Q3 2023 Vuzix Corp Earnings Call
Greetings and welcome to the Vuzix third quarter, ending September 30th 2023 financial results and business update conference call at.
At this time all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation.
If anyone should require operator assistance during the call. Please press star zero on your telephone keypad.
As a reminder, this call is being recorded I would now.
I would like to turn the call over to Ed Mcgregor Director of Investor Relations at Vuzix. Mr. Mcgregor, you may begin.
Thanks, operator, and good afternoon, everyone and welcome to the Vuzix third quarter in 2023, ending September 30th financial results and business update conference call.
With us today are music CEO, Paul Travers and our CFO Grant Russell.
Before I turn the call over to Paul I'd like to remind you that on this call management's prepared remarks may contain forward looking statements, which are subject to risks and uncertainties and management may make additional forward looking statements during the question and answer session.
Therefore, the company claims the protection of the Safe Harbor for forward looking statements that are contained in the private Securities Litigation Reform Act of 1995.
Actual results could differ materially from those contemplated by any forward looking statements as a result of certain factors, including but not limited to general economic and business conditions competitive factors changes in business strategy or development plans the.
Ability to attract and retain qualified personnel as well as changes in legal and regulatory requirements.
In addition, any projections as to the Companys future performance represent managements estimates as of today November nine 2023.
<unk> assumes no obligation to update these projections in the future as market conditions change.
This afternoon, the company issued a press release announcing its Q3 2023 financial results and filed its 10-Q with the SEC. So participants in this call who may not have already done so may wish to look at those documents as the company will provide a summary of the results discussed on today's call.
Today's call May include certain non-GAAP financial measures when required reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP can be found in the company's Form 10-K annual following S E C Dot Gov, which.
Which is also available as Vuzix dotcom.
I'll now turn the call over to Vuzix CEO, Paul Travers, who will give an overview of the company's operating results and business outlook.
Paul will then turn the call over to grant Russell Vuzix, CFO, who will provide an overview of the company's third quarter financial results.
Paul will then return to make some closing remarks, after which we'll move on to the Q&A session.
Paul.
Thank you and Hello, everyone and welcome to the Vuzix Q3, 2023 conference call on this call we're going to review our operating results and recent developments and then give you some perspective on where we see things headed in the fourth quarter and into the first half of 'twenty 'twenty four.
Grant will cover our financials in detail a bit later in the call, but I must start by providing some additional color regarding our third quarter financial results.
During the quarter, we saw lower than planned smart glasses sales, primarily due to the order placement timing associated with several larger channel partner deals most of them, we fully expect will close in the coming months.
As previously stated we are focused on the growth and expansion of our strategic channel partner program at Vuzix. This program allows us to expand the size of the qualified expert sales team that vuzix has in the market without the cost and efforts of having to grow an internal sales team.
We now believe this longer term strategy is the most cost efficient path, while allowing vuzix to best address the growth. We are confident is coming in the overall smart glasses enterprise space.
Expected third quarter revenue related to our OEM business was also negatively impacted by macro economic business conditions, specifically with a few large corporations have been delayed their investments in new technology in favor of maximizing their current earnings in cash flows again, we believe this represents a shift in there.
Timing and we fully expect over the next several quarters that we will close on the bulk of these transactions.
Despite the soft third quarter revenue I am pleased to report that we have our largest pipeline of smart glasses sales opportunities in the company's history.
Therefore, the outlook over the next 12 plus months, we believe is for continued growth.
Our OEM business continues gaining momentum our OEM group ended Q3, with our largest OEM backlog in our history.
Largely driven by continuing defense and aviation related engagements that said interests for a growing list of broader market customer engagement is being pursued.
Most of this OEM pipeline of customers projects are all focused ultimately on volume production programs. During Q3. We also made significant advancements in what is at the heart of Vuzix value proposition to the entire HR wearable industry, our wave guides and micro OLED display technology in this industry.
As expected to represent many billions of dollars in value for just the required display and optical components and technology that music can deliver today and as such I'll spend a little more time discussing this shortly.
Lastly, and as mentioned in our third quarter's earnings release, our company has reached a point to where we have both the ability and need to realign certain parts of the organization to take advantage of scale and realign our operations to better serve our customers. As a result, we are making changes that are expected to lower.
<unk> costs by as much as 20% annually once fully implemented the process is underway and will continue into 'twenty 'twenty four it impacts everything from operations to product of element as well as marketing and sales. We expect these adjustments will not only better support our growing customer base in all parts of our business but.
Also extend our operational runway and improved enterprise product margins, we have a bullish stance on the future and we are focused on realigning our company to become more efficient lower our cash operating burn and put ourselves on a faster and more visible path to profitability.
The Vuzix patent portfolio continues to expand and currently includes 346 patents and patents pending an impressive 50% increase over the last 24 months our portfolio covers a broad range of technologies and includes a significant collection of fundamental wave guide utility.
Patterns and applications as well as trade secrets regarding nano imprinting process equipment and materials like polymers adhesion promoters and release agents that are critical to how we can produce in volume and at low cost bottom line. We feel vuzix has a strong intellectual property position, which will be able to create.
A significant value for us across solutions, including wave died micro display engines full systems White label products and of course enterprise AR smart glasses.
As slide six shows the projected total market opportunity for the products and key technologies that Vuzix is and can ultimately deliver on using its intellectual property. We believe is massive.
Vuzix fields of family of competitive solutions within the enterprise smart glasses space and expect to win and maintain a meaningful share of this market as it ramps and ultimately grows our annual revenues to the hundreds of millions and potentially up to in excess of $1 billion annually.
As exciting as our enterprise business is it is dwarfed by the potential represented by the much larger broader market opportunities for our smart glasses.
And producing components and technology for this broader consumer market is where the lion's share of our development efforts and IP is ultimately focused such.
Such expected demand is a strong part of the reason why some of our competitors waveguide and display makers have commanded purchase prices of a half a billion to a $1 billion in recent years key suppliers of these technologies to third parties shouldn't be able to realize billions of dollars in annual sales.
In due course, and we are positioned to be one of the leading suppliers of the critical OEM components and a highly profitable wanted that.
I'd like your takeaway from this slide to simply be that vuzix value should not be determined solely by how many a our product units. We currently sell and ship in any given quarter maturing markets are historically choppy in terms of demand and implementation schedules, we believe our enterprise.
Has a long term incredible value and IP and that we are in the throes of leveraging it to become the leading supplier in a market that is touted to equal or exceed the mobile phone market that market alone currently exceeds one trillion dollars in hardware revenue annually.
Vuzix waveguide Mega factory is now operational and dedicated to the production of waveguides.
This state of the art manufacturing plant is a one of a kind facility that increases our wave guide unit capacity.
Lower manufacturing costs and allows us to utilize the more advanced processes needed for our latest wave guide designs.
This new facility, which is adjacent to our headquarters provides an additional 10000 square feet to our existing 12000 square foot facilities at our headquarters and has the option to expand into the full approximately 40000 square foot building is needed.
This facility is home to class 1010 thousand clean rooms, and will enable the use of higher indexed materials advanced glass substrates and unique wave guide configurations.
Vuzix now has broad in house capabilities that include rapid specification to design moly production replication and test system integration and wave guide fabrication. This unique facility enables not only the manufacturer wave guides for augmented reality smart glasses market, but also other.
Tension markets like large format or direct view heads up displays for in vehicle use cases and more.
A single example of this is our recent Vuzix incognito announcement.
I'm sure everyone has seen pictures of competing see-through, AAR glasses, where the glasses literally look like someone has turned on a flashlight growing out of the users is.
This is known as <unk>.
As you all can imagine having I glow in a pair of smart glasses for the broad markets is practically a nonstarter.
Vuzix incognito technology virtually eliminates the forward I glow typically associated with waveguide based smart glasses.
As you can clearly see eliminating the Ilo is critical technology for the broader markets to accept smart glasses Vuzix incognito is the first wave guide based technology in the world to achieve this level of performance.
Using <unk> incognito manages internal light reflection.
Minimises and manages for wood lately, which within a wave guide enhances.
Enhances low light optical performance significantly advances vuzix already industry, leading forward late ratio of one to eight.
Improves the contrast of virtual images in a our glasses and interaction with the external environment.
These refinements have been accomplished with no increases and Vuzix manufacturing costs per wave guide.
This new game changing wave guide functionality will be targeted for introduction into certain of the company's defense industrial enterprise and ultimately broader consumer market applications.
Wave guides and ultimately the micro LCD displays that drive them are essential components for lightweight a our smart glasses and other wearables, we believe our increased capacity.
Lower costs wave guide offerings, and our ongoing investments in next generation micro OLED displays will fortify vuzix positioned to play a critical role in an industry that should ultimately represent many billions of dollars of revenue annually.
As we've discussed in the past micro Leds have the potential to be a driving force in providing the performance.
Size and cost needed for a R and M are to achieve success in the mass market.
Michael Leds have the potential to be much more efficient lower power to drive high brightness.
With the resolution and form factor to enable small lightweight fashion forward smart glasses, but the current market technology approach, primarily using Gan gallium nitride and gallium arsenide material systems has its challenges with cost scalability.
Our efficiency and spectral performance that is constraining existing micro OLED cost manufacture ability and performance.
We believe our technology partnership with atomistic that is developing new micro OLED technology that will address these fundamental market requirements is much better than others.
And as a result, we will have a profound impact on the AAR micro display market and beyond.
Atomistic with its revolutionary applied materials science and unique atomic structure approach with a focus on required fundamental material characteristics has been operating under stealth mode out of the public I for the last 24 months and it is making great progress on many fronts and.
And while that might seem like a long time in the tech industry. The micro Leds design process takes time and portions of the fabrication process need to use very complex and customized equipment.
The atomistic team is making excellent progress against multiple key milestones, they're highly specialized fabrication equipment that is being designed and built from the ground up by atomistic is nearing completion and is on track to be qualified in the coming months.
Domestic has also just opened a website atomistic dot com. It is simple just yet but it is the beginnings of sharing more information about what they are doing with all of US. This website should be updated periodically as progress is made over the coming year suffice to say atomistic technology has great potential to <unk>.
Incredibly advanced full color high efficiency micro OLED displays displays that have the potential to up and the entire micro display industry with very compact full color exceptional brightness and all day battery performance that can be incorporated in our fashion forward smart glasses form factor that everyone.
John will want to wear.
Vuzix smart glasses are assisting enterprises across multiple key markets, including warehousing and logistics health care education language assessed and others early adopters of smart glasses understand the value proposition that our technology affords and are adopting wearable.
<unk> to eliminate costs, such as expensive and time consuming travel and to deliver rois and productive kpis.
As I mentioned earlier, our smart glasses pipeline is arguably our largest in our history with key accounts across all of the key markets outside of traditional enterprise. We are beginning to see not only interest but traction in the marketplace coming from emerging applications that are utilizing artificial intelligence.
Combination of AI and smart glasses have created a new value proposition and business opportunities for smart glasses.
AI enabled smart glasses can deliver rich new experiences to support education.
E Commerce Health care Communications defense security and more.
The possibilities are almost endless with this new technology.
Examples that exists today include visual search language translation voice control fact checking hearing impaired solution sign language smart glasses in real time human enhancement in the field. We expect this marriage of technologies to accelerate and help define the specifications and use cases for the next generation.
<unk> of lightweight all day wearable smart glasses.
First I want to be clear that when we talk about OEM products, we meaning the entire broader market segment.
This is everything outside of the enterprise medical and defense market segments, we play in today.
On the OEM products and engineering services front Vuzix has a growing list of companies under contract and opportunities in the queue with new and existing customers our investments into new manufacturing and research equipment and enhanced production processes are beginning to yield fruit in the OEM portion of our business.
Our recently opened a state of the art manufacturing plant for optical wave guides with significantly increased capacity is another solid foundation to further enable vuzix to be the preeminent supplier of optical wave guides for.
Our own internal production needs and our third party OEM customers.
We continue fielding new interest to develop waveguide based solutions for the defense commercial aviation enterprise and even the broader consumer markets.
In Defence Vuzix has many major customers that have been or are developing our wave guide into their head mounted programs.
Some are desiring full custom wave guide can display engines, while others will employ our standard waveguide and display engine offerings. We continue to anticipate several of these defense accounts to move from R&D projects and begin scaled production by the end of this year and going into the first half of 2024.
To quickly recap, we feel that Vuzix is one of the outstanding leaders in our industry today and it is evident in multiple areas vuzix.
Vuzix has critical waveguide technology from design right through to a one of a kind Mega factory for high volume production at broad market, enabling price points Vuzix.
Music is a major stake in what should prove to be the most advanced micro OLED display technology available solving for the critically needed high efficiency full color displays for the ultimate a our glasses solutions of the future most.
Importantly, we feel we are positioned well to win and see significant growth, especially considering we are a company that is cornerstone to a market touted by industry experts to ultimately be greater than a trillion dollars plus within a decade.
I'd like to now pass the call over to grant for his financial review.
<unk>.
Thank you Paul.
As Ed mentioned the 10-Q, we filed this afternoon with the SEC offers a detailed explanation of our quarterly financials. So I'm just going to provide you with a bit of color on some of the numbers now.
Our third quarter total revenues for the three months ended September 32023.
$2 2 million as compared to $3 4 million for the prior period in 2020 to an overall decrease of 36%.
The revenue decline was primarily the result of lower smart glass product sales, which fell 46% year over year.
At this time, we feel that several anticipated product orders from direct and channel partner customers were delayed a quarter or two as opposed to being council.
Sales of engineering services for the three months ended September 32023 was <unk> 8 million as compared to $9 million in the comparable 2022 period. Please note that as of September 30, we had approximately $3 million of remaining performance obligations under four current wave guide and projector development projects.
Which represents the remainder of transaction prices totaling approximately $4 4 million under these <unk>.
Active development agreements the company expects to complete and recognize revenues from these projects over the next three to 18 months.
There was an overall gross loss of <unk> 2 million for the three months ended September 32023, as compared to a gross profit of <unk> 9 million for the same period in 2022. The decline was due to lower sales volumes, resulting in higher overall cost of sales as a percentage of revenues due to lower absorption of fixed manufacturing.
Factoring overhead costs over a reduced sales base research and development expense was $2 9 million for the three months ended September 32023 versus $3 4 million for the comparable 2022 period, a decrease of approximately 15%.
The decrease was largely due to a reduction in external development expenses and contractors related to our existing and new upcoming products.
Selling and marketing expense was $2 8 million for the three months ended September 32023 versus $2 million for the comparable 2022 period, an increase of approximately 43%.
This increase was primarily due to higher salary and benefit expenses associated with increased head count as compared to the previous years comparable period.
General and administrative expenses for the three months ended September 32023 was $4 5 million versus $4 9 million for the comparable 2022 period, a decrease of approximately 8%. The decline was primarily due to a decrease in non cash stock based compensation expense.
Depreciation and amortization not included in cost of sales increased to $1 million for the three months ended September 32023 versus <unk> 5 million in the prior year's period. The bulk of this increase was due to the amortization of the technology license, we have with atomistic.
The net loss for the three months ended September 32023 was $11 million or <unk> 17 per share versus the net loss of $9 5 million or <unk> 15 per share for the same period in 2022.
Yeah.
Now for some balance sheet highlights our balance sheet remains strong with cash and cash equivalents of $38 million as of September 32023, and a net working capital position of $54 5 million.
The net cash flows used in operating activities was $8 million in the third quarter of 2023 as compared to a net cash use of.
Of $6 9 million for the third quarter of 2022, the bulk of this increase in cash was due to investments in accounts receivable and a comparatively larger net loss in the period versus the prior year third quarter.
Cash used for investing activities for the third quarter of 2023 was $2 5 million as compared to $3 3 million in the prior year's period, but the majority of this being a $1 $5 million payment towards our atomistic technology licensing fee commitment.
As of the date of this call. There remains the final outstanding license Sneaky licensing fee commitment to atomistic of $1 $5 million due on December 31 2023.
Other investments in Q4, 2023 will be modest as we complete the installation of final additional equipment to our wave guide plant expansion capital and licensing the expenditures will be significantly less in 2024 as compared to 2023.
As of September 30, the company continues to have no current or long term debt obligations outstanding.
As Paul mentioned earlier, we are taking proactive steps to reduce our cost structure and position us better to respond to demand fluctuations, while continuing to invest in new product development and maintaining our high standards of customer service and support.
Vuzix will remain not only a growth oriented organization, but ideally also a more cost effective organization.
We expect these cost transformation actions can produce many benefits interactions will include <unk>.
Improving the economics of our smart glasses business, resulting in improved gross margins and reducing operating cost in absolute terms and as a percentage of revenue.
Implementing our head count three throughout the organization after our last several years of additional operating cost investments.
This will also include reassignment in combination of functions in focus but of course, we will respond to the product demand fluctuations and continue to staff our production teams appropriately.
Outsourcing more of our non differentiating capabilities and activities to external contractors and partners. This should allow us to reallocate resources to focus on important investments in what we do uniquely and gives us a competitive advantage.
We'll strive to operate more efficiently and expect to create durable savings to fund investments in our key technologies and product capabilities. These cost transformations are expected to deliver results in the short medium and long terms.
Looking forward, we are confident we have the resources to execute on our growth business plan and further invest in our future with that I would like to turn the call back over to Paul.
Thanks Grant as our business continues to grow on multiple fronts. Our line of sight to achieving profitable operations gets clearer, we expect the pace of our growth in the coming quarters will continue and with our shift more to third party channel partners and resellers and our enterprise Smart glasses segment. This should allow us to more effectively manner.
Our sales and marketing costs.
And of course, we will be looking at further ways across the company to reduce costs and improve productivity. So we can bring as much of our revenues as possible as income to our bottom line.
It is a focused effort for vuzix and as grant just said we have the resources, we need to execute on our plans going forward.
But that said I would like to now turn the call back over to the operator for Q&A.
Thank you.
Ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad and a confirmation tone will indicate your line is in the question queue.
You May press Star two if you would like to remove your question from the queue for.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.
And our first question comes from the line of Matt Vanvliet with BTG. Please proceed.
Hey, good afternoon, thanks for taking the question.
I guess first.
What gives you confidence that some of the larger orders that you were anticipating that that sort of failed to come through this quarter will be.
Coming through in the next one to two quarters as you mentioned.
And maybe not even longer beyond that or outright.
Making a cancellation or a decision to move away from the technology.
Yes, there were two categories.
Orders that got delayed let's talk about the product side of the business first because theres really.
Really three categories.
Our order books get filled at Vuzix, we've got the channel business that we're building right now and building that business. It's not just as simple as you got a new guy and you bring him onboard it takes work and make sure that you've got folks that are compatible with vuzix that understand that.
Markets that we're trying to sell into and can support them well and.
Between doing that vetting and getting the negotiations done on bringing those folks on board. It just slipped into the next quarter.
We have.
Other folks that we're bringing on here in the fourth quarter and that has not been impacted it's just taken a little bit longer for these those channel partners to come on board for US and then there is the direct sales and one the one category that is really the <unk>.
Front end have seen a lot of growth, which was in our expectations for Q3 revolves around the whole supply chain marketplace.
There are.
More than a year full of companies that are in that box.
Just like <unk> been doing for some time now sliding sideways a bit like I said.
Yes.
Three or four of them, which represent significant business opportunity for vuzix.
Literally it just was a function of this excuse or that excuse revolving around things like new systems that got installed.
<unk> took a smaller order because they are not going to roll out quite as fast because part of what's going on in the world right. Now is they want to make sure that they're not screwing up their revenue streams, but there is no body.
In the warehousing and supply chain side of the business at the same we're not doing this.
So.
That's why I say Q4, Q1, possibly because some of those supply chain side of the house in Q4, they get off a busy with with yearend sales opportunities and the likes.
On the channel side of it. It's just vuzix is going to get the deals in place enrolling so.
Q five excuse me our Q4, it still looks like it's a great going to be a fine quarter for us.
Some of that business that we were planning on in Q3 should roll into our Q4 on the OEM side of the business you can see we've actually got a backlog now of like two plus three plus million dollars.
And there is another $3 million to $4 million that dial rates should have closed.
In the.
Third quarter and the only reason why it didn't is because you have companies that are saying look we're not bringing on new projects until the new year period across the board, it's almost like freezing hiring.
And so for two of those.
Present certain if.
If these guys are moving forward, we've gotten zero reason to believe that they are not.
It's possible that at least one of them will sign up and then in the fourth quarter. The other one is probably going to be the first quarter of next year.
Okay not in the business going away at all it's just timing issues in the <unk>.
World such as they are.
Alright helpful and then Greg when you look at the <unk>.
Cost reduction steps that you've taken how much of those are head count reduction versus just pulling back on discretionary spend.
And maybe any any level of magnitude at least on the structural cost reduction that you're going through.
Well our goal as Paul said was cute overall achieve about a 20% reduction. So if you look at our Opex.
<unk>.
We would expect to see.
20% reduction that could be implemented by the.
The middle of next year as far as discretionary versus people I mean.
There's probably going to be more discretionary stuff, we're going to.
Adjust and tweak rather than.
That's really head count I mean, we got a good team here, we want to keep some of the.
Great people, we have I mean, we're going to look at you know as I said, none stuff, we do that it's not differentiating or not.
L a proprietary and push it out to.
Uh huh.
Some other third party so we can.
Still keep active moving ahead without having to make the commitment.
More people as we said we do have.
In absolute headcount freeze going on right now the only exceptions might be in production to respond to it needed demand but.
We think we've got good opportunities.
A reduced cost.
And our future products are spending even more time to.
Improve the gross margins going forward on future generations.
It's a competitive business, we're all in so and we're going to.
Do our best to win.
Okay. Thanks for taking the questions.
No problem, Matt Thanks for asking.
Okay.
Thank you.
Ladies and gentlemen, there are no further questions at this time.
Actually.
Our next question actually comes from the line of Christian Schwab with Craig Hallum. Please proceed.
Hey, guys.
And then just on the decision to make the Opex reduction.
At this time listening to the prepared comments it seems like there is a tremendous amount of opportunity in front of you.
Between different customers in many different applications.
I mean, how are you going to satisfy those markets with a reduced workforce.
Yeah.
There's a balance there Christian on where those those.
Cost savings are coming from.
I will admit it.
The changes in some of the workforce, but as grant mentioned, it's related to things like where you might get work done etsy.
Et cetera.
We've got what we need to be able to deliver quite frankly, vuzix has got great infrastructure to deliver way beyond even what the current run rates or.
So.
Production capacities.
Our sales teams as you can see theres a shift in how our sales is starting to operate with bringing the channel partners onboard the way that we are so.
Got it.
We've got the.
Right infrastructure right now and in fact, we could even lower.
Some of the infrastructure that we have right now to bring it more aligned and still deliver very very well for the customer base.
And part of it.
Increased focus and I tried to do.
A few things simultaneously.
We might have had in the past we know what's working and we're going to focus and we're not going to.
Frankly, just chase every opportunity if we feel that market isn't isn't ready to mature as fast as some of the other markets, we see as opportunities and Kristen Theres, some natural things that are happening.
Investments in things like the new wave guide facility.
It's just not going to be anywhere near the amount of money and 24 that went in in 'twenty, three because that facilities up in its operational.
Don't need to spend further in that regard.
And in 2000 and for the amount of dollars that needs to go into the micro OLED development efforts is a fraction of where we had been in the past. So there's a lot of reductions that are coming just out of those kinds of things also.
Okay.
I guess Paul.
Going up on.
The answer there.
I guess it wasn't clear to me.
Given the broad set of opportunities then so if we're narrowing our focus and not trying to be all things to all people.
What should investors focus on what is the one or two applications or one or two customer segments.
Well that you anticipate to drive revenue growth in calendar 'twenty four.
You can see on the OEM push outs I'm not talking about that I'm talking about you know where the smart glasses is going to be used.
<unk>.
To drive revenue growth.
Health care and.
In health care.
In healthcare.
In remote support applications.
Warehousing.
And finally, there is a new category that's coming onboard that is part of this AI world, where there is a handful of companies that are using our glasses to help with hearing impaired.
It's a medical device.
Placement for hearing AIDS and the like and for people, who need sign language kinds of support.
It's a big marketplace just in the veterans.
Of the World in America, there are three and a half million folks and hearing impairment problems. In these glasses work way better and hearing AIDS for people that have bad enough severe enough hearing impairments. So the medical side of our business is happening all over the place with the companies like <unk> and proximity.
Rods and cones and the likes the business just keeps going and it's exciting.
Then the warehousing side of the business.
We have.
A large number of companies that are going beyond pilots now they are deploying its just.
It's taken a little bit longer as usual, which is frustrating in that side of the space, but youll see it there.
So those are the three or four areas that we're focused on right now to make it happen.
Great. Thank you for that no further questions.
Okay.
I will add Christine just because you asked on the.
On the side of the OEM business Defense Aviation wireless carriers glass. These companies and then finally, the broader markets and this one is so much easier to address for Vuzix, because it's lots of inbound.
<unk>.
Very few tradeshows are needed.
People know that we're doing this now its outreach that can be done direct so it's a it's a very inexpensive marketing and sales side of the business to address those those markets.
That's great and thanks.
You bet.
Thank you ladies and gentlemen, there are no further questions I would like to turn the call back to Paul Travers for closing remarks.
I would like to thank everyone for your interest and participation on today's calls theres going to be a lot of exciting developments and news in the coming months between now and the first quarter of next year.
Often lots of things.
A pile of skew more that are going on around things like our OEM business and some of our select partners that we're going to be able to share it with much more with so please stay tuned it should be an exciting month and a half to let's say three or four months. Thank you have a good evening everybody.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Yes.
[music].
Okay.
Mhm.
Hum.
Uh huh.
[music].
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