Q4 2022 inTest Corp Earnings Call
Speaker 1: P the.
Speaker 2: Greetings and welcome to the Intest Corporation 4th quarter 2022 financial results. At this time, all participants are in no listen only mode. A question and answer session will follow the formal presentation. If anyone who require operator assistance during the conference, please press star zero on your telephone keypad.
Speaker 2: As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Sean Sothard, Invest Relations for Intus Corporation. Thank you. You may begin.
Speaker 3: Thank you. Good morning, everyone. We appreciate you joining the call today and your interest in the provides
Speaker 3: Here with me are Nick Grant, our President and CEO , and Duncan Gilmore, our Chief Financial Officer and Treasurer.
Speaker 3: You should have a copy of the fourth quarter 2022 financial results, which we released earlier this morning. If not, you can access the release as well as the slides that will accompany our conversation on our website at ir.intest.com.
Speaker 3: After our presentation, we will open the lines for Q&A.
Speaker 3: If you turn to slide two, I'll review the Safe Harbor Statement.
Speaker 3: You should be aware that we may make some forward-looking statements during the formal discussions as well as during the Q&A session.
Speaker 3: These statements apply to future events that are subject to risks and uncertainties, as well as other factors that could cause actual results to differ materially from what is stated here today.
Speaker 3: These risks and uncertainties and other factors are provided in the earnings release as well as in other documents filed by the company with the Securities and Exchange Commission.
Speaker 3: These documents can be found on our website or at scc.gov.
Speaker 3: During today's call, we will also discuss some non-GAAP financial measures.
Speaker 3: We believe these will be useful in evaluating our performance. You should not consider the presentation of this additional information in isolation or as a substitute for results prepared in accordance with GAAP.
Speaker 3: We have provided reconciliation of non-GAAP measures with comparable GAAP measures in the tables that accompany today's release and slides.
Speaker 3: With that, please turn to slide three and I'll turn it over to Nick to begin. Nick?
Speaker 4: Thank you, Sean, and good morning, everyone. Thanks for joining us for our fourth quarter 2022 earnings call.
Speaker 4: I plan to provide some high-level remarks for you, then I'll hand it off to Duncan to speak to the specific results of the quarter and full year.
Speaker 4: Once he's finished, he'll hand it back to me to speak to our orders and backlog, and our expectations and goals for 2023 and beyond.
Speaker 4: Then we'll take your questions and I'll wrap up with a few closing remarks.
Speaker 4: Let me start by saying I'm extremely pleased with the results we were able to achieve in 2022.
Speaker 4: I want to acknowledge the outstanding efforts of our employees across the globe.
Speaker 4: Solid execution of our five-point strategy by our results-driven team delivered record performance in 2022, including orders, backlog, and revenue.
Speaker 4: Revenue and orders for the quarter and the year were also in line with our previously announced preliminary results.
Speaker 4: Our fourth quarter revenue surpassed 32 million, up 45 percent, and our full year revenue was approximately 117 million, up 38 percent versus the prior year.
Speaker 4: These results include a full year of the impact of the acquisitions we made in 2021 and integrated in 2022, including North Sciences, formerly Z Sciences, and Videology, both acquired in October 2021, and Archaeologic, which was acquired in December 2021.
Speaker 4: Going forward, these operations will be fully accounted for as part of our organic revenue.
Speaker 4: Our organic revenue grew a very healthy 28% in the fourth quarter and 17% for the full year.
Speaker 4: Fourth quarter orders of 31 million increased 3%, while our full year 2022 orders of 130 million increased 27% versus the prior year. With strong demand and semiconductor automotive, including electric vehicles or EVs, Defense Aerospace powered vehicles are now starting to change, resulting in low magnitudes of deaths during the service lifetimes.
Speaker 4: and life sciences.
Speaker 4: Additionally, our backlog at the end of the fourth quarter remains strong at 47 million.
Speaker 4: By expanding our addressable markets, building out our sales channels, building our talent and staffing, and driving innovation with new products, we've successfully expanded our geographic reach, widened our customer base, and grew our target market offerings and positions.
Speaker 4: Further demonstrating the success of our strategy, we integrated the three acquisitions that added new technologies and deepened our presence in our target markets.
Speaker 4: Oracle with the five point strategy is to accelerate growth while diversifying the business.
Speaker 4: To remind everyone, the elements of our strategy are global and market expansion, innovation and differentiation, service and support, talent and culture, and strategic acquisitions and partnerships. We need one moreCON vocalYES
Speaker 4: As a result of the investments and focus we've made in these areas to expand our customer base and increase channel partners, we were able to capture organic revenue growth across all markets last year. This growth was fueled both by in-market demand for our highly engineered technology solutions.
Speaker 4: as well as the impact of the acquisitions. With that, let me turn it over to Duncan to review the financials in more detail.
Speaker 4: acquisitions. With that, let me turn it over to Duncan to review the financials in more detail. Duncan, over to you.
Speaker 5: Thank you, Nick.
Speaker 5: Starting on slide 4, revenue for the fourth quarter 2022 was 32.4 million, up 45% or 10 million versus the same period last year and at the top end of our guidance range of 30 to 32 million. This revenue growth of 10 million comprised 3.7
Speaker 5: contributing to growth in all our target markets. Silicon Carbide growth applications along with test solutions for analog and mixed signal applications drove semi sales to $19.5 million up 58% year-over-year.
Speaker 5: Demand for both our existing and acquired technologies grew in the defense aero market, while our acquisitions were the main contributor to growth in the security, auto EV and life sciences markets.
Speaker 5: And this broadening contribution is indicative of the company's strategy to diversify and expand revenue with new customers and from new markets.
Speaker 5: Moving to slide 5, gross margin of 46.2% in the quarter was very similar to the prior year Q4 period.
Speaker 5: Compared with the trailing quarter, gross margin improved 100 basis points, reflecting higher volume and beneficial shifts in product mix.
Speaker 5: Supply chain and logistics challenges are abating somewhat or more realistically are becoming a normalized part of our business.
Speaker 5: Our teams have continued to adapt admirably through these challenging times.
Speaker 5: As you can see on slide six, our operating expenses were relatively consistent with our trailing third quarter and down 110 basis points as a percentage of revenue.
Speaker 5: driven by operating leverage as the business scales.
Speaker 5: As a percentage of revenue operating expenses declined more than a thousand basis points from the prior year period.
Speaker 5: Note that last year's fourth quarter included 1.3 million in transaction costs related to acquisitions and financing.
Speaker 5: The 0.9 million total increase over the prior year period includes the incremental operating expenses from acquired businesses, which added approximately 1.9 million.
Speaker 5: We also invested in sales and marketing and engineering as we executed on our strategy to drive growth.
Speaker 5: pre-tax intangible asset amortization was down 43,000 from the third quarter.
Speaker 5: Turning to slide 7, you can see our bottom line and adjusted EVA to results.
Speaker 5: We had net earnings of 3.2 million or 30 cents diluted share for the fourth quarter.
Speaker 5: On an adjusted basis non-GAAP EPS was 34 cents per share compared with 28 cents per share in the third quarter.
Speaker 5: Adjusted EPS reflects adding back tax-affected acquired intangible amortization.
Speaker 5: On an after-tax basis, acquired intangible amortization amounted to $463,000 in the fourth quarter.
Speaker 5: We expect after-tax intangible amortization for the first quarter to decline slightly to approximately 450,000.
Speaker 5: Adjusted EBITDA, which excludes stock-based compensation, was 5.3 million, a nice improvement over both the prior year and trailing quarters.
Speaker 5: Slide 8 shows our capital structure and cash flow. After the 25 million increase in our term loan facility at the end of Q3, we ended the year with 30 million available under this facility.
Speaker 5: We also have the full 10 million available under our working capital revolver.
Speaker 5: We believe we are effectively leveraging the balance sheet to achieve our goals and have the financial flexibility to continue executing on our five-point strategy for growth.
Speaker 5: We continue to balance that with our objective to maintain a total debt to adjusted EBITDA ratio under 2.5X.
Speaker 5: As you can see on the slide, our current leverage ratio is just 1x.
Speaker 5: giving us considerable flexibility to continue to pursue our acquisition strategy.
Speaker 5: Our cash and equivalents at the end of the fourth quarter were 13.4 million. We also have 1.1 million in restricted cash related to a prepayment on a customer order.
Speaker 5: As we did in the prior two quarters, we repaid $1 million of debt bringing it down to $16.1 million.
Speaker 5: Note that repayment of debt does not increase funding available under the terms of our term loan facility.
Speaker 5: While for the year we used cash from operations to fund both growth and build inventory to address supply chain shortages, we have in the last two quarters been converting more earnings to cash and generated 2.3 million in cash from operations.
Speaker 5: in the fourth quarter and $3.7 million in the second half of 2022. As we go forward, we expect we will continue to generate positive cash flow from operations.
Speaker 5: Capital expenditures during the year were $1.4 million, up from about $1 million in 2021.
Speaker 5: Our capex requirements continue to be planned at about 1 to 2 percent of revenue.
Speaker 5: With that, if you will turn to slide 9, I will now turn the call back over to Nick.
Speaker 4: Thanks Duncan. As previously mentioned, our fourth quarter orders were 31 million and increased 3% versus the prior year.
Speaker 4: This reflected increases across all end markets except in semi.
Speaker 4: Our orders to the semi-market decline $6.6 million compared with last year's fourth quarter. But I'll remind you that last year's fourth quarter benefited from a record of approximately $10 million order for our induction heating solutions serving Silicon Carbide crystal growth.
Speaker 4: Sequentially, our orders declined 4% driven by the timing of orders for semi and automotive EV markets. This was partially offset by increased orders for the life sciences, security, and other Depression's rise in supply, which is the whipping transmittal tower supply.
Speaker 4: Our backlog at the end of the year was approximately 47 million, up 37 percent versus the prior year. Our backlog declined sequentially about 2 percent as supply chain constraints moderated, enabling us to increase shipments to better meet customer demand.
Speaker 4: Approximately 45% of the backlog is expected to ship beyond the first quarter of 2023.
Speaker 4: Now I'd like to speak to our outlook for the 1st quarter of 2023 and our full year 2023 expectations on slide 10. As we enter 2023, we're excited about where we're headed.
Speaker 4: While the quarterly cadence of orders may be a bit lumpy,
Speaker 4: we are confident that we can achieve our revenue target, which represents high single-digit organic growth.
Speaker 4: In fact, this is despite the variability that we expect in our backend semi-market.
Speaker 4: Encouragingly, our customers in this base are indicating they continue to see positive secular growth trends over the long term.
Speaker 4: In addition, we continue to pursue strategic acquisitions and partnerships to expand our portfolio and better serve our target markets.
Speaker 4: We expect revenue for the first quarter of 2023 to be in the range of 30 to 32 million, with a gross margin of approximately 45%.
Speaker 4: First quarter operating expenses, including amortization, should run between $11.1 million and $11.3 million.
Speaker 4: Intangible asset amortization is expected to be approximately $540,000 pre-tax or $450,000 after-tax.
Speaker 4: Given loan balances and current rates, our interest expense should be approximately 190,000 for the quarter.
Speaker 4: We anticipate first quarter 2023 EPS to be in the range of 21 to 26 cents.
Speaker 4: while adjusted EPS should be in the range of 25 to 30 cents.
Speaker 4: As a reminder, we simply adjust for tax-affected amortization expense.
Speaker 4: We expect our high single-digit growth this year to be driven by strong demand across nearly all technology offerings and in markets.
Speaker 4: Customers' demand for our products in the automotive EV, defense aerospace, and life sciences industries has been strengthening where we have broadened our exposure through acquisitions. information on both devices at denim-ism.com.
Speaker 4: Additionally, demand for our front-end semi-applications around silicon carbide crystal growth remains robust.
Speaker 4: We do expect our backend semis to moderate in the second half of the year.
Speaker 4: Revenue for the full year 2023 is expected to range from $125 to $130 million.
Speaker 4: This does not include the potential impact from any additional acquisitions we may make. Our gross margin in 2023 is expected to be consistent with 2022, or about 45 to 46%.
Speaker 4: Operating expenses should be in the range of $44 to $46 million.
Speaker 4: This includes an intangible asset amortization expense of approximately $2.1 million for the full year.
Speaker 4: This translates to a tax-adjusted amortization expense of approximately $1.7 million for determining adjusted earnings.
Speaker 4: Our effective tax rate is expected to be similar to 2022, or approximately 16 to 17%.
Speaker 4: Finally, as Duncan mentioned, our capital expenditures for 2023 are expected to continue to run between 1-2% sales.
Speaker 4: Slide 11 highlights our revenue growth goals for 2025 that were outlined during our 2022 investor day.
Speaker 4: This demonstrates the success we are having against our plan.
Speaker 4: Based on our 2023 revenue expectations of $125 to $130 million, we will have grown the company at a greater than 30% CAGR since we implemented our five-point strategy.
Speaker 4: We expect to continue to drive single high-digit organic growth, coupled with strategic acquisitions, enabling us to achieve our 2025 goal of between $200 and $250 million in revenue.
Speaker 4: This includes targets for additional acquisitions we may make in between now and then.
Speaker 4: Acquisitions are an important element of our long-term strategy. We have an active pipeline of opportunities and we have the flexibility with our capital structure that we believe will allow us to execute on our plan.
Speaker 4: If you'll turn to slide 12, given our expectations for top-line growth, we believe we can drive meaningful earnings and cash generation as we scale.
Speaker 4: We believe our plan positions us to deliver divisional operating income of 40 plus million, adjusted EBITDA of approximately 30 plus million.
Speaker 4: and improve our earnings power to approximately 20 plus million all by 2025.
Speaker 4: Let me sum up on slide 13.
Speaker 4: As I have noted, our five-point strategy is delivering results for our shareholders. Our engineered solutions that enable our customers to improve productivity or create more effective solutions themselves are in high demand.
Speaker 4: Our growing sales force is reaching more prospects and our new organization structure with the three technology-focused business segments has driven greater collaboration across the company.
Speaker 4: This in turn creates even more opportunities for growth.
Speaker 4: We believe we are unlocking the potential of NTS through our five point strategy by driving discipline, accountability, and process improvements throughout the company.
Speaker 4: We believe we are unlocking the potential of N-TESS through our five-point strategy by driving discipline, accountability, and process improvements throughout the company. These are certainly exciting times for us.
Speaker 2: With that operator, let's open the line for questions. Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad.
Speaker 2: A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. We ask that you each keep to one question and one follow-up. Thank you.
Speaker 4: Our first question comes from the line of Jason Schmidt with Lake Street Capital Markets. Please proceed with your question. Hey guys, thanks for taking my questions and congrats on a strong finish to the year and really strong outlook. I know when you prepared your marks you mentioned that you expect growth across all your segments.
Speaker 4: We do anticipate our technology divisions will drive growth in 2023 here. You know, different product platforms serving different markets, you know, with our innovation should continue to create demand on that. So.
Speaker 4: As for which segments, we believe the automotive EV will be a nice segment for us. And just a reminder, that does not include our silicon carbide crystal growth solutions. Those are in our semi-segments.
Speaker 4: But we do believe Frontend Semi will be strong again in 2023 here and
Speaker 4: Our life science applications should also continue to grow. So we're pretty excited. We believe we've got the right target markets. We're going after we've got the right products and yeah, we have the right teams in place.
Speaker 4: Okay, that's helpful. And then just as a follow-up, your comments on the semi-market or expectation for the semi-market to moderate in the second half, I was just curious if that is sort of what your customers are telling you that they will need sort of this digestion period, or if you guys are just kind of being a bit...
Speaker 6: out there is still a bit unknown and whether they slip a little quarter or two or what have you. So we don't want to throw something out there that we're not confident we can achieve.
Speaker 4: Okay, that makes sense. Thanks a lot guys.
Speaker 2: Great, thanks Jason. Thank you. Our next question comes from the line of Ted Jackson with Northland Securities. Please proceed with your question.
Speaker 7: Thank you very much and again, I'd reiterate congratulations on the quarter of the year.
Speaker 7: I have two questions for you. The first one you've actually really done a nice job of highlighting already. You do break out revenue across seven different verticals. I just wanted to get a description and maybe add the verticals that you haven't talked about as much. What are the growth drivers for? Maybe we can talk a little bit about the fence.
Speaker 7: I mean, you've hit the semi and auto EV pretty well, but what would you look at it? What's the key macro driver in each of them? And then what particular product benefits from that? Then my second question just wanted to touch on the M&A strategy. It's a pretty important part of your growth. You are clearly looking around.
Speaker 7: can you put a little color around what type of activity is going on there, how full the pipeline is?
Speaker 6: the markets or the segments within your business that you're looking to grow through that. Thanks. Sure, thanks, Ted, and I appreciate the questions there. Yeah, relative to the market segments, you know, we've kind of touched a little bit on the semi. You know, we believe front-end semi will continue to drive.
Speaker 6: you know, nice demand for us in 2023 and beyond. Back end semi we have kind of indicated we saw, you know, from 2021 historical highs in 2022, a little bit of moderation. We're forecasting that to continue in 2023 here, but our front end semi should still...
Speaker 6: more than offset that back-end moderation that we believe Semi will grow overall. As we look at Auto EV, the applications for our battery test solutions, we continue to drive more innovation there with the products and we believe we'll be creating some nice demand this year.
Speaker 6: We also are seeing some good demand for our chillers, for a number of the traditional players in the auto EV space there. And shifting to life sciences, we continue to make good progress penetrating this space with...
Speaker 6: Really, two acquired businesses that we did are North Sciences, which was our zScience acquisition. This is the ultra-low temperature freezers and refrigerators out there serving the medical cold chain space. We are gaining traction in that market and believe that will be a nice growth in...
Speaker 6: up to be formally in production here at the end of Q1. It has some nice benefits for some applications in that life science space. We think that will be a good... for some other applications.
Speaker 6: a good demand generator and then defense arrow, a market that was slow at the end of 2021 and the first part of 2022, we really started seeing some nice demand pick back up in the second half of 2022 and we expect that will continue here in 2023.
Speaker 6: Oh, and then second part, sorry, second part of your question on the M&A front. So, yeah, our teams remain very active on M&A. As we've commented in the past, the
Speaker 6: the business, the approach we take is really more of a bottoms up where the each of the three technology divisions are driving pursuits and targeting companies and trying to build the right relationships to get them to see the benefits of being part of any test.
Speaker 6: And that activity continues. As for timing, it really comes down to when you got agreed upon seller price, agreed upon price, and due diligence has been fully vetted. So, you know, that's really up in the air, but we stay very active in that front.
Speaker 6: and it will remain a key part of our core growth strategies going forward.
Speaker 7: Well, thanks very much again, good quarter. And, you know, really nice detailed answer. I really appreciate it. Bye-bye. Sure, Ted. Thanks for the question.
Speaker 2: Thank you. Ladies and gentlemen, as a reminder, if you'd like to join the question queue, please press star 1 on your telephone keypad. Our next question comes from the line of Peter Wright with Interact. Please proceed with your question.
Speaker 6: Great, I'd like to add my congratulations guys on a wonderful record quarter.
Speaker 6: And thank you for taking my questions. Thanks, Peter. Yeah.
Speaker 7: My first question is on visibility and looking at your order backlog. You did mention lumpiness.
Speaker 7: I'm hoping you can help us understand in light of just such stable backlog over the last several quarters, what is driving lumpiness maybe on a forward-looking basis? Is there any attitude of customers that might be entering signs of reluctance or is it just size?
Speaker 7: and your OPEX only growing about 3% taking the midpoints, that's very good efficiencies going forward. If you could help us understand what some of those efficiencies are, that would be helpful.
Speaker 6: Yeah, sure. So I'll touch on the orders and the lumpiness and then I'll let Duncan speak a little bit to the guidance and the leverage there. So relative to the lumpiness that we see, really, Peter is...
Speaker 6: the, this kind of a shift that we've noticed from customers placing longer lead time, blanket orders, if you will, that will
Speaker 6: layout deliveries over multiple quarters out there and due to the size of those orders when they come in, it really can create a very lumpy pattern in the order timing category there. You know, we mentioned the large $10 million order we got in at the end of 2021.
Speaker 6: which was making a bit of a comparison tough in Q4 of 2022 there, but you know, throughout 2022, our largest order was 3 million, and we do anticipate that we'll see, you know, three or more size orders.
Speaker 6: that can really skew numbers depending on timing out there. So that's really what's driving the comment around lumpiness.
Speaker 6: marketplace is kind of driven customer behavior to try to lock in pricing, secure supply over a longer lead time.
Speaker 5: Yeah, I would also add that's why a quarter over quarter order numbers for example are never going to be as stable or smooth if you will as we're going to see in terms of revenue. So I think part of what we're trying to convey is just the fact that there is going to be that.
Speaker 5: quarter to quarter, quote unquote lumpiness, you know, because of that dynamic. On the efficiency point, I mean, I think you, you can capture it, you know, to some extent your question, Peter, it's really all about growing our expenses at slower rate than we're growing the top line.
Speaker 5: And over the long term, that's exactly what we're trying to do. So, I think as you pointed out, high single digit, kind of top line growth, just lower, mid single digit kind of expense growth. That helps drive our efficiency, improve profitability. Obviously, there's mixed shifts and things like that going on within the business as well that can kind of change things with respect to.
Speaker 5: profitability matrix, but it's really as simple as that quite honestly.
Speaker 7: That's wonderful. If I could have one follow up, if you could just help us understand what free cash flow was for the year. And the purpose of the question is really to try and understand earnings power in your 2025 guidance. And so if I look at
Speaker 6: You know, the lower end, even if your range conservatively in a 10% margin. You're looking at 20, you know, 20Million of net income.
Speaker 7: If you have to acquire about 50 million of sales.
Speaker 7: To achieve that I'm trying to understand how much of it you can fund from from operations cash generation and how much it will be somewhat, but, you know, not dilute of growth, but diluted to existing share count today. And the heart of the question in 1 question is, you know, what do you think earnings power per share is. In 25.
Speaker 5: Yeah, so let me kind of unpack that a little bit. First on free cash flow, as I think we outlined in our materials, for the full year, free cash flow was negative 2.8 million, but it's important to understand that the second half of the year, our cash from operations of 3.7, which translates to free cash flow of just over $3 million in the second half.
Speaker 5: closing out 2022. But I think the second half of the year is indicative of what we see moving forward as we've made that investment in the balance sheet, so to speak. With that cash from operations, we'll continue to pay down debt as we've done this year. We've taken our
Speaker 5: Our debt down by 4M during the year, we'll continue to kind of do that. We have our term loan facility available to us, which we talked about, we expanded that facility, have 30M available there to us to use for acquisitions moving forward.
Speaker 5: We've talked about from a leverage perspective not wanting to be more than two and a half X from a borrowing perspective. You're sitting at 1x at the end of the year with 16 million of debt, 16 million of trailing 12 months EBITDA.
Speaker 5: As we pay down debt, obviously the debt number will come down. We'll continue to drive the business forward in terms of the cash generation metric. So our borrowing capacity will increase.
Speaker 5: Depending on the size of any acquisition, I mean obviously look to use debt to the extent we can, but we have other options available to us. Capital markets, whatever, you know raising equity. So, you know, I think it's a shifting equation depending on what we're looking at, but hopefully that gives you some...
Speaker 5: little bit of flavor from a balance sheet perspective of where we where we are and where we think we're heading.
Speaker 2: Thank you, Peter. Thank you. Ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr. Grant for final comments.
Speaker 2: That's wonderful. Thank you guys. Thanks, Peter. Thank you ladies and gentlemen, that concludes our question and answer session. I'll turn the floor back to Mr grant for final comments. Thank you Melissa.
Speaker 6: I want to reiterate that I'm exceptionally proud of our global team who delivered these outstanding results for 2022.
Speaker 6: We are driving a culture of openness, collaboration, and accountability at Intest, which we believe enabled us to deliver on our commitments to our customers throughout the year.
Speaker 6: We are making great progress towards our vision to be the supplier of choice for innovative test and process technology solutions globally.
Speaker 6: Please note on slide 14 that we will be presenting at the Sderoti Small Cap Conference on March 23.
Speaker 6: at the inaugural EF Heighten Global Conference on May 10th.
Speaker 6: and the SIFL Cross Sector Insight Conference on June 6th. We hope to see you all at these events.
Speaker 6: We really appreciate you taking the time to join us on our call today and for your interest in N-TEST.
Speaker 6: you taking the time to join us on our call today and before your interest and interest. Thank you all and have a great day.
Speaker 2: Thank you. This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Thank you.