Q2 2020 DASAN Zhone Solutions Inc Earnings Call
Ladies and gentlemen, thank you for standing by welcome to Dasan Zhone solutions second quarter Twentytwenty earnings Conference call. At this time, all participants are not listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During this session you wouldn't be to press star one on your telephone.
See I bisect todays conference is being recorded if you required any further assistance. Please press star is here I would now and the conference I worked with their Kim.
Well good afternoon.
Welcome to Dcs, a second quarter 2020 conference call joining us today, the company's outgoing CEO Yung Kim.
Yeah, so called can't grow.
And our new President and CEO Charlie boats.
Before we begin I would like to provide the easiest sheep safe Harbor statement.
During this call management will provide projections and other forward looking statements regarding future events for the future financial performance of the company.
Company cautions you that such statements are only current expectations and actual events or results may differ materially.
Please refer to documents with the company files with the FCC.
Including his most recent 10-Q intend care reports in the forward looking statements section of todays press release.
These documents identify important risk factors that could cause actual results could differ materially from those contained in the company's projections or forward looking statements.
Please note that unless otherwise indicated the financial metrics being provided to you on this call are determined on a non-GAAP basis. These items together with corresponding GAAP numbers in a reconciliation to GAAP are contained in today's press release, which has been posted on D.C.S. as web site and filed with the FCC on form 8-K.
Management will also discuss historical financial and other statistical information regarding its business in operations.
Some of this information is included in the press release and the remainder of the information will be available and recorded version of this call on our website.
So with that I'll now turn the call over to you young young.
Thank you for that without tunnel and everyone. Thank you for joining us today.
As a many of you know I know, it's my last earnings call with the Tcs.
That's being an absolute older do you think tcs and being part of the company's transformation into what the D. today.
Good old provider of leading edge, DOCSIS, Fiveg transport and enterprise communications platforms.
And honestly say that I'm, leaving the company in a position of strength.
And independence of a world class leader tally fault.
Who was appointed on August 1st So the Companys board of directors.
To his new role as a president and CEO.
Finally, he is an industry trade blazer, though with a passion for driving exceptional operating performance.
Charlie I'm really excited to have you take hold them at the Tcs.
And to hit the ground to running.
I know you wouldn't bring to bear your knowledge of the company.
Oh industry can do your teeth management experience.
Excuse me in driving change transformation and girls.
Turning to all result.
Today, we told you the second quarter results that exceeded revenue marching and adjusted EBITDA guidance.
Selecting real progress in advancing both strategic and financial agenda.
The new record backlog and year over year margin expansion.
Yeah operating environment that remains impacted by corporate 19.
We have previously discussed with you the business model and technology changes playing out into brought that the marketplace.
And the corresponding sluggish spending.
All of which has been compounded by the lingering uncertainty surrounding Cobiz 19.
And its associated the impact on the global economy.
Slide chain and day to day operations.
Well its since with the outbreaks of called 19, we continued to see some deployment the polls.
Stuff and then proceed at the pay slow pace.
Just curious in Latin America, and the Middle East in particular, though.
Adult and implement appropriate safety procedures.
In some cases.
Small warehouses has have been closed preventing shipments from taking place.
And to own and pedal.
Eating lead times all critical component.
Extend do pull to eight weeks.
In this context it wasn't.
Nevertheless, particularly encouraging during the second quota to see new and existing customers leave reach these if this new platforms to enable next generation flavor and widely spaced opposite solutions.
Underpinning these encouraging second quarter results.
Hey, knocking the ball blunt that slowly start to improve with a growing momentum.
Turning to all the new products.
Bookings in the period, well up 14% from outflows quotes this booking.
In large part by not celebrating rate of adoption of our fiber based solution.
And the only ramp of new Fiveg network deployments.
We all know seeing a real signs of uptake in 10 gig X just pulling demand.
Adult coming more slowly than we had originally anticipated.
So as soon as the surrounding it just pole technologies and continuous innovation in bandwidth efficiencies no converging.
Giving us confidence that higher levels of a global adoption Oh approaching.
Despite a slower than expected a lot of X, yes, Paul in the quota tedious continued to invest.
In enabling R&D and Echo system integration, which has positioned the company to capitalize on upcoming Tinchy wave.
It's increasingly clear the box, it's growing demand for more flexible scalable and cost effective solutions to meet the talent is brought about by stuck explosion of.
I P data and video content and the Soviet tea.
And with the support of several leading customers.
We have made meaningful progress expanding customer engagements level.
He sees a strategically important as many of the company's customers.
Preparing networks for the next wave of brought by the stimulus funding through the rural digital opportunities Fund Hottie Oh, yes.
He is designed to bridge the digital T. body to efficiently fund.
The deployment to vote broadband networks in Rural America.
Through I used to phased process.
I see see with direct up to $20.4 billion over 10 years to fund you got to be speed broadband networks.
World areas.
Well, making millions of Americans homes and businesses.
The audio with phase one option is currently scheduled to.
To begin on October 22nd and then we'll target over 6 million homes and businesses.
The so all in some cases entirely and so with the broadband solution.
Last month.
They want to propose to bills in the U.S. Congress, which it was a direct the FCC to hasten the pace of investment.
From the program by condensing built the station process.
Setting Olivia is dealt requirements and ultimately awarding funds applicants.
That's all the sold bit though in an area that commits to offerings symmetrical gigabit service.
Given the competitive nature of the it'd be both section.
Yes, I anticipate that many greenfield to service providers would compete and take a portion of these funds from the largest traditional service providers.
I'll just seeing TZ has to capitalize early on this multiyear investment in broadband infrastructure.
Turning briefly to fight G.
Can you just achieved a significant milestones in Q2 with the shipments of it's supposed to commercially available from to hold pulled up to refer to it.
This is a disruptive zipfel, what incented to transport scalability.
Good cost efficient mobile network deployment.
When compared to traditional solutions.
Since the first shipments.
Some other response has been overwhelmingly positive.
Other leading service providers affirming the compelling value proposition of this new architecture.
Finally, the Companys mobile any whole product portfolio is well positioned to meaningfully penetrate this new $7 billion mobilized enable market opportunity, while Tony its five G switching and routing solutions into a.
Powerful new growth engine for the company.
I'll now turn the call over to Tom can cruel policy, a full to discuss our financial results for the quota Paul.
Thank you yeah.
Before I discuss the quarter's results.
Let me say, it's been an absolute pleasure working with you. These last seven months.
On behalf of the leadership team I'd like to thank you for your service.
And your invaluable contributions the Dcs over the last four years.
We currently do wish you all the best in a well deserved retirement.
Now, let's turn to our financial results for the second quarter ended June Thirtyth 2020.
Net revenue increased 49%.
70.5 million.
47.5 million in the first quarter a.
<unk> decreased 16% from 83 that 7 million, we reported in Q2 29 team.
The sequential increase in net revenues spend all geography with a notable increase in revenues in Japan, resulting from the initial deployments of our mobile any whole products.
The year over year decline in net revenue largely reflects the lingering impacts cougar parenting pent up.
Because what was the pause in capital spending on the part of carriers that we've discussed previously.
As service providers broadly plan their transition from copper to fiber based access solution.
Fiveg migration plans.
Looking at revenue by geography for the second quarter of 2020.
Korea accounted for 21% of our debt revenue.
Other Asia Pacific, including Japan was 34%.
Europe Middle East Africa was 24%.
North America accounted for 16% in.
In Latin America five person.
Parsing. These results further revenue from customers in Korea increased 54% to 14.8 million.
From 9.6 million in Q1 2020.
And decreased 22% from 19 million in the second quarter of 29 team.
Following the initial reaction by carriers and contract manufacturers to cope with 19 Q1.
Oh Korean customers have learned to manage operational challenges caused by the buyers.
Well also executing on the respective strategic broadband and Fiveg initiatives.
And paired with a new three years $66 million supply contract with LG Uplus, we're now starting to see growing pipeline of business opportunity in Korea.
Revenue from other you pack countries in Q2, 2020 was 24.2 billion.
64% from 14.8 million in Q1 20 Twond.
And up 6% from the 22 Dot 8 million, we achieved the region appeared in the year ago period.
As I alluded to a moment ago. This increase was led by new Fiveg mobile any whole deployments by record 10 at Softbank in Japan.
Although delete onsite integration activities have slowed the pace of development activity.
It has been encouraging you see facility locked down conditions loose.
With Japan remaining are largest my market opportunity 2020.
North American revenue was 11.2 million in Q2 2020.
Up 33% from 8.4 million in Q1 2020.
It up 5% from 10.7 million in the second quarter of last year.
Here, we anticipate continued quarterly sequential growth throughout the second half of this year.
The sales restructuring activities initiated in late 2019 continue to take hold.
It is demand for symmetrical 10 gig services continues to improve as our deal with applications are submitted.
Revenue from Latin America was 3.7 million.
Up from 2.2 million in Q1 2020.
Down from 6 million into second quarter of 20 Nike.
Despite some sequential improvement we continue to experience operational challenges at the region.
As many customer warehouses operate on reduced hours.
Presenting some shipments from occurring.
The same time lab access remains limited.
Beyond the impacts of covert 19 customer consolidation and heightened competition from Chinese vendors.
Can use to when the Latin American market.
[music].
That said, our R&D investments are starting to yield results.
With continued strong bookings for wireless mesh products with tier one carrier in Chile.
And improved demand trends for lower cost going to use and oil to use which we anticipate shipping and increased volumes in the region. During the second half of this year.
In EMEA revenue was 16.7 billion.
Up 35% from 12.4 billion in Q1 2020.
And down 34% from 25 to 2 billion in the second quarter of 29 Pete.
In Europe spending is generally remained soft in front of new investments in fiber access technologies.
However, we are seeing an increased order book in the Middle East.
Giving us confidence that we will see sequential growth in the EMEA region in Q3.
From a customer standpoint record 10 mobile was the only customer that represented more than 10% of our revenue.
Accounting for 90% that Rick.
Our top 10 customers in Q2 represent 60% of on yet.
Which was up slightly from 56%.
The same period last year.
Turning to gross margin.
Our GAAP gross margin in the second quarter of 2020 was 33.7% matching the 33.7 reported in the prior quarter.
And 49 basis points above the 33.2, we reported in the second quarter of 2019.
Adjusted gross margin, which excludes depreciation and amortization stock based compensation in inventory step up amortization was 34.4% in the second quarter of 2020.
This compares to 34.7% Q1.
34.2% in Q2 last year.
The gross margin variances for both periods reflect geographic and product mix changes.
Turning to our expenses.
GAAP operating expense in the second quarter of 2020 was 22 million.
This was down from 23.6 million in Q1.
And 24.8 million in Q2 of 29 team.
It was driven by cost cutting measures in the second half of 2019.
As well as cost containment efforts undertaken in response to cope with Dougherty.
Adjusted operating expense, which excludes depreciation and amortization and stock based compensation.
It was 20.4 million in the second quarter.
Improvement from 22 million in the prior quarter.
And 23.3 billion in Q2, 2019th.
The sequential and year over year decline in both GAAP and adjusted operating expense. That's was primarily due to effective cost control measures in the quarter.
As well the benefit of restructuring measures taken in the second half of last year.
Sequential improvement in our second quarter revenue generated adjusted EBITDA of 3.2 million for pure.
This compares to negative adjusted EBITDA of 4.8 million in the prior quarter.
And positive adjusted EBITDA of 6.7 in Q2 of last year.
Our GAAP net loss attributable to Dcs for the second quarter 2020 was $156000.
Well one cents per diluted share.
This compares to GAAP net loss attributable to these U.S. of 8.8 million.
Or 41 cents per diluted share in Q1 220.
Net income of 2.4 billion or 13 cents per diluted share.
Your last year.
At June Thirtyth 2020.
Cash cash equivalents, excluding restricted cash.
Totaled 38 million.
Compared to 26.4 billion at the end of the prior quarter.
The sequential increase was due to an increase in short term yep.
As like many companies, we drew on available lines of credit when the covert 19 crises hit.
We also availed ourselves of other sources of liquidity.
Including a secured borrowing against certain accounts receivable.
To create a large cash cushion in the event the covert 19 crisis created an existential threat to the company.
It did not.
So we expect to unwind that incremental borrowing in the second half of the year.
Total debt at June Thirtyth was 56.8 million as compared to 39.7 million at March 30 Onest.
Net debt, however increased by much lesser amount 5.5.
This was largely in connection with an 8.3 million increasing inventory related to upcoming third quarter shipments to Japan.
We expect or overall debt level to return closer to 40 billion.
The second half of 2020.
As we unwind most of the incremental borrowing we availed ourselves out in the early days of Cobot 19.
Our days sales outstanding at the end of Q2 was 129 days compared to 169 days in the first quarter.
And hundred 13 days in Q2 last year.
The sequential decline in Dsos reflects our commitment to approve or working capital metrics.
But there's still opportunity for continued improvement in coming quarters.
Backlog as of June Thirtyth, 2020 was 82 million roughly flat to the 83 million we reported at March 31st 2020.
Moving onto our financial outlook.
While our backlog remained strong and we remain optimistic about our long term opportunities.
We do anticipate that some impact to covert 19, well continue to be felt throughout the third quarter.
With that backdrop.
We're providing the following revenue and earnings guidance.
For the third quarter 2020, we expect net revenue of $74 billion to $79 billion.
Adjusted gross margin of 31.5% to 32.5%.
Adjusted operating expenses of 23 million to 24 million.
And adjusted EBITDA of negative point Fivemillion two positive 2.5.
Given the lingering uncertainties of covert 19.
Unlike many companies.
We continue to provide guidance one quarter ahead.
But did not provide a full year estimate.
However are healthy backlog and solid customer momentum.
Coupled with the commence ramp of Fiveg deployments in Japan.
Gives us confidence in our prospects for stronger second half is 2020 compared to the first half of the.
And with that we're ready to open the call to your questions operator.
Thank you ladies and gentleman asked a reminder to ask a question you want me to press Star one on your telephone to withdraw your question Christian Palomar hash key.
Please standby, while we compile the DNA roster.
Our first question, Dave can with B. Riley. Please go ahead.
Hi, This is a danny on for days.
Thanks for taking my question.
I was.
Was wondering about the market share opportunities that might be available at the expense of hallway is there any color that you guys can provide around that and for how you guys thinking about that.
This is Charlie how are you.
Good how are you.
Good.
First I'm, assuming that you guys are well aware of our 10 G market share already today I mean today, we we ship more tangi ports.
I think anyone.
Other than what we're seeing from while we in China itself. You know, we certainly are seeing and we'll continue to see while weigh in.
Some of the emerging markets, but you know we're pretty optimistic about the exit in North American Western Europe and so.
You know, we're pretty excited about the opportunity to compete more fairly in the markets that we're aggressively pursuing.
Got it thanks, and I was wondering if you guys have the.
Colour on the thundering spending environment in.
Access and the edge access.
I don't think that we've seen much change since.
Q1.
[noise], Okay got it and so we kind of have you guys are expecting to hit over 25 million on dot fiber land and I was wondering if you might have any color around that.
Okay. These young.
Yes, I think.
We are cheap gifting and by the customers.
Caveats to us and those that.
Enterprise type allowed both us and that continues to live right.
I think that's well that's the key is about business the so.
Oh proton DOCSIS categorically to five G.
And you hold professor and football gets into bye Bye bye.
But that continues.
[music].
I mean, certainly one of the silver linings, obviously, one of the silver linings and Corbett that I'm sure you guys are experiencing with other access companies.
As you know we have seen and we will continue to see more investments from the service providers, especially.
As they try to address a lot of the capacity constraints.
Specifically for upstream traffic. So we certainly are starting to see more demand for that can I think we'll continue to see more demand in that area as.
As John mentioned, certainly a lot of corporate American enterprise was hit the hardest with all of it but we certainly are seeing an uptick in our optical Lan technologies and [noise].
We see more of corporate America, returning back to the office you know, we're very optimistic in the sales pipeline in that particular area continues to grow.
Great. Thanks, and I just wanted to make sure I had the right number on the backlog was that 82 million.
Yes.
Okay, Great and would you be able to.
Give us what percentage of that is fiveg or.
Oh no.
No we're not going to give out those numbers. What we can tell you is when you're when you look at Q3.
One of the.
One of the numbers that we will share with you guys is you know weve two thirds of of Q3's forecasted revenue is already in backlog and so when we look at our go get number for Q3 going back to.
July 1st you know, we're we're at a level that we weren't had.
So in.
In Q1 and what.
Typically seen I mean, typically we've been in the 50% backlog as we entered the quarter and we enter Q3 with nearly 75% of our forecast revenue backlog, which is why we feel pretty confident and in our Q3 numbers.
Okay, great. Thank you I cant connected.
Questions you might want to Turkey.
Thank you our next question.
With Craig Hallum. Please go ahead.
Hey, guys its Christian Schwab.
So quarterly results.
As we look to the.
The commentary regarding you know deployment restart slower service provider could you quantify I know you know we've talked about a robust second half before it given Q1, you know it will be you know, obviously robust versus a combined basis, but.
Can you quantify how much potential revenue may be slipping out of the second half of 20.
In to 2021.
At this is young.
Yeah, we experienced a.
Look though.
19 issues, but you mentioned we've seen some difficulties.
Well.
But.
Yes.
Just to pull through.
He though.
Finally in Q2, I'm sure that a target I mean do three.
And he said these are pretty constant.
The two thirds of our backlog, which we think there.
But again.
I think it is easy definitely.
But nobody can predict coffee, but [laughter].
Oh sure I'll, just echo what I said earlier and and I'm speaking you know.
From a from my recent.
Asked it hit ATX you know the cable operators in the service providers are certainly seeing a significant amount of pressure that's being placed upon the networks, especially from an upstream drabek perspective, and when you look at the fiber access technologies that we have today and.
Certainly the Fiveg rollouts around the world are not slowing in fact, I would argue that they're accelerating and so when you look at the alignment of our products today.
Around fiber access as well as Fiveg transport and ER and the transformation that we're seeing an enterprise you know our sales team is definitely not seeing a slowdown.
Pipeline for the second half.
Great and as we think about five you roll out in Japan and congratulations.
A significant sales are accurate to.
As we look at racket in Softbank is is that it takes some spending that you expect to.
Sustain itself at an elevated level, you know well into 2021 or will be in a position too.
By new opportunities and new customers.
You know to continued revenue growth, how should we be thinking about topline revenue growth.
Okay.
A lot you got.
No I would you say.
For US you know that are fiveg optical transports in the first inning.
No. We were excited that we've had this great opportunity with rackets and to to rollout our initial fiveg deployments, but.
No you're going to see Fiveg optical transport, both from a front haul as well as a backhaul be a key theme for us.
Over the coming years, I think 2021, certainly as it has a pretty significant buildup for us as we bring that innovative technology to other parts of the world, including North America in Western Europe.
Great.
Yes.
The second enough areas when they start building is usually lost the big seems to be to five years.
He said you know both up with that has helped by Fiveg is at the beginning of the cycle.
Excellent. Thank you guys Thats, what I can do here.
HM.
And as we look to North America I know previously in calls Youve talked about you know potential are a piece that we're out there and maybe some opportunities potentially after T mobile and spread finally merged is there any update you can give us a.
Potential enthusiasm more opportunities in particular.
In North America.
Well I think the sales team is pretty excited about the success that we've had with the.
Fiveg optical transport platform that rocket town is rolling out and it's something that we are beginning to introduced to the tier one operators in North America and I think it was pointed out earlier you know the.
The pursuit of the rule digital opportunity fund.
That's something that we're gonna be aggressively pursuing and others.
Players in the United States I think there's a great opportunity for Dcs to be successful in that particular market, especially with with our fiber access platform.
And you know as you pointed out you know.
It's not just the wireless operators that are going to find a alignment with our fiveg initiatives, you've got the shows as well as the traditional telcos that going to need to move wireless traffic on and off their network as quickly as possible.
Great. Thank you guys are no other questions.
Thank you. Thank you.
Our next question comes from Savage, all with Northland Capital. Please go ahead.
Hi, good afternoon.
A young congratulation.
Great working with you would have been longer.
And Charlie look forward to working with you think weve crossed paths a few times over the years.
One to a kind of focus back on Japan.
The country pretty impressive to keep the backlog flat, but the big ship and two rocket kind of a quarter.
But how should we think about those rollouts as they proceed and the second half.
You mentioned, maybe shipping something to softbank as well, but.
You see between the two though is it some pretty substantial business has anything changed.
With regard to your anticipated timing there should we think about.
To be rocketed digesting some of them well well Softbank Graham from the second half for.
I know you've got a lot in backlog and I'm just wondering if you could make any comments about.
Your your timing for those two big projects as it regards the second half versus 21.
Oh, yeah, well Kim thanks, Thank you very much oil you'll kind was.
But there was many challenges in the second quota, but we should see in skewing.
Delivery and I think it's a really.
Q2 is the beginning and Softbank is just beginning you'll see.
Just a point to get built up from now rather than.
Oh, any I guess I don't see any thoughts Bill Bill.
Well to block so any any anything change I think it's going to be positive from novel old way.
Right and then also okay sorry.
That's right I'd also just like to add a I know you guys are aware of the 66 million dollar contract that we signed with LG Uplus.
You know for our attention coupon in Fiveg transport products, but we also are.
Anticipating that that.
Contract will continue to grow as well.
Well I Love you can see what he started I know algae has been consistent customer whether you started to ship on that in Q2, obviously you did see.
An increase in Korea that it sounds like you would expect to maintain I think you've made.
Similar comments about expectations around continued sequential growth for the year.
In the U.S. in Europe.
If I'm right.
So you got shouldn't.
Jim could bode well for.
For the second half in general.
Though is it.
And I think you also commented for case that you expect Japan to be your largest single country for the year is that correct.
Yes.
Alright, great.
Yeah, Let me just one more just kind of focusing back on the U.S. market, which.
It's been a reasonable part of your business, but seems to be.
You're taking on some renewed growth characteristics.
Especially with regard to rural broadband and you mentioned art off and you know who knows if we might see something substantial on top of that.
Would you say you're improvement there the result of improvement in overall market dynamic your own execution.
With regard to approaching the market or some combination of both and can we expect the U.S. market to be minimal more important driver for the from Germany to hunt from Uh Huh.
Well I'll answer it with three pieces I mean, one I don't think I would be here, if north America wasn't going to be a center of attention as we go forward. So it's certainly a key market that I've been part of last 25 years and while.
Can't speak to the success that we'll have in the future what I can say is that.
We are leading in the fiber access market with our Tangi bond platform and I think that that certainly has the sales team pretty excited about the prospects in North America.
As you pointed out earlier I think the fiveg.
Transport opportunity that we have in North America is pretty significant, especially when you compare.
Innovation and what we're doing in Japan, and how it aligns with some of the competitive.
Here is that we have in North America, and then you know I'm very optimistic about you know our enterprise opportunity, our optical Lan platform, and where we're innovating around software defined networking and software defined orchestration.
Certainly gives us a boost and those are certainly trends and technology that North America is is looking very closely at today.
Tim I think you know the both closely to my successor, and Sadly was basically growth in.
Because these he has deep relationships with though.
Major carriers in North America, and Western New rule.
So I think that was a.
And these strategic decision could bring in.
Todd.
Among many other.
Okay.
That speaks specifically why.
Yeah. He was 50 ahead.
Well for make a market.
Yes.
Thanks very much.
Oh my.
Thank you. Our next question is from Jon Groberg with government Bond <unk> go ahead.
Good afternoon everybody.
Yeah, Racket and you said that.
Other people are going to try to try to emulate there.
Carrier architecture.
And you being you know this.
The Fiveg Guy for Racket 10, though I know air spans is going to do over 100 million with rackets and this year.
You know in Iran, and stuff and.
How was the second half looking for you and what carriers.
Do you have high hopes to to try to you know sort of do with record test doing C and you can capture that.
Oh.
And I talk about what happens with about 10.
In Q2, and then I leave what is going to happen in the future with that occupancy.
Charlie.
You can see that roughly 10 was taking 19% of all revenue.
And that's the most of it a lot better utilized both some of that.
It was is so you don't phone call suits.
Okay.
That's though they start deploying hedging to degrees but.
On piece will accelerate.
Have we at least so no diesel a fellow right and would have.
A logical just the business from that.
Close of the unique nature that stuff.
Two but so what other customers you hope to attract to that.
Architecture.
I totally said earlier that there is many interest from full tilt headed in the operators.
I'll get into hockey victory.
So I'm sure that Todd.
Page affecting this too.
So.
Yes, I think one of the unique things about the.
Fiveg platform that we have is it something that you can lift and shift around the world. As you guys are probably very familiar with the Japanese architecture network for a lot of the fix wireline network is very specific to Japan, but what we're doing with rocket honest something that is.
Very affordable and it's something that we're aggressively pursuing around the world and.
I do know, Eric very well at air span and there are certainly someone that we believe could be a good.
Complementary partner to us.
Great. Thank you.
Thank you.
Ladies and gentlemen, this concludes journey, so I'd like turn the call back to Yung Kim for his final remarks.
[noise] thanks, operator.
Thank you all for joining today.
I, especially want to think PGS shareholders customers Populists an employee.
Who have supported the company over the years I.
I would like to close by saying it has been a tremendous owner to lead the PZ at.
The company's in extremely well positioned voiced the next phase of profitable growth.
The Charlie fault meter.
Leadership, and I look forward to the company's future success in the years Okay.
Correct.
And thank you joining us today for our presentation you may now.
[music].