Q1 2021 Aehr Test Systems Earnings Call

Good day and welcome to the Aehr test Systems' first quarter fiscal 2021 financial results call today.

Today's conference is being recorded at this time I'd like to turn the conference over to Jim Byers of MK, Our Investor Relations. Please go ahead Sir.

Thank you operator, good afternoon, and welcome to Aehr Test Systems' first quarter fiscal 2021 financial results Conference call.

With me on today's call are Aehr test Systems', President and Chief Executive Officer, Gayn Erickson, Chief Financial Officer, Ken Spink.

Before I turn the call over to gain in Canada to cover a few quick items.

Afternoon, Aehr test to issued a press release announcing its first quarter fiscal 2021 result.

That really will be available on the company's website at HR Dot com.

Coal is being broadcast live over the Internet for all interested parties and the webcast will be archived on the Investor Relations page at the company's website.

I'd like to remind everyone that on todays call management will be making forward looking statements today that are based on current information and estimates and are so.

And are subject to a number of risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements.

These forward looking statements, including guidance provided during today's call are only valid as of this date and Aehr test systems undertakes no obligation to update the forward looking statements.

And now with that said I'd like to turn the conference call over to gain Erickson, President and Chief Executive Officer Jane.

Thanks, Jim Good luck.

Good afternoon to those joining us on todays conference call and also listening in online channels.

Ken will go over our first quarter financial results later in the call, but first I'll spend a few minutes, providing some details around the challenges we experienced during the quarter and how we respond to that I will turn to what we're seeing now and why we think things are moving in the right direction and then following our remarks, we'll open up the lines for your questions.

As we anticipated on our last earnings call. Our first quarter financial results were impacted by the challenging global business environment, probably created by the cold at night, you Pendennis and push outs are forecasting customer orders during the past six months for Fox P systems and consumables.

We saw this from customer shopping Datacenters and some fiveg end use applications with Silicon Photonics Transceivers. We also saw Pushouts unforecasted orders for devices used in automotive applications and also sensors used in mobile devices piece.

These customers have indicated that they believe the push outs are temporary and that they will require the additional system capacity and consumables later in the current fiscal 2021 year.

The majority of our revenue forecast for this fiscal year comes from current customers that have already qualified or systems and consumables for production applications. This includes follow on orders from our silicon photonics customers' forecasted production ramp of client devices as well as adding new devices with our initial silicon carbide customer Duffy wasn't much.

Sure and follow on orders from our growing installed base of Fox wafer level and Singulated die much in test systems consumables.

Consumable sales of our Fox wafer packs and died packs accounted for almost 50% of our revenue last year, and we anticipate that it'll be a significant part of the gravity again this year.

We are maintaining our full year revenue expectations and expect the majority of our orders and revenues to be backend loaded. This fiscal year. It's also important to note that the vast majority of this expected revenues based on commitments from our current customers who have already planned their production and told us what they're going to buy from us.

I want to ensure that are shareholders know that were not confuse that fiscal Q1 was financially a bad quarter. However, we did have some events and achievements in the quarter that set us up and provide us optimism about our business for the rest of the year and moving forward.

In Q1, we shipped an inch successfully installed a box and people wafer.

Justin burn in system for initial production burn in and stabilization for a new customer who is a global leader of communication Transceivers for data centers telecom in Fiveg infrastructure.

This customer is forecasting to transition to our Fox XP wafer level test and burn in systems. During this fiscal year to meet their volume production forecast and we expect them to continue to grow for the next several years we.

We categorize this customer is a tier one customer, which we define as a customer with the resources and the market size to be able to purchase $6 million to $10 million or more per year of our systems and consumables.

On our last call, we announced that we closed an initial order with the world's largest outsourced semiconductor assembly and test so far during the.

During the first quarter, we began an initial marketing and sales campaign with this customer for the Fox P family of products, including their wafer packs and dog Tox for production caskets hardening and reliability screening megabytes isn't full wafer singulated die in March alone.

The initial marketing and sales campaign has already resulted in multiple new customer engagements they have.

They have asked that we not name them publicly yet because they see that move into the Silicon Photonics Assembly packaging and test space, That's a strategic initiative.

Want to gain market share from some critical target customers before going public with what they see as a competitive advantage of being able to buy a total solution, including full wafer level test and burn in before assembly of the Silicon photonics engines into the transceiver modules we.

We expect to make this partnership public in due course.

We also brought in deployment of the Fox XP for Silicon carbide devices during the quarter we.

We added multiple new device design wins and completed the initial production release of several new silicon carbide devices on our Fox XP system with our lead customer that is using the Fox XP system for high volume production burn in an infant mortality screening of silicon carbide devices at wafer level for electric vehicle power modules.

We're forecasting additional capacity needs for a Fox XP systems as well as consumables during this fiscal year and for years into the future.

A critical capability that only our solution can divide in the market today is the ability to test them, 100% of the die on a wafer in a single insertion, while providing 100% trace ability and pass fail results each device, including exactly what time during the test and burn cycle than devices failed. This.

This is a critical feature for them to provide confidence to their customers that they are moving all heard me like say inspired dishes.

They have made public presentations in industry conferences, telling the cost and quality assurance advantages of using our solution compared to traditional package and module level test.

Our systems are not only able to test 100% of their devices on 468, and 12 inch wafers, but we can test and burn in 18 wafers at a time and single Fox XP system.

We continue to see the total available opportunity for silicon carbide, and silicon photonics wafer level and Cingulated dye test markets to be approximately $250 million of needed capacity, including consumables.

The silicon carbide semiconductor device market is growing at a tremendous rate with unit growth and high power device is expected to grow at over 50% teacher from 2019 to 2025 per year old research.

We remain engaged with well over a dozen potential customers and in Q1, our list of tier one and tier two customers that are considering using parents' products for high market growth applications, including silicon photonics, and silicon carbide production burn and continue to grow in it.

In addition, we have seen incremental applications and devices in the mobile sensors segment that provides potential upside in this segment late in fiscal 2021 and into 2022.

Also as I've talked about before we started to see forecast for renewed demand for packaged part burn in applications, particularly from customers seeking high voltage capability.

Tina move toward higher voltages and other requirements for devices and automobiles, we expect to see bookings were seen from certain current EHR customers. This fiscal year and also expect to generate additional new opportunities with our planned introduction of a new package part burn in product at a very high voltage test capability.

However were relatively conservative with our forecast in package part burn as this segment seems to be heavily impacted this cold at night and delays in customer evaluations.

We have recently seen two customers push out their expected need for additional systems into our next fiscal year, which is it.

Which as it turns out actually helps us with the timing of our new system availability.

Still we do see the need for high voltage capabilities in both wafer level package part as a new high growth opportunity for air and expect to add several new customers that include both tier one and tier two level customers would package part burn in this fiscal year and next.

Well Covidien has created real challenges with travel restrictions and overall caution with our customers, which has resulted in delays to some production.

Customer production labs, we believe there is no long term negative impact there the demand for our products what the attractiveness of the key markets that we serve.

We maintain our belief that we will come out of this worldwide pandemic stronger than we went in with more production customers more applications and higher value products.

Our key customers are serving some of the highest growth markets, including data centers fiveg infrastructure sensors, and technology for smartphones and tablets electric and hybrid electric vehicles, and memory and data storage and computing data centers mobile devices and hundreds of applications that are keeping the world connected that's it.

As a result, we believe our products will be in high demand this year and for years to come.

As we continue into fiscal 2021, we remain optimistic about the growth opportunities for assistance of consultants within our installed base of customers as well as our ability to expand the number of customers using the Fox family of products.

We expect significant growth in both our top and bottom lines going forward with more fixed operating expenses and significantly higher margin products and services.

Before I turn the call over to Ken to discuss the financial results in more detail I do want to take a moment to thank John Schneider for his many contributions as a board member since 2015.

Earlier this month, we announced that John was retiring and not seeking another year with the board and also the appointment of Jeffrey Scott to our board of directors to replace John.

So I'm going to you know Jeff has been a significant investor with Air Force quite some time and is very active and engaged with the management. The company. He brings significant insight into investor relationships and also corporate banking and capital markets, Jeff will we be replacing the audit committee corporate governance, and nominating committee positions vacated by John.

So we welcome on Board and then.

And with that I'll turn it over to you Ken and then we'll open up the lines for questions.

Thank you again and good afternoon, everyone has gained noted our first quarter financial results reflect the impact of the challenging global business environment around the covert pandemic and customers, who pushed out forecasted orders for our Fox systems and consumables during the past six months.

These customers have indicated the push outs are temporary and that they will require the additional system capable capacity and consumables later in our current fiscal year as such we expect or fiscal year orders and revenues to be backend loaded EPS.

At the same time, we discussed on our last earnings call, we've taken actions to control spending and.

In our fourth quarter, we completed the restructuring to strengthen our sales capabilities and reduce our costs. These.

These actions, including closing or test systems, Japan subsidiary and moving to a sales rep distributorship model in Japan, and Germany resulted in permanent savings of approximately 120000 per quarter.

We believe these enhancements will improve our efficiency and material increase our sales activity and bookings going forward and increase our kind of TV penetration of key customers in our targeted markets.

As we have shifted to higher margin highly differentiated systems and consumables. These changes also position us for success with sales of our current products as well as additional new products planned for introduction this year.

We have also implemented a temporary cost reduction initiatives. These actions reflect prudent short term cost reductions in response to the decrease in order and shipment activities in Q4, 20, and Q4 21 and arc.

And our commitment to managing cash and expenses as we weather through these challenging times. These.

These temporary cost saving measures resulted in savings of over 200000 in operating expenses in Q4 and over 350000 in savings in Q1 21.

We announced in our 8-K filing earlier this month starting in the current second quarter, we expanded our cost reduction initiatives to include a 30% pay reduction and officers salaries.

An increase in mandatory shut down days and reduction employees. These.

These cost reduction measures are expected to result in savings of over $550000 per quarter.

Including the permanent and temporary cost reduction measures irrs revenue breakeven decreased by approximately 4.5 million per year.

It is important to note that even with these cost controls in place our operational capacity and bandwidth have not been negatively impacted and our main focus continues to be growing our revenue base within the large market opportunities the game mentioned earlier.

Now turning to the financial results net sales in the first quarter were 2 million down from $3 million to $3.8 million in the preceding fourth quarter and 5.5 million in the first quarter of the previous year.

The sequential decrease from the preceding Q4 reflects a decrease of 1.6 million in wafer level burn in revenues and 195000 and customer service revenues. This was.

This was primarily due to a decrease in wafer packed AIPAC revenues of 2.4 million, which was partially offset by an increase in wafer level burn in system revenues of 801000.

The decrease from Q1 last year reflects a decrease of 3.1 million and wafer level burn in revenues and 365000 in customer service revenues. This was primarily due to a decrease in wafer level burn in system revenues of 2.1 million and a decrease in wafer packed AIPAC revenues of 1 million there were no packaged parts.

System revenues in Q1, 21, Q4, 24 Q1 20.

Non-GAAP net loss for the first quarter was 2 million or nine cents per diluted share compared to non-GAAP net loss of 720000 or three cents per diluted share in the preceding quarter and the non-GAAP net loss of 214000, a one cents per diluted share in the first quarter of the previous year.

Non-GAAP results for Q1 21 include the impact of stock based compensation expense and a 2.4 million adjustment related to the closure of our Japan subsidiary.

This adjustment includes a 2.2 million cumulative translation adjustment in noncash item.

Representing the cumulative impact of a change.

Exchange rate fluctuations held on our subsidiaries books, which was released the income due to the dissolution and liquidation of our Japan subsidiary in Q1.

And a tax benefit of 215000 related to the closure on a GAAP basis net income for the first quarter was 107000 or zero cents per diluted share compared to a GAAP net loss of 2.9 million or 13 cents per diluted share in the preceding quarter and.

On a GAAP net loss of 213000 or two cents per diluted share in the first quarter of the previous year.

Gross profit in the first quarter was 227000 or 11% of sales compared to a gross loss of 93000 or 2% of sales in the preceding fourth quarter and gross profit of 2.3 million or 41% of sales in the first quarter the previous year.

The increase in gross margin from the preceding quarter is due to the impact of the 1.6 million excess and obsolescence inventory provision during Q4 20 accounting for a 44 percentage point impact in gross margin in the quarter.

Gross margin was unfavorably impacted in Q1 21 due to higher unabsorbed overhead costs due to low revenue levels in Q1 21 compared to Q4 20 in Q1 last year and an increase in direct material cost as a percentage of sales due to a change in mix from wafer level excuse me wafer packed AIPAC revenues.

The system revenues in Q1 21.

Operating expenses in the first quarter were 2.4 million down 334000 from 2.7 million preceding fourth quarter.

Down 286000 from the first quarter last year.

The decrease in operating expenses from the proceeding Q4 quarter is primarily due to restructuring charges of 220000 in Q4 20.

And a decrease in employment related expenses from a cost reduction initiatives implemented during the middle of Q4 20.

The decrease from Q1 last year is primarily due to a decrease in employment related expenses from cost reduction initiatives implemented starting in the middle of Q4 20.

SGN eight was 1.5 million for the first quarter and a decrease of 160000 from 1.7 million in the preceding fourth quarter.

And down 294000 from 1.8 million in the prior year first quarter. The decrease from Q4 and Q1 of last year is due primarily to a decrease in promote employment related expenses from the cost reduction initiatives previously mentioned.

R&D expenses were 900000 in the first quarter up slightly compared to 854000 in preceding fourth quarter and flat compared to 892000 in the prior year first quarter.

Turning to the balance sheet for the first quarter.

Our cash and cash equivalents were 6.3 million at August 30 Onest.

880000, compared to 5.4 million at the end of the preceding quarter.

Accounts receivable at quarter end was 1.1 million down from 3.7 million at the preceding quarter end due to the impact of lower revenue levels in the quarter.

Inventories at August 30, Onest were 8.1 million up slightly compared to 8 million at the preceding quarter and.

Property and equipment was 622000 compare.

Compared to 663000 at the preceding quarter end.

Customer deposits and deferred revenue short term and long term were 406000, an increase of 214000 compared to 192000 at the preceding quarter end.

Our current and long term debt of 1.7 million is related to funds received during the fourth quarter under the paycheck protection program or PPP, which we announced in an 8-K filing in late April.

The P.P.P. loan is intended to be forgiven subject to any provisions of the cares Act and we've just been notified that our bank is now accepting applications for loan forgiveness under the P. P. P program, we expect to complete the application process shortly.

Bookings in the first quarter totaled 672000.

Backlog at August 30, Onest was 1.2 million compared to 2.5 million at the end of the preceding fourth quarter and 3.6 million at the end of the first quarter the previous year.

Now turning to outlook for fiscal 2021.

For the fiscal 2021 year ended May 30, Onest 2021, we are reiterating our guidance for fiscal full year total revenue of between 25 million and 28 million, which would represent growth between 12% and 26% year over year and to be profitable for the year.

Lastly, a couple of updates on the Investor Relations Brian.

Our annual shareholders meeting will be held on Tuesday October 20, it and we will and will be available to join via webcast for all interested parties.

Then in November we will be participating in the Craig Hallum Alpha select virtual Investor Conference on November 17th we hope to see some of you virtually at the conference. This concludes our prepared remarks, we're now ready to take your questions. Operator. Please go ahead.

Thank you Sir at this time, we'll open the floor for questions. If youd like to ask a question. Please signal by pressing star one on your telephone keypad.

If you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again press star one to signal for question and we'll pause for just a moment to allow everyone an opportunity to signal for questions.

Again, Thats star one if youd like to queue up for question.

Well take our first question in queue. This comes from Christian Schwab, Craig Hallum Capital Group. Please go ahead.

Hey, guys good afternoon.

<unk> yeah. Good gain can you help us.

Help us understand.

You know the applications or the specifics I guess I kind of missed it in the prepared comments about the customer commitments for the meaningful revenue over the next you know a two to three quarters to get done.

To our target revenue range for the year can you walk us through some of the.

Commitments that you feel very confident about.

I'm sure I want to be I haven't thought through Xome.

Exactly being able to see it because in some cases the customers are are unique and people have a pretty good idea. What they are so I'll try and water it down a little old mean, they tend to try and do you know protect the.

The non disclosures live to specific customers, but let me just so let me just talk first about a few of the markets. So in silicon and Silicon Photonics, We I would say most of those customers all have clearly indicated that they will be increased.

Even their production capacity as they seek to this all of them are saying they are increasing their production capacity throughout the year.

And that would be consistent with the market growing that silicon photonics markets, like 40% or something cage or.

In terms of revenue, maybe a little higher than that and unit growth comps for the silicon Photonics Transceivers and just as a reminder, I as I've gone into detail before these are basic fiber optic transceivers that are heavily used in data centers and in long haul telecommunications applications and our big part.

The fiveg infrastructure. So in reality all of those are growing and candidly you know everyone.

Every one and said boy with this downturn or or with this kobe and everything being home anyone's uses data centers and I'm zoom and everything else. It's isn't data exploding the answer I think across the board is yes, but if you go when you look at companies there have been companies in the space like CRM and some others have actually specifically talked about you know.

Slowdowns in the data centers.

And we know specifically, there's been slowdowns in Fiveg infrastructure build and as a result.

People not having vendors on their floors or do the upgrade so we've had our customer is in pretty specifically describe their end customers having delays in orders and therefore say you know.

Good game I know, you've prebuilt assist them or we were anticipating taking it you know I you were not going to give you. The order until we have that order in hand from our customers and just for clarity because there is a high concentration of the data center guys and it feels like your name dropping but you know a good chunk of the dollars are spent by Amazon.

Good gold Facebook, Apple and the likes and Microsoft and so you know within those names I, specifically am aware of some delays and those data centers and upgrades and stuff that are impacting my customers, but they are restating, yes. They expected we knew that are reengaged.

And you know it's a it's just it's a short term delay and it's not a long term goal.

It's not until cobot clears gets like Hey, we just right now we have to get our act together to figure out how would you get vendors in here and do some things like that that's how it's been.

On the silicon carbide side of things.

I would say it's.

Less about that I I doesn't feel the same way it feels like people are going forward pretty aggressively with those certainly on the customer evaluation side of things can see some slowing or difficulty of.

Travel restrictions, but candidly and we shared with you before the bulk of our revenue forecast that we guided at the beginning and we reinstated now is actually not with new customer wins and so you know while those are impacted you know that's not what would be impacting our revenue for this year. So we.

Do you anticipate current customers ramping and they're being pretty specific about what their expectations are and we see facility upgrades going on and and coconut water and electrical for one of the tools are going to go. So there's you know reasonable visibility and then I'll I'll try one more market and that is.

You know people know that we're in in the mobile side of things and you know our end customers and their you know customers. There had been some pretty publicly visible delays things that would normally be introduced this time of year had been pushed out and of course, they didn't give us much.

Heads up of that that's obviously very secret. So soon is that what is don't come then you know there's a push out so we've seen some of that and we see some of that kind of flowing into the year, but they too are forecasting and capacity requirements plus some upside new opportunities that could <unk> forecasted.

Specific requirements for this fiscal year, plus some upside opportunities that could happen for a revenue as early as the end of this year or into two into next fiscal year 2022.

I hope that gives you some clarity.

Yeah, just a little bit potential further clarity. So you would expect the majority of the revenue.

It's come from Silicon Photonics is that for cat correct or am I thinking about that wrong no I mean, it I would say the majority of it is silicon photonics silicon carbide, though mobile sensors and actually we do anticipate the we haven't talked about them I didn't in fact, they didn't put it in the conference.

Called bullets as I think about it we had won a big customer a couple of years ago that we referred to kind of very generically in hazy as such I'd say.

Significant data center in high volume application.

Data storage I think we describe it there's reasons why were being elusive it will eventually come out.

But it that program was I was delayed.

For reasons that we know includes specific things related to co but in terms of when they were going to roll. This thing out but we currently have forecast that are at the end of this fiscal year for systems to be taken so.

You know, it's a it's a balance of all of those and in fact, it's.

Probably in that order of dollars, but all of those are you know material I'd say each of those could be you know 10%.

10% or more of our you know even the smallest market segment would be over 10% of our forecast.

Okay Fabulous and then lastly, what.

What happens if the cold it related travel restrictions you know remain in place through yeah, Yeah Yeah.

A few more quarters, where you know any way for us to figure out how that would impact your business or or do you believe that most of those negative impacts you know are behind you and that's why you're confident in reiterating previous guidance for the year.

<unk> <unk>.

Thanks, Christian and actually we had a couple of other folks paying us on this question. So I just I actually just quickly right before the call jotted down some notes so I just.

So people don't excuse me I'm going to actually read a little bit from my notes here. This one but.

If we could say as I wrote it down I just want to be so I guess it is clear as I can on it and it might repeat some things, but anyhow I first of all not all customers are impacted by the travel restrictions either because we have the resources. The locally so we put people on that or Weve worked around them.

For example, we've got a couple of specific examples where we sent ahead.

Applications and service people to those locations and they had 14 day quarantines locally.

One of those was international and one of those in the states.

And it wasn't flying from California into the state, which is kind of interesting, but the customer themselves have a quarantine put in place. So we plan to the dogs and hotels and waited out turns out working remotely doesn't always make that much difference when you're supporting coastal customers over the phone and over the computers, which is how we.

And they're doing so it doesn't make that much difference whether you're in your home or hotel setting aside you know the burden on that on the employees right, who we have these very committed employees or so.

The impact Unfortunately, corn team has can basically manageable effect right. So the guys go they're working every single day kind of like they wouldn't be doing come home and then they're released and they can get on the customer side and do something.

And then in many cases, we've actually just physically have local support resources and so the customers have figured out where important you know when you get on the floor, we get on the floor. So we've been able to ship and install systems without any impact.

And then in general we've always supported customer systems over the phone and remotely. So this doesn't change we have the ability to log in to customers. I mean, we don't jump on a plane to go to South Korea.

For something that surgeon, it's it's something that needs to be responded to by that factor, we just do that.

Okay their customers they told us that they delayed their ramps there.

Specifically tell us now that they expect them route to happen. There. This year. Okay. Obviously, it's fair to say this too could change.

I do see customers adopting to kind of a new normal.

If you want to call it that plenty for ramps and equipment installations, given the restrictions and they seem to be getting used to it or put in place processes to deal with it I mean come by contrast, you know in the first few months I think it was felt totally different and it was just complete locked down nobody has any idea. They didnt know you can they are.

People, who come on what would that be what are the protocols and so we have protocols for customers to come on site.

And have done that we have a building for vendors to come on that and they've done that and we now have protocols and a good handshake with customers that people seem to be getting business done, but that's very different than it was even two months ago.

I'm more concerned about cost new customer evaluations this feels more impacted.

Harvest I like our current fiscal year as we said is materially made up of current customers. So we're less dependent upon on new customers and so that also gives us a little bit of a cushion from this impact.

Having said that we're actually doing some novel things in and [laughter], maybe I shouldn't use the phrase novel These days, but we're doing some novel things in Presales. Okay last year before Coakley 19, we began putting in place a new demo center that we've talked about in our headquarters here in Fremont.

That was able to demonstrate all of our tools in real applications. Okay. We did this because we were getting quite frankly swamped with customer requests and we were like how do we optimize this thing because honestly traveling around and try and get them on customer sites is going to be very efficient, okay and it basically allows us to do actually.

Their benchmarks of our wafer level burn in Singulated die and module style for them and the Guy systems and see the result, okay. So they can come to our site, where they can send their wafers or devices and we will do it for them. Okay. So we actually specific experiences with our initial silicon carbide customer last year. So.

We've demonstrated to that and the effectiveness of wafer level burn in on their wafers. They were totally unclear whether this is going to work.

After the benchmark and the completion, they actually turned around and asked US would you be okay. If we sense you wafers that you could test for us for production use for our customers until we deliver a system that they immediately ordered from US We act.

We actually said, yes, and we while we were building the system over the next couple few months, we were shipping wafers. They were shipments wafers. We were testing we were shipping back and they went to customers. Okay. In this example, they never set foot on our Tesla.

So we were able to actually do that and so we were like well that seems like a good example, so now we're actually doing the same thing that we're offering to do this with other customers and in fact, we added three more stations since that call that outbreak that we can do more benchmarks in parallel these are all in in Cleveland.

And the man by Air personnel.

And we're actually pushing out a new program, we haven't really named it exactly but to entice customers to make this leap of faith and do the benchmark entirely remotely.

AH you know of course, we can do video conferencing, and like demos and things like that but there's some interesting. She interesting. This is probably an example of how things are going to change permanently in the world as honestly. This is more cost effective and efficient not only for us, but our customers. There's probably a best in class example of what we'll do even after the pandemics behind.

Yes.

Hello.

It's really our expectation that now as companies are realizing the restrictions are expected in place until next year. You know we're not confuse you I don't think anybody in the company I like our shareholders. No. One no. One is that you know assuming that you know cold. It's completely released went back to normal <unk> quite frankly in our fiscal year.

The customers looking at ways to continue with their business plans as well and.

They're not just going to delay all their plans and growth until after the pandemic. So we've specifically heard this from certain customers and I personally expect that most would be it would be taking on this plan. So you know again, we're not assuming that you know coated dries up and goes away November 3rd.

Got to be you know the pullback.

Pull that into this two for things to get better we're kind of assuming it's gonna stay the same for a while.

Okay, great. Thank you no other questions. Thank you.

Okay.

Our next question in queue comes from Larry Chlebina with Chlebina capital. Please go ahead.

Hey, good afternoon gain you mentioned that there's two process methods for testing silicon carbide wafers. The first one.

As the E. Apparently was easiest and that was the lead customer for that application.

You haven't production currently are you.

Are you are you a trialing.

Anyone with the other method the bug would improve.

Your system will work for the second method of testing silicon Herb carbide wafers.

Okay. So let me just sort of repeat back where everyone else that they didn't call that as much and just as a reminder, silicon carbide is a new complex semiconductor device Thats claim to Fame is you can run it to thousands of bolts and it operates very efficiently, whereas normal semiconductors can only run.

Tens of Wolves, and the big Aha and the kind of most notable one is when Tesla integrated silicon carbide discrete you know facts into their model three and ended up getting like I know 20, 30% longer range on the car. It's turned me electric vehicle hybrid electric vehicle.

Industry completely on edge and every every single one of them is shifting towards just as fast as they can and so they're all going to silicon carbide and there's just not that maybe people without much capacity that's out there the beauty of it and it's a little odd but has the tester guy the beauty of it for us is well silicon carbide.

Is extremely reliable long term it actually has a very high infant mortality rate, which means that a higher percentage of the devices fail early in the first so many hours of news, but after that they don't fail anymore and they are much lower but much higher reliability and lower failure rates than other component.

And they are much more efficient that's the perfect dream for us because that means you need our equipment to go in and weed out the infant mortalities by testing them for hours days at a time to remove the infant mortality and then they're more reliable. Okay first of all no. These devices the hot ones.

The other field effect transistors, you affect they're actually very simple device and there's two known methods that are published out there for <unk>.

Achieving the ability one of them is done with what we would call a medium high voltage on the gate source, which implies a voltage and grounds you got the two channels [noise].

Using and can achieve very high reliability.

And we eat out all of the failures, there's another type where you actually bring it to a very high voltage measured and say over a thousand boats and you isolate it so that it doesn't conduct and ensure that it doesn't fail over so many hours and what we understand within the customer base is there's literally two camps.

Customers do one or the other and in production not both and so we've actually our first customers and we've talked to people about it are out heralding the one with the gay bias and there are more than one there's multiple out there that have talked about that in a white papers and talk about why that's the great.

Thats.

And that actually our first customer applications. We are engaged with other customers on the reverse biases referred to which is a high voltage at both both wafer Singulated die Oh, I should say wafer singulated die and standard package part.

Actions and interestingly there theres a discussion with them like most people are doing some sort of package part today and really struggling with it or have lower voltage in home brewed and they're looking for new solutions, but doesn't meant mentally walk up and say well I need a package part burn in system, which is a different kind of machine with air cooled resource.

It is and things like that but it actually has real tradeoffs to it even though we sell them by contrast, most customers are saying, but if I can I need to get to wafer level Singulated die because the devices are put into modules. It die before they're never packaged up until their package with eight or 10 devices.

So we have customers are saying, yeah give me hope for high power high voltage package part burn in system and another group in the sand companies, saying they try and solve this at wafer level. There are some challenges at wafer level that we have some unique ideas and concepts and both hardware methodologies as well as design.

And for test that we have been communicating to customers and I would encourage any customer who possibly listens to this to give us a call we'd be happy to under Nondisclosure talk about those tests methods and how you can actually achieve high voltage testing at wafer level, which most customers understand the real.

Technical trade offs are what is needed to be done and we'd like to talk to you about our solutions can do you know its our expectations that we will how those solutions available for production customers in time.

As soon as this year.

So right now we're not counting on that for our four forecast either.

But we're working on that.

So game or did I hear you say that another approach a possible approach for that higher voltage application.

Would be or the seemingly the diverse and run them in a die pack configuration is yes.

Awesome and it really you know really cool up option at high voltage up to 2000 votes.

In a.

And that sort of a partnership way so well.

We are the loan.

Part of the non silicon carbide targeted customers.

Well, how many you do the reversed by the high voltage approach.

Approach and how many do the low voltage.

So so far it candidly and let's say there are Ken Ken obvious top guys. There's there's some smaller ones in that.

We are aware of about half of what they do.

They actually there.

Certain ones, particularly down the list in terms of size that have not yet shared with us what their preferences.

I'm not totally sure why that and by the way again. Some of this is normally I would jump on a plane and go visit them and we put them on able to do that we're definitely it's definitely something I feel but we are getting to some of the big guys.

So you didn't answer the question, though of the known approach.

Approaches the ones I know there are there are the other.

The ones I know I know three better gate and two that are reverse.

So far so.

So possibly could be.

It could be happen half or maybe even more of the low voltage and less of the high voltage correct and I know specifically on one of the big guys that does reverse which is the high voltage one they have specifically asked us about gate and wood and have discussed implementing that or benchmarking it.

Because it has some other advantages by the way, but they had qualified with their automotive customers reverse and it's actually kind of hard to change your qualification process. So one thing. We're also trying to do is I mean, the reality is like five big automotive guys right. So you know our lead customer is.

Engaged in yield.

Several of them and.

And so just getting qualified with this and wafer level burn in which has already been done I think will help and you know one of the thoughts as how do we get the industry message out there, but this is a viable qualification process.

So I mean, you prove the one with their current customer it seems like.

It's such an incredible benefit in terms of.

Oh, not only efficiency and throughput, but also savings from having a throwaway modules that have a defect in them and your screening room I before don't totally integrated or dialogue between.

So I mean I completely agree I'm really.

Really struck you know you view.

You landed your current customer a year ago.

And here, we are a year later and you still don't have.

Any additional customers in that area, which.

Oh, I, just find that hard to part owner Sim well.

No wonder such a clearer a benefit.

I think something that is very fair, Larry and we've been.

And discussions with some of the things we.

Some of the things we have done for example.

As we look to the byproduct of it.

If you look at Silicon carbide, there's really three main areas that it's being built right first it was in the U.S. customers.

Cree being the most notable one it's up and down the East Coast then it's in Europe between Italy, and Germany, That's a very big hot spots for Silicon carbide, we know specifically and Japan.

And what you'll note is that we made the decision to shutdown those sales offices are in.

Entirely in Japan, and we have the sales management team and there have all retired and we have replaced them with reps.

It's actually one of the specific things, we're trying to do as well as.

And we have a really great rep, often running in Germany that takes northern Europe, and we've had some recent traction with our rep, and Italy and France.

In this area as well.

So on your L.D. power actually.

On your L.D. presentation you.

You indicated I thought that the you were running trials.

With other silicon carbide.

Customers is that is that right.

I think it would be more I want to be a little careful them all the competitive stuff, but I think it'd be more clear that we have discussions with those customers related to trials on not on wafer.

Hi, Ken.

On your balance sheet you show.

Let's split of short term or long term data that's the PPP loan why is it what is some show up on on short term and other than the rest over a long term.

Well the PPP alone actually has the two components, it's not due for two years with the actual first payment not being due within six months from the loan origination.

So thats the requirement why it's broken out from a GAAP standpoint into short term and long term. However, as I mentioned, we the plan is as we expect to have loan forgiveness of the entire $1.7 million. The portal that our bank that will allow us to apply for forgiveness actually just opened up to us yesterday. So the plan.

And is is we expect to have that forgiven and hopefully that will be removed from our.

Our balance sheet is somewhere near our next reporting.

Good.

That was my next question.

Lastly.

Has the the CP status game as it slip ups.

Appreciably I think he said last.

Last quarter, there would be in the second half ever flip anymore since im hazard or.

The Delta if it has not it we have some things from that customer we actually had some that'd be an example, where we have the.

What I would call a fairly simple upgrade that we were planning to do.

We shipped all the equipment ahead and at the last second the customer called and said listen we we've gotta shutdown vendors can't get in the building right now it's not critical like you know, it's not keeping them from production or anything like that so I don't know if it were critical they wouldn't let us in.

But there's an example, where we haven't flown in and done it but we based on what we know right now from them, they're going to need additional tools.

In.

You know like not in our year and into you know and then the ramp sort of starts for about a two year round.

Okay. Then one last real quick question on Silicon Carbide, you know everybody. That's involved in is I'm really excited about the potential or is it really stand right. Now in terms of wafer starts you have a sense of where it is today versus I know in the projections or something like a half a million wafer starts in four years.

Per year, which would imply that if you could give.

All of that business a it would require some like a 160 xps to handle it or if it's a 48 hour burden, but where does it stand today.

Yeah, So I I think.

So I want to be careful of exactly your numbers. So they don't have in front I mean, but your math from generically is correct. The forecasted wafers over the next few years is it significant and it requires a lot of expertise.

So related to right now I don't have in front of me and I would you know I think the old developments, probably one of the people that have their finger on the best estimates of it.

It you know for certain there are released products. We know for a fact that you know products off our system are going in there going into you know.

I don't want to name the customer, but you know well known TB and electric vehicles. Okay.

We know that we're engaged with customers on other applications that are also released and then we have a number of applications for new cars. There are so many electric vehicle and electric electric and hybrid electric vehicles that are in place.

So there's there's tons and tons of evaluations going on and qualifications going on so I don't know I have a really good feel you are certainly our customer and the customers we're talking to you.

You know how capacity and will be ramping this year and some of those are many of them are bigger than ours to be getting with the one thing that is subtle about this market. That's interesting. So if you look at silicon carbide and you look at the players and you say by their revenue they stock.

You know just publicly you know top to bottom asked to Cree.

And when you go down on a few wells and you know down a little ways to like an on semiconductor something however, the application the application, which is power modules silicon carbide is displacing other power modules right and they are more efficient in fact, there is so much more efficient.

That nobody can even imagine selling an IGBT into that application two or three years.

So the real opportunity is and look at the power module companies.

And then you realize that companies on the list that are pretty far down the line Silicon carbide had one or 2 billion dollar businesses in that space. So those companies that are rushing into silicon carbide are have the ability to swap customers from a billion dollars worth of power silicon or.

Our IGBT modules over to silicon carbide. So it I think that that folks like that the markets. You guys are trying to get how fast is that transition and obviously the customers are that our customers, but those vendors have an ability to negotiate with their suppliers here do you want an IGBT for this price or do you want to silicon carbide.

And they are supplying the market today on all those electric vehicles.

Oh, no matter, where it gets interesting.

The real driver, though for your equipment for your process is the modules discretes isn't a big driver, but the goal.

Wafer level burn in with your system they'll use it for the discrete.

It's also right.

I believe I believe that's there and I think and I think that's the right way of looking at the modular so overwhelmingly advantageous to do it at wafer level, but we've heard from other customers that there's advantages to doing it anyhow. Once you get there right. So you know like our customer we believe our shipping products.

Going into just the components, having done wafer level burn it.

Right.

Hi, I wanted to go on that already.

The application for Silicon carbide.

In modules is fairly new as it does in terms of certainly automotive is another words. The first application that you cited with Tesla and the model three that was with the screen.

Products right.

It was that's a good holiday season, they put I think eight of them in the module.

It it isn't it wasn't as obvious or as ever contagious to go wafer level burning until you start ramping our modules and that's a fairly recent event is that correct.

It is I think you're in the early stages of overwhelming route.

Exactly and that's what I'm getting at so how you go after this and you knock these down you have to knock them down from Michael Dahl No. It isn't.

You know the model threes, but all for years.

But it's the modules that that's the driver and that's a result of them that's why.

You should.

Vern.

Birds should be knocking these down left and right over to or what.

So anyway, that's all I will.

Several of our investors and Larry I acknowledge your you're one of the folks that has a deep understanding their silicon carbide and we have customers that have portfolios in that space that were part of I I've done. This personally innocent odd thing to do publicly if you bring me on silicon carbide customer we will do.

We will make it very cost effective.

If not free to do a benchmark.

And one of the challenges to get somewhat as attention. We had plan I think we are in four or five shows this year that have all been cancelled they're running virtual.

And it was actually really caught us at an odd time.

So you know I.

Yeah, and I'll and I'll I'll buy you a dinner when we're [laughter] when we're able to do it but I wonder I wonder if they start losing business that somebody that is taken the approach like this that finds it can offer a much more economic price.

Because we're not throwing away you know maybe after 40% other modules are some because they have a pre exactly and as the news gets out there by the way I mentioned mix. If you go back to the notes from last last quarter for maybe isn't one of the other ones. So I always allude to you know silicon carbide customer and I don't go into a lot of the deep.

Tell but out on I think the obvious message boards.

They were pointing to it Doc paper has been removed [laughter].

So it's not publicly available, but and if you can give us you know theres a number of our shareholders actually have their fingers on at Mary I think you are one of them. So folks. It just it's interesting because you know they were out touting how great. It was and now they kind of pulled back it is an odd scenario because customers see the value of it and they're out.

That they're selling it as a differentiation to their customers well, obviously, everybody goes to a different kind of normalizes and were the only game in town.

Okay I took real time, thanks, you guys.

Thanks, Larry.

Our next question in queue comes from John say corn Dialectic capital. Your line is open. Please go ahead.

Yes, hi, thanks for HAE gain our you are so a few questions I'll try and be be quick first of all kind of like you reduce your breakeven.

Quarterly to around four and a half million is that right and if so is there some kind of EBITDA guidance for.

If you guys hit your targets for the year.

What I said not yet you reduced it for UNEV annually, but.

Right right.

Absolutely so kind of talk about a quarterly I think I've said before that our breakeven historically based upon our fixed run rate structure at our average margin is a little over six and a half million a quarter or a little bit over $26 million a year and that's it.

And that's what we said in the past with these cost reduction initiatives, reducing that 26, and a half million or six and a half million a quarter down or 700000, a quarter in spending that gets our breakeven per quarter down about five point.

5 million, a quarter or about $22 million year.

And that's a GAAP number.

That is a GAAP number correct.

I was thinking more of an adjusted EBITDA number, but that's fine so.

If you guys come in at 28, then that should all be excess should drop to the bottom right.

Right, Yeah, and again, so you talked the EBITDA, we actually did a cash breakeven if you take a look at what our stock comp is that you can pull out our depreciation expenses, which are right off of our SEC filings on our reporting you can see that if you look at cash breakeven that brings us.

Significantly under $19 million, a year or yeah, right about 4.9 million per quarter revenue for a cash breakeven.

Perfect. Thank you so I I thought somewhere you guys had said you had two dozen new kind of customers in the pipeline before in this press release had one doesn't I'm just wondering if.

I don't know if I'm, just mis remembering or.

Whether you lost a dozen people in your pipeline.

We haven't lost a dozen people on and I would I realize that we I don't think we've ever actually stitch together the words two dozen before like you'll see there's some conflicting we talk about well over a dozen and then we specifically say well over a dozen it just silicon photonics and silicon carbide.

On the number I'll just go out there I mean I was doing a review with all our sales team last week and it is over two dozen.

I mean, it's a long list and you know some of those are you know, but there's a there's a significant funnel of activities and one thing in particular win win in preparation for it you know some of those customers. You know are just can told us they are just on hold.

And so we try not to get into because and you have to start qualifying all of it but you know we're you know clearly directly engage continuously you know kind of regular cadence with well over a dozen of those but there is more and I think had a the cove it staffs that kicked in yet.

We would be struggling right now with just all of the activities we.

We would be we'd be adding 10 ops engineers and some other things and you know I want to give burning credit 'cause he was kind of out in front not anticipating kogut by putting these apps center in place and a number of other processors to allow us to do a lot more benchmarks in parallel.

And we are we we are working with customers right now on benchmarks, despite all that stuff, but it does feel like it's no doubt well I can't wait to complain about you being two swamped with business an opinion I will yeah.

No that would be nice.

Are you announced a couple of new wins commitments CEO said business. Some other things were those already in your A.O.P. for this year.

Or is that additional.

Hi.

Or should I assume that your year kind of further upside how does that how do I think about that so that certainly the osats and that that when that we install was already in our plan I mean that was anticipated. It's just it was more positiveness about it on you know there are.

There are some new customers in the list already.

Just from last quarter that you know I guess and I'm not counting on I was I want to be careful of saying, they're not in our plan because you know if one drops out and it comes in I don't want to feel like I we.

Failed on it you know obviously, we we don't know what your plan is anyway. We didn't have your guidance. So I'm just I'm curious what the only thing the only thing I have specifically called out is that you know on the mobile side of things.

We still get consumables every single year on that it's been a couple of.

It's been a couple of years since we actually added a lot of any any significant capacity, but we always get new consumables every year with different design turns and things like that and we're still planning on it we do have some new opportunities that come up that have an opportunity to add capacity. There's some some new applications and all that would be up.

Upside that aren't in the plan.

Again, they could also offsetting the other risk, but that's the only one I specifically talked about and for those set of fog I'm really hesitant to get too ahead of myself I missed on my skis, there because we've had some scenarios in the past where we got all excited about how big It was and then it didn't it didn't play out and so I'll I'll address.

They're just shocked.

Chuck you guys win when an order comes in and say we.

Say, we we knew it was going to happen all along but for now I'm just going to say there is appetite. There is are there some opportunities it looks like it's a late in our fiscal year and into next year, but still.

It looks I I'm pretty excited about.

Great and consumables. This year I don't know if you guys broke it out but roughly I don't care how wide.

Wide range, you give me consumables will be roughly what of revenues.

I don't think we have I'm going to have can correct me, but my guess is it closer to like a third or something like that this year.

So that could shift last year was higher than we give them than what we thought our runway what's going to be when it hit 50% and that's actually because that's the system has dropped out in the last so systems that we're anticipating to be shipping in Q4, we didn't shipping systems, all and so that's part of the reason it was a higher percentage.

We also had a scenario where our one of our lead customers have been buying systems without wafer packs and we break talking about that and then they finally caught up so normally there. If you just look at the hardware to consumable mix, there's going to be closer to like a third of the business, but over time as the installed base spice.

You know just uniquely like we've seen in some of our Fox somewhat older trucks products. They haven't bought a system in a while but they keep buying consumables that will grow and we do believe that there is a point where even in a normalized steady state year that consumables would be able to 50% of our business.

Great. So.

So this is my last question and it's not a question that the comment actually no I have a question then a comment when does the window open for insider buying after you guys. It released earnings as a kind of a standard 48 or 72 hours.

We only guide trainers nice win we've not announced when our under Windows open for insiders and.

And we're not going to do it at this point in time.

Okay. So other than my setup, Ken [laughter], Mike Mike My comment after the non answer to the first question is you know I appreciate John's service Your board and I wish Jeff to the best of luck in representing shareholders. I know he represents a substantial amount of cash.

Where's It listed in your proxy at 660000 on what.

On whether that's hammer has clients I don't know, but but I appreciate having a shareholder on your board.

And I would like to say that Ray and.

Mario Who's been on the board for 40 years and have overseen a 30 million dollar consumption in cash and a 90% drop in the stock price since the IPO or greater I don't see them buying stock in the open market and I've lost money in every one of your shareholders is lost money because your share price has had its lows and it's very frustrating we lose money.

Neither we put at risk for ourselves for our clients.

They don't they get money they get rig it's a 100 plus grand a year. He gets his health insurance paid he gets 30000 options struck at the market as.

And if I when I'm on the board and I'm I've been on three public boards over the last year I'm on to currently.

I believe that every public company board member should be risking their own capital by buying stock in the public market of the boards that they're on and if they don't believe in the story enough to put their own money on the line and get off the board.

You are telling me the story, that's amazing I love It I've put my friends My family My investors capital at risk because I think it's a great story I love the future and the upside and yet your board doesn't seem like it's worth their time to reach into their pocket.

And by the stock to with Us and I am offended as a shareholder and if I don't see them start buying stock and you don't deliver I promise you I will become a different type of filing shareholder so.

So that's my comment not my question and.

And thank you very much for your efforts and I Hope you guys succeed going forward.

Thank you John.

Thank you.

We'll take our last question from Marty Cawthon Chip Chen. Please go ahead.

Yes.

Hello Hello.

Hello, Tim.

Hey, My question Hi, My question.

Two questions one of them is regarding the closure of the Japan office.

And there are some savings associated with that which we see it pretty easy to see pretty clear on that.

It's we placed by a sales representatives and their cost to sales Representatives. My question is.

Do we see the cost of the sales represented had somewhere or is that something that we did.

We discover made or on the in other words, if the only thing they have.

Gross costs.

Costs of course into Japan office, but not the net cost because you do have to pay money. He typically commission or sales reps.

Yeah, and that's true that is true and that is true of other regions that we have sales reps today, and that's true and the European.

Region as well as in <unk>, and Japan going forward. So we do have arrangements with those sales representatives I don't think we have any just distributing distribution networks, where they buy and resell. So its paid at the commission it will show up in Japan.

SGN excess or.

Our cost of sales and so yes, it's not free but at least it is tied directly to revenue shipments as opposed to the opposite and then we think that within a normal revenue range and including some significant growth, we're going to be thrilled to death to pay those commissions yes.

Yeah, Yeah, I'm, all for paying commissions and this might be more curiosity that as we see the fading done one action.

And the question was is it possible or didn't see to say they are there, but the cost of the representative which we've got to pay them and they do earn their money, but it sound we don't have any fixed.

We do not have any fixed cost relationships with them. So they are only paid upon success.

The other thing I just wanted to be clear on.

Although we do save money and as I said at some point, obviously you know it if things go wildly successful there is a real scenario, we would pay them more than we would have done direct.

I'll be thrilled with that but number two that's not why we did it.

The reality is is that the customers that are in silicon carbide, the wafer level customers. The front end theres more test is a different type of customer and we think that we needed to do some things to be able to get out those customers by doing something different so it's less about saving money.

As actually putting.

Putting oh boy.

Better strategy and higher expectations for actually getting sales because we in reality, we've had little to no sales in those regions and we have been.

Working on this to take action by the way is not the reason at all to shutdown things in Germany and Japan. This.

This has been and this has been a.

This has taken us well over a year to date.

Okay second question is.

Yeah.

Again earlier in your presentation, you reiterated a list of applications.

You know like data centers mobile communications automobiles.

And then you also talked about new prospects companies that and that regular customers yet, but they are considering the facts.

Could you make a comment to say separating the prospects what percentage might represent 100% production test.

You're going to sell a lot of machines and what percentage might represent sampling task for demanding applications and the recent headwinds actually easy [laughter].

Yeah, it's likely he doesn't compare to historically if you.

If you just have one cuts that does.

That does 100% production test he might be worth many times many customers that use it for sampling and many more are they use it for engineering development.

So Marty I would say.

I believe of that entire list of customers you know the two dozen let's say.

All of them are production.

I'm not sure I know one that's engineering.

Yeah for in the wafer level side of things on the package part.

I know that a couple of them are absolutely qualifications and they're just clause, which means they do it early on in the life of the product and then they do monitors. So you could have one product and sit on it for a while.

Production, if they grow we grow.

All right.

Or if they grow.

They buy from us and as they grow exponentially than we grow it's technically if you want to be specific so the production makes more sense.

It's actually reasonably rare to have a sampling done at wafer.

And there's not a lot of applications, where that makes sense qualifications, we do have customers that do monitoring.

One of our big customers has an installed base of systems that are used to monitor a sample with our singulated die size module systems.

So it doesn't exist, but the test that today I think everyone. We're talking to is put up.

And so I was wondering are there.

Other devices.

And we'll be going to their customers after they tested they ship them to customers and.

And the testing 100% of their die on 100% of their wafers.

Yes.

Yeah, that's right.

And then the final question is are you.

Are you how much of your businesses with the People's Republic of China.

So its interesting we had.

I think 10 package.

Packaged part burn in customers on our ABTS in China.

Since I've been here.

We today have.

No wafer level systems in China.

And I believe we only have.

One customer who is not Chinese who plans to install.

Systems in China.

But I thought I mean, you had some of the Fox machine to up to a Chinese entity four or five years ago.

No no.

Oh, okay.

No no no yeah.

Yeah just to talk.

Right about that because one of the one of the discussions was you know with all the trade stuff going on how would it impact us and people I think I've shared in the past we used to buy chambers out of China.

We also buy them out of Singapore those are two vendors today and today, we're not taking chambers out of China. So we have.

So we don't actually have any supply chain.

Well take life, some printed circuit boards from the U.S. manufacture that builds in China, but.

But almost nothing is is exposed to China right now.

Oh, okay.

Alright, that's those are my three questions and thank you very much.

Thanks, Marty Marty.

There are no more questions at this time I will now turn it back over to management for any closing remarks.

All right. Thank you lot of questions. This time, we appreciate all of them and as always we do invite you to set up a call up we can have a follow on with you I often say I would invite you to come over and see what we're doing but we're not doing that right. Now so it's really urgent unless you happen to be a buying customer but.

Other than that we will be happy to set something up and talk to you and we do hope everyone stay safe from healthy and we'll talk to you next quarter.

Thank you ladies and gentlemen. This concludes today's presentation you may now disconnect.

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