Q3 2022 Sanmina Corp Earnings Call
Yeah.
Good day and welcome to the San Mena Corporation 3rd quarter fiscal 2022 earnings conference call. All participants will be in a listen only mode. Should you need assistance, please signal confidence specialist by pressing star than zero. Today's presentation there will be an opportunity to ask questions.
To ask a question, you may press star then one on a touchstone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to paid mulching Senior Vice President of Investor Communications. Please go ahead.
Thank you, Matt. Good afternoon, ladies and gentlemen, and welcome to San Mena's third quarter, fiscal of 2022 earnings call. A copy of our press release and slide for today's discussion are available on our website at sanmena.com in the investor relations section. Joining me on today's call is Yuri Sola, Chairman and Chief Executive Officer. We're out to know. And Kurt Edzima, Executive Vice President and Chief Financial Officer. Good afternoon.
Before we begin with our prepared remarks, let me remind everyone that today's call is being webcasted and recorded and will be available on our website. You can follow along with our prepared remarks and our slides provided on our website.
Please turn to slide three of our presentation or the press release Safe Harbor statement. During this conference call, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution you that such statements are just projections. The company's actual results could differ materially from those projected in these statements as a result of a number of factors set forth in the company's annual and quarterly reports filed with the Securities and Exchange Commission.
The company is under no obligation to and expressly disclosed any such obligation to, update or alter any of the forward-looking statements made in this earnings release, their earnings presentation, the conference call or the investor relations section of our website, whether it's a result of new information, future events or otherwise, report by law.
Included in our press release and slides issue today, we have provided you with statements of operations for the quarter ended July 2, 2022 on a gap basis, as well as certain non- GAAP financial information. A reconciliation between the gap and non- GAAP financial information is also provided in the press release and slides posted on our website.
In general, our non-gap information excludes restructuring costs, acquisition and integration costs, non-cass, stock-based compensation expense, and other unusual or infrequent items.
Any comments we make on this call as they relate to the income statement measures will be directed at our non- GAAP financial results. Accordingly, unless otherwise stated in this conference call, when we refer to gross profit, gross margin, operating income, operating margin, taxes, net income, and earnings per share, we're referring to our non-gap information. I would now like to turn the call over to Yuri Fola. Thanks, Paige. Good afternoon, ladies and gentlemen. Welcome. Thank you all for being here with us today.
First, I would like to take this opportunity to recognize Samin, our leadership team, and our employees for managing successfully around material constraints and navigating around COVID challenges in our China operations.
So to you, Samina, thank you for delivering strong and consistent results for the third quarter. Let's keep it up. Let's keep it up.
For agenda we have that Kurt or CFL to review details of our results for you, I will follow up with additional comments about some of the results and the future goals and Kurt and I will open for question and answers. And now I would like to turn this call over to you Kurt.
Thanks, Yuri. Please turn to slide 5.
In the third quarter, our team once again did an outstanding job delivering strong revenue and profit growth as well as cash generation. And profit growth as well as cash generation.
Q3 revenue of 2.02 billion grew substantially by approximately 5.6% from the prior quarter and exceeded the high end of our outlook of 1.825 to 1.925 billion.
This is primarily due to strong customer demand and excellent coordination with suppliers and customers to help mitigate material challenges.
Non-GAP growth margin improved to 8.4% compared to 8.1% in the prior quarter, primarily due to higher revenues and a more favorable product mix.
Nogap operating margin was 5.5% compared to 5% in the prior quarter. This was primarily due to improved gross margins and operating expense leverage. This was primarily due to improved gross margins and operating expense leverage.
NAWGAP fully diluted earnings per share grew significantly by approximately 14.4% to $1.30 compared to $1.14 in the prior quarter and exceeded the upper end of the outlook range of $1.05 to $1.15 by 15 cents.
Finally, Q3 GAP fully diluted earnings per share with $1.29.
Please turn to slide six.
This slide shows the quarterly trends of our financial results.
We've delivered consistent financial performance over the last two years, despite the challenges associated with COVID and the supply contracts can change constraints.
non-GAAP gross margins have exceeded 8% for the last nine consecutive quarters.
In addition, non-GAAP operating margins have been 5% or higher for 7 of the last 8 quarters.
Now please turn to slide 7.
Q3 IMS revenue increased to $1.625 billion, an increase of 4.3% over the prior quarter.
This is primarily due to strong customer demand and excellent coordination by the supply chain and operations team in conjunction with our suppliers and customers to help mitigate these material challenges. The supply chain need to be adjusted in conjunction consulted with staff
non-GAAP gross margin for IMS improved to 7.3% compared to 7% in the prior quarter, primarily due to higher revenue levels and a more favorable product mix.
Components, products, and services revenue grew significantly to 428 million.
Non-Gap gross margin for CPS was relatively flat at 11.9%.
please turn to slide eight.
We have a very healthy balance sheet which provides us a competitive advantage for our company.
Caching cash equivalence was $493 million.
Between cash and the availability under the revolver or other debt facilities, we have approximately $1.3 billion of liquidity. There were no borrowings under our revolver at the end of Q3.
Cash generation continued to be strong at Q3.
Cash flow for operations was 102 million and free cash flow was 65 million.
Our strong balance sheet and cash flow generation allows the company to continue to be opportunistic as it repurchases shares and returns capital to shareholders.
During the third quarter we repurchased approximately 3.1 million shares.
bringing the total for the fiscal year through the end of Q3 to 7.4 million shares.
At the end of Q3, we had approximately 188 million remaining of share repurchase authorization.
Now please turn to slide nine.
Despite the higher levels of inventory, we were able to manage working capital such that cash cycle days remained relatively steady at approximately 56 days.
Non-GAP pre-tax ROIC continue to improve to 31.6%.
Now, please turn to slide 10.
Let's talk about the outlet for Q4.
Overall, customer demand remains strong, but there continues to be supply chain challenges.
We expect Q4 revenue to be in the range of 1.95 billion to 2.05 billion for the quarter.
We expect non-GAP gross margins in the range of 8.1 to 8.6% depending on product mix.
Nogap operating expenses in the range of 61 to 63 million and Nogap operating margin in the range of 5 to 5.6 percent.
We expect non-GAAP other expenses of approximately $8 to $9 million.
Nogap tax rate of approximately 17.5%.
Nogap fully deluded share accounts of approximately 61 million.
when you consider all of this guidance or outlook.
For our non-gap diluted earnings per share, for Q4 is expected to be in the range of $1.27 to $1.37.
I would note if we achieved the midpoint of our Q4 outlook for both revenue and non-gap EPS. The Q4 outlook for both revenue and non-gap EPS.
Fiscal 22 revenue will have increased over 14% compared to Fiscal 21 and Fiscal 22 non-gap EPS will have increased over 20% compared to FY21.
We expect Q3 cap.
Q4 CapEx to be approximately 45 million.
driven by growth of new programs and to support future growth.
We expect appreciation of around 30 million.
In summary, demand remains strong across our customer base.
We're a confident in our business model and expect the company to continue to deliver strong operating leverage and cash low generation over time. The company is a very strong operating leverage and we're a very strong operating leverage and we're a very strong operating leverage
And with that, I'll turn the call back over to Yuri.
Thank you Kurt. Ladies and gentlemen, let me make a few more comments about business environment in the third quarter.
I'll talk a little bit about outlook for the fourth quarter and how Semina...
is possession for the future.
from Kurt, Samina delivers strong and consistent results.
key drivers in the third quarter war.
Growth Quad broad-based driven by strong demand from all our end markets.
Reportment of our supply chain organization was excellent by working closely with our customers and suppliers.
Leetons for semi-component is still challenging, but we saw some nice improvements in the third quarter. But we saw some nice improvements in the third quarter.
and we had great operational execution by creating a right flexibility to build the products in a short cycle time.
Through operational flexibility and excellent operational execution, we're able to deliver critical requirements for our customers.
I can also tell you that our SAMINA team has done an outstanding job as we continue to differentiate our industry-leading capabilities by delivering competitive advantage to our customers.
Overall, we delivered nicer gunny growth, quarter over quarter growth of approximately 6% and year over year growth approximately 22 plus percent.
Now please turn to slide 12.
Let me give you some highlights of the revenue for the third quarter by end markets. As you can see on this slide, top 10 customers were 47.7% of our revenue.
Communication networks and cloud infrastructure will continue to see strength in this market segment, which was 40% of our revenue.
Quarter over, this segment, quarter over quarter grew approximately 6%, and year over year grew 14%.
Growth was driven by optical systems, 5G networks and cloud infrastructure.
Industrial, medical, defense and automotive was approximately 60% of our revenue.
The segment grew 5.5% for over quarter.
We see strong demand year over year growth of 27.2%.
is the result of our efforts to diversify in these segments as we win new programs.
Growth was driven by industrial, medical, defense, and armoring. We nicely saw a night's growth across all of these ski markets. We nicely saw a night's growth across all of these ski markets.
Let me tell you more about bookings.
The third quarter bookings continued to be strong. Book to Bill was 107 to 1.
I can also tell you that the pipeline, a new opportunity, is solid.
And overall, we have strong demands and solid backlog.
Please turn to slide 13.
Now let's talk about revenue outlook by Marcus Sagmas for a fourth quarter.
We see a strong demand cross all in market segments.
Semina has healthy back lock for a fourth quarter and beyond.
New project went, but rather in the growth.
Respect supply strength and supply constraints to continue.
and we expect to many successfully around Matilaya Kustrenci.
We're forecasting that 40% plus or minus of four-quarter revenue will be from communication networks and cloud infrastructure markets.
driven by optical systems, 5G networks, cloud networking, and enterprise storage systems. All of these segments we expect to move in the right direction.
We also forecast that approximately 60% of revenue for a poor poorer will be from industrial, medical, defense and other more of markets. Again, in this segment, we expect to move in a right direction.
As you can see, Semina does not serve consumer markets.
Our focus is on mission critical, high complexity, heavy regulated markets.
Please turn to slide 14.
For Fort Porter, again, we see nice, nice strong backlog, and we're forecasting approximately 195 to $2.00 billion for revenue. $2.00 billion for revenue.
We also expect revenue growth for a year to be around 14 plus percent.
For non-gap EPS outlook is 127 to 127, and for a year we expect non-gap EPS growth of approximately 20% percent. So the way I would conclude, this was a pretty good year for Salina.
Now let me talk to you about growth for fiscal year 23 and beyond.
Let's talk about inflation and potential recession. I know this is on everybody's mind.
But I want to just remind you of not economist.
But I do have strong foundation and experience how to manage through this environment.
As we all know, inflation is here.
And recession may be here already.
Samina's management point of view, we are running Samina under the assumption that recession is already here.
Most important, the mean is well positioned.
for any economic environment.
On the positive side, we're excited about Samina's future for a fiscal year 2023 and beyond. For a fiscal year 2023 and beyond.
We have been consistent and continue to focus on the profitable growth which is evident in our results despite the challenges of microeconomics backdrop.
We focus on things that we control, which is quality of our customer base.
building right partnerships by focusing on high complexity products.
We focus on quality of earnings, the growth of the earnings.
We focus on quarterly and yearly cash flow.
that gives us opportunity to invest in our future, that will drive the margin expansion.
And we are focused on maximizing shareholder value.
short term and a long term.
are they smooth?
2023 with respect to see nice improvement over fiscal year 2022.
Samina is in a great position. We have a strong balance sheet and we will continue to generate strong cash flow.
Samina has well diversified customer base in a high complexity and heavily regulated markets.
And we can expect to continue to diversify our end markets as we grow.
We are going into fiscal year 2023 with strong backlog and strong forecast from our key customers.
New projects will continue to drive the growth.
pipeline of new opportunities is exciting.
Let me tell you more about making investments for the future.
and how we are expanding our capabilities to support new winds.
for 5th year, 23 and beyond.
We're really focused on some key markets that have been successful for us, such as Medico.
Defend to our mode. We believe we have all positions.
And fair amount of opportunities are front of us that we believe that we will continue to drive the growth.
industrial and alternative energy, we're in a great position and some great opportunities to continue to expand.
In communication and cloud infrastructure we have strong positions.
So we have focused on a leading edge technologies here.
In these key focus markets, overall we are expanding into more practical projects by providing industry leading technical engineering solutions from R&D.
advanced components
Products and Integrated Manufacturing Services.
All of these opportunities in these key markets are translated into growth and margin expansion for Sabina in fiscal year 2043.
Also, I can tell you that...
Samina still has a lot of leverage in our business model. Please turn to slide 15.
Third quarter was a good quarter for us.
Breven you up 2.2 billion exceeding outlaw by 5.6% sequentially.
and approximately 22% year over year.
Non-gap operating margin of 5.5% and spending by 50 basis points.
Nungat diluted the P.S. of Dollar Tury, exceeding our outlook by 14.4% sequentially and approximately 31.7% year over year. And we generated a strong pre-cashable.
For a poor poor, the man remains strong as we said it. We continue to work through supply chain constraints.
and we'll be managing this pretty well.
We're forecasting solid revenue of 1.95 to 205 supported by strong backlogs.
and non-GAAP diluted EPS $1.27 to $1.27.
I can tell you, Samina is in excellent shape.
and we are well positioned to manage through this dynamic environment.
Now, ladies and gentlemen, I would like to thank you all for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you for your time and support.
I would like to thank you all for your time and support. Operator, we're now ready to open the lines for question and answers. Thank you all.
Thank you. We will now begin the question and answer session. To ask a question, you may press star then 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys.
If it any time you have your question that's been addressed to you and would like to withdraw your question, please press star them too.
At this time, we will pause momentarily to assemble our roster.
And our first question will come from Rupu, Batekarya, with Bank of America. Please go ahead. Hi, I'm Rupu. Hi, Yuri. Thank you for taking my questions. Maybe for the first one, I'd like to ask in the communications and market, can you help us rank order this trend you saw in networking versus optical versus wireless 5G? Which one was the strongest? Which one was weaker?
And then as you look into the fourth quarter, how do you see that playing out in the fourth quarter in terms of the relative strength of these end markets? Yeah, as I mentioned, I think that segment for us is a good position. I think we involve a lot of the leading-edge technology. So with the networking part, as you know, in that networking part, there's optical components and optical parts, they go both of those.
I would say that the networking was for us very strong, optical also very strong, all three segments that 5G was a good quarter. It was a good quarter for us. We do it nicely and we expect to continue to do the same thing.
And so you expect that trend to continue into the fourth quarter as well?
Well, we still, we could have shipped a lot more if we have that part. So, you know, we still, you know, challenge to get all the parts that we need. We expect to continue to get what we're looking for as we've been doing it. Hope, as I said, I think things are getting a little bit better. So hopefully we'll get more parts. But we're in a good position to continue to have a very strong ship and so there.
Let me ask you this. The second half of fiscal 22, when we look at the June quarter and the September quarter that you are guiding, those quarters had easier year-on-year compares on the revenue side. But when we look at the first half of 23, the December quarter and the March quarter, they have much – the year-on-year revenue compares become much tougher. So can you give us your thoughts on the first half of 23? What are the puts and takes that we need to keep in mind?
And how do you think about year-on-year revenue growth, first half of 22 versus first half of 23?
Yeah, I think first half of 23 is going to be pretty solid for us what we see today. As I said earlier, my prepared statement, Ruplu, we expect definitely 23 to be a stronger here for us. What I mean by death to grow more than what we did in 22 and also to, you know, an absolute dollar. I don't want to give percentages out there. Definitely, we expect to make more money in 23 than we did in 22. Amazingothe, amazing.
expect to have a good year.
But we'll take, you know, one quarter at a time. That's all I can tell you, but I know we'll have a good year.
Okay, I have a couple for a cart. If we look at inventory, it looks like inventory grew 11% sequentially, and it's up like 78% year on year. So just over the next couple of quarters, how do you see inventory trending given year forecasting revenue growth? How should we think about cash conversion cycle and free cash flow over the next couple of quarters?
Yeah, so as we've said.
I'm prior calls. I mean the main reason why inventory has gone up is that you know We've been buying parts in the hopes that we would get in some of these constraints Semiconductor or other constrained parts and therefore when they haven't come in as expected You know, we still have that inventory on hand. So I think in terms of How I expect inventory to play out you know my
Expectation is that it will still grow a little bit more in the next quarter or two, but the hope would be As the supply constraints start to become more manageable that inventory would level off and then candidly Ultimately decline to get back to and more normalized turns But I would say we're probably in for another quarter or two of of
high inventory and perhaps a little bit higher inventory. But that all depends on a bunch of variables that are hard to predict.
And maybe for my last one, can I ask you, the CPS segment gross margins declined, looks like 20 bits on sequentially higher revenues. What were some of the puts and takes in that segment? Maria, can you jump in?
Yeah, that's really just product mix. As you know, that segment is made up of a bunch of different businesses, components, products, and services. So I think just the mix, even though the revenue grew, the mix was slightly different that quarter. We still believe in that segment and we expect, as Yuri mentioned, there's a lot of operating leverage in that segment, so we expect those margins to increase over time, especially some of these supply constraints resolved. Yeah, if I can add to that, Rupul, I think if you look at where we are today, we did a lot of different things but when we move to the decentralized country, you know, the
Our next question will come from Jim Suva with City Group. Please go ahead.
Hello, Jim. Thank you. Good evening. Could both of you maybe comment a little bit on the operating margins. Very impressive here. Is it structurally? You think you could stay at these levels or is it you're getting a little bit of extra profitability due to higher component costs and expedited shipping to meet customers? I'm just going to want to dive into the sustainability of the operating margins and how impressive high they are.
Well Jim, let me start with that. I'll turn it over to my expert, let me see if we'll hear. First of all, we drive, we think our minimum margin should be five to six percent operating. You know, as we said that beginning of the year, we want to get over the five, which we did, and then I'll keep it in our outfits. So we'll be in the five to six somewhere, but we want to be to the high end of that, okay? So that's a goal. I think what's happening, a lot of these improvements that we're making are paying off.
Because of parts, not getting parts on a daily basis, our efficiencies are not that good today. We expect our efficiency to improve as the constraints ease up. So we expect to really drive the margin up. We also bring in projects, Jim, that are a lot better to drive the margins up. So we have higher goals than what we delivered this quarter.
But it's going to take us a year to get where we want to get, but we're moving in the right direction.
Yeah, Jim, I'd say it's a combination of a couple things. I mean, obviously, gross margin improved by roughly 30 basis points. That was a combination of higher revenue. So we got a little bit more leverage in the model. And also favorable product mix. But as Yuri pointed out, we've done in the past candidly better gross margins. And I think as we get more efficient as the supply chain gets more stable when we receive material.
due to higher revenue and better mix and then operating leverage, you know, relatively flat opex on higher revenue and that resulted in the 5.5. There's always going to be some variability quarter to quarter, but we think, as Yuri has said multiple times, that there's continued leverage in the model and so as revenue grows and as some of these inefficiencies caused by the supply chain lack of linearity, I'll say inside of a quarter, we should continue to be able to improve things.
And then as my follow up, how should we think about uses of cash flow? Obviously, best to fund the current business. But beyond that, how should we think about uses of cash flow? Are there any areas you want to get into or you're comfortable with that or geographic footprint? I know you have a global footprint. How should we think about your uses of cash that you could use in the future? All right, let me talk from a growth and margin expansion that I'll turn into a curve.
We believe we have competitive advantage, both technology and execution point of view. So we're adding capabilities there. Back to your first question, we want to change the model on this business. So I don't think it's acceptable anymore in this business to be at the 4% operating margin. I think it needs to move up in the 5 to 6 consistently and hopefully in the high end of 6.
So that's our next step. But, Kurt? Yeah, I mean, I think it's your reason. Our priority is organic growth.
And part of that organic growth is to continue to add to our capabilities and to the result of not only expanding our existing customer relations but also new programs that we take on. I think in general, we're very happy with our geographic footprint. We have one of the broadest geographic footprints in the industry, but that doesn't mean we won't continue to expand existing sites to take on additional growth. So I think our number one priority has been and will always be.
Thank you so much for the details.
Thank you so much for the details. Thank you.
Our next question will come from Christians Schwab with Craig Heatham Capital Group. Please go ahead.
Congratulations guys on another great quarter of execution and guidance. I just have a quick couple quick questions here with with the with the mindset that you're
running the company as if we're already in a recession. Can you talk to us about further clarity of visibility of bookings and backlogs and how many quarters does that extend? You're very optimistic. It sounds like for a continuation of top line revenue growth in fiscal year 23 over 22, is there any quantification you can put around that for us?
Yeah, I mean, as I mentioned in our prepare statement, demand today, we see a strong demand. We have strong backlog. Our customers still optimistic about the future. We have all position. We have a strong pipeline, a new winch that are coming up that should be shipping in 23. And you know, these shortages really hurt us. I mean, if we didn't have these shortages, we could have...
shift a lot more. So, you know, as that gets resolved, I think some of these new programs that we have should continue to drive. So, we've heard, you know, we're optimistic that 23 is going to be a solid year for us. What we see today, Christian, is that we think in absolute dollars, we're going to do more than we did this year. Definitely, I think we're in a position to make more money, because we know internally.
that we can do more than what we're doing today. So we tune in, internally, but I say, we're running like a session here. You know, you constantly, nature of this business is you have to tune things up on daily basis. So it's all about doing the right thing for your customer, listening to your customers, and executing. That's all it takes. And the company's an execute better will be able to make a little bit extra money. And that's how model right now and our components, products, and services, I think I'm moving the right direction.
And we're going to continue with the same model. I like what I see. I like our position. We've got a strong balance sheet. So no matter what happened with recession, this is not going to, with 2008, 2009, we had a lot of debt. We had a lot of moving parts. Today, we're strictly focusing today on execution and winning the business. We have strong balance sheet. So whatever happens with the economy, I believe Samina will perform for the wall against any of our competitors.
So that's why we optimistic what's in front of us. But again, we have to make sure we do our job on daily basis. But again, we have to make sure we do our job on daily basis.
Great. And then to the last question.
We're rooting back to the meaningful growth in inventory. That is your conviction, investors should probably interpret your conviction and backlog booking and said new program pipeline. As a reason why despite possibly already being in a recession, we have no problem building a bunch of inventory waiting for constrained parts because we don't really feel like there's little no risk of any pushouts or cancellations. So let's make sure we're better clear. We're in the...
we shipped them last quarter. So that's kind of what we are operating in. Another thing, as I said earlier, Christian, as you know, we are not in consumer market. I mean, I don't, I think our market for consumer is fraction of percent, if any. So I think the other businesses, I think, will go through. I don't think we're gonna have a severe recession, but I'm not an export. We're in a market that we...
Focus on I think there's a lot of resilience in those types of markets and you know, we have one of the leaders there Yeah, I just just one one clarification on that point So I think first of all the inventory that that grows that is component inventory, right? That's raw materials We're not building finished goods that are sitting on dock waiting to your ship that you add a semiconductor to as soon as it walks in Our cycle times are really short so it's really more raw materials or subassemblies not not finished goods
I think the second thing I would say is you said, well, it shows San Mita's confidence. I'd say it shows San Mita's confidence, but it also shows our customers confidence because at the end of the day, the inventory is driven by our customers forecast and at the end of the day, those customers are on the hook for that inventory. So I would say it's not just our confidence, I think it's our customers confidence. I think it's our customers confidence.
That's a good question. Yeah, that's wonderful. Thanks guys, that's it. Thank you. Operator, we have time for one more question, please.
Thank you. Our last question will come from Anja Soderstrom with Sidoti. Please go ahead.
Hello, Anya. Hi, thanks. Hi, thank you for taking my question and congratulations on another exceptional quarter. I'm just curious, it's just like what's holding you back is some specific components that you depend on to be able to assemble the inventory you have. So what do you see in terms of obtaining those components? Is anything specific that needs to happen or?
I think this is a lot of these components, you know, custom around semi-Anya and it's been, you know, same challenges for over a year. The same challenges for over a year. The same challenges for over a year.
I said earlier, I'm prepared statement, things are getting better. As you know, some of these components was ordered over a year ago. We get in our shares. I think we work very closely with our customers. We have a cool-shoe with our customer base. They have a lot, between our strength and their strength, we have a lot of connections with the component supplier. But we're going through the same challenges as everybody else around the world. That's what we're talking about.
You know, we believe that we're managing it pretty well. We expect to see improvement sometimes in 23 right now. If I have to guess, probably middle of 23. But I think for next couple quarters, I think we'll continue to see some of these shortages will continue.
Okay, thank you. And just the last one, I understand you have a pretty recession-proof end market that you serve, but is there any area of your end markets that you see some sort of slowdown or?
Not really, I mean we have a few parts that are built around the COVID, you know maybe some of those parts but that's a small percentage of our business but overall we are in a very strong position.
Okay, great. Thank you, that was all for me.
That's all. Well, ladies and gentlemen, personally I wanna thank you again for your time. Appreciate it. In this environment, we take one quarter at a time. We are excited what's in front of us. Now it's all about executing for another good quarter. So with that, thank you very much. We're looking forward to talking to you. And if any of you have any questions, please get back to us. Bye bye.
The conference has now concluded. Thank you for attending today's presentation. We may now disconnect.