Q2 2023 Ichor Holdings Ltd Earnings Call
Good day, ladies and gentlemen, and welcome to <unk> second quarter 2023 earnings Conference call. At this time participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time.
Should you require operator assistance. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now like to introduce your host for today's conference Claire Mcadams Investor Relations for Ichor. Please go ahead.
Thank you Devin good afternoon, and thank you for joining today's second quarter 2023 Conference calls as you read our earnings press release and as you listen to this conference call. Please recognize that both contain forward looking statements within the meat, meaning of the federal Securities laws. These forward looking statements are subject to a number of risks.
Uncertainties, many of which are beyond our control and which could cause actual results to differ materially from such statements.
These risks and uncertainties include those spelled out in our earnings press release.
Described in our annual report on Form 10-K for fiscal 'twenty, two and those described in subsequent filings with the SEC.
You should consider all forward looking statements in light of those and other risks and uncertainties. Additionally, we will be providing certain non-GAAP financial measures. During this conference call our earnings press release, and the financial supplement posted to our IR website. Each provide a reconciliation of these non-GAAP financial measures to their.
Most comparable GAAP financial measures.
On the call with me today are Jeff injuries in our C E O.
Larry Sparks, our retiring CFO and Grace white, our incoming CFO .
Jeff will begin with an update on our business and then Larry and Greg will provide additional details about our results and guidance.
After the prepared remarks, we will open the line for questions.
Now I'll turn it over the call to Geoff Andres Jeff.
Thank you Claire and welcome to our Q2 earnings call.
Our second quarter results came in at the upper end of our expectations revenues were $185 million and declined less than expected primarily due to the acceleration of customer demand for a couple of end markets that are recovering more quickly and are currently soft Wi Fi environment.
Our gross margin operating expenses and operating profit performance also fell into the upper end of our guidance ranges and with more favorable tax largely offsetting the higher interest expense earnings of <unk> <unk> per share also exceeded our prior expectations of a breakeven quarter.
We continue to see the second quarter.
2023, as I course trough quarter during the current downturn with modest sequential growth expected as we progress through the year, our current expectations for the third quarter indicate revenue growth of about 4% plus or minus but the only difference compared to our prior outlook of 5% to 10% growth.
Being the stronger second quarter.
While our overall outlook for the full year is consistent with what we were seeing at this time last quarter. There was no question that there continues to be a significant amount of variability in customer demand and build schedules. For example at the same time as Q2 witnessed a certain degree of pull in of demand from Q3.
We also saw increased demand in a couple of pockets of strength, including increasing investments in the trailing nodes logic and high bandwidth memory.
These areas of upside, however, being pretty equally offset by softening demand in some areas of leading edge logic and slower build schedules in other areas such as the UV lithography.
So while we are witnessing some improvement between the quarters. Our overall outlook for 2023 is largely unchanged. However, the year is a bit more front half weighted than we previously thought given the stronger performance in Q2.
Clearly our expected revenue decline in 'twenty or 'twenty, three is a bit steeper than the overall market decline of 20% to 25%. This year due to several factors first is our relative customer exposure, which is more heavily weighted towards etch and deposition compared to lithography, we estimate that our customer shipments of etch and deposition.
<unk> systems would be down at least 30% this year.
Furthermore, the component side of our business, which is largely comprised of weldment and precision machine parts, and which typically represents about a quarter of our revenue is seeing deeper cuts as our customers work to reduce their inventory levels.
Bright spots for us this year are definitely within growing market segments, and new customer design wins, and we continue to expect to add a third 10% customer for fiscal 2023.
We are also less exposed to the memory market today than ever before.
Based on our customers' revenues by end market, we estimate that memory W. P investments drove approximately 40% of our sales in 2022.
And given the industry environment for memory year to date, we estimate our current exposure to be less than 25%.
All of these factors, which certainly are resulting in a challenging year for ichor in 2020 three are just as strongly indicating the potential for a very strong snapback of demand as the industry recovery accelerates for example, or outlook for the remainder of 2023.
It assumes little to no recovery in the memory sector.
Which is broadly expected to begin to rebound sometime next year, given the recent stabilization in pricing and demand environment.
Our business model and financial profile tend to generate significant operating leverage as revenues increase for example, we estimate our gross margin flow through to be approximately 25% as we move through the remainder of 2023 which at the midpoint of Q3 guidance will generate a 30% improvement in operating profit on a four.
[noise] percent increase in revenues.
A more significant revenue ramp in 'twenty 'twenty four could once again lead to very significant earnings growth as we look ahead.
Which is why we continue to make critical investments in our business and support our future growth. During this period, we are maintaining our focus on driving share gains for our proprietary products and making investments in new offerings that support our customers' long term technology Road maps.
We are utilizing this slowdown to complete qualification of new products that will both increase our share of our served markets as well as the internally manufactured content of our existing products.
We continue to make good progress on all of our focus areas. This year with new customer qualifications for our internally developed machining components, leveraging our global weldment footprint to gain additional share.
Qualifying our initial next generation gas panels as well as our proprietary chemical delivery systems and the development of new components that address the wet processing market.
I'd like to start with an update on our next generation gas panel evaluations.
We are now actively engaged with four customers.
We have now completed the qualification of two of the evaluation units, we ship for two different applications.
Our best estimate of when production shipments will begin as mid to late 'twenty 'twenty four is they will now move into their customer evaluation stage.
Additionally, we also expect to complete a third evaluation. This quarter that will also lead to first production units in a similar timeframe as their tool is introduced into the market.
These are important milestones for ichor and we are very pleased with the progress we're making with this new product.
We have finalized the qualification of incremental machining components and will begin initial shipments later this quarter. These components will be integrated into our existing gas panels that we manufacture today and will be margin accretive.
The new games in our chemical delivery business are progressing but at a slower pace than our gas delivery products. As a result, we are reviewing our Japan strategy to accelerate our results in this region.
We are also developing new components for this market that we expect to begin to release in 2024 as well.
And lastly, we reported on our last earnings call that we have completed the delivery and customer qualification of our first gas panels for the silicon carbide market and are now shipping production units. We continue to work closely with our initial customer and expect to deliver the first evaluation units to them for their next generation.
Tools sometime in early Q4.
In summary, I'll remind everybody here today that our revenues tend to recover more sharply went industry spending rebounds, and our business model enables earnings growth well in excess of revenue growth in the meantime, we are managing through the lower demand environment by focusing on delivering solid financial results as the business recovers from Q.
Two levels, improving our operational capabilities qualifying our internally developed products and developing new products that align with our customers' needs for both technology and cost.
Before turning the call over to Larry.
To share my sincere appreciation for his leadership.
The finance organization and across the enterprise over the past four years and congratulate him on his long awaited retirement.
Flaring I trace our roots back to our many years at applied materials, which is where we also met Craig sway.
In fact, Greg and I have worked together for the majority of our last 25 plus years in the business. Some of you might remember him from nano metrics, where he took over for me after I joined <unk> in 2017.
Craigs extensive experience in semiconductor equipment and his deep knowledge of course finance and operations will make this transition very seamless.
While we will all Miss Larry.
We also know we're in great hands with Greg with that I'll turn the call over to Larry to recap our Q2 results before closing with Greg to provide further details around our Q3 financial outlook Larry.
Thanks, Jeff.
I have greatly enjoyed my last four years at ichor and getting to know so many of you in the investment community.
First I would like to remind you that the P&L metrics discussed today are non-GAAP measures. These measures exclude the impact of share based compensation expense amortization of acquired intangible assets nonrecurring charges and discrete tax items and adjustments.
There was a very helpful schedule summarizing our GAAP and non-GAAP financial results, including the individual line items for non-GAAP operating expenses, such as R&D and SG&A in the investors section of our website for reference during this conference call.
Second quarter revenues were $185 million towards the upper end of our expectations and declined 18% from Q1.
Gross margin of 14, 5% was consistent with our expectations of flow through the just under 20% on the revenue decline as compared to our model of 25% incremental margin on increasing revenues.
Operating expenses were $21 $5 million and given the upside in both revenue and gross margin Q2 operating margin was also above the midpoint of guidance at two 9%.
As a result of higher interest rates net interest expense increased to $5 million, while our non-GAAP net income tax benefit for the quarter was also a bit higher than forecast at $500000. As a result net earnings for the quarter were two cents per share.
Our GAAP net loss included a noncash $11 million valuation allowance taken on our U S deferred tax assets recorded as a result of our U S profits falling into a cumulative three year loss as of the end of Q2.
A large portion of our fixed cost structure, including interest expense M&A amortization and stock based compensation is in the U S, which does not change with customer volumes.
As the industry recovers at our U S revenue and profitability grows we will reevaluate our valuation allowance requirements.
Now I will turn to the balance sheet.
Cash and equivalents at quarter end totaled $85 million, an increase of $16 million from Q2, while total debt declined by $7 million we.
We generated $27 million of cash flow from operations and after a $4 million of Capex free cash flow for the quarter was $23 million.
As expected working capital balances declined across the board given the current softness in the customer demand environment.
Counts receivables declined by $27 million and inventory declined by over $5 million.
DSO declined a bit to 47 inventory turns were 2.4.
Given the free cash flow generation in Q2, we elected to pay down a portion of our revolver, especially given the continual increases in interest rates.
Currently have $95 million available on our revolver and our net debt coverage ratio is currently about two times.
And now I'm pleased to introduce Greg swipe and turn the call over to him to share more details about our Q3 guidance Greg.
Thanks, Larry and thank you Chuck for the earlier introduction.
It's nice to know that many familiar names for my Datametrics days are listening to today's call.
Our revenue guidance for the third quarter is in the range of $185 million to $200 million, which indicates our expectations of modest sequential growth from Q2.
As Larry indicated our incremental gross margin flow through expectations are approximately 25%.
Increasing revenues.
We expect will drive Q3 gross margin improvement to the high Fourteens level.
We expect to closely manage operating expenses to 21.7 million dollar level, plus or minus $200000. As we continue to prioritize our R&D investments in support of our new product programs and maintain our critical infrastructure that will enable us to quickly respond to customer.
Yeah.
Is the spending environment further recovers.
At the midpoint of Q3 revenue guidance, we would expect to generate approximately $7 million of operating profit, which is a sequential growth increase of about 30% from Q2 levels demonstrating the strong earnings leverage.
Can achieve as revenue volumes recover.
Interest expense is expected to increase once again to approximately $5 $3 million due to higher interest rates.
Finally, our guidance on taxes as we move through 2023 will continue to reflect the expectation of a net tax benefit to be recorded for the full years.
Although we are expecting pretax income globally for the year, given the pre tax losses incurred in the U S. We expect to recognize a tax a net tax benefit in the range of $4 million to $5 million for fiscal 2023.
This is a bit smaller of a benefit than we forecasted last quarter and given that we've recognized $3 $2 million of the benefit year to date for modeling purposes, you should assume a benefit of $400000 at the midpoint of our Q3 guidance and approximately $1 million forecast.
For another quarter of sequential growth expected for Q4.
As we look ahead to 2024 on an ongoing basis, we expect to incur a nominal non-GAAP tax expense each quarter and for modeling purposes, you should assume a 5% to 10% non-GAAP effective tax rate.
Yeah.
Operator, we are ready to take questions. Please open the line.
Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing.
From the start he is one moment, please while we poll for questions.
Our first question comes from the line of Krish Shankar with TD Cowen. Please proceed with your question.
Yeah, Hi, Thanks for taking my question and Larry Congrats on an amazing careers and good luck with your retirement, you're gonna be missed and Greg welcome.
Thank you Bob.
And I have three questions and maybe I'll put Geoff maybe just.
Thanks for the color on what happened the quarter in your guidance and it's kind of consistent with what you said a quarter ago with you like X. The sequential growth I'm kind of curious like given your limited visibility and the fact that your customers like you mentioned trying to draw down inventory.
What gives you the comfort that Q4 is gonna be sequent to grow up and is there any way you can.
Once you probably hear it or is it too early to quantify how December quarters going to look like and then two other questions.
Yeah, I think that's a good question. So I think our visibility you've seen movement and we talked about builds move and things like that but in general kind of the magnitude of what we're seeing is holding up and that gives me some confidence that as our customers are working through this that what we're seeing.
<unk> is what we're gonna get so to speak so what I would tell you is I think the inventory correction at some of our customers is going to take us through this year.
To get done so but.
But I think our visibility you know quite honestly has kind of moved around a little bit quarter to quarter and moved within you know like advanced nodes and lagging nodes, but it's held up in kind of the same visibility for the year that we've seen and so if you kind of just play the numbers that you're probably looking at a four 5%.
Sequential increase at the midpoint of our Q3 guidance.
Got it very helpful. Jeff and then the second question is you kind of mentioned that you're going to add a third 10% customer this year.
It's probably it's a no given their exposure to E. D can you just help.
Help us talk a little bit about kind of like what do you eat your exposures and how Joe the way to quantify it or like how do you think about that going into later this year and into next year and then I had one last question after that.
Yeah, I think that we haven't quantified how much content, we get per U V, which we generally don't do that either on that other gas delivery products or other areas, but they're very transparent and so you know as you know they kind of slowed some of their builds down.
We've seen some of that and it's trickling through.
Second third and fourth quarter for us, but in general, they're still going to cross, 10% and I would say next year, it's very difficult. If I can tell you with Wi Fi was I can tell you if they stay above at or below it because you know, they're gonna be kind of near that.
At least that level by the end of the year, so, but I would say as it.
The way to think about it is any indication there, giving you about their growth year over year, we're going to see at a four or five months you know beforehand. So we will have a piece of 2025 in 2024.
So we would expect to see growth year over year still in that area.
Got it very helpful. And then my final question gets you know.
Like you know there's been a lot of focus on silicon carbide and seems like a very exciting market and my understanding is that you guys have some exposure to it.
Can you just help us like green kind of what your exposure is in terms of got finally got boxes.
What it is and how to think about that opportunity into next year for your silicon carbide exposure.
Yeah, I mean, it's a it's an initial customer I would say that it's a relatively complex gas box.
You know in comparison to a pretty easy one so I'm not going to tell you. The E. S. P. But I would tell you. It's kind of this year for US is high single digits in millions and next year I would expect that to continue to grow because we.
I would expect it to probably double year over year, only because we pretty much been delivering just in the second half of the year with kind of smaller quantities in Q2, so it's a growing market and that's at one customer and there are other areas that are benefiting from this that we're also trying to engage with at this point, but it's too way too early for me.
Kind of give you any outlook on that.
Doug I'd go with Jeff and congrats Larry.
Thank you Christian thanks, guys.
Thank you. Our next question comes from the line of Brian Chin with Stifel. Please proceed with your question.
Hi, there thanks for letting us ask a few questions and also congratulations to Greg and all the best view Larry.
Maybe.
First question.
So going back to the commentary around that.
Design activity for the new gas panels with the increase I core proprietary content.
Two successful quarles another progressing nicely can you Larry or maybe actually Jeff can you discuss sort of where these wins kind of on cost on performance merits, maybe a combination of both and also kind of looking a little further out of if those go well.
Yeah, how good design in activity kind of go from there.
Ford.
Okay.
Yeah. That's a good question. So the simple answer is there is a cost advantage and a technology advantage, which is how we've gotten the attention of.
Our initial customers and so on an apples for apples basis, I think some of the new components that we've done, particularly around the flow controller actually can hum.
Eliminate some components, which actually lowers the cost so they see a pretty good.
Cost reduction as well as performance enhancement handles a wider range of gases as well so.
Sizing that I would like to see these first applications move through their customer eval process. The third one has to do that as well and so maybe by the end of the fourth quarter or something we'll have a good feel for how they're doing now that they've moved it from say their apps lab in their facility out to a customer.
First tool.
Okay, so more to come sorry, Brian .
That's helpful.
Maybe for Gregg, Larry or Jeff on the cost structure.
Are you, where you want to be right now in terms of resizing head counting a lot a lot of that's variable and just the general expense structure, if revenue growth off the bottom remains somewhat measured here still over the near term.
Yeah, I think what what we've done as you know.
We have we have a pretty variable model in our kind of our direct labor workforce, where we carry a lot of temporaries and stuff, but so we have right sized out to what we see is inadequate level to kind of address the next several quarters of demand.
They're all fairly similar as you as you know and so we can handle any kind of uptick or anything like that which just overtime and things like that opex structure. We've taken a more of a a guarded approach because we have to continue our investments in R&D.
He is going to return to growth in scale. So we've scaled some places where we can and we've used kind of what I would call temporary variable cost reductions, which as you know P T O and.
Things like that so.
And then we're kind of not replace replacing attrition too.
Unless it's a critical role so if.
If we see 2024 not start to uptick we may take a different approach and opex.
Okay, great. Thanks, maybe sneak in one last quick question you know with some end markets, we're incrementally better in cooling trailing nodes.
What are your customers, saying about the durability and sustainability of trailing edge investment in calendar 'twenty four.
I think theres still remain pretty positive about that there's obviously there's some.
Political issues that could slow that up which I.
Don't have an opinion on its a trying to curtail our required licenses for some of the lagging nodes.
Nodes that could slow things up but right now the demand is is really pretty pretty healthy we participate in it.
Fairly well, but theres more things, we can do to kind of support that are our customers as well. So some of that they still do internally and we're working on seeing if we can help them in any way because it's a pretty healthy.
The market right now.
Okay, great. Thanks for the color.
Okay.
Yeah.
Thanks. Our next question comes from the line up Quinn Bolton with Needham and company. Please proceed with your question.
Hey, guys, Larry Congratulations on your retirement and Greg Welcome I guess, maybe first for Jeff just wanted to follow up on Brian's question on the sort of three customers adopting the nextgen gas panel I know you don't want to share too much color, yet, but would you classify or categorize each.
Programs, just kind of major etch and dep platforms or are you sort of starting on more niche platforms to kind of get your feet wet and does he have a gas panel performs and then you know you would you would sort of target larger higher volume system and say in 'twenty five 'twenty six.
Yeah, I think they're they lean more towards the kind of the niche applications, so not a blanket films or something like that so they are initially.
Smaller applications that we can kind of say cut our teeth learned get it out there and then move it to larger applications is as we have success in the marketplace, but having said that they're not they're not insignificant, but they all stack up so.
You know as we've talked about you don't need a lot of wins given the margin profile of that kind of shift from 90% procured the 70 or 75% internally manufactured to kind of move the needle for us. So we're pretty excited it's kind of a little bit of a well.
We've gotten our qualifications going we expect the third one by the end of the quarter as well and then those have to move now to their customer qualification process. So we still got a little bit of lead time before we move to production.
And then it sort of a change or shift in strategy for the Japanese market to try to accelerate some penetration could could you elaborate on on what actions are taken.
We're reviewing I mean, I don't Wanna get in too much details, but obviously, we've been trying to work through partners and the question is is do you go and get boots on the on the ground versus work with partners or some combination of the two and that's what we're trying to sort out to see if we can get this.
Accelerated.
Understood. Thank you.
Thanks Glenn.
Thank you. Our next question comes from the lineup Craig Alice.
Please proceed with your question.
Yeah. Thanks for taking my question and I'll Echo the prior congrats to both.
Craig Good luck and welcome aboard so.
Maybe I'll start off with you so it sounds like from what you're saying, while there have been some moderate movements some in some out.
That things are cracking well to what you would.
Then expecting three months ago. The question is this as we think about the potential for industry to move into a period of more significant acceleration. One are you seeing any signs that that is happening in too if not.
Where would you expect those to emerge and when would you expect those just start to surface.
So I'll I'll give you my my view I think memory and I think we've talked about this with my.
Several conferences Benac I view, it as kind of middle of the year next year I think foundries logic. I think is is maybe a little bit of the wildcard I think the trailing edge is gonna remain.
Fairly stable and then when you can add that I think our our first silicon carbide opportunity is actually a pretty good growth driver year round here as well. So I do think foundry logic is held up relatively well and I wouldn't suspect that that's kind of.
Deep diet, but there's there's a lot of both geopolitical and economic challenges right now that can change that direction.
So a little bit too early to tell so.
Got it Okay, and then maybe switching over to Greg So Greg we had some nice cash generation in the second quarter and some of that was used to pay down debt.
Should we expect with cash generation for three Q N how.
How are you thinking about potential further that production.
So.
[noise] Craig so they the cash flow that we're expecting we will continue to evaluate where we're generating are free cash flow and then as as opportunistic will pay down our debt.
But at this point, we expect that we should generate enough cash flow to a service the business as well as address some debt and a quarter.
And all of that Okay alright.
You know we're focused on inventory reduction you saw Seattle.
Ducks in this quarter and you saw a little bit you know.
Payment, we expect a new similar process. This quarter. So hopefully we can continue to bring that inventory down and then obviously with the interest rates, where they are debt repayments pretty high priority.
Yep, and then a given jeff's earlier comments that we might see the fourth quarter up somewhere around mid single digits would it be fair to think that we would be able to generate cash and have sufficient beyond you know growth initiatives to pay down to add a little bit more is that just two per Afghan <expletive>.
Yes, we we would expect to continue to to move our inventory lower as the primary driver for improved a cash flow in Q4.
Alright, thanks for the help.
Thanks, Greg Thanks, Greg.
Thank you. Our next question comes from the line of Dave too late.
Securities. Please proceed with your question.
Yeah. Thanks for taking my question I was wondering as far as your Oh Yum customers, where are we with the inventory levels that are are we know matching their demand levels or or is there still a significant level of inventory there and how long would you expect it to last.
Good question, Hey, Dave I think that on the components side of the business I think it's going to last through the end of the year I don't think there were there at and.
And it's it's not an across the board comment it's different in different of R. O E. M customers. So it's not one for all and all for one so I think the components side's gonna take the longer I think most of the gas.
Panels that kind of get hung up between you know when you know we all we all drive this industry on forecasts workouts change and so I think that is largely behind us. So it's really working through the components business.
Okay, and then I think I understand it you kind of answered it in different ways on this conference call, but as far as you know when the industry starts to you know turn into upturned boat what areas do you think that you.
You will outperform enter you know will allow you to go faster than the industry you know silicon carbides a good example, but maybe you could just outline what you'd think the two or three biggest opportunities are to outgrow the industry.
I think if I, if we can take a horizon of a year or two I think are.
Our new gas panels can have a material impact on us if we get qualified you know beyond the first three and at three and four silicon carbide, obviously as of focus area for US we're supporting.
Our first customer we're we're continuing to work on their next generation. This is.
An application I think is going to continue to grow and handsome legs for several years for sure and there's other opportunities that space as I said on the call a little too early to talk about who we're talking with but.
There are some other opportunities that I think we can we can do that there's opportunities I think.
For us to expand what we do for R. E V customer beyond just gas delivery. So there there are other areas were working on and I think as the industry rebounds you.
You know, we're so levered to a depth and edge and when memory recovers I think just that segment of the market and where we're at and we're going to outperform the overall market because of that as well.
Okay and final one for me is you mentioned this 25 per cent drop rate an incremental revenue is that what we can kind of pencil in throughout.
2024, which I would assume there'll be a much higher <unk>.
Yeah, I I'll I'll call I'll start the I think it's fair that maintaining twenty-five percent flow through for all twenty-four it'll it'll be dependant, a little bit on product mix and kind of the pace of the recovery but.
You know, we expect to continue to drive market share gains in revenue growth in the components part of the business, which is you know critical piece of our gross margin.
And as you have mentioned you know recognizing some some of the new gas paddle product revenues in 2024, it should allow us to continue to achieve 25 per cent oh through during the year, So where where are the worst shooting for that I mean, I think we've got a good plan and we just have to execute that plan as long as the mark.
It comes back kind of where we see it today I think that's a reasonable expectation.
No I'm I'm, sorry, just just as a clarification, if you see Ah Ah Ah.
Abroad adoption of your newer gas panel wouldn't you think the drop rate would be higher than 25 per cent or is that kind of baked into the cake.
Alright, I think initially it would it it it might have a little upside, but let's let's have some success before we had a fire in a R. I.
<unk> model at this stage, but it depends on the magnitude of it Dave obviously.
If you get $10 million for example, it's different than getting 20, or 25 or 50 that may change the needle.
Okay. Thank.
Thank you very much for that.
Tobacco.
There are no further questions at this time I'd like to turn it back over to jazz andreasen for clothes and continents.
Thank you for joining us on our call this quarter I'd like to thank our employees suppliers and customers for their ongoing dedication and support as we continue to navigate this highly dynamic business environment.
Our upcoming Investor activities include the need them semiconductor conference being held virtually on August 22nd and.
And Jeffries conference in Chicago on August 29th.
We also look forward to our next quarterly earnings calls scheduled for early November operator that concludes our call.
This concludes today's teleconference. You may disconnect your lines.
Thank you for your participation.
All day.
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