Q2 2021 Aviat Networks Inc Earnings Call
IRA I E R. A.
E. I E are you seeing Q1, yeah, you already know on shelf.
David at Iron ore on Dot com.
Okay. That's the first thing David.
Of the.
IRA.
Company name Dot com.
The name yet.
Okay. Thank you he will be placed on music hold until the conference begins.
Uh huh.
Mhm.
Good afternoon.
Welcome to Oviatt net.
<unk> second quarter fiscal 2021 earnings call at the time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note. This conference is being recorded.
I'll now turn the conference over to your host Mr. Keith Center on Vice President of Global Finance and Investor Relations. Thank you you may begin.
Thank you and welcome to have yet networks second quarter of fiscal 2021 results conference call and webcast you can find our form 10-Q press release and updated investor presentation on the IR section of our website at Www Dot <unk> networks Dot com, along with a replay of today's call.
<unk> and approximately two hours.
With me today are Pete Smith, <unk>, President and CEO, who will begin with opening remarks on the Companys fiscal second quarter, followed by Eric Chang, Our CFO, who will review the financial results for the quarter and first half of fiscal 2021.
Pete will then provide closing remarks on abbvie on strategy and outlook followed by Q&A.
As a reminder, during today's call and webcast management may make forward looking statements regarding the abf's business, including but not limited to statements relating to financial projections business drivers new products and expansions the.
The impact of Covid, 19, and that kind of economic activity in different regions.
These and other forward looking statements reflect the company's opinions only as of the date of this call and webcast and involve assumptions risks and uncertainties that could cause actual results to differ material from those statements additional information.
Information on the factors that could cause actual results to differ material from the statements made on this call can be found in our annual report on form 10-K filed with filed with the SEC on August 27th 2020.
The company undertakes no obligations to revise or make public any revision of these forward looking statements in light of new information or future events.
Additionally, during today's call and webcast management will reference both GAAP and non-GAAP financial measures. Please refer to our press release, which is available on the IR section of our website at Www Dot Abient networks, Dotcom and financial tables therein, which include a GAAP to non-GAAP reconciliation and other supplemental financial.
Information.
At this time I'd like to turn the call over to have you got the president and CEO Pete Smith Pete.
Yeah.
Thanks, Keith and good afternoon, everyone I.
I hope everyone remains safe and well during this period of working remotely and managing through the COVID-19, pandemic and I hope everyone is off to a great new year.
Thanks for joining us to review of successful quarter across the business the company.
Continue to execute on our key long term focus areas of <unk>.
Growth.
Margin expansion expense reductions and meaningful bottom line improvements.
Focused commitment by all members of the <unk> team.
<unk>.
Our highest reported quarterly revenues in.
More than five years and expense reduction.
Adjusted EBITDA margins of <unk>.
Solid balance sheet and liquidity position and significant customer wins in our mobile by G and rural broadband businesses.
During the quarter, we benefited from improved sales, including the increased software sales and the overall myths with revenues at $75 million.
Revenue increased six 4% sequentially from our first quarter of fiscal year, 2021, and 26% from the year ago quarter.
North American revenue increased over 34, 8% year over year International revenue improved nine 5% year over year. The strong second quarter revenues were driven primarily by our <unk> private networks and rural broadband businesses.
Adjusted EBITDA was $10 1 million for the second quarter, representing an improvement of $9 7 million versus the same period last year and an improvement of 24% from our first quarter of fiscal year 2021, adjusted EBITDA margins were a record $14 three.
Percentage for the second quarter.
During the quarter, we continued to demonstrate rvs differentiation in wireless transport products.
Software and services and the E Commerce, we've demonstrated the viability of these offerings with key wins in <unk> private networks and rural broadband.
As I've mentioned on prior calls our high capacity single box multi band radio platform provides the industry's simplest multi band solution, which lowers the customers' total cost of ownership.
Our unique multi band of hardware and software solutions recently led to avia being selected by a U S. Based tier one five G. Operator is the key microwave transport vendor, we couldnt be more pleased to have been selected and we believe this award further validates our position.
As a leader in wireless backhaul solutions from <unk> networks, moving forward to sharing more on this soon.
During the second quarter <unk> was also awarded a multimillion dollar contract with next link Internet for high speed wireless backhaul to support rural broadband connectivity, Netflix a leading U S. Internet service provider provides high speed connectivity to.
On residential subscribers in Texas, Oklahoma, Illinois, Kansas and Nebraska.
Both the U S based tier one of <unk>, operator, and next link wins.
As a result of avianca of having the lowest total possible ownership offering driven by the.
The industry's only single box multi band solution for optimum capacity, the highest system gain radios for small incentives and better reliability design software that simplifies network planning.
The avia store for simplified purchasing and reduced logistics costs and next day shipping and the obvious local North American service and support we remain excited about the <unk> and rural broadband opportunities that lay ahead.
<unk> builds will drive new backhaul upgrades at our rural broadband business will benefit from meaningful government funding, including the $9 billion <unk> fund role of America of the $20 billion Rural digital opportunity fund with.
With respect of private networks, our business remains strong and is growing obviously has a highly differentiated offering our leading RF performance, along with our software and services capabilities our keys the avia success here.
We continue to receive orders in the private networks business for our frequency of assurance software or Fas of unique software offering.
Or interference monitoring and analysis, providing customers increased network reliability and uptime are software and services platform remains a key focus for long term growth and we look forward to announcing new innovative software solutions at the outset.
Mentioned the execution of the team our commercial and operations team are on continuous improvement trajectories I want to recognize them for their results. In addition, we have strengthened the team with the additions of expenses Stokely to lead our HR function at Astro Dell to lead our product development organization.
These new additions will drive improvements in our talent and in turn differentiation in our products and services.
Turning the call over to Eric Let me provide a couple of additional observations and insights first this was a very good quarter and first half of our fiscal year, we remain focused and continue to execute on those collective efforts are reflected in our financial and operational results.
We've continued to demonstrate our ability to grow and to take share of demand. In addition, we must continue to lower our expenses to drive greater profitability and shareholder value. We've made significant progress on improving and optimizing our cost structure and remain on track to realize previously announced.
Cost savings low.
Looking forward, we see three significant drivers of <unk> private networks and rural broadband.
And believe we are well positioned to capture significant opportunities with our differentiated product software and services offering with.
With that let me turn the call over to Eric to review, our financials or coming back for some final comments Eric.
Thank you Pete and good afternoon, everyone.
My remarks today I will review some of the key second quarter and first half of fiscal 2021 financial highlights.
Building on the T tell financials can be found in our form 10-Q and press release, both of which were filed earlier this afternoon.
As a reminder, all comparisons discussed today between the second quarter of fiscal 2021, and the second quarter of fiscal 2020 and between the first half of fiscal 2021, and first half of fiscal 2020 unless noted otherwise.
For the second quarter, we reported total revenues of $70 5 million as compared to $56 million for the same period last year, an increase of $14 5 million or 26% driven mainly by our U S private network business as well as international sales growth.
As Pete mentioned, our total revenue for the second quarter was the highest since the first quarter of fiscal 2016.
During the quarter the North American team continues to focus on expanding sales and seizing upon <unk> unique products and services differentiation.
North America, which comprise almost 70% of total revenue for the second quarter was $49 2 million an increase of two increase of $12 7 million or 34, 8% from the same period last year, driven primarily by our private networks business.
International revenue continued its return to growth for the second straight quarter coming in at $21 4 million for the quarter as compared to $19 5 million for the same period last year on.
The international team continues to implement our new commercial sales strategy, which as a reminder includes defending tier one telecom business, winning new tier two accounts expanding outreach through partnerships and capture value will be on differentiate it while still early in its execution, we continue to see the benefits of all.
International strategy paying off.
Revenue for the first half of fiscal 2021 was the 136.8.
<unk> 8 million compared to $114 6 million for the same period last year.
We are again pleased that our backlog continues to remain above $200 million, even after recognizing our highest quarterly revenue since the first fiscal quarter of 2016, all due to our lease of focused domestic and international sales strategy.
Second quarter gross margins remained strong at 38, 2% and 38, 3% on a GAAP and non-GAAP basis, respectively, as compared to 32, 7% and 32, 8% for the second quarter of last year key drivers to the improvements in gross margin included regional mix product and service mix.
Second quarter GAAP operating expenses were favorably impacted by approximately 4% year over year coming in at $19 million compared to $19 8 million for the same period last year.
Second quarter, non-GAAP operating expenses, which exclude the impact of restructuring charges and share based compensation were favorably impacted by approximately four 1% at $18 3 million compared to $19 1 million last year.
Both GAAP and non-GAAP operating expenses were favorably impacted due to cost saving initiatives implemented in the second half of fiscal 2020, including our previously announced restructuring plans, it's slowed down hiring and reduced travel.
Moving on our second quarter non-GAAP net income was $8 4 million compared to the net loss of zero point of 9 million for the same period last year with the second quarter non-GAAP EPS coming in at $1 48 per share compared to <unk>.
<unk> net loss per share for the same period last year.
First half fiscal 'twenty 'twenty, one non-GAAP net income was $15 3 million compared to $2 million for the same period last year with non-GAAP EPS came in at $2 71 per share compared to 36 per share for the same period last year.
Adjusted EBITDA for the second quarter was $10 1 million, a $9 7 million of improvement from the zero point of 4 million. We reported for the same period last year with adjusted EBITDA margins coming in at a record 14, 3% for the quarter.
For the first half of fiscal 2021, our adjusted EBITDA was $18 5 million compared to $4 5 million for the same period last year and surpassed the $13 5 million for the full year fiscal 2020.
First half fiscal 'twenty, one of adjusted EBITDA margin was 13, 5%.
Moving on to the balance sheet, our cash and cash equivalents at the end of the second quarter were $43 million with no loan outstanding.
Net cash increased $6 8 million sequentially from the first quarter and $10 4 million year to date.
So on balance sheet remains very solid, leaving us well positioned to execute our long term plans, while maintaining flexibility and security in the current COVID-19 environment.
With that I'll turn it back to Pete for some final comments Pete.
Thanks, Eric.
A few additional comments before opening up for Q&A I'm extremely proud of the entire avianca team for their significant contributions to our results. We recognize that there is a lot of work in front of US we were on the right path to achieve our long term objectives.
Given our current view the <unk>.
Yes, we've made during the first half of the year.
And the overall environment, we are updating our guidance issued on November five 2020.
We currently expect revenue for fiscal year 2021 to be in the range of $255 million to $265 million.
And adjusted EBITDA to be in the range of $28 million to $31 million.
With that operator, let's open it up for questions.
At this time I'd like to inform everyone in order to ask a question press star one on your telephone to withdraw your question press the pound or hash key please standby, while we compile the Q&A roster.
Your first question comes from the line of Theodore O'neill from Litchfield Research.
Thank you congratulations on a great quarter.
Thanks Neil.
The question for you on the broadband of my first question is on broadband.
Last Thursday next link Internet.
Announced the signed an agreement with American tower to co locate their equipment on thousands of American tower sites to facilitate rapid deployment of fixed broadband and I'm wondering is is that where your radios go too.
Get some do you get to put something on all of thousand towers.
Uh huh.
So we don't have the details of the deployment, but we think we're an important partner and we.
We haven't worked through that announcement on what it means for us.
Net net it's neutral the positive okay.
In the quarter in the sorry in the Q you say, you've got a 12, 5% state government customer and I'm just kind of curious why you can't name the customer and how many other sort of large government.
Contract type of customers are out there for you.
Yes.
Yeah. So this Eric here.
Yeah, Yeah. So we haven't been given the permission to name the the customer is the U S State government right. It's about 12, 5% on a percentage for the for this quarter, but it is for private networks. It is for public safety.
Okay.
And then R.
Or are there other states, where there's an opportunity of the same kind of.
[laughter].
So there could be future opportunities and you know with with the way government appropriations are are taking place right now and the concern about the COVID-19.
Situation, there can be of kind of bringing in of demand and we were you know through our supply chain excellence, we were able to sort of satisfy that the government.
Rather quickly and non.
Normally without.
The urgency on the customer side, and our supply chain that demand would of been spread over a couple of quarters and we were really excited to be able to satisfy their needs and you know put the revenue on the scoreboard this quarter.
Okay, great. Thanks very much.
Sure.
Your next question comes from the line of Sarkis <unk>.
You mentioned from B Riley Securities.
Hey, good afternoon. Thanks for taking my question, Pete Eric and Keith.
Great turkeys.
So for <unk>.
So first question wanted to see if you can provide.
Color on the run rate for software sales in the quarter.
So so so go ahead of art.
Yeah. So let me come on on that right. So we generally don't.
Closed our software revenue.
We rolled out a the software back in Q4, and then we're ramping up that revenue but.
But we were not in a position right now to actually disclose that amount is definitely.
The lower percentage of right now, but eventually one day margin on the essentially got larger.
<unk> done well low at that point disclose that number.
Right right under later on.
So sort of can you just let me jump in.
Been at the company of little over a year and you know for the first couple of quarters, We said that we were going to invest.
More on software, we are starting to build our software business when it reaches the materiality of them well, we'll break it out its still small, but when we get our software wins. It does it is margin accretive and it's really exciting for us.
Okay. Thanks for that I guess give.
Given the trends of.
The software investment relative to what you're expecting to the Gardner from a sales trajectory I guess when do you think you reach a point of materiality to be able to break it out would it be within the next 12 months would it be within 18 months, just kind of want to get a better handle on that.
Some of my my.
Our hope is in the next two years to to make it.
To have a material level of debt, we would report on but I think as you know two years away and as we make that the two year journey and it will as we have the success that will show up in our and of our Martin and all of them.
Gross margin and our EBITDA margin, so I would say two years.
Okay, that's fair and helpful. Thanks for that I guess one of.
Go towards the the guide right. So the first fiscal 'twenty one our sales guidance was increased and we have a range of $2 $55 million to $265 million and for adjusted EBITDA. I think you said a range of 28 millions of $31 million I suppose on the low end and top end from a margin perspective that works out to 11 to 12 person.
Right.
Year to date, you're close to 14% from an EBITDA margin perspective, So I guess, if I look at the back half of this fiscal year and break down what you've done year to date versus what's remaining is it correct to think that your sales are going to drop off and inclusive of your EBITDA margins for the back.
Half of the year, just help me reconcile the guidance versus kind of the performance we've seen so far in the first half of the fiscal year.
Eric do you want to do you want to start on that.
Right. So so right now based on the even at the high end of the of the range for revenue and also from it at $2 65, and then the high end up the adjusted but a 31 the second half of it is of lower than the first half.
But you know, but we needed to get through Q3 of them at that point, if we need to up our guidance.
At that point, we might.
So sort of keeps the way I would look at this as you know we we did have some really good demand in Q2, and we were able to deliver on that we've raised our guidance. We you know we want to be conservative and we want to build the track record.
Of delivering on our commitments and if you roll the clock back you know 5678 quarters. The company has had a history of of.
One good quarter, one bad quarter, and we we feel like we're on a really good path. We do not want to get ahead of ourselves and we want to be conservative with our approach and that's why you know, we we want to be conservative both on the the revenue range and the <unk>.
Adjusted EBITDA range.
I appreciate the comment on the conservatism I guess, maybe it's just a little bit.
I'm trying to parse out here why logically right. If you're excited about the business why the second half would be worse than won't be seen so far I'm just trying to you know.
Pencil those two thoughts.
Fox together and trying to get a reason for that and it seems like you know.
The conservatism is one thing and being reasonable is another just trying to get more color on what the second half looks like.
Yeah, well you know where.
I would also say I'll I'll take those comments, we also see that the second half of the year will be better than the prior year's second and I think we're on a.
Growth trajectory and right.
Do you want to be.
The critical for our conservatism will will take that and we want them. You know, we're going to put out guidance that were comfortable with.
It sounds great. That's all from me. Thank you.
Alright. Thanks.
Your next question comes from the line of Orin Hirschman from a a G H investment partners.
Hi, congratulations on the progress of both of you.
In terms of.
Of rural broadband.
I don't know if you're breaking it out yet as the percentage of revenues.
If you're not the same.
Kind of question like of the software question and then I have a follow up on the rural broadband.
So the way.
In our Investor presentation, we show that we're about two thirds of private network, one third mobile network operators and no debt the rural broadband would be in the mobile network operator.
Segment.
So that's that's the level, we break that out.
And can you can you just refresh on everybody. If I may ask the question just where in the rural broadband networks do you play in.
When when do you go with the microwave links versus you know of physical link.
So some of the even on.
So the other types of links that exist.
Yeah. So so let's let's make the most common comparison fiber versus microwave and microwave is.
It is faster to deploy so win.
On a rural broadband provider has.
Our new ER.
Capacity requirements, let's say do the work from home due to Covid.
On the set up of microwave link link it goes much much faster than during any of trench and laying fiber and Uh huh.
Our supply chain is well positioned to deliver on that I think some.
Industry analysts have said that we all of our supply of giant gene is outperforming our peers then let's so that's all a rural broadband and then also microwave wins in situations, where there's a there's water or mountainous or different difficult terrain. So those are situations where.
Sure.
Microwave typically wins and you know in the the U S market the.
The the split between fiber and microwave is.
The three parts fiber, one part microwave and.
Internationally and in emerging economies debt that district.
Breakdown is more favorable to the microwave.
So I thought I'd give you as much flavor as possible on the microwave.
Or linked competition, if you will.
The one other follow up on the broadband is the is the formula for you right now.
To take the existing customer of SKU.
Handheld and recruited.
Got to the point, where they have the topology and they can put in their own orders is the.
To the.
Those customers more or are you continuing to find new customers.
Or both.
Or was it so.
Uh huh.
Both of them both are very important so we are continuing to add new customers. The.
Next link win was a new customer.
Customer or no dementia, and with our existing customers as well as our new customers. What we provide is.
On our website, we will call the Avi on cloud the customer will be in the the design environment designing their links and they can design their own wings. They can service their own links and procure their own wings in the some of our internal metrics are how often we have to you know.
The engage with a real live person in.
As we improve the environment, where we're satisfying our customers better and better with more and more no touch no interaction engagement and that's that's an improvement to the customer's experience as well as the customers' economics of we're really excited about our avia at cloud Platts.
Swarm that goes from design.
Through warranty and repair them.
In procurement and delivery, it's really working and we think that that provides the lowest cost to serve for rural broadband customers in the industry and we expect to drive more growth going forward and that will be with existing customers as well as new customers.
Okay, and then my follow up.
Question on different topics.
In terms of of having a mega deal like that 12% of appeal of the deal and then that's it.
With that I.
I mean, obviously the big deal the delivered in one quarter and not the credit but the.
But it's something that does that create lumpiness of potential lumpiness does that factor into the guidance.
For the second half so so yeah. So one of the things you know we a lot of our business is project based and that does.
Some lumpiness and one of the reasons are our guidance is on an annual basis.
Cause you know some quarters can be better than others because of <unk>.
You know of projects moving getting.
Getting pulled into a quarter are getting pushed out and you know certainly this we haven't had a greater than 10% customer.
And of while we were really thankful for.
This customer to be in Q2, and we do have a good funnel for the back half, but certainly a big project like this would factor into.
This quarter and.
No look we're hopeful to get on.
More of these big projects, but we also want to be.
<unk> of with respect to the guidance.
Okay, great. Thanks, so much.
So.
Your next question comes from <unk>, Zhang from Rice investment partners.
Uh huh.
Just a quickie do you have any problem with the chip availability.
No. So we have not had any issues with chip availability you know.
We're watching the the Taiwan, China supply chain.
We may be a little higher.
On the inventory to hedge that but so far we have not seen any supply chain interruptions or a chip issues.
On the cost savings category over the last year has that impacted the marketing at all.
No. So we continue to invest.
R. R. R R.
And lead generation marketing.
And one of the one of the processes that we have.
In the company as our strategic marketing effort focused on on value and that's helped US a growth grow top line and make sure that on our new products, we have we price the value.
And how much of the business is direct.
Right.
Hum.
Hmm, Eric do you know how to answer that.
I I I say at least 80% plus all of our direct yeah.
Yeah.
Yeah.
Okay.
Yeah. So.
Small part of our business goes through the distribution.
Or resellers.
Okay. Thank you very much.
Yeah.
Yeah.
As a reminder to ask a question press star one.
Your next question comes from Richard Religion from <unk> capital Advisors.
Good evening. Thank you for your work I appreciate as a shareholder.
I have three questions.
The first one is MTN is the customer now.
Now obviously much smaller.
It does it offer any upside at this point or what is the outlook there.
So Richard I don't want to comment on any specific customer there's the history with MTN.
You know they were a bigger customer and contracted what I can say is.
Africa is an important region our funnel in.
Good is growing we had the previous wins with Safari Dot com. So we're hopeful overall for Africa, and what what I would say about with MTN as an important player in Africa, and we you know we hope to to grow Africa going forward.
Forward.
I think that's about as far as I'd like to go on that.
Okay.
Is it fair to conclude that Africa is probably no longer going to be a decrement.
In any major way in terms of the revenues.
Yeah, I think that's fair to conclude yes.
Yes, and in my my other two questions regarding taxes so.
Your tax rate in the quarter was about I don't know of 13, 14%.
How did how did that come about.
Given you have you know a lot.
Net operating loss carryforwards operating care of what were you paying taxes, yes.
Yeah. So so let me explain.
So we don't pay tax in the U S. Because we have those Nols right, it's almost $400 million what do we do pay tax on it at the international locations, where we have of transfer pricing arrangements with each with each of the legal entities right, what does that equal and ease of doing a service for our customers was the marketing or is the four R&D, that's where and when does the <unk>.
The pricing would basically have the guarantee a profit for those legal entities and that's what we what we pay taxes.
I figured yeah. So in the U S on the net operating loss carry forward.
Fully reserved again against the value for that because it doesn't appear on the balance sheet is that correct.
That's correct. That's correct, we did as the posture of the Olympics me I went to the small partial release, probably a couple of years ago. It was about $7 5 million.
We haven't done the partial release of <unk>.
We used just because with Covid, there's all the uncertainties.
So that's why we stand yep.
But going forward given that you're really on a much better trajectory than you've been for a while.
At what point would you likely released some of that reserve back into the balance sheet.
We're looking at it right now.
Okay. No. That's fair I mean, I think you should you know yeah yep.
And again.
Have you been able to fully protect against the.
You know the.
Not being able to use much of it.
With you you've had a couple of different programs over the last two years I think to be able to do that and are you still confident that you can protect most of that.
Oh, you mean protect the NOL, yes, we have this I know of preservation plan right.
And investors that want to go above on the footprint of 90% threshold.
Require us to issue and an exemption.
So that's how we protect all of NOL.
Great. Thank you very much.
Thank you.
Your next question comes from Orin Hirschman from being a G H investment partners.
Hi, just one quick follow up on the last question.
If you if you do on non-GAAP, assuming you know youre of taxpayer, but not obviously of cash taxpayer in the U S. What would the what would the.
So you know fictitious great look like so to speak because of the rate that you would apply for non-GAAP purposes, you of any any idea on the either on the U S. On the whole kind of the company as a whole from guesstimate.
Yes. So so if you look on a non-GAAP financials in the press release, we estimate our total cash cash tax on annual basis about $1 $2 million. So basically we'd do 300000.
From quarter.
But if you did it at let's assume that you know that you look like you know the maintained profitability and you've got to play on the non-GAAP basis.
No real tax rate, what would what would the company look like plenty of 25% any idea of what the company would look like at that point.
Well, that's the only after we exhaust all of the Nols in the U S. First right at that point, we'll have to worry about what is that rate is going to be but for the time being the only cash tax that we pay on a for international and then the run rate is about $1 2 million of year.
Right No no I'm with you on that I'm, saying from a non-GAAP purposes. The accounts on you know for non-GAAP purposes of your own non-GAAP purposes. If you decide that you want to start applying of full tax rate. So you know, it's knowing full well you're not paying the cash tax, but what would that full tax rate looked like or have you not even done that analysis.
Yeah.
We haven't we haven't done that so yeah. Okay.
Because we have the magnitude of our Nols are.
On a pretty big so that's okay.
We'd probably beyond any investors modeling.
Okay. Thanks.
Thanks very much.
Yes.
Your next question comes from Richard Greulich from <unk> capital Advisors.
Not to beat it.
Not to beat a dead horse, but.
Have you thought outside the box at all about how you can utilize more of your NOL going forward.
Either acquisitions or you know something.
Something like that.
Yeah. So so so we do we are.
We are looking at acquisitions, we want to be pretty careful and make sure that the acquisitions are fit our core and we're going to be able to.
Extract the synergies and make it accretive.
To the overall business and you know a long time ago I learned the taxes not a reason to do a deal but if we were to do a deal we would certainly structure it oh and the.
On a way that would be most favorable so that we could get the leverage out of the Nols right. So it's certainly it's certainly a consideration.
Didn't go so far as to say, it's a driver.
Sure Yeah, I appreciate the well.
Lighter note of the fact is if the under the by the administration of corporate tax rates do go up from 21% to 28% you just your Nols become much more valuable.
I agree.
Great.
Okay.
Thank you very much thank you.
Yeah.
Thank you.
And that was on our last question at this time I will turn the call back over to the presenters.
Alright, thanks, everyone for attending it was a very very good quarter for Avia, a I don't want to take anyone anymore.
Any more time from anyone we're going to go back to work work on Q3, everyone should please stay safe and stay healthy and we'll talk to you in about 90 days. Thanks, everyone.
Okay.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating you may now disconnect.
[music].