Q1 2020 Earnings Call
[music].
Good afternoon, and welcome to the data Io Corporation first quarter 2020 financial results Conference call. All participants will be on what's going on in though should you need assistance. Please take a long carbon specialists are pressing the star keep all by zero.
After today's presentation, there will be an opportunity to ask questions asking a question and they press Star then one I'm sure you're touched on.
Withdraw your question. Please press Star then too.
Please note. This event is being recorded I'd now like to turn the conference.
Yeah.
Congrats and welcome everyone onto the data I don't think Russian first quarter Twentytwenty financial results Conference call.
With me today, our Anthony Ambrose President and CEO.
Version, and Joel Hatlen, Chief operating Officer, and Chief Financial Officer.
Before we begin at lunch.
Reminded of <unk> conference call concerning Cobot 19, future revenues results from operations financial position markets economic conditions estimated impact of tax reform product releases, new industry partnerships and any other statements that may be construed as a prediction of future performance or events are forward looking statements, which.
Involve known and unknown risks uncertainties and other factors, which may cause actual results to differ materially from those expressed or implied by such statements.
These factors include uncertainties as to the impact from the Cobot 19 pandemic, along with expected reopening in recovery efforts within the supply chain and among our customer base levels of orders ability to report revenues based upon the timing of product deliveries and installations.
Market acceptance of new products changes in economic conditions in market demand.
Racing and other activities by competitors and other rigs risks, including those described from time to time in the company's filings on form 10-K, and 10-Q with the Securities and Exchange Commission press releases and other communication.
Accuracy and completeness of forward looking statements should not be unduly relied upon.
I O is under no duty to update any of these forward looking statements.
Beyond today's conference call. Our next interaction with shareholders will be at our annual meeting to be held on May 18 at 10 Am Pacific time at our corporate headquarters in Redmond, Washington <unk>.
Here's events since our proxy agent was unable to handle mailing of documents to certain shareholders due to covert and team challenges. We've made our information available via internet delivery as needed we.
We have provided ample time for all shareholders to cast their votes and we hope you do.
Shareholders. It may not come to our offices, but instead may avoid social gathering risk by listening to our annual meeting via conference call.
Dissipation details are available on our website in the Investor Relations section.
Now I would like to turn over the call to Anthony Ambrose President and CEO did Io.
Thank you very much Jordan I'd like to comment on 2020 Q1.
And our recent developments I'll turn it over Joel Hatlen for more detail on specific numbers.
I'll start by first addressing the covered 19 situation.
Our data I O. The krona virus pandemic has impacted our customers suppliers and our facilities.
We've developed plans for each of these while focusing on our three priorities number one is keeping our people and their families safe.
Number two is keeping our facility safe and secure.
Three is serving our customers.
As an essential supplier to the medical and aerospace industries stadia data Io remained open for business.
We've been vigilant and keeping our employees in our facility safe we required most of our workforce to operate remotely while maintaining a core onsite group.
Staff, our manufacturing service and support operations.
Our global teams follow recommended best practices in accordance with an often in advance of local government mandates local health authorities are reporting steady progress in each of our operating locations and I'd like to take this time to recognize the efforts of aren't.
Higher global workforce, who have risen to the occasion and kept our workplaces their communities and family safe, while continuing to support our customers.
We believe our business and operational strategies, a proven helpful. As we manage the effects of cobot 19.
We remain globally diversified which provides competitive advantages as well as an inherent hedge to location risk.
This diversification spans manufacturing for a multi source supply chain engineering as well as in our customer base vertical markets and customer support.
From a financial perspective, we entered the crisis in a position of strength.
Eight Io is the largest company in our industry and we have the strongest balance sheet.
We are debt free at the end of the first quarter, we had $13.8 million and cash or about $1.68 per share of cash.
We believe were better prepared than anyone else in our industry to ride out whatever may come forward.
And are taking proactive steps to keep it that way.
Beginning in Q1 in early in the second quarter, we implemented cash conservation and expense management initiatives, including reductions and deferrals and executive and board level compensation.
We also reduced work weeks for certain locations and functions.
We will continue to evaluate on a case by case basis, all government programs worldwide that help us preserve our workforce and cash while at the same time.
At this time, however, we do not plan to accept funding from the SP, a PPP program in the United States.
Meanwhile, remain committed to our long term business objectives.
Unlike other industries, we believe the long term electronics industry will recover and require secure high quality device programming as it recovers.
Data, Iowa has consistently been at the forefront of the industry first quarter is no different as we continued to invest in our leading data programming and secure predict security provisioning platforms.
Our innovations in ultrafast performance and reliability were recognized in the quarter. In addition, we're honored to have received the coveted service Excellence award for advice programming support for the second consecutive year.
Our engineering innovations and comprehensive customer support seem to be resonating with customers around the world.
During the first quarter, our global sales channels and world class products enable us to win systems orders at new automotive customer locations in Asia, North America and Europe.
As well as being selected by global ventilator electronics manufacturer to ramp up their production of very important ventilators to fight Cobot 90.
Team.
We're very proud to be supporting the medical manufacturers in their SMS partners and announced the targeted program to provide our fastest support to customers building.
And call with 19 related products.
Economic times and markets May change, but the reasons were selected by customers remain the same.
Outstanding products, great customer support financial stability and global capability.
Overall worldwide, the automotive electronics market from which we've generated about half of our revenue for the past several years has been materially impacted by plant closures.
I've seen China factories reopening, although the U.S., Mexico in Europe remained shut down.
Guidance from leading customers indicate Europe at American locations will be reopening soon and ramping output later in the second quarter.
With the expectation of normal production by the fourth quarter of this year.
Within automotive electronics, we continue to believe that the sector tracks to a substantial multiyear increase in content per vehicle and complexity in design and programming requirements, including the transition from MCT, you Fs flash storage.
You'll recall that you Fs is the next generation flash memory used in latest automotive designs to support their projected growth in programmable content and performance.
While we're still in a very fluid situation with short term sales funnel puts and takes our conviction remains at the industry will need to reinvest when that happens whether or not we're the last one standing data will be will be in a position to gain market share with the most robust programming innovations.
For our other key target markets and Internet of things the rapid adoption of work at home policies and mid Cobot 19 underscores the importance of security all ends of the connected electronics ecosystem.
You've seen reports of hacking incidents are way up not just with home workers, but with the associated iOS devices as well.
Our centrix platform, a highly robust and flexible cost effective security provisioning and data programming deployment system for authentication devices secure elements and secure Microcontrollers has experienced steady interest. Despite the recent stress on the overall economy.
The low capital investment Centrix models, becoming even more attractive to companies require solutions on tight budgets.
Our marketing mix is shifting as well in response to cope with 19, well some of our key conferences have been canceled we will continue to look for ways to expand our market and other venues.
Through other channels Besides trade shows with enhancements in our digital marketing platform.
Our strategy for Centrix is to continue to expand its presence and simplify and scale. The overall platform in 2020.
Our strong cash position maintained by rapid actions combined with our long term view of the markets gives us the financial flexibility.
And launching pad for growth as conditions improve.
These uncertain times, it's our intent remain agile improve our processes follow our product roadmaps.
Protect our superior financial condition and grow relative to the competition.
With that I'll turn it over to Joel Hatlen, our Chief operating officer, and Chief Financial Officer provide more details on the quarter Joel. Thank you Anthony good day to everyone.
Net sales in the first quarter of 2020 were 4.8 million as compared with 6.1 million in the prior years period, and 5.9 million in the fourth quarter of 2019.
First quarter 2020 bookings were 4.3 million as compared with 6.2 million in the first quarter of 2019, and 6.9 million in the fourth quarter of 2019.
On a geographic basis international sales represented approximately 94.3% of total net sales for the first quarter of 2020 compared with 94.1 in between 19 Gary.
Total capital equipment sales were 54% of revenues.
In adapters and service revenues were 28% and 18% respectively of revenues in the first quarter 2020, compared with 61%, 24% and 15% respectively of revenues for the first quarter of 2019.
Gross margin as a percentage of sales in the first quarter 2020 was 58.2% as compared to 60.8% into first quarter with 2018.
For the first quarter 2020, gross margin was primarily impacted by fixed costs being spread over lower revenues.
And a 2.7%.
Production that relates to tariffs on us in China trade.
The revenue mix.
Shifting to increased percentages of adapters and recurring revenue sales as a percentage of total revenues benefited gross margins as these generally have higher margins as compared to equipment sales.
Operating expenses were down both.
Compared to the prior year and the prior quarter periods. The year over year change is primarily related to variable expenses, including substantially lower incentive compensation accruals and sales commissions as well as stock based compensation.
Cost control measures also significantly contributed to the reduction with most other expense categories lower than in prior periods.
Although R&D spending of 1.6 million was down compared with the prior year period. It came in consistent with the fourth quarter spending as we continue to invest in leading the industry and providing improved solutions for our customers.
In accordance with GAAP net loss in the first quarter 2020 was a loss of 554000 or seven cents per share compared with net income of 26004 zero per diluted share in the first quarter of 2019.
Backlog at March 30, Onest 2020 was 2.3 million as compared with 2.9 million at the ended the year and up from 2 million at March 31st of 2019.
Dale had 1.5 million in deferred revenue at the ended the first quarter.
Consistent with the ended the fourth quarter of 2019.
Data shows financial condition remains strong with cash of 13.8 million at March 30, Onest 2020, approximately 100000 less than at the beginning of the year.
Our days sales outstanding or DSL, a receivables collection measure at March 30, Onest were below our 60, a target range with receivables reduced by 1 million from good collection efforts from the ended the fourth quarter.
Samples were reduced to 3.6 million at the ended the quarter compared to 4.1 million at the end of the prior year.
Net working capital at the ended the first quarter was 18.4 million down slightly from 18.5 million at 12 31 of 2019.
This benefited from the cares act acceleration of our alternative minimum tax refund from tax reform back in 2017.
Finally, we had shares outstanding of 8.221 million at March 30, Onest 2020, as compared with 8.288 million at March 30, Onest of 200 2019 with the differences primarily related to the share buyback that we completed during the third quarter.
2000.
The 19.
That concludes my remarks limit yourself to one question and one follow up and if you wish to ask a question again after that May Press Star then one.
At this time, we'll pause momentarily to assemble our roster.
Our first question will come from Jason Smith with Lake Street. Please go ahead.
Hi, guys. Thanks for taking my questions. Just curious if you could comment what you're seeing from an order pattern standpoint in the month of April compared to the end of March.
Okay.
So.
Jason It's a it's a good question.
I won't get to quantitative I'll just say this you know we're not seeing the end of the world out there. Okay people are still buying things.
[music].
You know Capex was down in Q1, we put our internal numbers and forecast together for Q2, we assume capex would be.
Ill impacted as well.
But you know, it's it's not the end of the world, where we've definitely seen an impact but.
It's not like we've fallen off a cliff or anything.
Okay. That's helpful and then as a follow up I know you in the trip you mentioned.
In order for and electronics manufacturer in the ventilator market. Just curious if this is more of a one off when or if you've seen sort of sustained inbound interest from the health care medical market as a whole.
Well, we we haven't talked too much about in the past, we actually have a pretty good medical business, we havent broken it out it it's been considered.
Third part of our industrial business.
Up till now which is run between I don't know Joel 20, and 25% of our overall business for several years in that range. It fluctuates 15 to 20 yen and probably some more in the programming centers as well, but we called out the specific win because number one we put together a program for medical customers to make sure that they could.
Quickly re purpose.
Equipment to support new medical needs, that's actually one of the big advantages of the data biotechnology is with our pre programming you can convert from apart that might be supporting.
You know ventilation system in a car and in 30 minutes you can be reprogramming now to supportive ventilator for hospital.
[music].
Yeah, we could we can convert the line that quickly and so customer came to us they had a problem. They actually prototyped on alternative programming solution and founded the performance was terrible they came to us with Luminex and were able to get them about an eight ex performance gain and they moved very rapidly.
To a place an order with us and get that to support their ramp and the then customer we don't have the permission to use their name but.
Please go ahead.
Hi.
Can you discuss the margin profile by revenue type for capital equipment sales adaptors maintenance and software upgrades and per click fees for Centrix programming. Please thanks.
Yeah. It it I won't go into too much detail, but in general.
The software obviously carries higher margins.
Services tend to carry pretty good margins as well the capital equipment. It really depends on not only that type of system ordered but the channel and I'll give you. An example, so if we sell through a direct sales channel.
Will tend to have a higher gross margin and also a higher sales expense because we'll pay commissions.
If we sell through a distributor.
I have a lower gross margin on that equipment, because we provide the equipment at a discount to the distributor at the same time, our sales commissions will be much lower because the commission has been taken in the form of a product discount. So it's it's fairly variable that within those broad parameters that that's the pattern of our business.
Okay. Thank you.
One other question as well you mentioned the transition from.
E.M.M.C.T.U.F.S.
Can you talk more about what this means the automotive electronic sector would near and longer term perspective.
<unk> Nowadays standard relative to what else is available in the market from your competitors. Thank you sure. So as you know the semiconductor industry from time to time adopts certain standards for widely used components such as flash memory.
E.M.M.C. was that broadly deployed standard in the P.C. industry, the mobile phone industry automotive electronics for the better part of a decade.
Starting in mobile phones, probably three or four years ago. There was a transition to a new form of memory interface called U.F.S. without drilling down too far it it provides a much higher read capability.
Much better non sequential read capability, meaning if you switch around from application application you get the data faster and it also is able to operate it lower power.
That was very attractive for the mobile phone industry and they adopted at first and as the industry in general move towards U.F. ask the costs patterns and reliability characteristics were consistent with what was required for the automotive industry and they've been moving a lot of the high density.
Flash memory applications, such as infotainment.
In dash computing displays things like that two U.F.S.
That's actually a very good for data I.O., because we're one of the handful of suppliers that can actually program U.F.S. in the market in M.C. pretty much anybody could do it we did it better of course, because it's much faster but.
Right now, we're one of two or three suppliers that have announced the capability to support you up fast.
And when we're able to sit down with customers. We can explain why our our approach has some very important technical benefits that maybe some others don't.
So the moved to U.S.. We've you generally is very favorable to data I.
Because we have a a unique technology position and also we're offering upgrades to existing deployed equipment in automotive that make the transition the U.F.S. very cost effective for the customer.
Thank you very much.
My next question will come from George Mellow, but M.K.H. management.
He's got.
Good afternoon acting jello.
Right.
Oh you you you mentioned in the press release and also in your remarks that you have one.
<unk> you have to me <unk>.
In Asia.
Okay.
It seems pretty impressive can you can you talk a little bit about that.
I don't know how much deep there you can provide but how it goes down or <unk>.
I imagine d. the competitive away.
Exactly George and I called it out specifically for that you know what was otherwise a pretty dismal quarter for capital purchases. You know people just were not adding capacity, there's still nonetheless, new applications.
We've talked about infotainment, we've talked about advance driver assist one of them was also in the area of electrification.
Okay, which is you know a nice when for us we.
We hope, it's though start or something you know very <unk> very nice long term, we'll see how it plays out but we've we've instructed our sales team you know to continually to go after not only the customers they know but to pursue the new applications.
And you know the good news is an automotive there are a lot of new applications and we have a very good reputation in that industry.
Okay can you explain a bit <unk>, what kind of application that.
So battery powered cars.
Oh, okay.
And is that.
Some of the first when that space or.
Well we're not.
I know, it's not the first one George but you you would recognize the customers name.
Okay for me.
Great that's great news, well done and it's amazing to get new customers.
Quick question about.
Services and they didn't say that that's that's quite well.
You sort of reminded kind of web V.I.D.'s and how it that holding up as well.
Well that includes things that are not capital equipment purchases or not.
Adaptor sales. So for example, we offer software contracts, we have customers pay us and our read to do development of algorithms and other things like that we have maintenance agreements and things like that and of course Centrix falls in there as well.
Okay. So.
Okay, and you know we tend to be a little more stable because we'll we'll we'll tend to get an order for an annual contract and you know, we'll make up a if it was $12000 for a contract we'd take a P.O. for $12000 and then advertised at a thousand a month. So I tend to be you know fairly stable.
Okay great.
And then just on centric didn't you can you sort of.
If there's any sort of meaningful progress in the quarter or.
Some relationships that I, do penny and and and heard you expect some tricks to play out in 2020.
Well the interesting thing about centrix as you'd be hard pressed to if you looked at our inbound activity to understand there was any covert 19 effect going on at all.
We Unfortunately, you know lost a couple of our marketing venues that we were planning on and Q1 and also in Q2 and two three you know a trade show is not.
Likely to be a good thing from a marketing perspective, maybe for the rest of the year certainly through probably September.
So we're looking at other other ways to promote it the we've had good progress working with semiconductor suppliers. Good progress on the underlying technology. Good progress on new device supports and good progress on you know and customers and channel partners are coming in with new opportunities.
Okay, great, Okay Super think they're much.
Thank you George.
Then if you bypass good question it as star that in one star than one to ask a question.
Our next question will come from Mark Spiegel with Stan So capital. Please go ahead.
Hi, Anthony Ah good to speak to you again.
It's been a few little Walmart [laughter], well as you remain remember where value guys and you know so we we sold you know basically the stock on the way up but we're we're in pretty pretty good now so [laughter]. Thank you. So here's my question and it's a general question.
How much of your business is dependent on the volume up the end product in other words, you know, let's just say hypothetically that that they were using your machine to program the new Mercedes S. class and because automotive sales are gonna be terrible this year.
They sell I don't know you know 80000 of them. Instead of 100000 does that affect you guys are do you basically just sell them the tool and and you know after that it's it doesn't really matter how many of them they sell.
Well.
We're we're somewhat insulated on volume, but we're not immune to to volume effects. So you know automotive sales being potentially down would definitely have an impact on the people that by for capacity.
Okay, and but as we mentioned earlier, we had three new wins, primarily where there was new technology involved.
So for example, if you're making a a major model changeover and you're adding a lot of new features.
They have to put in place the capability to produce the car whether they produce.
As many as the guys forecasts six months ago or or not.
Now what we are seeing as customers that may maybe buying you know to a certain volume level or thought they were and now they're cutting back their forecasts, there's still going to buy but maybe they don't buy as much.
Maybe they try and squeeze out you know two machines instead of adding a third you know that type of thing.
So we're not immune but in general it's it's volume, but also remember it's the amount of bits programmed so if if the feature set doubles the amount of software code.
I've got a program twice as many bits, which means the programming demand goes up.
And then finally, the type of bits really matter you know security.
Carries quite a premium over a standard programming.
So yes, it will have an impact no. It's not 100 per cent deterministic and there are other factors involved.
How many machines.
Do you typically sell for a given model I mean, there's like one machine can handle 100000 Carson or you know 50 or 30 I you know I just I don't have a grasp of that really yeah. It really depends on the application. For example, if you're talking a infotainment you know you might need a couple of machines to to supply.
Infotainment and and remember we're working with the electronics manufacturers not the name plates. So we might see a general class of.
Applications that go into many models.
One one and customer or many models from different and customers.
So it's hard to draw a one to one correlation that I think you're looking for I I just can't give that to you.
Well. It's your typical last question is your is your typical order multiple machines to the same customer for the same application. So you know they might need five and in this case they only by for I mean is it something like that it's not just one machine per application.
I I think the typical order is probably depending on how you define applications, probably one or two per application.
Over time, the factories end up with multiple versions of our equipment.
Because they're dealing with multiple model years multiple applications et cetera.
Well that weren't they couldn't avoid dash back and forth.
So if there's a new model year or they forced to buy a new machine or.
You know I'm trying to I I guess goes back to my original question, if autos I'm I'm wondering I know you said, it's not one for one but let's say the auto market is down you know, 25%. This year, what would that typically <unk> well I understand things get more complicated and you do more programs I mean off the top of your had what is that due to your automotive business.
Is it you know down five per cent, 10% is flat because there's more programming going on I mean, I'm just trying to get a grasp of that yeah. I I, you know that kind of number wouldn't be good I'll just put it that way would probably have a disproportionate impact in the capital equipment, we'd still sell adaptors, we've still sell services things like that.
But the it's not a one for one correlation and and I I.
I don't know that I can give you a whole lot more detail authoritatively right now.
Okay last question I said the other than what you said you know things are not falling off a cliff, but they're being affected.
Quarter, you just report it is sort of off a cliff you know small cliff anyway relative to the year ago quarter do you see this let's call it low level of activity continuing or is it is it worse than this.
Well I think from an automotive perspective, I think electronics industry, you know bottomed out probably April was the bottom.
Just in terms of their their overall impact.
They're telling us they're gonna be reopening we've been getting supplier letters, you know, giving us some guidance on what they they're ramps are.
So the the auto factories appear to be reopening in Europe in the United States.
I I understand middle in next month.
<unk>. So that's a good sign and generally they close probably the third week of March so that'd be a two month hiatus. So we're going to have to work through that.
And they're not going to come back to 100% right away. So the range of floor forecasts that we're looking at is extremely wide.
And you know.
That's why we're taking steps to be ready save our cash but at the same time, if it turns around quickly we want to be ready.
Well <unk>, okay. So again I I'll try to pin you down a little and <unk> and you can try to understand yourself.
Our next question will come from Mcdonald's in private Investor. Please go ahead.
Mm.
Thank you good afternoon, Anthony and Joe I Trust, you and your families are safe I'm a longtime shareholder.
My question right.
My question is around I think centrix, specifically and it has felt like overtime or at least at the outset.
That the sort of [noise].
The picture around Centrix was one of the the <unk> a machine centric.
Some reconfiguring going on some relationships developed with the semiconductor companies in terms of provision name and then a little different business smoke not a little bit of a different business model a very different business model in terms of the pricing per unit versus the cap x.
In some of the recent documents I bread.
I read this termed security.
Deployment as a service.
I also follow some of the head count and and the personnel to get advertisement you have for a skill sets that you're looking to hire.
Yes, my trying to trying to jump to the end my sense is you've learned a lot about.
The needs for security in the marketplace and your strategy and your execution approach is shifting it would that'd be a correct assessment on my part and if so what can you share about what you're seen in terms of what customers actually need.
Yeah me equipment.
But I think you raised some good points, there and I remember as we learn our our positioning in the market gets refined we have a very strong head of marketing and business development, Michael said, well, who brings more of a software frame of mind to the table and so.
He's he's been able to adjust our product positioning accordingly.
You get to the basics when we talked about last quarter.
Was need to have we call simplifying scale.
The premise that people need security I think is being more and more understood.
At a slow pace, okay, admittedly, but people are getting.
Getting with the program.
On security.
The big challenges, how do they want to do it and what can they afford and what's that type of customer profile that we can best support.
And what we've discovered his customers one the whole security process and and to be simplified.
We don't control that entire process, we work with a number of partners.
Well the whole goal being to simplify.
And be happy to walk you through.
The hundred or so parameters you can decide to change honestly configured secure element.
And it would take us months to figure out what you.
Wanting to do on that or you can simply say you know I want to onboard this device to the cloud when it turns on.
Or I want authenticated when it turns on and make sure that I can manage software updates in a secure manner.
So what we're trying to do is explained the customer as well if that's what you want.
You know pick this preconfigured option over here or we've got to use case for you or profile that might make more sense and so we've we've.
In the process educating customers.
And hopefully speaking their language a little bit better than we have in the past and and that's really what I think you're seeing on centers.
And <unk> underneath his 18% of revenues when you look at a portfolio split between cap X.
Adaptors and software.
That's correct.
Thank you.
Thank you Mike.
[noise] Oh next question will come from a bit better with long testified says please go ahead.
I think you're thinking like watching I'm, sorry, if you mention it how many things with units are deployed.
We saw five deployed hobby.
Hi are you operate any one time discounts or financing options.
No you know, it's an interesting interesting point.
What we're really trying to be frugal with our cash right now.
If if I thought we are going to go you know jumping out of a v. shaped recession or something I might get more aggressive on something like that we're going to choose to keep our powder dry at least for a little while.
Awesome one last question.
This is your third street corner growing consumable is rather than you.
I'm just trying to understand what what what take away to read from that it seemed like <unk> in that line item, but I'm not sure that's material yet.
I know it reflects capacity utilization bikes I'm your customers is there anything you can offer.
I understand you know this sort of positive crime.
It's a positive trend, but I would caution you not to draw too much or infer too much worrying Crazy times right now.
And as I've indicated before you know the numbers in any one quarter can bounce around.
You know, it's clearly a trend we want we want the recurring revenue to go up that's part of the business strategy behind Centrix, and obviously centrix is contributing to that but the I, what I'm, saying is don't worry too much too fast.
If it growing because it's <unk>.
Because your customers are using you know programming a little bit more than using more of your product.
I think it's growing because.
As a percentage remember the capita the cap x. has gone down as well.
The other thing that clouds that a little bit was we had a very rough Q3 in terms of our business levels.
And you saw that that's been recovering since that.
Right. So that that's been growing use of though but but that's that's a grows does that mean your customers have worked off the excess inventory they had.
I think it.
What I'm, saying obvious don't draw too many conclusions over the last three quarters [laughter] bearing up and yeah, it's coming up and very low base, as well and which I'm aware, but I appreciate the color. Thank you.
Welcome.
But this time I'm showing no more questions and the question cue.
This will conclude our question answer session I would like to turn the conference back over to Anthony Ambrose spreading closing remarks.
Thank you very much grant as we have no further questions I'd like to close to call by thanking everyone for their participation today I'd also like to remind everyone to vote electronically in the upcoming shareholder meeting.
May 18th April 18th 18, and I hope our own remain safe and productive. Thank you very much.
The conference has now concluded. Thank you for attending today's presentation you may now with this color.