Q2 2021 DZS Inc Earnings Call
Yeah.
Good day and thank you for standing by welcome to the D. C. S second quarter 2021 earnings conference call. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session to ask a question during the session you'll meet the press star 1 on your telephone please be advised of today's call.
<unk> is being recorded a net.
I'd like to hand, the conference over to your Speaker today, Ted Moreau Vice President of Investor Relations. Please go ahead.
Thank you Katherine and welcome to the <unk> second quarter 2021 earnings conference call joining us today, our Dcs President and CEO Charlie vote, and we are excited to introduce to you our new CFO Mr Co working.
Yesterday after market close we published of the Investor Relations section of the Dcs website, our shareholder reported for the second quarter of 2021 to provide shareholders prospective shareholders and analysts with market insights product business and financial update as well as forward looking information.
On this call, we will provide projections and other forward looking statements regarding future events or the future financial performance of the company. The company cautions you that such statements are only current expectations and actual results.
Actual events or results may differ materially.
Please revert to the to the to documents that the company files with the SEC, including its most recent 10-Q and 10-K reports and the forward looking statements section of the shareholder report that was filed on form 8-K, as well as being available on the Investor Relations section of our website the.
These documents identify important risk factors that could cause actual results to differ materially from those contained in the company's projections or forward looking statements. Please note that unless otherwise indicated the financial metrics being provided to you on this call are determined on a non-GAAP basis. These items together with the corresponding GAAP numbers and the reconciliation to GAAP are contained in the shareholder.
The report referenced earlier.
I'd also like to remind you that we will plan to participate in the B Riley Jefferies and Wolf research Investor conferences during the third quarter I will now turn the call over to Charlie.
Thank you Chad welcome investors analysts day guests.
As Ted shared yesterday after market close we posted on our quarterly shareholder for us to provide a comprehensive update on our business, including current market trends and dynamics as well as announcing the appointment of Mr correctly, because of our new Chief Financial Officer and.
As highlighted in the news release, Misty and I have worked together for the past 7 years. During my tenure as CEO of gender and today brand it as living communications.
I imagine communications together, we have acquired and integrated 7 companies, including gender and the acquisition of Nortel, It's voice over IP business unit in 2000 of 10.
Many of the rare talent in the field of finance and ECS is fortunate to have a part of our team.
Mr. <unk> welcome to the is yes.
Following our opening remarks, I will turn the call over to Mr. <unk>, who will cover our Q2 financial results as well as provide our outlook and guidance for the remainder of 2021.
As I speak to you today I am celebrating my 1 year anniversary with ECS and 1 of years that.
We have strengthened the executive leadership team with experienced industry luminaries, we upgraded our global sales organization, we secured 61, new customers, we more than doubled our sales pipeline.
We acquired 2 technology companies, which are accelerating our innovation in areas of mobile edge transport and software defined networking and we expanded the R&D initiatives driving multiple new product introductions, and we strengthened our balance sheet and are now debt free.
Demand for broadband connectivity <unk> mobile and software defined networking solutions continue to flourish as our industry undergoes the significant upgrade cycle, which has been fueled by the pandemic.
Political dynamics numerous government stimulus funding programs and the technology movement towards open standards.
The pandemic has exposed the bandwidth limited mobile and fixed wireline networks due to the increase of employees working from home large scale applications, such as interactive video conferencing esports remote education, and all of healthcare and.
In addition, the China specific security threats of opened up numerous <unk> and fiber to the premises opportunities with tier 1 service providers.
As I shared previously we're in the early innings of the long term investment cycle.
Sitting at the convergence of fixed and wireless networks with our mobile edge transport broadband connectivity and software defined networking solutions, we are more aligned with our customers ecosystem partners and strategic technology partners, such as Broadcom of jabil than ever before.
In fact yesterday, Dcs and Broadcom publicly announced our intention to further advance our strategic technology partnership in the areas of broadband connectivity and mobile edge solutions.
Our focus on North America, Europe, the Middle East Korea, and Japan, combined with strong tier 1 alignment delivered our second consecutive quarter of record orders, increasing 9% sequentially and 65% year over year.
Mobile and broadband connectivity demand and exceptional execution has led to record first half orders of $245 million and a record backlog of $160 million as of June 30 of 2021.
Our record first half results demonstrates the positive progress. The team has made over the past 12 months align with our vision strategy and 4 growth initiatives, which are 1 of.
Our North America, and EMEA. It takes care of playbook to our next generation mobile transport portfolio, which is being fueled by <unk> on open ran through the numerous Huawei and DTE replacement opportunities and for the substantial upgrade cycle that is underway.
Around the world with fiber based deployments.
During Q2 of the current supply chain environment impacted our adjusted gross margins due to the longer than normal lead times elevated semiconductor cost increased semiconductor sorry increased the secondary market cost expedite charges.
<unk> and higher freight and logistics costs.
With that said, we believe the current supply chain environment represents near term headwinds and are not indicative of our long term operating model and margin targets.
Over the past 6 months, we've initiated a number of go to market product and operational work streams that we anticipate will increase our gross margins to 40% within calendar year 2023.
These margin expansion initiatives are detailed in our shareholder report.
I would also like the highlight that during the second quarter, we reached the favorable agreement with the German works Council that aligns with our plans to consolidate our German in Florida, the manufacturing facilities, giving us 1 of the largest access networking manufacturing facilities in the United States the.
The consolidation is expected to deliver annual cost savings of approximately $7 million.
I want to briefly touch on our innovation of product design initiatives, which are the growth engines of our business over the past 9 months. We have initiated numerous technology work streams that are yielding differentiated mobile and broadband connectivity solutions that will be orchestrated and automated by Dcs cloud.
2 weeks ago, we announced accelerate our next generation 10 gig ex U S pawn portfolio and our expanded helix edge access portfolio.
Our accelerate portfolio includes the first of our ultra high performance any service any port line cards with a high density higher gig interfaces.
In addition, we announced the consolidated communications.
1 of the top 10 service providers in the United States will deploy accelerate in helix as part of their initiatives to offer multi gigabit services to $1.6 million households.
We believe this is the largest announced 10 gig <unk> PON deployments in North America.
Accelerate can be deployed in a traditional edge office design bore is a fully distributed software defined networking architecture.
Our helix in Dcs cloud solutions together will provide differentiated access orchestration intelligence service management service assurance of data analytics capabilities.
To accelerate the helix in Dcs cloud combined with velocity, our core optical line termination portfolio in Kronos, our mobile edge transport portfolio will serve as the foundation for revenue growth and margin expansion.
With that as a business update I will now turn the call over to Mr. <unk> for our financial highlights.
Thank you Charlie and good morning, everyone.
Mentioned I've had the opportunity to work with Charlie from nearly 7 years, bringing 2 companies, which combined had revenues exceeding $1 billion.
Charlie the dynamic technology and operation on a leader with extensive relationships around the world.
Thrilled to reunite with Tom and joined the impressive leadership team he has assembled over the past year.
As Charlie highlighted the demand for <unk> mobile and broadband connectivity solutions remain strong as reflected in our 65% year over year growth in orders.
$128 million on 17% year over year growth in revenue to $82.7 million.
That's the top end of our guidance range.
Execution of the vision and strategy that was established when Charlie joined the company a year ago has resulted in revenue from the combined Americas and EMEA region exceeding 52% of the total the highest percentage since the beginning of 2018.
Over the past 12 months revenue has increased approximately 30% compared to the preceding 12 month period.
Growth over this period can be attributed to our participation of <unk> and open ran network deployment.
New customer and design wins, and the global fiber to the premises upgrade cycle that is underway.
With these trends continuing into the second half of 2021, we anticipate Q3 revenue in the range of $85 million to $90 million and we are range.
Excuse me raising our full year revenue guidance to $330 million to $315 million from our previous range of $320 million to $340 million.
Our adjusted gross margin for the second quarter was 33, 1%, reflecting shipments of lower margin products 2 of certain customers in Asia, and higher supply chain freight and logistics costs. The Charlie highlighted in his opening remarks.
As profiled in our shareholder report, we have implemented 7 margin expansion work streams that will begin during the second half of 2021 and will be reflected in our financials by 2022 for the.
The second half of 2021, we anticipate gross margin improving from Q2 levels based on known backlog on a more favorable geographic and product mix.
Looking ahead, we anticipate the consolidation of our Germany manufacturing operations, the Florida will yield the modest contribution in Q4 prior to the full year contribution for 2022.
We anticipate our full year 2021 gross margins to be on the 33, 5% to 35% range.
As Charlie highlighted earlier, we expect the manufacturing consolidation will represent approximately 7 million of the annualized cost savings approximately half of which will be reflected in gross margin and the remainder in operating expenses.
We have been thoughtful about our investments throughout the first half of the year in plan for the second half of our strategic investments have been focused on upgrading key positions throughout the company timely product innovation geographic and customer expansion acquisition, the numerous Huawei and DTE caffeine grow.
<unk> initiatives and an aggressive sales and marketing campaign pursuing the investment cycle underway and broadband connectivity and <unk>.
As a result Q2 operating expenses were slightly above our guidance range and we are now profiling, our full year operating expenses to be in the range from $106 million to $108 million.
Adjusted EBITDA during the quarter represented a slight loss of 400000, which was at the midpoint of our guidance range. We anticipate Q3 adjusted EBITDA to be in the range from breakeven to $4 million for the full year, we anticipate our adjusted EBITDA to be in the range from 6 to 14 million.
On.
I would now like to turn the call back to Charlie for his closing comments.
Okay.
Thank you mentioning and again welcome to Dcs.
I would like to provide some additional commentary regarding miss these remarks pertaining to the slight increase in spending for the full year 2021.
Our investment thesis and the strategy is centered around capturing market share over the next 12 to 24 months. There is a wave of opportunity that we're pursuing and while we are being thoughtful about what customers on specifically what countries. We are investing in our planned incremental R&D sales and services investments are required to ensure that we have the best opportunity.
To capture market share.
Our sales pipeline has more than doubled over the past 12 months orders revenue and backlog for the first half of 2021 exceeded our expectations delivering a book to bill ratio of 1.5 and we're responding to an increasing number of RFP spanning our entire portfolio.
As shared during our Investor day in May we were on the early innings of a breakout of investment cycle.
We continue to effectively manage the Eric the near term headwinds associated with our overall supply chain environment and we are in the final phase of our corporate transformation and integration of former zone on in key mile.
The results are yielding a stronger and more sustainable foundation led by innovation and a world class leadership team.
And that concludes our remarks from this morning.
I will now turn the call over of the operator to facilitate questions.
Thank you as a reminder, task of question you gentlemen, the press star 1 on your telephone.
To withdraw your question press the pound key.
And our first question comes from Christian Schwab with Craig Hallum. Your line is open.
Hi, guys. This is Tyler on for Christian Thanks for all of Us to ask a couple of questions.
First I was wondering Charlie if you can maybe expand or give give some more detail on your view of the current tight supply chain environment, I think it's pretty clear consensus that.
On the challenges going to persist for a while but I'm just wondering.
Do you think the worst of now behind you or is it going to improve from here or are we kind of kind of remain at the low trough level for for a while yet any color on on your view there it would be would be great.
Yes, I mean look I mean, I think we've been consistent I think with our peers that the supply chain environment is challenging although I've gone out of my way to make sure that we haven't used supply chain as a crutch on our inability to deliver on on.
Q on Q2, I don't think that supply chain is going to hinder our ability to deliver on the second half of the year.
Having spent a lot of time with Broadcom and other key technology partners.
We feel good.
Where we sit we certainly believe that the supply chain constraints are going to continue into 2022 and.
For us I feel like the balance that we have across the various supply chain partners is allowing us to manage the business effectively.
Thanks, that's great segue.
Second question.
Really appreciate the color on your financial target models, there and in particular, the gross margin improvements I was just wondering if you maybe could provide.
The number of drivers you gave for the targeted gross margin improvements getting the 40% at some point in 'twenty 3.
Look at our go to market with.
Product mix improvements and the number of operational execution improves I was wondering if you could rank them to some degree or outline maybe some some of the lower hanging fruit and others and what might be some of the most challenging.
All of those processes to improve gross margins. Thanks.
Yes, what we tried to do which it sounds like.
You understand us too.
Categorize our margin.
Improvement model in sort of 2 categories..1 that we feel like is more within our control, which we dubbed operational execution.
You can see we've got a target range of somewhere between $4.50 on 600 basis points. Obviously, 1 of the shoe is already drop with our ability to consolidate our German facility into Florida.
That's going to the <unk>.
$7 million that we represented on the call and in the sheer will report about half of that will be represented in margin improvement.
There's other strategic initiatives that we're working on from an operations standpoint, consolidating some of our contract manufacturers of which is allowing us to create a little bit more scale and create a little bit more.
The momentum with those particular partners.
The product rationalization that for the most part is behind us of the team has done a phenomenal job rationalizing the portfolio over the last 9 to 12 months and that certainly kind of yield some product margin enhancements.
In the second half of this year and certainly into next year.
So I think those are easy ones that we see a lot of clarity to certainly the tariff mitigation. Our ops team has done a great job mitigating a lot of the mismanaged tariffs over the last couple of years, So I feel like that.
The margin expansion is as.
He is well underway.
And then from a new product introduction perspective, I mean, we just have a new philosophy, our new products are going to come to market with the different margin profile.
And considering where we are selling products around the world. So.
I feel like the operational execution, we put a lot of time of energy into it lots of detail any of those work streams I feel like our are very well represented in what we shared.
On the go to market is really about our ability to continue to execute on I think.
As everyone saw we had a phenomenal.
The 6 to 9 months in growing our market share in North America, and EMEA and as.
As we continue to grow in North America, and Western Europe, and the margin profiles are much better there.
And so.
We feel like what we're representing is.
Its something Thats very manageable.
That's great. Thanks for the color that's all for us guys. Thanks.
Thank you.
Thank you. Our next question comes from Tim <unk> with Northland Capital. Your line is open.
Hi, good morning.
Couple of questions first on the and congrats on the order book by the way.
First the <unk>.
Sort of along those lines on you.
You mentioned the significant deployment with the consolidated spin.
The largest of at least 10 gig PON deployments in North America.
And it seems like you're stepping up opex investment of a bit too perhaps chase some other opportunities.
I Wonder if you as you look around the landscape of our looker on your pipeline.
Relative to what you've discussed here with consolidated you know what.
Sort of opportunities do you see out there.
In terms of magnitude and timing.
Relative to that either in North America or globally, and how has that changed I would say in the last quarter or so.
No. It's of Great question and I appreciate you're teeing it up because we.
We did highlight that we have I mean looking at the beginning of the year.
We can see that we're going to book 2 are almost $250 million on the first half of the year.
Certainly expected a robust 2021, but I think the first half and the opportunities. We're seeing are exceeding the expectations that we had and as I sort of highlighted Tim I mean look I mean to me. We've got this massive opportunity over the next 12 months to 24 months.
And in the access space, specifically in the mobile transport space, specifically I mean, you have these design win windows of opportunity and for US right now.
Our view based on what we're seeing from just the sales pipeline and the opportunity is being represented to us in North America and Western Europe.
Is an opportunity for us to invest and so we certainly have increased the number of sales personnel in North America and Western Europe, We've actually added some sales personnel.
In the Pan Asia region, So outside of Korea, and Japan, we hired some.
Very talented salespeople that are helping to expand some of the opportunities there, but when you look at.
Art off as you pointed out consolidated.
Certainly experience exciting opportunity for us I mean, there of longtime customer but.
We feel like consolidated is aligned with us as anyone and that's going to continue to.
To be an exciting and growing customer opportunity for us, but if you look at the $65 billion bipartisan infrastructure build it's nearing passage that's 3 times the size of art off and it's different in the fact that we believe that the $65 billion infrastructure Bill assuming it gets passed.
Is gonna be doled out to a lot of the municipality and local governments that we will be aggressively deploying fiber based solutions to their communities and Thats an area of that frankly, we're doubling down on right now and trying to get ahead of those.
Of those opportunities so.
I think our our increase in spend on the sales side, specifically has been attributed to adding more salespeople, where we see the opportunity for us to continued growth.
I mean would you say that's more oriented toward capturing the rural broadband opportunity, which would seemingly be done to do or.
Pursuing.
Tier ones I assume theres.
Okay.
The number of opportunities, perhaps even larger than consolidated working around out there both in North America and Europe.
So for those who have been following my career I mean, most of my career has been focused on the tier ones in Dcs.
Dcs, we are laser focused on the tier ones and so you can assume that some of the sales resources that we've added in North America has been <unk>.
Investing more in our ability to capture the tier ones in North America. We have invested recently in new sales force resources in Western Europe to focus on the tier ones in Western Europe doesn't mean that we're not supporting Megan's team, who are focused on the tier 2 and tier 3 as we are.
And in fact, we've completely upgraded that entire team and the pipeline that that team has.
Brought into Dcs over the last 6 months has been very impressive but as you can appreciate if youre going to go after AT&T.
Verizon Deutsche.
The way to telecom and others.
<unk> got multiple resources from those are large large scale companies and we're making the investment that we feel like aligns with the momentum that we have in those types of accounts.
Okay.
Great and maybe last question from me is for the time being focusing in on Q2 order performance on.
You saw a pretty big increase in the APAC.
Should we assume that that's principally driven by your existing existing major customers kind of the usual suspects in terms of Korea and Japan.
That might normally hit your 10% customer list as well any commentary there would be welcome.
Or.
Is the.
The sort of.
Tenor of the APAC business any any different than it has been.
Yes, So I think your commentary is spot on with 1 exception I mean, I think Asia as the region was up.
100, and over 100% of the orders year over year.
We did we did receive a pretty significant size order from the large tier 1 in India.
Which is our first and we're pretty excited about that and so that certainly added to the Asia.
Bookings in North America, I think it was up a 100% year over year. So.
So we saw a big uptick in North America, we saw strong orders from from Japan and from Korea.
We did have a pretty sizable order that we received from India, which as I think everyone knows India is 1 of the countries that as aggressively been on.
On the pursuit of anti Huawei and DTE.
Suppliers so there's.
A very very large scale opportunity for us in India were being thoughtful and careful about it but the.
The big difference between selling into India today versus when I was the agenda and as we were competing with a with Huawei and low low low prices and margins and it was a challenging year.
Got an opportunity now.
We're not competing with the Chinese suppliers, which makes it a little bit more entity does for us and if we feel like the tier ones are.
Absolutely different sort of value proposition with suppliers like us today.
Great I'll pass it on thanks, very much and welcome to Misty. Thank.
Thank you Tim.
Our next question comes from John Marchetti with Stifel. Your line is open.
Thanks very much.
Charlie I was I was wondering if we could just spend a minute on the mobile segment. Here. Obviously you cited some strong order growth, particularly around <unk> in your prepared remarks.
But when I look at that segment its come off that high from about the September quarter of year ago for 4 straight quarters, and just as I'm looking at the back half of the this year and into next do you expect that to get back to at least sequential growth I know, we faced some tough year over year comps, what should that mobile business start to grow as we see some of these.
First half orders start to actually come into revenue there or is that more of a 22 of that.
I think of lot of the open ran initiatives that we're working on as of 2022 initiatives. I mean, we obviously have 3 very large anchor customers for our <unk> mobile solutions.
We are hopeful that 1 of the larger tier ones here in North America. It kicks in in the second half of the year.
We've been I think conservative in forecasting that particular customer for the second half of the year on into next year, but what I will tell you is we are seeing a pretty significant.
Amount of momentum around open ran I don't know if you saw but I joined <unk> in the next G Alliance Executive Board.
Which AT&T and others are on that board is really focused on accelerating <unk> as well as the evolution of <unk>. So I think we're going to continue to invest in that area. We certainly see the momentum around open ran and we certainly are seeing opportunity for us around the world and I know you.
No this and appreciate it but.
When you make the decision to invest in tier ones. The sales cycle is a bit longer it's a bit more comprehensive but the the rewards are much greater in my view and so we are making the investments that are necessary in the tier ones. The process takes a little longer but we certainly are seeing.
<unk>.
Of the momentum that we want to see and look I mean.
I've been spending some quality time with Broadcom, which is 1 of our most strategic semicon.
Semiconductor partners for both fixed and mobile and some of the innovation that 2 companies are working on I think helps us differentiate our products.
And allows us to participate in that in both the fixed and mobile networks and a unique way as we go forward.
Got it and then maybe just a little bit on the.
The newly launched <unk> cloud just curious what kind of feedback you're seeing sort of to day again, maybe how we should think about that.
In 'twenty, 2 where again it by being a little too aggressive and it should be thinking about that more as the EBITDA of 23 contributors.
I'm glad that you brought that up because I think we could have done more to sort of highlight the excitement of momentum that we're seeing right now on Vcs cloud I mean, the ECS cloud for US is bifurcated into 2 sort of different segments, 1 on the mobile side. So.
So of specifically around network orchestration.
Application management, we call that <unk> slicing.
We did receive our first orders from Telus in July. So we were very excited about that and there is number of of.
Wireless initiatives that we're working on that side of the portfolio I think 1 of the exciting initiatives and 1 of the core investment thesis to acquiring rift was this unique ability for us to accelerate what we were doing already with ECS cloud to be able to bring to the market. What we believe will be the most robust.
Fixed wireline access orchestration service assurance data analytics portfolio from any fix.
The fixed wireline operator, and if you think about the fact that we've got 20 million products deployed around the world. There's this unique and significant opportunity for us to unlock the value. There. So the answer to your question I think it's a 2022 opportunity.
We see the back half of this year and really into the first half of next year as an opportunity for us to anchor a lot of those products into some of the networks that we're pursuing.
Great. Thank you very much.
It's part of it.
2 I think the question that was raised at the beginning by the Craig Hallum on margins I mean, when you think about our growth market.
When you think about our margin expansions into the second half of 'twenty 2 'twenty 3 I think that's where we see from CES cloud, making the big impact.
Thanks, Charlie.
Thank you.
Thank you. Our next question comes from Dave Kang with B Riley Your line is open.
Hi, Yes. Good morning, I was wondering if you can quantify on the supply chain impact on your.
Revenue and gross margin for second quarter, and what's baked into the third quarter outlook.
I think if you look at the missed these commentary and what's in the shareholder report Dave.
The attributed.
The supply chain to be about 500 basis points in the quarter.
Got it.
And then regarding your backlog, which was up quite nicely I was wondering if you can break out between broadband versus.
Mobile.
I don't I don't have that in front of me.
And I don't think we've ever broken out our backlog. So I've got people on the room shaking their heads. So I mean, I want to be careful and thoughtful about providing something that I haven't done that.
I mean to the extent that to the extent I would tell you roughly speaking because we did talk about that last week I want to say, it's about 50.50, but I'd have to I'd have to get back with you on that.
Got it.
And my last question is.
Regarding on going back to the supply chain situation I was wondering if you can raise prices in some of your peers are starting to do.
On the pass through some of the elevated costs you sound like 1 of my Board members.
Yes.
We have.
As long as I've been in this industry. The 1 thing that has been very difficult is raising prices to end users and having said that.
Thanks.
Being able to provide.
The software attributes and different.
Functionality to differentiate the products is obviously, the best way to be able to enhance margins.
Hard when you have contracts and we have a lot of.
Long term contracts that are in place for some of our tier 1 so it's a hard discussion.
It is something that we have been spending a lot of time discussing internally as you guys can appreciate I don't want to promise on.
Our shareholders and analysts that we're going to be able to.
The allowed an increase prices.
The delicate it's delicate.
The company that is in 1 particular area and you have nothing else to sell.
It might be an easier thing to do is specifically if you've got a lot of market share, but when youre trying to sell the portfolio of products.
It sometimes makes it challenging.
Got it thank you.
Thanks, David.
Thank you. Our next question comes from Ryan Koontz with Needham and company. Your line is open.
Okay. Thanks for the question more.
Most of mine have been answered maybe I can ask it a little different way Charlie how would you characterize the RFP activity in the tier ones and tier twos, obviously lots of tier 3 of bats are coming your way with the stimulus and subsidies but.
Are we starting to see on influx of ex U S pawn rfps yet the consolidated 1 obviously the results of that in the follow up there on consolidated of can we assume that your prime supplier there or the dominant supplier of the consolidated thank you.
The answer to the consolidated is yes.
I would tell you that.
The RFP activity.
Activity is dominated right now by 10 gig ex Gf's PON and.
Our software portfolio of our network orchestration products not that we're not receiving in pursuing a lot of the open ran I think the open ran market is at a different phase right. Now I think we're in we're engaged with numerous mobile operators from the network Orchestra.
Network architecture perspective that Hasnt moved from the network design and architecture to the RFP, but I would tell you that we're overwhelmed right now with RFP response of some of which we have had a hand in influencing those projects but.
Between North America, Latin America and in Europe.
We are we are reaching more RFP activity.
Since I've been here is I think the and the company has seen in a very very long time, if not ever.
Couple of thanks, Charlie.
Thank you.
Thank you and there are no other questions in the queue. This does conclude today's conference call. Thank you for participating you may now disconnect.
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