Q4 2020 CyberOptics Corp Earnings Call
[music].
Please standby.
Good day and welcome to the Ciber optics fourth quarter 2020 earnings call Today's conference is being recorded.
This time I'd like to turn the conference over to doctors the boat Corp, Carney President and CEO of Cyber optics. Please go ahead Sir.
Thank you.
Good afternoon, and thanks for participating in fiber optics, what it means going to school for the fourth quarter looks like you're crazy.
Joining me is Jeff Bertelsen, our CFO and Chief operating officer.
We are operating resulting from beacon, so although you might well what did you all four simple songs.
The other that'd be pleased to answer your questions at the conclusion of a healthy market.
In keeping with regulation FD.
We have made forward looking statements regarding our outlook and disrupted.
Womens.
These forward looking statements reflect our outlook for future studies, which are subject to a number of risks that are discussed in our form 10-K for the year ended December 30, plus day 90, and other filings with the Securities and Exchange Commission.
We urge you to review these discussions of this corrected.
I got up explored walk in sales what are the operating of our previously issued guidance for this period.
With that was benefited from strong is the highest suits.
A modest sensors and beacons and semiconductor products.
Our performance also benefited from customer acceptances.
$1.6 million Little Mexico hundred memory module inspection systems.
These factors offset up well against the decline in sales of excuse he thousand Multifunction inspection systems.
Loss from quarterly suits video of the day.
We reported shoots up 16, four $9 million for the fourth quarter of 2020 ended December 31st because virtually unchanged from the fourth quarter operating Nike.
Net income for the fourth block up when do you think it was $145 million or making sense for diluted share compared to other things Huntington Yep closing doors or two cents per diluted share it would be good or bad.
Net income in the fourth quarter, where do you think you benefited from the income.
Gross margin from 47%, reflecting the increased proportion of upside value products in the suezmax.
Jeopardy, because of the factors behind out of gross margin improvement in a few minutes.
And for the phone the other 2020.
I don't know people reported.
What is the card sales of $71 million, an increase of 18% from 15.
Right.
In 2019.
Net income in 2020 came from $517 million on 77 cents per diluted share some people at least some $774000 or 11 cents watershed. Thank you Brady.
All in all he wasn't really successful airports hybrid upticks due to COVID-19.
We wouldn't compete with you, but it won't be disciplined T D M audits technology and based on such products.
Turning now to a brief review of our product families shaved off inspection and metrology systems from 19%, yet, Oregon $822 million from the fourth quarter of integrating.
Within this category sales of ex Q3, Golden Multicultural inspection systems declined 42 per se, yet or what are you going to $4 billion.
You bet their degrees book, if you've ever done.
Inaugural quarterly sales radiation.
Michael I think we need to make it simple.
Excuse me goes on multiple systems.
Proximately $600000 in the fourth quarter of growth.
Additional orders what excuse me the other multiples relative to installed microwave EDI inspection and metrology are anticipated as we progress through 2021.
And I want to emphasize that we believe micro OLED inspection and metrology applications.
A significant long term growth opportunities outside of optics.
Fourth quarter system sales benefited from customer acceptances of our.
Mainly $1.6 million of backlog.
In Mexico, there's nobody more even switching from stores.
And as announced in January 'twenty 'twenty, one what do you see the orders valued at $4 $2 million from.
It makes 3000 Liberty bodies inspection systems in December from multiple sub contractors for the large memory manufacturer.
If you want to ship in the second line third quarter itself. Thank you Greg do you want this audits validate the importance of Hep C. D day modest inspection technology day memory manufacturers.
And she will always flow through the N. P. M ex systems had anticipated could you go into.
One.
Sales of inspection and metrology systems in the first total thank you granted one.
Forecasted to be below the low water on both a sequential and year over year basis, you could argue variations in quarterly sales.
So somebody administration per continuing for argue but ex 2000 metrology and inspection system.
Got it breaks on television relative.
You shouldn't amount of simple.
The net other Felicia tend towards the ex system have positioned us to capitalize upon long term growth opportunities.
Sales of substrate inspection and semiconductor reported advanced packaging inspection and metrology.
Here's a period can be sometimes increased 37 per cent year over year and $5 million in the fourth quarter of 2020.
The growth was driven by T. M audits in sales, which was 85 per cent year over year when people are at $5 billion.
They can people get weighted by demand from Oems and system integrators using P. D. A modest simple sort of high end semiconductor inspection and metrology applications.
He'll talk to medium duty cancer gastric with strong growth in the first quarter of 2020.
One on both a sequential and year over year basis.
Sales of semiconductor sales increased 21% year over year with people or $7 million in the fourth quarter of 'twenty drinking.
Sales of this year and possibly improve in terms of unexpected peoples sequential and year over year increases in the first quarter of credit line do you want.
We ended the fourth quarter of 'twenty with an order backlog of $3 million up from 70, $17 7 million in the third quarter due primarily to the recently announced orders valued at $4 $2 million or PD index 2000 systems.
We are forecasting sales of $65 million to $75 million for the first Florida. The Nike branded one ended March 31st.
The GAAP, you're spending outlook among customer to the other markets appears to be posting a good story.
This environment bodes well for sales of our PD and audits and vehicles since products during the coming year.
For this reason, we currently see 'twenty 'twenty, one shaping up as well we've got a good year for fiber optics.
We are confident that our P D a modest with sensors and systems that enable us to continue their day.
They continue building leadership positions in our targeted markets.
Thank you.
Jeff Bertelsen will review, our fourth quarter per port multiple greater detail.
Thanks above.
As we stated in this afternoons earnings release net income in the fourth quarter of 2020 benefited from a significant improvement in our gross margins.
Our gross margin percentage in the fourth quarter of 2020 rose to 47%.
From 42% in the third quarter and 43% in the fourth quarter of 2019.
This improvement resulted from an increase from the proportion of high margin products in our sales mix, including <unk> sensors and weight per cent semiconductor products.
Our gross margin also benefited from an increase from the average selling price per our F Q3 thousand Multifunction systems in the fourth quarter of 2020, reflecting more sales for higher end applications and the SMT and semiconductor markets.
We believe our gross margin percentage in the first quarter of 2021 will decline slightly by roughly one percentage point or so from the level in the fourth quarter of 2020.
Total operating expenses in the fourth quarter of 2020 declined by about 4% year over year to $6 $3 million from $6 $6 million in the fourth quarter of 2019.
Fourth quarter operating expenses were also down slightly from $6 5 million in the third quarter of 2020.
The year over year decline resulted principally from limited travel in the absence of Tradeshows.
Due to the COVID-19, pandemic and low professional fees.
Operating expenses were down on a sequential basis in the fourth quarter of 2020 due to lower expenses for incentive compensation.
Depreciation and amortization expense totaled $730000 in the fourth quarter of 2020 and stock compensation expense came to $318000.
Total operating expenses for the first quarter of 2021 are forecasted to be roughly consistent with the first quarter of 2020.
Our effective income tax rate in the fourth quarter of 2020 was 9%.
<unk> excess tax benefits from stock option exercises and the vesting of restricted stock units.
We are forecasting an effective income tax rate of approximately 20% in the first quarter of 2021, which assumes no excess tax benefits from stock option exercises in the quarter.
Cash and marketable securities totaled $30 6 million at the end of the fourth quarter of 2020 up from $27 9 million at the end of the third quarter and $26 3 million at the end of 2019.
Your line available balances of cash and marketable securities. We believe our capital resources are adequate for achieving our growth objectives.
We would now be happy to take your questions.
Thank you if you would like to signal with questions. Please press star one on your Touchtone telephone.
Joining us today use a speaker phone. Please make sure your function is turned off to allow your signal to reach our equipment.
Star.
One if you would like to ask questions.
And our first question will come from Greg Palm with Craig Hallum Capital Group.
Great. Thanks for taking the questions here so bad.
I think you've talked about 'twenty and 'twenty one it being another.
Another good year I think that's the way you described it and I'm curious if that means double digit growth in your opinion I know you don't usually give annual guidance.
It would be helpful to get some thoughts on how you're thinking about the cadence of the year.
Well thanks, Craig for the question, Yes, we do expect when do you think you're going to be a boutique sales alongside other opex.
And as you said, we don't give annual guidance.
Do you get the numbers semi cap market, particularly in the numbers get a bigger than few months I'm sure you're familiar with what's going on right now with charter yacht keeps moving around so a lot of demand for semiconductor chips, and we clearly see that.
In the products that you sell directly to Fabs are all sites such as Nissan sense on the amount of <unk>. Since we started to see I mean for instance, which are all used in the <unk>.
Manufacturing of the chips themselves. So clearly we see benefit from <unk>.
Rescap ex good healthy market.
Semiconductors I'll be I'll, just say that skewed from semiconductor Fabs and also companies.
Although on the flip side, we do service the electronics manufacturing maybe add to.
That is a significant part of our company and they started out chips can be a problem for many auto.
Total ancillary and stuffs like no other subsidiary shortage and auto lines are doing either and that does have some work with negative impact. So it's hard for us to quantify.
Listen line is clearly the semiconductor side is a big plus.
SMT side it is a minus but it's a relatively small number right now for us compared to semi so what are we think it's low.
Lastly, the expense.
Good growth, but I would hate to quantify at this point not really there are so many moving parts right now I hope that answers your question.
Yeah.
That's helpful what about.
The visibility into potential orders for sort of micro Leds.
Actually I think you said you know we expect to see it as the year progresses I mean, what's what's your confidence level do you think that the contribution this year. It can be in excess of all the contribution last year what are your thoughts.
Well that's a good question Greg.
You clearly see that the customers who are scaling up micro mediacom again and products, we'll be launching in the market anytime now.
So that's all positive.
Talking to them they are talking a lot more orders in the first half of 2021.
As you know Chinese new year just ended so many people are just coming back into the share right now so a lot of activity starting now for <unk>.
21, and so we are counting on some might really be items out.
The foreseeable future.
Do you expect it to grow as a book everybody a SKU for like revenue do you expect it to grow but it's hard for us to quantify the growth rate well yesterday. So early so far only one customer who's driving micro to read your mind.
As we are concerned with.
And use it and it is a consumer electronic companies driving the demand, but more companies actually drive so we expect more consumer electronics companies good volume.
Oh, My God trademark Sadia likelihood Edr and we get from you can expect that you could grow.
It's hard to sit here.
In February and quantify.
What kind of growth should we expect from a skew in the micro media deal.
Yep, Okay, and then just last one maybe help us understand the potential margin impact if any in Q2 and Q3, when and when a sizable three IMAX orders get recognized how should we be thinking about that for modeling purposes.
Yeah, I mean, we are.
Greg I think as you know we had we had previous previously said on an annualized basis.
You know the Amex 3000 product.
Would impact our margins given our current revenue and gross margin dollars by about one 1% to 2%.
We think both of those sales will be spread evenly weighted between Q2 and Q3, so there will be an impact.
You know the.
The ultimate impact in terms of points.
When you get to Q2, and Q3 as well depending on what our what our revenue levels are going to be in those particular quarters, but I would expect.
To see some.
Gross margin decline in in those quarters, probably a you know a couple of points anyways.
Some of it will depend on the sales mix of our other products and then.
As we get more into the third quarter.
No. We had talked mentioned previously on the last call about some potential cost reductions for the <unk> product and that will impact as well.
I do think we'll see some some decline in Q2 and Q3 from me of ex.
Got it makes sense all right. That's it for me if that's luck going forward. Thanks.
Thank you.
And our next question will come from Dick Ryan with Colliers.
Thank you say, Jeff what was your micro OLED related sales for all of 2020.
So for all of 2020 and micro led sales.
Sales were $4 6 million.
Okay.
Was there much or if anything in 2019.
At 2019 was $2 2 million.
Okay.
Yeah.
Thanks for that.
I wasn't sure if I caught it but you're talking about the nano sensor or something and you mentioned, both wafer and substrate inspection.
I didn't I wasn't aware of substrate inspection opportunity. So is the is the app or the rd opportunities they're expanding.
Yeah, we believe so a big piece of that question Dana So he launched regarding to Navajo resolution only modest sensor and the WEX system.
Product sometime in the middle of 2020, we have been showing it to customers.
And clearly there's a lot of interest.
They put inspection community called bumps incidents because of the speed of the central compared to competition.
Ex faster than any competitor out there right now and that's the main collection at the same time.
The got introduced to.
Folks, who are making substrates, Florida, Florida, the day for US right now and historically substrates.
Benign kind of sort of pieces with.
Very low number of features.
Advanced packages the heterogeneous packages that are getting launched as we speak.
They are putting a lot of features other substrates too.
And we'll see just out of the other dimensions of 50 or 100, micron smaller and they would like to inspect those features select wholly owned subsidiary inspection, it's kind of and then they bring to US right now and we have been talking to a few customers from that ADR and didn't really like what we have done with them.
And also from the W ex product.
The only difference low subsidy inspection is sort of hanging on vehicles and other substrate of which frankly is a lot easier than the day part.
One thing we will look a little different for the subsidy inspection system that all day for inspection system.
Everything is identical sales so it seems soft line similar handling kind of mechanisms and so on so we are looking at talking to both people and assets sort of switching.
That's a growth so yes, the hydro will be believe the Tam.
If you will for a man, who resolution sensor and the systems based on value resolution 10 times.
Bigger than what we initially towards so we are quite excited about yourself opportunities as we go from there this year.
No the competition on the way per slide.
You mentioned in the path from a Cam tech and non toll but well.
Would you competing with on the substrate side same or different.
No.
Really just a market, yes, youre right from the vehicle side, we compete by Monday with Cam take loss from L. A subsidiary of <unk> and a few other things like that.
The subsequent inspection substrates historically have come from Japan.
Market seems to be dominated right now by a couple of Japanese players.
It's one that I didn't read each other.
Non.
You haven't seen those completely in vapor inspection and we haven't seen the traditional wafer inspection companies lien.
Subsea inspections.
Primarily because there are different types of technologies that get used automotive technology is kind of unique in a way because we are doing better and prediction as opposed to a dark on Liza like Google is using our line.
Uh huh.
Technology that can be confusing.
And Tycho look at 90 degrees are really using old triangulation sensing technology. So we believe we have an intrinsic intrinsically big advantage.
The modest technology in tackling both wafer absolutely that subsidy inspection and it allows us to participate using the same center sales software there's different handling the Kansas. So we feel pretty good about both of these opportunities.
Okay.
So on the memory side, you know memory guys are adding capacity.
Actively now.
You know I know you did announce orders in January but.
Do they get distracted what just trying to add capacity to keep up with what the demand they see to may.
Maybe not look at year inspection systems as kind of a new way of doing things or don't you think that that Oh.
That's an obstacle to overcome you'll be more establish now than maybe you were a year or so ago.
It's a little bit of both I mean as you know.
Yes listen to other key.
Liberty manufacturers. One is what is kind of let me walk can be a mix of us in the past one is buying T D <unk>.
The median income because somebody standing to switch to TD in the future. So moving forward most of the sales in both of those customers are going to be Judy and mix.
Part of it is the line extension liberties.
Liberty in general is in great demand.
As we speak so we are getting the benefit every additional line generates demand for one more than makes a simple dose.
So there I didn't line, but part of it is also the second question would it be other than we just started in 2020.
They have a number off line.
Are you seeing some older technology.
Many of inspection right now so there's a number of lines we have to populate in the second customer right now without TD and ex solution.
And then the two existing large customers, we see a mix is a sizable opportunity in 'twenty 'twenty, one and beyond.
Suddenly I got into the total one two but so far.
Two customers are keeping us pretty busy.
Okay, great. Thank you.
Thanks Dick.
Thank you and our next question will come from Jason Smith with Lake Street.
Hey, guys. Thanks for taking my questions. Just curious if you saw any sort of supply constrained.
Q4, and if youre seeing any or anticipating any potential impact in Q1.
Oh yeah.
Yes, Jason you know I think generally what we're hearing from our suppliers is that you know the market for some other components certainly is starting to get tighter that that's for sure.
When it comes to Q1.
Don't think.
We're gonna be impacted by any any supply constraints certainly work right.
Right now we're actively looking at Q2 and Q3.
You know as of today.
Don't believe that.
What will be impacted in those quarters, but I think that the markets for components.
Certainly is getting tighter out there and that's something we're keeping a close eye on.
Okay. No that's helpful and I guess Relatedly I mean, I think there's a general assumption that it's going to be a pretty strong year from a growth perspective across the industry, but just given the supply constraint variables.
As you sit here today and not looking for specific guidance, but do you think the year shaping up to be more first half weighted or second half weighted.
That's what I mean, it's tough one to answer Jason.
As you know our board on this projects net our customers do and then they add specific low capex and capacity.
So it makes the scheme would go to the back end and day.
Any of these large customer decides to add capacity moving forward.
Certainly because of the index backlog that we have already disclosed.
But other quarters of a top line standpoint, two two in Q2, just because of the backlog already.
Exactly two total.
It's really hard to see right now.
But.
Overall, we do see good demand like non for semiconductor based products and the demand for SMT is increasing but still relatively soft compared to certain products.
If you want to add anything regarding seasonality.
No I think I think that's that's right I mean, I think as you had touched on in your remarks, you bolt I mean, I think that the overall environment is healthy right now.
Which is a good thing and I think we're well positioned and as you pointed out we do have the M X orders in the backlog for Q2, and Q3 and and we see other opportunities as the year progresses solar.
I think it's a it's a good marker right now.
Okay. No. That's helpful color and then just the last one from me how should we think about opex trending this year.
I know it.
I think you guided for about.
656.6 here in Q1, but anything other than the ordinary from an expense side that we should be aware of as we progressed no I don't Jason I don't think there's anything out of the ordinary I think one thing well you know maybe just need to keep an eye on it for the back half of the year as it travel and trade shows.
Our total loosen up.
As people get vaccinated do we see life returning to normal.
You know, we could see some potentially see some more travel costs and some of some of those types of things in the back half of the year, that's something that we'll keep an eye on and comment on them.
In the April earnings call and then in the July call, but that would really be the only thing that would come to mind from an opex perspective.
Still of course investing in R&D.
And so there'll be you know a few investments there, but really nothing out of the ordinary or no no massive.
They're large.
Upticks in opex or anything like that.
Okay. Thanks, a lot guys.
Thanks, Jason.
Thank you and our next question will come from Eric Slade with Acme analytics.
Okay.
If that was all other Sally tick up from.
From here.
I wish I had some questions on <unk>.
You guys. Okay. So 20 cents a share Jeff that that was a clean number no nothing extraordinary in there right.
Well I would say the one thing that I would in that number that I would point to are it really is a 9% tax rate.
And that's where Roger yes.
Yeah, we get extra benefits there from.
From.
People exercising stock options and so forth, so that rates a little bit lower than what you would see.
And in going forward in the future.
Assuming no stock option exercises, we would share some of those in the future.
Okay, well, if you back that out what would have what would have been instead of 20th sense, what would've been on a net basis, approximately I don't need them.
Yeah, I mean, so if we are.
We set our effective rates, 9%, so if you sort of.
If we sort of double our tax provision that would be volume.
Another 150000, which is roughly a ton.
No that would be roughly.
Couple of cents a share.
So you still look at 18th sensor I've got quite a number of them without the options some weeks ago.
So that leads me to.
I know you guys don't forecast, but I think the three analysts who follow you.
And in your backyard have you doing somewhere around $76 million is that correct for the year for the calendar year 'twenty one.
Yes, I believe that's correct, Eric if you are.
Taken average adjusted.
Okay. So that leads me to think that okay. So you had said you're going to 16.
They pick the midrange 17 million for the first quarter approximately that means the last three quarters to hit those numbers you'd have to do you'd have to average 20 million a quarter and I would assume it might ramp.
So $20 million with the kind of margins you guys are doing I would say you know so we'll take the 18 cents and off the additional 3 million. If you got to 'twenty. We're looking at I mean conceivably. If you are looking at third quarter is that right at $20 million approximately yeah, yeah Eric.
It's going to.
Get into.
Trying to forecast or project here, but I think you've got the the metrics right in terms of our margins.
Our tax rates and so forth. So you could put a model together to come up with that.
Gotcha.
I think I'm close with that I've talked enough about that.
Now on the memory side, you guys are still.
Very much looking at the third memory manufacturer. It seems like the second took a long time and now we're in a third.
Any color on it you know can we see it.
This calendar year or are you just don't want to go there as far as like it's when they order it.
Sign up they sign up.
I mean, the other and talking to them for a while now and the day auto customer in Florida, or SKU product. So they know us pretty low like they know okay.
And so we believe it's a matter of time.
Okay.
So far we don't have the hardest and frankly I can always fluctuate he really warmed existing two customers have plenty of expansion plan. So we are pretty busy right now with the existing players.
You said that you hope to get deployed one, but we're not counting on that.
Well, that's a nice situation to be in.
Where are you in that sort of cap rates, either I guess either.
It comes and when it comes in because you got enough business.
Now the other question I had for you Jeff goes back to the balance sheet. What was your cash at the end of the third quarter I think it was end of day.
Third quarter I think it was a $28 million is that correct.
Yes, it was.
And you're at 30 and change now right.
Up 30.6 Yep.
So what that cash come from some other stock options right, how much or how much was it.
It really it really came off.
First and foremost from earnings from them and then it it's working capital so that those are the two the two big drivers.
You know, we we didn't generate.
Exercise of stock options, just because of the strike price of the options wasn't a big cash generator. So it's really profitability and then and then working capital management are a collection of receivables reduction in inventory balances those types of things.
Yeah.
So now.
I think that does it for me except.
On the mini Mike on the many micro side so.
If I yourselves correctly, you have no competition on weight per cent.
Or the memory product doesn't sound like there's any low competition there.
On the many micro I know, it's hard to figure out.
New technology, but you are pretty comfortable in your possession, you don't see any competition out there major competition on those three parts of its fixed on a line for the mini micros that.
Makes sense.
There is competition there.
Excuse me of a superior product.
How to compete.
With a lower cost commodity times for all of them are really micro OLED inspection steps. So far if he gets used for the most critical steps such as yoga six, but there's always going to be competition index space.
Right Gotcha and.
We know on the call I think it was you know the third quarter call.
Yeah, what you anticipate it hadn't come in because of <unk>.
Whatever the reason is is the speculation amongst you guys as far as that.
They can't make us.
The production I can't make us efficiently fast enough.
And that's why you guys Didnt get the orders that you were counting on.
Second half of the year.
I mean medium doesn't know what exactly caused the delay in orders.
I mean I suspect it has something to do outside of items within the company the largest products.
But at the same time and.
And one of them was micro really everything but did what are the other changes that would be made to the product line. So we believe it's other things that were impacting the product launches.
That's because we didn't even have that good visibility what exactly constant debate, but clearly good moving forward from here would you be expecting more orders.
Since it's come from.
Yes.
Okay, I think that does it for me.
Great quarter on the earnings per share that was a very pleasant surprise I thought you guys might do you have to do a forecast with 911 assets. Just shows you that model, Jeff you've talked about once the revenue will start kicking in you guys have all kinds of money. So.
Hey, Karen.
Yeah Okay.
Thank you.
And once again, if you would like to signal with questions. Please press star one again.
Star One if you would like to ask questions. Our next question will come from miles Jennings private investor.
Good afternoon.
In line.
I know the cause.
Cause micro Leds potential is fairly significantly from what you said.
In fact, you've received.
$6 million so far in the first couple of years of their development.
And what I'd like to know is.
That's $6 million does that represent as it represented about one customer or several customers.
One one consumer electronics end user that is driving the demand so far but that children with novartis. We got from I believe each customer's Jefferson I mean, there's there's eight customers in total.
You know a large percentage of that is being driven by by one end customer, but theres a few other scattered in there too but.
One customers driving most of those most of that revenue.
Go ahead and.
This may be a little premature but.
I'm trying to just get a sense of.
Quite a ballpark price might be.
For the nano resolution sensor I know you can configure it all sorts of different ways and everything.
But I remember in the early days when you first had a M. R. S.
You gave us a sense of what a unit might sort of cross for the F Q3 thousand I believe.
Can I just wondered if you could give us you know a wide ballpark right because I can tell you price.
Per se that places out there.
Understand.
Typically now no resolution to ensure it is it really goes adoptions and what exactly is the customer looking for.
Because when you say mothers day.
Your competition, while number of digitally predictors number of beauty cabotage.
Especially when he's optics and transmission edge computing power to protect so depending on what exactly the customer chooses the price. It can vary quite a bit but you can get low demand distribution center depending.
Depending on the exact contribution from 100 $220000 price point range.
Oh, that's lower than what I had thought because I would think that with its extreme.
Measuring and inspection capabilities that.
We would've seen a higher price of that over the F Q3 thousand yeah.
Absolutely I mean, these are sort of indifferent if it goes for the block more than their SKU since when does every day.
It is generating 75 million TV data points every second so there's a phenomenon from food and it comes to the speed of data collection.
Hum generation.
Sure.
It does come in back into place.
At one time.
Gave us a ratio.
What the potential business for fiber optics would be in the front end versus the mid end.
This is just a sort of rough number I.
Seems as though you said something like.
Three or four times larger than what your historic.
Market, it's been over the last few years.
That is in the front end.
Could you give us any further perspective on that.
I mean, you can be looking at.
We haven't tried to quantify the market size, both flow out of the normal resolution sensor as well as low.
Inspection systems that use a magnetic solution center.
With presentation and what we have said is the central market is definitely.
$50 million to $60 million right now growing at about 20 to 25 per cent.
And in systems market is approximately $500 million growing at the same percentage.
So the systems market is roughly 10 times the size of the sensor market.
And the growth rates are obviously from that.
So that is still our best indication of what is the size of this opportunity for nano sensor and.
W ex switching systems.
We plan to participate both in the central and the system. So we will go to maybe break from the central side and also obviously from the system side.
Thank you very much and congratulations on the quarter, especially not getting over the $30 million cash balance.
And so when we say thanks miles.
Sure.
Thank you.
Thank you and at this time there are no further questions I'll now turn the conference back over to you for any additional remarks.
Well. Thank you all for your interest and questions. We look forward to updating you. After our Q1 results in April Thank you.
Thank you.
Does conclude today's conference we do thank you for your participation have an excellent day.
Okay.