Q2 2020 Knowles Corp Earnings Call
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With that said here with opening remarks is known as Vice President of Investor Relations. Mike now. Please go ahead.
Thanks, David and welcome to our Q2 2020 earnings call I might not be presenting with me on the call that air Jeffrey New President and Chief Executive Officer, and Jon Andersen or senior Vice President and Chief Financial Officer.
Our call today will include remarks about future expectations plans and prospects for Nols, which constitute forward looking statements for purposes of the safe Harbor provisions under applicable Federal Securities laws.
Forward looking statements in this call will include comments about demand for company products anticipate a trends in company sales on expenses and profits and involve a number of risks and uncertainties that could cause actual results to differ materially from current expectations.
The company urges investors to review the risks and uncertainties in the company's FCC filings include but not limited to the annual report on form 10-K in fiscal year ended December 31st 2019 periodic reports filed from time to time with the FCC and risks and uncertainties identified in today's earnings release.
All forward looking statements are made absolute as of the date of this call and knows disclaims any duty to upsell update such statements except as required by law.
In addition, pursuant to read G. Any non-GAAP financial measures reference during today's conference call can be found in our press release posted on our website God knows dot com, including a reconciliation to the most directly directly comparable GAAP measures all financial references on this call will be on a non-GAAP continuing operations basis, unless otherwise indicated.
So we've made selected financial information available in webcast slides, which can be found in the IR section of our website.
With that let me turn the call over to Jeff will provide some details on our results.
Thanks, Mike Thanks to all of you for joining US today for Q2, we reported revenue of $152 million with better than expected sales of Mems microphones in precision device solutions during the quarter.
We also saw sales tend to be hearing health market improved throughout the quarter, which gives me confidence that Q2, mark the bottom for demand in this end market.
Gross margins were 32.3% and our loss per share was one cents.
You know audio in inventory write off associated with reduced investment intelligent audio as well as lower factory utilization and sales weighed on margins.
This was partially offset by sequential improvement in precision device margins.
Let me begin with an update combust customer demand across our end markets.
In hearing health revenue was down close to 50% from normal demand due to cold and 19 with sales increasing each month as we move during Q2.
Earlier this month, one of our large customers announced that sales during the three months in Q2 were running significantly below prior year levels, but they saw stronger sales in the back half the quarter.
In spite of mixed conditions in the U.S. I was pleased to see momentum in demand picking up in the second half the quarter with improving market conditions in Europe and Asia markets.
Based on our current backlog, we expect significant sequential sales growth in this end market in Q3.
That said I still believe it could take until 2021 to get back to 2019 teen revenue run rates.
The mobile market represent less than 25% of total company sales in Q2.
We saw shipments into the mobile market improved sequentially stronger sales to Chinese North American Oems were partially offset by lower sales to a Korean OEM.
Microphone sales into Nonmobile end markets also increased sequentially with much of the growth being driven by computing as work from home trends remain in place.
Overall microphone sales were up 4% sequentially in Q2 versus our expectations of them being flat.
We are anticipating strong sequential growth in the <unk> and microphone sales in Q3, driven by continued strength in non mobile applications and recovery in the mobile market.
In precision devices, Q2 sales were up 11% sequentially better than the 5% be expected going into the quarter.
Driven by continued demand for our differentiated products across the telecom and defense markets.
Partially offset by lower Med tech demand.
Gross margins also increase from Q1 due to operational improvements in price recovery for increased Palladium Cross.
In Q2 in early Q3, we have seen a slowdown in med tech demand for high performance capacitors has more states are reporting rising cobot cases, and I see you availability Adobe has decreased.
This is let hospitals to suspend or slow elective procedures for implantable devices.
He is also delayed installations of new memorize that use our product.
We expect this sold out get MEGTEC to be temporary nature, we remain confident in year over year growth for precision devices in 2020.
Now, let me discuss where we stand from an operation standpoint.
For our manufacturing facilities around the globe, although we continue to operate below full capacity due to man, we're now largely back to normal in terms of government restrictions.
We remain diligent with the process as we put in place to keep our employee said.
One exception still impacting our operations is our ability to travel around the globe.
Specifically in the Philippines operations Cobot issues are delaying the timeline for installation of our new balance our mature automated line.
The installation will be dependent on these issues being resolved in this makes it difficult to set an exact timeline.
In the interim we plan to fill current demand for belts are mature receivers with manual production capacity.
I mentioned last quarter, we would take significant actions to manage working capital reduce operating expenses in control capital investments.
In Q2 was very pleased to see the team delivered $20 million in free cash flow as we focused on inventory cash collections.
In the quarter, we also announced an intelligent audio restructuring plan, which is part of a broader reallocation of resources that is expected to reduce our quarterly operating expenses to run rate of 42 to 44 million by the end of this year, while increasing spend in areas, where we see the highs for terms John will expand on this in just a moment.
Well there are still channels as well there are still challenged cobot 19, I'm pleased with the trajectory of the business.
As we look to Q3, we anticipate strong sequential growth driven by hearing health and Mems microphones.
Our company remains uniquely positions across the markets, we serve and I believe our strategy to deliver high value differentiate solutions to a diverse set of growing end markets will enable to come out of the pandemic well positioned to take advantage of future growth.
With that I'll turn it over to John to expand our financial results and provide guidance for the third quarter John.
Thanks, Jeff We reported second quarter revenues of 152 million with higher than expected sales of the Mems microphones and precision device solutions.
Shipments into the hearing health market were down nearly 50% from prior year levels with sales levels, increasing each month as we moved throughout the quarter.
Audio revenues of 105 million were down 13% sequentially with the decline attributable to lower shipments into the hearing health market.
Shipments of Mems microphones into the consumer markets were up 4% sequentially with growth driven by computing as work from home trends continue to remain in place.
The precision device segment delivered revenues of 48 million up 11% sequentially driven by robust demand in the telecom and defense markets.
Second quarter gross margins were 32.3% down 340 basis points sequentially.
In the audio segment gross margins were down 530 basis points sequentially as we incurred a 3 million charge to write off inventory as part of our reduced investment in intelligent audio.
In addition, we experienced lower factory capacity utilization driven by weaker end market demand associated with the Colgate 19 pandemic.
Precision device gross margins improved slightly over Q1 levels as the impact of improved factory capacity utilization labor productivity and higher pricing more than offset an increase in palladium costs.
R&D expense in the quarter was 20 million down nearly 10% sequentially, primarily driven by reduced spending in intelligent audio.
SGN a expenses were 27 million down almost 20% from Q1 levels driven by reduced spending and intelligent audio lower companywide discretionary spending and head count reductions taken to reduce cost during the cobot 19 pandemic.
For the quarter, we reported a loss per share of one cents.
Further information, including a detailed reconciliation of GAAP to non-GAAP results is provided in the financial tables of today's press release and can also be found on our website Nols Dot com.
Now I'll turn to our balance sheet and cash flow.
Cash and cash equivalents that ended the second quarter were 168 million up 21 million from Q1 levels.
We were pleased to deliver strong free cash flow during the quarter with cash generated from operations of 27 million and capital spending of 7 million.
Moving to the third quarter, we expect total company revenue to be between 185, and 200 million up 26% sequentially at the midpoint.
Revenue from the audio segment is expected to be up more than 40% from Q2 levels due to stronger consumer market demand and recovery in our hearing health business as market conditions improve in a number of European and Asian markets and certain states within the U.S.
Precision device revenue is expected to be down 10% sequentially with the decline driven by reduced shipments into the telecom market following stronger than expected shipments in Q2.
We project gross margins for the third quarter to be approximately 35% to 38%.
Up 420 basis points from Q2 levels due to improving factory capacity utilization in our audio segment and the favorable product mix as we expect a greater portion of revenues in the quarter coming from hearing health products, which carry above average margins.
R&D expense in Q3 is expected to be 18 to 19 million down more than 1 million from prior quarter levels due to restructuring activities related to intelligent audio.
We're projecting selling and administrative expense to be between 26 and $28 million flat with Q2 levels.
I remain confident that we're on track to achieve our previously announced cost reduction targets and exit 2020 with quarterly operating expenses between 40 to 44 million.
We are projecting adjusted EBIT margin for the quarter to be in the range of 10% to 14% and expect EPS to be within a range of 17 to 23 cents per share.
This assumes weighted average shares outstanding during the quarter of 94.1 million on a fully diluted basis.
We're forecasting an effective tax rate of 16% to 20% for the quarter as well as the full year, which is up from the first half of the year due to the impact of changes in jurisdictional mix.
For the quarter, we expect cash generated by operations to be between 15, and 25 million with capital spending approximately 10 million.
Despite the challenging market conditions associated with Covance 19, we remain well positioned to serve our customers needs generate free cash flow and deliver strong operating leverage over the long term.
I'll now turn the call back over to Jeff for closing remarks, and then we'll move to the Q and a portion of the call Jeff.
Thanks, John.
Our company remains uniquely positioned across a diverse set of end markets poised to grow over next several years, we remain the leader in hearing health solutions and expect.
Recovery to 2019 levels in six to nine months in Mems microphones, we expect non mobile applications to drive growth in the future and the mobile mark to stabilize as Fiveg phones are introduced.
We also remain on track to grow precision devices revenue this year.
2020 has been a challenging year, so far but I believe we can deliver shareholder value by driving revenue growth strong operating leverage and cash flow in 2021 and beyond.
Operator, we can now take questions.
As a reminder to ask a question you will need to press star one on your telephone to withdraw your question press the pound or hash key.
Please standby, while we compile the Q and a roster.
Your first question comes from the line of Charlie Anderson with call. Your Securities. Your line is open.
Yes. Thank you for taking my questions and congrats on nice bounce back here, So I wanted to.
To start with some of the healthcare exposure. So it sounds like obviously hearing health is starting to recover somewhat it sounds like as you went through the quarter that was the case you expected.
To be the case acute or whatever maybe if you could just kind of describe how things are running relative to that minus 50, you reported and then as far as precision devices you articulated some some impact there. So whatever maybe you just remind us how much exposure there is to that healthcare vertical within precision devices shareholder.
So let me start the precision devices first I.
I think as we look at it I would say.
With the exposure to that life Sciences market is between 25 and $30 million between 19, we expect that to be down I would say I.
I would say probably about 15% to 20% for the full year, but it's really as we see it today highly in Q2 in Q3, we started seeing weakness in in Q2.
It was obviously later than what happened in the hearing health market.
And that is definitely extending into Q3 weakness, but but let me again these are things.
Things like pacemakers other implantables, it's as wells installation of new MRI machines, and so we expect this is going to come back just a matter of when I think it's kind of in the the same vein as we talked about the hearing health market.
We'll come it will come back.
As far as hearing health.
John mentioned I mentioned sales in Q2 were down close to 50% from prior year levels.
We but we did see a fair amount of improvement through the quarter that it got a lot better as we got later later in the quarter I mean right now my best estimate right now is probably the hearing health market will probably be down maybe a little over 20%, maybe a year over year still and so I think we're getting increase.
Finally confident that that we're starting to see that recovery our customers are getting more bullish about the recovery. Obviously active preface. This all with that if there is something that changes significantly with cobot again.
Thank you all change, but right now we're feeling good that when I said last year it could be to them, even maybe the second quarter of next year.
To return to normal levels right now I I'd, probably say, that's pushing a little bit inward as opposed to staying the same are pushing out.
Great and then for my follow up I wanted to ask about you mentioned some of the issues you have in terms of getting getting the resources you'd need for the automated line I wondered maybe if you could just update us your thoughts on how the pipeline is looking how demand is looking are you still as ambitious in terms of some of the build plans as you were previously.
Maybe just on the impact of capital spending as it relates to the program. Thanks, Yeah, well first I don't think we're going to make a decision to install second line until at least the first lines installed.
You have to make sure. The yields are correct of return is correct on the oversight.
We do have demand in the back half the year.
Unfortunately, we're going to have to fill that with manual capacity.
And what that means is probably as it will be a little bit more in Q4 that probably Q3.
It's not going to be a great gross margins considering its going to be manual, but what we don't want to do it stopped the momentum that we have with customers.
Because the volumes that installed as far the installation aligned it is relative to travel restrictions.
The line will be ready to ship to the Philippines This quarter.
And it will our anticipation it will be shipped but what we unfortunately, what we need is a team of people from the U.S to have to go there from the Austin the automation house help install the line and so I'm a little bit nurse on putting in a data when it would be installed and we're making the assumption right now that it will not be installed.
Operation until the end of the year, but it could be earlier.
For right now we're planting manual production to be able to support the demand through the end of year.
Okay, great. Thank you so much.
Sure.
Your next question comes from the line of Bill Peterson with JP Morgan Your line is open.
Yes, hi cuts for thanks for taking my question.
I'd like to trying to parse between audio and the case of mobile versus versus non mobile.
See you have your wary of smart home. Your mobile you talked about compute I believe you talked about TV in the past how should we think about the demand profile for each of those segments.
Here in the back half a year.
Particular, I'm I'm seeing that third parties.
Are you assuming smart home spark speakers are actually going to be down this year versus persons hearables, which are actually going to be apparently up double digits. According to third party research so trying to get us feel for each of those segments within your microphone business.
Yes so.
Im looking at the numbers here I'm trying to see the real strong category beyond.
That will people to get back Aiotv, we agree with you smart speakers happened week.
But I think we're pretty confident with some of things that we've got going on in smart speakers, we do have potentially some share gains coming in the back half the year in smart speakers with unique products that are being introduced.
Mobile.
As we kind of said.
I would sit there and say that right now.
Q4 is going to be stronger than Q3.
With Q3 being stronger than Q2 pretty significantly sequentially.
I think tablet notebook, we still see Q3 being pretty strong and I think that's going to kind of start to slow down.
And then we see some pretty strong sequential improvement in here as we go to the back half the year, some very strong sequential improvement in here. So.
What I'd overall would say is.
We have this guide for Q3 I right now I would say this is probably not the peak quarter for the year.
We think that Q4 will be the peak quarter in terms of of shipments for the full year.
Okay with that in mine and also improve hearing health and presumably maybe your medical business precision devices getting better.
Should we think about the gross margin direct trajectory into the fourth quarter.
I guess also its assuming utilization continues to improve.
Yes, Bill this is John just to kind of recap here Q2 gross margins within the audio segment they were lower than what we expected going into the quarter. We had two we had two things first of all we had a roughly 3 million charge related to our reduce.
Used investment and intelligent audio really scaling back product lines to areas that we feel we can win so that was a charge going through gross margins. In Q2. In addition, we had actually lower than expected capacity utilization, especially in our hearing health business in Q2. So.
As you move forward I think the guide I pre provided for Q3 at the midpoint was 36.5% up pretty significantly sequentially.
That's really driven by improved capacity utilization the absence of that charge that we had in Q2 and it's a little early to give a lot give guidance on Q4, but I would expect it should be close to Q3 potentially slightly above Q3 levels, but again, it's really it's heavily to.
Pendant on it I mean really little color. Thanks for letting a little more color Bill I don't think we're going to be back to 2019 levels and hearing health in Q4 that would that be my expectation at this moment and so to that end number that is an above our average gross margin for hearing health and so and we're probably.
We're going to be still suffering from factory utilization problems in the hearing health market.
Into probably Q1 of next year.
Okay. So so not expecting really much utilization positive impact.
It's probably incremental probably be incremental and thats, where John it's kind of I think saying is right is that it will be incrementally better, but we don't we're not seeing you know us getting back to 2019 level within within the Mems microphone IC similar build plans Q3 Q4, the opportunity for margin improvement is better.
Utilization factory capacity utilization in the hearing health and the PD business and then also more sales of hearing health, which would would drive gross margin up.
Okay. That's fair thanks to the color and good luck. Thanks.
Thanks.
Your next question comes from the line of Christopher Roland with Susquehanna Your lines open.
Hi, Good afternoon. This is stuff and speaking on behalf of course.
So in your prepared remarks, you set that shipments into mobile in China Wireless North America during the quarter I.
I was wondering.
How should we think about the mobile market in the second half.
Should we expect the trends to continue and also just any kind of share losses in China.
Retention.
In China, I assume you're sitting up.
Yeah. Okay. So I think we did see sequential improvement in mobile in Q2, and we expect some pretty significant improvement in mobile Q3, and then again more sequential improvement in Q4. So we continue to see to continue to get better through through the through the year.
So, but overall, which is all with the backdrop that for the full year mobile is going to be down right. I mean mobile is a tough year for mobile.
Now back to your question about China.
I don't think our share losses have changed from what we said last quarter in other words, we still have very low share at wawa.
Why wait I don't think we've seen any significant shifts of insurance.
Okay great.
And as a follow up there have been some of the quite.
Im smartphone customers trying to exclude inbox headsets, which puts the phone.
Could you talk about some of the microphone content.
Shifting a typical headset.
That has had to your business customers would start to.
Take that out if that's all.
I'm struggling to understand the question just.
Yes, sorry so.
Yes. So is there has been some.
Good.
Yes, sorry, there have been some reports out there.
Some of the smartphone customers would start to really does headset inside the box when you first by their phones.
So just wondering if you could talk about the microphone content that you ship that typically.
And what would be the impact your business its customers started to take out the headset Arkansas.
Well I think generally speaking the trials Mark is doing quite well I think you lose a wide variance of different content for off from one microphones per year on through wireless to two microphones per year to three microphone per year.
Andrew wireless so theres, a pretty wide variance of content from from headset to add side.
That being said, we do see a trend towards digital theres more digital usage in.
In two wireless which is positive for us as well. So I think if this did move toward inbox content I think that would be positive for us because.
Right now most of the things that are in box today are the the old what we call. So by the ROE the old headset debt with a wire, which has one microphone. So thats started being put into a box you could see at least one more microphones being put into and then maybe four or I doubt sex of I would find it.
Hard to believe that that the highest end products would be included a box, but but I can only think that that would be positive. If it was put in box.
Got it thank you.
Your next question comes from the line of harsh Kumar with Piper Sandler Your line is open.
Hey, guys all things considered I just wanted to say very good execution, just given all the uncertainties, particularly maturing until one of the Boston on long.
My first question was Jeff you mentioned that for Q will be the top quarter I assume you meant that in absolute dollars versus sequential growth I just want to clarify you know we're always greedy for growth. So I just want to make at that point, great out yet and so it will be sequential growth again from Q3, our expectation.
Understood, but it'll be up in absolute dollars and maybe to that point, Jeff could you tell us where you are going to see the sequential going take what drove Threeq guidance was is China was us predominantly in that and for Q, which one of these two will be the driver.
Yes, I mean, I would definitely say its north American focused in Q3.
In a fair amount of of non mobile applications.
It is driving that so there although mobile is definitely up sequentially. There's a fair amount of non mobile application that is driving in North America, but China, our expectations will be up sequentially.
And then you know as I look towards Q4, we are right now expecting China will be up sequentially sequentially again.
I would say North America report, probably more flattish dropped sequentially.
Okay. Thank you and then I.
I had a last one was on intelligent audio you've caught.
A bunch of cost style, you you sort of guided for full year exit rate is that.
So you you believe at this point, you're done with the restructuring or you think it could be some some lingering costs that you could take out in the future or you just want to kind of wait and see how the business does from here.
I mean, I think just kind of describe I know John went into it we did a fair large restructuring in the quarter that was even beyond intelligent audio and so I.
I would say intelligent audio is about half of what we took out relative to getting to the numbers that John was talking about overall.
So I think for right now I think we're Don I think harsh I kind of feel about this and I think we've we've talked about us on previous calls is I think we positioned ourselves well that if when we returned to growth, which we would hope would be in 2021 that we are very well positioned to be a more profitable company Adam Adam.
Lower revenue number than we had in 2019 that would be the goal and so I think for right now I think we're we've done the restructuring that we felt was necessary to be done.
Thank you guys.
Sorry.
Your next question comes from the line of Suji de Silva with Roth Capital. Your line is open.
Hi, Jeff Hi, John So in terms of the the headset market and your expectation for doing better. There next few quarters, how much of that is predicated on bounce or mature and the automated line coming in or does the the microphone business. There alone kind of give you kind of good tailwinds into the headset market.
So I think any color last call. So do we had not thought that there was going to be a huge.
Amount to balance our mature within this year, you know I would say that obviously, we're kind of running walking that little bit a tight rope here now of demand versus how much manually we can really built right and so.
I'd say incrementally, we're probably expecting a little bit less sales now because of the manual lines, but I think the important thing for US is is that it's really about 2021 and so our intent is this slide will be filled and we are going to have to make an assessment of what whether or not we should be buying another line. So so.
This is very short term focused in terms of the but it's incrementally lower probably bells amateur demand, but not really a factor it's really microphones that you'll continue to be our focus the least and this year for the year demand.
Okay. That's helpful color and then the filter market anywhere as mentioned as much here you talked about where that is in terms of the demand.
Well I was restructured millimeter wave market and if that's on track to expectations.
Yes, I think we've talked about in the past first that the fact that you'll millimeter wave in terms of.
Fiveg is probably been a lot slower than we would've expected and what I said in previous quarters that defense has been really driving the growth.
What I would say is defense is still growing it's probably just slightly slower than we are expectation a quarter ago, but but I wouldn't say overly measurable I'd give we've talked about $40 million in revenue from millimeter wave it might fall a little bit short of that but again. The demanded defense is still is quite good.
Okay. Thanks, guys.
So.
Again, if you would like to ask a question press star one on your telephone.
Next question comes from the line Tristan Gerra with Baird. Your line is open.
Hi, good afternoon.
A quick follow up.
The balance how about your speakers I think your manual line has about 25 30 million units output per year, and you had talked about the automated nine being about 12 million units per year. So what percentage are you going to.
Move away from.
Hearing how to balance how much of speakers from your manual line.
In Q4, and also perhaps if you could quantify the potential coolest margin impacts flatten that some that production into pillar in Q4, Yeah, I'll, let John to handle the gross margin, but I think.
Let's say one thing that's going on relative to the hearing health market, we have excess capacity on the many lives and if you think about it we we have not been able to fill our annualized because a hearing health demand. It has been hurting obviously, our gross margins. So so we do have some excess capacity right now in the manual lines.
That's how we're able to still filled fill the demand now as we go into next year trusted I think that's probably we're very hopeful that excess capacity for hearing health and May Allied is going to disappear and then we're going to need to have these dismantle lined up and running so if I summarize before John gets the gross margin.
We do have excess capacity right now because of hearing health demand and we're using that capacity to fill the bells average or for the commercial market.
Yeah interest and just to add add some color with respect to gross margins when that automated line is in place and we're operating at close to 90% or above yields where we feel like we have a very good chance to get we would have above average above.
Company average gross margins of our average gross margins 39 think of 40% or above for that when we.
Fulfill this demand off the manual lines will be well below the corporate average, but again this is a temporary situation for.
We are thinking up to three months, if we get those lines put in place and are able to have them installed and running call. It Jan one.
And again, it's relatively small volume so I still stand behind that statement. We think we can still have sequential gross margin expansion going from Q3 to Q4, even incorporating these manual lines versus the automated.
Okay, Yes, but and then as a quick follow ups you mentioned today come to decline sequentially. In Q3 is that driven by based patient it doesnt seem necessarily in line with what we've heard from some of the companies.
Core earnings.
So maybe little bit milk powder as what you think is happening day.
So it is that base station, but what I would just say is is we had a if you remember at the beginning of quarter. We thought PD was going to be up about 5% sequentially. They ended up being like over 10%, 11% that was almost all telecom and I would say, we're seeing a little bit a lumpiness in other words, we delivered a lot more.
Product in Q2 than we expected.
And I don't think it's really impacting what we're saying for though for the long term for telecom. It just more a quarter to quarter that we shipped more in Q2, which is resulting in less in Q3. So it's just more I'd say the lumpiness of of delivery of more than anything.
Great. Thank you.
Justin.
Your next question comes from the line of Bob Labick CJS Securities. Your line is open.
Thanks, Good afternoon.
Just wanted to talk about the cost containment and the cost cuts you've done obviously have done a very good job, there and just to clarify or.
To be sure the 40 to 44 million in Opex.
And run rate that compares to 46 six and adjusted this you name for the quarter is that right actually actually it's 45 five Bob if you take the midpoint of the guidance call 45 546 million for Q3, the biggest delta going forward is going to be in our legal spending we're still.
Very active in the case, we have from a patent infringement standpoint, we are very confident that spending in this matter is going to fall off pretty significantly as we kind of exit Q3 exit this quarter and so again I'm confident that we.
We'll be able to even though we're at call. It 45, five this quarter that we will be able to get in that range of 42 to 44 million as we exit 2020.
Okay, Great and then kind of as you returned to growth in 21 is there.
Total operating leverage is.
Where do you have to bring back more expenses to support all I mean, I mean, we will have some so good question, we'll have some modest increases over that called the midpoint of exiting 2020 of 43, we'll have some modest increases you know merit for wages, some medical insurance or zone working on some.
Travel, but we think we can maintain this to a level of call. It 45 million a quarter in throughout 2021.
Obviously, if the revenue accelerates, we'll we'll revisit this but right now as we look into the first half of 2021, we're going to we feel confident to maintain this kind of around the 45 million a quarter run rate.
Okay terrific I appreciate that and then I'll just another question earlier, you mentioned I believe that sales into mobile were less than 25% of total in the quarter can you give us a sense of what that was a year ago.
Oh.
Looking at the numbers right here.
Well.
Well there was the of the whole company.
It was almost 30 last year.
Got it okay.
Alright, thank you.
Thanks.
No no further questions at this time I will turn the call back over to Mike now.
Great. Thanks, very much for joining us today as always we appreciate your interest to Nols and look forward to speaking with you on our next earnings call. Thanks, and good bye.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
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