Q4 2020 EchoStar Corp Earnings Call
Ladies and gentlemen, and thank you for standing by and welcome to the Echostar earnings Conference call for the fourth quarter and year end 2020 at this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session I ask a question during the session you will need.
And to press Star then one on your telephone please be advised that today's conference is being recorded if you require any further assistance. Please press star zero and I would now like to hand, the conference over to your speaker today, Jerry Brown and thank you. Please go ahead Sir.
Thank you good morning, everybody and welcome to our earnings call from the fourth quarter of 2020 on.
I'm joined today by Mike Dugan, our CEO, Dave Rayner, COO and CFO.
And Paul President of Hughes on.
Anders Johnson, Chief strategy Officer, and President of Echostar satellite services, and Dean Manson General Counsel and Secretary.
And as usual, we invite media to participate in a listen only mode on the call and ask that you not identify participants or their firms and your report.
And also do not allow audio recording which we ask that you respect.
Let me now turn this over and indeed from the Safe Harbor disclosure.
Thank you Terry.
All statements we make during this call other than statements of historical fact constitute forward looking statements that involve known and unknown risks uncertainties and other factors that could cause our actual results to be materially different from historical results and from any future results expressed or implied by the forward looking statements for a list of those factors and risks.
Please refer to our annual report on form 10-K filed today with the SEC all cautionary statements we make during the call should be understood as being applicable to any forward looking statements. We make wherever they appear you should carefully consider the risks described in our reports and should not place any undue reliance on any forward looking statements we assume no responses.
Ability for updating any forward looking statements Mike over to you.
Thank you Dave.
And thanks to all of you that decided to join US today for our Q4, 'twenty and 'twenty earnings call.
By all accounts 2020 brought its share of challenges, but the echostar team rose to the occasion and once again delivered solid financial results.
I'm very pleased with our 2020 per four months as evidenced by growth over 2019, and both revenue and adjusted EBITDA.
As we entered the second year of the global pandemic, we continue to supply their connectivity on which millions of consumers and enterprises government agencies and communities depend.
I'm also proud of the Echostar team's efforts and operational accomplishments and delivering services and have never been more vital to our customers.
Let me now I'll turn it over to the management team to expand on their business segments before closing with some final comments and then the question and answer period.
Catherine.
Thank you, Mike I'd like to Echo Mike's comments, and say that I am extremely proud of our performance and our financial results Hughes 'twenty and 'twenty revenue was our highest on record.
Adjusted EBITDA grew 7% and the fourth quarter and 8% for the full year compared to the same periods last year.
Our 2020, adjusted EBITDA margin was 38, 9% increasing from 36% and 2019.
We grew our Hughes net subscriber base by approximately 87000 during this year and.
And then recently recognized by U S News and World Report 360 reviews, and the best satellite Internet provider of 2021.
This is welcome validation of our dedication to connecting the unconnected to a high performance into and this shows.
We ended 2020, and with 1 million and 564000 and subscribers.
And the fourth quarter, and our subscriber base and the U S declined by approximately 27000 and.
As you know our U S consumer offering is currently capacity constrained and.
As a result, we continue to manage our sales and marketing efforts to optimize services to an existing subs. We also continue to innovate to enhance the customer experience applying advanced technologies, such as artificial intelligence across our network.
Driven by the ongoing strong demand for broadband services and our focus on offering ancillary services and enhance our customers experience. Our USR pool is steadily increase.
We expect these strength to continue and the near term.
And Latin America, and Q4, and we grew our subscriber base by approximately 11000 and improved our pool and the previous quarter.
Our sales slowed in this market relative to the total quarter as COVID-19, pandemic restrictions eased and many people return to schools and offices on a regular basis.
We saw an increase in June which we believe was partially due to changes we've made there and our collections process.
<unk> net sub debt issuance.
Community Wi Fi services, which we offer and partnership with Facebook connectivity continue to be and important offering for us and Latin America. We now have more than 1500 on these Hughes Express Wi Fi hotspots deployed and are focused on employing monthly arpels with targeted marketing.
<unk>.
We expect to see ongoing growth and these consumer markets in 2021.
Florida, and North American Enterprise business. The team continued to drive and increase in orders relative to the first half of 'twenty and 'twenty.
We closed upgrades and extensions with several large accounts and saw a significant increase in that field deployment activity.
With the increase in activity through Q3, and Q4, we completed more enterprise deployments in 'twenty and 'twenty than in 2019.
What's more the enterprise group received significant recognition and industry analysts reports during the quarter with both Frost and Sullivan and Gartner publishing research that highlighted the team's capabilities in the managed services market.
We continue to invest and expanding our market, leading capabilities and and innovation across our managed services portfolio.
Investments and artificial intelligence have allowed us to automate and identification and resolution of network problems.
These capabilities are being leveraged across our north American and international and enterprise customers as well and fat and total consumer operations.
And the international Enterprise business, we see projects and resuming and new opportunities developing.
One of the worlds preeminent and financial companies has extended its services agreement with us to provide managed services to their locations across the Americas, and Asia Africa, and the Middle East.
And India, we received an order to implement more than 4000 Atms in support of the state Bank of India.
The new audio and brings our total to more than 50000, Atms being serviced and India.
Also there we received expansion orders from reliance Geo to provide full G. Backhaul services in seven states and to add more than 600, VSAT as part of the barrel net program to connect villages across the country.
And the Asia Pacific Region, We won a project from the large maritime service provider to deliver a Jupiter system and an initial order of 500 modems.
In Africa and support of one of the region's largest national governments, we've been awarded a contract by a service provider to deliver a Jupiter system support and land mobility for government vehicles.
And we continue to work on closing on a joint venture agreement with Bharti Airtel in India.
As previously noted and subject to regulatory approvals.
For our defense business 'twenty and 'twenty was an outstanding year in terms of sales.
Culminating in the fourth quarter with follow on orders from major prime contractors and classified customers.
Our government's enterprise group was chosen us and approved provider by the Georgia Technology Authority under the GTA direct program that makes it easy per eligible agencies to procure essential broadband connectivity from us.
The team also continues to roll rollout networks for force state agencies across our.
Approximately 500 locations in Pennsylvania, we look forward to continued momentum in these business segments in 'twenty and 'twenty one.
Our Jupiter three satellite continues to progress at Max out.
In December 'twenty and 'twenty, we've contracted for the launch of the satellite.
We have received and updated schedule from Max.
And we now expect to launch and the second half of 'twenty and 'twenty two.
This delay is due in part to the COVID-19 restrictions that every company is facing and and part of production issues and certain components.
We are working diligently with Max out to both mitigate these issues and identify ways to recover this.
Schedule without risk to the satellite.
In addition, our launch vehicle should limit the amount of times and later to satellite arbitrating with Genesis and service scheduled.
And although we are disappointed with this delay we remain excited about Jupiter three and said he bring significant additional capacity to our markets as well as the ability to offer higher speeds and service plans to our customers.
In addition, we have started exploring potential architectures for the next generation Jupiter satellites.
We expanded our role with one web.
Neil broadband satellite company with the contract to develop and manufacture essential ground system technology for the new Leo constellation.
And a three year agreement valued at approximately $250 million Hughes will produce the gateway electronics and the core module will be used and every user terminal.
Designed by Hughes. This call module is uniquely adaptable across fixed as well as aeronautical and maritime mobility terminals for either electronically or mechanically steered antennas.
One word resumed deployment office broadband satellite constellation was on December 18th launch of 36 satellite the fee.
Since the company emerged from chapter 11 bankruptcy.
Hughes operates in and evolving industry and a changing market as we have for 50 years, we've learned a lot along the way.
For example, we know therefore, the Hughes net customer the top priorities of speed bandwidth and price.
We also know that the great majority of traffic on the Internet and video, which is insensitive to latency yet requires a significant amount of capacity.
And that's why geostationary satellite alright.
The deal for the consumer and business market that we serve.
Delivering superior economics, and large volumes of capacity right, where we need it.
And make no mistake due to the size of our addressable consumer market and the cost of other technologies and servicing low household density areas, we have a substantial opportunity for our Hughesnet service.
With the launch of Jupiter, three and 100 Megabit service plans, we expect to maintain our marketing and market leading position in rural and underserved markets.
And the demand is there and it's growing.
A satellite broadband connectivity market is large enough to support different service providers with multiple technologies.
Even with new constellations and planned launches there will not be enough capacity in the foreseeable future to meet the demand and our primary markets, let alone the rest of the world.
In addition to a thriving consumer business, we possess a diversified enterprise organization and partners and and.
Free continue to rely on our engineering expertise to propel their businesses.
Across all of these markets are multi transport innovations will bring the best available technology to meet our customers' needs.
Continuing to progress and innovate as the market changes and try and like we always add.
All in all it was a very strong quarter and year and I look forward to another productive year as we celebrate our.
Half century of satellite and leadership in 'twenty and 'twenty one.
I now hand, it over to Anders.
Thanks, and good morning and.
And Q4, <unk> revenue was $4 million down slightly from Q4 of last year.
We continue to pursue opportunities to lease our excess ku band capacity.
The overall FSS market continues to be soft and declines in demand for IFC capacity has obviously impacted the current environment we.
We are staying focused on those markets that we are ready to react when the rebound occurs.
We mentioned last quarter that the first third and GSO S band satellite for our Echostar Global subsidiary were and the commissioning phase.
Unfortunately, both satellite and have experienced technical and on anomalies that preclude them from fulfilling your intended regulatory milestone missions.
Although I would like to note that our EG one satellite is still operational and we are using it for testing.
We intend to seek regulatory milestone relief due to the force majeure events and despite this setback business development activities continue and we've been pleased with the interest the Echostar Global mission has received from a range of vertical players are.
<unk> is expected to launch in either Q2 or Q3 of this year and we are evaluating options for additional spacecraft.
With respect to developments in Europe and <unk>.
And on mobile has successfully launched its new synergy service.
Hybrid offerings and seamlessly integrate satellite and terrestrial LTE roaming services and a single small low cost mobile terminal using a single subscription and management and port.
We continue to see strong interests from our distribution partners and all of the Echostar Mobile's, new products and services and we are excited to see many of the new opportunities for application of MSS technologies to a variety of emerging verticals, including autonomous platforms and <unk> integration.
Additionally, we have launched several initiatives to deploy and new hybrid satellite and terrestrial technologies and services on our <unk> platform.
On the satellite Iot front, we're working with producers and others to develop and deploy the first real time bi directional satellite delivered <unk>.
Lower Ram and services, which will leverage next generation technology that fully integrate satellite and terrestrial services on a single chip.
We expect the initial operations and the lower managed services to begin and in the second half of this year.
We are also working with <unk> and others to develop hybrid services, leveraging our complementary ground component licenses in Europe.
These new services will focus on industrial enterprise applications, such as utilities transportation logistics and maritime as well as emerging verticals, such as unmanned aerial systems and urban air mobility.
Finally, as always we remain focused on our longer term strategic goal of full integration of S band satellite services into the emerging global <unk> network I'll now turn it over to day.
Thank you Anders.
My comments. This morning will be primarily on Q4 results and include comments on adjusted EBITDA, which is reconciled to GAAP measurements and our press release.
Consolidated revenue and the fourth quarter was $489 million down $10 million compared to the same period last year.
Hughes revenue was $482 million down <unk> 9 million compared to fourth quarter last year.
Higher consumer revenue from increased <unk> and.
And growth and Latin American subscribers were offset by lower equipment sales to enterprise customers, primarily due to the impact of a one web bankruptcy and Q1 and 2020.
In addition, we experienced negative foreign exchange impacts of approximately $10 million per.
Principally related to revenue and Brazil.
PSS revenue in Q4 was $4 million down slightly as compared to the same period last year and corporate and other revenue was $3 million also down slightly.
Third last year.
Consolidated adjusted EBIT on the fourth quarter was $167 million and increase of 7% from last year.
Adjusted EBIT and in Q4 was $188 million higher by $12 million.
Hughes adjusted EBIT margin increased by three two percentage points largely as a result of growth and a higher margin of consumer broadband business.
PSS and corporate and other were primarily flat as compared to last year.
Yeah.
Net loss from continuing operations was $3 million in Q, and Q4 and improvement of $54 million from last year. This.
This change was primarily due to higher operating income of $7 million lower net interest expense of $47 million, driven primarily by $50 million of interest expense accrued and the fourth quarter of 2019 related to our fee dispute with the government of India.
Improvement and foreign exchange foreign currency transactions of $6 million and higher gains on investments of $6 million.
This was partially offset by higher income tax provision of $10 million.
Capital expenditures and the quarter were $114 million compared to $104 million and Q4 last year. The increase was primarily due to spend associated with our G. III ground infrastructure as we start to prepare for the service launch.
Free cash flow defined as adjusted EBITDA minus Capex was $53 million during the quarter.
And 2021, we are targeting both revenue and adjusted EBIT growth, we plan to manage our U S consumer activity to maximize profitability and expect continued growth and our Latam consumer markets.
We force.
We foresee meaningful recovery and our enterprise equipment sales and services.
The lingering impacts from the pandemic and this segment of the business. We believe second half of 2021 will be stronger than the first especially internationally.
New agreement with one web should provide incremental growth.
We will continue to prudently manage all expenses, including those associated with the Jupiter three launch readiness.
In December 2020.
We bought back one 7 million shares of our stock and the open market and the cost of $38 million.
Through February 11, 2021, we had repurchased an additional $2 9 million shares for a cost of approximately $65 million.
Our cash and marketable securities balance of 12, 31 was $2 $5 billion.
And our seven and five eight senior unsecured notes of $900 million are due in June and our intent at this time is to repay them on a current cash.
With that I'll turn it back over to Mike.
Thank you Darren.
As you can all see and we've had a successful year and I remain extremely excited about our position within the satellite communications.
Demand for global connectivity continues to outpace supply and.
And we remain well positioned from a technology and financial standpoint.
And now I'll turn it over to the operator to start the question and answer session.
Thank you at this time, if you would like to ask a question as a reminder, please press star then the number one on your telephone keypad.
If you would like to remove your question.
And can.
And we'll pause for just a moment to compile the Q&A roster.
Your first question comes from the line Rick Prentiss from Raymond James Your line is open.
Thanks, Good morning, guys.
Good morning, Rick.
And.
First I know I'm glad I think the market and is also to see you put your balance sheet to work on stock buybacks.
It looks like maybe close to $400 million left on the authorized plan compared to your $2 billion market cap just wanted to confirm that that's right and we think the best M&A opportunity to buy your own stock, where it's at but what other M&A opportunities might be out there that you'd be interested in and Mike wants.
Well as you know Rick I mean, we've been looking and a lot of different opportunities.
For a period of several years and I.
I think we remain of interest and.
And transactions that make sense, where it grows our customer base grows our technology base.
And provides for incremental growth.
That's where we remain focused.
Okay and on the buybacks is about $390 million left that's ballpark, yes, Im sorry, you have the numbers right.
Absolutely correct.
The filing.
Okay.
And then obviously the Jupiter three has been delayed a little bit with Max or are there any abilities to republic costs from them with the delay and also as you think about.
Gross pre Jupiter three launch.
Should we think of this quarter.
The decline is kind of more similar to what you might experience until the launch and obviously <unk> increases can help offset that but just trying to think through.
The delay and the impact.
And we're working on all the options as far as per contract per Frac start and.
And I don't think of them in the space and think more about that we still need the space correct.
And we're very disappointed and the delays.
The issue with.
The U S.
Carol is that with the.
A continued growing demand average consumer and.
The Jupiter two and Jupiter one for you we've.
We try to manage the number of customers, we can support along with that.
The capacity constraints.
And to make sure that.
The capacity is what our customers need and therefore at times, we do and search.
Beams.
While the sub count to go down to ensure that we've got.
Solid and supportive of plans and people are buying so I can't totally predictive as people more and more people hopefully return to office and work from home demand goes down I would think that it will have a positive impact on our ability to add subs, but I can't say for sure.
Sure.
Don't know what things are going to look like for the next six months so.
Yes, I don't I don't expect major changes either up or down.
As we managed through.
Customer requirements.
And as we think of the Jupiter three and getting in service.
Pardon me and I think he mentioned that the launch vehicle choice would reduce the time from launch to and service can you give us an idea of how fast that might be and and I know people are very interested and knowing how much capacity will the Jupiter and three bring on and what that might do for growth.
As we look beyond the launch and service dates.
Well I think we've talked capacity on the past.
Not see any reason to keep going over that and nothing's changed as far as the space craft because it's gone through the design.
On the delivered capacity is expected to be pretty close to spec as to the launch vehicle over time.
Through in orbit testing and getting into servers and I got to be honest with you. We're working on that every day and.
So that is one area with the delay and the production and satellite, but there is a possibility.
Gaming back from in service cost however.
Per center that is.
We do not want to take and we do not want to rush through in orbit testing and aware of that might have a negative impact on on the spacecraft or our ability to meet spend because we get so and answer.
And as a very precise activity, we've got and be careful.
But we're going on.
We're going to shave off every possible day from the time, we launched total timeline and surface pumps.
And that's a work in progress.
Okay last one from me and other work in progress has been the JV in India, a lot of business happening in India can you help us understand what you think a reasonable timeframe is that that debt deal might close as it continues to await approval.
We are aiming for somewhere in the middle of the year.
So and mid 'twenty two.
We have to get to a bunch of zone.
Yes, many of the already and once our midpoint and I just wanted to from 'twenty, one sorry I misspoke.
And actually working through from regulatory approvals and everything is all set as soon as we get the last couple of regulatory approvals, we shouldn't be ready to close the deal.
And then hit the ground running pretty fast.
Yeah.
Great. Thanks, guys stay well.
Thank you.
Once again, if you would like to ask a question. Please press star.
From the number one on your telephone keypad and your next question comes from the line of Chris Quilty from Quilty analytics. Your line is open.
Thank you our problem and wanted to follow up on the consumer our pool, which you indicated was up both in the U S and international is in the U S market is the increasing <unk> more a function of existing customers.
Stepping up their plans or is it simply a mix issue of some lower value subscribers dropping off.
Well it definitely is the existing customers stepping up.
And I've.
And this COVID-19 crisis has been.
Obviously, spreading all roads and increasing the demand for these services.
And people are stepping up going up to higher plans et cetera, which has a good effect on the ARPA, but obviously has an impact on the number of subs you can accommodate all of them.
Is.
Satellite so thats one part of it the other part of it is we are selling.
Some additional ancillary services, which adds.
And could be our pool for example, and repair services that people don't one day unit down and are willing to pay extra money to have quick repair services.
And.
And we sell tokens for extra capacity, so there's a whole bunch on level two things that I had a dollar $2.
Two our output from these subscribers, which as you know very good money because the cost per against that or very little.
Understand and as you think about more people returning back to work. Obviously this COVID-19 period caused a very different demand patterns and what you've seen in the past.
With respect to the time of day.
And as people go back to work and perhaps they stepped up their plan because they were using a lot more capacity.
If you see a shift back to normal patterns, where people are.
More heavily using the service say after five P. M D.
And do you still have the right amount of capacity and the way that you've metered. It out. So that you can you won't be force to drop people from the plan.
Yeah, and it's one of those things that's that's evolving all the time and it's very difficult as Mike mentioned earlier to predict exactly what will happen and then in terms of the demand. So we are constantly adjusting the plans and adjusting the allocation of bits to the different plans and for the different subs to try to.
And maintain a balance between.
Customer satisfaction.
And.
And capacity and number of subsidiary and this is a process that's going on every day.
As we evolve and we just have to see what are how does come.
Come back to normal debt.
Total ups and it probably won't develop the way we think it will like everything else, it's about Covid and has been the but it's something we track to optimize continuously.
Understand.
Shifting to the enterprise market and if we can set aside one web and as a standalone and then look at the balance of the enterprise business.
It appears that for the past couple of years, the enterprise revenues and and installations have been struggling.
As we come out of Covid do you see any prospects for the enterprise business, putting up a year of growth again, excluding the one web business.
Yes. The answer is yes, and we have been reasonably pleasantly surprised and excited about.
And what's happening and debt markets were suddenly seeing.
Major corporations wanting to either expand the.
And the breadth of the services, we offer today are brand new customers or all customers and brand news and requirements.
And if you look at the enterprise business for US you got the United States and you guys and the rest of the world and the United States is primarily with the fortune 1000 companies using.
For the access.
Technology, using primarily terrestrial and technologies.
Internationally, like we mentioned about India, and Brazil and.
And many of the other countries and far East, It's primarily satellite June two and our dominant dominance and VSAT technology gives us a very very high market share in those areas.
And both internationally and domestically, we expect 'twenty one to be a good year.
Great and back to one web.
Can you give us any sense of how much of that $250 million you had had burned through prior to.
The chapter 11 bankruptcy and and how do you see that rollout progressing for the balance over 2000.
And this is a brand new $250 million.
After bankruptcy.
And when they went bankrupt we had to terminate the old contract and we got paid for all the work we've done net debt payments. So we started off after bankruptcy from zero and this is a brand new $250 million from that time for the next three years.
And will it be equally distributed over the next three years or is it.
Well I think the first two years will take most of it and then there'll be.
Probably six months worth of stuff left and authority.
Great and then and both fairly linearly because we ship.
Gateways to 42 sites all over the world.
You know almost on an equal timing basis.
Got it and.
One question for Anders on the failed small sites.
Have you been able to trace back the cause of those failures too.
Payload design issues or were these simply boss related issues.
Have they werent payload related at all.
The.
We had we have an issue.
Waiting to the propulsion system, which.
Because of the orbit debt our filing specifies and.
And we're sort of ride share and standard launch vehicles leave you off and the SSO orbits.
We have to change our attitude and our inclination and in both instances.
The propulsion system on board the spacecraft malfunction.
And you indicated.
Takeda debt. Your you will look for a force majeure in order to replace those satellites and and continued testing and and were you able to get any testing done with the satellites prior to their failure.
Only one failed completely the other one we're still and communications with and are running tests across it right now so.
But the third satellite which is due to go up on a rideshare mesh and right now in June.
It's a completely different design from from most of the bus the propulsion system and it does have the same.
Radio payload so the payloads on on the first two satellites, we are operational and we are working fine.
I understand alright, thank you very much.
Thanks, Chris.
Once again, if you would like to ask a question. Please press star and the number one on your telephone keypad. Your next question comes from the line of Ric Prentiss from Raymond James Your line is open.
Yes.
Hey, guys. Thanks for taking a couple of follow up questions.
Total expenses line there on one web.
I think there and also been some discussion that maybe you could be a <unk>.
Distribution or services or some other kind of partner besides just the equipment.
Can you elaborate if there's other potential for.
And working with one way than what it might entail.
Yeah, absolutely you know, we're a service provider all over the world.
And and the different service offerings that we have we expect to be leasing and depending on the market requirement and some capacity.
<unk> been and bundling it into the other services, we offer to our existing customers and nuc and new customers.
And when can that start given the one web timing for their constellations and go up.
On the constellation.
And as their constellations and up and tested and start we've got customers today, who would love to have us not only offer the Geo services, we normally offer but do offer new services and combined Neogen and services.
So.
And we've said in the past and we think the.
Leo Geo combinations.
Great.
Great way to address the the markets that our customers are and because they have strength for different applications.
So as soon as they are ready and we'll be we'll be ready to choose from to <unk>.
East capacity, especially in the markets, where we have service companies like India, Brazil and Europe.
Africa Middle East.
And obviously parties and one of the ones that have helped spring.
On went out of bankruptcy as well as the U K and government what do you and frame do you think that constellation will be ready to help you do bundling and India. So for instance, I think approximately two years from now.
Okay.
And.
Other topic I wanted to make sure obviously, we've finalized the quiet period from the <unk> auction.
You guys didn't get much there.
And that didn't get any but Spacex did get a like and can you just share with us kind of your thoughts on on what happened and the art off auction and how that impacts the future dynamics.
Well I think.
Basics, but what about $80 million a year for 10 years.
And.
In the scheme of things.
It sounds like a big number, but it's not really that day rate. If you look at the number of subs that it'll it'll help them subsidize I think the number and have a big different calculations.
40000, and subsea euros from.
And in that region.
We have one and a half million subs.
Up already so 40000 a year.
And I wish we had it but.
But it's not a day.
And overwhelming number either.
And the scheme day, they've got to be looking for as far as.
For like a million subs on something like that.
And so 40000 per year.
Be that big a deal.
Okay.
They've got a favorable ruling from the FCC.
You which are impacted.
We didn't think the FCC.
And I was going to do.
And that kind of a favorable ruling but the debt.
And that's probably where we maybe didn't do as well as from Kodak.
Okay, and then one per day, if you had mentioned and I think the 10-K you mentioned.
A limited number of enterprise customers are filing bankruptcy can you just help us understand kind of sizing that that risk and what what might be and how you've.
And are already positioned the bad debt reserve.
Yes, I mean, we're fully reserved on that and that was really earlier and the euro in the midst of Covid and you obviously had one where you've obviously got.
And if global Eagle and there was a customer of ours, so theres a number of retail customers.
We're working with those customers going through the bankruptcy process.
And fully reserved.
And hopefully we end up being over reserve then we get some proceeds.
On the final conclusion.
And we're pretty comfortable and all the physicians on the companies that have filed bankruptcy and slowed some growth and impact of revenue recognition.
For a while and certainly some of those customers downsized.
Their orders from us.
I don't know that we've lost one entirely.
Among those various customers the pile.
And also the Indian AGR ruling got cut resolved how was that reserve and how is that going to play forward over the next 10 years.
Good question, there is still a lot of rulings.
Come down from the <unk> and Supreme Court, we believe that we are fully reserved for it and.
Hopeful I can't even say optimistic but hopeful that debt.
And we get some rulings in our favor that indicate there were over reserve, but right now we're on a reserved and if we've got to pay it out under the most current ruling yet.
Paid out over 10 years.
Okay. Thanks for the follow up guys.
There are no further questions I'll now turn the call back to Jerry Brown for closing remarks.
Okay. Thank you everybody for.
Joining today and we look forward to talking to you next time.
That concludes today's conference call. Thank you everyone for joining you may now disconnect.
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