Q3 2021 Shoals Technologies Group Inc Earnings Call
Good afternoon, everyone and welcome to the shows Technologies Group Q3, 2021 financial results Conference call.
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After today's presentation, there will be an opportunity to ask questions.
He's also know today's event is being recorded.
At this time I'd like to turn the conference call over to Megan piece, Chief Legal Officer Man. Please go ahead.
Thank you upgrade or and thank you everyone for joining us today.
In the car with me your CEO JC Whitaker Tfl's Telecard.
P S illustrations Jack Turner.
On this color management will be making projections or other forward looking statements based on current expectations and assumptions.
Which are subject to risks and uncertainties as you listen and consider these comments you should understand that these statements, including the guidance regarding the fourth quarter at 2021, and the first quarter of 2022 are not guarantees a performance or results.
Actual results could differ materially from my forward looking statements any of our assumptions are incorrect or because of other factors. These factors include among other things the risk factors described in our filings with the Securities and Exchange Commission as well as economic and market circumstances industry conditions company perform.
<unk> said kind of answered the results the COVID-19, pandemic supply chain disruption availability and price of our components and materials project cancellations decreased demand for our products and our policy and regulatory changes.
Lily may indicate and belief that the assumptions underlying forward looking statements are reasonable any of the assumptions could prove inaccurate or incorrect and therefore, there can be no assurance that the results contemplated in the forward looking statements will be realized.
We caution that any forward looking statement included in this discussion is made as of the date of this discussion and do not undertake any duty to update any forward looking statements.
Today's presentation also includes references to non-GAAP financial measures you should refer to the information contained in the company's third quarter press release for definitional information and reconciliation a historical non-GAAP measures to the comparable financial measures.
With that let me turn the call over to Jason.
Thank you very much Megan and good afternoon, everyone.
I'll start off with some highlights from a quarter provide an overview of our acquisition of can I T V and I'll wrap up with a progress report on our new E V business.
Bill will then provide the financial details from a quarter and then turn it back over to me for an update on our outlook for before and first quarters of 2022.
During the third quarter, we continued to successfully convert customers will be away.
We now have four times as many customers using our system as we did at the time of her up you earlier this year.
And we don't see our market share gains slowing down.
As of the end of the third quarter, we had 12 additional customers transitioning to our system.
I couldn't be more pleased with customer conversion and the number of new customer prospects coming into ourselves fall.
We have a lot more growth ahead of us.
And we also made good progress during the quarter outside of our bill white with new products or so.
As of the end of the quarter, we were sold out of our new water management solution.
And we're currently mind your fries during her first large order of our new I'll be curbed benchmarking problems.
Both of these products have gross margins at or above our overall system solution margins. So we're very excited about their growth.
The games, we received and be away as well as the ramp of our new products for solar was reflected in a record backlog and awarded orders of $270.7 million at the end of September.
To put that number in perspective, we now have over 30% more backlog and awarded orders then we generated in revenues over the past 12 months.
During the third quarter. We also completed our first acquisition connect D V.
And can actually V as a California based provider of solar and storage you boss products.
The acquisition accomplishes several things for shows.
First can I T V as a leader and a boss for utility scale battery energy storage systems, and their product lawn and expertise significantly strengthens our offerings for this rapidly growing market segment.
Connect T V was one of the first companies to introduce specialized E boss for battery storage and their products have been specified for some of the largest standalone storage project in the U S.
We're very excited about what we can do with their products, leveraging our customer relationships and manufacturing cost structure.
I should also mention that connect D. V has a very strong expertise and AC solutions, which is another area, we see an opportunity to introduce new products.
Second connect C V cells solar emails offerings to customers that we did not historically have relationships with.
Making connect see the part of shows will allow us to convert these customers to our system more rapidly and accelerate our market share gains.
Third.
Connect Phoebe had excellent engineering talent that will help support our growth.
The company's historical business model was to focus on more challenging projects or a significant amount of customization was required.
There are very skilled redesigning and specifying product.
Having your engineers on the West coast with our engineering team in Tennessee add to our capability with two teams across time zones, we have more hours in the day to work with customers.
The purchase price for connect D. V was a combination of cash and stock and was not material Tora financials. We.
We expect the transaction will be accretive to our 20 twenty-two earnings per share.
Now turning to R E V business.
During the third quarter, we deployed are full easy solution set <unk>.
<unk> charging stations cord Charger Raceway and E D B L. A.
At a demonstration site outside of our headquarters.
We are using the site to showcase our products were perspective customers.
We've begun taken orders from customers and today have received orders from a charging network operator, a large investor owned utility and then he'd be C.
For one or more of our easy charging products.
We expect to begin shipping products for our customers during the fourth quarter.
The first public charging station to use our solution will be installed in the end of this year and we expect that if it performs well it could become the basis for the roll out of hundreds more stations using our equipment.
We remain very focused on the easy charging opportunity and are excited about the prospect of creating a significant business and easy to complement our core solar business.
Oh now turn it over to feel we'll discuss our third quarter financial results.
Thank you Jason.
For the third quarter revenues increased 14% versus the prior year period to 59.8 million.
Driven by an increase in revenue from solar components as well as an increase in demand for solar E boss generally inner combined as you go system solutions specifically.
The strength and components revenue during the quarter was consistent with the expected change in mix driven by the addition of a significant number of new customers typically start with component purchases.
Sales of system solutions represented 65% of total revenue versus 70% in the prior year period.
The acquisition of connect P. B closed on August 26th and its contribution during the quarter was immaterial.
Prices across our product lines during the third quarter were comparable to the prior year.
Gross margin in the third quarter was 36.4% compared to 39.3% in the prior year period.
Due to a higher mix of components sales, which have lower margin been system solutions as well as the impact of connect P V. During the <unk>.
Gross margins on components and systems solution products were in line with prior periods.
Connect P vs historical gross margins are lower than chose historical gross margins, primarily due to the higher prices they pay for components used in their products.
This results from the smaller size relative to shows.
Excluding the impact of connect P V gross margins would've been hi, Linda <unk>.
We expect to bring connect P vs margins in line with Shoals average gross margin as we migrate them to our suppliers.
Third quarter General and administrative expenses were $10 million compared to 3.5 billion in the prior you Perry.
This increase was primarily a result of higher stock based compensation.
Acquisition related expenses for connect P V.
Planned increase payroll expense due to higher headcount to support our growth and product initiatives.
New public company costs, and non-recurring public offering an expense.
Adjusted EBITDA for the third quarter was $16.9 million compared to 19.9 million in the prior year period.
Adjusted net income was 11.6 million in the third quarter compared to 15.4 million in the prior year period.
Please see the adjusted EBITDA and adjusted net income reconciliation tables, and our third quarter press release for a bridge door GAAP results.
As of September 30th 2021, we had backlog and awarded orders of 270.7 million.
An increase of 101% year over year, and 35% versus June 30th 2021.
The increase in backlog and awarded orders reflects continued robust demand for shows products from our customers.
Thanks, though.
Now I'll provide an update on the current market environment and solar and how it is impacting our near term results.
The key challenge to our growth is the current supply chain environment.
Our business model has effectively insulated us for most of the margin pressure that many of our peers are experiencing as a result of rising commodity prices and the form factor of our products has limited the impact of shipping and logistics shortages on our business.
But unfortunately, our customers still have to contend with these issues as they progress their projects.
The result is very fluid delivery schedules with customers, making frequent changes both the product specifications and when they want the product on site.
Recently, some of our projects have been delayed to accommodate design update as a result of panel changes or because other materials are components needed are not available.
In both cases, the impact to us is to delay when we can produce and ship product.
Which will have the effect of shifting revenues that we expected to recognize in the fourth quarter of this year ended the first quarter of next.
Well, it's not our practice to provide quarterly gardens, we felt that was important to quantify for our shareholders. The impact on a result of the changes that our customers have made which is why we are providing our outlook for the next two quarters.
Bill will take you through the numbers, but before I turn to him I'd like to make three final points.
First this is truly a timing issue.
We have not had a single order cancel and candidly our primary focus right now is making sure we have the capacity to deliver on the tremendous demand that we're seeing across our business.
Second.
You're not seeing any pressure on our margins are.
Our lower gross profit margin in Q3 is solely related to mix.
We expected it and talked about it on our last call.
I feel very good about our ability to continue to expand our margins based upon the order book, we have in hand today.
Third this is a temporary situation.
We've seen an extraordinary amount of disruption in the global supply chains.
But it is clear to us that the market is slowly beginning to normalize.
Suppliers are adapting customers are adapting logistics providers are adapting.
This won't last forever.
And now I'll turn it back to fail to talk about the specifics of what we see for Q4 and Q1.
Based on what we are seeing in the market and feedback from our customers. We currently expect fourth quarter revenues to be in the range of 40 million to $50 million.
We expect adjusted EBITDA to be in the range of 11 to 15 million.
And adjusted net income to be in the range of 3 million to 7 million.
As for the first quarter of 2022.
We expect revenues to be in the range of 71 million to 76 Megan.
We expect adjusted EBITDA to be in the range of 22 million to 24 million.
And adjusted net income to be in the range of 14 million to 17 million.
While the mix of components sales is expected to remain high in the fourth quarter, which will reduce our gross margin mcwhorter weeks.
We expect that to reverse in the first quarter of 2022.
Consistent with our outlook for adjusted EBITDA.
Jason back to Ya.
I'd like to close by thanking all of our customers for their commitment to shows.
Our employees for their contributions to our company success and.
And our shareholders for their continuous support.
With that thank you everyone and I appreciate your time today.
I'd like to ask the operator to open alone for questions.
Ladies and gentlemen at this time will begin the question and answer session.
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Once again that is star and then one to ask a question will pause momentarily to assemble the roster.
Our first question today comes from Brian Lee from Goldman Sachs. Please go ahead with your question.
Hey, guys Uhm, thanks for taking the question.
And I appreciate you know the the additional guidance here.
I I guess you know one of the questions I had was was more around the the the gross margins uhm.
I know you had telegraphed at three Q the margins would would have in a mixed impact can you kind of top to what you're seeing on the cost side and supply chain side of things outside of mix and.
And whether or not any of that is impacting the view for those margins in in <unk> in into one Q and then I had to follow up.
Hey, Brian This is Joan he can get to talk to you again.
Yeah, I'll I'll take that question. So when you look at the margin profile first and foremost it is strictly a function of the make shift and product.
And you know as we talked about before you know, especially when you look at the success that our sales team was add and you know converting over customers to our full system B L. A.
When those customers are in the process of converting going from prospects in transition, it's not uncommon for those initial product offerings to also we fall into that component category, while we're working with them to transition them over.
Okay fair enough. So it's all it's all makes related and then I I think you mentioned connect P. V. It's it's immaterial here in the near term, but but it did impact margins in the quarter. Your margins would have been higher if if you had not made that acquisition any sense of.
What that magnitude of impact was on a basis point basis, and then is there gonna be some connect P V margin headwind in the next couple of quarters. When do we start to see that maybe become more in line with the corporate average as your as your targeting.
Hey, Brian by Brian All up I can add that.
Go ahead. So please go ahead, okay, Brian that was it was approximately 100 basis points.
We will we were working through their suppliers are are much higher cost.
But we are transitioning those to our own suppliers.
The impact course, there'll be a little bit there'll be some impact in queue for and rolling into Q1, but once again. There overall sales are are immaterial and we're we're integrating them into the shoals manufacturing process quickly now and so it'll be mitigated.
Hopefully completely as we get through the first quarter.
Okay fair enough isn't it maybe last one for me and I'll pass it on on the.
The timing here of of the of the revenue I know, you're saying, Jason and fill that you haven't seen any uhm orders be cancelled.
And I know the the key one guiding to supposed to give us some sense of you know what slipping from the end of this year into the early part of next year. It would seem that they're still maybe you know 10 or $15 million of revenue that isn't getting captured across the two quarters that maybe you know.
We we had been anticipating so is is all of the queue for pushout being captured in Q1 or are we going to see some of that slip into the.
And the quarters following it and just <unk>, how would you kind of characterize your ability to capture the risk of additional project slippage as we move through you know the next several quarters not not just into the early part of 22. Thanks guys.
Yeah, no problem, Brian So uhm, you'll I'll take that so looking at where we are first of all I'd like to point out that your customer demand is very strong you know when you go back and look at our prepared remarks quoting activity. An average project size were up over 140% 170 per cent, respectively, and when you consider our backlog an award orders up over 100%.
And 70% related to your in 2020, you know there's a lot of opportunity ahead.
But when you look at queue for a rolling into Q1, you know we have a uniquely high level of demand booked for Q1, even aside from the queue for Bush house. So we're extremely comfortable with our particular forecast and we've actually included potential for incremental industry headwinds and those particular numbers.
Okay. Thanks, guys pass it on.
Thanks, Ron.
Our next question question comes from calling Rush from Oppenheimer. Please go ahead with your question.
Thanks, So much guys you know with wage inflation at the at the Labour level I'm just projects and you're on inflation have you guys looked at you know where your your relative value as in terms of labor savings and your person sorry to hear us or an opportunity for you to start increasing some prices as you displace more I, possibly ever.
Yeah. That's a great question call them, you know, especially when you consider our full system solution offering abroad. You know one of the key aspects is you know being able to provide real value with are offering in the form of savings and labor not only the classification of liver, but the amount of labor. So we're we're constantly evaluating that but keep in mind when you look.
<unk> and where we are at this point in time, we're really focusing all growth. So you know from a project perspective, we're keeping our pricing and lawn from that particular standpoint.
[noise] Alright, and then you know just in terms of some of the the smaller elements of of the the design that you guys have no can you talk a little bit about the potential that just diversify suppliers you know for with some of those cones around the around the wires are some of the the clip systems. You know certainly we're seeing in charges a basic materials not just on medals, but.
All over the supply chain, but I just want to understand you know how the person resilience <unk> get your full supply chain to serve a a global global customer base.
Yeah I'll call them Great question. So you know we have a vast Ivy L. A approved vendor list that that we operate from and you know one of the things that were constantly doing this we're constantly adding to that particular list itself.
To be able to make sure there's something were to happen with one particular supplier. We can immediately pivot over to another so that is something that we've been working on since day. One many many many years ago, we continue to build that overtime.
Okay I'll take the rest are fine thanks, guys.
Thanks for calling.
Our next question comes from Kashi Harrison from Simmons Energy. Please go ahead with your question.
Good afternoon, guys and thank you for taking the questions.
Uhm, Jason you you indicated that you expect a delivery schedule soon eventually normalize in in your prepared remarks, you said, you're actually already seen supply chains beginning to adjust can you go into you know maybe a little bit more detail on what do you mean by that where are you seeing improvements in the supply chain and then when do you expect things.
To you know.
Maybe get a little bit closer back to normal.
Oh, that's a great question. So you know, it's definitely hard to predict the exact timing, but when you take a look at the you know the raw material inputs. It come into our facilities. You know we are starting to see those normalize and you know based upon again you know the avs that we've actually built up.
We're actually utilizing and going out and supporting more of those particular abl's with additional orders to be able to derisked the supply chain itself, but I I think the the key thing is is working closely with your vendors themselves to make sure. They understand what the actual expectations are so that they can make their changes based upon any of the of the inputs from my <unk>.
Logistics perspective, if it takes so let's just say five days longer to get somewhere you know be able to make those changes accordingly. So that you can counteract that and actually received the material when you need it so that ultimately we can make our commitment star customers.
And what about from your customers perspective are you are you seem them.
Or are they now able to get more components than before have they are are there are they starting to readjust or did you was that payment more in reference to inputs into your manufacturing capabilities.
Yeah, it's really hard to speak to all the exact you know items from a customer perspective, we were mainly just thinking more to you know our particular inputs in general.
Got it makes sense and then my next question you know you're the backlog Uhm, you know increased 35% a quarter over quarter in the Empire bookings and growth <unk>, you know, what even pie growth in bookings was quite pronounced.
<unk> is is the increase just coming from you know these customers there you've been able to add or is there something else going on that's driving such a meaningful increase quarter over quarter and booking and bookings in backlog and then how should we think about converting that back log into revenue over the next several quarters or in the next several years. Thank you.
[noise] Oh, that's a great question when you when you take a look at the you know the contribution to backlog, it's really a function of several different things one of which you pointed out obviously you know customers that are coming on board you know as well as you know supporting customers that we've been working with but also as we begin to win more of that particular pipeline from most customers that.
Also was very accretive you know to our backlog an award orders and when you look at the you know the timing of our particular backlog an award orders. It it's very similar to what we've talked about in the past you know you're looking at roughly give or take you know about 12 months window, you know nine to 12 months that we actually cover from that perspective.
Some you know some particular projects my you know my actually span farther than that but that's a good you know rough average on all went backlog looks like.
[noise] helpful. Thank you.
Our next question comes from Mark straw from J P. Morgan. Please go ahead with your question.
Yeah. Good afternoon, thanks for taking our questions. Jason can you just comment about how kind of widely distributed the the project timing issues are these just to a handful of larger projects that are causing kind of <unk>. This near term air bubble or is it a broader issue.
You know, there's there's actually you know several projects you know larger projects that are out there you know and I think a good example here Mark is you know when you take a look at you know a particular panel manufacturer and let's say that one of our customer shifts from panel manufacturer eight a panel manufacturer.
<unk>. So it's the same form factor signed power levels. You know just a simple shift like that could ultimately put us into a redesign that could cause project delays if for no. Other reason than the connector type itself because we have to actually follow the connectors that are included with the panels themselves, but you know a large portion of what we're seeing.
It's a group of several projects that are out there and a few of them are are fairly large projects.
Okay and can you remind me at least it what kind of the the contract language is as far as who's responsible for those the expenses associated with those change orders I mean, if if you've already produced product and it it's ready to go out the door and then you get a last minute change.
Is the customer bearing that cost.
Oh, Yeah. That's correct that you know when you look at you know a couple of different things to point out uhm whenever there is a change too on a particular project to change orders associated with that and the customer is responsible for that.
One other thing I also want to point out you know based upon a margin perspective. If for example that change itself requires additional you know raw material inputs like copper itself that change order will also be reflective based upon the current comex price not the comex fries that was actually utilized at the initial.
Receive a bill.
Okay I've got it thank you.
Our next question comes from Phyllis <unk> from Roth Capital Partners. Please go ahead with your question.
Hey, guys. Thanks for taking my questions the.
The first one is on 2022 I know you haven't provided official guidance, but.
Mmm, thank back to your view of 2022 revenue and EBITDA.
From your I P O and then think about it now so.
What we've seen since then is.
Celebrating of growth.
Offset in part by these project delays and change orders.
So you think you think about the delta between what you saw you know a year and a half go versus we've seen now are you incrementally more positive on your 20 twenty-two outlook or incrementally more concerned.
Yeah. That's a great question feel so you know I can't specifically.
Talk about 20 2020 twenty-two outlook in general you know, we're only offering up information for Q4 and Q1 is you know, but one thing that I can tell you is I've never been more excited than what we've been able to accomplish specifically in solar as well as the other areas that have been today and you can see that as a direct reflect.
When you look at the number of customers that we've converted over the number of prospects that we've added in and obviously the demand that we're getting as you can see reflected in our backlog an award orders and the number of projects that recording.
Okay, great. Thank you, Jason and then as it relates to the upcoming reconciliation Bill you know, there's the prevailing wage requirements to hit the 30 per cent I T C.
When you think about the.
Change potentially in the labor pool for your customers what I've heard is that you guys might be able to.
Help reduce the labor because you've reduced the labor in the field they are actually might be more demand for your <unk>. Your.
Products and so forth, but wanted to understand if you have if you can share your view on how that new potential requirements and the I T. C for 30% may impact your visits.
Yeah, Bill. So you know when you look at the prevailing wage requirement not you know based upon the extension or <unk>. The current at D. C.
It definitely helps right because when you look at it labor itself, you know and the costs profile of labor.
You know whether it is you know general labor a licensed electrician in a prevailing wage or non prevailing wage anything that we can do to change that classification down significantly.
Significantly provides value to our customers themselves. So I think in that particular case, it'll provide even more additional value.
Okay, great. Thanks, and then one last one if you if I may as it relates to connect T V. Just.
In the past hour or so I've done a few checks on the company and it seems like they may also offer a traditional you boss Oh. So it was one and that they're offering might be you know more labor intensive than you're offering. So was wondering if you might be able to give us a little more color on the rationale beyond just.
Energy storage and and then you know it was part of it for example to acquire a customer base or you know something along those lines or is there something that we might be missing that might be useful to understand thanks.
Oh, that's a good question so really when you look at the overlap feel you know that that traditional evolves offering that we manufacture that they also manufacture there is overlap there.
That that's definitely not where the value is between the company the value really comes in and a lot of other synergies. When you look at the teams they've assimilated you know they have a lot of respect her and and the actual industry that we serve they have you know phenomenal products from an energy storage perspective.
And as we've talked about and are prepared remarks, you know there's also you know customers that they started that we don't so being able to you know merge the teams together to be able to you know continue to support you know the industry. Both from a P V. In a storage perspective with the combined product offerings that we have we will definitely be will definitely provide me.
Incremental value for our organization.
Great. Thanks for the colors.
Our next question comes from Joseph Osha from J M. P. Security. Please go ahead with your question.
Hi, and thanks, just for the record I'm with with Guggenheim now Hello, everybody.
Yeah.
How's it going Joseph Hello.
Just fine. Thanks, a couple of questions first day I know you said that the the run right on connect Phoebe was was the minimum but are you able to give us some sense as to how much. The Q1 outlook reflects your contribution from from that company or should we not be thinking that way.
Well you know I think first of all you know great question, you know I want a further reiterate you know just like we've talked about I'm very excited about that.
The combined forces of connect me van shows, but when you look at that for at outlook, we've already begun integrating our our operations together. So that we can leverage our collective capacity with existing orders that we have but if you take a look at the contribution you also got it it was definitely immaterial.
Okay, great. Thanks, and then the second let your your comment about people are respecting things is is really go are you interesting. So I've kind of got to two step questions. The first I would think I'm, calling kind of alluded to this if you're looking to take cost out or are you seeing people come back to you and say hey, we.
Want to do are you a complete be away or you know as opposed to just a component sale in an effort to get some of that maybe get some of the labor labor cost out and then the second question is you Wanna pay all from <unk>.
When people are are doing that I I would think that that that would tend to be the thing that that ended up having to push project. So as you know when you're seeing people talk about southern panel suppliers out I I assume that also is gonna is pushing the project by a quarter or two.
Yeah. So you know great questions, maybe I'll take these in reverse order. So when you talk about the panel supply itself.
You know when you look at Tom and you know obviously the timing that you know when there is a particular I potential delay you know it really varies depending upon what that delight looks like if a customer is actually making a a module change and they're going from one technology to another you know that delay it could be further out and there are some instances where you know a panel change itself is.
Made and doesn't have any delay because you know the product offering just rolls right in so there's really a combination and it would be very hard to quantify the exact delay depending upon you know the changes that are made.
And when you look specifically at BLA itself, I mean, you're you're spot on I mean that that is the exact proposition you know the bill like brings when you look at the the amount of savings that we get I'm kind of pointing back to something we've talked about you know him. Prior conversations is you're you're looking at you know just customers report an average of 40 per cent safe.
He's on labor, which is a remarkable amount when you look at the at the process itself.
Makes sense. Thanks, thanks very much.
Thank you Joseph.
Our next question comes from <unk> from Barclays. Please go ahead with your question Hi.
Hi, Thanks for taking my question just go back to connect T V. In the margins if I heard correctly. There was about 100 basis point impact on this quarter's margin from connect P V. But also immaterial sales so.
Is there something in there that affected Cogs from connect P. B R that negative margin, how do we sort of bridge those two points.
Yeah. This is phillip no they're not it made negative margins they contribute positively to the the bottom line, though minimally their cost struck he just different than ours and a lot of their work was so is subcontracted out of a previously was and we're working to bring that in.
In in the house and.
There were minimal margins and but we are quickly going to be transitioning them to are much better cost structure, and we expect their products to be contributing approximately our margins or the the shoals margins going forward in their products, so it'll be it'll be accretive to the business.
Got it got it thanks, and I think it was mentioned that some stock was issued how much that was issued to connect T V.
Yeah to me it was.
209437 chairs.
Perfect Perfect and then just one last one for me the <unk> the make shift to components from systems affecting three two and four Q anything that was specifically discreet in there. So other than the effect of someone E. P. C transitions and some of the the mix. It spot initially is there perhaps one big contract and they're just thinking you know it extended for me.
More than a quarter uhm, so just trying to get a sense of.
You know how that sort of happened and then how we shipped back to a greater percentage from systems.
No. That's a great question I'm getting kind of pointing out the make shift in Q3 with something you know that we saw we talked about and my last call and obviously you know we see that makes you you know continuing into the queue for.
Kind of as we've talked about before it's not necessarily just a contribution from one particular project. There were you know a small handful of projects that actually did shipped out.
You know that actually took that higher margin contribution with it for mobile I perspective.
Got it thank you.
And ladies and gentlemen that will conclude today's question and answer session and I'd like to turn the conference call back over to show C O Jason Whitaker for closing remarks.
I appreciate everybody's time today and look forward to having a future conversations. Thank you very much.
Ladies and gentlemen that does conclude today's conference call and presentation. We thank you very much for joining you may now disconnect your lines.