Q1 2021 Advanced Energy Industries Inc Earnings Call
Installation between GAAP and non-GAAP measures can be found in today's press release.
With that let me pass the call to our President and Ceo's E Mail.
Thank you Edward and good morning, everyone.
Thanks for joining the call today.
First quarter revenue was $352 million.
We had record sales into the semiconductor market, where we are benefiting from our leadership position in process power delivery systems.
We entered the second quarter with a record order backlog.
Demand is increasing across all of our target markets.
And we continue to win new design slots and impressive rate.
As customers adopt our industry leading products.
In the short term for most pressing tactical challenge.
It used to be dealing with constraints in the supply chain.
Particularly shortages of certain integrated circuits.
These constraints limited our upside in the first quarter had been forecasted.
Our second quarter guidance also incorporates the impact of these constraints.
However, given.
Given the proprietary nature of most of our products.
We believe that nearly all of the demand, which we can't satisfied in the second quarter will shift into the second half of the year.
Also we expect that the actions that we took in the first quarter to address chokepoint in the supply chain.
We will begin to have a positive impact for the third quarter.
Now I would like to provide additional color for each of our target markets.
In the semiconductor market, we generated record revenues in the first quarter.
Growing 35% year on year and 9% sequentially.
This strong growth was.
Driven by higher demand for our process power delivery systems, a key enabling technology for advanced etch and deposition processes.
We've maintained our leadership position in the process power market by <unk>.
Working closely with our customers and.
And by continuously innovating.
Advanced energy technology and products that enable our customers to improve yields increase throughput.
To reduce cost and lower power consumption.
Over the past year, we have launched a series of next generation products into the market.
Our latest high power RF generators.
Our unique in those plasma system.
And our back stream RPF system.
Are all highly differentiated.
And are currently being evaluated by our customers.
We believe that these next generation products will drive market share gains.
For advanced energy and the coming years.
In the first quarter, we won multiple designs slots at major Oems for both etch and <unk> platforms.
In addition to wins in process power are true traditional area of strength.
We also secured wins for artisan branded embedded power products.
To summarize we expect the 2021 will be a record year for sales into the semiconductor market.
And we are bullish about 2022 and beyond.
Given our strong lineup of differentiated next generation products.
Now on to the industrial and medical markets.
For our revenue was up 27% year on year.
In industrial applications, we saw strength in flat panel display.
Battery production.
Carbon fiber manufacturing and horticulture.
And medical demand for diagnostic and life science applications begin to improve during the quarter.
Looking forward, we expect the industrial and medical markets to strengthen through the course of the year.
Due to improving economic conditions.
As well as increased acceptance of our new products into a wide variety of applications.
In the first quarter, we confirm that our <unk> platform has been designed into multiple solar cell manufacturing applications.
In addition.
Our firewall eight plus power controller has been incorporated into our flat panel manufacturing applications.
Moving to the data center computing market growth.
Due primarily to ongoing inventory digestion by specific hyperscale customers.
Looking forward we.
We see increased demand in the second quarter.
Followed by a strong uptick in demand in the second half of the year.
We continue to make good progress for new product qualifications and expect to add additional tier one hyperscale customers later this year.
We won another board mounted 48 volt DC to DC design in the first quarter and continue to focus on 48 volt server opportunities.
Now I'll shift to the telecom and networking markets, where first quarter revenue was down sequentially and roughly flat year on year.
Our first quarter revenue reflected the full impact of portfolio actions, we executed in late 2020.
Moving forward, we expect to grow revenue by targeting higher end applications, where we can differentiate.
We are focused on <unk> infrastructure.
And in the first quarter on two critical <unk> design wins losses, as a leading telecom OEM.
In closing I'd like to share some personal observations.
Since joining advanced energy in March.
Visited most of our North American manufacturing and development sites.
In spoken paychecks for face.
With many members of the team.
My General takeaways from those initial meetings for our first.
I think we have a high level of employee engagement.
Second it would be up some excellent engineers and scientists have been energy and foster a culture of technical excellence.
In my first 60 days I've also had the opportunity to meet a few of our largest customers and channel partners.
Our customers from a genuine appreciation for advanced energy.
Yes.
To grow our business, we will focus on continuously improving our customer.
From a value proposition.
We need to deliver industry, leading technologies and products in a timely fashion with best in class quality.
The ability and service levels.
We have a strong balance sheet.
We will deploy capital, where it makes strategic and financial sense for that.
The power supply industry is highly fragmented.
And we think that supplier consolidation will benefit both advanced energy and our customers.
In conclusion.
I am delighted to be part of the advanced energy team.
We are targeting the right markets.
We have a strong lineup of differentiated products and we have a great culture.
We are focused on accelerating revenue and earnings growth and are on track to meet or exceed our aspirational goals and longer term financial targets.
Paul will now review, our financial results and provide detailed guidance.
Thank you Dean and good morning, everyone.
We delivered solid financial results in the first quarter cash flow up significantly year over year and above the midpoint of our guidance.
Overall customer demand was very strong.
<unk> in record backlog of over $400 million.
Giving us increased.
With visibility to customer requirements over the next several quarters.
We executed well to meet customer commitments and industry wide supply constraints limited upside in the quarter and will be the pacing factor in our revenue outlook in the near term.
As Steve mentioned semiconductor revenue set another record driven by both customer demand and share gains for our full suite of semi power solutions.
Overall earnings grew 42% year over year as gross margins continued to approach our long term target upgrade from 40%.
Firstly offset by increased R&D investments to fuel future growth.
Return on invested capital continues to be above 20% on solid profitability and working capital efficiency.
First quarter revenue was $352 million up nearly 12% year over year.
Down 5% sequentially as we had anticipated.
Semiconductor sales were $181 million.
A 35% from last year and up 9% over last quarter as our operations team was able to respond to strengthening customer demand.
Revenue from our industrial and medical markets grew 27% from a year ago to $78 million.
But declined 16% sequentially, mostly due to supply constraints.
Data Center computing revenue was $59 million down 31% from the very strong quarter, a year ago and 9% sequentially.
However demand for our products started to recover with several customers, placing orders late in the quarter.
Signaling a return to growth in demand after just two quarters of digestion.
Telecom and networking revenue was $33 million for the quarter, essentially flat with last year and down 28% from Q4, reflecting a new baseline going forward as we streamline our portfolio focus on higher value applications.
Non-GAAP gross margin for the quarter was 39, 7% up 190 basis points from a year ago on higher sales and realized synergies.
Gross margins were 20 basis points higher sequentially, primarily due to improved product mix, partially offset by lower volume and some added supply chain costs.
We expect for logistics and supply chain costs to continue to be a headwind to gross margin for near term.
Non-GAAP operating expenses were $79 5 million up $2 5 million from last quarter on higher R&D as we fund investments in multiple new growth opportunities.
Operating margins for the quarter was 17, 1% up 300 basis points from last year, reflecting improvements in gross margin and SG&A as a percentage of sales.
While we expect Opex to increase modestly going forward operating margins should expand in the second half as revenue growth accelerates.
Non-GAAP other expense was $2 6 million, including $1 1 million of interest expense and $1 2 million of FX losses on settlement of yearend position.
We expect other expense to be in the one $5 million to $2 million range going forward.
Our non-GAAP tax expense was $7 9 million from 13, 8%.
Primarily unfavorable discrete items.
Looking forward a 42% from 91.
A year ago.
Down from last.
Quarter due to lower revenue.
Turning now to the balance sheet.
We ended the first quarter with cash and marketable securities of $513 million up $30 million for Q4.
Inventory increased by $26 million and turns were three seven times.
Accounts payable relative to 163 million with associated EPS of <unk> 68 days.
Partially offsetting the increased level of inventory.
Inventory and payables should remain at higher levels on our expectation for increased volume and as we pursue supply of critical components.
Receivables rose slightly to $237 million and DSO was 61 days.
Based on net working capital were 96 up one day from last quarter.
Operating cash flow from continuing operations was $54 $3 million.
Capital expenditures for the quarter were $8 8 million and depreciation was $7 3 million.
We continue to expect capital expenditures to be about ticket fee percentage of sales for the year.
During the quarter, we repaid $4 4 million of principal amortization on our debt ending with total bank debt at $318 million and net cash of 195 million.
Our trailing 12 months gross debt leverage increased to one one times.
We did not repurchase any stock in Q1, and we paid $3.
The dividend of <unk> 10 per share.
Now, let me turn to guidance.
We expect demand to remain strong and increased sequentially across our market.
Driven by growing investment in semiconductor improving macroeconomic conditions.
And strengthening orders in Hyperscale.
However, in the near term industry wide supply constraints and specific components are limiting upside to our revenue.
As a result, we are guiding Q2 revenue to be $360 million, plus or minus $15 million.
We expect non-GAAP gross margin to decline around 100 basis points sequentially on line.
This favorable product mix and higher near term material and freight costs, which could last through the end of the year.
Operating expenses are expected to be $81 million to $82 million as we continue to invest in R&D and see natural increase in annual costs, partially offset by synergy actions.
As a result, we expect non-GAAP earnings to be $1 25 per share plus or minus 15.
Looking beyond Q2, we believe demand will remain strong in the second half of 2021 and into 2022.
Given the current supply chain environment, we expect second half revenue to grow 5% to 10% over the first half with upside as conditions improve.
In conclusion, we are more excited than ever about the opportunities across our markets. We are well positioned to continue to gain share from the same strong adoption of our new products.
We remain focused on executing our strategy to accelerate revenue and earnings growth over time.
With that let's take your questions operator.
At this time for you'd like to ask a question for Scott.
We'll go to number one on your telephone keypad.
Question is from Quinn Bolton with Needham and company. Your line is open.
Hey, guys just trying to look through the numbers, obviously, it sounds like you're seeing some <unk>.
<unk> upside on revenue day, the capacity constraints and I guess.
Look at the June quarter.
You guys are kind of 15% maybe $20 million light of day.
Consensus expectations for for the June quarter.
Is that the level that $15 million to $20 million.
That is the level of Av.
Revenue, you're leaving on the table because of capacity constraints or are there other factors going on.
GAAP at really good question Quinn, it's hard to quantify exactly certainly we are seeing strengthening demand and our outlook is really based on what we believe we can.
Net price or anything out of the factory in the quarter.
Certainly as we came into the year, we saw some supply can change slightly speaking in sort of a similar impact in Q2 now that demand is still there and little price become available, but it will take a couple of quarters.
Probably to catch it up.
Okay.
Just.
Looking looking at the at the numbers, if if youre missing some demanded for Q2 chips for the second half.
It almost looks like what pushes from the first happened in the second half that could easily support 5% to 10% growth and so I guess I'm, just having difficulty reconciling that the forecast, especially if some of the demand.
Is shifting into the second half.
Yes, again, we look forward to trying to get some color that can have because.
<unk> is a strong demand environment, and it's really limited by availability of parts.
So when you look at Westwood for we think it's more like half.
Of that forecast is supported by things that move forward and better into share.
But look the part situation improved spending per cap side 10 numbers and that's what we've laid zone at this point.
We have line of sight to as we reported in the next couple of quarters.
Although the parts shortages and challenge in the near term expense David.
Challenges, Inc mentioned, we actually think debt and bodes well broadly speaking it underscores the strength of the underlying demand drivers.
And the fact that this heightened industry line challenge would be the case.
Ultimately longer runway, combining that with stronger demand throughout the year, we teed up for.
Sure.
The growth in the second half for continued growth in 'twenty.
Okay.
Yes.
Okay, Great and the second question I had is.
The dealer side market share data I think for for power subsystems without.
Recently can you talk about just how you guys performed.
In 2020 in terms of market share in the in the RF power segment.
Okay.
Yes. This is Steve I think they have to make a comment on that one.
We did take a look at the report and we're very happy to see that growth.
Still the undisputed market leader.
And all of the areas that we care about.
Areas of RF power.
In process power semiconductor power doesn't.
Thanks.
For exponent.
It also showed that we drew from some of your revenue expense from the market last year.
For the most enterprises, we grew share for advanced energy.
We're very optimistic moving forward.
Forward, we've launched over the past year.
From a highly differentiated product suite conductor etch dielectric etch.
Success cross selling at artisan products entered the semiconductor critical so we're very bullish on semiconductor moving forward.
Great. Thank you for that color.
Your next question is from Vanguard with Cowen <unk> Company. Your line is open.
Yeah. Thanks for taking my question I have two of them closely Paul Auster.
<unk> on this component inflation is that impacting the top line.
Is there any interest that you might lose share to your competition or do you think is that it shows a settlement the club industry debt.
<unk> also seen the same credit component tightness.
Yes, I think if you look across our portfolio most of our portfolio is proprietary.
So if you look at semiconductors industrial medical those are largely proprietary products.
So that's why we made this statement debt.
Most of other income annual shift into the second half of lucid.
I think the only area, where we risk losing some share based on a lack of availability of components, it's probably in the fifth center for beauty.
Business is more of a build to print business.
So.
If we can catch up in that area in Q3, we may lose a little bit of share there.
But in large part from speaking for the company as a whole there's very little business that we think for web.
One for superior.
Okay.
Got it got it thanks, Pete and then for a follow up you spoke about data from the computing kind of.
Yes.
It will lead to the inventory digestion, but it started turning around.
In the March quarter, I'm, just kind of curious what.
Drove it suggests our <unk> IP enterprise budgets improving.
Or what are the reasons for the dilution getting done sooner than expected.
A lot of the same part D day quantifying how much of Hyperscale revenue grew in the March quarter.
I Wonder if the general question no volume.
I'll, let Paul address these more specific questions.
But.
And I think we saw.
Increased booking activity for the data center for the end of the quarter.
It can be anticipated and continue to pick up from Q2 and for what we see in our forecast for the day. The second half is going to be quite quite strong in data center and so that's what we're gearing up for it.
Yes, we didn't break out this time of change in Hyperscale.
Quarter over quarter, Krish, but we did see orders.
To come in strong towards the end of the quarter.
Sort of what gives us confidence that we have seen the bottom of debt that market from a digestion period, and we expect to see growth over the course of the year and as you mentioned earlier is stronger growth as we go through the year. So.
Net market went through a couple of quarters for digestion and equivalent coming back now.
Carlos Thanks for guidance.
Okay.
Okay.
Okay.
Thank you next question is from Mehdi Hosseini.
Thank you line is open.
Yes, Thanks for taking my question when I look at.
Revenue mix by end market it seems to me that.
Semi and industrial actually did better than expected and perhaps the shortfall was in the telecom and data center.
And I'm just trying to.
Reconcile the shortages with end market.
Would it be fair to say that perhaps in the semi as you had appropriate inventory of components. So you were able to meet the demand and he was just these new market or are you trying to scale that the shortages.
Hamper your ability to hit the targets.
That's a good question Mehdi I think if you look across our markets are higher volume markets added larger impairments from a supply chain perspective locally have some spot outages everywhere.
But on balance we were able to respond to increasing demand during the quarter in semi even while we had some some parts shortages there as well.
And broadly speaking on a higher volume day one.
The impact of other parts shortages and are in the company's advanced markets water.
Sure, Okay and then.
Uh huh.
Highlighted.
Opex, increasing a little bit.
Could we assume debt maybe.
Opex is up a couple of million in the second half versus the first half and then there could be continued increasing opex into 'twenty two.
Yeah. If you look at the numbers, we've been investing in R&D, obviously, that's where all the growth in that you've got a semiannual cost at <unk>.
And again a year goes on so you can expect to see any opex up slightly.
From Q2 levels over the year, but it should be very modest growth.
So as we go forward from Q2.
Okay. Thank you.
Alright. Thanks.
From a Amanda <unk> with Citi. Your line is open.
Sure.
Good morning.
Touching on to the data center side of the business you talked about and the expectation to add some more hyperscale customers throughout 2021 teams need to other customers in order to start to see a reacceleration of growth.
Or do you expect that the digestion that you've been seeing the last few quarters and.
And should roll off and you can see from growth outside of adding new customers throughout the year.
Yes.
The growth is for the separate issue because we see the growth from our current set of customers as we bring on new customers typically restart relatively low volumes and it ramps up over a period of months. So we have line of sight on the from a growth coming from our existing customers.
Hi.
And then on the industrial and medical side.
Obviously last year was pretty strong with some of the additions.
Okay unrelated to COVID-19 that in the medical side.
And should we see capex.
Capex in year over year growth on the industrial side, and specifically on the industrial guidance and that the medical side of the business for sure.
Yes, I think could be 2020 was there.
For industrial medical for obvious reasons.
We're definitely seeing bookings pick up in both areas.
And we think those strengthened every quarter. This year. So we think those two markets industrial medical.
We'll be coming back to life over the course of 2021.
Thank you.
Our next question is.
Graham with Rosenblatt Securities. Your line is open.
Yes, Hey, good morning, Thanks for.
Your time here and Steve welcome.
Could you.
Maybe quantify the impact on sales of your.
Portfolio changes in the.
Telecom and networking segments the revenues.
Yes guidance Paul.
We haven't called that out specifically, but if you recall, we expect it to be down in Q1 and it was we also commented that this kind of performance revenue baseline as we go forward, we will see some growth from here there'll be some kind of.
Orders can be a little higher a little lower but fundamentally inventory and establishing a new baseline post those actions. Once those actions really took effect in late 2000, 2010 day and.
And accelerating into 2020 and and as we go for an index is a reasonable baseline level.
Okay. Thank you.
I was also hoping for a little bit more color on day.
On some of the supply shortages logistics issues and what have you certainly everyone is feeling it so that we understand that.
Could you kind of tell us, which segments are being sort of affected maybe sort of.
Yes.
Listen.
For two leased.
If that's possible.
Sure happy to comment on that obviously.
Obviously, the biggest issue we have is in semiconductor chips microcontrollers other Ics.
Bye.
Second be ceramics ceramic substrates and other forms of ceramic and probably a third of our pads for some passive components for short supply.
And so we're spending the other time with our key suppliers.
We have almost the entire management team involved in expedite calls every week.
With me.
We're going out and bringing on new second sources, where we can find them.
We signed a number of long term agreements with our key suppliers. We did that in Q1 as we saw lead times stretch.
And so we think thats going to start benefiting us in Q3.
And we have secured our position as a preferred customer essentially for most of our key suppliers.
We're also taking some action.
Actions and our factories were building some buffer capacity simply excess capacity.
And the reason we're doing that is because there's a tendency for some of these fears components to be delivered.
Okay.
Batch fashion for the ended the quarter.
We want to be able to take big advanced products that requires some additional capacity.
That debt.
Very helpful. Thank you I guess the last question is around so we're spending a little bit more R&D.
Have these.
Supply chain issues. If you will we have higher materials and I guess I was just wondering maybe is there going to be a renewed focus on managing SG&A down a little bit to.
Prop up the earnings while we're going through this sort of transition period into the second half and frankly also in the second half because I think as you said Paul that.
Second half sales.
Our sales guidance for sure.
Up 5%, 10% sequentially as day.
As a previous question.
Pointed out was kind of what I think we're all expecting anyway. So this does look like it moved us maybe into 2022, so how do we handle SG&A. During this sort of these next three quarters to try to keep earnings propped up.
That's a good question.
But from the numbers, we've pretty much been able to hold our reduced SG&A over the last four quarters, even despite other kind of pressures to what normally.
The increase SG&A. So we expect to continue to do that.
And you wanted to drive a lot of leverage and in fact, we expect to see SG&A as a percentage go down.
Over the course of the year, so it's something that we're working on.
Clearly.
Our investments in R&D, we think will drive future growth.
And for those.
Some of the other headwinds we are seeing a per transitory.
<unk>.
A period of time.
And as we continue to execute our synergy plan.
Both opex as well as for ahead of us debt.
Okay.
Even in Ashford Inc.
I think broadly speaking.
We're back on our target our target model for growth.
This year early next year.
That's great color. Thank you Paul.
Yes.
Your next question is from Lasalle.
<unk> with Raymond James Your line is open.
Thanks for taking the question in the context of the industry wide supply tightness.
I'm curious if that broadly theme.
Potential targets lift for acquisition given that some other small other players, especially in the industrial vertical might be suffering particularly in the current climate.
You don't really haven't thought about that way for us.
I guess that would be.
Synergy range.
We can come in and buy a smaller company and exercise our leverage was in line.
But just a general comment we continue to be opportunistic we tend to look for.
Companies to acquire.
And so I think youll see us.
Back of that area looking for.
The company's strong technology strong technical teams.
Stickier products for the tended to be proprietary.
We'll be looking for companies that are exposed to semiconductor and <unk>.
Drilling better for opportunities.
Yeah.
For more kind of thematic Lee is there anything in the Baidu infrastructure proposal.
That would be directly.
<unk> been impactful to see your business.
That you can see.
Okay.
Perfect.
For the most interesting for our growth is the additional investment in semiconductors.
You can see that happening.
Basically trying to establish a stronger U S manufacturing base.
And if that happens then obviously that integrates.
Even more demand for semiconductor process power solutions. So they were very enthusiastic about that for.
Yeah.
Right and then maybe some of the industrial vertical.
You've sold into.
Yes, metallurgy and sort of glass and other other.
Think that could benefit from a more active industrial policy.
Yes.
Yes, I'm not really familiar with the details of your answer metrics at this point, but.
I hope Youre correct.
Okay fair enough. Thank you very much.
Again I'd like to ask a question Mark was that the number one on your telephone keypad. Your next question for Japan.
Your line is open.
Good morning, and thanks for taking my question.
<unk>.
As you look at the cost structure at advanced energy, especially your manufacturing footprint.
Different facilities that you have I know organic.
Debt much opportunity to look at that but.
Do you see there are opportunities for further optimization of our cost cuts that could.
Drive margin expansion.
Yeah. So so basically we have three centers of excellence in the country for your entry months in China, when simulators from the ones in the bookings.
We are in the process of consolidating our Chinese factories into one location. So we'll be exiting <unk> by the end of this year I think youre probably per year are familiar with that price.
Yes.
I think moving forward, we're very comfortable.
China, Malaysia and Philippines.
In place and.
And our approach there moving into trying to fully utilize each of those factors.
Factories and the good news is if we get to that point we have.
The ability to expand our operations in each of those sites. So I think I think we're pretty well positioned.
Understood. Thanks for that and maybe as a follow up if you could talk a bit more about share industrial and medical segments as to what Youre seeing.
In other words, so rich the true subsegment.
Industrial versus medical Youre seeing faster growth any sense on revenue.
Any particular end market or are you seeing.
Strong orders had strong revenue growth.
I'll make some general comments about industrial medical.
The reason I like those two markets so much.
They tend to be smaller and medium sized companies small or medium size opportunities.
But each opportunity typically once.
A little bit different so we take we start with our standard products for Configurable products.
And then we return them to the customers needs and that creates a very good relationship between the customer get credit for very sticky product situations. So typically these applications are very long lifecycle applications.
Once we get the zone again due to share for many many years. So we're going to continue.
To scour the market and look for more of those types of opportunities.
Okay, great. Thank you.
Our next question is from Weston Twigg with Keybanc capital markets. Your line is open.
Hey, Thanks for taking my question, Firstly I just wanted to start with gross margin.
Last quarter I think you said it would exceed 40% for the year Youre guiding a download for Q2 and you didn't mention that again, so I just wanted to get your thoughts on gross margin in the back half of the year and if you still think you can hit that that 40% target.
Exiting the year.
Yes, I think what we said with debt as we execute our manufacturing consolidation that we believe we can address a year at.
At 40% organic range.
Your line is still I would say broadly our goal, but certainly income.
Just takes in some of the supply chain constraints.
A headwind that we and we didn't see a quarter or two ago, and we think that's transitory from panels and how long a 10 plus plus clear.
Okay.
We think that in both headwinds for meeting by hundreds of 200 basis points.
I would say that more than even what we expense last year with Cowen Inc.
Okay.
For the reimbursement and other things with COVID-19.
By change a very full logistics channels very flow.
So in the interim we're going to face these headwinds at those side and as we book.
Can you share manufacturing consolidation.
We feel confident we'll be able to see on.
On that target model.
Okay that makes sense.
<unk>.
And then just when you talk about revenue growth in second half.
Can you help us understand.
Which are the stronger growth segments.
Relative to the first half.
Is it semi is it data center et cetera, if you could help us understand which ones are growing at low cash during the second half and driving that that upside that would be helpful.
Yes.
The good news is we see strong growth in all segments quite frankly.
So we see semiconductors cadence staples full speed ahead essentially.
The customers, we havent right vectors are very bullish.
About the demand in the second half into 2022.
So our challenge there is just going to be EBITDA because their demand.
Let me share comment on data center, we see that are coming back from the second half.
Industrial medical is going through a recovery phase and we think that's going to be very strong.
The only market, where we may not see as for our growth is probably telecom network I think will stay steady there.
Again, as we focus on five key designs, we think most debt.
Revenue would probably come in 2020 to retreat.
Okay. That's very helpful color. Thank you.
No further question at this time thank.
Thank you Nicole that day.
Question for Mike.
Well, thank you very much for joining us on the call today.
We see increasing demand across all of our target markets for the rest of 2021.
And although supply issues on limiting our upside from second quarter, we see increased COVID-19.
Commitments from our suppliers from the second half day by hopes that we can.
And for the year it for very high velocity. Thank you very much.
This concludes today's conference you may now disconnect.
[music].
Okay.
No.
Okay.
Net.
Yeah.
Okay.