pace of adoption vary by customer an application.

It's interesting to see a empowers assessment of the lead time as being one to four years, which is quite a wide range as more company. It companies adopt metal threed printing on their production floor. We are aware of the discipline process is needed to ultimately realize the revolutionary benefits of Threed printing.

Accordingly, we need to manage our near term expectations of the rate of growth of our industry for metal threed printing, while retaining our confidence in the long term market potential.

Please turn to slide 24.

Well I will close with the recent example of a metal Threed printing project.

We worked closely with Altair.

Global Engineering software provider to develop a lightweight structural part for a global automotive manufacturer.

He is this existing part was redesign in conjunction with Altair and Threed printed on one of our metal production machines using 316 al stainless steel.

The results ideally demonstrate the capability of our binder jetting technology.

Threed printed part is more than 45% lighter than the original part.

The weight and weight is very important in today's automotive industry.

The process to manufacture the part has been simplified with fewer production operations required.

And the Threed printing park requires less welding to a fix it to other structural parts in the vehicle, adding to the strength of the overall structure.

This is one of several projects currently in process. So you can see why we're so excited about our outlook.

That concludes my prepared comments and now let's open up the lines for questions.

Thank you we will now be conducting a question and answer session. If he would like to ask your question. Please press star one on your telephone keypad a confirmation total indicate your line is in the question can you May press star too if you would like to remove your question from the Q for participants using speaker equipment. It may be necessary to pick up your handset for pressing the star.

He is one moment, please while we poll for questions.

Our first question comes from the line of Chris Van Horn with F. B R. Please proceed with your question.

Good morning, everyone. Thanks for taking my call.

Well good evening excuse me [laughter] [laughter] you know you know obviously, you've got some good visibility for the fourth quarter.

But I was wondering if you know if you could give us any sort of sense on on what your visibility is for 2020.

You know with your new cost structure and some of the new printers that have come online and is there anything directionally that you could maybe got us too.

Yeah, Hey, Chris This is Doug we're certainly anticipating that we're going to get a bounce and get some growth with the product launches just hitting in the fourth quarter really that sets the tone for 2020, which certainly tempered expectations given the a manufacturing climate that's out there, but at a minimum we would expect to grow off of the 2019.

Okay and result.

Okay got it and when you when you.

Think about this the VX 160 pro.

You mentioned customer input without a variety of customers or was it one in particular.

Yeah, Chris This is John so from our standpoint, we have customers in those industries I mentioned of automotive despite the defense and aerospace customers that we already either work with or in the process of working on evolving their processes to use binder jet printing.

Those customers had parts that were large in some cases larger than our current built boxes that we we offer and so that's where the size of the 160 pro comes in and in other cases had production quantity and throughput demands that were larger than our 25 pro such such that it drove Uh huh.

Higher throughput.

Machine that's necessity. So in that regard those are the inputs that gave us the requirements for the Onesixty pro.

Okay got it and then you know with the you know with it sounds like you know.

By <unk> did the study that you cited the binder jetting technology is expected to grow pretty significantly I'm. Just wondering if you could maybe comment what that means from a competitive standpoint, and then maybe a little bit of how you'll be able to differentiate I imagine you know you're one of the first ones out there and then you've got a lot of track record, but I imagine.

When they've been people see these numbers I'm sure you'll see some competitors come to fruition just any commentary there.

Sure Yeah that study is gonna be published at Formnext, which is the trade show in another two weeks or so.

And not only does a talk about binder jetting, taking more of the overall share of metal Threed printing. It talks about the growth of the metal platform or the metal segment of additive manufacturing growing more than doubled during that period. So you're right. There's obviously, a great opportunity and other piece.

People may be focused on it as well we differentiate firstly based on our experience. So we we have done almost any material that's out there and have experienced with that so that experience base gives us great advantage. When we're working with customers who are going through that jam journey that I talked about secondly, we have existing.

Machines in the marketplace and so we have production machines and we continue to drive our our machine platform mix towards production.

Thirdly, I'd say I'm as I mentioned, the industry 4.0, and Siemens partnership on our sand printer that we introduced in June I've been really satisfied with the customer feedback that that industry 4.0, Siemens partnership is driven.

Because customers envision not one or two of these machines and up and that factory. They envision multiple machines and therefore, the that linkage to the digital manufacturing thread is really important to them. So those are three examples and there's there's more and frankly it depends different industries different customers have different now.

Elements of this so we feel confident in our ability to maintain a leadership position here.

Okay. Thanks for all that detail and then last from me you've gone through a big kind of cost efficiency exercise and I'm. Just wondering do you see it feels like you've done a lot. It I'm just curious if you see any more I'm sure you'll continue to try to identify but how do we think about the kind of the margin structure going forward.

<unk>.

Sure.

You're right the 2018 program, which really I mean, we had exhausted by the end of last year's fiscal year in terms of taking actions was a big move for us than you and you can see it in the overall result.

We got to stay nimble, we're certainly keeping our minds open to how to manage and manage the costs relative to what we see in terms of external demand in and market interest in the product and and other movements in the economies. So we have to be nimble in that area, we definitely have the experience.

Of the 2018 program to lean on when it comes to analyzing the company's costs and considering where we might be able to pick up but I wouldn't we don't necessarily expect a a significant action like that in the near term. It's just we're gonna have to be a surgical in our in our approach.

Okay. Thank you again for the time.

Sure person.

Thank you as a reminder, ladies and gentlemen, if you would like to ask a question its star one on your telephone keypad.

Next question comes from the line of Brian Kinstlinger with a lives Global partners. Please proceed with your question.

Great. Good evening, thanks, and the pre announcement it sounded like your revenue would grow for the year, albeit at a slower great to slower rate than previously expected, but the 20 million.

Suggests that the albeit down year can you talk about if anything's changed over the last few weeks since you put out that price pressure last press release.

Sure. Brian This is Doug So won't you know when we put the release out and really looking at the different scenarios that were available to us we saw.

You know scenarios that resulted in a likely growth model for the full year.

Over the last several weeks, we've seen continued stretching and order flow and in discussions with customers and it just doesn't give us the confidence level to continue to support that.

As the likely outcome for the full year.

Great and then on the $20 million to $25 million in backlog. Then are you seeing orders taken but then the customer asks for that product to be delayed in shipping hold off essentially is that what's happening.

Yes. Some of the 25.8 includes 2020 projects and in fact, even since that date and when you consider what we've negotiated through October a lot of customers are looking at to early 2020 installation. So it's just one of the factors you have to deal with a couple of major holidays in the fourth quarter.

Thats a to doing installation of a major piece of capital equipment that starting fresh in the new year oftentimes becomes something that we have to we have to face and so we've had some really nice wins, but unfortunately, they're not going to be 2019.

Completions.

Now are those customers.

Required to accept those machines eventually it could day back out.

Well.

For the most part our terms have significant payments upfront so.

Okay, we rarely have a situation where anyone would back out we'd so that that is that is unlikely in and not been our experience in the past.

These customers are committed it's just that their their timelines create a you know whether its facility readiness or other technological elements or create a desire to have those machines installed at an early in 2020.

But as Doug said, we've had some nice wins and continue to have a strong interest in our platforms.

But you know uncertainty in the overall manufacturing economy, sometimes pushes.

Capital expenditures out a little bit right sure.

But in the face of these challenges you mentioned you thought next year you get a pocket.

Or at least grow on these numbers and I'm guessing. That's you know not just asking you may have thought you were going to grow previously, but what gives you that confidence that the two new printers will be adopted and ramped pretty quickly.

In the face of these challenges.

I think we look at two factors one being that you got to look at the timing of the product launches themselves again. The 25 pro we introduced in May a and B S. Max Pro really in June and the deliveries are just coming online here in this quarter. So you know for a major capital investment.

A couple companies want to see this thing run a little bit there don't want to common and touch it and feel it and so we all feel like we've gotten the traction this year that we're likely to getting 2020, just based on those introductions, which are compelling.

The 25 probing.

The the or the fastest and the the largest box size for direct metal printer for finer powders that we've we've had in our history and the S. Max pro at at speeds significantly faster than the prior indirect model that we had.

But you got to look at the backdrop of what's going on an industry and see that the you know the manufacturing environment as an offset have to temper your expectations are against even not.

Our ability to have those those products out there. The one thing that we've been happy about is that or is that our share when we look out at market, where we're certainly not under pressure from competition.

Customers that we've talked to for a long period of time, including repeats have come back to us and are talking about upsizing. Their installation. So those are all positive factors that you know the products is is working and and Theres a deeper investment that's on the horizon, It's just not going to happen in a in a short period of time where are you.

A major pop over over a short a quarterly or or six month period. The only other thing I'd add to that is just the backdrop of the whether its am power Roland Berger a range of other consultants and industry analysts that very deeply know the industry or are extremely bullish on.

Binder jetting as a technology because of the advantage of costs and scale that it continues to allow customers to move from pilot production into or a prototype production into.

Volume production. So that's that that overall trend is there as well.

Great Lastly.

Can you just given the current cost structure talk about quantify what do you adjusted EBITDA It looks like on $20 million revenue in the quarter versus say 25.

Sure I mean at a 20 million dollar level, we're obviously targeting positive I know that's a you know it's not going to be.

You know, we would anticipate that at 20 million were probably more like around a million.

And then.

Incremental revenue at a gross margin of 40% with limited.

Overhead is that how we should think about it.

Sure on the incremental revenue, we would you know sort of anticipate a 50 cent drop to the bottom line. So at a 25 clip your.

You're talking about two and half incremental.

Okay. Thank you so much sure.

Thank you we have no further questions at this time I'd like to turn the floor back over to management for closing comments.

Great. Thank you for your time today and thanks to our team members around the World, who work hard to drive collaboration innovation and acceleration for the digital transformation of manufacturing, we look forward to updating you on our fourth quarter progress in March. Thank you again for your interest in next one and have a great evening.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.